Areiel Wolanow Finserv Experts Cloud Expo Europe 2020
ANNA FLOCKETT [00:00:16] Hello. We’re coming to you live from London Tech Show. My name’s Anna Flockett, Editor of StartUps Magazine. And I’m joined now by Areiel Wolanow, Managing Director of Finserv Experts. Areiel, thank you for joining us.
AREIEL WOLANOW [00:00:28] Hi, Anna. Thanks for having me.
ANNA FLOCKETT [00:00:29] Welcome. So could you just start by telling me a little bit more about Finserv Experts, what you do and how you help start-ups?
AREIEL WOLANOW [00:00:36] Sure. One of the things that I realised in 30 odd years of delivering technology solutions is that emerging technologies, new technologies only make a difference when they’re used to implement business models you couldn’t have implemented before. And I think this is a key fact that that was lost. And I really founded Finserv Experts sort of around that proposition that we would work on implementing, not software, but business models that were empowered by emerging technologies. Currently, the two that we’re working the most with are blockchain and machine learning. Next year it will be something else and that’s fine. The underlying principle is enabling new business models.
ANNA FLOCKETT [00:01:20] And and when did you found Finserv Experts? How long have you been going?
AREIEL WOLANOW [00:01:23] I founded Finserv Experts in 2016. So we’ve been going at it almost four years now.
ANNA FLOCKETT [00:01:28] Amazing. And how is the journey been so far?
AREIEL WOLANOW [00:01:32] The first part was grim. I won’t pretend otherwise, but roughly six months and we got our first major client and we’ve been going from from triumph to triumph since then.
ANNA FLOCKETT [00:01:44] Amazing. Could you tell me a little bit more about the work you do with blockchain and machine learning?
AREIEL WOLANOW [00:01:49] Sure. So we’ve done a number of really, really interesting projects. In Kenya, we implemented using machine learning, the credit scoring algorithm that drives in Pesa, which has created tens of thousands of jobs and made financing available to small businesses with an impact that has nearly doubled the country’s GDP. At Lloyd’s of London, we led the delivery of a blockchain prototype that would displace their current trade settlement system. We’ve also done some advisory work. I’ve addressed the G20 on the ability of emerging technologies to change the face of financial inclusion. I’ve also worked with central banks and financial regulators and I’m currently an advisor to parliament on blockchain adoption.
ANNA FLOCKETT [00:02:41] Oh wow. The technology you’re using is really helping the world. And so how do you see blockchain and machine learning and these technologies growing in the next few years?
AREIEL WOLANOW [00:02:52] I think we’ve we’ve moved past a large part of the hype curve. So the answer is really they will grow where they add value and as I said, where they enable business models that couldn’t exist before. I think the important thing is that when you find a new app on your phone and you and you are amazed by it and you tell your colleague or your friend about it, you don’t say, here’s this new app, it’s built on the IP stack. Those of us who are familiar with apps already know this and everyone else doesn’t care. Blockchain should should be or should earn that position of irrelevance. It’s the solution that matters. That being said, what blockchain enables is a set of solutions that we couldn’t have conceived of before. I’ll give you one example. Right now, my company is leading the development of a project in Indonesia to deliver insurance for natural disasters at a level that was never possible before. Blockchain makes that possible by handling how diverse the Indonesian geography is. And by removing huge elements of costs and reconciliation. The problem only 6 percent of people in Indonesia have insurance, and the problem is that it costs in terms of the human process as much to administer, say, a two thousand dollar insurance policy for somebody’s home in Indonesia as it does a $2 million policy for someone’s home in London. So the result is that you would have to charge the person in Indonesia many times higher percentage premium. Well, most that’s regressive. And most people don’t want a poor charge poor people more than rich people for the same product. So what blocked by by eliminating the reconciliation between broker carrier and re-insurer, blockchain blockchain makes it possible to deliver insurance for almost for less than a while for a 90 percent reduction in operating costs, which all of a sudden makes it possible for insurance companies to offer and home insurance in Indonesia without going out of business.
ANNA FLOCKETT [00:05:03] Of course. And how have you seen blockchain grow in the past few years? And machine learning for that sense, you know how is it really moved on?
AREIEL WOLANOW [00:05:15] Well, it’s moved on from a good idea to something to a hot topic, to a hyped topic to something that’s actually being used in production. Which which, of course well, you know, that hype curve is inevitable and it’s not exclusive to blockchain. So I search I first became aware of blockchain in 2011. I think like many like many technologists, when there was an article in the Gawker Web site about the Silk Road. So I well like everyone else. I went downloaded a copy of Tor and said is this real? Are they really doing that? And, you know, I was struck even then that this technology had use cases that were far beyond criminal enterprise in terms of its applicability. I first got the chance to actually use it as part of a defined solution. Looking at providence of Fair Trade coffee in Ethiopia. And this is back in 2014. Since then, I’ve just seen it grow more and more mainstream. When I was at IBM, I was given the opportunity to actually build IBM’s financial blockchain services practise in in Singapore for the ASEAN region. And I got to sell and then deliver IBM’s very first commercial blockchain consulting project, which was a trade finance prototype for Bank of America and HSBC. So you as as the large enterprise players, have invested more and more significantly and begun to realise how this can change their business model and how they deliver value to their customers. We’ve seen it become increasingly more less an object of hype and more part of a you know, an integrated part of a business solution.
ANNA FLOCKETT [00:06:57] It’s had like a rippling effect on other businesses. And are there certain areas in the world where blockchain is better received? And is there certain areas in the world where it’s needed more?
AREIEL WOLANOW [00:07:09] Yes, I think like like many emerging technologies, the best innovations and the most impactful ones are happening outside of developed markets. So blockchain is going to have more of an impact, is already having more of an impact in Southeast Asia, in Africa and Latin America than it will have in the U.S. or the U.K. or or even China.
ANNA FLOCKETT [00:07:34] Of course. And obviously, you just touched on your past at IBM, but.
AREIEL WOLANOW [00:07:40] I’m sorry Anna I can’t hear you.
ANNA FLOCKETT [00:07:41] Sorry. We just spoke a little bit about your previous experience to IBM, but I saw you were one of IBM’s thought leaders in blockchain, and that’s really interesting. Can we talk about that a little bit more?
AREIEL WOLANOW [00:07:52] Sure. I was at IBM for 12 years. And though I felt it was time to move on and start my own firm, I consider those twelve years to be a privilege. IBM has some of the brightest minds in the world and has given me the opportunity to work on a bewildering number of of really difficult and impactful problems. You know where I wanted to go from there is really more about working with start-ups, which IBM with its cost model isn’t set up to do. And as I saw, the locus of innovation shift away from the large corporates and into, you know, into the start-up world in the areas that I wanted to work and specifically as I saw blockchain moving past just crypto and ICO and into business solutions, I realised the time was right.
ANNA FLOCKETT [00:08:42] Perfect. And who else have you worked with and helped me with blockchain and the technology? A lot of people.
AREIEL WOLANOW [00:08:51] It’s a long list. So I said Lloyd’s of London, Bank of America, HSBC, a number of governments. Worked recently in Lithuania to help develop a position on Libra. I’ve worked with Deutsche Telekom to help design their blockchain as a service offering. So a wide variety of both large and small companies.
ANNA FLOCKETT [00:09:14] Quite a portfolio. And Cloud Expo is a show and, you know, London Tech Show. How important are these types of shows for these technologies and for start-ups? And have you been here before?
AREIEL WOLANOW [00:09:27] I actually delivered a keynote at this expo two years ago on machine learning and financial inclusion. So I’m quite familiar with the show. For my purposes I think the thing I get the most out of the show is to get some of the, you know, the UK landscape about some of the other small companies who are working on on what. Do I personally close business here? No, not usually. This show is for me at least more valuable in terms of the education I get in terms of what people are working on.
ANNA FLOCKETT [00:10:00] Definitely. And what have you guys got planned? What’s Finserv have got coming up in the future?
AREIEL WOLANOW [00:10:06] Well, we’re working now on a very exciting partnership that I can’t quite talk about yet. But the one thing that I can’t talk about we’re working with with a company called a UK FinTech called Finexos that has an amazing product solution to help out the roughly 12 million people in the UK who are struggling with levels of revolving debt they can’t handle. It’s a huge problem. It’s growing worse and the traditional banking sector isn’t responding well. You may have seen about three weeks ago, four weeks ago now, the FCA issued guidance about banks not charging excessive overdraft fees and their response was to change the interest rate to 40 percent. That isn’t quite what the FCA had in mind. And so it’s it’s a real pleasure to be working with an outfit like Finexos that is really going to change the game in terms of what banks can do for their borrowers to get them out of trouble while still retaining the full book value of their assets as well. And it just requires you all of the technology that that’s behind the solution and all of the process design that’s behind it has been proven in one way or another empirically already. It’s just a question of bringing these things together. And I’m really, really excited about what Finexos is going to do and the impact that they’re going to have on the market. And it’s a privilege to be the ones building the solution for them.
ANNA FLOCKETT [00:11:31] Oh, amazing. We’ll keep an eye out and look for all these exciting projects. Well, thank you very much for joining us.
AREIEL WOLANOW [00:11:37] You’re quite welcome.
ANNA FLOCKETT [00:11:38] Thank you for listening.