The ongoing Covid-19 pandemic opened the world’s eyes to the need (or preference) for socially distanced (contactless) transactions…and this effect is set to continue to unravel throughout the global finance and fintech space in part due to the ongoing pandemic and also given the transforming consumer behaviors. Catch this interview where John Hensel, Co-founder and COO at Securrency dips into the expansive finance and fintech segment while sharing his observations.
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Can you tell us a little about yourself John?
I spent much of my professional career serving a different purpose. For 29 years I wore the uniform of the United States Navy and had the pleasure of serving with some of the greatest people you could ever hope to meet. They were volunteers who dedicated themselves to serving others through the defense of the U.S. Constitution. We all played different roles, but we had a common bond and purpose. When I transitioned from Naval Service, I wanted to continue serving with a world-class team. Securrency provided me this opportunity. As a co-founder, I feel an incredible sense of responsibility and pride in what we’ve built and the team we’ve assembled. COVID-19 put a spotlight on the strength of our team and how we responded, much as my fellow Airmen, Sailors, and Marines did when we were in uniform…
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Tell us a little about the latest innovations/developments at Securrency Inc, we’d love to know of some of the challenges when it comes to developing infrastructure technology for capital markets.
Today’s global market infrastructure is both expansive and increasingly obsolete. With this backdrop, you would think the world is our oyster – endless opportunities to deliver solutions to improve efficiency, transparency, and automation. No doubt dozens, if not hundreds, of fintechs and regtechs are trying to do just this. The challenge we all face is “it’s like changing the engines on an airliner filled with passengers while inflight.” There are so many end-to-end solution dependencies transitioning financial institutions must account for. The ‘system’ cannot be brought to its knees to be built up again; there’s too much at stake.
At Securrency, we see this environment as a logistics challenge. These end-to-end networks, when broken down to discrete functions, can be systematically addressed when the foundational dependencies are accounted for – Identity, Compliance, Security, and Interoperability. The transition must be seamless with no adverse impacts on the rest of the network. As an enterprise architecture solution provider, Securrency’s technology bridges the gap from legacy to next-generation distributed ledger technologies. In doing so, we permit legacy institutions to methodically transition from legacy infrastructure while automating many of the overhead functions of compliance, revenue reporting, and asset management. In effect we tackle two important areas – divestiture of costly legacy infrastructure and automation of back office functions.
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With shrinking margins and increased competition in the marketplace, those institutions that innovate and modernize first will seize first-mover advantage and market share. WisdomTree, one of the world’s most respected exchange traded fund (ETF) asset managers, recognized the opportunity to do just that. WisdomTree is leveraging Securrency’s compliance and asset management technology to innovate the ETF industry and expand their reach to new markets. This is a multi-phase initiative that will deliver optimized performance and automation while keeping this premiere ‘airliner’ safely at cruising altitude.
Given the ongoing pandemic, how do you see it impact the way demand for certain personal level fintech will evolve?
“Necessity is the mother of invention.” What we’ve learned in the past few months is convenience matters. One could argue convenience has always mattered, but the reality is ‘status quo’ can be as immovable as Mount Everest.
The ongoing pandemic opened the world’s eyes to the need (or preference) for socially distanced transactions. Touchless payments are the most visible example and, frankly, it’s the western world that’s waking up to this innovation as markets in the east have embraced this technology for years.
But touchless payments are only part of it. At Securrency, we’ve been working on solutions that blend payments and investments since our founding in 2015. The convenience of having your ‘value at rest’ actively working for you in investments of your choosing and, when you need your ‘value in motion’ to make a payment (even a touchless one), seemed impossible just a few years ago. I’m happy to say Everest is moving. Through Securrency’s Active MoneyTM solutions, clients can hold interest-bearing and dividend-yielding digital securities with the added convenience of monetizing them at a point of sale transaction. We see this as a major step forward in the personal banking and payments space and we are excited by what the future holds as our services reach developing markets and the underbanked.
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If it weren’t for the effects of the Covid019 pandemic, what top predictions for the global fintech market would you have shared for 2020?
I’m not sure I see the predictions any differently with or without COVID-19. Certainly, the market downturn hit us hard in Q1, but the reality is a correction was coming regardless. Capital markets aside, the fintech market has been on a steady course for some time now. One need look no further than China to see the rapid adoption of blockchain and fintech applications. The deployment of the Blockchain Service Network (BSN) is a shot across the bow to the western world. Just like the US invested Billions (USD) in the 1950s and 1960s in the roads, bridges, and dam infrastructure across America connecting manufacturers to markets, China is making similar investments. As impactful as the US investment was half a century ago in establishing the US as the world’s global leader from an economic perspective, China’s investments will have a similar impact on financial markets and neighboring economies. 2020 provides a foreshadowing of what’s to come in the remaining years of this decade. The pandemic may have awakened us to the importance of financial services infrastructure, but the giant was already at work building for the future.
What are some of your thoughts on bitcoin and other digital currencies; how do you see demand/usage for this change with time.
Bitcoin and other digital currencies have been important sled dogs in moving the industry forward. They opened the world’s eyes to the power and efficiency of blockchain and distributed ledger technologies, but they also helped to facilitate massive crimes such as money laundering, terrorism financing, and human trafficking. Now many will rightfully argue that most who use these technologies and mediums of transaction are not criminals and don’t skirt the law of various jurisdictions in the course of their personal business. The unfortunate reality is those that do tarnish the potential of the tech. The good news is regtechs like Securrency provide solutions to not only address the identity and compliance issues, but also create a bridge permitting financial institutions and institutional investors to confidently embrace blockchain. As we wind the clocks forward, digital securities will undoubtedly displace the perceived benefits (convenience) of cryptocurrencies. The beauty of this development is retail and institutional investors will experience the same convenience in transactions as cryptocurrency users do today, but with greater confidence in the performance of the underlying assets (public & private equities, collateralized debt, non-fungible assets, etc.). I’m not predicting the end of cryptocurrencies, but the reality is institutions are adopting blockchain technologies for the efficiencies they deliver in asset-management automation, compliance reporting, and compliant distribution control. Asset managers will experience greater access to those seeking yield (much like Bitcoin is largely accessible globally) while confidently knowing compliance requirements are being addressed in an automated, self-governing fashion.
How, according to you, will emerging tech play a key role in the development and evolution of finance and fintech as a whole?
Blockchain technology adoption is moving at a blistering pace. The tide has turned and nearly every institution globally has programs underway with alliances forming (if they don’t, they’ll be obsolete soon). Emerging tech will certainly play a role in this evolution. More important than the technology is the role regulators play in adoption. As I framed earlier, changing an aircraft engine while the airliner is in flight is tricky business. Can it be done? – sure, but doing it deliberately and in an order that ensures success is key.
Risks must be taken if you want to avoid being on the outside looking in. Regulators that take a pragmatic view of the world open the door for innovation and, believe it or not, enhanced compliance. This is the hurdle we need to clear. Regulators such as the Financial Services Regulatory Authority (FSRA) of the Abu Dhabi Global Market are some of the most professional, diligent, and yes, pragmatic regulators in the world. They work closely with fintechs and with equally forward-leaning regulators from Australia (ASIC), Singapore (MAS), and other leading jurisdictions to advance the adoption of technology as an enabler of innovative capital markets and financial inclusion. Securrency is proud to be a part of the ADGM community as we work to advance the adoption of these technologies alongside the FSRA team.
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Tag (mention/write about) the one person in the fintech industry whose answers to these questions you would love to read!
Chairman Clayton, Mike Pompeo, Don Wilson
Your favorite FinanceTech quote
“We’re witnessing the creative destruction of financial services, rearranging itself around the consumer. Who does this in the most relevant, exciting way using data and digital wins!” – Arvind Sankaran
Would you like to share specific finance or business tips for Marketing and Sales teams struggling through this uncertain time?
The exit from the current financial crisis will be as rapid as the entry. Unlike events of the past spurred by war or regional disaster, the COVID-19 pandemic impacted markets universally. Supply side and demand side economics were simultaneously impacted. What we discovered in recent months (keep this in perspective as we are only talking about months and not years) is that people want to work and need to feed their families. Working remotely and quarantining in some communities resulted in some new behaviors and patterns, but the reality is people want to work wherever they can. They want to contribute to society, to a greater good, to be productive. People are thinking less about fancy cars, jewelry, and vacations and more about their families, stability, and normalcy (school, dining out, sports, etc.). With this future reality in mind, consider the human on the other side of any marketing or sales campaign. Consider the impact and weight many of them continue to experience in these trying times. More than 350,000 were lost to COVID-19 and the numbers will continue to grow even as the curve flattens. I don’t know anyone who hasn’t been impacted by it through a personal illness or the unfortunate loss of a loved one. Be compassionate. Be human. When marketing, consider how solutions you provide can bring us closer together even when we interact through a pane of glass UI.
Securrency is a technology products company that delivers a complete suite of security and compliance tools to issuers, broker-dealers, and alternative trading system (ATS) operators to enable the issuance, maintenance, and secondary trading of tokenized securities.
John, is a Co-Founder of Securrency, and serves as the Chief Operating Officer and Chief Revenue Officer. He leads global business operations for Securrency’s international team based in Abu Dhabi, UAE as well as Securrency’s global client and investor relationships. John served in the U.S. Navy for over 25 years as an aviator and a Major Defense Acquisition Program Manager. John is a graduate of the U.S. Naval Academy and has advanced degrees from the Naval War College and Johns Hopkins University.
