The June CSFI breakfast meeting on Blockchain, fintech and regulation

View from the CSFI June breakfast meeting at Dentons. Image from Paul on Twitter fred
View from the CSFI June breakfast meeting at Dentons. Image from Paul Parboteeah on Twitter

At the June CSFI breakfast round table we discussed some of the recent technology and market innovations in the Fintech industry. In fact, it wasn’t a round table at all – there were so many attendees that it ended up more like a lecture theatre layout. Credit to the panel for keeping the conversation two-way with the audience.

CSFI round tables are always interesting, and due to the Chatham House rule, I can only report on the main headlines and not who said them.

The key points were Blockchain, fintech, regulation and other innovation.

Blockchain

  • Bitcoin itself is too volatile as a currency, but Blockchain is a great technology.
  • Third party Blockchain implementation still have a form of third-party centralisation concept, which goes against the key concept of Blockchain
  • The cryptography and government intervention is an issue
  • Blockchain is still looking for its killer app. I don’t agree with this – it’s like saying relational databases (SQL) or spreadsheets needed a killer app to become popular

My major gripe in the session on Blockchain was the amount of Blockchain ‘experts’ saying “Well I’m no expert” and “From my understanding…” – some of these experts clearly hadn’t used Blockchain or even Bitcoin before.

Fintech

  • A recent Accenture report claims that technology investment in the Financial Service (aka Fintech) sector has tripled
  • Everyone has their own definition of what Fintech is. We agreed that the best definition is: “Using technology to disrupt existing business models
  • The Honduran government is using Blockchain for land registry
  • AirBnB and Uber have set up alternatives to heavily regulated industries… and vitally – consumers LIKE them. Consumers are comfortable with the risk of using these unregulated marketplaces, which their industries are waving their hands saying “It’s not fair
  • Marketplaces such as Uber, eBay, Match.com and crowdfunding sites take an interesting turn when established institutions start using these platforms – and it’s now happening in the peer-to-peer lending marketplaces
  • One of my favourite comments of the morning was “Traditionally it takes 10-15 years for an industry to reach an oligopoly status with 5-6 key players. In the tech business it takes less than 5 years.”

  • The Open Bank API will enable third parties to access consumer data – with permission – opening up a new form of commercial models for banks

Regulation

What to look out for

The view in the room for disruptive technologies included:

  • Regulatory sand boxes
  • Consumer-controlled data (aka consumers taking control of their own data again)
  • European Data Protection and information security
  • Blockchain
  • Open APIs for insurance companies – or in general, insurers catching up with the banking industry in the technology space

Overall the event was interesting and well worth attending. There was a good cross-section of vendors, IT consultancies, start-ups and institutions (such as banks). I don’t understand why there aren’t more institutions to keep their fingers on “the market pulse”, and why many of the people attending haven’t used the technologies that are being discussed.

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