From the 14-16 November IBMers from across our business came together to form team Hack-Trick to create a solution that disrupts financial services for RBS in their Hackathon in Tel Aviv, called the Fintackathon. Team Hack-Trick consisted of ideator Maxine Mackie, designers Teo Georgiev, Katy Monaghan and developers Arne Rutjes and Cesare Valitutto.
The dynamic and spirit of the team was great! We were excited to be part of a hackathon with other start ups and corporate teams and kept a steady pace in the face of big deadlines and bigger goals!
We used IBM Design Thinking to come up with an original idea and then moved into an execution strategy of “divide and conquer”. Arne and Cesare developed the interactive prototype whilst Maxine, Katy, and Teo worked on the story, designs and pitch.
We created a real working prototype where blockchain enables a peer to peer lending platform for small businesses- that works!!! Although the team didn’t make the podium we created something new, exciting and certainly did our part to disrupt financial services.
Story and Ideation
Starting from a broad brief, Team Hack-Trick applied IBM Design Thinking to create a solution that helps founders of small businesses to manage their cash floor through a peer to peer platform. We imagine this to be a 3rd party app that is enabled by RBS- we called it RBS Atrium.
Using a human-centered approach to observe, reflect and make are key fundamentals of IBM Design Thinking. We used these principles to help guide us and within the first 10 minutes of the Hackathon’s opening event we were brainstorming ideas on post its stuck directly on the windows of the Tel Aviv Stock Exchange!
We created a solution that disrupts banking for small businesses to help people who set up new businesses. Take Jeff, one of our user personas; Jeff is 28 years old and is a baker who owns a thriving cafe in the heart of Tel Aviv. Jeff's business is going well and is making a steady profit, but it wasn’t always like this. Jeff can use the platform RBS Atrium when his profits are high to invest some of his money into neighbouring business who are looking for a short term loans to help with their cash flow. Jeff gets to make a small profit, takes on some risk and can support his business community.
Team Hack-Trick created a solution that allows Jeff to use an app on his smart phone to specify find a business to invest in, specify the type of deal he is prepared to make and geo locate a business in his area. Jeff can also verify what others are staying about the business by analysing the sentiment of social media mentions. Once a potential business is identified, Jeff alongside our other persona Jane who owns a local cafe and is a specialist coffee supplier, seeking investment agree on a money lending contract for a short period of time. This equips Jane with the money she needs for expanding her business and give Jeff a small but reasonable profit... win win!
How it works
We used Smart Contracts to make the loan agreement, the application stores information about the loan, such as sender, recipient, amount, etc. into the blockchain whenever the "accept" button is clicked. We don’t include sensitive and personal information here that the bank will want to keep private.
We used a Bluemix API for social media sentiment analysis which allows us to collect and analyse tweets based on an input query (the name of the company for instance) and receive back an object containing a list of tagged tweets. We used RBS’s Blue Bank API to transfer funds from an account A to an account B, i.e. Jeff and Jane.
We demonstrated automatic repayments of the loan and for the purposes of our pitch we scheduled the repayments to run every 20 secs.
Why we created RBS Atrium
Why should Jeff invest in Jane's business? Jeff will get back the invested amount plus small interest agreed between both parties. The final amount is agreed by the two parties and regulated by the bank (removing any speculation). We see the scenario working also on the other way around: Jane would like to extend her business but she does not have a guarantor to ask the bank for a loan.
In the worst case, Jeff is covered by a legal contract signed by the two parties and RBS is guardian and guarantor of it. Obviously there is risk involved, but this rests with the lender.
What is the role of the bank in the peer to peer lending platform and how it can gain from it? To join our network (RBS Atrium) each user needs to have an open and active account with RBS, therefore the bank can have possibility to increase the number of its clients as soon as the application starts to grow in popularity. RBS would earn directly a small and reasonable amount for each loan agreement has been signed. The fee covers what the bank offers as provider of the service and guarantor for validity of the contracts.
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