Marketing Report – FinTech Ranking

Arival Bank’s Jeremy Berger: we are eager to work with SMEs who are involved in STOs

Xenia Vyazemskaya — Thu, 27 Sep 2018 10:09:50 +0000

On September 20, second day of Consensus Singapore, Jeremy Berger (Life.SREDA VC Portfolio Director, COO Arival Bank) gave a speech on the digital banking revolution at a meetup dedicated to the future of financial markets.

The event was marked as the first Asian meeting of Security Token Club – an international expert community focused on asset tokenisation, the recent trend in global financial markets.

As a guest speaker, Jeremy outlined the key issues SMEs are currently facing and described how Arival, the first digital fintech bank aims at solving them.

«Security Token Meetup provided a valuable outlook on the advantages of this rapidly developing market and the unique position we expect it to take within financial markets. As a bank, Arival is eager to work with SMEs who are involved in STOs (security token offerings) and excited to advance in the realm of financial innovation together».

Jeremy’s co-speakers were Brian Brackeen of Kairos project, which pioneered the first security token offering in the US, and Alexey Shadrin of Evercity.

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Life.SREDA is a leading fintech venture capital firm in Singapore. While contributing to making Singapore a fintech center of the world, Life.SREDA aims at expanding its competences to help businesses discover the new world of digital banking with Arival Bank.

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Japanese Government Unveils Evaluation Process for Blockchain Platforms

Life.SREDA Team — Wed, 19 Apr 2017 11:56:07 +0000

By Samburaj Das for CCN.la

In a month where bitcoin gains prominence in Japan’s mainstream after the cryptocurrency saw recognition as a legal method of payment, the Japanese government has revealed a method to evaluate blockchain platforms that are widely expected to transform a number of industries.

Published [PDF] by the Ministry of Economy, Trade and Industry (METI), the evaluation process is developed by the Information Economy Division which operates under METI’s Commerce and Information Policy Bureau.

Development of the evaluation process took shape after five committee meetings in total held between November 2016 and March 2017 that included members such as Yuzo Kano, co-founder and chief executive of Japan’s largest bitcoin exchange, bitFlyer and Masanobu Takagi, blockchain architect at IBM Japan.

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The Japanese ministry’s evaluation methodology includes 32 distinct pointers ‘which are especially closely related to the characteristics of blockchain technology’, the document reads. Evaluation items include scalability, portability, reliability, throughput, the number of nodes, performance efficiency and interoperability, among others. Blockchain platforms will also be classified by their public (open) or private (permissioned) nature and consortium-based blockchain platforms like Ripple and the Hyperledger Fabric will also be classified separately.

The need to create an authority-led evaluation process, METI explains, is due to heightened expectations of blockchain technologies to be applied in a number of sectors and industries. Described as ‘inexpensive systems that cause no downtime’, blockchain technology triumphs over conventional systems as they’re ‘extremely difficult to falsify’ in comparison, the ministry writes.

Credit: METI

Notably, it adds:

[N]o evaluation indices or criteria had been established to adequately assess the features of the technologies and to compare them with existing systems. This causes the public anxiety, misunderstanding, and unreasonable hopes to blockchain technologies, and leading to a potential unwillingness to introduce the technology.

Existing global evaluation models established by the likes of the International Organization for Standardization (ISO) are inadequate for blockchain-based systems, the Japanese Ministry claims. This is ‘due to [the] unique tradeoff caused by the structure of blockchain (e.g. Consensus between multiple nodes).’

Credit: METI

The next phase of cementing the methodology includes implementing the evaluation process among real world-systems and looking toward international standardization of evaluating blockchain systems

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FinTech Investment in Australia Increased in 2016; Slumps Around the World

Life.SREDA Team — Fri, 24 Feb 2017 13:30:33 +0000

By CryptoCoins News

Analysis has found that investment in Australia’s FinTech startups rose last year compared to the rest of the world.

In a report from KPMG, The Pulse of FinTech Q4 2016 [PDF], it found that total FinTech investment in Australia increased to $US656 million across 25 deals in 2016 compared to $US185 million across 23 deals in 2015.

It appears that authorities are beginning to realize the potential that FinTech can play in helping financial inclusion. So much so, that they are recognizing that improving the efficiency of banking services can systematically boost the performance of the economy.

It is because of this that could be one reason why government and financial regulators are now making huge efforts to support the creation of FinTech hubs in addition to helping them with the regulatory environment and the challenges it presents.

To demonstrate this, Australia’s Securities and Investments Commission (ASIC) announced last year that it was signing a first-of-its-kind blockchain agreement with the British Financial Conduct Authority (FCA) enabling financial technology companies in Australia and the U.K. to have greater support from financial regulators.

Not only that, but from December 2012 for the next 12 months all eligible businesses will be able to test different financial or credit services without first needing to apply for an Australian Financial Services License or Australian Credit License. It is hoped that this will help to further push the FinTech agenda in Australia.

Global FinTech Investment Drops

Analysis by KPMG shows that there was a 47.2 percent drop in global FinTech investment in 2016 to $US24.7 billion.

Despite this, venture capital investment remained strong in 2016, totalling $13.6 billion across 840 deals. This is a seven percent increase from 2015, even as deal flow dropped by around 100 rounds.

As can be seen 2016 was considered a tough year for the FinTech environment. The Brexit vote, the U.S. presidential election, a slowdown in China, and fluctuations in the exchange rate globally are some of the factors that prompted investors to be more cautious in their investments.

Yet, while a number of regions experienced some saturation within more developed financial technology areas such as in payments and lending, KPMG predict that increased interest will be seen in other areas. Over the next 12 months, insurtech, regtech, artificial intelligence, and data and analytics are likely to draw further growth.

It may have been a tough 2016, but the sector will continue to be an attractive sector in the future for its many benefits.

First appeared at CryptoCoins News

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China activity drove US$5.4 billion in Asia fintech funding in 2016

Life.SREDA Team — Mon, 20 Feb 2017 17:30:45 +0000

By e27

Asia’s fintech funding was level with US$5.5 million raised in the US fintech industry

Fintech startups in Asia raised a record US$5.4 billion from 165 deals in 2016, driven largely by large investments in China, according to a new report from CB Insights. A whopping US$4.6 billion of total funding came from just 46 deals in China.

Furthermore, the increased investment numbers are driven by huge rounds — the largest round was a US$1.2 billion round from Lufax while the tenth-largest on the list is a US$74 million round by QuantGroup. With the possible exception of a US$160 million deal for WeLab in Hong Kong, the entire top-10 list of funding rounds came out of China.

Total Asian fintech funding rose by US$600 million from 2015 when startups raised a total of US$4.8 billion. In 2014, Asia’s fintech companies raised US$1.1 billion and in 2013 it was US$300 million.

Also, the report chose to omit the Ant Financial US$4.5 billion fundraising (which was a private share placement and the world’s largest-ever tech funding round).

Asia’s fintech funding statistics approximate to the US$5.5 billion raised in the United States in 2016 — with a notable difference that it took 422 deals to reach that number in America.

Also Read: Singapore govt to pump US$1.7B to transform country into digital powerhouse

The total number of deals maintained its 5-year stretch of growth, albeit the three deal increase from 2015 to 2016 was a sizeable slowdown from the major jump between 2014 and 2015 (134 deals to 162).

For China specifically, 2014-2016 saw the number of deals flatten (44, 42, 46 respectively) while the amount raised skyrocketed (US$800 million, US$2.8 billion, US$4.6 billion).

How did it break down?

While overall Asia fintech funding increased in 2016, it dipped in the second half the year. 35 deals were inked in Q4 2016 — which was a drop from both Q4 2015 (38 deals) and Q3 2016 (37 deals).

Q4 2016 was the best quarter in 2016 for individual startups — the median amount raised was US$3.5 million. But, that was still below the US$5 million number from the year before.

Below is an “average deal share” percentage from 2016 based on the numbers from CB Insight.

It is not a perfect statistic because averaging a quarterly deal-share percentage does not take into account other rounds from the quarter (the numbers below do not equal 100). But, it is useful to get an idea of what kind of fintech deals are getting inked (for example, Series B funding never dipped below 17 per cent of deal share, a pretty high number for a late-stage round).

31 per cent of deals were seed round or angel investments
23.75 per cent were Series A rounds
22.5 per cent were Series B
10 per cent were Series C
Series D and Series E made up of 2 per cent of round share
“Other” accounted for 8.5 per cent

Despite the reality that most of the major fintech rounds happened in China, there is an impact in Southeast Asia. For example, the aforementioned Ant Financial made its first foray into Southeast Asia with an investment into Ascend Money. Also, over the weekend, Ant entered the Philippines through a strategic partnership with Mynt and Ayala.

VCs and Corporates

For deals in Asia, corporates participated in about 40 per cent of VC-backed deals and over the year it ranged from 31 per cent to 49 per cent quarter-by-quarter (by comparison Q4 2015 saw 45 per cent of deals involve corporates).

“Corporates saw slightly less deal share than the same quarter last year when corporates participated in 45 per cent of Asian fintech deals,” the report read.

Also Read: India’s True Balance recharges its coffers with US$15M funding from Korean VCs

The most active investors were, in order, 500 Startups, East Ventures, Sequoia Capital India and SBI Investments as the top-four. Tied for fifth was a group that included IDG Capital Partners, Golden Gate Ventures, Accel Partners India, IMJ Investment Partners, Arbor Ventures.

P2P lending company Lufax took home the gold as the company who raised the most money on the list with a US$1.2 billion financing.

First appeared at e27

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The March Of Financial Services Giants Into Bitcoin And Blockchain Startups In One Chart

Life.SREDA Team — Mon, 20 Feb 2017 09:33:53 +0000

By CB Insights

From American Express to Goldman Sachs to Deloitte, major firms across the financial services landscape have made investments in bitcoin and blockchain startups. And the financial services investments have continued into 2017.

The herd of new strategic investors is playing an increasingly important role in the health of the financing market for startups in the space. While quarterly deal activity dropped to its lowest point since Q2’14 in Q4’16, the quarter’s top two financing deals featured investments by major corporate and financial services players.

More specifically, distributed ledger developer Axoni saw Wells Fargo lead its $18M Series A, which included JP Morgan, Goldman Sachs, F-Prime Capital, and Thomson Reuters as investors. As Axoni CEO Greg Schvey said:

“Deploying distributed ledger technology in production at this scale is a watershed moment for the industry. The combination of technology and business expertise being contributed to this project from across the participating firms is unparalleled and the benefits are clear.”

To illustrate the boom of investment from financial services firms into the sector, we analyzed CB Insights data to plot each firm’s respective first investment in the space over time. As the chart illustrates, there’s been a plethora of first-time activity from corporates since August 2015.

It should be noted, though, that consortia are not included on the chart below. One such example is R3 CEV, which counts a bevy of banks and insurers including Credit Suisse, JPMorgan and Deutsche Bank collaborating to advance ledger solutions and standards that meet banking requirements. R3 has hit a few bumps of late, with Goldman Sachs and Santander – among others – leaving the consortium in favor of private blockchain investments.

Among the financial services investors are insurance providers such as TransAmerica, New York Life, and Mitsui Sumitomo Insurance Group (MSIG); payments giants including Visa, MasterCard, and American Express; as well as banks like Mitsubishi UFJ Financial Group (MUFG), Citi, Santander, and Canadian Imperial Bank of Commerce (CIBC).

As the chart below shows, strategic investments into bitcoin or blockchain startups over the past three years hit its apex in the fall of 2015 and into the winter of 2016. In recent months, Deloitte, Miami International Holdings (MIAX), and Credit China placed their first blockchain bets, with Deloitte taking a corporate minority stake in appropriately named blockchain settlement and payments platform SETL. In total, over 50 financial services firms or their strategic investment arms have invested in a bitcoin or blockchain-specific startup since the start of 2014.

Click the image to enlarge.

The original graphic from November 9, 2015 is shown below, which highlights the beginning of the acceleration of financial services firms investing in blockchain and bitcoin startups.

Of note, a relatively small number of startups have captured the large majority of financial services investments in the bitcoin and blockchain space. For example, the seven firms listed below – Circle Internet Financial, Coinbase, Ripple, BitFury Group, Blockstream, Digital Asset Holdings, and Chain — have received nearly $625M in funding and are all listed among the top ten most well-funded bitcoin and blockchain companies. Between them all, they count a significant number of financial services investors.

Notable Bitcoin & Blockchain Startups with Financial Services Investors
Company	Total Funding ($M)	Category	Financial Services Investors
Circle Internet Financial	136.00	Wallet & Money Services	Goldman Sachs, CICC
Coinbase	117.38	Wallet & Exchange	Bank of Tokyo Mitsubishi UFJ, NYSE, ReInventure (WestPac)
Ripple	93.90	Capital Markets & Financial Services	CME Group, Banco Santander, SBI Group, Standard Chartered
BitFury Group	90.00	Mining & Blockchain Services	China Credit Limited Holdings
Blockstream	76.00	Capital Markets & Financial Services	AXA Strategic Ventures
Digital Asset Holdings	67.10	Capital Markets & Financial Services	Citigroup, CME Group, Goldman Sachs, JP Morgan Chase & Co., PNC Financial Services Group, Banco Santander, DTCC
Chain	43.70	Capital Markets & Financial Services	Capital One, Citigroup, NASDAQ, Visa

First appeared at CB Insights Blog

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World Government Not Ready For Blockchain: Deloitte Report

Life.SREDA Team — Sun, 19 Feb 2017 06:07:07 +0000

By William Suberg for The CoinTelegraph

The latest report by accounts giant Deloitte suggests world governments are underprepared for disruptive technologies including Blockchain.

In “Tech Trends 2017: The kinetic enterprise A government perspective,” the firm gives an overview of seven emerging technologies, rating their relevance to government and government’s’ “readiness” to embrace them.

Out of all technologies, governmental organizations are least ready to accept Blockchain, Deloitte finds, scoring them just one out of five.

“Keep up. Even if you are not using Blockchain, the parties you monitor and work with may soon be,” the report addresses its target audience.

Delaware is cited as an example of a state jurisdiction looking to communicate with Blockchain technology and incorporate it directly.

“The State of Delaware is exploring Blockchain to ease the registration of new companies. The state may soon move that process, as well as the tracking of share movements and the management of shareholder communications, into a shared public digital environment,” Deloitte states.

The firm’s position on Blockchain is no surprise given its several years of heavy involvement researching and collaborating on potential use cases.

Just this week, it said that Blockchain principles could “benefit” from having globally accepted auditing standards incorporated in them.

First appeared at The CoinTelegraph

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Blockchain is becoming more than a buzzword, and now there’s tangible proof

Life.SREDA Team — Wed, 08 Feb 2017 16:09:26 +0000

By Nivedita Bhattacharjee for TechInAsia

Blockchain, which many experts have called the biggest innovation since the internet, has started gaining steam among bankers and financial institutions, a survey by Infosys’ Finacle shows.

Blockchain is a public ledger of all Bitcoin transactions that have ever been executed.

India’s second biggest IT outsourcing company, Infosys, owns Finacle, which is a product that services banking clients. The company partnered with Let’s Talk Payments to survey 100 business and technology leaders from 75 institutions ranging from regional to multinational banks to come up with a reading of whether the phenomena of blockchains is hype or reality. Here’s what they found:

33 percent of respondents expect to see commercial blockchain adoption by 2018, while a majority (nearly 50 percent) see mainstream adoption by 2020.
The average investment in blockchain projects in 2017 is expected to be about US$1 million.
The majority of banks – about 69 percent – are experimenting with permissioned blockchains.
About 50 percent of the banks are either working with a fintech startup or technology company to augment their blockchain capabilities, whereas another 30 percent are opting for the consortium model.
51 percent of executives driving blockchain initiatives are either chief technology officers or “chief innovation officers”.
Blockchain rollouts would be prioritized in business areas where it can significantly improve transparency, automate processes across enterprises, as well as reduce settlement and transaction times.
The top five “use cases” that are expected to go to production are cross border payments, digital identity management, clearing and settlement, letter of credit process, and syndication of loans. These use cases, or practical implementations, scored more than 3.2 on a scale of one to five, where one was the least prioritized for commercial adoption and five was the most prioritized.

First appeared at TIA

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‘Unified commerce’ can drive user payment experience and merchant sales

Life.SREDA Team — Sun, 29 Jan 2017 15:16:19 +0000

For the next year, the key trends are improving the checkout process with frictionless payments solutions and seamless experiences via a unified commerce approach.

When today’s consumers shop, they don’t just look for a good price, they also expect a seamless, personalized and efficient experience. If you have visited the Apple store or many restaurants in Europe, check out via a handheld device is nothing new, but the adoption in the U.S. market is still just evolving. Brands are getting more in tune with understanding that there is value in meeting a customer real-time as they are experience delight in-store and they can improve conversion rates by harnessing the opportunity help customers “capture” the moment.

The road to cashless payments is part of capturing that moment. Although numerous mobile wallet payment systems have been introduced to the market, including Apple Pay, PayPal, Google Wallet, Samsung Pay and more, consumer and retailer adoption still has a long way to go. According to the Federal Reserve, they estimated there would be $616.9 billion in cashless transactions in the U.S. in 2016, 10 times the approximate $60 billion in cashless transactions recorded in 2010, but still only about 1% of the market.

Apply Pay alone is reporting a growth of one million new users per week, and this technology will continue to convert users in the coming year. Further driving innovation in mobile payments, credit card companies are also more proactively teaming up to introduce their own branded contactless payment capabilities. During the 2016 Olympics, Visa introduced its payment ring, which uses a built-in NFC-enabled antenna that enables contactless payment capabilities. Unlike many other payment wearables, the ring does not require use of a battery or recharging! It’s only in beta stages so we will see how this one evolves.

Chip cards are also impacting user experience. While finding ways to improve security continues to leave at the forefront of solution providers and credit card companies, the EMV chip still hasn’t figured out how to lessen frustration for consumers at check-out. According to a recent Cayan survey of 1,000 consumers, 63% of shoppers experience some level of frustration waiting for chip card transactions prompting shoppers to potentially abandon the purchase.

At an average of 3.6 seconds per transaction, and the trickle down effect it causes at check-out lines, companies are working hard to speed up that transaction time through faster EMV processing. Nearly a quarter of customers say that a wait time of between 5-20 seconds for EMV/Chip Card transactions means that they would reconsider shopping at that retailer in the future. Finding a way to protect security integrity, yet improve speed will significantly improve customer satisfaction and loyalty.

Payments companies are improving each year at the roadmap for 2017 is just starting. By expanding their mobile offerings, and building mobile commerce capabilities, retailers are equipped to give consumers today’s consumer with high expectations a better holistic experience.

First appeared at PS

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China’s fintech is leaving the rest of the world behind

Life.SREDA Team — Mon, 23 Jan 2017 15:37:06 +0000

By Junse Lee for TechNode

China is emerging as a leading fintech market on a global scale. Half of the global investment in financial technology is happening in Asia, especially China, according to the World Economic Forum.

Contrary to trends in many developed countries, Chinese consumers are ready to embrace fintech technology as seen from the common use of Alipay, WeChat Pay, and e-commerce services such as Taobao and JD. The willingness of Chinese customers to embrace fintech offerings is beyond expected supply, creating opportunities for both incumbent and new financial services providers.

According to a report published by DBS and EY, 40% of Chinese consumers are open to using fintech payment methods compared to 4% in Singapore. The rate of fintech participation in wealth management and lending also tend to be higher. The report says that China has moved beyond the point of disruption compared to the West which is only just reached the tipping point of inflection.

Chinese lives are deeply integrated with technology giants both financially and non-financially. China already accounts for 47% of global digital retail sales, resulting in a massive domestic retail market in a closed digital economy. The digital generation in China is also driving the online retail market and leading the charge in China’s mobile payment adoptions. 66% of post-1990’s millennials shop and 54% of them bank via their mobile phones according to the EY report.

Major markets for fintech are also under-banked or unbanked populations in China. Traditional banks are not winning consumer’s’ trust, and a rising number of young Chinese consumers end up turning to digital disruptors with higher interests rates. They are more risk-embracing and less reluctant to greater propensity to spend than the older generations. The Chinese younger customers also demand higher-quality and client offerings.

“We hope the new generation of the financial system will be more inclusive focusing on the underserved or unserved including small-to-medium-sized enterprises (SMEs),” says Jonathan Lu, vice chairman of Alibaba Group and CEO of Alipay during his DAVOS 2017 panel discussion.

“In a small county in Tibet, 90% of overall electronic payments are made through mobile payments. This number is the highest mobile penetration that can bridge the gap for the people in the West and the developing East,” says Lu sharing his optimism for new opportunities.

Moreover, the willingness and trust Chinese customers put money into fintech give them a huge advantage compared to the Western world. Many of the Western companies are slow to adopt financial disruption system compared to the US.

China possesses unusual advantages of rapid urbanization, regulatory acquiescence, a massive and underserved SME market, escalating e-commerce growth, and explosion in online and mobile penetration that create a fertile ground for innovation in commerce, banking, and financial services as shared by EY report.

To meet the growing demand of online financial technology, the Chinese technology giants BAT are aggressively creating all-encompassing platforms with the aim of embedding their services into customers’ lives.

“There has been a lot of experiment around the financial technology,” says David Craig, President of Thomson Reuters during the panel discussion, “Financial industries have not historically been particularly good at collaboration. It tends to be a lot of group of people sort of collaborating, sort of competing. And this [fintech] actually offers a way changing how we operate and things work.”

China is already positioned to be the next global financial technology leader. There seems to be little doubt whether it will happen. It is, rather, a matter of timing.

First appeared at TechNode

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Corporates need a ‘consumer style’ invoice experience

Life.SREDA Team — Sat, 21 Jan 2017 10:58:29 +0000

From banking apps with real-time information on personal finances to Amazon-type shopping experiences that create one-touch buying, those who are responsible for improving and maintaining the financial success of a business think less about how their money moves.

Yet, when they sit at their office desk, the friction becomes the focus of the CFO’s job. From RSA security tokens to multiple banking portals, a CFO must set up processes and procedures to handle even the simplest of tasks, creating inefficiency and frustrations along the financial supply chain. This has left many wondering: where are the fintech disruptions to simplify my career?

One area in which technology is creating a frictionless experience is in invoice financing. Perhaps no other link in the financial supply chain is riper for technological disruption by those interested in saving money on financing costs; creating efficiencies in the processing of invoices and ultimately saving money on the corporate bottom line.

In large part this is due to the barriers of entry to the marketplace for finance professionals in small and medium enterprises (SMEs) as many have experienced barriers when looking for finance. When explained in business terms—from a corporate bank to a treasurer—the difficulty in securing financing makes sense. The corporate bank is examining factors such as balance sheet and capital ratios before taking a risk in extending credit.

Yet, this rationale fails to consider the human element and the experiences of the CFO as an individual first. The rise of fintech in the consumer world—such as P-to-P payments apps and crowdfunding websites—has the CFO as the individual seeking alternatives to the traditional ways of securing financing. Not only is it vital to financing new business and expansion but also to ensuring cash flow with existing buyers.

To the individual, this disconnect may seem arcane. In a world of online bill pay and banking apps on mobile phones, payments are nearly instantaneous. This leads CFOs to ask what can be done to bring a similar experience to their sales process and invoice financing.

As in the individual’s experience with online banking, the consumerization of invoice financing begins with greater access to data and streamlining of internal systems.

According to the 2015 Global Corporate Treasury Survey by Deloitte, the very technology that was meant to help a CFO do their job more efficiently is only hindering further progress. Forty percent of companies remain challenged by visibility into global operations, including cash and financial exposures. Forty percent also cited insufficient technology infrastructure to support their department.

It’s not for lack of technology spending, or technology support, but rather in how that technology is delivered. Sixty-four percent of respondents in the Deloitte survey said they use more than one enterprise resource planning (ERP) system to source and send data, which prevents treasurers from accessing reliable, complete and consistent data. In turn, this leads to increased operational difficulties and risk rather than providing sufficient solutions to address these challenges.

And that’s where the promise of a more consumer-friendly approach exists for the CFO. Just as P-to-P payment apps did not arise out of continuation improvement of online banking, a more streamlined process for invoice financing will not arise from the financing providers. That is because their margins rely in part on the complexity of treasury systems and functions and the scarcity of finance to keep rates artificially high.

This creates friction.

It is in removing this friction that the promise of fintech offers a solution. Just as the individual may turn to an alternative finance provider to take control of their personal finances, CFO’s are turning to lenders offering seamless invoice financing allowing them to take control of their finances to achieve success through a seamless one-stop-shop. This way, the CFO is empowered to take advantage of early payments and access funding from the same platform where they transact with their clients. The day has finally come when the individual is not only in the driver seat of their personal finances, but also of their corporate transactions.

First appeared at PaymentsSource

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