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SANTIMENT & BLOOMBERG: THE FUTURE OF DATA VENDING BUSINESS MODELS

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SANTIMENT & BLOOMBERG: THE FUTURE OF DATA VENDING BUSINESS MODELS

The market data market of 2017 is gargantuan in size. At more than $27 billion in confirmed spending per year(according to 2016 reports), demand continues to grow with no end in sight. This is the market that launched Thomson Reuters to a market capitalization of $44 billion dollars and Bloomberg LP to a colossal $8 billion in revenue per year… this is for market data alone. The true demand for market data is likely several times these figures; Consider that most hedge funds and large investment trusts are spending fortunes building custom data feeds. And that’s before factoring the cost of information changing hands.

Maksim

Maksim

When you consider the above numbers, you’ll conclude that the world’s’ most sophisticated traders and investors are willing to pay whatever it takes to create an information advantage that leads to profitable trading. It’s on this desire that businesses like Bloomberg made their name. But are they the future of the crypto-asset markets?

At Santiment we’ve taken a hard look at the data vendor business models and conclude that they’re on their way out… but wasn’t clear what would come next. So we made it ourselves: Santiment aims to be the next generation of market data vendors, though we’re focused exclusively on the crypto-markets. To show what we mean, let’s dive into the business model of the world’s’ largest market data corporation, that of Bloomberg LP.

Bloomberg generates revenues of about $8 billion per year, a colossal figure that continues to grow each year.Over 80% of these revenues come through subscriptions to the Bloomberg Professional Service, aka the Bloomberg terminal.The terminal gives you access to data feeds for the entire global economy, and is arguably the most advanced trading terminal in existence. These terminals have the ‘low price’ of just $20,000 per year per user, which many professional traders and investors have no problem paying for. After all, when you get access to the world’s’ most sophisticated data feeds platform, it just makes sense, right?

Numbers drive trading and investing success. And because money scales, that makes data the ultimate financial commodity.

But there is a cost to pay; The subscription fee is one-size-fits-all. You pay the price and get everything Bloomberg has to offer. Most traders use only a fraction of those feeds for the specific markets they trade, while de facto subsidizing the rest of the platform. Not to mention that $20,000 a year prices out independent traders, leaving Bloomberg with a core clientele of high networth hedge funds and investment banks and little else.

While the crypto-markets are just getting started, they foretell the distribution and democratization of finance, trading, and investment. Crypto foretells the passing of increasing value to consumers throughout finance, and market data is no exception. Santiment will ensure that.

While the one-size-fits-all terminal model may work well for traditional finance, it could never work for the crypto-markets. The advantages of the Bloomberg terminal that hook traders are meaningless in the crypto-economy, while the price point is unacceptable. That’s why Santiment is going down a different path.

Santiment data feeds will be available via an on-demand, tiered subscription service, where you can purchase your feeds a la carte. Crypto-traders and investors will have the option of paying for data feeds individually or as packages, giving them full control over their spending. There will be no need for them to subsidize the entire data feed library; They’ll be able to customize their feeds to serve their specific needs whenever they want

They’ll also be able to access a limited number of feeds by staking SAN tokens. Staking tokens allows them to try and sample a wide set of feeds with minimal barriers and no cost. If a crypto-trader wants to see if Santiment is right for him, he only needs to buy and stake enough SAN to cover his trial tests. If he decides the service is unnecessary, he’s free to sell his SAN and recoup his investment. If he sees that Santiment provides value, he can subscribe to his desired feeds and continue testing new ones with the remaining SAN stake. Additionally our 3rd party partners like exchanges and asset management platforms will be able to stake tokens on behalf of their user base at preferential rates, allowing users on partnered services to test even more feeds at an even lower cost.

There are some data feeds and content, particularly crowd sentiment related types, whose value diminishes in proportion to the number of users who have access. These exclusive data feeds and content will be available strictly by auction, ensuring their utility and keeping them premium.

Finally, we will provide some information for free as a public service, most notably the SANbase (Santiment database). The SANbase will serve as an anti-scam tool in the space by giving traders and investors a single place to gather all the information they might need about a project. By providing the SANbase for free, we’ll have a clear and useful way of introducing Santiment to the entire crypto-community.

We’ve thought carefully about how to bring data vending and market data to the crypto-markets. The business model we designed combines the best features of traditional data vending (a wide library of data feeds and a subscription model) with the incentive mechanisms of cryptocurrency (staking and auction models). Through this model, we will drive value to the hands of consumers, which will lead Santiment to market dominance. We also believe that by passing savings on directly to the consumers from the very start, Santiment will be able to pre-empt forays by traditional data vendors into the crypto-markets.

By designing the Santiment business model this way, Santiment can establish itself as the market data infrastructure of the crypto-economy in addition to marking itself as a next generation data vendor.

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Beyond the bottom line: why brands must show they care to connect with customers

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Beyond the bottom line: why brands must show they care to connect with customers 1

By Vadim Grigoryan, Partner, Lunu

Over the past few years, we’ve witnessed an ever-growing activism among consumers, with public opinion demanding that their concerns be heard and addressed. No industry has experienced this more than the retail sector, with brands regularly slammed by NGS or consumer-led initiatives for violating legal requirements or moral principles. Moving one step further in the experience economy, brands are not only required to provide a first-rate customer experience, but also a conscience. The product must be good quality, as should the experience of purchasing it. But now on top of that, consumers should feel positive about where they’re spending their money. This is particularly true in the crypto community, with cryptocurrencies regularly pointed out as too speculative as a product, or to energy-intensive. Is this really a surprise coming from a generation whose top concerns are collective ones such as the environment and global warming? The answer is a straight no! Brands have to face this new reality and embrace it accordingly.

This next step in the experience economy, that can be called conscious consumerism, provides an opportunity for brands to reinvent themselves and bring to the top of their agenda something that has so long been kept at the bottom, or on the side. Brands need to stand for something bigger than themselves. If they fail to do so, they will also fail to make an impact in the consumer’s mind, ultimately disappearing as a brand altogether.

  1. From the experience to the conscious consumerism. Today’s economy is as much about giving people the opportunity to feel good while purchasing the product or service, as it is about the feeling after the purchase. Environmental, social, and moral concerns are increasingly at the top of consumers’ minds and on the front pages. Brands need to realise this and adapt, but also accept this as an opportunity rather than a constraint. Profitability isn’t the number one priority anymore and they now have the chance to fully develop their CSR programmes without facing many of the internal/external constraints they would traditionally have faced.
  2. Having a meaning actually means something. Modern brands have to stand for something and if they do, they will also stand out in the consumer’s mind. Your brand won’t just be a jewellery maker anymore – it will be one that aims to make diamonds cleanly and ethically by creating them in a lab instead of digging them out from thousands of meters below the ground. Standing for something will also give you a voice and help you break through the noise, reaching out to ever more consumers.
  3. Having a purpose provides a valid reason to exist. By this we mean existing in the customer’s mind, as well as in stores and shops – because the truth is, both are now linked. To truly connect with your customers, brands need to go beyond their bottom line. They also need to show that this bottom line serves a purpose and isn’t a finality. Don’t be scared to embrace a cause if you want to keep a place in consumers’ hearts and minds.
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The largest event in e-commerce history? ‘Tis the season

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The largest event in e-commerce history? ‘Tis the season 2

By James Booth, VP Head of Partnerships for EMEA, at PPRO

Sometimes, change happens slowly. Other times it chases you down like that boulder at the beginning of Indiana Jones. In 2020, change is fully in boulder mode. And the holiday season is when it either catches up with you or you leap triumphantly from the temple entrance, golden statue in hand.

The shopping season kicks off on 11 November, with the 11.11 Global Shopping Holiday (formerly Singles’ Day). According to analysts, Alibaba and its merchants are on track to rack up $45 billion worth of sales on Singles Day alone [1], up from $38 billion last year [2]. And if last year’s results are anything to go by, a large proportion of those sales will go to non-Chinese companies. Last year brands such as Bose, Estée Lauder, Gap, Levi’s, Nike, The North Face and Apple all made over 1 billion yuan ($143 million) on Singles’ Day [3].

Increasingly, US and European consumers are also participating in Singles’ Day. However, both markets shift into proper holiday mode with Black Friday on 27 November. And there is every indication that this, too, will be bigger in 2020 than ever before.

Adobe Marketing Insights predicts a 20% increase in e-commerce spend over the Black Friday to Cyber Monday weekend [4]. Looking at the holiday season as a whole, Deloitte forecasts that seasonal e-commerce — online spending  is expected to grow by up to 35%, compared with just 14% last year [5].

But that doesn’t mean you can just relax and wait for the holiday season sales to rack up. As well as driving customers online, lockdown has also disrupted brand loyalties. During lockdown more than two-thirds of customers in some markets have tried a new product or service and of these, a quarter do not plan to return to their old habits once lockdown has ended [6].

Old shopping loyalties have been upended, and that means their holiday-season shopping is up for grabs.

For instance, 43% of over-65s are now shopping online compared to just 16% before lockdown [7]. For online merchants the grandparent present budget just became accessible. But to win your share of it, you have to provide a customer experience that this demographic will love.

Making the checkout page a priority 

The question then, is how to prepare your merchants’ or your own e-commerce site for the holiday shopping season. It’s only a few weeks until Black Friday, so there’s no time to lose. You need to find out where gaps are in your customer journey, and plug them, before those customers run away to someone else.

The customer experience at checkout is particularly crucial. One of the surest ways to lose customer trust at the checkout, is by not offering shoppers’ preferred payment methods. According to research by PPRO, up to 50% of customers have abandoned a transaction because the merchant did not offer their preferred payment method [8].

It’s a question of localisation. Except in this case, you’re not necessarily localising for customers in a particular geography. Instead, you might consider localising for consumers in a particular age group who are now shopping online for the first time. Or customers from a range of demographics who have never shopped online for a particular category.

No one size fits all when it comes to global payment preferences

If you want to succeed in global e-commerce, you must offer the preferred payment methods for every market and demographic you want to win over.

Worldwide, consumers use alternative or local payment methods in more than 70% of all consumer transactions [9]. These are the payment methods whole markets and demographics grew up with online and trust. Fail to offer them and you can have the best possible customer journey, but you’ll still lose basket after basket at the checkout.

With the acceleration of e-commerce and the influx of online competition, anyone who hasn’t optimised their payments offering will be desperately racing to catch up. Merchants need to think now about how they are going to maximise their revenue from what looks to be the biggest online holiday season ever. And payments is a crucial part of that conversation.

[FOOTNOTES]
1. https://techcrunch.com/2020/09/09/u-s-holiday-shopping-season-on-mobile-expected-to-be-largest-to-date-topping-1b-hours-on-android
2. https://www.cnbc.com/2019/11/11/alibaba-singles-day-2019-record-sales-on-biggest-shopping-day.html
3. https://www.forbes.com/sites/sergeiklebnikov/2019/11/12/alibabas-1111-singles-day-heres-which-brands-profited-the-most/#25ea1a164863
4. https://www.thedrum.com/opinion/2020/09/15/strong-ecommerce-strategy-key-black-friday-2020
5. https://www.digitalcommerce360.com/2020/09/16/online-holiday-sales-to-surge-25-35/

6. https://www.alixpartners.com/insights-impact/insights/covid-19-disrupts-brand-loyalties
7. https://www.essentialretail.com/news/elderly-consumers-drive-ecommerce
8. https://www.pymnts.com/news/payment-methods/2018/ppro-ecommerce-local-payment-options
9. Original PPRO research.

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Why insurance needs Tesla’s autopilot too

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Why insurance needs Tesla's autopilot too 3

By Christian Wiens, CEO of Getsafe

Digitization is the industrial revolution of the 21st century. What does this mean for a data-driven industry like insurance? The answer is simple: Turn everything on its head and reinvent yourself under high pressure- the future of insurance is digital.

“Hello Timo, nice to see you. I’ll be glad to help you.” Carla records claims 24 hours a day, seven days a week and takes less than two minutes to evaluate and process them. Carla works for a digital insurer and is a chatbot by profession. While she is answering Timo, she contacts the bank in the background, which pays Timo back his money – the same day. This is not a dream, but already reality.

In the digital age, intelligent machines are the new workers on the assembly line, and data is the new raw material. This applies to almost all industries and applies in particular to the insurance world as insurance is based on mathematical models and probability calculations – in short: on data. The more data on which the calculations are based, the easier it is to derive and price risk profiles. Data therefore changes the core of the product “insurance” in three essential areas; the offer phase, in the event of a claim and in the long-term customer relationship.

In the offer phase, we will experience long-term personalized product bundles that fit customer needs much better – away from standardized and inflexible policies. If the insurer can better assess the needs of the customer on the basis of his past history or behaviour, he is in a position to put together tailor-made insurance packages.

For example, it would be conceivable to automatically adjust the insurance cover as soon as the customer’s life changes, for example if the customer gets married, buys a car or a property or travels abroad.

Customer experience in the event of a claim will also change dramatically. Fraud is still the biggest problem in the system, with 2 percent of the customer base causing 40 percent of the system’s inefficiency. According to estimates by the Association of British Insurers (ABI), one insurance fraud is detected every minute – amounting to economic losses of £3bn every year. Of the estimated worth of total fraud cases a year, £2bn goes undetected.

But what if insurers are better able to assess customers on the basis of data and know which customers they can trust – and which not? Credible customers could then benefit from immediate payment of the loss incurred, while the few “black sheep” would not even be accepted as customers or would be checked more closely in the event of a claim being reported.

The computer does not act uncontrolled, but within certain parameters defined by humans. This is comparable to processes in the manufacturing industry: Here, too, people define the exact parameters that are to be checked – controls are implemented by machines that are significantly less prone to errors. The situation is similar when it comes to insurance fraud: people make value judgements and specify which indicators can point to a case of fraud. They retain sovereignty over the entire process. The smart algorithm, on the other hand, is only the tool for evaluating and linking the many individual data points. Smart algorithms will reduce  employees’ workload, but will not replace them.

Finally, digitization will also change the long-term relationship between insurer and insured. Tomorrow’s insurance will not only settle claims, it could even prevent them arising. A better database will not only make it possible to calculate the probability and amount of loss more precisely, it will also make it easier to calculate the risk of loss. Digital systems and sensors can also help prevent possible claims. Telematic tariffs in motor vehicle insurance are already moving in this direction by promoting a prudent driving style.

Sensors on washing machines and industrial plants or intelligent smoke detectors are one thing – monitoring people in the health sector is another. Some health insurers reward sport activities, for example, if the customer can prove this with smart fitness watches. It remains to be seen to what extent customers are willing to exchange this personal data for premium refunds. In the long term, the legislator will also be asked to take action to ensure that the solidarity principle is not undermined.

However, the danger of increasing surveillance is countered by a clear increase in customer service, individualised services and flexibility on the customer side: Digital insurers rely on  customer’s self-determination and a positive insurance experience in an industry that sometimes appears to be immobile and non-transparent.

Digitalisation has reached the insurance industry, but has not yet shaken its foundations. That will change: Tomorrow’s insurance will have little in common with today’s structures and processes. The autopilot at Tesla will also come for insurance. Not all companies will be able to master this switch to become digital insurers.

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