Blockballed: The State of Not Understanding Blockchain and Fintech’s Importance to Finance
Being blackballed is bad; being blockballed is worse. Finance execs who think blockchain and fintech are for the techies are going to get blindsided.
Mark Cheng of Mind Fund Group sounded the alarm, telling the Internet Economy Summit audience in Hong Kong – including many bankers – if you don’t take care of your customers, someone else will. And you won’t like it when they are up in your systems.
Financial aggregators are well known in the US where major banks are fighting them off, while in Asia the concept seems unknown. Giving you banking and finance passwords to a fintech service that provides all the services you wish you bank did – but doesn’t – allows you to finally make good use of the financial data your bank hoards. But banks are keen to remind you that what is done with that account is your responsibility – including fraud, money laundering and anything else someone might do with your account. Consumers that bristle at government data collection are perfectly happy to give away access for convenience. If banks are lazy about keeping up with fintech, the price they will pay is financial aggregators in their systems, enabled by their customers.
Don’t get blockballed
Cheng Li, Chief Technology Officer of Ant Financial Services Group
Many execs do have their eye on the future, however. The Summit saw Ant Financial CTO Cheng Li articulate how his firm was using blockchain technology to power their charity-donations platform and then use that experience to increase blockchain adaptation across their system, even into protecting against fraud in the global supply chain, in partnership with their sister company Alibaba.
“When the data is transparent, it requires no trust – what exists is a ‘truth machine.’” Tim Grant, R3
Tim Grant, the CEO of R3’s Lab and Research Centre, outlined how their consortium of major financial institutes and even central banks was growing as they sought to understand, develop and deploy distributed ledger technology. He has no interest in building what The Economist called a “Trust Machine”, in their famous blockchain cover story. When the data is transparent, it requires no trust – what exists is a ‘truth machine’.
Tim Grant, Chief Executive Officer of R3 Lab and Research Center
However, not total truth – or rather, not total transparency. In working with large institutions, concessions must be made to answer their concerns. Privacy means that there must be some control on who can see what, and R3’s recently launched Corda solutions allows more control over that privacy. Also, they are leaning heavily towards using Java for the simple reason that the banks are comfortable with it. A great many banks have joined the consortium, gaining access to the most advanced research and datasets in the world. Those not on board risk falling behind, becoming blockballed in the process.
Keeping up with the future
“if phones can roam, why can’t the payment systems embedded in them?”
Two panels for innovators and finance professionals outlined their thoughts on the future. Juwan Lee, CEO of NexChange, uncovered some inconvenient truth about fintech in Hong Kong. Alex Kong of TNG Wallet was disappointed that banks in Hong Kong wouldn’t play ball with his solution even as retailers and consumers were taking it up with gusto in Hong Kong and across South East Asia. Other countries were more cooperative with the new firm that is aiming to work with other payment providers to enable global payment roaming. He reasons that if phones can roam, why can’t the payment systems embedded in them?
Panel with representatives from the HKMA, Citibank Hong Kong, DBS Bank, China Construction Bank, Standard Chartered Bank, and HSBC.
The bankers had their chance in a later panel moderated by Cyberport’s Dr. Toa Charm (Chief Public Mission Officer). The flavour of the day was payments as most lauded the work of their teams in advancing new payment options for consumers. Priscilla Ng of Citibank Hong Kong took the opportunity to talk about the Citi HK Fintech Challenge – a chance for fintech firms to plug into 30 powerful APIs developed by Citi and possibly take on Citi as a major client. Fintech startups can choose to address one (or more) of six pain points Cit has identified
So at least one major firm is finding a way to work with fintech startups in a collaborative manner that ensures that they, for one, won’t get blockballed.