In discussions of what will lead to successful fintech ventures the focus is often on the technology. While the technology is obviously an important component in the success of a fintech idea or venture, the truly critical driver is how well the new approach helps better meet the needs of the end client.
Here at Hex Trust we often speak of ourselves as providing a bridge. Our firm provides a bridge between the two named components of fintech, the financial and the technology.
The sexy and attention-grabbing part of fintech is of course the technology. The services and interfaces available now would have seemed like science fiction just ten years ago. We forgo cash to instead pay for our purchases with mobile wallets. We bypass specialist advisers to derive our investment allocations using the algorithms of a robo-advisor. And perhaps most impressive and shocking of all, people are ignoring key aspects of the historical definitions of money and paying high prices — ever increasing prices over the last half year or so — for cryptocurrencies that arguably have no more substance than the cryptographically-defined arrangement of 1s and 0s.
But while the technology brings the flash, the technology itself is not what is driving fintech’s success. The technology only provides an improved pathway towards the user’s fundamental objective. For the past few years this writer was fortunate to teach the Fintech course for the MBA program at The Chinese University of Hong Kong. A regular component of the course was the reminder — almost a mantra — that ultimately fintech only succeeds insofar as it helps people (the customers) better meet their financial needs. Impressive as the mechanization and automation might be, it needs to make finance better or it will fail.
An example of this focus on the underlying need is seen in the roots of Hex Trust itself. Years ago one of our founders — our CTO — noticed a massive 10% or so arbitrage in cryptocurrency prices between Asia and North America. While trained as a software engineer he had spent his entire career designing and running trading and settlement systems for financial houses, and so finding such an attractive trade that linked to his expertise in technology was a golden opportunity.
Alas, making it all happen took a bit of work. Opening accounts was relatively straightforward, but then dealing with different wallets, keys, establishing transactions, etc, was extremely challenging without clear directions. After several days effort things were still labyrinthine, and this was with a technology specialist driving the process. For most financial professionals the effort would be too much (which is of course what allowed that 10% price spread to pop up in the first place.)
Even once the process was working, as our CTO put it, “…this is so convoluted, error-prone, and nerve wracking as is, it would never work at scale.” Therefore for cryptocurrencies and other crypto assets (including STOs, funds, etc) to develop as institutional asset classes, they need a mechanism that allows them to be treated in the same way as any other asset.
Hex Trust is proud of its in-house, proprietary technology, and the fact that we have built our own solution gives us great flexibility in meeting clients’ needs. Most importantly it has allowed us to build systems and processes that are not solely focused on what the technology can do, but instead zero in on what the end clients most need to make their jobs easier and their investments safer. Ultimately we succeed not just by having the best technology, but by bridging the technology and the finance. By doing his we achieve what is ultimately the most important objective for fintech — to help investors better achieve their investment goals.
Hex Trust is the Asian leader in enterprise-grade custody for digital assets. Led by innovators from the institutional financial services space, Hex Trust has built a proprietary platform that delivers a modern custody solution for financial institutions, asset managers, and corporations to safely and efficiently operate in the blockchain ecosystem. ZeroKey(TM), a proprietary technology, enables seamless transacting and fast access to assets stored on multiple blockchains, while maintaining the highest levels of security of cold storage solutions. As a registered Trust Company under the Hong Kong Trust Ordinance and holding a Trust or Company Service Provider (TCSP) license under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance, Hex Trust offers a truly end-to-end digital asset servicing solution. Visit www.hextrust.com to learn more.