“Mind The Gap!” – The life and times of a man on the move

Spotify and trading platforms, South African ingenuity, fear of competition is not healthy, a damned good Mozambiquan trout, and the blockchain-orientated future of electric cars. Here are my observations from this week’s travels, interactions and banalities

In this new weekly series, I look back on what stood out, what was bemusing, amusing and interesting during my weekly travels, interesting findings within the FX industry and interaction with an ever-shrinking big wide world. This is purely observational and for your enjoyment. 

Monday: Download? What’s that?!

This is a word that will likely not feature in the vocabulary of the next generation of internet users, and by default, the next generation of retail traders. Those, like me who have long since resigned themselves to liberal use of hydrogen peroxide in order to keep the gray at bay will be scorned by the youth of tomorrow for uttering the word download. We can expect chastisement in the form of “Download?! What century do you live in? You mean stream!”

So if that is the case, why do so many third party platform providers insist on maintaining a downloadable platform that inhabits the system folder of a local PC?

Back in 2000, when Norton Ghost was the latest cure-all standardization tool for enterprise software systems administrators to be able to remotely restore workstations to their correct modus operandi by having a ‘ghost’ image of the required system and all its applications, network connections and last saved files according to hardware configuration and user profile, downloading applications and being able to deploy them to and from a desktop with a ‘roving profile’ was cutting edge.

No longer did IT support engineers need to visit the desks of employees and no longer did employees need to move their computer to a new desk when corporate reshuffles occurred. They simply logged on elsewhere, and the MSI packaged applications would deploy to another workstation as per the user profile.

As this week began, I was speaking to a former colleague of mine who worked with me on bank projects like that 20 years ago. He is now National Systems Engineer for a large UK legal firm. As we reminisced about the times we had working in the Square Mile as contractors on app deployment projects within Tier 1 bank trading desks, my pal said “Deployable apps, wow that’s a blast from the past.”

If that is the case, and large commercial infrastructure is now completely hardware and platform redundant, then why do we in the retail FX sector tolerate legacy software that requires downloading? More to the point, legacy software that accounts for over 85% of the third party platform environment, requires all its brokerages to host their IP on a third party system, and is inflexible and cannot update itself on the fly in the way that modern web-based systems do in all other industry sectors from music streaming (Spotify) to shopping (Deliveroo).

If Spotify can be connected to the amplifiers of high end audio systems to produce completely lossless sound quality (I recommend using a Black Rhodius interconnect with Google Chromecast Audio to get this absolutely optimum) and then port it to the Apple Car Play system in most modern cars, then who is going to accept a user experience that dates back to a previous generation for their trading environment? That’s before even getting onto the subject of Spotify’s distributed nature….

Tuesday: Land Van Geleendheid

Africa is, to many, an unknown quantity. On one hand there are the distant memories of those extremely harrowing OXFAM advertisements during the 1980s, and then on the other hand is the Lion King.

A vast, resource-rich continent which if well organized could easily be another America, remains a mystery to those in cultural, academic and business environments the length and breadth of the globe.

The young and open minded population of many of Africa’s diverse nations are in many cases absolutely the right customer base for electronically traded asset classes, and, if executed properly, would benefit from a completely democratized global peer to peer monetary system as anyone with a middle income or entrepreneurial spirit does not trust the banking system and in most cases the government.

There is one exception to this, and it is the absolute powerhouse of the entire continent – South Africa.

Am I in…. Africa?

South Africa’s major cities are, not to put a finer point on it, absolutely magnificent. World-class industry, beautiful luxurious living standards, a diversified and extremely well organized economy that ranges from precious mineral extraction to high technology to car manufacturing (Yes, next time you sit in a right hand drive BMW, Mercedes-Benz or VW, it was likely made in the Rainbow Nation).

One of the world’s most advanced banking systems exists in South Africa, led by two hangovers from the colonial period, Standard Bank and Standard Chartered, both of which are Tier 1 and in one case has a direct subsidiary which is one of the reserve issuers of currency in first-class business environments such as Hong Kong.

Highly skilled workforce, and cities such as Johannesburg which are home to vast expanses of magnificent suburbia with every possible lifestyle accouterment at the fingertips of several million inhabitants who live in better conditions than those in many European countries point out a truly modern nation.

On Tuesday, I once again headed to Johannesburg, and once again all I can see among this melee of top level Western urban paradise and African flora and fauna is opportunity.

And lots of it. Johannesburg’s vast and rapidly increasing middle class are smiling, positive and full of energy. The nation is on the doorstep of vast, untapped resources and the sophisticated business environment that exists in South Africa is absolutely the right springboard from which to harness the material and resource base of the whole of Africa.

By this I do not mean extraction, I mean innovation. During the FinanceFeeds South Africa Crypto Summit this week, which took place at the Bryanston Country Club in Sandton, Gauteng (no, I did not want to leave either!), some interesting observations about this level of continent-wide potential was evident.

There is a vast and diverse base of introducing brokers who manage digital assets in South Africa, and many of them are seeking highly innovative ways to put the proceeds of their investments to use, most of which combine technological advancement with the untapped resources of the continent.

One particular conversation stood out. Bearing in mind that most of the ‘new economy’ enthusiasts consider digital assets from a humanitarian perspective rather than a balance sheet/corporate gray suit one, some of the innovative ideas followed that line of thinking.

It is indeed Africa – and very sophisticated it is, too

“I am investing in lithium extraction in Zimbabwe” said one delegate. “The country cannot manage itself, but there is potential there. I want to extract lithium and then produce gel batteries based on LithiumIon cells, which are rectangular and fit directly under solar panels” he said.

“One of the downsides of solar energy for houses is that whilst the sun radiates, the energy is being generated, but when there is no UV, the energy cannot be stored and goes to waste, hence in countries where solar heating is used, it only accounts for 25% of power for a domestic house” he quite rightly explained.

“My idea is to make Lithium Ion batteries which then harness the energy from solar panels and are part of the same unit. This way, over 90% of all household power can be gained from solar panels, and anything left can be sold back to the South African national energy suppliers.”

Yes indeed. His next step was to patent this and then adapt it for use in electric car battery cells. Well, Tesla was, after all the brainchild of another very avantgarde South African.

Wednesday: Blockchain on wheels? No fuel bill, and decentralized electric cars.

Whilst on the subject of electric cars, the proliferation of hybrids from General Motors, Toyota, BMW and Mercedes-Benz that proliferate the highways of South Africa these days is almost on a par with that of North America.

This provoked a thought. Back in the 1980s, when General Motors was working on its EV-1 electric vehicle project, the laughter from the middle class public was audible everywhere. “Oh look, they want us to drive a hairdryer on wheels!” japed the internal combustion proponents.

Indeed, the problem was that this prototype was far from fruition. It did not resemble, behave or look like a ‘proper’ car. It was, therefore, not a viable replacement for good old fashioned cubic inches and volatile liquid.

Nowadays, however, it is no longer amusing. Tesla has been regarded as a disruptive leap forward – and let’s not forget that in some ways this is a Beta release of an electric vehicle yet it has been widely considered to be a luxury performance car. Yes, there are concerns about battery life, and yes there are some odd features but this is a Beta release, and a darned good one at that.

The main reason it is good, however, is because it looks, behaves and drives like a normal internal combustion engined performance car, and that is the only way to make electric cars head into the mainstream.

We have come along way since the ‘hairdryer on wheels’ in 1989

So, the electric car hype arrived into the mindspace (a hipster word that belongs in the LSSU’s banished words list perhaps!) of the new age, coffee connoisseurs sporting overstyled facial topiary about four years ago when the Model S appeared on the market, and the ‘blockchain’ or ‘crypto’ prefix to every possible SEO-able word began permeating the same segment of society just a short time later.

When, in that case, will the two inevitably merge?

Well, it got me thinking.

People enjoy driving cars because of the personal freedom aspect – that can never be replaced, otherwise it would be a bus, however the battery distribution is now the subject of blockchain startups.

When it comes to electric vehicles, the first concern is the cost that the electric battery demands. I was talking about this whilst enjoying a fantastic Mozambiquan trout with salsa and sweet potato at The Fishmonger in Illovo, Gauteng this week, with some FX platform developers from my somewhat traditional generation of tech enthusiasts, one of whom said that in many parts of the world outside North America, the centralized systems used to host electricity substations are quite simply not up to the job of coping with load generated by the potential switch to electric cars.

In America, the load is spread, as substations are very cleverly positioned in many places and serve specific areas but in many urban environments outside America, they are centralized and often in cities which mean that adding further capability would be an infrastructure development nightmare.

Another problem is that electric vehicle batteries costs a humongous amount of money which may become one of the major reasons for people to pull back from choosing an electric car (and spending $50,000 on a Dodge Challenger Hellcat instead!) To solve this, blockchain startups such as CZero have come into the development arena with concepts that are intended not to require for people to shed loads of money from their pocket yearly rather makes the whole electric battery leasing process a rewarding journey.

CZero will lease the battery to consumers for their EVs and people will only have to pay for the maintenance fee at the time of lease. Once they start using the EVs on regular basis they will earn reward tokens for saving the carbon and on each charging swap about which you’ll read further.

Under this project, the idea is to take into account that generally, batteries takes a significant amount of time to charge and one cannot rush the process as well. Whereas, people are accustomed to getting their fuel vehicles filled with petrol/diesel in hardly 5 minutes and that is exactly what they would expect when it comes to electric vehicles. People would be hesitant to switch to electric vehicles if there is no proper solution available to this problem.

Thus, to tackle the whole affair of charging, CZero’s ecosystem brings an innovative solution through which people can get charged batteries in a jiffy. Consumers can go to any Czero Swapping stations (set up by CZero or in collaboration with CZero) and instead of charging and waiting for hours, they can easily swap their discharged batteries with the charged ones.

Who knows whether this will come to fruition, but we have seen democratized battery sharing before with projects like Shai Agassi’s “Better Place”, which is no longer in existence. Probably because far from being innovative, the car and its battery rhymed with “pony and trap”.

Thursday – Prince William and sunscreen. Yes, SuperPharm, you are advertising geniuses

Viral billboard advertisements are not often considered a thing of this century. Viral memes, yes. Viral 10 second YouTube clips yes. But good old fashioned paper? Very 1980s.

This week, however, Prince William made history by making the very first official state visit by the British Royal Family to Israel.

For those in the retail FX industry who still feel castigated by Google and Facebook (and so you should, their blanket banning of ads was draconian to use a mild word), take a look at Israeli national drug store and pharmacy chain SuperPharm.

Their use of a very amusing billboard advertisement campaign across the country made it from Ramat Gan to my computer screen all the way on the other side of the earth in Johannesburg this week, and has seemingly gone completely viral globally.

SuperPharm used Prince William’s inevitably high profile state visit to advertise sun screen products – using a very Israeli slice of sarcastic humor to emphasize it. I do not think it needs further words: Here it is – marketers, this is the way to do it!

Friday: Sledgehammer vs subtlety

So much brand consciousness exists in our varied and fascinating industry.

There are in my opinion two particularly rudimentary reasons for this, the first being that the retail FX business is a purely online industry which provides a non-tangible product to a global audience hence brand and user experience are paramount (well done to those who took the initiative do design their own trading environment – it was worth it and always will be), and the other being that the competition in such a borderless financial services and technology environment is extremely fierce.

What is the best way to deal with this? Don’t fight competition, join them.

Looking at the most successful businesses in the world, most have joined the competitors, rather than fought with them. Even firms that fought competition without actually locking horns with new rivals have failed. Nokia is a prime example, the firm having stuck doggedly to the original non-smartphone model.

People do not buy things because of what they are, everyone already had a phone when Apple launched the first iPhone. People buy because of why they are made.

This needs to be embraced in the retail sector of this industry, especially among service providers which are not based in major centers like London or Sydney.

The sledgehammer approach to marketing, and the vilification of competitors is something which sticks in the throat of pretty much everyone, and has become a taboo subject for discussion because of the defensiveness that it has created.

This is what the office of someone afraid of their competitors looks like

Last week, I was speaking to a firm that wanted to discuss its new product range on a discussion panel. My suggestion was to have senior executives from large, global companies which are renowned for excellence on the same panel, thus elevating this particular firm by association to industry leadership status.

“We cannot have competitors next to us” was the response.

The Sledgehammer Approach can manifest itself in various ways, but in every instance there are common themes which can range in manifestation from extremely subtle to harshly overt: view your employees as a mass rather than as individuals, assume the worst about them, and treat them accordingly.

Especially in large organizations where the sledgehammer approach is the status quo, there seems to be the perception is that it’s too much trouble, takes too long, and costs too much to identify the actual source of employee dissatisfaction, lack of productivity, or unmet expectations. It’s simply easier to use the sledgehammer with company-wide policies which, in intent, outcome, or both, are often punitive and ultimately counterproductive in nature. I’m sure numerous books, articles, and research papers have been written trying to explain how and where this management style originated.

Of course, this begs the question: If something is so bad, why is it so prevalent? Why do we allow this destructive force to exist? The problem is that in many cases, nobody wans to admit it exists, and it’s easier to just live with than try to eradicate. Tragically, ignorance, indifference, and resignation all contribute directly to the ongoing replication of the problem.

Let me be clear: the Sledgehammer Approach is one of most egregious examples of poor management. Whether the root cause is a lack of managerial competence, having too many plates spinning at the same time, or just plain laziness, the outcome is the same. As with the example of the Radio Volume Incident from 30 years ago, it’s easier to use a sledgehammer to try to smash a problem in one fell swoop than it is to find one loose nail and gently tap it back into place—or pull it out, if necessary. But what may seem easier or less confrontational or even cheaper in the short term very often turns out to be much costlier in a variety of ways.

Embracing competition leads to massive Chinese distribution channel – eToro’s APAC CEO Jasper Lee explains all in Shanghai, China

Look at companies like eToro or Saxo Bank. Both are very different to each other but both have absolutely embraced the advantages of working with competitors rather than against them. Saxo Bank will give YOU their code so that you can embed their trading environment into your bank, or insurance firm, or hedge fund’s own front end platform. This is a very clever way of providing a proprietary trading environment to all and sundry, meaning that other firms no longer become competitors, they become customers!

eToro’s masterstroke was becoming partly acquired by PingAn Ventures, the VC arm of one of China’s largest banks. Through this association, eToro gave them their code, and allowed the eToro system to be implemented into the application on the smartphone of every PingAn bank customer in China! If anyone can tell me a better distribution channel than that, and one that requires absolutely no further input, answers on a postcard…. Or should that be a distributed ledger?!

Wishing you all a great week ahead.

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