“The Roubini ThoughtLab WAM report” and the Pictet case

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The Roubini ThoughtLab report on “Wealth and Asset Management 2022: The Path to Digital Leadership” is a rich source of insights and statistics of the four stages of the digital maturity spectrum, from more than 1500 investment providers and 40+ interviews with senior executives from financial institutions, consultancies, and technology firms.

Screen Shot 2017-10-13 at 7.27.18 AMUndoubtedly, the SMAC stack (social, mobile, analytics and cloud) will be pervasive and the survey shows high double digit adaptation by 2022

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The 9 sectors that are analyzed have naturally very different digital maturity levels but nonetheless, digitalization is unstoppable. Since there is no canned solution on how to use technology to tap into new businesses, new markets, increased profitability, or market share, or productivity; the recipes vary. Financial institutions involved in WAM (mutual funds, private banks, alternative providers, universal banks, brokers etc.) don’t have access to low cost of capital and can’t afford endless experimentation even though the cost of experimentation failure has dropped substantially.

The WAM ecosystem sits well below Amazon which has access to the lowest cost of capital these days and can now borrow money for less than the cost of what China can borrow money. As a result, Amazon can experiment like no other company. Any amount of failure for them is a speed bump and doesn’t even affect their stock price or their customer turnover.

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From the 60 page Roubini ThoughtLab report on Digital WAM, one transformation story captured my interest, that is real and alive: Pictet Asset Management! A traditional brand name that stereotypical thinking could dismiss in terms of their aggressiveness on the digital maturity spectrum.

Pictet is using technology to tap into three new businesses:

  • A geographic expansion into North America to grow their strong global thematic investment offer,
  • A clientele expansion to gain market share in institutions that are underinvested in thematic strategies,
  • A clientele expansion to gain market share with the millennials, who care for socially responsible investing options.

This is no window dressing. Pictet is taking one of its core strengths and leveraging it with technology to improve revenues, profits, productivity, and market share. Pictet has developed 13 thematic strategies:  Biotech, Clean Energy, Digital, Global Environmental Opportunities, Global Megatrend Selection, Global Thematic Opportunities, Health, Nutrition, Premium Brands, Robotics, Security, Timber and Water. They have launched Mega, a Pictet micro-site that aggregates content around megatrends (infographics, videos, blogs etc), uses social media towards increasing Mega-Pictet’s ranking in the megatrends and thematic investing space.  Right now Pictet is reporting 10,000 followers and 8,000 monthly views. They already see that this approach has helped in promoting a new robotics fund and in reaching out to find a partner distributor in the US. Their also adopting elements of the innovative research process that ArkInvest has instituted which includes crowdsourcing intelligence from scientists, and academics as advisors and or theme developers.

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Source Arkinvest

Thanks to Anthony Christodoulou at Robo-Investing, official distributor of the Roubini thought lab report, who brought my attention to the report as soon it was live.

All figures are from the Roubini thought lab report.

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

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The financial inclusion on ramp for the next billion 



The emergence of billions from subsistence farming into a global middle class is both a) the biggest investment opportunity of the 21st century b) the cause of so much of the trauma (political, social, geopolitical) roiling the world today.

In short, there is a lot at stake in those two words – financial inclusion – and in the technology that is driving financial inclusion today.

Financial inclusion used to mean a) philanthropy b) governments telling banks to serve more poor people. That was analog financial inclusion and it was and still is very helpful. What we are focussed on is digital financial inclusion, which is more to do with mobile and blockchain. Digital financial inclusion is accelerating the way billions move up the ladder of opportunity.

7 billion in 6 tiers playing snakes and ladders

There are about 7 billion people in the world today. We can look at this with a glass half full point of view as a ladder of opportunity. Or we can look at this as a glass half full point of view as snakes that the unfortunate slither down into poverty.

Being an entrepreneur, I tend to have a glass half full point of view. If you are in one of those middle tiers and see how your earning ability is being hurt by billions around the world competing for labor, you can rail against foreigners taking your old job or find a way of trading with those foreigners or working for a firm that trades with those foreigners (or find work that is immune from automation and has to be done locally).

The economy needs growth. That growth will come from billions entering the global middle class as long as global trade remains open. The problem is that the climate needs us to stop driving that growth with C02 emitting fossil fuels. Again we can have a glass half full or empty point of view. Glass half empty = we must stop those billions entering the global middle class because that growth will kill the planet for all of us.  Glass half full = we must find profitable ways for billions entering the global middle class to use clean, renewable energy and that is a huge business opportunity.

Note: many of the examples that follow come from India, mainly because I happen to have lived and worked there so I can speak from experience, but the challenges and opportunities apply to all the Velocity 12 countries (more on them later).

The 6 tiers, starting from the bottom are

Tier 1 = Subsistence. This is the world of philanthropy, such as the amazing Bill & Melinda Gates Foundation. It is ensuring that people are healthier and better fed, with a focus on things like malaria and sanitation. The success of these initiatives puts more people onto the next ladder.

Tier 2 = Unbanked. Bill Gates famously said that “banking is necessary banks are not”. In this tier, banks as they exist today are irrelevant. The classic customer is a day labourer working in a metropolitan area and remitting money back to their home village and buying mobile pre paid services and other low cost services. Those remittances are not always the cross border remittances that Fintech fans like to talk about. These cross border remittances have regulatory hurdles.  In big markets such as India, the domestic remittances market is also big and being within a national border the regulations are easier.  The unbanked use “feature phones” (aka “dumbphones”) and transaction unit sizes are typically too low for bank payments rails (you need to make money on a $1 transaction or less). Visiting a bank branch or ATM is not something this customer tier considers and if they did banks would find them to be unprofitable customers. These customers want basic payment services at very, very low cost. This is the world of services such as M-Pesa and, in India, MoneyOnMobile (Disclosure MoneyOnMobile is a client of Daily Fintech Advisers, our earlier coverage here). The people in this tier who work hard and save diligently may move up to the next tier.

Tier 3 = Underbanked. They need the same ultra low cost basic payment transactions as the Unbanked. They do more volume and slightly higher per unit transactional value, but their needs are fundamentally the same. They are formally in a different tier because they are classified as having a bank account. Although now formally in the tier marked as “banked”, they almost never use an ATM or credit card or other bank service and as far as banks are concerned they are unprofitable customers. In countries such as India that have an active government policy of encouraging financial inclusion, many will be paid via pre-paid debit cards or mobile wallets. They need to use this digital cash to a) pay for for basic goods and services via pre-paid mobile wallets and b) remit money home and c) get physical cash back from retailers (so they can buy the goods that you can only pay for with physical cash (more than 90% of the economy in a country like India). This is the tier where world of services such as M-Pesa and MoneyOnMobile intersects with services based on smartphones and credit cards that come from the West. This tier also applies to the West. There are people in countries such as UK and USA that might have a bank account but almost never use it because they mostly live “hand to mouth” and banks don’t want their business. This is the world of pre-paid services such as Ffrees in UK and GreenDot in USA.

Tier 4 = Banked Middle Class. This is the world of traditional Retail Banking and the more recent Neobank entrants. The supply is obvious. The demand is less obvious. Who woke up this morning in the West and put “change my banking provider” into their top Must Do priority list? In comparison millions of people in tiers 2 and 3 wake up each morning and things like “top up my mobile phone minutes” or “send cash home to my family” are on their top Must Do priority list. Look at the data in India. Tiers 2 and 3 are about 850 million vs about 300 million in tier 4. As people climb the ladder of opportunity, that 300 million Middle Class will grow. However it is unlikely that, having used the services designed for Tiers 2 & 3, they will desert them for traditional banking services.

Tier 5 = Overbanked Wealthy. Not relevant to this analysis,  other than as Impact Investors.

Tier 6 =The Super Rich. Not relevant to this analysis, other than as Impact Investors.

Velocity 12 – the countries formerly known as emerging

The names have changed from third world to developing world to emerging markets to BRICs to high growth markets to The Rest (of the World). The latest is the Velocity 12 designation by Ogilvy.  I like it because a) “the countries formerly known as emerging” is too long and b) it denotes rapid growth opportunity as the most fundamental characteristic. If I had to choose one simple word it would be the Rest (of the World).

These markets are now the driver of change. This is the mega trend that we call “First the Rest then the West”. One simple but powerful innovation that has gone from Rest to West is the dual SIM phone, which started in India.

Quoting from the Ogilvy report:

“The 12 velocity markets identified herald a shift to South Asia as the epicenter of future middle-class growth.  Centered principally in India, but inclusive of Pakistan, Bangladesh, Myanmar, Indonesia, and the Philippines – and extending up to China, and to Egypt, Nigeria, Mexico, and Brazil in the other direction, the Velocity 12 markets represent a vast arc of future growth.   Over the next decade, these 12 markets will be the source of the next billion middle-class consumers, which will create a critical tipping point as the middle-class move from a minority to the majority of the local population in many of these markets.

Miles Young, Ogilvy & Mather Worldwide Chairman said, “The Velocity 12 research shows the world as it will be in the not too distant future. A billion new middle class members will literally change its shape. It will become, for instance, much more orientated to South Asia, especially India. Most Western businesses simply are not used to thinking this way.  This means finding a new lexicon of growth, as the phrase ‘emerging market’ doesn’t now describe the new realities. ‘Velocity’ better describes the real transformation in these markets.”

Tipping point theory

When economies move up this ladder of opportunity it happens very fast and there are behavioural economics feedback loops. For example in Tier 1, all the incentive is to have lots of children who will look after you in old age. Somewhere between Tiers 2 and 4, the motivation changes to having a smaller number of children who are well educated and cost a lot of money to raise. As these well educated grown up with high expectations start producing and spending, it lifts those economies and all who trade with or invest in those economies.

Image Source.

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

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Blockchain Bitcoin & Crypto Weekly CXO Briefing for week starting 16th October 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 1: $5,800: Bitcoin Price Hits New Record High

Decrypted: In September China’s announcements to ban token sales and Bitcoin exchanges sent Bitcoin’s price tumbling, but a few days ago the cryptocurrency’s price rallied to a new all-time high, hitting more than $5,200 on Thursday and following up with repeat performance on Friday, to break $5,800.

There’s been a lot of speculation as to the reasons behind Bitcoin’s recent price surge. Some speculate the upcoming Bitcoin Gold and Segwit2x hard forks, reports that Goldman Sachs is considering Bitcoin trading and rumors that China might reverse the bans and ease restrictions.

Our take: Last month China’s government, the People’s Bank of China (PBoC) and local financial regulators, imposed a nationwide ban on cryptocurrency exchanges that caused Bitcoin and the entire cryptocurrency market to drop.

But in the past few days, it would looks like the fears caused by China’s bans have been completely shrugged off by the market.

Yet, there’s been plenty of speculation about a Chinese reversal of the bans, and recently there have been reports in Xinhua, a state-owned news publication of China, suggesting that China’s ban is only temporary, until the Chinese government releases a stricter regulations for KYC and AML  for trading platforms.

CnLedger, a cryptocurrency news outlet in China posted on Twitter about the news in Xinhua:

“Xinhua News, official press agency of CN: Virtual currencies have become the top choices of underground economies. We shall adopt ‘0-tolerance policies’ towards crimes hidden underneath and take measures such as record-keeping, licensing, AML processes, real-name, limiting large transactions.”

With the new price high, Bitcoin’s market cap hit $97 billion, up over 480 percent year-to-date. Bitcoin’s new price level also triggered a positive rally for the entire crypto market. Ethereum was up over 5% over the last 24 hours, while Litecoin went up almost 14%. The combined market cap for all cryptocurrencies once again climbed towards the Sept. 1 high of $172.5 billion,  with Bitcoin being over 55 percent of the total market.

Another reason behind Bitcoin’s price increase could be the upcoming hard forks. We are expecting two hard forks for Bitcoin, that will create two new rival clones of the cryptocurrency. The first is Bitcoin Gold and its expected to happen on October 25, and second is Segwit2x in November, when Bitcoin’s block size will increase from 1Mb to 2Mb.

The last time we had a hard fork for Bitcoin was on August 1, when Bitcoin Cash was born. At the time anyone that had Bitcoin, automatically received and equal amount of Bitcoin Cash. Bitcoin holders received one BCH for each BTC they owned.  The same will happen with these upcoming forks. Holders of Bitcoin (BTC) will automatically receive Bitcoin Gold and this is a likely reason why investors are buying BTC, driving the price up. They want to get some “free money” and flip it when it goes up. When Bitcoin Cash opened in August, it was trading around $200 and in three weeks it almost reached $1,000 and a market cap around $16 billion.

There’s also been talk that Goldman Sachs is considering a trading operation focused on Bitcoin and other digital currencies. Smart and forward thinking financial firms are getting involved with cryptocurrencies. Golman Sachs will be joining the ranks of companies like Fidelity, that has been experimenting with Bitcoin and crypto.

Last but not least are the recent comments by Christine Lagarde, IMF’s Managing Director:

“I think that we are about to see massive disruptions. it’s important to look at the broader implications of technologies like digital currencies. My hope is that we can participate in that process because I see that as a very cross-border process.”

Many argue that Bitcoin could reach $7,500 by the end of the year, but plenty of volatility is still ahead, as regulators will be taking positions to control things. While this creates uncertainty around Bitcoin and other cryptos, investing in new things is not for the faint-hearted.

Everything is about perspective. Brisk fall mornings like today, wake up the senses. So did Bitcoin last week, when it hit its new record price. One more time it reminded us that regardless of naysayers and regulators, the real power lies with the people that believe. The price of Bitcoin isn’t going up, but dollars are getting very cheap, and they’ll get even cheaper.

Anyone getting into the crypto space, investing and trading, should be doing it because they believe in Bitcoin and blockchain: “In the world of business, the people who are most successful are those who are doing what they love.” – Warren Buffet.

News Item 2: Bitcoin Competitors Are Being Built in Ex-Google Coders’ Laptops

Decrypted: Since 2013, we’ve seen more than 1,500 cryptocurrencies, with around 800-900 actively traded today, but for now Bitcoin is the king. Several offer certain technical advantages over Bitcoin,  alternatives to digital cash, software development, social media, and other services powered by blockchain.

The better known ones are Ethereum, Litecoin, Ripple, Dash, Monero but there’s more in the woodwork, hoping one day they to dethrone the leader and become king of the hill.

Basecoin is one of the contenders, a token with a rules-based monetary policy built into its blockchain system. Bascoin is backed by high profile investors, that include 1confirmation, Andreessen Horowitz, Bain Capital Ventures, Digital Currency Group, MetaStable Capital, Pantera Capital, PolyChain Capital and AngelList CEO Naval Ravikant.

Our take: One of the problems that Bitcoin and other cryptocurrencies face today, is price volatility. All of the cryptocurrency transactions are speculative in nature, with traders simply betting on ups and downs, with almost no use as a medium of exchange. Price volatility makes it difficult for people and merchants to use cryptocurrencies for every day transactions or use them to keep all their life savings, because prices can fluctuate hugely, on a daily basis.

Consider issuing a Bitcoin loan. If the price drops significantly at any point before the end of the loan’s term, the lender is left holding a significantly devalued stream of payments.

The lack of price stability hinders mainstream adoption of cryptocurrencies.

Basecoin, a new cryptocurrency that has all the benefits of traditional cryptocurrencies, privacy, anonymity, decentralization, but with a monetary policy built into the blockchain that keeps the price of each token pegged to a stable asset, for example USD or basket of assets, dynamically adjusting its market price through the creative use of a combination of tokens.

As explained in the white paper, the idea is that the protocol would be set up to mirror an asset or an index, say the U.S. dollar or the Consumer Price Index, at which point it would use oracles (links to trusted, external data sources) to monitor exchange rates. The protocol would then automatically expand or contract its supply of tokens to maintain its value. In that sense, it is the world’s first “algorithmic central bank,” operating without need for human discretion.

Even though the development of efficient blockchains has come a long way since 2009, scalability remains to be a major issue for blockchain. Several companies are working various approaches to solve the scaling question, with many implementing side-chain or off-chain solutions.

Cypherium is another contender that is building a blockchain that wants to handle an expanded workload more easily. Cypherium is creating an entirely new blockchain by combining the strengths of Bitcoin’s Proof-of-Work and Byzantine Fault Tolerance consensus mechanisms. This novel consensus mechanism adopts the idea of decoupling key block mining from micro blocks for faster transaction processing, first pioneered in Bitcoin-NG.

Currently, the Bitcoin blockchain supports an average throughput of 7 transactions per second. The Cypherium chain aims to accommodate thousands of transactions per second.

Bitcoin isn’t going away anytime soon and most likely will remain the top global cryptocurrency, because it has by far the biggest network effect and the Bitcoin network continues to grow much faster than other cryptocurrency. Other cryptocurrencies will take over specific niches (Ethereum  Smart contracts) and we can expect newcomers to offer unique twists, creating solutions that will help the entire market evolve and push cryptocurrencies into mainstream adoption.

News Item 3: First 1GB Bitcoin Block Has Been Mined on Testnet

Decrypted: Bitcoin Unlimited developers working together with researchers from the University of British Columbia and from nChain, mined the first ever 1GB block on a Gigablock Testnet.

Gigablock Testnet, also known as BUIP065, has four specific objectives, including the set-up and maintenance of a global test network capable of supporting up to 1GB blocks and sustained Visa-level transaction throughput (3,000 TPS) on the Bitcoin network.

Any successful scaling milestones by the GigaBlock initiative will first be implemented on Bitcoin Cash.

Our take: Scaling has been one of the biggest issues in the recent history of Bitcoin. While a few years ago, only cents were needed to transfer money to another wallet, today fees are high, sometimes above $10, and can take hours to confirm the transaction. Bitcoin transactions are completed when a block is added to the blockchain, but at present Bitcoin’s blocks are limited to 1MB every 10 minutes.

Currently, Bitcoin is able to process about 3-7 transactions per second. Despite the fact Bitcoin (BTC) continues to be the most followed fork, its 1mb block size, limits the number of transactions that can go inside a block, and the time it takes to generate a new block in the blockchain. When you compare this number with Visa’s 24,000 transactions per second, it obvious that Bitcoin desperately needed changes to improve scalability.

The Gigablock Testnet initiative is backed by Bitcoin Unlimited developers, nChain (blockchain technology research and development) and the University of British Columbia. The goals are to determine how large blocks Bitcoin can handle, as well as identify the bottlenecks that may obstruct the network’s scalability, which currently pales in comparison to Visa’s throughput.

Increasing the network’s block size limit from 1MB is needed to reduce fees and make confirmation times reliable again. Bitcoin Cash has already shown that lower fees are acceptable, although confirmation times can still be skewed due to the current network situation.

The research project is setting up a global network of Bitcoin mining nodes configured to accept blocks of up to one thousand times larger than the current block size (1GB). These nodes are connected with transaction generators, each capable of generating and broadcasting up to 200 transactions per second. To identify bottlenecks and measure performance statistics, a series of “ramps” are performed, where the transaction generators are programmed to increase their generation rate following an exponential curve, starting at 1 transaction per second and concluding at 1000 transaction per second.

The Gigablock scaling initiative has been in the pipeline since July 2017, when both nChain and Bitcoin Unlimited convened at a workshop in Vancouver, Canada. Both groups share a common vision of scaling Bitcoin on-chain.

Bitcoin Core’s reluctance to larger on-chain capacity, pushed supporters of bigger blocks to fork Bitcoin in August. Supporters of bigger blocks and on chain scaling have formed an active community, around Bitcoin Cash. Bitcoin Cash was created on August 1, and now is trading around $300 with a market cap of $5 billion. A couple of weeks after it launched Bitcoin Cash made a bold move of increasing capacity to a default 8MB blocks and scraping away Segregated Witness.

Bitcoin Cash wants to empower merchants and users with low fees and reliable confirmations. The goal of Bitcoin Cash is to increase the number of transactions that can be processed, and supporters hope that this change will allow Bitcoin Cash to compete with the volume of transactions that PayPal and Visa can handle by increasing the size of blocks.

Now this latest breakthrough, makes the 1MB blocks look so 1980s. If the Gigablock initiative is able to increase the Bitcoin block size, making it reliable and workable, it could make Bitcoin even more viable for mainstream adoption in the future.

OpinionBitcoin’s price bubble will burst under government pressure

Bitcoin is a decentralized, denationalized digital currency operating outside the traditional banking and governmental system.

The biggest advantage that Bitcoin brings to the table is the ability to by-pass the conventional payment models. It connects buyers and sellers across national borders at minimal transaction costs. One doesn’t need to have a bank account to hold Bitcoins, and certainly, payments are a lot faster compared to traditional payment methods.

The price of Bitcoin has soared this year, from $1,000 to over $5,800 a few days ago. And it not only Bitcoin. Ethereum started the year at $8 and has traded as high as $400. In 2017, every week new tokens are issued, and Initial Coin Offerings have raised close to $2 billion in the first two quarters, so far this year.

While there are many other cryptocurrencies available today, Bitcoin has become synonymous with the word “cryptocurrency.” Anyone who has traded Bitcoin has come across the volatility and price fluctuations.

This has kept Bitcoin in the news.

The current price of Bitcoin has a 91% correlation with the volume of Google searches for bitcoin-related terms, according to a study by SEMrush, a search engine marketing agency. Google searches for “Bitcoin” go up and down, with the price of Bitcoin.

It has also made Bitcoin a lot of enemies.

It is no wonder then that both government agencies and financial institutions have remained skeptical of Bitcoin. Regulators are at odds over how to regulate Bitcoin and other cryptocurrencies,. Regulators in the U.S., Singapore, Japan Russia and China are looking at regulatory measures to control the growth of digital tokens and how to tax them.

China recently made it illegal for companies to raise new funds by issuing virtual tokens and shutdown exchanges. Japan is ready to introduce regulatory oversight on cryptocurrency exchanges in October. Meanwhile, the U.S. Securities and Exchange Commission (SEC) provides guidelines on its website for investors to consider before participating in token sales.

One of the reasons that people think Bitcoin is a bubble, is because its just so new for most. Bitcoin has come to the forefront, surpassing the performance of other financial assets. Earlier this year the price of a Bitcoin surpassed that of an ounce of gold for the first time. Currently, all the Bitcoin in the world is worth close to $80 billion.

Blockchain has found its way into financial markets, but for many Bitcoin is the black sheep. Jamie Dimon, JP Morgan’s CEO,  just might be Bitcoin’s biggest hater. A couple of days ago he said “governments around the world will crush Bitcoin,” regulating digital currencies out of existence. He admitted that the Bitcoin could reach $100,000 before it “goes to zero” and pointed that speculators are the biggest driver behind a recent rally.

But some factors have been working to Bitcoin’s advantage: economic and political uncertainty in several countries, increased inflow of institutional money and mainstream momentum by more and more people.

Some of the world’s biggest central banks have been running programs on adopting digital currencies. From the PBoC to the MAS and E-Estonia, many are looking to have their currencies go digital. In Sweden, they have already declared cash dead and India recently had a massive demonetization drive, part of which was driven by the need to make cash transactions digital.

Through a digital currency, central banks can trace funds more easily, hence be able to tax them. It also reduces the costs of printing and maintaining paper currencies, which according to some estimates costs up to 1.5% of GDP. Additionally, the cost of handling physical cash reduces for banks consequently reducing the need to operate physical bank locations.

Are fiat currencies going crypto? Yes, they certainly will be.

Will Bitcoin replace digital fiat currency? Is it a bubble? Will governments “crush” Bitcoin and altcoins? Your guess is as good as mine.

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 #40: Drivezy, SEC, Wealthfront and Fundrise, BeeSolar, ICT2017, Data privacy

  • The BBC Monday briefing offered insights the SEC stance towards Crypto-ETFs, Drivezy adopting Bitcoin before Uber. Bitcoin exchange guidance towards Segwit2X, and rising fees for processing Bitcoin transactions.
  • For me, this argument is more about public versus private real estate rather than passive versus active: Read more in: What a wonderful customer-centric investment world! The Wealthfront – Fundrise dispute.
  • InsureTech Connect 2017 (ITC2017) was held in Las Vegas, USA, in early October, with more than 3,500 attendees, including insurers and reinsurers, as well as entrepreneurs, investors, technology employees, and consultants.  48 countries around the world, gathered in Vegas. DailyFintech Review of ITC2017

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Battle for customer data heats up – Banks and Tech Giants lobby against each other

Data is the new Oil. The European regulators brought PSD2 into force with a mandate for all banks to get compliant with the regulation by next year. I also discussed in one of my previous articles that GDPR could be an excuse that banks would use to not stick to the spirit of PSD2 and open banking standards.


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The UK has gone one step further to create the Open banking framework that helps create data sharing capabilities within banking and an engaged developer community. However, in the US, banks have been notoriously lobbying against data sharing since Consumer Financial Protection Bureau (CFPB) released a set of questions on this topic for the public to answer.

Based on the responses to this public survey, it is pretty clear that customers wanted to own their data, and also would like to decide who the banks can share their data with. And they want the data to be shared safely and securely. It is widely believed that most banks (not all of them) in the US, would create enough bureaucratic barriers for small innovative companies to get access to their customer data.

The other technique they might follow is opening up data access to Fintechs just a few times a day. This might hurt the business models of many Fintechs that depend on real time availability of customer’s banking data.

On the other coast of the country, tech giants (Amazon, Facebook, Google and Apple) are gearing up to fight the banks to get access to their customers’ data. In the recent past a group called Financial Innovation Now has been setup by the tech giants, with a view to lobby for customers’ data.

These tech firms realise the opportunity they have in consumer finance, especially lending and loan intermediation. With a wealth of data around customers’ spending pattern, and on ecommerce peaks and troughs, Amazon for instance, should be able to recommend a financial product to the customer, and make an easy introducer fees.

Amazon and Paypal lobbyists have met with the  Office of the Comptroller of the Currency (OCC) to discuss “issues related to mobile payments and payment processing, financial innovation, and technology”.

Large technology firms are really interested in the intermediation piece, where you have access to all that data.

– – Paul Nash, the former senior deputy comptroller 

If firms like Amazon could get their hands on customers’ financial data through an API, they could be a serious threat in the consumer finance space. They just need to follow the path that Alibaba and Tencent took in China.

With the initial years of Fintech we saw many banks embracing (or pretending to do so) innovative technologies. However, with open banking, we may see reverse osmosis where the tech giants move closer to banking.

So banks now not only have to worry about Fintechs squeezing their top line, and regulators hitting their bottom line, but also have to worry about Tech Giants eating up their market share pretty quickly. Long Live Data.

Arunkumar Krishnakumar is a Fintech thought leader and an investor. 

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What follows is a Chinese translation of today’s InsurTech post on Daily Fintech by Stephen Goldstein, with translation by Zarc from InsurView. This article will also appear in Chinese on the InsurView site. To read more Fintech content in Chinese, you can scan the following QR code by Wechat and subscribe to InsurView’s Wechat account.

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以下是今日DailyFintech发布的由Stephen Goldstein撰写的InsurTech文章的中文翻译,由InsurView的Zarc进行翻译。 本文也将在InsurView网站上以中文显示。 要阅读更多Fintech的中文内容,您可以扫描以下二维码,并订阅InsurView的微信公众号。

InsureTech Connect 2017(ITC2017)会议在10月初于美国拉斯维加斯举办,出席会议的嘉宾超过3500人,其中有保险公司和再保险公司从业人员,也有创业者、投资者、科技公司员工以及咨询顾问,这些人从全球48个国家赶来,共聚维加斯,来讨论保险科技,以及任何与保险科技相关的话题。





在会议开始的三周前,Daily Fintech的CEO,Bernard Lunn发来邮件给我提了一些建议:



1、关注大型主题和重点事件。比如说当下关注度较高的话题有,再保险即服务(Reinsurance As A Service)和大灾风险定价等。和这些话题有关的专题讨论都要参加,并和这方面的专家进行沟通。




关于本次会议的回顾,作为会议主办者之一的Oliver Wyman已经发表过两篇文章

Insurance Journal也有一篇。

CB Insights提供了很多数据。



以下是我对本次InsureTech Connect 2017会议的观点:








Ring的CEO,James Siminoff在这次会议里扮演了白脸角色。他在对美国家庭保险公司的Telisa Yancy进行采访时,提醒了在座的所有人,我们来到这里的目的是什么。他说道:“人们并不喜欢技术,人们喜欢的是那些改善生活质量的解决方案,有些时候,技术正好提供了这些解决方案。”对此我深有同感。








当然,这并不意味着传统保险公司的高层的分享过时了,他们同样为保险科技的发展在添砖加瓦。安盛集团的首席转型官(Chief Transformation Officer)Benoit Claveranne在其主持的研讨会上分享了大量重要的信息。其中最关键的两点是:




上周的文章中我提到了Snapsheet和Keybank合作启动Snapsheet Transactions的消息。本周,又有两家公司宣布合作了,他们是Everplans和RGAx。RGAx将成为Everplans平台的主要分销伙伴,向全美国的寿险公司提供Everplans的文件存档服务。

我和Everplans的CEO兼联合创始人Abby Schneiderman进行了交流。他认为Everplans的平台对于保险价值链来说是一个很有价值的补充,该平台能够让投保人将所有投保信息归结到一处,这些信息将会有平台保密保存,在投保人或受益人需要进行理赔时,他们可以轻松的将需要的信息提取出来。







4、剩下的50亿人口怎么办?MicroEnsure Labs的主任,Peter Gross在其专题讲座“重新定义保险价值主张”中提到,“目前全世界还有50亿人生存在贫困线以下,每天都暴露在巨大的风险之中。”保险科技在为发达国家的消费者提供服务的同时,也应该努力去实现普惠保险。

5、很多人只是想乘机捞一把。因为保险科技的概念变得火热,很多投机者带着大量资金进入了这个行业,希望能乘势获取高额收益。这是资本市场的常态,但是我希望投机者们能够坦诚面对。我和有些人聊天后发现,他们甚至无法向我解释清楚他们的产品到底是to B的还是to C的,这就很可怕了。


我一位来自英国的朋友在去年参加了InsureTech Connect会议,当时他觉得他是参会者中唯一的外国人。今年他没来,我想告诉他,今年有48个国家的人参与了会议,相信大家并不会再觉得这是个只有美国人的会议。这也是保险科技全球化的趋势,在全球范围内大家分享和实践,是促进这一行业快速发展的良方。而消费者们也将最终从这些发展中受益。

#ITC2017 – The Daily Fintech Review


The networkers networked.  The start-ups hustled.  The investors swarmed.  The consultants consulted.  The incumbents searched.  And the rest, listened and learned. #ITC2017 was a great event, that brought over 3,500 Insurers, Reinsurers, Start-Ups, Investors, tech firms, consultants and more, from 48 countries together, to discuss Insurtech – anything and everything that has to do with it.  

I had three goals from ITC:

  1. Prospect for my business
  2. Learn about new trends
  3. Find good sound bites/themes to write a good story about the event

About 3 weeks prior to ITC, Bernard Lunn, CEO of Daily Fintech sent me an e-mail with some advice on preparing for an event:

Reporting from a conference/event

Here is what I have learned from doing a lot of them.

Sipping from a firehose is the hardest issue. It is hard to know what to focus on. I have found two techniques to help with this.

  • Mega themes and big issues. Have a few that you are looking out for eg Reinsurance As A Service, pricing Catastrophe Risk. Talk to anybody or attend any sessions that connect to those themes and issues.
  • Let it emerge. Soak it in. This is the opposite of the first. Be open to surprises and feeling the mood of an event.

Enjoy and remember one big lesson of the digital age – what happens in “Vegas lives on YouTube forever”.

With 22 meetings scheduled over two days, my desire to attend 12 of the talks/panel sessions and wanting to view all the start-ups in the expo hall, it looked like I was planning for this, let alone a firehouse.  

There have been a lot of good and interesting reviews of the event and I encourage you to read them to get differing perspectives from the event.  I have included links to some of the ones I have found at the end of this article.  Just by the sheer number of reviews, one can see the amount of buzz there is surrounding this event.

I am going to be critical in some areas and also offer some potential ideas for next year’s event. This in no way takes away from my overall feeling over the event – that it was absolutely amazing one.  A big shout out goes out to Jay, Caribou and their teams. The event was grand and had the feeling and buzz of something big.  There was a lot of substance (I thought there would be more hype to be honest).  It was just great to see so many people excited to talk about Insurance.

Here are my key takeaways from #ITC2017:

The excitement of the event was second to none.  In fact, Insurance almost seems cool now…but how long will this feeling last?

In the hype vs. substance debate, I would agree that there was a lot more substance on display than I thought there would be.  However, the hype was still there, just more so in people’s minds (i.e. the attitude towards Insurance/Insurtech).  If you went to an Insurance conference a 10 years ago (this would have been in the midst of the last financial crisis), almost everyone would be wearing ties and/or a full suit and the theme would be rather somber.  Not here.  I hardly saw a tie during my few days there. Not only that, but we also got to see the standard Silicon Valley start-up solid color shirts with company logo on display.  And the mood was vibrant.  People were excited.  I’ve never in my life seen so many people excited about Insurance and for them to actually feel genuinely cool being in the industry too (I feel that way too, so it’s OK).  

An interesting question (that I have not seen in any other written reviews) was posed in the pre-conference workshop hosted by Hannover Re and Sureify – ‘when will the burnout happen?’.  I found this to be one of the more provocative questions that I heard asked throughout the conference.  

There is an opportunity right now to implement tons of really interesting new solutions to the Insurance value chain.  Many of these solutions happen to be technology, which has helped to dub the term ‘Insurtech’.  I feel that, a bit, just like Fintech, because Insurance has now added a ‘tech’ to it, it feels cool to be in the Insurance business.

However, one day, these solutions will be considered ‘normal’ as it relates to the value chain, and that’s when I think the burn out will happen.  That’s when people who were here for the hype will move on to the next big hype/opportunity, and hopefully there will be some washout of the solutions (and people) that are not so good – allowing for the really good ones to really shine.  

Why such a focus on this?  Because the conference helped to remind everyone what we are here for…

We are here to find solutions, not build technology

I’m just going to come out and say that James Siminoff, CEO of Ring, was the WWE equivalent of a babyface at ITC2017.  His emotionally charged interview with Telisa Yancy from American Family, reminded me of why we are here.  His quote “Humans don’t love technology. They love solutions that make life better. Sometimes technology becomes that” has been mentioned many times so far.  And I couldn’t agree more.

Insurance is a business where we provide people with peace of mind, allowing them to know that there will be a monetary solution provided when they suffer a major loss/accident (or minor, depending on coverage purchased).  This loss/accident can either in the form of health, death or to some sort of property, and the solution is at a time when a person typically needs it most.  That is the core of our business.  

And because that is the core of our business, Insurance is REALLY important to the people who purchase/use it.  That’s why, there was such a focus on customer experience during the event (well, at least it was mentioned a bunch of times throughout the conference…)  

People that have been around the business for a while, or really understand this business, know this.  They know that technology is simply an enabler to improve the Insurance value chain, and that the fundamentals and principles of Insurance still need to be considered, in addition to, the new sources of information (i.e. data), available to them.  

What’s great, is that with some of these technology solutions, not only can we help our customers when they need it most, but we can also engage with them to help them prepare for the events when they need it most.

When we marry the two – fundamentals/principles of Insurance and technology together, then we can find solutions to improve what keeps being mentioned – customer experience.  

As mentioned in some of the other review articles, more incumbents were present than last year.  In my mind, this is important, as they can help teach some of the start-ups the fundamental and principles of Insurance, as well as the operational aspects of their business.  Start-ups, especially tech start-ups, are good at being nimble and offering solutions for incumbents, but they need to understand them first.  In this regard, I personally found that…

The industry ‘vets’ are not the traditional ‘vets’ you would expect

If you take a look at the speakers list for the conference, the majority are from start-ups. Yes, some of the more active Insurers/Reinsurers in the Insurtech space like AIG, AXA, Munich Re, XL Catlin, Chubb, Hanover Re and Allstate featured in some talks, but the list was dominated by start-ups.

‘The Insurance Company of the Future’, session, which featured Nick Martin, Fund Manager at Polar Capital, Steven Mendel, CEO of Bought by Many, Assaf Wand, CEO and Co-Founder of Hippo and Kyle Nakatsuji, founder and CEO of Clearcover was standing room only.

This is quite telling.  People attending the event wanted to hear from some of the new Insurance CEO’s on their take of how Insurance companies will look in the future…looking to them as the vets of the industry.

I was able to spend some time with Kyle and Assaf both individually.  If you take a look at their LinkedIn profiles, they only have a few years of pure ‘Insurance’ experience.  They have been able to, however, learn the principles of Insurance (Assaf through being around it with his father being a senior executive in the Insurance industry and Kyle helping start the Venture fund at American Family), and apply these principles along with technology, to build a proposition that is unique for customers for a variety of reasons.   

Talking to them, I felt as if I was talking to people that had been working in this business their whole life.  They really get Insurance.  It’s not about applying technology to the Insurance value chain, it’s about looking at the fundamentals of Insurance, seeing what customers need and what they don’t need, and then offering it to them, in a way that they would prefer to get it.  Technology is a primary helper in this, but it is not the main driver.

It’s actually quite simple if you start to look at it this way.

This is not to say that the incumbent C-suite that were there didn’t have something valuable to say.  They did.  The session by Benoît Claveranne, Group Chief Transformation Officer of AXA was one of the more informative ones that I attended.  I also heard and have read really good things about the session with Rob Schimek Executive Vice President and CEO, Commercial @ AIG, but unfortunately, I could not attend.  Benoît made a few very key points during his talk:

  1. When a start-up approaches an incumbent, they should make clear what they are looking for – to be invested in, bought out, or partnered with.  A lot of time is wasted on this during early engagement, and will help move the conversation along if it’s clear early on
  2. For start-ups – make a call after 1-2 meetings to see if the incumbent is serious about doing business.  Do they have a budget and a team to develop it?  If not, it may be time to move on to the next client.  

The point I am making here, is that there is a wealth of information from both start-ups and incumbents, and people on both sides of the fence that are looking at the fundamentals/principles first, and tech as an enabler.  The more that incumbents can understand what part of the value chain they are trying to solve for, and what sort of tech solutions are available to them, and start-ups can understand the fundamentals and principles of Insurance, as well as the value chain, then there will ultimately be better opportunities to improve the customer experience.  In my opinion, it’s not really about us vs. them, and…

Partnering is key

Last week, I wrote about the announcement between Snapsheet and Keybank to launch Snapsheet Transactions.  There was another partnership announcement this week between Everplans and RGAx.  RGAx will become the primary distributor of the Everplans platform to all U.S. life insurance carriers.  In my conversation with Co-CEO and Co-Founder of Everplans, Abby Schneiderman, we discussed how the Everplans platform is a complementary service to traditional insurance offerings and how it can benefit a customer to have all of their important documents and wishes in one place.  In the event of something happening to them, their beneficiary can use this tool as a roadmap to their loved one’s life and wishes ,minimizing the burden of searching everywhere for documents.  Referring to my second review point above, a good and practical solution for the customer.

These are just two examples of non Insurtech companies, partnering with ‘Insurtech or Incumbents’ to provide better, holistic solutions for customers.  In addition to this, we saw drones at the event, Google Maps, Card Tapp and someone told me that they could now do underwriting based on a swab of the cheek.  For a more traditional type of announcements that you would expect from this type of conference, Qover, made an announcement with Munich Re, one of the more active Reinsurers in the space.  (See an exclusive interview I had with them here)

Bottom line is, in addition to the point I make on industry veterans above, is that collaboration is key.  It doesn’t matter whether you are a Fintech, Insurtech, Insurance/Reinsurance incumbent or some other technology based solution – we need to continue to look at things from a customer Insurance value chain perspective – and ask ourselves, is this really beneficial for them or not?  Because ultimately…

It’s not all rosy, and there a few things we need to look out for…

While there were a lot of good things from the event, as highlighted above, there were a few things that I took note of that need to be addressed.  It’s easy, when surrounded by such a buzz of an event, to have blinders on to potentially negative/risky things out there.  Here is the list:

  • There is a lot of data available now, and it can be scary.   With telematics, wearables and IoT, Insurance companies, just like Google, Facebook and your smartphone, will now basically be able to know every thing about you.  If Insurance companies were just going to use this for targeted marketing, that is one thing.  However, and rightfully so, there is a lot of talk about how data can be used in the underwriting process and pricing products.  This really needs to be handled with care.  Insurance and Reinsurance is a business of risk management.  If carriers have more data and get an idea of the customers that are really hurting their overall book, there is more of a chance that they won’t want to underwrite that risk at all.  Regulation can help with this, however, will regulators be able to pick this up and understand it quick enough?  Right now, it is still early days, so there are still opportunities to understand this before it gets out of hand.  
  • Risk Management and Customer Data Protection are not being discussed enough. Sure, they got touched on, but I didn’t see this as the focal point of many discussions.  All solutions that are being implemented, need to have a proper assessment of risk attached to it (this relates to my point on fundamentals and principles of Insurance).  What are the different risks associated with implementing these solutions – from a customer, company and market risk standpoint?  How is customer data being protected with the increased use of wearables?  How are we ensuring data is not being used improperly?  The amount of regulators present at the event shows the openness to working together with incumbents and start-ups to understand solutions and how they ultimately impact customers.  They will need to continue to be proactive in collaborating and start-ups and incumbents will need to be proactive in engaging too.  I touched on this a few weeks ago.
  • Global sharing is just starting.  48 countries were in attendance, which meant that many cross-border conversations and potential opportunities for collaboration were happening.  This has so much value, and needs to continue happening.
  • What about the other 5 billion? During the session Redefining the Insurance Value Proposition, Peter Gross, Director of MicroEnsure Labs mentioned that ‘there are 5 billion low-income people in the world, who wake up every day exposed to massive risk’. Some of the solutions featured during the event may be costly to a customer – especially one that falls into this low-income category. This infographic shows the percentage of people with Microinsurance from parts of the world that have higher concentration of low-income earners.  For these people, Microinsurance may be all they can afford.  While some of these numbers are a bit outdated and they would have increased over the past few years, they would still not be as high as some of the Insurance penetration levels we see in some of the more developed markets like the US and UK.  How do we as an industry help these people to get access to Insurance/protection?  
  • It is apparent that some are just trying to cash in on the Insurtech gold rush.  I get it.  There is a lot of hype around Insurtech right now and a lot of money flowing into it.  So, you want to take an opportunity to get into it.  That’s fine, but at least be honest about it. The amount of people I spoke to that couldn’t explain to me in 30 seconds or less whether their solution was for a customer or carrier was not encouraging.  And from the other side, the amount of people who told me they were now an Insurtech innovation lab or incubator, just because had years of experience in Insurance was also not good.  Unfortunately, I only found this article after the event, but I think it is a really good future guide for events when speaking with start-ups.  And for those trying to advise or consult start-ups/incumbents – please articulate what you do, have done and what makes you different.   If you don’t know exactly what you can offer, just admit this, and say ‘we’ve been in the industry for a while and can better help start-ups to understand it’ or ‘we have a pretty cool technology that we think can be applied to Insurance, but are not sure yet how’. Being sincere and honest will take you a long way.

My two recommendations for next year’s event

It’s easy for me to write about how great the event was and also give some critical feedback of the event, but I also want to offer two ideas to the organizers for next year’s event:

     1) Let’s crowdsource the best ideas/learnings from the event

It is impossible to attend all the sessions, visit all the booths and still have time for networking.  There were so many good things to learn from the event, and everyone should have the chance to hear it all.  As review based scoring is how a lot of us shop nowadays, a crowdsourced review platform from all the attendees would help people to see content and/or share ideas that they may not have been able to get exposed to at the event.  This may also help to find the solutions that may be ‘real’ vs some of the ones that are ‘hype’.

     2) Workshops for start-ups/incumbents

This one may be a longer shot.  Lot’s of people at the event were looking for something – partners, funding, a story, etc.  For some, they had problems they were hoping to get solutions from.  For incumbents – maybe it is how to go about their digital strategy.  Or, how to best identify a start-up to work with.  For start-ups, maybe they needed that final piece to work through to make their solution a great one.  

Right now, the options for these folks is to go to a consulting company or an accelerator/incubator/innovation lab (both of which are OK options).  Since there are so many people here with such a wealth of knowledge, it would be great to see some opportunities for them to work through these problems during the conference itself.


I spoke with one of my friends in the UK who attended the event last year.  He explained that he felt like the only non-American at the event.  He did not attend this year, but we spoke a few days after the event.  I explained to him that the intro slide from Caribou showed that there were participants from 48 countries in attendance, and it certainly did not feel like an American only event.  There are things happening all around the world, and at much different paces than others (primarily due to regulation).  Sharing these ideas and best practices globally, will be the next evolution of Insurtech, allowing the customer to ultimately benefit from the innovative solutions happening around the world.  

Stephen Goldstein is an experienced Insurance executive and Insurtech dealmaker with a core focus on growing revenue, launching go to market initiatives and advising industry leaders.

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Links to other reviews of ITC

Oliver Wyman, the presenting sponsors of the event, had a nice summary here and here one too

Insurance Journal had one of my more favorite ones

CB Insights has if you like more data than words

Some really good ones here and here and here and here and here and here and other nice ones here and here and here and here

A good contrast from last year

And some top quotes from the conference