CVA Podcast: Iana Dimitrova, OpenPayd

Transcript

[Music] hello hello this is your host tras ahmed ready to kick off another bite size episode of the crypto valley association podcast a special thank you to cerebank for supporting this initiative as they pursue their mission to redefine finance for the new economy now let's discover together the growing trends of this fast-moving space and try to shed some light on the mysteries it contains today are joined by jana dimitrova chief executive of open paid a leading global payments and banking as a service platform that provides a range of banking and payment services to both financial and non-financial institutions so let's dive straight in and uncover

the hidden world of banking hello ianna how are you doing today hi shiraz great to be here and thank you for having me in an open page very well how are you today great thank you it's a pleasure pleasure to have you and maybe we we start this off as we usually do uh by hearing a little bit about your first blockchain related experience ah that's an an interesting question and and you know i would go very humbling to that question because most i guess of your audience is far more familiar with uh with the space than myself simply because i come from a very traditional background in terms of being a lawyer and then having spent my last 10 years in highly regulated financial services and in payment space

so actually my my first touch points with the the blockchain technology and and and overall new virtual currencies and new ways of moving money around was when we actually started getting demand at open paid from those people that have these new great ideas about moving money around but needed access to traditional payments and financial services so for me that was really the very first time um wonderful and and may i ask when you started hearing about some of these uh interesting ideas that these people were having i think that was probably around four or five years ago when it was still really something that people

were not yet ready to accept and explore as mainstream so i guess many of those businesses were just seen as an idea or a business or a way of of moving on the side that is not necessarily mainstream and i guess what we are seeing from from from our perspective which is the perspective of moving funds around in the traditional ways that that has really massively grown over the last i'd say three three years and the potential is growing exponentially day by day okay great i i see and so i'm very curious could you tell us a little bit more about open paid and some of the services that you're providing yeah very

very happy to i mean we we we like to think about ourselves as the provider of payments and banking services for the digital economy we have i would say a unique combination of licenses and license coverage across multiple countries as well as technology which is agile enough and and corresponds to the needs of the digital economy so i guess what what we do is we aggregate multiple payment methods and different payment schemes and we help our customers that trade digitally and need to move money cross-border and accept payments through

different payment methods and channels in multiple countries through a single apis for a single point point of contact okay incredible and identify some of your use cases being embedded finance fx and remittances marketplaces and platforms and now newly digital assets what what really brought you to kind of bringing this as one of the new use cases absolutely so i guess we are heavily focused on helping customers both from the financial services space but also from the virtual trading platforms to move money around and i guess the the the reason why we have gone in that

direction and that's not necessarily a new direction for us is is is purely organic it's purely the demand that we have been getting from all of those businesses that have the need to bring money into their system bring fiat payments into their system and have both the on and off-ramp functionalities in multiple countries in multiple currencies and have all of that 24 7 and and and fully instant so with the growth of that vertical of the digital economy the the demand for those integrated payments and banking solutions has only been growing and in a way what we do is is our

product development and our platform simply follows the demand of our of our customers and and and their consumers respectively okay thank you and you know one of the common terms that that we hear quite often in the cryptocurrency and blockchain space is kind of buy banks buy bitcoin uh and and we're just following along these lines i mean how do you believe the banking world as a whole is going to let's say transform with regards to this whereby you have a lot of let's say the decentralized finance world that has come come about and a lot of people that are taking out loans in a decentralized manner not needing let's say a banking infrastructure how do you believe things are going to be moving forward with

regards that's a really interesting question i think one has to be very carefully making predictions about the future because had you asked me that question four years ago i would have probably said that there will be some form of of uptake but the impact is going to be limited and also the number of banks and the appetite of traditional banks supporting those businesses will will also be limited i think we have seen an incredible evolution over the last 24 months and that trend is something that both traditional financial institutions and regulators are are now recognizing so from my perspective i think that the that market and i guess the ways of exchanging

wealth and and data is still to a large extent untapped and we're still at its infancy my view is that it is inevitable that some form of regulation will have to follow if the development of those alternatives is to grow but i think there will what's going to be very important for that future growth is to strike really the right the right balance between the two and i know that there are many many opponents to uh any form of regulation saying that that that would defy the the whole purpose of uh you know the blockchain technology as such and and the concept of decentralized finance but

equally i think that as as we progress putting the protection in a way of the customer whilst i would say safeguarding you know all of the benefits that the technology is permitting is is going to be inevitable so i think it's really reconciling those two agendas uh which is no no easy exercise but in my mind it is absolutely inevitable i see thank you very insightful and you touch upon a very very interesting point as well your background being kind of the legal and regulatory side of things what where do you believe the the kind of that aspect that the the regulatory side is headache i know that open patient is based in out of london and

now well uh the uk no longer being a part of the european union but uh understanding how do you believe these kind of the regulatory side will will adapt to this this growing technology yeah that's really a great question i think there are different ways of of looking at it first of all generally how is regulation going to adapt and follow those developments because they're in in a way now regulators are are on the back foot and they have to follow the uh the developments but also then there will be a question of whether there is going to be a different approach in between the uk and in europe i think overall regulation is going to come and the question is do we have to now regulate everything

that when it comes to the the blockchain technology or to trading virtual currencies or only certain products and services that pose a higher risk to the customer and because i think what we see in terms of say a lot of the bad press about some crypto providers out there it's not really related to 90 of the products and services that they offer to the mass consumer it is related to a very small portion of products that are somewhat investment products that come with a much higher financial risk to to the customer or much higher compliance risk or or money laundering risk but i guess it's it's really around striking

that balance and making sure that the regulators are not imposing a one-size-fits-all approach to anything and everything offered for example by a crypto exchange but they always place the emphasis on the key risks and those key risks might be of course from a money laundering standpoint or consumer consumer and financial risk protection from financial risk so i think it's having that measured approach and analysis on a case-by-case and product by product basis instead of a catch-all regulation on crypto exchanges by way of example okay i see and are there any jurisdictions that you're you're

currently looking at that are already not only at the forefront of this or or are kind of regulating the space or or looking to regulate the space through sandboxes or the likes in in in a positive way or in a way that you see see best fit i mean we've seen a lot i mean i'd probably be a little bit biased here even though i'm supposed to be uh neutral from coming from switzerland but uh i i feel like the swiss approach is quite interesting we've seen also malta singapore and other countries i mean any specific jurisdiction that you've looked at you're like wow these they're doing it in the right way yeah no absolutely i think you're absolutely right i think the approach in switzerland is is a very pragmatic one i think when it comes to malta for example in a couple of other european

jurisdictions they two three years ago seeing the potential of the industry they made the statement that they want to be the hub they want to be the home jurisdiction of of those new business model however some i'd say were far more successful than others and i think the comparison that you're giving in between switzerland and maltese is an excellent one because uh malta tried to be that hub but then effectively the process for a number of reasons of course internal and external slowed down so the if if you look at the number of providers operating out of that jurisdiction it's very limited in comparison to for example switzerland uh i still believe and maybe i'm biased on my end that the the uk as a jurisdiction and the fca as

a regulator are very open to business it's it's one of the most if not the most skilled regulator and experienced regulator out there and they always take a very pragmatic and open dialogue approach whether it's through the sandbox environment or other when it comes to those crypto businesses and i think we see that approach validated through the sheer number of applications and companies that are still operating out of the uk under the uh current temporary permissions regime and also the i guess proactive approach um that vfc is currently taking towards reviewing all of those applications and making sure that they can continue to operate in a sustainable manner out of that jurisdiction

yeah i say i mean thank you being being let's say british born uh it's very refreshing to see uh so i'm being so positive about it thank you for bringing some light uh back back to the space and um if i follow a little bit on on on those tracks and and go down the line of some of those actually the challenges in the past that i would say and on myself i think other crypto enthusiasts have getting space a few years ago maybe let now it's a little bit easier but the kind of whole element of kind of like fiat to crypto on-ramp and off-ramp it's it's always been a problem going from the new world to the traditional world i mean how are you looking to to solve this problem and is it is it a challenge that's now completely sold or is there

still strides and steps to make absolutely not solved i'd say that this is a challenge that everyone in this space are trying to get in this space is is facing so uh this is really where we we we are the experts and and that's why i guess we would like to see ourselves as the go-to infrastructure provider for those new businesses and those growing companies that are struggling to get the level of support that they require for their business types from traditional banks i think what is really important is to have a combination of two things in

order to solve those challenges on the one hand it is to have the regulatory infrastructure in place in terms of licenses but also in-house knowledge and expertise when it comes to to that sector so that we as a financial institution can effectively assess the business model as well as the risks associated with that business model and i know that that may sound like a very straightforward exercise but if you were to go to a tier one traditional bank probably that level of knowledge and understanding of the the variations would would not necessarily be there and this is why very often there is a blanket no approach

and and and also because the in-house expertise is not there i guess the return reward versus the initial investment in assessment is just not justifying the risks for for many of those those players whereas we have been building this very steadily throughout the years and we're now in a position whereby we can assess very quickly any new business model that is coming to us and make a very quick decision as to what has to be captured or mitigated as a risk discard or or perceived forward so that that infrastructure is incredibly important on one hand and on the other hand it is really the uh the technology that is fit for purpose for the instant 24 7

trading cycle that is required and that the customers of those platforms are expecting so i think combining the two is something that is quite unique in the marketplace and that is why companies are still at a large extent struggling to have efficient lincoln bridge between the fiat world and the crypto world okay and in order to educate there is a certain need to communicate and at least for for the time being you serve a little bit as an intermediary here between let's say this new world and the traditional world traditional well-being let's say the banks how how do you absolutely and maybe if if i just interject here it it is a lot about communication and frankly

i would say at times education especially from some of the platforms that don't necessarily come from a european background and uh regulated environment because for those that have been set up in europe many of the guys are actually coming previously from either payment services or other form of financial services so the touch points with regulation and i guess the restrictions and the compliance requirements are not foreign concepts to them so it's just about investing and building the right infrastructure but for those players that are coming from outside of the uk and europe and have been extremely successful in other parts of the world without facing that level of compliance requirements in scrutiny it is really an

exercise of of hand-holding and explaining the process end-to-end and this is really where we we like to think we're adding value to the growth journey of of our customers and partners i see thank you so much for for the additional comment there and i think the maybe one of the thoughts on a lot of our audience mine now is since you do a lot of this communication with the traditional with the banks what are some of the key points that that you raise to them in order to start some of these kind of let's say relationships collaborations with some of the the new world what are some of the key points that you can not only to convince them that they're kind of their ears and interests in this new space you mean with the traditional on the

banking side of things or on the customer side of things because on the banking side in terms of how do you get them engaged in this world yeah i think uh it it's not really not just about the banks i think it's also about our own regulators as well because it it all really starts with i guess ensuring that by facilitating those payments and offering regulated financial services we do this in a fully compliant manner so i think it really starts with having our own infrastructure and very strong in-house expertise and then making sure that the businesses the companies that we work with and and

help grow are in a position to in willing to invest themselves in i guess compliance and by the way when i say compliance this is very often really upgrading their technology it's not just adding more people or adding more manual processes i think we we really need to stop thinking for compliance as a tick box exercise because what we are seeing more and more is that investment in the right skill sets but also investment in technology helps manage those businesses their own risks far more efficiently and ultimately help them help them grow so i think it's really giving comfort to the

regulators as well as to banking partners that we are carefully selecting the businesses that we work with and we expect that to expect them to meet a very high standard a very high threshold of technology and i guess compliance knowledge and expertise well thank you um he's very interesting point there and and i mean as we're slowly approaching the the end unfortunately of this very uh this episode i i'd love to hear a little bit more about where you believe this space not only the blockchain one but the fintech space is heading and i mean we spoke about it before it's it's difficult to make predict predictions and projections but

what are your thoughts you know we've seen a real shift in demand for financial products over the last two years it was i guess originally the the demand for api banking was mostly coming from industries that are used to trading digitally whether that's you know crypto trading platforms or other financial services companies whereas now we are seeing that industries and business models that traditionally didn't have a digital delivery channel or touchpoint with their consumers say automobile manufacturing is a great example are coming to us and are saying we want api banking we now want to be able to reach our customers digitally we

want a fully integrated payments experience and you know what by the way we would also love the ability to integrate some of your banking or payments products into our own product set so that we can generate some revenue out of it and actually a very recent study that we did with close to 200 executives over the uk and europe the vast majority and i think it was over 75 percent are saying yes we actually expect to be generating some revenue over the next five years from some sort of embedded financial product that might be insurance it might be lending it might be core banking you know bank accounts but we're actually planning to do this so what we're seeing right now

is a significant demand for infrastructure and this is really where we focus so that we can then help those customers start generating revenue from financial services so to me the the shift to answer your question is towards more and more ever more fully integrated and embedded uh movement of of money and data so that the business any business can have as much traction and touch points with their consumer as as possible okay wonderful well well thank you yeah so much for for joining us today and and providing all these insights um before before we let you go i mean do you have

any uh final words for our listeners today no it's it's great to be here i think uh for us it's a really exciting time to be within within that financial services space and to be the go-to uh person and platform that bridges the traditional world to the virtual assets world so thank you for having me it's it's it's a pleasure our pleasure is all ours and incredible uh last words um and uh to the audience uh today if you enjoyed this conversation feel free to check out more on our website cryptovalley.swiss where we host plenty of events educational material and even provide information on how you can join our growing community thanks again jana for joining us

thank you so much for having me stay tuned stay safe and until next time from the crypto valley in switzerland bye [Music]