Changes take time, until they just happen. Financial services are at the cusp of a remarkable change that few bankers realize. The decentralization of technology, new regulation increasing competitiveness and ecosystem strategies - all these trends will mark the rise of a new era of financial services. This era will be fundamental to end user value and those who provide it will thrive.

Grow VC Group has prepared a report to cover the main changes and drivers in the finance services. This means especially FinTech services, but they have impact on the whole finance industry and also on the Internet services and business models.
This report covers much more than only the most predominant trends in financial services, in it we discuss analogies of data to the oil business, how new models have to truly spawn the rise of new ecosystems. We discuss the rise of financial institutions as safeguards of your money, as opposed to hiding money under your mattress as well as their failings when instead of a mattress, you have an offline wallet in a decentralized ledger system.
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1. Are blockchain and crypto finance real things, or a bad bubble?
2. Why cloud-based solutions make banking IT obsolete?
3. Why there are so many misleading ideas about AI and robotics in finance?
4. Can banks survive through the finance sector disruption?
5. Data is the new black gold, but what are the right models to utilize it?

Those are examples of questions that are considered in this report. No one has explicit answers, but this report gives new insight and angles to find answers. Finance services are a complex combination of finance services, instruments and technology, and it needs a lot of competence to develop new services, but it also requires to challenge the old models and thinking.

The disruption of the finance services is not driven by technology; it is driven by customer needs, and enabled by FinTech. Financial services as they stand today, cannot truly meet customer expectations of today’s and especially tomorrows global Internet and mobile era. Financial services firms are also competing in a breadth of services, where they cannot expect to be key contenders in all in the future. As startups and technology companies start to offer better services and really compete, the whole financial services industry must react.

The three key technology drivers are:

1. Cloud based open API solutions,
2. Better data utilization including AI,
3. Distributed solutions including different forms of blockchain.

Currently the real influence of these components is in the order above, although if you were to look at the public discussion the order would seem to be the opposite. In reality cloud-based services have already started significantly changing finance services development and costs. Data analytics is already very important, whereas AI is more like a nice key word.
Key transformations to be seen:

1. Customer centricity in offering design,
2. Cultural change in financial services firms,
3. Specialization of financial services functions and long-term positions.

The report is prepared by the Grow VC Group, together with two group companies, Difitek and Prifina. It has the foreword from Oracle's Financial Services and the media partner to distribute it is Disruptive.Asia.

The report covers many aspects of the disruption in finance and Internet services. It cannot cover all aspects, but it is one of the most comprehensive summary of FinTech, distributed finance models, and finance data services. The report helps everyone to identify the key drivers and changes that will impact on digital finance services and Internet services during the coming years.

​You can read the report here, and download all Grow VC Group reports here.

ICOs and cryptocurrencies became a big thing last year. Some people think they have changed the whole world, while others think they are the biggest bubble we’ve seen in a long time. The value of an individual coin or currency is hard to evaluate when the market is new and transparency not always good. It is much easier to say that the concepts, models and technologies behind cryptocurrencies will make a big change for finance and also for the Internet and economies. Distribution, tokenization and tokenomics are the new new economy.

Tokenization is the process of converting the rights of an asset or a service into a digital token typically on a distributed ledger such as blockchain. ‘Tokenomics’ is a model of distributed ledger-based financing for the economy. There are probably other ways to define these new terms, but basically, they refer to how securities and transactions can be based on digital tokens that are issued, sold and traded in blockchain-based markets and services.

Note that these models and concepts are not important only for finance and FinTech. Distributed models are also changing the very fundamentals of Internet services. While Internet architecture is of course distributed, Internet services are highly centralized – big databases and services that gather a lot of users. This has led to the idea that the Internet easily creates natural service monopolies similar to Facebook, Google and Amazon.

Blockchain and other distributed ledger models enable decentralized services in which data, transactions and ownership are distributed around the Internet to different parties. Bitcoin is a well-known example of this. It is not issued by a central bank, big banks do not handle transactions, and they are not stored in bank accounts.

But this is not limited to virtual coins. Distributed models can also mean, for example, that each consumer owns and manages his or her own data. Currently big Internet companies possess and control the data – when you go to use a service, you log in, and the service provider uses the data it has collected about you to provide the service. In the future, you could come to the service provider and bring your own data with you (or an ‘avatar’ based on your data), and sign up for services based on your personal profile.

This means, for example, you could apply for and receive an optimal loan using your own data via an API without relinquishing that data. Or it could mean a social media service doesn’t own or keep user data, but rather each user has his or her own data and updates – the social media service becomes just an API-based service that displays selected data to selected friends.

Almost anything tradeable can be a token

​Tokenization has become relevant now especially for startups and new projects that have create utility tokens to use new services, security tokens for equity, and some hybrid models of security and utility tokens. The problem with many ICOs is that the tokens for these services and assets haven’t enough data to properly define a value for them.

Tokenization can be done for all kinds of assets and services, and can be easier to value than startup equity. The ‘tokens’ could be real estate ownership, the right to live in an apartment, the right to use certain infrastructure, ownership of a private company, a currency issued by a government, or loyalty points from a supermarket or airline. Basically, all money, securities and vouchers can be digital tokens. This will change how we issue, sell and trade them. It will be all digital and it can be stored in blockchains, without a lot of paper work or central parties to handle transactions.

Tokenomics is a new term that tends to be used in different ways in different contexts. Put simply, it means economical and financial models that use distributed finance and tokenization as the basis of the economy. It means digital tokens, blockchain, smart contracts and models without centralized transactions or authorization. As the Internet of the 1990s started to create big services and databases, tokenomics can distribute services, data and transactions.

It is early days, of course, so it is hard to say now what all this means for businesses on the Internet. Right now we are worried that Facebook, Google and Amazon know more about us than we know ourselves, and they’re starting to manage our whole lives. Could it be that distributed models will stop this development and actually turn it in the opposite direction – perhaps to the point of even killing some Internet giants? At the same time, it is a threat for traditional banks, payment processors and even governments who worry at the loss of centralized control.
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Bitcoin, cryptocurrencies and ICOs are exciting and quick money for some people, just as some hot companies were during the dotcom boom in the late 90s. But these should not distract from the much larger and more fundamental developments happening behind the scenes that are going to change Internet services, finance services and traditional economic structures. It is not yet visible in mainstream activities and discussions, but many parties are already building those new structures, and the potential for disruption is massive.

Amazon can already recommend you books and movies, and remind you that it is time to order more coffee or toilet paper. Many other services make recommendations for you. In these cases the service or online store has your data and makes recommendations. But we are approaching an era where you can have your own data and your AI that makes purchases your behalf. It will change the customer experience, purchase decision making and the balance of power between stores and consumers.

Now large companies, like retailers, banks and media companies especially own that data. They use this data to advertise, make recommendations and tailor offers to you. It is always in their hands to manage this process and optimize offers so that they can generate maximal value from you.

Most companies use a lot of money to build their brands, image and appeal to the feelings of consumers. It has been important – a consumer's feelings and image of brands definitely have an impact on purchasing decisions. Actually, brand versus data oriented marketing practices have divided marketing people and departments, some marketing professionals believe much more in brand marketing and some others in data oriented targeting and optimization.

In the future this can be very different. When you have your personal data and you can use engines (you can call it AI, personal assistant or data analytics) that actually make purchase decisions and orders for you. A good purchase assistant cannot only compare prices; it should know other qualities that are important to you in order to find the right products. It will definitely change a lot in terms of how retailers and other services offer their products, conduct their marketing, and offer data from their products.

We have two very opposite developments in internet services at the moment - one that is its very early phase, and another that is approaching its peak. Big internet giants, retailers and finance institutions are becoming bigger, with more and more of your data that they can use to win more market share. Some people even see that Amazon is already so powerful in the US that it should be split based on antitrust laws. But this development can soon reach its peak.

The new development in the internet is more distributed solutions. We have seen this especially with blockchain and cryptocurrencies. There is no central party or database to manage the data and transactions. This has started to have an impact on finance and especially fintech services. But it is not only limited there. Distributed models will change many other things on the internet, including retail, data management and ownership, and who and how to utilize data to make decisions.

There are old IoT visions, such as how your fridge in the future will know what food you need to buy and make an order. It is hard to say, if it is a fridge or some other systems that will really start to do it, but this day is approaching rapidly. The fundamental change is when can you have your own data and engine to make decisions and orders, not simply trust the analytics of a store.

We already have services that help e.g. to find flights, hotels, and loans based on your preferences. Especially with travel booking these services are significant. They are still quite manual services, when you need always fill your preferences and the compare different options, and some booking services even try to complicate comparisons by having additional attributes and secret prices that the comparison services cannot handle.

Most probably there will be always some purchase decisions we want to make personally. At the same time, there is a significant part of purchases and orders we would like to delegate to a machine. A lot of data is already available to enable this, it just needs some new solutions that consumers can manage and utilize their own data and some smart machines to start to make decisions and send orders. It will put retailers and services into a totally new position. It is not enough to optimize offers and customer experiences only for human beings, but also for smart machines that have a lot of data.

Maybe we will see an arms race between selling and buying machines and who have better data. Consumers get better AI that optimizes their purchase decisions and value for money, and retailers, finance services and other vendors have machines that target to maximize sales and profit. Regulation, like General Data Production Regulation (GDPR) in EU, has also an impact on this, when it empowers consumers to control his or her own data. It will be one more area where data is prevalent in the business in the future.

The article first appeared on Telecom Asia.

Difitek's (a Grow VC Group company) customer APT Systems made announcement about new services and how its going to use Difitek's cloud based finance back office services. See the full release below.

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SAN FRANCISCO, CA , Feb. 05, 2018 (GLOBE NEWSWIRE) -- APT SYSTEMS, INC. (OTC Pink: APTY), a fully reporting public company in the Fintech sector, is pleased to announce that it has formally engaged the services of Difitek, Inc. to build the Verifundr escrow and payment platform. We look to Difitek to provide us with a modern framework, architecture and bank grade security features.

The Difitek platform and API is currently used to build online platforms and marketplaces globally all with a view to managing private placements, securities, real estate, crowdfunding, peer-to-peer lending, and utility tokens. Their expertise will support Verifundr objectives and all projects currently on the table and more importantly, the Intuitrader trading platform as well.

 “We are excited to build our own unique digital finance marketplace and now, over the top to work with the team at Difitek, the newly branded operational arm of Crowd Valley Inc.,” says Glenda Dowie, CEO of APT Systems, Inc. “Their expertise is needed in all areas of our operations and we thrilled to have them officially on board after months of discussions.”

RCPS Management, Inc. was created as a subsidiary of APT Systems, Inc. to allow management to explore and build financial systems.  Verifundr, through collaborations, will provide escrow and transfer services to clients both bankable and the unbankable that run legitimate operations.  Last year we joined the Ethereum Enterprise Alliance Network and will seek their expertise and input when developing our smart contracts that allow parties to complete agreed upon terms successfully and safely. We employ Blockchain ledger technology where it can enhance the security and history of transactions undertaken on the platform. To learn more, visit our website at www.verifundr.com.

About Difitek: The digital finance company, Difitek Inc, provides the end to end infrastructure needed to launch digital banking and online finance products and services that are accessible through a single on-line interface layer (API) and supported by our highly scalable cloud back office. Today supported platforms are in use worldwide utilizing our core features: security, robustness and trust.

About APT Systems: The Management of APT Systems, Inc. works to deliver stock trading tools like Kencharts and its platform Intuitrader, with a focus on handheld devices, while also strategically acquiring other compatible financial businesses which demonstrate strong growth potential. We are continuing our diligent search for software products that would enhance our operations while still watching dialogue on the proposed legislation for the Fintech National Banking Charter. Management launched its subsidiaries SNAPT Games, Inc. and RCPS Management, Inc. to further facilitate new financial products and long-term goals.

Disclaimer: This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. "Forward-looking statements" describe future expectations, plans, results, or strategies and are generally preceded by words such as "may," "future," "plan" or "planned," "will" or "should," "expected," "anticipates," "draft," "eventually" or "projected." You are cautioned that such statements are subject to a multitude of risks and uncertainties that could cause future circumstances, events, or results to differ materially from those projected in the forward-looking statements, including the risks that actual results may differ materially from those projected in the forward-looking statements; projected events in this press release may not occur due to unforeseen circumstances, various factors, and other risks identified in a company's annual report on Form 10-K and other filings made by such company. APT Systems, Inc. (APTY) may opt to disseminate information about itself, including the results of its operations and financial information, via social media platforms such as Facebook, LinkedIn, and Twitter.

Contact:   Glenda Dowie, CEO
415-200-1105
Email:  [email protected]
On Twitter follow @APTYsys 
Investor Online Info Kit: http://www.aptsystemsinc.com/online-investor-kit-for-apt-systems-inc-apty/    

The Grow VC Group has decided to write off its ownership in Deal Index Limited. London based company, Deal Index, aggregated data from crowdfunding and alternative lending services. The target was to become a leading data provider in the market. The market didn’t become significant enough and we also learned the whole data market needs a change.

The Grow VC Group was involved in Deal Index since 2014. The company managed to become, for example, the crowdfunding index provider for CNBC in Europe and Asia. The crowdfunding, but also p2p lending, markets development didn’t manage to meet our expectations all the while the fintech and alternative finance market otherwise grew very rapidly. Crypto finance has also changed the market.

We also learned that models to focus to aggregate a lot of data and then try to monetize it are becoming more challenging. Many parties try to protect their own data, and Deal Index was not able to innovate quickly enough with business models. The crowdfunding market especially is also challenging to get reliable data and utilize it, when the companies are typically in an early phase and investments are less based on data.

The Grow VC Group has been active to build and incubate new digital finance businesses since 2009. The market is developing so rapidly that we must learn all the time from the market and also be able to offer new and more innovative businesses and offerings. It is also fundamental to put focus and resources on companies and segments where we see enough growth. We have abandoned equity crowdfunding businesses and at the same time achieved a lot of success with technology and data solutions that can disrupt the whole finance market.

Our latest company, Prifina, focuses on data in finance services. It totally changes technology and business models of traditional data business. It is based on distributed ledger technology models and it gives ownership and control of data to consumers and customers. We believe that distributed solutions are the future of the finance industry, they will change the whole industry and data business also changes significantly from centralized data models where big players try to aggregate and monetize all customer data, to models where customers are empowered with their own data.
 
More information:
Jouko Ahvenainen, [email protected]