BlackRock – industry Goliath facing a Blockchain David?

BlackRock may be the industry ‘Goliath’ about to be hit by a stone from a ‘David’ competitor.

The advent of a combination of Blockchain (click here for brief explanation of Blockchain), ‘Smart Contracts’ and IBORs (Investment Book of Record) enable Asset Management firms to eliminate up to 50-95% of their operating costs across people, process, IT and infrastructure.

This facilitates a potential and immediate 50-60% cut in pricing for Asset Management-related services and product fees.

There is an assumption among many industry experts that new operating models for the Asset Management industry are perhaps five-10 years away.

They are wrong.

Major technology businesses, such as Microsoft and IBM, are funding major Blockchain initiatives.

Combine these with existing Workflow technologies and new operating models in the Asset Management industry may be only six-12 months away from market deployment.

Surely not Blackrock?

One reason to be sceptical about the Blockchain threat to asset management Goliaths is that naturally conservative institutional customers are unlikely to flock to a challenger startup. They are more comfortable in doing business with a $60bn market cap business in Blackrock and its peers.

The scepticism is misplaced.

At Close Quarter, we have good reasons to think that an existing player in the industry may launch a service at a much lower price of, say, 50% below existing charges, and with superior service.

The more aggressive pricing could be in place as early as the first quarter of 2017 whilst they transition fully to a new operating model facilitated by Blockchain technologies over the following 12 months.

History shows disruption kills faster

Goliath was not complacent but he was too large to move at speed.

History shows that disruptive innovation kills incumbents faster than ever.

It took 38 years from the invention of Kodak’s Digital camera before Kodak filed for Chapter 11 bankruptcy in 2013.

Newspaper and magazine businesses that thought they were at the bleeding edge of connecting with audiences proved to be grossly ill-equipped to deliver scale and technology.

Those who owned easy-to-use hardware and software – Nokia, Blackberry – were brought low within a decade of the launch of the iPhone.

There is no reason to think that in a low- or zero-interest world facing weak growth that the complex, multi-layered fee and commission structures enriching fund managers at the expense of their clients is immune to disruption.

At Close Quarter we speak with innovators, developers, CEOs and technologists and our view is clear – disruption in the Asset Management industry is coming fast. And we love it.

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John Corr – Managing Director (Close Quarter)
@johnpcorr 

What’s up with WhatsApp? Working up a WhatsAppetite

So WhatsApp has topped the paid-for iPhone app chart yet again. The cross-platform mobile messaging application allows users to send messages to other WhatsApp users without having to spend on an SMS, but what is so special about this app that makes it so popular with mobile consumers?

What’s so good if you have unlimited texts already?

In the UK, many mobile users already have a plan that gives you unlimited texts, so the ability to exchange messages for free seems somewhat redundant. Even more so, if you consider that WhatsApp uses the internet plan that you already use for email and web-browsing: no additional costs, but no additional value either?

Not quite. Unlike SMS or MMS communication, WhatsApp allows you to send and receive video and audio messages from within the app, using your pre-existing data plan. I can take a photo, or record a voice message from within a conversation and send it for my friend to receive instantly.

I can upload a media file from my mobile, broadcast my location using my phone’s GPS services, and import and send contact details from within the conversation too. And it’s got more emoticons than you can shake a USB stick at.

All this makes WhatsApp more appealing than texting my contacts in the UK. I can see if my contacts are online, typing, or when they last connected to WhatsApp. I can see if my message has sent, been received, or if it still hasn’t left my phone.

Saving you a fortune in roaming’ text charges

Where WhatsApp really comes into its own, however, is in messaging contacts abroad. If I am out of the UK, and therefore my mobile costs are subject to international charges, I can connect to WiFi and exchange messages free-of-charge as I would in the UK. Sending an SMS or making or receiving a call, on the other hand, would cost me.

A case study: a friend of my daughter has recently moved to Buenos Aires. Being regular texters and facing the expense of cross-continental texting, which wasn’t really an option, my daughter suggested her friend downloaded WhatsApp, which she herself had used to communicate with friends in Spain.

Now my daughter’s friend can visit Iguazú Falls and send the photos straight back to friends and family in London. She can send a video of a tango show to my daughter, who can watch it instantly then record a voice message to tell her friend how she wishes she could have been there too.

How can WhatsApp bring mothers and daughters together?

This isn’t necessarily something for the younger generations though. Mother and daughter keep in regular contact through WhatsApp, which affords a more immediate and personal exchange that email cannot compete with.

It offers a different service from Skype, which generally requires a computer, or at least a very fast connection, whereas WhatsApp can be used on the go to send an instant update wherever you happen to be.

Mobile consumers vote with their feet, and there appears to be a trend towards apps like WhatsApp whose advantages outweigh the pros of other services. This is by no means to say that the humble text message (or phone call) is dead after 20 years of ever-growing usage (declining for the first time last year in the UK).

Those interested in mobile technologies and how fast creative innovation can spread globally in the new world of Mobile Apps would do well to take note of the rocketing popularity of WhatsApp.

 

Worked up a WhatsAppetite? If you like the sound of WhatsApp, you can download and install from Google Play for free, or for £0.69 on iTunes.

Mobile Messaging Innovations

Mobile phones have long been used as a means of communicating with other individuals, first as traditional telephones, and then utilising the overwhelming popular method of text messaging. The drawback of text messaging and even telephone calls today is that these types of communication can quickly increase the user’s total cell phone bill. Many plans have limited minutes and limited text messages. New mobile technology innovation options seek to eliminate this problem while still allowing users to send text messages to one another. There are several applications that can now be used in place of text messages, but which work in essentially the same manner.

Alternatives to SMS messaging services

Meebo is one of the most popular choices for users who are looking for a mobile technology innovation that offers all the functionality of text messaging within an easy-to-use format. Meebo sends push notifications of new messages, stores the user’s chat history, and offers a desktop platform that allows conversations to move seamlessly from a mobile device to the computer. Meebo is compatible with iOS, Android and BlackBerry and is free to use. This innovative program makes it easy to connect with users on other devices as well as those on chat platforms like Windows Live Messenger, Google Talk, and more.

 

There are several other similar apps that provide the same basic service. Beejive and Trillian also provide platforms that are compatible with multiple smart phones and several web-based chat systems like Yahoo! Messenger. In addition, users can select a chat application with a slightly more limited scope, such as BlackBerry Messenger that offers text messaging with no character limit between users of BlackBerry devices. Google Talk has an app that allows Google users to enjoy the same chat platform on their phone that they can use through Google. Ultimately, most users will gravitate toward whatever mobile technology innovation has claimed the majority of their friends.

 Group Messaging takes Text Messaging to the Next Level

For users who want a mobile technology innovation that takes the idea of text messaging a step further, there are a variety of group messaging apps. These applications allow several members of a group to chat with one another. GroupMe connects iPhone, BlackBerry, Android and Windows Phone 7 users. Members of the chat have the option to send their location to a map of all the participants. Google+ offers group messaging as well, with push notifications so you don’t miss a thing. Google Voice allows you to send recorded voice messages or other forms of media. These platforms provide new and exciting ways for mobile users to keep in touch.

Designed by: Carne Associates & modified by Dawud Miracle