Lack of Sell-Side Coverage

| August 17, 2016

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Every month, Ipreo reaches out to our network of financial professionals to get their insight into issues that affect the marketplace, and to provide our Corporate clients with a little glimpse into the minds of the investment community.

Spotlight

NN

NN is an insurance and asset management company active in 18 countries, with a strong presence in a number of European countries and Japan. Our roots lie in the Netherlands, with a rich history that stretches back 170 years. The overarching company, NN Group, includes NN, Nationale-Nederlanden, and NN Investment Partners.

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How Blockchain Technology is Powering FinTech Revolution in 2020

Article | April 15, 2020

The 21st century doesn’t fail to surprise human society with its innovation. Blockchain is going as a part of mainstream business operations and it's impossible to keep FinTech unaffected. As the new universality of the twenty-first century, technological advancements have now unquestionably seeped into the workflow structure across multiple industries and are an indispensable element of varied business processes. Assignments that once needed human hands, bulky machines, and physical currencies have now been efficiently digitized. Mobility, cloud services, and consumers who have grown up in the digital age are forcing a CHANGE. Technology has been the core of a number of disruptive trends in financial services and it is a driver behind three key themes; the first being convergence of other industries into financial services that is frankly leveraging data and technology, the second is wholesale sort of interruption or disruption of business models and new entrants entering into the competitive landscape and certainly last is a much more transformative journey and that is the leveraging of things like Blockchain Technology, which is completely going to change the financial services ecosystem and marketplace in 2020. Anyone with an internet connection can now engage in day-to-day banking activities, trading and investment in the stock market, widen e-commerce platforms, make online payments, exchange currency online, undertake equity funding, and more. Similarly, new players are now experimenting in different areas of financial activity such as banking, payments, peer-to-peer lending, wealth management, and more. FinTech itself is at the cusp of the renovation as if there was a need. That flux of change is coming from the headwinds of Blockchain swinging its wings. Its stagnant style of doing business is apparent to all. What needs to be examined though, in this distinct phenomenon is the contribution of Blockchain which has enhanced this progressive revolution. Table of Contents •Why use Blockchain for Fintech? •How is it currently managed? •How big is the impact of Blockchain in FinTech? •Blockchain for Global Payments/Cross-Border Transfers •Blockchain in Trading and Trade Finance •Blockchain in e-KYC Utilities •for Credit Scoring •Conclusion (All in all) Why use Blockchain for Fintech? When we talk about FinTech, or technology for finance, we are going to touch a very delicate aspect. We are in 2020 and banks still demand people to send them a fax with their information, because regulators that are there are not catching up with the technology. So Blockchain for FinTech is a very powerful tool. But until the regulators don’t allow it to be deployed in full, recognizing digital signature, recognizing a contract, a time stamp by blocks in a blockchain is going to be hard. How is it currently managed? Let’s understand this with an example - payment with a credit card. Before the payment with a credit card arrives in our bank account, there are 12 companies with 12 databases. They bring the data one to the other before it arrives to the bank account. With the blockchain, it’s up in a single transaction. So in many cases for remittance and for rebalancing accounts, even between branches of a single bank, a blockchain solution allows to remove error in transaction. There are banks that have branches in different time zones. At the end of the month, one time zone branch writes the transaction in the previous month, the headquarters writes the transaction in the next month. And when the month goes to level, it creates a lot of confusion. The accounting system based on blockchain technology will guarantee that all is aligned perfectly. How big is the impact of Blockchain in FinTech? Blockchain surely is born for fintech and is already bringing quite a lot of interest. The reaction of the financial industry is being very positive, one of adoption. When the financial board saw blockchain, rather than getting scared, they started adopting the technology for their own good. In fintech, blockchain is making a big influence to start with. According to a survey on the financial services sector and fintech conducted by PwC, around 77% of the financial services industry plan on adopting blockchain by 2020. Banks being 1/3rd of the institutions surveyed have shown an inclination in incorporating blockchain in their operations as was reported by a study published by Accenture and McLagan (January 2017) that made mention of at least eight of the ten biggest global investment banks comprising the blockchain route. Blockchain for Global Payments/Cross-Border Transfers Blockchain-powered payments are hyper-secure and private. Each user has personal cryptocurrency keys that they can use to conduct transactions safely. The blockchain ensures that only participants involved in a particular transaction know the details of this transaction. Any changes to the transaction are possible only with the consent of all participants. Learn more: https://capital.report/blogs/tracking-the-future-of-cross-border-payments-with-ai-ml-and-blockchain/8124 As per Deloitte, blockchain-based payments from business-to-business and peer-to-peer results in 40% - 80% reduced transaction costs. They’re also settled within seconds. Yes, it would be a paradigm shift but as per a projection by Mckinsey & Co. blockchain could drive $50 - $60 Billion in transcontinental B2B and $3 - $5 Billion in P2P payments respectively. A blockchain records and validates every transaction and administers transactions in a way that no one can tamper with or delete them post-execution. FinTech companies such as Aeternity leverage this advantage of the blockchain to protect payments. Another benefit of blockchain is that it eradicates the need for a mediator to handle financial services like money transfers. This is a huge relief for businesses that provide peer-to-peer (P2P) transactions. Learn more: https://rubygarage.org/blog/how-blockchain-works#article_title_1 Blockchain in Trading and Trade Finance The trade financing field requires lots of tedious paperwork and bureaucracy. Stock and share purchases have to pass through brokers, exchanges, clearing, and settlement. Shipping, for example, requires client-side etiquettes like lading bills, invoices, and the letter of credit. Each transaction is typically completed within three days. Yet transactions can be delayed when trading transpires over the weekends. The blockchain technology can release traders from troublesome checks of counterparties and optimize the complete lifecycle of a trade. Using a blockchain, companies can intensify trade accuracy, speed up the settlement process, and reduce contingencies. Ornua and Barclays completed the world’s first blockchain trade transactions in 2016, employing four hours rather than a week on a letter of credit — a document guaranteeing the export of $100,000 worth of agricultural products. IBM & Maersk collaborated for a global trade platform to attain scalable solutions of Blockchain in Fintech. Furthermore, Forbes released its report of Top 50 Billion-Dollar companies who’re exploring the scope of implementing blockchain solutions. Learn more: https://www.forbes.com/sites/michaeldelcastillo/2019/04/16/blockchain-50-billion-dollar-babies/#3d2cf7be57cc Blockchain in e-KYC Utilities Identity can be undoubtedly established by government-issued documents such as driver‘s licenses, social security cards or passports, etc. Establishing identity through KYC verification is a lengthy procedure. While exploring the bank-driven approach to KYC customer record sharing, there is always a debate around centralized versus decentralized approaches. According to Niall Twomey, Chief Technical Officer, Fenergo, The centralized model offered centralized KYC utilities, controlled by a single entity. The main proponents and vendors behind these models at the time were incumbents with huge data resources and reach, which makes sense when it comes to creating a KYC utility. However, each utility had separate financial institution members, meaning that the overlap of customers and the ability to re-use customer information between them was seriously diluted. This was a key showstopper for utilities at the time. This led to a shift towards a decentralized model, where control is shared and participants coordinate with each other without going through a single intermediary. Blockchain is a form of distributed ledger technology, having a specific technological foundation and cryptographic features that enable the storage of data in an immutable (unchangeable) ledger of ‘blocks’ of records. The blocks of records are linked in groups or a ‘chain’, which are maintained by a decentralized network, where all records are approved by consensus. It can build trust between financial institutions as it is auditable, and can help streamline the attestation process; ensuring clients are in charge of their own personally identifiable data. The use of blockchain, currently best known as the foundational technology for Bitcoin and other cryptocurrencies, could overcome inefficiencies and duplication of effort in KYC information gathering between legal entities within a more comprehensive financial corporation or even between competing banks. The blockchain offers a digital identity system. Using this system, clients need to go through validation just once and can then use this verified identity document to conduct transactions all over the world. A blockchain allows clients to • Manage their personal identity data and reputation; • Share their data with others without safety concerns; • Log in to digital services without passwords; • Digitally sign any type of documents, such as claims and transactions. for Credit Scoring FinTech companies are widely using blockchain to cater to the unbanked population lacking CIBIL score and helping them get credit. Apart from the unbanked and underbanked, two more groups of consumers — credit invisible and unscorable — lack banking services. The Consumer Financial Protection Bureau (CFPB) shows that one in ten adults in the USA don’t have any credit history, and 19 million Americans have unscored credit records. Unscorable consumers mean people who have credit records at least in one credit reference agency but the data is too out-of-date to generate a reliable score. Consequently, millions of people are deprived of loans, mortgages, the ability to rent apartments, and more. Traditional banks and lenders approve loans based on a system of credit reporting. Blockchain technology unlocks the possibility of peer-to-peer loans, complex programmed loans that can approximate a mortgage or syndicated loan structure, and a faster and more secure loan process in general. When you apply for a bank loan, the bank evaluates the risk involved. They do this by looking at factors like your credit score, debt-to-income ratio, and homeownership status. This centralized system is often unfriendly to consumers. The Federal Trade Commission concludes that one in five Americans have a “potentially material error” in their credit score that negatively affects their ability to get a loan . Alternative lending using blockchain technology offers a cheaper, more efficient, and more secure way of making personal loans to a broader pool of consumers. With a cryptographically secure, decentralized registry of historical payments, consumers could apply for loans based on a global credit score. All in all In fintech, blockchain finds application in areas like digital ID, customer authentication, insurance, to name a few. Blockchain practitioners are experimenting with this technology to bring out new use cases and applications to solve the repetitive and complicated issues in the fintech industry. Blockchain in fintech is anticipated to reach $6,700 million by 2023 in the United States. Financial institutions will use blockchain for smart contracts, digital payments, identity management, and trading shares. The blockchain sector in fintech has been intended to provide banking with a more seamless and efficient experience. We will soon see the process of cash to crypto and vice versa to become ubiquitous. Blockchain technology has tremendous potential to deliver excellence in core areas of banking and financial institutions’ business model. But to succeed in implementing blockchain, financial institutions should collaborate with the ecosystem before they launch blockchain solutions.

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2020: Drive by regulators to adopt tech poses challenges for the firms they police

Article | February 25, 2020

The overhaul of the financial services industry in the post Great Financial Crisis (GFC) era has created a swathe of new rules and regulations for the regulators to monitor, and financial firms to adhere to. While such changes have presented firms with significant challenges, transforming how they operate and behave on a day-to-day basis, it has coincided with another notable overhaul in the tech arena.

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How Blockchain Marketing Helps to Build Better Connections with Consumers

Article | March 8, 2021

Blockchain is a relatively new technology but is significantly changing the world around us. The term refers to a decentralized ledger technology used in cryptocurrency transactions. Almost everyone is now familiar with Bitcoin and other cryptocurrencies. Blockchain technology is utilized to record cryptocurrency transactions and to ensure the security of such transactions. Blockchain technology continues to impact several industries – banking and finance are one of the industries. The trend continues to cybersecurity, shipping, real estate, and also digital marketing. Blockchain began as a technology for cryptocurrencies, but now it is set to take over several other industries. Since blockchain is a decentralized technology, it assures marketers that their transactions are secure by improving cybersecurity. The technology is not centrally controlled, as nobody controls or owns blockchain. With this in mind, marketers are not only waiting anxiously to see how blockchain will optimize or impact their work, but also looking forward understanding how they can better leverage the technology to deal with business partners and reach millions of potential customers in the digital marketing industry. Here are nine ways in which blockchain marketing can help marketers to boost their strategies and thus transform the consumer experience. 1. Targeting and Engaging the Right Audience With regards to the digital marketing industry, an estimate of 70% of marketers fail to target consumers with behavioral data, as only about one in a thousand ads get clicked in an online displays ad campaign. Despite the majority of marketers having lots of consumer data and paying huge fees to middlemen involved in advertising, they are still unable to engage and target the right audience. Blockchain marketing is an effective means through which marketers can use to get the right audience to see their adverts and then engage them with such ads. The technology creates a decentralized search engine where marketers easily reach and get in front of their target audience. Through this technology, marketers can also compensate target consumers using tokens (digital wallets) for providing their personal data to the marketers. Every time someone clicks on adverts on a marketing company’s search engine, they get paid. This increases the hyper-targeting of adverts, and consumers only see those ads that they have shown interest in. In this way, marketers only target and engage the right audience. 2. Ad Fraud Prevention Ad fraud is becoming an increasing problem facing advertisers and marketers. Paying for fake clicks and impressions is a common trend nowadays, as about one in every five pay per clicks is found to be fraudulent. Ad fraud is emptying marketers’ money and distorting their analytical data, which eventually affects their strategic decisions towards their marketing and advertising efforts. With the application of blockchain technology, marketing platforms can display all click-throughs in real-time, and marketers rent out their advertising space and attract quality traffic. In this way, blockchain authenticates clicks and therefore prevents ad fraud. 3. Decentralizing E-Commerce Blockchain is decentralizing how consumers buy products and services online. Marketers can use the technology to create decentralized marketplaces where they can sell their products or services directly to consumers without the need of using expensive third-party platforms. Such decentralized marketplaces have built-in Bitcoin wallets that help to pay and earn in cryptocurrencies without the need to rely on third-parties or intermediaries like banks. 4. Influencer Marketing Consumers normally believe what other customers say about a product or service rather than what a brand is saying about itself. With being that case, the majority of marketers allocate budgets for influencer marketing (a type of social media marketing that uses endorsements and product mentions from influencers) to promote brand awareness, drive engagements with their brands, and reach new target audiences. Blockchain makes it possible for marketers to take advantage of influencer marketing. By leveraging the technology’s immutability and transparency, blockchain marketing helps marketers to authenticate the identity of influencers and validate their followers and get a guarantee of their investment. With the help of smart contracts, payments can be held in escrow until the desired output has been achieved by influencers. 5. Eliminating the Middlemen Marketing involves finance and this means marketers doing transactions through banks. However, blockchain technology comes with digital wallets (cryptocurrencies) and this eliminates the need to conduct transactions through banks. The technology ensures that transactions run smoothly and minimizes the costs involved in making transactions through banks acting as middlemen. 6. Social Media Blockchain marketing is set to change the scenario of social media for individuals providing services to businesses and those using social media to reach consumers. Social networking sites built on blockchain are more secure with no central hosting server. One of the impacts of blockchain is that marketers can validate their own data without the need to rely on third-party tools for it. Blockchain ensures privacy, thus allowing users to transact in a private manner. Only the recipient and sender have knowledge about the contents of the transactions. Blockchain verifies users’ identities and therefore ensures their genuineness. It maintains transparency in social media ads that involve the process of buying, booking, and placing ads, thus eliminates the chances of fraud. Through blockchain marketing, it is possible for markets to get rid of the role of social media platforms (like Facebook, Twitter, Instagram) as middlemen by compensating customers directly instead of such intermediary platforms. When consumers log in on social networking sites, their data is released to marketers and blockchain ensures search data privacy. Marketing firms, which are monitoring customer behavior, are able to obtain all information from one place, which is reliable because of blockchain’s high level of accuracy, and marketers pay consumers for their personal information. Social media has spambots and fake news. With blockchain marketing, marketers are able to verify the content distribution, trace the spread of data, and even block fake contents and their contributors. 7. Data Collection Good data is highly important for marketers. Despite having abundant marketing tools and making attempts to try out different marketing strategies, the majority of marketers are still unable to get quality and accurate customer data. It is only consumers themselves who can provide accurate data. But how can a marketer make customers share their data? Blockchain marketing has made it possible for marketers to encourage customers to share their data in return for some compensation, and this making is a win-win situation for both parties. By putting consumers at the center of the data economy, data obtained in this way is highly authentic and relevant. 8. Smart Contracts Blockchain enables smart contracts, thus helping marketers to offer services to clients across the world. Such contracts are “programmable agreements that execute automatically when conditions are met.” Every contractual milestone must be fulfilled, even for the next steps to come. This ensures that payments are made only after the contract terms are met. The main benefit of a smart contract is that it can process transactions without third parties. The transactions are irreversible and can be traced, and through smart contracts, marketers get a guarantee that they will be paid and contractors are guaranteed of security. Such contracts provide transparency, thus saving time for both parties. 9. Reward Systems and Loyalty Programs Customers always remember when they are made to feel special. Sales loyalty programs work so well when they make customers feel special. Marketers can use blockchain to create an unforgettable, unique experience for customers. Gift cards can be attached to the blockchain, thus creates a safe platform for issuing and maintaining gift cards and loyalty programs. If clients accumulate gift cards but are unable to use or redeem them, then they will have a bad experience with the brand. However, with the use of blockchain, gift cards can be converted into cryptocurrencies or digital wallets, and make it easier for clients to redeem or use them. Conclusion Blockchain technology is still in its infancy and is expected to evolve and grow significantly in the next few years. It is set to disrupt digital marketing, offering marketers a variety of benefits in terms of efficiency, transparency, security, and performance. Marketers who plan to adopt blockchain marketing will be able to provide an increased trust to consumers and a better user experience because of hard-to-crack security and permission-based access of blockchain. With blockchain technology, marketers can gain more accurate information from customers directly interested in their brand. This would not only increase their return on investment (ROI) but also enable them to target adverts to potential customers based on verified data. Marketers interested in global transactions always feel at ease knowing that implemented smart contracts will guarantee secure deals.

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How to grow your customer base

Article | August 26, 2020

Need more repeat customers? You’re not alone. Businesses of all sizes struggle to win over new shoppers and to inspire brand loyalty in the ones they already have. Pulling off both at the same time is even harder. The key to growing this group is acquiring and retaining new customers. While marketing plays a role in the process, sales and support teams are typically responsible for winning and keeping new users.

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Spotlight

NN

NN is an insurance and asset management company active in 18 countries, with a strong presence in a number of European countries and Japan. Our roots lie in the Netherlands, with a rich history that stretches back 170 years. The overarching company, NN Group, includes NN, Nationale-Nederlanden, and NN Investment Partners.

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