# CLOUD SERVICES CENTRAL TO SMALL FINANCIAL SERVICES BUSINESSES IN THE NEXT FIVE YEARS, YET DATA PROTECTION CONCERNS STILL A BARRIER TO ADOPTION
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2018-04-19
Category: FINANCE
Category URL: https://financedigest.com/category/finance
Meta Title: Financial Services SMEs Optimizing Cloud Investment for
Meta Description: Discover how finance SMEs are benefiting from cloud investments, improving profit, productivity, flexibility, and customer experiences while still facing data
URL: https://financedigest.com/cloud-services-central-to-small-financial-services-businesses-in-the-next-five-years-yet-data-protection-concerns-still-a-barrier-to-adoptionhtml

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By **Sascha Ragtschaa,** CEO and co-founder, Chainium

**Smoke and mirrors**

Initial Coin Offerings (ICO) – when a start-up offers early investors units of either a new cryptocurrency or crypto-token in exchange against cryptocurrencies like Bitcoin – have witnessed exponential growth in recent months. In fact, it has [paved the way](https://www.financedigest.com/soft-lending-and-inflation-data-pave-way-for-smaller-ecb-hike.html "Soft lending and inflation data pave way for smaller ECB hike") for companies looking to raise funds. The [growth has been tremendous](https://www.financedigest.com/aluminum-cans-market-tremendous-growth-opportunity-trends-with-key-players.html "Aluminum Cans Market Tremendous Growth, Opportunity, Trends With Key Players"). Last year, the ICO for the new Brave web browser [generated](https://en.wikipedia.org/wiki/Brave_%28web_browser%29) $35 million in under 30 seconds, and messaging app developer Kik’s September ICO [raised](https://en.wikipedia.org/wiki/Kik_Messenger) nearly $100 million. In total, ICOs attracted millions of new investors that were interested in backing a multitude of [market disruptive](https://www.financedigest.com/the-peppermint-oil-market-to-leverage-the-digital-disruption-wave.html "The Peppermint Oil Market To Leverage The Digital Disruption Wave") ventures seeking funding.

By the end of 2017, ICOs had [raised](https://cointelegraph.com/news/icos-raised-4-bln-in-2017-what-2018-has-in-store) almost 40 times as much capital as they had in 2016, at a rate of around 50 offerings a month. However, with so many new ICOs being launched by companies around the world, the [market has become increasingly intricate and difficult to navigate](https://www.financedigest.com/subsea-navigation-and-tracking-market-one-the-most-booming-industry-in-upcoming-years-due-to-global-demand-in-industry-by-2027.html "Subsea Navigation And Tracking Market| One the Most Booming Industry in Upcoming Years Due to Global Demand in Industry by 2027"). So, how do the [investors of tomorrow that are looking to make an investment push](https://www.financedigest.com/investors-flee-uk-bonds-pushing-gilts-to-huge-monthly-loss.html "Investors flee UK bonds, pushing gilts to huge monthly loss") through the smoke and mirrors?

**At its heart**

It is crucial that new entrants wishing to purchase tokens with their hard earned cryptocurrency [funds are aware of the actions required to ensure a smooth](https://www.financedigest.com/oiling-the-wheels-for-a-smooth-funding-cycle.html "OILING THE WHEELS FOR A SMOOTH FUNDING CYCLE") and successful investment, as well as the potential risks involved.

Unlike an Initial public offering (IPO) which is undertaken by established organisations and underwritten by one or more investment banks, an ICO is – at its heart – an unregulated sale of purely [digital assets](https://www.financedigest.com/how-financial-services-organisations-can-address-the-vulnerability-lag-and-safeguard-their-most-important-digital-assets.html "How financial services organisations can address the ‘Vulnerability Lag’ and safeguard their most important digital assets"). The investment is, therefore, much closer to what is traditionally sought through a round of [venture capital than an investment](https://www.financedigest.com/italys-brembo-sets-up-venture-capital-arm-to-invest-in-tech-startups.html "Italy’s Brembo sets up venture capital arm to invest in tech startups") in a public company. So, [caution must](https://www.financedigest.com/britain-eu-must-use-caution-in-new-online-rules-un.html "Britain, EU must use caution in new online rules – UN") be exercised. The controversial Tezos blockchain [project](https://www.coindesk.com/tezos-founders-sued-securities-fraud-potential-class-action/) shows just how quickly things can go wrong with ICOs and has led to the need for a more secure framework to be agreed upon on how to run a regulatory friendly ICO.

**Broken promises**

Central to any framework would be to ensure that ICOs [don’t make promises they can’t keep when it comes](https://www.financedigest.com/people-dont-like-to-be-told-no-when-it-comes-to-finance.html "People don’t like to be told no when it comes to finance") to ‘returns’, ‘dividends’ or ‘profits’. Instead, they should simply focus on selling a [digital asset](https://www.financedigest.com/guide-to-choosing-a-digital-asset-management-system.html "Guide to Choosing a Digital Asset Management System") that will have a clear use case that solves a real problem.

How much assets are released via an ICO generally falls into one of the following categories: Raising a [capped amount to pay for the costs of setting](https://www.financedigest.com/greece-to-set-cap-on-electricity-prices-to-relieve-consumers-pm.html "Greece to set cap on electricity prices to relieve consumers- PM") up the network; selling a fixed percentage of total token supply to ensure the owners retain a certain amount of control; distributing tokens widely to a large number of users to decentralise the investments; selling tokens at the value that is decided by the market; or guaranteeing that all buyers will get some tokens, rather than issuing them on a first come first served basis.

[**Changing markets**](https://www.financedigest.com/plaque-disclosing-aids-market-important-changes-in-industry-dynamics-during-2022-2028.html "Plaque Disclosing Aids Market Important Changes in Industry Dynamics during 2022-2028")

The simple truth is that if the [global equity](https://www.financedigest.com/citi-expects-global-equities-to-rally-18-by-end-2023.html "Citi expects global equities to rally 18% by end-2023") market was created today, we wouldn’t build it like it is now. The equity market was founded circa 1800 with the creation of the [London and New York Stock Exchanges](https://www.financedigest.com/london-stock-exchange-pours-cold-water-on-merging-listing-segments.html "London Stock Exchange pours cold water on merging listing segments"). Country-specific stock exchanges made sense at the time, however today’s [equity market is a global](https://www.financedigest.com/global-equity-funds-see-large-outflows-on-slowdown-worries.html "Global equity funds see large outflows on slowdown worries") one so needs to be disrupted to be relevant to the modern investor.

It’s in [need of a decentralised global](https://www.financedigest.com/analysis-global-climate-coalitions-need-safer-harbour-from-antitrust-turbulence.html "Analysis-Global climate coalitions need safer harbour from antitrust turbulence") solution and that has led to the popularity of ICOs over the past couple of years. Built upon blockchain – the technology that underpins the main cryptocurrencies such as Bitcoin and Ethereum – ICOs have the advantage of being transparent enough to ensure democracy and visibility, whilst being private enough to [protect businesses](https://www.financedigest.com/fx-hedging-strategies-to-protect-your-business.html "FX hedging strategies to protect your business") and investors alike.

**A minefield for investors**

Until regulation gets tightened though, ICOs will [remain a minefield for investors](https://www.financedigest.com/unregulated-investment-schemes-remain-a-threat-to-investors.html "Unregulated Investment Schemes Remain a Threat to Investors"). There are plenty of [potential challenges that new entrants must be aware of when investing](https://www.financedigest.com/technical-textiles-market-2021-2031-potential-growth-attractive-valuation-make-it-is-a-long-term-investment.html "Technical Textiles Market (2021–2031)| Potential growth, attractive valuation make it is a long-term investment") in an ICO for the first time, yet until now very little advice is to be found online. For example, one of the issues that investors still feel uneasy about is the end of the era of [paper share](https://www.financedigest.com/thermal-papers-market-global-industry-analysis-size-share-growth-trends-and-forecast-2031.html "Thermal Papers Market: Global Industry Analysis, Size, Share, Growth, Trends, and Forecast 2031") certificates. This is because [consumers have an innate need](https://www.financedigest.com/money-orders-vs-checks-what-you-need-to-know-as-a-consumer.html "Money Orders vs Checks: What You Need to Know as a Consumer") for the tangible that is a habit they find hard to break. But they are, slowly. One of the way their [fears can be allayed](https://www.financedigest.com/euro-zone-recovery-gathers-pace-allays-fears-of-recession-pmi.html "Euro zone recovery gathers pace, allays fears of recession-PMI"), for example, is with standardised digital share certificates so that they feel they have a certain amount of protection.

But there are plenty of positives with token-buying too. Underpinned by the blockchain, ICOs present the [opportunity for businesses and investors](https://www.financedigest.com/thoracic-drainage-devices-market-rising-new-business-opportunities-for-investors.html "Thoracic Drainage Devices Market Rising New Business Opportunities for Investors") to get closer than ever before, completely removed from the shackles of stock exchanges, government regulation and institutional and corporate stranglehold. Those investors willing to take the chance can target a global equity market [worth](https://www.thestreet.com/story/14229200/1/global-stocks-are-now-worth-more-than-the-global-economy-and-that-s-worrying.html) US$76 trillion easier than ever before.


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