Technology can automate financial services, creating efficiencies and reducing cost. Accurate, timely information drives financial markets.
And within the past two decades, technology-driven data standards have dramatically increased the efficiency of financial products. So it’s only logical to consider how they can be incorporated into fintech offerings. Without data standards, the automation and speed promised by new financial technologies, like blockchain, crowdfunding and peer-to-peer lending, will not be met. This transformation is years, not decades away. We invite you to join us, exploring how data standards can help fuel the innovation that is happening now.
Blockchain and Smart Contracts
The blockchain is a shared distributed ledger system on which information about all cryptocurrency transactions, contracts or assets are recorded and made publicly available. Every time a new transaction is conducted on the blockchain, it is recorded and attached to the blockchain and becomes a permanent, transparent and searchable record, so that anyone who is part of the blockchain is able to view the full transaction history. Because the blockchain is usually open with all transactions viewable, it is considered “tamper-proof”. The transparent and permanent nature of the blockchain establishes “trust” between parties who do not know each other.
“Smart contract” is a term coined to describe computer protocols that facilitate, verify, or enforce the negotiation or performance of a contract, and that reside on the blockchain. Smart contracts can be used to make loans, issue securities or perform any number of more complex financial transactions. Many contracts include clauses, triggered by data-driven events that could activate, shut down or change the terms of the agreement. To learn more about blockchain and smart contracts:
- The Blockchain Landscape (PDF)
- Blockchain Funding Opportunities (PDF)
- FinTech Webinar Replay “Blockchain 101” featuring Christian Lundkvist, Consensys
Crowdfunding is the practice of funding a project or venture by raising monetary contributions from a large number of people, today often performed via internet-mediated registries. In October 2015, the SEC passed Regulation Crowdfunding as part of JOBS Act implementation. The new regulation, which became effective May 16, allows non-accredited investors to fund startups for the first time. Offerings that fall under this regulation start at $50,000 and range to as high as $1 million, with corresponding levels of financial disclosure requirements. Given the size of the funds being raised, data standards can provide a cost-effective tool to make financial disclosures available to funding portals to evaluate potential offerings and to investors considering an investment.