Mike’s Speech at the Singapore Fintech Festival 2017 with Moneytree Co-founder Mark Makdad at the APAC Salesforce Panel (November 15th 2017)

Question to Mark Makdad: What is your views on open banking and what it is going to bring to both consumers and the banking industry?

Mark: On the transactional side of the business as you said earlier, if there’s transactional APIs available, there is a large risk to existing to existing financial players to become an infrastructure layer, while the actual interface layers is handled by another company. When it comes to handling of meta-data like KYC data, the banks actually have quite an opportunity and I really feel that this is not discussed enough. I think many people will think that the fintechs are coming to take the data out of the system, wherein traditional banking context we (the bank) owns the data, which is true. However, customers also own the right to see that data. Just about everyone that I talked to in Japan (and we also operate in Australia), nobody just has one bank account, one credit card, one brokerage. We live in a complex way, financial-wise. So when we talk about wealth management or investment advisory, the traditional financial services need to have access to that broad layer of data. So there is an aspect with open API; banks being this intermediate. At Moneytree, we provide that extra layer for banks to do that.

Question: Mike, you’ve mentioned Softbank and your banking background. How do you find the transition in that matter? Did technology enable innovation and culture in your organization now?

Mike: One thing that is different between us and the other cryptocurrency exchanges is that our management team is mostly consisted of former bankers. We understand anything that touches fiat needs to have some sort of oversight (from KYC, AML, to CFT), and also connecting all the APIs together. In that sense, we empower financial institutions, not only banks, to provide cryptocurrencies to their customers. We do white label services as well, and we also do API-based pricing and execution, in that sense we are more of a B2B. That is how we grow our business. We are aware that there is a little bit of a love-hate relationship with banks, as we (an exchange) extend banking services to our customers.When Bitcoin started in 2009, it was immediately after the Global Financial Crisis, it almost took the entire world’s economy down. From then on, people wanted a free society that was anti-regulation, apart from central banks and governments. That led to a creation of a ~280 billion dollar industry as of today. What I see now is institutional investors, mainstream finance, they are all coming in. Our firm is at the intersection acting like a bridge between the crypto world and mainstream finance. This industry is going to expand and explode. ICO is just one part of that, where it is democratizing fund/capital raising. We believe that there needs to be a platform or an institution that bridges the mainstream finance and the token economy.

Question: What role does technology play?

Mike: When we first started, we were using AWS and flare services. Now that we are a regulated financial institution in Japan, one of the so-called “subtle” requirements from the Japanese government was to have servers dedicated in Japan. As a startup we used AWS, but we needed to grow even more quickly, so we then used Heroku (a private platform). Despite that, our transactions were growing so fast we had to work 24/7 in order to make sure that the infrastructure and services are online and working, because cryptocurrency is 24/7. Notwithstanding, the Japanese government said it wasn’t enough, and wanted another business contingency plan. From that point onward, we are no longer a fintech startup, and that is why we need to work with fintech partners who have agile and robust platform that we can grow together.

There is an opportunity for a cryptocurrency exchange to exist. For savvy users, if they wanted to use air miles here and AMEX points there, there can be better deals if these two can be exchanged through an exchange. Likewise, the beauty of a decentralized cryptocurrency like Bitcoin is that not one issuer can tamper with it. From this perspective, telco money, prepaid cards, loyalty programmes, ICO tokens, will be a store of value that can be exchangeable.