Some 1.7 billion people worldwide have no access to banking facilities, something that a number of organisations at the event were seeking to put right. For example, Freddy Kelly is CEO of Credit Kudos, a bureau that uses Open Banking and financial behaviour data to asses individuals’ and SMBs’ credit risk more accurately than traditional measures.
The big credit reference agencies are “blunt instruments” that rate people’s propensity to repay existing credit agreements, and “they don’t work very well”, he said. That’s true and his company is working with financial institutions that service NHS trusts, the police, and the military (living in barracks means that a soldier may have no registered address).
According to the organisers of London’s Digital Impact Week Summit, it is now possible to envision a world where everyone has a digital identity, and can therefore be connected to the economic system. In their view, blockchain (again) has a direct application in financial inclusion, via new decentralised finance models. But would such a system really work for humans on a global scale? Or would humans end up working for it?
Either way, this is the space that another start-up, SupraFin intends to play in. It’s a global, automated, blockchain-based investment management platform for digital and crypto assets. For CEO Liliana Reasor, crypto assets will eventually take over from financial assets: in the future, everything will be digitised in the form of exchange tokens (cryptocurrencies), utility tokens, or tokenised securities, she said. Her company offers a portfolio of crypto assets to clients, “depending on their appetite for risk”. She explained:
We need a complete remake of capitalist system: there is no point in all this being owned by the investment banks, who created the systemic failure [of 2008-09] or the tech entrepreneurs who created an addicted generation.
Crypto-currencies and digital tokens will certainly be part of the new financial world: Facebook’s Libra project (currently on ice) could be pegged to the dollar; the EU and European Central Bank are discussing launching a digital currency – partly in response to Facebook’s proposals – while China is reportedly close to launching a digital Yuan.
But the challenge for crypto assets, specifically, is establishing a fair value for them, which includes the cost-per-watt of mining them. Who pays the energy bills and offsets the carbon in a vast, decentralised network (in which the world economy could crash at internet speed) is an interesting question and one that your average startup is reluctant to answer.
For Ben Joakim, founder and CEO of Disberse – which he described as a challenger bank for the aid world – money moves slowly, expensively, and in an opaque fashion in the traditional financial sector. Banks charge upfront fees and there is a lack of transparency. Organisations like his and others at the event are here to change all that, he said. All noble ambitions.
But what about the humanitarian impacts of new technologies? This was the focus of some other aspirational and intriguing panels. With an estimated 214 million people on the move worldwide and forced displacement from wars, political upheaval, religious persecution, and other crises at a record high, population mobility is one of the leading policy issues of the 21st century.
Few realise that over half of all displaced people (51%) are under 18, many are female, and the worst rates of preventable mortality among women and young people are found in humanitarian crises. How can digital tools be deployed in these settings to prevent problems such as human trafficking and abuse, which occur when – as in the tsunami – people have no documentation?
Zufi Deo is co-founder and CEO of a start-up called BizGees, which aims to transform refugees into entrepreneurs. He is working towards giving displaced people a portable digital identity, so they can have access to healthcare and finance. But he said that technology in itself isn’t the answer to these problems; the solution is more human-centric design.
For George Windsor, Head of Insights at entrepreneurs’ network Tech Nation, and Georgina Brett, Chief of Staff at ethical investment specialists The Reserve, blockchain and distributed ledgers should be at the core of grand challenges such as aid distribution, new healthcare models, and preventing climate change (!).
Windsor said that these technologies can provide security and enable trust, but could also increase inequality:
We have to be really cognisant that the technologies aren’t in themselves good or ethical.
Brett added that the wealth divide is already extreme thanks to a deeply flawed financial system.
Conference Chair Helen Disney, CEO of Unblocked Events, admitted that while digital self-sovereign IDs could help to prevent human trafficking, the technology itself could be exploitative:
You’re giving up a lot of data. You’re not necessarily a customer with sophisticated knowledge – you may be selling your data to a big pharma. Some people are vulnerable because of where they live. How can people trust in the technology? They may be asking, ‘Why should I trust this phone or this app?’
That is the question.
Two speakers summed up this thought-provoking – if self-marketing centric – event. Anton Mozgovoy, Head of Product at smart contracts player Jthereum, said that, ultimately, digital transformation needs to be about social transformation, or it is no transformation at all. Excellent point.
For Chris Turner, Executive Director of socially focused enterprise the B Corporation, we need to get businesses to think “people, planet, profit” rather than simply of their shareholders. Yes indeed. All businesses should consider the planet, with annual environmental impact reports, not just profit and growth statements.
But how will they measure it? I’m so glad you asked me that. Let me introduce you to my blockchain start-up… [repeat and fade].