Thought Leaders in Financial Technology: Currencycloud CEO Mike Laven (Part 3)

Sramana Mitra: Very good. In your space, what are the trends and what are some open problems that you would point new entrepreneurs to look into?

Mike Laven: If you send a million dollars from San Francisco to New York, it’s a far simpler exercise than sending a thousand dollars from San Francisco to France. The world of moving money around the world is massively compliance and regulation intensive. There are rules about the kinds of information we have to collect about who’s sending the money and who’s receiving the funds and report it to authorities.

In Europe, there’s a whole alphabet soup of regulations. All of these have to do with the collection of data, the management of data, the protection of customer data, and providing that data to relevant authorities. In terms of making our business run efficiently, the segment is now called RegTech. It helps simplify the world of compliance and regulation, and then we make that available to our customers. We do not assume that the regulation itself will ever get simpler. It will only get more intense and more complex.

Sramana Mitra: In the RegTech field, what are the areas where you would go and start automating or start looking as you see it now? You’ve talked about your particular field. Have you thought about RegTech in a more comprehensive way?

Mike Laven: Identity management. You can get someone with the same name who lives in Atlanta, Georgia and another person who has the same name in another part of Georgia. There’s a series of things having to do with identity. The traditional way of handling identity like passports and utility bills is so out of date relative to the way that one can check identity via social media. All that has to be integrated into a high-volume system.

If you think of it, we have to onboard thousands of customers. At the same time, we have to monitor what goes on with thousands of transactions and monitor those against all sorts of things. Identity management and verification are very interesting areas. It’s all about doing that at scale in a way that is usually integrateable to other people’s systems and helps you with data. The RegTech world of compliance and identity is just an area where there’re lots of improvements to be made. It’s not static at all.

Sramana Mitra: Where I think you’re going with this is right. Regulations will keep evolving. There will always be some level of regulatory areas around which to either expand product lines or to introduce new product lines in the RegTech area in general.

Mike Laven: I have this discussion with companies all the time, “We would be able to do this if only the regulation wasn’t there.” You can’t think like that.

Sramana Mitra: It’s not even healthy for regulation to not be there. Human beings have a tendency of misbehaving.

Mike Laven: One thing you may see on a global basis is that for a company like ourselves, we have to take the most difficult standard of regulation and build to that. If you have a money chain that has three or four hops in it, wherever the most difficult standard is, that’s where you have to be. There is an inherent push on a global basis for a standard regulation. It will be informal. They’re not there yet and they’re not even close.

Sramana Mitra: Great. Thank you for your time.

This segment is part 3 in the series : Thought Leaders in Financial Technology: Currencycloud CEO Mike Laven
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