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The future of the banking


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Introduction to a discussion at Blockchain Economic Forum about the future of the banking. The key areas are, how blockchain and distributed finance services, new IT and back office solutions, and plug-and-play finance inside other digital services have impact on the whole finance sector and also change the the role and business of banks.

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The future of the banking

  1. 1. Grow VC Group ++ ++ @growvc ++ Enabling Digital Finance ++ Copyrights © Grow VC Group 2018 The Future of the Banking San Francisco, June 18, 2018 Jouko Ahvenainen
  2. 2. FinTech, Data & Finance Services Digital Infra & Consulting Exits Grow VC Group Worldwide pioneer and leading holding company in enabling technology and data in FinTech Hong Kong - London - New York - San Francisco Crowdfunding
  3. 3. We work with industry leaders
  4. 4. Incumbents Newcomers Leading telecom and media companies have survived Internet disruption, but most new business and profits have gone to newcomers Observation #1
  5. 5. Bank’s operations, legacy IT systems and business models are most probably obsolete, but traditional finance industry money, assets and instruments still have value Observation #2
  6. 6. 1. You cannot own customers ■ Telco’s and media companies thought they own customers, but the customers took new services elsewhere ■ Who can offer easy to use solution that work 2. Choose your battles and cooperate elsewhere ■ Banks have now hundreds of businesses, they cannot expect to compete in all of them ■ Core business should based on unique positions and competence; it is more likely bank’s core is to manage money than e.g. platforms 3. Develop based on customer needs, not based on legacy IT or existing organization ■ For example, basic bank accounts are now based on their history and legacy IT systems rather than very basic needs of customers to receive, to send and keep daily cash somewhere ■ This probably means radical changes for the organization and IT Don’t live in illusions
  7. 7. ▪ Consumer preferences have changed ▪ Technology is the catalyst for a cultural change ▪ Everyone must deliver end user value Software and Data are eating the world
  8. 8. ▪ Real time onboarding, data-driven decisioning and unprecedented data points; e.g. totally new loan and debt market ▪ If central ownership of data is no longer a requirement – is the fundamental fabric of the Internet changing ▪ PSD2 is more important for data than for the platform business Data to decide risk, manage risks and price
  9. 9. My Apartment: Current ownership 60% Rent to investors $700 Maintenance $150 Increase or decrease your ownership 0% 50% 100% 10% decrease compensation: $49,000 Rent increase monthly: $160 Start Loan Application Checkout 1. Take a photo 2. Upload your ID 3. Fill Application 4. Information Check 5. Decision in 30 seconds Integrated Distributed Finance (Examples) E-Commerce Real Estate PoS Lending
  10. 10. Financial Services come where they’re needed Source / photo:, 27/5/2018
  11. 11. 1. Tokenomics ■ Economical and financial models that use distributed finance and tokenization as the basis of the economy ■ The full impact is much more than only use of tokens, it is to distribute power, ownerships and transactions around network from central hubs 2. Tokenization ■ The process of converting the rights of an asset or a service into a digital token typically on a distributed ledger such as blockchain ■ Almost anything tradeable can be a token; not only a startup with whitepaper, but all utility and security tokens for private companies, real estate, infrastructure, or commodities 3. Distributed Models ■ Refers to many new solutions in the Internet that are enabled by distributed ledger type data and transaction models, as well as with service components and open APIs ■ The end of big ‘black box’ banks and Internet giants, when finance transactions, ‘wallets’, data control is distributed, and will have impact even on big centralized services like Google, Amazon and Facebook Tokenomics, Tokenization and Distributed Models
  12. 12. Intelligent Digital Finance Workflows Finance services and applications User Onboarding Deal Origination Compliance KYC / AML Investment Matching Escrow / E-wallets Deal Execution Closing & Settlement Loan Repayments Secondary Markets Reporting - Users - Organizations - Offerings - Investments - Loan Books - Payouts - Transactions - Wallets - Deal Rooms - Documents Smart Contracts and Connective Apps Difitek Payments | Identity | Credit Data | Accounts AI & Analytics enabled digital finance processes Case: Anyone can make finance services without expensive IT
  13. 13. ✓ Matchmaking demand between b2b customers and API services. ✓ One integration, global services. ✓ Generation of transactional revenue through matching of buyer and seller via API. Case: APIs, API Market Place and Framework
  14. 14. Read more at my columns and blogs Email: +44 7889 833 165 (UK), +1 646 363 6664 (US) Twitter: @jahven, LinkedIn: /joukoahvenainen Jouko Ahvenainen Founder & Chairman, Grow VC Group