World’s Risks and Research on the Blockchain.
Wrisx is an innovative system tackling a problem relevant for major institutions as well as SMEs and individuals in emerging markets: the need for research of counterparty risks.
WRISX PLATFORM Led by Dr Vlad Shipov, an experienced fintech entrepreneur and founder of an international trade credit insurance broking firm based in London, the Wrisx project is building the world’s first risk and research platform powered by blockchain. It is preparing a token generation event soon, which will help complete the development of the platform as well as market it globally.
The idea for an emerging markets research blockchain-based marketplace was borne out of observing a massive market gap. Wrisx team’s direct experience includes working for leading global institutions in the banking and insurance industry as well as setting up and running a credit insurance brokerage firm in London. There they have been witnessing firsthand how many projects from emerging markets are routinely declined by major insurers and FIs. This is often due to the lack of comfort and understanding by western-based institutions of emerging markets businesses as well as by the ratings-driven approach to portfolio management. Low country ratings assigned by a handful of western-based rating agencies act as ceilings for ratings of businesses in any country. This dramatically limits emerging market risk appetites of Basel III- and Solvency II-constrained financial institutions blindly following the rating agencies’ scoring. They are not equipped to do granular analysis as rating agencies only cover a small fraction of emerging markets businesses while also penalising them with very low ratings.
Wrisx’s business intelligence tokens will provide fuel to the blockchain-agnostic system and lower the barriers of entry to sourcing information on, and trading with, counterparties globally.
Wrisx enables independent parties to offer and source information services with businesses large and small located anywhere on the planet, able to access the expertise of independent analysts when they would like to research an existing, or potential counterparty or investment target in any market. Wrisx is positioned right at the sweet
spot of several concurrent significant trends we are seeing globally:
• Increasing adoption of blockchain-based technology in its various forms,
• tremendous growth of emerging markets with corresponding growth in demand for capital and risk services, including infrastructure investment, which represents another multi-trillion-dollar gap,
• Adoption of P2P models in various industries,
• Social impact,
• The lack of flexibility and market responsiveness of traditional sources of research and risk appetite and
• Regulatory developments such as the EU’s directive MIFID II, which will force banks to unbundle their research from their brokerage services as of January 2018.
Over the last several years we have witnessed a remarkable growth in community and start-up driven activities aimed at building business models powered by blockchain beyond its initial payment use cases. This has been mirrored by a flurry of initiatives to adopt blockchain tech by some of the world’s largest corporate and financial institutions:
So far, these two groups of activities have been relatively isolated from each other, but we are starting to witness a new wave of blockchain development – the one where innovative business models are emerging, allowing for cooperation between the two worlds – one of major corporations and the other of SMEs and individuals globally. This convergence is a welcomed development for the whole ecosystem, as it should help enhance the mainstream user adoption of the crypto technology by realising the tangible benefits it can bring to many kinds of businesses.
With global trade estimated at US$100 trillion per year and a major and growing part done on credit terms whereby one party takes the risk of another party’s non-payment or non-performance, Wrisx fills an important gap – analysis of the counterparty’s ability to perform becomes extremely important for the two sides to come to an agreement on a transaction. Traditional sources of obtaining such information are very limited, expensive, outdated and difficult to access across the whole universe of emerging markets.
EMERGING MARKETS GROWTH
This lack of coverage is lagging behind the booming growth in SME and large business activity in many emerging markets, on the back of a great middle-class expansion. 525 million people in Asia alone are already middle class, which is more than the total population of Europe. Another three billion are expected to join middle class ranks in the next twenty years, coming almost exclusively from the emerging markets.
CROWDSOURCED BLOCKCHAINBASED MODEL TO MITIGATE CROSS-BORDER RISKS
As various crowd-sourced models have demonstrated (Airbnb, Kickstarter, Upwork, etc), p2p models offer massive growth potential. Crowd-sourced crypto-based markets represent an incredible opportunity for expertise and resources-sharing over traditional inadequately functioning markets. New blockchain-based systems can attract new sources of support while opening expertise in new emerging market asset classes to a wider audience of investors from across the world.
MASSIVE SOCIAL IMPACT
In addition to its positive impact on businesses, Wrisx is also fulfilling a beneficial function both for emerging markets and for western governments and societies. With easier ways of doing business through such platforms as Wrisx, entrepreneurship can jump-start in a meaningful way in many countries. More business development in emerging markets, provides more quality employment and business opportunities to indigenous communities and their young and active population.
RESEARCH UNBUNDLING EU’s
Markets in Financial Instruments Directive II, an overhaul of trading rules set for implementation in January 2018, is set to ‘unbundle’ research and trade execution costs. Banks globally, will ultimately have to distribute their analysts’ research on online marketplace platforms. Alternative models including running an execution-only brokerage that sources its research from independent providers, are being explored by major users and producers of financial research even in developed markets, meaning the Wrisx platform’s arrival is very well-timed with its value both for emerging markets, but also developed markets research users.
Wrisx’s distributed blockchain-based application is a game-changer, for mitigating and researching risks of investing or lending to emerging and developed markets businesses, not adequately serviced by the current risk and capital systems, while enabling more local experts to offer their risk analysis services to those requiring them. Wrisx’ distributed application and platform helps bridge these gaps and ultimately facilitate global economic development.