Marketplaces and gateways for financial advisors – Schwab’s approach

I’ve been a fan of  Bill Winterberg and his FPPad channel. If Alexa is in your Christmas shopping cart, you should know that Bill is on Alexa for you to listen while putting on makeup or shaving in the morning. Just say “Alexa, enable FPPad”.

In early November, Bill covered the Impact2018 annual event by Schwab for advisors. The Schwab Intelligent Portfolios, the infamous Schwab Robo-advisor, that we have covered on DailyFintech from the start of the robo movement, is not what was the focus at Impact2018. This is an annual event for advisors who are being empowered by brokers, custodians, tech companies, asset managers, and banks.  The sponsor of the Impact2018 FPPad interviews was Envestnet | Tamarac. As a side note (not an insignificant one) Blackrock invested in Envestnet by acquiring 4.9% of shares. The world’s largest asset manager buying a piece of one of the largest adviser technology providers. Add to that that Blackrock owns another 5% through its passive financial products.

 Charles Schwab in a way has it all. For the 100% DIY investor, there is Schwab’s brokerage arm and the free robo service (continuously criticized for the high cash allocation). In the middle, there is an automated investing management offering with a free personal finance guidance (with financial advisors) with only a $5,000 minimum balance requirement. And at the other end of the spectrum, a rich and improving marketplace for in-house (using Schwab as a custodian) and third-party advisors.   

Andrew Salesky is a 20yr Schwab veteran that now runs the Digital Advisor Solutions at Schwab. His vision is to transform Schwab into a Digital Services organization. He is focused on serving and empowering financial advisors, both those in-house but also with third parties in the Advisory space.

Schwab scores high when benchmarked as a Digital Services organization, for the in-house custodied part of the business.

First and foremost, they have mastered the Digital Account opening, which is now a completely paperless workflow for advisors which takes 5min to open an account (regular account, pension, or charitable). This electronic authorization, itself gives the end customer a great experience. The first impression always creates a predisposition, and Schwab has its advisors back covered in 80% of account opening cases. The remaining 20% is the so-called NIGO (Not in good order), which means incomplete or incorrectly filled applications; and Schwab is tackling this business opportunity by experimenting with technology that can serve electronically advisors’ customers in this case.

Second, the Schwab Advisor Portfolio Connect, is an all-in-one solution at no fee, that is simple and efficient. Its main advantage is an operationally efficient portfolio management solution. The magic happens behind the scenes, taking advantage of ‘custodial data direct’. Advisors using this service don’t need end of day downloads and reconciliations and creating performance reports, billing and other crucial reports because all is completely automated.

On top of these digital capabilities for all Schwab advisors, the Digital Advisors Solutions department is strategically positioning Schwab as a Marketplace and a Gateway for third party advisors. This is multifaceted.

First is the MarketSquare. I love the name by the way. It feels like Piazza San Marco or some such. Schwab advisors can research technology vendors and products to help them make better-informed buying decisions, see product ratings and reviews from peer advisors, who understand the specific needs of independent advisors. The MarketSquare is creating an advisor community and tech vendors compete for their attention.

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 Second is the OpenView Gateway: Third party advisors can enjoy secure, high-quality integrations, for example with Orion, Salesforce, Addepar, and at same time have access to Schwab data. These integrations combine the best of Schwab and third-party capabilities and include many of the major technology tools firms depend on, including CRM, portfolio management, financial planning, trading & rebalancing, risk analysis, and more.

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Several other tech vendors are in the pipeline to be listed on the OpenView Gateway. Advyzon a provider of CRM solutions, client reporting, billing, document management, and a client portal; and LifeYield allows advisors to get their ‘Taxficient Score’ for all their clients to measure their tax efficiency.  Reports can be shared directly with the clients to show where they are adding value.


Last week I took a look at Morgan Stanley’s “WealthDesk” rollout for its advisors which is an integration of Morgan Stanley’s Goal Planning System. In Incumbent Robo-advice platforms, software, products: A look through Morgan Stanley’s WealthDesk platform I highlighted the Machine learning support through “Next Best Action” tool.

Schwab’s approach is very different that Morgan Stanley’s. “WealthDesk” is the integrated toolbox that MS advisors operate their business on. Schwab allows for 3rd party advisors and in-house advisors more choices of vendors and in that respect each advisor can tailor their toolbox differently. The “WealthDesk” toolbox is not available for 3rd party advisors.

MS is focused on empowering and retaining its current advisory network of 16,000 advisors. Schwab is increasing its outreach through a marketplace approach that if successful, can become the app store for tech targeting advisors (with genius capability and a community tying them together).

The end customer will decide of course; Financial advisors are being served through Fintech vendors that offer them dazzling choices. The platform that can help advisors make smart choices for their toolbox, will be the winner.

MS claims that their integration is ahead of the curve. Schwab positions itself as hub that filters tech vendors continuously and offers integration a la carte plus peer reviews.

Stay tuned.

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

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.

One97 – From selling Astrology services over the phone to a Global Fintech Unicorn

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A glance at the infographic with the top global Fintech unicorns[1] (as of Q3), fired several thoughts. Gold and bronze position to Chinese born giants, Ant Financial and Lu. The top seven Fintech unicorns that could fit their balloons which reflect their relative size in USD, included no European born companies. The US gave birth to four out of the seven Fintechs, which still operate mostly locally – Stripe, Coinbase, Robinhood, and Sofi.

One97 with a $10bil valuation, sitting right in the middle, was the only one that I honestly didn’t recognize with a blink. Once I started looking into the entity, I realized that a visit to New Delhi is long due. India is where One97 Communications operates. It is the leading mobile internet company offering mobile content and commerce services to millions of mobile consumers. Vijay Shekhar Sharma is the founder of this Unicorn which was launched in 2000!

One97 is endorsed by international big brand name investors:

  • Alibaba Group and Ant Financial (AliPay), own 40% of One97 shares.
  • Japan’s SoftBank became a shareholder in May 2017, injecting $1.4 billion in One97 for a 14.2% stake.
  • Berkshire Hathaway invested $356 mln in One97 (3%-4%) on the 28th October 2018, which brought the valuation up to $10bln[2].

One97 Communications is the mama of the flagship Paytm, born in 2010. This is the brand name that we all recognize.

PAYTM, at a glance

Paytm is a leading payment solutions provider to e-commerce merchants using a semi-closed wallet, approved from the Reserve bank of India.

Paytm started off in 2010 as a prepaid mobile and recharge platform and added a data card, postpaid mobile and landline bill payments.

In 2014, it launched the Paytm Wallet, and the Indian Railways and Uber added it as a payment option. It continued into E-commerce with online deals and bus ticketing.

In 2015, Paytm broadened its services with use-cases like education fees, metro recharges, electricity, gas, and water bill payments. It also started powering the payment gateway for Indian Railways.

In 2016, Paytm launched movies, events and amusement parks ticketing as well as flight ticket bookings and Paytm QR. It later launched rail bookings and gift cards. Paytm in India is considered the pioneer of QR based mobile payments.

In 2017, Paytm became India’s first payment app to cross over 100 million app downloads. It launched Paytm Gold, a product that allowed users to buy as little as ₹1 of pure gold online (₹ the new Rupee sign as of 2010).

It also launched the Paytm Payments Bank and ‘Inbox’, a messaging platform with in-chat payments among other products.

In 2018, it started allowing merchants to accept Paytm, UPI and Card payments directly into their bank accounts at 0% charge.

It also launched the ‘Paytm for Business’ app, allowing merchants to track their payments and day-to-day settlements instantly.

The company also launched two new wealth management products – Paytm Gold Savings Plan and Gold Gifting to simplify long-term savings. And an Indian robo-advisor. Paytm Money with various mutual fund products.

It also stepped into gaming with a mobile games platform Gamepind.

Just a glance at the Economic Times under One97, is sufficient to realize how it continues to make the headlines:

Paytm registers 600% growth in UPI transactions in 6 months

Now, you can pay LIC premium through Paytm

One97 Mobility Fund, the ecosystem play

While One97 Communications is the proud mama of Paytm, they have launched a $100M fund that invests in early stage mobile companies  – the One97 Mobility Fund (OMF). Their portfolio currently includes:

  • Paytm
  • TheMobileGamerPublisher of mobile social games for South East Asia reaching out to over 500M mobile users.
  • Ciqual: enables Mobile Operators to improve their data services through customer insights.
  • RainingCloud Technologies: develops AppSurfer (previously known as DroidCloud), a platform enabling Android access across multiple devices like non-android phones and PCs.
  • Dexetra: focuses on Artificial Intelligence around personalized Search and Mobility.
  • Plivo: a cloud telephony solution which helps enterprises and service providers setup, manage and run their own private or public telephony clouds.
  • IImjobs: A job portal run focused on mid-to-senior level placements.
  • CRAFTBY PRODUCTS: Engrave is an India-based design collective engaged in the pursuit of creating lifestyle products with fine craftsmanship.
  • Santa Claus Couriers: is an Indian eCommerce platform
  • MobiSwipe Technologies: allows merchants to use Android mobile phones or tablets as Point of Sale.
  • Zepo Technologies: helps small business owners to setup their online shop.

Why One97?

197 was the telephone directory number in New Delhi. Vijay Shekhar Sharma launched a call center selling Astrology services over the phone, which he named as One97. Eighteen years later, One97 Communications is the 4th Fintech unicorn on the global marketplace. An Indian mobile internet company which has earned the liking of international large investors and which acts like an ecosystem.

[1] Included in the Redefining Financial Services newsletter

[2] Source:

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

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.

Pension Tech alive and well in Edinburgh

One of the winning teams from the FCA’s tech sprint

Yesterday I had the privilege of flying to Edinburgh to take part in the UK Financial Conduct Authority’s Pension Tech sprint event. The day was aimed at bringing together creative minds from inside and outside the pension industry in the UK, to try and tackle some of the biggest problems.

I’ve spent a week in London, and it’s been a good chance to get my head around where the local pension industry is right now, and the current dynamics. It’s especially interesting when comparing to where Australia is in its journey, and how the two can possibly learn or guide each other. While there is no doubt Australia is more advanced on a number of structural areas – both on the technology and regulatory front – the attitude and embracing of innovation in the UK, as witnessed at the FCA event was certainly unique and encouraging.

Prior to the trip I was fortunate to be the benefit of a private research report into the local pension sector. Below are some of the highlights that are worth being across, should you be seriously interested in this space.

  • The UK pension sector has seen revenue increase over the last 5 years – revenue is calculated by combining contributions and investment returns
  • Automatic enrolment is driving growth. It is estimated that revenue will grow at a compound annual rate of 3.3% over the next five years from £143.8 billion to reach £168.8 billion in 2022-23
  • 54.4% of the UK’s pension funds are based in London, with Scotland the second most important centre for pension funding, with schemes mainly located in Edinburgh and Glasgow. The region accounts for 12.3% of all pension funds
  • Occupational pension schemes hold 81.4% of all industry assets. Thanks to auto-enrolment they are expected to grow faster than personal pension schemes
  • There are now 41.1 million pension members in the UK, up from 39.2 million in 2016 and is the highest level ever recorded

Engagement with pensions seems to be mired by a lack of compelling reasons or useful and convenient online options. As a result:

  • 38% of employees have never viewed their pension online
  • Of those that have, 20% only do it once a year.
  • 19% of employees check their pension once a month, compared to 88% of people who check into their online banking regularly

Surprisingly, or perhaps not so surprisingly, if you think about the increasing importance of a pension as a source of stable wealth creation for younger people, Generation Z employees that were surveyed, the youngest respondents, were more likely to check their pension online than any other group. Only 3% of this group believe they are saving enough into their pension.

My take-aways from the trip

Auto-enrolment is great – and we know default systems can work – but many of the younger people I spoke to complained about having to enrol in a fund each time they changed jobs. We know multiple accounts are a significant cause of balance erosion. Not linking the plan to the person, but to the employer will create problems, especially for younger workers. For me this is a huge red flag.

One young man I chatted to said one pension fund forced him to withdraw his money, because he had been with the plan less than two years. He of course could have somehow found a way to add it to a new plan, but once money is out of the pension system and in our hands, the temptation to spend today is significant. Money inside a pension fund should not typically be accessibly until retirement age.

The pensions dashboard, which promises a view of all your accounts, online, could be a game changer, but only if every pension fund reports into it. At this point in time, from the discussions I had, it doesn’t appear there is a standardised reporting format or an onus on providers to comply. I could be wrong though. In Australia, the ATO Supermatch and Supertick service that provides this see-through and visibility for super fund members has been a big driver in engagement and consolidation.

Needless to say, there is significant opportunity for innovation in the UK around pensions, and they have a chance to possibly leapfrog or learn from the mistakes other more advanced pension markets, like Australia, have made. I certainly have some strategic thoughts about where the most significant opportunities lie, and it will be interesting to watch this market from down under over the next 12 months!

Daily Fintech Advisers provides strategic consulting to organizations with business and investment interests in Fintech. Jessica Ellerm is a thought leader specializing in Small Business and the Gig Economy and is the CEO and Co-Founder of Zuper, a new superannuation startup in Australia.

Can HODL5 help the SEC reverse the 9 denials of BTC ETFs?


Last week was the launch party of HODL5 at the Swiss SIX exchange. Deborah Fuhr, CEO of ETFGI, a leading independent research and consultancy firm on trends in the global ETF/ETP ecosystem, flew over from London and top management of the Amun Group, was on stage.

We will all be watching how HODL5 trades, as it has the potential to become a retail darling and or an institutional darling. The first day of trading – Friday 23rd of November – saw 27,244shares ($400k) of volume. Flow Traders is the official market maker and a leading liquidity provider of ETPs.

#HODL5 is NOT an ETF – Exchange Traded Fund. It is a kind of ETP – Exchange Traded Product. With over $5 trillion in assets in ETF/ETP markets, we don’t pay attention anymore to details, do we?

Highlights ETFGI reports assets invested in ETFs and ETPs listed globally reached a new high of $5.12 trillion at the end of July 2018

  • Total Assets in ETFs and ETPs listed globally reached a record $5.12 Tn at the end of July
  • Net new assets gathered by ETFs/ETPs listed globally were $41.1 Bn in July
  • 4 ½ years or 54 consecutive months of net inflows into ETFs/ETPs listed globally  

Warning, ETFs are ETPs but not the other way around. I am sure you don’t confuse IPOs with ICOs. No need to highlight the differences between those.

ETPs are not ETFs and the reason you should care is that even a very successful #HODL5 exchange-listed product, won’t budge the SEC to approve any of the Crypto ETFs that have been rejected nine times already.

HODL5 is an exchange-listed product. It is a tracker which derives its value from an underlying basket of cryptocurrencies, the Top 5 by market capitalization, which is actively rebalanced on a monthly basis. These digital assets are held in custody (so HODL5 buyers don’t have to deal with that) and every time HODL5 shares are bought or sold, the underlying basket is adjusted.

The Amun Cryptobasket (HODL5 ticker) tracks five major cryptocurrencies: Bitcoin (BTC), Ripple (XRP), Ethereum (ETH), Bitcoin Cash (BCH), and Litecoin (LTC). Amun AG, is a Swiss startup and Amun Crypto Index is managed by VanEck, the German index unit of investment management firm. VanEck is also involved in the new Bitcoin OTC Index called as MVIS Bitcoin US OTC Spot Index.

“The new index is called the MVIS Bitcoin US OTC Spot Index (MVBTCO) and leverages price inputs from OTC desks at Genesis Trading, Cumberland, and Circle Trade. MVBTCO gives institutions a reputable benchmark to reference, rather than having to individually ping each OTC desk to receive price information before deciding which counterparty to transact with.” Excerpt from my subscription of Anthony Pompliano’s OffTheChain.

HODL5 is the 4th tracker listed on a traditional exchange. The first two are Grayscale Investment’s crypto-indices and Coinshares’ Bitcoin and Ether trackers, both of which rely on different legal structures. HODL5 is the first “Crypto-ETP” fully backed by digital assets. Despite the fact that HODL5 gives broader exposure to the crypto market, since it is a basket, and is fully backed by the underlying assets; I don’t think it will help alleviate the SEC reservations about Bitcoin ETFs.

After nine iterations and public feedback, which has now been closed, the SEC’s refusal to approve any Bitcoin ETF is based on the fact that the crypto market is plagued by fraudulent practices and price manipulation and investor protection is tricky.

ETFs have proven to be great financial structures and have become so ubiquitous that we forget what is happening behind the scenes in order to for these products to work their wonders. Two years ago, I wrote a post around this topic – which was not at all triggered by crypto asset trackers – Are ETFs Trackers that Fintech can turn into Trucks with No Brakes? – in which I go through the Creation/Redemption process that is vital for ETFs.

In summary, for each ETF, one has to think of the Issuer (e.g. Vanguard, Blackrock), the Authorized Participant AP (DTCC reports that there are currently 50 AP firms) and the Market Maker, and the Custodian (e.g. JP Morgan, State Street). The Authorized Participants (APs) are the entities that create and redeem ETF shares and are sometimes the same as market makers; but not always. They are the usual suspects (large broker dealers) and have signed AP agreements with the ETF issuers.

ETPs don’t involve Authorised Participants who are those that make the “magic” Creation/Redemption process of ETFs happen. ETPs are “subordinate” in the liquidity hierarchy to ETFs.

I always remind myself that a derivate structure cannot be more liquid than its underlying asset. Corporate Bond ETFs are the simplest and greatest examples in conventional markets of this. Since the Subprime crisis, corporate bonds have been plagued with illiquidity despite several noteworthy Fintech attempts to solve this fixed income conundrum. Even for equity ETFs, don’t forget that they become illiquid and mispriced in incidents like the surprising Brexit election results. Betterment, the largest standalone robo-advisor, had to suspended trading on Friday of the Brexit result for almost 3 hours[1] because ETFs became misprices

The growth of a basket derivative cannot improve largely the liquidity and mispricing of the underlying assets? Even though, derivatives do add to the maturity of a market (futures, options, structured products) trackers have never actually led a recovery of a distressed market.

The SEC’s concerns will not be alleviated even if HODL5 volumes show strong natural demand. The SEC is watching rigging, insider trading and any kind of 51% attack. A crypto ETF not only needs several market makers to play the roles of the APs but also to convince the SEC that insider trading is less feasible, price manipulation is naturally arbitraged away. Four crypto trackers are not enough to move those needles.

[1] The Betterment/Brexit incident

Source of image

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

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.

Wealth & Brokerage Fintechs stars from the Fintech100 report

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KPMG by now has a classic Fintech ranking publication – The Fintech100 Report which is in its 5th year. This year it is in collaboration with H2 Ventures Australia’s early stage VC (full report here). The reason I looked closer into their Wealth & Brokerage section (14 companies) is not because I agree with their ranking criteria or their categorization criteria. I am more interested with those in the emerging categories and those that have managed to be included for the second at least time. I am interested in outliers and underdogs.


Robinhood has made it in the Ten top list along with several giants in the “Multi” category like Ant Financial, JDcom, Du Xiaoman Financial, and Sofi (categorized in “Lending” which IHMO should have been “multi”).

Half of the wealth & brokerage FinTechs are in the Top 50 and the rest are in the Emerging 50. Asia (China/Japan/Korea) have 5 out of the 14 and Europe 4 out of the 14. The UK has given birth to 3 out of these 4 Fintechs. Only Robinhood is from the US and Wealthsimple in Canada.

From the 14 companies categorized as “Wealth” only two had made the KPMG 100Fintech report last year: Robinhood and OurCrowd from Isreal. Only one company amongst these is blockchain powered, Quoine from Japan, 29th in the list.

Noteworthy facts about the 14 Wealth Fintechs

  • In May, Robinhood (ranked 8th) surpassed its rival E-Trade with 5 million brokerage accounts and $150 billion in transaction volume.
  • 51 Credit Card (ranked 12th) from China as of the end of 2017, had 81 million users across all apps and managed approximately 106.3 million credit cards, helping users complete a total of $15.6 billion in repayment transactions.
  • Wealthsimple (ranked 25th in 2018 and 29th in 2017) out of Canada has over $1Billion In AUM and has recently expanded in the US and the UK.
  • QUOINE (ranked 29th) out of Japan is the first global cryptocurrency exchange to be officially licensed by the Japan Financial Service Authority. It currently processes annual transactions worth over $50 billion. Qryptos and Quoinex, are among the most advanced in the world.
  • OurCrowd (ranked 32nd in 2018 and 25th in 2017) out of Israel is currently backing 150 startups across the globe and have helped 20 startups successfully exit. The company now has offices in 7 countries and earlier this year hit a major milestone surpassing US$1 billion in AUM and an accredited pool of 10,000 investors.
  • Neyber (ranked 35th) from the UK has provided over US$90 million salary-deducted loans in partnership with employers since 2015. Last month Neyber partnered with robo-advisor Smarterly to launch investment portal SmarterCare for business loans which will offer an investment ISA to employees allowing them to invest directly from their salary at no cost to their employer.
  • Folio (ranked 44th) out of Japan – not to be confused with FolioInstituional, the Fintech for advisors from the US – is an online security brokerage service in Japan, specializing in thematic investing. The platform is a DIY for managing assets through a robo-advisor, but also for designing thematic portfolios (70 themes currently.

Emerging Wealth Fintechs

  • Meet Cleo out of the UK, the AI assistant for financial management targeting millennials, with over 600,000 active users across the UK, US & Canada.
  • DAYLI Financial Group is a B2B Korean Fintech that has become a Fintech venture studio involved also in blockchain. DAYLI owns, CoinOne a large Korean crypto exchange, launched the ICON ecosystem out of Zug. They also design proprietary technologic with AI capabilities for financial management.
  • Dreams is a Swedish neo-bank with $100mil AUM that uses behavioral science for their saving, spending and lending services, in addition to their community management UX.
  • Liwwa is out of Jordan and focused on a niche P2P lending sector serving the MENA region. It is a marketplace for fixed-income investors and SMEs. The company uses a lease-to-own model and offers a Sharia-compliant investment opportunity.
  • Tide is a UK mobile first bank for SMEs only. Not sure why it is not in the neobank category. Since launching in 2017, Tide has acquired nearly 40,000 small business customers and surpassed 1B pounds of transactions in March of this year.
  • Tiger Brokers is a Chinese online brokerage that allows Chinese investors at home and abroad, to trade stocks in the U.S, Hong Kong and mainland China market via the stock connect scheme between Hong Kong and mainland stock exchanges. After 3yrs it’s mobile app accumulated trading volume reached $150 billion. Earlier this year the company became an official strategic partner of NASDAQ data to distribute its US stock market data to the Chinese online world.
  • is a Nigerian Fintech with over 5,000 users. Their mobile app allows users to make payments, transfer funds, pay bills and withdraw from ATMs – all using their phone number. Last month alone they processed N234 million across just 17,000 transactions and have seen an average of 78% month-on-month growth in transaction volume and value since January 2018.

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

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.

Build, Invest, Transact: Blockchain4Finance at the CV Competition

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Annual thematic Blockchain competitions are a staple at the CryptoValley Summit. Last year, it was Blockchain for Insurance and this year Blockchain for Finance. The next theme is Blockchain for Real Estate.

CryptoValley Labs are growing not only in size but more importantly in connecting with the broader innovation ecosystem through partnerships. From various tech accelerators, angel networks, and incubators to corporates. They have rebranded to CV VC to include more of their activities: The summit, the competition, the new VC recently launched, the co-working space, the incubator, and ecosystem research.

Blockchain4Finance: the 2nd CV Competition

Native and non-native cryptocurrencies are already being treated as investments. Some argue that they are solely speculative and others (consciously or not) are into the new Boglism[1] that is now called HODLism.

Blockstate, ShufflUp and BlockKeeper are Blockchain4Finance finalists that are focused on Digital assets as investments. Orion Vault is close to this subcategory, as they are effectively opening up the digital art market and creating a new investable asset class.

The European Parliament this summer asserted that cryptocurrencies can be used as an alternative to money. Ambrpay, the winner of the Blockchain4Finance competition at the CV Summit, Wala and Pigzbe; are focused on crypto and payments.

Capexmove, EnigioTime, and MyBit are B2B tech companies providing tools to Build.

The ten finalists in brief

Ambrpay, the winner, came out of F10 accelerator and is solving the problem of subscription and recurring payments with crypto via smart contracts. Ambray is a decentralized payment gateway. Merchants will not have to deal with crypto (if they don’t want to) and can choose their currency of payment.

Capexmove came out of Level39 in 2017 and this year was accepted at the FCA sandbox. The focus is on business lending by using a blockchain-based debt management and automated loan payment service. From digitizing mortgages, to Bills of laiden, and Wills etc.

EnigioTime out of Sweden is aiming to solve parts of the complex problem of data monopolies by using DLT technology. Starting with a Digital Notary service, a solution of archiving and managing digital data in a decentralized and safe way, to proof of ownership and authentication.

Blockcstate is another Swiss company offering a Smart infrastructure stack that covers the financial product lifecycle. They are issuing Exchange Traded Notes that are fully compliant with Swiss and EU regulation. The first product on the Blockstate stack, called CTF15, is a passive ETN for institutional investors with the largest 15 crypto assets.

ShufflUp out of India has a crypto investment focus. They have started with a retail actively managed product that allows people to invest in a strategy that takes advantage of arbitrage opportunities in cryptocurrencies. They are also developing two other strategies.

BlockKeeper out of Germany, is an open source protocol with an app that can be used to track all blockchain based digital assets and transactions. It is an account aggregator dashboard with very strong customization features.

Orion Vault is a Swiss venture launched by ex-Google engineers, utilizing DLT for digital art, starting with photos. They aim to bring trust, transparency and liquidity to this market with a specific focus on Digital Art as a store of value. They use Ether for transacting. Later they aim to grow into the music and IP segments.

MyBit is another Swiss venture that enables developers to build, test and deploy wealth management apps efficiently (3 weeks!). Their SDK is open source. Some of the apps available are, wallets, automating token/stocks option distribution, decentralized bill splitting, Wills for distributing assets etc.

Pigzbe is out of Chiasso, Switzerland and currently at Kickstarter accelerator. It is an app to educate children about money by using a digital currency called Wollo. Parents can provide incentives to their children and they, in turn, earn rewards.

Wala out of Africa, is a zero-fee money app using the Dala digital currency. Operating already in 7 African countries. Listen to my interview with Tricia Martinez, CEO of Wala , No more fee-driven business models for the unbanked .

[1] Boglism is a derivative word that I’ve coined. Bogle is the founder of Vanguard that has built an empire on the premise of passive investing. Listen to my standup comedy at Cryptomountains Rock side event on this topic (from minute 7:30+)

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

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.

Machine Learning for RIA loyalty and customer engagement; by Morgan Stanley



Wealth management and AI is a natural combination. Standalone Fintechs, innovation labs of incumbents and of financial services IT providers, are all somehow working on this (3 types). There is another war of talent going on this area too. All three types of Financial services providers are looking for Data scientists and competing with all other industries (commerce, life sciences, and manufacturing). The market is tagging experienced conventional quants as AI experts. Public companies (mainly banks) are competing for tech branding.

I realized that I have not written about Morgan Stanley as much as Goldman or JP Morgan. Of course, this is not deliberate. I am well aware of the heads on competition between which of course is accentuated from business media. Look at the headlines during this reporting season and you will undoubtedly get a sense of this short-term pressure that public markets and the quarterly cycles, inflict.

What caught my attention this time about Morgan Stanley, was the release of the new version of the so-called “Next Best Action” system to the 16,000 RIA of MS. This system has been around for several years but as a rule-based system suggesting investment options for advisors and their clients. A system that every single bank with a wealth management offering has and that we all as clients wonder which is “best” (as if that is the right question in the first place since none of these rule-based systems could be customized).

Morgan Stanley’s “Next Best Action” is using Machine Learning to support advisors in increasing engagement. The success of this tool will be measured by its effectiveness to enhance the dialogue with the client whether it is through in-person meetings, phone calls or pure digital channels.

Like me, most of us are sick and tired of emails with pdf attachments of several analysts covering Alibaba (that I care about accumulating) and not knowing how to make sense of that. All of us, are realizing that only because of KYC stringent requirements, advisors look to incorporate our life events and goals into an investment proposal. Morgan Stanley’s “Next Best Action” system is using ML to advise clients on what to consider based on life events. For example, a client had a child with a certain illness, the system could recommend the best local hospitals, schools, and financial strategies for dealing with the illness. The system monitors and learns from the reaction of the client to the “Recommendations” and based on the client responses, improves the quality of ideas each day.

In a way, the system thinks for the advisor on a daily basis and presents relevant information and continuously improved recommendations. The advisor has a choice and can send customized emails and texts to clients. The system in a few seconds finds the clients’ asset allocation, tax situation, preferences, and values.

The system is empowering the advisor and this is where the potential of widespread adaptation lies. Never forget that tech adoption is always more of a cultural issue rather than a technical one. In machine learning, the more the system is used the better the next best actions are.

If the community of the 16,000 Morgan Stanley advisors make the “Next Best Action” their ally, then MS will have an edge and a loyal army taking care of their clients.

This is not about disintermediation. ML can build loyalty for the intermediaries servicing clients and at the same time offer continuously better advice to end clients.

This not some version of robo-advisory focused on best on-boarding and low fee execution. It is enhancing a hybrid wealth management offering in a way that offers a cutting-edge (value) to those using Morgan Stanley as a platform provider (i.e. the advisors) and the end clients.

Morgan Stanley has established its tech center in Montreal – Montreal Technology Centre. It has grown to 1200 tech employees focused on innovation in low-latency and electronic trading, cloud engineering, cybersecurity, AI/machine learning, and end-user technologies.

Barron’s reports that it took MS about 6yrs to develop the “Next Best Action”. The main KPI is customer engagement.  The other five variables monitored are: cash flow, brokerage business volume, new advice clients, the level of banking business, and account attrition.

Morgan Stanley draws from million conversations to build its AI

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

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.

Is cryptoeconomics the key to better DD on ‘hard basket’ investments?

The more I think about due diligence, the more flawed I realise it is.

Not because the act of due diligence itself is a bad idea – it’s not – but more that the process and steps that are taken to achieve it are so outdated and inefficient.

As an example, let’s consider a pension fund, who decides to invest in a mid-size businesses in the airport space. They might choose to do this as an experiment, or because they are being encouraged from a political/social perspective to deploy more capital into the business sector, as banks retreat. Rather than hand out the cash to private equity, this one they do direct.

In this instance, there are likely to be a few consistent factors.

  • It is highly likely the pension fund has never invested in the space, therefore has no internal due diligence experience
  • We can imagine the ticket size will be relatively small, compared to traditional investments
  • The cost to upskill the internal investment team, or hire consultants will impact ROI more than traditional listed equity investments, harming the deal optics

If we assume the project was run well, then once due diligence is completed, some very good and useful intellectual capital will now exist inside the fund. However given it’s not every day an airport goes out looking for investment, that intellectual capital is likely to sit unused, gathering dust.

Not terribly productive.

But surely there is another way? I mean, if AirBnB can help us rent out spare rooms, is there something similar that could help a fund ‘rent’ out its knowledge?

And if we take this one step further, who’s to say the investment team needed the knowledge at all in the first place – could they have simply rented it from others to start off with?

Investing in businesses is often deemed a due diligence problem. It’s getting worse, as the rate at which new business models are emerging is increasing, and digital complexity is compounding. The gap between traditional bankers and even fintech lenders, private equity firms and VCs will continue to grow – so long as we keep the same in-house model of due diligence. No man is an island. Or more aptly, no fund.

I think there may be a solution, powered by the crowd and underpinned by cryptoeconomics. There is a powerful collective wisdom in the market, that simply needs to be structured in a way that aligns incentives correctly throughout the entire process.

For those more complex, finicky deals, that just fall into the ‘too hard basket’, there must be a better way forward.

I will be in London from the 26th of November to 29th. If you would like to connect drop me a line on Twitter, or connect with me on Linkedin!

Daily Fintech Advisers provides strategic consulting to organizations with business and investment interests in Fintech. Jessica Ellerm is a thought leader specializing in Small Business and the Gig Economy and is the CEO and Co-Founder of Zuper, a new superannuation startup in Australia.

Welcome Marcus to the rebranded Goldman asset mgt division and to the UK

I can’t believe that it is already 2 years from the launch of Marcus from Goldman. I wrote about it Nov 2016 in Will Goldman become a verb? Watch the Marcus ads!

  • The consumer pays a fixed interest rateon the loan (which includes a profit margin for Goldman). It has no complexities (APRs and all the usual hidden in a credit-card type of arrangement).
  • It is simple and clear. No fees for late payments.
  • It is transparent and simple! No credit-score changes! There is nothing hidden, no optionality (hiding misunderstanding and potentially Goldman outsmarting the user).

My right hand, Gaston Greindl, briefed me last week on Marcus. Goldman has decided to add a dedicated loan specialists workforce who deliver live, personalised support to client, which goes well beyond the flexibility already offered on the platform to choose payment dates and payment options to fit their payroll schedule.

During the first year of Marcus – by the end of 2017 – Marcus had more than $2.3 billion in loans ranging from 12 months to 4 years.

The deposit part of the business – Online Savings Accounts for retail – is FDIC insured, no-fee again, and offering rates higher than the national average. During the first year of Marcus – by the end of 2017 – Marcus had more than $17 billion in deposits.

After extensive research and surveying, Goldman found that customers preferred to speak with human advisers for their borrowing and savings inquiries. So, all of Marcus calls are answered by loan or deposit specialists, improving the customer experience.

What caught my attention this time around, was the Barron’s article about Goldman Sachs moving Marcus into its asset management unit, which will be renamed the consumer and investment management division. Previously, Marcus had been part of Goldman’s investing and lending division.

I always talk about Fintech towards serving your existing customers in ways not possible before. Goldman has been fearless in experimenting with new business models in serving customers and in acquiring new customers. Over the past decade, Goldman has been an investment bank that wasn’t shy to get a banking license after the subprime crisis; has opened its proprietary IP to its Buy side clients (read more in my contributing chapter in the WealthTech Book ); and has acquired 37 Fintechs already making it the No.1 bank in Fintech investments (as of end of 2017)


Marcus was born in a neighbourhood catering to the basic consumer banking retail needs. Goldman now feels that it can and should be integrated in the next generation wealth offering of Goldman in the US. No fees, human advisors, flexibility even for the very basics: online savings and personal loans. This makes sense as product lines are blurring. Clients don’t want to have shop for their financial needs in 5 different places. Integration is the name of the game. Goldman is moving gracefully in that direction.

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While Marcus is being integrating in the US in the wealth offering, at the same time Goldman is launching Marcus retail in the UK. It started just a month ago and up 50,000 customers signed up in less than two weeks. UK residents can deposit from £1 to £250,000 – and withdraw their money as many times as they like, with no fees or charges. Fully digital onboarding plus customer service with a specialist available. Now this can’t be great news neither for the challenger banks nor for the high-street banks. Marcus has a brand name and offers an interest rate of 1.5% (for the first year), which is well above the UK average of 0.6%. The Marcus account rate drops to 1.35% the 2nd year. The closest easy access savings rate is currently 1.41%, offered by Yorkshire Building Society.

Expansion in Germany was also announced in May but there is nothing talked about since.

Marcus in the US has built a loan book that is not even 5% of the $72billion loan book of Goldman. It’s value is not the amount of loans or their margin. It is the new retail customers and moreso it is the learnings that Marcus is offering Goldman Sachs’ so that they can enhance their wealth offerings with consumer best banking services (deposits and loans) which means below cost and with human specialist customer service.

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

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.

Crowd Sourced DD the future to unlisted asset investment explosion

Lately I’ve been thinking a lot about the flow of capital.

You do that when you run a super fund. Especially when you are thinking about the opportunities that exist when you have the ability to be significantly more agile with your investment strategy.

And when you link the use of capital to where it is needed most, to grow the economy, you naturally gravitate towards the small business sector, and the unlisted asset space.

It’s not as easy as flicking a switch though – investing pension fund money is a huge responsibility, and how it is handled is a serious business. Small business and the unlisted space is notoriously risky, and pricing and handling that risk is the dark art of this game.

But it is relatively patient capital, and there are some interesting dynamics that can be explored, based on this principle.

But before you even get to that point, you need to find good businesses, and that is another huge problem that still needs to be solved.

One fintech in that space trying to solve part of that particular problem for wealth managers, like pension funds, is Delio. Based out of Cardiff, Wales, the platform offers ‘infrastructure as a service’ to help manage the entire unlisted asset investment process, from origination to exit.

Wealth managers, private banks, investment banks, family offices and many more can use the platform’s white label digital insfrastructure to upload deals and manage the entire process, end to end. The company is already partnered with UK Business Angels Association, connecting over 15,000 angel investors with high quality deal flow.

DelioConnect also offers platform to platform integration, so clients can originate, syndicate or distribute within the trusted network.

These sorts of platforms are the future of getting capital to small business. They are potentially far more powerful than neobanks in the SME space. And they solve the crowd-sourced due diligence problem. Which until technology is sophisticated enough to manage on its own – for which we are still a way off – is critical to increasing the flow of money into productive, growth investments.

The principles behind how platforms like Delio work should be attractive to smart pension funds and new age wealth managers, looking for efficiencies and an edge in the unlisted space.

Daily Fintech Advisers provides strategic consulting to organizations with business and investment interests in Fintech. Jessica Ellerm is a thought leader specializing in Small Business and the Gig Economy and is the CEO and Co-Founder of Zuper, a new superannuation startup in Australia.