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Product Strategy Recommendations

Hello and welcome to Continuous Improvement, the podcast where we explore strategies, frameworks, and concepts to create compelling and memorable product experiences. I'm your host, Victor Leung. Today, we are diving into an exciting blog post that discusses the innovative core banking product developed by Thought Machine. But before we delve into the details, let me tell you a bit about this groundbreaking company. Thought Machine has recently raised a staggering $200 million in a Series C funding round, attracting industry-leading VCs and global banks. With its flagship product, Vault, Thought Machine is revolutionizing the banking industry by empowering banks to offer innovative services to their customers.

Vault, a cloud-native ledger platform, operates on various cloud services, offering unparalleled flexibility to banks. From real-time data transmission and rich data streaming for AI and reporting, to managing international currencies, cryptocurrencies, and reward points, Vault provides an augmented product experience that goes beyond just functionality.

But let's take a step back and examine the different levels of this product. At the core is a modern banking platform, designed with an API-first architecture, allowing easy integration with services and technologies from other vendors. This is the actual product that meets the core needs of users. And finally, we have the augmented product, which includes features like a payments processing platform and the ability to run various retail banking products such as current accounts, savings, loans, credit cards, and mortgages.

Now, it's time to understand the competitive landscape. We will explore the competition at various levels, including narrow, form, need, and substitute. By understanding these levels, Thought Machine can better position its product and stand out from the competition.

Moving on to niche evaluation, we'll use Professor Alter's four criteria for a strong niche. The global retail core banking market is estimated to be worth just over £6 billion. To identify individuals with a need for this product, channels such as marketing and accessible platforms will come into play. And lastly, the predictable behaviors of banks looking to compete and differentiate their financial products will contribute to a strong niche.

Next up is the friction audit. We'll examine the different customer touchpoints and identify areas of friction that Thought Machine could alleviate. From the pre-purchase phase, which involves assessing risk, joining demo sessions, and decision making, to the purchase phase, which includes signing contracts, writing statements of work, and team formation, and finally, the post-purchase phase, which requires smooth product installation, clear product documentation, and reliable production support. By addressing these points of friction, Thought Machine can improve the overall customer experience.

Now, let's talk about product innovation. The sweet spot for incremental innovation lies in fulfilling articulated needs for unserved customers and unarticulated needs for served customers. Thought Machine is targeting customer needs that include out-of-the-box core banking services, flexibility with an easy-to-use configuration layer, hosting options on both private and public cloud platforms, scalability, enhanced integration with other banking systems, improved reporting and data analytics, data protection and privacy, and operational resilience.

Finally, in the blog post, the author provides priorities and recommendations for Thought Machine to fully realize the potential of their product. These include focusing on narrow niches and leveraging platform flexibility, building an open-source integration library, conducting a friction audit, and offering a SaaS solution.

That wraps up our exploration of this fascinating blog post on Thought Machine's revolutionary core banking product. I hope you found this discussion insightful. Thank you for joining me on this episode of Continuous Improvement. Remember, there's always room for improvement, so keep striving for excellence. Until next time!

產品策略建議

我最近完成了一個在線課程，學習了創建引人入勝且令人難忘的產品體驗所需的框架和概念。我選擇將這些知識應用到Thought Machine，一家開發了核心銀行產品的公司。這個產品正在革新銀行業，使得銀行能夠向他們的客戶提供創新的服務。

Thought Machine近年來增長迅速，最近在C輪融資中籌集了2億美元。該輪投資包括行業領先的風險投資公司和全球銀行，如Nyca Partners、Molten Ventures、JPMorgan、和 Standard Chartered。這使得該公司的總資金達到3.5億美元，估值超過10億英鎊。Thought Machine與幾家銀行合作，包括從一類金融機構到挑戰者的各種機構，包括Atom Bank、Curve、Lord銀行集團、Monese、SEB、Standard Chartered、TransferGo、Arvest、ING 和JP摩根追蹤。

該公司的旗艦產品是Vault，一個可以在各種雲服務上運行的原生雲賬本平台，包括亞馬遜網絡服務，Google Cloud平台和微軟Azure。憑藉智能合約，Vault提供了無與倫比的靈活性，使其可以運行各種零售銀行產品，如當前賬戶、儲蓄、貸款、信用卡和房屋貸款。

產品的層次

最好的產品不僅提供功能; 他們滿足了一種心理需求。以下是一種分解：

增值產品

• 賬本內外的實時數據傳輸使AI和報告能夠具有豐富的數據流。
• 銀行可以管理從國際貨幣到加密貨幣和獎勵積分的一切。
• 一個支付處理平台，允許任何銀行在全球所有方法、計劃和地區中處理支付。

實際產品

• 使用最先進的基礎設施在雲中的現代核心銀行平台。
• 產品庫具有一個包含超過200種預先配置的金融產品的目錄，如當前和儲蓄帳戶，貸款，和房屋貸款。
• 該平台採用了API優先的架構，使銀行可以輕鬆地連接到其他供應商的服務和技術。

核心產品

• 減少了就地硬件的資本支出，顯著降低了銀行的碳足跡。
• 使銀行能夠創新並向他們的客戶推出新的金融服務。
• 使用Vault Core作為通用產品引擎，銀行可以運行他們想要的任何產品。

競爭格局

理解在各個層次上的競爭 — 狹窄，形式，需要，和替代 — 有助於定位產品。

狹窄

• 與您的產品幾乎完全相同，既有核心功能也有實際功能。

• Mambu

• Temenos
• Finastra

形式

• 類似的實際產品在爭取錢包份額，但並非完美替代品。

• 微軟動態365

• 10x
• FIS MBP

需要

• 實際產品不同，但滿足用戶的相同核心需求。

• 傳統系統，如IBM大型機

資源

• 爭奪相同客戶資源（例如，金錢，時間，注意力）的產品。

• Excel

• Fiserv
• Silverlake

利基評估

使用阿爾特教授對強大利基的四個標準來評估產品的利基。

尺寸

• 全球零售核心銀行業務市場估值僅超過60億英鎊。

可識別

• 如何識別有此需求的個體：

• 新成立的銀行，擁有數字銀行許可。

• 需要將傳統系統遷移到雲平台的銀行。

可訪問

• 透過以下方式向這些個體進行市場推廣：

• 在銀行業務中工作的管理顧問。

• 在銀行生態系統內部運營的合作夥伴。

可預測的行為

• 渴望競爭並區分其金融產品的銀行。

摩擦審查

識別所有客戶接觸點，找出摩擦區域，並建議Thought Machine如何紓解這些問題。

階段：購買前 客戶接觸點：風險評估 摩擦：銀行對風險規避，不願意改變。 解決方案：引入敏捷方法

階段：購買前 客戶接觸點：參加演示會議 摩擦：技術知識過時的銀行 解決方案：引入現代雲架構

階段：購買前 客戶接觸點：決策 摩擦：銀行決策者與競爭對手有密切的個人關係。 解決方案：與決策者建立關係

階段：購買 客戶接觸點：簽訂合同 摩擦：複雜的軟件許可文件 解決方案：簡化和標準化條款和條件

階段：購買 客戶接觸點：撰寫工作說明 摩擦：銀行可能缺乏完整的需求。 解決方案：提早參與並提供技術估算

階段：購買 客戶接觸點：團隊組成 摩擦：銀行中缺乏參與專案的人才 解決方案：引入系統整合合作夥伴

階段：購買後 客戶接觸點：產品安裝 摩擦：銀行在產品安裝上困苦 解決方案：提供專業支援

階段：購買後 客戶接觸點：產品文檔 摩擦：銀行開發者難以理解產品 解決方案：提供啟用培訓和自助學習門戶

階段：購買後 客戶接觸點：產品支持 摩擦：需要平台穩定性 解決方案：提供24/7產品支援並按危急程度分級處理

產品創新

在已服務客戶的陳述需求和未服務客戶的未陳述需求的交集處，存在著增量創新的甜蜜點。以下是一些目標客戶需求：

• 即開即用的核心銀行業務服務
• 靈活性強，配有易於使用的配置層
• 既可以在私有雲平台上，也可以在公有雲平台上提供主機選擇
• 可擴展的解決方案，能夠承受高需求和吞吐量
• 更好地與其他銀行系統集成
• 增強報告和數據分析
• 保護個人識別信息（PII）的數據保護和隱私
• 提高運營能力以減少生產事故

優先事項和建議

為了充分實現雲核心銀行技術的潛力，我們建議進行以下的行動：

1. 專注於狹窄的利基市場，如遵循伊斯蘭教法的銀行產品，並利用平台靈活性。
2. 作為增值產品，建立一個與其他銀行系統的開源集成庫。
3. 進行摩擦審查，使產品更易於安裝，並提供無需安裝工作的SaaS解決方案。

對於此提案有任何問題，請隨時在LinkedIn上與我聯繫：https://linkedin.com/in/victorleungtw.

MongoDB Kafka Connector

Apache Kafka is an open-source publish/subscribe messaging system. Kafka Connect, a component of Apache Kafka, addresses the challenge of linking Apache Kafka with various datastores, including MongoDB. Kafka Connect offers:

• A fault-tolerant runtime for transferring data to and from datastores
• A framework that enables the Apache Kafka community to share solutions for connecting Apache Kafka to different datastores

In this post, we'll focus on using MongoDB as a data lake. The MongoDB Kafka sink connector is a Kafka Connect connector that reads data from Apache Kafka and writes it to MongoDB. The official MongoDB Kafka Connector can be found here.

Start the Kafka Environment

Download the latest Kafka version from here.

curl https://dlcdn.apache.org/kafka/3.2.0/kafka_2.13-3.2.0.tgz -o kafka_2.13-3.2.0.tgz
tar -xzf kafka_2.13-3.2.0.tgz
cd kafka_2.13-3.2.0

Run the following commands to start all the services in the correct order. Begin with the ZooKeeper service.

bin/zookeeper-server-start.sh config/zookeeper.properties

In another terminal session, start the Kafka broker service:

bin/kafka-server-start.sh config/server.properties

Once all the services have successfully launched, you will have a basic Kafka environment up and running.

Install the Plugin

Download the JAR file from here and navigate to the /libs directory.

curl -L https://search.maven.org/remotecontent?filepath=org/mongodb/kafka/mongo-kafka-connect/1.7.0/mongo-kafka-connect-1.7.0-all.jar -o plugin/mongo-kafka-connect-1.7.0-all.jar

Edit config/connect-standalone.properties and update the plugin.path to point to the downloaded JAR file.

plugin.path=/home/ubuntu/kafka_2.13-3.2.0/libs/mongo-kafka-connect-1.7.0-all.jar

Create Configuration Properties

In the /config folder, create a file named MongoSinkConnector.properties.

name=mongo-sink
topics=quickstart.sampleData
connector.class=com.mongodb.kafka.connect.MongoSinkConnector

Message Types

key.converter=org.apache.kafka.connect.json.JsonConverter
key.converter.schemas.enable=false
value.converter=org.apache.kafka.connect.json.JsonConverter
value.converter.schemas.enable=false

Specific MongoDB Sink Connector Configuration

connection.url=mongodb://localhost:27017
database=quickstart
collection=topicData
change.data.capture.handler=com.mongodb.kafka.connect.sink.cdc.mongodb.ChangeStreamHandler

In the /config folder, create a file named MongoSourceConnector.properties.

name=mongo-source
connector.class=com.mongodb.kafka.connect.MongoSourceConnector

Connection and Source Configuration

connection.uri=mongodb://localhost:27017
database=quickstart
collection=sampleData

Install MongoDB

Import the MongoDB public GPG Key by running the following command:

wget -qO - https://www.mongodb.org/static/pgp/server-5.0.asc | sudo apt-key add -

Create the MongoDB Source List

echo "deb [ arch=amd64,arm64 ] https://repo.mongodb.org/apt/ubuntu focal/mongodb-org/5.0 multiverse" | sudo tee /etc/apt/sources.list.d/mongodb-org-5.0.list

Update the Local Package Database

sudo apt-get update

Install MongoDB Packages

sudo apt-get install -y mongodb-org

If you encounter any errors related to unmet dependencies, fix them with the following commands:

echo "deb http://security.ubuntu.com/ubuntu impish-security main" | sudo tee /etc/apt/sources.list.d/impish-security.list
sudo apt-get update
sudo apt-get install libssl1.1

Verify MongoDB Status

Check that MongoDB has started successfully:

sudo systemctl status mongod

If it's inactive and needs to restart, run:

sudo systemctl restart mongod

Start Kafka Connect

To start Kafka Connect, execute the following command:

bin/connect-standalone.sh config/connect-standalone.properties config/MongoSourceConnector.properties config/MongoSinkConnector.properties

Write Data to the Topic

Run the console producer client to write a few events into your topic. Each line you enter will result in a separate event being written to the topic.

$ bin/kafka-console-producer.sh --topic connect-test --bootstrap-server localhost:9092
This is my first event
This is my second event

Send Document Contents Through Your Connectors

To send the contents of a document through your connectors, insert a document into the MongoDB collection from which your source connector reads data. Use the following MongoDB shell commands:

use quickstart
db.sampleData.insertOne({"hello":"world"})

After inserting the document, verify that your connectors have processed the change by checking the topicData collection.

db.topicData.find()

You should see output similar to the following:

[
  {
    "_id": ObjectId(...),
    "hello": "world",
    "travel": "MongoDB Kafka Connector"
  }
]

Reference

For more information, visit the MongoDB Kafka Connector documentation.

MongoDB Kafka Connector

Welcome back to another episode of "Continuous Improvement." I'm your host, Victor, and today we're going to dive into the world of Apache Kafka and its integration with MongoDB.

Apache Kafka is an open-source publish/subscribe messaging system that allows seamless communication between different data sources. One component of Kafka, known as Kafka Connect, provides a solution for connecting Kafka with various datastores, including MongoDB. In today's episode, we'll focus on using MongoDB as a data lake and explore the MongoDB Kafka sink connector.

But before we get into that, let's start by setting up our Kafka environment. First, you'll need to download the latest Kafka version from the official Apache Kafka website. Once downloaded, extract the files and navigate to the Kafka directory.

To start our Kafka environment, we need to run the ZooKeeper service. Open a terminal window, navigate to the Kafka directory, and execute the following command:

bin/zookeeper-server-start.sh config/zookeeper.properties

Now that the ZooKeeper service is up and running, let's start the Kafka broker service. Open another terminal window, navigate to the Kafka directory, and execute the following command:

bin/kafka-server-start.sh config/server.properties

Excellent! We now have a basic Kafka environment up and running. Now let's install the MongoDB Kafka sink connector, which allows us to write data from Kafka to MongoDB.

First, let's download the required JAR file for the MongoDB Kafka Connector. Visit the official MongoDB Kafka Connector repository and download the JAR file. Once downloaded, navigate to the /libs directory within your Kafka installation.

Now, let's update the config/connect-standalone.properties file to include the plugin's path. Open the file, scroll to the bottom, and update the plugin.path property to point to the downloaded JAR file.

With the plugin installed, it's time to create the configuration properties for our MongoDB sink connector. In the /config folder, create a file named MongoSinkConnector.properties. This file will contain the necessary properties for our MongoDB sink connector to function.

Now, let's add the required properties for the message types. We'll use the JSON converter for both the key and value and disable schemas.

Onto the specific MongoDB sink connector configuration. Here, we define the connection URL, the database we want to write to, the collection within the database, and the change data capture handler.

Great! Now let's create another configuration file for the MongoDB source connector. Create a file in the /config folder named MongoSourceConnector.properties. This file will contain the necessary properties for our MongoDB source connector.

In the MongoSourceConnector.properties file, we need to specify the connection URI of our MongoDB instance, the database we'll be reading from, and the collection within that database.

Now that we have our Kafka environment set up and the MongoDB Kafka connectors configured, it's time to install MongoDB itself. We'll go through the installation steps quickly, but keep in mind that you may need to adjust some commands based on your operating system.

First, we'll need to download the MongoDB public GPG key and add it to our system. This step ensures the authenticity of the MongoDB packages.

Next, we create the MongoDB source list, which specifies the MongoDB packages' download location.

After updating the package database with the MongoDB source list, we can finally install the MongoDB packages.

In case you encounter any errors related to unmet dependencies during the installation, we provided some commands to address those issues.

Finally, let's verify the status of our MongoDB installation to ensure everything is running smoothly. Simply run the command and check the output to see if MongoDB has started successfully.

Perfect! Now that we have our Kafka environment set up, the MongoDB Kafka connectors configured, and MongoDB installed, we're ready to start the Kafka Connect service.

To start Kafka Connect, open a terminal window, navigate to the Kafka directory, and execute the following command:

bin/connect-standalone.sh config/connect-standalone.properties config/MongoSourceConnector.properties config/MongoSinkConnector.properties

With Kafka Connect up and running, let's write some data to our Kafka topic. Open a new terminal window, navigate to the Kafka directory, and execute the command provided.

Fantastic! We've successfully written data to our Kafka topic. Now, let's ensure that our MongoDB sink connector is properly processing the data and writing it to the MongoDB collection.

To verify this, we'll insert a document into the MongoDB collection from which our source connector reads data. Execute the MongoDB shell commands provided, and the document will be inserted.

Finally, let's check the topicData collection in MongoDB to confirm that our connectors have successfully processed the change.

Congratulations! You've successfully integrated Apache Kafka with MongoDB, allowing seamless data transfer between the two systems. For more information and further details, visit the MongoDB Kafka Connector documentation linked in the show notes.

That's it for today's episode of "Continuous Improvement." I hope you found this exploration of Apache Kafka and MongoDB valuable. Stay tuned for more episodes where we uncover the best practices and tools for continuous improvement in the tech world. Until then, keep improving!

MongoDB Kafka 連接器

Apache Kafka 是一種開源的發布/訂閱消息系統。Kafka Connect，Apache Kafka的一個元件，面對將Apache Kafka與各種數據存儲連接的挑戰，包括 MongoDB。Kafka Connect 提供：

• 傳輸數據到數據存儲的容錯運行時
• Apache Kafka社區共享連接 Apache Kafka 到不同數據存儲解決方案的框架

在這篇文章中，我們將重點介紹如何將 MongoDB 作為數據湖。 MongoDB Kafka 接收連接器是從 Apache Kafka 讀取數據並將其寫入 MongoDB 的 Kafka Connect 連接器。官方的 MongoDB Kafka 連接器可以在這裏找到。

開始 Kafka 環境

從這裡下載最新版的 Kafka。

curl https://dlcdn.apache.org/kafka/3.2.0/kafka_2.13-3.2.0.tgz -o kafka_2.13-3.2.0.tgz
tar -xzf kafka_2.13-3.2.0.tgz
cd kafka_2.13-3.2.0

按照正確的順序運行以下命令來開始所有的服務。首先開始 ZooKeeper 服務。

bin/zookeeper-server-start.sh config/zookeeper.properties

在另一個終端會話中，開始 Kafka 代理服務：

bin/kafka-server-start.sh config/server.properties

所有服務成功啟動後，您將會擁有一個運行中的 Kafka 基礎環境。

安裝插件

從這裡下載 JAR 文件，並導航至 /libs 目錄。

curl -L https://search.maven.org/remotecontent?filepath=org/mongodb/kafka/mongo-kafka-connect/1.7.0/mongo-kafka-connect-1.7.0-all.jar -o plugin/mongo-kafka-connect-1.7.0-all.jar

編輯 config/connect-standalone.properties，並將 plugin.path 指向下載的 JAR 文件。

plugin.path=/home/ubuntu/kafka_2.13-3.2.0/libs/mongo-kafka-connect-1.7.0-all.jar

創建配置屬性

在 /config 文件夾中，創建一個名為 MongoSinkConnector.properties 的文件。

name=mongo-sink
topics=quickstart.sampleData
connector.class=com.mongodb.kafka.connect.MongoSinkConnector

消息類型

key.converter=org.apache.kafka.connect.json.JsonConverter
key.converter.schemas.enable=false
value.converter=org.apache.kafka.connect.json.JsonConverter
value.converter.schemas.enable=false

關於 MongoDB Sink 連接器的具體配置

connection.url=mongodb://localhost:27017
database=quickstart
collection=topicData
change.data.capture.handler=com.mongodb.kafka.connect.sink.cdc.mongodb.ChangeStreamHandler

在 /config 文件夾中，創建一個名為 MongoSourceConnector.properties 的文件。

name=mongo-source
connector.class=com.mongodb.kafka.connect.MongoSourceConnector

連接和源配置

connection.uri=mongodb://localhost:27017
database=quickstart
collection=sampleData

安裝 MongoDB

運行以下命令導入 MongoDB 的公開 GPG 鑰匙：

wget -qO - https://www.mongodb.org/static/pgp/server-5.0.asc | sudo apt-key add -

創建 MongoDB 源列表

echo "deb [ arch=amd64,arm64 ] https://repo.mongodb.org/apt/ubuntu focal/mongodb-org/5.0 multiverse" | sudo tee /etc/apt/sources.list.d/mongodb-org-5.0.list

更新本地軟件包數據庫

sudo apt-get update

安裝 MongoDB 套件

sudo apt-get install -y mongodb-org

如果遇到任何與未滿足的依賴項相關的錯誤，使用以下命令修復它們：

echo "deb http://security.ubuntu.com/ubuntu impish-security main" | sudo tee /etc/apt/sources.list.d/impish-security.list
sudo apt-get update
sudo apt-get install libssl1.1

驗證 MongoDB 狀態

檢查 MongoDB 是否已成功啟動：

sudo systemctl status mongod

如果它是非活動的並需要重新啟動，運行：

sudo systemctl restart mongod

開始 Kafka Connect

要開始 Kafka Connect，執行以下命令：

bin/connect-standalone.sh config/connect-standalone.properties config/MongoSourceConnector.properties config/MongoSinkConnector.properties

將數據寫入 Topic

運行控制台生產者客戶端以將幾個事件寫入您的 Topic。您輸入的每行將導致一個單獨的事件被寫入 Topic。

$ bin/kafka-console-producer.sh --topic connect-test --bootstrap-server localhost:9092
This is my first event
This is my second event

通過您的連接器發送文件內容

要將文檔的內容通過您的連接器發送，插入一個文檔到您的源連接器從中讀取數據的 MongoDB 集合。使用以下 MongoDB shell 命令：

use quickstart
db.sampleData.insertOne({"hello":"world"})

插入文檔後，通過檢查 topicData 集合來驗證您的連接器是否已將變更處理。

db.topicData.find()

您應該會看到以下類似的輸出：

[
  {
    "_id": ObjectId(...),
    "hello": "world",
    "travel": "MongoDB Kafka Connector"
  }
]

參考

欲了解更多訊息，請參觀 MongoDB Kafka 連接器文檔。

FinTech Security and Regulation Suggestions

I'd like to offer suggestions for how authorities should handle the application of Virtual Banking in Singapore's financial industry. Given the highly regulated nature of banking, the relationship between Virtual Banking innovation and regulation is often tense. There is a universal understanding that regulatory organizations are necessary to mitigate the risks and unanticipated consequences associated with new business models and financial products. My advice to regulators is to keep pace with the rapid changes in the fintech industry.

Virtual banks have posed new questions for the supervisory organizations that regulate how market players operate. This has led authorities to carefully assess the risks associated with emerging technologies in the financial services industry. While cloud technologies offer unprecedented potential, they also present new risks.

Four major motivations for regulation should be considered: uncertainty, resource conflict, disruption and unforeseen events, and public benefit. The adoption of cloud technologies will fundamentally change how the financial system operates, necessitating safeguards to prevent system collapse due to unforeseen events.

More specifically, precautions should be taken to protect virtual banking consumers from the drawbacks of a completely market-driven system. Monitoring within the fintech sector offers numerous benefits, but implementing effective regulation presents significant challenges.

Many market players may view regulation skeptically, believing it could hinder their prospects or operations. Therefore, implementing insightful regulation for the fintech industry won't be straightforward. Regulatory authorities could consider three approaches to fintech innovation:

1. Rule-Based System: The regulatory authority sets strict rules and processes that market participants must adhere to.

2. Principles-Based System: The regulatory body provides principles to guide market players, allowing them some freedom in achieving their regulatory responsibilities.

3. Performance-Based System: The regulatory body sets specific benchmarks for market participants to meet or exceed.

These approaches could help Singapore's fintech industry flourish. Careful regulation cultivates an ideal environment for innovation, building trust and fostering the widespread acceptance of new consumer goods and services. The Monetary Authority of Singapore (MAS) aims to make Singapore an "experimental center" for fintech innovation, in line with its long-term goal to attract fintech innovators to the Asia-Pacific region.

In an ideal world, one wouldn't have to choose between innovation and regulation. Virtual banks can leverage innovative technologies to streamline regulatory compliance. The burgeoning regulatory technology (reg-tech) industry offers software solutions that help regulators perform their duties more efficiently.

With shifts in the regulatory landscape, both existing and future virtual banks need to prepare for changes in daily regulatory operations. Establishing an open, respectful working relationship between policymakers and stakeholders in the fintech field will be critical for the effective adoption of virtual banking.

In July 2016, the MAS amended its Guidelines on Outsourcing for Financial Institutions (FIs) to acknowledge that FIs could benefit from cloud services. These guidelines require FIs to conduct due diligence and employ robust governance and risk management processes when using cloud services.

Cloud security environments should be regularly reviewed, and services should comply with various industry certifications. For example, ISO 27001 outlines best practices for security management, while ISO 27017 and ISO 27018 provide cloud-specific security recommendations. Additionally, MTCS Level 3 and PCI DSS Level 1 offer further security standards specific to Singapore and payment card industries, respectively.

By combining governance-focused, audit-friendly features with certifications and audit standards, regulators can ensure a secure control environment for cloud providers.

The MAS Guidelines provide recommendations for risk management techniques, including due diligence and risk assessment for cloud services. Financial institutions are expected to follow these guidelines and report their compliance to MAS annually or upon request.

The MAS Technology Risk Management (TRM) Guidelines and the Association of Banks in Singapore (ABS) Cloud Computing Implementation Guide provide additional guidance on risk management, governance, and controls for cloud outsourcing.

In conclusion, each virtual bank's path to cloud adoption is unique. Virtual banks need to understand their current state, desired state, and the steps required to transition from one to the other for successful cloud implementation. This understanding will assist virtual banks in setting goals and developing workstreams for successful cloud migration.

FinTech Security and Regulation Suggestions

Welcome to Continuous Improvement, the podcast where we explore strategies and insights for enhancing various industries through continuous improvement. I'm your host, Victor, and today we'll be diving into the fascinating world of Virtual Banking in Singapore's financial industry.

Virtual banking has undoubtedly reshaped the way we think about financial services. However, with innovation comes the need for effective regulation to manage risks and ensure the smooth functioning of the market. In today's episode, we'll be discussing the delicate balance between Virtual Banking innovation and regulation, and I'll be sharing some valuable advice for regulators in Singapore.

But before we dive in, let's understand the motivations behind regulation in the fintech industry. Uncertainty, resource conflict, disruption, and unforeseen events are some of the key drivers that lead regulators to assess the risks associated with emerging technologies.

Now, the adoption of cloud technologies has certainly revolutionized the financial system, offering unprecedented potential. However, it also brings new risks that require safeguards to prevent system collapse. This is where insightful regulation plays a crucial role.

When it comes to regulating the fintech industry, regulators can consider three approaches: rule-based, principles-based, and performance-based systems.

In a rule-based system, strict rules and processes are set by the regulatory authority, leaving little room for interpretation. On the other hand, a principles-based system provides guiding principles for market players, allowing them some freedom in achieving their regulatory responsibilities. Lastly, a performance-based system sets specific benchmarks for market participants to meet or exceed.

Now, each approach has its own benefits and challenges, but finding the right balance is vital for Singapore's fintech industry to thrive.

The Monetary Authority of Singapore, also known as MAS, aims to position Singapore as an experimental center for fintech innovation. Their long-term goal is to attract fintech innovators to the Asia-Pacific region. To achieve this, MAS has embraced the use of regulatory technology, or reg-tech, to streamline compliance processes and foster a conducive environment for innovation.

But what about virtual banks themselves? How can they navigate the evolving regulatory landscape? It all starts with establishing an open and respectful relationship between policymakers and stakeholders in the fintech field.

MAS has already taken steps to address this by amending its Guidelines on Outsourcing for Financial Institutions. These guidelines acknowledge that virtual banks can benefit from cloud services. However, they also require due diligence, robust governance, and risk management processes to be in place when utilizing cloud services.

Cloud security is of utmost importance, and regular reviews of cloud security environments should be conducted. Compliance with industry certifications such as ISO 27001, ISO 27017, ISO 27018, MTCS Level 3, and PCI DSS Level 1 ensures the highest level of security standards.

Additionally, MAS provides guidance on risk management techniques and expects financial institutions to comply with these guidelines and report their compliance accordingly.

In conclusion, successful cloud implementation for virtual banks requires a deep understanding of their current and desired states. Proper goal-setting and the development of workstreams specific to cloud migration are crucial.

By embracing innovation while maintaining effective regulation, Singapore can become a hub for virtual banking and secure its position as a fintech powerhouse in the Asia-Pacific region.

That's all for today's episode of Continuous Improvement. I hope you gained valuable insights into the relationship between Virtual Banking and regulation in Singapore's financial industry. Stay tuned for future episodes where we explore more strategies for enhancing various industries through continuous improvement.

Thank you for listening, and until next time, I'm Victor signing off.

金融科技安全與監管建議

我想提供建議，指導當局如何處理新加坡金融業的虛擬銀行應用。由於銀行業高度監管的性質，虛擬銀行創新與監管之間的關係經常處於緊張狀態。大家普遍認同，監管機構是必要的，可以減少與新的商業模式和金融產品相關的風險和未預見的後果。我建議監管機構與金融科技行業的快速變化保持步調。

虛擬銀行給監管市場參與者運營方式的監管機構帶來了新的問題。這使得監管機構必須仔細評估金融服務行業新興技術帶來的風險。雖然雲技術提供了前所未有的可能性，但也帶來了新的風險。

應考慮四大監管的動機：不確定性，資源衝突，破壞性和未預見的事件，以及公眾利益。採用雲技術將徹底改變金融系統的運營方式，需要采取保護措施防止因未預見的事件導致的系統崩潰。

更具體地說，應該採取預防性措施，保護虛擬銀行消費者免受完全市場驅動系統的弊端。在金融科技部門內進行監控有許多好處，但實施有效的監管仍然面臨重大挑戰。

許多市場參與者可能對監管持懷疑態度，認為這可能阻礙他們的前景或運營。因此，為金融科技行業實施具有洞察力的監管並不會一帆風順。監管機構可以考慮三種對金融科技創新的方法：

1. 基於規則的系統：監管機構設定嚴格的規則和程序，市場參與者必須遵守。

2. 基於原則的系統：監管機構提供指導市場參與者的原則，允許他們在履行其監管責任時有一定的自由。

3. 基於績效的系統：監管機構為市場參與者設定特定的標準，市場參與者需要達到或超越這些標準。

這些方法可以幫助新加坡金融科技行業蓬勃發展。謹慎的監管培育了創新的理想環境，建立信任和促進新的消費品和服務的普及接受。新加坡金融管理局（MAS）的目標是使新加坡成為金融科技創新的“實驗中心”，符合其長期吸引亞太地區金融科技創新者的目標。

在理想狀態下，人們不必在創新和監管之間做出選擇。虛擬銀行可以利用創新技術來簡化監管合規。新興的監管科技（reg-tech）行業提供軟件解決方案，幫助監管機構更高效地行使職責。

隨著監管風景的變化，現有和未來的虛擬銀行需要為日常監管業務的變更做好準備。在政策制定者和金融科技領域的相關人士之間建立開放，尊重的工作關係對於有效採用虛擬銀行至關重要。

在2016年7月，MAS修改了其對金融機構（FI）外包的指導方針，以認識到金融機構可能從雲服務中受益。這些指導方針要求金融機構在使用雲服務時進行盡職調查並實施強健的管治和風險管理流程。

雲安全環境應定期審查，服務應遵從多種行業認證。例如，ISO 27001概述了安全管理的最佳實踐，而ISO 27017和ISO 27018提供了針對雲的具體安全建議。此外，MTCS Level 3和PCI DSS Level 1為新加坡和支付卡行業提供了更進一步的安全標準。

通過將以治理為中心，適合審核的功能與認證和審核標準結合，監管機構可以確保雲供應商的安全控制環境。

MAS指導方針提供了風險管理技巧的建議，包括對雲服務的盡職調查和風險評估。預計金融機構將遵循這些指導方針，並每年或按要求向MAS報告其合規情況。

MAS的技術風險管理（TRM）指導方針和新加坡銀行協會（ABS）雲計算實施指南為雲外包的風險管理，管治和控制提供了額外的指導。

總的來說，每家虛擬銀行走向雲技術的道路都是獨特的。虛擬銀行需要理解他們的現狀，期望狀態，以及從一種狀態過渡到另一種狀態所需的步驟，以便成功實施雲技術。這種理解將幫助虛擬銀行設定目標並開發工作流程，以實現成功的雲遷移。

FinTech Security and Regulation

As a FinTech consultant, I am conducting a study on the security and regulation of virtual banking in the US financial sector. The federal and state governments in the United States have various agencies that regulate and oversee financial markets and businesses. Each of these agencies has a distinct set of tasks and responsibilities, allowing them to operate independently while pursuing similar objectives.

The United States operates under a "dual banking system," meaning that banks can be chartered by either one of the 50 states or by the federal government. Regardless of who charters the bank, it will have at least one federal supervisor. Below is a list of US banking regulations that virtual banks must adhere to.

Firstly, the Gramm-Leach-Bliley Act (GLBA) mandates that financial institutions—companies providing financial products or services like loans, financial or investment advice, or insurance—inform their customers about their information-sharing practices and protect sensitive data.

The principal data protection elements of the GLBA are outlined in the Safeguards Rule. The FTC's Privacy of Consumer Financial Information Rule (Privacy Rule) supplements the GLBA by providing additional privacy and security requirements. The GLBA is enforced by the FTC, federal banking agencies, other federal regulatory bodies, and state insurance oversight agencies.

For instance, the Safeguards Rule (16 CFR 314) requires financial institutions under FTC jurisdiction to have safeguards for protecting client information. Companies subject to this rule must ensure that their affiliates and service providers maintain customer data securely and implement their own protective measures.

Additionally, the Financial Privacy Rule (16 CFR Part 313) requires financial institutions to issue specific notices and adhere to certain limitations on the dissemination of nonpublic personal information. Unless an exception applies, financial institutions must inform both affiliated and non-affiliated third parties about their privacy policies and practices and allow consumers to opt out of sharing their nonpublic personal information with nonaffiliated third parties.

Secondly, the California Consumer Privacy Act of 2018 (CCPA) grants consumers more control over personal data collected by organizations. California consumers now have new privacy rights, including the right to know what personal information a business collects and how it is used and shared; the right to request the deletion of collected personal information (with some exceptions); the right to opt out of the sale of their personal information; and the right to non-discriminatory treatment for exercising their CCPA rights.

In November 2020, Californians voted to enact the California Privacy Rights Act (CPRA), which significantly expands existing privacy rules and will take effect on January 1, 2023. It's worth noting that the current "business-to-business" and "HR" exceptions will expire on the same date, making the full range of CPRA standards applicable to these types of personal information, which are currently largely exempt from the CCPA.

Thirdly, the NYDFS Cybersecurity Regulation (23 NYCRR 500) imposes strict cybersecurity standards on financial institutions in New York. Under this regulation, entities like banks, mortgage companies, and insurance providers must implement comprehensive cybersecurity plans and policies and maintain ongoing reporting systems for cybersecurity events.

Fourthly, the Information Technology Examination Handbook's "Outsourcing Technology Services Booklet" offers guidelines to help examiners and bankers evaluate the risk management processes involved in establishing, managing, and monitoring IT outsourcing relationships. Federal financial regulators have the authority to oversee all activities and records of a financial institution, whether performed by the institution itself or by a third party.

Fifthly, another section of the Information Technology Examination Handbook, the "Information Security" booklet, provides guidance on assessing the level of security risks to a financial institution's information systems. It encourages institutions to maintain robust information security programs that are supported by board and senior management, integrated into business processes, and clearly accountable for security tasks.

Sixthly, the Consumer Financial Protection Bureau (CFPB) has issued guidelines for its Information Technology Examination Procedures under Compliance Management Review. While institutions can outsource operational aspects of a product or service, they cannot delegate the responsibility for ensuring compliance with federal consumer financial regulations or managing the risks associated with service provider agreements.

In summary, virtual banks operating in the United States must comply with all the aforementioned regulations. This involves interpreting the rules, clarifying them, and preparing the necessary documentation. To achieve compliance, virtual banks will need to thoroughly analyze these requirements and take the appropriate steps to meet them.

Some of the key bank regulations in the United States include the following:

1. Regulation B: This regulation aims to prevent discrimination in the credit application process. It outlines the procedures lenders must follow when obtaining and processing credit information. Under this regulation, lenders are prohibited from discriminating based on age, gender, race, nationality, or marital status.

2. Community Reinvestment Act of 1977 via Rule BB: This Federal Reserve regulation encourages banks to lend to low- and moderate-income borrowers. It also requires institutions to disclose the communities they intend to serve and the types of credit they are willing to offer there.

3. Home Mortgage Disclosure Act of 1975 via Regulation C: This regulation mandates that many financial institutions annually provide loan data about the communities to which they have offered residential mortgages.

4. Regulation CC: This rule requires depository institutions to make funds available within specified time periods and inform customers about their funds' availability practices. It also includes measures to expedite the collection and return of unpaid checks.

5. Regulation D: This regulation imposes reserve requirements on certain deposits and other liabilities of depository institutions for monetary policy purposes.

6. Regulation DD: Financial institutions are obligated to inform customers about annual percentage yields, interest rates, minimum balance requirements, account opening disclosures, and fee schedules. This regulation applies to personal accounts, not corporate or organizational accounts.

7. Regulation E: This regulation establishes standards for electronic funds transfers, specifying the responsibilities of both consumers and financial institutions. It covers actions consumers must take to report issues and the steps banks must follow to offer remedies.

8. Regulation H: This rule requires member banks to implement security measures against specific offenses, as outlined by the Bank Protection Act. Member banks are also required to report suspicious activities under this regulation.

9. Servicemembers Civil Relief Act (SCRA): This federal law protects military personnel as they prepare to enter active service, covering a range of topics such as rental agreements, evictions, and interest rates on various forms of credit.

10. Bank Secrecy Act (BSA): Also known as the Currency and Foreign Transactions Reporting Act, this regulation mandates that financial institutions report certain cash transactions exceeding $10,000.

11. Unlawful Gambling Enforcement Act (UIGEA/Regulation GG): This regulation prohibits transactions related to illegal internet gambling.

12. Regulation M: Known as Subchapter M, this IRS regulation allows investment companies to pass on capital gains, dividends, and interest to individual investors without double taxation.

13. Regulation O: This rule limits the credit extensions that a member bank can offer to its executive officers, major shareholders, and directors.

14. Regulation T: This regulation governs investor cash accounts and the credit that brokerages may extend for the purchase of securities.

15. Regulation U: This regulation restricts the leverage that can be used in buying securities with loans secured by those securities.

16. Regulation V: This rule requires all entities that provide information to consumer reporting agencies to ensure the information is accurate.

17. Regulation W: This Federal Reserve regulation restricts certain transactions between banks and their affiliates.

18. Regulation X: This sets credit limits for foreign individuals or organizations purchasing U.S. Treasury securities.

19. Regulation Y: This governs the conduct of corporate bank holding companies and some state-member banks.

20. Regulation Z: Also known as the Truth in Lending Act, this regulation aims to ensure that loan terms are communicated clearly, enabling consumers to easily compare credit arrangements.

In conclusion, the above overview outlines the U.S. banking authorities and regulations that virtual banks must comply with.

FinTech Security and Regulation

Welcome back to Continuous Improvement, the podcast where we explore the world of finance, technology, and innovation. I'm your host, Victor, and in today's episode, we're diving into the fascinating world of virtual banking regulations in the United States.

As a FinTech consultant, I've been studying the security and regulation landscape in the US financial sector, specifically in relation to virtual banking. The US operates under a unique "dual banking system," which means banks can be chartered by either one of the 50 states or by the federal government. But regardless of who charters the bank, there are regulations that virtual banks must adhere to.

Let's start with the Gramm-Leach-Bliley Act, commonly known as the GLBA. This act mandates that financial institutions inform their customers about their information-sharing practices and protect sensitive data. The GLBA is enforced by the Federal Trade Commission (FTC), federal banking agencies, other regulatory bodies, and state insurance oversight agencies.

Under the GLBA, financial institutions must have safeguards in place to protect client information. These safeguards extend to their affiliates and service providers as well. Additionally, financial institutions must issue specific notices and adhere to limitations on the dissemination of nonpublic personal information.

Now, let's move to the California Consumer Privacy Act, or CCPA. This act grants consumers more control over their personal data collected by organizations. It provides rights such as knowing what data is collected and how it is used, requesting the deletion of personal information, opting out of the sale of personal information, and non-discriminatory treatment.

California voters also approved the California Privacy Rights Act, or CPRA, which expands existing privacy rules further. However, some exemptions will expire on January 1, 2023, making the full range of CPRA standards applicable.

Moving on, the NYDFS Cybersecurity Regulation imposes strict cybersecurity standards on financial institutions in New York. Banks, mortgage companies, and insurance providers must implement comprehensive cybersecurity plans and maintain reporting systems for cybersecurity events.

When it comes to outsourcing technology services, there are guidelines outlined in the Information Technology Examination Handbook. Financial regulators have the authority to oversee all activities and records, ensuring compliance with federal consumer financial regulations.

And let's not forget the Consumer Financial Protection Bureau, which has its own guidelines for information technology examination procedures. While aspects of a product or service can be outsourced, the responsibility for compliance with regulations cannot be delegated.

To summarize, virtual banks operating in the US must comply with various regulations related to data protection, privacy, cybersecurity, and financial operations. This includes the Gramm-Leach-Bliley Act, the California Consumer Privacy Act, NYDFS Cybersecurity Regulation, outsourcing guidelines from the Information Technology Examination Handbook, and more.

Understanding and adhering to these regulations is crucial for virtual banks to protect their customers' information, maintain compliance, and build trust in the financial sector.

That's it for today's episode of Continuous Improvement. I hope you found this overview of virtual banking regulations in the US insightful. Stay tuned for more episodes where we explore the latest trends, challenges, and innovations in the world of finance and technology.

As always, I'm your host Victor, and thank you for listening to Continuous Improvement.