Featured Startup – 5 Minutes With Avtar Sehra, Crowdaura

Posted on : 26-02-2016 | By : Maria Motyka | In : 5 Minutes With, Featured Startup, Finance, Innovation

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In your view, which aspects of the financial services industry are the most likely to be revolutionised by the Blockchain?

Blockchain is being presented as a savior of the financial system, which a key focus point on clearing and settlement. However, there are many aspects of the trade-lifecyle process that are being either overlooked or ignored and some of those aspects are fundamentally much more of an overhead in terms of time and cost than some of the post trade activities. In addition, using current technology the post trade activity cannot be fully autonomised as smart contracts still need external scheduling services to trigger key Blockchain events, such as cashflows.

Blockchain capability and capacity will increase in terms of data security, storage and compute. As this takes place, the chain will become an increasingly fatter layer in the financial services trade life cycle technology stack. For example Crowdaura is already experimenting with instrument document structuring, pricing and execution on chain as well as looking at the obvious post trade activities. While we are focusing on simple debt, equity and swap instruments at the moment, we have our sights on much more complex products and deal structures.

We also believe that the current view of deploying a global Blockchain fabric for financial services is most likely an incorrect approach. We think a global finance Blockchain network will develop like how many other networks develop, such as the Internet. For example there are huge opportunities for driving greater efficiencies in the internal trade lifecycle from execution, trade capture to documentation, confirmation and other post trade administration and control activities. At the moment these internal trade lifecycle processes are stymied by inefficiencies related to transfer of data between systems and executing reconciliations and reporting, or trying to maintain unpractical or uneconomical golden data sources.

In Crowdaura we are already experimenting with deployment of internal operational chains, where our applications can plug into, and providing adapters to integrate in-house or third party applications into the chains. Eventually these local area chains will then be connected to wider areas chains through trusted internal “pegging” nodes, very much like how LANs connect to the Internet in a current enterprise environment. In this model certain internal functions such as confirmations, clearing and settlement, can then move from the internal to the external chain, whilst still maintaining data security and privacy.

avtar

Crowdaura has recently been chosen for both the Fintech Innovation Lab (as the only Fintech startup in the lab utilising Blockchain) and the Microsoft Accelerator program – what made you stand out from competing startups?

Crowdaura beat over 300 start-ups to be accepted into the 6th Microsoft London Accelerator cohort, and over 600 start-ups to win a place in the Accenture FinTech Innovation Lab. We are one of the first Blockchain start-ups to be accepted into the Microsoft Accelerator, and this is because Crowdaura doesn’t position itself as a Blockchain company. We leverage a complex stack of technologies, with Blockchain being one of them, but our focus is to provide a best in class Financial Services offering.

We feel that Crowdaura is a glimpse into the future of investment/wholesale banking, as we bring together digital platforms, machine learning and Blockchain to enable large financial services firms to provide automated self-service banking to clients for securities lifecycle management. We want to help financial services firms do what they do, but more easily, cheaply, quickly and safely. This is achieved through automation of activities such as legal/regulatory document structuring; intelligent marketing, distribution, execution; and a Blockchain based clearing, settlement and administration engine.

What made us stand out is that we focus on developing technology for real world financial application. We look at a specific market, the business and operating models being used in that market, and then we try and build a minimal viable end-to-end system that enables frictionless execution within that market. We have many key services that are pre-developed, and most of these are web based (SaaS solutions), which can all be provided as a centralised “investment bank engine-in-a-box”.

However, the true power is leveraged in networks where exchanges can connect up with brokers, or banks with buy-side clients. In such cases we have developed a Blockchain engine, chain agnostic – meaning we can utilise the Bitcoin Blockchain, Etherium Blockchain, or any other blockchain and that can be leveraged for clearing, settlement and depository services, and executing Delivery Versus Payment (DVP) using fiat currencies. We are also experimenting with more on-chain functionality; obviously administration of coupons, dividends and voting are the easy wins. But we have a longer term vision connected with chains that have greater compute capabilities as we feel this is where the future is for truly distributed markets.

Could you share your experiences of working in an accelerator?

The London Microsoft Accelerator program itself has been steadily gaining momentum since launching three years ago, offering a select few start-ups mentoring, support and resources as they push their product through development and bring their offering to market. The accelerator culminates in a pitching event where VCs, Angels, and notables throughout industry assemble to view some of the finest start-ups in the UK and potentially offer investment.

Microsoft Accelerator (MSA) has been extremely supportive in helping us develop the technology side of our business whilst we were still in ‘stealth’ in the fourth quarter of 2015. With their help and support we were able to successfully win a place in the Accenture FinTech Innovation Lab as the only ‘blockchain’ startup in this year’s batch. Being part of the Accenture Fintech Innovation Lab is a great opportunity as it gives Crowdaura the opportunity to work with many of our potential clients in Investment Banking to refine our product and execute novel proof of concepts (PoC’s). So far it’s been exciting to network with different high-potential high-growth startups, share ideas, and discuss collaborative efforts in the future. There is also a lot we are learning from our start-up colleagues in the lab, they are all immensely intelligent and talented people running some incredibly innovative startups.