Brad Biren Of IQmop.com On The Future of Money and Banking
An Interview With David Liu
… Broaden your education to enable you to develop a suite of complimentary and translatable skills across the different business sectors. This mental flexibility is necessary as the entire economy will continue to be in a state of flux for at least a decade. We already see its utility when cross-training employees in what appear to be unrelated, though ultimately crucial, components of corporate success.
The way we bank has changed dramatically over the last decade. It was not too long ago when you had to wait in line in a bank to deposit money. Today things are totally different. You can do your banking without ever walking into a bank. In addition, the whole concept of money has changed. In the recent past, money usually meant bills and coins. But today, the concept of money has expanded to include digital currency and NFTs. What other innovations should we expect to see in banking in the short and medium term?
To address this, we are talking to leaders in the banking, finance, and fintech worlds, to discuss the future of banking and money over the next few years. As a part of this series, I had the pleasure of interviewing Brad Biren, Esq., LL.M.
Brad Biren is an American, gay, Jewish, autistic person, and survivor of traumatic brain injury. With a background in Elder and Tax law, with a passion for estate planning and crisis Medicaid planning, Brad has an extensive knowledge base. One of Brad’s favorite parts of his job is Special Needs Planning — a financial and legal roadmap to help families of diversely-abled people cultivate greater opportunities for their children. Through his innovative and novel use of synergies between tax, law, finance, science, and technology, Brad has leveraged his autism and education to help others within the community.
Brad loves to joke about having the coolest Hebrew name of any Jewish Millennial: Barack. He was born in New York City. His father is a First-Generation Israeli immigrant, and his mother is a woman from an established American-Jewish family. At Cornell University, Brad studied both landscape architecture and botany. He moved to Iowa to attend the University of Iowa College of Law. Later, Mr. Biren earned his LL.M. in Taxation from Washington University in St. Louis to enhance his expertise. Brad is passionate about working with businesses to show them that autistic people fuel innovation and optimization.
Thank you so much for joining us in this interview series! Before we dive in, our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started in this industry?
After a traumatic brain injury, my perception of the world had drastically changed. Several months after the car accident that caused the injury, I was suddenly exhibiting very strong symptoms of autism spectrum disorder [ASD]. I had undiagnosed autism, but through some fluke of how the brain heals, my neurology healed into a person that may be characterized as having Asperger’s Syndrome under the DSM-IV.
That change in neurology had an unusual outcome: a perception of the maths that became both tactile and ubiquitous. It was a tectonic change in how my brain processed the world. I had a background in design and plant sciences with a love of artistry, entering law school nearly under duress (read: guilt), but such was the life of a millennial during the 2007 recession. Yet, since my accident, I can visualize complex interactions that exist semiotically between maths and everything in existence. Due to that sudden ability to visualize concepts, my velocity of understanding and interpreting formerly indecipherable content increased to the point of what appeared like madness.
For about a year, my close friends learned to cope with what we named the “babbles,” a side effect of brain trauma, akin to rambling. Eventually, as the different parts of my brain fused and reinforced their new connections, I was able to explain complex ideas in my mind more clearly to others. I continue to have issues explaining bespoke solutions that cross boundaries between different business sectors; but with some finesse, effective communication is achieved. Acknowledging vulnerability and shortcomings in communication is essential for collaboration. I hope by doing this, it will encourage others in the business world to speak more openly, compassionately, and more humanely.
My drastic increase in mathematical comprehension led to strides in my understanding of economics, statistics, and eventually pointed me towards many-model or multiple-model forecasting [MMF]. I had realized my grasp of the interactions of tax, law, and economics had advanced when I started to notice solutions to problems that people had not yet realized would be problems. Granted, I did not know that people did not see these problems and were not thinking of solutions. That newfound capacity was brought to my attention when I saw confused looks on the faces of trusted professional colleagues. They responded to me as if I was speaking a foreign language.
As it turns out, I was. The language was not math or finance, or even tax or the law. The language seemed to be a weird mix of disciplines. Autistic brains systematize and hyper-organize information. It appeared that my new, more autistic brain had re-organized how I associated different and typically distinct areas of study. In hindsight, I realize that my perception was both novel to me and specific to those on the autism spectrum. It had never occurred to me that I had to alter how I communicated due to my altered perception.
My entrance into the field of digital banking and novel assets was almost inevitable in many ways. I was already an attorney with a specialty in crisis Medicaid planning. Then I obtained an advanced degree in taxation under the tutelage of IRS General Counsel, Professor Stephen Haller. Simultaneously, the count of consumers with novel digital assets was increasing. For some reason, the interplay of law, tax, and blockchain technology had suddenly made sense to me. The transition was, in many ways, conversion through attrition.
Can you share the most interesting story that happened to you since you began your career?
Preamble: Understand that this was MY most interesting story. Learning how to walk without falling over after my TBI was great, but it was not interesting to me — it was pain, sweat, tears, and therapy. Seeing how an autistic brain heals is a much more interesting story.
About six months after my TBI, I had begun my education at Washington University School of Law to obtain my LL.M. in taxation. While a student, I was exposed to many new aspects of the law, which led me down areas of study that I had suddenly not thought of as discreet unto themselves. For example, due to a new visual handicap, I began to listen to hours of audiobooks on complexity, statistics, geometry, economics, finance, banking, real estate, and accounting. My brain was up to something, but I did not know what during that time — I just felt compelled to devour information. Obsessive learning and highly focused hobbies are common among people on the spectrum. I did have to slow the speed down to about 0.7x, but that did not deter me.
Among the many books I read, The Model Thinker, by Scott E. Page had an enormous impact on me. He presents the concept of statistical modeling within our own lives. The author also describes merging the idea of data pool commonality and Markov chain probability to compare models that inform, in theory, a more accurate forecast. Nate Silver, our good friend at FiveThirtyEight, used this statistical modeling method beautifully. Similarly, I tripped upon a big part of the same methodology through my state of obsessive learning.
Nate Silver is the only election forecaster that gave Donald Trump a 1 in 3 chance of winning the 2016 Presidential election. Nearly every other forecaster, as we recall, stated that Hillary was a shoo-in for winning. In fact, a UK-based gambling book is known for paying out on that bet assuming her win was a foregone conclusion. So, what did Nate do differently? He created models that had within them interdependent variables. In other words, one state’s voting patterns would likely affect more than one state because that one state was actually an indicator for a common source of variance rather than an independent occasion itself. This removed a flawed assumption in statistics: zero interdependence on subsequent results based on prior outcomes. For example, flip a coin, and we assume that each consequential flip is unaffected by the prior flip, but that is not wholly true. On average, it appears to be. But, remember on the bell curve, 32% of a series of multiple flips will result in outcomes that are not 50/50. If chance was wholly independent upon subsequent occasions, then the bell curve would be more of a histogram with a single column in the center.
Knowing this, Nate Silver, grouped probabilities into an almost if/then scenario. In many ways, that is a Markov chain. A Markov chain gives you the likelihood of a second action based on information of the prior action. We see this everyday interdependence around us as correlation. When the price of oil increases, we may be less likely to choose to drive long distances. Knowing this, Mr. Silver didn’t just look at the probability of individual states winning as independent occasions. Rather, he measured their likelihood outside of isolation and considered their dynamic relationships — he went down the limbs of the tree of probability. Think of the many parallels among similarly situated demographics magnified to the level of a U.S. State. Suddenly, you start to see inter-state trends, such as a second state voting for Trump was likely going to indicate a similar outcome in another similar state. This more geometric approach led to some initial ridicule, but technically speaking, the closest approximation of the true election result.
While an LL.M. student, I also had begun to write for the Iowa Bar Association’s periodical, Iowa Lawyer Magazine. When I learned of the challenges handicapped and diversely-abled people have within the workplace I was inspired to attempt to calculate the true disabling rate of COVID. At the same time, it was recognized that COVID was producing many disabling symptoms that lasted long beyond “recovery”. This idea popped into my head: If COVID permanently disables people, how many people could we expect to be disabled due to COVID? I chose to focus on Iowa.
In the end, my forecast has an error of about 2.45%, and I invite you to understand my error in the spirit of collaboration. I had determined that COVID yielded a disabling rate of 19.21% per infection, per person, as a function of the overall mortality rate. A later study conducted by Oxford University, of those that survived infection from coronavirus in the United Kingdom, yielded a net disabling rate of 37%. My forecast was about the disabling rate in Iowa based on the Mayo Clinic’s definitions. Oxford’s forecast was more of an analysis of raw data based on a different variant (alpha) using a different set of definitions for “disabled”. My forecast predicted the infection rate per infection in each person. Later in the pandemic, we learned that the unvaccinated were becoming reinfected at the rate of every nine and 13 months. That means most of the population of both Iowa and the UK were infected twice before majority vaccination was achieved. When 19.21% is squared (representing the two infections), my forecast yields a 34.73% disabling rate.
This method used both a forward-moving Markov Chain and one run in reverse. I organized pools of data into groups of information that created different models for each historical occasion, no different from finding the slope of a line. Then, in one direction, I made different variables equal one another; much like creating a series of equations with equal signs between them. Eventually, they coalesce around a set of likelihoods much like a heatmap on a dart board. Gauss identified that after a certain number of additional sets of data, the precision of a forecast using Mean Squared Error (bell curve) [MSE] will likely not surpass a certain threshold of accuracy. Shake n’Bake some Euler into the mix and you see it is just so close you can refine your forecast — but no matter how much you try, there will always be error due to noise (variance within the sample group) or bias. Below is the equation:
The idea for running the Markov chain in reverse occurred when I read about the use of double descent models that provided a similar utility. Double descent asks, in what direction and with how much force should I roll this ball so that it can properly roll down the edge of a cliff, hit another flat surface on the way down, and continue on its descent? It is a question of trajectory and Force much like billiards. But I thought if double descent is efficient at reducing error in a forecast in one direction, what if we applied it to running the model in reverse, as if the ball went even further — and crossed the canyon floor, went up the first step, and up and out of the canyon?
With enough force it is possible, and we see it at the X-Games with people doing multiple flips on half-pipes in a row. In the first direction of the double decline, I normalized the population and disabling rates of the individual events. It revealed some interesting analyses. Upon further research, decreases in mortality matched up with historical inventions like anesthesia and blood transfusions. When run in reverse, I used the then approximated infection rate with the then known per infection mortality rate. An unusual thing occurred, first unlike typical Markov chains that demonstrate enormous resistance to congruent directional movement, this method resulted, still in two outcomes, yet they were not terribly variant. Being that variance is equivalent to error, it was my first clue that this method could reduce forecasting error.
Imagine for a second you have a pile of red pipe cleaners all oriented in the same direction. Now you pick up the lot and pinch them in half as a group and twist them slightly into an hourglass shape. Go ahead, marvel at your crating skills, but keep your hand on the twist. If you grabbed one pipe cleaner, could you determine with more than 90% accuracy in which direction its other end is pointing? If you answered yes, please show me your ways, but realistically, we couldn’t figure out which one was the other end of that particular pipe cleaner, let alone, where it was pointing using anything more than trial and error. Multiple or many model forecasting does something special with the hourglass of pipe cleaners. It bunches different groups of pipe cleaners up on either side of your hand in stretchy definition-based rubber bands, so either side of the hourglass is not congruent. Now try figuring out the answer of pipe cleaner direction by messing with the tension of each rubber band and perhaps on some of the inchworm-like sections that bulge out between the banded sections. In general, the bundle is beginning to take the form the rubber bands have contorted. Much like leaf springs within a car’s suspension system, statistical relationships bind the pipe cleaners and alter the shape of the group as a whole.
But, why, if we run the equation in one direction, does the group point in one direction, but when I turn it around and run it again it points a little differently from where I would have expected? The reason for this error is time. As time changes, so do the relationships between the pools of intermingling data. Even if we ran the equation simultaneously in either direction but allowed time to pass, changes will occur that alter the outcome. This is the inherent issue with dynamic forecasting.
While running the models, another idea occurred to me. I struggle with definitions. What if that skewed lexicon within my brain of typically unrelated fields of study were meant to be related? So, rather than bunching related and typically grouped models, I grouped the models atypically. It seemed plausible because at the core of all these models was the same relative set of data. This is when statistical error began to reduce the variance in the directions of the equations. The method appeared to reduce the bias imposed by time, and the resulting error. In my mind it feels organic, so, I refer to it as Organic Multiple Model Forecasting. (I fully acknowledge that this concept could have already been arrived at by others and will credit them wholeheartedly. After surviving a TBI, ego goes out the window!)
Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?
“The meek inherit nothing.”
Whenever I refer to those extemporaneous four words passed on to me, I ask the listener what gender they think the original speaker was. Oftentimes, people say without thinking that it was a man, and then step back quixotically, and scrunch one brow.
The original speaker was a mature woman with cancer. The statement, coupled with its semiotic virulence, provides a nuanced narrative that adapts to nearly all struggles, among all people. First, the statement is a misworded inverse of the proverb: The meek shall inherit the earth. That means, the speaker was cognizant of the Proverb and experienced a trial and tribulation that was resolved through assertiveness, rather than meekness. Second, the statement not only memorializes a complex experience, but like a sole survivor, it was birthed into the ether for posterity to remember. The speaker wanted us to remember her words. I understand it in its contrapositive:
The earth will be inherited by those who assert themselves.
Ok wonderful. Let’s now shift to the main focus of our interview. Can you tell our readers about the most interesting projects you are working on now?
In my downtime, I started to create novel forms of Non-Fungible Tokens [NFTs] and transactions based on blockchain theory. The latter solves several of the issues related to the taxation of NFTs. The former feels like a sandbox with infinite possibilities — because that really is what blockchain technology is offering to us.
Before proceeding, I believe it important for the reader to process the first paragraph through the lens of this quotation by Albert Camus: “In the midst of winter, I found there was, within me, an invincible summer. And that makes me happy. For it says that no matter how hard the world pushes against me, within me, there’s something stronger — something better, pushing right back.” I believe that perseverance is embedded in all of us, and not just the grandchildren of Holocaust survivors. It is my personal belief that it is important to make this statement to acknowledge the power of democratization within the banking industry in order to invite a wider and more diverse group of thought leaders to the table.
My most interesting projects are divided into three groups based upon how my mind systematizes novel information. First, I am in a constant state of finding strategies for cryptocurrency holders to avoid the excess or “triple taxation” conundrum. Within that “garage” or workshop of my bored mind, I also enjoy developing novel NFTs. The second, more active set of interesting projects requires more intentionality and focus. These projects include passive income ventures based on intellectual property and electronic property rights. Other related projects include creating what seem like an endless series of pitches for different products and ideas — not a complaint — just a state at which I had never imagined myself to be. The third group, which requires the most intention and focus is related to creating and building out my legal, taxational, and business consulting practice. Related to that is the online business consortium I run that helps drive the dynamo.
For reference, in sixth grade, I was 166 pounds, attended learning annex classes at Snug Harbor in Staten Island about space travel, grew orchids, and had filed for a patent. This does not mean I am more intelligent — in fact, the brain injury reduced my IQ. To me it means my parents had to have been either oblivious that their son was demonstrating clear signs of autism or, like most overworked parents raising children, they were just happy their child was enjoying life, getting good grades, and staying out of trouble. Honestly, I know it was the latter.
The importance of the above paragraph is to add nuance and narrative to a personal experience that can be too easily reduced to a set of symptoms and metrics that fail to inform my identity. The projects that interest me most challenge me. They force me to pull from parts of my brain I know exist; and if not, force me to create connections where ideas have yet to intermingle.
Many of us on the spectrum find purpose in how we systematize the world around us, and how we solve its problems. It is a purpose founded in compassion and expressed through altruism. That innate desire to understand the experience of others, improve the lives of others, empowered with action, is the motivation for these and any other of my future projects.
How do you think this might change the world?
My work can be further categorized into four discreet, though interrelated components. The first looks at optimizing tax treatment and the development of novel NFTs, generally. The second focuses on methods to improve MMF. Next, I advise startups on developing alternative revenue streams to make them more attractive for venture capital firms. I provide a similar service to non-profits, except with the goal of improving their bottom line. Lastly, through my work as an attorney, I can provide legal and taxational services to families with loved ones that need nursing care or a plan to help best provide for their diversely-abled child. The last service is actually the linchpin that allows or rather helps move the dynamo of the related business consortium.
In reverse order, to demonstrate the true significance of each project, providing legal services to families in crisis is my world-changer. The keystone of my being is to help the members of my community change the world. In Judaism, we have a saying, “Save one life, save a world.” When one helps a family in crisis see a future for their child that they did not think had any avenues for a successful future, one creates a world for that family. The creation of that world of opportunities changes each individual client and their families. Therefore, I believe that service has the greatest potential to affect change. Similarly, assisting non-profits to find alternative revenue streams in order to further their missions pulls me out of bed each day. Without appearing to conflate motivation with the likelihood of a project changing the world, I believe that it is the things that motivate us most that are inherently most likely to change the world.
Startups, especially tech companies, are very similar to nonprofits. Like many non-profit enterprises, tech startups are either myopically focused on one aspect of their business or have trouble narrowing their focus. Both groups are motivated and enthusiastic, yet there is a dissonance within the corporate structure-at-large. The dissonance appears to be competing narratives and visions that hamper optimization and prevent growth. Once the different threads of competing issues are unraveled, it is easier to solve much more than just issues within their revenue streams.
All of these projects require related pools of data. A relationship within data can be defined as narrowly or as broadly as one needs for their aims. Yet, every sector needs some amount of forecasting — I just happened upon MMF. The goal of this methodology is to overcome the hurdles in statistical error that perennially exist between a prediction and the actual outcome. When you harmonize Gauss, Euler, Pauli, LaGrange, Pearce, and a sprinkling of Fermat, you get a six-layer fugue. The beauty of a fugue is that not only are they the same played from either direction, but each constituent component is a piece of music unto itself. Also, a fugue can be rearranged in different ways, altering the overall result, but without altering its constituent parts. If you could imagine multiple model forecasting as a pile of lovely sections of music that must be arranged, perhaps into several possible outcomes, in order to predict the most likely arrangement. That arrangement, based on relationships in the bars of music, is the same as a prediction. Every government, company, and non-profit would benefit from improved predictive and forecasting models.
Lastly, when I am bored or my mind begins to wander, solutions to issues in tax, business, science, and the law start to reveal themselves. It is hard for my brain to slow down and so, when it is at rest, I sometimes slip into what I call my, “problem parking lot”. It’s where I can tinker with ideas or let excess “server” space meditate on problems and visualize answers. The first focus related to the taxational issues of cryptocurrency has proven to be a boon in terms of the level of advice I can provide potential clients.
The second focus, I reluctantly will say probably has the highest potential to affect how we view NFTs, the law, insurance, and tax, in general. That is a strange combination, but in my mind, these ideas share a symmetry. In many ways, they are all iterations of the same larger pattern (No, they share more than just e). For example, if someone disturbs an area with many species of birds, and the different species each react to the intervention, whether similarly or not, the event is a single mass event. At times, a non-fungible token may act as one of the species of birds, or it may act as a summative event, containing all aspects — think of an index fund. This is akin to the philosophical question, “Are we watching two boxers box or are we watching a single boxing match?” NFTs can retain almost a super-position between those two states until it needs to “collapse” into its mature final form.
My work leverages the idea of NFTs as being different iterations of various combinations of symmetrical systems.
The projects that I am being enormously cagey about broaden our options for NFTs, our engagement with them as more than just transactional non-fiat currencies and, thus, begin to utilize NFTs as alternative forms of financial instruments — perhaps, even as options, service contracts, or even tontines.
Put simply, we have only scratched the surface of NFTs with cryptocurrency and digital art.
What most excites you about the banking or payments industry as it is today? Can you explain what you mean?
The digital banking industry is at the point of mass-diversification. This can be said with near certainty for several reasons. The first is that existing banks are buying novel IT, UI/UX, and supply chain startups. Second, financial firms that are banking adjacent are also buying companies within this same pool of new digital payment startups. Lastly, much like convergent evolution, the interplay of similar, though different, iterations of processes by two different factions within the same market sector will create turbulence.
That turbulence will be the catalyst of both short and long-term invention and innovation — who knows what happens when you break a window in East St. Louis? In short, when banks are forced to compete with more than just other banks (in this case former cooperating entities), they must suddenly attempt new ways to stay alive and relevant. In many ways, the economy will experience mass fracturing specifically within the banking sector which creates opportunities for more investment among all strata of society.
What most concerns you about the banking or payments industry as it is today? What would you suggest needs to be done to address that?
My greatest concern is accessibility. For example, stating that something meets minimum standards of acceptability and then marketing your platform as being universally accessible for the diversely-abled, when in reality it is not, is a systemic problem. In many ways, this is like pink washing and the LGBTQIA+ community. In the last decade, many companies donated or invested in marketing campaigns aimed at appearing more accepting to the queer community. In reality, those same companies did not actually change their internal policies for the same target community. This is an issue throughout many industries and there is a very simple solution:
Hire more diversely-abled people to inform the UI and UX design for all interfaces.
This is not terribly innovative of an idea unto itself. Yet, we need only look back fifty years to see the revolutionary changes in the design of goods produced for female consumers once that group became part of the design process. Similarly, businesses need to understand that there are still large gaps in accessibility that extend far beyond the diversely-abled. For example, interfacing with any API/hub/App requires you to first learn how to interact with it. Different people learn in different ways. Therefore, assume that there is an accessibility gap for every user. We refer to that as the learning curve.
The banking and payment industry needs to improve accessibility with a view beyond just the diversely-abled to include diverse learners. This will lead to the greatest innovation in any sector: universal accessibility. It is a paradigm that may never be truly reached, but the closer we get to it, the more clients can gain access to a critical service, not available to all: banking.
How would you articulate how the concept of money has changed in recent times? Is it really a change? How is it still the same? Can you explain what you mean?
If money is no object, but an object can be worth money, then what is money?
If we were to imagine our Twentieth-Century view of money as the visible spectrum of light, the introduction of non-fungible and non-fiat currency revealed to us that the range of light extended far beyond our perception. Over time, money experienced an evolution from a “good or service traded”, to coinage made of precious material, to fiat currency, non-fiat currency, and finally electronic non-fiat currency. That jump from precious material minting to fiat currency is believed to be an invention of Genghis Khan. Granted, he did not call it fiat currency, but rather printed notes that signified a value based upon the guarantee of the state.
This was a game-changer for the globe. If we imagine little Temujin has matured and has himself the title of Khan, of a country with the farthest known geographic distribution at the time. How do you trade long distances between traders of far distant cities without hyperinflating costs due to exchange rates? His solution was simple: print his own currency, eliminate the need for exchanges of currency, and guarantee their value anywhere within the realm. That solution increased the speed of supply chains, the growth of trading cities, and helped to reduce the debt financing costs of a large army. The European Union follows a modern version of this concept: the Euro.
Fiat, then, can be described as a guarantee by a sovereign of the value of the note. Non-fiat currency means that there is no guarantee. That was developed later, and likely comprises the merging of two concepts: games of chance and cooperatives. Games of chance oftentimes use tokens of no true value, but for the limited use of the game. The tokens have a de minimis value outside of the game and only increase in value once the game is initiated and other users agree to respect the value of the token. Thus, the guarantee of a gaming token, or really its value, is based on a communal promise. That promise being, should you meet the rules of the game based on the value of the tokens, you will be rewarded with something of worth informed by the number of tokens you have collected.
That community guarantee has been seen in more modern iterations, especially in the 1990s, as we were attempting to claw out of the aftermath of hyper-inflation. Many local chambers and communities created their own “money.” It was not uncommon to see such community-respected and developed currency created in many towns in an attempt to start nascent downtowns and independent store owners. The guarantee of value was respected by any community-member that was part of the exchange.
The jump from non-fiat currency to Non-Fungible Tokens [NFTs] was an interesting development, but it was not an unlikely stage in the evolution of currency. The reason for this can be explained with the analogy of stock certificates. Granted, a share of stock, by definition represents the pro rata value that unit has as a function of the total value of the company. But imagine for a second that you created a company, with 100 shares, but the company has no assets. That is in theory the birth of every company — value is only added after stock is issued and those shares are exchanged for cash and assets. That sounds very similar to how NFTs establish their value — in the beginning there is nothing.
Yet, there is one main difference between stock certificates and NFTs: the intent of income generation inherent within a corporation. The directors of a company are fiduciaries of the business and must work in the best interest of the stockholders. That is required in statute. The leaders of the organization then attempt to increase the value of the stock certificates through amassing more assets and wealth. Thus, the stock certificate increases in value because, as stated earlier, its value is a function of the sum total value of the company’s holdings.
NFTs have no guarantees. Its value has no guarantee from a sovereign. The currency does not have an intrinsic value based in its material. In fact, there is no guarantee that all the members of the community will agree to act in the best interest of the value of the currency. Therefore, what gives NFTs value may be the lack of electronic fiat currency.
President Biden stated in his Executive Order of the week of March 07, 2022, that he was directing agencies to create a plan to form electronic U.S. currency. Many observers interpreted that as a sign the U.S. was exploring the creation of its own cryptocurrency. No, the United States would not make a secondary currency to internally compete with the value of the U.S. dollar. There is literally nothing to gain from that.
The creation of electronic U.S. currency, though, may create a tectonic shift in the currency markets. If electronic currency is available, which could make transaction processing companies like Venmo and PayPal irrelevant, the use of cryptocurrency will have to find a value added proposition elsewhere. This will require it find a means to guarantee its value. Regulation, as mentioned in the same Executive Order recommended consideration of exactly that.
If NFTs lose their uniqueness, it is likely the underlying blockchain technology will evolve to the future needs of businesses, but maybe not as currency.
Based on your vantage point as an insider in the finance industry, what innovations should we expect to see in banking in the short and medium term?
The biggest innovation is not if, but when Google, Microsoft, Linux, Oracle, and Amazon will enter the banking industry. Wal-Mart has been testing those waters in adjacent markets. For example, creating space for Jackson-Hewitt to provide tax filing services and direct those refunds toward Wal-Mart gift cards. Gift cards are a backdoor method of testing a corporation’s tolerance for financial compliance and for creating a proof of concept as a bank.
Each time a gift card is created, an account with an expiration date is created — at which point, all funds are forfeited to the company. The MTA in New York City is famous for collecting millions in excess unspent credit using this method. Until those funds run out, the company is a fiduciary by proxy of those funds, but those funds are part of a corporation’s cash valuation without affecting its tax basis as the money functions almost as an internal loan. This is where the company acts as a pseudo-bank. Another reason is to raise short term capital without issuing stock but categorize it as merchandise and call the storage of that merchandise and its maintenance as an expense and/or a depreciating asset.
The corporation providing gift card services is not paying interest to the cardholder, does not provide a guarantee like the FDIC, but it will use your “gift card balance” within its war chest of cash to invest as it wishes until you spend it. That last part is where gift cards allow companies a backdoor to dip their toes into banking. Yet, Google, Microsoft, and Amazon have offered gift cards for well over a decade, so why the change now? As online banking became more crucial during the pandemic, the integration and IT infrastructure for banking improved. Those improvements are found in APIs built using one of those referenced company’s existing APIs. Those companies are cognizant of the increased demand for online banking and either provide or have acquired accounting and payment processing startups as a block.
Those look like the movements of companies planning to enter the online banking realm. Add to that the addition of digital and cryptocurrencies, which require crypto-wallets, and it would appear that these companies are best suited and on their way into the banking industry.
Is the current banking industry ready?
How has the pandemic changed the way banks interact and engage with their customers?
Like nature itself, the banking and finance industries are now facing an accelerated Red Queen Effect.
It is a challenge to answer this question without broadening the definition of the word banking. The very need to do that wails out its own answer like an expanding accordion. The fact that the definition of banking has become so fluid and broad demonstrates the effect COVID has had on the sector. The result is an unclear region of the business sector. This blurring began after the recession when credit card companies were allowed to register and function as banks essentially. Some of them were even partially bailed out like true brick and mortar banks.
If the Great Recession blurred the lines, COVID, let us see the lines were never lines at all — they were membranes. Membranes are dynamic, flexible, fluid, and intentional thresholds. COVID showed every business sector that it had to be more like a membrane in each sense of those words. This alteration to banking affected the way the industry interacts with its clients. Each “neobank” appears more like competing cultures of slime mold. A slime mold is a unicellular, multi-nucleate organism that acts like you crossed a mushroom with a calculator. The misnamed organism has been known to solve mazes, project improved highway infrastructure design in the United States, and even was used to help optimize the subway systems of Tokyo.
During the pandemic, clients and banks were in many ways isolated from one another and had difficulty communicating and, thus, imperiled everyone’s ability to transact efficiently. Banks and retailers found themselves competing for acquisitions from the same pool of electronic financial transaction startups and IT talent. This created sectors of business that do seemingly bank-like things, but are not banks, because banks are now providing similar services as those non-banking enterprises. Thus, I call these new syndicates “neobanks”.
The best part of this competition and mass acquisition of startups is the dramatically improved integration of banking apps with payor/payee transactional systems coupled with crypto-wallets. Three things that should have already been connected but needed a microbe to solve the problem. This is an enormously attenuated metaphor, but it carries two lessons about survival that mirror the reality of post-COVID finance and banking. First, make sure your business model allows you to leverage existing assets to acquire new resources. Second, be flexible enough to understand the changing realities of your sector.
In your particular experience, how has the pandemic changed the way you interact with, and engage your customers?
The pandemic shifted the main source of business leads and customers to almost purely business-to-business. We provide services on an open door basis, but the need to invest in direct-to-consumer marketing has reduced in significance. In my state, I cannot directly solicit any client because I am an attorney. Attorneys must adhere to more rules when interacting with the lay public. Even before someone is a client, I must adhere to the Iowa Rules of Professional Conduct, which dictates optimal interactions for attorneys and the public. In general, that guides attorneys to provide the most options for communication with the fewest number of barriers. For example, if a client states that they have a head injury or memory issues, we are obligated to utilize a medium like email rather than the phone perhaps.
The Rules of Professional Conduct for attorneys have not allowed interactions with clients to be affected in a meaningful way. Yet, the pandemic undeniably changed how client streams originate. This is a great thing for the consumer because improving those business-to-business bonds improved their access to much-needed services in multiple directions. As the pandemic is beginning to lift, it appears that this more robust B2B lead generation stream will continue and the optimal communication will continue to grow to include novel forms of technology.
In my work in the telecom space industry, I’m very interested in the importance of user experience. How much of your interactions have moved to digital such as chatbots, encrypted messaging apps, phone, or video calls? How has this shift impacted the user and customer experience? What challenges do these apps present when used as a customer engagement tool?
Improving access to banking will only occur if the UI/UX design process includes more diversely-abled people.
There is a crucial distinction between licensed attorneys and other professionals in regard to communication. Our Rules of Professional Conduct require us to use all available and reasonable means to improve and promote client communication. We must also presume full competency and capacity, unless otherwise indicated. That creates a challenge in many ways when providing an optimal customer experience because every client has different needs when engaging in communication. Generational, neurological, and physical differences may play a role in how each client receives and perceives an optimal experience. For example, providing service to a neuroatypical baby boomer that requires magnification to view documents obligates and compels me to provide magnification. That experience also should likely happen in person in order to improve direct communication. Whereas, providing services to a neurotypical millennial in a wheelchair may obligate and compel me to offer Zoom meetings and other alternative means of communication to avoid any transportation issues.
This is intrinsically tied to banking for several reasons. First, disabled people need banking services. Second, the staff at a bank is not held to the same ethical standards as an attorney and will frequently not offer the necessary, although statutorily acceptable, assistance to disabled and neuroatypical folks. Keep in mind, due to COVID, at least 20–30 million Americans will be partially, though permanently disabled. In addition, the neuroatypical represent over 2% of the population. That is a grand total of about 10% of the United States population likely not receiving an optimal outcome at a traditional banking institution. Keep in mind, everyone already learns differently; therefore, there are already intrinsic flaws within your system that if left uncorrected, become amplified for the diversely-abled consumer.
Those two communities adapted to banking almost exclusively online long before COVID. In many ways, those groups were canaries of a trend towards online communication and integration long before larger industries provided similar access. The applications are not perfect and accommodations for a hurdle can just as easily create a new hurdle. There appears to be a positive influence moving through industry that is making the user experience more accommodating. This is likely due to startups being acquired in the merger & acquisition marathon still continuing throughout the economy. The Tax Cuts and Jobs Act [TCJA] accelerated that by granting a tax repatriation mechanism for U.S. corporations holding vast assets overseas.
If you could design the perfect communication feature or system to help your business, what would it be?
Invent a feature that creates extra time.
My business pursuits are arranged in a syndicate. A syndicate is an uncommon business structure, but it provides the greatest flexibility when launching a set of separate, yet interrelated ventures. In theory, each individual venture has an independent business model and method of revenue generation. (Remember the fugue analogy a few questions ago?) America’s most well-known and beloved syndicate could be General Electric. It is well-known for how its constituent companies synchronize into a synergistic relationship. That synergy creates an output that far outstrips the individual abilities of each venture working independently. Thus, their sum is greater than their parts.
This creates very unique issues and is not for the faint of heart. First, each business requires a unique business model that is informed by an expert within that field willing to collaborate. Second, each business requires a different level and variety of legal compliance. Third, much like that video of the puppies walking in lock-step around a circle as they eat, the different businesses need to be able to complete their individual tasks while still contributing to the larger interconnected mission.
That last part is the largest hurdle and has probably the simplest solution: automation. It is difficult to understand our own positions within a corporate structure, let alone your corporate structure’s place within a larger corporate environment. That is an enormous ask intellectually and consumes enormous amounts of personal RAM; and therefore, I consider myself in a similar position as any other entrepreneur. This solution would eliminate many smaller tasks and thus, would add extra space for our brains to focus on services that cannot be automated. For example, eliminating many menial and repetitive tasks would lead to truly human innovation that can only be cultivated with the introduction of extra time.
Fantastic. Here is the main question of our interview. What are your “5 Things You Need To Create A Highly Successful Career In The Modern Finance, Banking and Fintech industries?
- Broaden your education to enable you to develop a suite of complimentary and translatable skills across the different business sectors. This mental flexibility is necessary as the entire economy will continue to be in a state of flux for at least a decade. We already see its utility when cross-training employees in what appear to be unrelated, though ultimately crucial, components of corporate success.
- Have a specialty that will help you stand out, but not pigeon-hole you into one area. The education we gain from practical, and on-the-job experience, is effective at honing our skills. Yet, that process requires interacting with others and looking for synergies within the process of which you are a part. A specialty demonstrates credibility with the C-Suite and prepares you for the profession — especially finance.
- Allow your curiosity to run free sometimes. In a wonderful quirk of history, we are in so many different uncharted territories. It is almost like business, government, and society have become sandboxes to think of and try new ideas. That opportunity to try new ideas, learn new concepts, and collaborate with traditionally unrelated business sectors, may lead you to the next big idea. That is not an exaggeration. For example, blockchain technology and finance created cryptocurrency and the larger field of FinTech. Those two concepts were rarely connected. In fact, it wasn’t until the early to mid-20th Century that math, statistics, and finance merged to create our modern understanding of economics.
- Earn and/or obtain a credential. Credentials are credibility and right now, everyone seems to be an expert in FinTech, but few have professional educations, degrees, or certifications. It is crucial, whether you are an IT or accounting professional entering FinTech to obtain at a minimum a licensure overseen by FINRA or some other part of the SEC, if you are not a licensed professional in your state within your respective field already. That is not a hard and fast rule by any means — rather it is a solution to the issue of people with novel and reasonable ideas gaining more access to the design and development process. Access requires credibility. Therefore, establish your credibility early.
- Develop an above average understanding of civics and taxation. Civics is the study of how government works. Recently, President Biden issued an executive order that relates to cryptocurrency, its regulation, and the transition to digitizing U.S. currency. Do you know the difference between a statute, regulation, treaty, and executive order? Knowing those things will help you understand why that much feared executive order actually made the value of Bitcoin increase the day the order was signed. Also, we will all be asked about potential tax exposure at some point within our journey through FinTech. Cryptocurrency is taxed three times currently before it can become money again. Understanding why that occurs so frequently will help you understand how to better strategize your future FinTech decisions. In fact, it is important to know why some NFTs are theoretically allowed in a retirement account and why others are disallowed.
You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. :-)
Thank you for asking! I have two “heartsong” projects that I just can’t wait to launch!
The first, is a book that presents the business argument for U.S. businesses to hire more people with autism to maximize American innovation. There is still an enormous stigma surrounding the dreaded diagnosis of autism spectrum disorder. (By the way, screw whomever named it a disorder.) At the same time, autistic people must self-identify as having a disorder but are concerned about “coming out” to their employers. My hope is that this book would accomplish two things: 1.) to help remove this unreasonable stigma against a talented group of humans interested in contributing to society; and 2.) to persuade U.S. businesses that they need to catch up with their foreign counterparts that already actively recruit autistic people, in order for American enterprises to remain relevant.
The second project arose from that first hurdle mentioned above. I am forming a non-profit with the mission to document the histories, stories, and legacies of autistic people. As a demographic, we represent about 2% of the United States population, cross every socio-economic category and ethnic group, and yet, but for a handful of us, the very proof of our existence will be annihilated by apathy upon our deaths.
Autistic people have intrinsic value, besides a total global population that would rival half of G-20 countries, and have changed the trajectory of the human race itself.
I remind you all that Elon Musk, an autistic individual, altered the future. A few weeks ago, when he turned on Starlink and provided an alternative communication network to the Ukrainian people after the Russian invasion. That is an impressive feat unto itself. Yet, his identity as an autistic person will likely face similar erasure.
Sandra Oh once said, “It’s an honor, just to be Asian.” As I understand who I am more and more, I realize, that it is an honor, just to be autistic. As I step off of my soapbox, I leave you with this thought to bring back to your own communities for introspection and empowerment:
We are worthy of our place in history.
How can our readers further follow your work online?
Thank you so much for the time you spent doing this interview. This was very inspirational, and we wish you continued success.