By Don Bush
Kount Inc.
Several weeks into the new year, we've put 2016 behind us, and here at Kount, we've looked into the rearview mirror to highlight the top five events that shook 2016 so hard the reverberations will impact the financial tech industry the rest of this year and beyond. So, what do we have to look forward to?
One of the hallmark events that took 2016 by storm was Brexit, where over 50 percent of British voters supported Britain's exit from the European Union. Uncertainty about the referendum's repercussions will likely continue throughout 2017 as the British navigate the complexities of exiting. We anticipate new regulations and treaties with each European country, meaning vast implications for doing business in the U.K. and larger challenges for merchants as they conduct business across borders.
The ups and downs of the U.S. presidential election dominated headlines throughout 2016, ending with the inauguration of Donald Trump in January. His leadership has many new policy implications that will become clearer as he works to maximize the impact of his first 100 days in office. We anticipate innovation within the financial tech industry to continue, perhaps with new light shed on which entrepreneurs are developing technology and for whom. As the new president's policies take shape – including implications over data and international collaboration – the industry will have to react accordingly.
Some of last year's events were just plain explosive. Only a month after its initial unveiling, Samsung recalled millions of its new Galaxy Note 7 phones due to battery issues that caused the device to explode, ultimately leading the smartphone maker to discontinue the device series completely.
The fallout from the recalls has continued to plague the company and will likely have a halo effect that will also slow down the expansion of Samsung Pay. We anticipate Apple Pay to take the lead over Samsung Pay in the mobile payments race, especially with its expansion into Japan and Russia this year. However, eastern European countries are home to the development of popular tools used by cybercriminals all over the world, so Apple Pay will likely become a significant target for these groups and a major testing ground for Apple Pay's security measures and mobile payments overall.
Yahoo reported not one, but two record data breaches in 2016, both of which took place over two years before they were disclosed. They are considered two of the biggest single breaches of a company that we know of – compromising as many as 1.5 billion users and stolen data used over the last several years – with repercussions continuing to unfold. What happens to Yahoo will set a precedent for how companies handle data breaches and how consumers react to them, especially with its deal to be purchased by Verizon, as stakeholders will now be able to measure how much a data breach may cost them. This may be the impetus to ramp up security among companies, or just lead consumers into even more apathy.
Designed by the U.S. Department of Commerce and the European Commission, the EU-U.S. Privacy Shield Framework for protection of transatlantic data transfers passed to replace the now-discarded Safe Harbour Privacy Principles, which were declared invalid in October 2015. This new framework requires companies to align closely with EU data protection requirements including: strong obligations on companies handling data, clear safeguards and transparency obligations on U.S. government access, effective protection of individual rights, and an annual joint review mechanism.
While the framework may have been complicated by a recent Executive Order issued by President Trump titled Enhancing Public Safety in the Interior of the United States, it is a jolt designed to help increase fraud prevention and data protection for businesses and consumers. Especially as the amount of data continues to grow and be utilized for a number of business purposes, we anticipate efforts for data protection to increase significantly and demand that the financial tech companies that manage transatlantic data do so as well.
While many of these events will have ramifications that impact the industry well beyond 2017 – some we can and some we can't anticipate – one thing is clear: fraudsters will always take advantage of vulnerabilities that arise, especially those at a national or international level. Businesses must make sure they're protecting themselves and their customers when it comes to sensitive data and personal information. 
Don Bush joined Kount as Director of Marketing in October 2010 and became Vice President of Marketing in December 2012. Previously, he was Director of Marketing at Cradlepoint Inc. a leading manufacturer of wireless routing solutions in the mobile broadband industry. Don has worked in several management roles within the technology segment for over 20 years with both hardware and software manufacturers and as a partner in two top technology marketing agencies. He has led products launches and marketing programs for dozens of companies around the world such as Citi, HP, IBM, Kodak, Motorola and Weyerhaeuser, and he co-authored the seminar series, Common Launch Disasters and How to Avoid Them. Contact him at don.bush@kount.com.
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