Efi Pylarinou, fintech advisor at Daily Fintech, discusses how many of the recent changes in the financial world are unstoppable, and why that will ultimately benefit the consumer

For anyone that entered the Fintech ecosystem in 2017, says Pylarinou, he/she would not have seen it as the ‘Business war zone’ of previous years. Now, Fintechs are looking for partnerships with incumbents or exits; and incumbents are looking at Fintechs as a way of outsourcing R&D or effective go-to-market strategies as part of their digitization roadmap.

For the most part, the war of disruption between the ‘Captains and the Pirates’ has toned down, with Fintech merger and acquisition activity increasing.

We live in a world where customer expectations are very high and are pushing the business world to catch up with the advancement in personal computing. Financial services, from banks to insurance companies, are nowhere near able to offer a seamless, secure, interoperable user experience that is close to the level we are all used to from the likes of Google, Alibaba, Facebook and Apple.

Aren’t we all GAFA people in daily life but not in business!

Growing expectations from finance

Pylarinou argues that the changes underway are coming from three main sources: Changes at the end-user level, changes at the business processes level, and last but not least, technology enablers.

All three categories are concurrently pushing the transformation. Digitization, she argues, is unstoppable because it doesn’t originate from one single source that can be shut down, slowed down or swallowed by some giant.

The traditional front-middle-back office segregation and hierarchy is no longer viable. Large, universal organizations are being challenged, and don’t have any choice in the matter. Empowerment of end users will be the result of digitization of financial services no matter the destination.

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Pylarinou foresees that that destination will include more marketplaces, integration of scattered innovation that will result in full stacks rather than partial stacks, and invisible finance.

Finance should become invisible, and a large part of it ubiquitous, because its nature is to facilitate us in achieving our goals. Those goals are broad and numerous, whether it is buying a house, consumer goods and services, investing our assets and creating wealth (financial or non-financial), operating businesses (SMEs or large organizations), or insuring assets and processes.

Change through blockchain

Looking further down the road, Pylarinou sees the digitization process that is already underway resulting in real-time processing at the wholesale level instead of batch processing. The genuine disruption, one which is not simply an upgrade of existing services, is related to the potential of decentralized processes enabled through blockchain technology.

We must be careful not to treat blockchain as a ‘hammer looking for nails’

Nascent in its nature as it is, Pylarinou believes blockchain has the ingredients to push businesses out of their comfort zone in how trust can be established.

Individuals or corporate entities will perform due diligence and will implement a process based on that, in order to execute. We live in a world where we have entrusted central entities as intermediaries for all such needs. Blockchain technology is allowing us to automate trust between strangers.

Given its early stage, use cases give mixed results and are in diverse areas. They bring up new risks, but the decentralization trend is unstoppable because it resonates with the crowd for other reasons.

Financial inclusion, the hugely inefficient supply chain market, the vulnerabilities of post-trade and settlement processes, the insurance market and so on, can all be ‘blockchain-ified’ with significant gains in efficiency.

That doesn’t mean to say that blockchain can solve everything. On the contrary, Pylarinou is a big believer that we have to be careful not to fall into the trap of treating blockchain as a ‘hammer that is looking for nails.’

The future of digital currencies

Digital assets are not only Bitcoin or Ether. Some digital currencies will survive and be used (like Bitcoin), others will be tokens for business processes (like Ether or some other), others will be simply asset-backed tokens (like The Royal Mint Gold (RMG)), and others will digitize non-financial assets (like the CarbonCoin).

This demonstrates, says Pylarinou, the many different kinds of coins will emerge in the future. Tokenisation of the economy is also unstoppable. The fact that the 2017 ICO batch includes a lot of scams and failed ventures, she argues, doesn’t mean that the use case of crowdfunding on blockchains will disappear. Neither will other use cases of coins.

The trend toward tokenisation, she concludes, is here to stay.


CLS_CEEF_Date_DE_2017_CMYKEfi Pylarinou will be speaking at the forthcoming Cloud Expo Europe, Frankfurt, 28th and 29th November 2017 at Messe Frankfurt. To hear from Pylarinou and other cloud computing experts from around the world, register today for your FREE ticket.