5 Ways That We Can Help Stabilize The Cryptocurrency Market, With Areiel Wolanow

”Life is like a video game. The game can throw money or upgrades or power-ups your way, but the main reward for finishing a level is the opportunity to play a harder level”. This is an explanation I first came up with when trying to explain business to my then 7-year-old son, but over time I came to realize that it was a very accurate descriptor of my motivation for pretty much everything I do.

I had the pleasure of interviewing Areiel Wolanow, the managing director of Finserv Experts, an independent consultancy that provides delivery and advisory services in blockchain and machine learning. Areiel led IBM’s blockchain consulting practice in the ASEAN region, and has addressed the G20 and other major international forums on the potential for emerging technologies to change people’s lives. Currently, he is engaged by Lloyd’s of London to design a new, DLT-enabled business model for the London insurance market.

Thank you so much for doing this with us! Can you tell us the story of how you got involved with the Regtech or Crypto markets?

I first got involved with regtech when putting together a solution to assure the provenance of Fair Trade coffee coming out of Ethiopia. The Ethiopian Commodity exchange had an issue with fraudulent use of the Fair Trade designation, and was looking for a way to make sure that only coffee coming from plantations that genuinely employed Fair Trade practices labelled their coffee that way.

Can you share 5 ways that Regulation and Regtech can help stabilize the Crypto Economy?

1. Regtech can streamline the KYC/AML checks that are required for participation in the international payment ecosystem. Most countries follow some set of international standards for KYC/AML, but also have country-specific rules of their own. Keeping track of these as they evolve is exceedingly difficult; regtech solutions that perform this as a service can be of immense value in letting crypto firms focus on their primary value chain

2. Regulators can establish capital reserve guidelines for fintechs. Fractional reserve banking has been one of the primary drivers of wealth generation throughout much of human history. Fintechs are not banks in most cases, but by creating guidelines that fintechs can follow in their provision of financial services, regulators can help improve their solvency, increase their trustworthiness, and provide a much-needed injection of expertise in what constitutes an appropriate amount of financial leverage

3. Regtech firms can harness machine learning and other analytic techniques to improve the quality of due diligence. The emergence of ICO’s as an alternative funding channel for new business ventures has brought a welcome democratization of access to capital; at the same time however, it can be exceptionally difficult for investors to ascertain the legitimacy of any given offering just by reading its white paper. Regtechs can provide services to governments, investors, and the startups themselves that significantly improve the quality and transparency of ICO’s, as well as more traditional funding channels

4. Regtechs can help companies do a much better job in keeping their customers’ data safe and secure. We read with tragic regularity about one customer data breach after another. Regulatory frameworks like GDPR are a great start, but most businesses, particularly smaller ones, simply do not possess the skills they require to ensure that they are handling their customer data safely. Regtechs can provide solutions that simplify and demystify customer data protection, allowing businesses to focus on their primary value chain

5. And finally, regulators and regtechs alike can invest to modernize both the regulatory framework and the accessibility of cross-border payment services. Many of the most innovative ideas, particularly in the realm of financial inclusion, are hamstrung by archaic and inconsistent rules for cross-country currency movement and exchange translation. These rules are not only hindering innovation, they are deeply regressive: the poor typically pay much higher per-transaction fees than the rich. This disparity was unavoidable historically; the cost of sending a $20 payment is almost the same as the cost of sending a $20M payment. But now that it is possible to automate every portion of the cross-border payment ecosystem, there is no excuse for unfairly burdening the people who can least afford to support this archaic structure

What are the top concerns that crypto firms should be considering in order to have a competitive edge?

Work together to establish independent standards against which you can measure your solutions. Cryptocurrency today is mostly a niche investment that appeals to a small cadre of technologically empowered, risk seeking investors. To be embraced by enterprises, governments, and mainstream institutional investors, crypto solutions will need to satisfy the needs of these organizations to have credible measures of whether or not a solution is safe to be use

Look for opportunities to interoperate with the existing global payments infrastructure. Even the best crypto solution in the world is useless in a vacuum; the market is already glutted with startups who have the hubris to think that their solution is so superior that the world will be willing to abandon their current financial infrastructure to use it. The firms who are being successful to date are those who have found a way to live within the existing ecosystem, even when providing an entirely new product or service that ecosystem has never offered before

Get your smart contracts independently audited. Almost every major hack or breach in the crypto and blockchain world to date has been the result of a poorly designed or executed smart contract. Hire an independent firm with no other involvement in your solution to perform a detailed, line-level review of your smart contract code to ensure that no contractual loopholes or other exploits are readily apparent.

Can you share examples of measures you take to prevent internal data breach?

As a consultancy, securing the work we do for our clients is critical to earning and redeeming their trust in us, but securing our solution deliverables is relatively straightforward compared to the challenge of securing our clients’ live transaction and customer data. The key to doing this successfully is not any one specific measure, as new exploits are emerging constantly. Ongoing success relies upon having a core solution framework that allows new security measures to be applied as they become available in a way that doesn’t interfere with the regular execution of a firm’s value chain, or require extensive engineering or manual testing,

Can you share a story of a time when things went south for you? What kept you going and helped you to overcome those times?

When I left IBM to start a new services firm, the initial consulting engagement I had lined up fell through. For the first six months things looked pretty grim. What kept me going during those hard times was the people around me: my family, friends, and close colleagues. The best advice I can give anyone is to invest heavily in your human relationships, both personal and professional. This investment will pay off in a big way when everything else isn’t.

What are some things that you do on daily basis regardless of how busy you are?

I forget where I initially learned it, but I try organizing most of my days using something called the 40–30–20–10 rule. In summary, this means that each day you should divide up your time as follows:

o 40% of your day should be spent working on the main responsibility you are tasked with

o 30% of your day should be spent investing in your relationships. This usually means helping someone else with their main responsibility

o 20% of your day should be spent on innovation. Instead of just performing your main business responsibility, you should be working on ways to make it better or more efficient

o 10% of your day should be spent

Obviously, you can’t live by this rule every day; there are going to be times where 100% of your day (or more) will have to be focused on your main business responsibility. But remembering this breakdown is a great way to keep from being isolated, to become or remain a thought leader in your domain, and to keep yourself energized.

What are the top 3 upcoming conferences you are attending and are excited about?

· At the IP Expo in October, I will be delivering a talk on how AI can be used to drive new job creation instead of to eliminate jobs.

· At the Alternative Professional Services Summit in December, I will be participating in a debate on how blockchain and distributed ledgers can best be harnessed to drive value for professional service firms

· At the UK Parliamentary Working Group for Blockchain in January, I will be presenting the work we are doing for the London insurance market at a parliamentary evidence session.

Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?

”Life is like a video game. The game can throw money or upgrades or power-ups your way, but the main reward for finishing a level is the opportunity to play a harder level”. This is an explanation I first came up with when trying to explain business to my then 7-year-old son, but over time I came to realize that it was a very accurate descriptor of my motivation for pretty much everything I do.

How can our readers follow you on social media?

LinkedIn: https://www.linkedin.com/in/areiel/

Twitter: @FinservExperts

Thank you so much for this. This was very enlightening!