Anonymity a double-sided shield

 

How to protect your online privacy in 2020 | Tutorial

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Internet anonymity empowers people to speak without fear, and to be trolls

ONLINE anonymity is such a huge topic, often carrying a bad reputation because it appears to incite irresponsible behaviour.

Anyone can say something cruel or nasty, and no one will ever know it was him because he uses a made-up personality.

When you spend more time delving into the subject of Internet anonymity, you will find that it has its fair share of pros and cons.

It is a matter of debate among security researchers, politicians and policy analysts. There are those who say it affords everyone freedom of speech as there is less judgement levelled at an anonymous person who speaks his mind freely, and whistleblowers are able to unearth secrets and share information without fear of being accused of slander or ending up in jail.

It is important to note that freedom of speech doesn’t mean you have freedom to lie.

Online abuse is rampant, it’s easy for lies to be manufactured and spread, and news loses its credibility in the process.

Cloak of anonymity

Assoc Prof Dr Anasuya Jegathevi Jegathesa, programme director of Psychology at Taylor’s University, concurs that anonymity allows people to speak without fear.

“If you have to put your name to it, there may be consequences for speaking the truth, ” she said.

Dr Anasuya Jegathevi Jegathesan will be speaking at the Star Empowerment: Healing Hearts 2020, a forum on grieve management.Dr Anasuya Jegathevi Jegathesan will be speaking at the Star Empowerment: Healing Hearts 2020, a forum on grieve management.

“When you’re anonymous, you can avoid the consequences. The Internet and social media allow people to remain anonymous and there is a certain power in this.

“In certain situations, when you say your truth, you may be put in jail or you may be harassed and abused by other people because they don’t agree with you.

“In such situations, people choose to be anonymous because they need a voice and there’s no other outlet.

“Of course, even without the consequences, many still hide behind anonymity when they want to insult others or stir up disagreement. Online drama can be an interesting thing for some people!”

Digital culture expert Dr Niki Cheong of University of Nottingham feels that there are many strong arguments that can be made in defence of anonymity – victims and marginalised people and communities rely on the cloak of anonymity to speak truth to power.

“This is particularly so when they have been wronged or taken advantage of. This is also the case when it comes to larger institutions whereby acts like whistleblowing have shown to be a powerful tool.

“Journalism has for the longest time used anonymity for very good reasons – not just to protect the identity of sources speaking out against, among other things, corruption and misdeeds, but also to protect people who share important stories from being stigmatised or targeted.”

Cheong agrees that anonymity has emboldened many to engage in anti-social behaviour, both offline and online.

“We are seeing severe repercussions from an individual level with personal attacks and bullying, and at a more societal level with political suppression and information manipulation.”

Sharing stories

The advent of social media has also seen the rise of citizen journalism – which is the creation or collection, dissemination and analysis of information by the general public.

“It’s trendy to create news these days because when you have more likes, that translates to more interest in your channel, and that’s how you make more money.

“There is a financial reward for being popular – whether you’re a blogger, YouTuber or TikTok artist, ” Anasuya explains the psychology behind the obsession to create content and share it with the world.

“The other reward is an emotional reward. Research shows that when you see ‘likes’ and ‘comments’, there’s dopamine released in your system, and dopamine is a pleasure hormone that makes you feel good.

“So when people get more posts, or become more famous, they feel good about themselves.”

When it comes to sharing, she says that when “news” calls for attention and is fun or shocking, people naturally want to be the first to tell others.

“It’s a high, you get a good feeling when you are the first person to tell somebody some interesting or important.”

Because of this, people often make the mistake of not verifying information before hitting the forward button. Often a headline is enough to make someone share a post without even reading the story. Admit it, many of us have made that mistake, right?

Spreading rumours takes that scenario one step further, because a rumour usually has a negative tilt to it.

So why do certain people get off on spreading rumours? Anasuya says it’s because some people like to create flame wars.

“When you’re anonymous, after all, you don’t even have that platform where you can get popular, so why do people still share and spread rumours or false information? The dopamine is still there.

“They know they are in the midst of a drama unfolding, they are getting hits, creating issues and they enjoy this. They enjoy people ‘believing’ them.

“And sometimes they believe it themselves. Truth can be based on perception, after all, and there are lots of people who perceive truth in a different way from the norm. That doesn’t mean they are crazy, they just perceive truth differently, ” she says.

Cheong reckons that a lot of this boils down to the individual.

“Some people don’t always feel that there are real life consequences to their online actions.

“We’ve seen cases where trolls have been confronted by their victims and regret their actions once they get to know them better because they suddenly realise they are real people with real feelings and real family members feeling threatened.”

He cites the case of American writer/activist Lindy West who responded to the guy who stole her dead father’s identity to abuse her. West received an apology from the person who she had earlier billed her “cruellest troll”, and went on to talk to him which ended in forgiveness.

“There is also this culture on the Internet, from the early days, of doing things just for the sake of it, which may have partially influenced this disconnect, ” says Cheong, explaining the catchphrase

“I did it for the lulz” (IDIFTL) which serves as a description for any trolling you do or any Internet drama you cause. To explain further, “lulz” translates to “fun, laughter or amusement at another’s expense”.

“Increasingly we’re seeing in many cases around the world that there are few consequences for people’s actions especially when they favour those in power or are perceived as ‘public sentiment’, so people feel they can act with impunity, ” Cheong adds.


Check and balance

What can we do to prevent this situation from plunging?

“Censorship isn’t the answer, ” Anasuya offers. “Because then you will be going backwards, and people will find ways around it.

In journalism, anonymity protects sources who provide information, and victims from being targeted, says Cheong.In journalism, anonymity protects sources who provide information, and victims from being targeted, says Cheong.

“Instead we should be educating people about best practices: how to check on false media, how to verify news, how to spot fake accounts, ” she says, using the anti-vaxxer movement as an example of how things can go terribly wrong without proper check and balance in place.

In that case, research fraud – a study led by the now discredited physician-researcher Andrew Wakefield involving 12 children – suggested there was a link between the measles, mumps and rubella vaccine and autism.

This study was subsequently thoroughly debunked, and Wakefield was stripped of his medical licence. Yet, today there is still a growing number of parents who buy into the whole anti-vaxxer argument and refuse to vaccinate their children.

“Because of some fake research and false findings, this ‘correlation between vaccinations and autism’ went viral and people started posting scary stuff, so much so that even a few in the US Congress believe this false news!” says Anasuya.

“So why do people believe it? Because they need somebody to blame, they want to be able to point a finger and say this is why the world is going bad, this is why things are going wrong, this is why my child got sick. It’s not me, it’s something else.

“People feel power in thinking that they are not sheep being told what to do, when in fact that’s exactly what they are. They don’t check their news, they don’t check their facts.

“You have to educate people to recognise what is real news and what is false. And it has to be a repeated learning.

“The checks and balances do exist, if people know how to use websites like FactCheck, Snopes and Sebenarnya.my.

“There’s a huge bunch of very logical, very factual people in cyberspace who are constantly correcting false news but as a user you have to be able to use those channels.

“It is whether each individual who creates and receives news is willing to do all the checking required. And sadly this is not something that we teach our children in school.”

Cheong agrees that education is the best policy, but it needs to be a multi-pronged approach.

“We need better media literacy education at all levels, we need political will to ensure that any response to these actions is fair across the board, we need to pressure digital platforms to take a more proactive role in managing these sort of behaviour.

“And we need better leadership and role models.”

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Jack Ma, Asia's richest envisions the newspaper to leverage Alibaba's technology & resources

http://www.thestar.com.my/business/business-news/2016/05/03/let-our-readers-see-china-from-more-angles-and-perspectives/

Ma: 20 more years of enviable growth for China

In an interview with the South China Morning Post, Alibaba founder Jack Ma shares his views on the Chinese economy and the importance of entrepreneurship in supporting development.

CHINA’S economy will face “a difficult three to five years” but the slowdown will be good for its long-term development, Alibaba executive chairman Jack Ma told the South China Morning Post (SCMP) just before the e-commerce giant’s takeover of the 113-year-old newspaper.

Ma said the Chinese economy was indeed grappling with structural problems and that the authorities were working hard to steer it onto a new growth path.

But he dismissed fears that China would follow Japan’s route to stagnation, saying the country still had huge potential waiting to be tapped.

The rapid growth of China’s Internet economy and consumer culture could help the country through its temporary difficulties, Ma said.

China would likely continue to grow at a rate “enviable to most other major economies for 15 to 20 more years”, he said.

Ma gave the two-hour interview in Hangzhou, eastern Zhejiang province, during which he also discussed his vision for the SCMP, cultural differences between the east and west, and his concerns for Hong Kong’s next generation.

Commercial and residential buildings in Guangzhou, Guangdong province.

China’s economy has been grappling with structural problems but Beijing is working hard to steer it onto a new growth path.

On China’s economy, the businessman said it was unrealistic to expect an economy of such scale to maintain double-digit growth indefinitely.

“There is no reason to expect that an economy of such size can maintain such a growth rate indefinitely, nor is it good for China to continue to grow at such speed,” Ma said.

“After more than 30 years’ growth, spending a few years to adjust its course is reasonable.

“Some say the actual (growth) number could be just 5%. But even with 5% growth, there is no other economy of such size growing at that speed in today’s world.”

Comparing China with an ocean liner, Ma said the Chinese leadership understood that the country’s old growth model was unsustainable and that they needed to chart a new course.

“It is easy for a small boat to change its course. But as the world’s second-largest economy, China is like an ocean liner... we have to choose either to not slow down and overturn the ship, or to slow a bit to make the turn,” he said.

The key was to create enough jobs to keep the economy stable and buy time so the country could complete its much-needed transformation, Ma said.

Fortunately for China, he said, the rise of its Internet economy happened at the right time.

China’s gross domestic product grows 6.7% in first quarter – a good start to 2016

“The traditional industries are struggling, but we also see growth in domestic consumption, the services industry and the hi-tech sector, and young talents are flocking to these areas,” he said.

“The logistics and delivery industries create plenty of jobs for low-skilled workers. We still have a lot of room for growth.”

Ma said the deciding factor in a true economic transformation would be the country’s ability to unleash the entrepreneurial spirit among the young and create an environment to help it flourish.

“I believe there will be some great enterprises arising from China,” he said.

“The monetary policy and supply-side reforms are very important and can help rejuvenate China’s economy.

“But to me, the most important thing is entrepreneurship. If this can flourish in China, China will become successful.”

China’s slowdown had triggered panic among foreign investors, with some choosing to leave the country.

But this actually created fresh opportunities, Ma said.

History had proven that those who bucked the trend to invest in China during difficult times always received good returns, he added.

“China needs to develop its rural areas; China needs to develop its cultural industry. It is also shifting focus to services and IT industries. There are still plenty of opportunities around,” Ma said.

Global media agency in the making

http://www.thestar.com.my/business/business-news/2016/05/03/global-media-agency-in-the-making/

In the second part of an interview with SCMP, Ma says he envisions the newspaper to leverage on Alibaba’s technology and resources.

JUST why does Jack Ma want to own a newspaper, and what will he do with it?

Those are the biggest questions that have confronted readers of the South China Morning Post (SCMP) since news broke of Alibaba Group’s acquisition of the 113-year-old English-language newspaper late last year.

Now, for the first time since the Chinese e-commerce giant’s takeover earlier this month, Ma has outlined his vision for the newspaper.

The acquisition has raised eyebrows, with some suggesting that the SCMP – which has for decades been reporting aggressively on China – would change its direction.

A few even believed the newspaper might henceforth gloss over sensitive or controversial issues that risked incurring the wrath of the Chinese leadership.

In a face-to-face interview with the SCMP in Hangzhou, eastern Zhejiang province, Ma addressed these concerns, explaining why he believed in having a narrative on China that was different from that of both the mainstream Western media and Chinese state media.

“I don’t see it as an issue of (coverage) being ‘positive or negative’,” the Alibaba executive chairman said. “It is about being impartial and balanced... We should offer a fair chance to readers (to understand what is happening in China), not just a fair chance to China.”

China’s growth will remain enviable for the next 20 years, says Ma.

As a reader, Ma said, he valued the importance of obtaining unbiased information in order to draw his own conclusion based on the undistorted facts presented to him.

“I believe the most important thing for the media is to be objective, fair and balanced. We should not report a story with preconceptions or prejudice,” he said.

With its access to Alibaba’s resources, data and all the relationships in its ecosystem, the SCMP can report on Asia and China more accurately compared with other media who have no such access.

“Sometimes, people look at things purely from a Western or an Eastern perspective – that is one-sided. What the SCMP can do is to understand the big ‘why’ behind a story and its cultural context.

“I want to stress the importance of being fair to our readers. You should not impose your own view and prejudice on the readers and try to lead them to a conclusion. As a reader, I understand what a fair report is.”

The tech tycoon said his vision was to transform the SCMP into a global media agency with the help of Alibaba’s technology and resources.

Alibaba, the world’s biggest online trading platform, is aggressively developing big-data and cloud technology. Every day, it analyses and processes a massive volume of data that can provide powerful insight into the world’s second largest economy.

Ma reiterated his promise that Alibaba’s management would not take part in the SCMP’s newsroom operations. Rather, it wanted to represent readers’ interests and give feedback on how to improve readers’ experience, he said. “As I said to Joe (Tsai), you are going to the SCMP as a representative of its readers. You don’t have to represent shareholders. You speak for the readers,” Ma said, referring to Alibaba’s executive vice-chairman who is now the chairman of the SCMP. Ma, who last year unveiled a HK$1bil fund to help Hong Kong’s young entrepreneurs start up their businesses, said he invested in the newspaper because he “loves Hong Kong”.

Hong Kong was stuck in a rut and in danger of losing its direction, the billionaire said, urging Hong Kong’s youth to hold on to the city’s uniqueness and have faith in its future.

“The city has lost its can-do spirit. The big businesses are less willing to take risks. I talked to some young people in Hong Kong and they said they are lost. Young people indeed have fewer opportunities than before. But is it true that there are no more opportunities for them? No!” he said.

Hong Kong had many strengths that were unique to the city, Ma said.

“It has the best location. The ‘one country, two systems’ allows it to enjoy the good things from China’s growth and the best things from the West... The quality of Hong Kong’s graduates can match the finest from any other city. Its services industry is first class,” he said.

“Hong Kong people say Hong Kong needs to preserve its uniqueness. I say Hong Kong’s uniqueness is in its diversity, its tolerance of difference cultures... China does not want to see Hong Kong in decline. I have full confidence in its future.” – SCMP

By Chow Chung-Yan The Star

Related:

‘Let our readers see China from more angles and perspectives’

Boost for Alibaba, Chairman, vice-chairman bolster share buyback

Jack Ma’s potential entry lends fire to SCMP

Cloud storage for personal files made safe

 

Utilise various services: As different Cloud services are suited to different types of files, it makes sense to spread your files out over several different Cloud storage providers. — Illustrations: MUHAMMAD HAFEEZ AMINUDDIN/The Star

Find the best space for your personal files on the Cloud.

In the movie Creed, Sylvester Stallone’s Rocky Balboa character looks baffled when a young boxer snaps a picture of a handwritten exercise regime with his smartphone instead of just keeping the paper.

Balboa gets even more confused and looks skywards when the young boxer tells him it’s stored on the Cloud so that the information won’t be lost even if he loses his handphone.

It’s hard to deny the rising importance of Cloud computing in our daily lives, as most of the content, services, apps, and even enterprise systems today reside on the Cloud.

Most of us are probably aware of or have used services such as Google Drive, Dropbox and OneDrive.

These services, also known as public Cloud, requires little effort from you other than having to sign up for them.

Most are free and offer up to 15GB of space – if that’s not enough you can subscribe for a nominal sum to bump up storage space.

As these services are mostly operated by tech giants, you don’t have to worry about any of the technical stuff, but on the flipside, you don’t have much control over it.

If you wish to create your own Cloud, it’s now easier than ever as the price of devices and components ­needed to set up such a service have fallen a lot.

Also known as private Cloud, it allows you to keep your files within your own servers and manage them as you see fit.

It takes a bit of investment and know how – our accompanying story will help you decide if you should go for public or private Cloud.

Here we will explore the best public Cloud services so that you can pick one (or two or three) that meets your needs best.

Free and easy

Almost all the public Cloud offerings have a free option – they differ mostly in the size or additional services offered.

Our pick for the best free Cloud service is Google Drive, as you get 15GB without having to spend a single sen.

More importantly, Google has tied Drive to its online services such as Gmail, Photos and Keep, as well as ­productivity tools like Docs, Sheets and Slides.

So all your photos and documents will be synced automatically and will be available from one place.

If 15GB option is too limiting then you can opt to subscribe. For US$1.99 (RM8) a month, you get 100GB of ­additional space.

If you just want sheer volume then try out Mega which offers a whopping 50GB of space for free.

It doesn’t set a limit on file size like most of the other services, but we found the data transfer speed to be a bit slow.

Space for shutterbugs

It goes without saying digital cameras and smartphones in particular have made it easier than ever for everyone to shoot photos.

The real problem, however, is in managing your photos and finding a place to store them.

Most back them up to a desktop or laptop and while it’s better than not backing up at all, is not a good solution as all hard drives have a finite lifespan.

If you don’t have redundancy then you need to find a better solution in the Cloud and we recommend Flickr.

It gets our vote because it offers 1TB of space for free, which should meet the requirements of most users.

Photo size is capped at 200MB while video at 1GB for a single file which is reasonable.

It also has smart photo management which will automatically sort out ­images according to groups such as animals, people and buildings.

Free users will, however, see ads and will not be able to access the ­desktop app for uploading photos.

Like most services, it doesn’t support the uncompressed RAW file format which is preferred by photographers who use DSLRs.

If you like keeping your file as RAW, you will need a service like Amazon Cloud Drive which allows you to upload an unlimited number of ­photos, including RAW files.

Its Unlimited Photos plan will cost you US$11.99 (RM50) a year which is not too bad as RAW files take up a lot of space.

The unlimited offer doesn’t extend to other files, including video – for these files you are limited to only 5GB.

If you need to find space for your videos then you will have to opt for the more expensive plan called Unlimited Everything which costs US$59.99 (RM240) a year. This service, while expensive, lets you upload to your heart’s content.

Cross platform

Nowadays it’s not uncommon to own multiple devices running on different platforms.

If you have, say a MacBook Air for work, Windows PC at home and Android smartphone, you need a Cloud service that supports as many platforms as possible.

While the dominant operating systems – Windows, OS X, Android and iOS are usually supported, other operating systems such as Windows Phone and Linux are often overlooked.

Thankfully Dropbox doesn’t do that – it supports almost every platform, including the ones mentioned above. If you want an alternative, try Box, as it also works on many platforms except Linux.

By Lee Kah Leng The Star

Related:

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- Huawei Mate 8: A matter of size. by donovan quek ... The weight (185g) is well distributed and feels just nice for the size. For those who aren't

Bitrix24 - Free Cloud

bitrix24.com/Free_Cloud_Tools

Bitrix24 - 35+ Free Cloud Tools For Sales, HR, PM and Collaboration

One phone to rule all; Fintech, the healthy disruptors of forex

Software rules: Less than 20 of the iPhone comprises hardware and labour costs. The real profit is in software, which is all about knowledge and mindsets. – Bloomberg

WHO dominates the phone dominates the Internet. The whole world of information is now available in your hand, replacing your own mind as a memory base for instant decision-making.

The reason why traditional bank shares are dropping like a stone is that mobile phone companies and financial technology (FinTech) platforms “get it”. Banks and conventional financial institutions are stuck with so much legacy hardware (branches and outdated mainframes) and complex regulation that their CEOs feel beseiged by bad news – cyberattacks, privacy leakages (like the recent Panama leak), capital requirements and huge fines.

No wonder top bank talent is leaving the industry. In Silicon Valley they get fat bonuses to become “cool” without regulations. Regulated bank CEOs are held personally responsible for everything that goes on in their bank, having to deal with soul-destroying staff and expenditure cuts, on top of their own pay cuts.

I was at the Singapore Forum this month moderating a panel on FinTech when the Alibaba strategist mentioned that the current battle for market share is all about “mindset and handset”. The mindset of the Internet age is that you do not need to own any assets – you simply share or rent them from those who have excess capacity. The mobile handset is where most of the world’s population is moving towards doing business, from dating to buying a house, phone, using your fingerprint and retina as digital signature.

Finance today is an information business and FinTech (see below) can deliver payment services at 1-2 cents per transaction compared with US$10-US$12 per paper-based payment. Increasingly, we spend more on apps and software than on the actual hardware.

Did you know that the fastest adopters of technology in the world are porn, gambling and politics, in that order?

The financial consultants Oliver Wyman have come up with a major report on “Modular Finance”, which argues that technology has transformed finance into modular parts – modular supply (provision of financial services by specialists); modular demand (buying new services from such specialists).

Oliver Wyman’s report begins with a cartoon about a customer buying a house, arranging a mortgage and insurance, selling stocks and wealth products for the downpayment and paying for all fees through a single mobile phone. Equipped with the latest encryption, digital signatures and right apps, the mobile phone has empowered the customer to everything what used to take several visits and weeks to the bank, the lawyer, real estate agent and even land registry to complete the transaction.

In short, the game of finance is being fought by one super-bank to rule them all (Goldmans?) or one phone to rule them all.

The global supermarket model (one brand to rule them all) is having a serious re-think about being labelled G-SIFIs (global systemically important financial regulations), requiring special regulatory attention and additional capital and liquidity requirements. Increasingly, these universal banks do not need to own and supply all services in-house – they simply outsource the back-office or even key services to trusted specialists.

On the other hand, FinTech aims to change our lifestyles through different types of technology.

First, frictionless and seamless inter-operability integrates businesses like logistics with payments, such as Alibaba, making it easier to buy, pay and deliver in one pass.

Second, Big Data analytics, which Amazon uses suggest to you what to buy next and understand how customers are changing.

Third, Blockchain and Distributed Ledger technology, which makes systems more secure.

Fourth, artificial intelligence, such as robo-advisers on investments.

Fifth, data secrecy and unique identity codes that ensures privacy and confidentiality.

FinTech platforms have less staff, less legacy assets, less regulation and more flexible mindsets. These barbarians at the gate are only stopped by regulations that currently protect the banking franchise. This is not to say that they don’t have defects, such as lack of attention to anti-money laundering, terrorist funding and cyberattacks. When they reach super-scale, they are also Too Big to Fail.

The rapid evolution of FinTech means that Asia now has the money and the technology to transform our antiquated financial systems into the 21st century.

The Asian population is young, tech-savvy, mobile and willing to experiment with new services and equipment, which we are creating in Asia. The good news is that if our young startups get it right, the world is their market. The bad news is that if our regulatory and government support services don’t allow our startups to compete, our markets and jobs will be someone else’s lunch.

What is holding back this transformation to FinTech Asia is still mindsets. Look at how Jakarta taxi drivers are protesting against Uber. Regional banks are expanding their footprints by buying the franchises of retreating European and American banks in investment and private banking. But they and their regulators have not thought through how to use FinTech to cut back their legacy systems, many of which are obsolete and operating under-scale, because many regulators still insist on each bank owning and running their own hardware and branches. To be fair, not all regulators think that way.

Barriers to FinTech are sometimes regulatory mindsets. Asian regulators are more willing to accept the entry of financial institutions from outside the region than from their neighbours. Without regulatory concurrence, many banks and financial institutions do not dare to experiment with new technology.

We now have Asian customers moving to global service providers like Apple, Google and Amazon, if Asian financial service providers do not get their act together. Compe-tition is good – look at how Sri Lanka is negotiating with Google to provide balloon-suspended cheap high-speed wifi coverage.

Asian bankers and regulators need to think hard about what Asian customers really want to achieve global scale in terms of efficiency, stability and trust.

FinTech and mobile handsets are not the solution to all our problems, but they will change how the problems are resolved. The real problem is our mindset. Less than 20% of the iPhone comprises hardware and labour costs. The real profit is in software, which is all about knowledge and mindsets.

That belongs to the realm of politics and education, which is another story.

Andrew Sheng writes on global issues from an Asian perspective.

Fintech, the healthy disruptors of forex

SINCE the global financial crisis of 2008-2009, investment banks have spent much of their time and energy on regulatory compliance, leaving them “on the back foot” innovation wise.

Faced with growing regulatory demands in recent years, investment in new technology has had to take a back seat. This does not come as a surprise given the lack of deals and flows as well as the broad-based decline in commodity prices. That little space innovation wise has been quickly filled by fintech firms.

There are traditional fintech firms that act as ‘facilitators’ (larger incumbent technology firms supporting the financial services sector) and there is emergent fintech firms who are “disruptors” (small, innovative firms disintermediating incumbent financial services firms with new technology).

The fintech space can be further broken down to four major sectors – payments, software, data and analytics and platforms.

In the foreign exchange market environment, a typical trading would include sourcing for the best price either via electronically or via the voice broker.

In Malaysia’s financial market landscape of foreign exchange trading, the wholesale price or in other words interbank market is dominated by investment banks facilitated by money brokers who source the best available price to match foreign exchange trades.

With the wholesale market dominated by firms with deep pockets and ample liquidity, customers are subject to a spread cost, whereby prices they receive naturally takes into account a spread from the screens and a spread from the interbank price as well as a spread that is subject to the credit profile of the customer.

Global fintech firms however are altering this process or at least are gradually making inroads.

These firms provide a platform that offers a comprehensive foreign exchange solutions, including live mid-market exchange rates updated in real-time, customised foreign exchange rate alerts, a fully automated transaction information dashboard, multi-user and multi-subsidiary control panel as well as on-demand forex reports.

The best part is, these firms charge a flat fee of which is detailed before each currency trade with absolutely no additional or hidden fees.

Until recently, SMEs have had little choice in terms of where to go, other than to the banks, but now it seems a different foreign exchange model is emerging in the fintech sector, giving banks a run for their money.

The crux of these business models by fintech firms in the foreign exchange business is service via the use of technology.

The automation of the process, eliminates the middlemen and therefore reducing cost, fintech has enabled companies to be more transparent with their pricing.

In the case of Malaysia, SME’s play a vital role in Malaysia’s economy, with foreign exchange risks increasingly being a volatile variable in their cost structure.

These form of fintech solutions are likely to witness exponential growth, but the cost would be, a gradual erosion of SMEs foreign exchange business that are currently held by our local investment banks.

Fintech firms’ foreign exchange model broadly encompasses four major steps, namely, the SME firm carries out their foreign exchange transaction by selecting the currency, the amount, delivery date and beneficiary account and confirm the exchange rate.

Once this is done, the next step is, the SME firm sends the fund to the fintech firm whereby the fund is segregated and held in a local bank.

Bear in mind these funds don’t form the part of the assets of the fintech firm and are held separately to ensure full client fund security at all times.

The third step is, the fintech firm’s matching engine will proceed to the exchange, matching the SME firm’s fund with another company or through the wholesale foreign exchange market.

Throughout the process, the SME firm is provided full transparency on prices, giving the SME firm the liberty to be fully in control.

Once the trade is matched, the funds are sent to the chosen beneficiary account of the SME firm, either its own, a subsidiary or directly to its supplier.

A four-step approach that uses the middle rate of the foreign exchange, removes the so called spread cost that is usually charged by banks to these SME firms and finally gives full transparency on the whole process itself.

With the clout and importance of these fintech firms, the Monetary Authority of Singapore recently announced the formation of a new FinTech & Innovation Group (FTIG) within its organisation structure.

FTIG will be responsible for regulatory policies and development strategies to facilitate the use of technology and innovation to better manage risks, enhance efficiency, and strengthen competitiveness in the financial sector. The upcoming Singapore FinTech Festival, to be held in Singapore from Nov 14 to Nov 18 will be an event to watch.

Organised in partnership with the Association of Banks in Singapore, the week-long event, which is the first of its kind in Asia will bring together a series of distinct, back-to-back fintech events.

Bottom-line, Malaysia’s financial sector, in particular its foreign exchange market needs vibrancy and fintech firms are likely to add spice to the local foreign exchange market, aside from creating value added business processes and technology intensive jobs, it would provide a healthy competition to the local investment banking scene.

Suresh Ramanathan believes gone are the days when foreign exchange trading was noisy, loud and unruly. It’s more about savvy technology driven trading. He can be contacted at skrasta70@hotmail.com

By Suresh Ramanathan Currency Insights.

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