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Cybersecurity and Israel's booming fintech space
<p>Cybersecurity was high on the agenda this week when a delegation of Israeli startups gathered in Hong Kong for the 2nd Israeli FinTech Forum.</p> <p>The event, hosted by the Consulate General of Israel of Hong Kong and Macau alongside FinTech HK, saw a total of 11 companies showcasing their businesses to attendees.</p> <p>Sectors varied from payments and big data analytics to software-as-a-service (SaaS) solutions, but security was overwhelmingly the biggest fintech sub-sector. Here are some of the start-ups that presented:</p> <p> Algosec (Cyber securuty)<br /> Beyond Security (Cyber securuty)<br /> BondIT (Portfolio managament)<br /> Checkmarx (Cyber Security)<br /> CyberInt  (Cyber Security)<br /> OffLA (Cyber Security)<br /> (Payments)<br /> SentinelOne (Cyber Security)<br /> ThetaRay (Big Data)<br /> Wisesec (Payments)<br /> 2 Team (SaaS)</p> <p>Israel is a natural hub for the fast-growing cyber security industry which offers a range of fintech solutions including fraud preventation and anti-hacker software.</p> <p>The sector sits at a crossroads between the Israel's hi-tech industry and its sizable defense sector. The synergies are such that Israel startups are now poaching military and intelligence officers to give them the competitive edge in the space, according to the Wall Street Journal.</p> <p>For its part Hong Kong could be a big investor in Israeli cyber security. During the event, Sagi Karni, Israel's Consul General in Hong Kong, told the audience that in the last three years VC flows from Hong Kong to Israel's tech industry totalled $500 million, and the number is increasing.<br /> Photo: istock</p>
A Blockchain Alliance has been formed – not everyone is happy
<p>As part of the industry’s ongoing fight for legitimacy, a group of blockchain companies have decided to club together and form the Blockchain Alliance in order to better aid law enforcement. Some in the industry are alarmed.</p> <p>Created by Coin Center and the Digital Chamber of Commerce, two Washington D.C. trade associations, the Alliance is a private sector initiative intended to create a forum whereby enforcement agencies and regulators can share information and get technical assistance from the industry on blockchain. </p> <p>Some 16 companies and organizations – see the release for a full list – have agreed to work with a several government enforcement groups including:</p> <p> The FBI<br /> U.S. Marshals Service<br /> U.S. Secret Service<br /> Immigration and Customs<br /> Homeland Security<br /> Commodity Futures Trading Commission</p> <p>Needless to say, in a post-Snowden world, this does not chime well with some liberty-loving bitcoiners. Knowing this, the Alliance has stressed that it will not be a backdoor for the government to get info on companies and their customers but rather a “higher level discussion about typologies, trends, and technical issues.”</p> <p>That said, there is still some skepticism and debate on both Reddit and on the Bitcoin community forums over the extent to which the bitcoin community should be engaging with The Man. People like Bitcoin foundation director Bruce Fenton and Bitcoin Foundation chief scientist Gavin Andresen have weighed in on either side of the argument. And then there are the twitter reactions: </p> <p>New Blockchain Alliance is a big step to ensure Bitcoin is used for innovation, not crime. Well done, @coincenter.<br /> — Rep. Jared Polis (@RepJaredPolis) October 22, 2015</p> <p>Blockchain Alliance -- at first glance, a profoundly bad idea<br /> — Bruce Fenton (@brucefenton) October 22, 2015</p> <p>Value your privacy? DO NOT use any of the products or services listed in this Article.</p> <p>— Samourai Wallet (@SamouraiWallet) October 22, 2015</p> <p>@lightcoin Fintech is getting into Bitcoin that is why we nee</p>
Retail banking could witness “fintegration”: EIU
<p>Over the next five years, retail banking is likely to see a growing trend of banks’ co-option of Fintech models, notes EIU.</p> <p>The Economist Intelligence Unit published a report titled: “The disruption of banking” after surveying over 100 senior bankers and 100 Fintech executives to ascertain the likely landscape for the retail banking industryover the next five years.<br /> Fintech will strongly impact retail banking landscape<br /> The EIU report points out that digital disruption is the top-of-mind technological issue in the C-suite today, with senior executives in virtually every industry wondering whether their firm will be Amazoned or Ubered. The report notes the multi-trillion-dollar banking industry is facing disruptive challenges by financial technology upstarts, known as “Fintech”. The EIU report reckons over $25 billion has been poured into Fintech in the past five years, making it the number-one target for venture funding.</p> <p>Highlighting the enormity of the challenge, the EIU report draws attention to JPMorgan CEO Jamie Dimon’s remarks to his shareholders about Fintech: “They all want to eat our lunch. Every single one of them is going to try”.</p> <p>The EIU report points out that though over 90% of households in developed economies use a bank, over 90% of bankers project that Fintech will have a significant impact on the future landscape of banking. However, a majority of bankers (54%) believe that banks are either ignoring the challenge or that they “talk about disruption, but are not making changes”.</p> <p>Touching upon the strength of banks, the report notes one of the hallmarks of the customer relationship is a reputation for trustworthiness and stability with no major retail bank failed in the 2008 financial crisis. Nearly 95% of bankers and Fintech executives believe that banks will remain in a strong position even as Fintech gains ground:</p> <p>Banks will continue to dominate<br /> The EIU survey reveals that Fintech executives respect the banks more than the bankers themselves do. Responding to the future balance between the two segments, Fintech executives were more than twice as likely to predict that banks would continue to dominate the market:</p> <p>The EIU report points out that Fintech firms have the ability to take a “category killer” approach to banking portfolios, as the Fintech firms are able to maintain a laser-like focus on a single product, building excellence into both the technology and customer experience:</p>
Silicon Valley is hot for insurance tech, and Google is leading the way
<p>Insurance may be not be the sexiest area of finance but it certainly seems to be doing something for Silicon Valley where investors are courting disruptive start-ups, and internet giants like Google are looking for a piece of the action.</p> <p>Back in June, CBInsights reported that 2015 was already a record year for insurance tech investment with for $832 million being pumped into the space. That's a 9X increase from five years ago, accounting for more than a third of the $2.12 billion raised by insurance tech companies since 2010.</p> <p>A more recent report shows that Google in particular has been doubling down in this space, signing off six separate partnerships and investments in insurance tech just this year. Its biggest deals include the firm's own Google Compare service, an auto insurance comparison platform launched in March in partnership with CoverHound and But it goes beyond that.</p> <p>Google has backed three firms in the medical insurance space, via its investment units Google Ventures and Google Capital, the most recent being Collective Health.  It has also partnered with home insurers Liberty Mutual and American Family Insurance through its internet-of-things product line Nest.<br /> Photo: GotCredit</p>
Sweden is looking to be the world's first cashless country
<p>As the world’s financial hubs scramble to get ahead in the fintech game, researchers think it’s Sweden that will win the crown (pun intended) of the world’s first fully cashless society.</p> <p>The nordic nation already has a reputation for being the world’s most cash free country but a recent report by Stockholm's KTH Royal Institute of Technology reckon’s the Swedes are poised to rid themselves their loose change forever.</p> <p>Niklas Arvidsson, a researcher in industrial economics and management at KTH, boasts that the rapid expanding adoption of mobile payments means that his country simply has no need for your primitive paper notes. He says:<br /> "Cash is still an important means of payment in many countries' markets, but that no longer applies here in Sweden. Our use of cash is small, and it's decreasing rapidly."<br /> The report goes on to say that  there are less than 80 billion Swedish crowns ($9.6 billion) now in circulation, down from 106 billion six years ago. What’s more, of that amount only around 40-60% is actually in regular circulation, with the being stored away or traded in an underground economy.</p> <p>However, Arvidsson stops short of giving a date for when we can expect to see the final end of the cash crown. There are still plenty of reasons why paper and coins will persist. An article by the Guardian last year, for example, cited Sweden’s technology-resistant senior citizens, and the need to cater to cash-obsessed foreigners visiting the country, as just two reasons why the 100% cashless dream maybe some way off yet.<br /> Photo: Margo Akermark</p>
Dodgy bitcoin rustling DEA gets over 6 years
<p>Another Bitcoin case has come to a close and another name has been added to the crytopocurrency's hall of infamy: Carl Force. The dodgy DEA agent – whose nefarious misdealings during the Silk Road investigation were uncovered earlier this year – has been sentenced to 78 months in prison.</p> <p>Reuters reports that Force 'fessed up to charges of extortion, money laundering and obstruction of justice. U.S. District Judge Richard Seeborg said the scope of his betrayal was "breathtaking."</p> <p>Force was part of the team looking into Silk Road, the shady darknet drug marketplace that was shut down in October 2013,</p> <p>He told the judge:  "I'm sorry, I lost it and I don't understand a lot of it." When it comes to bitcoin he is probably not the only one. Which is why it's more than likely we see a few more scandals on the horizon.<br /> Photo: Vincent Diamante</p>
Standard Chartered rolls out Vietnam fintech platform
<p>Fresh from launching its Hong Kong fintech accelerator, UK bank Standard Chartered's Vietnam unit has teamed up with local investment fund Dragon Capital to form the "Vietnam FinTech Club".</p> <p>Its not an accelerator but a roundtable bringing together startups and investors, including veteran Vietnam VC IDG Ventures. According to a release, the club had its genesis during UK prime minister David Cameron's visit to Vietnam in July.</p> <p>With London quickly emerging as a global fintech hub, the UK government is looking to nurture fintech industry connections in emerging markets such as Vietnam.  This new platform will help give the UK  firms access to Vietnamese regulators, financial service providers, and ICT entrepreneurs. The Fintech Club will also help bolster  Standard Chartered's exisiting  Hong Kong-based fintech program. Nirukt Sapru, CEO of Standard Chartered Vietnam, said:<br /> "By backing the FinTech industry in Vietnam, we echo the bank’s strong commitment in supporting and encouraging innovation which we believe is a key driver of economic growth and prosperity. Standard Chartered Bank just launched a FinTech Accelerator Programme in Hong Kong to help local and international early-stage and more established FinTech companies grow in Asia’s vibrant markets. We hope to see strong participation from Vietnam in this initiative.”<br /> News like this can only serve as a boon for the country's venture capital  community which has been touting Vietnam's young demographics and increasingly tech0-savy population for several years. Only last week Chris Freund, founder of Mekong Capital told NexChange:<br /> “There is a big opportunity for VC and PE firms to invest and help their investee companies to build their management teams and apply international best practices, which often leads to those companies becoming the winners in their sectors.”<br /> Photo: Jerick Parrone</p>
Deutsche Bank to create fintech unit as part of restructuring
<p>Deutsche Bank is joining other major banks like Citibank and Wells Fargo and is building a fintech unit as part of a restructuring. The<br /> Wall Street Journal reports:<br /> Henry Ritchotte, Deutsche Bank’s chief operating officer, will leave the management board and work on creating a new digital bank for the company, according to the statement. The effort is seen as a big push by the bank into the so-called “fintech” arena, encompassing everything from retail banking to debt underwriting and digital-currency trading.<br /> Photo: Tech in Asia</p>
The rise of robo-advisors
<p>The increasing presence of robo-advisors in the financial industry worries some investment professionals. If artificial intelligence can meet the needs of clients who want low-cost, tailored, active management of their savings, then the role of human intermediaries will soon become obsolete.</p> <p>Kurt Schacht, managing director of Standards and Financial Market Integrity at the CFA Institute, took a deep breath and checked out a robo-adviser.</p> <p>He found that it was “highly effective and efficient—probably a much better service and product than the traditional retail brokerage account with a salesperson on the other end”.</p> <p>The robot welcomed him to the platform, asked a dozen questions about his financial history, objectives and risk tolerance and quickly created an optimal portfolio of low-cost, no-transaction-fee funds.</p> <p>“It was slick and much more tailored and calculated than working with a typical broker salesperson”, writes Schacht.</p> <p>But there was a flipside. The experience was cold and impersonal.</p> <p>“It was as if investment management had been reduced to the equivalent of a drive-through fast food restaurant”.</p> <p>But, quant providers feel that their time has come. At a recent event in New York where he participated as a panellist, Schacht found that they are convinced that few aspects of financial analysis, security selection and asset allocation can be delivered better by humans.</p> <p>Eventually, they argue, soft skills for client relationships and communications will be unnecessary.</p> <p>After all, who needs to talk with a real person who understands your financial challenges and appreciates your desired outcomes if a computer can get you to the same place in seconds?</p> <p>“For traditionalist CFA charterholders who bleed the virtues of client loyalty, service, and professional judgment, the robo-adviser trend is disturbing,” writes Schacht.</p> <p>&nbsp;</p> <p>Cyberport and NexChange are hosting an O-2-O meetup that will discuss this issue as well as examine many other opportunities and challenges that new financial technologies are creating in the wealth management industry.</p> <p>The event will feature five speakers closely involved in the latest developments and it should attract a wide cross-section of more than 200 delegates:</p> <p>Date: October 27, 2015</p> <p>Time: 16:00-19:00</p> <p>Venue: Cyberport 3, Hong Kong</p> <p>Please register here</p> <p>&nbsp;<br /> Photo: Andrej Blagojević</p>
Founders, investors gather in Hong Kong to share past failures
<p>Learning and growing from one's past failures is a core part of startup culture and this week a group of founders will gather in Hong Kong to observe that tradition at the 2nd annual Postmortem conference.</p> <p>The event will be held at KPMG's Causeway Bay office at Hysan Place and will feature a line-up of HK's best startup founders, investors and mentors sharing their personal failures, pivots, regrets, and mea culpas. Confirmed speakers at the event include:</p> <p> Deepak Madnani, Paperclip<br /> Daniel Walker, Dragon Law<br /> Christopher Geary, Asianet Group<br /> Elsa Chan, Jetlun<br /> Andrea Livotto, Perpetu<br /> Sam Gellman, Uber<br /> Jeffrey Broer, Grayscale<br /> Donna NguyenPhuoc, Angel investor</p> <p>The event starts tomorrow (October 17) but a handful of tickets are still available.<br /> Photo: Steve Jurvetson<br /> &nbsp;</p> <p>&nbsp;</p>