Gabriele Musella On The Future Of Finance
Gabriele Musella is the co-founder of Coinrule, an app which hopes to open up investment and trading to everyone, rather than just leaving it to the big banks and hedge funds. I spoke to him about the future of finance and the impact of the pandemic on his work and on the wider industry.
What does the future of finance look like to you?
I think that in the future, everything within the finance industry will become more open. Banks and financial institutions have started to open up their databases, and I think this trend will continue over the next 10 to 20 years thanks to the development of technologies like blockchain. Databases will become much more centralised, and the data will be accessible from anywhere in the world. This new system will also mean there is a copy of all transactions saved on a database, so in the event that a system crashes, there will be a back-up available.
The changes we will see will allow users to manage their finances without needing to go via a bank, you will be able to make big transactions from your own phone — essentially, people will gain much more power to control how their money is used and who it goes to. Say you wanted to transfer £1 million to someone in China who you’d never met before, you would now be able to do that from your own device, you wouldn’t need a middle man to help you with it. Some banks might still offer a middle man service for those of us who aren’t comfortable managing our own investments and transactions, but for the most part, it will become a much more controlled process for the user.
Do you think that Brexit is going to have a significant impact on the world of cryptocurrency?
I actually don’t think it will. Of course, some banks are leaving the UK because of Brexit, but on the digital side of things, I don’t think there will be much of an impact. Digital finance platforms like Coinrule will still be able to work freely, as they don’t really require as much of a relationship between the UK and the EU as some of the physical banks might. If you sell physical goods to the EU, of course, your trade will be affected, but on the whole, I think digital finance should be relatively OK.
Coinrule allows normal people to compete with the big professional traders and hedge funds. Why is it important to you to give normal people the tools to beat the market?
For me, it’s important to level the playing field between big banks and normal people. In the 21st century, everything is a knowledge battle, and once you have access to the same information, it becomes a game of intelligence and effort. By giving normal people access to the same tools as those the big banks use, we are giving them the opportunity to balance the economic system.
“Trading” is sometimes thought of as quite a scary word, but it’s really not as difficult as it may seem initially. If you give someone with a basic education a simple visual interface which uses normal language rather than complicated jargon, it can be quite easy to get into trading. It’s just that the way it’s traditionally explained makes it seem daunting.
We give people access to plans that they can tailor to help them get started with trading, and we also give them a library full of information which will be of use to them on their trading journey. These days, it is thought that around 30% of your savings should be actively invested in companies that share your values, rather than putting your money somewhere that’s only going to give you a 1 or 2% profit return.
Teaching the trading industry to normal people, that’s our game.
The pandemic has completely changed the working world. How has your business been affected by it, and do you think the effects of the pandemic will be felt in the financial industry for years to come?
Firstly, COVID-19 was actually pretty good for our company. That’s bad to say and is kind of controversial, but people being at home meant they had time to sort their lives out, which included their personal savings and investments, so that was good for us. In the first couple of months of lockdown, we saw a huge increase in signups and people paying for our plans. We now have over 13,000 users, who transact around £3.2 million monthly, and we have a revenue of over £10,000 every month. It was a huge validation to know that people want to learn about investment, it’s just that they usually might not have the time to start looking into it.
Secondly, we know that capitalism as it now has to have crashes every 7 to 10 years. I think the effects of this financial crisis will be felt for at least 3 or 4 years as it takes at least that long to recover from a financial crash, but there is a lot of optimism on the markets. People know that once there is a healthcare solution, a lot of industries will bounce back quickly, which will allow the financial markets to recover. Of course, taxes will have to be raised at some point to help pay for this, and that’s when we’ll really feel the financial impact, but on the whole, I expect we will bounce back from this relatively quickly, at least I hope we will!
What’s the greatest challenge you’ve faced in your career, and how did you overcome it?
In February we were in the middle of fundraising with Coinrule, we’d been in talks for 3 months and we were finally getting the paperwork sorted, and then the pandemic happened. Our valuation was pretty much cut in 3 overnight. Everything changed so drastically, and at this point, we were almost running out of money, but we still had salaries to pay. 4 out of 7 of the team have families with kids, we couldn’t just take away their jobs in the middle of a pandemic, with nowhere for them to turn, but it was really hard to work out what to do. I didn’t sleep for 3 or 4 nights because I was trying to work out a plan, it was tough.
What saved us was the Job Retention Scheme. That was literally a lifesaver for our company. We put 3 people on furlough, and I and my 2 co-partners cut our salaries to almost 0 for 3 months. It was difficult, but we got through it, and all our hard work seems to have paid off as we secured the £4 million valuations we had wanted, with some amazing investors, and now we are going to be launching a Seedrs campaign in the UK in October.
What do you want to be remembered for?
I want to be remembered as someone that contributed to making the world of finance less evil and more democratic for everyone. Someone that built awareness around personal finance and made it more fun, understandable and accessible for the average person, not just for the hedge funds and banks that have always run the show. After this venture I would like to work on issues dealing with the environment, so something to do with that too, but we’ll see what form that takes in the future.
Support Coinrule’s Seedrs campaign this October in the UK. You can find out more here.
Interview by Lola Sherwin. Find Lola on LinkedIn here.
