This Week in Fintech ending 23 October 2020

This week our experts brought you the following 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 Crypto is already way too big to ignore

Yesterday, I came across a tweet by Marc Bernegger about WEF’s first council entirely focused on cryptocurrencies. The World Economic Forum (WEF) has created the Global Future Council on Cryptocurrencies. The job of the council will be to evaluate challenges and opportunities, bring together different stakeholders and members of the global ecosystem to improve governance and spearhead initiatives that approach money in new ways. This is the third initiative by the World Economic Forum, related to cryptocurrencies and blockchain. Earlier this year, in January, the WEF launched the Global Consortium for Crypto Governance and in 2019 it launched the Global Blockchain Council. These initiatives by the WEF are of great importance and will change cryptocurrencies forever. They will influence the interest and growth of digital assets and blockchain technology among some of the most elite institutions, governments and world leaders and create global standards that countries around the world can follow. WEF’s crypto initiatives are just another indicator that confirm cryptocurrencies have reached a level of maturity that no one can ignore anymore.

Editor note: With 3 cryptocurrencies competing – CBDC & Libra & Bitcoin – the future for this asset class looks good.

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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 Bloomberg and Excel resilience

Soon it will be thirty years since I started working on Wall Street – 7 WTC, 37th floor, Salomon Brothers, Fixed income derivatives department.

Scary but true. Bloomberg terminals and excel spreadsheets were then the basics. The Salomon Brothers culture and entity has been completely absorbed and has disappeared. I have become a thought leader and influencer in Fintech. Bloomberg and Excel have yet to be disrupted.

Bloomberg is strictly a wholesale finance tool, business. Excel is a tool for both retail and businesses.

We all know that Bloomberg could be replicated with one tenth of the cost (figure referenced by Marc Rubinstein) but it has not happened. Every accelerator and VC, will advise against spending resources to put together the next generation of Bloomberg. It remains private, the anti-thesis of open source, and with no sign of `pay as you go` pricing. Surveys show that most users in the investment, financial world, use a very small part of the $20+k services. And yet, there is no pressure to move to `pay as you go`.

The strong social network (a kind of a boys club) remains intact.

Editor note: Premature epitaphs for Bloomberg & Excel (& Bitcoin) have been embarrassing. I was sure that open data networks would put Bloomberg into the dustbin of history – that was 30 years ago!

Wednesday Alan Scott Managing Director EMEA at 24 Exchange @Alan_SmartMoney wrote Stablecoin News for the week ending Wednesday 21 October 2020.

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: Fintech4us. How “empowered muppets” could get free financial content without becoming the product sold to the sell side.

Sometimes I have a hard time distinguishing between casinos and brokers. Casinos always make money from punters and brokers always win whether traders make or lose money. Both can be a fun way to usually lose money, because the occasional dopamine hit from winning makes you forget the losses.

Rich traders use expensive services such as Bloomberg that Efi profiled on Tuesday. They are the customer not the product.

Poor traders use free services that monetize by selling eyeballs to brokers; they are the product not the customer. These are the traders famously derided by somebody at Goldman Sachs as  “muppets”. This problem is evident in all markets, but worst in Finance/Fintech. Look at the biggest payouts for various forms of advertising and you will often find some variant of brokerage or casino. In anecdotal evidence, Daily Fintech get lots of enquiries “about the possibility of publishing a sponsored article” from advertisers who are in the brokerage or casino industries. Hint to all who reach out – the answer is no.

Editor note: We are reaching out to people who can help build a more inclusive financial system that will reduce inequality.

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Thursday

Rintu Patnaik, an Insurtech expert based in India, wrote: Innovation Cuts Basis Risk, Spurs Inclusion Of Uninsureds

In the past week, several promising insurtech ventures competed for top honors, based on impact they were making on the insurance landscape. As part of the proceedings, leaders were awarded in categories such as underwriting platforms, usage of artificial intelligence and few other focus areas.

The award in the underwriting platform category was given to a parametric solution designed to meet SME insurance needs during the hurricane season. This category had stiff competition, including another parametric product that is targeted to insure agri constituencies against commodity price volatility. In the AI category, the winner was a health insurtech that has employed innovative techniques to reduce health expenditures by ensuring fit of procedure to the symptomatic condition of patients.

Parametric risk transfer mechanisms are a common feature of insurance and RI, as well as a trigger applied in the ILS sector. Most often used by large corporations, sovereign risk transfer sponsors and risk pools around the world, as well as in micro and RI for micro-programs, as an alternative and more responsive form of risk transfer to traditional, indemnity-based solutions. Benefiting from fast and efficient proof of loss which requires no inputs from loss-adjusters, with payout being tied to pre-determined parameters, it offers rapid payout post-event and after the occurrence of natural catastrophes, can be extremely valuable.

Editor note: If you care about the efficiency of the Insurance business, this post is for you.

Christian Dreyer @x3er, our Swiss based CFA who focusses on how XBRL changes our world wrote XBRL News: Blockchain, specifications and ESEF

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 Finance for week ended 23 October 2020

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

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