Borderless Finance is quickly changing the landscape for international financial flows asking more of the competitive players in this market while pushing for a reduction of the costs. Amidst this disruption, the consumer and entrepreneur continue to emerge as the beneficiaries.
Private transactions, both private equity and debt, have been inefficient and littered with information asymmetry due to the way the transactions have been made. The emergence of public distribution of information on private transactions seeks to change that and the quickly arriving secondary markets for private transactions can bring liquidity and efficiency to typically cumbersome asset classes.
ICO’s are a new form of project financing for distributed ledger technologies or cryptocurrencies. The process involves collecting funds in the form of fiat or crypto currencies in exchange for a “coin” or “token”. In order to fully understand why this financing model exists, we must first understand the fundamentals of distributed ledgers in relation to regular internet protocols, which you can read more about here.
As the adoption of innovative technologies like Artificial Intelligence, Machine Learning, Blockchain, etc. increases, it impacts the rate at which the Fintech ecosystem evolves and affects different markets.
'As Fintech continues its progress around the world, new platforms emerge on a daily basis. Crowdfunding for Real Estate, peer to peer with asset backed loans, sponsor led syndicates. You’ve seen the statistic, there’s hundreds or thousands in different verticals and segments. Some represent novel new upstarts with their new niche or focus and some represent incumbents digitalizing their value chains using online tools. It's easy to think, that there are too many platforms.
With its high GDP, 2nd highest e-commerce volume in Asia and high rate of technological adoption, Japan presents a high potential for Fintech investment and adoption. However, the uptake has been lukewarm so far, owing to significant cultural and regulatory obstacles with Japanese investments accounted for only 0.40 percent of the roughly US$12 billion invested into Fintech globally in 2014, according to a report by Accenture.
According to Investopedia, “Fintech is a portmanteau of financial technology that describes an emerging financial services sector in the 21st century”. Originally, the term described technology applied to the back-end of established consumer and trade financial institutions. Since then that definition has expanded significantly to include any technological innovation in the financial sector, including innovations in financial literacy and education, retail banking, investment and even crypto-currencies like bitcoin.
As the world goes through a period of dynamic change and volatility, our CEO, Markus Lampinen in collaboration with Grow VC Group Chairman, Jouko Ahvenainen and Jean-Michel Pailhon, a fintech expert with 15 years of experience in the international financial services sector, take a look a closer look at technology developments globally in conjunction with the global economics and political ecosystem.
2016, a look in the rearview mirror
In mid-2016, the marketplace lending sector experienced some turmoil leading to increased scrutiny from regulators and institutional investors’ concerns about the securitization process and the quality of the underlying loans. However, this slowdown was temporary and personal marketplace loans globally grew by 210% (+64% for small business marketplace loans).
In recent times, everywhere one turns, disruption seems to impacting every aspect of the diversified financial services space, leaving no sector unturned whether it is in lending, borrowing, alternative finance or investment space. Financial technology coupled with social media input is altering the dynamic of the sector in pushing costs lower while creating a more efficient but equally more personalized user experience for investors and borrowers.