US Congress Reps Receive Blockchain Briefing at Capitol Hill Event
More than 15 members of #Congress met with representatives of the #blockchain #technology industry this week in Washington, DC.
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Competitive Collaboration in the Fintech Age
“How did you go bankrupt?” Bill asked.
“Two ways,” Mike said. “Gradually and then suddenly.”
The Sun Also Rises, Ernest Hemingway, 1926.
—
Inflection Point
After three-and-a-half years of helping build and scale AMP Credit Technologies – first as head of product management; then as head of strategy & corporate development – today marks my penultimate day with the company. Next month I’ll take on a new challenge: as Asia-Pacific #Fintech Leader for Ernst & Young (EY).
From the outset, our thesis at AMP was that enabling incumbent #banks (or at least those with the capability and willingness to work with startups) was preferable to competing with them – that combining our respective strengths would allow for greater scale and performance than competition and disintermediation. To be sure, we first had to build and demonstrate the efficacy of our alternative lending platform by putting our own money in the market (four separate markets, to be precise) as the ultimate “proof of concept”. Once that was done, and the results made clear, we knew that we’d be in a position to enable the more forward-looking banks to profitably provide unsecured credit to traditionally under-served small businesses. A similar thesis had informed our approach at Realex Payments – the European ecommerce payment gateway (since acquired by Global Payments, Inc.) which combined direct-to-market customer acquisition with white-labelled full-service delivery for partner institutions.
Competitive Collaboration
At its simplest, the thesis is that existing financial service providers have key competitive advantages relative to most challengers – not least those pertaining to cost of capital, data, distribution, and often (though not always) regulatory certainty. Conversely, the better fintechs are typically those that capitalise on their advantages relative to speed (both of decision-making and of action), organisational agility, and a demand-led focus on transparency and customer experience.
With experience on both sides of the table, it is my sincere belief that the greatest opportunity lies not in all-out competition but in a form of “competitive cooperation” between incumbents and fintechs. Indeed, despite the often confrontational rhetoric, many fintechs are already heavily dependent on the existing banking and payments infrastructure. In addition, I’m confident that we’ll see increased collaboration between fintechs (both early- and growth-stage) as they seek horizontal and vertical reach via international partnerships and product bundling, respectively. Finally, I expect ever-more collaboration between incumbents as they seek to acquire or maintain product and geographic coverage without having to build it themselves (with all the capital and regulatory considerations that would entail) – or simply as a means to pool technical knowledge.
Building solutions for banks and non-bank financial institutions has taught me that most incumbents are not prepared – technically, organisationally, culturally – for working with startups. Conversely, as an active member of the startups community (both as mentor and investor), I’m also fully aware how unprepared many startups are for working with incumbents. Both sides require support in addressing the challenges and opportunities of service un-bundling and re-bundling, of customer dis-aggregation and re-aggregation.
The Fintech Age
The application of #technology to financial services has historically been the preserve of established incumbents or their largest technology vendors. More recently, the ever-increasing availability of and access to inexpensive distributed computing power (and data analytics) has allowed new entrants to develop services and scale at unprecedented speed – thereby heralding a new ‘Fintech Age’. When considered in light of the regulatory changes of recent years and evolving customer expectations, it’s not hard to see why traditional financial services are being decoupled and in some cases displaced.
While there are certainly common characteristics to the rise of fintech as a global phenomenon, there are also environmental factors unique to Asia-Pacific. The global financial crisis – which simultaneously contributed to greater regulation and the retrenchment of global players – had rather different impacts in Asia than in the US or Europe. Correspondingly, the response of both governments and markets has been different. Added to this, we have the sheer size of the markets in Asia (whether of the traditionally unbanked or growing middle classes), their diversity, the absence of common platforms, the ascendancy of the mobile internet, and the associated opportunities (or necessity) for technological “leapfrogging”; these are the features that make Asia-Pacific the most exciting region in the world when it comes to new-form financial services. Mainland China, for example, is undoubtedly the world-leader when it comes to advances in alternative credit scoring, frictionless payments, and social commerce. Clearly there is much that each region can learn from the others.
Pastures New
And so it is that I move into a new role – one focused on driving collaboration and competition across verticals (banking, insurance, telecommunications, etc.) and throughout the region. As Asia-Pacific Fintech Leader it will be my responsibility to help EY clients (both current and future) navigate these new-form challenges and opportunities, while creating an environment of cooperation and collaboration across the spectrum. I’m determined to move past the current trend of marketing-led “collaboration 1.0” initiatives to more nuanced partnership offerings and real open innovation – with the incentives of all parties aligned from the outset. I expect to focus less on brand-building and more on advising clients on strategic partnerships and targeted acquisitions. The overriding objective will be to separate reality from hype, signal from noise.
I look forward to working with like-minded individuals – in industry and venture capital, in government and regulators, in startups and growth-stage innovators – to foster an environment of mutual advancement. I even hope to work with other service providers in this new era of “competitive cooperation”, wherein a rising tide will surely lift all boats.
Just as we’ve seen a new generation of fintech entrepreneurs (typically with a background in financial services) so too will we see a new generation of trusted advisors – those with the requisite knowledge, experience, passion, and excitement to address the challenges and opportunities of the Fintech Age.
Financial services is about to change in two ways: gradually and then suddenly.
[linkedinbadge URL=”https://www.linkedin.com/in/jamesphiliplloyd” connections=”off” mode=”icon” liname=”James Lloyd”] is Asia-Pacific FinTech Leader @ EY and this article was originally posted on linkedin
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The omnichannel customer experience is poised to take off in regulated industries
The #omnichannel #customer #experience is nothing new, especially in the consumer and retail #industries. Many companies and brands are using data and automation technologies to engage seamlessly with their customers at any time and place and across any device. At the same time, omnichannel doesn’t mean digitizing every aspect of the customer journey without regard to which channel is… Read More -
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Nasdaq Opens Blockchain Services to Global Exchange Partners
#Nasdaq‘s new financial infrastructure hub could pave the way for other exchanges to start using #blockchain #technology in a wide range of #services.
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Blockchain Entrepreneurs, Musicians Test Ideas at Berlin Music Festival
A group of #musicians, #entrepreneurs and #blockchain advocates is set to gather at a #festival in Germany later this week.
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TransferWise Valuation Tops $1 Billion, Will Target SMBs
London-based money movement startup #TransferWise announced it has received a further $ 26 million in funding to expand into the small business market. TransferWise’s #valuation now stands at $ 1.1 #billion, according to TechCrunch — so the birth of a #fintech unicorns is not a thing of the past. TransferWise allows users to sendRead More
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Marketplace Lending Platform – Build vs Buy
Peer-to-Peer or Marketplace lending platforms have transformed the lending space, making it more convenient and accessible for both lenders and borrowers, by using #technology as a backbone. The industry is witnessing extraordinary growth with PwC’s analysis indicating the P2P lending market could reach $150 billion or higher by 2025. The reason these marketplace lenders have been able to disrupt the status quo is because they have identified the consumer pain point and using technology, offered agility, flexibility and better experience which the banking behemoths were not able to.
Given the growth rate and the still untapped potential in many global markets, no wonder many players now want to enter the space with their own P2P lending platforms. Most of these players are either existing lenders, financial institutions, investment management companies or people with experience in Bank and Financial Services Industry , who are probably bored of their jobs and now want to explore the realm of alternate lending. Most of them understand the lending business, some of them have access to borrowers or lenders – but few of them have expertise or access to technology.
So here comes a Shakespearean dilemma –
to build or to buy the technology platform?
Why is this question important and what is at stake? We explain in detail below and lay out the options
- Time to Market – Perhaps the most important determinant of your success is your time to market. Will you be one of the first few players in your geography or merely an also-ran? Launching quickly is a huge advantage so your technology has to be ready quickly. Building it in-house would take around of 10 – 18 months whereas a good, while an established software vendor can have you up and running in 1 month.
- Cost Efficiency – When evaluating the cost of building vs. buying a software, keep in mind that the cost of building is not limited to the cost of development. It also includes cost of maintenance and upgrades. Buying a software solution means that the vendor takes care of maintenance and upgrades. Overall, the cost of building is typically around four times higher than the cost of buying.
- Expertise – You are most likely financial expert and not a technology expert. The project management of building a software from scratch is not an easy journey and can be full of unexpected delays. A software vendor on the other hand will provide you with a mature product that has been tested and used by others. Moreover, at the start of building the software you may not be able to fully anticipate the features required whereas buying a product will come with features that have been well thought through due to feedback loop from existing customers.
- Scalability & Flexibility – Since marketplace lending is a young industry, you need technology that is scalable and flexible to grow with you. You may want to introduce a new loan product or enter a new geographic market. If you need to innovate or change something in your process, the technology should be agile enough to support this and not be a step behind. A platform built by an experienced software vendor would be much more likely to provide that than an in-house system. This is because vendors invest significant time and resources to ensure their solutions are flexible to cater to a wide customer base. A platform solution offered by a vendor would also be already supporting different loan products, making it easy for you to enhance your own loan offering.
P2PForce is a mature software, and has quickly gained traction in the market due to the flexibility ans scalability it offers to companies looking to enter the marketplace lending space.
Unlike other such software providers, P2Pforce is built from scratch and hence more customizable. It is modular and based on APIs which means it can easily be integrated with other systems, either in parts or in whole. It is now used by clients in UK, Singapore, Europe, Philippines, Malaysia and India.
It offers superior functionality in a cost efficient manner so that you can succeed in your quest to launch your own P2P lending platform. The software is cloud-based and can be accessed from anywhere on your browser. We also ensure that your data is secure and that you have all the technical support you need so that you never have to worry about technology, leaving you to focus on growing your business.
[linkedinbadge URL=”https://www.linkedin.com/pulse/marketplace-lending-platform-build-vs-buy-vishal-sahu” connections=”off” mode=”icon” liname=”Vishal Sahu”], is Co Founder & CEO at #Fintech Labs and this article was originally published on linkedin
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Goldman Sachs: Blockchain Tech Could Save Capital Markets $6 Billion a Year
A new report from #Goldman #Sachs Investment Research projects #blockchain #technology #could #save billions across industries.
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Switzerland Is Lagging Behind on Digitalization, Says New EPFL Study
While #Switzerland is a global leader in many sectors, the country is #lagging #behind on #digitalization, according to a new #study.
In a new report released today, the Ecole polytechnique fédérale de Lausanne (#EPFL) – on behalf of Swisscom and SIX &8211;, explores Switzerland’s current digital landscape and details how it can benefit from future technological developments.
The document, entitled ‘Switzerland&8217;s digital future &8211; Facts, challenges and recommendation,&8217; suggests that although Switzerland is recognized as one of the world&8217;s most competitive economies, the country is lesser known for its information #technology sector or for its influence in the digital economy area.“The EPFL study clearly shows that although Switzerland is well placed globally, we are not in an overly strong position either,” Urs Schaeppi, CEO of Swisscom, commented on the research findings. &8220;We need to take action today so that we do not miss the opportunity to harness the technologies of the future.&8221;
The report focuses on five current trends in digitalization: digital infrastructure, startup ecosystem, data governance, the digitalization of the public sector, and societal trends. It aims at identifying Switzerland&8217;s strengths and weaknesses in the global landscape.
Findings suggest that Switzerland has a strong and highly competitive ICT infrastructure, but at the same time, is constrained by strict regulatory requirements and costs regarding mobile broadband.
The report also points out that there are still untapped opportunities in relation to data management as Switzerland has an excellent reputation globally for responsible data management and effective data protection. Therefore, it is ideally positioned to become a global &8220;safe haven for data&8221; and a prime location for &8220;big data&8221; centers.
When it comes to the entrepreneurial spirit, however, the study found that Swiss people are lagging behind the likes of the US, for instance, which has a strong startup culture. The Swiss startup ecosystem has not emerged yet, the report #says. It notes that changes in funding and taxing startups would help make the country more attractive to creative, tech-oriented companies.
The report also suggests that current legal framework is holding back digital progress. It notes that the country&8217;s relatively high level of regulation can pose a barrier to digital process. Additionally, e-government is relatively underdeveloped is Switzerland and represents an untapped opportunity for the Administration and the economy.
Some of the barriers to achieving success and becoming a major player in digitalization, are not specific to Switzerland, though. For instance, the report notes that digital literacy and readiness should be promoted through dedicated programs.
The report also lists a number of recommendations in order for Switzerland to fully benefit from technological developments.
Among these recommendations, the document suggests an increase in private and public infrastructure investments in mobile broadband. It also advises for the promotion of the attractiveness of Switzerland&8217;s infrastructure for finance-oriented digital infrastructure.
Switzerland should further improve and promote its position as a secure trusted center of corporate and individual data.
Furthermore, new funding mechanisms must be introduced to fill the gap between seed money and large investments.
&8220;Switzerland&8217;s digital future will depend on citizens, policy makers, and entrepreneurs at the local and global level,&8221; the report concludes.
Featured image: Man holding social object by chanpipat, via Shutterstock.com.
The post Switzerland Is Lagging Behind on Digitalization, Says New EPFL Study appeared first on Fintech Schweiz Digital Finance News – FintechNewsCH.
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ShoCard and SITA want to store your ID details on the blockchain to authenticate travelers
#ShoCard and #SITA, the IT company for the air transport industry, have been working together on an interesting project. They’ve been looking at ways to #store your ID #details on the #blockchain to manage traveler identification. More generally, ShoCard has been working on a seamless service that lets you store your identity onto the #bitcoin blockchain. This way, anyone can retrieve and… Read More
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