How will blockchain impact the music industry?

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While the financial industry is on the brink of disruption, the music industry has been on a steady decline as digital has replaced physical distribution the last ten years. Even though revenues in the music industry is growing for the first time since 1995, the gap between music consumption and artist revenues is growing. This is due to several factors, but one of the contributors for lesser known artists is how streaming platforms calculate royalties. The way it works, the artist’s monthly streams is divided on total monthly streams, effectively favoring whatever becomes that months huge hit, instead of dividing revenues per play. This has enraged both fans and artists, and some artists have chosen to pull their music from streaming services such as Spotify.

This is where many are advocating the use of blockchain for a more fair music and royalty distribution. I had the pleasure of meeting Imogen Heap last year, who then had released her last single on blockchain. By doing this, she hopes to create a “fair trade” music industry that aims to sidestep intermediaries like iTunes and Spotify and giving musicians ownership of their own work as well as giving the artists control of pricing and terms of use.

Cutting out the middleman is only one area where blockchain could benefit musicians. Royalties are often divided amongst several artists, where the performing artist(s) get one fraction, another to composer, another to the producer as well as fractions to the publisher, the record company, A&R depending on your contract. For sampled music, it gets even more complicated. In addition to providing an immutable proof of ownership for each recorded song, a blockchain-based solution might even sort out the payments of those royalties in real-time opposed to today’s streaming world where it takes forever for an artist to receive any payment from music published on digital distribution platforms.

Copyright administration is another area where complexity in today’s system creates room for intermediaries like performing rights societies to track and collect royalties whenever music is played public. For a small country like Norway there are no less than two different performing rights societies. A distributed database of ISRC codes could potentially automate and make this process more transparent and reduce the need for intermediaries.

Lastly, blockchain could enable new business models when it comes to funding. Crowdfunding has already become an option for many artists, and sites like Indiegogo and Kickstarter feature lots of artists hoping to raise funds for their next release. Based on how much is raised, backers receive various rewards in forms of both physical and digital copies of upcoming releases, merchandise and concert tickets. A blockchain-based crowdfunding solution would enable fans to invest in the next release of artists they love, and smart contracts would entitle the same fan a small fraction of future royalties. This would also incentivize fans to promote artists the support, creating a stronger bond between artists and fans, as well as give independent artists supporters that have a mutual financial incentive to promote the music.

A blockchain –based approach to digital distribution of music could benefit the entire value chain from funding, rights management, copyright administration as well as payments. However, as in most blockchain use-cases the real change need to occur in the business model. Technology is only an enabler that could provide transparency and provenance of digital rights.

Photo taken at Oslo Marathon 2015.

Banks should not underestimate Facebook Messenger

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This post was originally published at Techcrunch.

Before you say that Facebook is no longer perceived as cool with today’s youth, do you know what is even less cool? Banks.

When you break down the numbers, coolness becomes less relevant. When it comes to user engagement, Facebook’s reigns supreme above all others. WhatsApp has exceeded 1 billion users, and Facebook Messenger reports 900 million users, handling 60 billion messages a day combined — three times the number of traditional text messages.

The combination of chat and payments have already proven to be a great success, as exemplified by the launch of Facebook PaySnapcash by Snapchat, WeChats integrated payment solution and Kakao Pay in Kakao Talk in South Korea.

However, the potential for chat apps in financial services is by no means limited to social payments. Facebook has already confirmed that they are pursuing Wechat’s success, venturing into eCommerce. This is only the beginning. The introduction of chatbots on the Facebook messenger platform could revolutionize the way we look at relationship banking. Digibank in India is based entirely on a chat interface, and allows its customers to do all their everyday banking needs through a chat interface. Even opening their initial bank account. By applying machine learning and natural language processing, the chat interface is able to handle a wide variety of everyday banking use-cases that was previously solved by navigating through user-unfriendly mobile banking apps or contacting customer service representatives.

Facebook messenger’s  chatbots will have a significant impact on banking, and is predicted to usher in the end of the app-era. By transitioning from graphical UI til conversational AI, a majority of banking services could be automated through simple chat request like “what is my daily spending limit until my next paycheck” or “approve and pay my outstanding bills”. The impact of chatbots is not limited to simple daily banking requests. AJ Bell is aiming to utilize Facebook chatbots to offer trading services for investors, as well as Personetics that delivers personalized financial guidance to customers everywhere through their AI-powered chatbot.

The bots for messenger platform represent a unprecedented opportunity for incumbents to increase customer engagement. Banks are in possesion of vast amount of user data that is invaluable for unsupervised machine learning as well as intangible know-how through years of experiance for supervised machine learning.

Chat apps and virtual assistants is predicted to be the future of user interaction, and may even replace traditional web browsers and traditional online search as we know it. Banks should not underestimate the disruptive power of chat apps. Remember, it was a banker who once said: The horse is here to stay, but the automobile is only a novelty – a fad.

My bank already has an app

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This is a guest post by Jason Bates, co-founder of 11:FS and Mondo.

That’s what I hear when I tell people that I’ve just spent the last two years building a new digital bank. And they’re right, their existing bank has had an app and a website for years!

Most traditional bankers would also say that they do digital banking! They’ve been selling current accounts, credit cards, and loans with targeted digital advertising; increasing customer satisfaction with their apps, and dramatically decreasing the costs of servicing customers through their ‘digital channel’.

And despite what you might have heard, most people are also reasonably happy with their bank. They trust their money is safe, they have an app, and although they may sometimes complain about being caught out with hidden fees and charges, they aren’t running to the competition. The annual switching rates for banks is about 3%, and in a recent CMA survey 37% of people reported that they had been with their bank for more than 20 years.

So how will the next generation digital banks succeed, if the big banks are already digital and customers are happy?

Through hundreds of customer interviews, leading the product and proposition development at Mondo, I’ve found that most customers do generally think that their traditional banks are OK, But the conversation gets much more interesting when you ask about how they manage their day to day finances.

At that point, they give you a shrug, before diving into crazy stories of how difficult it is to manage the glide path between pay-days; deal with overlapping annual, quarterly, and monthly bills; save for holidays, open joint accounts with partners, and try to spend less, save more, and basically keep control of their money.

The problem is that what we we think of as digital banking today is actually just digitized banking. In the same way that putting a copy of a newspaper onto an iPad is not digital news, selling ‘albums’ on iTunes is not digital music, and getting fast access to taxi numbers is not digital transportation; looking at a digital copy of your paper statement and account balance just doesn’t cut it any more!

Digital is not just a new channel among many; it can turn traditional ‘dumb’ financial products into real-time intelligent contextual services that make customers lives much easier.

“Banks should be less like bad landlords and more like great waiters.”

So rather than providing cryptic statements and basic transactions – while making profits from customer’s mistakes – the customer proposition I developed at Mondo follows a different path.

Next gen. digital banks will provide intelligent services that make customers lives easier, save them money, and help them feel more in control, while dropping the punitive fees and charges that traditional banks apply.

From letting you know that your electricity bill is 30% higher this quarter, to advising that you are likely to run out of money 4 days early; from smoothing bumpy annual bills, to making that habitual balance check on your way to work unnecessary; there is a whole world of new intelligent services that will provide everyone, rich or poor, with the digital equivalent of a personal banker.

And of course this only becomes more powerful as banks like Mondo work with a growing community of customers and fintech partners to build additional services: integrating savings, borrowing, investment, and analysis into the banking app through secure digital interfaces (APIs).

So yes I tell them, your bank has an app, but you’ll look back in a few years and realise that it wasn’t digital banking. And like any big improvement, you’ll wonder how you ever lived without it.

You can’t have financial inclusion without digital inclusion

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This post was originally published at TechCrunch.

One of the most exciting aspects of fintech is the promise of delivering financial services to the unbanked and underbanked population of the world. According to the World Bank, 2 billion people are still unbanked in the world today. Even though this is a high number, it still is a decrease of 20 percent since 2011. Of the 2.5 billion people who have no access to a traditional bank in 2011, 1 billion have cell phones and services like M-Pesa has provided mobile money accounts to 12 percent of adults in Sub-Saharan Africa. However, a study conducted by GSMA found that “women are on average 14% less likely to own a mobile phone than men”, creating a gender disparity in financial inclusion.

Of the unbanked population, 1,5 billion people are unbanked due to their inability to prove their identity through a valid birth certificate, passport, proof of residence through utility bill or some other means to fulfil traditional KYC-procedures. When there is no bank account, people only gain access to and underground economy and is on the outside of vital economic and public services like education or welfare.

This has sparked the debate that digital inclusion if a prerequisite for financial inclusion, as digital, and specifically mobile financial services accelerates financial inclusion.

The United Nations has stated as one of their sustainable development goals that providing a legal identity for all of the world’s population by 2030 is a shared objective for the international community. This is also backed by the World Bank through the Identification for Development (ID4D) program to assist developing countries achieve this goal.

However, it is no straightforward process to create a global digital identity and several alternatives have been suggested. Estonia offers an e-residency, a transnational digital identity available to anyone in the world interested in administering a location-independent business online. There are several benefits for countries offering such a digital residency, including tax on any earnings generated through digital banking services on the identity, and is already  investigating the prospect of applying blockchain technology to the identity.  This includes an e-voting scheme for companies listed on Estonias stock exchange, similar to the basic principle of DAO, as well as notarization services  through Bitnation.

Deloitte is developing a proof of concept for smart identity, including the ability to use a single digital key to access any identity-restricted location, automated identification and verification of customers, public records like driving licenses and passports, into a single digital record.

The use of blockchain in creating trust in digital identity concepts were also one of the key subjects at the ID2020 conference, hosted at the United Nations in May with the goal of getting governments and corporations on the same page as UN when it comes to solving the need for global digital identities.

One of the initiatives seeking to provide a solution is a collaboration effort between ConsenSys, Microsoft and Blockstack Labs that aims to create an open source, self-sovereign, blockchain-based identity system. Bitnation has also launched its Decentralised Borderless Voluntary Nation Constitution using Ethereum, promising users to create their own nation through smart contracts.

Facebook is also taking matters into its own hands, and is creating a global digital ecosystem revolving around ownership of their users digital identity. According to the founder of Piratebay, Facebook can be considered the world’s largest nation with their own views on ethics and censorship. As our lives are increasingly entangled in digital services, social logins are shaping the future of our digital identities. The European Commission is even proposing the idea of using national ID cards to log in to online services, including Facebook, Twitter and even Uber. Thus strengthening your Facebook profile as a borderless digital identity.

Despite notable efforts, technology alone will not solve the problem. The real hurdles are borders, sovereign governments, global trade and businesses.

The first challenge is issuing and registering a digital identity. The problem disproportionately affects children and women, where it is estimated that 750 million children have no legal identity and as of 2012, the world has failed to account for the births of 230 million children under the age of five. This effectively puts millions of children at risk of being victims of human trafficking and child labor. Therefore, birth registration must be a top priority for digital inclusion. A blockhain-based approach could provide a starting point for an immutable record of legal identity. By applying a decentralized approach, citizens are able to own and update their own personal identity, thus removing the dependency on governmental intervention.

Storage, authentication, authorization and audit are key factors when creating a digital identity and different biometric factors as a means of authorizing an authenticating contain appealing properties to create a frictionless digital identity. Identity theft is an increasing problem, and a blockchain-based digital identity could potentially provide provenance for digital identities.

The importance of providing legal digital identities to the world stretch far beyond financial inclusion, and has the potential to provide better gender equality in developing economies, help people gain access to basic public services like health and education and secure rights for refugees just no name some of the benefits stated by the United Nations. Technology alone is not the answer, but the promise of blockchain could act as an enabler for a decentralized global identity database, where the people owned their own identity and no single government or corporation could assert sovereignty.

What’s next for Nintendo following Pokémon Go?


Like so many others, I have spent my share of time walking around like a mindless zombie hunting Pokémon with my cell phone this summer. The game was an instant hit with both gamers, being the fastest growing mobile game of all time as well as with investors as Nintendo stock leaped 25 percent at release.

The enthusiasm was fueled by projected revenues from in-game transactions as well as the belief that the release of one of Nintendo’s strongest franchises on smartphones marks a new era for the company.

However, the financial optimism was short-lived, as investors soon realized that the development of Pokémon Go was done by as a joint venture between Niantic and The Pokémon Company. Even though Nintendo is a shareholder in both companies, the estimated effective economic stake is only 13 percent. Combined with decreased revenues and weak YTD sales numbers for both the Wii U and the 3DS, the stock dropped 18 percent in a day. But, despite disappointing quarterly results, the stock is still up almost 50 percent YTD.

Is this wishful thinking from Nintendo fans with money to invest, or will Nintendo be able to bounce back again?

In order to look at this, it might be a good idea to just exclude Pokemon Go as a standalone game from the equation, as one mobile game alone will not be sufficient to generate sustainable revenues. Nintendo has announced a wearable accessory to the game that will retail at $34,99, but this will not be available until September. The  life-cycle for mobile games is becoming shorter, and Pokemon Go has already reached its user plateau.

Nintendo is well known for creating strong franchises based on its IP and has announced two Pokémon games for the 3DS this fall. Even though sales of the 3DS is on the decline, Nintendo has amassed an installed base of 60 million units. Some interesting metrics to observe for an indication on cross-platform synergies would be how many copies of Pokémon Sun and Moon that will sell in 2016, as well as whether 3DS sales will rise again as Pokémon as a franchise gains new popularity.

If this is Nintendo’s strategy, it makes sense that both Animal Crossing and Fire Emblem will launch as free-to-play mobile games later this year, with four more titles scheduled for 2016. Are Nintendo’s mobile games just a part of a cross-platform franchise strategy? It is also confirmed that the Nintendo NX will be a hybrid between a traditional home console and portable gaming machine. This is a bold move by Nintendo that will make the console stand out something completely different from the PS4 or Xbox One.

Nintendo is also seeking to cash in on nostalgia by releasing the NES Classic, which will definitely become a hit with everyone who grew up with Nintendos classic games. I’m getting one for sure!

Nintendo is a fascinating company that has been a creative force in the gaming industry for decades. But in order to stay creative, you should expect some failures along the way. Nintendo has created legendary game franchises like Super Mario Bros, The Legend of Zelda, Metroid and many more, as well as ushering in many of todays industry standards like rumble controls and analogue sticks. But in order to stay creative there must be an acceptance for failure, and Nintendo excels at creating spectacular failures like the Robotic Operating Buddy, the NES Power Glove or The Virtual Boy.

Even though millions of gamers is running around outside hunting Pokémon, it isn’t the first time Nintendo got gamers out of the lounge chair. Ten years ago Nintendo got us out of the couch to play Wii Sports in our living room, but the motion control hype died off and now seems more like a one trick pony. Regardless of whether AR is the new motion control, Nintendo need to capture a new generation of fans in order to stay in the spotlight. So far it looks like they are doing a fairly good job this round.

The state of fintech in 15 visuals

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This is a guest contribution by Max Wegner of Appcessories.

What makes the world go round — money or technology? It’s a big question, but now with the emerging sector of FinTech, you no longer have to choose one or the other. It’s both.

FinTech is a mashup of the terms “financial” and “technology,” and it describes the growing field of companies that use new digital technologies to help both consumers and businesses handle and manage their money. It’s more than just checking your bank balance online or making a payment through PayPal; FinTech includes categories like retail and institutional investing, financial research and data, financial transaction security, and even crowdfunding.

There’s more to know about FinTech, of course, like how and where the venture capital is flowing, how long the companies have been around, and where in the world they’re located. That’s why our friends at appcessories.co.uk have created this handy infographic. Check it out, and you’ll be up to speed on the world of FinTech.

A summary of the first half of 2016

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Apparently I am fintech according to some journalists

I get a lot of questions about my blog, so I thought I’d give a shot at a more personal touch as I summarize the first six months of 2016 before I take a hiatus from blogging over the summer.

First of all, why am I doing this? The the main purpose for writing this blog is to learn and reflect on subjects that I need to know more about professionally (as well as a few other subjects that I find personally interesting). If I am able to write about a subject it is a good indication that I have gained some insight is my general rule of thumb. In order to maintain a certain pace, I follow a firm routine and sit down almost every Sunday to write.

Looking back, this has been a tremendously exciting six months, and I have been lucky to have been working on a lot of exciting stuff.

For me, the year started out by analyzing and developing a vision of how we as banks should position ourselves in a world where traditional value chains are being replaced by digital ecosystems. What are the trends in fintech for 2016, and how is digitization shaping our society.

On that note, payments has been a significant part of my work. Both by participating in the acquisition of the Norwegian part of mCASH, analyzing the fragmentation of the payment landscape, as well as executing on the insights by serving on the board of directors on SpareBank 1’s mobile payments subsidiary.

Crowdfunding and alternative finance is on the rise, and I’m by no means just observing this from the side. Since January, I have been tightly engaged in building our own crowdfunding platform. Following the principles of Lean Startup in order to ensure product market fit and rapid time to market. The result has been a crowdfunding platform that is centered around the relation between the owner of the campaign and the contributors, rather than the marketplace itself. Chris Skinner even gave credit and said that banks should do like SpareBank 1.

When working with digital  transformation and innovation from within, it is important to understand the key trends and drivers that shapes the industry. The majority of my time is spent on change management.

Through Nordic Edge, the Stavanger region is aspiring to become a leading hub to make make cities, communities, companies and homes smarter. SpareBank 1 SR-Bank has invested, and looking into how banks should prepare for smart cities and the internet of (every)thing. I have been lucky to be part of the project team from SR-Bank.

Blockchain suddenly went from being “the technology behind bitcoin” to something everybody wanted to learn about. In my case, blockchain from a banking perspective. We are running our own blockchain pilot, and systematically looking how this could benefit or challenge the relationship banking model.

Artificial intelligence, or machine learning has been one of the hottest subjects in technology, and will impact the financial sector in numerous ways. Robo-advisory, processs automation, credit scoring and everyday banking services.

Collaboration has been one of the hottest subjects in banking this year, and I have spent some time on working on how banks could collaborate with fintechs in a meaningful way, either through open APIs, hackathons, partnerships or acquisitions.

This has served as a small sample of what I have been working on. Hopefully, I will able to reveal and share some insights gained through some of the other exciting projects I am currently working on during the second part of 2016 as well.

For those looking for summer reading material, these are this years blog posts in chronological order:

  1. Fintech predictions for 2016
  2. Digitalåret 2016
  3. Omfanget av roboter og kunstig intelligens er mer komplisert enn vi kan forestille oss
  4. Alternative finance is gaining traction in the Nordics
  5. Digitalisering er ikke forbeholdt fremtiden, det er nå det skjer
  6. My blog has reached its one year anniversary
  7. Are payments necessary?
  8. From headlines to heart and soul: How do banks engage with startups in a meaningful way?
  9. An update on fintech in Scandinavia
  10. A short summary of Money 20/20 Europe
  11. The evolution of Facebook
  12. Pirates with Ties interview with Christoffer O. Hernæs of SpareBank 1
  13. The ultimate guide to fintech in Norway
  14. Blockchain from a banking perspective
  15. Some reflections from the European FinTech Awards
  16. The stream from Oslo blockchain day is now available
  17. Challenger banks panel discussion at European fintech awards
  18. The state of fintech in Scandinavia in numbers
  19. What is the value of a fintech company?
  20. Mobil betaling handler ikke om å bytte ut plastkortet med mobilen
  21. What we learned about the transformation of Consumer Banking from 5 Pirates with Ties interviews
  22. Professional eSports is becoming a big thing
  23. Can banks and fintechs collaborate in a mutually beneficial way?
  24. How to succeed with innovation in established companies
  25. What is Brexit and why should you care?

I even found the time to record and released some music between it all.

Make sure to tune back in August for weekly updates on various subjects related to innovation, finance, technology and change management.