Financial services en Fintech

| 9-6-2017 | Peter Schuitmaker |

 

Onlangs las ik het artikel van Derek White, business banker op Finextra.com. Hij maakt melding van de opkomst van IT technologie op het bankwezen. Met name de opkomst van artificiële intelligentie (AI) in ons leven. Fintech is een samentrekking van financial en technology. Deze technology gaat de koers voor de bankwereld beïnvloeden. Althans, dat lijkt zijn boodschap.

 

Personal assistant in de ‘cloud’

Als eerste opstapje naar de toekomst noemt Derek White de personal assistant (PA). Deze is ge-host in de cloud en communiceert via headset en smartphone met een personal data base, ook beveiligd in the cloud. De PA helpt ons gebeurtenissen en data te herinneren. Ons op eventualiteit te wijzen. Een fraaie gedachte.
Derek werkt (in zijn artikel) deze functionaliteit verder uit met betrekking tot ons financiële leven. De PA helpt ons bijvoorbeeld tijdig om van aanbieder te switchen, bijvoorbeeld als abonnementen aflopen of wanneer er zich betere aanbiedingen voordoen. Optimale inkoop van energie, telecom, data, verzekeringen, enzovoorts gaan dan geheel buiten ons medeweten om. Zo gaat een dergelijke cloud PA ons aankoopgedrag beïnvloeden, of zelfs sturen. Deze PA herinnert zich een eerdere latente behoefte. Maakt ons opmerkzaam op nieuwe aantrekkelijke aanbiedingen. En hopelijk meer dan dat. Onze PA voorkomt financiële stress, door het juiste uitgavenpatroon te kiezen. Passend binnen ons –door de PA vastgestelde– behoeftepatroon en passend binnen het –door de PA vastgestelde– privé budget. Al met al mooie visioenen. En vooral bijzonder dat dit opgetekend wordt door een business banker. Uit een –ogenschijnlijk- traditionele business bank. Met een sterke focus op B2B.

Natuurlijk is Fintech hot. De vele honderden startups die inmiddels in de westerse wereld actief zijn, leveren op een of andere manier traditionele bankproducten: financieren, investeren, betalingsverkeer, risk management, compliance, hypotheken, pensioenen. We horen steeds vaker en meer over bitcoins en blockchain.

Holland Fintech

Alleen al in Nederland zijn er ruim 300 startups die zich verenigd hebben in Holland Fintech. Dit zijn bevlogen ondernemers die, niet gehinderd door wetgeving, overhead, organisaties en structuren technologie ontwikkelen voor moderne financiële dienstverlening. Zij zien de traditionele gevestigde orde juist als een knelpunt voor economische groei. En de eigen Fintech branche als aanjager van maatschappelijke vooruitgang. Met technologie als drager en financiële dienstverlening als focus.

Ten slotte

De visioenen van Derek White zijn prachtig. Maar innovatie in de financiële wereld komt vast uit een andere dynamische omgeving.

 

Peter Schuitmaker

Registered Advisor for Business Transfer and Succession

 

Fastned Obligaties – wegens succes verlengd…

| 8-6-2017 | treasuryXL |

In december 2016 hebben we deze vragen al eerder gesteld: Hoe interessant is beleggen in bedrijfsobligaties met een hoge rente? Hoe aantrekkelijk is deze financieringsoptie voor ondernemingen? In ons artikel namen we de obligaties van Fastned als voorbeeld. Het blijkt nu dat deze obligaties toch grote aantrekkingskracht hadden op investeerders.

Opnieuw advertenties Fastned

Tot recentelijk was in advertenties van Fastned het volgende te lezen:

De inschrijving op Fastned obligaties is een groot succes. Binnen een week was er al voor 5 miljoen euro ingetekend door meer dan 400 investeerders. We hebben daarom besloten om de inschrijving door te laten lopen tot de uitgiftedatum, 6 juni, 16:00 uur.
Dit betekent dat u nog … dagen de tijd heeft om in te schrijven op de obligaties en te profiteren van 6% rente per jaar.
Daarnaast is dit een mooie kans om (verder) te investeren in de groei van Fastned en een duurzame wereld.
Samenvattend volgens Fastned:
Rendement uit duurzame infrastructuur,  uitkering per kwartaal, looptijd 5 jaar, deelname al mogelijk vanaf € 1.000, operationele kosten afgedekt tot 2019, beleggen in duurzaamheid en nog meer.

Doel is het groei van netwerk snellaadstations en de uitgifte van de obligaties was dus gisteren.

Hoe zat het ook weer?

treasuryXL recapituleert:
In het Financieele Dagblad kon men op 6 december 2016 een Bartjens commentaar lezen over deze Fastned obligaties: Het principe is simpel: een wankel bedrijf leent geld. De relatief grote kans op wanbetaling willen beleggers gecompenseerd zien met een behoorlijke vergoeding, dat wil zeggen een hoge rente. In de VS worden dit soort emissies ‘junkbonds’ genoemd en ze zijn daar populair, hier is het een kleine markt. Maar toen in december 2016 werd er een onvervalst speculatieve obligatie uitgegeven. En dat was Fastned. Het bedrijf dat een Europees netwerk van snellaadstations voor elektrische auto’s bouwt, leende € 2,5 mln. De lening heeft een looptijd van vijf jaar. De couponrente is 6%. Ter vergelijking: de Nederlandse Staat (superveilig) leent voor vijf jaar tegen 0%, Shell (behoorlijk veilig) leent voor vijf jaar tegen een coupon van 1,25% en Gazprom (Russisch, iets minder veilig) leent in Zwitserse frank voor vijf jaar tegen 2,75%. Wat duidelijk maakt dat de 6% van Fastned behoorlijke risico’s impliceert. Het bedrijf is klein, jong en verlieslatend. Het heeft geen reserves en een negatief eigen vermogen, zo blijkt uit het prospectus. Maar goed, ‘de cost gaet voor de baet uyt’ en juist nu moet Fastned investeren.’
En nu anno 2017 blijkt het toch een groot succes.

Expert Douwe Dijkstra was in onze eerdere artikel heel duidelijk:
Voor beleggen in Fastned obligaties geldt hetzelfde als voor elke andere investering. Het rendement is omgekeerd evenredig aan het risico. Het lijkt mij enkel aantrekkelijk voor beleggers die wel een gokje durven te wagen met een te overziene inzet die ze wel kunnen missen. Of voor beleggers met een ideologische wereldvisie. Vorige week (in 2016 red.) las ik in een ander artikel nog dat die investeerders met een loep gezocht moeten worden.

Pieter de Kiewit vulde aan: 
Investeren in start-ups gaat mijns inziens gepaard met een andere investeringsanalyse dan in volwassen ondernemingen. Daarbij is de ‘groene factor’ voor vele beleggers reden anders naar een onderneming te kijken. Persoonlijk vraag ik me af of een avontuurlijke investeerder in dit geval niet beter een equity investering kan doen. Vanuit Fastned perspectief kan ik, met hun vertrouwen in hun business case, begrijpen dat ze liever obligaties uitgeven dan nieuwe aandelen..

En nu toch een succes…

Als wij FastNed mogen geloven zijn er overduidelijk genoeg investeerders geweest, die een gokje kunnen en willen wagen of duidelijk op zoek zijn naar duurzame beleggingen. De obligaties waren blijkbaar ‘niet aan te slepen’ en de uitgifte is zelfs verlengd tot de uitgiftedatum.
Wat zeker ook speelt is dat veel investeerders op zoek zijn naar beleggingsmogelijkheden, omdat er weinig rendabele (en veiligere) alternatieven zijn. En dan is flinke risico’s nemen blijkbaar toch interessanter dan bijna niets verdienen.

Bron:  Fastned 

Annette Gillhart – Community Manager treasuryXL

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What is the Blockchain and why you should care

| 7-6-2017 | Carlo de Meijer | treasuryXL |

You might visit this site, being a treasury professional with years of experience in the field. However you could also be a student or a businessman wanting to know more details on the subject, or a reader in general, eager to learn something new. The ‘Treasury for non-treasurers’ series is for readers who want to understand what treasury is all about. Our expert Carlo de Meijer is a blockchain specialist and tells us more about this new technology.

Blockchain

Blockchain is an immutable digital database or ‘distributed ledger’ that allows multiple parties to  transfer and store information (records) securely and reliably, shared via a peer-to-peer network of computers. There are public (or permissionless) blockchains where everybody is free to participate and private (or permissioned) distributed ledgers where only selected parties may enter the network.
The ledger is maintained collectively by all participants in the blockchain system based on a set of generally agreed and strictly applied rules.  It enables digital transactions to be validated quickly and to be securely maintained through cryptography, computational power and network users without the need  for a trusted third party.
In addition to transactions, blockchain has also the ability to run so-called smart contracts, to be coded and connected in such a way that the contract automatically executes an event if certain preconditions are met. Smart contracts could be used in real estate transactions to transfer title and release escrow when ownership is confirmed. Peer-to-peer insurance is potentially another use case.

Main characteristics

What are the main characteristics of a blockchain?
Blockchain has special qualities that makes it better than traditional databases: trusted, decentralised, shared, secure and automated.
·         Trusted: the distributed nature of the network requires computers servers to reach consensus, which allows for transactions to occur between unknown parties in a trusted way.
·         Decentralised: Blockchain allows to trade directly with any counterparty in a secure, fast and cost effective way, without making use of a central authority or third party intermediaries (middlemen) to approve transactions and set rules.
·         Shared: servers or nodes, maintain the entries (known as blocks) and every node sees the transaction data stored in the blocks when created. Each counterparty has its own copy of the same ledger. It allows anyone to obtain an accurate view.
·         Secure: the database is built to be immutable and irreversible, which means that there is inherent security. Posts to the ledger cannot be revised or tampered with. The information is tamper-proof and visible for all parties involved.
·         Automated: Software is used to generate and record information about the transaction (when it took place, and the chronological order of all transactions). This results in a chain of information, stored in a so-called block; hence the name blockchain.

Use cases

What are use cases for blockchain?
As the blockchain can be used to store and send anything of value, applications may be numerous. These do not limit to financial transactions such as payments, remittances, supply chain finance, securities settlement, stock trading etc. The potential may well be beyond the financial sector ranging from securing  intellectual property, health records, land registry and ownership records, marriage contracts, identity management, voting records, vehicle registries, tax collection etc.
What are the benefits of blockchain?

Conclusion

There are many benefits to be gained from using blockchain technology. Immutability, coupled with its immediacy, assured provenance  and transparency are core blockchain attributes. Removing the middlemen for transaction increases the speed and eliminates transaction fees for consumers and institutions alike. Other business benefits are also relatively easy to imagine, such as in facilitating identity authentication, privacy, access management, regulatory compliance.

 

Carlo de Meijer

Economist and researcher

 

Boek release: Discounted Cashflowmethode – Achtergronden en aandachtspunten

| 6-6-2017 | Peter Schuitmaker | treasuryXL |

 

Medio juni verschijnt een nieuw boek van onze expert Peter Schuitmaker met de titel ‘Discounted Cashflowmethode’. Dit is zijn tweede boek. Eerder publiceerde hij ‘Mijn bedrijf verkopen ‘. Wij hebben hem verzocht om ons alvast meer te vertellen over dit nieuwe boek en de daarin beschreven methode, die van belang is bij het verkoop of de overdracht van een bedrijf. 

DFC methode

Bedrijfswaardering is een veel voorkomend vraagstuk. Denk aan situaties van bedrijfsoverdracht, uitkoop van een aandeelhouder, management buyout, bedrijfsopvolging binnen de familie, boedelscheiding, enzovoorts. In de literatuur vinden we een grote verscheidenheid aan methoden. De DCF methode geldt echter als de meest zuivere benadering.
Hierbij worden toekomstige kasstromen op een of andere manier bepaald en deze worden op een of andere manier contant gemaakt. Maar: hoe zit dat nu met die ‘op een of andere manier’?

Het boek

In de praktijk van bedrijfswaardering worden veel fouten gemaakt. Vaak worden de technieken onjuist of onvolledig toegepast. Of verkeerde uitgangspunten gehanteerd. Dat roept onnodig vragen op over de juistheid van de waarderingsuitkomst.
Dit boek behandelt de achtergronden en aandachtspunten van de DCF methode. Hierbij komen diverse varianten aan bod, zoals de WACC methode, de Adjusted Present Value APV methode en de Cash To Equity methode. De theorie wordt behandeld aan de hand van een praktische casuspositie.
Mijn  boek biedt grip op de reken technische aspecten. Maar belangrijker, de keuzes en overwegingen bij het toepassen dan de DCF methode. Het helpt de lezer om een DCF waardeanalyse te doen. Maar ook kunnen zo waarderingsrapporten van derden kritisch tegen het licht worden gehouden. Om zo de juiste kanttekeningen te kunnen plaatsen.

Bestelinformatie

Auteur: Peter Schuitmaker
Uitgever: BBO&F Breda
ISBN:  978-90-826156-2-3
Prijs: €19,50 incl. BTW
Paginas: 92

Verschijnt: medio juni 2017
Te bestellen via www.bboenf.nl/boeken

 

Peter Schuitmaker

Registered Advisor for Business Transfer and Succession

 

 

 

Meer artikelen van deze auteur:

Pre exit strategie wint aan populariteit

Het belang van cash management in de aanloop naar bedrijfsoverdracht

 

Breakfast Session: Cash Flow Forecasting

| 2-6-2017 | Olivier Werlingshoff | Proferus BV | Sponsored content |

 

Proferus helps companies enhance their forecasting processes to fully take advantage of new opportunities and to get in control over their cash flows. Proferus will host their first breakfast session of a series dedicated to CFOs, Senior Cash Managers and Treasures, this time focusing on Cash Flow Forecasting.

Proferus

Proferus has expertise developing tailored solutions to improve cash management and treasury processes and has a strong partnership network to help companies introduce new tools and techniques to achieve their goals.

Breakfast Session

On June 20th, Proferus will host the first breakfast session of a series dedicated to CFOs, Senior Cash Managers and Treasures, this time focusing on Cash Flow Forecasting.

Content

In this session Proferus we will focus on sharing best practices and a round table about the following topics:

  • Cash Forecasting strategies Direct vs Indirect approach
  • Round table The Need for Cash Flow Forecasting
  • Cashforce Cash forecasting 2.0

Joining us in this breakfast session, Nicolas Christiaen Founder of CashForce will give real life examples of how CashForce is deployed to help companies efficiently deploy cash force forecasting for treasury management.

Date & Time

Tue 20 June 2017, 08:30 h  – 10:00 h
Add to Calendar

Location

Proferus
87 De Entree
1101 BH Amsterdam-Zuidoost
View 

Proferus would be pleased to welcome you.
If you want to register for the event please click on this link.

 

Blockchain hyperledger Project: Collaboration pays off

| 1-6-2017 | Carlo de Meijer |

Recently, I wrote that smaller blockchain consortia are needed. See my blog: Towards smaller and more focused blockchain consortia in  27 February 2017. The Hyperledger Project however may be the exception.

Umbrella

Things look quite good for the Hyperledger Project, described as being an “umbrella” for the developer communities to work on creating open source blockchain and related technologies. The Project receives even more interest from different organizations and industries than ever before since the start of this year. Their collaborative effort seems also to be paying off as the Hyperledger Project recently announced the upcoming release of its first production-ready blockchain: Fabric. And Hyperledger feels “there are still plenty of use cases waiting to be explored”.

The Hyperledger Project

Hyperledger Project is a global collaborative cross-industry effort created to leverage the emerging blockchain and distributed ledger technology. The Hyperledger project, that announced its first members in February 2016, has grown to more than 120, making it the largest blockchain consortium in the world today. These span various industries including finance, banking, technology, manufacturing, healthcare, and the Internet of Things, among several others, with big names such as IBM, Cisco, Intel, JP Morgan, Deutsche Bank, Wells Fargo, The London Stock Exchange and Accenture. Its latest members reflect all of these different areas as well, indicating the future for blockchain looks even more viable than ever before.
Hyperledger aims to enable its member organizations to build robust, industry-specific applications, platforms and hardware systems based on blockchain technology to support their individual business transactions by creating an enterprise grade, open source distributed ledger framework and code base. The goal is to advance blockchain technology’s use in business by developing both a cross-industry open standard and an open-source development library that would allow businesses to build custom distributed ledger solutions.

New Members

The Hyperledger Project continued its strong momentum in 2017. Early March Hyperledger announced that eleven new members have joined the project. The latest members include: Bank of England, Bitmark, China Merchants Bank, Federal Reserve Bank of Boston, Initiative for CryptoCurrencies and Contracts (IC3), Kaiser Permanente, Kubique S.p.A., MadHive, Monax, OSCRE and RadarWin Cyber Technology. Hyperledger also announced American Express and Daimler AG as Premier members earlier this year.
“Growth and interest in Hyperledger remain high in 2017. We’re now at 122 members and seeing even more diverse organizations across industry sectors invest their energy and resources in understanding how blockchain technology can strengthen their own business processes. This new set of members’ combined backgrounds and experiences will be invaluable to the community, as we strive to increase production deployments through this year,” Brian Behlendorf, Executive Director of Hyperledger, stated.

Central banks

Interesting is that now also The Bank of England and the Federal Reserve Bank of Boston are among the new members of the Hyperledger blockchain initiative. They are the first institutions of their kind to become part of Hyperledger, underlining the big interest of these institutions in the new technology. The Bank of England has already pursued a range of applications, including the potential issuance of a digital currency.

Working Group China

The Hyperledger Project, has now also set up a working group in China, mirroring the strong interest in the country. Hyperledger revealed that over 25% of Hyperledger members are from mainland China.
As a result, Hyperledger announced the Technical Working Group China (TWG China) to “help bridge and foster a working relationship between the global Hyperledger community with local technical teams in China”. The TWG China aims to facilitate interactions between Hyperledger members around the world and contributors and technical users in mainland China as well as other regional countries including Taiwan and Hong Kong. The Working Group is also tasked to grow the Hyperledger developer community in China by encouraging technical contributions to the project. TWG China will host and organize meetups, hackathons, training sessions and other community efforts to help push blockchain education, research and development.

Hyperledger Fabric

After the Technical Steering Committee (TSC) of the Hyperledger Project announced the promotion of its “Fabric” blockchain project to an active phase, early March, its first production-ready distributed ledger code base, was released at the end of last month.
“Hyperledger’s TSC agreed to grant the project team’s request to advance the Fabric’s status from Incubation to Active. As a reminder, we see Hyperledger as an “umbrella” for software developer communities building open-source blockchain and related technologies. Fabric falls under that umbrella and is the first of the five Incubator projects to graduate.”

Hyperledger Fabric is thereby the first project to graduate incubation to production-ready status. It was originally proposed by Digital Asset Holdings (DAH) and IBM as a result of the first hackathon during which a merge between the IBM’s proposal and DAH’s proposal was started. A group of developers from 20 different member companies has been instrumental in making the Hyperledger Fabric a reality.
“In the year since the project entered incubation, the diversity of contributors on Fabric-related projects has grown from nearly no diversity of contributors to 45 percent of the contributors – representing individual contributors or developers working for one of nineteen other companies, be they exchanges, banks, large ISVs or start-ups.” Behlendorf

The goal of Hyperledger Fabric is to supplement large-scale commercial operations of companies with a robust network. It is designed to enable confidentiality, scalability and security in business environments through a modular architecture. It allows components, such as consensus and membership services, to be plug-and-play. Fabric, will be utilized as the base protocol and platform for its member banks and companies looking to use blockchain technology in building both decentralized and private applications.

Various industry leaders and large corporations have expressed their interest to implement Hyperledger Fabric once the codebase is deployed and released. Community members including the London Stock Exchange, DTCC, and Fujitsu, said “they will allocate their resources in maximizing the potential of Hyperledger Fabric by showcasing its use cases in a wide range of applications”.

Loyyal Platform as an example

IBM Blockchain partner Loyyal became the earliest tester of Fabric and joined the Hyperledger Project soon after. They have built a handful of prototypes on Fabric, from the first release of Marbles to the most recent Fabric Composer release. And now they are building out an enterprise-grade loyalty platform utilizing Fabric and its newest features. Loyyal is thereby using blockchain and smart contract technology to reduce loyalty program operation costs through efficiencies and increase revenues through targeting capabilities. The Loyyal platform, built on blockchain, is transforming the loyalty and rewards industry by offering interoperability, multi-branded coalitions, superior liability management and dynamic issuance and redemption options.

 Other Hyperledger Projects

The Hyperledger Project has a special procedure to initiate blockchain projects. Any community member, contributor or partner company can propose blockchain projects or ideas to the Hyperledger Project and once approved, the development for the project will be pursued shortly after that. For Hyperledger projects like the Fabric to be deployed and introduced to the public, the foundation’s Technical Steering Committee (TSC) must unanimously agree that the codebase is production ready. The TSC thereby looks into the technical viability of the code, as well as its adaptability, flexibility, security and functionality to ensure that large-scale service providers will be able to utilize the blockchain technology without any boundaries.

Next to the Hyperledger Fabric, Hyperledger Project nowadays hosts multiple blockchain technologies. Hyperledger’s incubated projects include names like Blockchain Explorer, Cello, Iroha and Sawtooth Lake.

  • Blockchain Explorer

Hyperledger Blockchain Explorer is a “project in Incubation” that was proposed by IBM, Intel and DTCC to create a user-friendly web application for Hyperledger to view/query blocks, transactions and associated data, network information (such as name, status, list of nodes), chain codes/transaction families (view/invoke/deploy/query) and any other relevant information stored in the ledger.

  • Cello

A second project is Hyperledger Cello. This is a toolkit for deploying a Blockchain-as-a-Service, that reduces the effort required for creating, managing, and terminating blockchains. Hyperledger Cello aims to bring the on-demand “as-a-service” deployment model to the blockchain ecosystem, to provide a multi-tenant chain service efficiently and automatically, on top of various infrastructure, e.g., baremetal, virtual machine and more container platforms.

  • Iroha

Hyperledger Iroha is also a “project in incubation” that was proposed by Japan’s Soramitsu, Hitachi, NTT Data, and Colu. Hyperledger Iroha is a distributed ledger project that is designed to be simple and easy to incorporate into infrastructural projects requiring distributed ledger technology.

  • Sawtooth Lake

Hyperledger Sawtooth Lake is a modular blockchain suite. It supports both permissioned and permissionless deployments. Sawtooth Lake includes a novel consensus algorithm, Proof of Elapsed Time (PoET), targeting large distributed validator populations with minimal resource consumption. Transaction business logic is decoupled from the consensus layer into so-called transaction families that “allow for restricted or unfettered semantics”. Hyperledger Sawtooth Lake is contained in a single repository.

Hyperledger Project appears more promising

“Success of ‘clubs’ or consortia depends on the set up and governance, the stated aim, and also on the degree of alignment of interest of member organizations”. ”Models such as the open-source collaborative Hyperledger effort ultimately appears more promising when the aim is mainstream, commercial adoption”.Milan Salaba, partner at Deloitte

 

Carlo de Meijer

Economist and researcher

 

From Fintech to Regtech… from potentially disruptive to leaner compliance opportunities

| 31-5-2017 | François de Witte |

On 18/5/2017, I attended a seminar covering the topic “From Fintech to Regtech… from potentially disruptive to leaner compliance opportunities” organized by The Finance Club of Brussels, the Free University of Brussels (ULB), the Solvay Finance Society and Thomson Reuters.

Introduction

Fintech describes a wide range of innovation in financial technology, going from payment systems to lending and trading platforms.
Fintechs are seen in many cases as potential disruptors of the traditional intermediation of heavily regulated banks and other financial institutions See also my articles on PSD2 further down.
However Fintechs can also be enablers, helping banks and financial institutions to streamline their regulatory reporting and compliance, or help the disruptors in coping more easily with compliance in the future.

Setting the scene

Fintechs are playing an increasing role. The investments in Fintechs exceeded EUR 25 billion in 2016, and they bring a real digital revolution. Fintechs are perceived to foster the Digital Revolution, but equally to increase the digital divide in our society between the skilled and/or wealthy and those who are not.

Regulatory compliance is time-consuming and expensive for both financial institutions and regulators. The volume of information that parties must monitor and evaluate is enormous. The rules are often complex and difficult to understand and apply. There is a lot of data to be analyzed. Much of the process remains highly labor-intensive, or still depends heavily on manual inputs.

The Regtechs can be considered as an outgrowth of Fintec. Regtech use digital technologies— including big data analytics, cloud computing, robotics, behavioral analysis, blockchain technology and machine learning to facilitate regulatory compliance. Amongst  other things, Regtech applications automate risk management and compliance processes, enable companies to stay aware of regulatory changes around the world, facilitate regulatory reporting and support strategic planning.

In recent years banks have seen opportunities to ask Fintechs to solve their large regulation and compliance issues. They can change the paradigm of banks from heavy IT releases to agile sprints, from integration to standardizing protocols, from static functions to workflows.

Hence financial institutions are more willing to consider using Fintechs for getting more efficiency. During the seminar, somebody of the panel mentioned: “Collaboration is the best innovation”. Banks can also help Fintechs thanks to their experience in managing large databases, managing risks and providing the required critical mass.

We have seen some applications recently in areas such as the KYC (Know Your Customer) domain.

Regtech – some other considerations

However, as mentioned during the seminar by Antonio Garcia Del Riego, Head of EU Corporate Affairs at Banco Santander, in Europe there remain obstacles in using Fintechs. The Bank Regulators in Europe expect the banks to deduct the goodwill from the core capital of the banks. This implies that software investments cannot be capitalized and need to be written off immediately in the P&L. A second challenge is the ability to attract digital talent, given the fact that the regulators limit the way in which the remuneration can be paid, whilst startups can be very creative here.
For the regulators, there also remain challenges. Once banks will have automated their reporting, the regulators will have to follow. They also will have to attract digital talent, to treat all these data in an automated way. If they do not succeed in this, they might challenge the use of Regtechs, and this is not what we want.

Regtechs can potentially offer similar benefits to regulators as they do to financial institutions. We recently observed that some (quite few) Regtech providers have emerged to serve the significant needs of regulators. There have seen recently some examples in Fintechs bringing behavioral models to the regulators, or new cognitive technology or the use of Blockchain technology (smart contracts), to trigger automatic alerts for the regulators when the banks exceed some thresholds.

Some regulators are taking initiatives to foster innovation. In 2016, the FCA (US) created its “regulatory sandbox,” a space where financial services companies are encouraged to test new products without regulatory consequences. Recently the Australian Securities and Investment Commission also created its regulatory sandbox, suggested to establish a new regtech liaison group, comprising industry, technology firms, academics, consultancies, regulators and consumer bodies, and announced that it would host a Regtech hackathon later in 2017.

Other countries have also taken steps to support Fintech and Regtech innovation. The Monetary Authority of Singapore is in the process of developing a regulatory sandbox. We might expect other regulators to also take similar initiatives.

Conclusion

Thanks to their digital technology, Regtechs enable banks and other financial institutions to reduce the burden of compliance. However some steps need to be taken to create a level playing field and some topics will have to be clarified.
One can ask oneself the question how far these innovations can become game changers, awakenings for the banks, or even force them to more transparency and predictability towards regulators.

 

François de Witte – Founder & Senior Consultant at FDW Consult

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More articles on this subject:

PSD 2: A lot of opportunities but also big challenges (Part I)

PSD 2 : The implementation of PSD 2: A lot of opportunities but also big challenges (Part II)

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Nieuwe spelregels voor valutahandelaren

| 30-5-2017 | Erna Erkens | treasuryXL |

Wij hebben onze valuta-expert Erna Erkens gevraagd om te reageren op een artikel in Het Financieele Dagblad over de nieuwe gedragscode voor valutahandelaren. Zij geeft een reactie in de voor haar zo typische manier zonder een blad voor de mond te nemen.

Vrijwillige gedragscode

Ik schaam me inderdaad dat dit nodig is maar ik schaam me er niet voor dat ik 35 jaar als valutahandelaar met veel passie gewerkt heb. Gedeeltelijk voor rekening en risico van de bank, maar meer als sparringpartner van klanten. Zoals ik dit nu nog ben. De genoemde gedragscode is een vrijwillige en ik denk niet dat deze snel invloed zal hebben. Eigenlijk is het zoiets als de eed die bankiers moeten afleggen.

Mindset

Het moet een begin zijn van een mindset verandering. Maar als we nu kijken dat banken teveel boeterente rekenen bij de oversluiting van hypotheken, dan blijkt dat bij alles wat niet transparant is voor klanten de mindset ‘klant centraal’ even wordt vergeten. Dit moet veranderen. Er moet een andere motivatie komen om dingen te doen en vooral om dingen te laten. Dus geen focus meer op….. aandeelhouderswaarde. Hoge budgetten die gekoppeld zijn aan extra salaris in de vorm van bonussen. Maar, dit moet komen van bovenaf. Dus moeten het bestuur en de commissarissen het goede voorbeeld geven. Zij bepalen de richting van de bank. Mensen zijn hebberig en dit gedrag wordt nog steeds gestimuleerd. Maar niets doen is ook niet goed. Dus het is een zeer bescheiden begin.

Taak voor het bestuur

Dit begin moet samengaan met de besturing van de banken (of bedrijven). Besturen moeten budgetten vaststellen en bonussen uitdelen als collega’s eerst elkaar en dan klanten helpen. Het bestuur moet beginnen om te zorgen voor een veilige arbeidsomgeving waar wordt aangeven dat werkzaamheden zullen/ kunnen veranderen, maar dat er niemand ontslagen zal worden.  Dat managers instaan voor hun afdeling (mensen) en niet aan de kant van hun bazen uit angst. Zorgen dat de afdeling een goedlopende machine is met als centrum een gezamenlijk belang en geen individueel belang. Verzet tegen kennis is macht en politiek gedrag. Samen staan we voor onze club en we zorgen voor elkaar. Dat staat bovenaan. Het klinkt misschien soft, maar dat is het niet. Als mensen zich veilig voelen geven ze bloed zweet en tranen en heb je weinig ziekteverzuim en voelt iedereen zich goed. Mensen werken harder en zo krijg je vanzelf meer en beter resultaat en veel loyaliteit voor elkaar en het bedrijf. Mensen zijn dan trots op waar ze werken. Als er angst is of onveiligheid dan werken mensen voor hun geld en van 9 tot 5 met geen of weinig loyaliteit.
Zonder politiek gedrag en als mensen eerst voor elkaar zorgen en mensen voelen zich veilig gaan ze automatisch voor de klanten zorgen. Verkopen is transfer of trust. En dit begint in de top van de organisatie.

Mening

Dus wat vind ik ervan? Bestuurders van valutahandelaren: Schaam jullie dat jullie de omgeving maken waarin de menselijke behoefte van hebberigheid belangrijker wordt dan collega’s en klanten.  Jullie moeten beginnen met het geven van het goede voorbeeld. Laat dit een begin zijn, maar vooral bij de bestuurders. Ik heb altijd discussie gehad over dat ik teveel op de stoel van de klant ging zitten. Ik ben daar tot op de dag van vandaag trots op. Dat is wie ik ben. En zo zal ik altijd zijn.  Dat heet empathie en dat geeft vertrouwen. ‘Practice what you preach’ niet alleen op papier in missie en visie maar in gedrag. Altijd! Eventueel tijdelijk ten koste van winst nooit van mensen. Dan komt het met de aandeelhouders ook goed.

 

Erna Erkens

 

Erna Erkens

Owner at Erna Erkens Valuta Advies (EEVA)

 

 

 

Andere artikelen van deze auteur:

Valuta ontwikkelingen en rente – Verwachtingen voor 2017

Valutabewegingen van Euro, Britse Pond en US Dollar: Altijd reuring op de markten

 

Mergers & Acquisitions: The 26 process steps for a corporate treasurer

| 29-5-2017 | Theo Paardekooper |

The main task of a treasurer is linked to cash management and short term funding and investments. This is the common practice in the Dutch corporate market, but this is by far not the right view on treasurer’s tasks and responsibilities. In the UK and USA the treasury function is more based on a position close to the CFO, being responsible for the corporate financial strategy and being an advisor for the financial framework of a company. A treasurer is more than a operational position in the company.
One of the topics on the agenda of the treasurer is the merger and or acquisition strategy of the company. This blog gives you a short guidance in the 26 steps in selling (or buying) a company.

26 process steps

The treasurer will join a team of experts to execute this process.

Step 1. Market research. This research will give a clear view on the market to collect sufficient information for the management to make decisions during this process. Mostly a request for information is launched to candidate advisors that will be used in this sales process. These advisors will give a snap shot on the transactions containing information that is used in the Steps 2, 3, 4 and 5.

Step 2. Track record. Investigate the track record of the advisors involved in this process.

Step 3. Valuation of the company compared to its peers. Valuation can be based on Discounted Cash flow, EBITDA-multiples or Net asset Value.

Step 4. Prepare a Long List of possible buyers (or targets). This list can contain strategic buyers (competitors or companies in the same value chain) and financial buyers (private equity and hedge funds).

Step 5. Negotiate a fee structure for the mandate holders of the transaction, the investment banker, legal and tax advisor.

Step 6. Contact program prepared for the parties on the Long List on an anonymized basis. The name of the selling company is not (yet) mentioned in any contact with parties on the Long List.

Step 7. After establishing the first contacts in the markets a Short List will be prepared containing up to 15 possible candidates

Step 8. Preparing a teaser and a non-disclosure agreement. (NDA)

Step 9. An investment memorandum will be submitted to potential buyers after accepting an NDA.

Step 10. A process letter will be distributed containing the time frame and schedule for the next steps in the buying (or sales) process.

Step 11. Non-binding offer launched by the buyer including a data room request. This non binding offer contains at least: – a price and/or pricing mechanism, – information about the buyer and its representatives, – specification of the deal (buying in cash, shares, earn-out, vendor loan etc.)  and other requests for information that are required to launch a binding offer

Step 12. The bidder will arrange a bank financing agreement or term sheet.

Step 13. Assessment of the bids by the seller. To a maximum of 5 possible candidates will be assessed.

Step 14. Send an invitation to organize a due diligence. This due diligence will be related to the domains of legal, fiscal, financial, Human Resources, intellectual property, environmental and commercial items. A data room will be available for the potential buyers. Management of the selling company and management of the buying company will give management presentations. Also site visits can be part of this process. The due diligence reports will show the risk, the impact of these risks and the possible actions to mitigate this type of risk.

Step 15. Golden parachutes. Offer to key managers in the target company who probably will not “survive” after the transaction but who will be important in de selection process.

Step 16a. Launch of a binding offer including reservation to final approval by the banks and  shareholders of the buyer.

Step 16 b. Presenting term sheet of banks showing the financing capabilities of the buyer to close the deal.

Step 17. Start the approval/advise process to inform formal regulators and the employee’s council of buyer and seller.

Step 18. The seller will send a term sheet/heads of terms to the final preferred bidder (or 2 bidders)

Step 19. The seller gives exclusivity rights to one or two preferred bidders for a period of 3-4 weeks to negotiate a Sale Purchase Agreement (SPA) or an Asset Purchase Agreement (APA).

Step 20. Negotiation of SPA or APA containing:
Price and pricing mechanism about corrections on working capital, debt and cash position and conditions precedent.
Representations (Reps). A declaration of the seller about all the information submitted to the buyer. This information can’t give any reason for discussion or claim after closing.
Warranties, valid for a defined period containing a defined amount to cover certain risks

Step 21. Signing

Step 22. Closing. Transfer of shares from seller to buyer

Step 23. Settlement of share price payment after pre defined calculation of the price as defined in the pricing mechanism.

Step 24. Placing of funds on an escrow account, established to cover the warranties given buy the seller.

Step 25. Closing of accounts that were used for settlement. In the Netherlands a notary public is used in the settlement procedure, but this is not the process in other countries.

Step 26. 18 months after closing. Release of the escrow funds to the seller.

These 26 steps are a framework, but some steps can be merged in one process step. The position of the treasurer in this process is linked to his experience and his position in the management of the company.

 

Theo Paardekoper 

Independent treasury specialist

 

The changing training requirements of banks

| 26-5-2017 | Michiel van den Broek | treasuryXL |

 

Some time ago Treasurer Search published an article of our expert Michiel van den Broek. We believe that the topic of changing training requirements is still relevant – for banks and maybe even in a broader context.
Michiel van den Broek writes: Needless to say that the changing processes and services at banks are driven by the rapid information technology developments. This shift also impacted number and composition of bank staff.

Training

During years of training bank staff, I experience a growing demand for financial basic knowledge, for example:

  • What are core activities of banks and how do these generate different types of income.
  • What are the characteristics of various financial products such as equities, forwards and interest rate swaps.
  • How do I calculate the settlement amount of a financial transaction.
  • What determines the value of a bond.
  • What risks do banks run and how to manage risk.
  • How is the processing of financial transactions structured.

Sufficient financial basic knowledge contributes to better communication and understanding that enhances development & implementation of IT projects. Another important advantage is the lower operational risk: fewer errors, faster identification and problem solving due to better awareness and understanding.

Training online

At the same time I experience lower popularity of traditional training, such as self-study or classroom programs. There is more demand for interactive and easily accessible training via live online classrooms that that can offer next possible advantages:

  • More flexible scheduling.
  • Missed lessons can be viewed (all classes are recorded).
  • Easy access: no need for a training location.
  • Highly interactive.
  • Lower costs.
  • Higher frequency, more participants.

The improved software and increased internet speed reinforce the trend towards live online classrooms.

The changing training requirements at banks is therefore both content and form. There is more demand for financial basic knowledge through online facilities.

 

 

Michiel van den Broek

Owner of Hecht Consult