SAVE THE DATE - APPLICATIONS AND PARTNRESHIP OPPORTUNITIES OPENING SOON!

FINTECH FRIDAY$ (EP.11-Sep 28): How Amazon Bank is Dominating and Risks of a Digital Bifurcated World with Paul Schulte, Founder of Schulte Research

Share

NCFA Canada | Sep 28, 2018

Ep11-Sep 28:  How Amazon Bank is Dominating and Risks of a Digital Bifurcated World

About this episode:   On this weeks episode our host Manseeb Khan sits down with Paul Schulte Founder & Editor of Schulte Research, whose insights have reshaped the finance world for the past 30 years. They talk about how Amazon is the biggest bank in the world, China being 2 generations ahead compared to the West, and what his next book could be about it. Enjoy!

Host: Manseeb Khan, NCFA, Fintech Fridays show host

Guest: PAUL SCHULTE, Founder and Managing Editor, Schulte Research (LinkedIn)

Bio:  Paul Schulte is founder of Schulte Research, set up in 2012 researching financial institutions and financial technology. He has spent 3 decades in research on financials. He has worked for all 3 branches of US government, including the NSC at the White House. He currently teaches in 3 universities, has written 3 books and authored hundreds of articles. He has worked for the Number 1 investment bank from US, UK, Japan, China & Switzerland starting in 1990.  He has taught on 4 continents. His focus is technological change in banks & insurance. He has been a source for the WSJ, NYT, Bloomberg, Nikkei, FT, Economist, Barron’s and Forbes. His clients include some of the largest sovereign, pension, mutual and hedge funds globally.

 

Subscribe and tune in each Friday to check out the latest movers and shakers in fintech.

Listen to more Fintech Fridays podcasts here

 


Transcription of Interview

Manseeb Khan: Hey everybody how are you today. Manseeb Khan here and you are tuning in to another episode of Fintech Fridays. Today I have an incredible guest. He is a veteran in the industry. He's been in the industry for over 30 years. We have Paul Schulte. Paul thank you so much for making here today. I know I'm catching you in the middle between flights so thank you so much for taking time today to sit down with me and to chat.

Paul Schulte : You're welcome.

Manseeb Khan: So, Paul just for the audience could you just for a minute give us a little bit about who you are and essentially what your research firm does?

Paul Schulte : So, what I do is we look at we've been looking at financials and financial institutions, banks, insurance, broker dealers, investment banks for like 14 years and then about four years ago I wrote a book about that called a revolution in financial technology that's coming, and we decided that this was extremely important. So, I've been really taking a big turn and focusing much more on the ways in which financial institutions are being disintermediated by the explosion and financial technology especially of the Far East.

Manseeb Khan: So, could you talk a little bit more of what your research firm does. Are there any current trends that you guys are currently focusing on?

Paul Schulte : So, we work for. I work for sovereign wealth funds, hedge funds,  mutual funds, insurance funds and we do two things really work the boards of directors in terms of understanding their own needs for technology but also, I look at public equity of private equity activity and you know advise on you know what's hot. what's not. what's good. what stinks and you know what is. You know looks iffy. What is you know very interesting? And so, at the moment we just finished some work on the way in which Ali Baba, Tencent, Amazon and Wal-Mart are heading into India in a very aggressive way looking at you know where the winners and losers in India are. The sort of this big battle royale for the financial activity for payments, ecommerce, lifestyle, lending and so forth in India but also in Southeast Asia.

Manseeb Khan: Oh yes so kind of like how Wal-Mart recently acquired Flipcart to start making moves in the industry right.

Paul Schulte : So, looking at the strategies of Wal-Mart and Amazon and Ali Baba really are the three big players against each other. They're all doing slightly different things but they're going down of course very, very rapidly. And I think once again catching the banks by surprise.

Manseeb Khan: Why do you think that is. Is it because of because you were previously you did work with institutions. You have a very extensive background of being part of that world. Why do you think they're going to beat banks to the punch?

Paul Schulte :  I've worked with you know Credit Suisse and ING and Lehman Brothers, and then you know went Nomura bought Lehman Brothers. I worked with Nomura as well. Fundamentally I think it is an issue of shareholders. the shareholders of banks expect and want and will not tolerate anything other than a dividend you know of somewhere between 3 and 5 percent. And this means that the banks have to pay out 30, 40, 50 percent of their profits get paid out in dividends. and Amazon and Ali Baba pay out zero. And so, you're looking at you know billions of dollars in extra R&D you know investment spending that these guys have relative to the banks. So, if the banks really want to get serious about competing they have to go to their shareholders and say we're just not going to be able to have a payout ratio of 30,40, 50 percent of profits. The second thing is that you know banks fundamentally aren't allowed to collaborate and are not allowed to collaborate because of regulators. So, it's good to be regulated because you're sort of a cartel, you're a protected cartel. But on the other hand, you miss out the capacity to change quickly to collaborate to open up your ecosystem to the outside world where regulators are very you know hypersensitive. So, banks are coming out of a period where they've been in the doghouse because of all this bad behavior 10 years ago. And so, the regulators are putting them on a very short leash. So, these are all the reasons why the banks are having a very difficult time adjusting to these new realities. And then it just tends to be a sense of you know entrenchment and legacy. You know history institutional inertia that also work against you.

Manseeb Khan: So that they're just taking  advantage of it essentially. You recently posted a video on how China is pulling ahead of the U.S. in the battle of AI. Could you explain a little bit more the reasoning behind it and it is because like what people think of AI they don't China's not the first place that really comes to mind. Right. And secondly how do you see Canada's role in this battle being that it's there's been a lot of buzz that Canada does have a booming AI market.

Paul Schulte : Yeah Canada does Canada that was one of the first people to do quantum computing that there was a very active you know great stuff going on in Toronto. I think the smart city initiatives the Toronto house are great. So yeah, I think Toronto's fantastic. But West has you know a lot of things against it. The West has a 50-year-old legacy system of credit cards and  sort of antiquated payments that were there to put all these fancy apps on top of that. So, this is always going to be a problem with us. Regulators Attorney General upstate and the FCC. and we know  Washington D.C., regulatory bodies, and lobbyists you know who don't want this to happen. So, you know I was giving a talk to one of the well with the Minneapolis Fed group and you know what I was talking about China and all the stuff that China is doing. You know the guy stopped me and said hey wait a minute you know we're still trying to get people stop using paper checks. So you need to slow down here in terms of trying to think of what the U.S. can do to catch up to China. China is one the two generations ahead and payments, e-commerce. the integration of payments and e-commerce to civic activity like people paying tickets, fines, entertainment travel, movies ,lifestyle, leisure, venture, travel all of this has been integrated into one stop shopping for the entire system. And this is, and this also includes insurance, peer to peer lending, money market invested in  tax. It's all that everything is online and everything's integrated and everything's in one place and people have the choice of looking at Alibaba or WeChat. But Ali Baba tends to have the one of the best integrated platforms and this is the way in which we're seeing this go into you know Southeast Asia now and  Alibaba so all these problems going into Paytm in India. It's going into Tokopedia, Masada and Indonesia and so Alibaba is really gluing itself into you know another country with a billion people and another country with 350 million people. And so, you're looking at having a pretty good chunk of the world. you know covered in you know you know India Southeast Asia; China the U.S. hasn't done any of this.

Manseeb Khan: Yeah that's kind of what I want to touch on next. How do you see the western world kind of adopting? Right. would be like working with regulators would be working with lobbyists and lawmakers and everything would it be more of like hand-holding situation?

Paul Schulte : No. No, I don't think that's the case. We should have expected that. But I think Amazon's done something that's really unique and brilliant. They just said we're just going to go outside the US. We're going to start and do all this in a country called India and so Amazon has been laying out billions of dollars in very aggressive impressive expansion both in terms of indigenous internal organic R&D implementation of different types of structures for services for MSR customers but also making a lot of acquisitions in the last 18 24 months. So, from a standing start two years ago where Amazon was nowhere and was being highly criticized for being the. you know as I should be the biggest bank in the world two years ago it was nowhere. Two years later in India it has a compared to Amazon offerings to the standard chartered India offerings and quite frankly standard Amazon has everything a standard traveler can offer or basically 18 months and so from a standing start Standard Chartered can't hold a candle to what the offerings of Amazon. I believe Amazon has very aggressive ambitions to export that to many other emerging markets and potentially export that back into the U.S. This is what I am thinking.

Manseeb Khan: You did recently write an article. the article's title fintech is emerging with the internet of things that aim to challenge banks. How entrenched interests can prepare. Banks are not only the western world banks and institutions are not only losing opportunity in the expanding markets like China and Indonesia and India like you've mentioned. how unprepared are they in terms of A.I like we're hearing institutions starting to earmark for crypto and block chain? How prepared are there for this whole AI revolution?

Paul Schulte : Well I think I think it's getting a little bit better. You know I believe HSBC has at least a dozen and could be up to 20 plus blockchain initiatives currently. I think the one bank who gets it you know better than anybody else is Goldman Sachs. I think you know Citibank and JP Morgan  are pretty much rushing ahead. I think the European banks just don't have the capital or the spending power to be able to engage in this right now and so banks like Deutsche Bank are barely standing on two feet. And so, they're being knocked out of the game. And then you have you know some of the other banks that just are where they need to be. You know Barclays and so some of the regional banks are just not in a position to be able to spend. You have to spend a lot of money on this stuff, if you just want to do nickel and diming you're going to get left behind.

Manseeb Khan: Do you think it's more of like a is it because more of like a legacy thing that they're not nickeling and diming it or is it. They don't really believe the hype. What's your take on that.

Paul Schulte : Well you know I was reading this book chapter 7. They called the innovator's dilemma. It's the Christensen book and in chapter 7 it talks all about how the corporates of the 70s 60s and 70s with America were like these mighty engines of innovation and you know technological growth. top line growth. And they just stopped doing that. He was talking about corporates and then I when I read that article I was so struck because this is just absolutely applies to banks and so there's just it's institutional inertia. There are fewer positions are available people today and they just are becoming yes men because there's fewer promotions available. So, they shut their mouths and they don't know, and they don't dare innovate because if they make a mistake they get fired because there's always an excuse to fire people and try to reduce costs. And so, when you go down that rabbit hole of trying to reduce costs as your number one goal rather than improve innovation you're dead. And I think a lot of banks are going down this road. So, this is a problem right where you have a terrible return on capital. You have shareholders demanding a very high dividend and you just don't have a lot of money left over in absolute dollar terms or a dollar stand against Alibaba which has like a billion dollars to spend. Amazon is spending in India alone which is spending 5 billion dollars. And so, you're looking at a tremendous capacity for spends and a lot of different areas. Plus, Amazon is also moving into a farm to market food distribution as well. So, when they start to get all these different businesses you've got a tremendous synergy of business of agricultural, financial, lifestyle and civic activity together which gives you know a real unbeatable combination.

Manseeb Khan: So essentially, it's very much a evolve or Die mentality when it comes to compare to banks and to Amazon and Alibaba and all the other companies like that right.

Paul Schulte : Yes, exactly that system and that's life that we all we all have to do that even as adults in our 30s and 40s we have to keep on learning if we don't keep on learning where we're in real trouble. I think the times of getting a four-year degree or getting an MBA is that those times are over. Right. There's a constant need for learning and it's painful and I say to people I have two jobs. I'd have my old job which is looking up financials but also, I have another job which is learning to understand financial technology which has been exhausting but also very stimulating and exciting and interesting.

Manseeb Khan: I totally agree that it's kind of funny because I just came back from writing my accounting exams was kind of hilarious that we talked schooling. You’re probably a little bit more closer to understanding AI and seeing its evolution other than just in the banking space. Where else do you see it just making a massive impact?

Paul Schulte : In the area of Block Chain  is all about digitizing assets and only a very tiny portion less than 1 percent of the physical asset world in digitized. So, what we have is a world where when you digitize assets you do three things you turn it into a provenance right and then that's the whole foundation of auctions. auctions and auction houses whatever they are Kristie. Sotheby's big banks guarantee that this thing is true and real and is owned by X is being sold to Y. That's what blockchain does for physical assets. Number two it's a sense of collateral. collateral is what you use to create a loan. And number three and most important of all one of the greatest things that we can Digitize and one of the greatest values we have is that our parents spent you know between 500000 and 1 million dollars to get us to become 22-year-old educated people our body. And this is the area of insurance. And so, I think that insurance is probably the most it is going to be disrupted more than anything else. As more and more of the parts of the human, our cells become digitized and become a real value. so, we can be given the identification independent of government. We can be given Providence we can be given a sense of collateral and we can include 1 billion people who currently don't even have an identification or a bank account or you can include millions of that SME's on by three four five people you know all across the world who previously had to go to loan sharks to fund themselves. So, the possibilities are endless and of course lastly and most importantly in terms of our lifespan in terms of current kinds of things that we can learn about our bodies to employ preventative medicine to improve our life expectancy and to get you accurate pricing on insurance for physical movement and for our life.

Manseeb Khan: Yes, speaking of Insurance I should remind my dad that I need a life insurance policy. So, thank you for reminding me of living.

Paul Schulte : You are going to live to be 100 don't worry.

Manseeb Khan: Could we. Other than the articles and research papers that you say they produce regularly are we expecting a book anytime soon. If so what would like what are the topics that are frequently passing through your head that you'd probably want to put on paper or digital paper in this case.

Paul Schulte : Well we're yeah to a book with Professor David Lee in Singapore who is one of the leading thinkers in the world. Block Chain and we're doing some work on blocking insurance. We're doing some work on the movement of these Chinese financial technology companies out into the outside world into Southeast Asia and South Asia and we're doing an update a deep dive into what PingAn's doing. PingAn is  I think one of the most innovative companies in the world and we're also going to write a chapter on something that's very important which people need to be paying attention to. Right about now which is quantum computing because the cyber security implications of quantum computing are very important.  And last but not least we are looking at something that's really important. I think it's going to be the most core issue of 2019 and that is the way if the US increasingly goes on its own and sort of alienates Canada and alienates you know Europe and alienates China is it going to go along a road trying to bifurcate, trying to cut the digital world to have a Qualcomm. Qualcomm, Amazon, Google, Apple world, a Huawei. Amazon, Tencent digital world. And I don't think it's possible to do that. But trying to do so could be quite destructive know example I would give you is that Microsoft and Amazon have 31% market share in the cloud business in China. What if says you know you've invited out Huawei and you were basically expelled Ali Baba out of the U.S. Well how come we're letting Amazon and Apple. I'm sorry Amazon and Microsoft have you know a 31 percent market share in the cloud business for AWS and of Azure. and I think questions like this come up and so this is going to become problematic if this thing continues down a road of increasing tension between China and the U.S. So very important topic I think it's the number one topic of 2019.

Manseeb Khan: Right and that's you have mentioned in the past that's why you're seeing companies starting to enter emerging markets just in case something like that happens. They have remote offices they have remote sites, subsidiaries just in case those kinds of things may happen right.

Paul Schulte : Yeah pretty much. I think that's right. And I think that Amazon is truly an international company. Right. So, I don't know what political weight. They pull in Washington D.C. but I'm sure that there are  opposition forces at play in Washington D.C. to counter this desire for the U.S. to isolate itself. I think that's a minority opinion and it's not part of the mainstream and yet it seems to be having an immense cast has immense momentum right now. And so, it's very disturbing to watch this. You know what was played out yesterday at the U.N. and especially when you look at it from the Far East people are aghast at why the U.S. is doesn't have you know America first policy it's basically America alone policy. And I think there's no people who are more like gob smacked by this than the Canadians. And so, we've got to be very careful about where this is all going. If power is some of the powers in Washington want to bifurcate the digital world because I think it's impossible to do that. I think we've gone down we've gone too far down the road on this. And so, I'm just wondering what this all means. I think the physical bifurcated world has already occurred right the manufacturing world is already the supply chain already been broke about past tense but the digital world is a very different world that just doesn't lend itself to being broken into.

Manseeb Khan: Right. Because the whole the world the whole the pull for is the whole globalization rights that everybody is on the same team. We're here to help everybody and if a country is going to try to isolate itself from everybody else then it's going to be kind of hard of work with them. It's kind of like work like everybody playing in the sandbox where we have the one kid that like we're trying to include you doesn't want to come with us. It's kind of hard to like feet won't we'll can ask him so much.

Paul Schulte : Yeah that's right. That's right. That's right. Well thank you so much free time I have to jump on a plane. I'm going to a retreat with actually people from Monash University to discuss this topic in terms of the future of education. OK so this is important. This is an important topic for universities as well as universities risked being sort of cut out. Well if they don't change faster. And so, I personally have a similar problem with the banks.

Manseeb Khan: That's interesting. Well  Paul thank you so much again for your time. Enjoy your flight enjoy your treat. I'm very excited to see what you've learned, and I can't wait to have you on the show again.

Paul Schulte : OK. Thank you so much.

 

End of Podcast

 

Subscribe and Listen to more Fintech Fridays podcasts here

Join NCFA's weekly Podcast series 'FINTECH FRIDAY$' where we sit down with the incredible people in the Fintech community and talk about leading fintech products innovations developments and challenges!

Interested in getting involved as a partner or participant? info@ncfacanada.org

 


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

CNBC | Hugh Son | Feb 14, 2019 The first cryptocurrency created by a major U.S. bank is here — and it's from J.P. Morgan Chase. Engineers at the lender have created the "JPM Coin," a digital token that will be used to instantly settle transactions between clients of its wholesale payments business. Only a tiny fraction of payments will initially be transmitted using the cryptocurrency, but the trial represents the first real-world use of a digital coin by a major U.S. bank. While J.P. Morgan's Jamie Dimon has bashed bitcoin as a "fraud," the bank chief and his managers have consistently said blockchain and regulated digital currencies held promise. The lender moves more than $6 trillion around the world every day for corporations in its massive wholesale payments business. In trials set to start in a few months, a tiny fraction of that will happen over something called "JPM Coin," the digital token created by engineers at the New York-based bank to instantly settle payments between clients. See:  Do Banks Even Want to Go Blockchain? J.P. Morgan is preparing for a future in which parts of the essential underpinning of global capitalism, from cross-border payments to corporate debt issuance, ...
Read More
JP Morgan is rolling out the first US bank-backed cryptocurrency to transform payments business
Forbes | Alejandro Cremades | Aug 2018 Is debt or equity fundraising smarter for startups? There is more than one way to fund a new business venture and fuel its growth. For almost all, it is going to require bringing in outside money at some point. Even if that is only to multiply what is working or to create a source of emergency capital. The two primary options are to either leverage business debt financing or fundraise for equity investors. Each method can carry its own pros and cons. It is vital for entrepreneurs not to blindly follow the herd just “because everyone else is doing it.” Discover which is best for you, at your stage in business, and stack the most advantages in your corner. Once you have decided the course of action and have a lead investor covering at least 20% of your financing round you would typically also include in the pitch deck the form of financing in which you are raising the capital. I recently covered the pitch deck template that was created by Silicon Valley legend, Peter Thiel (see it here) where the most critical slides are highlighted. Debt Financing We’re all familiar with debt. At ...
Read More
Debt vs. Equity Financing: Pros And Cons For Entrepreneurs
Financial Post | James McLeod | Feb 9, 2019 The Innovation, Science and Economic Development Minister gives the Financial Post an early look at Ottawa’s report card on innovation that will be released next week Navdeep Bains wants Canadians to know that things are happening. Lots of things. The Innovation, Science and Economic Development Minister has a big job on his hands, hauling Canada’s economy into the 21st century by embracing artificial intelligence and a panoply of digital technologies to boost productivity and keep us globally competitive. But the federal government’s innovation agenda is still very much a work in progress. One of its pillars, the five marquee superclusters spaced evenly across the country, is mostly just an idea at this point, although $950 million in funding is beginning to flow. Does Canada feel more innovative than it did four years ago? Are we future-proofing our economy and seizing the jobs of tomorrow? Bains certainly thinks so and that belief will probably be part of the Liberal’s pitch to voters when the country goes to the polls later this year. Next week, he will release a 100-page government report called Building a Nation of Innovators that mostly serves as a ...
Read More
The race to future-proof the economy: Navdeep Bains on the state of innovation in Canada
Modern Consensus | Leo Jakobson, February 4, 2019 Move is latest series of steps by regulator to bring clarity and less confrontational approach to regulations enforcement The U.S. Securities and Exchange Commission wants to know if the technology to help it monitor major cryptocurrency blockchains for risk and regulatory compliance issues exists. The SEC is not looking to buy big data analytics tools at this time, but characterizes its interest as “conducting market research to determine the availability and technical capability,” of the tools presently available on the market, it announced in a notice on Jan. 31 What the SEC wants to know about is the “ability to provide the requested data but also an overview of the processes used to extract the data, convert the data into a reviewable format, and the verification steps to ensure there is no loss in data completeness and accuracy due to the data transformation tools and processes applied.” The software it wants would also make the data easy for SEC staff to read and understand on an ongoing basis, and would provide insights about that data—notably identifying who the data belongs to—as well as a way of ensuring the data is accurate and ...
Read More
SEC wants big data tools for monitoring and enforcing cryptocurrency market compliance
NCFA Canada | Feb 8, 2019 Ep24-Feb 8:  Re-imagining Philanthropy with Daryl Hatton About this episode:  On this Episode of the Fintech Friday's Podcast, our host Manseeb Khan sits down with Daryl Hatton the CEO of Connection Point. They chatted about microprojects, saving little girls and puppies and how to get hooked on Philanthropy. Enjoy! Focus on value and avoid the complicated terminology when growing new innovative markets Branding customer segment-focused funding products, white labeling collaborative uses cases Crowdfunding for good at the intersection of technology, people and impact Host: Manseeb Khan, NCFA, Fintech Fridays show host Guest: DARYL HATTON, Founder and CEO, ConnectionPoint / FundRazr (linkedin) BIO:  Daryl Hatton, CEO of award winning international crowdfunding company FundRazr and of the innovative sponsored crowdfunding company Sponsifi has founded multiple start-ups and helped bring one to a successful NASDAQ IPO in 1999. He actively serves as board member or advisor to handfuls of other hot companies in Canada. In addition, he is a Director and Crowdfunding Ambassador for the National Crowdfunding Association of Canada. As a social media guy and frequent public speaker, his Twitter tagline includes words like “#KingOfGastown, entrepreneur, cardiac survivor, foodie, whisky nut, philosopher, mentor, father and friend.” * Senior Business and Technology ...
Read More
FINTECH FRIDAY$ (EP24-Feb 8):  Re-imagining Philanthropy with Daryl Hatton, Founder and CEO of ConnectionPoint/FundRazr
Forbes | Michael del Castillo | Feb 4, 2019 It’s a balmy 80 degrees on a mid-December day in Singapore, and something is puzzling Allen Day, a 41-year-old data scientist. Using the tools he has developed at Google, he can see a mysterious concerted usage of artificial intelligence on the blockchain for Ethereum. Ether is the world’s third-largest cryptocurrency (after bitcoin and XRP), and it still sports a market cap of some $11 billion despite losing 83% of its value in 2018. Peering into its blockchain—the distributed database of transactions underpinning the cryptocurrency—Day detects a “whole bunch” of “autonomous agents” moving funds around “in an automated fashion.” While he doesn’t yet know who has created the AI, he suspects they could be the agents of cryptocurrency exchanges trading among themselves in order to artificially inflate ether’s price. “It’s not really just single agents doing things on their own,” Day says from Google’s Asia-Pacific headquarters. “They’re forming with other agents to have some larger group effect.” Day’s official title is senior developer advocate for Google Cloud, but he describes his role as “customer zero” for the company’s cloud computing efforts. As such it’s his job to anticipate demand before a product ...
Read More
Navigating Bitcoin, Ethereum, XRP: How Google Is Quietly Making Blockchains Searchable
Bloomberg | Doug Alexander | Feb 4, 2019 Without digital keys, clients lose access to coins, funds Board said last week that it was seeking creditor protection Digital-asset exchange Quadriga CX has a $200 million problem with no obvious solution -- just the latest cautionary tale in the unregulated world of cryptocurrencies. The online startup can’t retrieve about C$190 million ($145 million) in Bitcoin, Litecoin, Ether and other digital tokens held for its customers, according to court documents filed Jan. 31 in Halifax, Nova Scotia. Nor can Vancouver-based Quadriga CX pay the C$70 million in cash they’re owed. Access to Quadriga CX’s digital “wallets” -- an application that stores the keys to send and receive cryptocurrencies -- appears to have been lost with the passing of Quadriga CX Chief Executive Officer Gerald Cotten, who died Dec. 9 in India from complications of Crohn’s disease. He was 30. Cotten was always conscious about security -- the laptop, email addresses and messaging system he used to run the 5-year-old business were encrypted, according to an affidavit from his widow, Jennifer Robertson. He took sole responsibility for the handling of funds and coins and the banking and accounting side of the business and, ...
Read More
Crypto CEO Dies Holding Only Passwords That Can Unlock Millions in Customer Coins
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) ...
Read More
The 11 Biggest Fintech Companies In America 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 ...
Read More
Europe's fintech companies are preparing for a no-deal Brexit
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 ...
Read More
Report: State of Regulation Crowdfunding Says No Gold Rush But an Undeniable Job Creator

 

Share