Blockchain Economic Forum is organized in San Francisco on June 16 to 19. The focus of the event to discuss and analyze the impact of blockchain, tokenization and crypto finance on the global economy and finance services. Forbes has commented the event: "Blockchain Economic Forum comes back to facilitate the discussions of the most important topics of the crypto economy and its growing influence on the global economy."
Grow VC Group Co-founder and Chairman Jouko Ahvenainen will speak in the event. He participates in two panels: 1) Greatest Blockchain Use Cases for the Next Decade, and 2) The Future of the Banking. He focuses especially to analyze changes in the finance ecosystems and instruments, and give practical examples of new finance services. Now blockchain and tokens are often associated only to ICOs and bitcoin, but token type instruments, smart contracts, and tokenization are going to have impact on all asset classes, finance transaction processing, and how finance can be integrated into many digital services.
The speaker list includes many finance, economics and blockchain top names, for example, Tim Draper, top influencer and Venture Capitalist from Silicon Valley, Gary Gensler, former Chairman of the Commodity Futures Trading Commission, Joe Oliver, former Minister of Finance in Canada, and Reese Jones, Singularity University Associate Founder. Sophia, social humanoid robot, will also be in the event.
You can register to the event here, and 40% discount for a ticket with the code below.
“The West monetizes web services with the advertising model, and the East monetizes them with FinTech.”
I heard this comment at a think tank event I recently participated in. It is a very interesting observation. Alibaba, WeChat and many other online and mobile services, especially in China, have integrated payments and finance into their services, and it is a fundamental part of monetization for them.
I wrote earlier about how finance is becoming an important component to many other services. People can transfer money in chat and social media services; lending applications are integrated to e-commerce; and real estate services will include finance services and flexible models to adjust ownership based on cash positions.
Compared to many other Internet services, the positive aspect of new finance (FinTech) services is that money is the crucial component, and it is easy to incorporate commissions and other practices as earnings models, compared to many other web services like media and music.
Having said all this, the comment about West vs East is still a very good way to crystalize and illustrate the situation.
At the same event, I was engaged in a discussion about the future of banking services, and it was easy to see that people still live in two very different realities. We have western and some other market banks that see they still dominate the business – they look at their heavy IT and regulation barriers and think no one can threaten them. Then we heard a comment from a young FinTech entrepreneur from China, who told the audience that he hasn’t used cash for months, and actually he doesn’t even like to talk about ‘mobile banking’ – it is simply ‘mobile’. You don’t have to go to specific finance or banking services to handle money transactions – those transactions are integrated into services you already want to use. Payment and finance is just an enabler in using them.
Some banking and finance sector services also have a role in the future. We will probably have investment banking, funds and many finance instruments in the future, although data analytics and AI will change those services too. But if we think of our daily activities in which we pay and use money, those will be integrated more into the actual services. An important part of this change is the user experience – it is most convenient for the customer when it is not based on the bank’s processes, IT and earning models.
Why the East is leading the way
Why then do we see these differences geographically – i.e. between East and West? Probably there many reasons, but one important reason is how services have been able to leapfrog ahead in emerging markets, where many people have never had or really used traditional banking services, and have gone directly to FinTech services,. We must remember there are 2 billion adults that have no bank account in the world.
Probably it also depends on how willing people are to adopt new services. In some places, people still might like to use cash. But as already old examples like M-Pesa in Kenya demonstrate, when an easy service can fulfill a relevant need, people start to use it. The fundamental factor is to develop these services for real use cases and needs, not simply to implement a fancy technology.
Of course, we have also regulation and safety aspects. These are the components the incumbent actors want to emphasize, basically to calm their own concerns about whether they should really do something or just hope everything is easy for them in the future too. But we have seen that new solutions can also offer even better solutions for regulatory needs. We can have better (and much more convenient) e-KYC solutions; we can build trust in new ways with blockchain; we can provide much better and real time data for regulators, and also have better tools to detect money laundering.
The West also needs better models to monetize new digital services. FinTech is one solution for this globally. It can be financing for your purchases, convenient payments, effective KYC or token-based digital rights management. Maybe the East is now leading the way, but sooner or later it will be a global phenomenon – not just for the unbanked people, but also for Western bank customers.
The articles was first published on Disruptive Asia.
Difitek and Prifina (Grow VC Group companies) published new services at Grow VC Group's FinTech event in New York on May 22. The event was organized by Grow VC Group companies with Reed Smith. Participating were key industry leaders from top tier investment banks, technology pioneers such as Oracle, strategy leaders such as KPMG. Two panels focused to discuss FinTech impact from both technology and future finance services point of view.
Prifina demonstrated its invitation-only pre-version of its product to manage digital personal finance data. The product empowers consumers to collect easily all their finance data to their own data store and fully control it. A user can then use data easily, for example, to make a loan application, provide needed customer documentation for financial services, or use wealth management service with her or his own data. The service changes the fundamentals of the data business; users can own data and use it for her or his own benefits.
Difitek outlined the powerful capability of its Distributed Finance Back Office platform for cutting edge fintech and integrated finance applications. These capabilities include:
Use cases include:
Prifina demo video.
Difitek demo video.
Grow VC Group, together with Prifina and Difitek, organizes an invitation-only fintech event in New York City on May 22 at 5:30pm. The event includes discussions especially about the impact of FinTech on finance ecosystem, infrastructure and data models.
With a great group of panelists, we'll be exploring the practical impact of fintech and the current technological wave, not marketing hype, but what is happening behind the scenes and on the ground. For example, we will touch on enterprise #blockchain projects and separate between value we are seeing and marketing excitement.
The event is especially for finance institutions that look for new models to build finance services and manage data, partners that develop finance data and AI services, and FinTech investors. We'd love to see you there to share diverse insights and participate in the discussion! You can ask an invitation by contacting us.
Horasis will convene the 2018 Horasis Global Meeting over 5-8 May. The annual Horasis Global Meeting is one of the world’s foremost gatherings of business leaders who interact with key government officials and eminent thought leaders.
The Horasis community of more than 400 selected world leaders from 70 countries will gather for an unparalleled experience advancing solutions to the most critical challenges facing corporations and societies today. Participants will share insights and innovations on how to jointly inspire our future. Read a thought leadership report contributed to the Horasis Global Meeting.
Grow VC Group Chairman and Co-founder Jouko Ahvenainen has been invited to speak at the event. He will focus especially on questions about the future of banking and finance services. Fintech, distributed models and globalization are disrupting the finance services and sector and everyone must prepare for a new era of finance. Mr Ahvenainen focuses to emphasize especially changes in the ecosystem and infrastructure and models to manage and utilize data.
The event is co-chaired e.g. by José Manuel Barroso, Chairman, Goldman Sachs International, Vijay Eswaran, Chairman, QI Ltd, Timothy Lane, Deputy Governor, Bank of Canada, and Deborah Wince-Smith, President, United States Council on Competitiveness.
Read more at Horasis website or their Wikipedia page.
The latest statistics show that the ICO market grew again in March. Yet at the same time, more and more people are skeptical about the ICO market. An interesting aspect of the ICO phenomenon is to look at ICOs by category. When you do, you notice a surprising point – many categories are actually very small, while the volume is in a small number of categories. This indicates we are still in the phase where we are creating independent tokens for fancy ideas, not getting bigger ecosystems to work.
According to Coinschedule, the leading ICO categories in 2018 were communications, finance, trading & investing, and gaming & VR. Telegram’s ICO pre-sales explains the communications category – other leading categories represent tokens for services that are often hard to categorize as a utility or security token, and are tokens to be used in new services but at the same time meant especially to raise capital for new services with a white paper.
There are several models for categorizing ICOs, as many coin offerings are not so easy to fit to a specific category. But in any xase there are some interesting observations we can make from the statistics:
These are just some examples of interesting conclusions from ICO data. There are several reasons behind these, and, of course, we must remember the market is still very young. But many of these observations raise questions about whether ICOs are still mainly about raising money for new companies and projects, rather than using tokens, smart contracts and more effective processes to improve businesses.
Some people argue that this is natural, because it is new business models and innovations in particular where tokenization can make a big impact. So they argue that just using tokens for some existing businesses and asset classes is not really disrupting things – it’s just just improving them. But this is not so simple.
For example, let’s think of real estate. We can say that security tokens as a certificate for real estate or property ownership doesn’t disrupt the real estate business – it just saves a lot of paper work. We can also think of utility tokens as a rental payment option, which could create some new ways to offer places to live, e.g. with a pre-paid model. But actually this is only the beginning. When we start to think of more combinations of owning and renting, rights to live, trade ownerships and rights, participating in new development projects and creating different sharing models, then tokenization actually does offer tools to disrupt the real estate business.
We can find similar examples in many existing businesses, from insurance and healthcare to gambling and digital rights management. But as usual, new things are first offered by new startups, and they often want (and can only offer) their own independent new services. They don’t offer solutions that are linked to existing big businesses or a bigger ecosystem.
I have written and spoken many times about how a big problem for many new FinTech and finance services is that they want to create their own little island that lives its own life isolated from other services and ecosystems. For example, many crowdfunding services wanted to have their own deal flow and investors. It’s the same for p2p lending, online wealth management, compliance and data services – they focused only on their own service. It is not easy for a new company to work with many other parties, especially with big ones. But it is crucial in finance services to be linked to the broader ecosystem.
Tokenization and tokenomics will change many businesses – securities, contracts, and money will all go digital. It will create many new business models, new financing models, and make processes more effective and user friendly. But it requires solutions for areas where the money, assets and business really exist today.
Right now, ICOs are mainly to raise capital for new fancy ideas, often with some very artificial utility token concepts. I am really waiting for the next wave when tokens start to disrupt existing businesses, finance models and processes.
The article first appeared at Disruptive.Asia.
Through the increased availability of data and online connectivity through novel interfaces & APIs, we are faced with more opportunities than ever before. For instance, today, you can use many services to get data on purchases you’d like to make and suggestions on when the optimal time to make the purchase would be (e.g. flight tickets).
However, soon, this operation may seem antiquated as artificial intelligence (AI) and assisting algorithms have become more prevalent and can make these decisions in your place. In imagining a future like this, will the balance of power shift toward the data owner and end-purchaser or will tool manufacturers and conduits be able to gain an upper hand?
With consumer preferences for regained privacy and control, as well as new regulation such as the General Data Protection Regulation (GDPR), it’s plausible to see more data held by the consumer and the consumer exercise more control over where their data is used. Will the new emerging industry for personal assistants & algorithms that empower the consumer and leverage their data for their benefit take over the third-party applications that support consumer behaviour? Who will hold the power in this ecosystem? Will it be the consumer or the algorithm?
Ownership and control may seem removed from how these systems will shape up to be, but I do believe that they are the very core of where interests will lie. Imagine if the algorithm itself has enough power to have a self-interest – meaning, for example, the company that developed it sells it to enough consumers and is primarily driven by adoption in one way or another (to get to monetary transactions, data or both). Would that type of algorithm then optimize for individual representation or the adoption of the actual algorithm itself, where agency theory and agency dilemmas would clearly argue the latter? Even if seemingly innocent (of course, they want to create a business for themselves!), this may be less of a transition from the current internet, where troves of data reside in many forms of companies where users frequent (Amazon, Google, Facebook, etc.).
Now, consider if ownership and control sit with the individual consumers, for example, in the shape or form of individually licensed and tailored software on the consumer’s end-device with full rights to the software. You can even consider a situation where we all get literate enough to produce these algorithms ourselves – the more radical scenario. If “my AI” now literally represents me and is oblivious to all the rest of the consumers with “their AI,” I’ll surely have more power because the system’s incentives and interests will be my own. What I may indeed lose is the centralized, horizontal data benefits and products of scale these algorithms may have if distributed broadly, which would surely be an algorithm developer’s first response why distribution will serve the greater good. Yet, it’s not easy to translate this greater good to something practical or know whom this greater good actually serves.
How could you plausibly get this type of horizontal power as an individual consumer? Could you do so even with remarkable resources at your disposal? And if so, could it be seen as benefiting anyone but yourself?
How about when “my AI” can self-determine where this horizontal benefit may exist and talk not only to “your AI” but to all the “other AIs” in order to get a group discount on a purchase, for example? It may seem far-fetched at the moment, but this type of distributed-node thinking may well be on the horizon sooner than later. Especially, combined with breakthroughs in distributed connectivity and real time processing, we could be at a stage where the power of the network could benefit the individual without a central connectivity.
Decentralized and distributed systems may be the key to unlocking a true network system, where central authority & control are absent and individualism can be discovered through a network. We’d need individual interfaces that are attached to the end-user and a true portability that allows it to interface with the broader network, but it’s hard to imagine that this would not be attainable with current or soon-to-have tools. Maybe this is indeed a future we will soon see, where individual interests will actually be represented rather than those of global corporations.
The article is from Difitek Blog (a Grow VC Group company).
We are excited to announce that Difitek (a Grow VC Group company) is invited to speak at the Zero-in Conference, the first edition of the world’s largest Personalization event for Fintech and Marketing products, that will take place on April 19th 2018, at Pakhuis West in Amsterdam. Difitek’s CEO and Co-founder Markus Lampinen will represent the company at the event and give a talk about Life with Intelligent Algorithms.
Organised by the team that has built UPRISE Festival Europe, with 6 International Tech Festivals and Conferences in Amsterdam and Dublin, Zero-in Conference will be focused on the products that bring personalization in the fields of Blockchain and Cryptocurrencies, Banking and Payments, Funding Tech and Ecommerce, as well as Marketing and Adtech.
There will be two stages, one dedicated to Fintech and one to Marketing, with 70 well selected international speakers, more than 500 companies, and about 1,500 attendees.
The conference featured speakers include our very own CEO Markus Lampinen, Kelsey Cole, Co-founder and Chief Brand Officer of AdBank, Filipe Castro, Founder of Utrust, Sally Eaves, Member of the Forbes Technology Council, Antti-Jussi Suominen, CEO of Holvi Bank, Alexander Neymark, CEO of TiesDB, and Bryan Mason, COO of VSCO.
In his talk on the Fintech stage, Markus Lampinen will speak about the advancement of automation with new technologies such as blockchain and distributed services, the new role of software engineers that are set to become the bankers of the future, the increasingly predominant role of AI, the key importance of creating an ecosystem to make automation more intelligent, and many other interesting topics. For more info you can check this page: https://zeroin.tech/schedule/anticipate-and-act/
Date: 19th April 2018
Venue: Pakhuis West, Elementenstraat 25, 1014 AR Amsterdam, Netherlands.
For further information on the event, please have a look at https://zeroin.tech/.
Get in touch now to meet our team in Amsterdam!
Cambridge Analytica and Facebook data have made headlines during the last few weeks. I wrote about this already a year ago for TelecomAsia (read here). Information on most concerns and issues were available already then. The only real new piece of information is the role of another Cambridge University academic project that used Facebook’s data and help to develop analytics models. The discussion now focuses on one case and one scandal, but it is worthwhile to look at what is really going on in the data business.
The issues with Cambridge Analytica and Facebook are really only the tip of the iceberg. I would actually like to summarize some other important trends and issues I have also written about earlier that have an important impact on data business:
We can see that the data business is becoming more and more important all the time. As it is said, software ate hardware, but now data is eating software. At the same we have many different trends and new innovations in the data business. It is not only about having even bigger giants that have all data in their clouds, but we also have totally opposite development to solutions where people can manage and utilize their own data.
It is hard for many people and also for companies to follow all these developments. As we now were able to see, it took over a year until the mainstream media really realized the importance of the Cambridge Analytica case. When we talk about new data models and technologies, it is even harder to explain and get attention for them. But my prediction is that we start to see quite many new innovative startups in this area in this and next year. It is happening already especially for finance and healthcare data.
Of course, this big change won't happen overnight. There will be data giant companies for a long time. That’s why it is definitely important to develop people’s awareness, legislation and transparency surrounding how data is collected and used. We can also say many people have been extremely naive by using, for example, all kind of fancy apps that “tell your special skills based on your first name” or “find an optimal profession based on your profile photo” - and that the same time the user gives this app the rights to collect all his or her Facebook data.
The most important thing is to find the right balance between people and companies that use the data. People must realize, if they get something free, there are other models to do business, and nowadays it is often data. But companies must also understand they cannot just utilize data without clear value to the user. They must be also transparent, what and how they conduct business. As I wrote in a linked article above, data must be an enabler to people, not only a way for companies to exploit people. It will be a long journey to this new more balanced data business, but we can say the Cambridge Analytica and Facebook data case have been a wake up call for many people and this will accelerate the change.
The article first appeared on Telecom Asia.
Contactless payment cards are almost everywhere these days. Cryptocurrency coins and tokens are now being issued by many companies, especially via ICOs. Many parties are planning blockchain-based settlement solutions. At the same time plug-and-play type FinTech components can be easily integrated to any system to support new payment services.
As more companies look to adopt digital payment solutions, the trick is to match the right solution with the right service or scenario. Examples like London Underground tickets, paying digital music royalties, or a blockchain system to handle settlement between big companies might look very different from each other. But they actually face the same basic question in finding an optimal solution: Do we build our payment system with open public solutions, or do we implement a closed private solution?
To answer that question, we can highlight some important preliminary questions to inform that decision:
Let’s take some examples.
In a public transportation system, we’re talking about millions of users and hundreds of millions of transactions annually. Consequently, the cost per user/transaction and operating costs become more important than the set-up costs. Typically, for example, debit and credit cards have transaction fees that are based on the value of a transaction with some minimum fee to a card processing company (e.g. Visa or MasterCard). But processing in a proprietary system also has its costs.
In this kind of system, the user experience is also very important. If a customer can use any card or mobile payment system, it is much easier for them to use the service than if they first have to get a proprietary card, pay a deposit for it, and then load money on it. A better user experience also increases usage and revenue.
A good example is Transport for London (TfL), which started with the Oyster contactless card payments almost 15 years ago, but nowadays it allows people to use their own existing contactless debit and credit cards, as well as mobile payments from Android Pay and Apple Pay. Why would expensive proprietary solutions make sense in this scenario?
For cryptocurrency coin solutions, one area where this is taking hold is music royalties. Traditional solutions to track and handle payments of music royalties have been complex, inaccurate and slow. Digital music is easier to track thanks to DRM but the payment mechanism is still complex. A blockchain-based token payment system would be able to track whenever a song is downloaded from iTunes, streamed on Spotify or licensed for an ad, and ensure that the proper fee is paid by the user and received by the rights holder.
This kind of system must be very easy to use and understand, it must support millions or billions of users, and the end-to-end flow of transactions needs to be efficient, which means significant transaction and operating costs.
Compare that to a system for logistics or finance companies to settle and pay each other based on how they use each other’s services globally. This kind of system might have only dozens of users, but individual payment amounts (and commission fees) can be significant. Here, a proprietary solution could be suitable, since ease of use for consumers is not a key factor.
One important point regarding cryptocurrency token systems is exchange rate risks. For example, if a token is linked to Ether, the value of Ether creates a risk for token owners, and there might also be restrictions to converting them back to ordinary (fiat) money. In principle, we could also say that a proprietary transportation card has similar risks – e.g. the transportation system stops accepting it or there is very high inflation. But typically, these risks are small, especially when we talk about small sums of money on the cards.
As we can see, selecting an optimal payment system requires a lot of complex evaluation that also must include also forecasts of future use and costs.
At the risk of oversimplifying, we could say that for systems supporting large groups of ordinary users, open systems are probably more cost-effective and offer a better user experience, but they should be based on systems that don’t come with significant exchange or future-proofing risks. A settlements solution supporting a smaller number of parties could be a closed system with access restrictions and no transaction fees for external parties.
FinTech also enables the ability to include plug-and-play type finance and payment components for many services. Things like external payments, tokenized or lending solution can be integrated to any service. It is possible to use cloud-based back offices, services over open APIs, and open source components. We have come to an era where it is possible to innovate finance services inside any service and easily implement it via standard components.
In any case, it’s important to evaluate which models make sense before deciding what payment system to adopt.
The article first appeared on Disruptive.Asia.
Est. 2009 Grow VC Group is the global leader of fintech innovations, digital and distributed finance services. Our mission is to make the finance services more effective, transparent and democratic. The Group includes leading fintech companies in their own areas.
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