The New Banking Standard
In this op-ed, #bitcoin enthusiast Martin Hagelstrom touches on the slow but steady embrace of #blockchain by the world’s #banks.
fintech techcrunch
Updates from user Toggle Comment Threads | Keyboard Shortcuts
-
user
-
user
Blockchain’s Big Innovation is Trust, Not Money
In this opinion piece, a former Wall Street pro discusses why he believes the #blockchain is best perceived as an #innovation in distributed #trust.
CoinDesk -
user
Fintech and Blockchain Education: University Courses and Workshops in Switzerland and Germany
The vibrant #FinTech ecosystem is evolving rapidly and the sector is in increasing need for professionals with skills and knowledge on the new, emerging business models, digital platforms and tools that are gaining popularity.
To educate students and professionals on FinTech, #Switzerland and #Germany have a number of programs available that dive into digitalization in the banking and financial sector, #blockchain #technology, the emerging FinTech startup scene, and many other topics.
Here is a few of them:
Hochschule Luzern: CAS Digital Banking
The Certificate of Advanced Studies (CAS) in Digital Banking of Hochschule Luzern is a program aimed at providing students with professional skills and knowledge on the emerging FinTech ecosystem, teach them about the ongoing digitalization of the financial services industry, and the ability to use these new trends to grab new business opportunities.
The program is divided into four main #courses: the environment of digital banking, strategic digital banking, digital customer management and social banking, and FinTech products and solutions.
HWZ Hochschule für Wirtschaft Zürich: CAS Digital Finance
The CAS Digital Finance of the #University of Applied Sciences in Business Administration in Zurich, is a 18-day course targeted at financial services professionals.
The program is divided into four major blocks:
- Digital mindset: innovation management, cultural changes, digitalization as part of the overall strategy, etc.
- Digital products and services: fintech, crowdfunding/lending, peer-to-peer, #robo-advisor, etc.
- Technology: big-data analysis, cyber security, blockchain technology, etc.
- Customer experience: multichannel presence, online/offline strategies, community, social media, etc.
Frankfurt School of Finance and Management
As part of its bachelor’s degree in business administration, the Frankfurt School of Finance and Management is proposing a specialization called “Digital Innovation and FinTech” which focuses on the impact of technology and new business models and services on the banking and financial services industry.
The program will begin in the winter semester of 2016/2017, and as part of the launch of the new specialization, the university has teamed up with FinTech Group, which will support 20 students with their tuition fees. The company will also offer the three year&8217;s best students an employment contract.
Introduction to Blockchains and smart contracts for developers
Zurich-based ValidityLabs is a company that provides blockchain and smart contracts #education through courses and #workshops.On May 21, 2016, ValidityLabs will be hosting a workshop at Zurich&8217;s Technopark,
The workshop will be focused on Ethereum and is aimed at familiarizing developers, software architects and technical decision markets with principles of blockchains and smart contracts.
The workshop will feature a demonstration of a contract deployment and inspection on the Ethereum network.
Source: information and images from the mentioned universities&8217;/organizations&8217; wites
The post Fintech and Blockchain Education: University Courses and Workshops in Switzerland and Germany appeared first on Fintech Schweiz Digital Finance News – FintechNewsCH.
-
user
Central Banks Face Bitcoin Pressure
Given that the ‘distributed ledger’ #technology upon which #Bitcoin has been developed allows a payment system to operate without the need for intermediaries such as #central #banks, it is looking increasingly likely that the financial system is set to undergo a comprehensive transformation.
It also implies that centralized payment systems could begin to be phased out and replaced by decentralized ones, with trading, clearing and settlement being just three examples of processes likely to undergo disintermediation.
Whereas a centralized system relies on all parties to trust a third party (the central bank, in most cases) to keep a secure, correct digital record of transactions, the Bitcoin transaction relies on there being numerous copies of this record distributed across the network. Assuming, then, that the cryptography of the system works, the requirement for a third-party becomes largely irrelevant.
(Source)
The monetary system of Bitcoin challenges the central banks&8217; role
Central banks play a pivotal role in ensuring financial stability within a monetary system, however, meaning that payment innovations are being closely monitored by banks such as the Fed, the European Central Bank and the Bank of England. Indeed, central banks have a responsibility in supporting safe payment systems.
Bitcoin’s notable price volatility since its creation, for instance, is one of the key concerns for central banks – were a systematic price crash to occur, it remains debatable as to just how much responsibility the central bank could or should bear. Even the bank is technically not at fault, a widespread loss of confidence in the bank and the financial system could still arise.
More researches on digital currencies are expectedly conducted
Most central banks are in ‘monitoring mode’ at present, generally stating that more research needs to be done before policy can be considered. More recently, however, Bitcoin’s growth has prompted some central banks to express interest in possibly issuing their own digital currencies, backed by their respective country’s government. While this is yet to materialise anywhere, the Bank of Canada has been among the most open to exploring such technology.
The bank’s senior deputy governor Carolyn Wilkins stated last month that “we have to envision a world in which people mostly use e-money, perhaps even one that’s not denominated in a national currency, such as Bitcoin”, although remained wary of the ostensible risks that could arise, where central banks would struggle to implement monetary policy and where massive losses could be realized were the currency to crash. Wilkins has made clear that the Bank of Canada will explore the implications of digital currencies over the course of its three-year corporate plan.
The idea is of Government-backed digital currency
While much of the attention (and indeed, risk-aversion) on Bitcoin has primarily been concerned with the currency’s nascent price volatility, the Bank of England (BoE) has focused more on the potential impact of the distributed ledger technology. The UK central bank has provided particularly glowing feedback to #blockchain, with the bank’s chief economist Andy Haldane recently praising the technology’s potential capability in solving the challenge of ‘how to establish trust – the essence of money – in a distributed network’.
Like the Bank of Canada, moreover, Haldane is also in favor of issuing a government-backed digital currency, although in the UK’s case he argues that it could be used to charge a negative interest rate on currency, a measure which is not possible at present due to the widespread use of banknotes which could simply be held in safe deposit boxes to maintain value and would thus render attempts by the central bank to implement a negative rate as useless. The shift from paper to paperless currency, however, opens up the possibility of digital currency creation.
Bitcoin circulation in the market is considerable
In the BoE’s paper published last year, The Economics of Digital Currencies, the bank estimated that the amount of bitcoins circulating within the UK economy was less than 0.1% of sterling notes and coins and only 0.003% of broad money balances. As such, the impact from any serious Bitcoin fallout on the UK’s financial and monetary systems is considered negligible.
The Federal Reserve, meanwhile, has gradually become more vocal about the subject. During Bitcoin’s early existence, the US central bank was notoriously silent about Bitcoin, but began discussing the subject soon after the FBI shut down Silk Road – the illegal online marketplace – when 26,000 BTC worth $ 3.6 million was seized in October 2013.
In early 2014, Fed chief Janet Yellen stated that the Fed does not have the authority to regulate Bitcoin, due to the fact that this is ‘payment innovation that is taking place entirely outside the banking industry’. She did raise concerns about the potential for money-laundering, however, and has also recommended that Congress address the legality issues for those unregulated entities involved in virtual currencies.
The Fed has also conducted empirical analysis which has sought to test the security of the cryptography for transactions and the distributed maintenance of the ledger. The US central bank has remained somewhat averse to Bitcoin, highlighting the February 2014 bankruptcy of Mt. Gox, the largest bitcoin exchange at the time, and concluding, therefore, that Bitcoin many risks “whose nature and proportion are little, if at all, understood”.
More recently, the Fed’s official position has been to quietly monitor developments as they happen, but it has not stated whether it is considering issuing its own digital currency.
Digital currency, Bitcoin, raises several potential risks
The Bank of International Settlements (BIS), however, seems to have recently shown considerable enthusiasm towards the advancement of digital currencies. Although not explicitly a central bank, the BIS holds the membership of 60 global central banks, and has been instrumental in determining much of the regulatory landscape since 2007’s financial crisis. In its November 2015 paper, the CPMI Report on Digital Currencies, the BIS states several potential risks arising from the growing use of digital currencies, such as consumer losses resulting from excessive volatility, as well as fraud &8211; a problem which has plagued Bitcoin on previous occasions.
The report also acknowledges the diminished role that financial intermediaries could play as digital currencies and distributed ledger systems become smarter. Ultimately, though the BIS’ opinion on digital currencies remains favorable, especially pertaining to those which have a decentralized payment mechanism, describing them as “an innovation that could have a range of impacts on various aspects of financial markets and the wider economy”.
Yuan was used in 80% Bitcoin transaction
The challenge in addressing Bitcoin appears to be more complex for China’s central bank at present, however. According to Goldman Sachs research from March 2015, the Yuan is being used for 80% of global transactions into and out of Bitcoin, indicating the digital currency’s overwhelming popularity in China. This wouldn’t be so much of a problem were it not for the fact that the People’s Bank of China banned the handling of Bitcoin transactions in December 2013, before closing down more than 10 of the currency’s exchanges in March 2014.
The view from the central bank is that the currency has no ‘real meaning’, but the consensus view is that it is being used for large-scale money laundering. The huge popularity of Bitcoin in China suggests that, while some may be using Bitcoin for speculative purposes, a large proportion are using the currency to shift money illegally out of China.
Conclusion
More recently, however, it appears that China’s view towards Bitcoin could be warming. In an October publication, the Cyberspace Administration of China (CAC) stated clearly that we are now in the “post-Bitcoin era,” acknowledging the development that bitcoin has ushered in through the “expansion of distributed payment and settlement mechanism”. Whether such sentiment will ultimately be transmitted through the corridors of the central bank remains to be seen at this stage.
Given that minting and distributing a digital currency should cost a fraction of the cost of printing and distributing a physical currency note, one should also bear in mind the seignior age benefits of moving towards paperless currency – that is, the potential revenue the government will retain from such a cost-saving. Along with the fact that digital currency transactions will be easier to track and less susceptible to illegal uses, there seems to be plenty of incentives for central banks to promote the development of digital currencies like Bitcoin.
The post Central Banks Face Bitcoin Pressure appeared first on Fintech Schweiz Digital Finance News – FintechNewsCH.
-
user
Secrets InsurTechs can learn from the auto insurance industry’s telematics experience
The insurance sector is becoming more innovative. Various initiatives and projects launched around the globe are proof of that: from the classic “call for ideas” and corporate venture capital to innovation labs and accelerators that involve the largest insurance companies. According to CB Insights, InsurTech —which involves rethinking one or more steps of the insurance value chain through the use of #technology — received $650 million in funding in the first quarter of 2016, and the number of transactions more than doubled compared with the same period in 2015.
InsurTech investment in Q1 2016 more than doubled [ Click to Tweet]
The Italian insurance sector represents an interesting case history about InsurTech. Italy has the most advanced experience in combining the car insurance contract with hardware (the black box) and using that data throughout the insurance value chain. According to the Bain Telematics, Connected Insurance & Innovation Observatory—a think tank that Bain & Company developed with ANIA, AIBA and other insurance and non-insurance partners to help spread innovation culture in the insurance sector—telematics penetration reached 16% of all cars insured in Italy by the last quarter of 2015.
In Italy this type of approach is already mainstream, in contrast with other countries, where it is still a niche value proposition. By looking at the Italian best practices, one can identify certain critical success factors. The most important element is telematics’ capacity to improve the insurance bottom line: A significant self-selection effect exists on customer acquisition and material savings related to claims settlement (provided that adequate processes are in place and use the telematics information). The second aspect is represented by the benefit of introducing value-added services around the driver journey. The key element for both the client and the distributor is the partial kick-back of the value generated by the telematics approach on the insurance bottom line to both the client (via a discount) and the distributor (via additional fees).
The current discussion of how telematics will evolve focuses on gamification and reward mechanisms: mechanisms to manage client engagement and retrocession prizes other than insurance premium discounts. For example, Allstate in the US has adopted a score- and prize-based system related to driving behavior. The international best practice is undoubtedly Vitalitydrive, the approach through which Discovery (South Africa) has managed to create a motor-telematics policy based on driving behavior. In this case, the cash-back incentive for gasoline bought from partner gas stops replaces the premium discount.
By comparing gamification use cases with Italian best practices, insurers can retain an incremental quota of generated value, through telematics solutions that provide rewards financed by partners instead of through premium discounts. This approach requires the creation of an ecosystem of partners to provide a tangible value for the customer.
Rewards can be effective ways to steer behavior if they are built on mechanisms that result in frequent interaction with the client. From this point of view, the integration of monitoring driving behavior and the reward-system mechanism has a greater influence on behavior than a tariff that calculates the renewal premium based on those same variables.
InsurTech: Reward is the new black [ Click to Tweet]
The stakes are high for the insurance sector, and the auto insurance mandate has created the conditions for insurance companies to become relevant actors within the ecosystem. That said, the insurance sector faces a double challenge: first, to introduce this type of creative thought inside the product development process and second, to become equipped with competencies and instruments that enable the management of both gamification dynamics and the partner ecosystem. These challenges are forcing insurance carriers to start thinking and acting like InsurTech entities.
Matteo Carbone – Insurtech Thoughts
[linkedinbadge URL=”https://it.linkedin.com/in/matteocarbone” connections=”off” mode=”icon” liname=”Matteo Carbone”] is InsurTech Enthusiast, Insurance Thought Leader, Principal in Bain’s Finacial Service and Digital Practice, Founder and responsible of the Observatory on Telematics, Connected Insurance and Innovation. This article was originally published on linkedin.
-
user
Ethereum Startup Offers Grants to Open Blockchain Developers
String Labs has announced its program to award #grants to innovators building on the #Ethereum #blockchain. Permissioned ledgers need-not apply.
fintech techcrunch -
user
Bitcoin Miners Follow Profit to Ethereum Blockchain
A well-known Chinese #bitcoin miner gets into #Ethereum as a wide range of high-profile organizations begin to capitalize on the digital currency.
fintech techcrunch -
user
Payments Giant Qiwi is Building a Blockchain Replacement for its Core Database
Russian #payments firm #Qiwi is currently designing its own proprietary #blockchain system in an effort to replace its central payments #database.
fintech techcrunch -
user
Samsung Pay strikes partnership with Chinese online payment giant Alipay
#Samsung announced today that it has cemented a deal that will make #Alipay, China’s largest #online payments platform, available through Samsung Pay. Read More -
user
Tally raises $15 million for app to make credit cards less expensive, easier to manage
San Francisco-based #Tally Technologies Inc. raised $ 15 #million in Series A venture funding, to launch an app that promises to help people maintain good #credit while avoiding fees, charges and other credit card affiliated pains. Shasta Ventures led the Series A investment in Tally, joined by the company’s earlier backers Cowboy Ventures and AITV. Silicon Valley Bank also invested.… Read More
Reply