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PROVISION OF FINANCIAL INFORMATION: FROM ON-TIME TO REAL-TIME

Bert van der Zwan

We see, read and process new information every day, which is nothing particularly new, really. After all, even our grandparents processed information daily while reading the newspaper or, later, when watching their black-and-white TV. What has changed, however, is the speed at which the information is sent to us. IDC predicts that by 2025, the collective sum of the world’s data will grow to 175 zettabytes, up from 33 zettabytes in 2018. Previously, it was predicted that real-time information provision would become the norm because so much information would need processing, and this is exactly where we are now.

Nowadays, it is impossible to imagine a day without access to real-time information. Where would you be without Google Maps? What would happen if your mobile banking app showed you out-of-date information? Indeed, real-time information provides us with the most up-to-date information, and without this we would be well and truly lost. So, how does this work within entire organisations? Are departments taking advantage of the provision of real-time information? In this blog, Bert van der Zwan, CEO of fintech company Onguard, discusses what happens when the finance department starts working in real-time instead of on-time.

The tenth of the month
Currently financial departments all work ‘on-time’. Every month, financial reports, consisting of the progress of KPIs, are created and then shared with the interested parties. This is usually the tenth working day of the following month, because this gives financial departments enough time to gather all figures and hand them over to management, the directors and the shareholders, for example. Based on these figures – which would be a month old already – important organisational decisions are made. But if you ask me, it’s time to switch to real-time information provision so that everyone can work with current figures.

Data heaven
The digital revolution we are currently experiencing makes it possible to make decisions based on real-time information provision. However, to be able to do this, it is important that the data (or information) flow within organisations is sufficient. The FinTech Barometer 2019, our yearly survey amongst finance professionals, shows that data plays a part in 39 percent of organisations, so we don’t have to worry about whether there is sufficient data available. The trick is to actually make this data available in real-time.

Real-time with monthly recap
When we look at how finance departments currently report, almost a third (30%) indicate that this is done monthly. Nearly one in five (19%) expects in the future to be able to report financial data in real time. Still, over a quarter is convinced that monthly reporting will remain the standard. I would anticipate that a recap would be issued every month. However, the fact that reporting will still primarily take place monthly over the next few years is surprising, as leaving real-time reporting by the wayside is a missed opportunity, especially with the amount of data we are gathering from customers and from the market. Systems are increasingly ready to bundle all important information from the organisation and make it visible in real-time. For a CFO, a single overview with all real-time information makes it easier to carry out thorough analyses and make fact-based decisions. It also removes any worry about whether or not information is up-to-date and enables the organisation’s financial situation to be seen at a glance. In this way, it becomes much simpler for the CFO to make adjustments.

Thanks to real-time information provision, organisations can know what is going on instantly, especially where finances are concerned. If you ask me, this is an incredibly valuable addition for any organisation.


Data heaven
The digital revolution we are currently experiencing makes it possible to make decisions based on real-time information provision. However, to be able to do this, it is important that the data (or information) flow within organisations is sufficient. The FinTech Barometer 2019, our yearly survey amongst finance professionals, shows that data plays a part in 39 percent of organisations, so we don’t have to worry about whether there is sufficient data available. The trick is to actually make this data available in real-time.

Real-time with monthly recap
When we look at how finance departments currently report, almost a third (30%) indicate that this is done monthly. Nearly one in five (19%) expects in the future to be able to report financial data in real time. Still, over a quarter is convinced that monthly reporting will remain the standard. I would anticipate that a recap would be issued every month. However, the fact that reporting will still primarily take place monthly over the next few years is surprising, as leaving real-time reporting by the wayside is a missed opportunity, especially with the amount of data we are gathering from customers and from the market. Systems are increasingly ready to bundle all important information from the organisation and make it visible in real-time. For a CFO, a single overview with all real-time information makes it easier to carry out thorough analyses and make fact-based decisions. It also removes any worry about whether or not information is up-to-date and enables the organisation’s financial situation to be seen at a glance. In this way, it becomes much simpler for the CFO to make adjustments.

Thanks to real-time information provision, organisations can know what is going on instantly, especially where finances are concerned. If you ask me, this is an incredibly valuable addition for any organisation.


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Finance

WILL BLOCKCHAIN REVOLUTIONIZE FINANCE?

By Ken Timsit, ConsenSys

 

Over the last 10 years, researchers, software developers, start-ups, and large companies have been conducting experiments aimed at determining whether networks based on blockchain technology can ultimately – in whole or in part – replace the infrastructure on which financial institutions and capital markets are built.

 

In today’s electronic databases, any information can theoretically be replicated at will. This is why most governments allow only regulated actors to keep records of digitized assets (banks, depositories), to avoid pitfalls such as the execution of misleading transactions or the creation of artificial assets. With blockchain, these pitfalls can be avoided at the source code of the technology, which is available to all members of the network. The creation of Ethereum enabled a more robust blockchain network capable of “smart contracts”, which once programmed, can run automatically without the results being modified or manipulated.

 

Contrary to what some critics argue, the potential of the blockchain is not the creation of a free and unregulated space in which everyone can invent new financial instruments. Rather, the potential lies in creating a much more efficient and globalized commercial and financial infrastructure, in which many layers of control and intermediation are no longer needed as they are replaced by transparent and immutable IT rules that ensure the same risk management functions.

 

For example, bonds are essential financial instruments on which a large part of our economy and savings are based. The issue and exchange of a bond requires the intervention of several dozen financial institutions (issuers, intermediaries and investors). Some regulated players in this intermediary chain exist mainly to ensure that it is possible to know, at any time, who holds each bond, in order to guarantee their rights to its bearers.

 

It is theoretically possible to simplify these stacks of operators by linking them to a global blockchain network, open to all stakeholders in the industry. The blockchain network can thus ensure at any time that the number of outstanding bonds corresponds exactly to the number of bonds issued, and that each exchange transaction is carried out without the risk of default.

 

The blockchain revolution is first and foremost the reduction of costs and delays caused by the current financial infrastructure. The blockchain revolution also creates innovation opportunities for consumers, savers, and investors.

 

 

The Web3 revolution, often used to refer to the blockchain revolution, will be driven by the reduction in transaction costs, allowing the emergence of new peer-to-peer business models that we are not yet able to accurately predict, but which will probably participate in a rebalancing of the relationships between financial institutions and their clients. Some international peer-to-peer payment and loan-to-peer savings investment models are already attracting increasing interest from the most sophisticated consumers.

 

Where are we in 2020?

Today, the blockchain revolution is still in its infancy. Transaction volumes through blockchain networks, public and private, are low compared to those of existing systems. The fixed costs of the technology are still relatively high, and the user experience leaves something to be desired.

 

However, innovations abound. It is already possible for me, from my smartphone, to buy digital assets whose value is equal to about one US dollar, and to lend them in three clicks to other users who will pay me between 1% and 10% per year for this service, depending on the type of platform.

 

The number of large operational business projects is still small, but very promising. Numerous international commodity trading players have joined forces to create Vakt and komgo, two platforms that contribute to a significant simplification of trade and oil financing. Similar and competing projects, Voltron and Marco Polo, are being launched. On the corporate side, the Capbridge 1x platform (Singapore) already allows shares to be traded on an Ethereum blockchain network. Other important projects such as LiquidShare (France), SIX Digital Exchange (Switzerland), Daura (with Deutsche Borse and Swisscom in Switzerland), Synapse (Hong Kong Stock Exchange) are in preparation. The World Bank, Société Générale and Santander have issued bonds on an Ethereum blockchain network. These initiatives are still experimental but have attracted significant interest from financial institutions around the world.

 

And of course, many projects aim to revolutionize global payments by creating digital assets on blockchain networks that are fixed in Euros, U.S. Dollars or other currencies, such as those of the Monetary Authority of Singapore, the South African Reserve Bank, and Union Bank of the Philippines. Since the announcement of the Facebook-initiated Libra project, many governments have expressed concern about the possibility of private companies controlling global payment flows, and have asked their domestic financial institutions to redouble their efforts to explore competing initiatives.

 

All of this is to say that adoption is happening, albeit gradually. The middlemen and intermediaries of the financial world will not be replaced overnight. Moreover, the exact formation or architecture of the new financial system is impossible to predict with accuracy. However, it’s safe to say that blockchain will enable a financial system that is more efficient and yields more value-add to consumers, users, and investors.

 

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Finance

RECOLLECTING 2019 CRYPTOCURRENCY TRENDS & LOOKING FORWARD TO 2020

Marie Tatibouet is the CMO at Gate.io

 

It has been a bold and progressive year for the digital asset market with exciting announcements flowing in from technology behemoths and government bodies around the world. However, Facebook’s launch announcement of Libra (though they are now facing regulatory issues) and China’s new cryptocurrency law caught all the attention, affecting the Bitcoin price, and the overall market sentiment.

In 2019, the global market saw several catalysts emerging for mainstream adoption despite increased scrutiny around several burning issues such as wash trading and security breaches. For over 400 cryptocurrency exchanges in the world, being able to constantly improve on aspects around user experience and fund security is the only way to be sustainable. However, only a handful have real trading volume and technical expertise to build strong trust in the community. For instance, global wash trading has been the hottest topic of discussion in 2019 but new rankings on CoinMarketCap clearly indicate that the industry is working towards eliminating market manipulation.

 

Looking back at 2019

In 2019, digital asset organisations have constantly innovated to attract users but at the same time, the trading process has become increasingly fragmented, spiking the time gap between new users becoming long-term users.

 

Marie Tatibouet

Holding & Lending Funds

Since 2014, the Bitcoin margin trading market has expanded from $10 million to $100 billion. Margin trading has been a great use case in the cryptocurrency space. Many exchanges launched the feature to provide diversity to the trading experience and attracting a huge amount of users to the platforms. It allows traders to multiply their profits on successful trades, providing a range of possibilities for both profits and losses.

Staking is a process where users can buy digital assets and earn interest by keeping (holding) them in a cryptocurrency wallet for a particular period of time. It has proved to be a strong use case for digital asset companies as it encourages user participation. In 2019, staking programs brought stable earnings for cryptocurrency investments made by the users. For instance, HODL & Earn launched by Gate.io in August 2019 has been bringing stable earnings for cryptocurrency investments made by its users. The competitive advantage for HODL & Earn is its annual interest rate, which is as high as 32%.

 

IEO

Crowdfunding as an approach to build and grow products has seen a lot of traction over the last decade or so. One of the highlights this year was the emergence of “Initial Exchanges Offerings”, more commonly termed as IEOs, an alternative to traditional IPOs where companies can raise funds by selling a quantity of digital assets to investors, supervised by cryptocurrency exchanges. With over 1.5 Billion funds raised, IEOs shook the entire cryptocurrency space in 2019.

Owing to the richness and variability that we have seen so far, there has been no one clear winner to pick, but there’s also no ignoring the leaders; Gate.io has the second best average IEO returns, raising over 80 million dollars in its first 5 projects and has similar offerings panned out for 2020.

 

Source: https://medium.com/@neironix.io/top-8-largest-ieo-whats-happening-to-them-now-f7e60a638dda

 

Deals and Discounts 

Discount deals are being increasingly leveraged by digital asset companies, encouraging users to maximize their capital. Holiday seasons such as Black Friday are packed with jaw-dropping discounts. However, as an industry, we should aim to integrate discounts in digital currencies into the mainstream world, which would bring price stability.

 

Dynamic User Relationship

Cryptocurrencies are being taken seriously and companies are designing consumer-specific strategies. It is a great indication of the fact that more and more people are interested in trading digital assets. However, we have a long way to go when it comes to tackling the industry challenges and unlocking value for the entire ecosystem.

 

Regulation, Security, and Mass Adoption 

Central banks of the US, Europe, China, and Ghana are looking at creating their own central bank digital currencies, putting a structure to the adoption of the blockchain technology across finance and other industry verticals. Japan’s recent regulation amendments, China’s new crypto law have laid the right frameworks for mainstream crypto adoption.

While we have major countries pushing for the mainstream adoption, security remains a major concern. Cryptocurrency thefts and frauds in Q3, 2019 annual stand at USD 4.4 billion and this will only increase if fund safety mechanisms aren’t strengthened. Therefore, the strongest will survive as far as digital asset security is concerned.

Nonetheless, blockchain technology is helping to create an innovative and accessible financial system around the world and its mainstream adoption is closer than we can fathom.

 

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