The future of finance: PwC’s Oliver on how ‘fintech is becoming crypto’

Welcome to the Future of Finance, where Wealth asks prominent people at big companies about their jobs, how their firm fits into the crypto ecosystem, and what it all means for the way we use money.

John Oliver spent more than two decades at PwC, where he was a partner and co-head of US fintech trust services. Over the past few years, the firm has made a bigger push into fintech, which has increasingly meant a bigger push into blockchain and crypto.

We discussed everything from improving payment efficiency to empowering the unbanked to, perhaps most importantly, using blockchain to eliminate corporate expense reporting. Also: There may be a silver lining to US policymakers’ repeated failure to pass meaningful crypto legislation.

(This interview has been edited for length and clarity.)

How do you describe your work to people?

I wear many hats, so it depends on who I’m talking to. I lead our fintech practice. I am a career auditor at PwC. I have been in our banking and capital markets group. We decided a little over three years ago to create a fintech practice combining our technology professionals with our financial services people – specifically banking and capital markets people – and have one team that I co-lead with my partner in our technology practice. And crypto has become a much bigger component than what the technology really is.

So, just to be clear, there was a fintech push and later it came to include crypto and blockchain, or was that originally part of the thinking?

I would say it was a push for fintech, and crypto is becoming more and more dominant as part of what fintech really means. When we first started this, people were looking for faster payments. And what emerged as an answer is, in a sense, crypto. I remember probably about 2 1/2 years ago I was like, “This is really coming up” – you know, fintech is turning into crypto.

I saw you completed a blockchain course at Wharton. What were some big takeaways?

I took the course when I first came into this role. I basically knew enough about crypto to be dangerous at the time, and I really wanted to find an immersive experience. It was a great program with a group of other people and we really learned from each other and pushed each other more and more.

So the class was mostly financial professionals?

They were there, but obviously there were also local cryptocurrencies that approached it the other way, wanting to learn the financial side. And I think there were lawyers. People’s different experiences mixed together made the course much richer.

How did this turn into customer support? What trends are you seeing?

I would say the demand was much higher on the cryptocurrency side nine months ago. The venture capital/private equity space was full of capital going to local cryptocurrencies, and local cryptocurrencies were in the capital markets. So the stock markets were opening, there was kind of a rush to, “Let’s get ready and go public.”

We were getting a lot of requests to help build controls, help make sure the accounting was right, help build infrastructure – then last fall it really fell off a cliff. And not only did it fall into what we saw in the public markets, but funding froze. Currently, there is limited funding for crypto, so more requests are coming from traditional financial institutions that are taking advantage of this opportunity to build their own infrastructures. They build their own blockchain systems that they use in their own client networks.

If I can give you a tangible illustration, Consensus, one of the biggest, if not the biggest, crypto conferences was a few weeks ago in Austin. If you are sitting on a chair and watching people pass by, the volume of sports coats this year compared to last year has increased dramatically. This is traditional money. That dynamic has changed quite a bit.

You pointed out one of the notable trends – traditional finance – which is among PwC top five for the industry this year. After the collapse of FTX and several other bankruptcies, is it fair to say that we are already seeing TradFi play a bigger role?

Yes, companies that start with intra-company payments are currently the most common. They’ll start with, “Can we create a blockchain and digital payments engine for our own inter-company settlement processes?” Actually, we’re looking at that at PWC. Once we master this and iron out the kinks, we will in turn bring it to our customer network. And then, once we master that, we can scale it up and eventually move to a decentralized blockchain network.

Then, number two is on the custodial side – big investments in security, risk management and working on how we can get to some kind of proof of reserves statement to confirm to people that the assets are safe.

So once you’ve mastered some of these concepts internally, can you bring them to customers?

What’s more: we implemented a new travel system with a blockchain-based supplier. It’s a phased rollout, but we’ve started and the way it works will eliminate the need for employees to submit expense reports. If I book a flight and then take the flight, it is recorded on the blockchain. Now it is known. It also goes to the airline. This eliminates the need for employees to report costs and eliminates the need for a separate payment structure between us and the airline. We do not go through a travel agent.

Going back just for a second to the five trends for 2023 noted by PwC – we discussed the TradFi highlights a little bit – is there one of the five that maybe isn’t exactly where you thought it would be at this point?

I have to start with regulation. It’s not where I thought it would be. I say that and I feel a little stupid because I probably should have known we weren’t going to make any progress with regulation. I’ve thought a lot about “Is the lack of regulation hurting us?”

When you really think about how the history of America has developed, in every cycle of innovation that we’ve had, we’ve had no regulation—regulation usually lags behind. I actually think it encourages innovation. And while I know there are a lot of people who want it—and I want it too, because I think it creates some barriers for us—I think it’s also a means of fostering innovation.

Would getting one bill through Congress create some sort of snowball effect—other laws could follow more quickly?

No. Just look at how Congress works right now. Nothing snowballs. I don’t think that would be the catalyst. It’s going to be a tough push and Europe is ahead of us at the moment, Britain is ahead of us, Singapore is.

What does this mean for the future of finance?

The big players that exist in finance today, I don’t see them being disintermediated. I see them adopting and innovating and acquiring and being part of the future of finance. There’s always a handful of new players that really come to the fore, but I think overall the traditional big, big names will still be there.

What I think is fascinating and people don’t seem to latch on to is what we just went through. We’ve been through a crypto wave, then this metaverse wave, and now we’re into generative AI. And there may be another thing after these things, but they will begin to converge. And the real future is a digital experience with digital assets as the exchange mechanism, accelerated by generative AI. We are experiencing this right now. We see little of that. I don’t know about you, but I don’t carry much of a wallet anymore. I pay with my watch, my mobile phone. We are not that far away from fully digital assets. When I think about the future, there is no paper money.

Is there anything else our readers should know about what PwC is doing in this area?

We are starting to do some interesting things with bringing together ESG concepts and blockchain. We did a project to assess the carbon footprint of a particular blockchain and we were actually able to show if you use it appropriately and integrate it with the financial systems of the company, with the systems you can eliminate, you are carbon negative. There was a big wave of “Crypto is terrible because it uses all this electricity,” but we’ve moved away from that.

From a social finance perspective, how can we bank the unbanked? How can we get resources into the hands of people who can’t get financial resources without paying exorbitant fees? It can turn crypto from, you know, a “greedy thing” into a social good, and I want to be a part of that.

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