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DriveWealth Acquires Institutional Broker Dealer

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Brokerage infrastructure API provider DriveWealth announced this week it acquired Cuttone & Company, a New York-based institutional broker dealer. Terms of the deal were not disclosed.

DriveWealth has purchased Cuttone & Company specifically for its market and regulatory expertise and network of institutional trading partners. The New Jersey-based company will leverage this expertise to offer its own partners access to price discovery on its scalable, configurable, and redundant electronic trading infrastructure.

Ultimately, the acquisition will offer retail investors who trade fractional shares of U.S. equities via DriveWealth’s partners direct access to the point of sale for NYSE securities.

“These added resources, unprecedented transparency, and the ability to trade directly on the NYSE or across all U.S. equity destinations will open up greater opportunities for the retail investors we serve on our platform,” said DriveWealth Founder and CEO Bob Cortright. “Having notional trading technology connected to a flexible brokerage infrastructure allows investors to start small by investing in brands they know and care about. We’re proud to bring this new combination of Cuttone & Company’s institutional knowledge with our retail trading technology to become the most complete brokerage stack available to retail investors today.”

DriveWealth was founded in 2012 by Cortright and his co-founder Julie Coin. The company has raised a total of $100.8 million, including a $56.7 million DriveWealth closed last October.


Photo by Savvas Stavrinos from Pexels

Source: https://finovate.com/drivewealth-acquires-institutional-broker-dealer/

Crowdfunding

Switzerland’s Fintech Sector Continues to Grow but Certain Segments have been Stalling: Report

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Although the Swiss Fintech sector continued to grow last year, a closer examination suggests that certain segments showed signs of stalling or becoming a bit stagnant. It’s one of the main findings of this year’s Fintech research study by the Lucerne University of Applied Sciences and Arts.

Switzerland’s Fintech industry has grown into one of the leading providers of digital tech solutions for the nation’s finance sector. At the end of last year, there were 405 local Fintech firms operating in Switzerland – which is 23 more than the previous year, or an increase of 6% when compared to 2019.

Most of these Fintechs provide solutions for investment management and supporting banking infrastructure. Their business models mainly focus on technology development in the fields of automation, process digitization, and robotics.

Although there’s been steady growth in the Swiss Fintech space, there were also signs last year of the industry beginning to stall.

Thomas Ankenbrand, Head of Program and lecturer for Banking and Finance at the Lucerne University of Applied Sciences and Arts, revealed that “the growth rate has been at its lowest since 2015.”

Other signs that suggest the industry is slowing down include the decreasing median of the Fintech firms’ total market capitalization and the relatively stagnant median number of workers employed at these companies. The number of Swiss Fintech firms’ employees now working abroad is also increasing steadily.

By the end of last year, this group of workers (based overseas) represented over a third of the total workforce belonging to Swiss Fintech firms.

The Fintech hub ranking in the Lucerne UASA study confirms that, on a global level, the conditions for Fintechs are still fairly attractive or favorable in Switzerland.

But when “compared to other leading Fintech ecosystems, the conditions have deteriorated slightly in the past few years,” Ankenbrand claims. Analysis also indicates that the overall quality of the environment has a positive correlation with the growth and size of the Fintech ecosystem.

Ankenbrand argues that “working towards maintaining these conditions is not only important for the Fintech sector, but for the Swiss finance industry as a whole.”

A major portion of the total business volume, whether it’s monetary transactions, lending or investments, continues to be managed or handled by incumbents with just a few well-established Fintech challengers.

Swiss banks have also become a lot more efficient by embracing digitization. Traditional banks in the country are also developing their own Fintech solutions, according to the study.

The study also reveals that modern Fintech solutions are focusing mainly on the B2B market, which includes new products offered by traditional banks. Traditional financial institutions in Switzerland have also increased their assets under management while keeping the costs relatively low.

Thomas Ankerbrand pointed out that “this development is however not mirrored on the earnings side.”

In addition to the existing business models, overall technological progress, changing consumer requirements and new regulatory guidelines, Open Banking has become a major Fintech trend in the country as well.

A survey that included feedback from the Heads of IT working at Swiss banks reveals that there’s considerable developments related to Open Banking to better serve the B2C segment.

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Source: https://www.crowdfundinsider.com/2021/03/172914-switzerlands-fintech-sector-continues-to-grow-but-certain-segments-have-been-stalling-report/

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Crowdfunding

UK Research and Innovation Initiative to Invest £153M in Quantum Tech which will Significantly Impact Financial Services

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The UK government, via the UK Research and Innovation (UKRI), is planning to invest £153 million, in order to create new products and services that are based on recent advancements in quantum technologies.

Quantum tech is expected to have a major impact on the financial services sector.

This is notably part of a larger investment in the United Kingdom’s National Quantum Technologies Program which is set to provide £1 billion worth of investments over a 10-year period.

Large banking institutions, insurance service providers and regulatory agencies are currently assessing the different opportunities and advising their clients on quantum computers for quantitative finance, asset pricing and effective portfolio management.

Precise quantum clocks for accurately timestamping digital transactions to advanced high frequency trading and various quantum security solutions to protect financial data are also being developed.

The Commercializing Quantum Technologies Challenge, via UKRI’s Industrial Strategy Challenge Fund (ISCF), has awarded £90 million across 42 initiatives in order to realize the potential of the latest quantum technologies.

A project led by Rigetti UK in partnership with Standard Chartered Bank, Oxford Instruments, Phasecraft and the University of Edinburgh has received £6.4 million in funding to support the commercialization of quantum computing in the United Kingdom. The 3-year initiative will focus on creating a sophisticated commercial quantum computer – which will be accessible via the Cloud and will develop practical applications in machine learning, materials simulation and finance.

Roger McKinlay, Challenge Director, stated:

“Quantum technologies are expected to have a huge impact on the financial services industry. Banks, insurance providers and regulators are already thinking ahead to the implications this technology will have on businesses, the economy and society. We are looking to fund the best teams of UK companies and research organizations to help them develop their ideas for innovation and commercialization.”

The challenge will be launched via a 3-phased approach, allocating a share of £7 million in funding for conducting feasibility studies, £1 million for germinator initiatives and £47 million for large projects requiring extensive collaboration.

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Source: https://www.crowdfundinsider.com/2021/03/172915-uk-research-and-innovation-initiative-to-invest-153m-in-quantum-tech-which-will-significantly-impact-financial-services/

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Blockchain

Billionaires Now Have 1.9 Trillion More Reasons To Buy Bitcoin

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As part of BeInCrypto’s decentralized finance (DeFi) deep dive series, we’ll take a look at one of the space’s first-movers: Andre Cronje’s Yearn Finance (YFI).

The cryptocurrency and decentralized ledger technology (DLT) space is heating up right now, both in terms of value and development.

The market’s total market capitalization reached $1.7 trillion, last month. Bitcoin (BTC) alone hit $1 trillion market cap. Moreover, the number of cryptocurrency projects now sits at 8,697 according, to data from CoinMarketCap.

Furthermore, a recent analysis by The Block Research revealed that the DeFi space was the market’s fastest-growing area. This is after the Total Value Locked (TVL) in the space tripled this year.

Indeed, the DeFi space’s surge in popularity stems from the impressive development in the space, led in part by Andre Cronje’s Yearn Finance. The committed DeFi developer was also named by DeFi Prime as DeFi Person of the Year 2020.

In this article, BeInCrypto takes a deep dive into Cronje’s flagship project, Yearn Finance. We examine its pioneering fair release launch, delve into its infamous Vaults, and explore the now meme-ified “test in prod” approach to development.

We also have a look at what might be in-store for YFI and the wider DeFi space.

A fair release

Launched on July 17, 2020, YFI was a key proponent of last year’s “Summer of DeFi.” Its platform, developed on the Ethereum (ETH) network, was Cronje’s answer to the loosely tied world of DeFi staking.

At the time, exploring and researching the plethora of staking pools in the space took considerable time and resources. This rendered the space inaccessible for crypto-newcomers.

Cronje’s idea was to make Yearn a hub for all pools in the space, meaning yield farmers, as they’re called, only had to be in one place. Whilst not a completely new idea, Yearn also had an extra trick up its sleeve: the fair release model.

YFI had a maximum supply of just 30,000 tokens. Unlike many other platform native tokens, including BTC, YFI made all of these tokens available at the beginning.

However, the really unique thing with YFI, was that everybody, including Cronje, the other developers, and eager Yearn participants, had an equal chance of receiving a portion. The developers reserved no tokens for themselves.

Indeed, this instantly gave the platform star popularity, with the DeFi community dubbing the approach “The Fair Release Model.” The maximum supply has since expanded to 36,666 tokens, following a community vote to reward developers.

Summer heights

But of course, the initial release and still relatively small supply only did wonders for YFI’s price.

YFI/USDT (Binance) TradingView – Pi

Initially valued at just under $30, in less than two months, YFI soared to a value of $40,000 per token. This put its market capitalization at over $1.3 billion.

Fast forward six months, YFI ranks 58th out of the 8,697 cryptocurrencies, according to its market capitalization. Moreover, the platform currently has just under $310 million in TVL, giving it the 18th spot in the DeFi space, at the time of writing.

Sure, the fair release model is novel with admirable intention and justifiably the cause for the platform’s popularity. But what about the platform itself?

Into the Vaults

Yearn’s platform consists of several elements. The first is an Annual Percentage Yield (APY) table which shows the yearly interest rates available via staking in a number of lending pools across the DeFi space.

Yearn orders this table by APY size in a product called Earn, allowing users to quickly and easily see the best rates. But the platform’s flagship products are the Vaults.

Yearn Vaults are a collection of investment strategies which aim to extract the highest level of income over all of the lending pools linked to the platform. They work by automatically selecting the top Earn pools or via a custom strategy, and investing their users’ funds.

Essentially, the Vaults automate the yield-farming process. Indeed, the products really do simplify the DeFi earning process, reducing the learning curve which historically acted as a barrier to entry.

Accordingly, this is the principal reason why the platform is so popular. In fact, Yearn recently included in an upgrade another product called Zap, which bundles all of the above into just one click.

Whilst the terminology often associated with both Yearn and DeFi might seem complex at times, Yearn has really excelled at the simplification process.

However, despite the enormous achievements in development over the past nine months, Yearn — as is often emphasized by Cronje himself — is still an experiment.

Test in prod

This can be seen in Cronje’s infamous “I test in prod” quote. Essentially, the determined developer is exclaiming that the development of Yearn, and the existing platform are both experiments.

He makes this crystal clear on Twitter stating, “When I build software, I build it for myself. If you do insist on interacting with it, please use caution, there will be bugs.”

This, however, escapes some of the platform’s “investors,” or as he calls them “apes,” who are quick to hurl abuse at the developer following exploits or the discovery of bugs.

Indeed, Cronje recently wrote about his experiences in a Medium piece, which also prompted the aforementioned supply inflation to reward Yearn’s developers.

Whilst these “investors” are likely only in it for the money, it could be argued that testing in production dangerously exposes unwitting crypto-users to risk.

Just last month, a hacker exploited one of Yearn’s vaults for $11 million, with the hacker walking away with $2.8 million. Several other DeFi platforms following Cronje’s approach also saw exploits.

These included SushiSwap (SUSHI), Alpha Finance Labs (ALPHA), and CREAM Finance (CREAM). However, the test of a good experiment, is not perfection in experimentation, but how it adapts to new information.

All of the above-mentioned projects came back from those attacks, and still carry on today.

The future of finance

In fact, Cronje is praised not only for Yearn but for his aid in investigating all of the above exploits mentioned. To that end, popular DeFi-focused publication, DeFi Prime, named Cronje DeFi Person of the Year in 2020.

Moreover, not only do the exploit patches make these platforms stronger, but Cronje and Yearn are both encouraging a new DeFi sub-sector: platform insurance.

For this, Cronje and Yearn Finance will likely continue to lead the DeFi space, both through technological development and the development of new ideas.

In the truest form, Yearn Finance could be the future of finance, just as French oligarch DeFiGod is the “Futur of France.”

Disclaimer

All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.

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Source: https://coingenius.news/billionaires-now-have-1-9-trillion-more-reasons-to-buy-bitcoin/?utm_source=rss&utm_medium=rss&utm_campaign=billionaires-now-have-1-9-trillion-more-reasons-to-buy-bitcoin

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Big Data

Payments: what lies ahead after the digital boom

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Payments: what lies ahead after the digital boom

By Stefan Merz

It has been a year of momentous change for the payments industry. Previously, emerging trends have seen a massive acceleration as a result of the pandemic. Years of transformation transpired in just a few months with rapid shifts in both consumer behaviors and merchant expectations for e-commerce.

For instance, cash usage waned even further this year amongst fears around the pandemic, leading to a coin shortage across the country with many merchants pointing consumers to digital payments if they lack exact change. According to  McKinsey’s 2020 Global Payments Report, by the end of 2020, we can expect a drop of four to five percentage points in the share of global cash transactions.

The pandemic – while undoubtedly awful – has been rocket fuel for digital transformation, providing an opportunity for the payments industry to innovate. This year, for example, online payments via bank transfer have continued to proliferate, while installment schemes have been named as one of the fastest growing online payment methods worldwide.

So, after a year of such rapid transformation, what can we expect to see in 2021? And how will permanently altered consumer behaviors shape online payment preferences?

Installment Payments are Changing Mindsets on Credit

It is safe to say local payment methods, the nontraditional payments such as bank transfers, e-wallets, cash-based digital payments and local credit cards have seen huge growth over the last couple of years. They are now actually the dominant payment methods globally, used in more than 70% of all online transactions. Local payment methods (LPMs) continue to play a key role in accelerating digital adoption, particularly in emerging regions. In China, for example, LPMs generated $43 billion in revenue in 2019.

In 2020, consumers have been more inclined than ever to try different payment methods, in a search for greater convenience and heightened security during national lockdowns. According to Paysafe’s LiT research, 56% of global consumers mentioned that they used a new local payment method in the first month of the pandemic.

The payment method that has taken the world by storm is the interest-free ‘buy now pay later’ (BNPL) concept, with payment providers such as Klarna, Afterpay and Affirm leading the charge. Over this past holiday shopping rush, 44% of US consumers mentioned the availability of buy now, pay later is very important in determining how much they spend with retailers. Over the Black Friday weekend, Afterpay saw a 186% increase in sales, while Klarna processed an astonishing five times more transactions than in the first four years of their operation combined.

Research from Kaleido predicts that BNPL value will reach over 12% of total global e-commerce spend on physical goods by 2025, showcasing the staying power of this trend.

Ongoing furlough measures and job losses have seen consumers face unprecedented financial strain this year, resulting in a reliance on ‘pay later’ schemes over traditional payment methods due to their flexible nature and lack of financial penalties. With the economy not expected to recover to pre-COVID-19 levels for some time, this is a trend we see continuing into 2021. As such, this is certainly a payment method online merchants need to offer, now.

Staying competitive in an increasingly digital age will be harder

It’s no surprise that the figures from 2020 reflect a massive boom for global e-commerce. The ‘quickening’ effect, as coined by McKinsey, describes a 10-year shift in e-commerce experienced in just 90 days. During June 2020, during the height of the strictest lockdowns for many countries, e-commerce sales grew 34% year-on-year – the highest growth rate reported since March 2008. And consumers were not turning to their trusted brands during this critical period. Many shoppers branched out to new retailers.

Disruptions in brand loyalty have created a wealth of opportunities for businesses big and small, pushing them to take their operations online and across borders. Facebook even launched its own shopping feature to enable growing businesses to sell to customers.

E-commerce is now king as US online sales have jumped 37% in Q3 alone, while experts predict Amazon will have received 42 cents of every dollar spent this holiday season. This digital surge will continue to proliferate as shoppers will turn to online channels even after the lockdown restrictions start to lift. In 2021, it won’t be adequate for merchants to only support card transactions online if they want to stand out in a crowded market.

According to PPRO’s own research, 42% of US consumers will abandon their baskets if their preferred payment method is not available at checkout. While recent findings reveal the global average rate of cart abandonment is as high as 75.6% – causing brands to lose up to $18 million a year in revenue. We expect this demand to continue, putting pressure on retailers to expand current payment offerings.

Payments should prepare for hypergrowth

Rather than an evolution, the pandemic has been a revolution. It’s turbocharged digital payments and changed customer expectations and behaviors overnight.

More and more customers are now online, looking for products or services that suit their very specific needs. A shopper might look across borders for what they want: better-quality products, more payment methods accepted, stronger brand loyalty, and more. Merchants could reach untapped markets by offering the right mix of goods, user experience (UX), local payment methods and delivery options.

With over 500 significant local payment methods across the globe, each country will have different payment preferences. To be able to scale up and succeed in the new normal, merchants must work with payment service providers to activate as many payment methods as possible at the checkout page.

2020 has seen a huge change in relation to consumer payment preferences, but 2021 will be all about addressing that change and seizing the opportunities that have emerged. Merchants must get ready now, or else, risk losing out to the competition.

While 2021 will certainly be another challenging year for the economy, the future for local payment methods (and savvy retailers who offer them) will certainly be very bright.

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Source: https://www.fintechnews.org/payments-what-lies-ahead-after-the-digital-boom/

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