This Week in Fintech ending 4 September 2020

This weekly summary from our 7 experts, brings you insights based on their experience as investors, entrepreneurs & executives.

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Your Editor is Bernard Lunn. He is also the CEO of Daily Fintech and author of The Blockchain Economy and occasional opinion columnist.

Monday Ilias Hatzis our Greece-based crypto entrepreneur (Founder & CEO at Mercato Blockchain Corporation AG and Weekly Columnist at Daily Fintech) @iliashatzis wrote The future is being built on top of crypto wallets

I am sure some of you remember the browser wars. The browser wars referred to a period of intense competition between Netscape and Microsoft over which web browser would dominate the market. They started in the mid-90s, when the world was just starting to come online. A lot was at stake, as the company which controlled this browser could have a huge influence over its users. Search engines would bid to be the default search tool in the browser, while other companies would bid to be listed in the default set of preinstalled bookmarks that came with the browser. The browser was and still is a powerful gateway to the digital world. Fast forward 25 years later, crypto wallets are the new gate keepers to the future services. Crypto wallets are more than applications on a phone that hold your cryptocurrencies. They are future ecosystems that enable access to a variety of services that include wealth management, trading, insurance and payments, identity and social media.

Editor note:If you missed the browser wars you can still profit from the crypto wallet war, a similar market battle for control over a critical gateway.

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Tuesday Efi Pylarinou @efipm our Swiss-based Fintech Adviser,  founder of Efi Pylarinou Advisory and a Fintech/Blockchain influencer – No.3 influencer in the finance sector by Refinitiv Global Social Media 2019 wrote Not all Fintech services are good for society

The consumer debt levels in the US remain high and Fintech has contributed to this substantially.

Q2 2020 was the first quarter that household debt and credit dropped since 2014! However, 2019 closed with nearly $4.2 trillion in consumer debt (a record high which does Not include mortgages). According to Alicia Katz`s investigation (Deputy editor of The City) this surge is due to ` high-interest personal loans, increasingly offered by online financial technology companies known as “fintechs.”`(excerpt from the Fintech Debt trap)

Editor note: As Fintechs become more like Banks they serve their shareholders well, but may become as reviled as banks for their negative impact on society.

Bernard Lunn, CEO of Daily Fintech and author of The Blockchain Economy wrote: Will thin layer/fat commission ventures like Uber be replaced by full stack digital cooperatives?

For investors, thin layer/fat commission ventures have been the icing on the cake:

  • thin layer means no costs/hassle of service delivery; a simple app is all Uber needs because they do not  employ drivers or deal with any logistics issues.
  • fat commission means lots of revenue ; Uber for example makes a commission of 20%.

The technology innovation at the icing layer is simple – basic payments plus geolocation. The moat is certainly not in technology that could be built in months for 6 figures. Yes, within 6 months and for less than $1m you could  get the same technology as Uber!

That simple innovation at the icing layer can be worth a lot of money. For example,  Uber has a market cap over $58 billion.

Amazingly with those advantages, some thin layer/fat commission ventures like Uber struggle to produce profits.

So will Uber be like Amazon by getting such a dominant market share that they eventually produce lots of profits? Or will Uber be disrupted by innovation at the cake layer?

Editor note: Digital Cooperatives may disrupt the taxi/ride sharing market. Or not. Idealists hope so.

Wednesday Alan Scott Managing Director EMEA at 24 Exchange @Alan_SmartMoney wrote Stablecoin News for the week ending Wednesday 2nd September.

This weekly snapshot is the news that matters in the Stablecoin market.

Bernard Lunn, CEO of Daily Fintech and author of The Blockchain Economy wrote: Introducing Rintu Patnaik as the Daily Fintech Insurtech author

Editor note: welcome Rintu.

Bernard Lunn, CEO of Daily Fintech and author of The Blockchain Economy wrote: Are Security Tokens emerging from coma as INX IPO debuts?

TLDR. Well it depends, said the consultant punching the clock. Will Security Tokens enable scammy operators to separate dumb money from their money? Or will Security Tokens power a new wave of innovation to make the world a better place (perhaps via “digital cooperatives”).

Editor note: I am an optimist (essential for an entrepreneur) so I think Security Tokens will power a new wave of innovation to make the world a better place.

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Thursday

Rintu Patnaik, an Insurtech expert based in India, wrote:The Elusive Sweet Spots In Insurtech Evolution

Editor note: Rintu’s inaugural post is a good description of the $5 trillion and fast-evolving Insurtech space.

Christian Dreyer @x3er, our Swiss based CFA who focusses on how XBRL changes our world wrote XBRL News: risk disclosures, RegTech and analysis software certification

Editor note: This weekly snapshot is the news that matters in the XBRL market.

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Friday Howard Tolman, a well-known banker, technologist and entrepreneur in London. wrote: Alt Lending: Credit Decisions in a digital world

Editor note: This weekly snapshot is the news that matters in the Alt Lending market.

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