With Blockchain, Where There’s Smoke, There’s Usually More Smoke
In this op-ed, Jonathan and Robert Wolinsky of the Genesis Project focus on the #blockchain #technology industry’s inability to deliver on its promise.
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Blockchain to Optimize and Secure Client Data Information – Part 3
Blockchain-based Enigma system
Researchers from the Massachusetts Institute of #Technology, therefore, have developed a guaranteed privacy system based on #blockchain, in which #data can be stored, verified and shared without ever being revealed to any of the network’s parties. ‘Enigma’, which is powered by the blockchain, is essentially “different computers that are talking to each other, but they don’t do mining, they just provide resources to the network, bandwidth, some of their hard drives, some of their CPU power”, according to co-founder Oz Nathan, a technology entrepreneur with experience working with the Counter Terror Unit of the Israeli Defence Forces. This will purportedly allow #banks, for instance, to confidently sign up to private blockchains, knowing that sensitive #client data will remain private.
Enigma’s founders are also speaking to medical companies, particularly those who are unable to put huge swathes of client medical #information onto the blockchain. As a solution, Enigma breaks down data into smaller pieces, and rather than performing conventional encryption, a “secret sharing” method is used, according to co-founder Guy Zyskind where the system “guarantees mathematically that each of these pieces are completely masked, completely random and completely #secure&8221;.
Blockchain is to prevent industrial data breaches
Moreover, there does not appear to be a limitation to the magnitude of projects that can be put onto the blockchain. The UK government is now looking to blockchain technology to protect itself against data breaches within some of its biggest industries. Guardtime, which provides cyber-security services and uses blockchain to secure sensitive data, recently announced it will be in charge of protecting the UK’s nuclear power stations, flood defence systems and electricity grids from cyberattacks.
According to a recent report by think tank Chatham House, a ‘culture of denial’ currently exists in the UK’s nuclear power industry with regards to the risk of cyberattacks. Blockchain’s permitted ledger, however, can be used by Guardtime to boost the security of some of the largest systems of UK infrastructure. The system uses hash-function cryptography that is based on ‘signature’ authorization, known as Keyless Signature Infrastructure (KSI). Ultimately, the technology allows all data across the system to be securely authorized, while allowing for independent verification of the records, without the need for centralized authorities.
Although blockchain’s technology has been synonymous with the rise of #Bitcoin, Guardtime has been using similar technology for the purpose of security prior to Bitcoin’s emergence. The company employs cybersecurity experts who have experience in the US military, as well as state-level digital security experts from Estonia, who resolutely defended the country from a comprehensive cyberattack by Russia in 2007. Indeed, Estonian innovations in addressing confidentiality and data integrity have been deemed by the US as cutting-edge, which has in turn led to the formation of the #FinTech partnership.
Defence systems, telecommunications companies and financial-services firms are all looking at the technology, according to CTO Matt Johnson, who also believes that Guardtime&8217;s permitted blockchain can provide proof of time, identity and authenticity, while preserving confidentiality of the data, on an industrial scale.
The post Blockchain to Optimize and Secure Client Data Information &8211; Part 3 appeared first on Fintech Schweiz Digital Finance News – FintechNewsCH.
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London’s Fintechs: Top 10 Rising Stars
Although not as large as in the US, London has a burgeoning startup ecosystem that leads the European market. In the field of #fintech, though, London is the world’s number #one.
The UK, which employs some 61,000 people in the financial #technology sector, ranks ahead of other competitors. In 2015, fintech generated £6.6 billion (US$ 9.41 billion) in revenue, and accounted for 32% of all revenues generated across in-scope regions.
Image credit: Tower Bridge in London by Mapics, via Shutterstock.com
In a report commissioned by the UK&8217;s HM Treasury released earlier this year, EY argues that the UK&8217;s strong fintech ecosystem could be in part explained by its world-leading fintech policy environment. This prosperous environment includes supportive regulatory initiatives, tax incentives, and government programs designed to promote competition and innovation.
London in particular has a number of very successful fintech startups which grew on to become unicorns. These billion-dollar ventures include Skrill, the popular e-commerce business providing online payments and money transfers services; Wonga, a payday loan company offering “short-term, high-cost credit;” TransferWise, a peer-to-peer money transfer service; Funding Circle, a peer-to-peer lending marketplace; and Markit Group, which provides independent data, trade processing of derivatives, foreign exchange and loans, customized technology platforms and managed services.
Powa Technologies, once valued at US$ 2.7 billion, collapsed into administration in February this year after blowing through more than US$ 200 million of investors&8217; money. Powa Technologies, which provides mobile commerce and e-commerce services, was struggling to sign clients, struggling with management dysfunction and a demoralized workshop, according to a report by Business Insider.
Powa, which appointed Deloitte as administrators following its failure, was eventually broken up and two of its units, namely PowaWeb and PowaTag, were sold to separate groups of investors.
Like anywhere else, there are winners and losers, but today, we will focus on London&8217;s top 10 #rising #stars:
WorldRemit
Founded in 2009, WorldRemit offers much cheaper international money transfer services than traditional players and further allows users to send money to and from smartphones.WorldRemit has raised over US$ 145 million so far and was valued at US$ 500 million in a US$ 100 million funding round last year, according to the Financial Times.
RateSetter
RateSetter is a peer-to-peer lender that lets users lend their savings out to individual borrowers. The platform has lent over £1.2 billion (US$ 1.72 billion) since launching in 2009.RateSetter has raised over US$ 10 million in funding so far. The company is known for having introduced the concept of a &8220;provision fund&8221; into peer-to-peer lending and has recently announced plans to broaden its client list to include small and middle-sized enterprises.
Crowdcube
Founded in 2011, Crowdcube is an equity crowdfunding platform that lets companies raise money by selling shares online, and people to purchase equity in unlisted, UK-registered, businesses.The platform has helped 400 businesses raise over £160 million (US$ 228 million) from over 280,000 investors since it launched in 2011. Crowdcube has raised US$ 18.6 million in funding so far.
Zopa
Founded in 2005, Zopa is the world&8217;s oldest and Europe&8217;s largest peer-to-peer lending platform service that lets users lend money to others. Zopa, an award-winning loan provider, has lent over £1.53 billion (US$ 2.19 billion).Zopa is also a founding member of the Peer 2 Peer Finance Association industry group. The company has recently branched into the car loan refinance market and phone finance.
Zopa has raised over US$ 55 million in funding.
Seedrs
Seedrs is an equity crowdfunding platform for investing in startups and later-stage businesses throughout Europe. Founded in 2012, the platform lets users invest as little as £10 or €10 into the businesses.Seedrs has allowed £130 million to be invested in over 350 deals since the platform launched. In 2015 alone, 38,000 individual investments were made on Seedrs worth £64 million (US$ 91.5 million).
Seedrs has raised over US$ 21 million in funding so far.
iwoca
iwoca is an award-winning finance provider for small businesses in the UK, Poland, Spain and Germany. iwoca offers flexible credit, allowing businesses to get up to £100,000 in credit facility. The company is partnered with Alibaba to offer a trade finance product, e-Credit Line, to businesses purchasing from Chinese suppliers.iwoca has raised US$ 31 million in funding. The company was founded in 2011 by two ex-investment bankers from Goldman Sachs and Deutsche Bank.
Atom Bank
Atom Bank is what we call a &8220;neo-bank,&8221; a branchless, app-only bank. Founded in 2014, Atom Bank received its banking license in June 2015 and launched its app in April 2016.Atom Bank is backed by Spanish bank BBVA, Woodford Investment Management and Toscafund Asset, and has raised over US$ 196 million so far. Atom Bank is targeted at the millennial generation.
Currency Cloud
Currency Cloud provides &8220;cross-border payments as a service.&8221; The company&8217;s platform leverages the cloud to provide access to and optimize across a multitude of payment networks and exchange rate providers, and at cheaper costs. Currency Cloud&8217;s technology powers some of the industry&8217;s biggest names including WorldRemit and TransferWise.Founded in 2012, Currency Cloud has raised US$ 35 million in funding.
Tandem
Founded in 2014, Tandem is an app-only bank which made headlines earlier this year when it successfully raised £1 million (US$ 1.43 million) in its first crowdfunding round in just 15 minutes.Tandem, which has yet to launch, has already been granted a banking license and has been valued at £65 million (US$ 92.9 million), according to Business Insider.
SETL
Founded in 2015, SETL develops and provides #blockchain infrastructure for finance firms.SETL has launched earlier this month the OpenCSD, a blockchain powered platform that enables market participants to run permissioned registry service for payments, settlement and clearing of cash and other financial instruments.
If you are interested in learning more about London&8217;s fintech scene and emerging trends in digital finance, two events will take place in London in the coming months.
London Fintech Week, which will take place between July 15 and 22, 2016, will dive into the city&8217;s thriving fintech community. The week-long event will tackle anything from blockchain tech, payments technologies, to capital markets and insurtech.
Special Offer: Sign up now with code FTSW to get 15% discount for event registration!
Another event, the Global Expansion Summit, will cover the broader digital economy on October 17 and 18.
Special Offer: Sign up now with code FINTECHNEWS to get 20% discount for event registration!
Featured image: Millennium Bridge in London, by Songquan Deng, via Shutterstock.com.
The post London&8217;s Fintechs: Top 10 Rising Stars appeared first on Fintech Schweiz Digital Finance News – FintechNewsCH.
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Citi Shows Off the Eye-Popping Power of Virtual Reality for Trading [VIDEO]
We’ll say this: #virtual #reality #trading looks cool. Citigroup released a #video earlier this week that #shows the potential (tremendous) #power of virtual reality to present data for trading. The example used is a trader at a workstation with a massive monitor — the #technology could equally be used with mobile devices &8212;Read More
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Blockchain to Optimize and Secure Client Data Information – Part 2
Blockchain application in financial data and compliance
Blockchain makes the top secured financial transactions controllable
The financial services industry is another major area in which #client #information must be securely protected to prevent market manipulation. At the same time, however, compliance divisions must be aware of the identity of trading counterparties in order to mitigate potential money-laundering activity. As such, a system which balances both compliance requirements and trading anonymity is required.
Indeed, regulators may find the anonymity of #blockchain a challenge to wholly approve, as it makes it difficult for them to conduct their ‘know your customer’ (KYC) checks to prevent money laundering. Blockchain’s close association with #Bitcoin, moreover, hasn’t helped matters, especially as the #cryptocurrency has been notoriously used in criminal activity, and even funding for terrorist activity.
Blockchain offers solutions to AML
In November, Israeli start-up Polycoin showcased its blockchain-based compliance service, which will provide a verification system for financial transactions. This will help compliance officers to handle their anti-money laundering (AML) and KYC requirements. Polycoin’s platform scrutinizes financial transactions to try and identify who they are from, and they are then placed into a ranking system. Those transactions deemed as being suspicious – such as an AML breach – will be identified by Polycoin’s platform, which will then send an alert to compliance for further investigation.
Polycoin CEO Alfred Shaffir thinks his firm can provide a complete solution for blockchain compliance, and considers Polycoin’s innovations could have as profound an impact as digital financial crime prevention tool ‘NICE Actimize’ had in the late 1990s. As such, Shaffir is of the opinion that for any bank working with blockchain, transformation of compliance systems and procedures will be their first priority.
Indeed, #banks have already responded positively to Polycoin’s proposals, with the start-up participating in the innovation accelerator project in Israel conducted by financial services giant Citi, while also being chosen as one of 10 participants out of 170 applicants for Finnish bank Nordea’s accelerator in Helsinki. Shaffir has stated that Polycoin has received much interest from those banks that are interested in integrating blockchain into their businesses in the future.
Blockchain compliance specialist Tradle is simplifying the KYC process even further. Last August saw London’s Startupbootcamp #FinTech accelerator take place, where Tradle CEO Gene Vayngrib explained how blockchain #technology could ease the costly pain of compliance for banks. The company is creating a user-friendly smartphone interface that will allow documentation to be sent electronically, thus eliminating the need for inefficient paper-based communication. Furthermore, within each bank currently, separate KYC checks are conducted across products, divisions, locations and subsidiaries &8211; this lack of sharing elevates KYC costs unnecessarily.
Vayngrib instead proposes a blockchain-based app called Trust in Motion which stores KYC #data on a permitted ledger and which all authorized parties can access when required. He calls it the Instagram for KYC, as clients can snap a picture of their ID documents (their passport, for example) and send it directly to the bank. Once the compliance officer verifies the pictures using authentication processes, the documents are digitally signed and put onto the blockchain which, assuming the appropriate authorizations have been granted, can be co-managed by the bank and the client for updates and reverifications.
Blockchain automates AML procedures
The technology could also be extended to include AML rules, whereby instead of having to prove to regulators that AML checks have been conducted by sending them mounds of data, automatic procedures can be established that perform AML duties such as the reporting of suspicious transactions. According to Vayngrib, the blockchain method wholly preserves the privacy of the data, while the regulator “could get information about suspicious transactions without banks sharing a lot of raw, private data with them”.
While regulators will like the fact that blockchain’s verification process involves a network of users providing authentication and security, bankers on the other hand will not like this lack of privacy, particularly when it comes to sensitive trading data. Furthermore, financial institutions (and other companies) have suffered numerous data breaches in recent years that have cost them dearly.
Even if several banks are operating on a shared private ledger (with only a limited number of network users), each bank will still want to keep data from every other user in the network. Banks are extremely secretive about the business they transact, as well as the clients with whom they conduct business, meaning that this information can’t be disclosed to competitors, even on a private blockchain.
The post Blockchain to Optimize and Secure Client Data Information &8211; Part 2 appeared first on Fintech Schweiz Digital Finance News – FintechNewsCH.
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Bank of England Explores Blockchain, Says Digital Currency is Far Off
The #Bank of #England is continuing to explore distributed ledger #technology as part of a wider embrace of financial technology.
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Blockchain To Optimize and Secure Client Data Information – Part 1
As #data becomes increasingly powerful, meaningful and valuable, concerns over its security are on the rise. Indeed, ‘big data’ has become the recent buzz-term to describe the ever-expanding, often-unstructured nature of important #information, and has opened extensive discussions over how to approach ensuring data integrity is maintained.
Data Security
One of the primary appeals of #blockchain is the security it provides, which prevents such data from being hacked. The data is fed into the system, where an encrypted code – known as a ‘hash’ value – is created for each initial transaction. Unique hashes are then combined (which allows large amounts of data to be processed), before being placed onto the block’s header along with a timestamp. At this point, the header becomes #part of a cryptographic puzzle which must be solved by the blockchain’s network of users – through a trial and error process, from trillions of possibilities – before it is finally added to the blockchain. This layered system of security, therefore, is being sought after by industries in which #client information is of a highly personal and/or valuable nature.
Blockchain application in healthcare
One of the most eagerly anticipated applications of blockchain is in healthcare, an industry which has long needed to undergo data optimization. In late January 2015, US health insurance provider Anthem learned of a massive cyberattack to its IT system, which ended up compromising a staggering 80 million patient and employee records. Because only one entity was being used to keep records of sensitive client health information, all data became readily available to the hackers from this single source.
The blockchain, however, uses cryptography to enable security in record-keeping, as well as sometimes using a system of ‘multi-signatures’, whereby gaining approval to the blockchain – and access to client data – requires the approval of several authorised users. Moreover, this can apply to all client data. Given the intensely private nature of such information, it requires the utmost protection, which blockchain can provide. Information relating to the client’s identity, medical history, specific diagnoses, treatments undergone and much more can thus be protected.
US companies lead the early blockchain explorations in healthcare
The US is currently leading the way in much of the early explorations, although the Dutch health giant Philips Healthcare is also investigating blockchain’s scope for use in the health industry. Little has been revealed about Philips’ project, other than it is in collaboration with Tierion, a start-up which is facilitating the collection and storage of big data on the blockchain. Tierion uses a system called chainpoint to ensure that all the data can be verified by blockchain receipts and timestamps. Meanwhile, California-based blockchain company Gem is also examining blockchain’s healthcare potential.
Gem CEO Micah Winkelspecht believes blockchain’s true benefit will be realized once independent parties within the health industry can be connected to the ledger to manage the lifecycle of a hospital bill. The blockchain, therefore, could be used to manage payments for numerous parties, including “insurance companies, hospital billing departments, lenders, and patients”, and Winkelspecht is now in discussion with relevant stakeholders within the health industry to explore this possibility. From there, Winkelspecht attests that blockchain can then be used “to manage the lifecycle of a patient’s medical record”, among other uses.
US blockchain company Factom, which is currently working with the Honduran government to provide greater security for the country’s land registry data, has also partnered with medical records and services solutions provider, HealthNautica, whose clients include hospitals and physicians, in order to use blockchain to enhance the security of medical records and achieve efficiency in claims processing. HealthNautica’s data, ranging from medical bills and client-physician communications to claims and disputes, will be cryptographically encoded by Factom, which produces a digital fingerprint of the data which is time-stamped and verified.
Patient confidentiality is maintained throughout because at no point is client data seen by third parties, Factom included. HealthNautica president Shailesh Bhobe calls Factom’s blockchain #technology the “perfect fit” for improving the security of its data, while board member Andrew Yaschuk believes that if health insurance companies are also educated on the merits of blockchain, all parties can be involved in verifying claims data while still protecting client confidentiality.
The post Blockchain To Optimize and Secure Client Data Information &8211; Part 1 appeared first on Fintech Schweiz Digital Finance News – FintechNewsCH.
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How a 3-D Printed Building Became the Center of Blockchain in the Middle East
CoinDesk profiles a recent meeting of the Global #Blockchain Council, a 40-member working group seeking to boost the #technology in the MENA region.
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Bank of Canada Demos Blockchain-Based Digital Dollar
The Central #Bank of #Canada revealed yesterday it is developing a #digital version of the Canadian #dollar based on #blockchain #technology.
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The Future is Now for Banking as a Platform (BaaP)
What do fast-growing companies like Uber, Airbnb, Amazon, Deliveroo, and Facebook all have in common? They’re all platforms.
Deliveroo delivers food – but doesn’t make it; Uber is the world’s largest taxi firm, but doesn’t own any taxis; Airbnb is one of the world’s largest accommodations provider, but owns no accommodations.
These platforms have quickly grown to become giants in their fields because they benefit from network effects: the more people and businesses that join them, the bigger the benefit of being a member, which creates a positive feedback loop encouraging further growth.
But What About #Banking?
So far, banking has been almost unique in resisting the platform business model: there were no benefits from network effects – so no reason to share a platform, and #banks owned the way customers purchased financial services – so no reason to share an alternative.
But all of that is changing.
New #technology is lowering the barriers to entry, new regulations on information sharing (such as PSD2) are creating opportunities for new business models, and changes in customer attitudes are encouraging fresh approaches.
Soon, banks may lose their dominant position as the primary intermediaries for their customers, and traditional industry leaders will face calls to either revamp or risk becoming obsolete.
What does the future hold for your #bank? And how will #BaaP fit into the equation?
What will BaaP look like?
In the traditional model, banks create products and sell them to their customers. Almost all of the products and services offered are owned and controlled by the bank, and there is only limited collaboration with key partners.
In contrast, a BaaP model allows for much more in the way of partnerships. Banks focus only on their core activities, with other functions fulfilled by partners. There is scope for partners to develop and offer their own products, which will work in partnership with the core products through the use of APIs and open source. Key data is shared with partners to enable this.
Three Questions Banks Must Answer to Succeed at BaaP
Moving to a platform model is a big step, involving reversing the silo mentality that many banks have and replacing it with a new culture in which other #FinTech organisations aren’t necessarily your rivals.
Here are three key questions banks must answer before getting started:
1. What is your focus going to be?
When you move to a platform model, you no longer need to be producing and controlling every product. The possibility for other businesses to have products on your platform means you must decide exactly what value you are going to bring, as this will influence which partners you try to attract to your platform.
2. How will your architecture support your platform?
Most legacy software used by banks were built with the idea that other businesses should not have access to the information within. These silos need to be broken down, and new infrastructure built in their place that enables APIs and open standards.
3. How will you maintain and improve security?
The necessary changes in culture and technology to move to a platform strategy will inevitably create new security challenges. As these changes take place, it is imperative that banks continue to invest in their security; a significant breach in the early days of a platform could cause significant damage to reputation, making it harder to gather partners.
Should You Choose a BaaP Model?
BaaP is happening now – and those that embrace it now will have a significant advantage over those left trying to catch up. The platform model offers almost limitless possibilities for those that choose it, and banks should decide soon whether they want to have an absolute platform or not.
Are you considering BaaP? Crealogix can help. We provide a multi-disciplinary absolute platform model that is fully-customisable, modular, and transparent.
To find out more, check out Crealogix
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Elke Blank-Buerk is Senior Sales Manager at CREALOGIX Group.
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