News > FinTech

New player adds tactical sophistication to robo-advisor landscape
FinTech
<p>Robo-advisors are still a small percentage of the overall wealth management industry, but there is no denying the rapid growth of these online-based money managers.</p> <p>That rapid growth is paving the way for new entrants to the robo-advisor field, including New York-based Huygens Capital LLC, which describes itself as “a systematic, tactical, ETF strategist and robo advisor enabled by proprietary predictive analytics.”</p> <p>Huygens is launching its tactical, risk-focused robo-advisor Monday, and it appears to be a well-timed entry into the robo-advising space. As of December 2014, the 11 largest robo-advisors had a combined $19 billion in assets under management, representing eight-month asset growth of 65 percent, according to Wealth Management.</p> <p>That number has continued surging.</p> <p>Read more at Benzinga. <br /> Photo: Peyri Herrera</p>
Banks around the world unite to explore the use of Blockchain
FinTech
<p>Financial tech firm R3 has created an initiative under which some of the world's largest banks will explore the use of blockchain in the financial sector. The effort represents the first time major banks have joined forces to research how blockchain may influence the sector and improve operations.</p> <p>This week, several big name banks including HSBC Holdings plc (ADR) HSBC, Deutsche Bank AG DB, Citigroup Inc C and Bank of America Corp BAC all signed on to the consortium, which is headed up by David Rutter, the former CEO of ICAP Electronic Trading.</p> <p>Blockchain For Markets</p> <p>The banks are planning to research how blockchain can revolutionize financial markets and whether or not implementing the ledger-like technology would be beneficial. Many believe that financial institutions would benefit from blockchain as the system would make their operations more efficient and increase transparency. Blockchain ledgers are able to keep track of every transaction, and integrating that system within financial institutions around the world would make it easier for banks to monitor cross-border payments and interact with each other.<br /> Smart Contracts<br /> Blockchain could also be used to facilitate contract transactions as the system would have the ability to recognize whether or not conditions have been met. Deutsche Bank has been working on this initiative in order to issue corporate bonds through a blockchain-powered smart contract system.<br /> Security Concerns<br /> Of course, as blockchain is a relatively new technology, there are concerns regarding the safety and security of such a system. Several hacking attacks have given bitcoin, the cryptocurrency that runs on blockchain, a bad name and could lead to resistance from the public. However, R3 is hoping that through collaboration within the financial sector, the risks associated with blockchain-powered systems will be addressed and the technology can be used to move the industry forward.</p> <p>This story first appeared in Benzinga.<br /> Photo: 401(K) 2012</p>
Standard Chartered launches FinTech Accelerator Program
FinTech
<p>Standard Chartered launched a new SuperCharger FinTech Accelerator Program in Hong Kong today. In a unique collaboration, the UK bank has partnered with fellow-heavyweights Baidu, China’s top internet search engine, and TusPark Global Network which has already incubated 19 companies in its technology parks that have subsequently listed.</p> <p>The venture aims to encourage innovation and entrepreneurship by helping local and international early-stage as well as more established FinTech companies grow in Asia’s dynamic markets.</p> <p>Technopreneurs will be part of a structured curriculum and receive coaching and mentoring from Baidu’s technologists, Standard Chartered’s bankers together with venture capitalists and industry experts to refine their business model, develop market entry strategies, navigate the regulatory landscape and identify joint ventures opportunities.</p> <p>“Hong Kong’s vibrant international financial ecosystem as well as strategic location as a gateway to China, one of the world's largest FinTech market opportunities, makes it the perfect place to co-create the future of financial services with technopreneurs at the intersection of finance and technology,” said Ericson Chan, Standard Chartered’s regional chief information officer, Greater China and North Asia.</p> <p>The program kicks off today with a call for technopreneurs to come forward with their business ideas. Applications will close on 20 November 2015. Throughout October, a roadshow will travel in search of the best businesses worldwide with stops including London, New York, Tel Aviv, Singapore and Beijing.</p> <p>Between January and April selected businesses will then have the chance “to explore cross-pollination of ideas between other verticals such as IoT, media and hardware, located within this world-class innovation hub,” said Standard Chartered in a statement.<br /> Photo: Thomas Fan</p>
Feds bust a $32m cyptocurrency scam - but it's not Bitcoin
FinTech
<p>The cryptocurrency world has been rocked by another scandal after US regulators file fraud charges against the operator of a global pyramid scheme involving a digital currency called GemCoin.</p> <p>About $32 million was swindled out of investors by US Fine Investment Arts (USFIA) which claimed it owned large amber mines in Argentina and the Dominican Republic, the Securities and Exchange Commission (SEC) said in a statement.</p> <p>The SEC has put Californian Steve Chen, and 13 companies linked to him, at the center of the alleged fraud</p> <p>It claims that Chen falsely promoted USFIA as a legitimate multi-level marketing company and told investors they could profit by investing in amounts from $1,000 to $30,000, and earn larger returns as more investors are brought into the program.</p> <p>Chen is alleged to have then converted existing investors’ holdings into Gemcoins, saying the virtual currency was secured by the company’s amber holdings.  In reality, the SEC says, the were worthless.</p> <p>In its litigation filing, SEC said the $32 million raised from Gemcoin went straight into Chen’s personal accounts in China, which are now frozen.</p> <p>However by the time the SEC rumbled Chen. the majority of the funds were already blown on luxury cars, travel, entertainment, and cash withdrawals.<br /> Photo: Michael Rhys</p>
Bitcoin Island: The UK haven leading a revolution
FinTech
<p>Before the birth of Bitcoin, the Isle of Man - a tiny tax haven in the Irish sea - was famous for three things: motorcycle races, the Bee Gees, and a breed of tailless cat. Today it’s becoming synonymous with cryptocurrencies and fintech.</p> <p>This is largely linked to the island’s low taxes, relaxed regulations, and high-speed internet connections which have helped fuel a boom in financial services and online gambling on the island. The Economist reports that these two sectors now account for a third and one tenth of the territory’s income, respectively.   </p> <p>Given the potential applications for Bitcoin in both these areas, its no surprise the island is adopting Bitcoin in a big way. Many of the island’s hotels, taxi firms, restaurants and cafes now accept it as payment. </p> <p>The island’s tax structure, with no corporation, capital gains, or dividend taxes, has also been a draw for bitcoin startups, including exchanges and gambling platforms. </p> <p>In addition to assisting with the  formation of the Manx Digital Currency Association, the local government has encouraged its adoption by bringing in a legal foundation for Bitcoin. </p> <p>In April, the Isle of Man government changed it Proceeds of Crime Act to cover bitcoin exchanges operating from the island so that business have to comply with the territory’s anti-money laundering (AML) laws. </p> <p>While this means companies face greater oversight and more filing requirements, it has broadly been seen as positive news for bitcoin business seeking credibility with consumers and financial institutions. It's no wonder then that regulators around the world now have their eyes on this tiny pioneering island. <br /> Photo: Steve Conover<br /> &nbsp;</p>
Fintech fights abandonment with easy access
FinTech
<p>&nbsp;</p> <p>Fintech startups are taking a page from online retailers to keep users from leaving the site before they have completed their transactions.</p> <p>"Abandonment" is the bane of the industry. Potential users often leave apps before they complete the signup process or before they hit the "buy" button for all kinds of reasons. Today's startup entrepreneurs are working to improve the user experience by focusing on simplicity. The big hit of 2015 -- trading app Robin Hood -- has won big kudos for its streamlined look.</p> <p>Users want financial products that look and feel similar to the apps they're using on a daily basis, from Gmail to Facebook to Amazon, says Nikita Filippov, managing partner at Octoberry and developer of banking app Sense. Right now, "when you go down to the mobile bank [app], it looks like the 90's."</p> <p>At recent Finovate conferences, presenters hawked apps and ideas that focused on "frictionless" experiences. Here's what some of the hot startups are doing:</p> <p>&nbsp;</p> <p>Hedgeable (Best in Show, Fall 2015)</p> <p>"People don't like complicated," says Mike Kane, CEO and Master Sensei at Hedgeable. Hedgeable, private banking for millennials and Gen-X, displays the dozens of menu options a traditional private bank would, but with bright colors, symbols like a gas gauge for setting risk tolerance, word clouds, and bold, easy to click boxes. "People like visualizations," says Kane. The Hedgeable platform is social, a la Venmo. It also takes the online social offline, inviting users who invest on the platform to parties and events.</p> <p>Avoka (Best in Show, Spring 2015)</p> <p>"We create a very simple environment," says Don Bergal, Chief Marketing Officer at Avoka, which boasts one of the fastest mobile credit card signup processes -- a mere 90 seconds. Bergal says the company tries to figure out what will send users away prematurely. It's not totally intuitive. Sometimes it's just one question too many. Other times it's asking for a photo too early in the process. Retail sellers are the best at managing abandonment,  says Bergal. (But even retailers struggle: one study suggests the abandonment rate averages about 67%.) Financial service are also struggling to make the sign-on process fluid between units and services. "We try to create a user interface that doesn't look like the classic mobile bank," he says.</p> <p>Payswag</p> <p>"You have to take fintech and apply to the average, everyday person," says Max Haynes, CEO of mobile app PaySwag. For PaySwag that means reaching the under-banked. Haynes was "stunned" to find that nearly half of under-banked people don't have an email address they check on a regular basis. But they do have a smart phone they use daily. "It's a simple revelation," he says, explaining that these mobile users also expect 24-7 coverage for everything from messaging to banking.</p> <p>Blooom (Best in Show, Fall 2014)</p> <p>The 2014 hit in New York still</p>
Learn from those who brew beer how to be a better financial advisor
FinTech
<p>Wherever large enclaves of European immigrants settled in America, it would not take long for a handful of breweries to open for business in the local community. These breweries distributed their fermented concoctions to the local taverns and clubs within close proximity to where the beer was produced. Unlike the Internet companies of today, brewing beer for most of the 19th century was not a scalable business model. Unpasteurized beer with active yeast has to be consumed within a short period of time after the fermentation process is completed. Otherwise, these liquid bread products become moldy and give off a rank odor.  Nobody likes to drink stinky beer pumped out of vintage kegs that have been stored for who knows how long.</p> <p>After a large wave of German immigrants settled into Saint Louis in the mid-1800s, brewing beer became a major local industry. Determined to expand his distribution base outside of the local community, Adolphus Busch in the 1870s incorporated several technological innovations at his Saint Louis brewing plant. Busch was the first American brewer to pasteurize beer, which enabled the suds to have a longer shelf life than did most of the local fare consumed within a short distance around the Saint Louis area. Busch also introduced refrigerated rail car technology. Temperature-controlled rail cars enabled beer to be transported over longer distances without sacrificing a significant loss in quality upon arriving at its final destination. Both the pasteurization and refrigeration technologies enabled Budweiser to grow into a national beer brand, giving Anheuser-Busch the right to call itself the “King of Beers.”</p> <p>These disruptive technologies in the beer making industry would seem to be a force majeure for the smaller craft breweries forced to compete against it. It is counterintuitive to imagine a rinky-dink microbrewery remaining in business against a fermented tide of technological brewing innovation located wherever beer is produced in large quantities. Despite the increased efficiencies of a national brewery due to its economies of scale, microbreweries are opening at a faster rate than ever. Creative Biermeisters are experimenting with different flavors and hops, selling their fermented creations to evermore hipster patrons eager to escape the bland, watered-down alcohol products sold by evil multinational corporations. Fancy refrigeration and pasteurization technologies be damned. Brewing large quantities of beer in oversized Lauder Tubs and shipping the swill cross-country from a centralized location isn’t going to cut it for this finicky subset of hop-heads who frequent their local microbrew joint.</p> <p>In the Internet era, where scalable business models disrupt entire industries, the gurus experimenting with different fermented potions in the dungeons of their local brewpubs have found a way to not only compete against but also thrive in the midst of scalable technology. These smaller establishments have found a niche, avoiding being tapped-out even if drones in the future can drop sanitized kegs of cheap corporate beer on the back porch of a college frat house at breakneck prices.</p> <p>Those in the investment advisory business can learn a thing or two from these small microbrewers. With robo-advisors gaining a foothold in the investment advisory space, embracing a niche form of investing may be one route that financial advisors can embrace in order to compete against cloud-based scalable Internet technology. In a previous blog, I wrote about the challenges that a robo-advisor faces in an expensive stock market (see Benjamin Graham’s Value Investing versus the Robo-Advisor). One way in which a human f</p>
Fintech funding surge: $1.3 billion in a week
FinTech
<p>Fintech startups are seeing a surge in funding. According to Finovate, The past week  has seen 19 start-ups raised $1.3 billion - and that's not including the $1 billion SoFi round led by Softbank, which despite wide coverage this week, actually closed a few weeks earlier.</p> <p>Here is Finovate's run down of funding for the past week:</p> <p> Paytm, e-commerce and payments, India - $675 million<br /> Avant, consumer lending , U.S. - $325 million<br /> Kreditech, consumer lending, Germany - $92 million<br /> Elevate, consumer lending, U.S., - $70 million<br /> PushPay, mobile payments, New Zealand - $18.7 million<br /> Ellevest, investment platform, U.S. - $10 million<br /> Credible, student lender, U.S. - $10 million<br /> Zameen, real estate hub, Pakistan - $9 million<br /> Cloud Lending Solutions, enterprise lending platform, U.S. - $8 million<br /> Qualpay, payments, U.S. -  $8 million<br /> QuanTemplate, reinsurance platform, Gibraltar - $7.6 million<br /> MMKT Exchange, loan syndication platform, U.S. - $5.9 million<br /> InForcePRO, insurance analytics, U.S. - $4 million<br /> MX (MoneyDesktop), loan syndication platform, U.S. - $4 million<br /> AboutLife, retirement planning, U.S. - $3 million<br /> Orb (Coinpass), payments, Japan - $2.3 million<br /> Safe Cash Payment Technologies, paynents, U.S. - $1.2 million<br /> BloOom, wealth management, U.S. - $50,000<br /> Adyen, payments, Netherlands - N.D</p> <p>Photo: Ed Ivanushkin<br /> &nbsp;</p>
China Development Bank joins angel round for P2P lender
FinTech
<p>China’s economy may be in the doldrums but its appetite for peer-to-peer (P2P)lenders sure looks stronger than ever.</p> <p>According to China Money Network, state-backed behemoth China Development Bank (CDB) has just joined a $34 million angel round for Kaixindai Financing Services.</p> <p>How much it invested in the firm was not disclosed, and neither were the identities of CDB’s co-investors, and neither was anything about the identities of CDB’s co-investors, other than the fact they are from Jiangsu province. What we do know though is that Kaixindai, a Jiangsu-based P2P lender, was created by the provincial government and CDB back in 2011, and that it has racked up nearly $2 billion in transactions since then.</p> <p>It apparently plans to use the proceeds from the round to expand into other areas in China, a tall order for most given that there’s nearly 2,300 P2P companies fighting for their share in the region.</p> <p>With backing from the state however, something tells me Kaixindai is going to do fine.<br /> Photo: uberof202 ff</p>
HKMA rejects criticism of its approach to Fintech
FinTech
<p>Fintech entrepreneurs are not shy about criticizing Hong Kong for a perceived Luddite attitude to their innovative products and services. At the Cyberport and NexChange Fintech O-2-O Meet up last week, panelists and delegates compared the city’s regulators unfavorably to their more accommodating counterparts in the US, UK and even usually cautious Singapore.</p> <p>Well, on Friday the Hong Kong Monetary Authority (HKMA) hit back at its detractors.</p> <p>Speaking at the Hong Kong Institute of Bankers conference, Arthur Yuen, deputy chief executive, insisted that the HKMA welcomed fintech development, recognizing that it intensified competition in the financial service industry and empowered customers, reports  AsianInvestor.</p> <p>It was the first time for a while that the regulator had clarified its stance on an industry that attracted more than $12 billion of investment in startups last year.</p> <p>He rejected criticism that conservative restrictions inhibited fintech companies in Hong Kong, and argued that although it wants to ensure consumer protection HKMA does not want to stifle innovation.</p> <p>“We want to be technology-neutral,” and allow banks to adopt new technology while retaining safeguards for customers, he said.</p> <p>However, perhaps a little ambiguously, Yuen added that “the same customer protection requirement will more or less remain relevant regardless of the channel used to deliver it,” he said. </p> <p>He is most concerned about new entrants and whether the regulatory framework is sufficiently robust to supervise and the public sophisticated enough to understand the risks.<br /> Photo: Martin Ng<br /> &nbsp;</p>