Where is your digital vision?

fintech summary - digital vision banking

fintech summary - digital vision banking

The result of US election was a shock, at least for me. However, I remember this paragraph from Fred Wilson, one of the most well known VCs:

“But more than that, going into a foxhole right now seems like the wrong idea. Some of the best companies have been created in times of great economic turmoil. And, because of that, some of the best venture capital investments have been made in times when everyone was risk averse. I am not for getting too excited when times are good and I am not for getting too conservative when times feel bad. I am all for looking for opportunity at every turn.” 

At least we have the certainty of uncertainty. Let’s embrace it.

Thanks for reading; YOU are awesome!

Have a wonderful week,


If Internet Giants Are The Competition, Are Banks Ready To Compete?
By Chris Skinner

The reason why Amazon, Facebook, Google and Alipay can leverage data so effectively is that they all began with a single data view and have added leverage to that single data view over time. When Google was founded in September 1998, it was serving 10,000 search queries a day. By the end of 2006, the same amount would be served in a single second. Platform is the model, scale is the key, and consistency is the focus. A hangover from the past, a reflection of product focus, and a lack of ability to invest in consolidation and rationalisation. However, if data is the competitive battleground, it’s just another reason why banks need to get an enterprise data structure in place sooner rather than later.


Where Is The Bank’s Digital Vision?
By Chris Skinner

You cannot create a digital vision if you don’t have leaders who understand digital. In fact, again, the reason why most bank leaders avoid changing core systems is that they don’t have vision and so can duck it. Most CIOs are not there to give vision. They are there to keep the lights on and maintain the system (especially as 80% of their budget is spent on just that). So who’s going to create a digital technology vision if there’s only bankers in the room and no one to challenge them?


Blockchain-Powered Revolution in the Insurance Industry
By Elena Mesropyan

Probably the most far-reaching implication of blockchain is disintermediation. A decentralized consortium network of insurance carriers, which manages all of its transactions online, could eliminate the need for intermediaries for less complex coverages, e.g., auto insurance and mass-market products. Disintermediation in the insurance industry means structural transformation of the industry, its curation from mediators that may have a significant impact on end pricing and reach. By providing a universal source of truth that is tamper-proof, blockchain could also lead to increased efficiency — resulting from a reduction in human error, fraud, data duplication, processing delays, transaction and administrative costs and opaqueness — ultimately benefiting the end-consumer with better service and lower premiums.


BaaS Is Becoming The Sexiest Vertical In FinTech
By Vladislav Solodkiy

BaaS (bank-as-a-service) is the new black. Essentially, it’s the heart of banking. Recently Starling Bank and Mondo, the latest two challenger banks to win their UK banking licenses, have placed open APIs at the forefront of their strategies to maximize their competitive advantage over their incumbent rivals. Application programming interfaces (APIs) are the pieces of software that allow two separate IT systems to communicate and interact with each other. Open APIs will allow both Starling Bank and Mondo to crowdsource the development of new products and services far more quickly and cheaply than they could manage on their own. This is a vital consideration for new entrants that have limited resources of their own and need to deploy a full service proposition.


5 things that made me smarter this week

The Back to the Future 2 villain was based on Donald Trump. Biff Tannen used a casino fortune to fund his quest for political power.

There’s a virus that can spread between smart light bulbs. It travels via radio waves and could theoretically shut down wifi across an entire city.

It’s possible to have emotions without feeling them. Some reactions occur outside our awareness.

Medieval peasants had more time off than modern-day Americans. Frequent holidays were key to preventing a revolt.

The legalese associated with Apple product ownership can involve more words than The Hobbit. If you own a Mac, an iPhone, an Apple TV, an Apple Watch, and an Airport router, you’ve probably agreed to at least 100,000 words of legal contracts.

FinTech Weekly Summary | Aug 15 – 22

Banks have been forced to open their APIs to third-party organisations. The regulator claims that this will benefit the customers since they will receive tailored services, and will have the opportunity to switch banking products easier. I buy that. Data is power, and now customer will own it, not the bank. However, as the old cliche goes – with great power comes great responsibility. There are number (valid and not so much) concerns about the security of the data and opportunistic behaviour that some third parties could engage in. Again I totally agree. But there is a bigger opportunity here for us as a society. Whether we like it or not our lives are becoming more and more digital and in turn, data driven. All the data points that are collected by the plethora of apps that we use, health trackers that we were, banking products that we use. We shouldn’t debate IF it is secure to give customers access to their data (and/or third-parties with customer’s permission) but we should debate HOW to make it secure to store and manage the ever-growing personal database.

Thank you for reading. You’re awesome!

Have a fantastic week,


China Is Disrupting Global FinTech
By Joshua Bateman

Going forward, declining technology costs and China’s inexpensive labor market will ensure it remains a fintech axis. Regulations are also supporting the industry. Appropriately regulating financial services is challenging. If policies are too lax, investor risk increases. Too stringent, innovation is stifled. Unlike developed markets where regulations were instituted prior to technologies being invented, Chinese regulators are relatively young and are evolving with fintech. They do not need to re-write existing regulations, an arduous task. Although more stringent regulations could temper growth, the trend is toward greater fintech adoption in China, driven by technology companies.


The Subtle Tyranny of Blockchain
By Stefan Thomas

Project Xanadu (started in the 60’s) was a competitor to the World Wide Web (WWW). Xanadu has been around for longer and had more ambitious feature set such as two-way links. Both Xanadu and the web are decentralized, but the web was much simpler. All it required was a minimal protocol and simple data format. No interaction was needed between websites, which meant that they could evolve independently from each other, and rather than waiting for the Xanadu creators to add a feature. There are parallels to the blockchain, lets look at payments as an example. Bitcoin is a replacement for existing centralized ledgers like the credit card networks. But Bitcoin still has a lot of shared rules that participants must agree to such as the proof-of-work mechanism, currency distribution function, block size limit, lack of anonymity. By contrast, in adding one more layer of abstraction, the Interledger Protocol allows me to choose options that I like and still seamlessly transact with someone who has made different choices in each of these categories.


Ethereum Scaling Advances With ‘First’ Off-Blockchain Payments
By Alyssa Hertig

Ethereum and bitcoin currently each support only a fraction of the transactions seen daily on centralized payment networks like Visa or MasterCard. As developers seek to take on this challenge, scaling is widely seen as a fundamental issue yet to be solved. Raiden draws inspiration from the Lightning Network, an in-development off-chain transaction network that’s often trumpeted as a fix for scalability on the bitcoin blockchain. If success this could open up the floodgate to much wider adoption and incredibly more efficient use of blockchain. These include making micropayments for seconds spent watching online videos or facilitating trade in Internet of Things-enabled markets, where machines pay other machines for chunks of bandwidth or temperature sensor data.


UK Banks Ordered to Digitalise or Else
By Chris Skinner

On Tuesday the Competition and Markets Authority (CMA), a UK Government Agency, told British banks that they must digitalise or suffer penalties. In a report entitled Making banks to work harder for you, they have ordered the UK banks to digitalise within two years or face regulatory fines. The key headlines include, under what the CMA calls its “Open Banking programme”, that banks must share their customer data with third-party app providers. The second headline is that all banks will be required to introduce a Maximum Monthly Charge (MMC) to limit the costs of an unarranged overdraft. Third, the CMA has ordered new measures to encourage more people to switch their accounts to other providers.


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FinTech Weekly Summary | July 24 – 31

As Umberto Eco once said “You can not make a spoon that’s better than a spoon”. We are so clung onto an idea of FinTechs replacing banks. They won’t. We need banks and you can’t make a better bank than a bank. In my eyes bank’s main responsibility is to protect our documents and money, everything else is an add-on. These add-on services are what we can disrupt and improve, or encourage banks themselves to improve them. Money-transfer is a great example, you can do it outside bank; cheaper and better. Banks won’t disappear but they may change their face drastically over the next decade by losing some services, drastically altering others and, possibly, creating new ones.

Have a fantastic week,


Counting Down to the Bank of Facebook
By Lionel Laurent and Leila Abboud

The biggest risk comes when technology heavyweights like Google, Apple or Amazon really start to zero in on their business. These tech giants are relentlessly innovative, and their reach — Facebook alone boasts 1.65 billion monthly users — and grip on customers’ personal data is virtually unparalleled. For now, the tech giants have barely scratched the surface. Apple and Google have mobile payment tools, Facebook users can send money to friends through Messenger and Amazon is pitching student loans in partnership with Wells Fargo, but they’re not exactly setting the financial world on fire. Their Asian cousins are more advanced: WeChat and Tencent can now be used to pay for everything from rent to a taxi, and Alibaba runs mutual funds.


A Seven Year Old Idea Comes of Age: Bank-as-a-Service
By Chris Skinner

Bank-as-a-Service is an idea came from and point to banks opportunities to grow business by releasing more of their capabilities as APIs, as software, as apps, as widgets … as anything that can plug-and-play into anything else. Part of this is that it’s not just banks’ products, processes and designs that should plug-and-play, but we should be able to plug-and-play any other services into the BaaS model, such as Stripe, PayPal, Fidor, Moven or any other APIs, apps and analytics we want.


Ethereum’s Two Ethereums Explained
By Alyssa Hertig

What started as an attempt to rescue investor funds in a high-profile project has resulted in a schism that has effectively split the community on the second-largest public blockchain. There are now two slightly different versions of this platform available to users – ethereum, the ‘official’ version of the blockchain maintained by its original developers, and ethereum classic, an ‘alternative’ blockchain maintained by a wholly new team. Now that it’s happened though, and ethereum classic exists, the community has tons of questions. These include whether hard forking the blockchain, or rewriting the code to reverse transactions without near-unanimous consensus, is worth the risk, and if ethereum developers forked again to solve a similar problem, would it split again? Either way, it’s not clear if the rise of ethereum classic is a bad thing for the technology. The protest blockchain gave the minority a chance to build their own system, and some people think it’s an exciting development.


What Is FinTech And Where Does It Live?
By Vinod Sharma

Fintech can manage your money automatically for betterment or wealthfront and not pay for investment advice that may or may not outperform the market. Fintech companies whose line of business combines software and technology to deliver financial services – will reshape and improve finance by cutting costs and expanding access to financial services. FinTech companies can create a more diverse and stable credit landscape by gathering data from social-media and other sources to assess the needs of young businesses and borrowers on the fringes of the banking system. To model the Fintech enterprise, its better use a method rather than make things up on the go. A method guarantees results and increases the productivity, predictability, repeatability and reliability of the business modelling and transformation. Most of the FinTech companies wins on the principal of “The ability to relate to people, to inspire and motivate them is what you must ever work on as a leader”.


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FinTech Weekly Summary | July 17 – 24

Last week Ethereum community voted to create a hard fork (a piece of code that will overwrite immutable records on the Ethereum blockchain) to recover stolen the DAO funds. This is a historic moment in the cryptocurrency community. For example, Bitcoin community has been debating for over a year to increase the size of bitcoin. Ethereum has voted and implemented the change in under a month. While the community is smaller and they were under time pressure to make the decision to recover DAO funds, it shows that Ethereum developers and community are willing to be adaptable and solve problems as and when they appear – and they will. This is a major advantage for Ethereum in the Ethereum vs. Bitcoin debate.

Have a wonderful week,


Will Deposit Accounts Be The Next Wave of Fintech Innovation?
By Jessica Ellerm

There’s one sector of finance that really doesn’t get a lot of airtime when it comes to fintech – deposits. Checking accounts, savings accounts, transaction accounts – while they’re the bread and butter of banking, they’ve been relatively untouched since they were first invented. You put money in, and, if you’re lucky, earn a little interest before you take the money out. In today’s world, the humble bank account hardly feels revolutionary, yet the brilliance of it is we all need one. Is there an opportunity here for a fintech startup to slice away this part of a bank’s core business, by adding a little flavour to the whole deposit experience?


4 Scenarios for Lending Club – the proxy for Fintech disruption or hype $LC
By Bernard Lunn

When Lending Club did it’s IPO in December 2014 I declared it as the Netscape moment for Fintech. Meanwhile, the $LC stock price tanked to such a level that by late May 2016, after the Lending Club CEO ouster, the conventional wisdom became that yes this was the Netscape moment for Fintech and we all know how the Netscape story ended – they were crushed by Microsoft. That is one of the 4 scenarios that we analyze in this post – that incumbency wins, that big banks crush Lending Club and that Marketplace Lending becomes a footnote in banking history.


Why It’s Not So Easy To Bring Down The Cost Of Banking

Every year, Bank of America spends about $1 billion to move money around in armored trucks and shuffle various other bits of paper about.  It is a cost they might like to cut – along with the costs of fixing broken ATMs and replacing lost cards – but these are costs that just aren’t going anywhere anytime soon. The digital banking revolution gets lots of airtime – and has surely led to many branches being closed in favor of the frictionless smartphone or ATM tech that does the same job better.  Or theoretically better anyway – when it came to cases, consumers complained they weren’t getting personalized enough services and JPMC found itself rehiring tellers. Which, in a nutshell, is the new tight spot banks find themselves in when trying to boost near-term earnings. Interest rates remain at historically low levels and sunk costs are – well, sunk – and also growing.


The Case For Bitcoin (Or Something Like It)
By Chris Skinner

So what does this mean? Well, many of us look at dollars, euros, pounds, yen, yuan as being of great value, but they’re not. These currencies are all useless. They’re just fictions. They are made up by governments to be of value, and because we believe in governments, they work. As long as the government works, the currency works. The Zimbabwe Dollar and the Venezuelan Bolivar are only imploding because their governments stopped working effectively. What happens when money stops working? For me, the bancor is bitcoin 4.0: a design upon a design that gradually makes the faults of bitcoin 1.0 to be wrinkled away until we do have a trusted digital currency. Bearing in mind what’s happening in Venezuela and Britain right now, maybe that wouldn’t be such a bad thing.


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FinTech Weekly Summary | June 12 – 19

The future of banking debate has two sides – banks will be replaced by tech companies (fintechs or apples and facebooks of this world) vs a view that challengers are just a noise and banks will replicate their features in-house or simply buy them when they need to. They certainly have capital to buy out any FinTech firm but simply having capital may not be enough. What banks are currently missing is the appeal and the ability to hire the right talent to continue the innovation. Customers expect more than an update twice a year. Buying a challenger will provide banks with great interface/platform for that moment. But will the core team stay or will they just cash-in and move on to find another challenger? Who will replace these people? Same resource that created the initial tool/app that fell behind?

Have a wonderful week,


Big Banks Will Look More Like Google by 2025
By Don Raftery

In the ongoing battle of big banks versus fintech companies, there will be an ultimate victor: the incumbent. By 2025, leading banks will operate as digital financial superstores that blur the line between technology companies and banks. Even as large banks reassert themselves in a digital age, they will face competition from new market entrants eager to apply far-flung communications networks, artificial intelligence, cloud-computing platforms and other technology advantages to the world of banking. Virtually, the only thing standing between banks and giants like Google and the telecom providers will be a banking license.


Could Apple Be Your Next Bank?
By Alessandro Hatami

If Apple decides to launch Apple Banking, it would give banks a real run for their money. Apple has a better grasp on user experience and customer engagement than most businesses, not just banks. The attractiveness of the banking sector for Apple isn’t in its financial return. Apple’s interest is in becoming an even more integral part of its customers’ life, creating an even higher barrier for them to switch hardware provider. In a few years, we could see that not only does the world’s biggest taxi service not own any cars, and the world’s largest hotel chain not own any property, but also that the world’s greatest bank doesn’t have a banking license.


Digital Is All About The People
By Chris Skinner

I got caught up in a conversation about building a new digital bank the other day, and was asked how I would organise the project. I’m a simple guy and go back to basics. Basics of any company always comes back to people, process and product. There are no barriers, so build the bank with passion and vision based on the human outreach through digital foundations. Once you have that journey outlined, you can start to fill in the blanks. The blanks define the processes required to connect the human contact to the digital foundation. It will determine how many humans and buildings are needed in the digital structures, if any, and will provide the roadmap for building the new bank.


5 Factors Experts Say Drove Bitcoin’s Rise to $700
By Charles Bovaird

The price of bitcoin surged close to 20% over the weekend spanning 11th June and 12th June, and this robust appreciation grabbed the attention of many experts who were quick to give their two cents on the rally. Market observers provided a wide range of explanations for this climb: the ongoing ‘Brexit’ uncertain, the rising visibility of blockchain technology, the impending halving of rewards paid to key participants in the bitcoin network, concerns about China, supply demand mismatch. This could be any of this factors or combination of some/all of them. But Bitcoin is certainly becoming a currency that is affect by geopolitical factors.


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FinTech Weekly Summary | May 30 – 05

Two themes stand out in FinTech lately – blockchain and failings of P2P lenders. Blockchain is where P2P lending was 2-3 years ago – in a state of euphoria. Every major news outlet tries to cover it (even not financial oriented ones). None sees the challenges but only trying to rehash benefits copied from somewhere else. On the other hand, P2P lenders are in a polar opposite situation. There is pure negativity surrounding the industry with Lending Club and Prosper seemingly not doing well. We need to appreciate that each of these innovations will go through a cycle of building up unrealistic expectations then dropping to an unreasonable pessimism state. I’m not worried about P2P lending right now, once the cloud of ‘doubt’ will disappear realistic expectations will be built. I am more worried about the hype surrounding blockchain and whether it can be sustainable. We will see.

Have a fantastic week,


Will Blockchain Become The Internet Of Finance?
By Joe Harpaz

In many ways, the business opportunities enabled by blockchain technology are not dissimilar in concept from other disruptive technologies built on the peer-to-peer model, such as Uber and Airbnb. And that’s where things start to get really interesting for blockchain. Like these other types of peer-to-peer applications, blockchain has the power to significantly disrupt the status quo by removing administrative layers from the banking and finance process, ultimately streamlining labor- and cost-intensive functions across a wide array of financial services. While we’ve yet to really see the first real Uber or Airbnb of blockchain emerge, there are dozens of different firms working to develop solutions based on the technology. Imagine what will be possible when they get the recipe right.


Making Sense of Blockchain Smart Contracts
By Josh Stark

The lack of clear terminology in this field is an unfortunate reality. The different uses of the term illustrate a broader challenge in our industry. The interdisciplinary nature of blockchain technology, and “smart contracts” in particular, lead people to see the technology as primarily belonging to their own discipline, at the expense of the others. Lawyers often look at smart contracts and see marginally improved legal agreements, without appreciating the fuller potential of blockchain-code to extend beyond law’s reach. Developers, on the other hand, consider smart contracts and see the limitless possibilities of software, without appreciating the subtleties and commercial realities reflected in traditional legal agreements. As with any interdisciplinary field, both must learn from the other.


PayPal Isn’t a Bank, But It May Be the New Face of Banking
By Telis Demos

PayPal Chief Executive Dan Schulman said his firm doesn’t want to supplant banks and hopes it can provide products that also bring revenue to lenders. “What we mean to do is to extend traditional consumer financial services,” he said, adding that his target market is the two-billion-plus people who are outside the traditional banking system. Ultimately, one future for established banks could be to serve as regulated money vaults to connect to a variety of fintech services. That would be similar to what has happened in other industries in the past decade, such as mobile communications, in which pricing power for service providers eroded while smartphone makers such as Apple Inc. boomed. “Apple didn’t have to become a cellular carrier to launch the iPhone,” said Bill Ready, global head of product and engineering at PayPal. “A bank is the carrier behind a lot of the services we provide, and when we deliver value to our customers, we bring volume to banks.”


Chris Skinner: Beware The Mice Of Fintech
By Chris Skinner

I’m often asked whether banks should be afraid of the threat of fintech. My answer is that most fintech is enhancing what banks do, rather than threatening their core business. I sum this up as “wrappers, replacers and reformers.” I believe that the only fintech firms banks should really fear are those that replace core bank services, such as saving, investing, and borrowing. These are the fintech start-ups offering robo-advice and peer-to-peer lending. Now, already I can see some banks enjoying some schadenfreude as they see Lending Club trip up and Prosper stumble. But there is more to the picture than recent events.


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FinTech Weekly Summary | May 08 – 15

The way that banking, and likely other industries, will look in the next 10 years will be mainly different in two ways: contextual use of data and razor sharp focus on User Experience (UX). Companies will achieve competitive advantage by best positioning themselves to acquire and quickly processing data. Then using this data to create a better experience for their stakeholders. This is already happening but on a very small scale, we only analyse limited touch points with our customers, such as their transactions or their basket content. There is scope for much, much more. A single gas turbine, coupled to the industrial Internet, generates four times as much data in one day as the entirety of the world’s Twitter posts. As Chris Skinner rightly identified – the focus will shift from product and profit to customer and technology. If technology is sound and customer is happy, the product will great and profits will be awarded.

Have a wonderful week,


Will Blockchain Drive The Fourth Industrial Revolution?
By Daniel Riedel

The benefits of IIoT are apparent, and we’ve developed the technologies for machine-to-machine communication; now, the challenges of standardization lie between society and the next revolution. This has pushed us toward a new evolution of database technology that the past three decades have led up to, and we’re finally seeing momentum build. If we are all to benefit from the enhanced efficiencies brought by a fourth industrial revolution, we must settle on a single model for machine-to-machine commerce. In an environment that requires continuous modification of data but also sensitivity to conditions required for uninhibited informational trade, blockchain, and the trust it creates, is our best path toward a new industrial revolution.


Principles Of The Reimagined Bank
By Chris Skinner

Banks rarely see regulations as an opportunity, and see the product and profit first, the customer and technology second. This is where the wheels start to come off. All of the fintech startups I meet are far more attitudinally geared towards thinking like the above. If banks cannot change their thinking, they will sleepwalk into disruption. It’s time to wake up. I think it’s time to bring design into finance and use design logic to create the next-generation financial platforms. Design thinking starts with the basic question: what is the user trying to achieve: a journey (Uber), a memory (Facebook), an answer (Google), fun (Apple) … a payment? No. It’s nothing to do with a payment. It’s fulfilling a wish. How would you design a bank based on a wish? Design for fulfilling dreams. It’s got nothing to do with banking.


An Anatomy of Bitcoin’s Great Scaling Debate
By Dr Paul Ennis

Bitcoin’s scaling debate is clearly one of its defining moments. It has pitted the user bases sharply against one another whether through endless Reddit debates, digital media or even at the “top” tier of the development teams. It also raised significant issues around centralization and bitcoin’s somewhat awkward relationship with the mostly China-based mining industry. This post will attempt to document different parts of the debate as it played out from different perspectives.


The DAO: Or How A Leaderless Ethereum-Based Organization Raised $50 Million
By Michael del Castillo

A distributed organization with no single leader that could theoretically exist so long as there’s an Internet connection was launched last month. ‘The DAO’, as it’s called, takes its name from the description for a new type of entity: a distributed autonomous organisation. The DAO has garnered over $50m worth of ethers (ETH) – the digital token of the Ethereum network – from investors. Think of it as a hub that disperses ETH to other startups and projects. Backers of The DAO receive voting rights by means of a digital token, which can be used to help determine the future direction of the organization and which projects will actually get funded following a voting period. Participants stand to receive possible dividends, including ether, in return for supporting the project. Yet, there are outstanding questions about the exact origins of The DAO as it exists in the wild today.


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FinTech Weekly Summary | May 01 – 08

This week I’d like to share a short post from Seth Godin, a well-known marketing expert, that I read this week and has really resonated with me. I think this is really relevant for FinTech community. FinTech firms tend to overly focus on customer feedback, especially the ones’ they couldn’t convert. However, we should instead focus on the ones that we won over already and ask them for guidance. See Seth’s post below.”When someone doesn’t say yes, they’ll often give you a reason. A common trap: Believe the reason. If you start rebuilding your product, your pitch and your PR based on the stated reason, you’re driving by looking in the rear view mirror. The people who turn you down have a reason, but they’re almost certainly not telling you why.

“When someone doesn’t say yes, they’ll often give you a reason. A common trap: Believe the reason. If you start rebuilding your product, your pitch and your PR based on the stated reason, you’re driving by looking in the rear view mirror. The people who turn you down have a reason, but they’re almost certainly not telling you why.Fake reasons: I don’t like the color, it’s too expensive, you don’t have enough references, there was a typo in your resume. Real reasons: My boss won’t let me, I don’t trust you, I’m afraid of change. By all means, make your stuff better. More important, focus on the unstated reasons that drive most rejections. And most important: Shun the non-believers and sell to people who want to go on a journey with you.”

Fake reasons: I don’t like the color, it’s too expensive, you don’t have enough references, there was a typo in your resume. Real reasons: My boss won’t let me, I don’t trust you, I’m afraid of change. By all means, make your stuff better. More important, focus on the unstated reasons that drive most rejections. And most important: Shun the non-believers and sell to people who want to go on a journey with you.”

Have a wonderful week,


It Doesn’t Matter If Craig Wright Is Bitcoin’s Inventor
By Joon Ian Wong

An Australian entrepreneur, Craig Wright, has written an extensive blog post claiming to provide cryptographic evidence that he is bitcoin’s inventor, the pseudonymous Satoshi Nakamoto. It’s easy to see why so many are scrambling to parse Wright’s claim. Bitcoin, after all, has ignited an explosion of activity in the usually dull expanses of the international financial system’s back offices. Bitcoin itself has become a spectacular success: All the bitcoin in circulation today is worth about $7 billion; and indeed, it was the best performing currency of 2015. But while the question of Satoshi’s identity is a fascinating internet riddle, with more than a tinge of Keyser Söze-like mythology around it, the truth is, it doesn’t really matter.


How Peer-to-Peer Changes The Financial World
By Chris Skinner

Another factor of reimagining finance for the internet age is the very nature of person-to-person connectivity and peer-to-peer networking. These two factors are very different and also different in the nature of how people are connecting. In the developed world, we have the viral connectivity of the smartphone; in the developing world, we have the basic connectivity of the mobile phone. Soon, both will transition into smart and mobile objects from cars and televisions to heating systems and refrigerators. The banking system meanwhile is still stuck in a world of debit and credit transactional structures of volume and value based upon people paying for things. As we move from paying for things to consuming parts of things and as our devices order those things on our behalf, the banking system needs to rethink.


FinTech Doesn’t Just Disrupt Banks, It Makes Them Platforms
By Josh Constine

It’s easy to move your money between banks. What’s annoying is moving your apps. Even down on the credit and debit card level, e-commerce products from Amazon to Uber have added friction to switching banks. You’d have to go in and update your accounts in each of these apps. Now fintech is doing the same with apps jacked directly into your bank account. That could allow banks to focus more on new customer acquisition and upselling than retention, because users are inherently becoming entrenched with their existing bank.


What Fintech Exits Tell Us About The Bubble Question
By Bernard Lunn

The hype talk on stage presentations is contrasted with behind the scenes talk about bubbles and down rounds and layoffs. We have been trashing the Fintech hype all through 2015, so we are clearly not perma-bulls and feel OK and now are offering a positive point of view amid all the gloomy talk. There is a new sober realism, neither hype nor gloom since we have some hard data to analyse recent exits to understand the market better.


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FinTech Weekly Summary | Apr 24 – 01

FinTech has started the disruption of traditional finance. It started using tools and practices from the tech world such as beautiful user interface (UI) and better user experience (UX) or mobile first development. However, one big shift that will have in the next technology evolution will be artificial intelligence (AI). A move to AI first design. This is particularly powerful in fintech or any financial matters because an algorithm can make better decisions than we can. People are emotional about money. When you are in an emotional state you tend to act irrationally. We see that with direct debits – automatically pay my bills so I don’t forget it, monthly savings deductions – take my money before I spent it, roboadvisors – invest longterm and ignore news headlines. AI to make more day to day decisions about what we do with our money and where we spend it is the way forward. We will all be better of because of it.

Have a lovely week,


The Unique Value of Crowdfunding Is Not Money — It’s Community
By Ethan Mollick

Crowdfunding has been growing explosively, with over $2 billion raised via equity and reward crowdfunding in the United States in 2015 alone. However, crowdfunding is more than another way of raising funds. In connecting creators and entrepreneurs directly with customers and funders, it transforms the opaque and oligarchical market for early-stage fundraising into a more democratic, open one. Rather than relying on venture capitalists and marketers to try to project nascent demand for new innovations, creators can directly reach out to customers and communities to refine ideas and gauge interest. Crowdfunding acts as a platform, matching innovators with those who need innovation, and thus is reshaping which ideas come to market.


The 9 Mistakes I Made When Bringing Blockchain to My Startup
By John Rampton

As a relatively new concept, blockchain is still evolving, so it’s easy to understand how mistakes can be made in terms of how it can actually be used. Many processes are still being tested to see if private blockchain applications will work for various business functions. By sharing the mistakes I’ve made, hopefully others can learn and avoid the same pitfalls. At the time, I recognized the potential that blockchain technology had to help us quickly advance our technology and the solution we offered customers, thereby creating a competitive advantage.


Banks and Fintech in 2025: An Unlikely Alliance
By Eyal Lifshitz

The fintech industry has orchestrated in just a few short years a sweeping change in customer preferences and expectations for the modern “bank” experience. The next decade will demonstrate the impact of this disruption as customers choose financial services based on the product experience, not on the breadth of offerings. In 10 years, most banks will still be public-facing brands. Their role as a safe deposit box for our cash will continue, but consumers’ rising standards will force them to rise to the occasion, ensuring a best-in-class experience is a core component of their offering. This unlikely alliance is just over the horizon. Both the old and new worlds will have no choice but to find a way to join forces, looking like startups while working like banks.


Open Sourcing Finance: You Cannot Delegate This Project
By Chris Skinner

Leading incumbent banks from their traditional command and control structures to open sourced operations that are shared, cooperative and inclusive. Open sourcing finance is the shared economy business model of partnering, white labelling and integrating components to create a new business model of aggregated components of product and service. Any bank resisting such change will not survive and, to understand such change, truly requires a leadership with technological prowess, not just banking knowledge. Many banks will fail to meet this challenge, not because their bank is weak or unable to adapt, but more because their leadership is weak and unable to adapt.

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FinTech Weekly Summary | Apr 17 – 24

I have recently returned from my trip to Spain and Portugal. The food and sun were great, but what I really enjoyed was the fact that I can use euros in both countries. There was no hassle of exchanging currencies, finding the best rates or exchange points. The seamless monetary system made it easier for me to spend money (no need to find exchange), obtain the better value (no translation cost/fees) and budget better as I didn’t need to convert every price back to currency I understand to make a purchasing decision. This has a significant economic benefit. If Bitcoin, or any other digital cryptocurrency, could replicate the similar model on a global level this would have a sizeable positive impact on the global economy. For the consumers, it would be much better experience travelling abroad.

Have a fantastic week,


Why Blockchain Could Enable a True P2P Insurance Model
By Olivier Rikken

In the new business model, the focus of the insurers would shift away from asset management and instead would focus on matching supply and demand and to risk calculation research. The insurer would provide a marketplace-like platform where customers can post their insurance demand, which could be either a standardized product or even a specific demand. This business model could be very interesting, and it could bring multiple benefits, creating a true P2P, crowdfunded insurer. One can even argue that, should this model develop fully, we might no longer have a traditional insurer, but instead, an intelligent capital trading house that fulfills this essential market role.


What’s Next For Personal Financial Services?
By Erin Shipley

Technology companies are increasingly vocal about their role in the finance ecosystem. It is telling that we are seeing organizations spring up like Financial Innovation Now, a policy group composed of companies including Amazon, Apple and Google — a hint that big banks are likely to be facing increasing pressure not just from upstart companies, but large, well-recognized brands with the reach and funding to offer a comprehensive suite of financial services if (but more likely when) they choose. This is likely to be the next wave of innovation shaping the future of personal financial services.


Cash, Fear and Uncertainty: The Holy Trinity of Bitcoin and Blockchain
By Matt Reynolds

The hype around blockchain comes from the fact that it looks to disintermediate banks. Fundamentally, a non-fiat currency that behaves like cash – whether that’s Bitcoin or something else – is terrifying to a bank. If we centralise trust, it’s possible for certain types of actors to try and exploit the centralised nature of this system. Think CIA in Snowden-type examples, think the FBI in “please-give-us-a-specific-version-of-iOS-so-that-we-can-brute-force-this-iPhone”-type examples. The blockchain is our first real example of a technology that allows us to build systems with disintermediated trust. That aspect itself is beyond hype – from a societal perspective we’ll likely gravitate towards systems where trust cannot be exploited, and the blockchain is a great way of building those types of systems.


India’s Audacious Plan to Bring Digital Banking to 1.2 Billion People
By Saritha Rai

Decades ago, most people couldn’t afford to buy an entire bottle of shampoo, so Unilever, Procter & Gamble, and other companies sold them in small sachets that people could afford to buy, paving the way for marketing everything from detergent to toothpaste in rural areas. Nadhamuni is betting that the new digital payments system will be low-cost, high-volume, like a “shampoo-sachet revolution in the financial sector.”

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