Debt happens, guys–that’s the message from #Goldman #Sachs&8217;s new #consumer advertisement for its much-talked about new consumer lending arm, #Marcus. It&8217;s also Goldman&8217;s #first advertising campaign… ever. Marcus&8217;s goal, like all consumer lending arms, is to provide consumer loans. However, most consumer lending arms are not backed by #banks thatRead More
Bank Innovation
Even though the #digital age finds its root in the 1950s with the rise of computers, we had to wait until the mid 1990s and the rise of the internet to witness a first wave of tectonic shifts and the creation of what many defined as the New Economy. Innovation, characterized by the application of #technology to productive means and resulting in driving down costs relentlessly over time, was hard at work. This first wave did not escape the rule and we saw the cost of “discovery” plummeting. By discovery I mean the ability to find any type of data. Google benefitted from this trend and built an empire based on hyper efficient search. We also benefitted from another wave that saw the cost of &8220;communication&8221; dropping and the rise of various forms of connecting between humans. Facebook can be viewed at the intersection of discovery and human connections. Apple benefited from the connection/communication wave. Finally, Amazon mined the decreasing cost of discovery in the e-commerce field.
More recently, we have benefitted from the wave of &8220;personalization&8221; where a myriad of applications have unbundled past needs, uncovered needs we did not know we had, or disintermediated needs that were poorly serviced. Again, this wave resulted in the cost of personalization plummeting.
Crucially whenever costs plummet, demand grows in both expected and unexpected ways. The New Economy and our demand have certainly exploded.
It is interesting to observe that the #financial #services industry did not immediately espouse these #waves, nor did it find itself materially impacted by them, or at least it appears so to the naked eye. For example, #banks were not particularly diligent in their internet banking efforts at that time. Even though new technology companies won the early stages of the New Economy and even though the financial services industry did not register any &8220;win&8221;, we also can categorically state that banks or insurance companies did not lose. They still command, to this date, market share and dominance in all five sectors – lending, capital markets, insurance, asset management, payments &8211; in every geography.
The #fintech movement, in its first two phases, the &8220;direct to consumer&8221; phase and, once that first phase failed, the &8220;partnership pivot&8221; phase were essentially driven by the necessity to play catch and for the financial services industry to capture the lower costs of &8220;discovery&8221; and of &8220;connecting&8221; with users. Much needs to be done as most participants have not completed their digital journey. Even though startups and incumbents alike are still mostly focused on digitizing front end processes &8211; on-boarding, distribution, sales, underwriting amongst others &8211; we have now seen a broadening of the digitization movement towards middle and back office processes.
Still this has not resulted yet in a dramatic lowering of costs in financial services and an increase in demand. To be clear, the cost of lending will never &8220;decrease&8221; below an incompressible cost of capital. The cost of delivering a loan should decrease, and in other sectors, the cost of of a payment (be it domestic, p2p, mobile, cross border, b2b) has yet to decrease across the board.
Meanwhile, the technology world is busy reinventing itself and as the waves of discovery, communication, connection and personalization are flattening, new waves are engulfing us. I will focus on two technologies which I believe are the leading candidates to usher the next wave &8211; again characterized by reduced costs and demand explosion: Artificial Intelligence and AR/VR
Artificial Intelligence holds the promise of bringing our decision making to the next level. Any of the AI vectors &8211; machine learning, deep learning, nlp/nlg/nlu to name a few &8211; will drive down the cost of &8220;decisioning&8221;. By decisioning I mean the ability to arrive at optimal decisions via superior analysis of mountains of disparate data and in the absence of clarity. Most technology companies are locked in an epic arms race hiring the right talent, developing their own AI tech stacks and applying their technology breakthroughs to their fast evolving business models. The next wave may indeed see the rise of cognitive enterprises and cognitively enhanced individuals.
AR/VR holds the promise bringing our interaction with the world to the next level. I understand there are differences between AR and VR and for the purpose of this post will assume them away. AR/VR will drive down the cost of &8220;immersive discovery&8221;. By immersive discovery I mean discovery in action, using the full capabilities of our bodies in movement, in our three dimensional world; as opposed to the discovery we have done to date from behind a laptop or a smartphone. Given the explosion of supply and demand ushered by the plummeting cost of &8220;discovery&8221;, I leave you to imagine what this wave may be able to bring about.
Although it seems AI holds a slight edge over AR/VR currently based on maturity and traction, I do not definitively know which wave will be dominant first at scale, either in the enterprise or retail world. Suffice it to say that either wave will pose unique challenges to the financial services industry. Challenges inherent to customizing, designing, implementing and integrating each new technology paradigm. Challenges inherent in making use of and making sense of these new technologies with the right human skills. Finally, competitive challenges in the face of what we can only assume will be renewed pressure from non financial services enterprises ever more willing to capture poorly defended margins in lending or payments.
Although threats from fintech startups or tech companies have not been successful in eroding meaningful market share yet, many industry analysts believe that up to half and sometimes more of incumbents’ revenues are under threat. I believe this analysis does not fully include the implications of the lower cost of &8220;decisioning&8221; or &8220;immersive discovery&8221;. As such financial institutions may be under even more threat than we realize.
Be that as it may, a reasonable and well educated practitioner will healthily push back and raise two objections to the demise of financial institutions at the hand of the potential dislocating effects of the above digital waves. One is articulated around regulation, the other around core systems.
Regulation is tedious, complicated and costly and serves as a defensive moat. In some instances it can be a drag as financial incumbents cannot act as flexibly or nimbly as non-regulated entities. Still, regulation acts as an effective digital fire retardant. Regtech not only holds the promise of lowering the cost of compliance, it also holds the promise of lowering the cost of developing and disseminating regulation to the market. Should regtech lower the cost of compliance to such an extent that fintech startups become more competitive or non-regulated tech companies become less averse to regulation, then regulated financial institutions will come out weakened, all else being constant. I am not predicting this will happen, yet the likelihood should not be discounted altogether
Core systems in the market today are cumbersome, expensive to build, expensive to maintain. Even though financial institutions &8211; banks or insurers alike &8211; dislike their vendors with the intensity of a thousand suns due to the woeful inability current core systems exhibit operating in a digital world, the fact is not everyone can afford core systems. Imagine a world where the cost of building, provisioning or deploying a core system would plummet and you are one step closer to another incumbent competitive advantage vanishing.
Although the future of regtech and core systems is more difficult to predict than a presidential election, the trends clearly point towards cost and complexity reduction and even though the full effects of either the lower cost of &8220;immersed discovery&8221; or &8220;decisioning&8221; are still be be felt, they cannot be avoided. These new digital waves hold the potential to drastically lower the cost and complexity of &8220;building a bank&8221; or &8220;building an insurance company&8221;. Obviously, regulatory capital, liquidity and solvency issues will still hold, but picture a world where building a core stack will be as easy as building a web site and where the cost will be a fraction of what it is now &8211; to the dismay of the entire value chain of third parties currently feasting on any implementation, from consultants to systems integrators &8211; and you can start grasp the monumental changes afoot. Digital waves keep coming and most financial institutions are still standing. How will they respond to the coming waves is an important question to ask. How will incumbent service providers cope is equally intriguing. How fintech startups exploit gaps will be fascinating to witness.
ps: no #blockchain was harmed while writing this post.
Der Technopark Liechtenstein hat in ihrem Blog das #Liechtensteiner #Fintech #Startup #Tradico interviewt. Das Unternehmen setzt sich massiv für den Fintech Standort Liechtenstein ein.
Manuel Hehle
Ich bin Manuel Hehle und komme aus Bregenz, arbeite in Liechtenstein und habe ein Startup aufgebaut, die Tradico AG. Wir sind ein FinTech-Unternehmen.
Ich habe viele Jahre im Banken-Bereich gearbeitet. Es wird immer schwieriger für mittelständische Unternehmen ihre Waren zu finanzieren, bevor sie sie verkaufen können. Darin habe ich einen riesigen Markt gesehen. So habe ich beschlossen, Unternehmer zu werden und etwas eigenes aufzubauen. So ist Tradico entstanden.
From Pixabay
Unser Business Modell ist, wir kapitalisieren das Working-Capital und erleichtern so das Management von mittelständischen Unternehmen. Wir helfen ihnen ihre Waren zu finanzieren und haben hierfür ein ausgeklügeltes Modell entwickelt.
Wir können online sehr schnell eine Waren-Einkaufs-Kreditentscheidung treffen. Der Unternehmer hat ein verlängertes Zahlungsziel und kann sich auf seine Kernkompetenz konzentrieren.
Für Unternehmer ist dies normalerweise schwierig. Die Banken-Welt hat sich insgesamt verändert, es gibt mehr Regulierungen. Es besteht ein grosses Bedürfnis im Markt für unser Angebot, und wir verhelfen Unternehmern wieder zu Liquidität und #Wachstum.
Daher “Speedup Your Business”—das ist unser Claim. Das leben wir. Wir wollen wirklich Unternehmen helfen zu wachsen.
Kein Mittelstandsunternehmen kannte uns. Wir standen vor diesem Problem. Über LinkedIn und Xing haben wir schnell Unternehmer erreicht und sind dann auch schnell gewachsen. Mit Hilfe von Google Adwords kamen wir zu weiteren Kunden. Im Moment ist unser Zielgebiet die DACH/Li-Region, also Deutschland, Österreich, Schweiz und Liechtenstein.
From Wikimedia
Wir haben uns bewusst für diesen Standort entschieden, weil er eigentlich ideal für unsere Art des Unternehmens ist. Es gibt ein grosses Potenzial an kompetenten Leuten. 25% unserer Mitarbeiter sind Abgänger von, oder noch Studenten an der Universität Liechtenstein.
Es ist ein toller Finanz-Marktplatz. Liechtensteiner Banken suchen nach Partnern in diesem Segment. Wir wollen mit Banken auf Augenhöhe zusammenarbeiten und sehen hier sehr viele Vorteile. Die Finanzierung kommt grösstenteils auch aus Liechtenstein. Es war von Anfang an der perfekte Ort für unseren Start.
Technopark Liechtenstein
Die Holding ist in Liechtenstein, wir sind auch in Liechtenstein operativ tätig. Der Platz ist ideal gelegen im Zentrum Europas; in wenigen Stunden bist Du überall in Europa. Die Liechtensteiner Banken sind unsere Partner. Die Regierung ist ebenfalls Startup-freundlich und das hat uns sehr geholfen.
Es gibt sehr gute Initiativen, wie den Technopark Liechtenstein, der jungen Unternehmern einen Auftrieb gibt und ihnen dabei hilft, erste Schritte zu machen. Gerade am Anfang ist diese Hilfe wichtig.
Netzwerken ist das A&O, überall, egal ob es sich um ein etabliertes Unternehmen oder ein Startup handelt. Liechtenstein stellt dieses Netzwerk zur Verfügung.
Wichtig für ein Startup ist, dass man das Produkt skalieren kann. In unserem Fall funktioniert dies ideal. Wir setzen unser Angebot in verschiedene Kanäle um, wir arbeiten online, was auch sehr skalierungsfähig ist. Ausserdem arbeiten wir mit einem Multiplikatoren-Modell. Grosse Banken vermitteln uns potenzielle Kunden, wodurch wir sehr schnell eine grosse Bandbreite an verschiedenen Geschäften betreut haben.
Im Moment wachsen wir 500% im Jahr (in den #letzten #zwei #Jahren). Wir machen im Moment über 30 Millionen Schweizer Franken Umsatz.
Ein Startup zu Gründen ist mit Hochs und Tiefen verbunden, aber man lernt unglaublich viel. Die letzten 14 Jahre habe ich im Bankensektor gearbeitet, habe auch verschiedene Jobs gemacht. Das ist nichts gegen den zwei Jahren, in denen ich das Startup gemacht habe. Die Erfahrung ist intensiv und Wahnsinn, aber ich würde es wieder machen.
Tradico, ein Liechtensteiner Startup
Das wichtigste ist, den Fokus zu behalten und direkt darauf zuzusteuern. Das zweit wichtigste ist das Team; Du musst Leute anstellen die besser sind als Du selbst. Dann ist es harte Arbeit, oft 16, 17 Stunden am Tag. Mit einem guten Team, der Execution, kann man das Ziel erreichen.
Dieser Artikel erschien zuerst hier
The post Tradico, ein Liechtensteiner Startup mit 500% Wachstum in den letzten zwei Jahren appeared first on Fintech Schweiz Digital Finance News – FintechNewsCH.
The two most prevalent use cases for the #blockchain in #fintech are trade finance and cross-border transfers—moving money at a quicker pace and more securely, according to research by Coindesk. However, as has also been reported, #security is becoming more of a concern for fintechs and for #consumers, especially as our livesRead More
Bank Innovation
For some time it seemed rather academic or nerdy to think about #Bitcoin #scaling. Who cares whether Bitcoin will scale if it is only used by a few people for nefarious activities? Now that one can buy Bitcoin at over 1,000 railway ticket booths that are now also Bitcoin ATMsRead More
Bank Innovation
Die soeben erschiene neue #Schweizer #Fintech Map von #November beinhalted nun 168 Schweizer Fintech Startups. Vier neue sind seit Oktober dazugekommen.
Die Newcomers sind:
Swiss FinTech Startup Map
The post Schweizer Fintech Landkarte &8211; November Update appeared first on Fintech Schweiz Digital Finance News – FintechNewsCH.
U.K.-based foreign exchange app #Revolut is shutting down its #cards in countries #outside the European Economic Area (EEA), including the U.S., Bank Innovation has learned. The move is said to be temporary. In the past few weeks, Revolut #customers across the world received notifications that their cards will be inactive beginningRead More
Bank Innovation
#Robo-advisors are causing an uproar and the #wealth management industry needs to #adapt to this new #environment, says Morgan Stanley, one of the largest wealth #managers on Wall Street.
According to Michael Cyprys, an equity analyst at the firm: “The rising threat from robo-advice leads financial advisor’s role to evolve: greater focus on financial planning, embracing digital tools such as robos as a means to become more efficient; pairing human and machine.”
&8220;Digital capabilities become increasingly more important as Millennials are more digital savvy than previous generations which is transforming the investment and wealth management landscape; innovative new entrants such as Robos could take share,&8221; Cyprys wrote in a note earlier this year.
A survey conducted by Morgan Stanley found that 58% of Millennials and 50% of Generation X are interested in using robo-advisors.
Robo-advisors, or automated digital wealth management solutions, have attracted about US$ 50 billion in assets, according to Aite Group LLC. These solutions charge fewer fees, are more open to smaller investors, and are more convenient, offering mobile access and sleek, easy to use apps and websites.
Although the figure remains relatively small compared to the US$ 130 trillion in assets currently under management globally, robo-advisors &8220;have a long runway for growth,&8221; Cyprys said.
Addressing the emerging trend, many firms and #banks have created hybrid models such as Charles Schwab and Vanguard, both of which have developed services that allow their advisors to make significant use of algorithms and robo-advisors.
RBC has teamed up with BlackRock&8217;s FutureAdvisor, Wells Fargo is planning to launch its own robo-advisor in 2017, and UBS&8217;s American wealth management division has invested in robo-advisor SigFig earlier this year.
Going further, Royal Bank of Scotland announced in March that it would replace 220 investment staff with robo-advisors. The bank said that in the future, only clients with £250,000 or more to invest will get face-to-face advice.
Despite the growing appetence for robo-advisors, industry observers and experts believe that these solutions will not necessarily displace traditional wealth managers.
&8220;This is not a human vs. robot competition where one will win,&8221; Jon Stein, CEO of Betterment, an American automated investing service, told Bloomberg.
&8220;There will be customers who want an online driven solution and there will be customers who want the in person relationship, but even those people will expect better #technology as part of the relationship.&8221;
Echoing Stein&8217;s statements, Citi analysts wrote in a report released earlier this year:
&8220;We see the advent of robo-advice as an example of automation improving the productivity of traditional investment advisers, and not a situation where there is significant risk of job substitution. Higher net worth or more sophisticated investors will, in our view, always demand face-to-face advice.&8221;
Holger Spielberg, head of digital innovation at Credit Suisse, shares this sentiment. In an interview earlier this year, Spielberg argued that automated investment services bring many benefits and opportunities to both customers and the banking sector.
&8220;At the end of the day, we #need to look not at what it means for banking, but for the user – the recipient of financial services,&8221; he said. &8220;We need to put them at the forefront.&8221;
Technological disruption is inevitable, Spielberg said. However, he also believes that some aspects of the traditional wealth management services will remain relevant, notably human engagement.
&8220;The human element is a crucial aspect of our strategy,&8221; he said. &8220;What isn&8217;t changing, even with all the changes, is the intent in receiving value.&8221;
Rather than creating a faceless and unresponsive automation, robo-advisors may very well add value and efficiency to private wealth management.
In July, former Credit Suisse bankers Bastian Lossen, Giles Keating and Felix Roescheisen announced plans to launch a new robo-advisor service called Werthstein, according to Finews.
Werthstein has created a new approach in digital wealth management. The solution combines a multimedia platform with portfolio management. The platform will provide wealth management services for free. Customers will only pay a subscription fee for video and multimedia content provided through the platform. These will mainly consist of video clips of bankers and experts sharing investment ideas.
Other robo-advisor services in Switzerland include True Wealth, Glarner KB, Swissquote, and InvestGlass.
Featured image: Robot hand by Ociacia via Shutterstock.com.
The post Robo-Advisory: Wealth Managers Need to Adapt to New Environment appeared first on Fintech Schweiz Digital Finance News – FintechNewsCH.
The #asset #management side of #insurance business is a sleeping beauty that hasn’t awoken to the #Fintech drumming. Apart from the regulatory driven involvement due to Solvency II ( covered here) I have not seen any laser focus from Fintechs in the asset management part of insurance businesses. Naturally, lowRead More
Bank Innovation
S.E.A. Asset Management a boutique fund manager in #Singapore, announced it has listed its UCITS compliant Asian short duration high yield strategy on the Fundbase platform in Switzerland.
Via LinkedIn
The award winning #Swiss #Fintech company Fundbase has developed a database that acts as gateway for investors helping them to find and follow alternative investments that interest them.
Fundbase offers built-in analytics tools as well as the ability to track investment funds via watch lists and collaborate with funds via their user interface.
Alexander Zeeh CEO
“We are proud to cooperate with the leading platform for discovering, analyzing and executing alternative investments” said Alexander Zeeh, CEO of S.E.A. AM. “Fundbase will allow us to increase our exposure and allow us to connect with qualified investors in Switzerland”.
Gallen Tay, CIO of S.E.A. AM is overseeing the company’s fixed income and equity investments out of Singapore.
Dieser Artikel erschien zuerst auf dem Finanzprodukt Blog
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