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Under the Radar: Bank Executives Not Aware of Key Fintech Startups [Chart]

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Under the Radar: Bank Executives Not Aware of Key Fintech Startups [Chart]

Flying Under The Radar

Bank Executives Not Aware of Key Fintech Startups

The Chart of the Week is a weekly Visual Capitalist feature on Fridays.

Mid-afternoon single malt scotch. Summers in the Hamptons. Six-digit bills for yacht maintenance. If you thought bankers live in a bubble, you are correct. Today’s chart is even further evidence: banks are unaware of the very products and services that are vying to pull the rug from under them.

Fintech startups such as Square, The Lending Club, Nutmeg, and Betterment are taking the world by storm, but so far bank executives are unaware of their existence. A survey of 110 bank executives, ranging from directors to C-suite management, found that the majority of respondents do not know key fintech startups that are rapidly changing the banking landscape.

First, the benchmark: 92% of execs knew about Paypal, one of the first real fintech companies to exist. Paypal was started in 1998, IPO’d in 2002, and then was subsequently bought out by Ebay for $1.5 billion. Last year, the company moved $228 billion in 26 currencies across more than 190 nations.

Now, let’s take a look at some of the newcomers:

The Lending Club has a $5 billion market capitalization, after debuting on the NYSE after a widely celebrated IPO in December 2014. It raised $870 million in the IPO, yet only 18% of banking execs know about the company and what it does.

Square was co-founded in 2009 by Jack Dorsey, who was previously involved with starting a little-known company called Twitter. Square is an electronic payments service that was last valued at $6 billion in 2014, when it did its last raise of $150 million. Somehow only 15% of bank execs know about this company.

Nutmeg is the company that bank execs know the most about. About 23% of respondents know of the company. Nutmeg is an online wealth management platform from the UK that last raised $32 million in 2014 at an undisclosed valuation.

Betterment is another online financial adviser that was valued at between $400 million and $500 million in early 2015 with billions of assets under management. Roughly 73% of respondents had never heard of this fintech startup.

This reminds us of the early days of file-sharing and eventually music streaming services on the internet. Music labels, which are almost all but gone of the way of the dinosaur, fought with legal threats, lobbying, legislation, and lawyers rather than by way of innovation.

That may be the only way that the big banks can fight if it becomes too late.

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Can Data Centers Be Sources of Sustainable Heat?

Data centers produce a staggering amount of heat, but what if instead of treating it as waste, we could harness it instead?

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Diagram showing how waste heat from data centers could be recaptured and recycled to provide sustainable heat in residential and commercial settings.

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The following content is sponsored by HIVE Digital

Can Data Centers Be Sources of Sustainable Heat?

Data centers support the modern technologies on which we rely, but also generate incredible amounts of heat as waste. 

And since computers tend to be very sensitive to heat, operators go to great lengths (and expense) to get rid of it, even relocating to countries with lower year-round average temperatures. But what if instead of letting all that heat disappear into thin air, we could harness it instead?

In this visualization, we’ve teamed up with HIVE Digital to see how data centers are evolving to recapture and recycle that energy.

How Much Heat Does a Data Center Produce?

To get an idea how much heat we’re talking about, let’s imagine a mid-sized cryptocurrency operation with 1,000 of the most energy-efficient mining rigs on the market today, the Antminer S21 Hydro. One of these rigs needs 5,360 watts of power, which over a year adds up to 47 MWh.

Multiply that by 1,000 and you end up with over 160 billion BTU, which is enough energy to heat over 4,600 U.S. homes for a year, or if it happens to be Oscar season, enough heat to pop 463,803 metric tons of popcorn. Less if you want melted butter on it. 

How Waste Heat Recycling Works?

At a high level, waste heat is recaptured and transferred via heat exchangers to district heating networks, for example, where it can be used to provide sustainable heat. Cool air is then returned to the data center and the cycle begins again.

Liquid cooling is by far the most efficient means of recapturing and transporting heat, since water can hold roughly four times as much heat as air.

Data centers around the world are already recycling their waste heat to farm trout in Norway, heat research facilities in the U.S., and to heat swimming pools in France.

A Greener Future for Data Centers?

Waste heat recycling has so far been voluntary, led by operators looking to put their operations on a more sustainable footing, but new regulations could change that. 

Amsterdam and Haarlemmermeer in the Netherlands require all new data centers to explore recycling their waste heat. In Norway, they require it for all new data centers above 2 MW, while Denmark has taken a carrot approach, and developed tax cuts and financial incentives. And in late 2023, the EU Energy Efficiency Directive came into force, which will require data centers to recycle waste heat, or show that recovery is technically or economically infeasible. 

With Europe leading the way, could North America be very far behind?

HIVE Digital Provides Sustainable Heat

HIVE Digital is already recycling waste heat from its data center operations in Canada and Sweden. 

Their 30 MW data center in Lachute, Québec, is heating a 200,000 sq. ft. factory, while their 32 MW data center in Boden, Sweden, is heating a 90,000 sq. ft. greenhouse, helping to provide sustainably grown local produce, just one degree short of the Arctic Circle.

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Learn how HIVE Digital is helping to meet the demands of emerging technologies like AI, sustainably.

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