Daily Fintech brings fresh daily fintech insights from people just like you – senior executives, entrepreneurs & investors working in the fintech revolution. Our weekly summaries give you a look at what you will get by reading the whole article.
Monday Ilias Hatzis @iliashatzis our Greece-based crypto entrepreneur, wrote Bitcoin is the first step in separating money from state.
Governments & central banks have total power over money. Central banks create money as debt and charge interest on it, while governments can spend as much as they want & debase money when they need to. Bitcoin is based on an idea as radical as that which animated the founders of the United States. Since they broke precedent in 1776, the separation of church & state has become an accepted norm. In future we may accept the separation of money and state in the same way. Citizens suffering from hyperinflation agree.
Editor Note: this has huge resonance for anybody passionate about the upcoming elections in America, where getting money out of politics is job number one.
Robo Investing has cut fund investing cost by 50% since 2000! Active manager’s margins are being squeezed & they fight to prove value. Yet all is not rosy with passive funds, with increasing Customer Acquisition Costs, low margins and decline of user experience as a differentiator. Volume alone is not enough, advisers also need to prove how they add value, perhaps by impartial advice or by offering funds of specialized assets. That is the Tug-Of-War between volume and value.
Editor note: Robo funds have not been tested in a liquidity crisis. They were a minor part of business in 2008. If/when we have another iiquidity crisis, the robo funds and ETFs may exacerbate the crisis as they make trading so easy. We may have seen a preview of the next iiquidity crisis in the repo market this week.
Wednesday Jessica Ellerm @jessicaellerm, our Australia-based Fintech entrepreneur, wrote Payments giants battle it out for the new breed of retail customer.
Payments processor Adyen has prized eBay away from PayPal and a high profile customer from Square. Is there a changing of the guard afoot in the global fintech payments hierarchy, dominated by PayPal and Square?
The context is the seismic change in retail/eCommerce. Brands who embrace the future of retail – a blended and friction-free buying experience across in-store and online, on a global scale – will do well. Of course, to achieve this goal, a fluid and flexible payments partner is key.
Editor note: Payments is a massive market and drives a lot of Fintech value creation. So it is no surprise that some of the biggest Fintech public market winners are payments innovators such as PayPal and Square. This article shows that nobody can rest on their laurels and that competition is relentless.
Thursday Patrick Kelahan @insuranceeleph1, our US based Insurtech expert, wrote Flood risk AI is now a reliable tool- is there a desire to put it to work?
Patrick Kelahan is a CX, engineering & insurance professional, working with Insurers, Attorneys & Owners. He also serves the insurance and Fintech world as the ‘Insurance Elephant’.
Think about $ billions of uninsured flood damage when you see extreme weather news events. Flood insurance has been a wallflower at the coverage dance- an eager participant but not able to find a suitable partner. Innovation efforts have found suitable risk prediction partners for carriers- FloodMapp, Hazard Hub, and Previsco among others- but is the flood insurance market ready?
Politics, inertia, customer preferences & regulation might keep music from playing.
Editor Note: Pat looks at why flood insurance is so hard to get right and some innovative approaches to the problem and why some worthy initiatives were destroyed by politics and inertia.
Friday Arunkumar Krishnakumar @karunk, our London based Fintech investor, wrote Revolut Youth targets new customer segment – Kids and Teenagers
Catch ‘em young is banker marketing mantra – people rarely change from their first bank. UK with c. 20% of the population under 18 is an example. This is where top neobank Revolut offers “Revolut Youth” for 7-18 years old. Neobanks cannot use the parental inertia route (use the bank that parents always used). This is a parent controlled child account – parents make the decision, but sub accounts are specific to the child – appealing to parents with low fees, controllable, educational. Good for both parent & kids = winner.
Editor Note: A friend who is also a parent was showing me his Revolut account with sub accounts for kids. As a big traveler he was first hooked by the low FX rates but he stayed because of the simplicity and low fees of accounts for his kids. Ages ago, pre Fintech I set up an account at a Big Bank to help make my son more educated about money. It was a disaster. I put in a small amount and within sometime it was all gone, eaten by fees. Message to kids, banks take your money. “Revolut Youth” looks like a winner.
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