Basics of the fast-growing cryptocurrency Ether

23 August 2017

While Bitcoin is all about payment technology, Ethereum Blockchain technology is set to bring much more real-world applications. Discover how the two cryptocurrencies work and differs from one antoher.

Key Figures

Bitcoin nearly tripled in value so far this year while Ether is up roughly 4,000% year-to-date.

Ether virtually lost all its value in a single day in a June “flash crash”, from 319$ to 10 cents on one exchange before recovering all its losses.

Key Definition

Blockchain is the DNA of a digital currency that records every single transaction made.

Ether’s Blockchain is called Ethereum.

Smart contracts let people exchange not just money but also property, stock, etc. without having to go through a lawyer, notary or other service provider.

Interview with Bernardo Sanchez Incera, Deputy CEO at Societe Generale

Xavier Gomez

17 August 2017

During MoneyConf 2017, Techfoliance Team had the chance to meet with Top Fintech players and influencers.

Xavier Gomez, our Co-Editor in Chief, had the great pleasure of meeting Bernardo Sanchez Incera, Deputy CEO at Societe Generale Group.

About Bernardo Sanchez Incera

Bernardo Sanchez Incera is currently deputy CEO at Societe Generale Group (SG). He is former CEO of Monoprix, the french retailer part of Casino group. He is a graduate of an MBA at INSEAD and a master at Science Po Paris.

SG’s Growth Strategy in Emerging Markets

Bernardo explained that Societe Generale is actively looking at Fintech development in emerging markets. The company is running various initiatives in sectors like mobile banking to promote financial inclusion in underserved market. The french bank experienced some failures in the early years (e.g. in Africa) but is now better structured to grow more rapidly in emerging markets.

The case of India

In India, Catalyst startup Accelerator was launched by SG with a view to supporting the Indian ecosystem. Local FinTech players can collaborate with the relevant banking division to provide a POC in only 6 weeks in sectors like artificial intelligence, machine learning, big data, data visualization, audio transcription and sentiment analysis of their customers.

The case of Africa

In Africa, Societe Generale is among the 3 most active international banks. The Group is responding to banking challenges by developing innovative payment solutions in collaboration with local players such as the french FinTech TagPay. SG also launched a program called Connect several months ago to equip nine African subsidiaries with a mobile banking solution. The application is already used in Morocco and will be soon launched in four new countries: Ivory Coast, Senegal, Cameroon and Ghana.

The french bank is also working on an alternative model to banking with a new offer: the “Yup”. Yup is based on the “agency banking” model. “Agency banking” is the fact of providing traditional banking services without needing a bank account or a bank branch. The intermediary between the core system and the clients is called an “agent”. “Agents” are boutiques or merchants that are equipped with a terminal to let people access to the “Yup” offerings. With “Yup”, SG wants to reach the unbanked population in Africa.

“It’s a way of deploying more quickly and cost-effectively a much larger relationship network than the traditional network of agencies we can have in these countries”, Bernardo Sanchez Incera said.

The case of Asia

In Asia, Societe Generale signed an agreement with Smartkarma, a Singapore-based fintech that has built an online investment research platform. As part of this agreement, “Societe Generale will use Singapore-based fintech company Smartkarma to provide third-party Asian equity research to its institutional clients”.

Societe Generale in Insurtech

Societe Generale Insurance has been collaborating for two years with Baseline Telematics, a Canada-based start-up that is providing Usage Based Insurance (UBI) programs to insurers. Baseline Telematics allows SG to access a secure platform to collect, store and upgrade basic data related to its insured clients. The data collected through a mobile or any item embedded in the vehicle represent a real value in terms of customer knowledge: the driving, the frequency or the context of use of the vehicle.

Ambition matrix

Societe Generale has big ambition in mobile banking in emerging markets and according to Bernardo,

“It is key for us to be on the lookout for new trends in order to be able to set up, test and understand the emerging models.”

Bernard Sanchez Incera recognizes that Societe Generale Group had been under the radar over the past years in Fintech compared to other players but is not less active: the acquisition of fiduceo by Boursorama in 2015, leader in account aggregation and budget management tools (Personal Finance Management) in France, etc.

The basic strategy is to develop employees’ innovation mindset to improve customer experience. Open banking is also the next major topic for banks like SG. It represents the opportunity to monetize data in order to create value for banks.

Why we need more InsurTech?

Nir Netzer

18 July 2017

InsurTech is the use of technology innovations designed to embrace savings and efficiency from the current insurance industry model.

InsurTech start-ups are constantly exploring new paths that large insurance firms have restrains to exploit. These, include offering extremely customizable policies and automation of processes as well as innovative insurance models that are using new streams of data from internet-enabled devices to dynamically price premiums according to observed behavior.

Traditional insurance companies are at a disadvantage because of outdated IT systems and regulatory transformation programs. Their systems are structured and heavy which allow little room for large scale changes. Until recently there were no players to undermine the insurance companies work model. Having little competition from only similar financial institutions, has left the industry somewhat behind others in the financial services sector, making the industry suitable for disruption. The main purpose of InsurTech is to transform the insurance industry with new technology to improve customer experience, automate processes and simplify policy managements well as to increase competition.

State of the InsurTech industry

InsurTech interest increased exponentially across the world in 2016, mainly due to the rowing investor concentration. Moreover, 2016 saw the introduction of a range of disruptive InsurTech solutions, including those aimed at unbinding insurance offerings and providing niche insurance offerings outside of traditional insurers. This year, most InsurTech investments will likely focus on companies and startups specializing in individual components of the value chain, such as client engagement, underwriting, and claims processes.

We are in a time when start-ups are starting to test the waters with InsurTech. For example, a meaningful activity is noted with Artificial intelligence (AI) systems, which are able to find the right mix of policies to complete an individual’s coverage by using apps to pull different policies into one platform for management monitoring. As a result, AI is capable of creating on-demand, focused, insurance. The attention to artificial intelligence, Machine Learning, and deep data analytics technologies is expected to grow in the near future as well as in the long term.

InsurTech mergers and acquisitions and venture funding transactions are likely to increase in both number and strategic significance over the next 2-3 years. According to a report that was published by KPMG, analyzing Q1 of 2017 , we are witnessing a steady upward in both venture investment volume and value (to crest at 175 financings and $1.7 billion in value last year). VC-specific InsurTech investment dropped to $243 million across 43 deals, however, this decline in investments is not expected to last, particularly as insurance companies around the world have begun to feel the pressure to embrace InsurTech innovations.

The rising InsurTech stars

Recently, there have been many FinTech companies dedicating their research and development efforts for proving alternative InsurTech technologies. Two main leaders that currently developing InsurTech solutions are Lemonade and Trov. Lemonade is a property and casualty insurance company that is transforming the business model of insurance. By introducing technology and transparency into an industry, Lemonade designed an insurance experience that is fast, affordable, and hassle free. Likewise, Trov is a U.S. based technology startup that provides on-demand insurance and is one of the growing supporters of InsurTech companies looking to modernize the insurance market by taking advantage of new digital technologies.

Overall, we expect that InsurTech innovations will constantly expand since there are a large number of organizations to explore new paths that other insurance companies have restrains to exploit. Start-ups are using innovative technologies to improve customer experience, automate processes and simplify policy management, and we expect to see many more InsurTech solutions in the near future that enables efficiency to this traditional industry.

Join the discussion next July the 24th

On July 24th, FinTech-Aviv will host an event at Rise TLV for the purpose of Exploring InsurTech – to explore the different aspects of InsurTech and discuss on the latest innovations of this exciting segment. The event will draw on the knowledge of top quality experts and give you the chance to find out more about top notch InsurTech solutions designed for the global financial industry. You can follow-up the updates on FinTech-Aviv’s meetup group.

*The event will be broadcasted live on FinTech-Aviv Facebook group.

[NEW] All you need to know about Fintech licensing in Lithuania

Team Europe

10 July 2017

Lithuania now position itself as a strategic point of access for the Fintech companies considering to penetrate the European market.

[divider]FINTECH LICENSING LITHUANIA[/divider]

[tabs tab1=”Payments” tab2=”E-money” tab3=”Specialized bank”]
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A company holding payments licenses, is entitled to provide any or all payment services identified in Annex 1 of PSD I.

Two types of the payments licenses:

(i) Restricted scope:

Valid only in Lithuania and the average monthly volume of the payment transactions shall not exceed EUR 3 million within the last 12 months;

(ii) Full scope:

A company holding a full scope payments license may provide payment services across the EEA (no volume limits apply) under the freedom of establishment or freedom of services. The minimum required equity capital for the full scope payment institution varies from EUR 20 000 to EUR 125 000 (depending on the payment services to be offered).

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A company holding e-money license is entitled to issue, circulate and redeem e-money as well as to provide any or all of the payment services identified in Annex 1 of PSD I.

Two types of the e-money license are available:

(i) Restricted scope:

Valid only in Lithuania and the average monthly amount of the unpaid e-money shall not exceed EUR 900 000 within the last 6 months;

(ii) Full scope:

A company holding a full scope e-money license may provide services across the EEA (no volume limits apply) executing freedom of establishment or freedom of services. The minimum required equity capital for the full scope e-money institution is not less than EUR 350 000.

Payment and e-money institutions can join SEPA payment infrastructure and offer their clients personal accounts with IBAN codes.

(iii) Tips to apply:

Payments licencing and e-money licensing procedures include, amongst others:

Assessment of the institutions’ shareholders (applicable for the full scope licence only),
Prepare business plan and program of activities,
Have an appropriate management, internal organisation, processes, risk management and internal control procedures to ensure sound and prudent activities of the payment or e-money institution.
Documents needed for the licensing may be submitted in English language.

The regulator is very proactive in granting licenses. A decision may be adopted in only 3 months which is 2-3 times faster compared to other EEA countries.

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[tab]

As of 1 January 2017, a new concept of a specialized bank has been introduced into the Lithuanian legal framework. Specialized banks are equivalent to full services banks with the license capable of being passported across the EU, except that:

(i) Initial capital:

The requirement for a specialized bank is 5 times lower than for full service banks (EUR 1 million v. EUR 5 million);

(ii) Limits:

The specialized banks cannot provide investment services or manage investment funds, closed-end investment companies, pension funds or engage in the activities of a similar nature.

(iii) Tips to apply:

The licensing application is to be submitted to the Bank of Lithuania, however, the ultimate decision is taken by the European Central Bank. The license of a specialized bank should be granted within 6 months (extensions are possible, however up to the maximum of 12 months).

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The information shared in this article has been provided by Ellex Valiunas, a Vilnius-based law firm that help FinTech companies to set up a corporate framework for their business in Lithuania and assist them throughout the licensing process. Know more

Key Take Aways from MoneyConf 2017 in Madrid

Nathan Sexer

4 July 2017

Few weeks ago, MoneyConf was kicking off in Madrid and we have had great time sharing thoughts on the new financial era with influencers and emerging Fintech startups.

In case you could not attend, we are happy to highlight key take-aways on a wide range of topics ranging from deep technologies like Machine Learning, Artificial Intelligence, and Blockchain to sectors like Insurance, Lending, Capital Markets, Retail Banking or Crypto-Trading.

Financial exclusion and global poverty

Nearly half of the world lives in poverty, with less than $2.5 a day. Michael Schlein from Accion, recognized that

“Financial Exclusion is a failure of imagination of the banking system”

Fintech is part of the solution and as exposed later in the article, benefits of increasing access to financial services are multiple and therefore, Banks and Financial institutions should all aim at reducing that gap:

“It makes lives better and provide a sense of empowerment. Economies will globally benefit from financial inclusion”

AI: good or bad news?

Later on, Roman Stanek from GoodData stated that

“Artificial Intelligence will steal $1.2 Trillion and 40% of jobs in banks will be replaced by 2025”

Jobs Replaced by #AI will mostly impact insurance employees, bank tellers and representatives, financial analysts and construction workers.

Speakers like Derek White from BBVA also mentioned that

“Competition makes you smarter”

Competition comes from Bank incumbents, Fintech newcomers but more specifically technologies like AI that are taking over the financial world and urge companies to surpass themselves to keep up with latest trends.

Blockchain: lot of talk, few accomplishments yet!

Industry leaders spent most of their talk explaining or detailing Blockchain applications and potential impact on the financial industry.

People use conditional a lot when it comes to Blockchain. In 2015-2016, every large financial institution started working on it. They have started working on prototypes, proof-of-concepts and now try to implement solutions on niche segments; but we are still very far from a massive adoption.

Blockchain vs Remittances

Remittances are a very good example of concrete applications of Blockchain technologies through Bitcoin. However, it still faces a scalability problem and sending small amounts of money often costs too much to process.

How will blockchain go mainstream?

It was interesting to hear the view of Huy Nguyen Trieu, CEO at CFTE and The Disruptive Group, who went straight to the point:

“What’s happening in Blockchain is not disruptive at all“

He continued by saying that:

“Blockchain architectures have inspired new ways of thinking but haven’t transcended yet any sector or industry”.

People try to do things at a larger scale, in a more decentralized manner and Blockchain makes a lot of sense in an economy that tends to be more and more collaborative, in particular with peer-to-peer services and connected infrastructures.

We are at a point where people try to disrupt every sector with this new technology, but “Disruption in Blockchain mostly comes from Bitcoin & Cryptocurrencies than blockchain technology as a whole.” Said Huy. Industry leaders should not try to apply Blockchain to everything even if it looks attractive. Most of blockchain applications are undercover, without the consumer knowing they are using it, and this is the way it is supposed to be.

“I don’t understand why everyone want to understand how Blockchains works. No one wants to understand how smartphones work. It just works.” Heard during Blockshow Europe 2017

Blockchain vs Trading

Yoni Assia, CEO of eToro, talked about the implementation of new technologies within wealth management and how this will impact market exchanges. He noticed on his platform an interesting trend: not only there was a huge surge in the past 6months in Bitcoin and Ethereum investments but

“People started to hold more their Cryptocurrencies than their stocks” He followed “Blockchain might be as big as electricity, internet and computers, and belivers will own a share of it; they can own it.”

Peter Smith, Co-Founder and CEO of a blockchain-consulting group, mentioned Fred Wilson saying

“Banks are ignoring the potential of blockchain by making private blockchains”.

A lot of people are doing it wrong, and he supports the argument that Blockchain’s full capacity will be unleashed on public networks.

Joseph Lubin, who co-founded Ethereum, and later Consensys, gave one of the most inspiring talks. In a few words, he contradicted the previous arguments that Blockchain is not disruptive saying that

“Blockchain is a breakthrough in computer science. (…) We are at the early-days of mechanisms and Ethereum has a big lead in applications platforms. There are many other Blockchains and permission-less systems to come: it is going to be an exciting century”

Note: If you want to know more about him and the technology, you should have a look at the talk he gave at Ethereal Summit, covering his story and the Ethereum vision and applications.

Award-winning Startup

Big congrats to SESAMm for winning the Startup Pitch contest!

Interview with Mark Mullen, CEO & Co-founder at Atom Bank

Xavier Gomez

1 July 2017

During MoneyConf 2017, Techfoliance Team had the chance to meet with Top Fintech players and influencers.

Xavier Gomez, our Co-Editor in Chief, had the great pleasure of meeting Mark Mullen, CEO and co-founder of Atom Bank, one of the most promising neobank in Europe.

About Mark Mullen

Mark Mullen serves as the Chief Executive Officer at Atom Bank plc. Mr. Mullen has 25 years experience in the sector and served as the Chief Executive Officer at the multi-award winning telephone and internet bank first direct, the first telephone bank launched in October 1989.

What do you like the most about working at Atom?

The opportunity to create something new and valuable that didn’t exist before.

About Atom Bank

Atom Bank is a Fintech company that calls itself as “Britain’s first digital-only bank”. It delivers banking services directly on a mobile app. It has no branches, tellers, and no physical outposts.

Atom uses biometric identification: face and voice recognition (and fingerprint ID coming soon) to log-in to the app. Every person who join Atom receive a personalized version of the digital bank.

Why Atom Bank?

The company was officially founded in 2014 and currently provides low cost financial services such as mortgages and current account services.

Atom first received its banking license in June 2015. The company opened to the public in April 2016. Digital challenger banks, a new breed of banks that aim to give customers a simple and transparent experience mainly through a mobile app, are becoming more popular in the UK and elsewhere.

Mullen sees savings account as a must-have product but is looking further since customers don’t want to pay for a current account anymore. As a result, banks are forced to make money from ancillary services like foreign exchange and overdraft fees. Atom Bank wants to reivent and simplify today’s complex policies and processes offered by the banking sector.

The new banking world

Mark said that banks are failing to manage the obsolescence of their current IT infrastructure. The adequate move for banks to reduce their ponderous cost structure is through partnerships with Fintech solutions. Atom Bank’s model is strong enough to challenge traditional players on core banking products.

Mark is determined to shake off the complex banking structure that has been here for years. Atom Bank’s core infrastructure is designed in such a way that it can be developed in open architecture.

“We don’t want to build a replica of somebody else’s bank, we want to create a new generation of bank” said Mark

He added:

“We believe in banking. It’s deeply unfashionable to admit that. But we are convinced that banking has and will continue to add value to the society for as long as money is needed.

Most bankers see the new regulation as a pain while Mark sees it as an opportunity for banks to improve and reinvent themselves with PSD2, GDPR and Open banking measures.

Ambition Matrix

Atom will soon launch additional banking products, including debit cards, overdrafts and instant access savings, all of which will be managed via the app.

Atom Bank recently closed its latest funding round of £100 million with support from the Spanish bank BBVA, Toscafund and Woodford Investment Management. The capital raised values Atom Bank at £270 million.

The bank recently launched its first mobile mortgage product, allowing borrowers to manage everything via the mobile app. The company currently employs a team of over 260 permanent employees and is set to grow in the coming months.

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