Will the next financial crisis be caused by finance or cyber? | FinTech Summary Issue 78

The Crypto Sector FinTech

Cyber security is one of the biggest ‘new’ global problems that have arisen lately. During financial crisis everyone wanted to buy as much property, sell as many financial products; make as much money. The currency has shifted from dollars, pounds, and yen to ‘innovation’. The financial sector is trying to score as many innovation points as possible. FinTech is trying to get as high on the ‘new and cool’ scale as they can. Are we taking the necessary precautions building these new features and products? Are we cutting corners to ship as soon as possible? These corners tend to be things that are not identifiable right now, such as security holes, until they are the only thing that matters. Global reliance on data and the internet is growing exponentially. Is it likely that next major crisis will be caused by cyber security failures, not finance? (Hint: watch Mr. Robot on Amazon Prime Video for some clues – great show!)

Thanks for reading; YOU are awesome! Just hit reply if you want to get in touch 🙂

Have a wonderful week,


How hackers hijacked a bank’s entire online operation
By Andy Greenberg

The traditional model of hacking a bank isn’t so different from the old-fashioned method of robbing one. Thieves get in, get the goods, and get out. But one enterprising group of hackers targeting a Brazilian bank seems to have taken a more comprehensive and devious approach: One weekend afternoon, they rerouted all of the bank’s online customers to perfectly reconstructed fakes of the bank’s properties, where the marks obediently handed over their account information. Kaspersky researchers believe the hackers may have even simultaneously redirected all transactions at ATMs or point-of-sale systems to their own servers, collecting the credit card details of anyone who used their card that Saturday afternoon.


Why insurers need insurtechs to improve digital experience
By Danni Santana

Large insurance incumbents are not agile enough to build out top-notch user experiences without the help of insurtech startups. There are two answers to insurtech disruption: build capabilities in-house or partner with industry newcomers with an option to buy at a later date. The latter submits all user experience control to insurtech startups. However, it is a risk Munich Re feels it has to take. Most consumer-facing websites do not ask customers for basic information they can easily scrape of Facebook profiles. They are also mobile-first and include some sort of chat function. In return, Munich Re offers startups capital, product design capabilities, and global multiline capacity—the ability to expand businesses across state and country borders. At some point startups will want an exit and we will think about whether we will be their exit.


Sweden going cashless
By Chris Skinner

For as long as I can remember, I’ve been hearing about a War on Cash. The war, as illustrated by India’s recent demonetization, is not on cash itself but on the illegal use of cash and, by association, the fraudulent creation of cash. Both fraudulent notes and coins along with large cash denominated amounts transferring between criminals, spurs the governments of the world to try to get rid of cash. Things have changed in the last seven years though, thanks to mobile and contactless payments. And astonishingly, about 900 of Sweden’s 1,600 bank branches no longer keep cash on hand or take cash deposits – and many, especially in rural areas, no longer have ATMs. Circulation of Swedish krona has fallen from around 106 billion in 2009 to 80 billion last year. This is why the world’s oldest central bank, has now announced that it’s exploring the concept of a digital currency (the eKrona) to accompany its Swedish kroner notes, which could ultimately save tourists a trip to the currency exchange desk.


Finding common ground between legacy systems and insurtechs
By Joe McKendrick

“Worlds colliding” seems like an apt way to describe the meeting of the minds between insurers and Silicon Valley’s free-wheeling digiterati. But it’s been happening lately, big time. The verdict? Insurers have ‘no choice’ but to get on board. True to the spirit of disruption, many of these new technology ventures have made their moves fulfilling needs the large established insurers have been overlooking. Large insurers are sitting up and taking notes. Of course, it should be noted that Silicon Valley is just as much a state of mind as it is a physical location in California. All across the world, companies are seeking to deploy technology to address business opportunities and problems in new ways. By all recent indications, insurance is becoming part of this movement. The spirit of Silicon Valley lives in Chicago, Boston, Berlin and Bangalore as much as it does in San Jose.

How has fintech transformed regulator – proactive vs reactive approach

Proactive regulator fintech

Regulators perceived slow, inefficient and reactive. This would be best visualised by 1000’s of pages long tomes of regulatory frameworks such as Dodd-Frank Act. However, the role of the regulator has changed significantly. The regulator is under a constant spotlight to make sure that financial crisis of 2007 does not repeat itself. Equally, it is pressured to foster innovation, which, in turn, fosters competition. Having many small players reduces system risks and is fairer to the customer.

To do this regulator can’t simply be reactive anymore, i.e. you mis-sold insurance products – pay a fine and refund customers. The regulator is encouraged to become much more proactive to prevent the misconduct from happening in the first place. For this, the regulator needs to have a hand on the pulse of the market, lots of data and access to the innovators of tomorrow. Sandbox by the Financial Conduct Authority (FCA) is a great example of embracing forward-looking innovation. However, a sandbox is as much of proof of concept for the regulator as it is for the startups. It serves as a forum for discussion, a way to capture data and keep a hand on the pulse of cutting-edge innovation. Arguably, because of this the regulator will be much better positioned to take action when its needed next time.

Thanks for reading; YOU are awesome!

Have a wonderful week,


Brexit is not the death knell for UK fintech
By Oliver Bussmann

To be clear, I’m not saying that Brexit has sounded the death knell for UK fintech. Quite the contrary: there will doubtless be opportunities as well as challenges. Outside the larger EU framework, the UK government may have more room to introduce fintech-friendly regulation, or pursue policy to make it easier for these firms to find financing. It would also find it easier to enter into bilateral agreements with other countries. If the UK can, for instance, get closer to the US administration on the fintech topic, bringing each country’s fintechs and investors closer together, UK fintechs would no doubt profit. The shock may also prove to be a catalyst, pushing UK-based entrepreneurs and tech talent to work harder to produce the increased efficiencies and lower costs that fintech promises. Yet, there’s no doubt that Brexit has upended the apple cart. As long as the current uncertainty remains, concern is more than warranted.


Bitcoin vs Gold: which is a better long-term bet?
By Aaron Stanley

Imagine that you have $100,000 at your disposal. You must spend all of it on either bitcoin or gold – no mixing and matching – and the assets will then be stored in a trust that cannot be accessed again for 50 years. Which option would you choose? With the two commodities now in roughly the same price range, it’s worth putting aside some of bitcoin’s short-term volatility and liquidity concerns to compare them as long-term stores of value side by side. Sure, you might argue bitcoin is newer and flashier, and that it has arguably more utility in the digital era than gold. But, gold has the indisputable track record, having been a cherished store of value for thousands of years across human civilizations. However, bitcoin’s traits have led to those backing the cryptocurrency to believe it could potentially unseat gold over the long haul.


What does FinTech investment success look like?
By Rupert Bull

CBInsights quote “Venture Capital Funnel Shows Odds of Becoming a Unicorn Are Less than 1%” seems to imply everything else is failure. I strongly disagree. They reinforced this impression by saying further down in the article “70% of companies end up either dead, or become self-sustaining (maybe great for the company but not so great for investors).” This is wrong. I think FinTech investment success means creating a self-sustaining company. Becoming self-sustaining is good for the founders, the early stage investors and the employees. It is also good for the broader economy if more companies survive and grow – just think of all the spin off professional service revenues that ensue. If this were to happen at scale it would also mean less capital was wasted and therefore less capital would need to be raised and invested.


Rethinking capitalism with the blockchain – part II
By Kary Bheemaiah

As we move into a more digital world with faster technological evolution providing strong headwinds of change, it is important to realize that adapting to this change will not simply be a case of investing in the new tool or updating one’s skillset. Capitalism has always been a renegade, whose greatest impacts have been born out of conflict and change. At every turn, this has required that tough questions be asked, and our notions and conceptions be rewritten. If we are to continue growing with hedonistic sustainability, we need to better understand capitalism. The unison of complexity economics and the blockchain is a step in that direction and will entail the creation of new cultural forms, institutions and a new vocabulary for education. But with a better understanding of capitalism, people in democracies can play a much more positive and vigorous role in shaping their economic institutions. There would be no capitalism without a culture of capitalism and there would be no culture if the existing ideologies were not challenged and overcome. At a time when information is so abundant that we can get the answer to any question, the real responsibility becomes asking the right question. If we fail to ask these questions and leverage the power of decentralization and transparency, we risk starting a conversation with the next generation by beginning with an apology.

Why bankers like sour grapes; bank-fintech partnerships that work; bitcoin fork – FinTech Summary 76

fintech bankers sour grapes

A few weeks back I have mentioned about a small FinTech dinner I’m hosting. We have an impressive group of people who have expressed interest in joining. I have one more slot left, let me know if you want to join. The dinner will be in London, at some point in April (we’ll agree on the best date with the group).

I’m planning to host this every month so even if you can’t make April let me know and I will add you to the list.
Thanks for reading; YOU are awesome!


Making a bank-fintech partnership actually happen

By Anna Bennett

It’s no secret that fintech companies can easily get caught between a rock and a hard place when trying to grow their businesses. They know that getting their proposition into a bank is likely to be the only realistic way to achieve mass market scale and, crucially, deliver their backers the returns they expect on their investments. But they also won’t have to go far to find a fellow fintech with grisly war stories to tell about the bitter and brutal experience of trying to navigate a bank’s due diligence process, and demonstrate that they are fully compliant with all relevant regulations. Some fintechs have been broken entirely by the process, and plenty of others brought close to the brink. But why is the process such a nightmare and what practical steps can fintechs take in order to minimise the risks, maximising their chances of securing a business-defining deal with a bank?


The banker and the sour grapes
By Duena Blomstrom

Fintech these days has become like an immensely fast-paced game with absurd levels of difficulty thrown in for ever-diminishing (or at least largely unclear) pots of gold. No one has to bear the stress more than those working in large incumbent banks. I’ve said this many times before: no other industry behaves quite like ours, or has been affected by the sharp advent of technology and its effects on customer experience in quite the same fashion, so we’re experiencing unprecedented levels of discomfort in many ways irrespective what part of the industry we’re in. All of us – bankers new and old, technology makers and commentators – we are all impacted by this spectacular time in the growth of digital and the money retail business. There’s no time to complacently relax into anything – deep conceptual thinking is nearly banned if we wanted to keep up, there is definite uncertainty to accompany ever growing demands, and it feels like the more we learn and the more we try, the harder it is.


War of the words: who’s said what about a bitcoin fork?
By Alyssa Hertig, Stan Higgins & Garrett Keirns

Bitcoin is abuzz with chatter about the prospects of a possible network split, a development that could drive the emergence of two separate blockchains. It’s an eventuality that has businesses in the industry weighing in again on a long-standing impasse over the digital currency’s future direction. What’s more, the nature and tone of the scaling debate appears to have sharpened, driven by animosity between those who support one vision over another. As such, a range of bitcoin startups (exchanges, wallet providers, miners and hardware makers) have weighed in on where they stand on the issue. Perhaps unsurprisingly, much of the preparation seen comes from companies that would find themselves in possession of handling two separate bitcoin assets on behalf of customers should the network split.


InsurTech industry has grown by 25%
By Igor Pesin

InsurTech is a relatively new industry. However, it’s developing quite fast and becoming one of the most booming verticals in the FinTech space. First of all, don’t pay too much attention to the 34% drop in the InsurTech market in 2016; it actually grew up by 25% considering the number of deals. The year 2015 showed an abnormal rise in the InsurTech market, which was mainly driven by Chinese large and extra-large deals, including $1B USD invested into the world’s largest InsurTech startup Zhong An. More and more investors are being attracted to InsurTech/HealthTech segment. It turns out that insurance companies are more active in InsurTech than banks used to be in FinTech; it seems that they have learned from the unsuccessful experience of the latter to not to resist changes or ignore them.

FinTech Summary 75 – Apple Bank, Expensive Bitcoin, Bots, PSD2 Effects

FinTech Summary 75

Every so often a new hype cycle comes around, it was bitcoin, then it was blockchain now it’s bots. We are early into development circle and expectations currently set out by the public are unlikely to be met. It won’t feel like talking to a human any time soon, not you can’t just chat to your banking bot when you’re bored at 3am about the game you saw yesterday. It will feel more like an advanced Q&A box where you don’t need to use keywords but the bot implies them from your sentence. There are challenges that we need to overcome, particularly the data ownership. If you’re using a bot a banking bot on Facebook, everything you say about your banking life will now be with Facebook. That’s a problem for me, and for many others. It is still a huge technological advancement and it will be huge, someday, just not tomorrow.

Thanks for reading; YOU are awesome! Just leave a comment if you want to get in touch 🙂

Have a wonderful week,


How PSD2 Will Change Europe’s Banks For The Better
By Artem Tymoshenko

Open APIs will change this by forcing banks to give the same access to your banking information that their website has. Banks will still be required to authenticate users and provide the same level of security that they do now, but they will not be allowed to restrict account owners to accessing it only through their services. This will allow third-party financial service providers to build services directly on top of banks’ data and infrastructure. This means that banks will no longer be competing just against other banks, but against everyone who wants to offer financial services.


Hello, May I Speak to My Personal Bot?
By Eran Livneh

By and large, customers want to better manage their finances, but they don’t have time to stay on top of it all. That’s where the chatbot can lend a helping hand, by automatically executing money management tasks on behalf of customers, dutifully working to improve their financial well-being behind the scenes. Because of its ability to always be available, predictive, understand compliance, and work autonomously, a chatbot can become a critical – even if not an exclusive – channel for customers interacting with their banks. At the end of the day, if a customer receives excellent customer service, he/she won’t care if it comes from a human employee or a chatbot.


Will Apple Bank be the first new American #Fintech Bank?
By Chris Skinner

On Wednesday the American Office of the Comptroller of the Currency (OCC)* followed up on its promise last December to introduce a national bank charter for Fintech bank startups by issuing a white paper on how to apply for a licence, the evaluation process and what will be involved. It’s a massive move towards allowing Fintech firms like Square, Stripe and Simple to become full banks in the USA, if they want to be, plus any other firm who fancies a shot like Apple, Wal*Mart and even Ant Financial. It doesn’t mean they’ll get a license, but it does mean they can apply for one through one agency rather than having to deal with 200. This is a significant step towards encouraging Fintech banking competition in the USA and reflects similar moves made in other geographies.


But, but… I thought Bitcoin was supposed to be cheap?
By Izabella Kaminska

Total transaction fees in bitcoin are on the ascent, challenging a key claim put forth by bitcoin acolytes in the early days: that the bitcoin payments network could compete with the mainstream banking system on cost. Reality, however, is finally catching up with bitcoin. Fees are escalating due to capacity constraints being imposed on the network on account of blocksize limitation as well as the reduction in bitcoin mining awards. If unresolved such constraints will impede further scaling of the network and make bitcoin prohibitively expensive for day-to-day transaction use. Thus far, however, a have-your-cake-and-eat-it solution has escaped the developer community with all options on the table introducing some sort of compromise, whether that’s to bitcoin’s security or its decentralised and trustless nature. And, naturally, because this is the anarchic utopia bitcoin, nobody can agree on how to proceed anyway


Blockchain Needs To Become Boring To Become Mainstream

blockchain boring

I finally got to reading Warren Buffet’s annual letter to shareholder. It is interesting to see how the world’s most successful investor thinks. One piece about their sizeable insurance business really struck me – how to build a successful insurance business:

“At bottom, a sound insurance operation needs to adhere to four disciplines. It must (1) understand all exposures that might cause a policy to incur losses; (2) conservatively assess the likelihood of any exposure actually causing a loss and the probable cost if it does; (3) set a premium that, on average, will deliver a profit after both prospective loss costs and operating expenses are covered; and (4) be willing to walk away if the appropriate premium can’t be obtained.”

Thanks for reading; YOU are awesome!


This Week’s Summary


The promise of blockchain is a world without middlemen
By Vinay Gupta

The blockchain is a revolution that builds on another technical revolution so old that only the more experienced among us remember it: the invention of the database. First created at IBM in 1970, the importance of these relational databases to our everyday lives today cannot be overstated. Literally every aspect of our civilization is now dependent on this abstraction for storing and retrieving data. And now the blockchain is about to revolutionize databases, which will in turn revolutionize literally every aspect of our civilization. We’re going to see the potential for a trajectory of radical change in all industries. As a society, we’re experiencing a time of unprecedented technological change. It can feel like an insurmountable challenge for leaders to stay on course in such rapidly changing tides. And yet, with each passing generation, we are acquiring more skill and expertise in navigating a high rate of change, and it is to that expertise that we must now look as the blockchain space unfolds, blossoms, and changes our world.

Lost in translation – how to talk to a robot
By Michael Weinreich

Well, quite a lot. 2017 is the year of the bots, and many companies are trying to jump on the train, creating showcases to illustrate that they’ve not missed the “new trend”. From Amazon’s Lex, the technology that powers the virtual assistant Alexa, to the integrated news, shopping and weather bots in Facebook Messenger, the conversation with a ‘roboter’ seems to be the next big thing, and perhaps soon our most common way of communication, especially in the customer service field. So how do you achieve this? Bots are great, but even greater once they’re part of an integrated customer service platform. Clearly, all human agents need to be empowered to fully follow and understand transaction history and create a seamless customer interaction experience. By integrating bots into your customer service strategy and platform, you can avoid getting lost in translation.

Blockchain needs to become technically boring
By Daily FinTech

“Communications tools don’t get socially interesting until they get technologically boring.” Two examples of boring technologies having a big impact on Fintech are QR Codes and Prepaid Cards. Blockchain is definitely not boring. It will probably have a bigger impact than QR Codes and Prepaid Cards, but it may still fade into the sunset of overhyped technologies. It is exciting because that is a huge delta – change the world or dustbin of history. I incline to the former – that Blockchain will change the world. However, that promise won’t be fulfilled until Blockchain becomes technologically boring. This post looks at why that is true and at efforts to make it technologically boring.

Why can’t digital identity be easy, like payments?
By Dave Birch

I have often seen payments (especially card networks) used as an analogy for digital identity. There is, however, one key difference between payments and identity: you cannot sell stuff online without a means to receive payment, and normally this means integrating with a payments scheme that works for your customers. You can, however, sell stuff without leveraging an external identity scheme – you just give the user an ID and password specific to the service. This is, however, bad news for users, resulting in the fragmented personal data and password mess we find ourselves in today. Merchants are going to have to be a lot more careful with personally identifiable information in the future. One thing they could do is use an identity provider to hold that data, and in the process reduce their risk. Individuals also need to realise that their personal data is valuable, just like their money. This is going to require some education, because so far they’ve been taught to share data without considering the consequences.

How Payments Will Change One Of The Underlying Foundations Of Our Society

The way we pay and transact is one of the underlying foundations of our society is one of our basic utilities. I believe we are going to see some drastic changes in this foundation in the coming 5 to 10 years. Because of the transaction cost and settlement time we try bulk our orders, we don’t pay for a page we read we buy a book. Once transaction cost disappears and clearance times will drop to minutes and second and not hours and days a lot of business models with change. Many payments will become more granular. New business model will become possible like paying 1 cent for every article you read online, instantly and automatically will change how content producers are rewarded. Instant free transfer to a foreign country will change how we employ people for our businesses. Decentralisation of payments will fuel the changes even further. Fintech is at the forefront of this evolution and I’m really excited to witness these changes shaping up first hand.

Thanks for reading; YOU are awesome!


Summary for this week


A Brief History of Blockchain
By Vinay Gupta

Many of the technologies we now take for granted were quiet revolutions in their time. Just think about how much smartphones have changed the way we live and work. It used to be that when people were out of the office, they were gone, because a telephone was tied to a place, not to a person. Now we have global nomads building new businesses straight from their phones. We’re now in the midst of another quiet revolution: blockchain, a distributed database that maintains a continuously growing list of ordered records, called “blocks.” These changes, and others, represent a pervasive lowering of transaction costs. When transaction costs drop past invisible thresholds, there will be sudden, dramatic, hard-to-predict aggregations and disaggregations of existing business models. For example, auctions used to be narrow and local, rather than universal and global, as they are now on sites like eBay. As the costs of reaching people dropped, there was a sudden change in the system. Blockchain is reasonably expected to trigger as many of these cascades as e-commerce has done since it was invented, in the late 1990s.


How Blockchain Is Changing Finance
By Alex Tapscott and Don Tapscott

It begs the question: Why is our financial system so inefficient? First, because it’s antiquated, a kludge of industrial technologies and paper-based processes dressed up in a digital wrapper. Second, because it’s centralized, which makes it resistant to change and vulnerable to systems failures and attacks. Third, it’s exclusionary, denying billions of people access to basic financial tools. Bankers have largely dodged the sort of creative destruction that, while messy, is critical to economic vitality and progress. But the solution to this innovation logjam has emerged: blockchain.


In Praise Of Cash
By Sam Haselby

The cashless society – which more accurately should be called the bank-payments society – is often presented as an inevitability, an outcome of ‘natural progress’. This claim is either naïve or disingenuous. Any future cashless bank-payments society will be the outcome of a deliberate war on cash waged by an alliance of three elite groups with deep interests in seeing it emerge. The defence of cash will be simple and intuitive. As unsexy and analogue as cash is, it is resilient. It is easy to use. It requires little fancy infrastructure. It is not subject to arbitrary algorithmic glitches from incompetent programmers. And, yes, it leaves no data trail that will be used to project the aspirations and neuroses of faceless technocrats and business analysts into my daily existence. It comes with criminals, but hey, it’s good old friendly normal capitalism rather than predictive Minority Report surveillance-capitalism.


How Insurers Can Implement Tech Companies’ Tactics
By Joe McKendrick

In 2011, venture capitalist Marc Andreessen famously coined the phrase “Software is Eating the World” in a Wall Street Journal article. The point: Companies across industries are doing so much digital and tech work that they are, essentially, becoming software providers in addition to their original businesses. And, we’re seeing that happen in the insurance industry as well. Disruptions are coming in fast and technology-savvy companies are moving to shake up the insurance business. While there are signs all around that as insurers are moving ahead in adopting digital technologies to streamline and energize their businesses, we’re also seeing insurance business models being altered by the tech sector. Insurance, in some ways, is becoming another data-driven service that can be added to digital platforms.

Insurtech On The Rise – Transforming A 5000 Year Old Industry



Insurance business model is one of the oldest business models out there dating back to Chinese and Babylonian traders as long ago as the 3rd and 2nd millennia BC, respectively. The principle of distributing the risk among many players is unchanged but the surrounding wrapper of services is changing rapidly. As an offer, insurance has been commoditised. It has become a part of the bundle. Whenever you buy a car, you want that car to be insured. Insurance is not a product anymore, it is becoming a service add-on that is bundled up during the buying process. This is further fuelled by the rise of sharing economy, where transaction frequency has increased dramatically and a new way to serve insurance is needed. New routes to market will emerge and distribution channels will see major changes.

Thanks for reading; YOU are awesome! Just hit reply if you want to get in touch 🙂

Have a wonderful week,


What comes after Marketplace Lending?
By Bernard Lunn

Now that Lending Club is past its crisis mode and is just another mature company that has to impress investors with predictable growth in financials on a quarterly basis, we look at where the puck is headed in lending. What innovation will change the lending game and create companies as big as Lending Club ten years from now? There are four innovations that focus on two big imperatives facing any ‘lending’ entrepreneur – reducing Customer Acquisition Cost (where Customer = Borrower) and reducing Cost Of Capital (reducing the intermediary cost) – the next generation deposit account, just in time borrowing by consumers, big data for the lending to micro entrepreneurs, automated working capital financing for SME.


The FinTech Wave – Part 1, Part 2
By Chris Skinner

There’s been a lot of talk about fintech lately. We talk about the billions of dollars being invested in fintech; the wave of unicorns and startups in this space; the challenge they bring to banks and incumbents; the way in which they’re reaching new spaces and places – but what is fintech? It’s no longer this big bucket of finance and technology. In fact, saying ‘fintech’ is like saying ‘retailer’. But what exactly are they retailing, and in the fintech sense what areas of finance are these companies automating? Chris provides a very detailed breakdown two part post.


Is the Facebook of Banking Still Possible?
By Diana Asatryan

If you picked up the New York Times Business section this morning, you probably saw the photo of the fintech guru, Brett King, looking out the window of a dimly-lit room. The caption read: “Brett King once hoped his company, Moven, would become ‘the Facebook of banking.’” Those hopes are gone now, the article suggests, as King has shifted Moven’s business model from being a standalone challenger bank, to selling its software to the banks. “We realized that if you want millions of users as a bank it is a very different proposition than building a social media network,” King told the Times.


Leveraging Machine Learning to Create a Powerful Cross-Selling Engine
By Adam Anderson

Financial institutions have always known the data they possess could yield tremendous insights. They just haven’t figured out how to tap this goldmine. The vast amounts of customer data — device details, login information, transaction histories, payment behaviors, etc. — give banks and credit unions a truly unique opportunity to learn more about- and deepen relationships with consumers. Why cross your fingers and hope staff guess which product they should pitch your existing customers next? A data analytics system deploying the principles of machine learning can take the guesswork out of your cross-selling program. Transport your marketing from the crude “fries-with-that?” mentality of yesteryear to the Netflix and Amazon world we live in today.

Fintech is not just fintech anymore

fintech evolution

I’m looking to host a FinTech founder dinner in London for about 6-8 people. This would be a great and intimate opportunity to network and meet fellow founders, the future of finance 🙂

Let know if you would be interested in attending or perhaps your company would be interested in sponsoring it.

Thanks for reading; YOU are awesome! Just hit reply if you want to get in touch 🙂

Have a wonderful week,

Fintech is not just fintech anymore
By Chris Skinner

There’s been a lot of talk about fintech lately. We talk about the billions of dollars being invested in fintech; the wave of unicorns and start-ups in this space; the challenge they bring to banks and incumbents; the way in which they are reaching new spaces and places; but what is fintech? It is no longer this big bucket of finance and technology. In fact, saying ‘fintech’ is like saying ‘retailer.’ But what exactly are they retailing and, in the fintech sense, what areas of finance are these companies automating?

Evolution in our sector isn’t about payments, it’s about identity
By Dave Birch

We’re shoehorning systems into environments they were never designed for, so maybe it’s time to rethink and construct a new kind of infrastructure (based on identity, obviously). there’s a shift under way from the ‘POS as a device’ to the ‘POS as a platform’, and there’s a convergence under way, but that convergence is towards the virtual rather than the real. In other words, the checkout and payment experience is converging to the app, not the tap (OK, that’s my bumper sticker and not exactly what the participants said, but I think it conveys the sense of the discussion!) and the payment experience will be the same whether in-store, on the phone or at a website.

Blockchain 2017: Out of the lab, into the field
Diana Biggs

As many have predicted, 2017 is the year blockchain is set to break out of the Proof-of-Concept stage and into production environments. It’s exciting to see the myriad of use cases for this technology being explored . The question then, which projects will we see move into real-world implementations in 2017. While venture investment in the space has been slowing down, the number of projects does appear to be rising. In short, 2017 should be a telling year in understanding which sectors and players will be the first to move beyond the whitepapers and press releases and start gaining some traction. Watch this space.

Machine Learning, AI and the Future of Data Analytics in Banking
By Scott Hackl

Traditional retail banking providers, weighed down by monolithic legacy systems and ponderous regulations, are in uncomfortable territory. Advancements in fintech have upended the industry, enticing both large financial firms and smaller tech startups to apply disruptive technologies in ways that threaten the status quo. To become more agile and remain relevant, traditional retail banking providers find themselves exploring their technological options with focused intensity. In particular, they’re looking for insights into customer behaviors. The answer? Advanced data analytics and AI to allow retail banking providers to focus on high-value activities and creative solutions around the customer experience.

AI, UX, Innovation and Uncertainty in Banking

Chess FinTech Banking Experience

Banking services have been commoditised since moving from one-to-one to one-to-all relationship infused by digital revolution but it can’t stay that way anymore. Banks face extreme regulatory pressures and thinning margins are making it difficult to stand out from the crowd. But what’s more worrying is that banks also don’t seem to be in any hurry to offer additional service to the everyday customers. You can open a bank account, get a debit card, possibly an overdraft and a credit card too, if you were a ‘good’ financial citizen. The difference will be very small (if any) whether you go to HSBC, Barclays or Lloyds. Everyday banking is starting to feel like using a gas station – you need to use it but you really don’t care which one you’re going to use – it is a commodity.

You can read my full article here – Boring, beraucratic, commoditised: why banks need to shift towards experience

Thanks for reading; YOU are awesome! Just hit reply if you want to get in touch 🙂

Have a wonderful week,

How AI Will Become the Most Defining Technology for the Banking Industry
By Elena Mesropyan

Artificial intelligence is here to stay, and 2017 will be about the adoption of ML/AI by the FinTech community and beyond. Experts agree that FinTech companies will harness this technology to make better decisions and offer improved solutions – they will make use of predictive analytics to break down big data and analyse large volumes of consumer information. AI will be the most defining technology for banking industry. The two-three most promising areas where digital advances could revolutionise the customer experience are artificial intelligence, chatbots and personalisation. Financial institutions have found a variety of use cases that bring undebatable benefits for organisations and customers.

Unrealistic Expectations About Innovation – There’s No Silver Bullet
By JP Nichols

Managers have this bad habit of looking for a silver bullet – that magical holy grail that will make all of their problems go away quickly, and preferably painlessly. Those expensive consultants. That fancy new CRM system. This flashy acquisition. That confusing and demoralising internal reorganisation. Many have this same unrealistic expectation about innovation. Your competitors that are sticking to their programme are starting to create their own competitive advantages. Partly through the accumulation of a lot of small wins, and partly by getting better at successive experiments because they’re learning more quickly what works and what doesn’t. Tighter iteration loops.

Embrace Uncertainty To Give Your FinTech Start-up The Edge
By Bernard Lunn

If there is one thing I’ve learned during my time working for a growth company, it’s that you have to get comfortable with uncertainty. In start-up and growth-stage land, uncertainty is a place you should actively want to inhabit. And while there is some truth to the ripple effect of the downside of uncertainty in particular domains, the negative press the word has received has possibly blinded many in business to its hidden, positive traits. Especially when it comes to creatively outwitting your competition.

Building a Better Experience in Banking
By Brian Solis

Design and tech can only go so far as the products, services, processes, systems, operations, et al. are designed to support. This is why customer experience, design, innovation and leadership must work in lock-step to fuse the connection between usefulness, user experience, value and enchantment. Customer-centricity or obsession or whatever you want to call it, is just one step. Change gains momentum with a new mindset that sees customers, markets and opportunities through a lens of possibility and invention not legacy perspectives. As a regulated risk-averse industry, financial institutions can find every reason to make safe bets. But at best, that leads to what I refer to as iteration, doing the same things better. That might work for your traditional customers, but Generation-C demands innovation, products and services that unlock new value. Disruption either happens to you or because of you, and that’s measured by how many innovative and iterative experiences make the old ones obsolete.

Can Banks Innovate Like Startups? Should They?

Can banks innovate like startups

Can banks innovate like startups

This week I have been asked to contribute to a crowdsourced book on fintech (insurtech, regtech and wealthtech to be more precise).

I have submitted my 3 abstracts and now if they get enough votes I will get to write full 2,000 pieces and get them published.

I have a big ask – could you please cast your vote for my pieces if you like them, and even if you don’t, be honest 🙂

To do that you need to register on http://thefintechbook.com/ and click voting, you can find me if you filter for authors in top right corner of the screen under name Alex Nechoroskovas. I have submitted abstracts for all 3 books. I am incredibly grateful for your support!

Thanks for reading; YOU are awesome! Just hit reply if you want to get in touch 🙂

Have a wonderful week,


Are You Sure You Want To Innovate Like A Startup?
By Pascal Bouvier

As corporations reinvent their innovation processes, they have lots to learn from startups, but must realise that lean startup wasn’t designed for their context. They have different goals (serve a mass market, rather than a niche), different risks (a reputable brand, rather than the flexibility to start over), different constraints (legal regulatory, ownership) and of course, an ‘unfair advantage’ of resources to put to use – none of which is suited to lean startup. This institutional nature, which makes decision making slow and risk aversion high, busts the idea of lean. In all the enthusiasm for the startup ecosystem, we need to re-address how corporations are using this for their own innovation. Now’s the time to create an optimal new approach.


The Power Of One Sigma
By JP Nichols

Lean and Six Sigma programmes work well when there are identical operations and repeatable processes in large volumes, particularly when those operations can generate a lot of accurately measured data. When administered properly, they also focus on creating real value by improving quality, cost and customer satisfaction. But what happens when you perfectly execute the wrong priorities? Kodak was arguably the best manufacturer of celluloid film in the world (although Fujifilm might argue that one). Nokia was the world’s leading maker of mobile phones, with 48.7% market share in 2007. The quality of their operations was admirable, and not what turned out to be the Achilles heel for those companies. New technologies and new business models regularly disrupt the status quo. Blockbuster beat all comers in the business of operating video rental stores. It executed the standard business model of its industry better than anyone else until Netflix showed up. Netflix didn’t beat Blockbuster at its own game – it changed the game.


Banks – Big, Binary And Beyond Redemption
By Gary Schwartz

The bank’s service ladder is losing its rungs and is being pulled (kicking and screaming) into a marketplace where the consumer is in control. A customer walks into a bank and asks for money. She will either hit the magic 700 FICO score and walk out of the branch with a cheque, or she will not. There is little fuzzy, human logic below this presumptive line. Banks are binary, very linear and often lack the necessary 360-degree view of their consumers because they have never been challenged to develop these tools. With customers looking for alternative solutions to the yes-or-no culture, can banks adapt? Can we learn from other industries such as retail, that have been rudely disrupted over the past decade? Can banks learn to adapt and move towards a customer-centric business that allows for just-in-time services, information and access in a frictionless and seamless way? The answer is no.


The Great Distribution in Finance
By Markus Lampinen

We’ve grown up with the belief that we need a bank account to store our capital. At the same time, modern technology and FinTech innovation have made it possible to create complex products and services at very little cost. Do we need a bank account or do we only need some place to store our money? And even further, with the proliferation of technology tools, specialist services, open interfaces, and a rising global computer literacy, is there any stopping the global emergence of new types of services that offer that exact service in a new way?  We’re going to see a distribution in financial services due to changes in technology. So why would you want to have your money with a bank? Because the bank’s name still carries weight and makes you sleep better at night, whatever complaints you might have during the week but this might change.