Legislation allowing ordinary American investors to invest in the shares of startups and small businesses was first introduced in the U.S. Congress in 2011. Despite bipartisan support and the approval of President Obama, it is only now becoming a reality. Read More
Over $50bn have been invested globally into automated investment management advice models (the so-called “#robo advisors”), the majority of it in the US.
After the startups Wealthfront, Betterment and FutureAdvisor broke the ice for this new type of market player, Charles Schwab and Vanguard followed suit and used the power of their brand to collect a multiple in assets compared to the first movers.
A very remarkable situation occurred – also in the US – after BlackRock in summer 2015 acquired startup firm Future Advisor, who following that deal within a few months only was able to close various robo advice B2B deals, for example with BBVA.
But is robo only a US phenomenon?
#FinTech boutique TechFluence hast tracked 50 startups in Europe in this category, spanning from fully automized models to hybrid models. Especially in Germany the number of robo advice startups has increased significantly to almost 20 – some of them still in stealth mode.
The German market also saw some deal related activities already. The founders of Owlhub joined the team of LIQID, orchestrated by Project A. Very recently the very traditional private bank Hauck & Aufhäuser, which awaits approval for their future owner Fosun, acquired easyfolio, that had already changed hands from the founder to publisher Frankfurter Allgemeine.
Currently the digital wealth management vertical sees a lot of interest from various sectors. Not only do #banks and – naturally asset and wealth managers – consider a form of robo advice in various countries. Also players from other sectors watch the scene closely.
We expect the telecom sector expanding the interest from banking solutions (in Germany in cooperation with Fidor) also to other sectors which formerly where a mere banking domaine.
Mobile providers know the clients so much better than financial services providers. Given the massive growth potential estimated by Cerruli (almost $500 bn AuM) or AT Kearney (~$2.2trn), both by 2020 this would not be a surprise and a wake up call for all financial advisors to brush up their digital skills in order to stay relevant.
“FinTech Forum On Tour | Robo Advice” on 8th June 2016 in Berlin will put startups and “corporate startups” in the robo advisory space on stage in front of investors and incumbent financial institutions.
If you are interested to join you may request at [email protected]
“Robo” advice startups may apply to pitch !
About TechFluence / FinTech Forum On Tour
TechFluence is an award-winning FinTech research and advisory boutique based in Frankfurt and London. Founded in 2012, TechFluence is on a mission to create the financial services of the future, working closely with FinTech startups, investors, financial institutions and corporates. In 2013, when Continental Europe was known for just a handful of FinTech startups, TechFluence co-founded FinTech Forum, the first and the largest community for FinTech in Continental Europe that has brought together 150+ startups with 350+ investors, financial institutions and corporates. FinTech Forum On Tour combines research, scouting and selection rigor with the event format of FinTech Forum to address specific domains, #technology or customer objectives.
This article was originally published by Michael Mellinghoff on linkedin
A #Bank of #Japan #official said this week that #central #banks should #watch developments surrounding #bitcoin and #blockchain “closely”.
CoinDesk
A Japanese #blockchain startup has reportedly raised $ 6.2m in a new Series A funding round.
CoinDesk
Having just spent about 15 days in Japan and met with several Japanese #FinTech entrepreneurs, investors, incubators & #banks, Chloé and I (FINTECH TWIN$) were surprised to see how thriving – yet atypical – was the Japanese Fintech scene compared to Western or other Asian ones. Where London, New York, San Francisco, Singapore and Hong Kong are racing for the ‘FinTech hub gold medal’, Tokyo seems to be left behind. Yet, a Japanese FinTech hub has recently started to emerge, with its own specificities and growth drivers.
Hence the need for this comparative panorama, in which we have identified #6 Japanese FinTech specificities that all FinTech cheerleader with worldwide ambitions should bear in mind.
1# JAPAN: Over-capitalised banks with a Lilliputian focus on innovation vs. the WEST: Under-capitalised banks with a giant focus on innovation.
Japan is the 2nd largest financial market in the OCDE with over USD 16 trillion worth of personal financial assets. Japanese Megabanks- Mitsubishi UFJ, SMBC and Mizuho – are particularly well trusted by Japanese customers, which traditionally have had little incentive to switch to alternative financial solutions / Fintech. Japanese banks also have been less hit by the global financial crisis, and did not witness an exodus of financial talents toward alternatives careers such as FinTech ventures. Yet, it comes with a surprised that Japanese financial institutions have traditionally had a lower focus on innovation, with IT investments stagnating around 3% of their net incomes, a level well below their global peers. Yet recently, banks have started to look at FinTech, with Mitsubishi UFG launching its FinTech accelerator in 2015 for instance.
Western banks, on the other hand, have been more severely hit by the global financial crisis, which led to less customer trust in the overall banking system and the rise of innovative FinTech startups targeting disillusioned customers and proposing innovative financial solutions. Hence the need for banks to innovate quickly, create new revenue streams and increase their operation efficiency.
=>Consequences: The Japanese financial sector is still dominated by large financial institutions, and the FinTech start-up scene is pretty immature compared to the West. A win-win collaboration between start-ups and banks: while FinTech start-ups are seen as competitors in the West, Japanese banks see them as innovation facilitators and are more keen to collaborate with them.
2# JAPAN: A lack of entrepreneurship vs. the WEST: A start-up minded culture.
According to the Global Entrepreneurship Monitor (GEM), Japan has the second-lowest level of early entrepreneurial activity in the world, beating out only … Suriname! What is more, none of Japan’s start-ups number among the world’s 145 ‘unicorns’, or those valued at more than $1 billion (China and the United States are home to 22 and 92, respectively). English is another issue and – as we were interviewing entrepreneurs and bankers – we were quite surprised by the limited number of people who could easily switch to English (Yet, I have to admit that my Japanese is very poor too… Fair enough!).
On the other Asian side, India is the world fastest start-up ecosystem, with more than 3,100 start-ups in 2015, and 10,000 expected by 2020. Hence explaining the flourishing Indian FinTech start-up scene.
=>Consequence: Before becoming a FinTech hub, Japan will have to overcome a risk-adverse culture that prevents start-ups to emerge.
3# JAPAN: FinTech disruption initially started in the PFM and the Wealth Management areas vs. the WEST: FinTech disruption started in the lending and payment areas.
In the West, disruption initially started in the lending area with P2P lending platform such as Zopa (UK) or Prosper (USA). India witnessed the same trend, with numerous Fintech startups proposing credit scoring, lending (Faircent) and payment solutions (PayU, Oxigen, Citrus, MobiKwik) to those 60% of Indians who are still unbanked.
The FinTech solutions proposed in Japan are different and we could even say that japan has leapfrogged the ‘lending’ revolution because banks’ services were already efficient in this area. Most Fintech startups have therefore emerged in the Personal Finance Management (PFM) area – with great success stories such as Money Forward, Zaim, or Freee. The PFM sector is indeed skyrocketing in Japan: with a unique situation whereby over 52% of personal financial assets (a total of $16 trillion) are composed of cash and deposits (e.g.with 0% interest) an increasing number of wealthy Japanese are looking at PFM and robot advisor services to better manage their savings. Cross-border lending platforms represent another opportunity: Since January 2016, the Central Bank has imposed a negative interest rate on deposits from commercial banks, essentially charging them for parking excess funds. Hence, the huge opportunity for cross-border P2P lending platforms, such as Crowdcredit, which connect wealthy Japanese investors (and soon commercial banks with surplus of deposits) to Western borrowers.
=>Consequence: Japan might lead the way in robot advisory and wealth management. 8 Securities, a leading mobile investing start-up originally based in Hong Kong has caught this trend, by opening its second office in Tokyo.
#4 JAPAN: Low scalability with heterogeneous market, regulation and infrastructure vs. the WEST: High scalability with homogeneous market, regulation and infrastructures.
Unlike the US and European markets that are more homogenous in their composition, the Asia markets remain very fragmented, limiting the rapid scalability of FinTech businesses. Yet, Singapore and Hong Kong have managed to shine as ‘sub-regional hubs’ for FinTech startups looking to expand their products to South-East Asia (from Singapore) or Mainland China (From Hong-Kong).
The Japanese situation is different. With its insular geography, its hermetic markets, its strong regulatory requirements and its specific customer behaviours, Japan is not an easy market for Asian or Western start-ups willing to expand their products oversees.
=>Consequences: Japanese customers’ needs are completely different from Chinese, Indian, Malaysian or Singaporeans’ ones, and FinTech startups looking to enter this market will have to adapt their offering accordingly.
#5 JAPAN: A shy regulator, neglecting FinTech vs. the WEST Proactive regulators keeping a close eye on FinTech.
In the UK, the FCA has demonstrated its support to the FinTech industry, providing transparency and creating a level playing field with initiatives such as ‘Project Innovate’, tax incentivess (Seed Enterprise Investment Scheme, R&D Tax Credit, ISA Scheme etc) or even trade missions from the UKTI ‘Business is Great’. On the Asian side, the Monetary Authority of Singapore (MAS) has set up in August 2015 a FinTech and Innovation Group to promote the industry and committed S$225 million (US$167 million) over five years in FinTech projects. While deliberately allowing grey zone to foster FinTech innovation, the MAS has however recently announced it will start regulating FinTech startups that ‘pose risks to the wider financial system’. Similarly in Hong Kong, the Securities and Futures Commission (SFC) is keeping a close eye on FinTech.
On the other hand, Japan regulators have traditionally neglecting FinTech, preventing banks to invest in #technology subsidiaries for instance. Yet, The Japanese Financial Services Agency (JFSA) has recently started to discuss revisions of the Banking Act to enable banks to invest in IT ventures such as e-commerce, or online payment.
=>Consequence: The Japanese regulation is less ‘FinTech-friendly’ compared to Western or other Asian regulations. Yet, the JFSA has recently changed its attitude toward FinTech and started to benchmark British best practices by welcoming the ‘FinTech is GREAT Trade Mission’ in late December 2015.
6 JAPAN: A FinTech ecosystem still working in silos vs. the WEST: A connected FinTech ecosystem, bringing together start-ups, banks, tech- giants, VC funds, universities, incubators and regulators.
FinTech centers such as Level 39 (in London), CyberPort or FinTech Hong Kong (in Hong Kong), Stone & Chalk and Tyro FinTech Hub (in Asutralia) – just to name some of them – have proven their ability to encourage thriving FinTech ecosystems.
The Japanese Fintech ecosystem, on the other hand, is still at a very early stage, and has just started to organise itself with initiatives such as the FinoLab, launched in early 2016. Interestingly in Japan, FinTech has been more ‘Tech’ than ‘Fin’-oriented: Tech giants such as IBM Japan, NTT Data, Rakuten (the e-commerce giant) have been quicker to cooperate with start-ups than Japanese banks and seem to lead the race for FinTech talents.
Hence our title and most distinctive Japanese trend compared to the West: Japan – A sumo fight between the ‘megabanks’ and the ‘megatech’. It seems, indeed, that Japanese ‘MegaTech’ will be key actors in this FinTech competition… Toward a 2020 Tokyo (FinTech) Olympics?
Ready to play the 2020 (FinTech) Olympic Games with FINTECH TWIN$?
Contact us at [email protected]
We have a full FinTech report about Japan!
The TWIN$.
The original post was published at https://fintechtwins.net/country-analysis/japan/
In today’s digital world, everyday functions such as making dinner reservations or hailing a taxi are done at the touch of a button. Similarly, other, more complex and esoteric functions, such as #wealth #management, are also moving toward automation. This evolution is enabled by the creation of state-of-the-art software, which has helped make wealth management more consumer-friendly… Read More
#CapGemini took its latest step on its bid to dramatically increase its investment in #blockchain #tech this week, announcing a retail payments trial.
fintech techcrunch
A representative for a US think tank spoke before a #Congressional #committee yesterday on #blockchain‘s role in #health #care.
fintech techcrunch
#Capital #Float, an #online #lending #platform for small businesses in India, announced today that it has closed a $ 25 million #Series B. Read More
The #Korea #Exchange opens up about its strategy on #blockchain tech and why it is investigating how it could be used to open new markets.
fintech techcrunch
Reply