Clubhouse Recap: Banking & Wealth Management in the Bitcoin Ethereum & Crypto Era

The Fintech Elder Recap of the FINTECHTALK™ show on Clubhouse

Hey guys, I recently came upon the word “Epiphany”. The dictionary says:

a moment of sudden and great revelation or realization.

And that, my friends, is what happened on March 24th at the FINTECHTALK show on Clubhouse! Epiphany.

The topic seemed prosaic enough. “Reimagination of Banking and Wealth Management in the Crypto, Bitcoin, Ethereum and Stablecoin era”, hosted by the genial and well-informed Paddy Ramanathan of iValley Innovation Center.   How controversial could that be, I wondered, as I checked into the Clubhouse room.

Paddy has been hosting these talks for several years now and has created quite a buzz in the Fintech world. People look forward to these events. He gets some interesting visionaries and moderates the information flow really well.

This time it was no different.

The first clue that it was going to be a remarkable session came from looking at the line-up of speakers. We had

  • Nancy Tengler a frequent contributor to CNBC, Fox Business, and Bloomberg, who was Paddy’s co-host at the event. 

  • Lex Sokolin from Consensys, a Linkedin Top voice

  • Amy Oldenburg from Morgan Stanley, with a strong interest in all things blockchain

  • Shayne Mullen from BlockFI - BlockFI is the new entrant in the fast-growing fintech unicorn family. 

  • Diana Biggs and Alexander Blum, both digital asset entrepreneurs

It was no surprise then that the Clubhouse event was attended by more than 200 people and the questions poured in thick and fast as the discussion unfolded.

Lex set the tone by simplifying the whole area beautifully, reassuring everyone that the Fintech business was no different from any other. He urged the audience to think about the fundamental mental model at work.

“End-to-end digitizations of products is now possible”.

Lex had worked at Lehman and lived through the crisis (2008/9) that liberated him and pushed him to go into fintech entrepreneurship. It made him think about how consumers engage with financial products and the psychographics of that. More recently he has shifted to blockchain at the intersection of digital assets, blockchain-based software, tokenization and DeFi.

“Look at Spotify,” said Lex. “It is digital, but it has the same widgets in the back to build to the digital asset point and has basically dried up CDs. It may not be fundamentally transformative; the storefront has changed but not the factor.”

Similarly, for Blockchain-based products he made the point that they could be manufactured in a digitally native way, not just distributed. Quite similar, if you think about it, to the flow from CD-ROM to MP3 to online streaming, and from books to online books to kindle.  In other words, end-to-end digitization of financial products is now possible.

“Could DLT stuff like BTC, ETH and Stablecoin become the new fabric of financial services?,” asked Paddy.

Lex drew an analogy of the evolution from Horse-and-Buggies to cars from the 90s and then to Teslas with computers inside it. In his opinion, there would be more capital flows into new fintech products quite like how EV/self-driving cars like Teslas would attract more attention even though cars from the 90s still existed.

“Fintech took SILICON VALLEY CUSTOMER-First thinking and put the store on the phone”.

“It’s an industry like any other”, he said, “where products are manufactured in factories and sold at stores, with a value chain in the middle.”  Bank accounts, investment accounts, loans, etc., are nothing but products, with a few twists. He made a particularly striking comment: Fintech took Silicon Valley consumer-first thinking and put the store on the phone.

Amy drew a brilliant analogy – countries that lacked even a landline infrastructure moved straight up to high-quality mobile technology. Likewise. In certain markets, many populations will go straight to fintech startups instead of traditional vehicles.

“We are not a bank!” declared Shayne. He spoke about how banking is being transformed. Where it once took months to get a loan sanctioned, involving applications, today the matter is closed within a couple of hours.

“Wealth managers face significant challenges explaining digital assets to conservative clients”.

Alex and Diana spoke about the new angles to wealth management. 

What was interesting was that both seemed to have drawn inspiration from stints in countries with extremely poor infrastructure.” Many could not afford the bus fare to a city to visit a bank” observed Alex. Diana likewise was inspired by the financial challenges she witnessed in Burkina Faso.

Amy felt that continuous announcements happening on regulatory issues; the adoption of these technologies is slower than hoped.  A lot of the infrastructure is not there yet. Tax implications are unclear. This itself is affecting the volatile value of bitcoin as the perceived risk is higher.  She also pointed out that education is a significant matter for wealth managers as explaining digital assets to traditional high net worth individuals is not easy. Importantly, tedious cross-border transactions may find solutions through this technology. But as Lex pointed out later, at the other end of the spectrum, nobody takes advice from investor advisors anymore and they seem to be quite comfortable with Coinbase, Robinhood and so on

“The uncertainties have changed - From KYC to KYT”.

 “Further,” he said, “with a blockchain the uncertainties are different.  We are moving from KYC to KYT – know your transaction, tracing back the flow of money to the very first transaction that was the origin.”

Whew!

All that was quite a bit packed in 90 minutes! Strategy, execution, crystal-ball gazing, demystifying the Fintech world! 

Now, do you see why I said it was an epiphany moment. So much fabulous information in 90 minutes!

Let me sign off with a reminder that you can check the upcoming show schedule at www.fintechtalk.co and that you follow the Fintechtalk club on Clubhouse and Be in the Know.

I’ll see you there!

ᠻ꠸ꪀꪻꫀᥴꫝ ꫀꪶᦔꫀ᥅

EPILOGUE

Web 3.0 - The Financial Services factory is changing

…And you better start swimmin'
Or you'll sink like a stone
For the times they are a-changin' Bob Dylan


Interested in reading more from Lex

The Fintech Blueprint, by Lex Sokolin.


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