Most of Nitin’s career has been involved with business model changes around disruptive technologies and M&A work in the TMT sector for companies around Silicon Valley. He has developed M&A strategies, conducted commercial/operational/technical due diligence and has assisted with M&A integrations and separations for his clients. He specialises in creating value from emerging technologies and helping his clients prepare and adapt to the next big thing. A veteran with over 1,000 transactions, he specialises in revenue synergies and has also led dozens of cost-focused consolidation M&A deals. His recent work includes helping CEOs, boards, investors and business leaders transform their business models by leveraging disruptive trends and M&A to pivot into new business models, utilising technologies such as SaaS, SDN, blockchain, open source, AI, IoT, AR/VR, drones and voice-enabled devices.

“As a Silicon Valley insider for two decades, it is a fascinating challenge to utilise my business knowledge, network of experts, consulting skills and experience in M&A deals to solve problems at the cutting edge of new technologies”, says Nitin. “I have built an expansive network in Silicon Valley with TMT sector clients who look to me to help them through difficult business changes, serving as both a trusted adviser and personal advocate.”

 What are the current key business and technology trends within the TMT sector?

I believe that today we are experiencing the equivalent of tectonic shifts in business that are primarily technology-driven and are impacting the fundamental ways we do business – and these trends extend far beyond the technology sector. These shifts can conflict with each other, making business strategy more difficult to conceptualise and execute today than it was in the past. Some of these shifts are as follows:

• Product to cloud vs. cloud to edge;
• Centralise (SDN/NFV) vs. decentralise (e.g., blockchain);
• Players who monetised voice are now monetising data (e.g., telcos), while those who monetised data are now monetising voice (e.g., Google, Amazon);
• Brick-and-mortar stores to an omni-channel retail economy, or ‘bricks-and clicks’;
• Closed-source to open-source (Android);
• Human to machine (AI);
• Real to virtual (AR/VR); and
• Building traditional enterprises vs. monetising ecosystems.

Each of these shifts is a transformation that presents an opportunity to get ahead of the game.

There are few absolute rules in this new frontier – companies need a data-driven approach to navigate the complexity, uncertainty and ambiguity, which has become profound over the last few years and is not likely to abate.

Traditionally, technology has served to enable or enhance existing business models or to create entirely new ones. More recently, we find ourselves in a place where there is a developed technology, but the ecosystems and business models around it are taking longer to evolve. Take, for instance, blockchain – here we have a viable technology, but it will take a few years to build scalable business models around it and monetise it. CEOs and corporate think tanks must devise new ways of adapting in such a landscape.

I have built an expansive network in Silicon Valley with TMT sector clients who look to me to help them through difficult business changes, serving as both a trusted adviser and personal advocate.

How is FTI positioned to take advantage of these so-called shifts and disruptions in the market?

FTI is configured differently than traditional consulting firms because we have an expert-centric approach to creating value for our clients. Most of our practitioners have deep industry experience, having operated businesses as executives and in consulting for several years, which has created a lot of credibility with clients and other executives. We are also an industry- and sector-oriented firm and taking a profitability view of the business is a highly valued and impactful perspective for our clients. We not only understand the sector, trends and structural shifts, but can also translate those into meaningful operational and tactical outcomes. Our clients tend to hire us for our expertise and experience rather than to simply add leverage to their internal teams. Given the highly sector-focused approach, we tend to formulate points of view on what is coming next, to ensure our clients are well prepared to adapt.

You have quite an amazing M&A background as well. What are key current M&A trends and drivers in the sector?

There is a lot going on in the M&A world. The last two years have been record-breaking, with unprecedented deal activity across industries, geographies, private equity and corporates. While there is some rumbling that M&A is slowing, I think that the big drivers are intact. For one, the US dollar has appreciated significantly against some developing market currencies, and that creates an interesting value discount. The 2017 tax cuts will continue to put more money in the hands of corporates, which will likely fuel M&A activity. The wave around digital business models is not cresting, and companies will acquire or strengthen their capabilities in this space. Incumbents will continue to consolidate to survive and create scale.

All these trends have put pressure on internal M&A teams and external advisers to create more value and to do it quickly. M&A integration has gone through a lot of change, and many professionals have still not adapted to the structural integration aspects and approach it ‘function-by-function’, limiting their ability to create value. There are several industries and sectors where the M&A wave is just starting – the scaling of technologies such as blockchain and AR/VR will attract preemptive strikes from bigger players. Private equity firms continue to be aggressive and are developing some unique strategies for deploying capital and creating value. When you consider all of these trends, I don’t think that M&A activity in the sector will slow down appreciably anytime soon.

The last two years have been record-breaking, with unprecedented deal activity across industries, geographies, private equity and corporates.

How do you go about keeping up with all the trends in the market while continuing to build skills and reinvent yourself?

This is an important aspect that has become critical if you want to stay current, relevant and excel. Learning patterns, adapting and creating value for the entire ecosystem around you is vital when working within this field. Gone are the days when one could read a few books or attend a couple of training sessions to grasp a new subject. Our clients are very smart people and they have access to a vast collection of materials and resources.

The way I have adapted is by learning from my network. For example, I learned about autonomous driving by speaking with approximately 50 companies across the value chain. By the time I spoke with a couple of dozen players, I started seeing patterns and trends that they were not able to see individually, such as partnership opportunities, M&A opportunities, market needs and disruptive trends.

After you’ve networked, it’s about building insights and getting into more details through targeted discussions around specific areas of autonomous driving. Clients value market insights and trends from external sources as validating. I did something similar with blockchain and IoT previously. One can always dress up their credibility with technical credentials, but this is usually less effective than learning from the field and building insights and skills from it. People are also curious about what others are thinking and doing, hence forming a cohesive, defensible, fact-based point of view often goes a long way.

Gone are the days when one could read a few books or attend a couple of training sessions to grasp a new subject.

It is widely believed that you are one of the most connected C-Level Executives in the TMT sector. How have you built such an impressive network?

Great networks are always built over time. It is easy to make connections, but it’s a lot harder to maintain them. I like connecting with people in general and I like exchanging ideas and facilitating with them – be it making introductions, sharing insights, learning from them, advising them or being helpful otherwise. Not all meetings have to be about getting something out of them – be genuine, take interest, help if you can and I guarantee that will deepen your relationships with them. I always tell people that if your relationships are strictly an outcome of your business, then something is not right, but if your business comes to you as a byproduct of your relationships, then you are doing it right. Remember, it is about the quality and strength of your network – not the numbers. It takes a lot of commitment to genuinely foster and maintain a network as it gets bigger. Your network is like a living organism and it needs to be nurtured in order to strengthen and grow. There is not one magical formula for this; everyone has different styles, but it is important to know what works best for you. The crucial element is to put yourself out there in the field.

You have received multiple awards for pioneering new approaches in M&A – please tell us about them.

The most important outcome is to innovate and adapt – awards are only a byproduct of that but, of course, serve as a validation and recognition of your contributions. Some of my work that has been externally recognised is creating a new framework for delivering revenue synergies in M&A, a new approach to managing M&A from strategy through integration by utilising Wargames - a new and unique way to assess blockchain and understand how to unlock its business model value. Additionally, I am currently working on building a new approach to assess and integrate platforms, which requires a different approach from integrating products or processes. When it comes to platforms, the bulk of value created is outside the company and delivered through network effects. Stay tuned for more on this topic.

How does one go about generating new business in today’s world? Has the approach to sales changed?

I think the best way to sell nowadays is to be visible in the right places, share insights and experiences to create a ‘pull effect’. You can no longer just show up and talk about the services your firm offers and wait for the client to bite on something relevant. More specifically, today’s clients judge your expertise by how well you understand their business, trends and context apart from your technical or functional area.

Today’s clients judge your expertise by how well you understand their business, trends and context apart from your technical or functional area.

My field is highly relationship-driven – the deeper you know your topic, the more amplification you will get from the network or relationships in order to get referrals. We don’t live in an age of long attention spans. If you meet the CEO of a company in the elevator, speak about business issues relevant to him. If what you’re saying resonates, you’ll have plenty of opportunities later to talk about how great your firm is.

You also sit on boards of multiple companies – can you tell us about them? How do you choose the companies that you join?  

Foremost, I need to genuinely believe in what the company does and that I can really add value. I am always happy to help talented people with my ideas, skills or network. A great idea is unlikely to succeed without great management teams, and resonating with these people is a key consideration for investing time.

I’m also attracted to disruptive technologies that could have a big impact on the business world. Some of the companies that I am a board member of include Pronto, a partner orchestration and automation platform; SmartBeings, an AI based smart speaker focused on enterprises; and Crosby, a blockchain-based asset tracking technology which is unique and differentiated.

What is your advice to CEOs and how do you adapt to changes in today’s world?

• Get comfortable making frequent or sudden pivots. Never get into a comfort zone or be complacent, even when you are ahead of your competition.
• Find builders and give them responsibility, authority and accountability.
• Develop foresight and skillsets to navigate business complexity and strategic ambiguities.
• Move away from intuition to data-driven decision making wherever possible.
• Build ecosystems and develop skills to monetise them. There is no need to own the value chain, but you should learn to have a specific and influential role in it.
• Continuing with traditional approaches will not change much.
• Invest in continuous and fast-paced learning.
• When it comes to the organisation, be agile and respond quickly.

What is your advice to the Management Consulting community on how they should adapt to the changing landscape?

• Understand the changing business landscape and identify your niche, skills required and ways to play.
• Look at ways to adapt your skill set and see how you can create value as the next big thing surfaces.
• It is about constant learning, reinvention and reorientation of your skills.
• Bring data, facts and insights into everything that you do and put yourself out there.
• Your network is a vehicle to engage, learn and amplify your personal brand – reach out to people and create avenues to exchange value.
• Client relationships are for life. Stay engaged and avoid tendencies to move on after your successful project.
• Adapt your thinking from pure enterprise or client to the ecosystem itself – you will discover more ways to add value for your clients.

Did you know that in 2017 alone, close to $4 billion in startup capital was raised through ICOs? Well, according to info we found out at BTXchange, ever since the issuance of the first ICO in 2013, a lot of hype has been created around this futuristic form of fundraising.

1. Most ICOs Use the Ethereum Platform

A good number of ICOs are established on the Ethereum platform. This comes as no surprise considering the nature of cryptocurrencies generated by the startups who launch ICOs.

The Ethereum network has been known to be offering a lot of essential components for running a crypto project. For example, you can conduct an ICO token presale by using Ethereum-powered smart contracts which have proven to be pretty much reliable.

2. A lot of ICO Projects Get Published On Medium

Medium is one of the biggest publishing platforms for crypto projects. The platform gained fame after BitcoinTalk forum declined in popularity a few years ago. Currently, many ICOs publish their whitepapers and information at this place due to the high traffic associated with the site.

It has a simple interface that’s easy to navigate, which is especially convenient for users who wish to browse through tons of projects on the platform with minimal time and effort.

3. Telegram Is the Core Messaging and Chatting Platform

ICOs are time sensitive; any delay in communication could potentially be damaging to the participants. For instance, if an ICO has a discount within a certain period, information needs to be communicated to the crypto community as quickly as possible.

Telegram provides a chance for the ICO issuers and subscribers to communicate promptly. Users can get timely answers to critical issues including the status of the tokens release, listing on exchanges, pricing, and more.

4. They Are Subject to Regulations

Contrary to the popular myth, ICOs are regulated to at least some extent in most countries. It is not possible anymore to just launch one and wait to collect enough funds to start your business. In fact, if you are a US-based organization and ignore the relevant laws, there is no doubt you will quickly land in hot water.

If you wish to discover more interesting facts about ICOs, how they work, and their history and current state, check out the infographic below.

Blockchain has been synonymous with crypto currencies for some time but its range of applications and roles in the wider digital transformation are now much more fully understood. This is certainly true of the financial industry, which is gradually shaking off its legacy systems and incorporating this revolutionary technology into an ever-growing number of uses.

Blockchain is correctly described as the technology behind crypto currencies, recording transactions made between parties. But its key and unique feature is its capacity to provide an undisputed audit trail. It establishes an incorruptible digital ledger of transactions that can be programmed to record every data item of value.

In practice, Blockchain acts like a single spreadsheet copied thousands of times across a network of computers. This spreadsheet can be updated on a constant, real-time basis and is shared identically across the network.

Using Blockchain, two strangers can conduct business with no need for a third party, while creating a legally-indisputable record of an agreement. As such, there is no point of weakness at which data can be corrupted or hacked. This issue is of growing importance for those players involved in deals in which adding more contact points increases vulnerability exponentially.

Using Blockchain, two strangers can conduct business with no need for a third party, while creating a legally-indisputable record of an agreement.

Transactions are more efficient and secure

Each year the financial industry conducts trillions of euros-worth of transactions and Blockchain has the potential to revolutionise how these deals are executed.

Blockchain streamlines and speeds up transactions, facilitating fast and secure payments with less cost, potentially anywhere in the world. The security that Blockchain provides is also a key element in that it renders the tactics used by cybercriminals as obsolete.

JP Morgan, HSBC and Bank of America Merrill Lynch are already exploring Blockchain to facilitate international payments and trade-related transactions but Blockchain can also be used in the real estate sector, for example, to conduct transactions, including the transfer of properties and escrowing of funds.

Smart contracts can deliver powerful changes

Blockchain can also be used to apply ‘smart contracts’, which are still at a nascent stage of development, but which have the potential to deliver powerful changes in a wide range of sectors.

Smart contracts have the terms of agreements written into computer code and this enables the automation of certain functions, such as authorised parties conducting transactions according to the terms. A simple illustration of this is a vending machine, which enables a consumer to buy a bar of chocolate at a fixed price without the need for any third party.

Blockchain can also be used to apply ‘smart contracts’, which are still at a nascent stage of development, but which have the potential to deliver powerful changes in a wide range of sectors.

Smart contracts have tremendous potential. They provide security and consistency and help to reduce transaction costs, not least by reducing the need for ‘middlemen’. At present, they are far from flawless and work still needs to be done to address the grey areas that, in practice, often arise in contracts and transactions. There is much room for refinement, but such contracts do already have clear applications. In real estate, for example, smart contracts can keep track of leases and monitor payments. Going forwards, smart contracts can only become much more commonplace in the financial industry.

Incorruptible long-term data storage

The technology by which computers store information has gone through several cycles over the decades. Data carriers have seen evolution from punch-cards and magnetic tape to floppy and zip discs, to the more familiar CDs, DVDs, hard drives and USBs. While the latter formats are still widely used, they are clunky and perishable.

Drooms is the first virtual data room (VDR) provider to recognise Blockchain’s potential in the transaction space and incorporate it into its product offering. By using this technology, information that was previously archived using DVDs, hard drives and USBs can be authenticated at the click of a button.

Such documentation is invaluable in the legal guarantee phase of a transaction. If there is a legal dispute, then there can be no argument as to who accessed which documents and data and when. Parties cannot argue that they were misled with regards to what they were buying.

Drooms is the first virtual data room (VDR) provider to recognise Blockchain’s potential in the transaction space and incorporate it into its product offering.

Drooms is also storing the data on its servers for a fee for the duration of a warranty period. Whereas DVDs might be lost or corrupted over time, for example, this issue does not exist if a data room is available for reactivation whenever required and all data has been verified and archived according to a unique Blockchain record. All parties with a password will be able to access the data at any time and without the need for notaries.

Ahead of the technology curve

Drooms’ current goal in relation to Blockchain is to provide tamper-proof, cutting-edge and long-term data storage and protection with quick, secure and unrestricted access for all parties involved. We currently offer all modern formats of storage, but we have no doubt that Blockchain will eventually supersede these, not least because it will not fundamentally alter the costs of a VDR initially and over the longer run it will only reduce them.

Going forwards, financial professionals need to consider the power of Blockchain to disrupt their businesses and industries and to pinpoint ways in which they can leverage this ground-breaking technology to their advantage.

Further ahead, we see tremendous potential in applying Blockchain to the incorporation of digital signatures and improving contract analysis. Enabling clients to sign documents within a data room, thereby avoiding third-party involvement and the need to print and sign documents before re-uploading them to the system, boosts efficiency without creating inferior versions of contracts.

Thanks to Blockchain, future data rooms could enable users to read and pull up previously unsearchable contracts that have been signed by specific parties, thereby automating traditional contract management.

Going forwards, financial professionals need to consider the power of Blockchain to disrupt their businesses and industries and to pinpoint ways in which they can leverage this ground-breaking technology to their advantage. Our plan is to help our partners by staying ahead of the technology curve, finding new and innovative ways in which to help them using Blockchain.

Website: https://drooms.com

Below, Finance Monthly kicks off this week with Rob Brockington from Pipster on the ICO ‘train’ damaging the reputation of blockchain, one of industry 4.0s biggest innovations.

When the trading industry experienced the ICO boom in January this year, amongst all the excitement there was a huge increase in available Altcoins. This surge in brand-new tradable ‘coins’ and the demand for them changed the trading landscape. Crypto exchanges such as Binance, Coinbase, BiTFinex and Kraken enabled a world-wide audience gold-rushing to the next big Bitcoin. Each of these relatively new exchanges, ideally positioned to help facilitate the speculators and investors, became key players within a booming sector of the industry worth billions almost overnight.

As unregulated exchanges, obligations for risk-control and customer-care were literally non-existent. Basic KYC (Know Your Customer) procedure was limited if at all practiced, which meant that swarms of uneducated retail investors were throwing money into ‘Blockchain-related’ investments with reckless abandon. A significant proportion of investment was sunk not only within ‘coins’ and ‘tokens’ that were market-ready and currently traded but towards proposed altcoins and technologies that existed only in the form of a white-paper. Many naive consumers were effectively scammed by dodgy entities and classic bucket-shop/pyramid schemes. The press naturally reported on these shady dealings and outright theft, branding ICO’s as by-and-large dangerous and risky.

Compounding this matter, even the more reputable exchanges experienced hacks and security leaks, which dealt further damage to the credibility and investability of the legitimate blockchain-related businesses and ICO’s. In fairness most exchanges responded very quickly to clean up their act and develop their protocols. However as they weren’t and still remain unregulated in most parts of the world, local authorities and enforcement agencies have had to get involved. Naturally, ICO’s, cryptocurrency and subsequently other Blockchain-related investments came under greater scrutiny. But to blame blockchain technology for organisational failings in centralised exchanges or poorly structured white-paper proposals is missing the point. To use a simple analogy, you can’t blame the existence and manufacturers of knives for knife crime. But you can legislate for it (enforcing businesses not to sell to minors or youngsters without ID) and to raise awareness to aid and prevent further potential victims. Tricksters and thieves will always go where the money is and the authorities ain’t. Similar ponzi and pyramid schemes still exist in all other areas of massive investment, such as in property and stake-ownership. Timeshare anyone?! ICOs are simply a new medium for these criminals and we’d all do well not to make the mistake of placing the blame on the ideas and technology the industry is based upon.

So with this slew of new ICO’s popping up during the boom being largely scams, with no product or service promised ever materialising, the impact on trading has been significant, both institutionally and on a retail basis. Investor panic ensued causing a massive sell-off in crypto assets, which signalled the end to crypto’s first boom. Much of the media witnessing fingers getting burnt, but demonstrably uninformed on the technology, were quick to deem blockchain as an untrustworthy platform for transactions. Preferable only to those shady individuals and enterprises who demand anonymity over transparency. Unregulated over regulated.

The detrimental impact to the broader market of equity investments, fundraising and crowdfunding was immediate. ICO’s being unregulated allow companies to acquire huge amounts of capital with a successful campaign (Telegram being a prime example) while avoiding giving away real equity to their investors. Instead investors receive tokens/coins that can potentially be traded for products/services at a later date or sold for a higher value, which unfortunately few have to-date. All of the regulated procedures for funding and investing in companies that other businesses must adhere to are being effectively sidestepped. Given the opportunity to give away 0% of their company for say $40m, with a very good and well executed ICO - rather than use a regulated service such as Kickstarter or Crowdcube, to raise an arbitrarily capped value of either $1m USD or €5m EUR (where they have to give percentage of equity) is a no-brainer.

ICO’s have predominantly adopted a model of tokenizing a service to draw investment. This has resulted in companies having to come up with weird, wonderful and at times completely pointless ways of adding blockchain technology to a concept or service that already functions. There are hoards of people boasting about how blockchain will change the world. I believe it already has. The opportunists and bandwagoners creating an ICO for whatever ludicrous reason (like buying sports cars over blockchain) are only helping to detract from the true entrepreneurs who have fantastic and viable ideas that could help so many people, given the appropriate backing.

The nature of this sector is that the people interested in ICO’s are those also exposed and interested in blockchain or vice versa. I expect this will change and we’ll see a broader demographic of people trying to take blockchain out of these more-specialised circles. Still, with a majority of blockchain events flooded with ICO’s and their parade of questionable ideas and proposals, there’s a long way to go for the industry yet to root out the chancers. Whereas blockchain itself is being transformed and built upon around the world to create real next generation technology.

There are so many types of blockchain and utilisations of blockchain and these can be seen over a variety of coins/tokens already out there in the market. Further development of the tech and building the future of decentralised-data-exchange is the main aim. Unfortunately trading on the price of cryptocurrency using this technology is all that attracts a lot of newcomers to blockchain.

It’s down to the financial industry and government to rectify the damage caused to blockchain by ICO’s. Regulation will affect the exchanges that Altcoins are traded on and as soon as cryptocurrency is regulated, ICO’s will likely be taken in under that umbrella. Making it far more difficult for companies to secure the amount of money they have been accruing over the past few years. Hopefully regulation will serve to ‘cleanse’ the ICO industry of these shady dealers, and companies will not be able exploit naive investors and dissuade future potential investors. With regulation recognition and legitimacy will come, thus empowering blockchain technology to fulfil its potential and improve trading as well as society on the whole, as so many like I have promised it will.

Gold has long been known as a store of value to help investors weather turbulent financial markets. Below, Shaun Djie, Co-Founder and COO of Digix, explains why digital gold is a forward moving solution for everyone.

In recent years, it has also become far easier for the average individual to buy and sell gold. There are online bullion dealers and high-street shops selling gold, as well as exchange-traded funds for gold, which are effectively investment funds that track the price of gold.

However, while it’s now easier to purchase, the spread between what individuals pay for this asset and what dealers sell it for can be very big. This is especially true for small denominations of gold. Exchange traded funds overcome many of the associated complications of investing in gold but they tend to be more expensive than physical gold because of the inclusion of brokerage and management fees.

But for those interested in investing in gold and getting a better deal for it, the good news is an alternative to owning physical gold and relying on ETFs is emerging – thanks to blockchain technology.

Understanding blockchain’s potential

Blockchains are shared digital ledgers that record every transaction ever made on them. So physical assets like gold can be divided and represented by tokens, and blockchain technology can keep track of the ownership of those tokens.

Gold has become one of the first real-world assets to be tokenised and freely traded on the blockchain. With this comes a level of divisibility that hasn’t been seen before. Emerging gold ownership and trading protocols can ensure that tokens are minted on a proportional basis – so, for example, one token is equivalent to one gram of a physical gold held in a secure vault.

In some systems, the delivered gold is subject to verifications at the point of deposit into the vault, as well as at quarterly reviews by independent auditors. Hence, there should never be more tokens created than the total weight of physical gold bullion backing them.

Simplicity and liquidity

In this way, gold-backed tokens not only bring divisibility but also an easy, reliable and secure way to own and trade gold. Liquidity would increase, which would be good news for current gold investors and any prospective investors who may have been put off by an inability to access small denominations or by the fees that ETFs charge.

For existing investors, more profits from gold can end up in their pocket too. Buying a gram of gold through leading smart asset companies on the Ethereum blockchain costs under US$40, where as the retail price for a 1g bar hovers around the US$77 mark.

That’s because, by removing the physical and administrative costs of creating 1g gold bars, tokenised gold can get as close to the the spot price of gold than any method – regardless of the size of purchase.

Stability that investors can rely on

While these benefits will sound appealing to many investors, some may point to the historical volatility of cryptocurrencies as a sign that they won’t appeal to gold investors’ needs. It’s certainly true that the huge speculative bubble in virtual currencies has led to immense volatility.

However, gold-backed tokens are totally different to existing cryptocurrencies because of the bridge they have to the real world asset. To build confidence in crypto markets, gold-backed tokens are needed. They can also diversify portfolios and be used as collateral for lending and other financial products.

For existing investors, gold forming a central part of the crypto economy would be beneficial, pushing up the demand for the metal even further. These investors have always been able to see the value of their investment in this asset. However, through the tokenisation of physical gold, they can benefit from the liquidity, divisibility and security of these digital assets just as much as entirely new investors can.

Artificial intelligence (AI), Big Data, and Cloud are no longer just buzzwords as enterprises globally are embracing all types of next-gen technology to drive significant business transformations. Blockchain, a more recent addition to the roster, fits within the same technology bracket and is poised to become a major disruptive force across all industries. However, despite emerging applications across supply-chain logistics, healthcare and FinTech that are promising ‘game-changing’ solutions leveraging the technology, to date, very few companies have been able to tap into the complete potential of blockchain.

The Growth of FinTech

Thanks to the rapid global proliferation of the Internet and coming of age of tech-savvy millennials, the marriage of technology and financial institutions has expanded from simple credit card and ATM transactions to online money transfers and payments. In fact, the FinTech industry has already staked its claim in adapting emerging technologies such as wireless payments and AI-enabled chatbots.

Leveraging these next-gen technologies to complete traditional financial transactions, such as money transfers and loan applications has resulted in many consumers looking to deal with FinTechs over traditional banks. Their ability to promptly, securely and successfully complete transactions have helped build customer trust over time. With the continued improvement in security and privacy measures backed by new technologies such as blockchain, the ‘trust quotient’ in the financial services industry is bound to rise manifold. Looking ahead, 77% of financial institutions are expected to adopt blockchain by 2020, according to PwC’s 2017 Global FinTech Report.

What is Blockchain?

Oftentimes incorrectly used interchangeably with the term Bitcoin, blockchain is actually a distributed ledger that is capable of maintaining an ever-growing list of records. Although it resembles a spreadsheet like Excel, there are certain unique features that set blockchain apart from traditional databases:
• Decentralised: Blockchain promotes a decentralised system where data is distributed across several servers. Its lack of a single authority makes the system fair and more secure.
• Immutable: Blockchain is a tamper-free environment. It has immutable and irreversible records that do not permit changes once a ‘block’ is written. Only new records can be written.

These key benefits make blockchain a vital tool in building trust between businesses and customers, which is especially critical in the financial services industry, by providing access to accurate data from retail banking to investment banking to insurance.

How Blockchain Helps Build Trust

In the digital era, the rate at which consumers adopt next-gen technology is among the top growth metrics for the FinTech industry; however, FinTechs face big challenges in generating trust among consumers. This is where blockchain comes into the picture. In a complete shift from how traditional banks operate - where customers have little to no insights into their banks’ operations and processes, blockchain maintains its data in a centralised repository. This shifts the ‘power’ into the hands of the consumer, effectively cutting out intermediaries and ensuring complete transparency in all transactions.

Blockchain provides companies with access to a decentralised network where they can share information in a secure environment that guarantees unalterable data transfers and ensures an agreement of obligations from both parties when processing a transaction. In addition, it simplifies financial services, such as money transfers, loan applications, and mobile payments, something that every customer yearns for in terms of augmenting their overall experience.

Ensuring the accurate authentication and authorisation of every customer and transaction is another big challenge for FinTechs when it comes to establishing trust. Blockchain technology makes these functions, as well as identity management, a lot simpler and more convenient by enabling users to choose the mode of identity and with whom they want to share it while registering. The information is then stored on a secure decentralised network, with user-only access to alter it. This helps FinTech companies save on paperwork and data servers.

Blockchain Applications in FinTech

Cross-Border Payments

Cross-border money transfers can be expensive and slow due to complex procedures. Blockchain technology is able to simplify, speed up, and make cross-border payments less expensive. Peer-to-peer transactions cut out the ‘middlemen’, resulting in faster and less expensive transactions. In fact, blockchain also helps lower the remittance costs on the total transfer amount from about 20% to a mere 3%.

Smart Contracts

Smart Contracts are arguably one of the most promising applications of blockchain in the FinTech industry. They are nothing but computer programs developed to verify or enforce agreements. These contractual clauses are either partially or fully self-executing or self-enforcing. Smart Contracts using blockchain help in recording information on a shared ledger, making it an unquestionable digital proof, thus empowering everyone from regulators to individual artists and authors with strong security features, a lowered risk of internal hacking, and the prevention of plagiarism of work by intermediaries.

Share Trading

Share trading involves several third parties, such as brokers and the stock exchange. This makes the clearing and settlement process time-consuming and cumbersome with multiple stages and bureaucracy to navigate that can take up to three working days to complete. The decentralised nature of blockchain technology, however, helps remove the unnecessary intermediaries and optimise the whole lifecycle of the trade by enhancing trade accuracy, speeding up the settlement process, and reducing risks.

Trade Financing

Trade financing – financial activities related to commerce and international trade – involves lots of tedious paperwork and bureaucracy, making the process highly time-consuming and risky. Blockchain-based trade financing helps overcome these bottlenecks, streamlining the process. It eliminates the need for participants to maintain a personal database of documents as well as the risk of an error in one document being duplicated to its copies by creating a single digital document that contains all the necessary information. Blockchain also supports real-time updating of the document, which ensures all members have access to the most up-to-date information at all times.

Happily Ever After: FinTechs and Blockchain

In today’s increasingly digitised world, there is a growing need for a bridge between new technologies and financial institutions in order for the industry to meet the demands of consumers who want a convenient yet safe and secure way to complete their financial transactions. Blockchain has the ability to build that bridge and FinTechs leveraging this new technology will reap the rewards of an exponentially increasing customer base.

With the support of a trusted service delivery partner with experienced customer service agents who can knowledgeably address questions and concerns about blockchain, these new FinTech kids on the financial block are poised to take on traditional banks.

About Neeraj Sabharwal
Neeraj Sabharwal, Director of Cloud and Big Data Solutions at Xavient Digital - powered by TELUS International, has more than 15 years of experience in the next-gen technology industry, helping customers derive incremental value from their data. He is a true data enthusiast and enjoys writing his popular blog and regularly contributes to articles as a member of the Forbes Tech Council.

About Xavient Digital - powered by TELUS International
Xavient Digital is a US-based provider of digital IT solutions and software services, headquartered in California with offices throughout the United States and an international network of delivery centers. Xavient Digital leverages its global footprint to deploy the best talent, time to market and cost optimisation benefits for its customers. Xavient Digital’s corecompetencies are in digital transformation stacks and full lifecycle IT services across telecom, media, BFSI and consumer technology verticals.

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Ever since the UK’s decision to leave the EU was announced, there has been a lot of speculation surrounding what will happen to the Irish border. Northern Ireland is part of the UK, which would leave the EU when Brexit goes through, but the Republic of Ireland will remain in the EU. This has led to many calls for border controls between the countries. It’s generally agreed that customs checks on goods will be required, yet whether passport checks are needed remains debatable. Recently the Chancellor of the Exchequer has suggested using blockchain to solve the issue.

In this post, we assess whether implementing blockchain will solve the Irish border issue. We conclude that it’s highly unlikely that blockchain alone will solve the problem, but a solution that incorporates blockchain as part of the process is more likely.

Why Blockchain?

The current line from the Treasury according to one source is that they are ‘actively considering technologies that could help facilitate trade over the Northern Ireland – Ireland land border.’ This was confirmed by Chancellor Phillip Hammond, who, when asked about how the government could achieve smooth trade after Brexit announced “there is technology becoming available ... I don’t claim to be an expert on it, but the most obvious technology is blockchain.”

Yet there are a few theories as to how blockchain could be involved practically. That’s not so surprising, as the only real major use of blockchain so far has been to power the cryptocurrency bitcoin.

What Could Blockchain Do?

Essentially, blockchain is a decentralised ledger which stores a digital record of transactions which is tamper proof. There have been a number of companies that have started to apply blockchain technology to their supply chains, with the most common reason to keep track of goods. One such example is of a start-up that used blockchain to track its tuna stock, every time it changed hands from net to supermarket the blockchain was updated.

This could be applied to the Irish border for documenting the movement of British goods through the supply chain, as a way to verify compliance with the EU’s rules. Checking blockchain certifications should be more efficient than paper ones, but it will be slower and it’s still unclear what other benefits this could hold.

Are There Any Other Options?

Presumably there are other options, given that the Treasury has revealed barely any details as to how blockchain might be applied. Especially as research into dealing with 6,000 heavy goods vehicles per day crossing the border has shown that using blockchain as a solution is ‘untested or imaginary’.

There’s still a chance that there won’t be a hard border and no technological solution will be required. Until the logistics and exact requirements are sorted out, it remains to be seen what will happen in terms of a solution.

Will it Be Successful?

According to most experts who have thought about the logistics of using blockchain to solve the Irish border issue, probably not. However, a solution that includes blockchain in part could be possible.

Indeed, in an interview with Cointelegraph, Vili Lehdonvirta, an associate professor and senior research fellow at the University of Oxford stated that “in my assessment there is zero chance that blockchain technology will help deliver a ‘frictionless’ border between Northern and the Republic of Ireland.”

Added to this, Nick Nick Botton, an expert on trade affairs and digital economies at Landmark Public Affairs stated that “The Northern Ireland issue is sadly not one that will likely ever be solved via technology, it's strictly a political issue at this stage.”

For businesses whose model relies on importing and/or exporting over the Irish border, seeking out financial options in case plans to use blockchain or other technology to sort out the issue fails is a good idea. Currently, it seems like there isn’t much of a plan, but that should all change in the near future.

Benjamin Bilski, who’s been named in Forbes 30 under 30 and is the Founder and Executive Director of The NAGA Group AG, a publicly listed FinTech that unites financial, cryptocurrency and virtual goods markets, discusses upcoming trends and predictions for the future of the cryptocurrency sector.

When it comes to virtual currencies, 2018 will go down in history as the year in which experts and renowned economists proclaimed the death of cryptocurrency, yet again, due to the deep plunge of the global market cap from its all-time high of over $850 billion in January to below $200 billion at the time of writing this. Bitcoin has faced a price decline of almost 70% from its peak of $20,000 in December 2017, tech giants imposed bans on crypto ads and the US Securities and Exchange Commission (SEC) just suspended ETF trading in two crypto-based securities. The list of negative news goes on.

However, cryptocurrencies have been declared ‘dead’ over 300 times to date and after resurrecting so many times, it is fair to say that “what doesn’t kill you only makes you stronger”. Pessimists often disregard the fact that cryptocurrencies once again have demonstrated their resilience against volatility and price shocks. To put things into perspective: in 2011, Bitcoin was valued at only $0.23, a year ago - at $2500 and today, it’s worth almost $6000 – despite the plunge. Therefore, it’s far too early to say farewell to cryptocurrencies. Technologies that shift the paradigm often take a long time to be fully understood before they gain real traction. I believe that the recent cryptocurrency bubble burst marks the beginning of a far more interesting era.

4 cryptocurrency trends to watch out for

1.Maturity kicks in after the bubble

The recent burst of the crypto bubble is the result of a rampant ‘gold rush’ and everyone’s fear of missing out. Ventures without strong fundamentals or good tech embarked on unrealistic projects, trying to gain the attention of investors who were driven by the prospect of getting rich quickly. $5,6 billion in 2017, a staggering $6,3 billion in the first quarter of 2018 (or 118% of the total for the previous year) - sums in ICO funding were skyrocketing. However, many of them were scams, and under the pressure of price collapse, over 800 coins went dead.

But this is actually good news. Certainly, the losses many investors had to face are infuriating, but the disappearing of ‘dead coins’ will also sort out the bad apples. As part of a self-cleaning process of the market, remaining projects with real value will have a better chance of showing stable and organic growth. Eventually, naked greed for short-term profit will give way to long-term projects of true Blockchain utility that investors and interested parties can track. This process of maturation with serious players emerging is likely to decrease volatility and increase market stabilisation

2.More regulation to come – though limited on national levels

At the same time, the crypto economy can expect more regulation to come across the globe as a result of the recent bubble and the underlying ICO fraud. Whether we look at South Korea’s decision to recognise crypto exchanges as regulated financial institutions and banks, or the recent legislative developments in Australia: regulators are looking to catch up.

Although one would think that regulation may be detrimental to cryptocurrency, it will eventually be central to its future. Without proper regulation, cryptocurrency investors and those participating in ICOs will have little protection, should their digital wallets be compromised. Recent surveys have shown, however, that 40% of traders see lack of security as one of the biggest concerns. As regulation of cryptocurrencies rises, investors' faith in them will rise, too.

However, the capacity of regulation will not create a panacea for the cryptocurrency sector. Across the world, we will see more regulation on nation-state level but not so much on international. This is likely to maintain some uncertainties for investors since national regulation runs contrary to the global and transnational conception of cryptocurrencies.

 3.Crypto attracts new investors, becoming mainstream

Though cryptocurrency has previously garnered minimal investments from larger institutions and hedge funds due to its volatile nature and non-regulatory framework, the industry as a whole can expect major shifts in the long run. Plans of multinational investment banking giant Goldman Sachs to open a cryptocurrency trading desk have laid out, although there’s no official confirmation that the project will be realised.

However, Goldman Sachs CEO’s comments that it’s too “arrogant to deny cryptocurrencies” signify that even institutional investors see imminent winds of change for the entire financial sector thanks to the evolution of cryptocurrencies. These indications of further mainstream adoption will have an impact on price, even before there is significant institutional activity. Eventually, this will encourage many pessimists to enter the cryptocurrency market which will further lead to a legitimisation of virtual coins as an asset class.

 4. Crypto will create more jobs

As the adoption of cryptocurrencies by start-ups and more established institutions is gaining ground under the new frameworks, the higher demand for Blockchain technology talent will fuel a next generation of engineering jobs across the globe. Even now, Blockchain jobs are the second fastest growing market and the future is promising more. The latest quarterly skills index by global freelancing website Upwork shows that the fastest growing skill in the United States during the second quarter was Blockchain. On the other side of the globe, Asia has seen a 50% increase in the number of roles related to Blockchain or cryptocurrencies since 2017.

Education plays a crucial factor in here. As demand for greater understanding of these technologies grows, business schools and universities are rushing to launch courses on cryptocurrencies and Blockchain. Currently, 42% of the top 50 universities offer at least one class related to Blockchain or cryptocurrencies. And I’m sure there’s more to come.

The Outlook

While the cryptocurrency landscape is still nascent, there are a lot of exciting developments happening. With the market maturing after the bubble burst, growing regulation, the attraction of new investors and the ensuing creation of crypto-related jobs, the future promises a lot of exciting things for the sector. All these trends will pave the way for mass adoption of cryptocurrencies and its acceptability as an asset class.

Do you want to go from being a stock market dreamer to a high earner? A new tool could be what you need to transform your hindsight into insight.

How Rich Would You Be? uses market data from the past 12 months to reveal exactly what you could have made if you invested in a variety of cryptocurrencies, commodities and companies. It also forecasts the potential gains for each over the coming months to predict the next big investment opportunity.

Via a bespoke algorithm that uses machine learning, the tool feeds historical data on all 15 options through a recurrent neural network to unveil the future rise and fall in value for each investment.

The 15 commodities monitored include:

• Bitcoin
• Ethereum
• Ripple
• Bitcoin Cash
• EOS
• Gold
• Oil
• Copper
• Wheat
• Coffee
• Apple
• Alphabet (Google)
• Microsoft
• Amazon
• Facebook

All data is displayed in concise visualisations, allowing you to compare individual or multiple investments side-by-side.

The future predictions reveal that the cryptocurrencies will experience the highest percentage increase, yielding more profit than commodities or companies.

The algorithm also reveals that the value of Ethereum will skyrocket from $289.26 per unit to $788.42 if it continues on its predicted path - an astounding 173% increase by October 28th.

Similarly, Ripple investors should look forward to the next month since the cryptocurrency is charted to rise in value by 159% - surging from $0.34 per unit to $0.88 per unit.

Alphabet Inc should perhaps be avoided as the value of the company is set to drop -10% per share. Following in Alphabet’s footsteps is Apple, which is set to fall -8% from $227.63 per share to $208.47.

Despite the unpredictability of the cryptocurrency market, the historical data shows that when compared against commodity and company investments, EOS, Bitcoin and Ripple boasted three of the top five investments.

EOS aficionados who invested in September 2017 will have noticed a 786% increase in price per unit over the last year - a jump from $0.73 per unit to $6.47.

Though it is now set to undergo a negative percentage change, Amazon experienced a 106% increase in value per share between September 2017 and September 2018.

Unfortunately for commodity investors, the two investments that have made the biggest losses over the past year include coffee and copper. Coffee has made the most significant loss over the last year, with a -20% change - dropping from $129.65 per pound to $1103.33.

Copper investors will also have been disappointed with the -12% change in value over the previous year from $3.06 per pound to $2.68.

Commodity investors who chose to invest in oil over copper would have enjoyed a 46% rise from $48.07 per barrel to $69.97 in just one year.

Values: Historical and predicted change in 15 leading investment choices

(Source: How Rich Would You Be?)

There is a rush to improve speed, convenience and user experience in financial interactions, but at what cost to security?

While for the most part bankers are positive about their ability to improve their financial performance in 2018 and beyond, evolving risks – particularly cyber risk – are no doubt preoccupying their thoughts.  A recent report by professional services firm, EY, puts cybersecurity as the number one priority for banks in the coming year, and it comes as no surprise, especially with Britain’s National Cyber Crime Unit data showing 68% of large UK businesses across sectors were subject to a cybersecurity attack or breach in the past 12 months.

It’s a mounting problem, and the financial services industry needs to fight back. We’ve picked out the four key ways of countering the continuing threat to banks’ cybersecurity – and it’s a case of fighting cyber with cyber.

1. Artificial intelligence

Like it is in retail and manufacturing, for example, artificial intelligence (AI) and advanced analytics will play a key role in banking moving forwards.

And the financial services industry is looking to this technology to play a major part in the prevention of cyber attacks, reducing conduct risk and improving monitoring to prevent financial crime.  Mitigating such external and internal threats is critical to both business continuity and limiting operating losses, and so AI shouldn’t be overlooked as a key tool in reaching this goal.

2. Electronic identification

In order to meet the regulatory technical standards, which will be enforced in September 2019 as part of the European Union’s PSD2 payments legislation, the number of transactions requiring two-factor authentication will rise in the coming months.

What has been deemed by the industry as “Strong Customer Authentication” will be required, and this should result in payments and account access relying on customers providing and using a combination of the following: something they know, like a password; something they have, like a phone or card; and something they are, such as a fingerprint.

More factors equals more security is the industry theory here.

3. Biometrics

Which leads us neatly on to point three: biometrics. This push for two-factor authentication and new electronic identification will pave the way for more biometrics use.  With some of the largest players in card payments, including Mastercard, investing heavily in such solutions, we expect others to start to follow suit.

As Ajay Bhalla, President for global enterprise risk and security at Mastercard puts it: “The use of passwords to authenticate someone is woefully outdated, with consumers forgetting them and retailers facing abandoned shopping baskets.

“In payments technology this is something we’re closing in on as we move from cash to card, password to thumbprint, and beyond to innovative technologies, such as AI.”

4. Blockchain

According to the EY research report, 20-40% of financial service providers are investing in Blockchain now and are planning to increase investment, while approximately the same percentage are investing now but planning to reduce expenditure.

Either way, it shows that Blockchain is very much on the agenda for banks. The main attraction of Blockchain is that it creates an indelible audit trail which is distributed across multiple servers, so there’s no single weak link for cyber attackers to target. This provides banks with unparalleled transparency and increases trust.

Blockchain also has the potential to make a complex global financial system less complicated and reduce the number of middlemen involved in the transferring of money.

So, that’s the technology on offer, but what are the next steps?

Unless banks collaborate more with their peers, or improve their use of the wider ecosystem, the required investment in advanced technologies to address issues of growing cybercrime will be substantial and could strain their ability improve financial performance and grow their businesses.

And, as bank leadership teams focus on investing in the relevant people and technology – and it is the combination of both that’s crucial here – to enhance cybersecurity, they may struggle to find the right skill sets or the right methods for integrating cyber experts into their organisations.

Raising their knowledge of the technology available to help stem the tidal wave of cyber threats is a key requirement for banks, if they don’t want to end up washed up on the shore as a result of their defences being breached.

If the recent software failures in the financial industry are anything to go by, then disruption to payment systems are becoming the ‘new normal’. This week David O Riordan, Principal Technical Engineer, SQS Group, delves into the benefits of blockchain, in particular in the aftermath of a software disaster.

The VISA card payment outages, Faster Payments issues and disruption to card payments at BP petrol garages, all within the first half of 2018, have caused many to question the regulatory environment around financial institutions. And with the Bank of England and FCA requesting banks to report on how prepared they are for IT meltdowns, stating that any outages should be limited to just 48 hours, the finance industry is under real scrutiny when it comes to technology.

Corporations are now expected to have a Disaster Recovery (DR) and business continuity plan put into place to avoid falling victim to software failures. Nevertheless, what business leaders need to understand is that while no IT solution is completely foolproof, and will likely go down from time to time, the key is knowing how a potential internal failure can be mitigated without affecting the overall performance. This can only be achieved with a well-practiced DR plan that is second nature to the responsible parties and can be executed in the desired timeline. However, this can be both costly and time-consuming to set up. How can such incidents be minimised, or potentially eliminated, in the future? Blockchain is an alternative technology solution business leaders should consider, as it has fraud protection already built-in and is highly resistant to all type of attacks and failures.

Blockchain for Business Continuity

Built-in Fraud Protection:

Blockchain is a de-centralised platform, where every node in the network works in concert to administer the network and no single node can be compromised to bring down the entire system. It is a form of distributed ledger where each participant maintains, calculates and updates new entries into the database. All nodes work together to ensure they are all coming to the same conclusions, providing in-built security for the network.

Most centralised databases keep information that is up-to-date at a particular moment. Whereas blockchain databases can keep information that is relevant now, but also all the historical information that has come before. But it is the expense required to compromise or change these databases that have led people to call a blockchain database undisputable. It is also where one can start to see the evolution of the database into a system of record. In the case of VISA and other payment systems, this can be used as an audit trail to track the state of transactions at all stages.

Ingrained Resiliency:

Additionally, blockchain removes the need for a centralised infrastructure as the distributed ledger automatically synchronises and runs across all nodes in the network by design. As a result, Disaster Recovery (DR) is essentially built in, eliminating the need for a synchronised DR plan. The inability to alter entries in the ledger also contributes to the overall security of the blockchain, improving resilience against malicious attacks.

This is unlike traditional large centralised systems where resilience is provided by failover within a cluster, as well as site-to-site Disaster Recovery at a higher level. Disaster Recovery plans and procedures can be costly due to a large amount of hardware and data replication required. Furthermore, most businesses often do not execute it, so when disaster strikes, corporations are not prepared to deal with the aftermath; as seen with VISAs outage problems.

The Downside of Decentralised Blockchain Technology

Performance:

While blockchain can be used as a system of record, and are ideal as transaction platforms, they are slow compared to traditional database systems. The distributed networks employed in blockchain technology means they do not share and compound processing power like traditional centralised systems. Alternatively, they each independently service the network; then compare the results of their work with the rest of the network until there is an agreement that an event has happened.

Confidentiality:

In its default, blockchain is an open database. Anyone can write a new block into the chain and anyone can read it. Private blockchains, hybrid limited-access blockchains, or ‘consortium’ blockchains, can all be created, so that only those with the appropriate access can write or read them. If confidentiality is the only goal then blockchain databases offer no benefit over traditional centralised databases. Securing information on a blockchain network requires a lot of cryptography and a related computational liability for all the nodes in the network. A traditional database avoids such overhead and can be implemented ‘offline’ to make it even more secure.

Blockchain for Disaster-Relief?

As an emerging digital disruptor technology, no one can say for sure where blockchain technology will ultimately lead. While many have disregarded this technology, the potential is certainly there to attempt to solve some of the most common problems in the digital space.

However, with high customer demands on the increase within financial services and with the combination of a widespread network and substantial cost pressures, IT outages will continue to impact consumer experience. Businesses can minimise potential damage by managing communication effectively and dealing with the technical nature of the outage quickly. With a comprehensive and well-rehearsed data recovery plan, it can not only mitigate outages but maintain standards of service too. This will encourage customer retention, loyalty and growth. Therefore, blockchain should be considered, as it has a built-in check and balance to ensure a set of colluding computers can’t ‘game’ the system; as the network is virtually impossible to crack. As blockchain processing efficiency improves, it will increasingly become a more viable proposition, potentially making traditional disaster recovery unnecessary in the future.

Bitcoin was created in the aftermath of a catastrophic economic recession and a fiasco in the worldwide banking system. It was the poster-child of the ‘cypherpunk’ movement, which believed in the transformative power of cryptography to mitigate that of governments and of capitalism. More broadly, it was the latest in a long line of political movements that have occurred throughout human history – from the French revolution in the 18^th Century to the communist revolutions that gripped the 20^th – all of which have aimed to give power “back to the people”.

But Bitcoin, the cryptocurrency once heralded by anarchists and libertarians as a technology that would unfetter us from a domineering financial system, now stands on the cusp of assimilating with the very sector which it was supposed to circumvent. For staunch advocates of total crypto liberty, that philosophical sea-change might feel like an expedient betrayal – and they would be right. But Bitcoin has evolved in a way that even its founder surely didn’t anticipate: its popularity has forged a whole new financial market, and an entire crypto ecosystem in its wake.

That’s no small feat, and it’s not one that financial institutions can realistically ignore. The power of blockchain, crypto’s underlying technology, may be in its decentralised nature – and in many sectors, that level of decentralisation is viable. But for the world of finance, this simply isn’t the case, and it never will be. The destiny of all successful financial products is institutionalisation, and given the triumph of crypto, institutional involvement – and the regulation that follows from that involvement – was always inevitable. If the client demand is there, which it is, then institutions have every right to meet that demand – and many already are.

The horse bolted last year, when two exchange giants, CME and CBOE, launched bitcoin future trading operations. That set the gears turning for other exchanges and banks. In May this year, Goldman Sachs, the most prestigious of the major Wall Street Banks, waded into the crypto world with a crypto futures trading operation and a dedicated trading desk. There’s plenty of activity on the horizon too: the New York Stock Exchange, part of the Intercontinental Exchange, is reportedly setting up an online platform for buying and holding crypto.

Crypto has also strayed into the world of asset management, where the number of funds currently stands at around 251, with $3.5 - 5 billion in assets under management. Considering only 20 hedge funds for cryptocurrency existed in 2016, this represents substantial growth. Even George Soros is said to have given approval to trade virtual assets in the last few months, having called it a bubble in January of this year.

Firms like Soros Fund Management and Goldman Sachs are far from outliers in the world of finance. According to a recent survey from Reuters, one in five financial institutions is considering trading cryptocurrencies within the next 12 months. That’s a noteworthy shift from 2017, when BTC and crypto were derided by the financial world as a scam and an avenue for criminality. Financial institutions may be saying one thing, but they’re doing quite another, and there will be fast followers now that Goldman has put the wheels in motion: very few want to lead, but everyone wants to be second.

As tends to be the case with the crypto market, wherever BTC goes, others follow. Ethereum futures appear to be on the horizon, at least as far as CBOE is concerned. The Initial Coin Offering market as a whole has also witnessed rapid institutionalisation. Back in 2017, all token sales were public, and widely advertised. Now, most ICOs get their money in private sales from a handful of investors. Even if start-ups do decide to run public sales, the vast majority of funding still comes from institutional money.

The elephant in the room is now working out the effect of all this institutional involvement. Most obviously, we’ll soon be seeing the impact of big money, as the process unlocks billions on billions of dollars that float in the world’s financial systems. With that, we’ll see more block trades occurring. Prices are likely to rise. Volatility may increase, or indeed, it may decrease as the market becomes more liquid.

Regardless of price movements, institutionalisation looks set to be a positive thing for the market, providing legitimacy in the space: after all, the more positive actors there are in the market, the better.