Category Archives: Fintech Opinions

March 10, 2021   Entrepreneurs, Start-ups, Small Businesses, FinTech and Alternative Finance, Fintech Opinions, Fundraising, Investing, Trading, Innovation and Resources, Stories, Voices   No comments

Why the Canadian Tech Scene Doesn’t Work

Alex Danco blog | Jan 2021

Alex Danco on Canada’s startup ecosystem

Toronto is not the next great startup scene. Neither is Waterloo, or Vancouver, or anywhere in Canada.

I’m sorry that I have to write this. I really am. I want it to work. But the growing chorus of aspirational claims that “Toronto’s tech ecosystem is growing faster than anywhere else in North America” or “The Toronto-Waterloo corridor is ‘the nice person’s Silicon Valley’” honestly do not portray an accurate picture of what we’ve built here.

To be clear: I am not saying there are no individual success stories of Canadian startups, or that there are no good angel investors or VCs here, or that there are no individual instances of things going right. Shopify obviously worked out great, there are other big success stories like Lightspeed making their way up, we have some really good initiatives around bringing new builders into Canada, and there are a good many individually inspiring startups that I admire.

There is certainly a lot of something here. It’s true that big companies are adding tech jobs here; it’s true that there is a lot of activity in the startup scene here. But we do not have a real startup scene that actually works; not yet. You cannot put the Toronto tech scene side by side with the Bay Area’s and say, “These are similar; ours is just smaller.” Come on; it’s not. The Bay Area’s startup scene continuously pulls incredible companies into existence. Ours… does not do that.

See:  4 Ways the Startup Landscape Will Shift in 2021

The Canadian tech scene, as it currently operates, does not support startups. It stifles them. I’m sure for some of you it’s in your professional interest to insist otherwise, and look I respect that, but I care about us getting this right, and someone needs to say this so it might as well be me.

Programs like SR&ED, Institutions like MaRS, and other well-meaning but disastrous government initiatives to support the startup ecosystem relentlessly pump money into the startup scene. This money is advertised as “free” or “non-dilutive”, but in reality it’s the most expensive kind of money you can imagine: it’s distracting, it begs justification, it kills creativity, and it turns your startup into a government work program.

Once your startup becomes a government work program, even if you pretend otherwise, you are forever onwards compelled to play fixed, finite games with your time and with your resources. You have to define what problem you are solving, and what you’re doing to solve it. You have to demonstrate value created.

The minute you spend any time doing that, with any part of your startup, that becomes the work product of more and more of the startup over time. Once you slip into playing fixed, definite games, that becomes everything you do. You become a milestone-oriented company, rather than a growth-oriented company. And there’s plenty of non dilutive money and government support for supporting and rewarding those milestones, so you can play this game for some time. So will your other founder peers, and this will just be normal.

But by becoming a milestone-oriented company, you’ve unwittingly destroyed your ability to actually put VC money to work, the way startups can do in California. And even before you take VC money, by becoming a milestone-oriented company, and learning how to talk and act in order to highlight those milestones and raise money off of them, you’re going to preferentially select for Bad Angels and disappoint Good Angels. The Good Angels simply won’t be having any fun: they won’t find the infinite game they’re looking to play, so they simply won’t play at all. So the early-stage funding environment gets saturated by the wrong type of money: well meaning, perhaps, but toxic to startups. And so startups start out hobbled, and likely never recover.

See:  7 Types of Investors to Avoid Like The Plague When Trying To Raise Capital For Your Startup

And this keeps the cycle going: the failure of these startups to sufficiently mature into unicorns (how can you blame them) compounds investors’ insecurity and obsession with “getting some exits for the ecosystem”, reaffirming their experience that these investments never generate any real returns, and reaffirming all of their decisions to say No rather than Yes. The ecosystem becomes defined and bounded by its small thinking.

And then, imagine you want to start a startup. Would you do it here? Or would you just get on a plane, and go to California?

Unfortunately, this decision compounds generation after generation of startups. For every batch of 10 new founders, the 2 most creative ones immediately leave (because it’s the right decision), leaving behind the other 8. They then start and grow their startups in this fixed-mindset, milestone-oriented environment, and become the environment that the next 10 founders step into as they graduate from Waterloo, or wherever. When the two particularly creative founders in that batch look around, yeah they’re probably gonna go to California too; again, leaving behind the other 8.

It was a bit of a bummer writing this essay. It’s not fun to write about this systemic trap we’ve gotten ourselves into; especially because there are so many individually good people and startups and firms in Canada who are trying their best to do good work. This is a system problem.

See:  The Intersection of Small Business, Tech and Our Financial Ecosystem is More Important Than Ever

My hope is that people in Canada reading this will realize that the problem facing us isn’t a lack of anything. The problem with our startup scene isn’t a lack of money, startups, investors, hustle, great Universities, technical talent, or creativity. Our problem is actually the presence of actively bad things: all of our non-dilutive (but extremely expensive!) innovation credits, the presence of incubators and entrepreneurship programs, and the accidental costs of milestone thinking. If we want to build a real startup community in Canada, we need to let go of those crutches, and choose the Infinite Game.

Anyway, I’ll wrap this up for now, but I hope we get this right eventually. In so many other ways beyond the tech scene, Canada is a special place. We’ve pulled off something absolutely incredible in our experiment of speedrunning multiculturalism; we’re (in my opinion) one of the overall nicest and freest places to live in the world; Canada is great and there’s a lot to be proud of here. But Canadian tech, specifically, can do better. I hope we do!

Continue to the full article --> here

 

The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

NCFA Financial Innovation MapNCFA Innovation Opportunity BriefsNCFA Fintech Insights
NCFA Fintech WhispererNCFA Fintech Fridays PodcastNCFA Weekly Newsletter

 

Read More
March 5, 2021   Entrepreneurs, Start-ups, Small Businesses, Equity Crowdfunding, Alternative Funding, FinTech and Alternative Finance, Fintech International, Fintech Opinions, Innovation and Resources, Stories, Voices   No comments

5 Challenges Facing all Start-Ups

Guest Post | March 5, 2021

Startup challenges

Starting a new business isn’t easy at all. The world is littered with start-ups that failed in their first year, and you don’t want to become one of them. However, if it wasn’t challenging, then everyone would be doing it, and it’s all part of the experience of creating a start-up. While every business journey is different, here are some of the challenges most start-ups face.

Financing

Setting up a successful business doesn’t come cheap. To see your idea through, you may need millions of dollars of investment, and finding it isn’t always easy. This area has been opened up a lot in recent years with changes to initiatives like equity crowdfunding, but it’s still one of the biggest hurdles start-ups face. Getting that initial money in can set the ball rolling for your business, but you’ll have to work hard to secure it.

Expectations

Sometimes it’s your own expectations that can hold you back the most. The word start-up is very loaded. We tend to think of exponential growth, exciting markets, and fast money when we hear the word start-ups, but for many businesses, this is far from the truth. Business success takes time to achieve, even if you’re one of the lucky ones.

The majority of start-ups fail in their first few years, so you have to be realistic with your expectations. This will allow you to make better decisions for your business.

Brand Recognition

How do you create a buzz around a brand-new business? Many start-ups are entering into markets where there’s fierce competition, and they’re up against established names. In these cases, it can be extremely difficult to get your brand recognized.

See:  Governments, Don’t Let your Startups and Scaleups Die

This is where innovative marketing comes in and can make all the difference. Branding can be something that sets you apart, but if you’ve not got it right, it can mean you never stand out from the crowd.

A Changing World

The world changes quickly, and if your business can’t adapt, then it will struggle to get off the ground. For example, in the early 2000s, business travel was huge. If deals needed to be made on the other side of the world, then you just flew over there. However, changing global opinions and technological advances have meant that travel budgets are much tighter.

If you’re not using innovative services such as Amex Global Business Travel, then you might not be making the most of the opportunities a changing world offers.

Making the Right Hires

Your employees are one of the most important parts of your start-up, and it’s important you find people who are going to fit with your culture. It’s easy just to look at job-specific skills when hiring, but you really want somebody who’s going to grow with your business and embody your values. Those first employees will leave a big impression on your business for many years to come, so it’s worth putting the extra effort into your hiring decisions.

 

The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

NCFA Financial Innovation MapNCFA Innovation Opportunity BriefsNCFA Fintech Insights
NCFA Fintech WhispererNCFA Fintech Fridays PodcastNCFA Weekly Newsletter

 

Read More
March 3, 2021   Blockchain, Crypto, Digital Assets, Tokens, CBDCs, Stablecoins, Metaverse, NFTs, Digital Identity, Privacy, KYC, AML/ATF, Entrepreneurs, Start-ups, Small Businesses, FinTech and Alternative Finance, Fintech Opinions, Innovation and Resources, Voices   No comments

How Verifiable Digital Identity Will Protect Your Post-Pandemic Privacy

Be[in]crypto | David Lucatch | March 2, 2021

digital identity a basic human right

In Brief

  • COVID-19 has changed the very fabric of our world and how we live our daily lives.
  • The use cases of user-controlled digital credentials are nearly limitless.
  • We must continue to support regulation like GDPR in the EU, CCPA in California, PEPIDA in Canada, and others.

It’s no secret that COVID-19 has changed the very fabric of our world and how we live our daily lives. 

For example, consumer online spending with US retailers increased 44% in 2020, compared to 2019, according to the latest Digital Commerce 360 analysis.

International tourist arrivals declined by 74% (roughly one billion fewer trips) in 2020, compared to the previous year, making it “the worst year in tourism history.” Plus, 29% of polled working professionals said they would quit their jobs if they couldn’t continue working remotely, as the world begins to reopen.

All of these changes will impact the way that business is done moving forward. They will push organizations to closely consider the vulnerabilities of their current online and on-premise privacy and data management policies and procedures.

See:  Digital transformation: 9 emerging roles you need on your team

The internet has always been susceptible to fraudulent activities. Think for a moment back to the iconic New Yorker cartoon, which first appeared in July 1993 when the internet was in its mainstream infancy.

The “On the Internet, nobody knows you’re a dog” pictorial demonstrates that from its initial inception, there have been myriad online opportunists leveraging the internet to misrepresent who they are.

While the pandemic has largely kept the world at home for almost a year now, we have seen online shopping and virtual banking transactions consequently skyrocket making the inherent vulnerability for the digital consumer much more obvious.

The “trusted triangle” concept

While the internet does not provide its own secure trust layer, there are still some solutions available to proactively protect one’s digital identity.

The idea of “identity” is based around the concept of a mutual, trusted relationship between parties through which each person has a basic understanding of who the other person is. One such solution involves using a “trusted triangle” process, similar to the conducting of an e-commerce transaction.

When e-commerce transactions are conducted online (whether for retail, healthcare, travel, education, or entertainment purposes), a trust triangle is formed, with the issuer, the holder, and the verifier serving as the three corners.

See:  PwC Report: Canadian Digital Trust Insights 2021: Cybersecurity comes of age

All parties involved want to be certain that the individuals within the ecosystem have gone through a verification process. In retail transactions, for example, the verifier must confirm the cardholder, the validity of the card being used, and the legitimacy of the issuing organization before the retailer should accept the payment.

However, in these types of transactions, does the verifier or issuer really know that the cardholder is who they purport themselves to be? Or are they just someone with the right information at the time of the transaction?

Proving you are who you say you are

Using verifiable credentials, individuals, or holders, use a digital wallet that can carry multiple types of verifiable identity credentials in a user-managed and controlled device or cloud-based platform.

Individuals are then able to securely store, control, and share their most valuable information through that self-sovereign wallet. This includes access credentials like passwords, proof of educational degrees, certificate completion, membership cards, government credentials, and healthcare credentials.

See:  Privacy laws might prove to be a blessing in disguise for crypto

Within this digital ecosystem, verifiers — employers, schools, airlines, and others —  will be able to request a verifiable, reputable presentation of credentials to determine acceptance. Thus, they will ensure that individuals are who they say they are and possess the necessary credentials to enter or participate.

I believe ownership, management, and control of one’s personal online identity is a basic human right. Just as a person has the right to control the use of their name and who has access to medical information, individuals should have the right to own and be the sole beneficiary of their valuable digital data.

If a digital wallet is controlled by the service provider who issued the wallet, then the user is neither sovereign nor completely private while making transactions.

Continue to the full article --> here

The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

NCFA Financial Innovation MapNCFA Innovation Opportunity BriefsNCFA Fintech Insights
NCFA Fintech WhispererNCFA Fintech Fridays PodcastNCFA Weekly Newsletter

 

Read More
March 2, 2021   Digital Identity, Privacy, KYC, AML/ATF, Digital, NEO, Open Banking, Open Finance, Enterprise, Scaleup, Entrepreneurs, Start-ups, Small Businesses, Fintech AI/ML, Data-driven, Automation, Generative AI, FinTech and Alternative Finance, Fintech Opinions, Innovation and Resources, Legal Issues, Regulation, Consultation, Research, Stories, Voices   No comments

Review: Financial Consumer Agency of Canada (FCAC) submission to Advisory Committee on Open Banking

FCAC | March 2021

FCAC review 2nd around of open banking consultation

Overview

The Financial Consumer Agency of Canada (FCAC) is a federal financial sector regulator, which oversees federally regulated financial entities’ compliance with consumer protection measures, promotes financial education, and raises consumers’ awareness of their financial rights and responsibilities. In addition, FCAC is responsible for monitoring and evaluating trends and emerging issues that may have an impact on consumers of financial products and services, as well as providing timely and objective information and tools to help consumers navigate financial products and services.

The Advisory Committee on Open Banking (the Committee) shared consultation materials with interested stakeholders, including the FCAC, in fall of 2020.  FCAC welcomes the opportunity to participate in the development of a uniquely Canadian open banking solution that prioritizes the right of the consumer to control their financial data and puts in place safeguards to ensure they are protected from financial and non-financial harm. This submission has been submitted to the Committee for their consideration in the context of their consultations.

See:  NCFA OpEd: Canada’s Open Banking Consultations: Let’s Get it Done!

FCAC is broadly supportive of a hybrid model for open banking that carves out specific roles for government and industry and sets out the building blocks outlined in the Committee’s consultation  materials.  FCAC supports the Committee’s advocacy of a framework centred on several core consumer outcomes:

  • Consumer data is protected;
  • Consumers are in control of their data;
  • Consumers receive access to a wider range of useful, competitive and consumer friendly financial services;
  • Consumers have reliable, consistent access to services; and
  • Consumers have recourse and redress when issues arise.

We strongly recommend adding a sixth core consumer outcome: Consumers benefit from consistent consumer protection and market conduct standards. Based on experiences in other jurisdictions, consumer confidence is necessary for the success of open banking. A core outcome related to market conduct and consumer protection should be explicitly stated to provide assurance to consumers and as a signal to the industry.

This would include the following base level requirements: clear, simple, and not misleading language; no coercion or tied-selling; express consent; and a robust complaints-handling system which prioritizes a fast and seamless process for the consumer.

See:  Digital IDs Help Open Banking Reach Its Fullest Potential

It is inherent in the Committee’s consultation materials that consumers will have meaningful protection; FCAC recommends that the sixth core consumer outcome be added to reinforce this foundational principle. This central focus on consumer issues is critical to enable adoption of open banking and also needs to be ongoing – consumer protection must be embedded in every stage of accreditation, implementation, and in the governance and maintenance of any open banking system. Consumers should continue to receive at least the same level of protection that they currently enjoy, including in terms of liability protection. For example, today consumers are not held liable for unauthorized transactions on their debit and credit cards, provided that they have taken reasonable care to protect their information. FCAC believes that similar protections should apply in the open banking framework.

FCAC recognizes that the time to act is now and acknowledges the positive role that open banking can play in the future Canadian economy. We agree that the risks of the status quo (i.e., screen scraping) will lead to adverse outcomes for consumers.

FCAC has already warned consumers of these risks through a consumer alert and will continue educating consumers on open banking as implementation moves forward. To that end, FCAC plans to publish additional consumer education web content on open banking and fintechs in early 2021.

Summary of Recommendations

FCAC’s consumer protection mandate is exercised in two principal ways: 1) we oversee regulated entities’ compliance with consumer protection provisions, and 2) we educate consumers to improve their knowledge, skills, and confidence in making financial decisions. As a result, FCAC is well-positioned to contribute to the design and implementation of an open banking framework. The following are the main recommendations and issues that FCAC believes would merit further consideration by the Committee.

FFCON21:  7th Fintech & Funding Conference and Expo: Breaking Barriers | May 11-13, 2021

Consumer protection / market conduct standards and consumer recourse

  1. Incorporate legally binding consumer protection and financial inclusion requirements into the accreditation criteria from the outset (e.g., fair access to financial products and services; the requirement and verifiable ability to provide financial redress; policies and procedures related to effective complaint handling; express consent for data sharing and how consumer data will be used; and, communicating product and system disclosures in a manner that is clear, simple and not misleading). These requirements should trigger enforcement actions when non-compliance occurs.
  2. Invest in a national awareness and education campaign focused on open banking to ensure consistent and unbiased messaging to consumers that does not select winners and losers. This campaign should be jointly funded by the industry and government and be coordinated by a respected authority who will employ evidence-based practices. FCAC has the experience and mandate to contribute to and coordinate such a campaign.
  3. Apply stricter accreditation and implementation programs for firms seeking write access. Write access carries greater risks for consumers than read access and therefore should only be allowed when the framework is established and operating effectively.
  4. Apply a liability framework that ensures a single, seamless consumer experience, which does not put the onus on the consumer to navigate the attribution of liability, and provides fast redress / reimbursement for consumers.
  5. Designate a single external complaints body (ECB) for open banking activities and afford the ECB binding resolution authority.

See:  Global Risk Institute Report: Discussing Open Banking Regulation for Canada

Oversight

  1. Careful consideration must be given to the delineation of the role, scope and authority of both the accreditation body and the implementation entity.
    1. It may be appropriate for the accreditation body to be industry-led and responsible for technical standards, particularly in relation to accreditation criteria. It will be important to ensure that consumer issues are adequately represented within this body.
    2. The implementation entity should be a regulator or be under the oversight of a regulator or other appropriate government body. The implementation entity needs to be set up in a way that is transparent, prioritizes consumer interests and protection, and manages conflicts of interests.
  2. Appropriate government oversight of both bodies will be fundamental to consumer confidence, particularly if the accreditation or implementation entity is afforded the authority to establish and enforce rules.  Close monitoring will be required to ensure that the rules and their application do not advance business interests at the expense of consumer protection.

Data access

  1. Given that open banking-type activities are already present in Canada (e.g., screen-scraping), immediate direction is required during the interim period while a framework is developed. This direction should include expected commitments/roles for government and industry, guidance on interim liability allocation and access to redress, how consumer protection will be incorporated, and a sunset date for screen-scraping.
  2. The open banking framework should include barriers to prevent firms performing similar functions from operating without accreditation and under different rules (i.e., by continuing to use screen-scraping).
  3. Reciprocity should be driven by consumer consent; firms should not require reciprocal data access in order to provide a product or service.

Continue to the full analysis --> here

 

The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

NCFA Financial Innovation MapNCFA Innovation Opportunity BriefsNCFA Fintech Insights
NCFA Fintech WhispererNCFA Fintech Fridays PodcastNCFA Weekly Newsletter

 

Read More
March 1, 2021   Digital, NEO, Open Banking, Open Finance, Enterprise, Scaleup, Entrepreneurs, Start-ups, Small Businesses, ESG, Financial Inclusion, Sustainable Finance, Fintech AI/ML, Data-driven, Automation, Generative AI, FinTech and Alternative Finance, Fintech International, Fintech Interviews and Podcasts, Fintech Opinions, Innovation and Resources, Payments, Transfers, Rewards, Stories, Voices   No comments

Banking on digital growth with Chris Skinner

The Finanser | Chris Skinner

Chris skinner interview

Chris Skinner:

Traditional banks tend to push products through channels to get greater share of wallet and cross sell. Whereas, digital banks start with the customer journey and need, and then build the user experience to be part of a relationship interaction digitally, rather than trying to actually sell them anything.

James Robert Lay:

Greetings and hello. I am James Robert Lay and welcome to the 67th episode of the Banking on Digital Growth podcast. Today’s episode is part of the Exponential Insight series, and I’m excited to welcome Chris Skinner to the show. Chris is an author, speaker, and troublemaker, according to his LinkedIn profile. I like that. And Chris has written 14 books, most recently Doing Digital: Lessons from Leaders. He also writes a daily blog and consults about the future of banking. Hello, Chris, and welcome to the show.

Chris Skinner:

Hi, James. Thanks for inviting me. Great to be here.

James Robert Lay:

Yeah. And I think you mentioned before you do a lot of thinking about the future and when we think about the future, particularly through the lens of financial services, it can be hard to let go of the past. This idea of being built on the cloud natively, it’s operational, it’s mindset. And you share in your book Doing Digital, that banks must create a burning platform to ignite change for transformation, to spark change of transformation. Can you expand on this thinking about creating a burning platform? Is this really about first principles thinking, starting over instead of duct taping something that’s really falling apart, or just trying to hold things together for the old world?

See:  Are you measuring these 5 metrics of digital progress and success?

Chris Skinner:

Well, there’s over 30 lessons in the book that I sort of outlined from the interviews I made over six months with these five big banks. But you start with obviously working out what to do and how to do it and getting a vision around how to digitally transform. And then you have to disturb people and make the organization uncomfortable. This is what Jamie’s doing with this “I’m scared shitless about FinTech.” He’s been doing it for a number of years in fact. I think his first time was about 2014, “Silicon Valley’s coming to eat our lunch.” And there’s been regular mantra from Jamie around effecting change and disturbing people. That’s quite funny, because when you look and track what he’s been saying about Bitcoin, for example, it’s turned around from, “Bitcoin is just a Ponzi scheme for criminals” to, “It’s worth $146,000 by the end of this year and we should invest in it.”

So it’s interesting how things change. And I think the critical thing is it’s great to have a burning platform and say, “We’re all going to die unless we change,” which actually is another thing I heard from two of the banks. You know, if we don’t transform, we die. But you have to then say, “What are we transforming to?” And I use the quote often of Charles Darwin, which is “It’s not the fittest, the fastest, the most intelligent or the strongest who survive. It’s the ones who are most adaptable to change.”

See:  Economic performance associated with digitalization in Canada over the past two decades

But the thing is, and my challenge to most banks, is are you adapting to change in the right way?

If you’re delegating digital transformation to a CFO or CTO, CIO, CDO, giving them a budget and a project to implement in a line of business that’s fragmented, you’re really not going to survive. Because you have to digitally transform as a company with a leadership team who are passionate about making the whole company change.

And you really have to adapt, not necessarily in a way that’s rigid. In a way that says, “Well, we have to have a vision of the way forward, so this is where we need to try and get.” It’s not a fixed destination. It’s a continuum of change to make this organization fit the 21st century based on the internet and born on the internet. And that’s the huge challenge for any bank leadership team, because most banks are led by bankers who don’t understand technological requirements.

James Robert Lay:

We’re burning the ships. We’re either going to survive or we’re going to die, and we have to keep moving forward.” But what’s holding bank leadership teams back the most, or maybe a better question is about specifically vision, is what’s blinding them to begin with in the first place?

See:  Has fintech made banking better?

Chris Skinner:

Well, I think, and again, going back to Jamie Dimon’s comments. He points at Square, Pay Pal, but also Ant Group and Amazon and says, “You know, these guys are going to be taking all of our business.” And that’s the disturbance, but then you have to then say, “So how are we going to change? And what do we have to change into?” And it’s a metamorphosis. It’s not a reengineering. It’s a complete reinvention, renewal. And I think what blinds them and holds them back is the challenge of doing that is humongous. It’s really not easy.

There’s a couple of great books that I’ve used through my years of talking about this. One is How Do You Make the Elephant Dance? by Lou Gerstner, talking about turning around IBM in the 1990s. But more recently Satya Nadella’s book about Microsoft. When you look at Microsoft and the turn around there, you go,

“That’s amazing that you can take a company that’s stubborn, saturated, sinking, and suddenly make it nimble and quick and turn around.”

How did they do that? It’s really about recognizing the cultural needs. Digital transformation has nothing to do with technology. It’s about people. It’s about making people understand that they have a voice, and they have an ability to enable change. They’re not just being told what to do, but they can tell us what to do.

Continue to the full article --> here

The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

NCFA Financial Innovation MapNCFA Innovation Opportunity BriefsNCFA Fintech Insights
NCFA Fintech WhispererNCFA Fintech Fridays PodcastNCFA Weekly Newsletter

 

Read More
February 22, 2021   Enterprise, Scaleup, Entrepreneurs, Start-ups, Small Businesses, FinTech and Alternative Finance, Fintech International, Fintech Opinions, Fundraising, Investing, Trading, Innovation and Resources, Research, Venture Funding and Building, Voices   No comments

GameStop Testimony: When Short Sellers, Social Media, and Retail Investors Collide

Cato Institute | Jennifer J. Schulp | Feb 18, 2021

retail investors want to participate

By no means should the GameStop phenomenon result in changes that restrict retail investors’ access to the markets.

Before the Committee on Financial Services, U.S. House of Representatives

Introduction

Chairwoman Waters, Ranking Member McHenry, and distinguished members of the Committee on Financial Services, my name is Jennifer Schulp, and I am the Director of Financial Regulation Studies at the Cato Institute’s Center for Monetary and Financial Alternatives.

See:  Retail investors are becoming more than shareholders

I thank you for the opportunity to take part in today’s hearing entitled, “Game Stopped? Who Wins and Loses When Short Sellers, Social Media, and Retail Investors Collide.”

Watch the testimony C-span here:

Retail Investing

Before addressing the GameStop phenomenon specifically, I’d like to address the participation of retail, or individual, investors in our public equities markets.

Retail participation has ebbed and flowed over the years, but the recent trend toward increased retail participation accelerated sharply during the pandemic. Approximately one-fifth of market trading volume is now attributable to retail orders, which is a substantial increase over 2019.1

Most commentators point to the increasing availability of zero-commission trading as drawing in more individual investors. In late 2019, many large brokerages began offering zerocommission trading, following the lead of Robinhood Financial, which introduced commissionfree trading in 2015. But several other factors also likely attracted retail investors, including the widespread availability of fractional-share trading,2 the ability to open accounts with low balances, and the ease of app-based trading platforms. Even limited entertainment options during the pandemic probably played a role in increased retail interest in investing.

See:  Stop Calling Them ‘Dumb Money’: Retail Investors Are Revolutionizing the Stock Market

Retail participation in our equities markets is important and beneficial. Retail investors are widely understood as providing liquidity in markets. The fact that retail investors behave differently from institutional ones, and sometimes behave differently from each other—far from being a bad thing—can be particularly valuable in times of market stress. Where institutional liquidity dries up, for example, retail trading can help to lower bid-ask spreads and dampen the price impact of trades.3 In fact, retail investors may have been a market-stabilizing force during the March 2020 coronavirus-induced market crash by staying the course with their investments and buying when stock prices dipped.4

Investing in the stock market also provides an important path to wealth for individual investors.

With average annual returns for the S&P 500 during the past 60 years of approximately 8%,5 long-term investors generally benefit by being invested in the market.

There is already a strong degree of retail participation in the U.S. stock market; when measured in 2018, approximately 38% of total U.S. equities were held directly by households.6 However, only 15% of U.S. households directly hold stock.7 In other words, ownership of equities is concentrated in the hands of the comparatively few and comparatively wealthy.8

Even if you include pooled investment funds, which is how the vast majority of households indirectly hold stocks as a part of their retirement assets, ownership is still skewed towards the wealthy. In 2019, about 53% of all households had stock market investments, but only 31% of families in the bottom half of the income distribution were invested.9

Stock ownership is also highly correlated with race, education, and age.10 For example, in 2019, approximately 19% of white households directly held stock, compared to approximately 7% of Black households and 4% of Hispanic households.11 Those with a college degree are about twice as likely to directly hold stock than those who just had some college education, and more than three times more likely than those with only a high school diploma.12 And the older a person is, the more likely he or she is to own stock.13 These patterns equally apply to ownership of indirectly held stock.

See:  Canadian Regulators Green Light World’s First Bitcoin ETF for Retail Investors

The retail investors making up this new surge, though, are different. Data released by brokerage firms identifies a high number of new clients who are first-time investors and who are younger than the average investor.

This is confirmed by recent research by the FINRA Investor Education Foundation and NORC at the University of Chicago (“FINRA/NORC Study”), which found that investors who opened a taxable investment account for the first time in 2020 were younger, had lower incomes, and were more racially diverse than those who had previously opened such accounts.15 These new investors also held lower account balances, with about a third holding account balances less than $500. Indeed, the ability to invest with a small amount of money was a commonly cited reason for opening an account for the first time in 2020.

This may portend, as one of the researchers noted, “a shift towards more equitable investment participation.”

GameStop Phenomenon

Some things seem clear. Importantly, the temporary volatility in GameStop and others did not present a systemic risk to the functioning of our markets.

As the Treasury Department recognized, following a meeting with officials from the Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission, the Federal Reserve, and the Federal Reserve Bank of New York, the market’s “core infrastructure was resilient during high volatility and heavy trading volume.”21

See:  Big Tech takes aim at the low-profit retail-banking industry

This is not surprising. Despite the huge trading volume and rapid increase in value, the GameStop phenomenon affected a very small part of the market. GameStop’s market capitalization, even at its peak, was around $24 billion in an approximately $50 trillion market.22

And short interests, which may have been targeted by some traders, represent a small, and recently shrinking, portion of equity market value.23

Stock prices move in and out of alignment all the time, and markets are no strangers to bubbles.

Continue to the full article --> here

The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

NCFA Financial Innovation MapNCFA Innovation Opportunity BriefsNCFA Fintech Insights
NCFA Fintech WhispererNCFA Fintech Fridays PodcastNCFA Weekly Newsletter

 

Read More
February 9, 2021   Blockchain, Crypto, Digital Assets, Tokens, CBDCs, Stablecoins, Metaverse, NFTs, Enterprise, Scaleup, Entrepreneurs, Start-ups, Small Businesses, FinTech and Alternative Finance, Fintech Opinions, Fundraising, Investing, Trading, Innovation and Resources, Stories, Venture Funding and Building, Voices   No comments

BIGG Digital Assets Inc. to Reinvest Free Cash Flows From Operations into Bitcoin

BIGG Digital Assets | Mark Binns | Feb 9, 2021

BIGG digitalVANCOUVER, February 9, 2021 – BIGG Digital Assets Inc. (“BIGG” or the “Company”)(CSE: BIGG; OTCQB: BBKCF; WKN: A2PS9W), owner of Netcoins (Netcoins.ca) (“Netcoins”), the online cryptocurrency brokerage that makes it easy for Canadians to buy, sell, and understand cryptocurrency, and owner of Blockchain Intelligence Group (“BIG”), a leading developer of Blockchain technology search, risk-scoring and data analytics solutions, announces its intention to acquire additional Bitcoin with free cash flows from operations.

BIGG’s operating businesses, Netcoins and Blockchain Intelligence Group, have experienced significant increases in product demand over the past several months.  As a result, BIGG has now achieved positive cash flow from its monthly operations.

BIGG has adopted the strategic initiative of utilizing its free cash flows to acquire additional Bitcoin to supplement its current coin holdings. Commencing this month, at management’s discretion and as operations permit, BIGG will seek to reinvest its free cash flows to acquire Bitcoin at the prevailing market rate. This initiative is a clear indication of our continued strong belief in the future of Bitcoin, its store of value capability and its future valuation potential.

See:

BIGG plans to continue aggressive investment into both of its businesses. The Company has a robust treasury, having raised over $20 million via equity issuances since November 2020.

BIGG CEO, Mark Binns, remarks “BIGG is a compliance-first crypto company that believes Bitcoin offers the best store of value for its free cash flows. This has led us to adopt an initiative of reinvestment into the underlying asset of our industry. Of late, we are seeing a surge in the number of corporations buying Bitcoin to hold as a treasury reserve asset.

We have held Bitcoin on our balance sheet since 2017, and foresee the next evolution being the investment of fiat profits into crypto. BIGG aims to be at the forefront of this movement. Profits from Netcoins’ trading and Blockchain Intelligence Group’s software sales earned in fiat will be converted into and held in Bitcoin, until such time as required by operational demands. The decision to roll forward our profits into Bitcoin, where we anticipate returns to outpace fiat values, is easy and highly strategic.”

View the original release --> here

 

The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

NCFA Financial Innovation MapNCFA Innovation Opportunity BriefsNCFA Fintech Insights
NCFA Fintech WhispererNCFA Fintech Fridays PodcastNCFA Weekly Newsletter

 

Read More
« Older posts
Newer posts »