Japan – renewing my long-standing relationship

Posted on November 10, 2015 by Content in Context

I’ve just spent three weeks in Japan, travelling around by train, staying in Airbnb accommodation, and soaking up the art, architecture, design, food, beer and general culture. It was the longest time I have spent in Japan, and several years since my last trip in 2010. But given I have been to Japan more than 25 times in the past 20 years, it was like renewing an old friendship.

Image © Rory Manchee - all rights reserved

My earliest visit to Tokyo, back in 1995, was to spend a few days with a friend from London who was managing a now-forgotten Britpop band on their debut tour of Japan. After attending a couple of their concerts, being entertained by their Japanese record company, visiting a few tourist spots and hanging out in a number of Tokyo nightclubs, it was a very limited/skewed introduction to the country.

My next visit the following year was even shorter, and even more skewed. Another friend from London (now a well-known writer and broadcaster) was supposed to be covering yet another Britpop band on their Japanese tour, on behalf of a British magazine. Instead, we scored some free tickets to see the Sex Pistols at Budokan (it was their infamous Filthy Lucre tour), and my one night in Tokyo was spent drinking with the band after the gig, in a bizarre subterranean bar. But that’s another story.

Most of my trips to Japan have been for business, and only to Tokyo. So this latest visit was an ideal opportunity to stretch out and explore in more depth. Over the next few posts, I’ll be commenting on my experiences, across such topics as coffee, AirBnB, art & architecture, crate digging and some navigational issues.

First, here are just a few of the reasons why I appreciate Japan:

The love of good design
Hardly any graffiti, virtually no petty vandalism, and scarcely any litter
The food
People rarely talk on their mobile phones on the train or in public places
The service culture and overall politeness
Trains run on time
The convenience stores
IC cards (take note, Myki…)

Of course, nothing’s perfect: Japanese TV is mostly awful; good espresso coffee is in short supply; everything comes over-packaged; and in many situations, it’s still a cash-only economy. I also appreciate that it’s a complicated society, often seen as repressed, and difficult for outsiders to understand.

But for all its challenges, Japan must be doing something right, as in-bound tourism numbers (especially from Greater China) are at record-breaking levels.

Next week: Seeing Japan with #Airbnb

Finding Careers in #FinTech

Posted on November 3, 2015 by Content in Context

Through the many meetup events I attend around Melbourne, people often ask me for career advice on which FinTech startup to join or follow. In response, I try to summarise where I see the current state of the sector, and clarify where they see a role for themselves – information I am happy to share here. I should preface my remarks by stating upfront that I am not a qualified career adviser (but I can refer you to people who are).

First, in choosing to make a career move to FinTech (or any other startup venture), it’s important to know whether you are looking for a similar role within a new business, or making a move into a new area such as product management, UX, content development or coding. Assuming you have acquired the necessary technical skills to transition into a new role, you still need to work out what your personal fit will be in a startup environment. Alternatively, you must demonstrate an ability to apply your knowledge and experience to the benefit of the new business, and a willingness to learn on the job (and perhaps even in your own time, and at your own expense). Accountants who can write code might be rare, but someone with a finance background and who is proficient in writing spreadsheet macros may have a better chance of transitioning into coding if they can build on this core expertise (e.g., helping to develop algorithms for decision-making tools such as stock-screening applications).

Second, FinTech within Australia is still largely based on P2P lending (including SME), payment solutions, banking apps and price comparison platforms, with some developments in financial planning (“robo advice”, stock tracking, portfolio management). Oh, and cryptocurrency, although since CoinJar relocated to London, this seems to have gone quiet…. While there are some B2B FinTech startups (e.g., Moula, Bluedot), they are still in the minority, so the current opportunities are mainly going to be within B2C solutions, or those playing in two-sided markets. This dynamic will also influence your decision.

Thirdly, everything we are seeing points to exponential growth in mobile banking, payments and financial services, but each vertical is taking a different approach because of their respective regulatory frameworks, transaction models tied to technology platforms and commercial processes, and the underlying lack of a true “single view” of customers. For example, within the next 10 years, 80% of new superannuation accounts will come via mobile engagement – which is why we are seeing a growing number of industry funds targeting a younger audience, aligning with “lifestyle” choices, and bundling financial planning and advice services. Rather than “big data” dumps, these super funds need demographic and psychographic data to support their digital engagement strategies.

Fourthly, FinTech is obviously important, but it can no longer simply play on disruption – technology is the enabler, and partnering is the way forward. If you have a track record in bringing parties together to collaborate, to form joint ventures, or to engage in any sort of co-branding exercise, then you will find opportunities emerging all the time. As discussed at a recent FinTech event, even large banks are realising the need to partner and collaborate on new technology, especially when it’s not part of the bank’s core expertise. However, as one superannuation fund director told me, it’s also challenging for large organisations to outsource part of their technology to smaller companies because they are giving someone else custody of their brand.

Finally, it’s difficult to predict what the FinTech jobs of the future will be (just as 10-15 years ago, roles in content marketing, social media and SEO hadn’t been thought of). A simple principle that has helped me navigate a zig-zag career path (to transition from the public sector into large corporations, and from full-time roles into a portfolio career) has been knowing my transferable skills at all times, and being aware of the need to replace and refresh them as required.

Next week: What I did on my holidays…

#FinTech: The 8 things I want from mobile banking apps

Posted on October 27, 2015 by Content in Context

As we await the launch of ApplePay in Australia, and in light of the plethora of mobile banking tools, here is my wish list against which all such apps should be assessed:

TRUST – is my money safe?
CONVENIENCE – can I do multiple transactions from within the same app?
SECURITY – is my personal data secure?
RELIABILITY – will it always be there when I need to use it?
FLEXIBILITY – can I access and transact with all my accounts, brands and products from a single app?
COST – can I expect lower transaction, service and account fees if I use it?
SPEED – is it real-time?
EASE OF USE – is it intuitive?

Next week: Finding a career in #FinTech

Do we need a #FinTech safe harbour?

Posted on October 20, 2015 by Content in Context

As part of the recent FinTech Melbourne Meet Up, there was some discussion on the regulatory challenges startups face when trying to validate an early-stage concept. The notion of a safe harbour or “regulatory sandbox” has gained some momentum, with ASIC’s Innovation Hub, and a commentary by Deborah Ralston, of the Australian Centre for Financial Services, who is also inaugural Chair of ASIC’s Digital Finance Advisory Committee.

If we assume that the main purposes of financial regulation are: system stability, minimum professional standards, consumer confidence, investor protection, market transparency and risk mitigation, then I doubt anyone can deny the benefit of a formal and robust compliance regime. However, technology and innovation are combining to challenge and disrupt the inherent inefficiencies that can accrue within a static regulatory environment (especially one that is reactive, rather than pro-active), which is largely designed to monitor legacy frameworks and incumbant institutions.

While the ASIC initiative is not the same as obtaining an ATO private tax ruling, it does at least show that the regulator is keen to be more consultative in helping startups test new ideas. But the reality is the cost of initial compliance and licensing can be a barrier to a new venture, before the concept has even been market-tested. So perhaps there is an opportunity to ring-fence emergent FinTech ventures, so they can explore real-world applications, but limited by market scope, number of participants, transaction values and timeframes. (Such a model already exists for private equity offerings….)

As it stands, in the case of P2P lending platforms, a startup might find itself having to be licensed and regulated as a financial services provider, an approved consumer credit provider, an authorised depository institute and possibly a licensed financial planner as well. That’s a lot of compliance for a new business that might not even have a single customer.

From my own experience, what constitutes “financial advice” is subject to very wide interpretation. Several years ago, I was responsible for introducing a new financial product to the local market – a bond pricing information service. The service was aimed only at institutional investors (not retail customers), based on collated and published data supplied by existing market participants. Nor was it a real-time data feed; rather, it delivered intraday and end of day prices calculated on actual traded bonds. Yet the regulator determined this constituted “financial advice”, even though no trading recommendation or investment decision was inherent in the data. It was also designed to offer a more transparent and objective process for pricing portfolios of less liquid or rarely traded securities, where mark-to-market solutions are unavailable or inappropriate – thereby providing some clarity to market participants.

Meanwhile, the responses to shady advice and other malfeasance inflicted upon retail investors by “established” financial institutions and “traditional” financial planners usually take years to work their way through the legal and regulatory processes of investigation, mediation, settlement and prosecution. (And if anyone wants to understand what actually caused the GFC, well before the term FinTech had been coined, check out John Lanchester’s book “Whoops!”)

Next week: What I want from a mobile banking app.