The legal services industry in the United States generates about US$350 billion a year in fees. In the United Kingdom, the second largest market for legal services in the world, a 2020 report by KPMG for the Law Society estimated legal services generated value of around £60 billion a year after costs. So law is a substantial industry on both sides of the Atlantic, but its product is antiquated, expensive, opaque and of variable quality. Which is one reason why artificial intelligence (AI) is mak...
Dec 14, 2021•1 hr 4 min•Season 1Ep. 80
Open Banking is existentially important. By pioneering the exchange of customer data between financial institutions through Application Programme Interfaces (APIs), it is the leading experiment in the economic consequences of giving consumers ownership and control of the data they create through their interactions with business and government. The success of the experiment matters intensely because the impact of data-driven transactions on the structure of capitalism as a whole, let alone financ...
Dec 09, 2021•1 hr 2 min•Season 1Ep. 79
Financial crime compliance has grown from small beginnings in the Bank Secrecy Act passed by the Nixon Administration in 1970 to combat money laundering. The PATRIOT Act of 2001 added countering the financing of terrorism (CFT) to anti-money laundering (AML). But it is the universalisation of these American precedents through the International Standards on Combating Money Laundering and the Financing of Terrorism and Proliferation of the Financial Action Task Force (FATF), first promulgated in 2...
Dec 02, 2021•59 min•Season 1Ep. 78
In January 2018, Gibraltar became the first jurisdiction on the planet to pass into a law a regulatory framework to accommodate financial services based on blockchain. It has helped to attract to the Rock more than a dozen digital financial services companies, including crypto-currency funds and Insurtechs. The government of Gibraltar and the Gibraltar Financial Services Commission (GFSC) pride themselves on their closeness and accessibility to the industry, which they believe encourages a spiri...
Dec 01, 2021•58 min•Season 1Ep. 77
Gibraltar has built a reputation as a congenial domicile for insurance companies. With a robust regulatory regime but an accessible regulator prepared to work fast, Gibraltar is now home to a third of motor insurance premiums in the United Kingdom, including those paid to household names such as Admiral. With nine tenths of its business emanating from London, Gibraltar has suffered little from the loss of free access to European Union (EU) markets that followed Brexit. In fact, Gibraltar may eve...
Dec 01, 2021•1 hr 2 min•Season 1Ep. 76
Central securities depositories (CSDs) are a target of the tokenization evangelists. CSDs are in theory completely redundant in a system by which tokens are issued directly into digital wallets, transactions are settled token versus token (TvT) between digital wallets, changes of ownership are registered automatically on a distributed ledger, and holdings of tokens are safekept in digital wallets and serviced by smart contracts. How soon such a system could come into being is impossible to predi...
Nov 30, 2021•1 hr 24 min•Season 1Ep. 75
Perhaps one jurisdiction and a half have actually launched a Central Bank Digital Currency (CBDC). But the second largest economy in the world (China) is now promising to turn its pilot CBDC into a full-fledged digital fiat currency as soon as February 2022. It would be surprising if a member of the G7 – and especially the United States, possessor of the dominant reserve currency of today -did not feel obliged to respond. The Bank for International Settlements (BIS), whose membership encompasses...
Nov 23, 2021•1 hr 6 min•Season 1Ep. 74
Greengage, which has been active in the crypto-currency markets for the last three years, has set itself a new mission: to become the merchant bank that channels the fiat currency deposits of crypto-currency exchanges to small and medium sized enterprises (SMEs). To that end, it is currently considering whether to pursue a banking licence, which would allow the firm to provide a full set of banking services across three fiat currencies. But transforming the fiat currency deposits of crypto-curre...
Nov 10, 2021•50 min•Season 1Ep. 73
New York-based INX Limited shot to prominence last year when it raised US$85 million in an initial public offering (IPO) that was not only tokenised but, because it was fully registered with the Securities and Exchange Commission (SEC), open to all kinds of investors. This broke with the established pattern of issuing security tokens to sophisticated investors only, placing INX in the vanguard of the burgeoning tokenisation industry. The company is already developing plans to tokenise OTC-traded...
Nov 10, 2021•1 hr 8 min•Season 1Ep. 72
There is no shortage of challenger banks and neo-banks but it is often hard to discern what is being challenged or what is genuinely new. Most are doing nothing more disruptive than creaming off revenues established banks are too lazy or dysfunctional to retain. The character of five-year-old Chetwood Financial is harder to categorise. Its leadership emphasises the personalisation of its products rather than the quality of its customer relationships. By refusing to take ownership of its customer...
Nov 10, 2021•37 min•Season 1Ep. 71
Real estate is a primary target for tokenization. Its size and intrinsic illiquidity makes tokenization and fractionalization unusually appealing for owners and developers, and investors are attracted by the opportunity to gain exposure to the asset class at lower cost. So it is not surprising that the real estate sector spawned the flagship tokenization of shares in the St Regis Aspen hotel back in 2018. Among the real estate entrepreneurs that recognized the significance of that transaction th...
Nov 03, 2021•57 min•Season 1Ep. 70
Projections put the size of the security token markets at US$8-9.5 trillion within just four years. That is bigger than the US$7 trillion invested in the privately managed asset markets that are presently seen at the most promising axis of growth for the tokenization industry. The rewards are easy to list. A lower cost of capital for issuers. Increased liquidity, and access to a wider range of asset classes, for investors. Automation of costly asset servicing by smart contracts. Faster completio...
Oct 20, 2021•1 hr 6 min•Season 1Ep. 69
The wealth management industry is under pressure. Profitability depends on scale, and in the United Kingdom there are more than 27,000 firms vying to advise clients on the management of their savings, from independents with a handful of clients to the wealth management arms of global asset managers and private banks. Clients are increasingly demanding, forcing their wealth managers to invest in technology to provide digital interfaces and reporting. They are also more sensitive to cost, and like...
Oct 08, 2021•52 min•Season 1Ep. 68
Growing institutional interest in crypto-currencies, not least as a hedge against rising inflation, has spawned a range of custodial services to safeguard the private keys without which nobody can access the digital wallet that contains the assets. Hex Trust, the Hong Kong based provider of institutional grade digital asset custody services, was among the first in the field. Since it opened for business in March 2018, Hex Trust has gathered a diverse clientele in the private banking, wealth mana...
Oct 06, 2021•55 min•Season 1Ep. 67
It always takes time for revolutionary technologies to establish themselves. Blockchain is no exception. Although the pace of mass adoption is speeding up – the telephone took 70 years to achieve 50 per cent market penetration among consumers, while smartphones managed that in three – blockchain is more akin to a general-purpose technology such as electricity in its ability to transform a wide range of commercial activities. As such, it must solve engineering problems that constrain its growth, ...
Sep 30, 2021•1 hr 4 min•Season 1Ep. 66
Cross-border payments are notoriously expensive. They are also slower, less reliable and less transparent than domestic payments, in which transfers are now (or soon will be) both instant and instantaneously visible. One reason for these inadequacies is that an oligopoly is at work. There are around 25,000 banks in the world, but almost every cross-border payment ends up being handled by just 15 of them, all of which have relationships with thousands of correspondent banks. Unsurprisingly, given...
Sep 29, 2021•1 hr 14 min•Season 1Ep. 65
The margin pressure exerted by asset management clients is forcing global custodian banks on to an unsustainable path of rising asset values and shrinking revenues. Tokenization, while rich in opportunity, could exacerbate the problem by increasing asset safety and compliance risks without reducing the need to invest in new technology. Financial market infrastructures reeling under the same pressures offer no immediate release in the form of cost-sharing. To contain the effects, custodians are c...
Sep 13, 2021•1 hr 4 min•Season 1Ep. 64
Data is all about correlation rather than causation. But this is why it is so powerful. In the past, management decisions could be based on whatever the decision-maker deemed to matter. Now, the causal nature of decision-making is being challenged by a host of correlations. Of no market is this truer than the previously opinion-rich but near data-free zones of workforce management and office location, both of which the Pandemic has challenged at the elemental level. So the emergence of Vertis.ai...
Aug 19, 2021•41 min•Season 1Ep. 63
Nivaura was a blockchain pioneer in London, working with banks, stock exchanges, financial market infrastructures and law firms on a string of high-profile regulatory sandbox projects that proved blockchain technology could support private placements, structured products, bonds, crypto-currency-backed bonds and equity settlements, even within the existing regulatory regime. The company is now automating data flows in the primary debt capital markets and nurturing the growth of the open-source Ge...
Aug 18, 2021•59 min•Season 1Ep. 62
Custody, long the poor relation of the traditional securities industry, has emerged as the foundation of the digitalization of the capital markets. That is because it is confidence in the safekeeping of the private keys that unlock ownership of crypto-currencies and security tokens that will determine the level of institutional investment in both. Polysign subsidiary Standard Custody & Trust has just raised more than US$80 million to build a blockchain-based, institutional-grade custody serv...
Aug 10, 2021•43 min•Season 1Ep. 61
Future of Finance Co-founder Dominic Hobson spoke to Revolution Populi CEO Rob Rosenthal about giving consumers the choice, what they will choose and how digital entrepreneurs can create the apps to change the balance of power in data ownership and control. Hosted on Acast. See acast.com/privacy for more information.
Aug 02, 2021•32 min•Season 1Ep. 60
Issuers, asset managers and investors are under mounting pressure to report how their investments comply with a range of environmental, social and governance (ESG) criteria. The principal difficulty they face is obtaining data reliable and comparable enough to make meaningful judgments about the companies and the securities they issue. Nobody understands that challenge better than Tim Mohin, now Executive Vice President and Chief Sustainability Officer at Persefoni, a company founded to help com...
Aug 01, 2021•42 min•Season 1Ep. 59
Like insurance and trade finance, international art is a large and valuable market bedevilled by extended chains of intermediaries, excessive levels of fraud and hefty transaction costs. And, like those other markets, art is ripe for transformation by the application of digital technology and techniques to the identification of assets and counterparties and the delivery of objects against payment. Future of Finance co-founder Dominic Hobson spoke to Angus Scott, CEO of ArtClear, a company whose ...
Jul 30, 2021•52 min•Season 1Ep. 58
No market has defied attempts to reconstruct it quite as deftly as foreign exchange (FX). The US$6.6 trillion a day market provides a handsome living for a great many people, despite a succession of embarrassing scandals and the publication by central banks of a global Code of Conduct designed to prevent them. FX has more than survived the disappearance of 19 national currencies into the euro and is even now drawing crypto-currencies into its orbit. One reason FX has retained its freebooting per...
Jul 30, 2021•28 min•Season 1Ep. 57
1transfer describes itself as the “first transfer agent for the digital world,” by which the founders mean the emerging universe of security tokens. Though it is a consortium venture embracing seven firms in broker-dealing, automated trading, crypto-currency and FinTech, 1transfer is very obviously the brainchild of Houston-headquartered Entoro. The entire raison d’etre of the investment bank is to exploit the accelerating convergence between investment banking, private securities placement, tra...
Jul 28, 2021•36 min•Season 1Ep. 56
1. Will a wallet-based system replace an account-based system? 2. How can privacy best concerns be addressed? 3. What will the impact of CBDCs be on Stablecoins, crypto-currencies and digital assets more generally? 4. What can be programmed into a CBDC by (a) central banks and (b) private commercial banks? 5. What are the use-cases for a CBDC? 6. How can CBDCs best made inter-operable across national borders? 7. What opportunities do CBDCS create for banks to reinvent themselves? Hosted on Acast...
Jul 21, 2021•1 hr 2 min•Season 1Ep. 55
HQLAx is a properly funded start-up using the R3 Corda variant of blockchain technology to improve the ability of banks to mobilise eligible collateral, wherever it is, by tokenising assets while leaving them exactly where they are. Users expect the service to yield massive benefits in capital and liquidity savings as well as lower operational costs, but the stated aim of the venture - “frictionless ownership transfers of assets” - is capable of extension far beyond the starting-point. Future of...
Jul 12, 2021•1 hr 4 min•Season 1Ep. 54
The UK residential property market is an active one, supporting more than 100,000 transactions a month. But it is also notoriously slow, complicated, inefficient and expensive, with multiple intermediaries extracting transaction costs - guaranteeing anybody who offers to digitise the process a warm welcome from house-buyers and sellers. Counter-intuitively, all those intermediaries - estate agents, conveyancers, lawyers, surveyors, mortgage brokers, lenders, data vendors and government offices –...
Jul 07, 2021•33 min•Season 1Ep. 53
If you have ever wondered how the global payments industry has made some people very rich indeed, read The Payoff, the new book by former SWIFT CEO Gottfried Leibbrandt and former SWIFT Head of Corporate Affairs Natasha de Terán, published on 1 July. The authors show that the payments industry imposes a massive tax on all forms of economic activity, but for once the villains are not the banks, whose work in managing counterparty, settlement and liquidity risk they consider to be more than useful...
Jul 01, 2021•1 hr•Season 1Ep. 52
Back in the blockchain heyday of 2016-18 there was no shortage of schemes to apply the technology to primary market issuance, bond market trading, and post-trade settlement and financing. Some of the ideas of that burst of creativity are now coming to market. – Bond issuance on to distributed networks – The on-chain trading of bonds between market participants – The financing of bond market transactions in an on-chain repo market – The use of bonds as collateral to secure commercial and central ...
Jun 30, 2021•1 hr 5 min•Season 1Ep. 51
