Owning a home is one of the biggest dreams for many, yet the process of buying any property can be laborious and flooded with additional fees, delays and disappointments. Blockchain may just be able to chain that. Below Finance Monthly benefits from expert insight from Kai Peeters, the Founder and CEO of HiP, on the implementation of blockchain in the real estate sector.

We are now bearing witness to blockchain based technology coming out of its infancy, and showing how it can be applied to vastly improve multiple markets - including the archaic property market. With a few established businesses and technology giants warming to blockchain, we have to start asking more profound questions about/around how it could improve the situation for a buyer/ buyers and the real estate market as a whole.

The current housing market simply does not work for the majority of first-time buyers. Working exclusively with traditional financial institutions, real estate markets around the globe confine first-time buyers in long-term unmovable loans that put enormous pressure on young people looking to buy a home. This is why, despite interest rates being reasonably low, the number of new mortgages has been declining since the 1990s. Meanwhile, the minimum deposit is largely unaffordable for people who earn average wages, and without help from their family it is virtually impossible for them to get on the property ladder. Technology can transform the way we buy and sell real estate by eliminating additional costs and disorganization of our housing market, Smart contracts that can handle that aspect more efficiently.

Having a decentralized real estate platform addresses current market issues, and introduces the individual investors who can fill the void left by traditional financial institutions and inject more life into the market. This can also allow property to become a more valuable asset in itself, where each buyer is able to release equity without losing ownership, and raise money free of debt. Being able to turn equity into currency and have control over debt levels brings the choice back to the buyers, owners and investors.

The upcoming platform HiP was designed with all those benefits in mind, especially for first time buyers, who can use an inbuilt calculator to enter the price of the property they want to purchase as well as the down payment and monthly payments they can afford. HiP will then calculate the remaining amount needed to buy the property and this outstanding amount is offered out to investors. This means that the first-time buyer will own a percentage of the property whilst also being entitled to a proportional percentage of profit and capitals gains when sold. Investors on the HiP Exchange who have co-financed the property will also receive return on their percentage of the real estate equity they own.

This is a new world of opportunity for first time buyers who now have access to other financing options that were previously unattainable to them. With HiP focusing on the way we fund properties, and other innovative minds using blockchain based technology in other areas of the real estate sector, it is only a matter of time until the array of problems within the real estate markets becomes a thing of the past.

Worldwide spending on blockchain is set to top $2 billion in 2018, according to the International Data Corporation.

Stacey Soohoo, research manager, customer insights and analysis at IDC, said: “The year 2018 will be a crucial stage for enterprises as they make a huge leap from proof-of-concept projects to full blockchain deployments.”

There is, clearly, a lot of time, money and effort being spent in tapping into the potential of this technology. But, how can we expect to see the benefit of all of this? How far will blockchain go in terms of changing the way we do business?

Finance

Having originally been met with some scepticism in the banking sector – probably due to its disruptive nature and the presence of scams targeted at early adopters – blockchain is increasingly being harnessed by financial institutions to change the way they do business.

Perhaps most obviously, this can help to add speed and security to the process of transferring money, something that everyone from a holiday-bound consumer to a novice investor dabbling with a forex demo account through to a FTSE100 CEO can appreciate.

Yet, as the FT notes, the process of clearing and settlement, the verification of a customer’s identity and the raising of syndicated loans can all be made more efficient with blockchain.

Traceability

Yet, to focus solely on banking and payments would be to ignore the broader scope of the benefits of blockchain.

In industries where ‘traceability’ is crucial, this provides a clear, immutable record of a financial transaction. Examples of where this is necessary include the charity sector – where organisations need to prove that donations ended up at the intended target and, perhaps most pertinently in a business context, for diamonds.

For diamond companies, being able to create and manage a record for customers and clients will enable them to be clear that their product in genuine and sourced responsibly – two things that will help reputable firms to stand out from companies engaged in practices that have threatened to tarnish the sector.

Privacy

While speed, security and a transparency are clearly important, so too is privacy, especially in sectors such as healthcare where it’s vital to protect patients’ data and, typically, there are issues with out of date security software and records systems.

While the US’ private healthcare system has already embraced blockchain, the NHS could benefit too. As Tech UK notes, tracking medical test results in real time, sharing data between medical teams in different locations for research purposes, speeding up compliance paperwork processes and handling documentation for short-term staff could all be done quickly and – crucially – with the required level of privacy. This doesn’t just benefit the NHS but also a number of science and healthcare companies that rely on the NHS for work as third parties.

In some respects, blockchain’s real power is not necessarily that it changes what can be done as a business. Rather, it enhances the way in which companies operate in the digital age, allowing to carry out the processes and practices that they have developed in recent years and allows them to be done quicker, safer and cheaper.

The impact of blockchain within the financial services industry could be significantly delayed by the damaging PR currently associated with cryptocurrencies, new research suggests.

Insight gathered in a report by international law firm Gowling WLG reveals that financial services experts are fearful that if the negative headlines surrounding the likes of Bitcoin impacts industry opinion about blockchain software, it will perpetuate the common confusion between the two.

The report, entitled 'The ultimate disruptor – how blockchain is transforming financial services', states that an estimated US$2.1 billion will be spent on blockchain solutions[1] during 2018 and, by 2021, levels are expected to reach US$9.2 billion. In order for the system to reach these levels of growth and its benefits to be realised, it's essential for businesses to understand the capabilities of blockchain and other distributed ledger technology (DLT) beyond Bitcoin.

Dean Elwood, CEO of blockchain company Umony and contributor to the report, said: “Bitcoin is creating so much noise, much of it negative, that the genuinely useful and practical side of blockchain is getting buried. I think there is a real pressure on the industry and people like me, to make sure that everyone really understands the difference between blockchain and cryptocurrencies like Bitcoin."

The report features insight from specialists including NEX Exchange, Blockchain Hub, BTL Group and AgriLedger.

Many of the contributors believe that the development of blockchain technology will happen much faster if the industry collaborates and regulators are involved in the development process. This is because the very nature of DLT revolves around sharing information, not only internally, but also with customers and, in many cases, with competitors.

David Brennan, partner and co-chair of Gowling WLG's global tech team, said: "The business community has been quick to grasp the numerous opportunities blockchain solutions afford, but the key challenge will be communicating its significance to both the public and policymakers. Collaboration between governments and the private sector is key in order to facilitate widespread acceptance and adoption of the technology."

The firm's research also suggests that the appropriate industry regulators need to catch-up with the technological developments within blockchain and DLT, yet the majority of those interviewed do not believe that the technology itself requires regulation.

Andrew Gardiner, founder and CEO of Property Moose, said: "Cryptocurrencies need regulating, absolutely, 100%. But you can't regulate blockchain itself. It's just a piece of tech. For example, do you regulate Microsoft Word or Google for emails? They all have to be ISO compliant, so you’ll have industry standards, but these are not regulation.”

For a full overview of the research conducted with financial services experts, including insight on who will be affected by blockchain, the opportunities and threats facing the technology and the level of investment now going into blockchain development, see Gowling WLG's white paper 'The ultimate disruptor – how blockchain is transforming financial services'.

(Source: Gowling WLG)

[1] 1 Worldwide Semiannual Blockchain Spending Guide, International Data Corporation, 2018.

Finance Monthly caught up with Alex Corral, the Co-Founder and Chief Executive Officer of preCharge Risk Management Solutions. Founded in 2003, preCharge has since protected thousands of the world’s largest merchants, including Sony Entertainment, Footlocker, BassPro and many other brand name clients. Below Alex tells us more about it.

Tell us a bit about the technology and solution that PreCharge offers.

Since our inception, our technology has protected merchants. If you purchased from a major brand name online, there is a good chance that preCharge reviewed the order. Our goal was always to make identity validation seamless and in most cases, the millions of people we monitored never even knew. For over a decade, we worked with merchants to understand their tools, their needs and their technologies, and those merchants supplied us with their internal processes, as well as with millions upon millions of consumers, which lead to the creation of one of the most advanced identity verification tools online. While merchant service is a fickle industry, and merchants often change providers every 18 months, our average merchant was on board for upwards of five to ten years. Our goal was simple - verify the consumer without the need for them to contend with sending in their ID, calling for verification and jumping through hoops. We are now taking that same technology and offering it freely to consumers in an open-source, stable, audited and compliant solution. Our goal is to offer consumers a way of transacting with each other and not having to worry about whether who they are talking to is legitimate. We do this by offering everyone a free preCharge Wallet, which unlike traditional digital currencies, is centered around a person’s email address. From there, we validate the consumer, and in 99% of the cases, the consumer doesn't even need to send in their ID or other personal information because we are able to use the various data points to track who they really are. In the rare 1%, we will simply ask for some verification through our third-party companies, but preCharge will never see your information. Once a person has a wallet, they can basically ping other users with our utility token; think digital currency. An advantage is that while the wallet does have a unique alphanumeric code like traditional tokens, the core is an email address, so anyone with an email address can either send tokens to another user or simply use the service to validate their identity. We are rolling out an oAuth technology that will allow merchants to freely use the service, validate consumers or even transact business, essentially taking what merchants paid millions of dollars for year after year and giving it away for free. Our feeling is that our merchants help build this network, the consumers are the network; why not give it back to them for free?

What makes PreCharge’s solutions unique? 

While there are literally thousands of token options out there, no other is as heavily focused on compliance, auditing and openness as preCharge is. When it comes down to it, someone will become the leader in the token arena, why shouldn’t it be a company that has been building the technology for over a decade? We were helping create tokens even before it was a thing in 2006, with Sony Entertainment and Galanet, and worked with them for years on their in-house game tokens. My guess is that when you consider our history, our partners and our resources, preCharge will become the leading transactional token on the market.

PreCharge has been helping merchants and consumers all over the world before people knew anything about cryptocurrencies - can you tell us more about the history of the company? 

I had just sold my marketing company and moved to New York City. In 3 years, we had gone from start-up to over 30,000 clients, and were one of the leading companies in PPC in 2001. During my time there, most of our operations were handled by leading consultants or by our people in-house, but the one thing I enjoyed working on was processing the actual credit cards, I even created a script where every time we would process a credit card, it would sound like a cash register. We eventually had to take the script down, which is a good thing, I guess. Over this period, I had personally processed tens of thousands of credit card transactions and over time, I noticed various patterns and figured, why not automate it? Most consumers are good, honest people, but our job was to focus on the bad actors, those looking to harm others and then simply stop them. I met several people who really liked the idea.  We then were able to gather 40 investors, and preCharge grew. Over the years, the system adapted and changed but the goal always remained the same: to seamlessly allow commerce. The sad part is that whenever we would find a bad actor that was a merchant, they would sue to suppress the information, so we were often the target of lawsuits and various litigation issues. Those matters just became a cost of doing business. We put a lot of focus on compliance, audits, third-party reviews and ensuring compliance, and plan to continue that, and with this transparency built into our DNA, people will learn to trust digital currency and those behind it.

Have you always wanted to be the CEO of preCharge?  

No - my goal was never to be the Chief Executive Officer; I am more of a hands-on person. We had hired two CEOs in our past and sadly, the last one nearly destroyed the company. Working with my team and our people, I am doing what I can to be the kind of CEO people can be proud of, and hope to continue to do that until preCharge reaches the point where a more experienced and savvy CEO comes along.

What do you think the future holds for Blockchain and cryptocurrencies? 

I find most things in life are evolutionary, meaning they are bound to happen. It's pretty easy to project - space travel, quantum computing, digital currency, all inevitable solutions. What most people tend not to realise is that we've always had digital currency, as long as people transacted business digitally. When you send money through a Money Transmitter like Western Union or use your credit card online, you are in fact doing it digitally. The only difference with cryptocurrency is that it's open and secure, for all to see. People lost trust in the closed loop natures of payment systems and frankly, I don't blame them. I have first hand witnessed some pretty horrific things banks do, and frankly, it's sad. Digital currency is an absolute; governments and many banks are trying to suppress it, but you can't. The very nature of digital currency is that it's open and secure; it's just applying value to one form of digital currency over another, and as it stands, people will ultimately find that they can trust an open source and public system over any government or bank, which is what everyone ultimately wants. preCharge is simply the medium to make that happen.

What lies on the horizon for PreCharge? 

We are working to build out a partner network, where people can train and educate others on financial management and digital currency. We plan to focus a lot on teaching people - from high school students, all the way up to regulators, as to what digital currency really is. We want to show people that it's there, it's real and although you may not be able to touch it, it’s the very thing governments have been doing for decades. We already have several classroom visits set up, and are looking to build out more. We have a number of online certifications planned, where people can learn about it online in their free time. Ultimately, we want to educate people on what it is and what it is not. Not so much teach people about preCharge but rather, what is Blockchain technology, what is digital currency and why is it so important. Ultimately if we can do that and prove to people that it's real, then maybe they will find they can trust an open system as a means of validation, and hopefully the solution they ultimately trust is preCharge.

I am happy to see the industry starting to mature, and we plan to be there when they graduate!

Website: https://www.precharge.com/

Nearly 9 in 10 technology professionals believe blockchain technology will be as transformative for business as the internet has been.

New research from Intrinsic Insights commissioned by BTL Group has revealed that after reduced costs, the main benefits of blockchain technology are greater data security and protection against cyber threats.

At a time that concerns over data are at their highest, blockchain technology is considered a very adept way to provide greater privacy.

“In a world of increasing concerns over the security and integrity of our data, individuals and businesses are realising the inherent benefits that applications built on blockchain technology can provide when keeping people’s data private,” said Dominic McCann, CEO of BTL Group. “This research also illustrates just how many businesses are looking at using blockchain and of those that are yet to explore it, there is a significant proportion looking to do so in the next two years.”

After two years of high profile and successful blockchain projects, learning how blockchain can be developed better, on Monday 23rd April, BTL Group will be test launching Interbit its multiple blockchain platform - a next-generation platform that has unique “chain joining” capability specifically created so that developers and businesses can quickly, easily and securely build applications.

Tackling these issues head-on, after two years of development and investment, Interbit’s unique “chain joining capability” has the capacity to inter-connect many thousands of Interbit blockchains per solution, in completely private, secure and horizontally scalable manner, addressing the shortcomings of.

A token-free blockchain platform, Interbit has been developed for ease of use. Whether users be a global enterprise, business innovator or software developer, the platform has been written in JavaScript to produce a level of simplicity that is efficient for users and requires no need to learn new programming languages or tools.

Tom Thompson, CTO of BTL Group Ltd. said: “After two years of successfully completed high profile proof of concepts, significant investment and committed development, we are ready to release our Interbit platform for testing and feedback. What we have built is a next generation blockchain platform that allows users to benefit from our chain joining capability by easily and quickly building fast, scalable and secure blockchain applications. Developers can be up and running on an Interbit blockchain within minutes.”

(Source: BTL Group)

Warren Buffett’s comments on cryptocurrencies highlight how he needs to be educated on the future of money, affirms the boss of the deVere Group.

The observation from deVere Group founder and CEO, Nigel Green, follows Mr Buffett’s address to an audience gathered for the Berkshire Hathaway annual meeting.

Mr Buffett opined: “Cryptocurrencies will come to a bad ending.”

However, as he spoke, Bitcoin, the largest cryptocurrency, had added $2,563.48 to its value in the last month, marking a price hike of 37.9 per cent.

Mr Green comments: “It comes as little surprise that Mr Buffett and his 94-year-old business partner, Charlie Munger, criticized cryptocurrencies at their annual meeting. They have done so consistently.

“But what I do find monumentally baffling is that two of the world’s most successful investors cannot see the intrinsic value of some form of cryptocurrency.

“Do they honestly believe that there is no place for, and no value of, digital, global currencies in an increasingly digitalized and globalized world?

“Do they not see many of the world’s major tech companies, established banking groups and household name investors investing in, using and/or beginning to adopt cryptocurrencies?

“Do they not see governments, central banks and financial regulators recognizing the need for regulatory frameworks because cryptocurrencies are becoming so mainstream?”

He continues: “One of the world’s greatest investors, Warren Buffett is a hero.

“However, he admits he does not understand cryptocurrencies.   He once told CNBC,‘I get into enough trouble with the things I think I know something about. Why in the world should I take a long or short position in something I don’t know about?’

“I believe his recent comments on cryptocurrencies illustrate his lack of understanding in this area and how he perhaps needs to be educated on what is likely to be the future of money.”

The deVere CEO concludes: “Financial traditionalists, like Mr Buffett and others, appear to exclusively believe in and be motivated by the old, centralized system of money.

“I would suggest that they need to also be open to a new, decentralized, digital, global currency.

“Whether they like it or not, the world has profoundly changed and moved on in recent years. It can’t, and won’t, go backwards.”

(Source: deVere Group)

Price comparison site finder.com has released its monthly Cryptocurrency Predictions Survey on how the top 10 Cryptocurrencies by market cap and three trending coins will perform in 2018.

Out of the 13 coins, finder.com’s 13 panellists predict that Dogecoin (DOGE) will experience the greatest percentage growth by December 31, 2018 (5,838 percent). DOGE was sitting at $0.003 (£0.0021) per unit on March 27, 2018, and is forecast to reach $0.1938 (£0.14) by the end of the year.

Cardano (ADA) is expected to have the second greatest increase in growth by the end of the year (812 percent), followed by Ripple (XRP) (526 percent).

Despite this growth, Bitcoin (BTC) is still expected to reign as the highest value per unit, predicted to hit $9,100 (£6,464) by May 1, 2018, and reaching $21,485 (£15,261) by December 31, 2018.

Although presently a bearish market, April is the second consecutive month that panellists have predicted no drops in value for these coins by the end of 2018, signalling optimism for future growth.

Comparing the forecast market capitalizations for Bitcoin (BTC), Bitcoin Cash (BCH) and Ethereum (ETH) – the only three of the 13 coins with reported number of coins available –  Ethereum (ETH) is predicted to see the highest growth by the end of the year (234 percent). This was more than double that of Bitcoin (BTC) with a 114 percent forecast increase, and Bitcoin Cash (BCH) at 40 percent.

The 13 panellists in the April Cryptocurrency Predictions Report include:

• Alisa Gus: CEO of WishKnish, a blockchain gamified social market network aimed at helping communities grow, and founding member of the DC Digital Economy Hub
• Clayton Daniel: former tax accountant and financial advisor, author of #1 Amazon Bestseller ‘Fund Your Ideal Lifestyle’, and founder of Sprout Superannuation
• Frank Schuil: CEO and co-founder of Bitcoin-trading platform Safello. Senior adviser for businesses and associations, including CG Blockchain, Rhino Ventures and BitAngels
• Fred Schebesta: Co-founder of global comparison site finder.com, including Crypto Finder. Award-winning entrepreneur, author, mentor, and a global keynote speaker
• Jen Greyson: CEO of Powered by Neureal℠, intellectual property specialist, and named one of the Top 8 Women in Crypto
• Jörg Molt: CEO and Blockchain Specialist of the Satoshi School 1–10 Mitglieder in Bavaria, Germany
• Joseph Raczynski: Technologist, futurist, Joetechnologist.com and Reuters, technology consultant and manager specialising in Blockchain technology
• Kohei Kurihara: President of the Government Blockchain Association Tokyo Chapter. Co-founder and CMO of Collabogate, aimed at bringing people into the Crypto market faster
• Kunal Patel: Business mentor for Startupbootcamp FinTech and SuperCharger Fintech Accelerator. On the advisory panel for YES BANK
• Kyle Wang: head of business development at Hub Token, advisor and consultant to ICOs and blockchain-enabled startups
• Samson Williams: partner of Axes and Eggs, a blockchain and Cryptocurrency mining consultancy, and the CSO for Ireland-based fintech firm, SeedUps
• Sergei Logvin: Co-founder of Rocket ICO, the world’s first decentralised accelerator based on the DAO concept, advisor to Opporty.com, Project Districts, TravelChain and LibertyLance
• Tim Lea: published author and regular speaker on blockchain, the CEO of REFFIND and the director of Veredictum

The full details of the survey, complete with comments from the panellists, can be found here: https://www.finder.com/uk/cryptocurrency-predictions

Jon Ostler, UK CEO at finder.com said, “While the downward trend has continued over the past month for many coins, our panel remains bullish in a presently bearish market, signalling optimism for future growth. This is the second consecutive month where panellists are expecting no drop in value for any of the included coins by the end of 2018. While Dogecoin (DOGE), Cardano (ADA), Ripple (XRP), Ethereum (ETH) and Stellar Lumens (XLM) are expected to see greater percentage growth than Bitcoin (BTC) this year, BTC is still forecast by our panel to reach the highest value of the 13 coins, at $21,485 (£15,261) by December 31. Before considering purchasing Cryptocurrency, it’s crucial to understand that the market is incredibly volatile and will continue to represent high risk. It’s important to do your research, seek professional advice and compare your options before taking the leap into the market.”

(Source: Rooster)

With ICOs at the forefront of cryptoculture worldwide, blockchain technology is predominantly being driven by digital currencies and their markets, but why? Below Finance Monthly hears from Drew Bell, Chief Developer at Ethercoin, who explains why.

2018 is set to be an even bigger year for Initial Coin Offerings (ICO) than 2017, with more startup’s turning to the fundraising method to remain in control and transparent in the process. According to a report by CNBC^[1], around $100million a month is raised via ICO’s, showing the demand is increasingly prominent between investors and individuals.

However, as with many emerging trends, ICOs have been met with some scepticism and criticism. Before new businesses start jumping on this trend to become the next blockchain success, it is important to understand the challenges it might face and why trust should be built into the core of its offering.

Whilst there can be fraudulent ICOs, businesses and mainstream audiences need educating and to be made aware that ICOs are a viable fundraising mechanism.

The fastest growing form of investment

There’s no denying the fact that ICOs, “the fastest growing form of investment” carries numerous benefits for businesses looking to generate significant ROI without having to seek out venture capitalists. An Initial Coin Offering can be created by just about anyone, and offers businesses an efficient and streamlined fundraising opportunity.

Aside from the obvious benefits like being able to streamline a fundraising campaign for a startup business, by conducting a decentralised application, users will be offered a much better experience.

There is also the added benefits of online marketing, where an ICO can be marketed to a large, global targeted audience with little effort and cost. Potential investors can therefore research about a particular ICO via online ads, social media and websites no matter where in the world they might of originated from. The ICO investment model is open to everyone and free from the geographical restraints associated with IPOs.

An unpredictable market

It’s widely known that the blockchain and cryptocurrency market is an unpredictable place, where the majority of business see it as a sure fire way to attract investors who are looking for the next big blockchain score. Yes, an ICO looks to be an easier and more cost-effective way to raise funds for your business, but it can be just as challenging as as securing a venture capital; but you do have more control.

One of the biggest challenges a new business can face when journeying down the ICO route is the sheer amount of competition. In an interview with Business Insider, the founder of Evercoin announced there were around 30 new ICOs launching everyday, and raising as much as $200million per ICO^[2]. Businesses need to make sure they are distinguishing themselves from such a saturated market with a strong unique selling point that will not only put them ahead of the game, but generate interest and a buzz amongst investors. With so many ICO projects not having an effective marketing plan and channels to promote themselves, they can get lost in the sea of ICO scams that take centre stage.

Essential to make a difference

ICO’s are essential for businesses wanting to enter the market, and to be able to thrive, ICOs need regulatory safeguards to be implemented and investors need to be educated. Trust should be at the forefront of any businesses fundraising project, and one of the first steps to building trust is for businesses to create an extensive whitepaper and detailed roadmap.

Due to the volatile nature of the blockchain technology, it can be hard to understand the true nature of the transaction during an ICO sale. Businesses should ensure they offer a safe and secure platform to boast legitimacy can help to instill trust amongst investors.

Communication is the key to success with generating trust amongst the blockchain market. By using social media to engage and update its audiences, investors will start to feel empowered and as if they are a part of the process. This will promote a higher level of transparency and result in more investment.

In today’s unstable and saturated blockchain market, it is essential that businesses looking to start on their fundraising journey are putting security, transparency and trust at the forefront of raising capital to maintain solid investment and build credibility amongst investors.

^[1] https://www.cnbc.com/2017/08/09/initial-coin-offerings-surpass-early-stage-venture-capital-funding.html

^[2] http://uk.businessinsider.com/ico-initial-coin-offering-explained-bitcoin-ethereum-2017-11?r=US&IR=T

2017 was a busy year for regulatory compliance and technology across the globe. We witnessed countless mass data breaches, sexual misconduct claims, money laundering scandals, and of course, the Wild West that is the Blockchain. Alongside that, we continue to see significant advancements in Artificial Intelligence (AI) and Machine Learning (ML) technologies across all industries, being applied to automate business functions, gain insights into behavior patterns, and more.This year, the Banking Industry will adopt ML and AI-based automation for enhanced efficiency and data-driven decision making.

Banks were slow to adopt ML based automation in 2017, but to remain competitive in 2018 and onward, banks will have to consider  how adding AI and ML fueled technologies will impact their growth and improve the efficiency of their business processes.

Many financial institutions have been quick to experiment with AI applications in the frontend of the business, for example, to streamline and improve customer service via chatbots. In general, the value proposition is that AI can automate manual and repetitive roles but now, we are seeing AI being applied towards broader data-driven analysis and decision making.

This not only reduces costs and saves time, it also eliminates the risk associated with human prone errors. The machine is well-situated to consume large data sets while also self-learning overtime. But before even considering the tremendous opportunities to implement this technology on the backend of the business, organization leaders will need to educate themselves on how the technology actually works.

AI in the Enterprise

While many AI-based solutions have advanced over years, the financial industry remains suspicious of the science behind the decisions made by such technologies. Now we are seeing a shift towards increased transparency in AI-based solutions, where the science behind machine learning (ML) based decisions can be justified, tracked, and verified. This should help move along industries on the cusp of adoption.

Artificial Intelligence and machine learning in the long term can be applied to reduce costs and time by automating a once manual process.  However, on average, most AI algorithms are only about 80% accurate, which doesn’t live up to the business standards of accuracy. That leaves 20% flawed, which requires human input to bridge the gap. There is an inherent design flaw to any AI solution which does not utilize some human component in development. It is a general understanding that the most successful AI models use the 80:20 rule, where 80% is AI generated, and 20% is human input. This is implemented in the form of supervised learning or human-in-the-loop.

Human-in-the-loop Integration

A best practice in the successful development of AI includes a human component, typically referred to as “Human-in-the-loop” or supervised learning model. The way it works is that machine learning makes the first attempt to process the data and it assigns a confidence score on how sure the algorithm is at making that judgement.  If the confidence value is low, then it is flagged for one or many humans to help with the decision.  Once humans make the decision, their judgements are fed back into the machine learning algorithm to make it smarter. Through active learning, the intelligence of the machine is strengthened, but the quality of the training data is based on the human contributors.

(CrowdFlower Inc, n.d.)

Some data analysis is specific and complex, such as the case with Financial Regulation. The evolving and complex nature of regulation is a tough subject matter to master. AI in RegTech requires an in-depth knowledge and understanding of the regulatory framework and how to read and interpret the text.  In these types of fields, expertise is far more critical than the tool. However, if a tool could incorporate subject matter experts into the machine learning model, then the tool becomes exponentially more viable.

Expert-in-the-Loop takes Human-in-the-Loop to another level. It makes use of subject matter experts to train the machine and flag the machine’s errors. For example, a well trained machine in the RegTech industry could eliminate countless hours a compliance officer takes in researching, reading, and interpreting regulations, by automatically classifying documents into topic-specific categories or by summarizing the aspects of a document that have changed from a previous version.

The Expert-in-the-Loop model differs from Human-in-the-Loop in one major way: Human-in-the-Loop doesn’t differentiate between the aptitude level of the various participants to judge the particular question correctly. Human-in-the-Loop takes advantage of the Law of Averages which states that if many people participate, the average response will yield the correct result. So the response from a college student and a PHd student would be weighed the same. On the other hand, Expert-in-the-Loop , specifically looks at the experience level of the participant to determine how their result will be weighed.  With Expert-in-the-Loop, a human is essentially supervising another human’s qualifications. While the cost is higher than both the unsupervised and the Human-in-the-Loop models, the results of Expert-in-the-Loop models are proportionally more accurate, making them suitable for highly specialized and industry specific topics.

Nearly every industry is exploring how to use AI and machine learning as tools to increase efficiency and streamline data analysis, among other things. The future holds endless possibilities for this emerging technology. It serves as a bridge to close the gap between information and the time it takes to compile results. The speed of data can bring about a new era of understanding and increased reaction time in the Financial Services industry.  There are a lot of unknowns still left to address, but the technology is becoming more intelligent and its applications more advanced. Early adopters will have the benefit of experience on their side once the inevitable industry-wide adoption finally falls in place. Until then, organizations can pilot new applications and evaluate their impact and success. Ultimately, the financial industry will need to educate themselves on the pros and cons, while considering the implementation of this new technology.

Trading is no longer a male-only club. Women now represent 19% of online traders worldwide, and they’re also more successful at it than their male counterparts. This stems from an international report assessing the habits and demographic data of more than 500,000 traders. It was published by BrokerNotes, the online trading comparison site.

What’s caused the shift
The shift has been driven by the democratisation of trading as a result of the internet. This has paved the way for women to enter an industry that’s historically been dominated by men. But it’s not only that female trader numbers are increasing. They’re also better at it.

Women are depositing less than men in their online trading accounts (on average $424 less) and are making fewer, more calculated trades. Men, on the other hand, make more trades and are much more likely to be reactionary to changes in the market, which is proven to have a negative impact on overall return on investment. This type of trading costs men money – the average income of a female online trader being £35,743 compared to the average male income of £32,525.

The female crypto boom
The crypto boom has had a big role to play in fuelling the surge of female traders. Last year, there were 9.6 million total online traders worldwide. In 2018, it’s now 13.9 million, with 2.7 million of them being female. Interestingly, 59% of women choose to trade crypto over traditional assets like forex.

Although both genders are trading Bitcoin, women only represent 10% of total Bitcoin traders. This points to the fact that women are looking to altcoins when investing in crypto with females accounting for 18% of Dash traders and Ripple also attracting a higher percentage of female traders.

Other data points

• Highest percentage of female traders in the UK are in Herefordshire (21%).
• 42% of women describe themselves as experienced traders.
• 16.23% of female traders earn more than £50k/year compared to only 10.93% of male traders.

Marcus Taylor, CEO at BrokerNotes, commented: “When people think of trading, they think of testosterone-fuelled ‘Wolf of Wall Street’ characters. The reality is there’s no place for stereotypes in an online world. By offering anyone the tools to research and develop trading strategies, the internet has opened up trading to the masses. With more women demonstrating a flair for trading, it points towards a transformation that’s also moving towards gender equality.”

Blockchain is by now known as one of the leading technologies of the 4^th industrial revolution and is set to have an impact as far and wide as the internet did. This month Finance Monthly delves into the growing world of blockchain, its biggest uses and the top companies that are using blockchain in their corresponding sectors: Banking, Energy, Retail and Gaming.

Banking

Once treated with caution, blockchain technology is now expected to cause substantial disruption to the banking industry, as banks and bankers are consistently seeking use of blockchain technology in order to transform sizeable areas of their business. From payments, settlements and compliance or identification, the accessibility to a decentralised platform by multiple parties at one time, cost-effectiveness and security benefits are winning legions of fans within the banking sector. Some of the main advantages and usage to blockchain technology within banking are:

Payments – Banks are able to shift their payment systems on to blockchain (or at least part of) or for launching digital currencies.

Trade finance – Blockchain technology provides a modernised update that many feel is necessary when it comes to working with various parties on goods shipment. The technology simplifies the process by enabling numerous parties’ access to the same information, at the same time, removing the need for unnecessary paperwork.

Identity – Due to the cryptographic protection blockchain technology provides, it is able to share a constantly updated digital record at all times to more than one person, or company - Great for customer identification and ensuring trust between consumers and banks.

Syndicated loans – Ideal for managing the lifecycle of a loan, Credit Suisse has already adopted the fashion of putting syndicated loans on blockchain technology.

Energy

Blockchain technology promises to help the energy industry radically transform its processes and markets. Although one of the slower industries to adopt the technology, for those who have, one of the many capabilities on offer is the adoption of a peer-to-peer trading model, which changes the way in which energy is bought and sold.

The rise of renewable energy sources that connect back to a wider grid, has helped convert energy consumers in to producers, therefore letting them sell excess power back to the grid and cutting out the middleman; in short it connects those who want green energy, to the producers who can supply.

The other common use within the energy industry is within the development of cryptocurrencies for monetary payments – something only a handful of companies have begun to trial, such as MARUY.

Retail

There are a few areas within the retail sphere in which blockchain currency can add value. The first is with trust and transparency. With the rise of online shopping, it is harder for retailers to earn trust from their customers, as the human element of a company is essentially being removed.

Blockchain technology will help to support the transparency desired by consumers. Similar to banking, all parties involved – supplier, manufacturer, retailer and consumer – can all trace a products journey and history and therefore, reaffirms the trust between retailer and consumer.

A second and obvious use for the technology is of course with payments. Blockchain promises a shared ledger where all financial transactions are recorded, eliminating the margin of error within the transaction. Blockchain also permits retailers to bypass the fees of intermediaries with a currency such as Bitcoin – this offers all the benefits of traditional currency, but without transaction fees and reconciliation issues.

One retailer trialing the use of blockchain technology at present is Walmart. The US chain is using the technology within its food division. The retailer is able to identify and remove food from its stores that has been recalled and using blockchain, the company is able to obtain crucial information from its suppliers, on its food sources, to ensure all vital food standard requirements are being met.

Gaming

Developments within the gaming industry are not uncommon and blockchain technology is now the next, or for some the latest, wave of disruption to the industry. The key shifting factor for gaming is taking it from a traditional hardware platform and on to the cloud, via a decentralized gaming ecosystem. Blockchain technology naturally lends itself to achieving this.

With blockchain, the gaming industry can be a much more enriching experience for gamers, as currently gamers – both casual and hardcore – invest a lot of time and money in to obtaining collectable, limited edition items within their games, however with the help of blockchain, they’ll be able to play and pay for their gaming needs using tokens, such as Playkey’s token, PKT.

Blockchain technology helps in this shift by encouraging owners of powerful gaming PCs and GPUs, to “rent” their servers to the individuals who don’t necessarily have the funds, or hardware they require, to play the games they desire. This means gamers will not have to invest in expensive gaming consoles and other hardware. The more developers look into blockchain technology, the more it becomes obvious that it is a natural transition for the industry.

With the rise of several follow ups to Bitcoin, cryptocurrencies are proliferating at a very serious rate. With ICOs left, right and centre, Bitcoin could soon be facing serious competition; or is the competition already here? Below Richard Tall from DWF explains why Ethereum could be the new kid on the block.

I was helping a client the other day, to identify some of the legal issues surrounding his cryptocurrency trading business. One of my questions to him was which cryptocurrencies he trades in - and he very kindly shared a list of them with me.

It was pretty long.

I have previously made the point that, in the last four years, humankind has invented seven times more "currencies" than the governmental currencies that already existed. The two most famous of these, to those of us not immersed in the market, are Ether - the token associated with Ethereum - and Bitcoin.

Seemingly to most, Bitcoin is a bigger beast than Ethereum. But does the latter present a threat to the former's dominance?

The present state of the cryptocurrency market

As I write this article, the market capitalisation of all cryptocurrencies has taken a hammering as they suffer further setbacks. These range from UK mortgage companies refusing to accept funds generated from cryptocurrencies as deposits for properties, to concerns about further governmental bans in jurisdictions such as South Korea.

All of the major cryptocurrencies have trended in much the same way, albeit they do different things. Ether's market cap today is about $102 billion (slightly larger than Kraft Heinz) and Bitcoin's is about $190 billion (about the same as Citigroup).

In 2017 alone, the value of Ether rose by 13,000 per cent against a somewhat modest showing of 2,000 per cent from Bitcoin. There is little point in trying to ascribe reasons to the differing levels of value increase though, as a market driven by those seeking to get rich quick is no real market at all.

Ethereum's perceived threat to Bitcoin is not a simple comparison of relative worth, then. There are essential differences to what each does and while Bitcoin is currently synonymous with cryptocurrencies in the minds of the public, as the market matures the value of both Bitcoin and Ether will be driven by factors other than the frenzied speculation which currently persists.

Crucial differences between Ethereum and Bitcoin

In reality, Bitcoin and Ethereum are quite different.

Ethereum is a computing platform which provides scripting language for smart contracts. This means that there is a blockchain upon which a number of contracts can be written and which automatically execute on the happening of a set series of events.

As with most blockchains, it is open source, which means that anyone minded to do so can use the Ethereum blockchain to write and implement smart contracts, which are simply a series of promises in digital form. A bit like a contract really, just with the word "smart" added at the front.

Ether is the unit of value deployed on the Ethereum blockchain, and consequently shares certain characteristics with Bitcoin. It is a potential store of value and is fungible between persons who perceive it to have a value.

Bitcoin is ubiquitous. It has become mainstream, can be used as a means of payment in a number of different arenas and is part of common parlance.

Technically, there are no limits to the use of Bitcoin. While it settles in a way different to dollars or pounds, it essentially does the same thing - which is not a lot, really. Money exists and it sits in our bank accounts. It may enable us to do things but in itself it does not undertake any activity.

Ethereum - more than just a cryptocurrency

As we are currently seeing, governments are starting to put restrictions on cryptocurrencies, driven not by a desire to see their citizens exchanging any particular kind of asset for another asset, but because their citizens are speculating on something which their governments perceive they do not understand.

Ether is simply a child of Ethereum. Ethereum is actually a huge computing network which enables anybody to build a decentralized application. A business, if it determined that it needed a blockchain developed solution, could employ a programmer to build that on the Ethereum platform.

Ether, while associated with the Ethereum platform, is capable of performing the same function as Bitcoin. Whether or not it does so is simply a factor of the parties to any transaction determining whether or not Ether has any value to them.

So back to the central question, is Ethereum a threat to Bitcoin? Probably not.

While Ether is clearly a competitor to Bitcoin, bearing in mind that the combined market capitalisation of both is way south of the market capitalisation of some of the world's biggest companies, there is room for both. Ether has the advantage of being associated with Ethereum, and Ethereum does what Bitcoin cannot do, and came to be because of the limitations and single function of Bitcoin.

Mainstream businesses are beginning to embrace Ethereum technology with banks and other entities using Ethereum-led solutions for things such as payment services. The biggest threat to Bitcoin remains Bitcoin itself, with the continuing creep of government regulation and the ongoing tag of financial crime driving market behaviours.