A better financial world, my unfinished crazy journey to a fairer system for all.
My commercial obsession with technology started when I took over the lease of a video shop from my grandfather in the late 1990’s so he could retire. In those days retailers had to sign 25 year leases!
At the time Netflix didn’t exist, Blockbuster Video was the daddy and DVD’s we’re just starting to hit the shelves alongside this new thing called Playstation.
People did, and still do love movies, however the costs of acquiring a single video cassette to rent out in the shop was £70 — £80, so provided it rented out every night at £3.00 for new releases, and it didn’t get damaged or not returned, you could possibly make a return on that unit within 3 months. It was a dying business model and I needed to change something quick just to break even.
The only hope of survival was the Playstation and the new DVD market. Maybe this would be the saviour of the rebranded “Moviestar” and boarding the playstation gravy train as an online games sales business “Gamestar”.
My techie at the time had started to build me a presence on the basic internet for my finance business and said “you know what Lee, that’s a great name, we can shoot for the internet stars for all types of products, and I have just acquired the internet domain Pornstar” — very well Jose’ you carry on with that one then, I’m sure it will work well on the internet, but I think I’ll pass.
With the finance business going very well, I decided to invest further into Moviestar and Gamestar and opened an Internet Hub for the local community, aka a Cyber Cafe. It became more of a passage of discovery as to how big this internet thing would become and how retail was not for the fainthearted. Check out the date in the newspaper photo below when all the computers of the world were due to be hit with that big bug!
In a matter of months of setting up the UK Gamestar website to sell games across the UK , we were doomed! I supposed you could say in today’s terms, we got “Amazonned”, as we were on-shore and paying VAT aka “centralised” .Off-shore warehouses “decentralised” in Jersey started popping up selling to the UK internet users and the rest of the world without VAT — “Game Over”.
With basic knowledge gained around the speed of development globally via the internet and the rapid commercial land grab opportunities, I decided to create a website for financial advisers who were very much behind the curve. In the late 90’s we were still using 56K dial up modems, and all financial services were carried out by fax and post.
A light bulb moment occurred when I was approached by a UK insurance company Legal and General in 1999 to help them roll out an internet life assurance offering. Their main competitor Norwich Union had just launched a deal with Tesco to sell life assurance off the shelf, over the phone and via the internet. L&G had invested £10M in some great internet technology but nobody was using it. If I started using it, they would pay me a higher commission and deliver our customer with a lower cost of insurance, no- brainer, let’s do this!
I saw a great opportunity, however the 56K dial up modems were too slow and the application pages regularly crashed and took so long to complete. As a youthful early internet adopter we had the best internet connection available at the time, there wasn’t a cat in hell’s chance that the insurance brokers and financial advisers across the world could embrace the internet for many years to come. I saw an opportunity to grab the space.
The .Com bust
It became very obvious, very quickly when the $billion of private equity flowing into internet start up’s failed to deliver a return, we had a problem.
Many high profile internet retailers failed due to poor internet connectivity and excessive marketing. Nearly every burnt .com investor and commentator ran to the hills and doom mongers declared the internet project a failure.
Dial up modems would not deliver on the internet project, there had to be a better way.
Internet 2.0
I thought differently. It wasn’t a .com bust, it’s just that the internet had taken hold so fast globally, that it needed to recalibrate.
The concept was sound, lower overheads, quicker turnaround times, electronic secure records as opposed to paper — it all made perfect sense. I gathered the team together and said we needed to capitalise on our first mover advantage and fast.
In the middle of 2000 I had read that there was this new internet service called broadband, with very little down time and communication would be up to 100 times faster than dial up. It was very expensive, but this was a game changer. We were back in the game.
Within 12 weeks we were up and running, I sent a fax out to 1000’s of financial advisers saying I had done a deal with Legal and General to deliver this new product called internet life assurance. It was non-regulated, paid higher commissions and your clients would pay lower premiums.
Within 18 months, 100’s of advisers had joined our network. We had taken platform commissions from £10,000 p.m. to £200,000 p.m. and took the company public on the London Stock Exchange AIM July 2002 with a Market Cap of £10M.
Credit crunch.
In 2008 it seemed like the world had imploded. Global bank failures sent the UK economy in to chaos.
The banks received bailed outs, the intermediaries and brokers did not.
Our public company, linked directly to the mortgage and loans broker market could not pass the regulatory stress tests as our main suppliers, a number of american banks and the UK’s HBOS and Northern Rock had shut up shop. We had no money to lend.
Cutting out the banks with online Peer to Peer Saving and Lending.
In 2012 I came up with the idea that to prevent being personally exposed to banks shutting up shop again, which they are quite within their rights to do, I would establish a decentralised network of people, who would lend to other people over the internet with myself as the custodian.
The internet platform would take a commission for the loan origination and a monthly administration fee to collect and distribute the mortgage and loan payments.
The P2P loans idea was originally pioneered a few years earlier by Zopa (Zone of Potential Agreement) for small super prime personal loan borrowers. The Zopa network of personal lenders didn’t want to lend to the people who needed access to property loans or mortgages the most. In 2012 the majority of the poplulation could be deemed the un-banked and P2P could help them.
In 2013 we built a website, eMoneyUnion and decided to pitch the non-regulated online idea to the world via a global crowdfunding platform. In April 2014, 100 great people came together via the internet and invested in us and we raised £430,000 to build the P2P network, with many coming from overseas.
Since 2014 we have been proud to welcome a number of great people to the team, helping us raise a further £5 million to expand our network of savers/investors and borrowers. Notable investors including Sir John Hegarty and my son Billy who worked together last year to come up with the global re-brand of eMoneyUnion to JustUs — P2P for the world.
In 2017 JustUs became fully regulated by the United Kingdom regulator The Financial Conduct Authority (FCA) as a P2P platform to continue it’s journey to democratise finance. Part of the in-depth process was the establishment of secure segregated client money accounts and governed financial systems and controls.
I don’t believe we will see the end of the worlds centralised banks in my life time, but there is a thriving non-regulated network ripe for financial services adoption and it’s called the blockchain.
Centralised Government banking is needed by the worlds financial gatekeepers to maintain security. The Federal Reserve and Bank of England are not overly concerned about the threat of blockchain, however they do acknowledge the economic benefits and potential uses and are keeping a watchful eye.
The early adopters of blockchain for P2P financial services are swiflty disrupting the old school foreign exchange desks, with more new fintech operators seeing the benefit and costs savings of distrubuted ledger technology (DLT) and near immediacy of trade. I too can see the opportunities and have been working for quite some time on our P2P global expansion programme the Moneybrain “BiPS” Network.
Decentralised networks such as Amazon, Google and Facebook have transformed the world of trade and communication, bringing freedom, service and choice to the 85% of the world deemed un-banked.
The next disruption should be financial services, bringing the same freedoms, choices and economic trade for the world.
P2P global evolution — Tokenisation
Cryptocurrencies aka Crypto are digital or virtual currencies that are encrypted (secured) using cryptography, which is a technique of securely verifying the transfer of a transaction between parties.
There are two types of Crypto — Coin and Token
Coins such as Bitcoin, are standalone and are meant to be solely a form of payment or exchange in the moment of time and transaction.
Tokens have the same functionality of a coin, being that of medium of exchange, but they offer increased functionality. A token can give holders the ability to take part in some sort of activity such as voting, buyback rewards and bonuses. Tokens can also carry underlying value, which can also be exchanged via the blockchain.
A powerful example of a Crypto token use would be, I wish to transfer £20,000 worth of tokens from my digital wallet to a family member in Europe today via existing foreign exchanges. The best charge rate being approximately 0.5% so it would cost me at least £100 and take at least 24 hours. Alternatively I could transfer my token value of £20,000 to the family member and it would cost via the blockchain about £0.06 for server/miner charges, that’s 99.94% less for the same transfer of value arriving in the family members digital wallet in approximately 20 seconds.
To take advantage of trading contracts or value via the blockchain, a token first needs to be created, also known as minted. The token then acts as the exchange of value.
I believe that these smart contracts, using tokens to exchange value via the blockchain will revolutionise financial services, even more so than the positive impact the internet has had on our world!
85% of the worlds population have minimal access to financial security and freedom. With the decentralised blockchain and P2P tokenisation, that could very well be about to change.
The team at JustUs and our sister company Moneybrain are passionate about expanding our network with the wider world to help drive this change.
To learn more about our pre-sale of the Moneybrain BiPS token offering, which opens on November 1st 2018 You can register your interest here https://bips.moneybrain.com/
