The new paradigm of FinTech started ten years ago with startup solutions that have emerged following the financial crisis. Since then, tech leaders (BATX in China or GAFA in the USA) have leveraged their customer database to launch “TechFin” solutions. More recently, the banking industry is adopting FinTech or TechFin solutions opening its customer database and building financial services infrastructures to adapt to digital finance. Finally, blockchain technology is the last stage of this profound transformation creating an Open Finance ecosystem based on digital platforms.
Banks are partnering through several consortia based on private / permissioned blockchains to develop digital platforms for trade finance such as Voltron or Marco Polo Network with Corda. We.trade and eTradeConnect collaboration is even creating a network of digital trade finance platforms between Europe and Hong Kong based on Hyperledger. Enterprise Ethereum is another private blockchain alternative based on the public blockchain Ethereum. In this way, ConsenSys partners with fifteen of the world’s largest banking and commodity companies to develop the trade financing network Komgo.
Financial markets consider using blockchain to improve trading processes. For example, the stock exchange HKEX is teaming up with Digital Asset to accelerate the post-trade process and reduce settlement risk for the Stock Connect (Hong Kong, Shanghai and Shenzhen Stock Exchanges collaboration). Capital markets also benefit from distributed ledger technology to exchange digital securitisation of underlying assets. Thus, FinFabrik is developing capital markets software for the financial institutions and Liquefy betting on Security Token Offering to transform illiquid assets into liquid assets.
This article is part of the Global Fintech Ecosystem series