TexxFactor FinTech Hackathon — Shape the Future of Inclusive Finance

From 11th to 12th of April 2018, Deutsche Bank, FinLeap, Deutsche Vermögensberatung AG and KPMG jointly organized a FinTech hackathon in FinLeap’s office in Berlin. More than 30 developers, product managers and business professionals participated in this event.

The idea was to create innovative FinTech products, using Design Thinking approach and the data provided by Deutsche Bank. Another important focus of the event was to encourage women to take lead and create products by women for women, since this gender group is underrepresented in the financial industry. Mixed-gender teams were also taking part but the majority of the participants were women who work in tech.

In total, eight teams were ambitiously working on their ideas to win the competition, coding until late at night and trying their best to create more innovation in the financial sector. Among projects being developed, there were gaming products to attract younger generation to use financial products, data-driven recommendation system, marketplaces to connect clients with financial consultants and many more.

Blockchain-Driven Smart Contracts for Secure Pension Plans

For this challenge, we decided to look into one of the most crucial financial topics in life — pension! When people get older, this is usually one of their main financial resources to rely on. Secure pension plans enable our society to function smoothly. Moreover, stability in our economy depends on secure pension plan execution. Using blockchain technology, we can make this happen in a more secure and seamless way than ever before.

Let’s first take a look at the current system in Germany, which is similar to most other Western economies. First, we need to differentiate between state pension and private pension plans.

State pension plans function upon the intergenerational contract, meaning that pension money collected from the younger generation is then distributed to the older generation. For simplicity, we can assume that nothing or little stays in that money pool — in essence, this means whatever monetary input goes in, it is immediately re-distributed to those who are retired. As in most countries, the exact distribution will of course depend on how long and how much a given retired person had been paying into the pension fund before he or she retired. In Germany, the retirement age is at 67 with few exceptions. Individuals can also pay more into the governmental pension fund than legally required to receive more pension when they retire.

Private pension plans, on the other hand, function under an investment principle and there are many variations of how exactly this can work. Often, this is a matter of an agreement between an individual person and an insurance company. However, the underlying principle is this: An individual pays money into his or her own pension fund on a monthly basis. This money is taken by the insurance company and invested into bonds, stock market and other assets, so that the money increases in value. Once this person retires, he or she will receive the money plus investment gain at once or arrange monthly pay-outs.

Legally, employed individuals have to pay into the governmental pension fund. In fact, this money is automatically deducted from their salaries. Self-employed individuals are free to choose, and many people choose a private pension plan over governmental pension plan. Also, those who are employed often sign an additional private insurance contract to make sure they do not only depend on the governmental pension when they retire.

Both governmental and private pension plans are centralized systems and payment of the pension depends on the bank and/or insurance company. This creates several challenges:

Vulnerability: Money being centralized in one place offers an attractive target to hackers.

Tediousness: As any process which runs through an intermediary, it succumbs to a paper-centric bureaucratic procedure.

Bankruptcy: Any central authority, such as a bank, may go bankrupt, placing pension collected in danger.

In this challenge, we focused on the governmental pension fund and created a blockchain-driven smart contract to enable a secure and seamless process. We chose Ethereum blockchain but as long as a smart contract technology is used, this system is blockchain/DLT-agnostic on a whole.

Below you will find an outline of how the current system works. Kim, the end user, contributes monthly payments to the insurance company, which she signed a private pension contract with. Insurance company is usually cooperating with a bank or even several banks to invest the money received from Kim. Now, once Kim turns 67, she can receive back the money she invested in addition to investment gains the insurance company made with her money.

Problems with the current system:

Slow and bureaucratic: We waste too much paper, resource and time with this system.

Not seamless: Which is particularly disappointing to digital natives.

Sustainability: Represents some danger to the society since if the bank is not there anymore, e.g. it goes bankrupt, there may be difficulties in retrieving the money.

Vulnerable to cyber attacks: As it is the case with all centralized systems, this structure represents a tempting target to hackers.

Another point which may be particularly important to large financial institutions is that Generation Z’s digital natives tend to trust technology more than central authorities.

Also, seamless digital experience is an integral part of their life and hence it is highly important to them. Offering products powered by trusted, coherent technology such as blockchain may let banks win this younger audience as their clients. We believe that these systems will run on blockchain/DLT in future and while it may appear early now, it is worth considering to be the first player.

The following figure shows the system we developed:

System Architecture

Our system architecture is shown below in the figure. The testing customer dataset was provided through dbAPI with JSON format. Based on the transaction data, we created an AI-driven recommendation system.

Web3.js is the interface to communicate between frontend, contract ABI and Metamask. While we used Metamask to test the system, a digital wallet would be used in real life. At the same time, smart contract technology makes it possible to enforce pension collection and distribution without third parties.

First, we analyzed the historical transaction of the user from dbAPI to understand the user behavior. Next, we identified the risk attribute and the available fund, so that we could make the recommendation of the voluntary contribution for extra investment. The contribution is then recorded in the Ethereum-based blockchain. Once the person reaches retirement age, the smart contract is executed and the person will receive the pension. An important advantage of a blockchain-driven smart contract in this case is that our solution reduces the number of intermediaries and thus people do not have to depend anymore on an insurance company, a fund or a bank for the money to be paid out.


In conclusion, our team developed a secure, seamless and trusted blockchain-driven solution to how governments can structure their pension plans, using the advantages of a decentralized system.

In the next step, an interesting challenge would be to work on a solution for private pension plans — creating a secure stream of investments and incorporating token economy to motivate people to invest into their future.

Team Behind BlockPension

Alice Chan from Porsche Digital Lab focused on data strategy and the recommendation system, Amine Ünal was responsible for backend and blockchain-driven smart contract, Filip Noetzel created the frontend and connected the smart contract with the user interface and Diana Rees worked out the blockchain-driven business concept and led the team to the happy conclusion of winning the hackathon.

Note: Images in this article are based on these icons:

a. “Call Mom” icon by Matt Brooks from The Noun Project.
b. “Bank” Icon by Umar Irshad from The Noun Project.
c. “Complex” icon by Marie Van den Broeck from The Noun Project.
d. “Government” icon by Yu luck from The Noun Project.
e. “Guarantee Hand” icon by Till Teenck from The Noun Project.
f. “Secure” icon by Alena Artemova from The Noun Project.
g. “Community” icon by Symbolon from The Noun Project.
h. “Paperless” icon by Youmena from The Noun Project.

Alice Chan

Alice Chan is a data scientist at the Porsche Digital Lab. You can follow her on LinkedIn and Twitter.

Diana Rees

Diana Rees is a serial entrepreneur, tech leader and is currently working on a blockchain/DLT project. You can follow her on LinkedIn.




Next Level German Engineering: Where innovation meets tradition. The Porsche technology hub to create tomorrow.

Recommended from Medium

Bitcoin May Not Survive the Looming Quantum Computing Era

(EN) Mad’s Crypto Corner #AMArathon with 5KM Recap

Solving things that are not yet solved

DeFi Detectives: Chef Nomi Investigation Notes

Taking money over the web using Bitcoin — the way it was designed

Analytics firm Elliptic raises $60 million funding led by SoftBank

ZOIDPAY | A Revolutionary Approach to Managing Your Crypto Assets

How To Protect Your Crypto: Best Practices

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
Next Visions

Next Visions

There’s more to Porsche than sports cars // #NextVisions is a platform about smart technologies and the people that drive our digital journey.

More from Medium

Unlocking Digital Credentials for Educators across Europe

VRMETA Architecture

Metarri’s SDK: A Deep Dive!!

Subsquid: a pathway to efficiency