Digital currency and online data management are at the frontier of transformational change in banking and financial services, as innovations in the blockchain space are changing the rules in the competitive financial landscape. DCEBrief spoke with Steve Wasserman — the founder of two highly successful startups that both made it into Inc’s list of the 500 fastest growing companies. His latest venture VmentsTM offers digital products and services designed to better serve the needs of banks and other financial entities in the blockchain era.
Read the full story below.
DCEBrief: Steve, what new issues are banks & financial institutions facing in the present environment?
Steve Wasserman: “Recent advances in digital and financial technology are rapidly changing the way customers expect to interact with their financial institutions and manage their finances. This has placed banks under increased pressure to remain responsive to these changing expectations so they can retain their customer base against many aggressive and more agile startups in the space. The advent of digital ledgers—or blockchain—is transforming how we manage currency and data, and a lot of startups are making the most of the competitive cost advantages these innovations yield. Digitally transformed businesses profitably outperform their peers in every industry, leading to higher market valuations."
DCEBrief: Can smaller banks and financial institutions afford to take their time to upgrade, given their incumbent status in the marketplace and existing customer market share?
Steve Wasserman: “Institutions that do not respond to this external threat will not survive. Remember Kodak? The entire film industry was replaced by digital photography. Netflix disrupted and replaced Blockbuster video, and Uber and Airbnb are revolutionizing taxi and hospitality industries. Doing nothing is not an option when you know your industry is being actively disrupted by more agile startups. Community banks with less than $10 billion in assets used to make more than 75% of all consumer loans in 1990, but they don’t even account for 10% of them today, as new entrants and larger banks take over most of their business. Small to mid-size financial institutions have always been slow to adopt new technology, with many of them still running core systems built in the 1960s and 70s that are difficult to just ‘patch over’ to integrate with today’s market-competitive digital solutions.”
DCEBrief: How can VmentsTM help these smaller banks and financial institutions remain competitive?
Steve Wasserman: “Small or community banks can network together to engage in digital ecosystem solution alternatives such as VmentsTM to retain and expand their customer base, reduce costs, and increase market valuations. VmentsTM is a virtual network that interfaces with existing legacy platforms and accounts to transition and transform the client’s core banking and surrounding infrastructure into a fully functional networked ecosystem. The system speeds up transaction settlements and reduces transaction fraud, chargebacks, and other security risks. We help banks and financial institutions follow a roadmap to transform their legacy in-house systems, and eventually decommission them as they are replaced by elements within the VmentsTM ecosystem that have extended and improved digitally enabled customer focused features with improved efficiencies and at lower cost. "
DCEBrief: How does the VmentsTM ecosystem achieve these benefits for its clients?
Steve Wasserman: “Vments patent pending Blueprint of Our Products and IP is a starting point to work with Our Consulting Services to follow the Roadmap to implement, integrate, and customize Our Use Case Destinations of the Vments Enterprise Digital Banking (EDB) Platform and Ecosystem. These are the pillars of What We Offer. Vments business enabled technology stack supports these pillars and is the core of our private and permissioned blockchain functional ecosystem and network of financial institutions. At the core of the technology is Virtual Fiat Money (VFM) which flows through account types CommunityVcash and CommunityVcredit established by participating financial institutions in their local base currency. CommunityVFX accounts set-up by participating FIs are equivalent account types in other than their local currencies. Smart Transactions are used for Peer to Peer transfers with optional standard or self-describing formats plus optional attachments. The Smart Transactions also control permission based access for applicable parties. Our LoyaltyVpay technology initiates transaction requests through vendor and merchant loyalty identification ending in Smart Transaction approvals. Enterprise level Open API Use Cases are designed and built on top of all of these core technologies. The key to Vments ecosystem is that it is tightly integrated, flexible, and customizable. This enables banks to implement a complete ecosystem at their own pace and prioritized use cases.”
DCEBrief: What synergies can these components create for the convenience of clients and partners who participate in VmentsTM ecosystem?
Steve Wasserman: “Vments helps our clients and partners transform their systems, business operating and financial models, and product offerings into open, secure and networked banking services of the future, one API use case at a time. We make it possible for them to realize the future of banking and financial services for their organization, customers, merchants, and communities. Our strategic partnering and collaborative approach with small and medium banks and financial services (FIs) establishes a digital money ecosystem that enables growth, transformational business models, and new marketplaces. Our partner network includes hardware and software integrators, resellers, and consulting services companies that are interested in co-developing and integrating with our Open APIs that enable and enhance the use cases for the network of clients. Our ecosystem opens up new functionality and shared lower costs with higher efficiencies not previously feasible in the current siloed systems used today.”
About Steve Wasserman:
Serial entrepreneur in Fintech, Blockchain, ERP, and Electronic Payments software. Steve has always been an architect in financial systems that drive payments innovation. Steve has two prior entrepreneurial ventures that were listed in Inc’s 500 fastest growing companies, with both ending in acquisition—the last of which became part of a $300 million purchase by PayPal for TIO Networks, which acquired a startup that Steve co-founded. Steve’s creative approach to electronic payments and data exchange makes him uniquely positioned to realize the future of banking and financial services.