NCFA Canada | Oct 13, 2018

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Transcription of Interview

Manseeb Khan:  Hey Everybody Manseeb Khan here. And you are tuning in to another episode Fintech Friday. Today I have the amazing the incredibly talented Ali Pourdad CEO Progresa. Ali thank you so much for sitting down with me today.

Ali Pourdad: Thanks for having me.

Manseeb Khan:   Yeah so Ali could you just give the audience a little bit about who you are and essentially who and what Progresa is.

Ali Pourdad: Sure. I'm happy to. I think for those who are not aware of myself or Progressa I have a background as an entrepreneur. I've been there for about 20 years. This is my second business I had to get out of high school. Pre Dot-com which shows was my age. This is my second life. We started Progresa back in 2013 in Vancouver . Me and my co-founder originally started off as a straight consumer finance lending business. And sort of quietly behind the scenes we were building software. And today. I would say we're sort of a full-blown financial technology company and we have a lending business. That drives a significant amount of revenue but we also. A multitude of software offerings for our major Canadian enterprises. We solve problems for Canadian business.

Manseeb Khan:  Yeah that's incredible. So, this might be a silly question, but I guess we'll make you a little bit more different than Money Mart and any of the other loan services out there.

Ali Pourdad: Sure. Yeah but you don't see companies like money mart or other loan services, companies as a competitor because. We don't we don't go direct to consumer like they do. So. A company like many of markets has branches, HYG online but there are really seeking consumers and going directly at consumers for lending products and offering them. Credit where they actually paying cash in their pocket and not necessarily helping them  helping them. Progressa fundamentally different. All of our customer acquisition comes from other businesses. And we're typically solving problems for those businesses and probably problem for those consumers. And what I mean by that is our software is setting up and offering a number of services. But the main purpose of at least  two thirds of our software solution. Revolves around enterprise collections and try to have a healthier and more of a holistic approach to the recover money as a Canadian enterprise so. That would be an example of you know a young lady or a young gentleman who's going through a tough time in the past that. They owe. You know Roger or TELUS money. Progresa is the company that will come in and help facilitate that recovery for those enterprises. Help them recover money but also offer a better experience. To that young lady or that young gentleman who might be going through that tough time or stressful time. Ultimately. What that means is that larger TELUS, Bell, and other enterprises that use Progresa. Will have better net promoter score. Better. Which is better customer satisfaction. And ultimately manager their risk better for them. There's been real demand for differences between that and traditional lenders. All of our loans for example the customers will actually not seeing money, we're helping pay their debts and pay down the debt. And leaving them into better financial life.

Manseeb Khan: You guys also do. I mean I've from looking from your website and from some of your past blog posts you just do go a little bit more deeper than credit scores. You start building I guess a customer persona. And just like a characteristic of like who this  person is their past history someone is not in and of itself is pretty incredible because now the loan is a lot more  personalized, it's a lot more individualized`.

Ali Pourdad: Yeah exactly and that's a very good point. I mean we do have a proprietary technology that we built over the years. Technology is quite different than what's out in the market today, what's out in the market today is, you put it very well it's not personal. It's very generic and it's very archaic. And so, it leaves a lot of the population in a position where. They can't be helped even though they might be financially responsible or living within their budget. You are doing all the right thing but. On paper it doesn't reflect that. That's where Progressa shines that. That's why we've been successful even quietly growing behind the scenes because. We'd be making major investment. And that technology that allows us to evaluate these consumers just fundamentally differently and give them credit for things that might you might not necessarily see as a traditional lender.

Manseeb Khan: So, you recently raised the 84 million dollars round which is absolutely incredible. Previously you raised a 10-million-dollar round. You took a much more alternative approach compared to the other startups out there. There were a lot more loud a lot more bullish. In a sense they have the mentality of You don't need banks, we don't need do we need the old world because we're building the new one right. We don't need your guys help you guys look much more silent a lot more tactical route of quietly building partnerships with banks and credit card companies. Could you talk a little bit more of that approach and what that approach looks like and what would your advice look like to other startups on collaborating with banks and other institutions.

Ali Pourdad: Happy to answer that question. I would say there was always a very well thought out plan in the early days when we first launched there was a lot of fintech’s out there that. We’re making quite a bit of noise in the marketplace. A lot of that noise revolved around either taking down the bank or replacing the need for banks etc., etc. . And you know in the Canadian marketplace we have an affiliation with the bank that's going to be quite hard to displace. And we saw that in the early days. So, you know what we decided to do is just invest in. Trying to tackle bank problems. What are the things that the banks are trying to tackle and how can we? Help them be more successful. That was a fundamental decision we made early on. We did it quietly and without making noise because. Frankly we weren't ready to scale the business and have been a business that had both. Technology and lending. You're not going to scale until you have scalable technology and you can't have scalable technology until you have a track record behind with. Very chicken and egg. You have the built of a little bit slow and steady or you risk blowing up your company. And that's what we did. And we now reach the point this where we that we have a very strong foundation as you mentioned. We raised a big round that round the reflection of. The sort of the order that we chose to tackle problems. And investors saw that they saw that we hadn't blown up our business and that. We're you know conscience of investors capital. And they doubled down and supported that next stage. You know my advice entrepreneurs considering building disruptive technology you really need to evaluate what your road map looks, what's you path revenue. Or if you have a better revenue try to disrupt banks or try to work with banks. Sometimes both can be achieved at the same time and. That's the route the Progressa chose.

Manseeb Khan: Some of the investors mentioned that you've actually from day one you started operating the business as it was a public company. You know you talked about how you guys built the very strong foundation. Could you just give us a little bit more detail of what that foundation looks like and how you pretty much just muted out everybody else and just put your head down and just build Progressa.

Ali Pourdad:  Sure. Yeah, I mean I know my background in between my first business and Progressa sort of pivoted professional services I became a chartered accountant I worked at PWC for a number of years. Really built up my professional skill set so that. I knew that one day I go back entrepreneurship and I really wanted to have a good tool kit. To build a business in a proper way. You can help businesses any number of ways a lot of entrepreneurs get lucky, some of them blow up their businesses. I knew that this type of business was going to be successful I need to build the skill set. So, with a professional a background I very quickly started to build the team and the right spot. And we focus on things that we knew were going to be needed to rebuild capital. Making sure we have proper financial reporting, making sure we have things like insurance, making sure you know we have good controls, getting audited financial statements and so on and so forth. And we made all of those investments right off the bat. To raise money in the Canadian marketplace. Well there's a lot of heavy regulation. You know the government securities regulations in each of the provinces. Is there to protect investors and rightfully so as a company that you know had a strong report below like we do. We had to have all of these checks and balances in place . In order to be able to successfully raise money. Today, that got an easier because we're more on the radar. But as early stage startup when you're going through these things. Such as one of one of the things you might not think about that makes  will make life easier for you. Make those investments. So, you know allocate capital to proper lawyers. Allocate capital to make sure you build your finance team. Have that reporting to share holder reporting as well it's very important in the early days. To keep you're a shareholder in the loop people and keep them happy. Because you might be going back to them for more money and investors are happy to see the right track to a great growth story. But you've got to deliver what you say.

Manseeb Khan: So, I guess sticking with the same chicken and egg analogy that you previously mentioned you want to make sure you have all your ducks in a row before you start bringing on investors and everybody right.

Ali Pourdad: Yes exactly. I mean we would I mean nowhere we're 6 years in, and we bootstrapped for the first couple years we've totally bootstrapped the business. I don't remember having a management team up until two and a half years into the company. So, we were probably. 20, 26 people before I hired my first other senior manager. You know Ali was HR, He was the CFO. He was legal. I did. I'd basically over just over 20. Individuals in the organization. And tell that point you know as an entrepreneur when you reach that point and your business is run rate is reaching a point where you. De-risk the investment. To the point, we have reached that. You know we've got to the point where the business has started to prove it or start to prove that. Even if we do start to make the right investments and people and scalable technology that we could build something big. Once we had the core competency of the central bank when we take. Both decisions. You know I would be going any other way. in any  entrepreneur that's looking to start a business today. Simply understand you're core competency first. Do that. Make the investment and understanding that before you build. Anything scalable on top of that. You want to make sure that you're building on the right foundation because you'll still move faster you pay your investors a lot of money

Manseeb Khan: You guys are also gearing up to go public by the end of 2019. So. Again just talking about the huge round that you just raised. What got investors excited? Was that a marketing experiment?

Ali Pourdad: To give credit to the investment bankers that were involved in our fund raise they did a good job positioning Progressa of the Canadian marketplace. Listen we may go public, we haven't officially announced anything, but the reality is that a lot of the market driven. we're executing on growth right now. The business is reaching record run rate on revenue and the bottom line and it sets us up to go public nicely. That's what our Board decides to do and our shareholders support. We do have a number a lot of shareholders. They were already about 200 shareholders are Progressa today. So, you know as a small business with 200 shareholders everybody has to be on. The same page about a decision like that. There's lots of avenues for late stage private companies to. Create liquidity for investors if that's their plan. My personal plan is to continue to execute on our strategic plan that our board has signed off on. It's ambitious and it grows this business into a very credible player in Canada. One thing that you mentioned earlier that all sort of reiterated that we had. Very much flown under the radar for 3, 4, 5 years and now we're trying to get on my radar. Where you can fully expect that. So, we're going to be. Doubling down quite hard on that side of things and therefore you know we're going to be more on the radar than ever before. And that's very much a function of launching our technology offering publicly. And you know all of our technology offerings that we made all these investments in. Have supported a growing lending business. But today they're ready to support. Other companies and support them and help them achieve their business objectives. And  you can expect to be hearing a lot more about Progressa as we roll up those products in the coming weeks.

Manseeb Khan: Yeah, I'm super excited just to see like what's going to be like the changes that may or may not happen now that you guys are going to be a little bit more on everybody's radar. So how are you going to keep the team and Progressa motivated healthy and productive and how do you see I guess the environment changing I mean I a rumor going public?

Ali Pourdad: Yeah, I mean there's different challenges for us as a Toronto and Vancouver company as they try to make. There are two very different cultures. I think.,  The first point is that you have to put the people first if you want to grow your team in a healthy and productive way. you make investments and bringing the right leaders in the work of younger teams that motivate them. But you also have to keep an eye on market trend is that you know you're out there especially in a large organization like we are. They're always talking they always have their eyes and ears on their friends that other organizations to stay competitive truly competitive you need to have a proactive strategy with your employees and not reactive. You know as it relates to Progressa today we really doubled down on people we've made serious investments in our senior H.R. people. We just went on Merit Finley the senior executive from over venture just literally started and this last week, really big win for a company like Progressa because you can't navigate this late stage try this. Potentially IPO scenario without a person like that. The IPO that just leads to bigger and better things. I mean I would expect our team to increase in size modestly. But I our H.R function that really where I would be focused. If you were to IPO, you suddenly now have different challenges and risks. And you need to keep people first That have a people first philosophy. As long as that  doesn't change, and you double down with  everything else. Then post IPO should look really good.

Manseeb Khan: There are a lot of startups that both have either office in Vancouver and in Toronto. I guess your best advice to them would be just double down on people focus on HR and just be there for every single individual in the company because they're the people that are going to help build your amazing building and your business right.

Ali Pourdad: Absolutely. I mean are companies are complex, as an entrepreneur you may not see that on day one. You may be just doing everything and happy to do it and that sort of learning things on the fly. But as you build out teams and build out processes start making investments and technology becomes very. Sort of evidence to how complex it is. And., I think. You know my advice obviously try to simplify it as much as you can and keep things simple for yourself and for your senior leaders that you bring on. Businesses are inherently complex and if you don't keep people first they get  burnt out They don't grow. They get frustrated. You really have a people first mindset to drive that. We haven't always had it right. Progressa it's not something you get right. Right away, you sometimes make mistakes you hire the wrong people and you just need to iterate just like iterate technology iterate on your team and get it to a place where it becomes scalable. Because it's not just technology scalability that. Drives businesses like fintech its's people scale ability. Have the right people at the right times. And. You have to know when it's the right time for those people to move on. These companies evolve very fast. I mean you know in the early days you might double, triple, quadruple revenue year over year. If you maintain those run rates for two three four years. And haven't paid those investments in people get burnt out really fast. And so. That would be my advice.

Manseeb Khan: Yeah, I love that people scalability. That's incredible. So, I guess you have mentioned that a little bit early on like how much harder it is for Canadian  fintech companies to get Canadian investment money. What is your perspective on the regulating sector. So, for example consumer loans. Do you feel that the government is including regulators? And do you think they're striking the right balance between investor protection and enabling market innovation?

Ali Pourdad: Yeah, I mean I think certainly some regulation is needed across the board. Otherwise you know you get your in situations a country that things don't make macro sense anymore. The best example would be in 2008 there's no lack of regulation that caused banks in the US  to have aggressive underwriting practices and that turns into major problems. So, you don't want that. Sort of worst-case scenario. In Canada. You know people I think people would be quite surprised to understand there is a fair amount of regulation out there in consumer loans. We know we have a very heavily regulated mortgage-based payday loan base. And even other types of lending were very heavily regulated. You know in my view household debt to income ratios are quite concerning in Canada. That is, you know that could easily be correlated. Other things that may not be a regulation issue simply could be. You know high real estate prices the low interest rate. Those are very hard things the regulators control. So, balance is tough  question the answer from an investor standpoint I do believe provincial governments have worked hard to find that right balance investor protection and enabling innovation. You know a major issue that we continue to have in Canada though. Is that these provinces that security regulators aren't harmonized yet and that may. Make things complicated for starts to navigate and innovate quickly.

Manseeb Khan:  Touching back on what you said you guys have invested in a lot of the technologies right? Do you see the future with digital banking by offering a full range of services. And if so I guess what technologies you are most excited about and that you think is going to have the most impact.

Ali Pourdad: Yeah, I mean I think we're already a lot of the way there in Canada. I think our  major banks have fairly strong digital banking offerings themselves. And so, you know there's lots there's a there's a lot of room for disruption, but I think the single probably the single most important legislation required to. Fully complete digital banking roadmap for all Canadians and probably the one I'm most excited about. Is the open banking concept? And that's something that governments started to get wind down in the year they. Have already started to empower consumers with data. Once the banking data is back in the control of the consumers and not the bank. Then you really will have a truly digital banking environment with a full range of services. And you know the ability to unlock full potential. And until then you know you know I think Canadian fintech’s will continue to innovate. You know again Progressa we play behind the scenes we try to play it with. Predicates. Where that. Adds value to a bank and credit cards and so on. Solve problems. You know. What that could lead to it. The regulators don't offer it if they don't move quick enough on open banking, then the banks could just snap up fintech’s one at a time as they see fit. I think. You know you. Have. Different data that are still around after five six seven years. They are well positioned to. Sit down with parents who are having those conversations hoping they can change the environment in Canada significantly. As it relates to digital banking operate because it could really make life good for Canadian's for Canadians and either the playing field for a lot of consumers out there without traditional access to credit Or Just traditional banking products simply because their data is in the control of the banks. Is not doing anything with that.

Manseeb Khan: So essentially the old gatekeepers of helping Canadians in the past are going to be greatly diminished just making it ,like you mentioned a couple times or just making lives of Canadians that much more easy.

Ali Pourdad: That's the idea. I mean banks I think banks do a  great job I've got. I'm not in the camp that banks need to go down or fold or be this be disruptive. Certainly, there's a lot of services and banks that are frustrating to the consumer to deal with. At the end of the day they happy they think large investment digital banking offerings. The issue is less to do with those offerings and more to do with. Empowering the consumer. As a consumer of a bank. You sometimes feel handcuffed. And. I you know I think fundamentally that a lot of upside here for Canadians. If the government does step in and offer you know to open up the data again it's kimono and give power back to the consumer. It just opens up a wide range of opportunity to offer service that. Really. You know make life good for that consumer I mean best examples are the social media companies in the U.S. that. Are able to take data and improve. And again, depends on who you ask. But if you ask me and you've offered your consent really improve life for you and they think very sort of seamless day to day. There's no reason they can't be in that situation in Canada with banking data and make a well thought out plan.

Manseeb Khan: So, speaking of peer to peer you're seeing a lot of people starting to shift into getting into crypto and very much getting into blockchain and how do you see loan services like yourself getting into blockchain and how do you see loan services in the blockchain and different from existing services that we have today. And what I'm asking is What do you need to see be a KYC, be it regulatory to make an actual shift to be 50/50 blockchain or if not just go all in on blockchain.

Ali Pourdad: Yeah. So, I think the answer to that question is simply to look at where the regulations are heaviest and where. Block Chain can solve those problems. And in lending you know I think those questions are still being asked. There not fully fleshed out but certainly where you have heavy KYC the mortgage space and other types of lending in Canada. Yes, the blockchain can solve a significant problem as it relates to onboarding customers and making sure that there's a paper trail for everything. And so, from that perspective the block chain has some real application. Things more seamless for consumers. I think. You know the parts crypto is concerned there is a lot of the young population out there that. Has been investing in cryptocurrency. And the average age of a crypto user is quite young. And they're building up cryptocurrency wallet. With real financial holdings there so. That money is available.  but not in their Canadian or Canadian bank account it's not available under U.S. bank account. It's available in their crypto account. And so. Naturally. You know there's going to be. Sources and uses for the money and the lending is one option for the cryptocurrency you're going to start to see platforms. That offer peer to peer lending options for the crypto currencies. Simply because people are going to be sitting on those currencies and are going to want to get that money to work and try to generate a return just like any. You know company or other peer to peer platforms the in  U.S.  for example, trying to achieve. Definitely we're going to see shifts into crypto I don't think it's to take over the world as far as lending is concerned, I think lending is just A function of whatever currency is sitting on out there whether it's crypto or fiat. But certainly, the block chain going back to that will make life good. And I think that the companies right now that are Again asking the question when. Where are the problems? Where the pain points? And how can I use blockchain to make things better? At Progressa that  We're certainly exploring a lot of those things but not haven’t decided to use the blockchain yet.

Manseeb Khan: So, you did mention peer to peer loans right. So, do you see peer to peer loans disrupting your business given that it would make it a lot more easier for just Canadians and if not under serviced  Canadians to get loans or just to make sure they can pay the Rogers bill or the phone bill or what have you.

Ali Pourdad:  I don't necessarily see that I think offering credit is a core competency that you have to learn over time. It was something that is easy to reproduce. We have learned by mistake. The have to have money loose. Because you definitely will lose money in the beginning and it takes time to. Again, understand that core competencies that you can start to scale it and make money in greater amounts you know is it possibly disrupt able ? absolutely there is possible disruption there in the future. I think in Canada probably a lower chance of that happening. Peer to peer lending in Canada first of all is being banned by securities regulators for quite some time. In the U.S. certainly you see peer to peer lending is much more prevalent. And you're already seeing a block chain-based companies tackle peer to peer lending. But there is just a drop in the bucket and the reality is the block chain is at this point heavily correlated with crypto currencies. And are like crypto currencies and so that's the main driver. You know if somebody borrowing and they don't need crypto currency then there's really no use of the platform. So. As far as I understand there's we're still talking about tens of millions of crypto currency users across the world not hundreds of millions or 200 you know are billions yet. And so, it's still a quite a small market. Relative  to the overall market and something that. Companies just to keep their eye on and evaluate as they grow and look at market opportunities and pounce on it if you think there's something there to. To grow into.

Manseeb Khan: Yeah no absolutely. Like we said before the average crypto very young so it's tens of millions 100 to hundreds. So, it's not a very young, very infancy stage for companies to pounce on it right. So, I guess one of the things that is out there that's very prevalent in the business media would be alongside of crypto and blockchain would be AI right. AI is definitely going to be disrupting the banking industry for sure in the past couple episodes. It was also mentioned that AI is also going to be very disruptive for the insurance business. How do you see AI either disrupting or helping the loan services and Do you see as an opportunity or do you see it as a threat?

Ali Pourdad: Oh, I mean perhaps this is an opportunity for sure want to be very people are asking this question because I don't know that I would recommend. You know getting into lending if you have an AI that's not the reason to get into lending and I don't think you can use AI effectively right off the bat anyway. I think you have to grow into AI. AI is by its inherently is reliant on big data. You're not just sitting on that data when you launch a business. You have to build the data over time, you need to make sure it's a scaleable data. It's being housed properly that a lot of an investment you have to make it into a  data infrastructure. To leverage AI effectively. So, from our perspective I mean we definitely see it as an opportunity because we've made those investments. Heavy investments in technology and our data infrastructure. I mean we have a  full data team in Vancouver. That to use AI effectively to have automated credit models and use sort of machine learning to automate the recalibration process that we that we currently have humans doing you know. And so that that's all upside for business that make those investments. But it's not something that I don't think  it's not practical for a number of years. You have to you can't just acquire the data, you have learned by mistakes. And build up to date on an appropriate way so that when you're ready to build scalable technology you know they you add AI to the list.

Manseeb Khan: Yeah. So, all of that is just testing and learning right? Where do you see yourself in Progressa the next three to five years? I mean given that we talked about block chain and crypto and AI?

Ali Pourdad: Three to five-year progress as generating, I mean you can see us like a traditional online lending business. But over three to five years Progress is going to generate the majority of its revenue from that technologies. And a minority of its revenues is from the lending business. I mean we made a  significant investment in software. That are driving great growth in  our lending business today. But over the next three to five years you know I fully expect that we'll be able to service our much larger enterprise partners in more meaningful ways as a software provider and much more so than a lender. For me personally you know I'm having fun. We've made significant investments in building out a great team. And I want to see this team be successful. I work closely with our board and I'll continue to run Progressa as long as they have me with the job. At the same time, you know Progressa has set me up for many great opportunities personally well had to get involved with many younger entrepreneurs as I can. And guide them and share my voice. I had the privilege of contributing weekly for a couple years on the Business in Vancouver the technology panel and continue to do that and have fun. You know I'm in a mode personally where Progressa even though we've been flying under the radar behind the scenes. Progressa has set me up to contribute back how meaningfully and guide younger entrepreneurs and try to get involved with younger businesses that have disruptive technologies. But I think that's what I see for Her my future.

Manseeb Khan: Yeah that's incredible it's actually very humbling to hear that like even though you are I guess relatively compared to traditional businesses you guys are a very young company, but you already have the mindset of Yeah, I know I'm still a startup and I'm still building a great business, but I still want to give back to young entrepreneurs. someone to guide them like hey that mistake I made over there yeah don't do that to just do this instead this was going to make your life so much easier. That's absolutely incredible. So as an aspiring young entrepreneur myself I wholeheartedly thank you and amazing entrepreneurs like you for helping and just guiding us and giving back.

Ali Pourdad: Yeah. Thank you. I appreciate it and thanks for having me on the show.

Manseeb Khan: Absolutely. So, what will be the best way for young entrepreneurs out there to contact you. Could we snapchat you. Do you up on Twitter. What we the best way to contact you?

Ali Pourdad: Yeah for sure. I'm on Twitter as my handle is  Ali Pourdad. It's my first name and my last name. You can find me on progressa dot com as well. I will have a bio on there with my name, so you'll find me on Twitter, you'll find me on Instagram. And happy to chat with young entrepreneurs. I mean we certainly have a handful of Progressa. But again, I'm also on LinkedIn. Always a good way to find me in on LinkedIn. Happy to chat with young entrepreneurs  and add I value where I can.

Manseeb Khan: Awesome. Ali thank you so much for sitting down with me today and I can't wait to have you on the show again hopefully post IPO.

Ali Pourdad: I'd love to be back thanked you !

End of Podcast

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Court Tests the Liability of DAOs and Their Makers: What You Need to Know

March 29, 2023

Coindesk | Sam Reynolds | Mar 29, 2023 Decentralized autonomous organizations (DAO) are beginning to look like general partnerships in the eyes of U.S. courts. A U.S. court in California has ruled in favor of plaintiffs who alleged that the bZx protocol, and governance token-holding members of its decentralized autonomous organization (DAO), were negligent and liable for losses resulting from a hack that drained its treasury. The putative class action against bZx, its founders, software developers Leveragebox LLC and Hashed Labs LLC was initiated in July 2022. Drained wallets:  The case stems from the $55 million hack of decentralized finance (DeFi) lender bZx in 2021, which resulted because a developer downloaded an email attachment containing malware. Not only did the attacker drain the wallet of the BZRX token, but other digital assets like ether. This is on top of other hacks the protocol suffered in 2020, one of which was for $8 million, while two others that occurred were for $630,000 and $350,000. See:  Sushi DAO Head Chef Served With SEC Subpoena While the court dismissed some of the claims, such as claims that founders Tom Bean and Kyle Kistner are personally liable for breaching fiduciary duty, the fact that ...
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Peer-to-Peer Finance and the Empowerment of Marginalized Communities

March 28, 2023

Guest Post | March 28, 2023 Introduction Since the 1970s, global finance has seen significant changes that have impacted millions of people. The development of mobile phones and other technologies has enabled new ways to make and manage payments, invest money, and take out loans. But not everyone has been able to benefit from these technological advances. In particular, marginalized communities often lack access to financial services that can help improve their lives. The importance of financial systems The importance of financial systems is often overlooked in the development community. While there have been many innovations in technology and business models, we've failed to keep up with the rapid pace of change in the financial sector. As a result, millions of people still lack access to essential banking products and services, and even more so if you look at those living on less than $2 per day. What's most alarming is that this trend isn't new: it has been going on for decades. In fact, according to data from the World Bank Group's Global Financial Development Database (GDFD), only 1% of all adults worldwide had access to formal savings accounts as recently as 1990 - a number which rose by ...
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FFCON23: MARCH 28, WEEK 3 AGENDA: ReFi, Sustainability, Purpose

March 27, 2023

Team FFCON23 | March 27, 2023 Want to get insider access to some of the most innovative advances happening in #fintech. Grab an OPEN ACCESS ticket and enjoy a live virtual event at  #FFCON23 with access to all on-demand content!  On behalf of NCFA and our valued partners we look forward to seeing you there.   More information can be found:  https://fintechandfunding.com/ The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org ...
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Epic’s CEO Tim Sweeney Illuminates How the Metaverse Will Actually Function

March 27, 2023

The Verge | Andrew Webster | March 23, 2023 Epic’s CEO, alongside executive VP Saxs Persson, talks about the future of virtual worlds and what needs to happen for the metaverse to really come to fruition. Epic’s outspoken CEO, Tim Sweeney, took some time to talk about one of his favorite topics, the metaverse, which is something the company is putting a lot of money into. Right after the event, I had the chance to sit down with Sweeney, as well as Epic’s executive VP Saxs Persson, to talk about just what the heck a metaverse is and how it might work in practice. See:  What CEOs Should Know About the Metaverse Can you give me a clear definition of what the metaverse is?  Tim Sweeney: It’s just an online social entertainment experience in a real-time 3D setting. You and your friends, going around having fun together, in a 3D world. What’s happening here is somewhat a phenomenon of scale. We now have enough people with access to powerful devices so that you can actually go out and do this with all of your friends. It’s no longer something for elite computer nerds. That makes you convinced that this is ...
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Twitter Generation’s 1st Banking Crisis is Different From 2008

March 27, 2023

CNBC | Hannah Ward-Glenton | Mar 27, 2023 The banking crisis today looks very different from 15 years ago thanks to social media, online banking, and huge shifts in regulation. So how is it different?  Social media not only allows rumors to spread more easily, but also much faster. "What social media has done is increase the importance of reputation, perhaps exponentially, and that's part of this problem I think," Donavan added.  Social media gives "more scope for damaging rumours to spread" compared to 2008, Jon Danielsson, director of the Systemic Risk Centre at the London School of Economics, told CNBC in an email. "The increased use of the Internet and social media, digital banking and the like, all work to make the financial system more fragile than it otherwise would be," Danielsson said. "There are a couple of tweets and then this thing [the collapse of Silicon Valley Bank] went down much faster than has happened in history," Fraser added. While information can spread within seconds, money can now be withdrawn just as quickly. Mobile banking has changed the fundamental behavior of bank users, as well as the optics of a financial collapse. See:  Digital Asset Experts School Senate ...
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Financial Privacy: SEC Launches Enormous Database Compiling All Stock Trades

March 26, 2023

Cato Institute | Jennifer J. Schulp | Feb 17, 2023 What little financial privacy you have when trading stocks is about to get even smaller next month. When you make a stock trade, your broker already is required by the Bank Secrecy Act to maintain records of it, monitor your trading activity, and report any suspicion of illegal activity to the federal government. Starting in March, your broker will be required to directly report all of your trades, including your personal information, to a massive government database. If the Bank Secrecy Act concerns you—and even if it doesn’t—just wait until you hear about the Consolidated Audit Trail (CAT). The Consolidated Audit Trail is intended to collect and accurately identify every order, cancellation, modification, and trade execution for all exchange‐​listed equities and options across all U.S. markets, allowing the Securities and Exchange Commission (SEC) to track orders and identify who made them. See:  Office of the Privacy Commissioner Announces Digital ID Ecosystem Resolution to Ensure Transparency and Privacy This massive surveillance database is a financial privacy nightmare:  The CAT began collecting trading data in 2020, after years of development replete with challenges and controversies. It is scheduled to begin collecting customer information on March ...
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U.S. SEC Files Lawsuit Against Tron Founder Justin Sun

March 26, 2023

Coindesk | Nikhilesh De | Mar 22, 2023 The regulator alleged TRX and BTT are unregistered securities, and claimed Sun created an "extensive wash trading" program to boost their trading volume. The SEC said in a press release it was suing Sun, the Tron Foundation, the BitTorrent Foundation and BitTorrent (now known as Rainberry) over the sale of tronix (TRX) and bitTorrent (BTT) tokens, which the regulator described as unregistered crypto asset securities. The regulator further alleged the defendants "fraudulently manipulat[ed]" TRX's secondary market through an "extensive wash trading" scheme. See:  SEC Warns Investors: Be Vigilant Regarding Crypto Asset Securities The SEC alleged, by having his own employees "engage in more than 600,000 wash trades of TRX between two crypto asset trading platform accounts he controlled." According to the court filing, Sun's Tron Foundation employees conducted the trades, the BitTorrent and Tron foundations controlled the accounts and Rainberry employees transferred funds for the trading. Celebrity influencers: The agency is also suing Lindsay Lohan, Jake Paul, Soulja Boy, Lil Yachty, Ne-Yo, Akon and Michele Mason on illegal touting charges for their roles allegedly promoting TRX and BTT without disclosing they were paid to do so. The majority of these celebrities settled the ...
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