Presentation at Tieto’s Banking Day June 2014 in Stockholm Sweden

1. Entrepreneurs and technology
challenging the Banks?

2. ”Bitcoin has made me interested in issues
like finance and money – things that I never
thought about before. Now I am really
curious and questioning why things are the
way they are in the finance world….and
wondering what can I do to change them.”
- Bitcoin 2014 Conference Attendee

3. In just a few years in Sweden alone…
Company Founded Business
Klarna 2005 E-commerce payment services
MyLoan 2006 Loan broker
Trustly 2008 Online payments
TrustBuddy 2009 P2P lending
FundedByMe 2011 Crowdfunding, crowd equity
Tink 2012 Personal finance
Safello 2013 Cryptocurrency exchange
KnC Miner 2013 Cryptocurrency mining equipment
?? 2014 ?

4. Share of wallet is rapidly shrinking
Nordic Banks
Pay, Save,
Lend, Insure
Nordic Entrepreneurs
International Entrepreneurs

6. Increasing competition for
investors through crowdfunding
Massolution 2013
Millions of dollars 2015e
USD 17 bln
Crowd equity
rising

8. And in the US and UK…
•P2P lending
•>USD 3.8 bln in personal
loans since 2007
• USD 750 mln growth each
quarter
•Now offering business loans
•Strategic alliance with Union
Bank

9. From Africa to Eastern Europe to ?

10. The future?
Facebook + banking license?

11. People
• “Net generation”
• 24x7 “mobile” workforce
• Knowledge via MOOCs
Technology
• Broadband
• Mobile hardware
• ICTs
• AI
• Robotics
Open Source
• Software
•Hardware
Convergence of…..
Finance
• P2P lending/microfinance
• Crowdfunding/equity
• Cryptocurrencies

12. Institutions
Emergent Collective
vs
E.g., Central Bank
~ Long-standing financial
institutions and regulations
E.g., Bitcoin Community
~ Emergent collective of users across
globe connected through internet
Challenges to institutions?
Teigland, Yetis, Larsson, 2013
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2263707

13. Challenging the
fiat money
system?
In just five short years… Bitcoin
•Open source project in Jan 2009 by “Satoshi Nakamoto”
•Developed by self-organizing community of 1000s strangers
across globe
•Approx USD 8.4 bln in circulation (June 2014) and 70,000
daily transactions
•SEK 55 bln of Bitcoin vs Swedish Crown of 91 bln SEK
Teigland, Yetis, Larsson 2013 http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2263707

14. Cryptocurrencies reshape global finances
Currency Code
Year
Est.
Founder(s) Active Website PoW PoS
Bitcoin BTC or XBT 2009
Satoshi Nakamoto
(pseudonym)
Yes N/A Yes No
Ripple XRP 2013
Chris Larsen & Jed
McCaleb
Yes ripple.com No No
Litecoin LTC 2011 Charles Lee Yes litecoin.org Yes No
Peercoin PPC 2012
Sunny King
(pseudonym)
Yes peercoin.net Yes Yes
Dogecoin DOGE 2013
Jackson Palmer
& Billy Markus
Yes
dogecoin.co
m
Yes No
Namecoin NMC 2011 N/A Yes dot-bit.org Yes No
Mastercoin MSC 2013 J. R. Willett Yes
mastercoin.o
rg
No No
Primecoin XPM 2013
Sunny King
Yes
primecoin.or
Yes No

15. Rise of local currencies

16. Bitcoin – so much more than a “coin”
From dumb to smart money
Underlying Bitcoin protocol holds real
transformative power
Transfer property rights (e.g., shares,
certificates, digital money) fast,
transparent and very securely.
http://thenextweb.com/insider/2014/02/15/bitcoin-platform-currency/

17. Changing
regulations

18. How should banks react?

19. “Keep your enemies close…”

20. Remember.. you can’t control networks
If you try to stop this, something else will
rise and take its place? What will this be?

21. What does the future hold?
• Will we see a parallel to other industries,
e.g., music, software, newspaper, books?
• Will “trusted” third parties no longer be
needed since trust can be mediated through
networks, which are self-regulating?
• What basic assumptions will no longer hold,
e.g., do we need money?

22. The genie is
out of the bottle….

23. "...when the rate of change
outside an organization is greater
than the rate of change inside,
the end is near...."
- Jack Welch

24. Some questions…
•How to learn about new developments such as
crowdfunding, P2P lending, cryptocurrencies, mobile
payment systems?
•How best to engage and with which developments?
•How to turn threat into opportunity?
•How to let go of control…..

25. Robin Teigland
robin.teigland@hhs.se
www.knowledgenetworking.org
www.slideshare.net/eteigland
@RobinTeigland
Photo: Lindholm, Metro
Photo:
Nordenskiöld
If you love knowledge, set it free…
“We ain’t seen nothin’ yet….”