NowCM : “New technology will only replace the old one if it provides exponential benefits, which DLT and DeFi certainly can provide”

Writer Laura Campan

The Luxembourg House of Financial Technology (LHoFT) member NowCM recently announced its acquisition of the London-based rising fintech Nivaura.

Its founders, Robert Koller and Fredrik Creutz, agreed to get back to a market lagging behind in terms of digitisation, as well as the way to go to (hopefully) turn the tide.

NowCM is well known for being on the forefront of digitalisation in capital markets. Do you believe the development of decentralised infrastructures is necessary to eventually remove the friction related to people and paper?  

NowCM is the only end-to-end regulated cloud-native platform and marketplace in Europe, where financial regulation serves an important role of ensuring the safety and soundness of the financial ecosystem. Many find the promise of decentralisation and its potential to displace the regulatory state with DLT technology as a seductive ideal. NowCM takes a different approach: we are building a complete suite of modules, where one of our modules has a regulated issuance vehicle in Luxembourg and another core module is based in France, a multilateral trading facility (MTF) supervised by the French regulators ACPR and AMF. NowCM is also a SWIFT member. These modules work with the current value chain and systems allowing for a digital and real-time experience already now. 

NowCM follows a DLT-ready policy which includes various connections to different DLT technology providers but also our own wallet and tokenization toolbox which is tightly integrated with our other modules. In particular, our vast data model of more than 5,000 variables and close to 10,000 validation rules, allows us to create really smart contracts. DLT ready means for NowCM however also to be agnostic on the underlying technology and blockchain. 

However, the degree of digitization in capital markets lags behind other financial services. Is there any trend that could create a disruption within the industry, and eventually force change and reinvention? 

We don’t see a big bang change coming as conventions have been developed over decades same as regulations in the sector and systems have been developed to cater to these forces. Given the responsibility in dealing with 3rd party capital these rules and regulations all have their valid reason. New technology will only replace the old one if it provides exponential benefits, which DLT and DeFi certainly can provide. Changes in technology, however, will be gradual as systems need to be fit for purpose and a huge amount of capital flows and parties will need to migrate. 

Should we see a connection to the recent acquisition of London-based fintech Nivaura? 

This fits well into our DLT ready strategy. We have also taken over Nivaura’s blockchain know-how as well as its tokenization platform. We are currently integrating these tools into our systems to make them natively available for whoever wants to use them. In addition to this we have created an integrated wallet that can be tied to users and entities. We provide of course the relevant connections to act as oracle in an DLT environment and due to our SWIFT connection, we intend to provide a stable coin solution for atomic settlement.

NowCM recently stated that “additional points of external connectivity will be announced in the near future”. What could you tell us about it? Any new partnership in sight?

NowCM is implementing its long-term strategy to become the global omni-channel and golden source for bond issuance and to contribute to the establishment of new standards for primary debt markets.

On February 16th, 2023. NowCM Group and Marketnode, an SGX Group and Temasek joint venture, announced that both companies have entered into an agreement to collaborate on the digitalisation of Asia-Pacific primary debt markets through a joint offering via Marketnode Gateway – a fixed income issuer services platform now integrated with NowCM’s transaction management applications to support Asia-Pacific bond issuances. Prior thereto we have already announced cooperations with Liquidnet and BondAuction. We strive to provide what one could call an operating system for other complementary solutions to use our platform and build on top of our extensive data model. We are constantly onboarding new solutions and partnerships.  

NowCM is an open ecosystem and is available for new collaborations and interconnections. 

NowCM also opened its main developer hub in Lisbon a few months ago. Why settle in Portugal?  

NowCM’s main goal is to accelerate economic growth by providing real tools designed to help the governments, global infrastructure communities and financial institutions to prepare, finance and refinance their innovation developments and sustainable initiatives. 

Our Head Office and regulated issuance vehicle is located in Luxembourg. The decision to choose Portugal as a new location was based on a list of comprehensive criteria of key cultural and growth factors, including availability of top talent, fintech ecosystem, regulation, entrepreneurial mindset, English-skills, infrastructure, and work-life balance.

We have identified Portugal as a new location to open our global developer hub and expand our services here. Apart from our global activities, we want to support digital transformation of Portuguese companies and public administrations that will provide real tools for Portugal to become one of the most important hubs for finance and tech innovation in Europe, with a fast-developing start-up scene. 

This is a European journey of contributing to the realisation of a capital markets union (CMU) and from our three European hubs in Luxembourg, Paris and Lisbon we believe that the Portuguese tech scene can play an important role in the success of the CMU and as a showcase of how European fintech solutions have a natural hub in Portugal.  Although European, we also notice our imminent growth opportunities in Asia, the US and other regions.  We count the leading global banks and European issuers among our clients and look forward to making several important announcements in the coming months.