Innovation from the Customers’ Needs Backwards- InsurTech Startups that Found Service Nails that Needed Hammers

In the interest of full disclosure this column was not the
planned piece for this week, but as the original plan became an exercise in
distilling a wonderful volume of great information down into 1200 or so words,
I was thankful for a discussion with an insurance startup I had where this
observation was reiterated by a founder:

“We did not want to be
a hammer looking for a nail.”

That phrase reminded me why the research for a following week was conducted- there are InsurTech companies that have made great efforts in seeing customer or service needs- that exist- and devising innovative ways to deal with the respective issues’ pain points and taking the innovations to market.  So why not wait to publish that theme?  Well, because the industry needs constant reminders that innovation needs a purpose, and that there are startups who are purposing real service needs.  So I took my own advice with the topic- be the finder of the nail, first.

There are many InsurTech startups across the global market,
and one can’t place the spotlight on all. 
The approach for this column is discussion of four companies that in
their own unique way have found an unmet purpose (nail) by research or
accident, have dug into the issue, and produced a solution (hammer) that is
tech-based and somewhat unique.

Empowering Patients for Provider Choice

The unexpected needs of parents Cole Sirucek and Grace Park prompted
the sequence of events that resulted in the patient empowerment firm, docdoc
Now founders as well as parents, Cole and Grace identified a need for
medical patients to have better control over who provides them services than which
was traditional for the profession.  A
medical concern within their family highlighted that the medical profession
(including hospitals) held full sway over who provided service, even if the
provider was not the most apt choice. 
Working to ensure others wouldn’t have options when medical needs arose,
the company worked with a team of medical and tech professionals to develop the
largest, most comprehensive network of medical professionals in Asia, a network
that identifies professionals by characterizing what each does extremely
well.  Need knee surgery?  The network identifies a patient’s best
option, not only for an orthopedist, but a knee expert.  And why would this be important within the
medical services value chain?  Having the
best expert results in more positive outcomes, which results in less unexpected
cost and patient issues post op.  In the
bigger picture, docdoc has created a Knowledge Model that can be leveraged by
other health networks (not ‘here are the providers in your network,” but ‘here
are the best fit providers’).  Options
for the patient, networks for the providers, and less after-effects for the
insurers.  (contact:  Madhurima Dutta

Highest and Best Use of an Entrepreneur’s Time is not Getting Insurance Quotes

There are more than 7.5 million self-employeds in the UK.  That’s a lot of hard-working individuals (and
the number is growing), says Sherpa ‘s
CEO, Chris Kaye
.  And if averages are extended, each of
these folks shop for up to seven insurance policies annually, time spent
chasing what carriers provide, and not necessarily what the self-employeds need.   Chris Kaye (along with Sherpa founders Lachlan Gillies and
Greg McCafferty)
identified the need for these customers to have an insurance service that
covers them for all risks,
can be tailored to their lifestyle and keeps up-to-date as their life changes.  Not rocket science (seems intuitively like
what a good agent could do), unless one can promptly assess each customer and then
provide an AI-driven personal insurance solution. Here’s the firm’s tech
innovation- Sherpa’s “Brain,” a proprietary AI risk assessment
engine, takes data given by members and makes personalized recommendation
for what cover they need.  But- Sherpa is not an insurance plan, it’s a subscription
based membership organization, has a fully-digital process, wherein a Member
can be underwritten and get ‘on risk’ in about seven minutes, and Sherpa
charges a transparent, flat fee that gives members access to a personal
insurance solution that matches their advice. 
Of course the members benefit from cover provided by an affiliated
global insurance company, and have the comfort that as life changes occur their
personal choice for insurance cover remain. 
The firm’s intention is to not only broaden UK available lines from Life
and Critical Illness covers, but to other markets and other personal lines

Digitizing Life Insurance Claim Processes, No, Making Life Policies about the Beneficiaries

Benekiva founder Brent Williams had a
successful financial advisory business in which he continuously found issue- life
insurance settlements were an administrative nightmare for beneficiaries, typically
driving settlement periods to three months from the respective carriers’ notice
of policyholder death.  Brent served as
apologist for the carriers, and also found in addition to delays in benefits,
recipients of policy proceeds were reluctant to take that next step- financial
care of proceeds- because the claim processes were so convoluted.  In collaboration with the current Benekiva
team members and co-founders, Bobbie Shrivastav and Soven Shrivastav, (and after more
than two years’ research) Brent, et al, introduced a digital approach to claim
process that focused on beneficiaries’ needs backwards through the admin of the
policy.  In this case, an industry expert
collaborated with tech and innovation experts, jointly identified a customer
issue, developed universally applicable methods that carriers could implement,
and the end result is prompt payment of policy proceeds.  Sure, unclaimed property laws helped
facilitate the end result, but the digital answer to customer needs is the key.  Benekiva now works with carriers to streamline
what in great part are legacy process wrought with workarounds, and to the
benefit of the industry cut through the Gordian Knot of the paper chase.  Oh, and the firm is helping carriers with
Blockchain options for claim and beneficiary management.

Helping Leverage Customers’ Ownership of Data  

Customers don’t know what they don’t know, and for data collection and use (particularly telematics), that knowledge is lower in great part due to who has taken control of telematics- companies (including insurance carriers.)  If data are the next oil boom, then those who own the wells are not the current beneficiaries of the wells’ output.  That’s the identified service opportunity for RevdApp , best described by its founder, Filipe Pinto, thusly:

“to offer consumers a way to own and manage their
mobility records and to leverage them in a trustworthy marketplace where
service providers bid to offer them services without compromising their
privacy. We eliminate data silos and unleash value.”

What, you say, what has that got to do with InsurTech and insurance service?  Well, picture customer possession of an open ledger of performance within a digital ecosystem, data that can be provided by the customer to support value-based access to services?  Customer owns driving data, can leverage that data for insurance purchases, or perhaps more favorable lease pricing based on positive performance than someone who has a history of more risky behavior.  Telematics have to date been the bailiwick of companies who collect those data, and have been leveraged to the benefit of the companies in terms of user-based insurance (UBI), e.g., Metromile, Progressive (Snapshot), and Allstate (DriveWise), along with most other larger carriers.  RevdApp is developing a digital ecosystem where beyond UBI customers can benefit from the service value of trust- companies may extend favorable terms to those with relative good performance data ledgers, and surcharge those without.  Customers control their data, how it’s applied to services, and how it’s applied to pricing.  At this time the firm’s IoT data ledger service access is applied for exotic auto use, but customer focus can bridge to almost any partnered service.

Are there many solution ‘hammers’ in the InsurTech orb looking for nails?  Sure are.  But there are many customer service ‘nails’ just waiting for observant entrepreneurs that can be open to understanding what solution is being called for.  The four examples noted above have unique starting points, and certainly unique solutions, but each developed from the kernel of an idea-  the need to #innovatefromthecustomerbackwards, and in spotlighting those I could keep my journalistic hammer tucked in my work bag- for another week.

Image source

Patrick Kelahan is a CX, engineering & insurance professional, working with Insurers, Attorneys & Owners. He also serves the insurance and Fintech world as the ‘Insurance Elephant’.

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

Subscribe by email to join the 25,000 other Fintech leaders who read our research daily to stay ahead of the curve. Check out our advisory services (how we pay for this free original research).

To license or not to license – are we asking the question?

In 2017, SME challenger bank OakNorth first came to the attention of Daily Fintech readers in a post from Bernard titled ‘Can challenger banks break the massive bank concentration in the UK?’.

Since then the bank has achieved some significant milestones, many of which have come to light in the press in the past few months. For starters, the bank has lent more than £2.5 billion to UK small businesses since 2015, and trebled its pre-tax profits in the past year, bringing in £33.9m in 2018.

Not bad going, and possibly why Softbank led a £440 million round into the fintech, which was announced back in February.

The company isn’t shy about expansion – who would be if you were making bank like they are. Oaknorth now plans to broaden its lending tentacles into the US. But rather than compete head to head with US banks, it wants to deploy its origination software, powered by its subsidiary OakNorth AI.

It’s very clever, and begs the question many of us in various corners of the world are thinking when it comes to challenger banking.

Is a license really worth it?

As more and more licensees for hire crop up to service the challenger banking space, and licensing is disconnected from platforms and technology, the value in owning the entire stack does need to be questioned. It’s counter to the way many investors and founders think – the ‘own it all’ mentality is strong and pervasive. In many instances it has been proven to work well and be a true value creator. But times are changing, and founders should continuously ask ‘why’ they are pursuing a certain product journey. In some instances, the vanity of being ‘full stack’ can be hard to shake.

In Australia, Up, a consumer facing digital banking brand born out of Ferocia, a financial software development business, has taken the front-end route. The interface leverages an existing banking license from Bendigo and Adelaide bank.

From a marketing and customer acquisition perspective, not having a license doesn’t seem to be preventing the company from acquiring customers. Many neobanks are hot on their footsteps, but most of them have had the added hurdle of overcoming licensing. Will it be worth it compared to time to market?

That, of course, is the multimillion dollar question many investors will be wondering.

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.

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

Subscribe by email to join the 25,000 other Fintech leaders who read our research daily to stay ahead of the curve. Check out our advisory services (how we pay for this free original research).

Robo-advisory: Women, Freemium, and Subscriptions


Spring has brought lots of action even in the commoditized robo-advisory segment.

Three picks capture the flavor of the day in US robo-advisory.

  • Ellevest, the B2C standalone robo focused on women, raised $33million from a select group of investors[1].
  • Betterment, the hybrid standalone robo, drops account minimum for customized portfolios for retail clients too.
  • Charles Schwab adds a subscription-based financial planning offering (Not one size fits all).

Ellevest is in its 4th year and remains focused on empowering women. The offering includes a significant educational and coaching service for business women. What became clear from this recent funding round, is that the only viable part of the business is actually the HNW part. Ellevest Private Wealth Management is the premium service targeting HNW females and most of the capital raised will go into growing this business. This makes me believe that Ellevest doesn’t actually belong to the robo-advisory category but to the `Financial Wellness for Women in Business` category.

Betterment, on the other hand, has gone hybrid in two ways. Both in terms of offering a 100% DIY asset allocation service and with an advisor lite possibility; and having a B2C business parallel to a B2B business for financial advisors and for corporates (e.g. Uber). Financial advisors using the Betterment platform didn’t have an account minimum anyway. Now Betterment drops the 100k account minimum for individuals that want a customized portfolio allocation through the Betterment Flexible Portfolios offering. Their Premium service for 40bps now has no minimum. Betterment`s move comes in response to demand from existing retail clients to be able to customize their exposure in certain asset classes. The business decision of offering this flexibility at no cost, confirms that Customer is King and will remain so forever and ever.

Charles Schwab subscription service rhymes with Apple`s news service. For $30 a month, Schwab offers a financial planning package. Schwab Intelligent Portfolios Premium (rebranded name) is offered at $30 a month after a one-time $300 fee with a $25k minimum. Asset allocation is from a universe of 50+ ETFs, including a financial plan with a customized roadmap and unlimited one-to-one guidance from a CFP professional. Regulated financial-investment advice at $630 for the 1st year and $360 annually thereafter.

Schwab Intelligent Advisory (the original robo name) was at 28bps per annum 0.28% of assets.

Think of the 300,000 Schwab Intelligent Advisory accounts ($37 billion). Some will remain in the free, no-advisory offering. But a significant part will switch over to Schwab Intelligent Portfolios Premium and get advice. Evidently, any account with enough assets ($125k seems to be the magic number) will switch over.

What will this move do to the rest of the large players? When will Vanguard follow suit?

This is another discount brokerage moment in the investment industry. This is the subscription financial advice retail moment. Michael Kitces, the cofounder of XY planning Network XYPN, has deployed a successful subscription-based business for financial advisors, thus proving that it works at the B2B level. Now Schwab is pushing for a B2C implementation.

[1] Rethink Impact, PSP Growth, the Melinda Gates’s investment fund Pivotal Ventures; PayPal; Wynn Resorts co-founder Elaine Wynn; former Google and Alphabet chairman Eric Schmidt; former top aide to President Obama, Valerie Jarrett; and Mastercard. Source.

Sources: Schwab on Bloomberg; Betterment on FP; Schwab on ThinkAdvisor.

Book one hour with Efi – Ask me anything (AMA) for 0.10BTC –

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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Blockchain Front Page: Is a 51% attack a real issue?

Is a 51% attack a real issue?

Last week our theme was “Can a Cryptocurrency replace the US Dollar to Become the World’s Reserve Currency?.

Our theme for this week is “Is a 51% attack a real issue?”

In 2018, cryptocurrency hackers earned $20M with 51% attacks, The report by Group-IB, showed that in 5 incidents last year, hackers walked away with $19.5 million worth of cryptocurrencies.

Hackers attacked Verge twice stealing more that $1 million, $550,000 worth of ZEN, Litecoin Cash was hit, and the biggest heist was Bitcoin Gold, when the attacker sent 388,000 BTG ($18 million) to their personal wallet.

This February,  Coinbase discovered that Ethereum Classic was attacked. Hackers accessing Coinbase’s network, rewrote portions of the platform’s transaction history enabling users to spend the same cryptocurrency more than once. The Ethereum Classic blockchain was rewritten by someone that controlled at least 51%. Over $1 million was lost as a result of this hack. On, Ethereum Classic is the 20th largest cryptocurrency, with a market cap of $526 million.

In “Once hailed as unhackable, blockchains are now getting hacked,” on MIT Technology Review, Mike Orcutt makes the argument that blockchains are no longer safe and that we’ll see more of these attacks in the future.

While these hacks took place on smaller blockchains, they are a very real. They show us that a 51-percent attacks are not just a theoretical concern anymore. And they are not the only way to hack a blockchain.

What is a 51-percent attack? It’s when an attacker controls at least 51% of the total mining power of Proof-of-Work blockchain. To make a simple analogy, you can think of it as owing 51% of a company’s shares, you are the majority owner. The same is true with blockchains.

Most blockchains like Bitcoin, Ethereum, use the Proof of Work protocol to verify and add a new blocks of transactions to the blockchain. To add a new block, a complex cryptographic math puzzle must be solved. The miner, that solves it first, adds the new block to the blockchain and receives a cryptocurrency reward for the work they performed. This process is called mining. If someone was able to get control over a majority of the computing power on a given blockchain, they would be able to impose their will on the rest of the network, including making changes to the ledger.

These attacks have become quite tempting, especially with services like NiceHash, that can give you instantly the mining capacity you need to take over a coin’s blockchain, like Ethereum Classic.

Crypto51 published research on how much you would need to spend, in order to take over the top cryptocurrencies. You can see the full list on Crypto51 on their website.

Screen Shot 2019-04-01 at 1.26.25 AM.png

In the case of Ethereum Classic hack in February, the cost is $5,437 an hour, $130,488 per day. In a 3 day period the attacker made $1.1 million. I’d say that it was a very nifty profit, when you compare it to the $391,464 cost.

Proof of Work blockchains are susceptible to 51-percent attacks, but not all blockchains are created equal. For smaller networks, 51-percent attacks present a real threat. But for Bitcoin and Ethereum, the risk is pretty low. The computing power and coordination that is needed to take over 51% of the hash power for large blockchains, would be enormous, making the chances of a successful attack very unlikely.

While Proof of Work is the most widely used consensus method, there are plenty of solutions that are trying to tackle the problem: Merged Mining, Penalties for Delayed Blocks, Notary Nodes, Permissioned Blockchains, Proof of Stake.

Blockchain technology is very simple and extremely secure. Is it fully secure? No. But what technology is. Can blockchain security be improved? Yes, it can. As cryptocurrencies and blockchain become part of our lives, hacks will become more frequent , challenging the legitimacy of the industry and the technology. The only thing we can expect is that the top cryptocurrencies, implement solutions to minimize the risk from potential attacks.

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Ilias Louis Hatzis is the Founder & CEO at Mercato Blockchain Corporation AG. He writes the Blockchain Weekly Front Page each Monday.

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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The Path To Mainstream Adoption Of Bitcoin Is Not Through Legacy Finance Institutions, It Is Through The Excluded

mainstream (1)

TLDR. The conventional wisdom is that Legacy Finance Institutions will lead the way to mainstream adoption of Bitcoin.  This post outlines an alternative thesis that the route to mainstream adoption of Bitcoin is by building a second leg as a currency for everyday spending among those excluded from financial services today, starting in countries with a Fiat currency crisis such as Venezuela

This is an update to this chapter of The Blockchain Economy digital book.

This post describes:

  • The conventional wisdom trajectory
  • Bitcoin’s second leg will be built from the wreckage of exotic Fiat currencies
  • When Bitcoin gets traction in developed markets, it will be via those who feel excluded by Legacy Finance
  • Traders are from Venus, Investors are from Mars and Martians need to study Venezuela
  • Profit comes from serving the excluded said Captain Obvious
  • Investors who understand Bitcoin users will do best
  • Serving the Bottom of the Pyramid is a lot easier when the marginal cost is zero and payment cost is close to zero
  • Blue and Red Ocean strategies of Legacy Finance Institutions in the Blockchain Economy
  • Watch what is happening in the Exotic Fiat Currency Countries.

The conventional wisdom trajectory 

The conventional wisdom trajectory has 3 phases – from past, through present, to future.

  • Phase 1. The past (still with us). Cypherpunks, Anarchists & Libertarians. This created the early traction that got Bitcoin from an obscure message board to the possibility of game-changing innovation.
  • Phase 2. The present. Speculators. This classic speculative bubble of late 2017 (followed by the bear market of 2018 and early 2019) brought in new players and new capital (and excited the Legacy Finance Institutions). 
  • Phase 3. The future. Institutions & Governments. This is when Bitcoin is supposed to grow up and put on a suit, to make it make it easy for the masses to use services offered by Legacy Finance. Conventional wisdom sees this like a pivot from Phases 1 and 2. In this pivot scenario, the Cyperpunks, Anarchists & Libertarians are thrown into the dustbin of history and the speculators are told to grow up and trust in the products sold by Legacy Finance. 

This chapter argues a contrarian thesis that bitcoin’s path to mainstream is not a pivot but rather a continuation of Phases 1 & 2. The conventional wisdom scenario plays well at Davos (World Economic Forum), the gathering place of those with wealth and power (Big Tech & Big Bank). This post shows why that conventional wisdom is wrong.

Bitcoin needs a second leg to be stable. Bitcoin’s first leg – store of value – will eventually become unstable if it has to stand on its own. Bitcoin needs a second leg – a currency for everyday spending. That second leg will not be built by Institutions or Speculators, it will be built by entrepreneurs (maybe with Institutional partners) who know how to serve the needs of those who have been excluded by Legacy Finance (who need Bitcoin as a currency for everyday use).

Bitcoin’s second leg will be built from the wreckage of Exotic Fiat currencies 

We can witness this happening today in countries such as Venezuela that are suffering from hyperinflation (as described in this post). This has reached Act 4 in the Creative Destruction 7 Act Play This is “when the going gets weird, the weird turn pro” (quote from Hunter S Thompson, who was certainly weird but also professional enough to write best-selling books).

It is likely that the Bitcoin habit, which we can witness in Venezuela, will spread to countries that are close, physically and/or culturally, to countries with hyperinflation. These neighbours will witness the horror of hyperinflation and see how practical Bitcoin is as an alternative. For example, Argentina and Peru, while not yet suffering hyperinflation, may follow the example of Venezuela. This has reached Act 3 in the Creative Destruction 7 Act Play. Act 3 is Denial. A famous example of the Denial Act 3 was subprime mortgages that blew up in the Global Financial Crisis in 2008. For a long time the surface numbers looked good until a few nonconformists looked below the surface (watch The Big Short movie for an entertaining take on that story). A more recent example in Finance was the Wells Fargo fake accounts scandal (which was going on for a long time before it was uncovered).

If Bitcoin is limited to countries with hyperinflation, those of us working in developed markets with strong Fiat currencies can dismiss it as a phenomenon (like wheelbarrows full of cash) that have nothing to do with “normal” countries.  The next bull market needs a use case story that more people can relate to.

If  Bitcoin spreads from Venezuela to other countries such as Argentina and Peru, the markets will have a story to relate to. There are 180 currencies listed as legal tender, of which only 8 are considered as “major” by the FX market. Contagion spreads rapidly.

When we see that contagion spread to developed markets with Fiat currencies that are perceived to be strong today, then we will have reached mainstream adoption. Again we need to look at edge cases aka those who feel excluded by Legacy Finance.

When Bitcoin gets traction in developed markets, it will be via those who feel excluded by Legacy Finance

This is Act 2 in the Creative Destruction 7 Act play. Act 2 is when we see Straws in the Wind. It takes guts to see a few straws blowing about and bet that this is caused by an invisible wind. The signs of change are far from obvious but “the answer my friend is blowing in the wind”.

The reason change comes from the excluded is obvious. Their needs are not being met by Legacy Finance. We see that happening today in Venezuela. When the issue is feeding your family, the clunky UI and risks of Bitcoin do not seem a big deal. Using Bitcoin gets onto your Must Do Today action list.

Are there markets like this in the developed world? Are there enough people excluded by Legacy Finance in the developed world to make sure that the Bitcoin contagion spreads to the developed world? I believe the answer is yes and that we can see this answer blowing in the wind of three niche markets in developed world that have excluded by Legacy Finance:


  • Financially excluded because they are poor. The Western underbanked, excluded from or ripped off by Legacy Finance market providers will see the appeal of Bitcoin. When told by Legacy Finance that “Bitcoin is bad for you” they may take the view that if Legacy Finance does not like it, then it must be good.


  • Excluded by Banks because they are Small Business. Daily Fintech has dedicated one day a week (Wednesday) to Small Business finance because Small Business owners are a good example of the Excluded – banks did not want them because they were neither Corporate or Consumer (the two models that Banks understood). This is why Square is such a big player in Bitcoin. Small Business owners who want to avoid problems with credit card networks (see here for more) will be motivated to accept Bitcoin and spend in Bitcoin.

Traders are from Venus, Investors are from Mars and Martians need to study Venezuela

The difference between traders and investors looks small on the surface – it is simply the length of the holding period. In reality, the approach is fundamentally and completely different.

Bitcoin traders look at price charts. Bitcoin investors look at how people are using Bitcoin.

Given that real Bitcoin usage today is quite limited, Bitcoin investors have historically looked at what products are being built today that will enable new forms of usage in the future. To give an example from an earlier era, an investor would look at an early version of Hotmail and extrapolate that mass use of email via browsers was possible.

The hope story on Bitcoin is getting a bit long in the tooth. The market needs to see real usage traction, not just products with potential use. For that we need to look outside the developed world.

So Bitcoin investors need to understand how Bitcoin could serve the Excluded

Traders need a story. Bitcoin as a one-legged stool (digital gold store of value) is not enough to power the next bull market. To reach the mainstream investor, Legacy Finance Institutions will need more than the how (things like Custody), they will also need a usage story. They will need to show why Bitcoin will change the world and how that is already happening.

Traders will still trade and their liquidity is essential. Some of the traders who got into Bitcoin during the last bull/bear cycle will get back into active trading during the next bull/bear cycle. Many will do this via Institutions, others will use startups.

Profit comes from serving the excluded said Captain Obvious

Question: which market looks more attractive?

  • A. Markets where customers have many options. You will need to persuade them to switch from their current way of doing things and the advantages you offer are not really life-changing.


  • B. Markets where customers have few, if any, good options. If you can deliver them a solution it will be  life-changing for them and they will take whatever steps are needed to get your solution.

You probably answered B, yet most solutions target A. A big reason is that most developers today work in developed markets (where Customer A is located) and we find it easy to build solutions for people who are like us.

Investors who understand Bitcoin users will do best

That is another Captain Obvious statement and yet most investors work in developed markets and feel comfortable investing in solutions for those markets.

We can see this in some early Bitcoin entrepreneurs such as Wences Casares of Xapo who comes from Argentina.

Serving the Bottom of the Pyramid is a lot easier when the marginal cost is zero and payment cost is close to zero

The Bottom of the Pyramid (BOP) is a socio-economic concept that allows us to group that vast segment  – in excess of about four billion  – of the world’s poorest citizens constituting an invisible and unserved market blocked by challenging barriers that prevent them from realising their human potential for their own benefit, those of their families, and that of society’s at large.

Technically, a member of the BOP is part of the largest but poorest groups of the world’s population, who live with less than $2.50 a day and are excluded from the modernity of our globalised civilised societies, including consumption and choice as well as access to organised financial services. Some estimates based on the broadest segment of the BOP put its demand as consumers at about $5 trillion in Purchasing Power Parity terms, making it a desirable objective for creative and leading visionary businesses throughout the world. One of the undeniable successes in this process is the explosion of the Microfinance industry witnessed in many parts of the world.

The first person to really focus on BOP was C.K. Prahalad (1941-2010), who in the process has inspired influential leaders and countless ordinary citizens sharing his vision, to joint efforts for the unleashing of their creative and productive potential as part of an inclusive capitalist system, free of paternalism toward the poor. Source

The iconic use case was Unilever with their single serving soap packages in India. That took real innovation.

Serving the Bottom of the Pyramid is a lot easier when the marginal cost is zero, for obvious reasons. You can deliver at the price point needed in the market without having a margin problem with cost of goods sold .

The advent of fast, low cost micropayments via offchain technology such Lightning Network also make it much easier to profitably serve the Bottom of the Pyramid. Credit Cards obviously don’t work in that market and physical cash has hidden costs (theft, time, handling etc).

Blue and Red Ocean strategies of Legacy Finance Institutions in the Blockchain Economy

The Cypherpunks, Anarchists & Libertarians who kick-started the Bitcoin Blockchain engine tend to relegate Legacy Finance Institutions to the dustbin of history. Clearly Bitcoin is a big bang disruption for Legacy Finance and many will suffer a Blockbuster/Borders/HMV/Kodak type fate.

We see two fundamental strategies for dealing with this kind of big bang disruption:


  • Red ocean. Beat your current Legacy Finance competitors, even at risk of disrupting your current business, by aggressively offering Bitcoin related services 

Institutions need help from a range of service providers such as strategy to code to legal. Serving the Institutions will always be a profitable business.

Watch what is happening in the Exotic Fiat Currency Countries

The bridge from hyperinflation “broken Fiat” Currency Countries to developed markets will be via “exotic Fiat” Currency Countries.

The 8 most traded currencies are

U.S. Dollar (USD)

European Euro (EUR)

Japanese Yen (JPY)

British Pound (GBP)

Swiss Franc (CHF)

Canadian Dollar (CAD)

Australian Dollar (AUD)

South African Rand (ZAR)

There are 180 current currencies across the world, as recognized by the United Nations. That is a lot of what FX traders call the “exotic” currencies.

Watch the currencies/countries that are physically and or culturally close to “broken Fiat” currency countries. For example, If Bitcoin spreads from Venezuela to Argentina and Peru, the markets will have a story to relate to and other countries may copy this way to avoid the horrors of hyperinflation.

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Bernard Lunn is a Fintech deal-maker, investor, entrepreneur and advisor. He is the author of The Blockchain Economy and CEO of Daily Fintech.

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The battle of Fintech is over, the battle of TechFin is about to begin

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Jack Ma famously called Alibaba and their tech giant peer group – TechFins, declaring their intention to sneak into financial services. Banks were too focused on their battle with Fintechs then, that they perhaps were blindsided by the rise of TechFins. The first quarter of 2019 has been eventful, with major headlines from big tech firms like Facebook, Apple and Alipay.

Over the past few years, since the Fintech boom has been afoot, talks of Fintechs vs Banks have been rife. But only when China saw leap frog moments in its payments landscape, via, Alipay and WeChat, did the industry (both banks and Fintechs) pay any attention to the big tech giants. I have always said that the Tech giants had two big advantages.

They have what the banks don’t have – agility in innovation, and they have what the Fintechs don’t have – Massive Customer base (and their data).

The challenge in exploding into Financial Services for the tech giants was that, it was non-core to them. However, the evolution of Fintech use cases, and the seamless integration of these applications into consumer’s routine, have made them almost invisible. So, all the tech giants had to do was pick use cases where they could be mostly invisible – payments was a low hanging fruit.

Two weeks ago Barclays and Alipay announced their partnership. Alipay will now be available with several merchants across the UK, and allow for seamless payment experience for half a million Chinese residents, tourists and students in the UK.

Barclaycard, which processes nearly half of the UK’s credit and debit card transactions, today announced a new agreement with Alipay, the world’s leading payment and lifestyle platform, which will allow retailers to accept Alipay transactions in stores across the UK

The partnership is for UK retailers to accept Alipay payments without replacing their existing point-of-sale system. Alipay users on the other hand will enjoy the benefits of the seamless journey that they have at home.

The other key event of the last couple of weeks has been THE APPLE CARD. If you haven’t yet heard, good for you and I suggest you google at your peril. But atleast for me, the social media reaction was a bit too overwhelming. My take on the announcement –


  • Secure card numbers – many of us have faced credit card frauds, but most of us wouldn’t have thought of getting rid of the card details from the face of the card.
  • No fees – Really? Is there a catch? I still can’t believe that. Especially on international transactions.
  • User experience in staying on top of expenses, card balance, interest etc.,
  • Data privacy – Apple have declared that they would stay away from customer data


  • Cashback of 2% is underwhelming. Many providers, including Amazon offer better benefits.


  • Plastic cards? Let’s all go back to the cave. For how long are we going to hang on to plastic credit cards? That was perhaps the most disappointing thing about the launch for me. And the worst part is, the card only supports chip and pin and won’t support contactless.
  • No Android compatibility – of course, they have always been a closed ecosystem.

Irrespective of the disappointing aspects of the card, I believe, Apple has rocked the boat, and banks are feeling the heat. They are cash rich, know how to create digital+physical products, have a brand following, and can disrupt payments in a bigger way, if they chose to.

With IBM entering the remittance market through World Wire, Facebook testing out Whatsapp payments, Alipay entering the UK market in a big way, and Apple’s recent announcement, the Penny should have Dropped for the banks. And the realization should hit them that Fintechs were more of a distraction, the real battle has just begun.

Arunkumar Krishnakumar is a Venture Capital investor at Green Shores Capital focusing on Inclusion and a podcast host.

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

Subscribe by email to join the 25,000 other Fintech leaders who read our research daily to stay ahead of the curve. Check out our advisory services (how we pay for this free original research).

Climate Change Concerns Require a New Look at Property Insurance on a Macro Scale

Climate change is no longer just the concern of flood-exposed coastal residents, or those who inhabit potential wildfire areas; there is growing indication from insurance companies that the cost of events related to climate change will spill over in significant ways to property insurance in total.  Global insurer Munich Re’s Chief Climatologist, Ernst Rauch, recently discussed the issue with The Guardian, “Climate change could make insurance too expensive for ordinary people”, indicating that the rising financial effect of catastrophes could spill over into rates being taken across the  spectrum of property insurance policies. 

“If the risk from wildfires, flooding, storms or hail is increasing then the only sustainable option we have is to adjust our risk prices accordingly. In the long run it might become a social issue,” he said after Munich Re published a report into climate change’s impact on wildfires. “Affordability is so critical because some people on low and average incomes in some regions will no longer be able to buy insurance.”

Low and average incomes?  If one agrees that Munich Re’s outlook is correct it might be said that affordability will be an issue for ALL incomes in some regions if no carrier makes insurance available due to excessive risk;  if there is no property insurance available (or it’s not purchased by customers- interesting perspective on earthquake insurance here) this problem spills over to financial markets in terms of loss of mortgagee casualty protection for real property loans.  Take the spillway further, and riskier areas become less viable for economic activity in the big picture.  Consider even further- reduction in occupied properties, reduction in property tax revenues, public revenue… now there’s trouble.

What’s to do?  Wring hands, rend garments, wail and gnash teeth?  How about some real change of thought for property insurance?  Let’s look at coverage, coverage amounts, indemnity, parametric options, and connected properties (IoT).

If property insurance policies covered just fires or probable maximum loss (PML) perils, insurance would be significantly less costly.   Correspondingly, if those PML perils had a ‘floor’ severity amount beneath which the customer held responsibility (not unlike windstorm or earthquake perils in the US), insurance would be less costly.  If policy coverage for frequent claims, e.g., water losses, was capped at a known amount, insurance would be less costly.  Continuing, if frequent insurance claims were payable essentially on demand (no claim inspection needed), insurance would be less costly.  Even further- if insurance products were more available with less cost of acquisition (customer or company cost), premium volume would rise, making insurance less costly.  Customers have become accustomed to the granular indemnity response that today’s policies provide, and that may need to change.

So what’s the point?  Again, the industry is at a potential tipping point- natural and manmade losses are growing faster than expected ($500 billion in 2017-18 alone, per insurer Swiss Re , estimated $200 Bn insured), and the purpose of this article is not to focus on what is a given- increasing cost of insurance due to the expectation that the pattern continues.  Of course absent the presence of insurance to indemnify at a time of loss, what matters the cost?

What if:

  • Connected devices became ubiquitous, not just as features in devices, but as data collectors?  Simple, inexpensive moisture sensors for example that not only serve to turn off water supply, but also as aggregators of damage information.   A leak occurs, triggers a parametric cover response from the property owner’s policy.  Sensors that recognize material obsolescence, prompting maintenance by the property owner.  Roof sensing that anticipates not only wear, but damage due to sudden perils.
  • Property insurance policies became hybrid indemnity/parametric risk management vehicles, with higher frequency, lower severity claims paid upon occurrence, at a predetermined coverage limit with no need (other than fraud vetting) for expensive claim investigation?
  • Mortgage holders held part of the risk for major losses in areas where climate risk perils, e.g., coastal flooding, wildfire, etc., are known elevated risks?  Mortgagees do this now to an extent as those property owners without adequate risk cover will walk away, and the mortgagees are left with the property.  Change the mortgage payment risk from an upfront portfolio percentage to anticipate walkways, to a loan ‘premium’ to help cover the elevated insurance policy premiums.
  • Governments held parametric disaster response insurance policies that triggered when events occurred, jump-starting financial response to community-wide disasters?
  • There was an acceptance that pollution is contributing to climate change, and pollution tax paid by firms was used to fund disaster recovery efforts?

Just some thoughts, but holding key ideas- broadening responsibility for risk management beyond just the individual property owner and changing the expectation of property insurance from a full indemnity model to one that recognizes a loss but doesn’t hold one party to the contract (the insurer) solely responsible for determining the amount of loss and working to identify every detail of the financial loss.

If property insurance is to remain viable from an industry basis it seems the product needs to be considered from a loss/disaster perspective backwards, from a who is at risk from a ‘no recovery’ aspect, and then from a who benefits from helping fund risk management efforts.  There are plenty of data available to the industry to calculate the probable cost of individual high-frequency claims, and by extension the premiums needed for a parametric basis for settling that nature of claims.  Individual investigation of smaller claims is simply not a highest and best use of expensive human capital, and if AI is to be applied to those claims, why not carry the knowledge to preemptive claim resolution (loss is detected, payment is made?)  Sure, the policy forms that exist today would need rework (as would customer expectations), but in the face of pricing risk sharing beyond many property owners isn’t radical thinking needed?

Wildfire losses like those experienced in California or Greece exposed the nature of who and what is insured, the haves and have nots, and also the difficulty in rebuilding (or not) areas that have had regional destruction ( see Paradise California’s wildfire recovery challenges.)  Significant wind and flooding damage in Hong Kong, Japan, southeast US, and southern Africa produce ripples that extend materially well beyond those regions.  Confidence that risk is being apportioned and shared will serve to stabilize capital that is being made available as a backstop for significant risk (catastrophe bonds, insurance linked securities, and traditional reinsurance- with an interesting ECIS regional perspective Seeking Alpha view here ).

Climate change effects highlight the big responses to big events, but whether there’s a clear bread crumb trail between change in climate and change in property insurance the anticipated path is clear- the cost of insurance is rising along with global tides.  And the effect that all benefit from a viable, affordable insurance industry is also clear- risk management is a keystone factor that if absent ripples through economies on a macro scale, and as such needs a unique macro approach to ensure we are all not insurance poor.

Image source

Patrick Kelahan is a CX, engineering & insurance professional, working with Insurers, Attorneys & Owners. He also serves the insurance and Fintech world as the ‘Insurance Elephant’.

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

Subscribe by email to join the 25,000 other Fintech leaders who read our research daily to stay ahead of the curve. Check out our advisory services (how we pay for this free original research).

What makes a fintech unicorn?

It’s not every day you hear about a unicorn prancing about in your neck of the woods. This week in Australia, a new one horned beast was spotted, with B2B cross border payments startup Airwallex crowned (or should I say horned) with the enviable title of  fastest ever unicorn status downunder.

There are now 326 Unicorns in the world, according to CB insights, or I guess 327 now, given Airwallex’s announcement.

Fintech Unicorns are rarer than some others, occupying 4th place by category:

Category Count
Internet Software Services 82
Other 45
e-commerce 44
Fintech 32
Healthcare 30
On Demand 23
hardware 14
Social 11
Data Analytics 11
Auto Tech 11
Media 8
Travel Tech 7
Cybersecurity 7
dataanalytics 1

The US dominates as the home country for Unicorns, followed by China, the UK and India, and then a very long tail.

Country Count
United States 156
China 91
United Kingdom 17
India 13
Germany 8
South Korea 6
Indonesia 4
France 3
Hong Kong 3
Israel 3
Switzerland 3
Brazil 2
Colombia 2
South Africa 2
Australia 1
Canada 1
Estonia 1
Japan 1
Luxembourg 1
Malta 1
Nigeria 1
Philippines 1
Portugal 1
Singapore 1
Spain 1
Sweden 1
United Arab Emirates 1

You’re most likely to be a Unicorn if your cap table contains SoftBank Group, Tencent Holdings, Sequoia Capital China and Tiger Global Management. I cut funds with 1 or 2 Unicorns from the list.

Funder Count
SoftBank Group 29
Tencent Holdings 29
Sequoia Capital China 21
 Tiger Global Management 20
 Fidelity Investments 19
 Andreessen Horowitz 18
 DST Global 18
 Goldman Sachs 16
 Kleiner Perkins Caufield & Byers 16
 Sequoia Capital 16
 Institutional Venture Partners 15
Tiger Global Management 15
 GGV Capital 14
 Google Ventures 14
 Temasek Holdings 14
Sequoia Capital 14
 Hillhouse Capital Management 13
 Index Ventures 13
 Baillie Gifford & Co. 12
 Kohlberg Kravis Roberts & Co. 12
 Sequoia Capital China 12
 Tencent Holdings 12
 Wellington Management 12
GIC 12
Goldman Sachs 12
 Accel 11
 Coatue Management 11
 Founders Fund 11
 ICONIQ Capital 11
 Khosla Ventures 11
 T. Rowe Price 11
Accel 11
 capitalG 10
 General Atlantic 10
Alibaba Group 10
 New Enterprise Associates 9
 Qiming Venture Partners 9
 Alibaba Group 8
 Bessemer Venture Partners 8
 J.P. Morgan Chase & Co. 8
 Shunwei Capital Partners 8
 Spark Capital 8
 Y Combinator 8
Andreessen Horowitz 8
General Atlantic 8
New Enterprise Associates 8
 Battery Ventures 7
 General Catalyst 7
 IDG Capital 7
 Insight Venture Partners 7
 Morningside Venture Capital 7
IDG Capital 7
 Ant Financial Services Group 6
 CMC Capital Partners 6
 Data Collective 6
 Matrix Partners China 6
 Sequoia Capital India 6
 Yunfeng Capital 6
Qiming Venture Partners 6
Warburg Pincus 6
 CDH Investments 5
 Greylock Partners 5
 Lightspeed Venture Partners 5
 Redpoint Ventures 5
 Ribbit Capital 5
 Silver Lake Partners 5
 Thrive Capital 5
 Warburg Pincus 5
Baillie Gifford & Co. 5
T. Rowe Price 5
Temasek Holdings 5
 Daimler 4
 DCM Ventures 4
 Greenoaks Capital Management 4 4
 JOY Capital 4
 Legend Capital 4
 Polaris Partners 4
 Primavera Capital Group 4
 Qualcomm Ventures 4
 SIG Asia Investments 4
 SoftBank Group 4
 Source Code Capital 4
 TPG Growth 4
 Venrock 4
 ZhenFund 4
Founders Fund 4
Lightspeed Venture Partners 4
 Altos Ventures 3
 Benchmark 3
 BlackRock 3
 Capital Today 3
 CCB International 3
 China International Capital Corporation 3
 China Renaissance 3
 DFJ 3
 FirstMark Capital 3
 Foundry Group 3
 Foxconn Technology Company 3
 Gaorong Capital 3
 Genesis Capital 3
 GIC 3
 H Capital 3
 Intel Capital 3
 K2VC 3
 Matrix Partners 3
 Ping An Insurance 3
 Revolution 3
 RRE Ventures 3
 Shenzhen Capital Group 3
 Silicon Valley Bank 3
 True Ventures 3
 Valor Equity Partners 3
Access Industries 3
GGV Capital 3
Insight Venture Partners 3
J.P. Morgan Chase & Co. 3
Kleiner Perkins Caufield & Byers 3
Silver Lake Partners 3

But if you’re chasing Fintech Unicorn Status, while Tencent and Sequoia Capital China are still a good name for the cap table, landing money from Accel, General Atlantic, ICONIQ Capital and Kleiner Perkins are the names to look for, compared to the general VC population.

Name Count
Sequoia Capital China 5
Tencent Holdings 4
 Accel 3
 General Atlantic 3
 ICONIQ Capital 3
 Kleiner Perkins Caufield & Byers 3

There is over $1 Trillion worth of value that’s been created in the birth of these Unicorns, for founders and shareholders. It would be fascinating to calculate what value has been delivered per dollar invested/created in productivity gains or cost savings for the community of users they serve.

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.

The 5 Banking commandments for your own Bezos moment

Dear Banks,

It only takes an internal memo to ignite your own Bezos moment.

Five clear and crystal commandments[1] (“good artists borrow, great artists steal”) that you can steal from Jeff B.:

  1. All teams will henceforth expose their data and functionality through service interfaces.
  2. Teams must communicate with each other through these interfaces.
  3. There will be no other form of inter-process communication allowed: no direct linking, no direct reads of another team’s data store, no shared-memory model, no back-doors whatsoever. The only communication allowed is via service interface calls over the network.
  4. It doesn’t matter what technology they use. –(tech neutral)
  5. All service interfaces, without exception, must be designed from the ground up to be externalizable. That is to say, the team must plan and design to be able to expose the interface to developers in the outside world. No exceptions.

Bezos ended his 2002 now famous mandate with a chilling little twist:

  • “Anyone who doesn’t do this will be fired.  Thank you; have a nice day!”

Just 17 years later, you can feel free – I would say you should feel inclined to do so – and steal this. You can end your internal memo with a kinder twist:

“Anyone who doesn’t do this will no longer be with the team.  Thank you; have a nice day!”

2019 in Finsev

I am using `Banking` to refer to financial institutions that have traditionally been in the business of serving retail, institutional, and corporate clients across all the spectrum of their needs. The Banking business model has been a PUSH operating model and the opaqueness and regulatory barriers to entry have allowed them to morph into a predominantly product business.

I am celebrating this month 4 yrs with Daily Fintech, during which I have been writing every single week on global innovations in Capital markets, wealth and Asset management[2].

I can safely say by now, that the only sustainable banking model is a PULL operating model that at its core becomes a platform as a service business. Much like Bezos transformed Amazon from a digital bookseller business, into a platform as a service.

For this to happen, the core transformation needed is in the `middle office` (conventional parlance) via APIs. Unless banks realize this, they will become suicidal and victims of a `lemming effect`. Their herd behavior to keep up with digitizing the `front office` to improve their customers` experience and even their engagement; will prove futile. The reason being, that as long as the culture remains that of selling products eventually; banks will find themselves in a commoditized business with margin going to zero.

`Any bank that does not transform its `middle office` via APIs; will become extinct. Thank you; have a nice day!”

 The good news about this transformation is that it has lots of possibilities and variations. But a bank has to start its platformification process, first internally.

Think first Private APIs that enable each and every department to access data and workflows in real time. Then, one can think of Public APIs, Partner APIs, and the Open Banking obligation or opportunity. Banking transformation needs to look more like 2/3 internal APIs in the first phase.



Chris Skinner and Jim Marous, have been preaching relentlessly about these issues. But it seems that it is difficult to convince `Doubting Thomas`[3]. There is no reliable data (to my knowledge) on this topic that is essential, despite the fact that it may seem a `detail`. The devil always hides in the details.


Over the past 3yrs, I have been monitoring the Financial APIs from the Programmable Web and there is clearly an increase. From 2016 to date, we have gone from 1700+ to 3800+ financial APIs. Of course, there is no quality differentiation or usage stats with this doubling. And none of these stats, are related to the paramount internal transformation measured by Private or Internal APIs, and their usage.

The one piece of evidence that I can share with you, is from Goldman Sachs. Marquee[4], is the GS sophisticated freemium platform for its institutional clients, which I have used as a great example of `Empowering Asset Owners and the Buy Side` WealthTech Book, 2018 Wiley.

Adam Korn, who has spearheaded the project of giving out Marquee for free, reported late last year that:

` After months of work, Marquee now fields more than 100 million API calls each month, about 5 million of which come from outside Goldman’s four walls. Marquee now has roughly 12,000 monthly active users, split evenly between internal and external clients. And the number of users is beginning to increase, according to Korn.`

[1] The API Manifesto Success Story


[3]doubting Thomas is a skeptic who refuses to believe without direct personal experience—a reference to the Apostle Thomas, who refused to believe that the resurrected Jesus had appeared to the ten other apostles, until he could see and feel the wounds received by Jesus on the cross.

[4] Named in honor of CIO R. Martin Chavez, known by everyone as “Marty”.

Book one hour with Efi – Ask me anything (AMA) for 0.10BTC –

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.

Subscribe by email to join the 25,000 other Fintech leaders who read our research daily to stay ahead of the curve. Check out our advisory services (how we pay for this free original research).

How the UK could become the early stage Fintech capital of the world post Brexit thanks to Securities Tokens


This week is Brexit week. Personal disclosure: I think Remain was the right option. However, as a business person I know that you have to work with whatever actually happens, rather than what you hope will happen and that you look for opportunities in problems that the world delivers to you.

At Daily Fintech we look at world events through the narrow lens of “is it good or bad for Fintech?”

So, here amidst the doom & gloom, is my optimistic case for Fintech post Brexit.

I specifically wrote early stage Fintech capital of the world. The tremendous tax incentives in the UK for investing in startups via Seed Enterprise Investment Scheme (SEIS), is a big driver for early stage. Other places may have bigger pools of capital for doing later stage deals (Silicon Valley is dominant there) but in few places are the incentives as good for early stage – and ventures have to go through early stage to get to late stage (said Captain Obvious).

SEIS offers unparalleled incentives for high income people to invest in startups. Even if a venture fails they get a lot of tax back immediately. On exit, they get zero capital gains tax, after 3 years minimum holding.

SEIS has been around a while. So has Fintech. What is new is the emergence of legal Securities Tokens. Look at these from the perspective of that early stage investor. The investment is priced by the market and can be traded (if Securities Token exchanges get their act together with some reasonable liquidity/spreads). Perhaps more important is it becomes harder for big Funds to come in at the next round on terms that disadvantage you as an early investor (not impossible, just harder).

For the entrepreneur/capital raiser, the fact that SEIS offers zero capital gains tax after 3 years minimum holding puts a de facto lock-up into the terms (because any investor selling before 3 years loses this tax advantage).

If the UK is the place where investors can go from angel/seed to exit within 3 years, the UK is where the best entrepreneurs will want to be – and where the best entrepreneurs want to be will be where jobs and prosperity is created.

What about access to Europe? Entrepreneurs can choose jurisdictional locations and strategies that give access to investors in different locations around the world. Many ventures today are decentralised with people in multiple locations. Consider Ethereum as an example (with developers and other employees all over the world. Talent can choose where they want to live; entrepreneurs and investors follow talent.

What about all those Banks relocating out of London due to Brexit? For those losing jobs and those who depend on them, it is 100% bad news. For Fintechs looking for talent and users it is good news.  Many of the jobs will be automated anyway and an HR policy of “relocate due to Brexit” simply avoids having to fire people due to automation.

So, London could become the early stage Fintech capital of the world post Brexit thanks to Securities Tokens.  There are lots of policy, regulatory, legal and technical issues to make this happen, but nothing that is rocket science. 

The real issue is London as a diverse, fun talent magnet. The passporting/regulatory issues are far more manageable. If Brexit means entrepreneurs cannot recruit talent from around the world regardless of country of origin, religion, colour, sexual orientation, then all bets are off.

The solution is simple. Every startup given SEIS status should have the right to offer work/residency permits to whoever they want, from anywhere, no questions asked.

It is a real opportunity, but we should never underestimate the ability of politicians to snatch defeat from the jaws of victory. 

What are you seeing? How will this play out? Please go to this thread on Fintech Genome to comment.

Image Source.

Bernard Lunn is a Fintech deal-maker, investor, entrepreneur and advisor. He is CEO of Daily Fintech and author of The Blockchain Economy.

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

Subscribe by email to join the 25,000 other Fintech leaders who read our research daily to stay ahead of the curve. Check out our advisory services (how we pay for this free original research).