FinTechCity, a company based out of Europe that focuses on highlighting top European companies in the FinTech space has released their annual list of the FinTech50 2016. In addition to this industry-best list, FinTechCity puts on events, forums and webinars hosted and sponsored by some of Europe’s biggest FinTech experts. This year’s FinTech50 list includes nine blockchain and Bitcoin related companies, which holds significance as in late 2015, heading into early 2016, many influential financial executives across the world declared an interest in blockchain technology’s application. These companies were Bitnet, Blockchain.info, Elliptic, Everledger, Ethereum, Monetas, Tradle, Setl, and Xnotes Alliance.
The FinTech50 2016 panel consisted of over 30 industry professionals who combed through upwards of 1200 total businesses for consideration to the final list of 50. While many of the mentioned companies showed a knack for innovative use of today’s cutting-edge technology, the most exciting additions to the list were those associated with the Bitcoin and blockchain technology industry.
“FinTech has the potential to entirely reshape the way organisations and individuals interact with each other and this is not limited to the Financial Services Industry,” Edith Chan of Xnotes said.
The winning technologies are the ones that are the easiest to integrate with and that offer the most business opportunities owing to its business contents.
“Adding consensus mechanisms and smart contracts to the mix will enable new unforeseen usages, not unlike the World Wide Web and mobile phones have done,” Alex Van De Sande, lead developer at the Ethereum Foundation, told BTCMANAGER.
“Ever more, leading experts are coming to recognize that cryptofinance technologies – such as blockchains and Monetas’ digital contracting platform – will be the most impactful game-changers for the finance industry,” said Monetas CMO, Vitus Ammann.
“Rather than improving the legacy systems in existence, cryptofinance will radically transform the business. Organizational structures and processes to provide trust will be replaced by cryptographic algorithms working in (near) real time. Decentralized ownership of digital assets will replace central account management. Microtransactions will be carried out profitably and smart contracts will replace compliance-burdened legacy systems.”
While not, strictly speaking, a blockchain-based company, Monetas’s inclusion in this list represents valuable part of the cryptofinance ecosystem. Its technology has a number of similar features to blockchain technologies, including the use of digital signatures), explained Ammann. “The Monetas transaction platform provides interoperability with blockchain technologies to facilitate the most secure asset storage.”
Peter Randall, CEO of SETL, addressed the role of regulators in the fintech sector:
Great financial technology can make a difference only when it is coupled with appropriate regulatory cover and is designed to be adopted.
He added, “Every decade or so a ‘fin-tech’ type story comes to prominence: in the 1970’s it was SWIFT, In the 80’s it was the dematerialisation of ownership from physical share certificates into electronic ledgers. The 1990’s were characterised by the widespread adoption of RTGS systems in Central Banks. The Millenium decade saw the application of C21st technology to the front office processes of financial services. SETL believes that the 2000 and teens will see the replacement of the legacy mainframes systems running COBOL in the post trade environment with C21st kit running distributed ledgers.”
More global solutions
“I believe the main issues affecting everyone around the globe revolve around government corruption and a sense of disconnect between citizens and their elected representatives (in countries that have that luxury),” said Van De Sande.
In order to create solutions to that [problem] globally, we need an internet with more tools for privacy, trust, transparency and accountability, and that’s what we are building with the Ethereum ecosystem.
Ammann also commented on the potential for cryptofinance companies to provide a tremendous boost to financial inclusion.
Today 2.5 billion unbanked people have no access to global trade and financial system. The combination of the ever faster dissemination of smartphones and cryptofinance technologies will power financial inclusion to everyone worldwide – doubling the participants in the global economy.
In the list’s closing remarks, Eddie Harding, ICON Corporate Finance’s Head of FinTech, discussed the influence of corporate venture capital on FinTech. In relation to large banks investing in cutting-edge technologies, Harding discusses the fact that many are attempting to hedge against threats from smaller and scrappier startups and large internet companies that could potentially take market share away from them. He specifically mentioned Spain’s Santander Bank as having invested heavily in a $100m venture capital fund that has pegged Ripple and distributed ledger maker Digital Asset in their blockchain technology play. Santanders’ primary interest, in this case,lies in the opportunities in the international payments, settlements and remittances space.
The closing remarks offer an interesting perspective to consider when thinking about the application of these types of technologies. Harding talks about how big companies like Google, Amazon or Apple come as an especially large threat to the established banks because not only are they natively accustomed to developing, acquiring and embracing cutting-edge technologies on a consistent basis, they’ve also got loads of cash at their disposal to throw at the myriad of technical and logistical challenges. Add on top of that a huge and loyal consumer base and you’ve got a real challenge for established financial institutions to compete with.
It’s worth noting that this list lacked a lot of the political partisanship seen in the cryptocurrency and blockchain world. Seeing Blockchain.info and Ethereum on the same list along with a variety of other varying sized businesses is exciting for those rooting to see the overall industry continue to expand and evolve. It’s reasonable to assume that 2017’s list might very well be dominated by a majority of blockchain and Bitcoin related businesses if the rate of interest and growth continues.
The growing number of cryptofinance technology companies in this group just reflects the game-changing impact of FinTech development reaching a new level.