The Value Creation of Consortiums

For readers unfamiliar with Fnality, we are a shareholder-led ‘consortium’, which in essence means a group of various organisations and/or stakeholders who come together with a common objective to promote, use, develop, enhance, educate, influence, or integrate a market solution. The Fnality consortium, 15 of the largest institutions in financial markets, have the collective mission to develop financial market infrastructure that removes barriers to the free flow of money via the establishment of Fnality Payment Systems in our identified currency jurisdictions. In this blog post, we provide insights into the value created by a consortium, where the model is managed effectively.

On first reading, the above definition of consortium may appear like any other start-up arrangement which is funded by numerous shareholders. However, the key difference is that a consortium is characterised by active participation to shape the broader organisational direction for the common good. It is not driven by a short-termist desire for profits, but instead a genuine desire to create meaningful and valuable transformative change. The Fnality shareholder-led consortium model is a major differentiating factor from other players in the payment space. All our shareholders are active participants in the governance, technical development, and strategic direction of Fnality, and have been instrumental in defining our core use cases, the first of which are now in active development bank-side.

This continuous and active engagement with our consortium of shareholders and stakeholders is extremely important given that many FinTech companies, especially blockchain-based projects, often fail to deliver on their promises to shareholders.

At Fnality, we consciously consider the outcomes for our various consumers and the positive effects our solutions can have in solving the operational inefficiencies which the market faces today. By truly understanding the strategic needs and pain-points of our consortium members, we can leverage the existing strategic capabilities, strengthen collaborative capabilities, and develop blockchain-specific capabilities through future use cases.

There is a growing concept amongst academics called ‘Evidence Based Blockchain’, defined as “the conscientious, explicit and judicious decision making based on professional expertise and evidence from organisations, stakeholders and scientific research”. Fnality in many ways adopts this approach with our consortium by seeking to understand any problem, gather data, critically consider a solution, apply these learnings to the problem, and iterate the results. Through implementing such an evidence-based approach, we are able to prioritise our workload in a way which ensures that our limited resources and lean ways of working derive value for our shareholders incrementally. It may not be rocket science, but we believe having this consumer-focused lens allows us to provide meaningful value to our consortium. Given that our shareholders are some of the largest financial institutions in the world, we are not simply solving a problem which is specific for our shareholders – we are solving for issues faced by the financial ecosystem at large.

Another value-adding factor of the Fnality initiative is that through our consortium of members, we have access to a pool of domain knowledge and insights which can be leveraged from subject matter experts within our shareholder group, far exceeding that of other players in the market. Of course, a company can hire an expert with years of experience in their respective domain area, but it takes a community of like-minded and ambitious people to make meaningful transformation, not a single visionary. With this in mind, Fnality places a great emphasis on creating Communities of Practice internally to resolve common issues of consortium members, establishes working groups with our shareholder banks to gain expert insights, and advocates for improved industry standards at external bodies, such as the Enterprise Ethereum Alliance.

In conclusion, these conscious actions driven by our consortium generate a ‘network effect’ whereby the more engaged shareholders are, the more likely the use cases developed will satisfy the needs of participants, ultimately resulting in greater adoption once Fnality Payment Systems are live. As Fnality nears the next key milestone of our mission, our consortium of shareholders is eager to demonstrate the meaningful value through consortium-led projects. As the saying goes, ‘there’s no strength without unity’ – and at Fnality our consortium of shareholders recognise and embody this approach in the pursuit of meaningful change.

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