- The modern user wants to interact only with fintech apps, not banks
- Consumer trust is earned by creating an intuitive experience
- Regulators are putting past frameworks on new technology
Bankless Times talked to Iakov Levin, cofounder of Locus Finance and former CEO of CeFi platform Midas Investments.
What are some factors behind fintech’s biggest successes so far?
I think the biggest success is the growth of apps like Revolut, eToro, basically, digital banking. I think this success relies on the molding process, the possibility to solve all your tasks and problems related to your finance account, basically through your phone, and the possibility of doing it anywhere in the world.
Is fintech dangerous to banks?
It is dangerous to the banks that do not evolve, that do not adapt, that continue to have old technologies across management, software building, managing, developing, and so on.
Should commercial banks increase their investment in fintechs?
I think they are already increasing the investment and research in fintechs and in crypto and like they should be all over the place, and they should understand the water in which they're swimming. There is no other way for them to survive.
What requirements should central bank-issued digital currencies (CBDC) fulfill?
It's only for the government to decide what they should fulfill. Obviously, there will be some KYC process, 100%. And it's much easier to track the flow of the money if you have digital crypto.
Is collaboration between banks and fintechs a good option for consumers?
I think that the modern user really wants to interact only with fintech apps, because fintech apps usually polish their user experience and have different sources of generating value for the company. They’re more consumer-centric compared to traditional banks.
How is consumer trust best earned in the relatively new fintech industry?
By creating the best experience, by creating such an intuitive experience that you would forget that you're using a bank or you're using crypto, you're using blockchain. You do not need to think of how it works. You just have the interface that is already built for you and for your needs.
From this trust is earned because you're creating such an experience that it's like so easy to do, which obviously makes you more trustworthy in the eyes of the consumer.
Does crypto regulation have any effect on fintech companies?
Obviously, we saw that Revolut decided to drop crypto because of the regulations and so on. This will be always a part of the industry. Crypto regulations have a huge effect on fintech companies. And once strict regulations will be established, being transparent and possible to follow worldwide, we will see a new wave of crypto features popping out in PayPal.
We already see this in Revolut in many other banking apps and so on. This should be the new wave of these companies to evolve with crypto. But they need crypto regulation first.
How would it be best to go about crypto regulation?
Crypto regulations are good, if they are well thought-out. What we see right now is an attempt to put the frameworks of the past on this new technology that just emerged and it will take some time to figure it out.
What rules should we put into the industry in order for it to flourish and be somewhat secure? It will take a lot of time, I think years, maybe a decade, but we will get there because we have no choice.
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