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FEATURE
FINANCIAL SERVICES AND THE DIGITAL LEAP In recent years, we have seen growing demands in making every part of society more sustainable. However, one sector has faced many challenges when trying to adapt – the financial sector. With its many regulations and high demands on security, there has been a general fear of converting physical confidential financial documents to be completely digital. The Link spoke to Henrik Kristensen, CEO at Reguity, Christopher Ansara, Founder and CEO at ALT/AVE and Nino Vang Vojvodic, Co-founder and CTO at ALT/AVE – two companies trying to change the game. By using the latest technology, they aim to make the digital finance bubble both easier, safer and more sustainable. BY: SAGA PALMÉR
Due to the profound digitalisation of everything we do – from working, to socialising and shopping – the finance sector has been forced to move in the same direction. To handle the growing demand for an online presence, at the same time as taking all regulations and potential security flaws into consideration, have not been an easy task for the industry. However, Henrik Kristensen, CEO at Reguity, believes that within this transition, both challenges and opportunities are born. Opportunities in unlisted companies Previously, one big challenge investors had to face, was to find companies willing to invest outside of the stock market. Reguity is working to make this both easier and safer by collecting and presenting different alternatives on one single platform. This financial infrastructure platform aims to bring businesses and investors together, as well as to create a clear and concise overview of the investment history. “It’s very common for companies to miss to thoroughly document its ownership. In most countries, there is a legislation associated with the Companies Act, saying that each company should have a shared ledger. The shared ledger should include all transactional history, and you should be able to navigate in the company’s accounting history; to be able to tell who the owner was and of what, at each specific moment. This is not a simple process, especially for someone without experience doing it. On our platform, we help companies to secure their private equity assets – offering services that under normal circumstances are available solely to public companies or CSD registered companies.” According to Henrik, the process of investing in these companies can be fairly complex, and involves a lot of risk both for the buyer and the seller – risks that the platform is trying to reduce and prevent – all while juggling the challenges following an increasingly globalised market. “The buyer needs to understand if the purchase of the asset is legit, while the seller is at risk of not receiving the payment. For example, if a German owner of a Swedish company wants to sell it to a British investor, you will find yourself in a situation with many challenges. Not only geographical challenges but chal-
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lenges when it comes to language, currency exchange and so on. Our digital platform offers a solution for these types of issues, so you can decrease the time you need to spend on it.” Worry-free detail sharing Another company, also overcoming the challenges of online security but in a slightly different way, is RegTech company ALT/AVE. Many of us have gotten used to sharing documents online, after doing so for decades, but only recently did these services become available within the financial sector. Restricted by regulations and the high demands on security when sharing confidential information, these companies have been working hard to find new, safe ways to keep up with the digitalisation.
“It’s very common for companies to miss to thoroughly document its ownership. ” As documents such as contracts and terms of services often contain sensitive or confidential information, sending and sharing them online can be tricky – even complex and expensive. On the other hand, being able to send the documents digitally is both quicker, and – if done right – more secure. ALT/AVE uses distributed ledger technology, meaning that information is encrypted and stored at multiple places at the same time – making it impossible to change or to hack and helping ensure that its platform is meeting the regulatory and security standards of the industry. Christopher Ansara, Founder and CEO, and Nino Vang Vojvodic, Co-founder and CTO,
explains how it works. “When a financial institution transfers a document to a customer using our service, it runs through an advanced algorithm. This algorithm then generates a hyperlink that can be embedded in an email to the customer, with a call to action. Once checks are completed within the client application, the document ‘unlocks’ and customers are then able to view the document,” Nino explains. Win-Win for both the planet and the client This way of sharing information is not only safer for the users, but also for the planet. Christopher says that once the service is up and running, it will result in a 95% reduction in paper usage and a 25g decrease in CO2e per document, compared to with postal delivery. He highlights the need for more digital information sharing in the future as one of the main driving forces behind the idea of the platform. “Our backgrounds are within financial services, and we saw how much paper was needlessly used – and wasted – throughout the sector. The thought of treeless forests and streams of vans delivering mountains of needless paperwork kept us up at night and so we set to work to find a solution.” Both ALT/AVE and Reguity see great potential to grow in the future. The pandemic forced society into an online lifestyle, that most likely will stick around post COVID. This shows that the demand for secure financial services online won’t slow down anytime soon. And as we’ve already seen, the challenges are both many and complex when confidential information is moving from physical to digital – but with new technology, and innovative companies making the most of it, the future is looking bright.
Henrik Kristensen, CEO at Reguity, Nino Vang Vojvodic, CTO at ALT/AVE and Christopher Ansara, CEO at ALT/AVE.