IIBA Italy Chapter - I°Aperitivo Veronese

Verona, 22 Settembre 2016LIston 12 – Piazza Bra 2, Verona

“Business Analysis: tecniche e spunti di riflessione per le PMI”

• UNA TESTIMONIANZA DI SUCCESSO: Blockchain e nuove frontiere: l’efficacia della

Business Analysis • Avtar Sehra, Alessio Menini, Marcello Fiori - Nivaura

Confidential – for emailed recipients only, please do not distribute

p e r

I I B A I t a l y C h a p t e r

Three years ago we were working to help a client execute and manage the whole lifecycle for a

private placement Bond issuance

It took 4 months to complete the process SLOW

Simple product but high legal/admin costs EXPENSIVE

Challenging to manage all the servicesHARD

Complexity meant easy to make mistakesDANGEROUS

FASTER Deal structuring and admin should be instant

CHEAPER Standard products shouldn’t cost so much

EASIER Be able to leverage key services in a single place

SAFER Built on standard legal/regulatory framework

Pre-Issuance Issuance Post-Issuance

General Trade Lifecycle

How it Was How it Should be

The Need

Small

Issuing Agent Size

Medium

Large

IssuanceSize

Corporate Bond /Gov. / Money

MarketSyndicated Loans

Low Mid High

P2P/P2B Loans

Equity

EquityCrowdfunding

Syndicated VC / Funds

Minibonds

Retail BondIPO

Wholesale Loan

Debt

Private Placement

Wholesale Debt

Initial focus is on $2trillion market for small-mid value financial asset issuances, as it is currently a challenge to service profitability and competitively by larger financial

services firms

Deal Focus• Low-Mid Size Issuance• Smaller Ticket Sizes

Product Focus• Debt (bonds/loans)• Structured (equity linked)• Reinsurance (swaps)

Strategy: Market Focus

Best Practice Platform Design Principles1. Focus on the value being produced and consumed2. Minimize friction in production and consumption of

value3. Match optimal producers with the consumers of

value4. Enable frictionless curation and sharing of value5. Enable producers to build trust based on quality of

value6. Incentivize consumers to become producers of

value

Data Room Platforms

Data Exchange

Sales/Admin Platforms

Flexibility

Transparency

Traditional Channels

Phone

Mail

Meetings

Fax

On-demand Self Service Digital Platforms

Current online channels are “execution shop-fronts” or basic “data repositories”

rather than platforms to empower and engage clients

Strategy: Competitor Landscape

Strategy: Final Choice

Nivaura's digital platform products enable execution and lifecycle management of smart financial assets, to make smaller value deals and ticket sizes more

profitable and competitive for larger financial services firms

A disruptive technology.Applied to an istitutional market context.With reliable and profitable customers.

Able to identify our experience background.

Automated Document Generation

Legal documentations are generated automatically and digitally signed, before an associated smart contract is generated

The Solution

Book building and Term Coordination

Automated workflow for issuer to structure a deal and enable

syndication and term coordination with counterparties

Decentralised Blockchain Custody

Structured smart contract deployed on Blockchain network to enable

frictionless settlement, depository and administration

Once financial assets are structured and subscribed on the platform, the subscription allocations are recorded on a decentralized Blockchain register for ongoing custody services

Nivaura is designed and developed a user friendly system that reduces time and cost and improves transparency and effectiveness in the end to end

issuance lifecycle

Over the last 10 years Robo Advisory and Self Service Platforms have revolutionized Retail and Private Banking…

Over the next 10 years there'll be an even bigger revolution in Commercial and Investment Banking through Automation, Platforms and

Blockchain/Smart Contracts

B LO C KC H A I N&

S M A RT C O N T RAC T S

Transparency Cost Flexibility RiskExchange Markets

Blockchain Enabled

OTC Markets

Blockchain based CCP and depository enables transparency and settlement risk control of

exchange markets with flexibility and low cost of OTC markets

Benefits of Blockchain

C A N VA S

Fintech Innovation Lab Q1 2016

Microsoft Accelerator Q1 2016Regional Finalist Q4 2015

Digital Zurich KA Q2 2016

Canvas: Key Partnership

How can a Startup meet and engage a big Financial Institution?

Accelators and Incubators…

Partners…

Canvas: Key Resources

• A team with a technical and cultural background different from ours, with more and flexible approach… in one word: Geeks!

• Agile approach to software development, ready to POC and quick MVP deploy

• Continuous technical social network monitoring (Reddit, Slack channel, Telegram)

• Promote side projects, embracing the Google’s 20% Time approach

• Collaboration tools (Jiira, Slack)

C O N T E XT

Blockchain is Not A Silver Bullet

• Web revolutionized transfer of information, blockchain is revolutionizing transfer of value

• Blockchain by it self won’t drive change in financial services

• It’s a tool that needs to be used the right way along with other tools at the right time

• It will only be successful when it fades into the background

• Lots of noise in the industry, but no one knows how to use blockchain commercially outside payments

Small

Issuing Agent Size

Medium

Large

IssuanceSize

Corporate Bond /Gov. / Money Market

Syndicated Loans

Low Mid High

P2P/P2B Loans

Equity

EquityCrowdfunding

Syndicated VC / Funds

Minibonds

Retail BondIPO

Wholesale Loan

Debt

Private Placement

Wholesale Debt

Blockchain Won’t Give Quick Wins

• Technology Integration: Embedded legacy infrastructure leads to integration complexity and costs

• Coordination and Execution: Coordination complexity in multiparty syndicated deals leads to longer execution times

• Documentation and Confirmation: Product and legal/compliance complexity leads to delays in documentation and confirmations

Everyone is focusing on the top end of the market or just thinking narrowly to shoe horn a blockchain solution into current manual and inefficient processes

Small

Issuing Agent Size

Medium

Large

IssuanceSize

Corporate Bond /Gov. / Money Market

Syndicated Loans

Low Mid High

P2P/P2B Loans

Equity

EquityCrowdfunding

Syndicated VC / Funds

Minibonds

Retail BondIPO

Wholesale Loan

Debt

Private Placement

Wholesale Debt

Real Commercial EdgeReal change will occur where it’s least expected, and will be where blockchain can be a key component of a new and more efficient and effective technology stack

• $2trillion market for small-mid value financial asset issuances has a lack of market infrastructure, is highly manual, lacks transparency and is a challenge to service profitability and competitively

• Key areas in this sector are small-mid size private placements, syndicated wholesale loans, structured products and catastrophe instruments

• The commercial edge will be achieved by ensuring smaller ticket and deal sizes can be made more efficient and profitable, and facilitate liquidity

• The information provided by Nivaura in this document (Response) is proprietary and confidential to Nivaura.• Without Nivaura’s prior written permission, our Response, either in whole or in part, must not be reproduced in any form or by any means or disclosed to others or used for purposes other than its evaluation by the intended party. It may not be disclosed to any third party even

for the purposes of evaluation, except as expressly authorised by Nivaura in each case.• Where we have mentioned other Clients or Partners by name we stipulate that no contact be made with any such Client or Partners without the prior approval of Nivaura in each case. • Where this Response makes reference to trademarks that may be owned by others, the use of such trademarks herein is not an assertion of ownership of such trademarks by Nivaura and is not intended to represent or imply the existence of an association between Nivaura and

the lawful owners of such trademarks.• This Response and any document to which it is attached is subject to (i) completion of each party’s internal review process and; (ii) subject to contract, where applicable.• Whilst care and attention has been exercised in the preparation of this Response, Nivaura do not accept responsibility for any inaccuracy or error or any action taken in reliance on the information. This Response remains subject to contract and all warranties whether express or

implied by statute, law or otherwise are hereby disclaimed and excluded to the extent permitted at law.• Any pricing or valuation information provided in this document is provided on a budgetary basis for evaluation purposes only. Any final agreement by the parties on pricing or valuations shall be agreed via an appropriate contract (to be agreed).

© Nivaura 2016

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