Grow VC Group and its companies participate in Crypto Funding Summit in Los Angeles on January 24 and 25. Crypto Funding Summit is a two-day event being curated by crypto enthusiasts, with an audience of about 500 people in the Los Angeles Convention Center. The main goal is to connect crypto investors with most promising blockchain entrepreneurs. Crypto hedge funds, crypto investors, ICO projects, blockchain enthusiasts from all over the world will get connected at the Crypto Funding Summit.
Grow VC Group Co-founder and Chairman Jouko Ahvenainen will speak at the event. In his speech "Crypto Investment Ecosystem with Data and AI" he especially talks about needs for basic finance ecosystem components in crypto investing, blockchain and funding services. This means, for example, importance of regulatory processes (KYC, AML, compliance), interfaces to the traditional finance services, and transparency. Data and AI are coming to an important role in all fintech services, including crypto investing. Mr Ahvenainen also participate in a panel discussion "The Rise of Crypto Funds." A few Grow VC Group are also active to develop solutions for crypto funding, distributed finance, and fintech data services. For example, Difitek is the leading cloud based finance back office as a service, and it is used also for blockchain based finance services. Prifina develops new solutions for consumers to manage their personal finance data and use it in different services based on distributed ledger technologies. Token Index Fund is an investment company that invest especially in qualified crypto tokens and help other parties to make tokenization for their their assets. January 10, 2018 – As part of capitalizing on its market success and strategic developments, Crowd Valley will now be known as Difitek (www.difitek.com). The company belongs to the Grow VC Group. Following the growth of the digital finance market, the company has a full offering through its back office and API for a wide range of financial offerings, such as online lending, online investing, trading, cryptocurrencies and ICOs, neobanks, energy and real estate applications.
Further the company has unveiled its new offering, a Distributed Finance Platform, featuring the Difitek Intelligent Connectivity Layer built on serverless technology, currently in an alpha phase with select clients and partners. The platform has full support real time data and high volume applications, supporting such use cases such as real time pricing of private loans. Current customers and partners have initial access to new products and services. Existing applications provided under the former name will remain in full effect and unchanged. Difitek has since 2012 provided a Platform as a Service (PaaS) for new finance products and applications. Today it adds the Difitek Intelligent Connectivity Layer as a value add service on top of its API first offering, allowing the smart combination and automation of API functions, resulting in the creation of meaningful workflows using artificial intelligence. This will allow the piloting of unprecedented financial applications, with cutting edge tools and world leading bank grade security. “Today marks a new chapter in the company’s history, with its team in the digital finance market since 2009”, says Markus Lampinen, CEO of Difitek. “2018 will see new starter module announcements, new enterprise partnerships and a deeper focus on training data as a true enabler in access to capital and financial inclusion.” For more information, please visit www.difitek.com and keep reading further announcements to be unveiled this year. Contact information: info@difitek.com 415-580-0087 One Market Plaza, 36th Floor, San Francisco, CA In Asia, FinTech development has taken several paths. China is probably the leading FinTech country in the world. Singapore and Hong Kong want to add “FinTech hub” to their finance hub reputations. And emerging markets need basic finance solutions for the unbanked.
Let’s compare Singapore and Vietnam, which have very different levels of FinTech opportunities and development. Which nation has the better opportunity to become an advanced FinTech country? A tale of two ASEAN nations Vietnam has 95 million people, but less than 30 million have a bank account, and fewer than five million have a credit card. Singapore has excellent infrastructure, sophisticated services, and a well-developed finance ecosystem. But although Singapore’s existing services fulfill basic needs for businesses and consumers, traditional finance companies want to protect their positions, and regulators struggle to find a balance between traditional and cutting-edge services. In Vietnam, the financial infrastructure and ecosystem are weak. However, its growing population and economy need access to financial services, and nowadays there’s a clear path to next-gen services which bypasses obsolete finance services and technology. Asia’s diverse FinTech markets Singapore and Vietnam are just examples of the Asian finance and FinTech markets. They represent two different tracks of development, and how development is different in various Asian countries. This also means totally different situations for regulations, services, and technology developers. In emerging economies like Vietnam, demand is high for basic finance services-like a simple account to receive, hold, and transfer money, get loans, and make payments. This opens opportunities for mobile banking, online lending, and mobile payment solutions. Integrated FinTech solutions offer many opportunities in these markets, e.g. online lending can be offered via e-commerce or a check-out process for people who have no credit card. Developed economies like Singapore focus on increasing the efficiency of their existing services and offering advanced services to consumers and businesses. This means solutions for wealth and personal finance management, and more data- and AI-based end-user services. But how can FinTech change the IT infrastructure, value chains, and processes within the finance sector? Banks and other traditional institutions must begin to renew their IT sooner or later. New solutions are more cloud-based, with open APIs, and will offer better tools to make data-oriented services and empower customers to do more. The new models New IT and data solutions are a common factor on both tracks. For example, a modern cloud-based back office-as-a-service can be maintained for a fraction of the cost of a legacy back-end IT. This makes it easier for companies in emerging economies to get to the new era fast, and requires courage from management of traditional finance companies in developed countries to dump legacy systems and move to new technology. The PSD2 regulation in Europe will have impact on this globally, and companies realize the influence of open APIs is not to use old banking IT, but build the ecosystem in a new way. It also requires courage to go for open APIs and cloud-based models and choose a position in the changing value chain. Now is the time that finance institutions need visionary people to join management teams. In 2018 we won’t see the finance world change overnight. We’ll see accelerating development within digital finance services and the ecosystem. Finance companies build their positions and capabilities for the future. In 2018 you cannot yet win the FinTech race, but you can lose it, if you ignore essential developments. It’s not enough to repeat key words like ‘blockchain’, ‘AI’ and ‘ICO’-you must build concrete things, go for new IT solutions and design future services based on actual customer needs. The article first appeared on Telecom Asia Vision 2018 publication. ICOs and cryptocurrencies had a bigger than expected role in FinTech and alternative finance in 2017. We haven’t yet seen a big disruption in the finance ecosystem and value chains as a whole, but the technology and components to create one are a reality. What can we expect in FinTech in 2018? Do we finally see cryptocurrencies finding real uses? Will we get rid of banks, distribute finance data, and see data replacing form-filling in lending processes?
Here are my five main predictions for FinTech in 2018. 1. Tech companies will really begin their attack on finance in the B2C and B2B frontiers Traditional finance companies have significant challenges to adapt to FinTech. As examples in other industries demonstrate – such as retail, e-commerce and media – software and tech companies are in a strong position to challenge the incumbent players. Tech companies can design new services for customer needs from scratch and they have better competence to utilize the latest technologies. This offensive will happen on many frontiers, from simple consumer services like payments and money transfers to core back-office and transaction handling services. And this will be done by a number of companies, from plentiful startups to a few tech giants. Companies like Google, Oracle, Microsoft and Amazon will bring their own consumer and back-office services to the market, and also acquire startups. 2. Distributed ledger and finance solutions will start to come to the mainstream, but (proof of work) blockchain will see real competition from other distributed solutions Distributed solutions will become important – not only for Bitcoin and other cryptocurrencies, but also for many other finance solutions to handle smart agreements, authorize transactions and store data. But there will be a race regarding which kinds of technologies will be used for these purposes. Most probably it will be different solutions for different situations – cryptocurrencies have their own needs, but the amount of data is very limited; data management solutions with a lot of data need more effective storage solutions and high capacity payment solutions of their own. 2018 will provide more ideas about which solutions are going to dominate and where. 3. Data, data analytics and AI will be the big change-makers in finance services Almost everything that is being called ‘AI’ in marketing presentations and business plans is not really AI, but some kind of use of data and data analytics. Anyway, data is starting to play a very central role in finance services. It really is the component to enable more automation and better decisions. Lending and debt markets are areas where data and analytics (and eventually proper AI) can make a big difference. Lending is one of the most significant businesses in finance, and it is still very old fashioned in areas such as loan application processes, decision-making and secondary markets. This will change – and when it does, it will change the whole market. 4. The ICO boom will calm down, but tokenization will spread to more established asset classes People must start to investigate tokens and underlining assets or services behind ICOs more. Perhaps right now it is exciting to participate in an ICO, but it is not enough in the long run. Projects, services, and startups are currently very difficult ‘asset classes’ to invest in. We can assume we’ll see more tokenization of other assets, like real estate, loans and later-phase companies. Those assets have much more data and transparency to the actual investments, and they will become much more prominent in the market. 5, The value of Bitcoin and other leading cryptocurrencies will remain volatile and unpredictable Bitcoin and some other leading cryptocurrencies will stay in the headlines. But please be very skeptical of people that claim they know something about the future value of them. Typically in investments, you can select one of two strategies: (1) luck, and (2) build a well-diversified portfolio. This applies also for cryptocurrencies. If you choose Strategy 1, then timing is everything. With Strategy 2, cryptocurrencies are only a part of your total portfolio, and depending on your risk assessment, you adjust the size of that part. Empirical finance research backs a diversified portfolio theory. Timing is often the most difficult to predict with new emerging technologies and businesses. This is certainly true of FinTech. I believe all of the things described above will happen. But it is hard to say how much will happen in 2018. In any case, I would assume we will see changes. The emergence of FinTech will accelerate in 2018. All companies really must build their positions to prepare for the big FinTech race. This post originally appeared on Disruptive.Asia. The holiday season is coming after the very exciting and hectic year in FinTech. This has been an excellent year for Grow VC Group and its companies, we have built new businesses and grown the existing ones.
Especially we like to thank all our customers, partners and supporters. We hope you have now time to take a break, spend time with love ones and also get fresh ideas for the new year. Season Greetings from Grow VC Group and its companies! Cryptocurrencies and related distributed technologies need a proper ecosystem to become a significant and meaningful part of the finance ecosystem Blockchain, ICOs and digital securities (e.g. cryptocurrencies) have become the new kids on the finance block – and of course opinion is divided. Some believe they will take over the entire finance industry in a few years and make all traditional finance instruments and institutions obsolete. Others see ICOs and cryptocurrencies as the biggest bubble and/or scam of our time – in the US, there are now plaintiff lawyers that only focus on ICO lawsuits. Maybe the reality is something between: these solutions have a lot of potential, but they need a proper ecosystem to become a significant and meaningful part of the finance ecosystem. It is easy to print money, but the real test is if you can use that money to buy something. Let’s look at some fundamental problems of these instruments and systems that point to a missing or weak ecosystem:
Historical precedentWe can compare this development to the history of crowd and p2p finance, starting with equity crowdfunding for early phase startups. I remember a venture capitalist said years ago, “I think this online crowdfunding is a great model, but why has it started with the most difficult asset class, startup equity?” This comment comes to my mind when I look at ICOs. P2p lending, online real estate finance, and later, stable-phase company equity have become more important markets than startup equity in the crowd and p2p finance market. Institutional capital and investors have also taken an important role in these markets, and often they represent greater than 50 % of the capital committed. These markets still also have their issues, where too many platforms try to be totally independent and just get their own deal flow and investor bases to work. But securitization, syndication and cooperation of different services have become important in this market. There has also been a lot of work done with regulation and regulators in the crowd and p2p market. There are platforms that don’t follow all regulations, but all significant platforms want to do it, and they must. In many countries there has also been quite constructive cooperation in developing key regulations. This is needed for the distributed finance solutions market as well. Missing ecosystem components The missing components in the ecosystem are essential new business opportunities. Let’s take a few examples:
The article was first published on Disruptive.Asia. Photo: Crowd Valley's architecture for distributed ledger ecosystem integration.
Equifax’s data leak was truly monumental; it involved compromised information of 145 million people. An interesting part of the story was the hearing with former and current executives of Equifax, Yahoo, and Verizon at the US Senate Commerce Committee. In this hearing the interim CEO of Equifax Paulino do Rego Barros indicated that it is Equifax and other companies that own this consumer data, not consumers, and consumers have no control over it. This even when it emerged that several customers have had their data collected without their directly knowledge. How long can it continue like this?
Finance services and health care are two areas where companies have a lot of data from people. It is often also very sensitive information in nature. There are many companies in those industries, and people often use services from several companies. It is often valuable too for the consumer that companies can share information between them. For example, when you go to a doctor or hospital, it can help in your treatment that they know your medical history, and when you apply for a loan or use wealth management services, your finance history helps to find the right products and make decisions. But it must be consumer’s decision to share this data. We have had two parallel, but slightly opposite, developments with the internet. While each individual can generate more activity - for example publish his or her photos, articles and have their own e-commerce site - the data is concentrating more to some central places, such as to big companies, data aggregators, and data processors (for example Equifax or online marketing platforms). Now we can see developments that we could move to more distributed models with data too and individuals could get better control over their data. This technically is also linked to blockchain development that particularly has an impact on the finance industry. Blockchain basically distributes finance data, transactions and authority around the Internet, to individuals and their nodes. A person can have her or his own bitcoin and cryptocurrency wallet, which is not the account of a bank or finance institution. Now we will see solutions where people can have their own safebox for their finance, health care, and other data. Lawmakers will probably try to give further rights to consumers to control their own data; in some countries sooner, some later. But new distributed ledger and data models can empower consumers sooner to take control and impact the balance. In finance and data services we can see development that the control and databases will be distributed. It is not anymore a hierarchical centralized model to manage data, but it will be a distributed model with the consumers in control. Read the whole article at Prifina Blog. FinTech is disrupting the finance industry to the point where we’re likely to see quite a bit of M&A activity as a result. That activity could take several different forms, but one likely possibility is that FinTech or tech companies could acquire traditional finance names.
It appears the transition for banks to really utilize FinTech has been difficult. I wrote earlier how banks are stuck with their legacy organizations, processes and IT. Traditionally, mergers and acquisitions are a way to help that transition. However, many M&A activities fail to bring any real transition or realize results. The finance business is also a brand business. Retail banking, wealth management, private and investment banks have many well know traditional brands. Sooner or later, some new FinTech players will want to link themselves to old brands. They will also target licenses and regulated businesses, and one way to get them through acquisitions. We will see different kinds of M&A activities when FinTech really starts to have an impact on the finance business:
Who will be the tech and FinTech companies that will be big in the finance market? The easy answer is Google, Apple, Amazon and Facebook, all of which have a lot of users and many of them already offer some finance functions like payments, money transfer or lending. But the global picture is more complex. China is the leading FinTech country right now, and companies like Alipay and Tencent are already significant FinTech companies. Alipay processes up to 120,000 transactions per second, more than 10 times the numbers of Visa. Most probably we’ll also see new companies becoming significant players in the finance industry. Data, AI, and finance back-office services will become an important part of the market. This could mean that the consumer interface is quite fragmented, but there are important technology companies that empower many of those services. These services are also going to the cloud, which means that AWS, Microsoft, Google, IBM and Oracle will play a role in the finance ecosystem. FinTech can be one of the biggest new opportunities for cloud providers. They also might become interested in offering more back office functions for different consumer and end-user services. The finance market will probably see a lot of niche services. At the same time, there could be a few FinTech backbones that enable most those services. In principle, banks could emerge as those backbones with PSD2 and open APIs. But in practice, considering their capacity to adapt and current use of obsolete technology, it is hard to see how banks could win that game. The most probable scenario at the moment is that some bigger FinTech and technology companies will make acquisitions to offer more technology services to different finance end-user services. They want to expand their technology offerings to all finance services. End-user FinTech services will acquire brands and licenses of traditional finance that are valuable in their business. What that ultimately means is that banks are on the path of the telco – they can keep some heavily regulated finance services, but their margins will go down and soon you’ll be seeing some bank mergers. The article was first published on Disruptive.Asia.
VanFUNDING 2017 was a BLOCKCHAIN and FINTECH FUNDING conference that pushed boundaries to discuss the latest developments, educate, inspire, and connect ‘You and your vision’ with leading innovators, entrepreneurs, investors, vendors, thought leaders and policy makers in the quickly emerging sectors of fintech, P2P, crowdfinance, blockchain ICOs, digital currencies and alternative finance.
Grow VC Group made the closing keynote about FinTech and blockchain ecosystem. He emphasized especially that all parties should together develop a well working distributed finance ecosystem, not only individual services. You can also read more his thoughts about the ecosystem needs and opportunities here. The conference includes presentation and discussions especially about blockchain, ICOs, and regtech. The panels shared very different point of views and opinions from ICO bubble to models how distributed models can take over the whole finance industry. The regulation and regtech are also very important parts to get the ecosystem really work.
Photo: Interview to a business TV channel.
Photo: Panel about blockchain globally.
Photo: Vancouver downtown.
Photo: Grow VC Group keynote.
Photo: Regulation panel.
Cloud services are often seen only as server capacity, but we are now entering the phase of serverless cloud services (read more here ). We also see services from cloud companies, like Google Apps, Microsoft Office and IBM Watson. In the future cloud companies probably offer more services, not only apps but APIs, too. One area where cloud companies are getting more active is fintech.
We can simplify and divide cloud services into three categories: 1. Infrastructure as a Service, IaaS, that is pure virtual computing resources, 2. Platform as a Service, PaaS, that offer a platform where software can be developed and run, 3. Software as a Service, SaaS, offers an application on servers to users. We have seen a lot of IaaS offering as AWS, Microsoft Azure and IBM Cloud. We have also a lot of SaaS offerings, starting from Salesforce’s CRM to Microsoft Office and millions of other services from small and big software companies. PaaS business has been smaller, but can be expect that especially PaaS is a growing segment with vertical cloud solutions? AWS is often seen as the leading cloud company, but if we include all these categories, actually Microsoft is the biggest cloud company. Especially on IaaS we have also seen differences between services in terms of how ‘pure’ server capacity they are, but nowadays most of them offer pure capacity and now they go for serverless Function as a Service. The emergence of FaaS and serverless actually also means we are coming closer to PaaS models. It means that we have a development environment that offers some back functions and pieces of software code to developers. The interesting question is if we will start to have more of these functions and e.g. service industry vertical functions. For example, we can see especially finance industry specific functions, when FinTech services are really coming to cloud services. This development probably also brings different back-end services to clouds. It can mean we have back-end functions to easily create finance, IoT and mobile location based services. Then we really have a significant model and business between IaaS and SaaS. We can already see; the cloud companies have realized this opportunity. FinTech is an interesting segment to observe this development in. Most finance institutions have traditionally had their own servers and infrastructure, and only most recently have they started to use or at least consider cloud services. It means many kinds of cloud models, public cloud components, private clouds, hybrid models and also the building out of their own cloud. Then PSD2 and open APIs to bank services actually could be a kind of SaaS or PaaS model, although the obsolete legacy banking IT doesn’t really offer a basis for that. Banking IT has been a very important customer to many IT companies, including IBM, Oracle and finance sector focused solution providers. Now these companies are facing challenges as banks also consider new, more cost effective moderns solutions. New FinTech services definitely don’t use legacy services. This means that companies like IBM, Oracle, Microsoft and those finance solution providers consider what can they offer in the future and how. One solution is to take a more cloud based approach, but not only offer virtual server capacity, but back-end services too, i.e. a kind of PaaS or FinTech-FaaS for finance services. This can mean a real revolution for finance IT solutions. But as in with any revolution, it is not clear who will win and who will survive. New players for finance services can also take this market, as it has happened in disruptions in many industries. Of course, companies like AWS and Google are newcomers to the finance industry and can become important. We already have huge Chinese players like Alipay (that processes payments more than anyone else in the world) and Tencent. But then we have totally newcomer startups that offer FinTech platforms and back-ends. Data and AI are also becoming a critical part of finance services. This means new requirements for applications and platforms. IBM, of course, emphasizes their Watson as a solution, but many customers still feel it would give too much control to IBM with their data, and they really want to have services in their own hands. This also means that it should be more like a PaaS or FaaS model. We can assume the cloud business grows strongly also in the near future. At the same time, we can start to see more variation in the cloud offerings and also vertical back-end functions that offer special value to use a cloud in a specific industry or solution. This probably also mean mergers and acquisitions in the market. Software companies also want to offer infrastructure and infrastructure companies back-end services. The big game in clouds is just starting. This post originally appeared on Telecom Asia. |
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