Venture Wanted: AI Based Regtech firm to spot Mis-selling

As per Boston Consulting Group, since 2008, Financial services firms have spent about $321 Billion in conduct/mis-selling related issues.  Regtech firms have focused on improving efficiencies of compliance processes within banks. However, mis-selling products and services is a behavioural problem, and a harder nut to crack for Regtech firms. In this post, I have attempted to define some of these behaviours, the outcomes, and how a Regtech app using Artificial intelligence could catch these behaviours by plugging into the right sources of data.


Conduct 1

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Regtech firms focusing on mis-selling need to define a methodology and the data sources to develop AI and machine learning to proactively address mis-selling. Some of the key data elements needed to identify mis-selling in my opinion are,

  • Product Life cycle
  • Marketing and Sales
  • Customer/Social Media Sentiment
  • Employee compensation
  • Operations and Technology Spend

Product Life Cycle data is critical to understand the process to develop and approve a product. It shows the involvement of senior management in the process, and the governance involved in getting the product out to the market. Data around complexity scores of a product will be useful for compliance teams to understand if there is enough support for both employees and customers to understand the product.

Marketing and Sales data is critical to ensure that right amount of money is spent in marketing the product and the sales commissions are aligned to the firms strategy. Sales data is also critical to analyse a sudden spike in sales of a product. Data can show if it was because of the new sales manager, a tweak to the product or just plain old mis-selling triggered by some year end target.

Customer complaints and social media sentiments are required to understand if a product or a service sold is keeping the customer happy. Also, in the open data world, product usage information could give firms a good view of, if a customer is using them.

Employee compensation often is directly related to aggressive sales done by sales people at banks. Combine this data, with sales of products, usage of products by customers and even complaints from customers, you get the view of how a particular bonus structure drove an employee to sell a product to a consumer when he or she didn’t need it.

An AI algorithm that can have this data can spot regularly occurring trends such as the above, and even alert senior management when they approve a particular product, or agree to a compensation structure. Of course, many firms already use social media sentiment to spot product issues, but that is just one side of the story.

The root of the problem is within Financial services firms where their strategy often doesn’t align with their culture. AI can spot if their product strategy and employee compensation are genuinely aligned with their “Values”. AI could spot mis-selling based on social media sentiments, identify them even before it gets to social media, but a even better state could be to identify patterns that instigate mis-selling behaviour even before they occur.

In proactively managing mis-selling, banks can not only save fines they have paid to regulators but also cut down on the £5 Billion claims market. I believe, a well analysed framework that identifies mis-selling issues and reports on them to the regulators would help all parties involved. It will most definitely save billions for banks. Regtech firms, are you listening?

Arunkumar Krishnakumar is a Fintech thought-leader and an investor. 

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Customer onboarding is an easy UX trick for Insurtech, but claims processing requires some hard AI tech 


A Singapore Insurance incumbent called NTUC Income has announced that it is using IBM Watson AI to change the claims process experience.

A lot of the traction for Insurtech ventures is changing the cost/speed/convenience of the customer onboarding experience. That is certainly valuable. For some types of low ticket item insurance, it is a game-changer. You only bother with low ticket item insurance if it is cheap and fast.

However, what really matters to consumers and so what will move the Net Promotor Score needle is the claims process. That is what drives rants (“the expletive deleted took ages and made my life hell”) and raves (“definitely recommend them, when xyz happened they paid promptly and without any hassle”).

Changing the claims process is hard. The journey has to start with a strategic vision from the top to make claims processing into a source of competitive advantage (in other words, to avoid being yet anther claims avoidance company).

Then the hard work starts.

Artificial Intelligence in the real world

In our introduction to Artificial Intelligence Week on Daily Fintech back in March 2016 we wrote that the “commercial rollouts of AI need a magic quadrant of:

• Technically feasible.

• A good ROI from replacing humans and improving predictability.”

What is interesting about the NTUC Income story is that it is not just about cutting costs. It is also about changing the user experience.

From their Press Release:

“Income receives an average of 14,000 hard copies of IncomeShield pre- and post-hospitalisation claims monthly, which are currently reviewed, assessed and approved manually. This contributes to a significant number of man-hours spent on data entry before claims data can be processed to enable pay-outs.

To address this challenge, Income is using IBM Datacap to better manage claims that are received in a variety of media types. Datacap combines advanced imaging, business rules, natural language processing and machine-learning technologies to automatically classify and extract information in real-time from most types of documents, thereby eliminating labour-intensive manual data entry from paper claims.

For the processing of data, Income is using IBM Watson Explorer, a cognitive search and content analysis platform at different stages of the insurance lifecycle. It can read and analyse structured and unstructured data, such as medical certificates and bills. The length of hospital stays, medical histories, surgical procedures, and other contributing factors are then taken into consideration by the system before it makes claims recommendations and calculates the pay-outs to policyholders. This will reduce the time claims assessors spend researching and matching claims information. Overall, it is anticipated to improve the quality and speed of the decision-making process as well as the consistency of the claims experience for policyholders.”

The company is planning for growth based on demographics – more health claims from an ageing population in Singapore. American, Japanese and European health insurance should take note.

Dancing Elephants

Incumbents are supposed to be slow moving elephants that agile startups can run rings around. That narrative plays out in banking, but not so much in Insurance. Many times we have found Insurance incumbents innovating at digital speed.

NTUC Income has innovated before:

“In October 2016, Income revolutionised the motor insurance industry with the introduction of two innovative motor insurance schemes – Drive Master and FlexiMileage – that leverage telematics to personalise insurance based on an individual’s driving behaviour.

The Singapore Insurtech story

This is another story of Insurtech innovation  from Singapore. We recently also covered CXA Group.

Coop = Social in Purpose, Commercial in Approach 

NTUC Income is a Coop. To American ears that sounds almost socialist. However think about what drives digital innovation -customer centricity, customer first, customer experience. That has to be at odds with a shareholder first approach. As they put it:

“NTUC Income (Income) was made different from the start. Founded in 1970 to provide affordable insurance for workers in Singapore, our mission has always been to maximise value for customers above profits for shareholders.”

Their motto is  “Social in Purpose, Commercial in Approach” 

The strategic vision from the top to make claims processing into a source of competitive advantage is a lot easier if you only have one master to serve – the customer.

The future is digital. The future is also coop. Welcome to the digital coop.

Image Source.

Bernard Lunn is a Fintech deal-maker, investor and thought-leader. 

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How will Amazon impact small business lending in Australia?

Since Amazon announced its intentions to launch into the Australian market in April, share prices for its most obvious and direct competitors have been in free-fall. Some commentators and analysts estimate around $4 billion in value has been wiped from some of Australia’s largest retailers and grocers.

And while many believe the Amazon ‘Armageddon’ fear gripping local investors is exaggerated, there is no question the global behemoth will force local businesses to up their game.

But Amazon, being Amazon, isn’t just about books and bananas. Amazon touches everything – including small business lending. And while the hysteria around Amazon’s imminent Australia arrival hasn’t enveloped the banking system yet, perhaps it should.

According to the Financial Times, Amazon’s small business financing arm, Amazon Lending, has originated around $3B worth of loans on its platform since it launched 6 years ago.

The company is now expanding in the UK, US and Japan. Why wouldn’t it make a crack for Australia, in what is currently a massively underserviced small business loans market?

Differentiated competition from fintech is also low. While global companies like Square have launched their payment facilities in the Australian market, there is no sign Square Capital is going to be available to merchants any time soon. PayPal’s working capital product has been the most well-known working capital solution on the market, originating just over $100M in loans, while Tyro’s working capital solution for bricks and mortar stores is in the early stages of it’s release.

That’s not to say fintech’s and the alternative lending sector haven’t made an impact over the past few years. Between 2015 and 2016 the share of business lending for the big four banks was estimated to have dropped 0.44 percentage points.

While the numbers are hard to pin down, some estimate the demand for small business lending market in Australia sits at around $150B per year. Demand outstrips supply, at $77B, a ‘prime’ opportunity for Amazon indeed.

With bank levies, a cooling property market and the spectre of a Royal Commission hanging over local Australian banks heads, the Amazon effect won’t be welcome. But the savvy investor should seriously consider this when thinking about where to park their hard earned cash. The good news is, small businesses can only win, whatever the outcome.

Daily Fintech Advisers provides strategic consulting to organizations with business and investment interests in Fintech. Jessica Ellerm is a thought leader specializing in Small Business.

The financial sector should act as “Married but available” to innovation


This is my second year at the Swiss International Finance Forum whose theme was “Excellence in times of Change”. Last year, it was “Back to growth” and you can find my takeaways in Back to growth despite the triple-witching in banking & with a AAA regulatory recipe.

I leave all the political and strictly macro themes for others to reflect on, even though there is a strong connection to capital markets and investments. I will share with you the different thinking and positioning that has occurred since last year. The stage was a runaway for financial services Executives, Academics, Central Bankers, Board members, Regulators (check the program here).

The perspectives and questions being asked, confirmed that the Swiss Finance community is awake and alert.

Cultural shifts

The old guard is paying attention and knows that the Finance sector is sitting on a Burning platform (to use the change management jargon). Ulf Berg of BLR Partners, urged the financial sector to move fast. Speed is essential. Optimizing costs is necessary but not enough. Swift change for large scale impact, is needed. He bluntly, said “forget about strategic plans” and referred to an innovation analogy of being aggressive and relentless in

as if engaging on a single dating platform with the motto

“Married but Available”.

Susanne Chishti from Fintech Circle, prompted the Swiss to start “Admiring Entrepreneurs” because “Worshipping Entrepreneurs” is one of the main factors that has contributed to London’s top ranking as a Fintech hub. Only 1% of Switzerland’s financial sector is currently, working in Fintech. London is already at 10%.

Essential Reflection questions

It was the during the first panel discussion that top executives from large incumbent players (UBS, Blackrock, Credit Suisse, SIX, Swiss Re) and the Swiss Banking association; shared with us how their mindset is changing.

Even though traditionally banks haven’t been investing heavily in the personal development of their staff, they are now challenging their own thinking on topics like:

  • What is a Bank?
  • Where do we add services and how can we serve the client better?
  • Who is our supplier?
  • Are Bankers the new horses?

If AWS is the new supplier of financial services, then is our data or software that is on the cloud in the Swiss jurisdiction? What is the regulatory interpretation on these issues

What is the new legal framework for robots and what will be the next innovation replacing the “limited liability” concept.

Are middlemen needed? Can we move fully to P2P, whether in payments or other credit services? Is there is a need for a trusted third party, even in a blockchain world?


If the tendency is “to follow the customer” and if business will travel where the business people want to live; then, are we becoming more local-national or more international? Is Switzerland suffering from regulatory arbitrage? Switzerland maintains its stamp duty tax on transactions and its withholding tax, while the UK is offering huge tax relief (first £500k) for Fintech Investments.

Market access is needed for Switzerland. In Europe this is a big issue because of the European rules and the lack of equivalence.

Switzerland has been leading in asset management but only with regards to private money. Institutional asset management is serviced predominantly, in the Anglo-Saxon world.

Europe itself, is becoming increasingly dependent to the US in terms of data, rating agencies, settlement, security etc. At the same time, Europe is moving away from India as the main back office outsourcing center, the dependency to the US is increasing.

Europe doesn’t seem to able to finance its growth. Over 40% of European startups will be bought by US entities and this figure doesn’t include those that simply move to the US and stay independent.

These concerns are amplified by the reality that large tech firms are on a buying spree. They are buying the innovators and as Markus Brunnermeier, the Princeton scholar, pointed out the Corporate Savings rate is rising which means that this trend won’t come to a halt anytime soon.

And I will close with some of the insights that Henri Arslanian, Pwc director based in Hong Kong, shared during his opening keynote.

  • It is the large tech firms leading innovation, so think TechFin.
  • China is 2yrs ahead of Silicon Valley.
  • India is the biggest global experiment in financial inclusion.
  • Voice tech is happening faster than we anticipated.
  • Facts and Figures that can’t be ignored:
    • Facebook has 50 regulatory licenses in the US alone
    • More than $14billion transactions are processed on a daily basis in China; this is more than double what Paypal processes in one year!
    • Ant Financial has 340million users!
    • Tencent has 17million users, outside China!

Keep active, be agile and nimble on the global dating platform. “Married but available” for the financial sector is the way to go in times of change.

Source of image

Efi Pylarinou is a Fintech thought-leader, consultant and investor. 

Get fresh daily insights from an amazing team of Fintech thought leaders around the world. Ride the Fintech wave by reading us daily in your email.

Blockchain Bitcoin & Crypto Weekly CXO Briefing for week starting 26th June 2017

The Blockchain Bitcoin & Crypto Weekly CXO Briefing is all you need to know, each week, jargon free for CXO level business leaders and investors who will use this technology to change the world. Each week we select the 3 news items that matter and explain why and link to one expert opinion.

For the intro to this weekly series, please go here.

News Item 1Suddenly, Bitcoin to Be Officially Legal in India

Decrypted: Last November, when the government in India announced the demonetization of the 500 and 1000 rupee notes, it shocked its citizens. Rising demand for Bitcoin in India was just a matter for time. While the government made it difficult to use cash, raided those it suspected of concealing gold and assets in forms other than cash, it was inevitable that people would turn to Bitcoin and other cryptocurrencies. Now the Indian government has made a 180 degree turn, from never wanting to do anything with Bitcoin to legalizing it. This is huge news, especially because it comes from an emerging market and one of the world’s fastest growing economies.

Our take: The stories in the news are somewhat misleading. They are implying that Bitcoin was illegal in India up to now and that the Indian government decided to make it legal with its recent announcement. Well, that is not exactly true. The fact is, that buying, selling, trading or mining Bitcoin was not illegal in India under any law. Several Bitcoin exchanges operated in India (Unocoin, Coinsecure, Zebpay and others). Some politicians, mostly in the ruling party, were against Bitcoin. What really remains to be seen, is if the Indian government will recognize Bitcoin as a currency or not. If it does, then there will be restrictions imposed under the FEMA (Foreign Exchange Management Act) laws. The Indian government wants to give Bitcoin a legal status in the country. They want laws so they can levy taxes on it, and when people get returns for Bitcoin investments they can be taxed. They want laws so local talent can thrive and innovate in the space.

The increased adoption by the Indian people in the past few months, decisions in other countries around world like Japan, Australia and upcoming crypto adoption in Russia, certainly affected the Indian government’s thinking. They did not want to be left behind in a world were technology is transforming money and how people exchange it.

This is an extremely sound decision and India will emerge as a strong cryptocurrency market. Today, when you compare Bitcoin trading volumes in India to that of other Asian and world markets, they are very modest. But, the vast majority of India is still unaware of Bitcoin. According to the United Nations in July 2016, the population was 1,326,801,576 and is expected to surpass China’s population by mid-century. And lets not forget, India is one of the largest remittance markets with a total value of more than $70 billion. This is where Bitcoin’s true potential lies.

With India’s +1 announcement, we will see more countries getting on board and at a faster rate. We can also expect the United States to continue to dragging its feet and staying away from Bitcoin, as the dollar remains the world’s top reserve currency. But, there is an ancient greek saying that says “It’s impossible to escape from what is destined.” Either from inside, as more US. States legalize Bitcoin or from outside, like Russia embracing crypto, the United States will eventually join the rest of the world.

News Item 2Ethereum Slides as Network Backlog Points to Growing Pains

Decrypted: Ethereum’s network experienced extreme congestion as a result of Status and Civic ICOs last week, delaying transactions and frustrating users as several exchanges announced delays and halted withdrawals. Just like with the Bancor ICO, the Ethereum network chocked, creating a huge backlog, delays and people claiming their transactions were not carried out.

Our take: On June 20, the Ethereum recorded 300,000 transactions, reaching Bitcoin’s transaction levels. Ethereum has caught up to Bitcoin, going from $17 million dollar crowdfunded project to market with a $30 billion dollar market cap and competing with Bitcoin head to head. Ethereum’s smart contracts have also attracted significant interest, helping it carved a niche with ICOs and token sales. Essentially, organizations are able to issue assets and tokens on the blockchain that are tradable and very liquid.

Moreover, everyone is worried about a possible bubble and that the ICO gold rush won’t last forever. Many companies are racing to get their share of the pie, before the novelty wears off. I spoke with a VC last week, that has participated in several ICOs, and he said it will be all over in the next six to nine months. I don’t agree. It will just get harder for new ICOs to get attention. The ICO buzzword will not longer be a passport to easy money. Also, regulations and accountability mechanisms must be established. The market is very liquid and people are willing to switch one token for another. Trading stock is completely different from buying and selling cryprocurencies. Many traders jump on these ICOs without any intention of long term ownership, but only to flip them and gain more ETH.

Maybe my VC friend is right. The ICO craze that’s driven by Ethereum’s smart contracts, has blurred the line between virtual currencies and securities. Bitcoin is no stranger stock exchanges. In the past with GLBSE, BTC-TC and Bitfunder and more recently with Crypto Stocks. The principal cause for their shutdown appears to be legal problems. Sooner or later ICOs will likely run into regulatory problems.

One thing is certain. Businesses with real value will come out of this. There will be winners and there will be losers. When you look back at the late nineties, companies like Google emerged out of the dotcom era, while many others that were well funded, just died. Investors will become more selective about where they invest their money. When organizations raise money, whether its from VCs or ICOs, what happens to the money that flows into those organizations, differs. It depends on the quality of the organization and the people.

The second thing that’s certain is that there’s a real issue with Ethereum’s scalability. It has become obvious that there is a serious issue with the current gas payment structure. Network congestion is something we often see with Bitcoin. Over the last year Bitcoin’s scaling issues created similar problems, with slow transactions and higher fees. With upcoming ICOs, its possible this will happen again and again. This poses serious questions about Ethereum’s scalability and possible vulnerabilities to DDoS attacks. Ethereum will have to address the congestion issues in order to retain users and value.

News Item 3SegWait Is Over! Bitcoin Network Shows 80 Percent Support For SegWit2x

Decrypted: Big news. It looks like SegWit2x is going to be locked in on July 31st. Bitcoin mining pools at the New York Consensus agreed on SegWit2x, and a few days ago 80% of the miners signaled their support. SegWit2x is a Bitcoin scaling compromise that includes the activation of Segregated Witness and the inclusion of the 2 megabyte hard fork to increase the block size altogether.

Our take: On a decentralized platform, when you have people with different opinions, reaching a consensus can be hard. This has been the case for Bitcoin and the scaling debate. The SegWit2x proposal is a bridge between two big opposing camps. Bitcoin Core that wants SegWit, and Bitcoin Unlimited that wants to increase the block size. It looks like Bitcoin will definitely get SegWit, but its still remains to be seen if the hard fork will go through in the coming months.

Despite 80% support by the mining community, many feel the UASF (aka BIP148) is the best solution. The BIP148 proposal has raised a lot of questions and caused some panic. BIP148 is based on the idea that if the economic majority agrees, then miners that don’t will be forced to activate SegWit. In effect the BIP148 proposal is a hard fork, even though it was suppose to be a soft fork. Although SegWit2x and the UASF are not mutually exclusive, Bitmain has proposed contingency plan to protect users in the case of BIP148. Segwit2x requires Segwit and thus, if Segwit is locked in on the network, BIP148 won’t do anything. And it looks very likely that SegWit2x will be activated on July 31st, a day before UASF.

Bitcoin’s new climb comes as the community becomes more convinced that SegWit will activate on the network at the end of July.

The price of Bitcoin went up because of SegWit optimism, while Litecoin down.  Many believe that Ethereum will overtake Bitcoin, but Bitcoin should be wary of a different coin, and its not Ethereum. Ethereum has it’s own scaling issues. Anyone that has participated in any of the recent ICOs knows. Even though earlier this month it got a big thumbs up from Russia, I think the main potential competitor to Bitcoin is Litecoin and its partly due to how similar the two coins are.

Even though Litecoin has the best chance of doing this, I personally think that nothing will replace Bitcoin. I think Naval Ravikant said it well in this tweet: All Bitcoin has to do to become the premier store of value is survive.

Bitcoin will go even more mainstream after the 2nd activation and scaling issue is solved. In the meantime we can expect the prices of altcoins to go up. In the fiat currency world we have many currencies and the same goes for cryptocurrencies. Today there are 800+ in existence and new cryptocurrencies can only bring innovation, new approaches and technical solutions.

OpinionWhy Putin endorsed Ethereum by meeting Vitalk Buterin?

This week we’ll be discussing an opinion posted on our own Fintech Genome, by Bernard Lunn:

“Putin clearly wants to disrupt American power any way he can. Disrupting the US$ as a reserve currency is part of this. He knows that the Russian Ruble is not a contender. So why not promote an alternative, however far fetched? Decentralization will disrupt the power of the corporate giants of the Centralized Internet era, most of whom are American and none of whom are Russian. So why not promote a leading platform for Decentralization? Russia has a lot of people with crypto expertise who will benefit as this grows.”

Why did the Russia make a U-turn? What does it see now that it did not see last year, when people that traded cryptocurrencies could be jailed?

In an article on Bloomberg that Vlad Martynov, an adviser for the Ethereum Foundation said:

“Blockchain may have the same effect on businesses that the emergence on the internet once had — it would change business models, and eliminate intermediaries such as escrow agents and clerks. If Russia implements it first, it will gain similar advantages to those the Western countries did at the start of the internet age.”

Hoping to maintain its currency dominance, the US is introducing new regulations that will make Bitcoin even more difficult for Americans to use, in the name of combating terrorism and money laundering. In a blockchain world, where the US is still dragging its feet in terms of regulations, this could be the way to reduce its dominance on the global financial system.

Innovation has been moving to places that have been more progressive in setting up crypto regulations. Places like Crypto Valley in Switzerland or Singapore, where they just started tokenizing fiat currency. Ethereum is headquartered in Switzerland. How do you make sure that an asset like Ethereum with cap of 30-40 billion is not created in another part of the world? You create a legal framework that will allow businesses to operate and innovate within the rules. India wants to be one of these places and so does Russia.

The space race in on, and some are still wondering if the moon is there. Bitcoin and Blockchain are going to change the world in profound ways. Change is inevitable.

What you think? Do you agree with Bernard Lunn, that Russia is trying to disrupt American dominance by embracing cryptocurrencies? Go to this thread on the Fintech Genome to tell us what you think.

Ilias Louis Hatzis is a Blockchain entrepreneur who writes the Blockchain Bitcoin & Crypto (BBC) Weekly CXO Briefing each Monday.

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Wrap of Week #24: Bitcoin, Bancor, Lykke, Colu, P2P insurance for crypto, Klarna

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When millions start thinking about what money is from first principles, the toothpaste is out of the tube


Bitcoin is uncontrolled and uncontrollable and is going through the classic Ghandian four phases – “First they ignore you, then they laugh at you, then they fight you, then you win”. We are sort of in phase 3, except many governments and big companies want to benefit from Bitcoin going mainstream, so there is no clear united opposition to Bitcoin. That was true for Ghandi as well – many in Britain also thought that India should be independent.

Whether it is Bitcoin or some other cybercurrency or some combination of cybercurrencies is not the issue. All will fuel and be fuelled by a change in thinking. Nor will Fiat currency go away, any more than newspapers, TV and physical stores went away.  The past and the future are always with us, even if unevenly distributed.

What is bigger than any single cyber currency is that millions of people are starting to think about what money is from first principles. The basic thought is that money is only worth what we all agree it is worth. Once that thought gets established in the minds of millions of people, the toothpaste is out of the tube and you won’t get it back in.

That thinking is fuelled by Blockchain, Bitcoin and Cybercurrency for sure. These innovations force us to think outside the box. The momentum behind Bitcoin creates lots of conversations where mainstream people ask early adopter to tell them about Bitcoin. That conversation may end in people just dismissing it as crazy, but enough people do start thinking a bit differently and then the next next time they look at Bitcoin they have a more open mind.

It is not just Bitcoin that changes how we think about money:

  • Consumer to consumer payments. Whether it is Venmo or Zelle or Square Cash or any number of alternatives, the idea that I can send cash as easily as email gets established in people’s mind. This has nothing to do with Blockchain, Bitcoin and Cybercurrency, but it does change thinking. It is then a short mental hop from sending cash in USD to sending cash in Bitcoin.
  • Initiatives to end Fractional Reserve Banking in many countries. It has already happened in Iceland, is going to referendum in Switzerland (where it is called Vollgeld) and has serious establishment figures (such as Lord Adair Turner and Martin Wolf) backing the idea in the UK (where it goes by the name Positive Money). The UK based Positive Money is also getting attention in other English-speaking countries like USA and NZ. The schemes vary in detail and obviously get vociferous and well-reasoned opposition from the banking lobby, but what is interesting is that when the schemes are explained to mainstream consumers the most common reaction is “that is how I thought banking worked”. It is the idea of Fractional Reserve Banking – how the world works today – that seems weird to ordinary people.
  • Fintech regulation. When companies can get regulated for all the different functions of a bank (see Swiss Fintech License as an example), you start to ask “what is a bank that is different from a licensed Fintech?”  The answer is something along the lines of “an institution that is allowed to do  Fractional Reserve Banking”.
  • Local currency use cases. See this post about Colu. This is a simple mental transition. The currency has a familiar name – Pound or Dollar for example – and pegged convertibility to your Fiat currency. Yet it is not Fiat currency as we normally think about it.
  • Heavy handed government action. Whether it is demonetisation in India or the Cyprus government taking money from your bank account, the idea that your money is your money becomes challenged in the Fiat currency realm. That makes people motivated to look for alternatives.
  • Doubts about silver and gold. Taking the long historical view, Fiat currency may be viewed as a blip. That is the view of many who like Silver and Gold. Yet there are doubts also about these markets. Is the Silver market manipulated. Is some physical gold really Tungsten with gold plate?

Crossing the Chasm inspired lots of entrepreneurs. It was written as a guide for teams planning the crossing. What is fascinating about Bitcoin, is that there is no team doing that planning. There is only what we often call community, but which could also be described as warring neighbours at times. That is a strength in my opinion. It makes Bitcoin AntiFragile (another book that has inspired so many).

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Bernard Lunn is a Fintech deal-maker, investor and thought-leader. 

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