Where Finance Finds Its Future

The investments in Bitcoin by Ruffer and MassMutual may have caught the headlines, but crypto-currencies are becoming a tool for corporate treasurers to manage their liabilities as well as a source of capital growth for asset managers. Near-zero to negative interest rates and repeated central bank interventions are encouraging a more adventurous approach in the corporate as well as the retail markets. Whether this will end well cannot be known, but treasurers certainly need safe ways to trade and even safer ways to custody the assets, and the conventional banking industry is not rushing to provide them. Rob Gaskell, partner at Appold, the London-based emerging technology advisory and investment company, shared with Dominic Hobson his view of the risks and opportunities. Hosted on Acast. See acast.com/privacy for more information.

Security tokens are coming. In fact, they are here already, and have been for a while. Though most of the security token offerings (STOs) in the last three years were hard to distinguish from Initial Coin Offerings (ICOs), several corporates and banks (Banco Santander, Bank of China, BBV, Daimler, Deutsche Bank, Société Générale) have tokenised bonds or loans on public as well as private blockchain networks. Hosted on Acast. See acast.com/privacy for more information.

The blockchain era has spawned a great deal of innovation, but its most lasting impact might well lie in the fact it forced us to think more imaginatively about data. A decade ago, every business wanted to be the next Facebook or Google, by selling its data to third parties. Today, the coming businesses are those which have grasped that data naturally belongs not to corporations but to consumers because, once consumers wake up to that fact, a lot of apparently successful businesses are going to be seriously discomfited. One person who has mapped a future in which computers steaming data are the constant companion of consumers is David Shrier, author, futurist, co-founder and CEO of Esme Learning Solutions, and professor of practice at Imperial College Business School. He spoke to Dominic Hobson about the role of data in trust, identity and democracy, the future of the financial services industry, and how to forge a successful path into a future in which everyone is connected by computers and informed continuously by algorithms processing streams of data. Hosted on Acast. See acast.com/privacy for more information.

One reason institutional money is now being invested in crypto-currencies is that it is safe to do so. Fireblocks, the provider of an institutional-grade safe custody and settlement platform for digital assets, can take a good measure of the credit for what is happening. Dominic Hobson spoke to Michael Shaulov, CEO and co-founder of the firm, as it completed a US$133 million Series C fund-raising that also saw giant global custodian BNY Mellon take a strategic stake in Fireblocks. Hosted on Acast. See acast.com/privacy for more information.

Central securities depositories (CSDs) were imposed by regulators in the 1990s to solve the securities settlement problems of the 1980s. They have succeeded admirably in that task but so far only a handful have sought to move decisively beyond it and embrace the new opportunities created by the tokenisation of financial assets on blockchain-based networks. Instead, the majority of CSDs have appealed to their origins in the minds of central bankers and securities market regulators of a generation ago. Ironically, the trust imparted by their record of success and regulated status are precisely the qualities that would enable CSDs to exploit the tokenisation markets. Hosted on Acast. See acast.com/privacy for more information.

As blockchain technology emerges from the Trough of Disillusionment (© Gartner) and ascends the Slope of Enlightenment (© Gartner) the original promise of what it can deliver once it reaches the Plateau of Productivity (© Gartner) is being rediscovered. Capexmove, a London-based business applying blockchain initially to the debt markets, emphasises the savings in external and internal reconciliation, internal controls, internal audit and regulatory compliance as the various parties start to work off a single source of information that is always up to date. Reliance on smart contracts to automate asset servicing and compliance checks delivers further economies. Cuneyt Eti, co-founder of Capexmove, told Dominic Hobson how the Capexmove debt tokenisation platform saves issuers, investors and intermediaries time and money. Hosted on Acast. See acast.com/privacy for more information.

Personal lines insurance is a byword for low levels of customer satisfaction, and none attracts less enthusiasm from buyers than motor insurance. The scope to cut prices through automation and improve customer service by moving away from form-filling and call centre queues, is correspondingly high. Peppercorn Insurance is a start-up that aims to cut motor insurance premiums and lift service levels by using artificially intelligent (AI) machines as digital agents to sell and change insurance policies and even handle claims as well, around the clock. Nigel Lombard, the founder and CEO of Peppercorn, is now on his third InsurTech start-up. Dominic Hobson asked him what distinguishes digital agents from chatbots, whether he plans to sell the software to other insurers, and about his long-term ambitions for the business. Hosted on Acast. See acast.com/privacy for more information.

Questions posed from the October 2020 discussion and will provide the framework for the March 2021 discussion:How can a DataNet be realised most efficiently?What role can government play in accelerating progress towards widespread adoption of digital IDs?What can we learn from a comparison of the digital ID schemes in those jurisdictions which have adopted them already?How can Open Data initiatives best be harnessed to the adoption of digital IDs?What factors will encourage banks to take digital IDs seriously (in those countries where they have yet to do so)?Which types of organisation are best suited to issue digital IDs and manage the associated information flows and data storage?Where should liability for inaccurate, misleading or fraudulent identification information lie?Is an internationally agreed set of digital ID and data profile standards desirable and, if so, how can they best be achieved? Hosted on Acast. See acast.com/privacy for more information.

With all the excitement being generated by institutional investment in crypto markets, it is easy to forget that a strong business case has to be implemented as well as advanced. Institutional investors entering any market need to be confident they can buy the assets, safekeep them, collect any entitlements and sell them .The recent investment by Ruffer in Bitcoin has captured headlines, but institutional money has followed the crypto-currency markets for years. Asset manager Fidelity launched a digital asset custody service as long ago as 2018. Mainstream banks, including BNY Mellon, Northern Trust and Standard Chartered are now following suit – precisely because their buy-side clients want to invest in the asset class.However, while crypto-currency investing appeals to institutional asset managers as a commodity play and an inflation hedge, and their custodians are scrambling to support them, the crypto-currency markets are far from mature. In fact, they are full of complexities and risks that do not stop at volatile prices. Chief among them is compliance risk. It is easy for investors that do not understand such risks to lose their reputation as well as their money.In this Future of Finance webinar Dominic Hobson will discuss with three crypto-currency converts, all of them veterans of the traditional capital markets, how they are enabling institutional asset managers and their advisers to strike the right balance between risk and opportunity in the crypto-currency markets. Hosted on Acast. See acast.com/privacy for more information.

Questions posed from the Payments Part I discussion in June 2020 and will provide the framework for the February 2 discussion:Payments still create significant costs in capital held for liquidity purposes. In what ways can the cost be reduced?Cross-border payments are still not instant in most cases. How can a genuinely global instant payments network of networks be built?The value of mobile telephone networks in connecting everybody to everybody is rich in further potential value for payments. How can it be realised?What do payments market infrastructures and payment markets participants need to do to be ready for the Internet of Things?What is the optimal method of achieving universal adoption of Digital Identities by consumers and companies?In payments, are blockchain technologies and APIs rivals, complementary or entirely separate technologies? Hosted on Acast. See acast.com/privacy for more information.