Aigang brings ICO gold rush to Insurtech with a plausible blockchain concept

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Call it double disruption. Real time claim to cash using blockchain could disrupt Insurance. That is disruption number one. ICOs could replace large parts of the traditional innovation capital business – early stage VC and IPOs.  That is disruption number two.

That makes Aigang an interesting concept to study. The fact that it is only concept – not a product, let alone a profitable business – is part of the second disruption story.

Tigger is all excited about how all this innovation will create a better world. Eeyore says this will all end in tears. ICO speculators shovel in cash to make a quick buck while retweeting  Tigger. Eeyore sits on the sidelines waiting to be able to say “I told you so” and buy later for pennies on the dollar.

Who is right here?

To help initiate a conversation, this post looks at the:

  • Concept
  • Technology
  • Team
  • Jurisdiction
  • The deal for “investors”

The concept – real time claim to cash for small claims

Conceptually this makes sense. This post explains why claim to cash time is so critical and why blockchain based smart contracts is the enabler. The post was written in May 2016 and Aigang was formed in 2017 so they may have read it or simply tuned into the same innovation radio waves. This bit explains the basics:

“Auto Payout Based on a Trustless Smart Contract

This holds out a win/win promise. Customers know that payout is automatic and immediate (no more hassling for payout during the most stressful times when the bad event has actually happened). Insurance companies get two benefits:

Elimination of fraud. The Insurance company does not rely on the customer’s version of truth. There is independently verified data.

Elimination of claims processing cost. This is a consequence of elimination of fraud.

For this to work, it has to be binary simplicity. An algo has to make a yes/no decision instantly. Something with complexity (such as who is at fault in an accident or whether a medical procedure is covered) needs human intervention.

One example of where we see that binary result is flight insurance. The flight was either cancelled or it was not. Blockchain systems use external data sources (e.g via the Oraclize service ) to get this proof of what happened. A Proof Of Concept for this flight insurance use case was coded during a weekend at a hackathon using Ethereum – proving that technical risk is not the prime concern.

We expect to see lots of use cases where this binary rule applies where really low cost insurance can be offered (thanks to elimination of fraud and claims processing). This is classic disruption at the edge – where disruption usually gets traction. For example, there are lots of use cases within the sharing economy. These are on demand or just-in-time insurance use cases.”

Aigang is going after a sensible early market in the “really low cost insurance” segment – mobile phone batteries. It is small enough to enable real time settlement and” human real time” (less than a few seconds) changes user behaviour.

It looks like Aigang can get the battery data automatically from your mobile device. Yes this is also an IOT play. Eeyore was heard muttering about random buzzword generators – ICO, Blockchain, IOT, Insurtech, but Tigger responded by saying that the concept makes sense.

The investors will be P2P. The crowd will be the new Lloyds Names. Hmm, how does that fit with Solvency 2? Will the crowd take unlimited liability like Lloyds Names? This can only work outside the regulatory framework.

The technology

Ethereum – brilliant plaform, still with bleeding edge risk. As Aigang put it:

“Built on Ethereum testnet, the application is not fully functional yet, and there are chances that the users attempting to send funds from their Ethereum wallet could lose their funds.”

On the plus side, they do have a fairly active GitHub as per Token Market.

What is your risk appetite? This has technology risk at the platform level and at the application level. If you don’t really understand Ethereum or trust somebody who does, this is not for you.

The team

They look good on pixel. But they have not got a product in the market, so that is all one can say. One assumes they are all getting paid in equity and tokens. If the ICO succeeds they will become a real team.

They also offer “bounties” to contributors. No, I did not ask for or want a bounty for writing this post.  This is like 1999 when landlords would take equity for rent.

The jurisdiction

Singapore. One assumes Aigang will block IP addresses from America and make big bold signs saying “no Americans please” in order to stay out of SEC clutches.

This is far outside the regulated world. This is not a sandbox experiment. Aigang  plan to offer a product outside the regulated world. This post by a VC in 2014 explains why this strategy makes sense drawing on lessons from Skype.

The deal

This is not being revealed yet. In ye olde innovation capital game, a concept stage venture with  MVP still in development like Aigamg would raise $50k to $500k. $50k would be for a first time entrepreneur. $500k would a proven entrepreneur wired to top Angels and VCs. Two years later, 10%  of these would do a $5m Series A and a year later about 50% during loose money times would do a a $50m Series B. Aigang will probably raise $50m out of the gate.

Will it be a great deal for token  investors? I doubt it. Maybe for equity investors who have a lot of appetite for risk and if the price is right.

Will it change the world and unleash a new wave of Insurance claim to cash innovation using Blockchain? I think so.

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

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Fintech and Art – platforms and tokens

Just three months ago I started covering how technology (Who’s Who in Fintech and Art) is transforming the illiquid and non-standardized asset class of Art. The post was inspired by Spiros Margaris the Artist.

I had identified five startups offering more transparency, platforms for provenance or exchanging value; using machine learning or Blockchain technology.

  • Arthena: A machine learning platform that allows us to become a co-owner of a genuine Picasso
  • Artelry: A mobile art discovery platform.
  • MutualArt: a global leading source of art market information and manager of the APT (Artist Pension Trust) collection.
  • Ascribe with a focus on empowering artists.
  • Weifund a blockchain-based equity crowdfunding platform developed by ConsenSys.

A Fintech entrepreneur who is an Artist

Today I am inspired by another Swiss Fintech personality that has also a less known artistic side. Marc Berneggger, is a serial entrepreneur, who wears gracefully and successfully more than one Fintech hat. Before I dive in that part of his activities, I share with you Marc’s Pixel based art which started as he was playing around with his Commodore 64 to create pixel prints. Since then he has designed 3D sculptures of pixel art in square, rectangular and sphere shapes. He has exhibited and evolved as an artist.

Marc is involved in the venture studio Finleap with 12 ventures currently and with a recent fundraising of $21million (bringing to a $121million valuation). He recently joined the board of Falcon Private Bank, a Swiss private bank, who just announced that through their partnership with Bitcoin Suisse their wealthy clients will be able to store and trade bitcoins via their cash holdings with the bank. He is also on the board of the newly announced venture of The CryptoFund, which will be the first FINMA approved diversified investment vehicle for institutional investors to gain exposure in the cryptocurrency space in a simple and compliant way.

Fintech and Art startups

The startups already covered in April using blockchain technology were Ascribe and WeiFund. In June, WeiFund supported the funding of the Braid movie, a psychological thriller, that raised $1.7 million through a token sale that promises to distribute 30% of revenues to the token holders. The shooting of the movie has already started and distribution is planned for the end of 2017.

The progress of this symbolic crowdsale will be watched, as it is the first of its kind. A use case of the decentralized principles for artists tapping into investors directly and in a way (partly) making them into producers. Will this idealistic way of producing movies, where the audience can invest and share profits in movies they care about and want to see, scale? Will the trading, flipping ICO frenzy allow any room for such experiments?

Ascribe has invested in Verisart, a startup that is using the blockchain technology and focusing on authentication of art.

To the list of blockchain based startups, I am adding ArtByte, the digital currency supporting the arts. The cryptocurrency is aiming to monetize artistic content, similar to how Steemit is focused on monetizing broader content.

To the list of decentralized ecosystems creating the future Internet of Value, I am adding SingularDTV who is also building the infrastructure for monetizing the entertainment industry.

“As a tokenized ecosystem within the CODE structure, SingularDTV will be able to operate as a blockchain entertainment studio that is a producer, acquirer, and distributor of content. Its universal and non-regionalized rights, revenue and royalty platform is laying the foundation for a decentralized entertainment industry.” Source: Anatomy of SingularDTV’s CODE (Centrally Organized Distributed Entity) A Decentralization Generator for the Tokenized Ecosystem

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 To the list of platforms focused on transparency and match making, I add Wealth-initiative, a Swiss startup that has launched a platform for wealthy clients to trade 4 asset classes: real estate, art, passion investments and direct equity. For now the platform is a secure marketplace for P2P trading of private clients within institutions. Later the plan is to offer the capabilities across institutions.

We will be watching the competition between the platformification and the tokenization of value exchange in Art.

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.

 

 

From a Blockchain based to a Blockchain inspired world, SWIFT could deliver verdict at Sibos

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This time last year, the dust hadn’t settled on the Blockchain hype, and several key players within Fintech and Financial Services were quite upbeat about the possibilities. However, as results of PoCs from various consortiums, central banks and payment providers emerged, the results were mixed. Daily Fintech covered an article on R3’s miseries towards the end of last year when Goldman Sachs left the consortium.

Since then, R3 publicly moved away from Blockchain, into a Blockchain inspired world using an open source distributed ledger named Corda. The R3 consortium lost three major banks towards the end of last year. This is vastly attributed to the fact that they chose to move away from a pure Blockchain implementation to a Distributed Ledger implementation for Corda.

The three banks Goldman Sachs, Santander and JP Morgan left the consortium and invested in Axoni that was a pure Blockchain firm. It got worse when R3 blogged that they were not a Blockchain firm, and had always been a distributed ledger company and got trolled on social media for that.

This was shortly followed by the news that SWIFT had launched its inter-bank payments platform that it believed would be the future of its cross border payments platform. The platform was called GPI (Global Payments Innovation), and had a founding consortium of 12 global banks. The GPI, at that time was based out of traditional technologies and not Blockchain. However, earlier this month, SWIFT announced that GPI was being beta tested on Blockchain with 22 new banks validating the system. Verdict on this PoC is going to be at Sibos later this year.

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Apart from this, the Bank of England (BoE) haven’t delivered a conclusive verdict on the PoC with Ripple for Cross border payments. The detailed report on the PoC was released earlier this month. The key message was:

” Cross-border payments when applied to wholesale markets present different challenges than when compared with retail and corporate transactions, which the Ripple product is designed to handle. The availability of liquidity is one such challenge, and the PoC allowed the Bank and Ripple to begin exploring these questions. “

In other words “Ripple’s solution wasn’t fit for purpose”, although Ripple chose to see it differently.  A few days later, Ripple announced that a pure Blockchain based approach was not scalable for banks and advocated a “Hybrid approach”.

Wearing my technology hat on, I see some fundamental lessons here, and I may be repeating what has been so often mentioned.

  • Find technologies that can solve your problems – it may not have to be Blockchain.
  • Do not interchangeably use Decentralised Ledgers and Blockchains. You can photocopy on a Canon machine too (not just on Xerox).
  • Innovation doesn’t always have to be on sexy technology. SQL Server and Oracle can do the job too.
  • Simplicity is often overlooked and massively underrated.

I believe that SWIFT’s announcement of the results of their Blockchain PoC at Sibos could provide a decisive direction for Blockchain in Financial Services/Payments. And it might well be “Let’s Move On”.


Arunkumar Krishnakumar is a Fintech thought leader and an 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.


 

Decentralized empowerment with the Pillar Wallet: A secure dashboard with No Accounts, No Apps

The European Commission’s Fire Study of Next Generation Internet recently concluded among other things, that:

  1. Internet should ensure citizens’ sovereignty over their own data and protect privacy;
  2. Internet should ensure diversity, pluralism and a right to choose; and
  3. Internet should avoid the concentration of data in a few proprietary platforms.

Personal Data Spaces was seen as a very important technology area for all the above top ranked values.

In this post, I take a look at this broad, complex, and crucial topic and a venture, the Pillar project, that is focused on solving the problem of Personal Data Spaces.

We live in a world that is entangled in a web of cyber-security issues. Accounts are one of the main entry points for hackers and cyber-terrorists.

Wouldn’t governments, enterprises, and the crowd, love to solve this?

We live a world in which our digital assets are held by several centralized entities. They offer us access to them via accounts and monetize all the data we generate. Corporates have learned to live with complex custody and counterparty risks, and we “accept terms” blindly.

Wouldn’t corporates and the crowd, love to get rid of this?

We live in a world that operates via apps which don’t even talk to each other. Our life goals and projects live in silos. Interoperability remains a huge challenge for enterprises, and for us, it seems too far from being possible.

Wouldn’t corporates and the crowd, love to personally control from a dashboard access to only what is necessary?

Enterprises are swimming in an ocean of cyber-security issues that drain financial and human resources. We, the people, we are all plagued by inertia around all these issues: Accounts-Passwords-Apps-Custody-Privacy.

Don’t we all dream of a new world that tackles these issues at scale?

The Pillar project

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The Pillar project aims to address these issues by replacing Accounts with Atomic Ownership and replacing Apps with Services.

This will be done by first creating an open-source wallet that will be the dashboard for all assets. From IDs, financial records, health records, education, professional engagements, and much more.

David Siegel, blockchain expert, author of the book Pull (Penguin), and godfather of the Pillar project, says “We’re starting with a wallet, but we’re aiming to replace the iOS and Android operating systems with the Pillar system that has no apps. It uses tokens, smart contracts, and a growing ecosystem of online services that let you pull the information you want, find what you’re looking for, buy what you need, manage the ownership, and interact with hundreds of other systems easily and securely.

We envision all consumer devices and wearables being eventually powered by the Pillar wallet. Because the data is decentralized and stored in secure blockchains, it is of little interest to hackers, thus, providing high-level security.”

The Pillar project will offer end-users personalized assistance in very simple and secure ways that are unimaginable today. By being able to securely access the relevant personal data and get rid of the usual silos of the Apps world, the Pillar wallet will let you manage everything you own, everything you want to look for, everything you consume online; without logins, searches, and multiple step requirements.

Imagine a world where you walk into a new doctor’s office – all the paperwork, test results, prescriptions, billing, and insurance are taken care of automagically by your Pillar wallet.

Imagine a world that governments and corporates, get rid of accounts and account-management entirely. Everyone had his/her own assets in their own wallet and simply plugs into the government or enterprise system as needed – i.e. to use the necessary services via existing APIs that are now modified to accept Pillar tokens.

The Pillar project development

 The open source Pillar Wallet, will allow the development of the necessary ecosystem on top of it. This will include a browser, an exchange, a calendar etc.

 All digital assets will be residing in the decentralized world of various blockchains (which are behind the Pillar wallet) and you will be the owner of these private keys. This will replace the existing centralized ownership structure with the new Pillar atomic ownership capabilities and will get rid of the inherent, systemic cyber risks.

The ecosystem that will be built on top of the Pillar Wallet will be partly built by the Pillar project team and partly by other parties. The vision is to eventually, connect all consumer devices and wearables to the Pillar wallet.

The Pillar system will use its own native utility token, called the pillar (symbol: PLR). The PLR is a meta-token which will be used “behind the scenes” to cover all your needs and offer all the services seamlessly and in a “pay-as-you-go” fashion. From identity, to energy, to golf, to job engagements.

The Pillar project is a Big Hairy Audacious Goal that will offer to governments, enterprises and individuals, the decentralized empowerment needed to change the current operating systems and processes. The vision is to become the dashboard used by e-Government services and the medical industry for identity and security, by financial service providers for wealth management, or by enterprises for employment (and for any other high value service).

There are three development phases towards making this open source dashboard reality:

  • Phase 1 – by Q4 2017 – Building the Pillar multi chain wallet and integrating it with the various systems.
  • Phase II – by Q1 2018 – Enhancing the multi chain Pillar wallet with an exchange platform, an escrow messaging, a browser etc.
  • Phase III – by Q2 2018 – Enhancing the Pillar wallet with the creation of the personal data locker and the personal assistant that will separate the Pillar wallet from other wallets (e.g. Jaxx, Shapeshift, Lykke, etc).

Disclaimer: I am an Advisor to the Pillar project, a Bold venture looking to create a smart and secure alternative to our world of apps, logins and increasing centralized risks. I am lured to it because it is Open-source, Multi-chain, and can solve major pain points for governments, enterprises, and individuals.

The Pillar Token (PLR) sale will take place on July 15, 2017. See more details on the Pillar web site where you can also read the white paper and more.

The Pillar token is key to the decentralized empowerment of our personal digital lives and of government and enterprise processes.

Join the conversation on the Fintech Genome The Pillar project and the upcoming PLR token sale or in the commentary below.

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.

Israel’s Colu launches Blockchain based Community Currency – “Local Pound, East London”

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Colu, a blockchain based payments app is pioneering the concept of localising cryptocurrency for a better community. Colu offers peer-to-peer payment platforms facilitating digital financial transactions at local businesses, creating a closed-loop economy to bolster the economic well-being of the community. Earlier this week they launched the “Local Pound, East London”.

Founded in 2014 by Amos Meiri, who had also founded ColouredCoins.org before then, Colu use the blockchain for various types of financial transactions – both physical and digital. They initially created local currencies for some parts of Tel Aviv, and as the community and the customer base increased, they brought them together under an umbrella currency for Tel Aviv (Florentine Shekel). They now have local currencies for Jaffa (Pishpesh Shekel) and also have created the local currency for Barbados (Barbadian Digital Dollar).


“What we did is, we developed what we call an economy in a box. A solution to manage digital currencies on top of the Blockchain”


Many British towns and cities are already familiar with the concept of a local currency, usually supported by the local council. Bristol, Brixton, Exeter, Kingston, Glasgow, Birmingham all have their local currencies. Colu have added to this list by launching their first UK based local currency for Liverpool in 2016, and now for East London.

Research by Local Multiplier 3 shows that every £1 spent with a local supplier is worth £1.76 to the local economy, and only 36 pence if it is spent out of the local area. That makes £1 spent locally worth almost 400 % more to the local economy. That’s a much better proposition than paying multinationals for the same products and services.

Colu have chosen Liverpool and East London because they believed there was a strong sense of community pride and a booming tech landscape that would help build a local digital economy. The Liverpool Pound now has about 16000 users and about 30 businesses accepting the currency. Businesses pay a £20 monthly fee to Colu. Customers then pay via the app on their phone, and Colu pays the businesses what they’re owed on a monthly basis.

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Local currencies have had challenges in sustaining the initial momentum, as its essential for local businesses and their suppliers to be using them consistently. Local currencies created in the UK so far have been supported by their councils, and when the currency loses steam, they can get behind it.

Not sure if Colu would receive such support if needed. However, they have reached 50,000 customers and $1 Million in transactions on their platform. Momentum is certainly there.


Arunkumar Krishnakumar is a Fintech thought-leader and an 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.


 

Lykke: the early pioneer in the next generation of Global Digital Asset Marketplaces

Lykke has been ahead of the curve in the Capital Markets 3.0 evolution, in multiple ways. I confess it is difficult to put an order to all the aspects of the Lykke venture, simply because it is a Big Hairy Audacious one.

Lykke is open-source (if you fancy, go to Github here and download here). And maybe retail like you and me, doesn’t care, but it is a big deal in the 4th industrial revolution. Open source is the first pre-requisite to hope for network effects. Financial markets and especially, asset trading has not been used to business models with network effects. On the contrary, it has been operating in proprietary mode either on the data side or on the modeling side.

Lykke is real, live and way beyond beta mode. You can register on the Lykke App and not only get quotes for several cross pairs (from fiat exchange rates to crypto crosses) but you can also see the order book real time!

Lykke seems for now, like an FX trading app that keeps adding more crosses. True that it keeps adding more “assets” to its menu of capabilities; the most recent one being Ether crosses. True that it also has some commodities like Gold, Palladium etc; and some less known colored coins like the Solar colored coin, the Tree colored coin etc.

Lykke isn’t just another trading app using the colored coins protocol. Lykke wants to become a global marketplace for all digital assets. All the magic is hidden in the new understanding of “Digital assets” and “marketplace”.

Coming from an upbringing in the old world, we can imagine mapping “Digital Assets” to fiat currencies, all sorts of financial instruments typically issued by businesses (currencies, public or private equity shares or bonds from corporates or governments ect.). Such thinking is a linear extrapolation from current reality; i.e. take shares in a public company or gold in a vault and create a digitized version of it.

But Lykke is going after the new world that is allowing for the creation of new asset classes, the true digital assets, the tokenization of all: e.g. utility tokens in the protocol layers that are being built as we speak (e.g. Tezos TEZ, Golem GNT etc), or tokenized values like the TREE colored coin which entitles the holder to a Mangrove tree CO2 certificate or the TIME colored coin from Chronobank which is a labor market; or tokenization of business processes like the IATA token.

Lykke wants to be the global marketplace with the new understanding. They want all business to be launched and executed on their app. When I say all, I literally mean all. The Lykke app wants to be the center of the world. Whether you are a retail individual (investor, trader in the old sense, or not) or a business (to be built or grown up with complex business processes) or a government; Lykke wants to serve your needs. The accelerator they launched recently, will grow the ecosystem and have the desired network effects. Lykke is open of course, to all sorts of business partnerships, for example, the recent partnership with Splendid, a Swiss student loan lender, for servicing international students via blockchain transfers, a process which cuts costs of such cross border transactions and simplifies the process.

Lykke is using the colored coins protocol, not the ERC20 token standardization which has become the most popular software during the recent ICO boom. The colored coin protocol is of open-source and requires programming to be used (one of the reasons that the ERC20 standard has been massively adopted is the ease of use).

The colored coin foundation started in 2013 and is based on the Bitcoin ecosystem. Currently, there are 4 entities that have joined the consortium: Lykke, Colu, Bitt, and Etoro. Bitt is the venture focused on the launch of the Barbados Dollar on the blockchain with the local central bank. Colu is an Israeli venture focused on standardizing the colored coin protocol and the development of their mobile wallet. EToro the social trading platform just recently announced a pilot crypto-wallet that aims to tap into the ICO market.

Lykke’s approach

The exchange that Lykke has created is running on the colored coins protocol. What differentiates it from the newly launched (only beta version running) Bancor venture which broke the record in terms of ICO funding, is that it Lykke’s exchange is based on a P2P matching process whereas Bancor claims to have a secret sauce that creates liquidity and allows for automatic price discovery without requiring a counterparty (which is a breakthrough). Lykke is on the colored coin protocol and Bancor is using the ERC20 standard.

BNT (the $153million ICO) are utility tokens for their exchange (to be built). LKK the colored coins trading on the Lykke app (for now) are not utility tokens but equity shares. 100 LKK coins represent one share in the Swiss registered and regulated company. Lykke is going international in Asia but is not yet available in the US.

The shares of the company have surged in the past months (read more about this from the CEO Richard Olsen here).

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Lykke was early in using the ICO funding mechanism. They placed their first public shares last October and raised CHF1m and in February-March this year they innovated in placing 1yr forward Lykke shares (LKK1Y colored coins) raising CHF2m. They are leading the way in showing others how Capital markets 3.0 can work on their app. I expect that they will be innovating more going forward.

Their most recent innovation already operational (for now only for Bitcoin) is the Offchain Settlement integration on their exchange. This makes the network faster but still has the safeguards of the blockhcain.

Disclosure: I am a shareholder of the LKK coins and look forward to the experience of the first Digital annual shareholder meeting on the 29th of June, were more than 3000 shareholders from 87 countries will come together and vote. Stay tuned.

The race has picked up speed at the protocol layer and at the Dapps layer (payments, exchanges etc). Lykke was live early with a stunningly simple UX and will now has to compete with the recent “white papers” and “MVPs” that are getting piles of funding to accelerate their development. The Lykke “Go-to-Market” strategy is taking the regulatory route (i.e. obtaining exchange licenses in Singapore and the US, payment licenses and even investment licenses in Europe) and aiming to become the center for exchanging value for everybody (from consumers to businesses).

The invitation to join the great global conversations referring to Lykke on the Fintech Genome, is open. Join to learn and contribute here.

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.

 

BanQu – Financial Network on Blockchain creating Economic Identity for the unbanked

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In one of my previous posts, I discussed how startups in the Nordics were working with their governments to help refugees get on the social and economic ladder. With due respect to the work being done there, use cases of providing banking and payments capabilities to refugees, is a tactical short term fix almost. The real problem is that refugees do not have an economic identity. BanQu, led by Ashish Ghadnis and Hamse Warfa (an ex-refugee from Kenya) are trying to solve this problem. They are using proprietary blockchain technology to drive financial and social inclusion through economic identity for about £2.7 Billion unbanked people globally.

Between the two founders at BanQu, they have various stories to tell on why they embarked on this journey. Hamse Warfa was refugee himself from Kenya when he was 12. He lost his identity (not just a name), when he had to flee his country with his family. After twenty years, he now has a doctorate in public administration at Hamline University, left a job with Margaret A. Cargill Foundation to start BanQu. However the experience of being a refugee in the process made him realise the criticality of economic and social identity.

The average stay for a refugee in a camp is 17 years. This long duration of economic exclusion is compounded by high poverty settings that refugees live in, given that 90% of refugees come from regions considered economically less developed.

Ashish Ghadnis the CEO and Co-Founder of BanQu, is a serial entrepreneur. He sold his previous business in 2012, and started volunteering in Africa. During his charitable endeavours in Africa, he identified problems that many Africans face.

A woman farmer feeding a family of eight people at $300 a year, who has an acre of land on which she has been growing corn, and using the income to run her family for thirty years. This lady has no identity or financial history. But it is just common sense that she deserves financial inclusion and would be highly credit worthy. This is true for many women in countries like Myanmar, Bangladesh, Syria, Congo, Somalia, CAR, Burundi, Colombia, El Salvador.


True transformation, true inclusion, and true fairness and 100% worldwide inclusion in the global economy can ONLY come from a massive shakeup; a massive redesign that fundamentally changes the foundation of the world’s economy.


So how does BanQu provide economic identity using blockchain? In four simple steps.

  1. Create an identity for the unbanked on BanQu’s Distributed Ledger platform
  2. Onboard the banked, financial institutions and other financial stakeholders to BanQu
  3. Allow connections between the parties (banked and the unbanked) to build a mini financial network
  4. Create history of transactions on the platform, which would eventually become the economic identity of the unbanked, using which they can scale their access to various financial avenues.

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The integrated approach of using principles of Social Media and DLT in a financial context seems quite powerful. Some use cases BanQu are addressing are,

Remote Purchase: Say, A is banked and B is a unbanked friend/family living elsewhere. B can connect to A on BanQu.  This allows A to provide funding to B, which B can use to purchase goods from say C.

Funded Wallet: A could also remotely add funds to B’s wallet, and B can use this to purchase goods from C

Term Purchase: B purchasing goods from C could happen on pre-agreed terms, where payments can be spread over a period of time.

Remittance: Remittances can also happen using remote funding of wallets where, A can fund B’s wallet for a particular amount, and B can receive cash from C (instead of goods in the above case).

Credit Worthiness: All the above scenarios provide a track record for B to move from Unbanked to Banked. And over a period of time this could help B establish credit worthiness in the financial world.

Wearing my investor hat on, that’s too many use cases for a startup to handle so early in the game. And I often get sceptical and fear for the entrepreneur who starts with “I am going to change the world”.  But BanQu somehow feels right, honestly.

The real challenge is setting up the financial network infrastructure and bringing onboard a good mix of credible unbanked and helpful banked. Once this happens growth could be viral and the financial network could be used for endless purposes.

A case study as described by Ashish: If you’re a poor female farmer on the Tanzania-Rwanda border, feeding a family of eight or ten on $300 a year, which is less than $2 a day. At harvest, the broker says to her that unless she sells her corn to him at a price it will get wasted. The mother is forced to sell the corn because she has no access to information. She has no identity. But if she has a piece of land and has been harvesting crops for thirty years, she should be able to produce 100 kilos of corn. Then the U.N. has orchestrated buyer contracts for that 100 kilos of corn.

Using BanQu, this mother/farmer has three things which she never had before.

One: On her phone, through the blockchain and BanQu, she gets to know that her one acre land can help her produce 100 kilos of corn for which she has a buyer (the U.N.), even if the harvest is a few months away.

Two: If you dry the corn to 13 percent moisture content, the price of corn doubles. With BanQu’s technology, the mother has an identity, she owns a piece of land, has a produce forecast and a buyer. And that buyer is now going to allow her to get collateral to get a dryer so she can dry her corn. All that becomes part of her history.

Three: The blockchain has given her an identity created by her transaction history. She can now borrow as lenders can see  that she has a piece of land, a microloan, a harvest, a dryer and that she is selling them at market price.  If that Rwandan woman farmer has her identity in the blockchain and she has gone through three farming cycles, the lender would not charge her 30 percent on $100, but would charge her 4 percent on $100 because she has history.

This makes me wonder if the current financial system needs some very fundamental changes. So many products, with very high barriers to entry, which effectively ignore 2.5 Billion consumers. Surely, its time to go back to the drawing board, and may be, that’s what Banqu are doing.

Like most Fintech use cases of blockchain, this is still in pilot mode, and is yet to be proven as a viable business model. However, once/if it takes off, there is no reason, why this can’t become mainstream and create yet another leapfrog moment.


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

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