Hyperledger, R3 & Enterprise Ethereum Alliance Join Banking Heavyweights to Discuss …

Fidelity, Barclays, Credit Suisse & State Street joined by leading tech experts at the Blockchain for Finance Conference on October 3-4: https://goo.gl/jstcRu

DUBLIN, IRELAND, August 15, 2017 /EINPresswire.com/ — 250+ senior fintech experts will take over the Aviva Stadium in Dublin this October to discuss their blockchain strategies in a bid to move their blockchain projects from proof-of-concept to full-scale deployment.

Blockchain gurus Brian Behlendorf (Hyperledger), Matthew Spoke (Enterprise Ethereum Alliance) & Clive Cooke (R3) will speak alongside finance kingpins including Hadley Stern (Fidelity), Jeremy Wilson (Barclays) & Moiz Kohari (State Street) to address some of the challenges companies are facing when looking at the business case for blockchain and distributed ledger technologies within financial services.

Key topics up for discussion this year include:

• Blockchain Use Cases: See how POC’s in areas including trade finance, payments, insurance, identity, supply chain finance, syndicated loans, securities and clearing are moving into full production

• Blockchain, Digital & Fintech: Explore how financial services companies are looking to incorporate DLT into their wider business strategy to aid your forward planning

• Regulation, Compliance and Legal: Address legal uncertainty surrounding blockchain with a focus on smart contracts, standards and big data and how the landscape is likely to take shape moving into 2018

• Technology Concerns: Explore the importance of interoperability and scalability for blockchain technology as well as the security issues that still concern financial services

Other speaking organisations at the conference include Credit Suisse, IOTA, KBC, BNY Mellon, Aeternity, Credit Agricole, Deutsche Bank. Melonport, Deloitte and more…

To see a full breakdown of the agenda and speakers involved in the 2nd Blockchain for Finance Conference, download the conference brochure at https://goo.gl/jstcRu

Dean Murphy

FinTech Network

+44 (0)203 468 9461

email us here

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Accord Project joins Hyperledger to push standards for smart contracts

Accord, which has been created by Clause.io, will establish a set of open source software development tools. These will be proposed to the technical steering committee (TSC) as new projects at Hyperledger, so that a broad community of developers and users will be able to collaborate directly on the future of contracting.

Clause.io is co-founded by Houman Shadab, Professor of Law at New York Law School, who is well known in the blockchain space.

Shadab pointed out while commercial agreements are relatively standardised, when you drill down deeper into contracts used even within the same industry there is a plethora of specific approaches.

He said: “In order to realise the potential benefits of legally binding contracts that use blockchain technology, widespread agreement must reached on a far greater range of issues than required to overcome the costs of proprietary approaches with traditional contracts.

“These issues range from foundational ones, including the usage of templates and the proper interface for legally binding text, to issues unique to smart contracts, including the suitability of data to confirm contract obligations to security, storage, and execution with a blockchain.

“Without standards, smart contracts may improve businesses, but they won’t transform them. The need for standards and open source tools to usher in a change to the nature of legal contracts and business relationships is why we at Clause are launching the Accord Project.”

Hyperledger welcomed 10 new organisations to the platform (including Accord). The latest General members include: ANNE, Beijing RZXT Technology Development, Capgemini Financial Services, New H3C Technologies, Revelry Labs, Smart Link Labs and TradeIX; and the new Associate members were the Accord Project, Tecnalia Research & Innovation and University of Luxembourg.

Brian Behlendorf, Executive Director, Hyperledger, said: “Welcoming this many new members from all over the world in various industries is great to see.

“The added support comes at a perfect time, with the recent launch of Hyperledger Fabric 1.0 and the goal of working together as a community to reach and promote production deployments of the technology this year. These new members will be advantageous in our efforts in building open blockchain software and pushing more Hyperledger projects to 1.0.”

Damien de Chillaz, vice president, Blockchain Leader, Capgemini, said: “At Capgemini, we seek to become the partner of choice for our Financial Services clients who feel ready to move from proof of concept to production on Blockchain.

“We believe that this ambition requires the right combination of business intimacy and technical expertise that we can bring through our leadership position in Financial Services and our global presence and expertise in Distributed Ledger Technology. Although we remain ledger-agnostic, we are very excited to join Hyperledger and its open source community, to help shape the future of financial services alongside our most strategic clients.”

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    How to Start a Business “DISRUPTED”

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    Recently I blogged about the huge transformation underway in the financial services space and how the industry is being fueled by a wave of innovation and entrepreneurialism that mirrors that of the tech industry.

    Today, there are more alternative financial companies that I’ve ever seen in my entire life. Whether its new forms of payment technology, emerging models for lending capital to business, or new devices that make financial transactions faster and more convenient, the fintech space is thriving.

    Houston, we have a branding problem

    So how did these new entrants come into the fintech space to begin with? I’ll start the conversation by first stating that traditional financial services companies like banks and insurance organizations have a brand problem. To be perfectly candid, a lot of people don’t trust banks. You rarely see bankers portrayed in movies as sympathetic, likeable protagonists. I’m not saying that perception is fair, but banks are indeed struggling these days in terms of their brand and reputation.

    Disruptive companies are often borne out of branding problems. On-demand driving services like Lyft and Uber, for example, didn’t gain traction in the market because of their superior analytics, but rather than taxis had a brand problem. Airbnb, in another example, gained success because hotels have a brand problem with many non-business travelers.

    The lack of trust and feeling of disenfranchisement that many consumers feel about the banking, investment and insurance industries is at the core of this wave of innovation in fintech. As a result, the financial services market expanded to accommodate the demand from consumers looking for more flexible, convenient and easy ways to send, manage, save and invest their money.

    Do you not totally believe that premise?  Then why have online Insurance quotes become more like one-click shopping experience on Amazon?  Insurance fintech companies such as Esurance were one of the first innovators that drove change, only to be acquired by Allstate, an arguably more traditional insurance company. The effect of insurance fintech companies was not unnoticed by the industry.

    Redefining banks, lenders and everything in between

    Additionally, it should be noted that at no point in time has the business relationship of companies to traditional banks ever been more disrupted.

    Let’s look at the historic way that businesses began. When I grew up, when you wanted to start a business, you went to the bank and you got a loan. Business owners today can launch a company without ever involving a bank, thanks to peer-to-peer platforms like Kickstarter where you can find investors within hours with a just a mouse click. I am not saying that having a bank account wouldn’t make it easier to engage in a business. The relationship has changed though.

    The way we pay for things has also radically evolved. With the emergence of Bitcoin, even the definition of currency has changed. These days “fintech” can encompass pretty much anything – it’s no longer limited to payment processors. It’s becoming increasingly difficult to define what makes a company a “lender” or a “bank.” For example, is Kickstarter a lending company now, if its members help to launch a business?  Amazon now “lends” to small businesses anything they need based upon an algorithm.

    What about equipment manufacturers? Are they lending organizations? Increasingly, the answer is yes.  When it comes to purchasing large equipment – say, a tractor from Caterpillar – you’re no longer tied to a traditional bank to process your loan. Many Fortune 500 companies (including Caterpillar, Allstate and State Farm) are entering the financial services space, allowing customers to bypass banks and self-finance directly through the manufacturer or insurer.

    Don’t lose sight of the data

    And let’s not forget about the data security story here amid this financial services feeding frenzy. Financial organizations possess a massive, sprawling footprint of sensitive consumer and business data encompassing credit reports, credit histories, payroll information, tax information and more.

    The challenge comes when the industry evolves at such a rapid pace without ensuring that the protections, governance and controls associated with the traditional financial world remain in place. This presents an urgent and critical call to action for emerging fintech players to prioritize data security and governance and to educate themselves about the industry-specific regulations and requirements specific to the financial services sector. For example, Social Finance (SoFi) recently settled with authorities around their use of “soft pull” of consumer’s credit reports that were used in marketing campaigns.

    Many of the new entrants to the space are founded by teams that lack a formal financial or banking background – they may come from internet or tech companies, for example. As a result, they may not even know to ask the most basic, but very critical, questions about data storage and protection, as well as industry regulations and policies specific to financial organizations:

    • Should I use encryption?
    • Have I implemented solid security controls around storage?
    • What regulations like GLBA, Dodd-Frank, Glass-Steagall, and FCRA impact a fintech startup and their usage and governance around consumer data? (with a small “trick” question in there)
    • How can I avoid becoming the next security breach waiting to happen?

    Will banks become obsolete?

    Despite its rapid growth, remember that we’re still early in the game when it comes to fintech. It’s premature to say that traditional banking organizations will fade away entirely, the reality is that there has to be some bare minimum of a construct for businesses to make and sell goods and services. You might be buying supplies via some form of alternative lending versus writing an old-school paper check, but you’ll still, in some form or another, leverage a financial services organization.  European banks are already starting to broker partnerships with fintech companies to better meet their customer’s needs.  Insurance companies acquired most of the insurance fintech startups, so that route is possible as well.  Disruption will inevitably change the current order of things a little bit, but I don’t foresee any major downfall of the industry.

    I’d like to close with a quote from Clayton Christiansen’s book, The Innovator’s Dilemma about the origins of disruption:

    “Disruptive technologies bring to a market a very different value proposition than had been available previously. Generally, disruptive technologies underperform established products in mainstream markets. But they have other features that a few fringe (and generally new) customers value. Products based on disruptive technologies are typically cheaper, simpler, smaller, and, frequently, more convenient to use” 

     



    ENCLOSURE:https://blog.dellemc.com/uploads/2016/03/For-USC-Engineering-School-1-e1499868735179.jpg

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    Banking as a Platform in the World of Disruptors

    In 2016, Starbucks Corp had $1.2 billion loaded onto Starbucks cards and the Starbucks mobile app. This figure exceeded the deposits at many financial institutions.

    The mathematics of these numbers goes beyond people’s love for coffee.

    If extrapolated, this data is an indicator of the massive recast the financial services industry is undergoing, largely influenced by disruptive technology and evolving consumer behavior. What does this mean for incumbent banks?

    Customers are Becoming Competitors

    There is a new pressure created by the increase in the number of players and the unique nature of participants entering the market everyday. These players, once used to be a banks’ customers and partners and are now swiftly becoming their digital competitors. Any business handling volumes of customer data such as large retailers and telecom giants are either launching their own consumer banks or payments services or are jumping on to the financial inclusion bandwagon with their mobile or virtual only offerings. For instance, Walmart offering low cost checking accounts to unbanked Americans is nothing new, nor is the partnership between Orange Money and BNP Paribas in Africa, that allows money transfer between the banked and the unbanked via mobile phones. Globally, postal service providers are also trying to create a banking ecosystem for customers, leveraging their deeply penetrated branch networks and well orchestrated distribution systems.

    Sometimes these initiatives are executed in close collaboration with incumbent banks and sometimes they are not. But the fact of the matter is the whole industry is infused with change outside in and banks must view this as a unique opportunity.

    Competitors are Becoming Partners

    Banks are now opening up to the idea of working in a symbiotic relationship with new entrants, especially fintechs. Improved customer experience and connectivity on newer channels have been areas of concern for incumbent banks’ while fintechs excel in exactly those areas. There is a potential business fit between the two. Since fintechs and other disruptors offer simple yet substantial changes to the way people consume financial services, banks are fast entering an era wherein partnering with these new specialized firms will help them upgrade their range of value propositions. Rabobank, for example, has partnered with a startup, Tradle Inc., to build software to check customer identities using blockchain technology.

    Fintechs do not have the baggage of siloed infrastructure and they do not struggle to meet the same business objectives as their banking counterparts. Understanding modern consumers intuitively and making technology work in coherence with latest market demands is ingrained in their DNA. They are also more relevant because unlike banks, they are designed to cater to specific needs of specific markets. Banks, in turn, offer regulatory stability, large consumer base and well rehearsed profitability in each market. While large banks have the option of investing in accelerator projects or acquiring or partnering directly with technology startups across domains, smaller banks can explore trade associations and industry cooperative initiatives to remain relevant in the race which they cannot run alone on their small budgets.

    Banks are exploring various options, from partnering with disruptors to experimenting on their own in close collaboration with competitor banks. For instance Bank of America and Wells Fargo are evaluating their options in joint tests with other banks through R3 CEV consortium. Another interesting phenomenon is unfolding in the UK, where the Post Office has signed an agreement to provide face-to-face services to banks’ clients. This move comes in the wake of consumers going digital; reducing branch visits and the banks’ intention to minimize their branch networks. With this initiative, banks can let the widely present post office take care of the distribution while they focus on what will matter in the future: the digitization of offerings.

    Such partnerships, research and development act as the diving board for differentiation and customer satisfaction in a world filled with choices.

    Convergence is Becoming the Central Force of the Industry

    Convergence is expected to be one of the biggest drivers of the financial services industry in 2017 and beyond. Banking is fast moving into the space of relevant new technologies such as internet of things, blockchain, open APIs, cognitive computing, and AI rather than the age old core systems. Since these areas require niche expertise and a fresh approach, traditional banks are increasingly acknowledging the significance of converging with new and specialized players to innovate. Convergence of business models, expertise, technology, and channels is changing the world around us and is enveloping the banking industry as well.

    What Next: Banks as Platforms

    To survive in the sea of digitally native fintech firms, banks need to explore future proof business models. A relevant option is to serve as platforms for fintechs and other service providers by sharing their data with different stakeholders across the value chain. The new age service providers can then make use of this intelligence into offerings that are compatible with market demands. The opportunities are enormous: right from digital payment solutions to real time and context based offerings to customized peer-to-peer lending.

    Choice of device and channel is a hygiene factor for consumers today. Financial service providers need to be present across channels so consumers can choose their touch-points according to their ‘moment-specific’ financial needs. A great example in this area is the Visa Developer platform, which is designed to help financial institutions, merchants, and technology companies meet the demands of consumers and merchants, who increasingly rely on connected devices to shop, pay and get paid.

    With initiatives such as PSD2 and the Open Bank Project, banks can expose their data in a secure environment and in a consistent and standardized manner. This gives all stakeholders a level field to experiment, research and develop products that fit the digital life of consumers. Third party companies get more room to explore ideas and come up with neoteric solutions.

    Furthermore, banks could either turn into backstage data pipelines or transform into more deeply rooted versions via their fintech partners. Just as Whatsapp killed the SMS market for telecom providers; fintechs in a post ‘platformification’ era could eat into banks’ visibility to consumers and become the intermediate layer of interaction between the bank and the consumer. If banks view these technological advancements in an optimistic light, they could evolve into more socially and commercially viable future proof institutions.

    Banks have grasped the business potential of the platformification phenomenon. The Citi Mobile Challenge initiative by Citibank allows fintech developers to innovate and let new ideas flow into the system. Such arrangements also give the digitally savvy business customers the freedom to make their own banking services. With Open Financial Exchange (OFX), banks can let their clients access their products in a consistent manner. It is then up to the clients to make use of the available information in the way they want. They can either use it to create their own systems such as Customer Relationship Management or Enterprise Resource Planning engines or come up with newer and more innovative solutions such as new payment or lending products.

    While some experts still see a risk in exposing well earned experience and information to new entrants, several incumbents find value in the ideology of open banking. According to the latter, it gives all the digital stakeholders the flexibility to work and innovate at their own convenience rather than being pushed to perform in a tethered environment. Since this whole ecosystem comes with issues of governance and control, banks are slowly realizing the significance of sharing and coming to an understanding of ‘how much to share’.

    The Road Ahead

    In an age when we are erasing boundaries between industries at an unimaginable pace, new entrants do not have any constraints of products, services, geographies, business models, channels and the overarching business philosophies. Virtual is the new real and today’s business intelligence might be completely irrelevant tomorrow. Only established startups and advanced incumbents can go beyond the tipping point of success. Competition can now come from hidden corners of the business landscape. Everyone is busy either building on what they already have or acquiring what they do not. For instance, Rakuten, the Japanese e-tailer is now utilizing its large network and customer data to offer financial services. Disruptors are inadvertently picking the most ‘leak proof’ costing models, minimizing prices for end consumers and forcing incumbents to follow suit. And yes, it is not easy to choose the right business partner from this baffling mix of options

    What should banks do in this time of the basic banking concepts turning upside down? Should they innovate on their own? If they do, what kind of technology vendors will they need? Should they outsource expertise or partner with fintechs? How do they choose who to partner with? Should they become platforms of everything to cater to everything, everywhere, all the time?

    Irrespective of what the banks do, the quality and relevance of services the end consumers get will increase manifold when banks become platforms and make their data available in a standardized manner. Consumers will, subsequently, have more choices to choose from and they will no longer be victim to the cross-sell and up-sell push by incumbents. They will not need to fit their needs to predefined bank offerings. They will rather see, explore and consume what they like best, at the time they want it and will pay for it via the channel they prefer, exactly the way they consume their coffee.

    My colleague Shalu Upadhyay and I co-authored this blog. We would love to hear your views. We are reachable at tushar dot chitra at Oracle dot com and shalu dot upadhyay at Oracle dot com.

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