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Cobalt uses Blockchain tech to process FX trades

It was around this time last year when I first started looking into blockchain technology and its capabilities. Even though blockchain technology was initially developed to accommodate Bitcoin transactions, my personal interest has been much more in its potential to act as “shared ledgers” for a wide variety of transactions or ‘contracts’ (see Fig. 1-2 below):

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Fig. 1 – High level outline of smart contracts via shared ledgers – Taken from: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/492972/gs-16-1-distributed-ledger-technology.pdf

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Fig. 2 – High level outline of distributed ledger technology – Taken from: http://www.thegeniusworks.com/2016/02/blockchain-from-geeky-bitcoin-technology-to-a-revolution-in-everyday-processes/

In the past year, I’ve seen a lot of initiatives and companies pop up in the shared ledger space. I’ve looked at the likes of Abra, Ripple and R3. London based Fintech startup Cobalt is another promising player in the shared ledger arena. Andy Coyne, Cobalt’s Co-Founder and CEO, explains the problems that Cobalt is looking to solve:

“The speed at which trades are executed between participants across every corner of the globe has altered on a scale that previously seemed unimaginable, while competitiveness has increased and costs related to market access and execution have shrunk.

In contrast with execution technology, associated post-trade infrastructure has failed to keep pace. Legacy systems and practises being used to support these processes have changed little since their inception; they are now so inefficient and unfit for purpose that they introduce risk and unnecessary cost, having a serious impact on trading institutions’ profitability. This comes at a time when there is a move away from revenue to a real focus on true profitability.

The root cause is a glaring mismatch, where back office processes that evolved to support profitable voice and proprietary trading of 25 years ago are failing to support high volume, low margin electronic trading.

This is exemplified by the huge degree of unnecessary replication. A single transaction executed in today’s trading environment creates multiple records for buyer, seller, broker, clearer and third parties, introducing inconsistencies throughout lifecycle events such as affirmation, netting, allocations and confirmation, through to trade finality and nostro reconciliation. This hugely increases the probability of creating discrepancies, caused by multiple system hand-offs, normalisation and reconciliations. High frequency trading firms are particularly vulnerable, incurring huge costs for high volumes of low value tickets.”

Fig. 3 – Andy Coyne, Co-Founder and CEO of Cobalt on his company’s mission – Taken from: http://www.cobaltdl.com/blockchain/

In short, Cobalt are trying to remove any inefficiencies and unnecessary (operational) costs or risks related to the processing of foreign exchange (‘FX’) trades. Using the blockchain and its shared ledger functionality, Cobalt aims to simplify the way in which foreign exchange transactions are being processed. Instead of creating multiple records for one and the same transaction, Colbalt creates a single view. It this thus looks to significantly reduce the number of system hand-offs and reconciliations for one transaction, typically inherent in current processing of FX trades by legacy systems.

Cobalt’s focus is predominantly on the “post-trade” phase, and the risks and costs currently associated with this phase (see Fig. 4 below):

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Fig. 4 – Potential benefits of Blockchain for capital markets – Taken from: http://www.oliverwyman.com/content/dam/oliver-wyman/global/en/2016/feb/BlockChain-In-Capital-Markets.pdf

Main learning point: By providing a single view of a transaction between multiple parties, Cobalt aims to significantly increase the transparency of FX trades and remove complex back-end systems and processes i.e. banking legacy systems.

 

Related links for further learning:

  1. http://www.reuters.com/article/us-banks-forex-blockchain-citigroup-idUSKBN14413A
  2. http://uk.businessinsider.com/citi-invests-in-foreign-exchange-blockchain-startup-cobalt-dl-2016-12
  3. https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/492972/gs-16-1-distributed-ledger-technology.pdf
  4. http://www.chyp.com/sharing-ledgers/
  5. http://www.thegeniusworks.com/2016/02/blockchain-from-geeky-bitcoin-technology-to-a-revolution-in-everyday-processes/
  6. http://www.cobaltdl.com/blockchain/
  7. http://www.fxweek.com/fx-week/news/2475678/first-commercial-dl-solution-to-handle-14bn-daily-transactions
  8. http://financefeeds.com/this-is-not-a-noise-this-is-serious/
  9. http://cobaltdl.com/wp-content/uploads/2016/07/Blockchain.pdf
  10. http://www.oliverwyman.com/content/dam/oliver-wyman/global/en/2016/feb/BlockChain-In-Capital-Markets.pdf

 

 
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Posted by on February 26, 2017 in FinTech, Startups, Technology

 

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My product management toolkit (18): Keeping an eye on consumer trends

As a product manager, I know how easy it can be to get trapped into the every day and lose sight of what the future could bring. We tend to get immersed in the more tactical, day-to-day stuff and forget about the bigger picture. Also, there’s a daily avalanche of new technology developments and market trends, and it can be tempting to act on the latest trend, out of sheer fear to miss out. But how do you know whether it’s worth following up on a specific trend!?

A few months ago I learned more about how to best identify and assess trends by listening to a podcast with Max Luthy – Director of Trends & Insights at TrendWatching. TrendWatching have developed this very handy framework in the “Trend Canvas” (see Fig. 1 below).

 

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Fig. 1 – The Trend Canvas by TrendWatching – Taken from: http://trendwatching.com/x/wp-content/uploads/2014/05/2014-05-CONSUMER-TREND-CANVAS1.pdf

The Trend Canvas distinguishes between the “Analyze” and the “Apply” stages. During the Analyze stage, you assess a trend and its underlying drivers. What are the basic consumer needs a trend is serving and why? What kinds of change is this trend driving and why? In contrast, during the Apply stage you’ll look at ways in which you and your business can best tap into a trend, and who would benefit from this trend.

I’ve found the Trend Canvas to be very useful when exploring and assessing trends. The thing I like most about this framework is that it forces you to think about the customer and how a customer is impacted by a particular trend. Let’s take the trend of electric cars as a good example:

 

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Fig. 2 – Smart Electric Drive – Taken from: https://cleantechnica.com/2015/07/31/11-electric-cars-with-most-range-list/

 Analyse trends

  1. Basic needs – What deep consumer needs & desires does this trend address? – I haven’t spoken to many electric car owners yet, but the ones that I’ve spoken to mention “environmental consciousness” and “cost saving” as the basic needs that drove their purchase of an electric car. The experts at TrendWatching mention some other typical types of basic of needs worth considering as part of your analysis (see Fig. 3 below).
  2. Drivers of Change – Why is this trend emerging now? – What’s changing? – To analyse the drivers of change, it’s worth looking at ‘shifts’ and ‘triggers’. Shifts are the long-term, macro changes that often take years or decades to fully materialise. For example, a rapidly growing global middle class and increasing scarcity of oil are significant drivers of the appeal of electric cars (this report contains some interesting insights in this regard). Triggers are the more immediate changes that drive the emergence of a consumer trend. These can include specific technologies, political events, economic shocks and environmental incidents. I feel that recent improvements to both the technology and infrastructure with regard to electric cars are important triggers.
  3. Emerging Consumer Expectations – What new consumer needs, wants and expectations are created by the changes identified above? – Where and how does this trend satisfy them? – Purchasing expensive fuel for your car is no longer a given, and consumers starting to become much aware of the cheaper and environmentally friendly alternative in electric cars.
  4. Inspiration – How are other businesses applying this trend? – When analysing a trend, a key part of the analysis involves looking at how incumbent businesses are applying a trend. For example, the Renault-Nissan alliance has thus far been the most successful when it comes to electric cars and learning about the ‘why’ behind their success will help one’s own trend analysis.

Fig. 3 – Basic needs categories to consider when analysing trends – Taken from: http://trendwatching.com/x/wp-content/uploads/2014/05/2014-05-CONSUMER-TREND-CANVAS1.pdf

  • Social status
  • Self-improvement
  • Entertainment
  • Excitement
  • Connection
  • Security
  • Identity
  • Relevance
  • Social interaction
  • Creativity
  • Fairness
  • Honesty
  • Freedom
  • Recognition
  • Simplicity
  • Transparency

 Apply trends

  1. Innovation Panel – How and where could you apply this trend to your business? – To me, this is one of the crucial steps when exploring trends; asking yourself that all important question – how can I best apply this trend to my business? For example, how does a specific trend fit in with our current offering of products and services? Why (not)? It’s similar to when you assess a product opportunity and go through a number of questions to look at the viability of a trend for your business (see Fig. 4 below).
  2. Who? Which (new) customer groups could you apply this trend to? What would you have to change? – How often do we forget to think properly about who this trend is for and why they benefit from it. Which demographic is this trend relevant for and why? For instance, with electric cars, one could think about middle class families who are very cost and environmentally conscious consumers.

Fig. 4 – Assessing “Innovation Panel” when applying trends – Taken from: http://trendwatching.com/x/wp-content/uploads/2014/05/2014-05-CONSUMER-TREND-CANVAS1.pdf

  • Vision: How will the deeper shifts underlying this trend shape your company’s long-term vision?
  • Business Model: Can you apply this trend to launch a whole new business venture or brand?
  • Product / Service / Experience: What new products and services could you create in light of this trend? How will you adapt your current products and services?
  • Campaign: How can you incorporate this trend into your campaigns, and show consumers you speak their language, that you ‘get it’.

Main learning point: The Trend Canvas provides a great way for anyone to assess trends and innovations, looking at a trend from both a consumer and a business point of view.

 

Related links for further learning:

  1. http://productinnovationeducators.com/blog/tei-083-trend-driven-innovation-for-product-managers-with-max-luthy/
  2. http://blog.euromonitor.com/2012/11/10-global-macro-trends-for-the-next-five-years.html
  3. http://trendwatching.com/trends/pointknowbuy/
  4. https://about.bnef.com/blog/liebreich-mccrone-electric-vehicles-not-just-car/
  5. http://trendwatching.com/trends/cleanslatebrands/
  6. http://www.cheatsheet.com/automobiles/10-car-companies-that-sell-the-most-electric-vehicles.html/
  7. http://www.cheatsheet.com/automobiles/the-10-best-selling-electric-vehicles-of-2014.html/
 

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App review: Plum

When I reviewed Cleo a few weeks ago, I also came across Plum. Plum describes itself as “your personal savings” assistant and lives in Facebook Messenger.

How did Plum come to my attention?  I came across Plum whilst reviewing Cleo, another virtual savings assistant. I then spoke to Victor Trokoudes, co-founder and CEO of Plum, who gave me a first introduction to Plum.

My quick summary of Plum (before using it) – I expect Plum to not only monitor my spending and saving habits, but to also do my saving for me and transfer savings directly to a savings account of my choosing.

How does Plum explain itself in the first minute? – From the headline to smaller print on the landing screen, it’s apparent that Plum is all about saving, helping me to save. Plum “monitors your daily spending and automagically sets money aside for you.”

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Getting started, what’s the process like?  After I’ve clicked on the “Sign up for free” button, I’m taken to Facebook Messenger where I see a landing page that explains about Plum; “I’m a robot. I was built to help you save money so you don’t have to worry about it.”

At this stage, I’m not entirely sure about how exactly Plum will help me to save money, but I decide to click on the “Get Started” button to find out.

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On the next screen, I’m presented with the choice between signing up and learning how Plum works. I decide to do the latter and click on “How it works”.

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And I’m pleased that I asked the Plum bot to explain how it all works, because I like the response that I get in return:

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I now feel more confident about how Plum works and how it can help me with saving money, so I decide to click on “Sign up”. After entering my email address, the Plum bot asks me for some more information to complete my setup. After clicking on the “Complete setup” button, I’m taken to separate page where I can enter my personal details.

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After I’ve entered my personal details, the next step is for me to link my bank account to Plum. I like how Plum is keeping me posted on progress by striking through the previous two steps of the onboarding process. There’s copy there to assure me that my bank login details will be treated securely by Plum; making it clear that Plum “will never, ever store it (my bank login, MA) on our system.”

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Did Plum deliver on my expectations? – Once I’ve managed to sync my bank account info, and have completed my Plum set up, the app starts helping me to save money. For me, Plum’s biggest draw is that I can add money to my Plum savings. Plum tells me how much of my cash is still available for withdrawal, and prompts to me decide on how much money I’d like to set aside.
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Similar to the standard account and transaction info that your traditional bank offers, Plum provides a neat overview of my monthly and total savings, and I can see my most recent transactions at a single glance. Ultimately, I feel I can only truly answer the question about Plum delivering on my expectations once why I’ve achieved a specific savings goal. In the meantime, I feel that Plum does offer a pretty smooth onboarding journey and a clear path to actually saving money. If you’re struggling to save or understanding how much you can save in the first place, definitely worth checking out Plum and start setting money aside!

 

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App review: Cleo

I wrote about virtual assistants a few weeks ago, which made me realise that I hadn’t yet explored Cleo in more detail. Cleo is a virtual assistant that I believe can help me save money. However, my knowledge of Cleo ends there, so let’s have a closer look at Cleo and its onboarding process:

  1. How did Cleo come to my attention? – I came across Cleo a few months ago as I was looking at so-called ‘robo advisers’ like Betterment and Nutmeg.
  2. My quick summary of Cleo (before using it)? – When you search for Cleo, Google will tell you that it’s an “Intelligent assistant that helps you save money”. I therefore expect a virtual assistant that will give me a better view of my expenses and gives me tips on how to spend less. I expect an app that’s highly personalised, aiming to making saving fun. I guess a bit similar to Qapital, an app that I reviewed a few months ago.
  3. How does Cleo explain itself in the first minute? – I like how how the homepage of https://meetcleo.com/ talks about Cleo being “The simplest way to manage your money” (see Fig. 1 below). The page also mentions “bank level security” although I must admit that I’m not entirely sure what that means in the context of Cleo.
  4. Getting started, what’s the process like (1)? – Cleo’s onboarding process feels very intuitive and easy, particularly the part where Cleo syncs with my bank account (see Fig. 3 below). The messaging about how Cleo will treat my current account data instills trust and is clear, even to the point where I get a text from Cleo to say that banks are a bit slow when it comes to synching (see Fig. 8 below). However, when I’m asked to set my monthly income, I’m not sure what purpose this will serve and how I’ll benefit from sharing this data with Cleo (see Fig. 4 below).
  5. Getting started, what’s the process like (2)? – The simplicity of the onboarding process is reinforced by the text messages that I’m getting from Cleo on my mobile whilst onboarding on my laptop (see Fig. 8 below).
  6. Did Cleo deliver on my expectations (1) – After completing my onboarding with Cleo, I get a pretty comprehensive overview of my bills and spending (see Fig. 7 below). Perhaps I hadn’t fully set my own expectations when signing up with Cleo, but I’m left with a faint feeling of disappointment, expecting to receive more insights around my spending patterns or be able to ask Cleo specific questions about my balance. For example, when I ask Cleo about how to best increase my balance, she refers me to the generic balance call to action which she’d shared with me 3 seconds prior in the same exchange on Facebook Messenger (see Fig. 10 below).
  7. Did Cleo deliver on my expectations (2) – Some of the machine learning parts that underpin Cleo feel like they’re working pretty well, and getting started with Cleo felt very seamless and self-explanatory. I’m, however, keen to see how Cleo will develop further over the coming months, in becoming truly ‘intelligent’ about my spending habits and ways for me to save money.

 

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Fig. 1 – Screenshot of the homepage of https://meetcleo.com/

 

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Fig. 2 – Screenshot of the first step of the Cleo sign-up flow

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Fig. 3 – Screenshot of the second step of the Cleo sign-up flow

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Fig. 4 – Syncing a bank account with Cleo

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Fig. 5 – Screenshot of setting a monthly income in Cleo

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Fig. 6 – Screenshots of the workflow around adding bills

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Fig. 7 – Screenshot of the ‘outputs’ of the info entered into Cleo

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Fig. 8 – Text updates from Cleo throughout the onboarding process

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Fig. 9 – Chat message from Barney, CEO and Co-Founder of Cleo

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Fig. 10 – Chatting with Cleo through Facebook Messenger

 
 

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How Alipay and WeChat are setting the tone for payments

I recently had to think back to the words of a well-known London-based Fintech CTO who talked about how in Asia, the Fintech playing field is miles ahead compared to some of the things that are happening in Europe and in the US. His comments came to mind when I overheard a conversation between two, ‘more traditional’ shall we say, senior financial service people, talking about  “definitely worth having a mobile app, since that’s what people want and expect.”

To be clear, I’m not trying to knock apps, especially if you look at the amazing apps that the likes of Revolut, Simple and Monzo have created. However, I can’t help try to look ahead and figure out what could be around the corner. For example, I recently looked at PayKey, which integrates payments with messenger apps. The likes of KakaoTalk and Line are already doing this successfully.

I do feel though that all these products are simple dwarfed by the scale with which WeChatPay and Alipay have been adopted, predominantly in Asia:

WePay by Tencent (Tencent is known as Weixin in China)

Even though the functionality of the continental version of WeChat feels quite limited, it’s easy to see how WeChat has evolved rapidly from just a messenger app to platform which incorporates gaming, shopping and payments. WeChatPay, the payment functionality built into WeChat, enables peer-to-peer money transfers, make payments online and with participating offline retailers.

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Fig. 1 – Screenshot of WeChat payment interface – Taken from: https://walkthechat.com/wechat-payment-5-reasons-tencent-might-kill-alipay/

There are a number of different types of WeChat payment applications:

  • App Payment – For Android / iOS apps wanting to include WeChat as a payment option
  • Offline Payment – WeChat Offline Payment is meant for brick-and-mortar stores wanting to add WeChat payment via QR codes
  • Official Account Payment – This application is used in order to embed WeChat payment within a mobile website

By integrating with WeChat messaging and payment functionality, brands are creating a very seamless user experience and are interacting where their (target) customers already are. Soapnut Republic and its integration with WeChat’s payment functionality is a good example (see Fig. 2 below).

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Fig. 2 – WePay screenshot, once a user has completed shopping, she can either use her card to pay or use WeChat’s mobile wallet – Taken from: https://www.clickz.com/how-coach-and-moleskine-use-wechat-for-ecommerce/100300/

JD.com – a big Chinese ecommerce platform – has got redirects with WeChat. For example, when customers following the Moleskine account on WeChat want to make a purchase, they are redirected (within the WeChat app) to the brand’s mobile-friendly store on JD.com (see Fig. 3 below).

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Fig. 3 – WePay screenshot, once a user has completed shopping, she can either use her card to pay or use WeChat’s mobile wallet – Taken from: https://www.clickz.com/how-coach-and-moleskine-use-wechat-for-ecommerce/100300/

I can imagine that when WeChat launches its new “mini-apps” service in a few days time, its market presence will increase even more. These mini-apps are a type of app that one can use immediately, without having to download or install anything. Users scan a QR code or search and can immediately open an app.

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Fig. 4 – Example of WeChat mini-app as created by Walkthechat – Taken from: https://walkthechat.com/wechat-mini-apps-look-like/

As WeChat has only launched a developer Beta version of its new mini-apps, I haven’t yet had a chance to play with the apps. However, I’ve learned that through mini-apps users and businesses will most probably be able to (1) do voice recording (through the WeChat API) (2) login (the app will also enable voice recognition) (3) send messages to users and (4) build web apps and services on top of the app.

One will be able to access mini-apps through a special panel, which will be accessible from the “Discover” section of a user’s WeChat account. These mini-apps enable storage of some of the data and code directly on one’s phone, which no doubt will help with app performance and speed.

 

Alipay by Ant Financial

Forget about traditional banks, Alipay’s ascension and reach has been incredible. Its parent company Ant Financial is controlled by Jack Ma, the founder of ecommerce platform Alibaba. This gives Ant Financial access to all of Alibaba’s ecommerce businesses and the merchants who sell through the platform. Through ownership of Alipay, Ant Financial plays a part in about 65 per cent of China’s online payments and about 80 per cent in the mobile space.

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Fig. 5 – Screenshot of Alipay’s mobile wallet – Taken from: https://www.techinasia.com/day-with-wechat-payments-in-stores

Given the role that Alipay plays in the ecosystem of online buyers and sellers, it’s interesting to look at how Alipay facilitates cross-border mobile payments and how it supports settlement with overseas merchants in 12 foreign currencies (see Fig. 6 below).

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Fig. 6 – Introduction to Alipay’s cross-border mobile payment capability – Taken from: https://global.alipay.com/product/mobilepayments.htm

Until writing this piece, I hadn’t realised that Ant Financial has a stake in Paytm, which is claimed to be India’s largest mobile and ecommerce platform (see Fig. 7 below).

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Fig. 7 – Screenshot of Paytm’s iOS mobile wallet

Main learning point: Call me a clairvoyant, but I can see how the likes of Alipay and WeChat will soon take over the world – from a payments perspective at least – purely because of the scale at which they operate and the way they’re nested in a large, diverse ecosystem of online services and users.

Related links for further learning:

  1. https://intheblack.com/articles/2016/07/01/alipay-and-wechat-are-making-china-a-global-payments-power
  2. https://news.ycombinator.com/item?id=11347387
  3. http://en.people.cn/n3/2016/0902/c98649-9109330.html
  4. http://www.fintechasia.net/alipay-vs-wechat-war-of-chinese-payments/
  5. https://walkthechat.com/wechat-payment-5-reasons-tencent-might-kill-alipay/
  6. http://www.beyondsummits.com/blog/alipay-vs-wechat-how-does-alipay-overturn-world-through-scenario-based-payment
  7. http://www.wsj.com/articles/china-mobile-payment-battle-becomes-a-free-for-all-1463945404
  8. http://a16z.com/2015/08/06/wechat-china-mobile-first/
  9. https://www.techinasia.com/kakaotalk-kakaopay-mobile-epayments-korea
  10. https://techcrunch.com/2016/11/16/tencent-q3-2016/
  11. https://techcrunch.com/2016/03/17/messaging-app-wechat-is-becoming-a-mobile-payment-giant-in-china/
  12. https://techcrunch.com/2016/03/08/alibabas-ant-financial-raising-new-funding-at-60b-valuation-ahead-of-ipo/
  13. https://www.techinasia.com/day-with-wechat-payments-in-stores
  14. https://intheblack.com/articles/2015/12/01/how-wechat-is-reshaping-facebooks-social-media-future
  15. https://walkthechat.com/wechat-payment-5-reasons-tencent-might-kill-alipay/
  16. https://www.clickz.com/how-coach-and-moleskine-use-wechat-for-ecommerce/100300/
  17. https://curiositychina.com/blog/archives/3095
  18. https://stripe.com/docs/alipay
  19. https://global.alipay.com/product/mobilepayments.htm
  20. http://blog.grata.co/new-wechat-mini-apps/
  21. https://walkthechat.com/wechat-mini-apps-look-like/
 
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Posted by on December 29, 2016 in eCommerce, FinTech, Mobile, Technology, User Experience

 

Some good conversational UI examples to learn from

It was Dennis Mortensen – CEO/Founder of x.ai – who made me aware a few years ago of the concept of ‘invisible interfaces’. He talked about applications no longer needing a graphical user interface (GUI), taking “Amy” – x.ai’s virtual personal assistant as a good example (see Fig. 1 below).

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Fig. 1 – Amy, x.ai’s virtual assistant – Taken from: http://www.agilenetnyc.com/business/x-ai/

Since then, I’ve been keeping more of an eye out for bots and virtual assistants, which can run on Slack, WeChat, Facebook Messenger or Amazon Echo. Like “Amy” these applications can be driven entirely by complex machine learning algorithms, or can be more ‘smoke and mirrors’ and operated entirely by humans. Let’s just have a look at some relevant examples to illustrate where I think some of these virtual assistants and chatbots are heading.

Example 1 – Nordstrom Chatbot and Operator offering personalised discovery:

US based Nordstrom recently launched its first chatbot for the 2016 holiday season. If you’re already on Facebook Messenger or Kik, Nordstrom’s virtual assistant is only a click away. Users who engage with Nordstrom’s bot will be asked a number of questions about who they’re shopping for. The bot will then respond with bespoke gift suggestions based on the user’s responses.

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Fig. 2 – Nordstrom Chatbot – Taken from: https://chatbotsmagazine.com/the-complete-beginner-s-guide-to-chatbots-8280b7b906ca#.l5e2i887r

You can get a similar experience using Operator, which is driven entirely by human experts who’ll provide you with personalised advice on what to buy (see Fig. 3 below).

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Fig. 3 – Operator’s experts providing tailored advice to its users – Taken from: https://www.operator.com/

Example 2 – KLM sharing flight information via Facebook Messenger:

KLM, the well known international airline, now enables customer to receive their flight documentation via Facebook Messenger. After booking a flight on KLM’s website, customers can choose to receive their booking confirmation, check-in details, boarding pass and flight status updates via Messenger. It’s built on a Messenger plug-in which customers only have to enable in order to receive ‘personalised’ messages from KLM (see Fig. 4 below).

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Fig. 4 – Screenshot of KLM’s Messenger app – Taken from: https://messenger.klm.com/

Example 3 – Telegram using buttons for discovery and shortcuts:

As much as it’s great to have a very simple ‘single purpose’ conversational user interface, there are messenger apps and virtual assistants out there that do offer user functionality that works better with buttons to click. A good example is the Telegram app, which has buttons for specific actions and shortcuts (see Fig. 5 below).

telegram-v1

Fig. 5   – Screenshot of the buttons in Telegram’s messenger app – Taken from: http://alistapart.com/article/all-talk-and-no-buttons-the-conversational-ui

Main learning point: I’ll no doubt learn more about conversational user interfaces over the coming months and years, but looking at simple examples like x.ai, Nordstrom’s Chatbot, Operator, Telegram and KLM’s Messenger feels like a very good starting point!

Related links for further learning:

  1. http://alistapart.com/article/all-talk-and-no-buttons-the-conversational-ui
  2. https://uxdesign.cc/10-links-to-get-started-with-conversational-ui-and-chatbots-3c0920ef4723#.yqpfdz5re
  3. https://chatbotsmagazine.com/the-complete-beginner-s-guide-to-chatbots-8280b7b906ca#.l5e2i887r
  4. http://www.geekwire.com/2016/new-nordstrom-mobile-chat-bot-ready-help-shoppers-find-perfect-holiday-gift/
  5. https://www.techinasia.com/talk/complete-beginners-guide-chatbots
  6. https://www.smashingmagazine.com/2016/07/conversational-interfaces-where-are-we-today-where-are-we-heading/
  7. http://www.theverge.com/2016/3/30/11331168/klm-facebook-messenger-boarding-pass-chat-integration
  8. https://messenger.klm.com/
  9. https://www.operator.com/
 

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What Visa and R3 are doing with blockchain technology

In the online Fintech course that I’m currently doing, every other course video is about blockchain and the possibilities it offers. Earlier this year, I wrote about blockchain, trying to demystify some things I’d heard about it up to that point. If anything, watching my course videos with Blockchain experts such as Shaul Kfir, CTO at Digital Asset, has raised my curiosity about blockchain technology even more. In the past week alone, I came across two interesting blockchain related developments, which caught my eye: (1) Visa B2B Connect and (2) R3 Corda:

Visa B2B Connect

visa-b2b-connect

Fig. 1 – Visa B2B Connect diagram – Taken from: https://usa.visa.com/visa-everywhere/innovation/visa-b2b-connect.html

Recently, Visa has started partnering with Chain, a US-based blockchain technology company, to create a proof of concept called “B2B Visa Connect” (see Fig. 1 above). Instead of building a more ‘correspondent’ type of integration between Chain’s core blockchain technology and Visa’s infrastructure, it’s looking to create a peer-to-peer relationship between banks. The essence of Chain’s blockchain network is a shared ledger that allows banks to move assets more securely and efficiently.

I listened to Adam Ludwin, Chain’s CEO/Founder, explaining on a recent podcast that Chain are effectively building “a business-to-business payment network.” Adam highlights that, in essence, Chain are applying cryptography to financial services. As result, entities – whether’s its financial institutions or customers – can have direct control over their financial assets, using a (private) cryptographic key. Adam stresses that there’s no single currency on the different Chain networks. Instead, the currency is specific to the currency issued by the participants of the network in question.

The main thing that I’m taking away from Visa B2B Connect is that Chain is looking to “digitise Visa’s existing currency” by building blockchain technology for Visa from scratch, aiming to design an architecture to solve Chain’s specific problems in mind. In contrast, the likes of Digital Asset, Ethereum, R3 and Ripple, are more like existing architectures which can be modified to meet the needs of specific financial institutions and their customers.

R3 Corda

Last week, R3 – a consortium of 75 banks – announced the introduction of an open source blockchain, to be used by banks. It was announced as “distributed ledger designed for financial services”, called Corda. The ledger hasn’t been built yet, but it was interesting to already get a flavour of its underlying principles:

  • Corda has no unnecessary global sharing of data: only those parties with a legitimate need to know can see the data within an agreement
  • Corda choreographs workflow between firms without a central controller
  • Corda achieves consensus between firms at the level of individual deals, not the level of the system
  • Corda’s design directly enables regulatory and supervisory observer nodes
  • Corda transactions are validated by parties to the transaction rather than a broader pool of unrelated validators
  • Corda supports a variety of consensus mechanisms
  • Corda records an explicit link between human-language legal prose documents and smart contract code
  • Corda is built on industry-standard tools
  • Corda has no native cryptocurrency

Fig. 2 – Overview of Corda’s underlying principles – Taken from: http://www.r3cev.com/blog/2016/4/4/introducing-r3-corda-a-distributed-ledger-designed-for-financial-services

The other thing that I took away was the business problems that R3 Corda is looking to solve:

  • Bank A and Bank B agree that Bank A owes 1M USD to Bank B, repayable via RTGS on demand.
  • This is a cash demand deposit
  • Bank A and Bank B agree that they are parties to a Credit Default Swap with the following characteristics
  • This is a derivative contract
  • Bank A and Bank B agree that Bank A is obliged to deliver 1000 units of BigCo Common Stock to Bank B in three days’ time in exchange for a cash payment of 150k USD
  • This is a delivery-versus-payment agreement
  •  … and so on…

Fig. 3 – Business problems R3 Corda is looking to solve – Taken from: http://www.r3cev.com/blog/2016/4/4/introducing-r3-corda-a-distributed-ledger-designed-for-financial-services

In essence, R3 Corda is looking to significantly improve the way in which banks share and managements agreements between them. The goal is remove any duplication of data or confusion about inter-bank agreements or transactions. Given the immutable nature of blockchain technology, it’s easy to see why banks are collectively developing Corda:

“What I see is what you see and we both know that we see the same thing and we both know that this is what has been reported to the regulator”

Main learning point: Understanding how blockchain applications are built to solve specific problems (R3 Corda) or improve existing experiences (Visa B2B Connect) really helps in painting a better picture of the tangible value that blockchain technology will deliver.

 

Related links for further learning:

  1. https://usa.visa.com/visa-everywhere/innovation/visa-b2b-connect.html
  2. https://chain.com/technology/
  3. https://sharetheledger.com/reading-list/beginners/
  4. https://chain.com/docs/protocol/papers/whitepaper
  5. http://www.forbes.com/sites/laurashin/2015/06/24/nasdaq-selects-bitcoin-startup-chain-to-run-pilot-in-private-market-arm/
  6. http://www.the-blockchain.com/2016/05/03/chain-inc-rolls-open-standard-blockchain-capital-one-citigroup-fidelity-first-data-fiserv-mufg-nasdaq-state-street-visa/
  7. http://bankinnovation.net/2016/10/chain-releases-open-source-code-partners-with-visa/
  8. https://chain.com/press-releases/visa-introduces-international-b2b-payment-solution-built-on-chains-blockchain-technology/
  9. http://www.r3cev.com/blog/2016/4/4/introducing-r3-corda-a-distributed-ledger-designed-for-financial-services
  10. http://www.ithome.com.tw/news/105319
  11. http://11fs.co.uk/podcasts/ep119-back-blockchain-gang/
 
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Posted by on November 14, 2016 in FinTech, Product Management, Startups, Technology

 

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