Blockchain and distributed ledger technology in finance - research based analysis
- 1. Blockchain and distributed ledger technology in finance - research based analysis Ilkka Lähteenmäki
- 2. - 20+ years in banking - Inc. 10+ years of financial research - 2011-2016 in Danske Bank - Head of business development in PB - Head of strategy planning in FIN - Partner in two start-ups - Since Oct. 2016 research network of FinTech - Together with the Bank of Finland and Ministry on Finance a FinTech Institute - Ph.D. about banking development & partnerships - 7 journal & conference publications
- 3. • Independent think tank • Academical foundation • FinTech research and business development hub • Researchers, incumbents, start-ups, regulators • Bank of Finland and Ministry of Finance • Coordination, education, research • Up-to-date Finnish FinTech status • International co-operation
- 5. Our research network FinTech causation research Aalto Hanken Lappeenranta University of Technology University of Oulu Hanken University of Tampere University of St.Gallen FinTech Management Mental Model Customers, Data, Insurance Customer value creation
- 6. FinTech causation research Financial business: - Business models - Competencies - Competition - Co-operations - Management - Customer experience - Value creation - Partnerships
- 7. Summary Current banking processes: - Rife with problems - Regulatory costs - Inefficiency - Digitally wrapped - Centralized - Exclusionary Blockchain or DLT? - to do more with less - streamline their businesses - and reduce risk in the process Blockchain - contracting, clearing, settling, and record-keeping tasks - forge agreements, make transactions, and build value - to verify their identities, establish trust, or perform the critical business logic Industry change - DAOs DLT - identity and reputation, moving value (payments and remittances), storing value (savings), lending and borrowing (credit), trading value (marketplaces like stock exchanges), insurance and risk management, and audit and tax functions. Business model change and ecosystem implication
- 8. Blockchain in current banking processes Source: Boston Consulting Group
- 9. Blockchain is not hype anymore Source: IBM Institute 2016
- 10. R3CEV
- 12. Trade finance The new platform helps optimise internal processes for banks and reduces the risk of documentary fraud, but the key cost efficiency is in speeding up the time it takes to complete a trade transaction – from as many as 20 days, to just a few hours. Loading the goods, issuing invoices, dealing with home bank, getting recommendations checked, sending the paperwork and getting it endorsed by the importing bank. In the worst case scenario, it can take 20 days. Since all this is physical, it’s really difficult to accelerate that process.
- 13. Significant part of the change is made by start-up firms
- 14. Status right now solutions for authentication, blockchain-as-a-service, open-source blockchain, application development, mobile wallets, compliance, trading and investment
- 15. FinTech synergy API and open banking 3rd party applications FinTech Banking-as-a-service Platform economy Generic platforms IoT Banking-in-a-service DAOs Replaced Banking Services Value delivery level
- 16. Blockchain and DLT as an architecture
- 17. Managers’ mental model is the most critical obstacle DOT-model (Holmlund-Strandvik-Lähteenmäki, 2015, 2016, 2017)
- 18. Do not neglect Bitcoin
- 19. Banking is only contextual https://smartlog.kinno.fi/
- 20. Customer value creation Value creation spheres False True Value: - Value-in-production - Value-in-use - Co-creation - Service dominant logic - Customer dominant logic
- 21. History view Salaries online ATMs Tele- banking PC-banks Internet banking Mobile 60´s 70´s 80´s 90’s 2000’s 2010’s Apps 50´s FinTech Screen scraping
- 22. Thanks!