Finance Inclusion Revolution – Interview with Alex Fork President Founder of Humaniq Part 1
Humaniq’s visionary founder and President Alex Fork has a dream: He wants to help eliminate poverty in the world, by delivering new financial options to people in Africa, Latin America and parts of Asia. He firmly believes that financial inclusion is key to lift people out of poverty. Alex thinks he can make his dream happen with the help of Humaniq, a blockchain based app and platform that uses a new biometric, digital and reputation concept based on proof of face for identity management.
Humaniq is part of the next generation banking 4.0. Based on Ethereum it has open APIs that can plug into services from other companies. It targets the unbanked population, which according to World Economic Forum is around two billion people. The unbanked tend to have no formal Identification and low literacy, so to begin with, Humaniq plans to be a simple banking service allowing for biometric authentication, simple account set up and money transfers. Later on, it will add P2P lending, loans and insurance services.
With a recent successful ICO that in the first day generated over 2 million USD, and solid partnerships in the past few months with Chronobank, SingularDTV, the project is now fast growing on a scale that even the team thought would be not possible so fast. Humaniq ICO will run until the 27 April. It offers the first opportunity for investors to get involved in the world’s first humanitarian financial inclusion bank, a kind of Graeman bank for the blockchain age.
Intelligenthq interviewed the young visionary founder of Humaniq, Alex Fork, who told us more about his background, education and his project. The interview will be published in 2 parts. Here the first:
1. Can you tell us about you, education and your personal and professional background?
I passed technical education. I began my career as a junior research associate. We were engaged in complex mathematical computer calculations of dynamics and stability of structures. I then became interested in trading and robotic platforms, and also got acquainted with the world of investments. I made investments in real estate, various businesses, traded securities, and through this activity got acquainted with Bitcoin. Due to my technical background, it was easy for me to understand the basics of Blockchain technology. In 2012, I launched an initiative group with 11 people. We were all programmers. We began to experiment with creating various solutions for the exchange market. During this period I spent a lot of time studying Bitcoin. Thus, I gathered a large amount of information, which I decided to systematize by writing the book “Bitcoin. More Than Money”. Thanks to this book, I was invited to participate in many conferences, and became acquainted with the entire business community, working in projects that used blockchain. We formed a private club, where I was to represent the interests of this community. At first the club was called “Bitcoin Foundation Russia”, but after a while we renamed it to Blockchain Community. On behalf of this community, I came up with the initiative to create an accelerator that would help Blockchain and fin-tech start-ups. We found support from iBank, and in late 2015 I founded FutureFintech accelerator.
After a year and a half of the accelerator’s work, about 80% of Russian-speaking fin-tech startups got into our pipeline. I developed further partnerships with several banks and found that it is very difficult for fintech start-ups to start partnerships with banks and gain access to client databases. This takes a lot of time from 6 to 12 months. You have to prove that the developed services are needed, in order to prove to the back security service that these issues do not pose any threat.
However, there are a large number of potential customers in the world, which are just not included in the financial world today. During my work in FutureFintech, I talked to a lot of experts, including Vitalik Buterin. Buterin told me that Blockchain could help the charity field. For one year I noticed how there was not a single service that was interested in financial inclusion. Thanks to the accumulated experience, I came to the idea of creating Humaniq project.
2. You are a member of Advisory Board of Blockchain.community (the oldest and largest association of Russian-speaking entrepreneurs working with products based on Blockchain technology). Can you tell us about it?
Blockchain.community is a voluntary association of enthusiasts, professionals, entrepreneurs and services interested in studying, developing and applying Blockchain technologies. The association was created in 2013. The main initiator was Ivan Tikhonov, the founder of the largest Russian-language forum Bits.media, which is now visited by up to 10,000 unique readers a day. Previously, this forum was called btcsec (Bitcoin Security).
I joined the Association in 2014, and six months later we renamed it to Blockchain.Community. In early 2016, we elected Artem Tolkachov as chairman, now he is director of Deloitte CIS. He is a man with a well-deserved reputation, very decent and honest. He is engaged in issues of the legal status of crypto-currencies and Blockchain.
3. You wrote the book Bitcoin. More than just a money? Can you tell us about the book and the thesis behind that?
“Bitcoin. More Than Money” is a kind of comprehensive review of bitcoins as a global phenomenon. The book contains all information about Bitcoin. It covers its historical development in the world, its technical features and its applicability in some theoretical financial hypotheses. It approaches as well anonymity analysis and provides the reader with a large number of diverse points of view. It also contains translations of reports on Bitcoin from organizations such as the FBI, the European Central Bank, the Office for Combating Financial Crimes of the US Treasury, as well as hackers.
Thus, the reader, having read the book, can fully develop his own opinion about such a phenomenon as Bitcoin.
4. How do you see the Bitcoin evolving and all its different factions?
A great question! In 2007, the world financial crisis began. And it is not over yet. The fundamental reason for this crisis is uncontrolled money issues, including derivatives, and other securities. This crisis led to the intellectual bankruptcy of virtually all the leading experts. Now no one in the world knows how to solve this problem.
There are two fundamental hypotheses that suggest a solution. The first hypothesis is a return to the gold standard. But humanity has already experienced this, and such a solution might be a step back. The second hypothesis is the idea of developing public control over the issue, which Blockchain and its various architectures allows to solve. Bitcoin, in this sense, is to some extent a global experiment. The function of money has several components. Money is a means of accumulation, exchange and measurement. The one who performs the function of keeping, takes everything. And this is Bitcoin. In this regard, Bitcoin is similar to the mathematical model of gold.
In the world of other cryptocurrencies, there are various projects that try to find a new model of money. Some projects suggest that anonymity is an important property. That is the case of Monero, Dash, ZCash. Other cryptocurrencies focus on consumer qualities, rate of transactions, and so on. Ethereum, for example, has an idea of increasing the number of transactions in the payment system by automating payments and business processes, up to full absence of the human factor. Actually, Ethereum is the second among all the cryptocurrencies in terms of capitalization.
5. How do you see blockchain and Ethereum technologies as drivers for social impact and special when it comes to financial inclusion?
The fundamental difference between these tools and classical banking service, such as Visa, Mastercard payment systems and other banking products, is simplicity and cheapness of their use. People who earn one, two, three dollars a day have no deposits, or their deposits are measured in only tens of dollars. They are unprofitable to the banking system a priori. However, regional penetration rates are forecasted to range from 50% in Sub-Saharan Africa to 87% in Europe. These will be sufficient to use simple Internet services.
Blockchain also allows creating a financial account without overcoming any bureaucratic obstacles. For this, it is just sufficient to have Internet access – a driving force of social impact. Another significant social impact is the ability of any community to create its own crypto-currency, its means of payment. This is done in a few hours. Thus, communities on the Internet can come up with various mechanisms to use game tokens, if they see the point in that. Based on what has always happened in history, I think that in the coming years, the search for new types of money will grow in the digital world. And this is a very interesting and intriguing phenomenon.
6. You are the founder of the cfintech cluster Futurefintech (Futurefintech.org). Can you explain the work you have been doing there and how you manage it with humaniq?
Yes, recently my work on Humaniq takes almost all of my time. But, thanks to the active support of Dinis Guarda to the project, I can do more now than I could manage alone.
The purpose of FutureFintech is the development of innovative technologies in the financial field. FutureFintech is a cluster that includes coworking for teams, incubator, accelerator, mentor support and the program of training activities.
We work with similar clusters in other financial centers of the world: London, Hong Kong, Luxembourg, Singapore, New York.
On the basis of the fin-tech cluster, we offer a number of specialized services to partners: search for projects during the year, for integration, hackatons, strategic session on development of future products, placement of the terms of reference for project search, internal acceleration of projects, search for foreign projects, regular competitions, educational and professional activities, work with universities.
During the work of FutureFintech, 12 fin-tech projects, 20 associate teams (a total base of about 250 projects – 85% of Russian-language projects) became residents of the cluster. News digest of the most relevant news, events in the world of financial technologies is issued every month.
Annually we hold series of events in partnership with Banks, Payment systems and other market participants. The last of them was Oscar Blockchain in Munich, and before that we organized an hackaton for creating artificial intelligence for financial organizations. Of course, when we talk about artificial intelligence, we talk about weak artificial intelligence, about technologies of machine vision, machine learning, in-depth training, to study customer behavior, transaction behavior, scoring, and so on.
7. Can you tell us how do you see both finance and innovation present landscape, namely in the bridge between the big players and new comers and projects related with financial inclusion?
I would list the following basic IT trends of the market of financial services for individuals in the order of their importance. First, it is globalization, by which I understand strengthening the integration of all world economies: active inclusion of developing countries in the world economy; a growing market of freelancers; an increase in the market of cross-border transfers – concerning a sharp increase in the number of clients around the world. The second trend is an acceleration of life as a whole, expressed in changing the attitude of mankind to time. Speed becomes the main competitive advantage and a valuable resource, with the future only having importance. The next trends are total digitalization, the transition of all markets to “digital rails”; mobility – the whole world is on a smartphone screen; “programmable money” for the entire digital world, as well as the growth of non-cash payments; another trend is an acceleration of the generation change. New people – a new technological cycle every five years. Intellectual capital is gaining more weight, so-called emotional consumption is increasing, the importance of virtual communities is growing (new “states” in the global network).
On the other hand, increasing volatility and anxiety can be called negative trends. The change in the world economy causes more and more tangible instability: the confidence of market participants and population in monetary policy of central banks is declining, and dependence on intermediaries is growing. The emerging diversity immerses the world financial landscape into chaos. Today, the integration of new financial services with major market players is very difficult. As I said before, a start-up has to overcome a lot of barriers to access client databases.
It is also important to note one trend in the development of both banking and money. I’ll probably start with money. There are many different concepts about the evolution of money: the commodity theory of the origin of money, the debt theory, and the state theory. But the logic is that previously, money was represented by very big inconvenient forms, including paper ones. Gradually they were digitized, only because it is easier to overcome distances, divide and calculate. And now they are being programmed as well! Now you can say that if you try to figure out the way the format of money has been changing, from commodity to gold, from gold to paper, from paper money to electronic money, you can find out that the evolution of money is moving towards the concept of simplifying their use, by making it adopt an instant nature and easy transferability capabilities. If we continue this logical series, we must come to the conclusion that money will be easily and virtually humbly, absolutely comfortable to transfer. This will lead us to the marginal state of the bank as a service. And to some extent, the bank, in its modern form, should even disappear. In the future, the user might simply not notice how the payments occur while having them under control. I like the concept of Bank 2.0, Bank 3.0 of Brad King. When I talk about Humaniq project as a concept of Bank 4.0, I assume that when your wallet is your face, you can pay for certain services and goods without much thought, without taking any unnecessary actions.
This, of course, is still an idea, but I really want to bring it to life and test it in practice. You have probably watched AmazonGo video, where with just a smartphone, you can go to the store, take products and exit. So, for the next generation bank (including Humaniq), even a smartphone will not be needed. No carriers will be needed. The main carrier – your wallet – will be your face.
8. Fintech and Finance innovation have disrupted the financial world as we know it. What are your views of it in a time when Fintech, Blockchain, AI became the most powerful trends?
The trend of transition of finances to digital rails is similar to the way we switched from horses to road transport. Absolutely everything changes. Education, systems of production, society, transport… New infrastructures appear. The world is changing as a whole. And, accordingly, players change during such transformation, too. It’s one thing – previously you had to breed horses, and now – produce wheels, tires, and so on. Therefore, FinTech, Blockchain, AI are natural companions of the modern financial world.