Fintech's Top Accountant Talks Blockchain, ICOs And More

The Benzinga Fintech Summit is a gathering of the top leaders in brokerage, payments and cryptocurrencies in San Francisco Nov. 14. Ahead of the Summit, Benzinga is profiling fintech thought leaders who are speaking at the event.

For this installment, Benzinga interviewed Asael Meir, head of CohnReznick's technology industry practice.

Benzinga: Tell us about your background and current role in fintech.

Meir: Living in global banking capitals such as New York City and London, combined with a life-long fascination with the power of disruptive technologies has gravitated me towards fintech, where I am surrounded by innovative thinkers that are leveraging technology to create better user experiences (UX) in finance.

In my current role as the national leader of CohnReznick’s Technology Industry practice, I manage a strong, multi-disciplinary team of professionals who assist fintech companies and founding entrepreneurs through complex capital formation transactions, liquidity events and the related accounting and tax implications. We enjoy working alongside and supporting visionary clients as they elevate their companies to the next level!

What trend in fintech are you paying the most attention to right now?

First, we are paying close attention to the rapid development of blockchain and distributed ledger technologies. Infrastructure upgrades such as the emergence of 5G telecommunications networks will accelerate the rate of adoption by mobilizing blockchain technology and expanding its use cases.

Second, as crypto economics continue to evolve, we are closely monitoring new regulations. Considering recent SEC enforcement actions over Initial Coin Offerings, we expect additional legislation over governance and taxation of ICOs.

Finally, reflecting on mounting public concerns over data security and privacy issues, we expect a significant impact to the domestic fintech market. Although individual states such as California are enacting legislation aimed at privacy and data security, it will be interesting to see if other states follow the same path or will federal regulation come into effect similarly to GDPR in Europe.

What are common mistakes fintech founders make in terms of accounting and operations? How can founders optimize their businesses to disrupt financial services?

One common mistake made by fintech founders is not properly assessing the scalability of their “people” infrastructure.

We often speak to founders of growing fintech companies that are getting short-sighted business advice from service providers who don’t really understand fintech companies and the issues these companies face. Founders and C-level executives should surround themselves with industry specialized mentors and advisors that are able to advance their company’s desired growth trajectory. It is particularly crucial that companies seek out and engage with “smart investor money” to unlock strategic revenue generating relationships and facilitate longer-term exits and strategy.

From a finance and accounting perspective, what are the most exciting applications of blockchain technology? What problems can it solve?

There are so many applications of blockchain and distributed ledger technologies, which go well beyond crypto currencies. Perhaps the most exciting applications are the ones that we have yet to think about because of hardware and infrastructure limitations. Imagine the possibilities that so much data can provide. How will A.I. and machine learning evolve as computing powers improve and 5G communications networks become accessible to the general-public.

Beyond data integrity, Blockchain and distributed ledger technologies increase the speed in which multiple writers can contribute to shared information. This effectively creates “velocity value-add."

Five years ago, what did you think would happen in fintech? What has ended up happening relative to your predictions?

Due to its regulated nature, the space has been primed for disruption. Big banks and industry regulators were historically slow movers, so expect the continued emergence of nimble disruptive fintech players. Global financial giants have been falling behind on UX innovation and as a result we are seeing increased level of investments, business valuations and partnerships of big banks and smaller innovative fintech companies. I still believe there is a lot of white-space for agile companies to capitalize on emerging fintech market opportunities.

What advice would you give to someone with an idea that could disrupt financial services?

Research the market you plan to disrupt. Get as much market information as you can, talk to market participants to confirm that your idea would be disruptive. Find out who your competitors are and make sure you can articulate why your idea is a better solution. Seek out an experienced trusted advisor for feedback on realistic product development milestones, capital sources requirements and expectations of market valuations.

There are other options to building it yourself, consider collaborating or partnering with other market participants to accelerate growth. Speed to market is a big advantage when disrupting regulated industries such as financial services. Remember that action cures fear, so “just-do-it." Start your company!