Category: Fintech

August 3rd, 2017 by jja_fr

L’influence des banques et acteurs établis se renforce avec la maturation d’un certain nombre de projets innovants, notamment dans le domaine de la Blockchain

Les FinTech désignent communément un ensemble d’initiatives technologiques innovantes qui ont eu lieu, pour l’essentiel au cours des cinq dernières années, dans le domaine financier.

S’inscrivant dans une tendance générale d’automatisation et de rationalisation des métiers de la finance, notamment en matière de gestion de la relation client (BtoC) et de traitement des opérations financières (back office), et de nature à favoriser l’organisation de marchés d’instruments non cotés, l’innovation y est généralement susceptible de survenir à deux niveaux : celui, le cas échéant à service inchangé, des technologies mises en oeuvre, et celui d’une offre de services ou de produits susceptible d’avoir des effets substantiels (disruptifs) sur l’organisation et la structure des marchés.

Par métonymie, FinTech désigne aussi les sociétés, en général des start-up spécialisées dans le développement et/ou la promotion effective du recours à ces technologies.

Le degré de développement des FinTech varie selon les domaines considérés et les initiatives entrepreneuriales, en fonction des services proposés et des technologies employées. Des initiatives sont ainsi notamment identifiées en matière de paiement (et de crypto-monnaies), d’assurance, de planification, de prêt et finance participative (crowdfunding), de la Blockchain, de trading et d’investissement, de traitement et d’analyse des données, et de sécurité.

Des typologies peuvent utilement être établies sur la base des statuts réglementaires des services financiers offerts, qui relèvent en France, selon le cas, de la compétence de l’Autorité des marchés financiers (AMF) et/ou de l’Autorité de contrôle prudentiel et de résolution (ACPR).

À la suite d’une multiplication des projets, les tendances observées au cours de l’année écoulée montrent la maturation d’un certain nombre de projets, en particulier dans le domaine de la Blockchain. Dans ce contexte, différentes initiatives se précisent notamment pour ce qui concerne leurs modalités de financement, techniques et réglementaires.

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L’AMF a présenté le 3 juillet 2017 à la presse sa cartographie des risques 2017, en présence de Benoit de Juvigny, Secrétaire général de l’AMF, Stéphane Gallon, chef économiste à l’AMF. Risques de remontée trop rapide des taux d’intérêts, de réappréciation brutale du prix des actifs, et affaiblissement de la coordination internationale ont été abordés.

Posted in Fintech, Report Tagged with: , ,

May 11th, 2017 by jja_fr

Introduction

We are committed to fostering innovation that advances our objectives. Innovation can arise from diverse sources, such as start-ups, technology providers as well as regulated firms, including large financial institutions. They all have the potential to challenge existing business models, products and methodologies to benefit consumers and markets as a whole.

New technology plays a fundamental and increasingly pivotal role in delivering innovative products and services. These new products and services can improve on those currently available, offering consumers easier access to, and better, financial services. Equally, some products may not be suitable for certain consumers. Our objectives as a regulator mean that we need to strike a balance between supporting innovation and ensuring consumers are adequately protected.

Distributed ledger technology (DLT) is an example of rapidly developing technology which offers exciting potential to support the needs of consumers and the market. DLT may also present new challenges and potential risks. For example, how regulated firms allocate responsibilities for systems shared among them.

We generally take a ‘technology neutral’ approach to regulating financial services and are interested in considering whether there is anything distinctive about DLT which would require us to take a different approach.

We use this Discussion Paper (DP) to start a dialogue on the potential for future development of DLT in the markets we regulate. We are particularly interested to explore where the balance of risk and opportunities may lie in relation to DLT. Following this DP, we look forward to further engagement through public events, supervisory work and the various channels we have to interact with the Fintech industry.

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Posted in Blockchain, Fintech, Report Tagged with: , , ,

April 5th, 2017 by jja_fr

How can blockchain and smart contracts benefit securitization?

We will explore in detail how potential benefits could play out at the different stages of the securitization lifecycle, but for now, here are some common themes to keep in mind:

One version of the truth. Blockchain enables a single, consistent source of information for all participants in the network. In an industry that currently faces inefficiencies around the storage, reconciliation, transfer, and transparency of data across multiple independent entities, this feature could be highly beneficial.

A complete, immutable, and traceable audit trail. From loan origination to primary issuance, servicing, and changes in ownership in the secondary market, blockchain can create a chronological and immutable audit trail of all transactions. With this capability, regulators and auditors could finally get a systemic view of the ownership of the underlying securitized assets. An issue that troubled the industry during the global financial crisis—determining who owned the title to some underlying assets—could be more easily resolved.

Better valuation and price discovery. The transparency facilitated by blockchain could reduce the information asymmetry and network disadvantages that some entities, especially smaller ones, currently face in the securitization industry. The resulting market efficiency could raise the investment appeal of securitized assets and deepen the potential pool of investors.

Speed and certainty. Blockchain, through its disintermediation and simultaneous recording of information across the system, can virtually eliminate time lags in information and payment flows throughout the securitization process, including in the secondary market. This increase in speed and certainty could significantly reduce counterparty risk, release capital, and reduce the return thresholds that investors demand.

Security. Blockchain’s capacity to increase the security of transactions and data, and mitigate fraud could be appealing to the securitization industry, where integrity of data is paramount. Blockchain’s immutable audit trail, for example, could permit every asset (and every transaction involving that asset) to be linked to a particular security, facilitating asset perfection and eliminating the risk of double-pledging assets.

The combined impact of all the above advantages—greater efficiency, speed, transparency, and safety for data and transactions—could lower risks in the securitization market as a whole and lead to greater investor interest. This in turn could improve prices, volume, and spreads. With better and more transparent information, regulatory compliance could also be simplified and market failures could become less likely.

With these general points in mind, we will now take a more detailed look at the specific places where blockchain could impact the securitization process, ranging from loan origination and loan servicing through the structuring, review, and initial sale of the security, to the servicing of the security, ongoing ratings monitoring, and secondary market trading. At each stage, we will look at some inefficiencies in the current process, then explore how blockchain is likely to change how the industry handles certain questions around its core functions and obligations, including data recording and dissemination, transaction execution, receiving and making payments, and regulatory compliance.

We will also look at why, despite the likely advantages, implementing a blockchain in the securitization industry may be challenging. We will conclude with a vision of a possible future state and with ideas about possible next steps.

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November 28th, 2016 by jja_fr

Blockchain R3

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October 31st, 2016 by jja_fr

Blockchain

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blockchain
September 8th, 2016 by jja_fr

Distributed ledger technology (DLT), more commonly called “blockchain”, has captured the imaginations, and wallets, of the financial services ecosystem. DLT provides transaction immutability, which is a key requirement for eliminating the need for an enforcer of trust in the ecosystem. Tamper-proof distributed data enables an environment in which trust is not an issue and allows counterparties to operate with a single version of the truth.

Current state

  • Traditionally, asset and transaction information was stored within physical books to independently reference previous actionsinternally and externally. As technologies advanced, physical books were translated into digital ledgers.
  • Today, every FI maintains its own digital “book of record” repository.
  • As a result, central intermediaries proliferate in the industry, providing unbiased reconciliation services to facilitate transactions between counterparties without requiring them to trust each other. For transactions executed internal to the organization, reconciliation is performed within lines of businesses.

WEF The future of financial infrastructure

DLT transformative potential

  • At its core, DLT is a growing repository of transactions organized in chronological blocks where the technology intrinsically makes changes to previous transactions functionally impossible.
  • DLT has been designed to replicate data among participating nodes in real time, ensuring all parties operate off of a single version of the truth at all times.

Financial services implications

  • Challenges information silos between market participants and eliminates the need for inter-firm reconciliation.
  • Disintermediates central intermediaries and reduces the fear of arbitrage within the ecosystem.
  • Enables audit trailsto be established for assets and transactions with a significant reduction in disputes.

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Posted in Fintech, Strategy, Technology Tagged with: , , , ,

August 30th, 2016 by jja_fr

The credibility of blockchain

The concept of distributed ledger technology — or blockchain as it is commonly called — has taken the financial services sector by storm, with venture capital and investment pouring into technology startups. Debate over blockchain’s promise, as well as its limitations, is ongoing. For every believer who says blockchain is the most revolutionary technology platform to emerge since the internet, there are skeptics who claim it is merely the latest tulip mania.

Nonetheless, a broad consensus is emerging that it represents a real innovation over many of the systems and processes used in financial services and banking today.

Our view of the credibility of blockchain technology is informed by candid discussions with clients, banks, exchanges, central securities depositories and existing market service providers. There has been an influx of attention and initiatives from market participants, including startups and newly formed industry consortia focused on driving technical standards and fostering collaboration.

Unlocking Economic Advantage with Blockchain

While in the United States, the Depository Trust & Clearing Corp. is fielding proposals for a complete replacement of its credit default swap (CDS) settlement and reporting infrastructure, the Australian Stock Exchange is attempting to address changing regulatory requirements with a blockchain-based pilot. Regulators such as the Bank of England and European Securities and Markets Authority (ESMA) have published thoughtful commentary on the feasibility of digital cash and distributed ledger technology. Collectively, the tone of conversations has shifted from “Is this worth exploring?” to “How do we best engage?”

Financial commitments to blockchain are also growing. Investments in blockchain startups to date have reached $300 million, a figure that is growing swiftly. Investments totaled $125 million in 2015, and this has already been surpassed in the first half of this year. Although predominantly venture capital-backed, a handful of companies have attracted significant bank investment. Furthermore, we see growing internal spending by banks, which we estimate totaled $80 million in 2015.

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