The Crypto sector – the biggest challenge and what the smartest people are thinking about it

The Crypto Sector FinTech

So by now, I think we all have heard of the blockchain, ethereum, bitcoin also known as the ‘crypto’ industry. It is growing big. It will grow even bigger, however, like with any growth story, there are crucial challenges that have to be overcome. One particular challenge is scaling. Fred Ehrsam in his post ‘Scaling Ethereum to Billions of Users’:

“Everything will be tokenized and connected by a blockchain one day. Scalability is the crux of that journey at the moment. Ethereum is orders of magnitude off from being able to support applications with millions of users at the moment. Yet in true decentralized fashion, there are a diverse set of efforts attempting to solve that problem. The biggest bottleneck to solving scalability is the number of people working on the problem. If current efforts are well-executed, Ethereum could be ready for a 1–10m user app by the end of 2018.”

There are a number of efforts that are underway to solve this conundrum, but they take it and have some of the smartest people on the planet working on them. What is best is that we finally have a way to monetise and reward these efforts – crypto tokens. As Chris Dixon puts it:

“Crypto tokens are currently niche and controversial. If present trends continue, they will soon be seen as a breakthrough in the design and development of open networks, combining the societal benefits of open protocols with the financial and architectural benefits of proprietary networks. They are also an extremely promising development for those hoping to keep the internet accessible to entrepreneurs, developers, and other independent creators.”

All these new advancements in the crypto sector have drawn a lot of media attention. And investors. The value of bitcoin has soared more than 200% in recent months. Even The Economist, a rather conservative magazine, often features articles on cryptocurrency and bitcoin. Recently, The Economist has raised a very valid question – more often than not, the word “bitcoin” now comes attached to the word “bubble”. But the question of what has driven up the price is important. Is this just a speculative mania, or is it evidence that bitcoin is taking on a more substantial role as a medium of exchange or a store of value?

There are other big challenges too, particularly computing power. And when it comes to computing power, the next big thing is quantum computing and Moore’s law. Vijay Pande explains how Moore’s law will be even more effectively:

“Classical computers thrive on the curve of Moore’s law, with performance roughly doubling every year; after n years, classical computers are 2^n times faster. This means we’ve seen roughly a 1000x increase in computing power in under a decade. In the quantum hyperscaling Moore’s Law, the speed of a quantum computer is exponential in the number of coherent quantum elements or “qubits” — that is, 2^q. But successfully incorporating technological advances in using silicon technology would enable the qubits themselves to follow Moore’s law (q = 2^n)… making the resulting performance power of the quantum computer 2^2^n. This means that the performance of quantum computing is exponentially more rapid than Moore’s Law. It’s as if Moore’s law itself sped up like Moore’s law.”

Finally, the use of the ‘crypto’ infrastructure will go far beyond financial transactions. Chris Dixon has written previously:

“Bitcoin was introduced in 2008 with the publication of Satoshi Nakamoto’s landmark paper that proposed a novel, decentralized payment system built on an underlying technology now known as a blockchain. Most fans of Bitcoin (including me) mistakenly thought Bitcoin was solely a breakthrough in financial technology. (It was easy to make this mistake: Nakamoto himself called it a “p2p payment system.”) In retrospect, Bitcoin was really two innovations: 1) a store of value for people who wanted an alternative to the existing financial system, and 2) a new way to develop open networks. Tokens unbundle the latter innovation from the former, providing a general method for designing and growing open networks.”

And the new ‘killer’ app could be anything. Fred Ehrsam argues it may be VR, it could be anything else.

A world without money, AI and promise of big data, blockchain control and next gen finserv – FinTech Summary 80

FinTech Summary 80

This Monday we had our first Fintech dinner and I’m pleased to say that it was very successful. I was so impressed by the people attending, thank you very much for making it happen, and for reading fintech summary! We all learned something new, met someone fascinating and had fun in the process. While this was the first, it certainly won’t be the last fintech dinner. Just reply to this email if you want to join the list to attend any of the future ones. I’ll keep you in the loop 🙂

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

Have a wonderful week,


A world without money
By Chris Skinner

Before this seismic change, money didn’t matter. We shared beliefs that allowed us to live together in relative peace, but the creation of money changed the balance of humanity. Some of us became more powerful, whilst others weaker. In fact, the biggest change between the first age and the second age is that it is no longer muscle that wins. It’s brains. The reason I’m writing this is that I’m wondering about the future of money. If money is a myth, created by governments to control the masses.  Then what happens if we have no money in the future? Stripping the world of the wealth focus and monetary controls could be an interesting future nirvana … or it could be anarchy and destruction.


Artificial intelligence: fulfilling the failed promise of big data
By David Weldon

The topic of artificial intelligence is dominating discussions of data management this year. But while a growing number of organizations are interested in AI, many don’t fully understand what the technology can do to help boost their customer engagement or the bottom line. AI promises to automate the process of understanding customers and anticipating their needs, then delivering the right experience to them at the right time. Organizations are hoping to impact the top line by acquiring new customers and increasing the value and lifetime of existing ones, and they’re hoping to impact the bottom line as well by reducing costs through automation. The primary challenge is and will always be the data. Data is the lifeblood of AI.


Who controls the blockchain?
By Patrick Murck

Blockchain networks tend to support principles, like open access and permissionless use, that should be familiar to proponents of the early internet. To protect this vision from political pressure and regulatory interference, blockchain networks rely on a decentralized infrastructure that can’t be controlled by any one person or group. Unlike political regulation, blockchain governance is not emergent from the community. Rather, it is ex-ante, encoded in the protocols and processes as an integral part of the original network architecture. To be a part of a community supporting a blockchain is to accept the rules of the network as they were originally established.


Financial services – the next generation … where is it?
By Chris Skinner

We have three major fintech models, each with their own unique blend of thinking. You have the Legacy West, the Growth East and the Innovative Emerging. If you’re looking for the next-generation financial system, you definitely will not find it in the Legacy West. That will show you the next generation of the existing system. You need to look to the emerging markets specifically, as they’re leapfrogging all of us. A great example is that the emerging economies will show us the next digital identity scheme, as this is critical to inclusion.

Core banking system – the ‘Death Star’ of banking | FinTech Summary 79

FinTech Death Star Banking

A true disruption of banking will only happen when startups find a way to blow up banking pricing models that used to sustain their business model. This is likely to come in a form of unbundling from the very core, such as deposit accounts. The reason it hasn’t happened yet is because banks are doing it better. There is an Achilles weakness, however, the lack of real-time transaction processing capability. Cracking that could provide a very real and serious edge over banking incumbents. Copying model app design is easy. Offering P2P loans is easy. Changing your core banking system is not. This would, indeed, prove that banking is necessary but banks are not.

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

Have a wonderful week,


Road to (perdition) unbundling
By Pascal Bouvier

We know of two evident truths since the internet graced us with its presence. First, intermediators in any given industry will be disrupted as new business models emerge and effectively unbundle old paradigms. Second, this unbundling has not happened yet in the financial services. The question we are all working toward answering and in the process elevate to a third truth or disprove altogether is: will a great unbundling/rebundling occur in financial services? Suffice it to say, that, at a high level, new business models will disrupt old ones by unbundling their offering, rebundling new features/functionality and leverage at scale by aggregate attention as a result of said unbundling/rebundling. It is inevitable that credit intermediation will be upended as a result of this shift. How money is created as well as how capital requirements are engineered in the aggregate will have to be revisited should this model take hold at scale.


Arguing with a banker
By Chris Skinner

We are on the cusp of radical change. Some banks are leading this change, while some banks have no idea what change is coming. Bank is there as a trusted store of value. The lending part is now no longer important, as that can be done through alternative media such as peer-to-peer lenders. The bank’s risk management function is being eaten by software. This means that credit analytics, transparency and management of risk, and the democratisation of finance, is becoming a key change factor as people connect directly through marketplaces and platforms. Banking isn’t the end, but the means to the end. The end is what we’re buying and selling. A bank provides a method to enable that to happen, but software, platforms and marketplaces can just as easily provide that method in a far cheaper, faster and lower risk form.


What the father of venture capital can teach us about blockchain
By William Mougayar

Today, the industry is begging for a rewrite and a reengineering of the financial regulatory structures of yesteryear, giving hope to the current array of activities that have developed around cryptocurrencies. If that sounds far-fetched, remember that stocks were once considered a new asset class. The current asset classes include stocks, bonds and cash as ‘traditional assets’. Alternative assets include commodities, REITs, collectibles, insurance products, derivatives, foreign currency, venture capital, private equity and distressed securities. It is also worthy to note that the alternative asset classes have varying degrees of compliance requirements: from being regulated to non-regulated. Should regulators stop scratching their heads and treat cryptocurrencies simply as a new alternative asset class, we’ll be done with the debate. Hopefully, crypto will not take 20 years before the investment community buys into that concept wholeheartedly. These groups should note, it has already seen big successes. Bitcoin, ethereum and many other crypto projects have generated financial returns for their early investors, while creating a new economy – the blockchain economy. Just as Georges Doriot was credited for seeing that capital needed to get ‘creative’ to birth venture capital, we need to be creative today, in order to birth ‘crypto capital’. The difference now is we have a roadmap to replicate.


Bullion on the blockchain: a new gold standard?
By Noelle Acheson

It’s hard to believe that the price of gold was fixed twice a day via conference call as recently as two years ago. In 2015, the London gold market (the largest in the world) switched to an electronic pricing system, broadening participation and, in theory, ending decades of opacity, inefficiency and occasional manipulation. However, the price is still fixed only twice a day and most trading of physical bullion still occurs on OTC markets, perpetuating the lack of transparency and cumbersome reconciliation. This partially explains the recent flurry of activity in gold trading technology. This past week alone, both Euroclear and the Royal Mint announced progress in testing blockchain-based gold trading. IEX also has trials under way, and the Canadian Royal Mint already allows the public to buy and sell bullion on a blockchain platform. A more liquid and verifiable market for physical gold could create greater trust in ‘digitized gold’ by lowering skepticism about price fixing and removing doubts about the authenticity of the underlying asset. Increased demand and a greater choice of vehicle is likely to further boost liquidity, which in turn would increase circulation. This would enhance gold’s functionality as collateral or even as a means of exchange. The greater the ‘usefulness’, the greater the value.

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.

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.

What’s Going To Change Banking The Most Next Year

what's going to change banking the most next year

what's going to change banking the most next year

I was asked this week – what’s the biggest change that’s about to happen in banking. To me it’s data. How we use and what we achieve with it. Banks have moved from one-to-one (teller and a customer) to a one-to-many relationship (online portals, self-service) but smart use of data can enable us to reestablish personalised services and bring back customised one-to-one relationship between the bank and the customer with help with bots, machine learning, and adaptive technologies. Further, the upcoming PSD2 (and UK equivalent) will alter how the data is stored and used. Nailing this (data) step is essential to progress towards the banking-as-a-platform model, which is the future of finance.


Are Blockchain Patents a Bad Idea?
By Jeff John Roberts

A future fight for control of potentially important technology for banks and other big industries. Blockchain is at a crossroads. On one hand, the technology, which promises to revolutionize record-keeping in businesses like banking and farming, is more open than ever with firms including Chain and R3 saying they would make their blockchain software code open to the public. But there is another force at work that could close off access to the technology. That force comes in the form of patents as big banks and others file applications that seek 20-year monopolies over various aspects of blockchain.


Has The Blockchain Hype Finally Peaked?
By Financial Times

Is the hype around a blockchain for financial markets finally over? Sober reality bites on automating networks of trust on which modern finance rests. It has turned out that Silicon Valley’s breezy idea of combining its peer-to-peer computing ethos with that of the money management practices of Wall Street is hard to do. Automating the networks of trust on which modern finance sits has proven complicated. Some have taken comfort in the “Hype Cycle” developed by research firm Gartner a decade ago to describe the trajectory of the average technology. Early executive and investor enthusiasm hits a peak of inflated expectations and is brought crashing to earth. Once through a trough of disillusionment does enlightenment arrive, and the technology becomes useful.


Banks Don’t Understand Their Customers
By Jim Marous

As the banking industry responds to the “Age of the Individual”, big data and advanced analytics will define the winners from the losers. It is critical for banks and credit unions to deliver on the personalization promise. Banking organizations are making some progress towards harnessing consumer insight to enhance the customer experience and to boost overall profitability, but there is still a long way to go. Although consumers prefer a personalized approach, most financial institutions seem to understand their expectations, but can’t meet these expectations as they’re faced by various challenges. For instance, most are unable to offer products or solutions in real time.


Why FinTech and Why Now?
By Evans Munyuki

There is no denying that technological innovation is an evolutionary force in business, politics and even culture; in the industry of finance, it is driving capital, captivating attention and connecting us more efficiently to our institutions, to our communities and to each other.  In my experience and in my line of work, you either harness innovation to your benefit (or to the advantage of your customers or company) or else you get left behind. Due to the realization that we now share that FinTech is not a bubble about to burst nor is at the forefront of some dynamic upswing. It is inherently disruptive to the status quo of access, inclusion and interaction with the financial marketplace, driving emerging market development and from it, competition.

How Bitcoin Will Meet The Scaling Challenges Needed To Go Mainstream

fintech bitcoin scaling

fintech bitcoin scaling

How Bitcoin Will Meet The Scaling Challenges Needed To Go Mainstream
By Bernard Lunn

For some time it seemed rather academic or nerdy to think about Bitcoin scaling. Who cares whether Bitcoin will scale if it is only used by a few people for nefarious activities? The scaling challenge is real but with all the tech brains and money committed to solving it, Bitcoin will meet the scaling challenge so that it can go mainstream if consumers want it. There is constant talk about Internet scaling challenges. The Internet looks like one of those systems that should not work in theory but works well in practice – meaning that the theory is wrong. Decentralized, loosely coupled systems are hard to understand but seem to work well. The Bitcoin Blockchain maybe the same.


Integrated Loyalty: How Uber and Capital One Embedded Loyalty into the Customer Experience
By JP Nicols

It’s become well-worn trope in fintech punditry to declare such and such an app or company as the “Uber of banking”, presumably meaning both that it’s a seamless customer and payment experience, and also something with massive growth potential. This on-demand seamless delivery is raising the bar for customer expectations in banking, and so is the Uber payment experience. To me the best part of the Uber payment experience is that there isn’t one. I don’t want a payment experience, I want a ride from point A to point B. It’s a great example of the “disappearance of payments”.


InsurTech CEOs Believe There Has To Be A Better Way
By FinTech Roundup

The cultural differences between decades-old brands and startups and, perhaps more than anything else, the pace at which the two operate create difficulties in these working relationships. For big companies with hundreds of staff the process of digital transformation, while more cost-effective in the long run, can be painful. One of the key forces driving these changes is the increased access to rich data sources and open access to artificial intelligent algorithm that can crunch through that data to offer more personalised services, explained to consumers. Another field of technology that will impact the future of insurance is the smart home and insurers’ ability to process and make use of the vast amount of data the devices can collect.

Goldman Sachs Drops Out of R3 Blockchain Group
By Kim S. Nash

Founding member leaves as cooperative seeks equity investors. Goldman Sachs Group Inc. has dropped out of the R3 CEV LLC blockchain group. The investment bank was one of nine original members of R3, founded in 2014 to explore the use of the distributed database technology in Wall Street infrastructure. The technology, best known for underpinning the system that trades the virtual currency bitcoin, has garnered increasing attention as a way banks can save billions of dollars and make old-fashioned processes faster and more efficient.

FinTech Summary #51: Three Sexiest Words in FinTech

FinTech Summary - Three Sexiest Words in FinTech

I was working on a project for a major global bank to help them build their digital strategy/brand. They feature we discussed were impressive, but the statement was rather dull, safe, wordy. This is exactly why they are struggling to establish an industry leading brand – the unwillingness to be bold, brave and adventurous. The best branding lesson I ever got was – “If I can substitute one company for another and have the ad still make sense, it’s not a good ad.” That’s why fintechs are often ahead of financial institutions, just look at the TransferWise ad

Transferwise FYCK ad


Thanks for reading – you’re awesome!

Have a wonderful week,


This Week’s Summary

The Three Sexiest Words In FinTech
By Chris Skinner

Three big areas are emerging in FinTech, from an investors viewpoint: FinTech for the unbanked, the rise of blockchain technologies and InsTech. The “Sexy words” in FinTech for tomorrow will belong to IoT, O2O, big data and chat-bots. Notwithstanding a huge potential of all these developments, no breakthrough is likely in the short term. These services will be developing for years and, what is most important, we will have to learn them. Users will have to become comfortable with sharing their growing amounts of data and ask questions, make mistakes, correct them and teach firms how to understand us and be able to predict our needs. This teaching process will hinge on our willingness to engage and the amount of time and effort we have to spend on them. It takes not only developers.


Remember Satoshi: Blockchain Economics And Law
By Kurt Dew

Economics and law are a couple of important factors in the success of any venture. Thus the mystery. The single economic fact that resulted in the economic feasibility and ultimate significance of blockchain technology — the founder’s contribution — seems to be misunderstood. It is simply silly to ignore Satoshi’s major coup: converting potential hackers of blockchains into protectors. I hasten to add, looking at the rules governing bitcoin’s miners — the specific set of miner incentives in bitcoin — there is no doubt these rules can be bettered. I believe a skilled financial analyst could design a permissioned blockchain where protectors of the system are identified, managed, and monitored, while giving them incentives sufficient to make protecting more valuable than hacking.


Why Fintech Startups Might Not Want to Become Unicorns
By Julie Verhage

In mythology, unicorn sightings are blessed events. In the fintech world, they might be increasingly ill-fated. Striving to achieve a valuation of $1 billion or more may no longer be in a start-up’s best interest, according to recent valuation trends and the venture capitalists who invest in the space. Fintech firms, in particular, are posing a headache for investors as rising valuations create a limbo-like state in which start-ups become too pricey for larger firms to buy, but don’t have business models that are scalable enough for a debut in the public markets.


InsurTech Ventures Going After Big and Complex Health Insurance Pain Points
By Amy Radin

Innovators addressing the root of user pain points can influence how plans are selected, and health care is consumed. The levers are not easy to move. Success requires compliant ways of combining big data analytics and personalization with user-centric digital experiences. The headline of a recently published New York Times article, Cost, Not Choice, Is Top Concern of Health Insurance Customers would seem to state the obvious. People don’t see value because they don’t understand what they are buying. People are being held accountable for health decisions that they are not equipped to handle. People don’t always make rational decisions. The multiple miracles that would have to occur for a quick fix make it unlikely that we will see a simple, logical health insurance experience any time soon. We are relatively early in what is likely to be a long game.


5 things that made me smarter this week

Purple Skittles taste different in the US because of regulation. A federal ban on growing blackcurrant prevented the flavor from growing popular stateside, even as it became commonplace in Europe.

What Should You Choose: Time or Money? People who chose time were on average statistically happier and more satisfied with life than the people who chose money.

New Yorkers will pay $56 a month to shorten their commutes by a minute.

Paralympic runners in Rio ran faster than their Olympic counterparts. In the 1500-meter race for the visually impaired, the first, second, third, and fourth-placed runners each beat the timeset by gold medal winner Matthew Centrowitz in August.

Your smartphone works better in your right hand. Especially if it’s an iPhone.


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FinTech Summary: Mobile Wallets, Selfie Banking, Economic Freedom

FinTech Summary Issue 50

I want to share a quote with you that I read this week and it has really resonated with me. This is the reason why I write this newsletter:

“The work you do while you procrastinate is probably the work you should be doing for the rest of your life.” – Jessica Hische

Thanks for reading – you’re awesome!

Have a wonderful week,


Building A Mobile Wallet That Customers Want
By Faisal Khan

There should be no doubt that as a society, we are more dependent on our mobile phones than ever before. Our smartphone represents the core of how we communicate and interact. It is truly an extension of us. A digital wallet isn’t the end of cash. Though many would like it, unfortunately, in many, many developing economies, for various reasons, cash remains king and it won’t be disappearing anytime soon. A hybrid coexistence of digital and analogue cannot be emphasised enough. Both ecosystems are here for the next couple of years, with the cash society slowly losing ground to the digital society. A well-designed mobile money wallet solution will take this into consideration and interface with cash-based transactions.


How Digital Currency Will Change The World
By Brian Armstrong

Digital currency may be the most effective way the world has ever seen to increase economic freedom. If this happens, the implications are profound. It could lift many countries out of poverty, improve the lives of billions of people, and accelerate the pace of innovation in the world. Economic freedom is one of the great meta-problems of our time (right up there with A.I., quantum computing, and cheap renewable energy). If we can create more economic freedom in the world, it will serve as a giant economic stimulus package for the world, accelerate innovation, reduce wars, make the poorest 10% better off, overthrow corrupt governments, and raise happiness.


How The Financial System Crushes The Poor
By Chris Skinner

The reason for thinking this is that poverty and inclusion is yet another area, like identity and clearing and settlement, where technology is not the solution. It can assist in creating a solution, but it’s just part of the solution. The first part – before the technology – is the willingness to use the technology to create a solution. We have things bubbling away to do this, such as the United Nations Digital Identity Project, but it’s going to take a long time. Bear in mind that 1.5 billion don’t officially exist – their births have never been recorded – and there are still 757 million adults (including 115 million 15-24-year-olds) who cannot read or write a simple sentence. That’s a sizeable portion of the world’s population who, even if you gave them the technology, may not be able to use it effectively.


One of the World’s Biggest Banks Is Swapping PINs for Selfies
By Lucinda Shen

The world’s 6th largest bank by assets is making use of selfies in a bid to increase both security and convenience. The “selfie” will be matched with a photo from a passport or driving license. On the flip side, the rise of digital banking solutions has also resulted in cuts in physical branches and layoffs. Banks, suffering from weak revenue, have sought to lower expenses while investing more funds in digital and services that can’t be handled by computers.


5 things that made me smarter this week

Science is getting to grips with ways to slow ageing. But what does that mean for our society?

What Happened When I Moved My Company To A 5-Hour Workday. A little over a year ago, Tower Paddle Boards started letting employees leave by lunchtime and offering 5% profit-sharing.

How Tech Giants Are Devising Real Ethics for Artificial Intelligence. For years, science-fiction moviemakers have been making us fear the bad things that artificially intelligent machines might do to their human creators.

Bees Buzz for Their Supper. The familiar buzz of a bumble bee is one of those summer sounds that is easy to take for granted. But for the bees, buzzing has a purpose.

It’s official: giant pandas are no longer endangered. Pandas have been one of the world’s most popular totems of the need for wildlife conservation may now become a symbol for the movement’s success.


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