When I first spotted #Shift #Technology with their focus on #fraud detection for #insurance, I assumed I would find a venture in Israel (which is known for smarts in finding the bad guys in cyberspace, as we outlined when we went to Israel on our #Fintech global tour). So I was surprised to find that…Read more Shift Technology #using AI to #battle Insurance Fraud insuretech
Bank Innovation
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This post appeared first in The Times and Raconteur in the #UK.
Until the financial crisis #banks had enjoyed decades of growth unencumbered by the disruption seen in the newspaper, telecommunications and music industries.
During the good years banks’ profits soared and, while they embraced customer-facing internet and mobile apps, the foundations, processes and #technology on which banks are built, despite billions spent on technology, would look familiar to those who worked there in the 1970s.
UK banks now face the perfect storm of significant technological advancements plus a regulator and government that want to foster innovation, and an ever-growing disillusionment of banking customers to banks’ offerings.
Disrupting #financial services
In recent times the UK has been hailed as a global leader for a new type of company called a “#fintech” which combines financial services, technology, and innovative processes and customer experiences to compete with traditional banking products.
Companies such as Nutmeg, TransferWise, MarketInvoice, Mondo Bank and their kind, offer a genuine alternative to the major banks for financial services. These fintech companies have the advantage of starting with a blank canvas and standing on the shoulders of advances in technology brought in the internet and smartphone age.
Fintech companies are now breaking from the pack, and highlighting the depth and seriousness of the technological and cultural deficiencies that most banks suffer.
It’s important though not to see fintech as some sort of banking panacea which will right all the banking wrongs. As recent revelations around Lending Club have shown, there are downsides to fintechs, although it’s worth noting banks have not been immune from controversy in recent years. However, generally speaking, fintech is leading the charge for disrupting how financial services are created and delivered to customers.
Key to the success of fintech has been the use of APIs (application programming interfaces). Think of APIs as a set of rules that computer programs can follow to communicate with one another. Imagine a plug and plug socket; APIs offer a standard way for two bits of software to interact with each other across the world.
Whole companies have been created off the back of integration of great ideas and APIs that others have exposed. For example, if you’ve ever used Rightmove to look for a property, Rightmove didn’t build the map that you use to find your property. Google did. Rightmove then added their own properties over the top of Google’s maps via API integration.
The use by banks of internal APIs – those for internal development – is increasingly becoming common as they try to drive speed and cost effectiveness into traditional legacy systems. But open APIs – those exposed to allow third parties access and development – have been reserved for banks that have reached the right level of maturity for new ways of working.
This reluctance to adopt open APIs has been a major driver for the slow evolution of banking across Europe and has led to the European Commission stepping in with the revision of the Payment Services Directive (PSD). While the aim of the original PSD, adopted in 2007, was aligned with the bigger economic vision for the EU, namely to create a single market for payments, PSD2 has a very different agenda.
“Banks now have the opportunity to become platforms, connecting, curating and controlling new services offered by fintech”
In short, PSD2 mandates into law in December 2017: third-party access to accounts whereby e-commerce providers can take online or mobile payment directly from a consumer’s bank account without going via intermediaries; use of APIs to enable payment by directly connecting the merchant and the bank; and the ability to consolidate account information in a single portal. In the latter, an API enables a new type of financial services company – an account information service provider or AISP – to aggregate account information to let consumers with multiple banks view all bank details in one portal.
For banks that currently sit in a position of significant power, PSD2 is likely to cause a major change with the departure from a hub-and-spoke model, which has traditionally governed the relationship between centralised data and the internal distribution channels. Within Europe, PSD2 and the rise of fintech offer a true vanguard moment for traditional banks.
Smart banks getting ahead
Banks now have the opportunity to become platforms, connecting, curating and controlling these new services offered by fintech. This would in turn allow them to drive real growth in their business. Or, if they lose control, the banks face the real risk of becoming separated from their customers by the new breed of fintechs that are creating their own intelligent platforms which could relegate banks to utilities.
Bad decision-making at this critical point could see banks facing the real prospect of becoming like mobile phone networks or interchangeable, commodity infrastructures, and by shying away from this new world, they may inadvertently make their worst fears become…
For the full article and views on what some awesome banks are doing to get this right go and read the rest here on Raconteur 🙂
[linkedinbadge URL=”https://www.linkedin.com/in/davidbrear” connections=”off” mode=”icon” liname=”David M. Brear”] is Co-Founder and CEO at 11FS and this article was originally published on linkedin.
We hear a lot about “smart contracts”[1] these days. Â What about “smart lawsuits”?
Lawsuits are a dispute resolution tool. Â Over-simplying (a lot): a plaintiff puts their problems into a complaint (sometimes called a petition) and files it with a court. Â The defendant answers (or doesn’t, and maybe gets defaulted). Â No dispute? Â No need for a lawsuit.
How were disputes resolved before lawsuits? Â Using current lingo, we’d probably call it “peer-to-peer.” Â You stole my cows? Â I’m stealing them back. Â The reader can imagine their own, more colorful, self-help remedies.Â
Formalized court systems made most modern commerce possible.  Whether or not you like them (or think they should last) is a matter of personal preference.  Whatever you think, they are also likely to remain in place for some time, process automation brought to you by software notwithstanding.Â
Lawsuits may have been an improvement but they aren’t always fast or efficient, a common complaint. Â Proving that one thing is or isn’t true takes time and, often, testimony or documentary evidence. Â They are also static, not dynamic documents, and changes must be incorporated by written amendment. Â Nor are they aware or able to respond to or interact with external data. Â Lawyers are catching up, but we still use tools and #technology with 19th century (and earlier) antecedents. Â
Take a basic function of a lawsuit, deciding what’s true and what’s not. Â Who decides that in our current system? Â First you have to distinguish between law and facts, at least in the U.S. Â We use a jury system, in which a number of citizens are selected to decide which facts are true and which aren’t. Â In a non-jury case, the judge will make factual decisions. Â In all cases, the judge makes legal decisions. Â
Some lawsuits are dismissed early for a variety of reasons. Â They may fail to state a claim under any recognized theory of law. Â It may be true that you can sue someone because you don’t like what they had for breakfast. Â If that’s all you got, though, your lawsuit will probably be dismissed if the request is made.
If you make it past motions to dismiss you may end up in what’s called discovery (again, I’m referring to the U.S.)[2]  Discovery is the phase of a case where the parties get to learn about the other sides’ facts — what do they have that will prove their case?  The proof may be in the form of witness testimony or exist in documentary form.  Document can be ink and paper or electronic.Â
Some cases make it to trial.  Some don’t.  They may settle, they may be dismissed.  Some cases are resolved in motion practice.  Summary Judgment is an example.  It’s a way to resolve a case without a trial where (1) there are no “genuine issues of material fact” and (2) the moving party is entitled to a decision in their favor as a matter of law.  (See Rule 56 of the Federal Rules of Civil Procedure for the Federal Court formulation.  Many states follow this, though not all.  https://www.law.cornell.edu/rules/frcp/rule_56). Â
How do you get summary judgment in your favor or defend against it and live to make it to trial? Â You have to be able to get your facts in front of the judge, who will decide the motion. Â Traditionally, this involved citing deposition testimony and getting witnesses to provide affidavits or declarations, under oath, attesting to facts (either to show a dispute the lack of one), and including documentary evidence (the authenticity of which may need to be established by a person with knowledge). Â Disputes often turn on things like whether a document was signed, whether or when products were delivered — things that can be proved or disproved with documentary evidence, which may or not be readily available or for which authenticity may be disputed.Â
The Federal Rules don’t use the word #blockchain in Rule 56, but they do refer to “electronically stored information”, right between “documents” and “affidavits of declarations”.
(1) Supporting Factual Positions. A party asserting that a fact cannot be or is genuinely disputed must support the assertion by:
(A) citing to particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations (including those made for purposes of the motion only), admissions, interrogatory answers, or other materials;Â
At the risk of stating the obvious, blockchain data = “electronically stored information”.  Explaining to a Court what a blockchain or #smart contract are may for educational (if not foundational) purposes still require an explanatory declaration of affidavit.  But it’s not hard to foresee a time in the not too distant future where moving papers might point to an address, no affidavit needed. Â
If a record’s substance and existence can’t be contested, that would do away with a lot of disputes and make summary judgment practice simpler for many. Â As for broader applications, here’s a nice formulation by Nina Kilbride of Eris Industries:
It may not happen overnight, but this may be how blockchain based smart contracts may start to pave a way to smart lawsuits.  The first lawsuit or summary judgment motion that refers to a contract address may have the distinction of being the first (sorta) smart lawsuit.
—
* Â Photo credit: Â https://pixabay.com/en/bird-cage-hanging-birdcage-vintage-783185/. Â CC0 public domain.
** Disclaimer: Â These are my personal opinions only. Â They may not be shared by and are not sanctioned by clients, past, present or future, or any law firm with which I’m affiliated. Â And none of this is legal advice. Â A blog post isn’t a substitute for a lawyer.
[1]. Â Neither smart, not contracts. Â You’ll find a recent and very thoughtful discussion of “smart legal contracts” here: Â http://www.coindesk.com/making-sense-smart-contracts/.
[2]. Â The world is a big place. Â The fact that I’m referring to U.S. practice is because I am U.S. trained lawyer.
 [linkedinbadge URL=”https://www.linkedin.com/in/stephendpalley” connections=”off” mode=”icon” liname=”Stephen Palley”], the author of this post, is a lawyer focused on Construction, Insurance, and Compliance Driven Software Development. @palleylaw
The 4 #fintech #events in #Europe below that you should not miss will celebrate the innovation and disruption in finance. All areas of financial innovation are showcased and the hottest and most innovative & disruptive startups and companies in the area will present. International and national experts share insights and experiences. Find your next great experience in fintech #this #June & #July
#Blockchain Amsterdam 2016
June 9th, Amsterdam
We’re in the early stages of a mass transformation in industry, the third phase of the information age. The first phase saw the introduction of computers, in the second phase they became interconnected and gave rise to the digital economy. The third phase is now among us. Computers and digital #technology are now ubiquitous, we have more data than we know what to do with and we’re redefining sectors that seemed untouchable for decades.
We are in the age of realignment and that’s where we find Blockchain technology. A distributed ledger, born from clever mathematics and a desire to transact anonymously while maintaining trust on both sides of the exchange. The world is starting to wake up to the vast number applications for such technology. The internet changed the world in 20 years. Blockchain will do it in 10. Welcome to year one. Welcome to Blockchain Amsterdam.
>> Sign up now with code FTSW to get 20% discount!
FinCoder 2016
June 20th, London, UK
The organisers of London Fintech Week bring you the 2nd Annual Fincoder, a conference tailored especially for Fintech technologist, developers and coders. Fintech developers are changing the face of the financial services industry. Hear from some of the brightest developers and technical leads from large financial services firms and fast-growing start-ups. Learn what it takes to work with large financial services firms and what investors look for in emerging financial technology. Discover new opportunities, ways to tackle challenges and the latest trends in financial services technology. From enterprise to start-up and everything in between, 140 attendee will join together at Aviva’s Digital Garage in Hoxton on June 20th 2016. This event is part of London Tech Week.
June 28th, Zurich, Switzerland
Money-Tech features 20 international digital payment and finance technology company pitches and offers 1on1 meetings.
Innovations presented will include digital currencies, mobile banking, peer-to-peer financing (crowdlending, crowdfunding), crypto finance, new trends insurance tech, #robo advisors, among many others.
Speakers will include academics and executives from fintech startups and financial services firm including Roland Berger, Ascribe, the Ethereum Foundation, Nexussquared, Wikifolio, Crowdhouse and more.
>> Sign up now with code fintech16 to get 15% discount!
London Fintech Week 2016
July 15th-22nd, London, UK
Fintech Week is a series of conferences, workshops, hackathons, meetups and parties. Each day we focus on a different topic. We always ensure that there is plenty of time for networking and meeting other innovators. In 2014, we successfully organised London’s first Fintech Week. In 2015 we scaled up and attracted delegates from across the globe, got some of the brightest minds in financial services on our stage and ran a Blockchain Hackathon in Canary Wharf.
The main conference/exhibition takes place at the Grange Tower Bridge Hotel, but other events take place across the City of London, Canary Wharf and “Tech City.” In 2016 we’re going bigger.
Fintech Week 2016 aims to unite the world of Fintech in the world’s financial capital – London of UK. Series of events will help to enhance the dialog between established multi-nationals, innovation firms, disruptive start-ups, governments, media and investors. You will be inspired, learn something, meet new clients, partners, developers, investors and find value for your business.
>> Sign up now with code FTSW to get 15% discount! Limited offer.
The post 4 Notable Fintech Events in Europe this June &038; July appeared first on Fintech Schweiz Digital Finance News – FintechNewsCH.
Amid a broader push to investigate #blockchain by the Dubai government, major local #telecom provider Du is refining its strategy toward the #technology.
CoinDesk
Do you operate a #startup that is tackling the financial services industry? Is your startup looking to disrupt the finance and banking sector? Are you looking to connect with the industry’s key players, decision makers and investors, and grow your venture to the next level?
Well, you may want to consider attending these seven #upcoming #fintech startup #pitch #competitions in #Europe and get the boost you need to grow your business:
June 20, 2016, in Zurich
Startupbootcamp Fintech is an accelerator program operating around the world. Its Startupbootcamp FastTracks are informal events that are used as part of the screening process aimed at selecting the top 10 cutting edge fintech startups that will get the chance to present their ventures and eventually get the opportunity to apply for the three-month accelerator program in London.
Startupbootcamp Fintech is looking for startups all areas of fintech including payments, cryptocurrencies, financial inclusion, asset management, capital markets, peer-to-peer, platforms, security and authentication, insurance, and lending.
The EIT Digital Challenge is aimed at fast-growing European #technology startups that are offering digital tech applied to industry, cities, wellbeing, infrastructure and finance.
The 15 most innovative European startups in these fields will be selected to compete to win up to €50,000 in cash, access to EIT Digital’s pan-European innovation network, as well as the chance to join the EIT Digital Accelerator for a full year, and eventually get support to find international customers and raise Series A financing to scale up.
The submission phase is open until July 15, 2016.
September 06, 2016, in Cologne, Germany
In its sixth year, the Pirate Summit is one of Europe’s biggest invitation-only gatherings of early-stage startups and investors. The Pirate Summit aims at celebrating entrepreneurship by being a platform where founders, investors and entrepreneurs can meet and connect.
This year, the event will take place at Odonien, in Cologne and is expected to bring some 1,200 participants.
The Pirate Summit will also be organizing a startup competition. The selected startups will receive two free-tickets to the Pirate Summit for the founding team members and a guaranteed pitching slot at the semi-finals of the “Walk the Plank” pitch competition at the first day of the Pirate Summit.
October 08, 2016, in Zurich
Swiss Startup Invest and Swiss Start Up Factory will be running the Elevator Pitch competition on October 08, 2016. The best candidates will get the change to pitch their businesses during the Swiss Startup Day event on October 25, 2016.
Registration opens on August 01, 2016, and will run until September 20, 2016.
The BBVA Open Talent Competition is back with its 8th edition aimed at providing support to and collaborating with promising startups tackling financial technology and other projects affecting the industry such as Big Data, cybersecurity, and APIs.
The winners will receive €30.000 each in cash prize, enjoy a two-week program in Mexico City and Madrid, and get the opportunity to get to know and engage with the entrepreneurial ecosystem and BBVA executives with the goal of making their business grow.
Participants need to register their projects before June 27, 2016 to get a chance to be one of the finalists in Europe, Latin America and USA, and the rest of the world.
Under the banner IN3 (Innovation-Investment-International), Global Expansion Summit offers a series of events, workshops and networking opportunities to facilitate the creation of innovation hot spots in new markets around the world, allow for startups, governments and corporates to connect, foster corporate and government innovation and digital transformation, and promote collaboration between innovation hubs across the world.
This year, Global Expanson Summit will run three startup competitions during its annual event on October 17 and 18, 2016, in London:
As a visitor you can register for the the whole event with Code &8220;FINTECHNEWS&8221; and get 20% discount.
October 17, 2016
14:15 – 15:30
Start Me Up Abroad is aimed at early stage startups looking to kickstart their business abroad. This is a dedicated platform for pre-funding startups to pitch to a panel of investors and accelerators from some of the most sought after startup city hubs and then take 5 minutes’ worth of questions from the panel.
October 17, 2016
16:00 – 17:15
The Bakery Live will focus on providing a new way to get innovation done with a low cost and low risk model. A large corporate brand will present a brief/challenge facing their business. The Bakery will select six startups from a large number of applications for the brief. These six startups then have three minutes to pitch their idea to the corporate client. The two finalists will be brought back for a final round and deeper Q&A. The corporate client speaker will choose the winner for a trial with the help of the audience.
Featured image: A businessman on a track ready to run by Stokkete, via Shutterstock.com.
The post 7 Upcoming Fintech Startup Pitch Competitions in Europe appeared first on Fintech Schweiz Digital Finance News – FintechNewsCH.
[Transcript of Keynote given at FinnovAsia on May 30th 2016]
===
Since the 2007 financial crisis, we have witnessed a series of scandals ranging from PPI mis-selling to the LIBOR rigging scandal. The direct consequences of this has been the implementation of a more stringent regulatory regime increasing overall compliances costs. Indeed, since 2007, financial fines have increased 45-fold, incurring additional compliance costs of multiple billions of dollars. Indirectly, the financial instability that is being generated impacts the population with most recent reports estimating that cancer mortality has increased by 500’000 and 50%+ of Americans cannot afford an unexpected expense of US$400.
In my opinion, Regulatory #Technology (#RegTech) represents a dual opportunity. Economically, it resolves compliance cost concerns of CEOs, whilst socially it delivers a direct add-value to regulators to enhance market stability and consumer protection.
In other words, while in advanced economies early #FinTech developments (e.g. P2P lending) appear to be a re-action to the symptoms of the previous financial crisis (e.g. credit shortage), RegTech appears as a more mature approach that may limit the severity of the next crisis.
Similarly to FinTech, the benefits of automatizing reporting and compliance processes are not new, as demonstrated by the introduction of pattern analysis or the work done by the SEC in the US in 2000. Furthermore, most of the post-crisis reforms focus on data transparency (e.g. Central OTC clearing), openness (e.g. PSD2) and standardization (e.g. unique entity identifier) However, whilst not new RegTech as a term has increasingly been used in the last 6 months. This uptick of activity warrants the necessity to start re-conceptualizing RegTech and set a foundation of understanding across the industry, regulators and policy makers.
Establishing a topology of the sector, RegTech covers four key areas:
As it currently stands, the most visible RegTech innovation seems to be in the e-KYC space, similarly to how payments and alternative lending used to define the bulk of FinTech innovation. The pain points encountered by #banks given their current AML/KYC process and relative simplicity of developing a certified third party authentication platform (versus implementing a wide scale use of smart contracts to identify contractual liability of a firm in real time) explains the immediate focus given to this specific sub-sector. However, the digital AML/KYC process represents a superficial (i.e. customer-facing) use of RegTech similarly to how certain digital banking propositions are simply a better UX skin on top of an outdated core banking engine.
In my mind the real long term value (both from an investment and social perspective) is embodied in solutions that redefine the way #regulation is being created so that risk identification and compliance can leverage on data and automation to really be proportionate (e.g. to actual risk) and real time (e.g. as opposed to batch reporting). In that respect, the development of Regulatory Sandboxes represents an initial step for regulators to deploy and learn how to use RegTech as part of their regulatory toolkit.
In that regard, the FCA (in the UK) has, once again, championed the promotion of this objective with the announcement of a “regulatory sandbox” in Nov 2015 (e.g. currently accepting applications and will go live with 10 participants in September 2016). This approach has so far been positively echoed in other jurisdictions with ASIC in Australia and MAS in Singapore holding consultations. The benefits of sandboxes are diverse. For external stake holders (e.g. start-ups), they reduce time to market and compliance costs. For internal stakeholders (e.g. regulators) they add an interaction method with start-ups as well as a transition tool towards a more data-driven supervisory model.
However, these developments are currently very much in experimental phase. The fact that access to the sandbox is limited to a handful of participants and the scope of experimentation constrained by EU laws (e.g. exclusion of credit institutions, insurance or alternative fund managers as well as base line regulatory capital for some activities irrespective of portfolio/market size) shows that only specific FinTech start-ups will benefit. The counter to that being considered, given the current Brexit discussion. Was Brexit to materialize, the FinTech eco-system in the UK (heavily driven my EU regulatory requirements) would lose its appeal (and VC funding in EU is already down 40%+ in Q1), making the rationale of a sandbox a moot point. In other words, a Brexit would leave the sandbox with not enough kids to play inside!
I therefore see the current sandboxes (e.g. virtual, umbrella, regulatory) as the first building block towards a reconceptualized regulatory regime that is truly real-time and proportionate. This means that the parameters of the sandbox also need to be conceived with an end objective in mind and leverage a true opportunity to change the current paradigm of market supervision/regulation and firms’ compliance and reporting processes. An illustration of this shift would be as follows:
This is very much an ongoing conversation and a very rare occasion where the interest of FinTech, FinServ and Regulators fell easily aligned.
[linkedinbadge URL=”https://www.linkedin.com/in/jbarberis”off” mode=”icon” liname=”Janos Barberis”] is Millennial in FinTech | HKU Law | Founder FinTech HK & SuperCharger | Co-Editor The FinTech Book
As the hype and pessimism around #blockchain #technology converge toward reality over the next several years, one certainty emerging among Wall Street and Main Street traders is that advancements in platform technology will profoundly change how commonly used securities known as derivative contracts will be traded. The distributed ledgers inconceivable just a couple of years ago are on the precipice of ushering in a new era of innovative financial engineering and precision in risk management.
Wall Street firms are beginning to tinker with blockchain and smart contract technology that will allow buyers, sellers and central clearing houses of derivative trades to share information, such as KYC (Know Your Customer), in real time across various distributed ledger platforms unleashing incredible efficiencies.
Last month it was reported that Barclays tested a blockchain platform called Corda, developed by the bank consortium R3. Electronic documents that served as derivative contracts were pre-populated with standardized values, which, one day, will allow the contracts to be hashed out between counterparties, traded on an exchange across multiple #banks and then cleared and settled instantaneously.
Derivative contracts are financial instruments that derive their value from some underlying asset, such as stocks, bonds, commodities or even interest rates. Derivative contracts have become increasingly fundamental in effectively managing financial risk and creating synthetic exposures to asset classes. For example, airlines use future contracts, a form of derivative, to hedge against fluctuating oil prices . Hedge funds use options, another form of #derivatives, to speculate in questionable company stock without baring the cost of purchasing a large number of shares. Derivative contracts typically have shelf lives of 30-day increments.
Industry leaders expect distributed ledger infrastructure to foster new approaches to financial engineering, enabling financiers to customize derivatives consisting of individual cash flows to meet precise needs in terms of timing and credit risk. According to a report produced by Oliver Wyman, a management consulting firm, blockchain-enabled derivative contracts could be financed by issuers selling their own instruments that match the cash flows they expect to achieve, “in essence creating swaps without the need for balance sheet intermediation.” Traditional swap agreements are traded over the counter.
#Armin Ebrahimi, CEO, ShoCard discusses digital fingerprints and how #Blockchain is an important part of the underlying #technology to ensure user privacy.
A number of major #central #banks worldwide have organizing working groups dedicated to exploring #blockchain #technology and digital currencies.
fintech techcrunch
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