NCFA Canada | Oct 5, 2018

Ep12-Oct 5:  Building Blockchain Products & Decentralized Solutions for Enterprise and Startups

About this episode:   On this week's episode of the Fintech Friday$ podcast our host Manseeb Khan sits down with Mathieu Glaude the CEO and president of Northern Block. They talk about having a sovereign digital identity, the excitement behind stable coins and why supply chain in blockchain shouldn't be overlooked. Enjoy!

Host: Manseeb Khan, NCFA, Fintech Fridays show host

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Transcription of Interview

Manseeb Khan: Hey this is Manseeb Khan and you are tuning into a brand-new episode of fintech Fridays.

Manseeb Khan: Today I have an amazing guest today. I got Matt Glaude from Northern Block. Matt thank you so much for sitting down me today. I know like every entrepreneur your days slammed packed. So, thank you for taking time out of your super hectic schedule to make it.

Mathieu Glaude: My pleasure. Thanks for having me.

Manseeb Khan: Absolutely. So, Matt could you just for the audience give us a little bit of who you are and a little bit of who and what Northern Block is?

Mathieu Glaude: Sure. So, my name is Mathieu Glaude. I'm a CEO, president of Northern Block, Northern Block is Toronto based Blockchain product development shop focused on building enterprise Blockchain solutions. So, we've been around for just over a year now. We're still a small team just under 25 employees but we're dabbling in all sorts of areas, so we're doing a bunch of interesting projects in the supply chain space and the identity space building tools and developer tools for writing smart contracts and doing a lot of cool stuff in the space working with many different clients in the business verticals.

Manseeb Khan: you have worked with some of the past bigger enterprises and now you guys are moving to smaller enterprises. Could you talk a little bit more of the challenges, trials, and tribulations you have had experience implementing blockchain technology into a bigger enterprise.

Mathieu Glaude: Yes sure. So just a bit of a background on when we first started Northern Blocks so my co-founder Sasha and myself have experience working both startups and larger enterprises. But prior to northern block we were both Capital One Bank building digital products for them. So, I personally was a product manager working on a bunch of different products. For example, the online banking space and payment infrastructure, some Agent desktop servicing and my co-founder Sasha was Agile coach grand master and we were partners the other they're executing on a lot of cool projects. so, when we first started getting into block chain technologies when we were still working on capital when we were looking in the enterprise space because that's where we were at the time that's what we were trying to investigate just specifically for the firm. We were out at the time if there was any applicability of these technologies so when we first started getting into it we were taking the lens of how you make this work within a larger enterprise right. So, once we finally decided that we saw enough of the market to go out there and there was room for a service shop because we really felt that there was a lack of execution in the enterprise block chain space. When we left Capital One we really took that approach of how we could build stuff internally and inside the larger enterprises. So, when we made that leap we got a few contracts with some larger firms, so some stock exchanges some consulting firm’s government agencies as well built a bunch of different projects. It wasn't us. There was some overlap and some of the stuff we're doing but they're very different verticals very different products. But I mean you were good at building products, so it doesn't really matter what industry we're in. I mean we work well with the clients that know their industry and know their  stuff and we're good on just building products and executing so doesn't matter. But anyways all that to say that's when we started we were doing larger enterprise work I guess pretty rapidly.  We found that it was difficult to get stuff beyond a certain point. We knew that right coming from larger enterprises. I don't know what drove us to go back there. But yeah there's a lot of barriers that we can get into those. But you know we really wanted to take stuff to production. We really saw the disruption that this technology could actually bring to the various industries and to the world itself and the benefits it has to the end user and returning the control of that ownership back to the end user. And we really didn't feel like this vision and these goals that we had to try to achieve this by taking stuff to production was the easiest to do within the larger enterprise. So that's when we kind of switched. switched  our route and focused more on building outside.

Manseeb Khan:  Blockchain all everything, that you hear in the news either positive or negative a little bit more positively skewed. Is that how incredible blocking technology is and like how incredible and beneficial it would be to I guess enterprises and just like big conglomerates. Do you see any disadvantages, enterprises be medium or big size integrating with block chain technology?

Mathieu Glaude:  Yes. Not necessarily a disadvantage. There's a lot of proven use cases. If you look at the most popular things that are being worked on. This was from a Deloitte survey. Either this or last year. It seems like most large enterprises are doing something in blockchain right whether it's just building a  proof concept or trying to do a pilot seems like over 80 percent of executives in these large companies I think are with over 500 companies surveyed are doing something so people are learning people are investigating. People are dabbling with it. I don't think there's a lack of use cases and I think there are tremendous advantages of building these solutions. I think the difficulty of getting past a certain barrier to implement is just the products that you build using blockchains are totally different than any existing product. If I'm if I'm a bank and I see that I could potentially leverage block sharing technologies for KYC for example to store customers data on there and there might be an advantage to share this customer data amongst a consortium of other banks. But it sounds like a good idea. But you know it's that there's a lack of economic incentive for them past a certain point to even want to do that. So, one thing is like the learning to get up to speed with this stuff and see what the advantages are. But these people know that you know they're smart people they know what advantages these things could bring but there's a lack of incentive to want to follow through with these programs. Often, we see that you know these large enterprises already have existing businesses that are doing very well and they're very profitable for them. So why would they want to build something totally new totally disruptive that would disrupt their existing moneymaking either. Exactly their current moneymaker. To do this new thing. Right so it's a big gamble and obviously seen as a gamble. There's a lack of success stories and stuff but it's definitely one of the big difficulties we're seeing is just like the incentive to go on to do with the economics.

Manseeb Khan: Yeah, I mean that seems to make sense right because it's a very you see with a lot of the bigger corporations a lot of the bigger conglomerates the current way of doing things the best way to make the money. And it's very hard to say if it's going to be disruptive how things are currently happening and flowing why would we want to do that. I wouldn't invest millions if not billions of dollars into this new thing that's going to destroy what I currently have going on. This is amazing. I'm comfortable doing this.

Mathieu Glaude: And at the same time when these large enterprises the number one risk factor is cyber security. Yes. And like you're seeing repeatedly all these hacks happening there was just last week that massive Facebook when it's nonstop and like the ones we're seeing in the news are only the ones that are being broadcast. Exactly and to you most.

Manseeb Khan: Yeah there's so many of them that none of the companies that want any publicity behind right.

Mathieu Glaude: Right. So, it's a big factor as well. If I'm an executive driving blockchain technologies or driving innovation within my firm. I if I was going to say OK let's invest in this product. I think we're going to be able to create a competitive advantage by doing this and create a good business model on top of this. Well then watch right. I'm going to build this decentralized ledger technology or whatever I'm doing and then like every other piece of technology inside my company I'm going to need to wrap it up with a thousand layers to make sure.

Manseeb Khan: That it's all secure it's good to go. Yeah.

Mathieu Glaude: So, you know back to that incentive why would I spend. Call it a few millions on this one I'm going to have to spend ten on top just to secure its rights. Yeah exactly. So, a lot of these things really impact why you know what we're not seeing things progressed as fast as we would like. It's really not. It's really not a lack of technology it's really one of the big things. So, a couple of times there's is just incentive to one.

Manseeb Khan: Yes absolutely. Absolutely. So, you did mention on the top of the episode that one of the things that Northern Block does focus on is supply chain. I think one of the big parts that a lot of media coverage is not getting behind is how important supply chain is in the aspect of block chain. So, could you share a little bit on your opinion on why we think supply chain is very important. And I guess some use cases for it.

Mathieu Glaude: Sure. Yes, it was. We have a couple supply products that were building back by block chain technologies. A lot of the stuff we do is I mean we dabble with public block chains depending on the use case and the business requirements. You can make a distinction, right? between the public watching and permissions or consortium or even private auctions. A lot of the stuff that our partners and our clients want to build require consortium style. So that means identifying a bunch of parties that want to partner together to share data or share assets between themselves on an open ledger between themselves between the whole world just between them. So if you're saying I want to do a supply chain solution if you imagine McDonald's for example wanting to do a  block chain based supply chain solution to track the quality of their ground beef or their meats through the whole supply chain from time the cow was born to someone who consumes a hamburger you know you probably wouldn't put that on a public block chain like Ethereum or Bitcoin or you know whatever. I don't necessarily need the whole world to see how the access to even though you can encrypt stuff to have access to you know the patterns and data and what's happening so maybe in that case I have a let’s call it a hundred different parties. Probably more complicated than we think it interacts with you know from cow to hamburger. So as an end user it would be important for me to know that what I'm eating is actually what it is exactly. I've seen more and more of this stuff especially in the social conscious stuff like I want to know that what I'm getting is what it really is and so then that really comes down to how are you able to properly track the provenance of whatever good or whatever you're consuming. So back to that McDonalds example if I have 100 people in the supply chain then potentially there is all these touch points where people are interacting with the product or whatever the product is at that point. I might want to capture datapoints though might want to capture it you know, and it could be data points from an actual person that's touching it, or it could be data points from an IoT device or sensors or whatever for example that temperature controlling or whatever you know whatever success metrics we have for this product. So, get McDonald's I want to build the solution that every single person is going to use at the same time. It's hard to do.

Manseeb Khan: It's like No absolutely especially like we talked about McDonald's it's a huge franchise such a huge company it can be very hard to implement block supply chain solution for hamburgers or even French fries.

Mathieu Glaude: And then do they want it to do they want. At the same time if now I'm implementing this solution on creating a lot more audit ability and visibility into what's happening in the supply chain through all the different members want that's some of them are probably making a decent living there and maybe they're not bringing as much value to this whole thing but they're making money out of it so why would they want everyone else to see that exactly. So, there's an incentive there as well. But you can imagine if someone like McDonald's tried to implement all these people are most likely so dependent on that client they would have to buy into that. Yeah but so these are some of the types of things that we're doing is that we're building these consortium networks of parties for specific processes that we could go capture and we're very aware how hard it is to you know scale something that size that example we just gave. So what we do is with our partners in the industries that we're working in we really try to get a specific slice of that supply chain and we try to get everyone on their approved the concept do a pilot run it's successful with them once we've proven that there's enough value for the users and everyone involved and that's when we can start kind of expanding it in whatever direction we want to.

Manseeb Khan: Yeah absolutely. So, it's important to have a niche target  base. And speaking of all this McDonalds is getting a little a little hungry. So, you did also mention that northern block is doing some work in the digital identity space. Could you talk a little bit more about I guess in your terms what digital identity is and the advantages of implementing digital identity.

Mathieu Glaude: Yeah sure that's one of those big problems that a lot of different people are trying to solve. Back to the Facebook example it's like Facebook owns all their user’s data so their users are their product, or their site and they use that data to make money. So, the promise of digital identity is back to the fact that you can return data ownership to the user. So, you have this thing called sovereign identity as an individual I should own who I am. And so, what I interact with different people whether it's at the airport taking a flight and I need to show ID or I'm at the LCBO trying to buy a bottle of wine and then to verify my age or whatever it is that people need access to my personal information. I should be able to choose exactly what I shared with these people without them having access to all my information not just decentralizes the process right. Instead of all these different parties having their own databases that are vulnerable to attacks with my personal information on it which could harm me instead I have my identity and my personal information stored in a decentralized manner and then I could who's who I share it with. And, what you share essentially with who. Right exactly. And so, like I mentioned that there's a bunch of different people that are trying to do stuff in that space. I mean you hear about the Uport or civic and those are some of the leaders in the space right now. We haven't seen much adoption yet. Of course, this is  indicative of the whole space. So, what we're doing is, so we had worked on a couple of concepts. So, we got familiar with the topic how can we use the benefits of it since Northern Block builds decentralize applications, identity is a big factor for every single one. Identity is at the center of every single application. And so, if I want to for example in my supply chain solution if it's decentralized enough I want to make sure that the data that is being provided is coming from a certain person. I want to verify it's coming from that person. I want to know that it's that person driving the data. So, it's clean data. There's no applicability there. If I have trade financing tool or asset trading or whatever you need to know who the person is right based on whatever jurisdiction you're operating in they're making or rules or regulations whether you need to be accredited whether KYC has to be done to be able to transact. So all these things could potentially be decentralized so we could actually stop having hundreds and thousands millions of companies just hoarding everyone's personal data and you really return ownership of the owner which is the user which is yourself and then you could actually just control we share it with and who sees it and you know how it's being used and you could potentially imagine a future where you could actually make money out of sharing that stuff right if you want and share it.

Manseeb Khan: Yeah absolutely. A very interesting use case and everybody gets to be like their own influencer in the sense of like oh hey this Car company has tried to target me. Ok cool I'll share this information, so they know that I want a minivan or what have you. Right.

Mathieu Glaude: Yeah and then imagine like every time you go online now you're seeing all these websites that tell you that there are other browsing the cookies. And so, what if you had a decentralized browser and then your identity is attached to your usage right. So instead of all these websites taking cookies your taking the cookies and then if they want the cookies and they could ask you for it and then you could start creating markets like that. Right. So more. It's just that it's a win for the user for people.

Manseeb Khan: Yeah absolutely. And it goes back to like what we started with is like it comes down to reclaiming who you really are and your sovereign identity and just taking it from there right like you have ownership of who you are. Ideally you want to have the exact same ownership in a digital space.

Mathieu Glaude: And it removes friction like you don't have to do all the repetition everywhere. Yeah. Oh, my goodness. Every time you need to consume a product or service the same thing you're providing the same information. So, it removes friction for you and ultimately back to this whole incentive thing but ultimately it will be cost savings for all these companies as well having to manage and secure  your private data. They would own it

Manseeb Khan: Or even like personally like I know. I can count the number of times I forgot my ID and I go to bar, and they ask for my ID. Like just Google my name. I've pretty good SEO behind name, you can just Google me. I'm who I am.

Mathieu Glaude: If the data is as trust it's trustworthy enough that's what we're trying to get like authentic data that people trust is accurate then you could start getting in situations where I don't even need to share like a certain piece of information if they need it. If another trusted party let's call it a bank for saying a bank is trusted enough to make an attestation that I am who I am, I live at this address and whatever right. So potentially you could limit the amount of information that's being shared. If people are trusting what other people have said about you.

Manseeb Khan: Yeah exactly. That's a cool concept. Yeah that's like that's exactly what going to touch a little bit more next if there's more than enough opportunity of people becoming trusting parties like trusting party don't necessarily have to be institutions or an organization they can just they can't even be individuals of like yeah this is. That's him that's my little goofball boom.

Mathieu Glaude: And you know if you're storing all that data all these transactions on an immutable ledger one could think that there are projects in space as well and I think this is going to be huge. It's the whole status of reputation side of things that now it could actually create a standard for a status or reputation of someone that impacts what these people are allowed to do or potentially if these people are interacting with other people and impacts the quality of the data they're testing to something that I know there a reputable person and I know they're a reputable person because they've done all these things and it can start screening business logic around the stuff and you know really decentralized it no longer I can actually focus on the bank or exactly realty companies.

Manseeb Khan: And it's more power to the individual right. It goes down to back having sovereign identity and just having even more validation in I guess the blockchain ecosystem or what have you. Exactly. So other than supply chain and having a digital identity what else excites you about the blocking space?

Mathieu Glaude: There's a lot of cool things that have a lot of potential. Just starting in the public space taking a step out of the enterprise where like the enterprise you talk about supply chain stuff and IoT stuff, identity stuff we could get back to. But some of the some of the things that we're seeing that are really exciting in the public blockchain space. One is the decentralized exchanges. Once the hit once they get it right and you're able to do a true peer to peer exchange of assets and you're able to create a market that's going to be very powerful. So, we're excited about the decentralized exchanges. Stable coins have been a huge topic of discussion. Basically, a stable home just  a better asset to trade because it just holds its value. Whereas people aren't comfortable right now using a lot of the crypto assets as a leverage or to move around just because of the fluctuation in prices right.

Manseeb Khan: So, a stable coin be something like an asset that is like I guess tied down with gold or like a legit like physical commodity or?

Mathieu Glaude: Yeah there's a bunch of different ways to do it. It could be tied to a commodity it could be tied to the U.S. dollar right. Or it could be tied to a bucket of crypto assets. There's a bunch of difference approaches there and what we're seeing all these different things take a couple of weeks ago the exchange Gemini's and the U.S. exchange owned by the Winklevoss twins. Right. Right. Those two, the Facebook guys. So, they launched the stable coin pegged to the U.S. dollar. So you know if I think about a used case that I want to do cross-border remittances it might not be the greatest right now with the current market conditions tend to use ether or use lite coining or to use bitcoin just because if you know from the time I send it and then the time it gets to a place in this transaction someone else that value fluctuates so much and so people are looking to solve that problem of how could you use distributed ledgers for these transactions that are pegged to something more stable or if it's fiat or a bucket of crypto.

Manseeb Khan:  Right. Right. if I accidentally send somebody even more money than I should I get pissed. Like I couldn't imagine sending somebody the exact Ethereum that they requested like oh it's a skyrocket 15 percent, like god.

Mathieu Glaude: Yeah, it's just that it's not usable in the real world. Absolutely. Absolutely. You can scale that business. So yeah, it's an interesting space as well that there's a bunch of stuff that is super exciting that people are working on in the public space. I mean there was a personally in Northern Block  we're working on a lot of developer tools. so the technology is still very early on and depending of where you're building on what the block chain you're building you're not necessarily going to get the same help from tools and documentation and stuff like that which makes it easier to develop which in a lot of you know software development outside of outside of smart contracts and blocking technologies like it's more mature. So, you have that subsets of developer that there are less barriers to execute and implement stuff whereas if you're smart contract developer the time you'll have is probably developing on Ethereum just because they're the most mature platform and mature block chain and set of tools right. I mean even at a lot of the tools are very fragmented and need to go all over the place right. What we're doing and what we're trying to help the developers because you know that's been a big pain point for us trying to build this stuff. Yeah how can we bring everything together to make it super easy to rights to deploy smart contracts to test that trust us networks to the point nodes to deploy API is all the stuff that there's a lot of commonalities for any developer that's trying to do this or trying to build blockchain products. so, we're implicated in that space as well and we're happy a few team members of ours are going to San Francisco on Friday this week actually. To participate in San Francisco Ethereum hackathon so exciting to see just what the people are working on and trying to move forward.

Manseeb Khan: Yes. No absolutely. I mean I'm very excited to see you creating a I guess central hub with all the developer tools for everybody out there like that be. That's got to be more than more than valuable to everybody.

Mathieu Glaude: Ultimately, it's the developers that choose where things are being built. Exactly. It's not the business of the business as have other requirements and everything but at the end of the day it's a developer that pulls the trigger on it. Yeah. If you could give them proper toolkits to be able to execute better. Yeah, I think that that's it's a win for everyone right. And so, us being a first user of that it's really helpful building and because we're building it for ourselves and we're using it ourselves. And we're looking forward to growing that product into the market.

Manseeb Khan: So, Matt if people want to get in touch with you or Northern Block or even one of the amazing devs that you're sending are San Francisco will be the best way to contact you guys would it be to Twitter or Snapchat you. How do we. Well the best way to get touch with us.

Mathieu Glaude: We're not on snapchat but you could just Google US Northern block online. Northernblock.ca  or on most social channels. We're active on Twitter LinkedIn so you could find us pretty easily there and that but please reach out if you have any questions. We love talking to people about this stuff.

Manseeb Khan: Well Matt thank you so much for sitting down with me today. I learned way more about supply chain and blockchain than I ever would have even. I'm very excited about having a sovereign identity and I'm very excited to see what's more in store. Other than the developer tools and just the amazing work that you do in Northern Block. I can't wait to have you on the show again.

Mathieu Glaude: Thank you. I appreciate  you have a me. This was a fun conversation.

End of Podcast

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The 11 Biggest Fintech Companies In America 2019

February 5, 2019

Forbes | Jeff Kauflin | Feb 4, 2019 This article was updated on 2/4/19 to include Ripple, the fourth-most valuable private fintech company in the U.S.  Financial technology startups continue to attract a growing amount of attention and capital. In 2018, valuations of the biggest private companies bulged, and at least six new fintech unicorns were minted in the U.S. U.S. fintechs raised $12.4 billion in funding, or 43% more than 2017, reports CB Insights. That growth outpaced the 30% increase in venture investments across the entire U.S. market. And fintechs will need those dollars—they tend to burn about two to three times as much cash compared with other startups, according to an analysis by Brex, likely due to factors like regulatory hurdles. Here are the 10 most valuable private, venture-backed fintechs in the U.S.: 1. Stripe, $22.5 billion Originally a service to help small online sellers process payments, today Stripe serves tech giants like Microsoft and Amazon, too. In 2018 the company announced three new high-profile products, including credit card issuing technology, point-of-sale software and a billing platform for subscription businesses. Cofounders: CEO Patrick Collison, 30, and president John Collison, 28. Irish-born brothers, dropouts from MIT (Patrick) and Harvard (John) ...
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Europe’s fintech companies are preparing for a no-deal Brexit

February 4, 2019

CNBC | Elizabeth Schulze | Jan 31, 2019 Navigating the uncertainties of Brexit is proving to be a tough task for newcomers in the financial services sector. Fintech firms are proactively applying for licenses in EU countries ahead of the Brexit deadline. So far Brexit uncertainty hasn't dented investment into London's thriving fintech market. Europe's fintech companies are getting serious about the possibility of a no-deal Brexit. As uncertainty looms over the U.K.'s split from the EU, the industry gathered this week at the Paris Fintech Forum. Payments providers, cryptocurrency exchanges and digital banks all said they were taking steps to prepare for the worst-case scenario. But navigating the uncertainties of Brexit is proving to be a tough task for newcomers in the financial services sector who are luring in users with borderless, frictionless payment and banking solutions. "It is obvious the bigger the market is, the better it is for fintechs, the faster it is they can start, the more opportunities they have," Wim Mijs, CEO of the European Banking Federation, told CNBC on Wednesday. "If you cut off that market, you're hurting yourself, which is Brexit in one word." See:  Who’s afraid of Brexit? Here’s why Canadian fintechs ...
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Report: State of Regulation Crowdfunding Says No Gold Rush But an Undeniable Job Creator

February 2, 2019

Crowdfund Insider | JD Alois | Feb 1, 2019 Regulation Crowdfunding (or Reg CF), created by Title III of the JOBS Act, has been available for several years now. While not without its shortcomings, Reg CF has been leveraged by hundreds of issuers, typically smaller firms, raising over $100 million since May 2016. This past week, Crowdfund Capital Advisors (CCA) published a report on Reg CF entitled “2018 State of Regulation Crowdfunding,” providing a snap-shot of the securities exemption and its overall performance. Crowdfund Insider communicated with CCA principle Sherwood “Woodie” Neiss regarding the report. Neiss told CI the promise of Reg CF as a jobs creator and economic engine is starting to prove true: “Back in 2012, the promise of Regulation Crowdfunding was jobs, a local economic generator, and an industry revitalizer. With the close of the 3rd calendar year of Reg CF we can see that those promises are holding true. Reg CF is proving to be a jobs engine (creating on average 2.9 jobs per issuer), economic generator (pumping over $289 million of revenues into local economies) and industry supporter (enabling 82 unique industries in regions across the USA).” See:  Prominent Group of Fintech Leaders Send Letter to SEC Chair Jay Clayton Demanding an Increase in Regulation Crowdfunding ...
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