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A credit check solution where ID-theft is impossible?


This week in fintech

May 16 · Issue #103 · View online

A weekly summary of the latest news in our world of finance, design, and technology.

  • 👨‍💻 What makes for a successful design department?
  • ☕️ Design in Norway
  • 😓 Data leakage for 60% of Norway’s population
  • 🧨 The biggest collapse in crypto history?

😓 Data leakage for 60% of Norway's population
Last week someone hacked into Norkart, which provides IT systems for map and property information in Norway. Personal data for more than 60 percent of Norway’s population may be leaked, causing an increased risk of ID theft.
Norkart recommends the 3.3 million affected to voluntary block against credit rating. We don’t have any national register for this in Norway (yet), causing everyone to contact Norway’s four different credit raters. This will never happen, and a message like this only weakens confidence in the technology built up.
The second-order consequence is that you will have to lift the lock again when necessary to complete a purchase. But how should a user know (or even care) which credit provider someone is using?
Luckily, a credit block doesn’t apply when disclosing credit information to banks and financial institutions if these are used in connection with the banks’ risk and solvency assessments. If not, we would have struggled with all the blocks for years to come: People would get a rejection on loan and wouldn’t connect that a credit check was done.
As usual, we’re not in the business of pointing out problems but instead finding solutions. So what should be done? We should get a central solution for blocking credit checks. However, the best solution would be that it was connected to BankId, sending out a push message every time someone wanted to credit check you that you could accept or decline, preferably with a message that told you the context. This could potentially solve most of the ID theft issues.
👨‍💻 What makes for a successful design department?
What makes for a successful design department? And how do you avoid siloing it from the rest of the business? McKinsey is trying to answer these questions in their latest report Redesigning the design department. A few key findings that stood out to me:
  • There was limited to no correlation between the number of designers in the department and financial performance
  • Top-performing companies put designers into cross-functional teams to improve not only the products but also the business.
  • A high level of integration was not linked to a single organizational archetype, implying that wholesale reorganization is not a prerequisite to unlocking design’s potential. (Hauken: Sad news for banks that like to reorganize as a hobby 🙈)
  • Designers working in top-quartile companies by financial performance were up to 10 percent more likely to have expertise beyond design (Hauken: That’s why our designers specialize within Fintech, and most of them can code.)
Peter Merholz, the author of the book “Org Design for Design Orgs,” is, however, quite skeptical about the findings:
I don’t mean to be dismissive out of hand. BUT, there’s a lot that’s not defined, most importantly, Design: are they talking marketing design, industrial/product design, digital product design, service design, etc.
☕️ Design in Norway
The consulting company Okse has completed its yearly survey about design in Norway. It shows that most designers work in the office in an interdisciplinary team (and no one works at a café 🙈).
Some key findings:
  • The trickiest part of the design job is the lack of resources (time and money) and that it is difficult to convince about the value of UX.
  • The best part of the design job is the variation (in work tasks and working methods) and Improving/simplifying of the everyday life of users.
  • Prototypes (76,4%), workshops (70,4 %), and user tests (67,8 %) are the most used methods for designers.
  • Empathy is the most essential skill designers should possess.
🧨 The biggest collapse in crypto history?
Last week the Terra/Luna ecosystem crumbled before our eyes and is a poster example of why regulation is a good idea:
Terra is its own blockchain (like Bitcoin and Ethereum), which mission was to bring a trustworthy and reliable stablecoin solution to the crypto world. Terras stablecoin was pegged 1:1 to the value of the US Dollar. Stablecoins must be worth $1, because their whole point is to be worth $1. But why would anyone want to own a stablecoin? The reason is simple: the protocol paid ~20% interest to lock up your coins – allegedly risk-free 🙈. Think of it as an extremely high-yield savings account.
Unlike other stablecoins, Terra was an algorithmic stablecoins, meaning that it is deeply undercollateralized: It had only had $2.5 Billion worth of assets in its vault to back the ecosystem. They had, however, issued over $14 Billion in stablecoins. Terra was supposed to handle this with the help of some algorithms that burned a supporting currency, combined with buying Bitcoin when needed.
This is where the problem started: Someone (we still don’t know who) took out a loan of ~ $ 350 MM and started shorting the stablecoin. The plan? To repurchase it cheaper and return what they borrowed. This caused the ecosystem to come under tremendous pressure, and the stablecoin suddenly was worth $0.80, and everyone started selling in panic, causing it to fall even more. At its lowest, it was worth $0.05.
It is estimated that the attacker closed their short position and profited ~ $815 MM, before borrowing costs. The Terra ecosystem went from a $60b market cap to nearly 0 in 7 days. Read in more detail what happened at not Boeing or this quick breakdown by Kupat
That's it for this week 👋
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Marius Hauken, partner Stacc X
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