Grow VC Group keynote about FinTech and blockchain ecosystems at VanFUNDING 2017

Grow VC Group ++www.growvc.com ++

@growvc ++

Enabling Digital Finance ++

Copyrights © Grow VC Group 20171

FinTech and Distributed Ecosystems: Opportunities to Make It WorkVanFUNDING 2017, Vancouver, November 28, 2017

Jouko Ahvenainen

You can take photos, share

them and write down

notes, but

this presentation will also

be available on Slideshare

(growvc) and the Grow VC

Group’s Blog at

growvc.com/blog

FinTech, Data &

Finance ServicesDigital

InfrastructureExits

Grow VC Group – company examples

Worldwide pioneer and leading holding company

in enabling technology and data in FinTech

Hong Kong - London - New York - San Francisco

Grow VC Group

Global leader in enabling technology and data for FinTech

■ Started its operations in 2009 as the pioneer to start digital finance service

■ Grow VC Group was the first in the world to launch an online startup equity investing service

■ The group includes over 10 businesses

■ Grow VC Group companies have more than 100 customers with millions of end users globally having launched

new digital finance services

■ The main hubs are in London, New York, San Francisco and Hong Kong

■ Several of its companies are leaders in their own areas, e.g. Crowd Valley, Prifina, RE Bearing, and Startup

Commons

People

■ Grow VC Group’s management and founders have been listed as top influencers in the world in digital finance,

Fintech, crowdfunding and digital business

■ Our key people are serial entrepreneurs who have experience to launch several new companies and products

around the world to consumer and business market

■ Our people have been in executive roles to launch international corporates’ products to new markets and build data

analytical approach for go-to-market and sale

Grow VC Group Works with Industry Leaders

5

Path to distributed data oriented empowering finance

1. Development from big black boxes (like banks or their IT) to

distributed services and solutions

■ More targeted services, including finance services integrated to other

services like lending to e-commerce

■ Distributed ledger, open APIs, back office as a service, and new data

models

2. Data must be an enabler, not only an optimizer

■ End-users must get immediate, tangible value from data, not only so

that companies use them to optimize their own businesses

■ For example, it is not only that a bank optimizes interest rates based

on customer risk, but the customer should get the optimal solution for

their finance needs

3. Distributed power

■ Banks and finance institutions used to dominate the finance business,

but new solutions distribute the power to many service providers and

customers, as we have seen in media and retail digital disruption

■ It is about business models and culture, but also about IT. New

technology enables new models, mainframes are dead

Rule #1

Bank’s operations, legacy IT

systems and business models are

most probably obsolete, but

traditional finance industry money,

assets and instruments still have

value

Look at Crowd and P2P Finance History

• It started with startup equity crowdfunding

■ “the most difficult asset class”

• Today lending, real estate and later phase companies are more important markets

■ Broader understanding about these models and more stable ways to value

• A lot of cooperation with regulators

■ Constructive cooperation and regulatory sandboxes in many countries

• Institutional investors and money play an important role

■ 70 to 80 percent of p2p lending money from institutional sources

• Syndication, securitization and underwriting are important in any finance market

■ Requires common tools and methods to value assets and securities

Rule #2

It is easy to print money, but

the real test is, whether you can

pay for something with it

Too Many Small Islands With Their Own Rules

1. Mainly independent cryptocurrencies, ICOs and technical solutions

■ Companies and projects issue their own tokens often based on unclear underlining assets and services

■ Even if technically possible to exchange to other digital assets, exchange rates and values hard to evaluate

2. Not linked to fundamental regulatory requirements, e.g. KYC and AML

■ It is hard to believe regulators would allow anonymous users and transactions

3. So far no models to link to the bigger financial ecosystem to underwrite, syndicate and trade

■ Each service targets to have its own assets and investors, when different cooperation models in the traditional

finance sector are the key to success

4. No common models to get and use data to value, monitor and rate assets

■ A slide show or white paper is not enough to analyze any asset and especially follow, how its value develops

5. No independent 3rd parties to analyze, rate and value assets

■ Common models, practices and independent evaluations are an important part of the system to value assets

and keep the market stable; now ICOs or crypto funds can even manipulate the market

Blockchain Is Not Final

• Capacity, efficiency and latency issues

■ Room to improve and innovate

■ Other solutions: Hashgraph, Hyperledger, …

• Common concepts for distributed ledgers but many implementations

■ User experience is still poor in many services, users are confused with many functions, and how e.g.

transfer tokens

• Need to have compatibility of different data models, tokens and transactions

■ Real finance market need compatible data, metrics and language

■ Different systems must work smoothly together

Rule #3

Technology enables disruption,

but

new business models implement it

This Means Opportunities

1. Real time data, data analytics and AI can be used to evaluate and value digital securities

and underlining assets

■ Data is becoming really powerful in finance, fintech and distributed models, but of course a slide show or

a fancy data are not enough to value an asset

2. ICOs, digital securities and smart contracts for many others and easier asset classes help

bring more investors and money

■ For example loans, real estate and later phase company equity

■ Practically, all assets in the world can go to digital securities and smart contracts

3. Needed components, like KYC, data and syndication, can be based on new distributed

technology solutions

■ These needs don’t necessary mean to use old centralized ecosystem solutions

4. It is important to have clear roles and responsibilities in the ecosystem

■ It is always complex if a party issues a security based on its own asset on its own market place based on

its own valuation model

Rule #4

1849 gold rush made only few gold

miners rich, but

it was mainly shovel sellers and

service providers that made a

fortune

CASE 1: Crowd Valley back office for services and data

Data based services on Crowd Valley back office

CASE 2: Prifina – consumers manage their own data

Prifina – empower users with personal finance data

Grow VC Group keynote about FinTech and blockchain ecosystems at VanFUNDING 2017

Economy & Finance

Transcript of Grow VC Group keynote about FinTech and blockchain ecosystems at VanFUNDING 2017