Fintech becomes the new fashion in Davos

In terms of practical applications of blockchain, blockchain can enable near real-time settlement of most types of financial transactions, thereby eliminating counterparty risk, freeing up capital, and significantly reducing transaction costs. Blockchain can also achieve a split model at the data and service levels, allowing individuals to actually become managers of their own accounts.

"It was so difficult to get into this conference. I communicated with the organizers for a long time before I got a spot." At the 2016 Summer Davos Forum, Wu Huanyu, vice president of MasterCard China, told a reporter from the International Financial News that he had planned to attend an event called "Disrupting Retail Banking" on the afternoon of June 27, but found that he was almost turned away because the event was overcrowded.

At the event, TransferWise CEO and co-founder Taavet Hinrikus discussed how TransferWise provides P2P money transfer services and how digital innovation will change the future of financial services.

This has almost become the norm at this year's Summer Davos Forum. The theme of this year's Summer Davos Forum is "The Fourth Industrial Revolution: The Power of Transformation". Fintech has become a hot topic at this forum. Both traditional financial institutions and emerging Internet financial companies hope to catch up with the trend of this season.

Calls for governments to start regulating the race

On the first day of the Summer Davos Forum, a sub-forum titled "Fintech will encounter a bubble" attracted many listeners. At the meeting, many regulatory guests discussed the regulatory issues of Fintech.

Taavet Hinrikus, CEO of TransferWise, a British financial services startup, believes that for Fintech companies, regulation is not too much or too little, but appropriate regulation. The industry believes that government departments should adopt a "smart regulation" approach, that is, clarify key principles and allow the development of innovative technologies. For the industry, it should adhere to a comprehensive regulatory framework, not authorization or licensing, or define the path of innovation.

Catherine Wood, CEO of ARK Investment Management LLC, suggested that governments should also compete in terms of regulatory policies. She said that the UK's regulatory policy on Bitcoin is currently the most appropriate, which has attracted many US companies to do business in the UK. Some US companies even told the US government that they should refer to the UK government's approach.

In fact, the phenomenon of Fintech companies "picking customers" has already occurred. Bitbank co-founder Guo Hongcai told the International Financial News reporter that Bitfinex, a Bitcoin platform originally registered in Hong Kong, plans to leave Hong Kong and go to Taipei to conduct business.

So, will the recent Brexit event weaken the competitiveness of the UK’s fintech regulators?

In this regard, Taavet Hinrikus said that in the past week, the outflow or inflow of funds to the UK was particularly frequent, causing the company's trading volume to increase by 3 times. From this perspective, "Brexit" will not affect the company's business.

Catherine Wood said that the situation is still unclear, but from a security perspective, Bitcoin will definitely be affected by this incident. In fact, the Brexit incident has intensified investors' risk aversion, causing Bitcoin to rise slightly again.

Tang Ning, founder and CEO of CreditEase, said that the company's investment in the Fintech industry is a long-term behavior and will not be affected by the short-term impact of Brexit. Tang Ning also expressed his confidence in the future of Fintech, believing that Fintech technology makes the financial market more flexible and can form a beneficial complement to traditional financial institutions.

China's Internet finance companies are crowded

In this forum, many domestic Internet finance companies flocked to make their appearance and announced their financial technology strategies.

In the above-mentioned sub-forum, Tang Ning revealed that CreditEase will focus on the field of financial technology and will take more actions in the future.

"The fintech industry is a high degree of integration of finance and technology, including various fields such as smart investment advisors, blockchain, and mobile payments. CreditEase has established a new financial industry investment fund, focusing on capturing investment opportunities in the fintech industry at home and abroad, and investing in companies spanning hot areas such as blockchain and transaction payments." Tang Ning said frankly.

Just three days before the Summer Davos Forum, CreditEase also participated in the D round of funding for Bitcoin company Circle. CreditEase has previously participated in investments in many financial technology companies, including co-investing in overseas Fintech companies such as Traedshift with DCVC, HSBC, and Temasek.

JD Finance CEO Chen Shengqiang said that in the past two years, in addition to its own technology reserves, JD Finance has also invested in many technology companies and data companies. The company's management goes to New York and Silicon Valley in the United States every year to study how traditional financial institutions innovate and some of the latest technology companies.

Chen Shengqiang also talked about the process of investing in Zestfinance, a data risk control model company. He said that he drove for three hours alone in the United States where he was unfamiliar with the place, and even refueled once in the middle, which finally impressed the other party. At present, the two parties have achieved many cooperative results in the field of data risk control, and the joint venture company of the two parties will be established in China in the near future.

Guo Yuhang, founder and co-CEO of Dianrong.com, said, "In the future, Dianrong.com will strive to become a Fin-Techist, because the future of financial technology must still be driven by technology, rather than simply selling products online instead of offline."

Guo Yuhang also pointed out that an important responsibility of Fin-Techists is investor education, so Dianrong.com began to assume this social responsibility this year. At the same time, it also paid attention to and invested in some emerging financial technology companies to support their growth.

Traditional financial institutions pay attention to blockchain

Traditional financial institutions have also shown a keen interest in financial technology, and the technology they are most concerned about is blockchain.

UBS Group released a white paper titled "Creating a Trust Engine: How Blockchain Will Transform Finance and the World" at this forum. The white paper points out that in the next 20 years, the impact of blockchain technology on the world will be as profound as the impact of the Internet in the past 20 years.

The white paper believes that in terms of the practical application of blockchain, blockchain can enable nearly real-time settlement of most types of financial transactions, thereby eliminating counterparty risk, releasing capital, and significantly reducing transaction costs. Blockchain can also achieve a split model at the data and service levels, allowing individuals to actually become managers of their own accounts.

UBS points to tomorrow’s “smart wallets” — applications that people will use to connect to blockchain-based financial systems. For example, “smart wallets” could be built into personal, freely programmable portfolio manager-style applications.

These applications are able to trade on behalf of users, even browse the news, and make trading decisions autonomously based on market trends.

Qian Yujun, head of UBS China, said that currently, China is mainly engaged in alliance activities. In early 2016, the People's Bank of China publicly announced an investigation into digital currencies in response to Chinese investors' interest in Bitcoin and other cryptocurrencies. However, blockchain may face regulatory challenges in China.

Last March, UBS launched a pathfinder program to explore, utilize and share the potential of blockchain. In future scenarios, UBS may have its own blockchain platform and issue currency. In addition, there may be blockchain-based stock trading platforms, and multi-purpose settlement coins can be used for settlement between these platforms. UBS said this will help narrow the gap between blockchain and the real world.