Tag Archives: Bitcoin

LFP085 – The Nature of Money, Economic Imbalances & will Central Bank Digital Cash alleviate them? With David Clarke Positive Money

Money may or may not be “the root of all evil” but it is the root of FS and the economy – both of which are problematic.  The nature of current money is absolutely part of this equation.

In this special episode we review what money was, what it is now (created by private organisations as debt), the problems that leads to (esp asset price inflation, pyramids of debt, widening inequality, and exacerbated economic cycles) and central bank digital cash – what it is and whether it can help.

A recent Bank of England publication stated that the nature of money is widely misunderstood including in one respect in university textbooks (!). Couple this with a recent survey showing that only 1 in 10 MPs understand where money comes from and it’s no wonder we are adrift.  A slogan in the recent general election was “there are no magic money trees” but in fact there are.

Positive Money are “a movement for a money and banking system that works for society and not against it.” Positive Money’s founder Ben Dyson is now Economic Research Lead, Digital Currencies at Bank of England which I think tells you that these guys are thinking along the right lines.

I’m delighted to be joined today by David Clarke Positive Money’s expert on central bank digital currencies.

Needless to say “money” is at the heart of FS and an understanding of money is at the heart of understanding FS. If the BoE identified common misconceptions there was an even bigger one at the start of the Fintech era that somehow the Fintechs could “beat the banks”. This was always nonsense for many reasons but the biggest of which is that if we say abolished banks overnight then we would also abolish 97% of all the money we own – money being mostly “bits in bank computers”.

We cover a huge territory on the show, principally as its in a sense more important to first understand the context to Central Bank Digital Cash than it is the as-yet-unworked-out details of how it might work.

With such misunderstanding amongst our great leaders is it a surprise that the economy keeps toppling over and FS crises have been pervasive in recent decades?

Topics discussed on the show include:  Continue reading

LFP058 – Exchange Traded Funds (ETFs): Tutorial, Bitcoin, Blockchain & Fintech with Laurent Kssis CEC Capital

CEC Capital

Today I have the pleasure to be joined today by Laurent Kssis MD of CEC Capital who has worked in the ETF industry for 14years. We’ve spent a few episodes recently in the heady heights of the super-big picture so let’s get back to the coalface and dive in depth into an important area of FS.

ETFs – Exchange Traded Funds – have been many times on the London Fintech Podcast, always in passing, so I thought it was more than overdue to attack them head on.

Like Banquo’s ghost in Macbeth ETFs are the thing that haunt the whole Investment Management Fintech scene … if, in essence, you can gain exposure to equity markets in a balanced way via a vehicle with minimal fees what exactly is there for Investment Management Fintech to disrupt?

Laurent KssisLaurent certainly has feet in both #oldFS and #newFS camps being the non-exec chairman of the Blockchain investment company Coinsilium. So he is the ideal expert to talk to us about this sector today.

Conceptually ETFs started life as traded funds – if you like index-tracker investment trusts – although why they weren’t just called investment trusts is a question for Laurent. According to wikipedia since 1993 in the US where they were first created an unbelievable $3trn have been invested in them. They have also moved a long way from their origin as index-trackers with (quoting wiki) “By the end of 2015 ETFs offered 1,800 different products covering almost every conceivable market sector, niche and trading strategy”.

So that’s ETFs per se. But like everywhere in FS the wave of innovation that is Fintech is lapping on many shores. If ETFs have inhibited the growth of one area of Fintech what is Fintech doing to them? Listeners will certainly get their money’s worth today as we range from a tutorial on the basics of ETFs through Bitcoin ETFs to blockchain – a huge waterfront.

Topics discussed include:

– how Laurent’s career led him to being an expert on ETFs and progressing that into hot areas like Bitcoin and Blockchain

– the relevance of the “transition management” world [what happens when one fund manager takes over eg a pension fund from another]

– an ETF is a “marketable investment vehicle that allows you to buy and sell during trading hours of the Exchange a basket of stock/bonds/commodities through a single share”

– comparing and contrasting investment trusts and ETFs; management fees, transparency, NAV calculation, premia/discount ranges

– the multiplicity of ETFs eg there are around 50 different ones on the Euro Stoxx 50; different exchanges, currencies, market timezones leading for challenges for  market makers in setting prices, hedging themselves etc

– “trading channel” effectively the arbitrage channel is the range in which ETFs trade compared to their underlying components; over a decade ago this could have been as much as 10%/+5% to -5% (“quite extortionate”) but then illiquid, hard to hedge against;

– this changed rapidly when institutions started to get involved in larger size

– management fees (“TER” – total expense ratio) typically, on ETFs such as Euro Stoxx 50, have gone from ~0.65% a decade ago to ~0.12% today

– ETFs are allowed in ISAs, SIPPs, 401k

– in 401k’s over 50% of the investments are in ETFS (!)

– ETFs are UCITS compliant (which allows passporting into Europe), registered mostly in Ireland and “tax-advantageous” locations (Jersey/Guernsey/Luxembourg)

– ETFs are open-ended they can increase in size at any point (depending on demand:supply); how this is done

– ETFs are undergoing a huge explosion in diversity – you can buy almost anything via ETFs – gold silver, precious metals, industrial metals, agricultural products

the huge opportunity for Fintech in providing a more up-to-date angle to investing in these; the tendency of the first wave of Investment Management Fintech to just replicate investing in the same boring old stuff as existing I.M. firms (core equity markets and bonds for example)

– a whole interesting tale about Bitcoin ETFs and what Laurent learned on that journey – you’ll have to listen to hear that tale 😉 …

– the difference between ETFs and ETNs (Exchange Traded Notes)

– the recent Bitcoin hacking through BitFinex and how it differs from last years MT Gox; a high quality exchange, the role of regulation in re; hot wallets and cold wallets – a painful tale all round 🙁

– blockchain versus bitcoin

ETFs were new once and have been a great success – what can Fintech learn from that (you’ll have to listen ;-)) …

– ETFs have had a rough ride too – from journalists to scandals…

– an overview of Coinsilium – the world’s first listed blockchain publically listed investment company

And much much more 🙂

Share and enjoy!

 

LFP042 – Bumper Fun-Packed New Years Show On Fintech & Star Wars, Beer, Media, 2015 review & 2016!

source: focusrs.org

source: focusrs.org

This is London Fintech Podcast episode 42, the answer to life, the universe and everything. Well a bit of everything anyway. And I have the pleasure to be joined today by – er – myself.

In the now traditional (um – can doing something twice be a tradition?) first podcast of the year step away from diving into a topic with an esteemed guest and take a more top of the mountain view of the landscape.

As it’s a bumper funpack we will cover a whole range of topics all of which pertain to Fintech.

So we start today’s show with the relevance of Star Wars; move on to beer and deep dive into a topic that applies to Fintech and to the whole of our perception of the world, the media – mainstream and indie.

Next a review of key themes from 2015 UK Fintech and finally we wrap up with some thoughts about the future.

In the next episode I’ll be back to the far easier task of asking folks smarter than I the answer to life the universe and everything or at least what’s going on in their corner of the Fintech phenomenon

Share and enjoy!

Happy New Year to all 🙂

~~~

Links I reference are:

LFP031 – Payments & Non-Bank Banking with Rich Wagner CEO Advanced Payment Solutions

APS Logo Stacked

I am delighted to be joined by Rich Wagner founder and CEO of Advanced Payment Solutions (APS). In a world where some of the largest Fintechs were formed only a few years ago it’s rare to meet one that has been going for 11years,

Rich WagnerAPS is one of Europe’s most innovative payment solutions companies. A leading challenger to High Street banks (they tell me), APS provides fast and secure banking solutions and focus on providing easy to use banking products to individuals, small businesses and the public sector, specialising in business expense and current accounts, prepaid (debit) accounts and lending products.

You, like me may not have heard of APS but in terms of impact:

– Over 1.2 million Cashplus (current account) cards have been issued to date

– Serving 50,000 SMEs

– Providing banking solutions for benefit recipient for 30% of the local authorities in the UK

– APS has processed over £3 billion payments to date

APS is also the fastest growing provider of payment solutions to local government – its prepaid card and current account, run in partnership with MasterCard, supports over 1 in 5 of the UK’s local authorities with their social care programmes, handling over £180 million worth of benefits payments each year.  This year APS became the first non-bank to team up with the Post Office – allowing customers to access their accounts from Post Office branches.

Originally the main focus of the show was to be on payments, however as we spoke it broadened out to be much more “banking without banks”.

Topics covered include: Continue reading

LFP022 – 30,000 Feet Overview of Payments with Dave Birch of Consult Hyperion

david-birch-presents-mobile-payments-11-728

Having done a few Alternative Finance shows recently it’s important to recall that there is another hardcore Fintech sector that is already changing the world (as opposed to threatening to in the future). This is payments.

One quarter of the Fintech50 are payments companies and when I looked a little while ago there were well over a thousand on Angelslist. So we definitely need a super sherpa to guide us through this landscape.

Consult Hyperion are an independent technical and strategic consultancy that specialises in secure electronic transactions. For two decades they have been working with technologies ranging from smart cards and mobile phones to contactless tickets and electronic ID in mass-market systems that include global payments, national and regional ticketing, international settlement, national identity and corporate  services.

So I think they might know a bit 🙂

Dave – besides being a member of the Amalgamated Union of Wheeltappers, Shunters and Podcasters was a founding director of the Consult Hyperion, is now their global ambassador and has decades of experience under his belt.

A very rich show with plenty about what is really going on with payments – especially from the strategic big picture perspective which certainly helps put the semi-infinite number of payments startups into some kind of context.

Topics discussed include: Continue reading

LFP017 – Innovation Bridge Building between Startups and Incumbents with Samad Masood of Accenture

Accenture_Logo25

Innovation may be great but it leads to challenges – for #newFS how to get it out there (I think the “how to do it” is going well right now”).  For #oldFS the challenge is “how to absorb it”.

This bridging is being done by both new and established firms. In LFP002 Warren Bond of matchi.biz (a smallco/fintech) discussed their dating/database approach to bridge.  In this episode Samad Masood who previously ran Accenture’s Fintech Innovation Lab and is now Open Innovation Lead at Accenture shares his experience of how a big, established player sees this challenge.

Samad has a deep background in this area having been involved in reporting on the startups just as the dot-com bubble was hitting its peak.  One of the key takeaways from that experience for him was that “the best technologies aren’t always the best businesses” – a lesson which needs to be borne in mind in the current boom. A further lesson was that innovation has a great impact than people expect but it also takes longer than they expect.

The fintech stone has been lobbed into a very large pool and the ripples have spread far. Accenture is a multinational management consulting, technology services and outsourcing company. Measured by revenues, the world’s largest consulting firm and has over 300,000 staff.

Notwithstanding this “large oil tanker” scale it has proved remarkably nimble and agile in orientating itself to the new world (and perhaps see their Ad above). Its reports on Fintech investment patterns are the most widely quoted of all. It was perhaps the first to set up a fintech accelerator program (in New York in 2012) which is now in NY, London, HK and now Dublin.

In terms of bridge building Samad describes his threefold topology of Fintechs: Continue reading

LFP016 – New Year’s Special – Behind the Scenes, UK Fintech 2015 and Occupy Fintech!

LFP016 banner

The New Year is a time of reflection, a time for looking forwards and a time to take stock. So in this light this will be a special, somewhat off-piste episode with just me at the microphone. This episode has three parts:

In Part 1 I talk about some of the behind the scenes stories that go into making the LFP and share some of my thoughts about the challenges of the creative journey – a journey which many fintechs will have been through and are going through.

In Part 2 I discuss the five themes that I expect to see in UK Fintech in 2015.  These all go under the overarching banner of “2015 – The Year When Fintech Grows Up”.

  1. Less Spin
  2. A Shake-Out
  3. Fintech Maturing and Breaking-Up into Subsectors
  4. Group-Think in the Subsectors
  5. #NewFS Getting More Solid

If Xmas is a time for traditional rituals like family, over-eating, and hitting Amazon Prime bigtime 😀 it’s also a time for thinking of those less fortunate than ourselves.

If you work in Canary Wharf you will probably never see a homeless person there (I never have – are they kept out?). Meg Hillier the MP for Hackney South and Shoreditch points out that in Hackney a staggering 47% of children live in poverty :-O 🙁

In Part 3 I discuss the wider societal impact of Fintech and its media narratives.

Will Fintech, driven by the “billion dollar IPO narrative” end up being just another “get rich quick scheme” for a tiny few and become self-centred and greedy like the existing widely-disliked banking system?

Is Fintech just about creating some new mega-corporates that will live in tall shiny buildings?

Can Fintech be more than this?  Can it have a social conscience, can Fintech contribute to society and make the world a better place?

 

Let me know what you think!  In my pre-Xmas mode of thinking of those less fortunate than ourselves I tweeted a few socially pertinent tweets under the hashtag #OccupyFintech.  For those of you interested in this topic please feel free to use and amplify.  You don’t even have to sleep outside in the cold in a tent 😀

In the next episode  Continue reading

LFP007 – Dot Coms to Fintechs, Lessons Learned by Michael Nulty, 40yrs+ as an Entrepreneur, Investor and Angel

Special agent Michael Nulty (well in his dreams anyway :-D)

Special agent Michael Nulty (well in his dreams anyway :-D)

Wisdom is massively under-rated in our data-driven society. Data, information, even knowledge can be learned.  Wisdom however has to be absorbed. Wisdom is the hard-earned distillation of decades of life experience. So in this summary today I can only scrape the surface with a precis of information and knowledge.  As always I just pick out a few points here – it’s a wide-ranging conversation. To absorb the wisdom you will need to listen and reflect.

Michael is a lifetime entrepreneur, He is a fellow of the Royal Society and he is currently founder and MD of Third Sector Finance which adapts Financial Services products to meet the needs of social enterprises in the UK. I met him at a digital currency day as he is both an investor in digital currencies as well as working on improving the blockchain (this distributed ledger that was discussed in LFP003). He is a non-executive director of Gnaratas a company in the renewable alternative fuel sector in Swaziland. In the second Gulf war he co-founded a company that became very active in supplying satellite comms businesses to the non-military allied forces.

I could go on but I think you get the drift. In a world where words get devalued bigtime Michael is a Real Entrepreneur with a capital R, capital E.

His seminal experience was starting a painting and decorating business in the Isle of Man.  He learned not only “pure capitalism” – employ good people, pay them x, bill x + y – but also from the millionaires whose gardens they also maintained.  Most of them were nice (a surprise) and all of them kept it very simple. K.I.S.S was an everlasting lesson.

One of his core experiences which may well help shed light on the current fintech boom/bubble is none of the above incarnations.  In the dot-com bubble. Michael was an active investor in a whole bunch of dot-com companies – most, but not all, of which went through the roof and then through the floor on the way down.  Taking a temporary early retirement in France he had plenty of time to reflect on what differentiated the succesful investments from the unsuccessful ones.

Lessons from Dot Com Boom Investing

Continue reading

LFP005 – Innovating in Fintech & Emerging Market FX with Jon Vollemaere of R5FX.com

R5 730_90_banner_white 3

There are some huge misunderstandings in the Fintech scene right now.  Innovation is (often) misunderstood. The importance of domain expertise and experience is (often) misunderstood.  Also what’s happening with emerging market currencies and the London Fintech scene as a whole?

On this show today I am delighted to welcome a serial FX entrepreneuer – Jon Vollemaere CEO of R5FX.com (which is all very synchronicitous as this is episode 005 :-)) – to discuss all of these issues.

Wearing his day job hat, upcoming regulation requires Foreign Exchange trading banks to radically change their current trading channels for emerging markets. In essence this is to increase transparency in a market which has around $100bn turnover every day. R5 is leading that change by creating an electronic trading platform for emerging market currencies which is focused on moving the market from voice to screen.

Above and beyond this current incarnation, Jon is an excellent person to discuss innovation, FS, FX and Fintech with as he has 20yrs experience in FX markets and is a serial entrepreneur having worked, in essence, with Fintechs before “Fintechs” existed as such. So he brings great practical experience to the show.

Additionally Jon is a top bloke. Having lunch with him recently I was reminded of the City in the ‘80s – when everyone had something interesting to say outside of Financial Services as well as within it. Indeed it is no surprise that the most creative folks do have the widest horizons. Very tough to be creative if you wear blinkers.

 

The Importance of Experience and Domain Expertise in Fintech

This is especially valuable in Continue reading

LFP003 – Lifting the bonnet on Digital Currencies with Dr James Smith of elliptic.co

Should have gone to Specsavers?

Should have gone to Specsavers?

Hysteria

The Daily Mail hasn’t yet written about how Bitcoin causes cancer. I’m rather surprised given the hysterical tone of much Bitcoin coverage. “It’s going to a million dollars!”. “It’s going to zero!”. “It’s the future of money!”. “It’s a scam!”. “It’s for drug dealers and terrorists!” .  And those comments are just from the sober broadsheets 😀

[And just in passing the currency accepted by terrorists and drug dealers worldwide is a wad of US$ bills – nothing is going to displace that soon ;-)]

Oh dear.

In this episode I am very glad to welcome Dr James Smith, CEO and co-founder of Elliptic – a company founded by three PhDs – which has recently raised £2m to grow it’s business as a digital custodian of digital currencies.  As per the photo above even the Chancellor George Osbourne is happy to be photographed at a Bitcoin ATM.  So we can assume there must be something more to Bitcoin than hysteria if hommes serieux are coming to the party. Continue reading