Scalable Capital: from Digital investing to Deposit accounts and Brokerage services

Efi Pylarinou is the founder of Efi Pylarinou Advisory and a Fintech/Blockchain influencer – No.3 influencer in the finance sector by Refinitiv Global Social Media 2019.  Fintech funding and activity for investing solutions is remarkably healthy given the macroeconomic conditions. The Stash ($112million in April 2020) and Robinhood ($280million in May 2020 and $320million in July) sizable funding rounds and the acquisition of Personal Capital by Empower Retirement […]

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The Re-bundling rhythm varies by region

Efi Pylarinou is the founder of Efi Pylarinou Advisory and a Fintech/Blockchain influencer – No.3 influencer in the finance sector by Refinitiv Global Social Media 2019 As technology commoditizes products and services at an ever-increasing rate, the re-bundling of fintech services is trying to catch up with the rhythm. In the US market which has more unicorns and later-stage fintechs, this is more prevalent. SoFi first comes to […]

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The next generation of re-bundling with embedded finance is on its way


Efi Pylarinou is the founder of Efi Pylarinou Advisory and a Fintech/Blockchain influencer – No.3 influencer in the finance sector by Refinitiv Global Social Media 2019. 

The rebundling of scattered digital financial services is underway at different stages in the various subsectors. Rob advisors adding consumer banking services, digital lending platforms adding investment offerings, mobile-only banks adding insurance and investment services, and on and on. Embedded finance (sorry Ron Shevlin for using this buzz word), platformification of banking, or creating an Asian Internet of Finance Western edition; in one form or another these trends are unstoppable. By now, they are the normal.

So what does the next generation of re-bundling look like and has it started already?

Last January, I wrote a post that seemed very much out there (and to some maybe it still sounds awkward) that looked at the existing silo between Food and Finance.

Food and Finance blurring through technology

With the COVID-19 lockdowns still fresh in our minds, managing uncertainty, enhancing our immune system, and the connection between our finances and our health (physical and mental) are very clear.

The current setting makes it very easy to understand Paolo Sironi`s dense FMT theory. Just focus on the main underpinning of FMT: Finance is about managing uncertainty. Of course, this is not reversable. Meaning managing uncertainty is not only about finances. Our physical and mental health are a big part of dealing with uncertainty. In my earlier piece I took the scientific views of biomedical gerontologists and of philosophers who foresee `the last days of death` and linked them to what Hippocrates and the Chinese have been preaching for centuries:

Food could become our best medicine

The research and innovation on this front, is already underway. At the upcoming Decoding the nature of future conference in Paris (Fall 2020), several important topics will be discussed. I zoom into the big topic of linking Food with Health and the trends around customized products for the future. AlimAvenir, a French specialist in the food innovation, has published a study addressing four main big topics

  1. Feeding 9.8 billion people in 2050: alternative proteins?
  2. The kitchen of the future: digitally assisted home cooking or robots?
  3. Food and health: are customized products the future?
  4. Transparency, traceability and future imperatives

Under the 3rd topic, of my interest, they look at customized food, the role of microbiota in certain pathologies that are big issues (like obesity, diabetes, gastro diseases etc). They conclude that smart IOT devices will allow advancements in this direction. They see growth in preventative medicine.

They also see reducing uncertainty, repricing financial contracts based on genetic data. They suggest that this decade will also force us to decide on how genetic data is shared. Technology aims to improve our genetic data (in this framework through customized food) so that a mortgage provider (be it a bank, or a non-bank) can customize the tenor of the mortgage accordingly. With better or improving genetic data, the tenor of the mortgage can lengthen.

Customized food can improve genetic data which in turn can improve conditions in financial contracts.  

I am starting to see a world of programmable financial contracts whose clauses are cryptographically linked to our genetic data.

In turn this data is dynamic with customized food being one of the ways we can improve it. Rejuv the spinoff from SingularityNet is one example of this kind of innovation. It is built on the Singularity Net protocol which is a decentralized protocol for benevolent AI agents (see previous post here). Rejuv connects individual health data securely, with researchers, clinics and the AI agents, to improve health via lifestyle adjustments. Tokens are used to reward members.

The silos between customized food and finance, are starting to blur in these new ways. The triangular connection I see, is now the broader Longevity sector to finance. In addition to customized food as medicine to improve genetic data, we can foresee precision, preventative, personalizes, and participatory medicine – the so called P4 – linking to finance.

Managing uncertainty in life is first about improving our physical and mental health. So starting with that as the core offering and creating a marketplace with analytics and services that improve diagnosis, prognosis, and suggest customized `journeys` (treatments), looks like the way a 2030 financial platform-ecosystem should look like.

Managing health uncertainty, advising and optimizing that aspect of our life bundled with debit, credit, insurance, and investments, is the way to go.

Customized health and wellness journeys improve our longevity (length and quality of life) which leads to a more pressing need to manage jointly our finances.

 One example of innovation in this direction is the Longevity Bank, soon to be launched, by longevity scientist experts. I met Dmitry Kaminsky, cofounder of Longevity Bank, in Davos and included the initiative (No. 33) in `Celebrating the WEF 50th anniversary with 50 bytes from Davos 2020`. Their motto is Health is the New Wealth.

The challenging link between genetic data, health data, financial data and corresponding analytics on each of these areas, is the next re-bundling wave. The opportunity is big and the complexity is breathtaking.

Margaretta Colangelo and Dmitry Kaminsky, the authors of the Longevity Industry book, call the Longevity industry, the Biggest and Most complex industry in human history. I think this statement will have no challengers. Yet we are marching towards a rebundling with finance.

Stay tuned.

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Convergence as a trend in the re-bundling phase of financial services

There is ample evidence that 3 is a magic number. It dates back to the old times and is well captured in the Latin phrase[i] Omne Trium Perfectum  – everything that comes in 3s is perfect. I bring this up not only because I chose to provide three examples in my post today but also […]

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Saas offerings, re-bundling and the pot of gold

pot of gold.jpg


Jessica Ellerm wrote about `Something as a service`, the new fintech paradigm while looking at Raisin`s offering. This prompted a discussion with Richard Turrin and Aki Ranin around Saas models for banking. Richard is a proponent of `Buy versus build` which allows for rapid deployment. Aki is a proponent of shared infrastructure because it allows for economies of scale and expansion in additional markets.

Increased Saas model adoption and APIs, make it difficult to predict whether incumbent banks or Fintechs are becoming the plumbing of financial services. For me, we actually need to reconsider whether this should be a question at all.

Two or three years ago, the `dump pipe` debate was hot and terms like Big banks becoming Dumb Pipes or Dumb pots, were trending as discussion topics in articles, conferences and debates[1].

`The “dumb pipe” debate originated from the telecom industry and there is a lot of literature on the subject. The grandfather of the debate is David Isenberg who in 1997 published the seminal paper The Rise of the Stupid Network.` Excerpt from Andra Sonea`s post On banking “dumb pipes” and “stupid networks”

We have been using the `dumb pipe` term because it works in the attention economy which is dominated with trendy jargon. But we each map the term to a different concept.

We are actually even biased. When we look at a Fintechs with a B2B Saas offering like Mambu, then we may think that it if Mambu powers an incumbent bank to offer lending, then maybe the bank is at risk of becoming a dumb pipe. On the other hand, when we realize (if we do at all), that Mambu is powering N26, we don’t classify N26 as a bank with a high risk to become a dumb pipe.

Mambu is a great example of a Fintech specialized in a Saas core banking offering. It powers up Oak North bank, which is the No.1 UK challenger bank. It is the heart and brain of the ABN Amro`s digital banking spinoff, New10, that focuses on SME lending; and more.  Mambu does not offer the banking license (a different approach to Solaris Bank). Just by looking at these two examples – Mambu and Solaris Bank – that have unbundled financial services in different ways; we have to pose the question `Where is the value being creating?`

  • Powered by Mambu means: Go to market fast with a Saas cloud-native solution – Client has the banking license; Fintech has the tech – Who is the dumb pipe?
  • Powered by Solaris Bank means: Get into banking with a Saas cloud-native solution – Client can offer banking services without a banking license of its own – Baas – Fintech has the license and the tech – Who is the dumb pipe?

The `dumb pipe` threat was native to the digitalization phase of unbundling as the disruptive force that was going to dominate. Now we are in a re-bundling phase and fintechs are growing their stack of offerings, incumbent financial institutions are transforming their offerings, and tech companies are also stepping in. From Sofi moving from lending into wealth management and Habito powering the mortgage offering of Starling bank; to Kabbage powering Santander`s business loan offering, to Motif launching structured products for Goldman Sachs; to Goldman powering the Apple card and Solaris bank powering Alipay`s acceptance in Europe.

I hope you are convinced that we can’t spot easily dumb pipes in this kind of world. If business expansion is powered through a Saas cloud offering, then the next question to ask is whether this powers your ability to offer advice by analyzing what is processed in the pipes and whether it enhances your brand through strengthening your trusted relationship. As the re-bundling continues and the commoditization of transactional banking services also continues, the

Last man standing will be Brand and Advice[2].

If you use Saas offerings towards offering advice and enhancing your brand, then there is no reason to fear becoming a dumb pipe.

Last minute footnote – As I am finished posting this article, a Linkedin post from Richard Turrin grabbed my attention about Tencent`s investment in a UK startup, Truelayer which is tech company leveraging APIs within the PSD2 and Open banking progressive European regulatory frameworks, to give access to financial services.  TrueLayer powers neo bank Monzo.

[1] Are Banks Destined To Become The Next “Dumb Pipes”? via Tech crunch

Banks May Be Turning Into Dumb Pots Of Money via Forbes

The Big Banks Are Becoming `Dumb Pipes`; As Fintech Takes Over via CBinsights

[2] Inspired, copied and stolen from Gary V`s tips from his the recent at The Financial Brand Forum’s. See 9 Priceless Tips For Financial Marketers From Gary Vaynerchuk


Efi Pylarinou is the founder of Efi Pylarinou Advisory and a Fintech/Blockchain influencer.

 I have no positions or commercial relationships with the companies or people mentioned. I am not receiving compensation for this post.

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