Welcome to The Fintech Files, your weekly roundup from FN’s fintech correspondent Ryan Weeks, keeping you up-to-date with the latest developments in financial tech and innovation.

Sibos, the globetrotting payments conference that each year pulls in transaction bankers in their droves, is becoming more welcoming of fintech firms.

It was only last year, in Sydney, that conference organisers Swift, the payments outfit, cracked down on crypto firms presenting their products at the event.

This time around, there were 11,000 attendees at London’s Excel Centre from September 23 to 26, with 110 start-ups involved in proceedings. In a “discover” zone, early-stage start-ups were invited to flaunt their wares.

Yet for all the effort, there are signs at the conference that the use of blockchain in payments is still struggling to get beyond the experimentation phase. It is a state of play embodied in the fact that Sibos’ mammoth exhibition booths — which cost a pretty penny — are for the most part home to major banks and their service providers.

The few exceptions include the blockchain vendor Ripple and the fintech firm Starling Bank. One attendee, James Lloyd, Asia-Pacific fintech lead at the consultancy EY, took to Twitter to exclaim that Starling’s glossy, teal-coloured booth marked the first time he had ever seen a challenger bank exhibiting at Sibos.

Yet the overwhelming sense at the conference is that the old ways — slightly amended — are best. Connecting the world’s faster payments systems across borders through the use of cloud-based systems, for example, is a far more exciting prospect than tinkering with distributed ledger technology.

Many banks are nevertheless exploring blockchain or are involved in a pilot scheme of some description. Only last week, on September 17, two bank-backed blockchain projects named Fnality and Finteum joined forces in an attempt to bring greater efficiency to foreign exchange markets for large institutions.

But for now the vast majority of these projects remain exactly that: projects.

This has not dampened the optimism of Marcus Treacher, senior vice president at the cross-border payments blockchain firm Ripple. Ripple now has more than 200 paying customers across 40 markets. Emerging markets, in particular, are proving fruitful.

“In the banking world we’re seeing a lot of take-up and flow between Latin America and other parts of the world, particularly Brazil, and also between the Middle East and South Asia,” said Treacher.

He sees the same theme playing out on the exhibition floor of Sibos. “The banks exhibiting from emerging markets… I see more creativity, I see more energy. I see less fear of change than I see in Western Europe and maybe parts of North America,” he said.

Rajnish Kumar, chair of the State Bank of India, said his firm is already making use of blockchain technology to assist with international transfers from Nepal to India. SBI is also looking at applications for the technology in internal accounting and lending to farmers, but Kumar aptly summarised the state of things: “These are all ideas which are still in an exploratory state.”

Banks’ money is flowing into blockchain companies, but for some, the greater traction for now lies outside of financial services.

The UK-based start-up Everledger, which uses blockchain to chart the origin of luxury assets such as diamonds, closed a series A fundraising on September 24 after clinching an additional $10m from the Chinese internet giant Tencent Holdings. Tencent is the operator of the messaging system WeChat — into which Everledger’s technology will be integrated.

Asked whether Everledger sounds a death knell for storied institutions like art dearler Sotheby’s, founder and chief executive Leanne Kemp said: “We’re an enhancer to Sotheby’s, right? A second layer of trust enhancement.”

Her answer might hint at the problem for financial services blockchain firms — which deal instead in the language of revolution and replacement.


Get in touch Drop me a note at ryan.weeks@dowjones.com or find me on Twitter or LinkedIn. Got any news tips or feedback (good or bad)? You can also contact the FN news desk via news@efinancialnews.com


Further reading

More than $211m has been lost to crypto exchange hacks so far in 2019, prompting investors to pile cash into crypto security start-ups like Chainalysis and Elliptic. Meanwhile the seemingly bland business of crypto custody is attracting the big beasts of wholesale finance, including Fidelity Investments, the fund manager, and the investment bank Nomura. Read on to find out the industry is bracing itself against cybercrime.

Very relevant to the subject of today’s newsletter is this new report from the Financial Times on disillusionment in the blockchain space.

AltFi reports that Glint, an app that allowed users to pay using gold holdings, has fallen into administration.

Considerably less troubled is the digital bank Monzo and its chief executive Tom Blomfield, who I chatted with for our latest An Audience With profile piece on Monday.

Big banks have invested $18m into payments start-up Fidel, according to City AM.

Sifted has laid out the landscape of fintech lenders in Europe, which it says is collectively cutting in to bank revenues.

Here’s the story of Everledger’s fundraising in full, courtesy of VentureBeat.

And finally from FN, Fidelity-backed crypto custodian Knox has broken cover after more than a year spent in stealth mode.

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The Fintech Files: Despite All The Pilots, Blockchain Is Yet To Lift Off
The Fintech Files: Despite All The Pilots, Blockchain Is Yet To Lift Off
The Fintech Files: Despite All The Pilots, Blockchain Is Yet To Lift Off
The Fintech Files: Despite All The Pilots, Blockchain Is Yet To Lift Off

The Fintech Files: Despite All The Pilots, Blockchain Is Yet To Lift Off

The Fintech Files: Despite All The Pilots, Blockchain Is Yet To Lift Off