Ahead of the Blockchain for Finance Conference 2018, Dogpatch Labs in Dublin’s IFSC held a pre-conference pitch session which was attended by about 60 people. This writeup looks at a talk from Brian Nolan, Founder of Finteum about their finance platform which aims to make a global financial market for intraday borrowing using Distributed Ledger Technology.
Brian introduced himself with a background in managing bonds and derivatives, including at Bank of Ireland Capital Markets as well as UBS, and incorporated in May 2018. The main problem he discovered in his time is that intraday mechanisms currently in the financial system don’t enable efficient cash management, especially as regulations have introduced a raft of rules around liquidity. This means that financial organisations have to hold a balance against intraday spending, and central banks mainly manage things to ensure orderly processing of transactions.
Finteum aims to address this by setting up a market between banks who need short term cash for just a few hours, and also know when it’ll be returned via a smart contract. The platform is very high-finance (and to be honest a lot was above my head, although there were plenty of bankers in attendance who seemed to understand what he was saying), and Finteum wants to make sure that there is a shared data record between different counterparties. The platform is web based, with a cash network in place, built on the R3 protocol. Using blockchain, it will enable a shared trusted database between participants, as well as the speed of blockchain settlement.
The platform aims to have a fiat linked token to reduce or eliminate cryptocurrency price volatility and has partnered with consultants Baringa Partners to assistt the development, and is also seeking a CTO at this time.
As an example during his pitch, he explained how a bank could use the platform. A bank would need liquidity for a very short-term timeframe, such as a few hours. They log into the platform, see the amounts available, take a contract which is settled in a few minutes, and return the funds later that day as agreed within the terms of the contract.
After his talk, a number of questions were asked by the floor. First up, what interest rate would they use? The shortest available is currently an overnight rate, and nor really applicable for just a few hours. At this time, they are undecided on how to charge, as they have to make a new process or use a fixed rate. This led on to a second question as to how they’ll make money on the platform, and he explained that their goal is to set a transaction related fee, not a subscription at this time.
If you’re interested in the platform, you can find more at finteum.com