Breaking Banks, Silos, or Networks: which is harder?

 is the founder
Pylarinou Advisory
and a Fintech/Blockchain
influencer – No.3
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Refinitiv Global Social Media

In innovation, we frequently talk about `Breaking Silos`, one of
my favorite cross-disciplinary topics. This past weekend (unusually
warm and sunny creating the temptation to be outside) I was ironing
as there is no cleaning lady anymore and listening to
Episode 19 of `Breaking Banks Europe`
. This one was hosted by
Matteo Rizzi and Spiros Margaris and with an Ecosystem Zoom into
Luxembourg. And who better to discuss this with, than Nasir
Zubairi, the CEO of The
– the Luxembourg House of Financial Technology.

I recalled meeting briefly Nasir for the first time at SIBOS in
Geneva in September 2016, before he had given birth and baptized
LHoFT. [ SIBOS size conventions may take really long to happen
again if they ever happen in that globalized format.] Today we are
looking at 4 years of an important ecosystem stakeholder, The
LHoFT, whose role in Luxembourg has been vital. Luxembourg is like
perfumes that come in small bottles and has distinct top global
roles in the fund industry, in green finance, and microfinance (to
name a few). As a result, Regtech is a big focus for the LHoFT,
especially around anything related to funds. We can actually think
of Luxembourg as a predominantly B2B fintech hub with an interest
in fund administration technologies, payments (always a core
component of finance), and lately blockchain for capital markets.
Nasir mentioned a few names of Blockchain4Finance companies in
Luxembourg during the podcast, like Tokeny, StokR, FundsDLT which are focused on
Tokenization. Such companies are leading the way for the evolution
of Capital markets which includes the fund industry.

FundsDLT is a homegrown
initiative that I have covered before (Sep 2019) in `Two
live Blockchain use cases in Mutual Funds administration and four
` along with Calastone and other cases. Just last month

FundsDLT announced the closing of a Series A investment
develop a Decentralized platform for fund distribution.
Clearstream, Credit Suisse Asset Management, and Natixis Investment
Managers were the investors that joined the seed investor the
Luxembourg Stock Exchange.

Nasir also highlighted The LHoFT
3rd cohort which is focused on African Fintechs for
financial inclusion.

Catapult: Inclusion Africa 2020

► A-Trader –

► A-Trader –

► CinetPay – Côte

► Dundiza – Tanzania

► Esusu – Nigeria

► Eversend – France

► Exuus – Rwanda

► OZÉ – US &

► PaddyCover –

► People’s
Pension Trust – Ghana

► Pezesha – Kenya

► SmartTeller –

► SympliFi – United

► uKheshe – South Africa
& UK

Zooming out of Luxembourg as a Fintech ecosystem

Nasir`s tweet from last week about the persistent use of Fax
machines in financial services, highlights that it is difficult to
Break the network effects that are ingrained in financial services.
Calastone confirms the challenges from the use of fax machines in
fund distribution, during this global abruptly forces shift to
remote working.

we have been busy the past 3 weeks helping
distributors who no longer have access to their fax setup a direct
link into our network and giving them access to the TA’s and
asset managers from their laptops via our EMS tool

— Louis Wright (@LouisWr96015371)
April 2, 2020

The Global Fax market is growing. Part of it is on the Cloud but
a significant part of it stubbornly uses standalone fax machines.
Business workflows are networks that cannot be easily Broken. If
your supplier, or customer, or service provider uses-requires a
Fax, you will too. Breaking those networks is very hard. If we
don’t manage to get rid of fax machines during this crisis, when
will we?

A 2017 IDC report
on the Fax market showed that 36% of fax
volume (monthly pages) was sent or received using standalone fax
machines, which is more than the fax volume sent or received using
all other fax technologies.

Screen Shot 2020-04-06 at 11.24.31

The same report showed how the West (naturally) has Fax networks
that stronger and more difficult to break. In North America, for
example, 88% of respondents expect fax usage to grow or remain

Screen Shot 2020-04-06 at 11.26.47

Finance is not as bad as manufacturing in terms projected usage
of Fax. However, a 20% increases was projected.

Screen Shot 2020-04-06 at 11.28.37

The top reasons of usage and expected growth of usage are

  • Fax is an integral part of workflow – Networks
  • Fax is evolving and integrateable with email –
  • Fax is secure, compliant and with a verifiable receipt –
    Compliance, Traceability

Culture eats software. While innovations in Regtech and
Blockchain for Capital markets are advancing, those pushing these
innovations are challenged by a financial world that uses Faxes for
trade confirmations of all sorts of assets, fo receiving mortgage
and all kinds of loan applications, processing claim forms in
insurance etc.

Breaking business flow networks that operate in a certain way,
is difficult.

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Breaking Banks, Silos, or Networks: which is harder?
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