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If Banks Aren’t Absorbing Fintech Startup Products, They’re Investing in Them

Monday, July 4th, 2016


Q: Will fintech force the banks to change?


Be it blockchain or mobile loans, fintech innovation is happening, and the old guard needs to get on board or face falling behind. Traditional banks that embrace the technological and cultural change fintech is forcing on them are also more likely to see their business grow alongside it.

Some banks are getting the picture, learning the tools of the fintech trade by partnering with and investing in fintech startups and incubators instead of trying to build the technology starting from scratch.

Consider a recent move by CIBC to set up the “C-Suite” at MaRS in Toronto, a space physically separated from its corporate headquarters. The office has fewer regulations, giving developers breathing room to create new products for the bank, including its Apple Watch app.

Aayaz Pira, Senior Vice-President, CIBC Digital Retail & Business Banking, explains that the team focuses on client experience only. “It’s very important that we foster a test and learn environment.  While we enjoy great successes some projects never make it off that ground – and that’s OK.”

Others seek the expertise of startups through competitions such as “The Next Big Idea in Fintechby BMO and Ryerson University’s DMZ, or collaboration spaces hosted by Boston’s Workbar and Digital Credit Union, one of the largest credit unions in the U.S.

While the big banks are generally doing a good job of delivering the right product mix for the masses, “there are some areas for improvement,” says Sean Cooper, a consumer financial journalist. Cooper cites fintech firms such as online lender Grow and robo-advisor WealthSimple as having success to date in “filling the gaps” left by traditional banks.

Many banks are also choosing to invest directly in fintech players to gain market access. For example, Goldman Sachs is an investor in Boston-based Circle, an international money transfer app that converts between local currencies and Bitcoin, with a separate division in China. Other investors in Circle include Baidu and Beijing-based investment firm IDG Capital.

Forbes’ fintech expert Laura Shin says that if Circle successfully adds the renminbi as an available currency, it could tap into a potentially lucrative stream of Chinese students studying abroad.  

“We want to enable Chinese consumers to share value with anyone in the U.S., with anyone in Europe, and, through the blockchain, with anyone in the world instantly,” Circle chief executive Jeremy Allaire told Shin.

Because fintechs are still relatively new to the financial services world, especially in comparison to most financial institutions, the challenge for the banks will be partnering with and investing in startups that are expected to survive and thrive. It’s a tough call given the failure rate of startups. Of course, banks have proven to be not be too big to fail either.

See also

Will Blockchain Revolutionize The World of Financial Contracts?
Will Fintech Overturn Financial Institutions and Regulations?

Startups Must Pursue Partnerships within Finance and Work from Inside

Monday, July 4th, 2016

Fintech story gauge NO compressed
Q: Will fintech overturn financial institutions and regulations?


To stage a revolution in the banking industry, fintechs can’t go it alone.

These startups depend on existing structures and regulations to gain market access. That means fintech founders must mix their entrepreneurial drive with an ability to work within the rules. Only some are able to walk that tightrope, which often require a reliable relationship with established banks and other financial institutions to strike the right balance.

Founders starting out in fintech need to know that they’re entering an established market, and adjust their attitude, experts say.

“Fintech is really hard and the hubris I see in entrepreneurs and investors entering the space makes me worry that people have no idea what they’re getting into,” entrepreneur Savneet Singh wrote in a recent post on Medium.

Singh says fintech is hard to scale internationally and doesn’t respond to “regular” methods of growth hacking.

“It’s really hard to convince a random person to hand over their bank info, DOB [date of birth] and personal info. No matter how great the product is, that’s still a tough sell,” he says.

Banks are already leveraging their customer’s trust and data in creating new products to compete with fintechs. For instance, BMO’s SmartFolio, a digital advisor product, is fully integrated with its online banking system, an advantage that new startups can’t offer.

Even established startups are finding financial markets, and their regulations, to be challenging. Square is losing money according to its first quarterly report in March. And online processing service Dwolla was fined $100,000 for running afoul of data security regulations.

Given these issues, what does a fintech startup need to succeed?

Danish Yusuf, founder of Zensurance, a startup that offers pay-as-you-go insurance aimed at small businesses, says partnerships within existing structures is the way forward.

“Fintech is different from some other industries given the massive regulatory challenges,” says Yusuf. “Also, fintech startups love to claim that they are fighting the system and going against the existing powers. It makes for a great raison d’être.”

As a startup, find a quiet niche that doesn’t depend on existing financial infrastructure for customers, or find a way to work within the rules, not overturn them. Standing alone means you go nowhere – which is why so many startups partner with existing institutions.

See also

Will Fintech Force The Banks To Change?
Will Blockchain Revolutionize The World of Financial Contracts?

Blockchain Missing Some Pieces Before it Hits Mainstream

Monday, July 4th, 2016

Fintech story gauge MAYBE compressed

Q: Will the blockchain revolutionize the world of financial contracts?


If you’re not familiar with the blockchain, you will be soon. It has potential to fundamentally change the way transactions of value are carried out. The implications for traditional banking are enormous. The World Economic Forum forecasts that 10 per cent of global gross domestic product might be stored on the blockchain by 2027.

The blockchain differs from the traditional banking records in that all financial transaction data is contained in a distributed ledger. Here is how the chain works:

User makes a request from their device to the blockchain.

The blockchain decides in unison to grant the request.

The request is added as a fresh link in the blockchain.

All members are up-to-date and the request is on record.

Each record depends on the one before and is fixed.

The blockchain “makes it possible for the front office to interact directly with the ledger, simplifying reconciliations and the trade process more generally,” according to Accenture’s 2016 report Top 10 Challenges for Investment Banks 2016.

There are many early forays. Digital Asset Holdings is working to develop secure blockchain infrastructure for clearing funds and securities, while Nasdaq at the end of last year completed its first share trade with its own Linq ledger.

One of the most compelling use cases for blockchain is smart contracts, which are written in and enforced by code. Apple Music could be described as a smart contract. Singer-songwriter Imogen Heap has even released a single that can be purchased through the blockchain. Ether is a blockchain technology used in this way.

Non-financial use of blockchains

  • Insurance
  • Car rental
  • Voting
  • Identity documents
  • Record keeping

PwC gives a theoretical example of how smart contracts could be integrated with the blockchain: “Imagine a car insurance that is embedded in the car itself and changes the premium paid based on the driving habits of the owner… The car contract could also contact the nearest garages that have a contract with the insurance company in the event of an accident or a request for towing.”

This technology could seem superfluous as there are already existing systems in place. But as points out, smart contracts may be invaluable in places that do not have robust legal frameworks.

Of course, everything seems secure until it gets hacked. According to CoinDesk, in June 2016 $1.16 million (U.S.) of value was drained from the Ether blockchain into a new account. An unpatched security hole in a smart contract was to blame.

Several patches are being proposed, such as offering the attacker a bounty for the Ether’s return. But other fixes mess with the irrevocable nature of blockchain–the most extreme suggested is unravelling every single chain link one by one.

“While the agile approach of ‘ready, fire, aim’ generally works best with new software, it can be dangerous when $150 million gets loaded into the chamber,” explains blockchain expert David Seigel.

What impact this breach will have on the confidence around blockchain remains unclear. The response to the attack, and how to prevent one in the future, is still being analyzed. It does suggest that blockchain technology still has a few hurdles to overcome before becoming a regular and reliable piece of the financial system.

Developer Hotfix

See also

Will Fintech Force The Banks To Change?
Will Fintech Overturn Financial Institutions and Regulations?

Women in Tech on Twitter: Fear, Loathing, and Support

Thursday, June 30th, 2016

Women in the technology sector are using Twitter to share fear and vent, according to analysis by the TechPORTFOLIO team with the IBM Watson Tone Analyzer.

As part of our month-long series highlighting women in tech and their unique experiences and challenges, we looked at a list of prominent women in the sector who were active on Twitter and used cognitive analysis to determine the tone of the tweets sent to them in public. We wanted to find out whether there was a difference in the way that people in public and their community spoke to them on Twitter, compared with the technology sector at large.

Women on Twitter

Tone Analyzer Women

Control Group

Tone Analyzer Control

The figures above seem to indicate that there is much more anger and fear present in conversation aimed at women in technology, and marginally more emotional range and openness.

A large number of the tweets with a degree of fear or anger were people seeking or offering mutual emotional support, for matters large and small.

The tech community in the control group had more conversations, but they were more one-sided. There were a far higher level of “drive by” tweets without any real attempt to engage in conversation; such as requests to retweet, or feature suggestions.

In our analysis, we didn’t see that many examples of outright abuse directed at our women in tech list. The control group — which was filled with several high-tier individuals such as Apple CEO Tim Cook, philanthropist Melinda Gates, and “inventor of the web” Tim Berners-Lee — had several tweets that been marked as deleted. It’s possible that any retroactive reporting on Twitter’s language and possible tendency towards abuse might be affected by reporting of offensive content and moderation.

This shows that despite Twitter’s ongoing issues with harassment against women, the platform is still a valuable community space. Settings that allow for trusted conversation, like these from UX researcher Caroline Sinders, would support this while allowing for some protection against drive-by abuse.

Try the Tone Analyzer now. If you want to incorporate IBM’s Watson into your own application hosted in the cloud, click here.


For our group, we selected the Anita Borg institute’s Twitter list of 500 most important women to follow on Twitter. Of those, we found the 50 most active, and took one week of tweets: June 8 to June 15, with a maximum of two @-replies each day.

There are no “men in tech” Twitter lists, of course, at least ones that are from comparatively reliable sources. Our control group, therefore, was Robert Scoble’s popular list of most influential people in technology. Several of the people on the list are, of course, women; a straight comparison with the online population at large works better for our purposes, anyway. Once again, we took the fifty most recently active users.

The control group contained several high-tier individuals on Twitter, making the volume of @-replies incredibly high. The TechPORTFOLIO team had to cut the time period down to 24 hours only, for June 8–and even then, we had to remove an unusually high spike of tweets aimed at @davidplouffe, an Uber board member and Barack Obama election campaign strategist. (Sorry, Mr. Plouffe, you were already having a bad day.)

For a free trial of IBM Watson Analytics click here.

UK Startups Worried About Talent and Funding After Brexit Vote

Friday, June 24th, 2016

After the United Kingdom voted 52% to leave the European Union, the startup community in London and Scotland — both of which voted to remain in the union — has been thrown into turmoil.

Debbie Wosskow, founder of the lobby group Sharing Economy UK, told London tech magazine The Memo: “Make no mistake, the news this morning is seismic. It is disappointing that we are in this situation and there is no doubt that the weeks ahead will be turbulent for many different reasons.”

North of the border in ‘Silicon Glen,’ the situation is much the same. John Peebles, the CEO of Administrate, an Edinburgh-based training management startup with $1.54 million of funding, told The Herald that a great deal of government-backed enterprise funding and talent came from Europe.

The Brexit decision has been disappointing to virtually all Scottish startups, Peebles told TechPORTFOLIO. “We’re in a relatively small market here in Edinburgh, and because there is a lot of activity, many Scottish startups are looking to hire into their team for growth. That’s just become a lot harder, potentially, now that the wider EU may start to require a work visa.”

One feature of the EU is free movement of labor; anybody born on the continent with a European passport can take a job in another European country. Although this is a startup-friendly policy, greatly widening the pool of candidates, Leave leaders campaigned against it.

Fred Destin, partner at venture capital firm Accel, told the Financial Times that the “fluidity, speed and simplicity” of this system was a huge benefit, and that the suggested replacement — a points-style system, like the one used in Canada or Australia — was too cumbersome for small organizations.

Turmoil aside, the European Union itself is keen to push quickly and make the process as fast — if not pain-free — as possible, with the President of the European Parliament looking at legally speeding up the steps, saying that uncertainty is the “opposite of what we need.”

Brexit leaves unresolved issues and no timelines or known conclusions. The labor market and free trade won’t be settled for a long time, and the pound sterling is plummeting.

Some see the final conclusion — when it arrives — as a positive. Jim Duffy, CEO of Entrepreneurial Spark, which describes itself as the UK’s largest free accelerator, says that businesses are trading across the world, not just Europe.

“Entrepreneurs will simply just get on with it and what’s important today is that they continue to focus on planning to ensure that they can navigate any turbulence in the coming days and weeks.”

Peebles agrees. “On the one hand, the instability of Brexit and a potential second independence referendum are unsettling, but on the other hand, we’re lucky that most tech startups are focused on global markets.”

Still, what many are describing as an emotional, ‘lizard-brain’ reaction from the British people is likely to have serious political consequences in the years ahead for the UK and the EU.

Toronto Culture Best Worldwide for Female Entrepreneurs

Thursday, June 23rd, 2016

Toronto has the most female entrepreneur-focused culture in the world, according to a study by the Dell Women Entrepreneur Cities Index.

The survey, released at the White House’s Global Entrepreneurship Summit, measured 50 world cities and ranked 25. For culture, the criteria included:

  • Female entrepreneur role models
  • Networking groups
  • Social and print media on women entrepreneurs
  • Policies around equal pay and hiring
  • Paid maternity and paternity leave

The methodology explains how and why the decision was made.

A city’s culture, while less tangible, is believed by women entrepreneurs to be a critical enabler for their participation in commerce… [we measure] the prevalence of relevant mentors, networks, and role models, and the predominant attitudes and expectations of that community toward women entrepreneurs.

Overall Ranking Lags

Canada’s biggest city fared less well in the overall ranking on the status of women in technology. Toronto ranked sixth, taking into account factors including access to capital and talent availability.

The overall ranking means more work needs to be done, given the emphasis that federal and provincial Canadian governments place on workplace diversity.

In Toronto, 19 percent of startups had female founders and 25 percent had female employees, compared with averages of 24 percent and 29 percent, respectively, for Silicon Valley.

Jim Diffley, a senior director at one of the study’s backers, research firm IHS, told Fast Company that a whole new set of metrics had to be created to produce the ranking:

“This is not something that has been done before,” Diffley said.

Top 10 cities for female-friendly culture

  1. Toronto
  2. New York
  3. Sydney
  4. Munich
  5. Singapore
  6. London
  7. San Francisco Bay Area
  8. Paris
  9. Stockholm
  10. Sao Paulo

Cover image contains icons licensed under Creative Commons 3.0, by Gerald Wildmouser

Land, Sea and Air: When IBM Bluemix Goes On The Move

Wednesday, June 22nd, 2016

Whether it’s in a tiny Swedish development drone no bigger than a slice of toast, or a lumbering garbage truck in the streets of Nairobi, Bluemix technology can be found on the move across the world. Check out these case studies:

Crazyflie Drones

Malmö, Sweden-based Bitcraze has created a handheld drone called Crazyflie, which weighs 27 grams and is equipped with long-range radio. It’s open sourced and expandable – almost like an airborne Raspberry Pi.

The Bluemix cloud is used as part of the mechanism to pilot the drone, either through an app or a gaming controller, significantly reducing development time. “It really saved us a lot of work when we got started,” says Bitcraze co-founder and developer Marcus Eliasson.

Fixing Nairobi’s Roads

To monitor the Kenyan capital’s traffic and construction needs, city officials fitted their fleet of garbage trucks with specially adapted mobile devices that used acceleration, gyroscopic and location data. As the trucks make their rounds, the devices upload their data to the cloud.

Bluemix is then used to deliver the results of the analysis to officials, accessible on mobile and desktop. “For the first time, city officials have a clear understanding of where potholes and speed bumps are,” says Dr. Aisha Walcott-Bryant of IBM Research Africa.

Speedboat Racing

SilverHook designs high-speed racing watercraft reaching speeds of up to 200 mph. Pilots have access to real-time feedback about the race through IBM Watson Analytics and Bluemix was used to rapidly develop and deploy this infrastructure, cutting development time by 40 per cent.

Ian Taylor, CEO of Animation Research, which works with SilverHook, says that the speed boat’s pilot receives data in real time helping drivers make decisions on the fly.

For a free trial of IBM Bluemix click here.

For a free trial of IBM Watson Analytics click here.

Ideal Has a Solution for Hours Wasted on Sales Recruitment

Thursday, June 16th, 2016

That friendly email in your inbox inviting you to interview for the highly-contested sales position you applied for may not have been written by a recruiter. Same for the text message to follow up if you forgot to respond.

It’s all part of a recruitment platform from Toronto startup, which uses algorithms, artificial intelligence, and IBM Watson in an attempt to relieve the recruiters’ burden from matching and contacting candidates.

Ideal is co-founders’ Shaun Ricci and Somen Mondal’s second startup. The first was Field ID, a safety compliance management firm. As the sales team grew, explains Ricci, they noticed inefficiencies with the way they were hiring.

“We looked at all the pieces of our business–the sales, the development, everything was very data-driven, very metrics-heavy, except when it came to recruiting,” says Ricci.

techPortfolio_Quote_June 16

They often found themselves hiring people who would not last more than six months. “We ended up with a lot of people that we liked, personally, but who weren’t necessarily a fit for the role.”

Ideal was later born out of a need to solve the problem of wasted time while recruiting for sales staff – both by automating the mechanics of the recruitment process and by using surveys and cognitive technology to assist matching.

When Ideal sets up an automated sales recruitment system for a company, they build a benchmark of what works – the values that team holds, such as integrity or leadership – as well as detail the company’s perks, such as flexible working.


On the other side, sales professionals signing up for the platform are asked their priorities. “Some people want to work from home,” says Ricci. “Some people want free espresso. There are pretty different attitudes towards culture.”

The data is then processed and matched in an algorithm, and recruiters are given a list of top candidates on the Ideal platform to choose from. The software e-mails and texts the chosen candidates; if there is no response, the recruiter is notified.

Job descriptions and resumes are all broadly similar in structure, which means the content can be brought out, organized, and interpreted.

“A boring job description is pretty data rich,” says Ricci.

Watson can compare how close the resume is to the job description, more quickly and with far more granularity than a human.

Better Decisions

“We can process a lot more efficiently. Our goal at the end of the day is to make better decisions when screening acquisitions, so the people who do talent acquisition can spend more time on high-value tasks, such as interviewing,” Ricci adds. has raised $2.5 million in funding, from a combination of angel investors and self-funding from the sale of the founders’ first startup to Master Lock in 2012. Customers include Context Media and Top Hat.

As for the future, Ideal is looking at increasing their scope beyond sales to other professions, and opening direct use of their platform to their customers. As for more potential use of the Watson technology Ideal is considering is considering using the voice services on phone screening.

“What if we can have those phone reviews recorded, and you can send those voice recordings to Watson, and you get text of the conversation as well as analysis of the voice. Can you detect if a candidate is passionate?”

Pizza Menus, Rebounds, and Blood Sugar: 3 Watson Use Cases

Tuesday, June 14th, 2016

We’ve been told countless times, what you get out of a computer is only as good as what you put in. But what happens if you’re feeding a computer that learns and reasons?

According to Caroline Ong, Business Analytics Leader at IBM Global Business Services Canada, cognitive computing is not necessarily programmed, but designed to understand context, reason (and provide that reasoning). Moreover, cognitive technology means the machine learns from feedback.

And because there are so many applications for this kind of technology, the system becomes specialized according to what it’s used for.

“It’s not one giant machine that takes knowledge from person 1, client X and system Y,” explains Ong. “Watson is a solution tailored to specific industries and specific client use cases.”

Here are three real-life cases from the IBM Watson team and their collaborators that use real life data in surprising ways.


The Toronto Raptors’ system can call up and interpret game statistics from every member of the team – and perhaps more importantly, their prospective opponents, so that the team can be as prepared as possible.

“We’re working with the Raptors to reimagine their data instead of using pen and paper, to pick out who we should be drafting next, or what are some of the tradeoffs we need to make,” says Ong.

Data is an important aspect of this with a feature called “Tradeoff Analytics,” where the user can tweak various statistics and see possible results. But basketball isn’t just a numbers game – personality analytics of players and opponents can also provide some valuable intelligence.


Blood Sugar Levels

Medtronic, which makes devices that measure blood sugar levels in diabetes patients, are exploring how to incorporate IBM Watson technology to ease the pressure on caregivers.

Ong said that the aim was to improve “quality of life for the patient and for the caregivers of the folks who are dealing with diabetes. The two teams in IBM and Medtronic worked together to see how we predict hypoglycemic levels and events, up to three hours in advance – as opposed to waiting for things to happen before we act on them.”

The aim is to get peace of mind for the caregivers without having them constantly monitor physically every single time.

Other health uses of Watson include Under Armour, data from wearable technology that can be used to make fitness recommendations, and a partnership with the BC Cancer Agency that uses patient data, a genetic profile and medical literature to make personalized treatment plans.

Pizza Menus

A robot concierge being piloted by Hilton hotels uses IBM Watson cognitive analysis to give guests advice, for instance, on what nearby Italian restaurants have kid-friendly cuisine.

Connie, the collaboration between IBM and Hilton, takes and interprets local information such as restaurant and tourist information using speech to text, dialog and natural language APIs, and ingests information from IBM travel advice too WayBlazer.

Ong says that the project behaves like a virtual assistant, “but this time the communication is done through talking to a robot in the lobby of the hotel.”

The more questions the robot is asked, the smarter it gets – and the robot keeps a log of questions that people pose it, which is helpful for the hotel itself.

“The good news is, you don’t have to tip the robot,” says Ong.

For a free trial of IBM Watson Analytics click here

Analytics4Life Takes The Stress Out Of Coronary Artery Disease Tests

Wednesday, June 8th, 2016

For a disease recognized as the most common global cause of death – 8.14 million worldwide in 2013 – coronary artery disease is extremely laborious to diagnose. A Canadian firm, Analytics4Life, is looking to cut out a large part of the labor involved – and the danger posed to patients – by leveraging data in new ways.

In a nuclear stress test, patients must exercise on a treadmill to measure blood flow after radioactive dye is injected. Physicians and hospital workers need to spend resources on managing radioactive nuclei. The test can take up to five hours and is only 75% accurate.

Analytics4Life, a startup based in Kingston, Ontario, is attempting to develop a much more straightforward method, using machine learning through neural networks and genetic analysis, with physiological information conventionally considered valueless.

“We’ve been able to demonstrate a very simple test that takes about three minutes to do where you don’t have to stress the patients,” says Shyam Ramchandani, co-founder and Director of Marketing and Business Development at A4L. “It’s just surface electrodes that go on patches on the body: seven of them. Three minutes later, they’re done, and then by the time their patches are off and their shirt’s on the result is on the doctor’s portal.”

Tech Portfolio Fact

This month, A4L is running its first machine learning tests with recruited patients already diagnosed with coronary artery disease, a condition where the vessels that supply oxygenated blood to the heart are obstructed by plaque; if the plaque builds up excessively and hardens, the condition leads to blood clots, angina and cardiac arrest.

After crunching what A4L calls “phase energy” data – which draws on a wide array of physiological signals – from the electrodes, and generating a formula based on the results, the company will then test blind on another selection of patients to see if their formula is an effective predictor.

“‘Phase energy’ is purely a mathematical concept,” explains Ramchandani. “There is no current physiological description of this. We will be the first to demonstrate this.”

The test itself can be administered from a “phase energy signal recorder”, an iPad Mini adapted with proprietary technology to connect to the electrode input. The recorder transfers the data to the cloud. The front-end software and the data processing lives on IBM Cloud, and important code infrastructure is hosted on IBM’s Bluemix platform.

This setup makes it all portable. “You technically can take our test anywhere you have a 3G signal,” says Ramchandani. “You wouldn’t have to fly people in from remote areas to a place that has a special camera.”

According to Ramchandani, IBM infrastructure is ideal for handling healthcare data. “We have an almost off-the-shelf HIPAA compliant tool. When you’re collecting medical information, you have to either de-identify it in a way that it can’t connect it back to the patient, or it needs to be hosted on and transmitted on infrastructure that’s been validated for security purposes.”

A4L completed series A funding last August for CA$10 million, and is hoping to complete series B at the beginning of 2017 to help it fund commercialization activity and a pivotal clinical trial.

Tech Portfolio Fact

That pivotal clinical trial will support their next key step: the FDA approval process. “If you can’t get through regulatory affairs in an efficient manner and get the kind of reimbursement you need, it’s not going to be a business,” Ramchandani says. The company has made senior level hires in order to facilitate interaction with the FDA.

Another option for A4L is expanding in Europe. (They will not start with Canada initially, because the market is too small.)

Although a price for the test hasn’t been set, A4L says that the overheads for its new system, once approved and functioning, are going to be astronomically less than the status quo. “We have no regulated nuclei that needs to be injected, purchased, or handled,” says Ramchandani. “You don’t need a specialized technician, or a specialized camera.”

And no more running on a treadmill, either.

For a free trial of IBM Bluemix click here.