ChatGPT could play a key role in several areas of finance. Guillaume/Getty Images
Experts have predicted ChatGPT’s impact on a variety of industries, and it appears Wall Street will be no exception..OpenAI’s ChatGPT has been the subject of public fascination recently. Microsoft poured $10 billion into the startup during its most recent round at the end of January, which reportedly valued the startup at $29 billion.
It’s still early days — ChatGPT was released to the public in late November — but experts already expect ChatGPT and its underlying tech to be utilized as a productivity-enhancing tool in finance. “It’s going to automate select tasks that knowledge workers are engaged in today so that they can focus on higher-value tasks,” Dylan Roberts, partner and principal at KPMG, told Insider.
ChatGPT has the capacity eventually to replace humans in certain roles, according to some, but the realization rests in the customers’ hands. “Technology will be able to do it. The question is, do customers accept it or not?” Peter-Jan Van de Venn, vice president of global digital banking at consulting firm Mobiquity, told Insider.
However, ChatGPT does have at least one issue specific to its application to finance. The product is “black-boxed,” according to Charles Hearn, the chief technology officer at fintech Alloy, meaning the AI can present answers without being able to trace how it got to those answers. That process can make it difficult to meet some regulatory requirements in financial services.
Others are skeptical of ChatGPT’s ability to revolutionize industries and doubt the likelihood that it is the end-all be-all for white-collar workers. One Princeton professor even called the chatbot a “bullshit generator,” The Markup reported. But Dev Patnaik, CEO of strategy and innovation firm Jump Associates, said dismissing tools like ChatGPT so quickly is a mistake.
“You are using all of your brain power to stack up reasons of why the future is not going to happen rather than think and reason about what you’re going to do about it when it does,” Patnaik told Insider. But while you mull on whether or not to pay attention to ChatGPT on Wall Street, some are already putting the tech to work. At Sweden private-equity giant EQT, ChatGPT is enhancing the firm’s 7-year-old AI platform it built itself, according to Alexandra Lutz, who heads up EQT’s AI-powered Motherbrain.
But while you mull on whether or not to pay attention to ChatGPT on Wall Street, some are already putting the tech to work. At Sweden private-equity giant EQT, ChatGPT is enhancing the firm’s 7-year-old AI platform it built itself, according to Alexandra Lutz, who heads up EQT’s AI-powered Motherbrain.Continue reading..
The exponential growth in e-commerce and the impact of the pandemic have fuelled the rise of ‘Buy Now Pay Later’ (BNPL), making it one of the biggest retail trends in 2021. This is set to continue in 2022, with new players entering the market and new partnerships and acquisitions being established. BNPL has largely been driven by consumer appeal, easy availability and the promise of no interest and no fees – if payments are made on time.
It is popular across all demographics for different reasons but has especially gained traction among millennials and Gen Z consumers as a means of financial empowerment. For consumers, it provides an easily accessible method of borrowing, instant gratification, a flexible returns policy and the ability to manage finances by spreading the cost of purchases over an agreed period.
For retailers, it reduces basket abandonment, increases sales and adds stickiness, without any risk. BNPL providers pay merchants up front and issue loans to consumers while bearing all the credit risks and administration costs of running the loan programme. They typically charge the retailer a fee of around 2-7% of the transaction plus a fixed fee, depending on their business model.
If managed correctly, BNPL offerings can be a convenient and cheap way of accessing credit, but late or missed payments can lead to late fees, blocked accounts, bad debt and even impact credit ratings. BNPL company Laybuy revealed that in a six-month period in 2021, almost half their revenue came from late fees. This is revenue gained from people’s inability to pay, and there is growing concern that BNPL practices are leading to financial hardship and debt accumulation in an industry where oversight is needed to protect consumers.
THE GROWTH OF BUY NOW PAY LATER
Research and Markets’ Global Buy Now Pay Later Market Report 2021 forecasts that BNPL spend will grow by 22.4% from 2021 to 2028, reaching over $20 billion by 2028. In the UK, an FCA survey found that the total value of BNPL transactions in 2020 was £2.7 billion and is expected to grow rapidly by 2024. According to UK consumer protection charity Citizens Advice, 45% of people aged 18 to 34 and 31% of those aged 35 to 54 have used BNPL to make purchases in the last year. And the BBC estimates that approximately 15 million adults in the UK are actively using BNPL, an increase of more than 2 million in 2021.
Looking at BNPL provider data, Afterpay found that retailers using their service had a 50 to 200% increase in basket size. Klarna and Affirm reported a 58% and 87% increase in average orders, respectively. Equifax estimates that BNPL users spend 51% more on clothes each month than online shoppers who pay up front. PayPal launched its BNPL service in October 2020 and in one year has processed over £2.5 billion in payments globally.
The data paints a powerful picture. Unprecedented times caused by the COVID-19 pandemic led to the explosive growth of BNPL at a time when many people were experiencing financial uncertainty and needed an easily accessible form of credit.
THE PROBLEMS FOR CONSUMERS
Because the market is currently unregulated, BNPL providers are not obligated to perform full affordability checks on consumers, and users can accumulate debt across multiple lenders. In many cases, users see this as a technology innovation and don’t realise they are taking out a credit agreement and could be referred to debt collectors if payments are missed. Citizens Advice reported that consumers were charged £39 million in late fees over a one-year period. Of those who were referred to a debt collector for missed payments, 96% said there had been negative consequences.
These statistics justify the concern that many consumers are spending more than they can afford on non-essential purchases while unable to pay essential bills, causing spiralling consumer debt. The voices calling for tighter controls and market regulation are getting louder.
THE REGULATORY GAVEL
As concerns about consumer debt increases, the UK Financial Conduct Authority (FCA) commissioned a review, led by Christopher Woolard, which found that “BNPL represents significant potential consumer harm”, such as its promotion to consumers, poor consumer understanding of the product, lack of affordability assessments and inconsistent treatment of customers in financial difficulty. The Woolard Review recommended that the industry be regulated to ensure better protection for users, and the FCA is currently undergoing a consultation process to define the regulation framework.
FCA regulation will protect consumers and position BNPL as a sustainable product with more transparency and greater checks for credit risk and affordability, bringing it on par with other credit products, such as credit cards. It will ensure that people are treated fairly and provided with clear information to ensure they can make informed choices about whether they want to use the product. As a credit product, BNPL should be appropriately regulated to protect all users.
Many countries, including the UK, the European Union, the USA, Australia and New Zealand, have raised concerns about consumer debt and are actively looking into passing new regulations for BNPL. I predict that as more data becomes available and the debt crisis rears its ugly head, more countries will follow suit.THE CHANGING FACE OF BNPL
As the market becomes increasingly saturated with major banks, payment schemes and new entrants competing for market share, BNPL growth is extending across markets to banking, luxury retail, travel, hospitality, insurance, trading, healthcare, and the list is growing. Many global retailers are building their own in-house solutions with the aim of protecting their customer base and better controlling the services they provide.
Others are forming partnerships or making acquisitions to build out their own services, such as Amazon’s partnership with Affirm and Square’s acquisition of AfterPay. As competition heats up and the market expands, it becomes even more critical that the industry is regulated and brought in line with other credit products.
Will regulation burst this expanding bubble? Time will tell, but it seems safe to say that it won’t! During the pandemic, BNPL enabled significant strides towards financial inclusion, and its impact should not be underestimated. Yes, regulation will curb over-spending as stronger credit risk and affordability checks are implemented, but consumers will continue to use BNPL because of the convenience it provides.
TECHNOLOGICAL IMPACT OF BNPL REGULATION
Regulation will play a great part in shaping BNPL innovation and the emergence of new technologies and products, which will bring new opportunities and challenges. For businesses to compete and gain sustainable competitive advantage, they must have the right technology to power these products.
For example, to provide a seamless and secure customer experience while also increasing affordability checks to protect consumers and enable them to make informed purchasing decisions, payment fraud systems must have the ability to analyse data in real time and generate accurate credit risk predictions without sacrificing the merchant checkout experience. This will require powerful predictive risk analytics capabilities and machine learning algorithms to develop and test new credit and risk models. Open Banking can play an important part in sharing wage and income data to enable businesses to make more accurate lending decisions and develop bespoke credit offerings.
Consumer demands will accelerate the growth of instalment products as banks and fintechs develop new bespoke and customisable solutions. We are already seeing this with Barclaycard, Monzo and Revolut and even Visa, Mastercard and Amex instalment programs. Big BNPL providers, such as Klarna, AfterPay and Affirm, could use their significant amounts of consumer spend data to develop personalised financial services products and super apps to help consumers better manage their lives.
FINALLY …If regulation can strike a balance between consumer protection and innovation, where the risk of financial hardship is balanced against BNPL benefits, it would certainly have a positive impact on the consumer credit market and beyond. However, regulation will not happen overnight, as the industry will need time to implement compliance requirements and technology changes.What is clear though, is that BNPL innovation is continuing apace across industries, even to trading and cryptocurrency platforms, and there must be the right technology to power these innovations and the appropriate regulatory oversight to protect consumers.
Annmarie is a Payments leader with 25+ years of experience in Payments, Banking, and Fintech. Passionate about payments innovation, she specializes in payments processing, solution delivery, and consultancy. With an MBA in business and expertise in technology, she is a trusted advisor to clients, who appreciate her ‘big picture’ view…
Alpari is one of the largest Forex brokers that acquired experience over the years of operation, while was founded in 1998 by three partners in Russia that started from zero, passed through all complications, crises and managed to become a global trading company.
Currently, Alpari offers a wide range of quality services for modern internet trading on the foreign exchange currency market with over a million clients from 150 different countries and serves global offices in UK, Russia, Ukraine, Belarus, Belize, Moldova, Mauritius, Saint Vincent and the Grenadines, Uzbekistan, Kazakhstan and Georgia & many more.
Alpari is a reliable broker due to its strong standing and long years of operation. There are numerous instruments available for trading including Binary Options, the education. Research and analysis section is just great, Alpari is good for beginning traders, also provides automatic trading and participates in various projects.
10 Points Summary
St. Vincent and the Grenadines
SVG FSC, FSC
Forex, spot metals, CFDs, Cryptocurrency and Binary Options
💰 EUR/USD Spread
🎮 Demo Account
Available with Demo Contests
💳 Minimum deposit
💰 Base currencies
USD, EUR, RUB, GOLD, BTC
Dedicated education with research tools
☎ Customer Support
An additional feature is the numerous projects and sponsorships that broker performs in various social activities, like supporting Children by Charitable Fund, the partnership with football, biathlon, rugby, chess teams and Mountineers team support.
Alpari is not a scam it operates for many years and has quite good reputation, Yet, Alpari is a well-established and known brand, which proved its history and transparent product offering by the millions of clients they serve and a long history of successful operation.
Alpari is an international company, which holds several regulatory licenses in order to be able to offer its services globally, which includes licenses from the Financial Services Authority of Saint Vincent and the Grenadines and the International Financial Services Commission of Belize.
In addition, Alpari is a member of The Financial Commission, an international organization engaged in the resolution of disputes within the financial services industry in the Forex market.
Forex trading performed at Alpari additionally to all attractive features also offers highest leverage of a maximum 1:1000.
Generally, the Forex major currency pairs allow levels of 1:500, and then depending on the chosen trading instrument, thus minor currency pair most often allows leverage of 1:400, while commodities are set to 1:100.
Nevertheless, remember to learn how to use leverage smartly, as a high set level may play against you as well, which dramatically increases your risks while trading.Trading InstrumentsAlpari trading offering consists of Forex – currency pairs, spot metals, CFDs along with Cryptocurrency trading and Binary Options.
Moreover, there is a choice between the execution model you want to use, as Alpari offers two options of orders, a Standard which means the company puts only the aggregate position of all client account and execute based on streaming quoted using Instant Execution.
And another option is an automatic ECN technology via MT4 Bridge, which connects Alpari’s servers to the ECN, means trader’s orders executed at market price. Account typesThere are 4 various account types available as retail trading accounts at Alpari, as well investment through PAMM accounts. The available accounts offering includes specifically designed accounts for various needs either through the choice between platforms MT4 or MT5, alpari.binary, as well as the size of lots and Standard trading feature or PAMM.
It is great at Alpari that you can start trading in the Forex currency market with any amount of funds on the account since there are no minimum deposit requirements. There is also a Demo account, as well traders can sign for a Forex live account to keep the risks as low as possible through trading with a nano.mt4 account where the currency is traded through cents.
Alpari offers two types of execution the standard or through ECN connection, hence the charges of spread will be applicable according to the chosen method and starting from 0.0 pips. To see full fees always check funding fees, inactivity fees or other commissions.
While the Alpari trading fees, which are built into the Alparispread considered to be on a very competitive level among the market offering, you can check out and compare Alpari fees to FP Markets. See below Standard account trading fees.
EUR USD Spread
Crude Oil WTI Spread
BTC USD Spread
Overnight fees Also, always consider the overnight fee you will pay in case the order is held longer than a day. As an example, going short for EurUsd currency pair will cost you 0.65, and long position -1.31.
Methods of Payment
So once you need to fund a live trading account, you’ll have a selection through major payment options along with special offers from the company, for commission-free deposits. However, few options may be eligible for fees, thus check it with customer service as to your applicable region.
Payment methods including
Bank Wire Transfers,
credit or debits cards
electronic payments Skrill, Neteller, WebMoney, eBanking, and FasaPay.
In addition, traders within the Alpari are able to perform account-to-account transfer in USD, EUR, and GLD currencies with no commissions.
Alpariminimum deposit amount starting from 0$ for Nano MT4 account and moves on further from 20$ and 500$ respectively for ECN accounts.Alpari minimum deposit vs other brokers
Most Other Brokers
Alpari deposit fees are 0$ for some of the payments, including 0% fee for Cryptocurrencies like Ethereum, Litecoin and Zcash. Alpari provides various withdrawal options, however additional payment methods may incur additional charges and depend on the provider and region you sending from.
Alpari offers as a trading platform the most popular and known MT4 along with its advanced generation MT5. There is no matter which device to use since there are available versions for PC, Android or iOS devices that allows earning anywhere.Actually, there is no need to explain a lot about MT4, as it is a choice of millions of traders across the world that are able to enjoy the functionality of the platform and its comprehensive features. Also, EAs at Alpari are allowed with no restrictions, and traders of any style are welcomed.
In case you prefer MT5, which is the latest generation of the earlier popular version, the platform will bring additional orders and instruments for analysis with increased functions assisting in trading even more efficient.And the last, but not the lease is a Binary trader, which is a platform developed by Alpari specifically for binary trading delivers a simple, but effective user-friendly platform along with allowance to perform trading via the mobile application.Therefore, the trader of any experience and size can count on a trading performance powered by the great choice of software that enhances strategies and general possibilities.
Along with that, Alpari designed truly dedicated support to their traders, while novices who have just taken their first steps onto the Forex market can enroll into one of the InvestmentAcademy’s educational courses. The courses will teach not only the basics of Forex but also different methods of analysis that will give some unique insights, how to avoid common pitfalls and minimize your losses.
Also, Alpari provides a vast of analytical support and analysis through trusted sources, alike fundamental analysis provided by Forex economic calendar and news from FxWirePro, with Technical analysis from Trading Central and signals from AutochartistOverall, Alpari review features the company with a long history of operation, which passed numerous crises and hard times nevertheless managed to offer global services to the thousands of their clients. The Alpari brand indeed reputable one among the market offering, notwithstanding the fact of its weak point of recent regulation.
Nevertheless, we can recommend Alpari as a trustable broker to trade with.Alpari solutions meets various traders’ needs, throughout different types of execution and a variety of tools to choose from. In addition, the broker shows great learning capabilities and support, as well as the variety of generous programs alike contest, cashback options, etc that are definitely a plus to the company portfolio and advantage to you as a trader.
The crypto industry’s deepening ties to banks and asset managers will pose a risk to financial stability, the European Central Bank has warned, in the latest sign of how central banks and governments are stepping up their scrutiny of the market. The ECB said on Tuesday it had undertaken “a deep dive into cryptoasset leverage and crypto lending” and found evidence that these activities were becoming more risky, complex and interconnected with traditional institutions.
“Investors have been able to handle the €1.3tn fall in the market capitalisation of unbacked cryptoassets since November 2021 without any financial stability risks being incurred,” the ECB said. “However, at this rate, a point will be reached where unbacked cryptoassets represent a risk to financial stability.” The first such warning from the ECB, published as part of its twice-yearly financial stability review, followed similar messages from US and UK authorities, which have been unnerved by a series of recent failures in the crypto market.
Bitcoin, the world’s flagship cryptocurrency, has halved in value since November and recently fell below $30,000 for the first time since last summer. The market’s most important stablecoin, tether, momentarily lost its peg to the US dollar, while its rival terraUSD all but collapsed. The crypto market itself has boomed in size in recent years, with major platforms like Binance and FTX offering a wide array of complex financial products.
The world’s biggest crypto exchanges processed almost $700bn in spot trading last month and $1.1tn in bitcoin futures, according to data collated by The Block Crypto. Recommended Gillian Tett The Goldilocks crisis may have arrived for crypto The ECB said trading volumes for cryptoassets “have at times been comparable with or even surpassed those of the New York Stock Exchange or euro area sovereign bond quarterly trading volumes”.
At the same time, some crypto exchanges are offering loans to customers to allow them to increase their exposures by as much as 125 times their initial investment, it said. But “significant informational and data shortcomings persist”, which meant “the full extent of possible contagion channels with the traditional financial system cannot be fully ascertained”. ECB president Christine Lagarde said on Dutch television at the weekend that a crypto token was “worth nothing, it is based on nothing, there is no underlying asset to act as an anchor of safety”.
Fabio Panetta, an ECB executive, recently likened the sector to a “Ponzi scheme” and called for a regulatory clampdown to avoid a “lawless frenzy of risk-taking”. Links between eurozone banks and crypto assets “have been limited so far”, the ECB said in its report on Tuesday. The central bank said some international and eurozone banks are “already trading and clearing regulated crypto derivatives, even if they do not hold an underlying cryptoasset inventory”.
Recommended Behind the Money podcast20 min listen A crypto vibe shift? The ECB also cited risks from decentralised finance, or DeFi, in which cryptocurrency-based software programs offer financial services without the use of intermediaries such as banks. “Crypto credit on DeFi platforms grew by a factor of 14 in 2021, while the total value locked was hovering at around €70bn until very recently, on a par with small domestic peripheral European banks,” it said.
Rehypothecation, in which collateral for a loan can be repledged against another loan, increased the chances of leverage limits being breached. As many as one in 10 EU households “may own cryptoassets”, though most had less than €5,000 invested in the sector, according to a recent ECB survey. Similarly, a Fed survey released on Monday found 12 per cent of US adults held or used cryptocurrencies in 2021. The EU is finalizing legislation, called markets in crypto assets, but the ECB said it would not come into force until 2024 at the earliest.
“Given the speed of crypto developments and the increasing risks, it is important to bring cryptoassets into the regulatory perimeter and under supervision as a matter of urgency,” it said.
The crypto boom on Wall Street coincides with more funding and hiring in the start-up world. Crypto and blockchain companies raised a record $25 billion last year, an eightfold increase from a year earlier, according to CB Insights data.
Farooq said that even with the start-up boom, JPMorgan has seen “limited attrition.” Those leaving have been people “wanting to start their own company versus wanting to leave and go do something similar.”
However, JPMorgan did lose one of its highest-profile crypto deputies last year. Christine Moy is on garden leave after departing her role as managing director and global head of crypto and metaverse at Onyx. She has yet to announce her next move.
“After over a half-decade laying the foundations for blockchain-based infrastructure across financial markets and cross-border payments, creating new businesses that have already scaled into the $USD billions at J.P. Morgan, I am looking to challenge myself further by finding new opportunities to create value and drive impact for the Web3/crypto ecosystem from a new angle,” Moy told CNBC in an email.
Other top crypto executives who left Wall Street recently expressed some frustration at how long it takes to get projects moving within a large financial institution. Mary Catherine Lader, chief operating officer at Uniswap Labs, left her job as a managing director at BlackRock last year. Her foray into crypto started as a side project within the asset management company.
“It certainly wasn’t my primary job,” Lader said. “It was kind of a hobby, as it is for so many people on Wall Street, and it definitely wasn’t something that at the time I was thinking about, because it was early stages of adoption.”
Justin Schmidt, former head of digital asset markets at Goldman Sachs, made a similar career change last year. He joined institutional crypto trading platform Talos and described the risk in a similar way, calling the decision “multidimensional.”
“Inherently, you’re taking a brand risk — Goldman is one of the storied institutions of Wall Street,” Schmidt said. “You are also taking a risk by staying someplace more traditional, and I very firmly believe that this is a generational change and there’s a generational opportunity here…..
In 2016, while Tarek Mansour was an analyst at Goldman Sachs, he watched clients nervously trying to hedge their investments in case the Brexit referendum passed. They had no direct way to do it, and the insight became the seed for a startup idea—Kalshi, an exchange where investors could make unusual bets on future events. He cofounded the New York company with fellow MIT alum Luana Lopes Lara in 2018.
The hardest part: regulatory approval. “In one day we both called 65 lawyers,” Mansour says. “All of whom said, ‘People have been trying to do this since the ’80s, and it’s not happening.’” But they persevered—and in November 2020, Kalshi became the first federally regulated event-based trading exchange in U.S. history.
Today you can use Kalshi to bet on how many Americans will ultimately get a Covid vaccine or whether this year will be the hottest on record. Billionaires Charles Schwab and Henry Kravis have invested in the startup alongside blue-chip VC shop Sequoia. Kalshi has raised $36 million and processed $10 million in trades since launching in July 2021.
Eleven of the thirty companies featured on our 2022 list were crypto firms, an all-time high.
The list makers were chosen from nearly one thousand nominations and were evaluated by an all-star set of judges, including Paul Gu, a cofounder and head of product at fintech lender Upstart; Joey Krug, the co-chief investment officer of crypto fund Pantera; Jackie Reses, the former head of Square Capital and a fintech angel investor; and Lauren Taylor Wolf, a cofounder and managing partner at activist hedge fund Impactive Capital.
As bitcoin reached a record price of more than $68,000 in 2021, crypto entrepreneurs made a strong showing on our list. Eleven of the companies featured were crypto firms, an all-time high. One example is Antonio Juliano, the founder and CEO of Dydx, a trading platform for professional investors outside the U.S. to buy and sell cryptocurrency derivatives.
During a couple days in September, Dydx surpassed Coinbase in daily trading volume. Juliano expects the 19-person startup to bring in $125 million in revenue this year and $81 million in net profit. Elena Nadolinski, the founder and CEO of privacy-focused cryptocurrency company Iron Fish, is another. Iron Fish uses a novel and advanced cryptography tool called zero-knowledge proofs to make crypto transactions private.
While nonfungible tokens (NFTs) have taken off this year, Alex Atallah, the cofounder and CTO of dominant NFT marketplace OpenSea, has helped his company reach $300 million in revenue, up from less than $1 million last year. Now he’s on track to become one of crypto’s newest billionaires.
Many list makers also hailed from fintech. Scott Kazmierowicz and Michael Spelfogel started Cardless in 2019, creating software that lets brands launch their own co-branded credit cards. They’ve hatched cards for pro sports teams like the Boston Celtics, Cleveland Cavaliers and Miami Marlins. Cardless has raised more than $50 million and is valued at $315 million, according to PitchBook.
Akash Magoon cofounded insurtech startup Nayya, which helps people with tasks like picking the most cost-effective health insurance plan and finding lower-cost pharmacies. It has 400 corporate customers and is on track to reach $7 million in revenue in 2021.
Ambika Acharya cofounded Weav, which aggregates sales data for small businesses and makes it easily accessible, letting lenders see it in seconds to assess borrower risk. Corporate credit card startup Brex was Weav’s first customer, using it to power its instant payouts feature. In August 2021, Brex bought Weav for $50 million.
Leaders in traditional financial services made up one-third of our list. Hannah Buchan is a partner at Beehouse, a $300 million investment firm focused on the legal cannabis industry, which has deployed tens of millions of dollars across private equity, stocks and debt deals.
Alex Nesbitt is a principal at BC Partners, helping close deals like the $3.4 billion SPAC merger and IPO between Cyxtera Technologies, one of the largest data center companies in the U.S., and Starboard Value Acquisition Corp., a blank check company.
And Mason Liang is a portfolio manager at Millennium Management, a $50 billion hedge fund, where he oversees one of the largest teams in charge of the firm’s “quantamental” strategy, which combines quantitative and fundamental analysis to assess investments.