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The Bulletproof CTO webinar recap is finally here! This time we took a closer look at the Fintech industry. Check it out!
Sadly, the 4th edition of the Bulletproof CTO webinar is behind us, but we are back with a quick recap to highlight the most electrifying moments of our talks. The latest episode satellites around Fintech. As a host, I had an amazing opportunity to have a fascinating talk with my two amazing speakers:
Przemysław Kowalczyk, co-founder of Ramp – the company builds decentralized, robust infrastructure to make crypto apps not just powerful, but also delightful. Their technology unlocks a future where everyone can exchange value as easily and efficiently as using the Internet. They strive to make this a reality for everyone;
Mathias Klenk, co-founder of Passbase – the company offers a set of SDKs to developers to integrate into their service facial recognition, liveness detection, ID authenticity checks, and ID information extraction, while also baking in privacy protections that allow individual users to control their own identity data
For all the newbies out here, the Bulletproof CTO is a series of online webinars hosted by The Codest. Our talks have been hosted quarterly from 2021. We address them to tech and engineering leaders as well as software professionals
aspiring to step into engineering management roles.
We dedicated this episode to the newest topics and trends that are on the radar of the majority of Fintech leaders and enthusiasts. Enjoy our event in the form of a sum-up article and broaden your tech horizons with us!
‘I think we can’t talk about 2021 without actually mentioning Web3, which in fact basically starts to hit the mass market and is being adopted into the mainstream, in my opinion. What we now really started to see is that in 2021, traditional finance companies can no longer ignore Web3 and cryptocurrency and this is also what we see with lots of newer players like neo banks and finance apps, all starting to launch cryptocurrency trading – all they are thinking about now is how to implement new ways of blockchain technology, crypto or NTFS into current product offering. It is super exciting to see as in the past, this segment has been more or less ignored.’
‘Five years back or even more, traditional finance treated these more as a phase that would go away, but now we are simply at the point where it cannot be ignored anymore. Of course, I’m extremely stoked in 2022 to see more and more of these applications and use cases actually using DeFi products or crypto products in their own applications.’
‘We are building products for web-free companies and we have amazing growth in this area. But before we dive deeper into crypto specifications and blockchain trends, I just wanted to go back to more global trends of more traditional fintech. So, there are two big trends:’
‘We see a general shift towards alternative payment methods, especially in open banking payment methods – I hope that this is going to happen. The challenge posed by alternative payment methods is that they are undermining the card payments dominance. I feel like that’s going to be great for consumers, as we can see in PSD Open Banking but also Blik in Poland. They can offer better UX and lower costs. I feel like that’s something very exciting in the long run. Also challenging the dominant player is always good for the consumer because the client then gets more options and I also feel like crypto can also be one of the solutions as people are starting to use crypto, even as a payment method and that’s especially interesting for us.’
‘Wider access to banking data – that’s also boosted by the open banking trend in general and I also see a trend in e-id. I feel like Mathias would know more about it. This is also about accessing verified banking data or governmental data. What do you think about e-id Mathias?’
Mathias Klenk:
‘I think that, since I’m at the core of that, it’s like another trend that goes in line with what we have said and you can also see the correlations between. The bloom of fintech is also a bloom of pure fraud that is happening in fintech, and online fraud in general. It’s like a constant cat and mouse game, so basically, those fraudsters or scammers are constantly inventing new schemes on how to fraud end users. This brings its own challenges with it.
So, I think that what 2021 has brought in that stance is that, just like this whole industry was booming, so was a fraud and I also think that this will, unfortunately, continue in 2022 – there will still be a cat and mouse game. In the end, you need to stay on top of each other, you need to develop machine learning algorithms to detect those things early on and continue to raise a bar for people who scam and fraud. Probably the crypto space has always been an area where you have to be super careful since a lot of stuff is happening there.’
Przemysław Kowalczyk:
‘One of the key challenges for us is actually fighting fraud and being compliant with all necessary regulations and that Passbase, for example, is helping us to do. I concur with what you said about the fraud, the growing number of fraud attempts and theft is true and we also see that trend growing and have a lot more tools to fight it, but there is also this balance between how well you can protect your customers and their privacy. To protect customers, you need to get more data and you cannot get more data without challenging those questions about privacy, but that’s another topic.’
Mathias Klenk:
‘I think that what will slowly start to become even more relevant is the expectation of more regulations to come in 2022. So, basically, even though it is exciting to see the fintech industry, wider crypto space and lots of free space to bloom at this point, the government will just implement stricter regulations. It makes it harder for some startups to get into that space. So, I would expect that in the upcoming years there will be stricter regulations or even more anti-money laundering laws because for now the crypto space is almost like a wild west where you literally just connect your wallet and can do all kinds of things without barely any regulations.’
Przemysław Kowalczyk:
‘Yeah, I think that stricter regulations are what we can expect in 2022, especially in the crypto area because, as you said, it’s still a wild west there and only exit and entry points are kind of regulated. That’s also interesting because that scrutiny wouldn’t come without actual usage, so users are using it and that is why regulators are looking at those applications. So, I feel like there are these correlations of what people are using and what regulators are looking at, which I think is the actual strength of actual usage in Web3.’
‘We are building solutions for all of those Web3 applications. For me, this growing trend of Web3 and in general more use of blockchain technology is just something I’m super excited about on a personal and professional level. I feel like we are finally at the moment where blockchain is going mainstream but what’s interesting is that it is becoming popular not under the name of blockchain but actually as NFTs and Web3. It shows that there is an actual use case there and so, for example, people are thinking about it as ‘I want to buy this NFT or want to play this game and they are not thinking about how the technology works underneath, they just want to use it and it shows that we are on this bling of mass adoption.’
‘I just wanted to mention one more thing. What I think that also happened last year that is going to push forward this mass addiction is that we finally invented a way to scale blockchain. As you might have heard, blockchain transactions are very costly and take a lot of time, for example, 10 minutes for Bitcoin. We finally have a solution called layer 2 solutions that enables much faster and less expensive transactions and that will allow growth.
‘I think that something that you have touched upon is that 2022 will be the year of layer 2 solutions where the whole Web3 community will focus on scaling it. There are basically two camps – the Ethereum maxi camp that focuses more on how we can scale Ethereum from layer 2 and the multi-chain camp that says the future is in multiple blockchains like Solana, Avalanche, and so on. Let’s say they offer different capabilities and cheaper transaction costs.’
‘The point you mentioned is super interesting. I mean I’ve been in this industry for almost seven or eight years. I’ve seen these cycles happen every few years so in 2017 there was ICO, in 2020 there was DeFi, last year it was NFTs. Every time this community was faced with challenges, it succeeded and brought another use case to the mass market. As you mentioned, suddenly we have people touching this technology who do not even realize that it’s blockchain technology or that they are using Web3 because they just want to buy this jpeg from a monkey or this trading card with their favorite soccer player and this is super exciting to see because I think that the biggest hurdle in the past was that it was so difficult for everyday users to set up a metamask wallet that handled well their privacy. It was super scary to buy Ethereum and crypto and send it to the hash when they heard about all the scams. This is what Ramp is luckily already solving to make it as easy as using Apple Pay or a credit card so that you can buy Ethereum and then this NFT.’
‘In the end, fundraising is more of an art than a science so it’s not easy. At its core, you need to build something that users want so if you have a great product or idea and you create something that users want and will use, you will quite naturally have product traction and an ideal market fit. Sam Altman once said that ‘the rate of iteration is the higher predictor of a future startup success.’ So, the more you iterate, the more you incorporate user feedback and the better your product will become and the bigger is the chance that you will reach product-market fit fast.’
‘In the end, the general advice is to be different from your competitors, try to build a better product in that sense and then just try to outperform through building a better product and gaining more traction. If you truly focus on building the best product out there and delivering the best value to the users, investors will come quite naturally.’
‘I believe that the point that Mathias mentioned is the most important. So, you actually need to have a great product that users love and use. If you have the market product fit, then investors will come – that is a must. Then, on top of that, you need to obviously build an investment story, explain what you actually want to achieve. You need to show that you have the right people that think long-term and are ready to scale up the company and that they are here for the long run. Still, the most important part is to have a great product.
‘What’s going to change in 2022 is that the days of cheap capital are going to end. We have higher interest rates. At some point, we will see less capital on the market. It is a great time to focus on building, iterating and improving your product. Such time tests business fundamentals – do we actually have a strong product and a strong team? If you have this, then you shouldn’t worry.’
If you found our sum up retrieving and the topic suits your interests then don’t hesitate to watch a full recording of our talks where many more absorbing fintech topics were covered. You can find the video down below, enjoy the show!
We are coming back with more talks soon!
Thank you for joining us on this Fintech adventure! Naturally, I’m planning the next Bulletproof CTO episode soon – the topic is still in stealth mode.
…but it will be revealed soon! In the meantime you can already book your virtual sit in advance here.
That’s it for now, stay bulletproof, folks!
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