The Finance industry has a long history of being the heart & the brain that power economies. Every time this heart & brain has a problem, economies are impacted. Every time there is some crisis in the financial industry, something new is born that reshapes the economies and society.
That describes more or less the recent history of the financial industry. It is already a decade since the 2008 crisis and complex transformational process is underway . New players using new technologies and new business models, are reshaping the industry. Embracing a new culture in financial services and a new business approach is paramount.
That’s also the story of Efi Pylarinou, an experienced financial professional who embraced innovation and became a Fintech thought leader and influencer. Her vision of Finance comes from her heart & brain that combines her love and experience for the financial industry with her decision to embrace innovation. She wears her Wall Street hat and works tirelessly at the beat of her Fintech heart.
She set up a new vision for Finance, using Fintech tools and pursuings Sustainable transformation & Capitalism with a Purpose.
Question: Can you tell us about you, your education and your initial career in Banking?
Answer: I grew up on an island in Greece, between Italy and the Peloponnese. Zakynthos is right across from Olympia and south of Ithaca.
I was blessed. My father was a humanitarian who walked the talk as a doctor and later became mayor, senator and much more. His legacy is alive today, more than 10yrs after his death. My high school teacher was my life inspiration which led me to study mathematics in Greece and when later I decided to go for a PhD in Finance in the US; I dedicated my thesis to him. It was just after the `87 crash that I switched to Finance and wrote my thesis in 1992 about Stock market returns and Chaos theory.
Q: You are a Doctor in Finance, and a seasoned Wall Street professional who has grown into a global Fintech influencer. What were your career highlights and what is your present focus?
A: My Wall Street career started at Salomon Brothers as a research and structuring person on the fixed income derivatives desk with Myron Scholes. All the LTCM guys, and Michael Corbat, current CEO of Citibank, on the same floor. I got involved in Emerging markets. I had an instinct of growth areas and in retrospect, I usually moved in at the bottoms and rode the upside when most were walking away. I trained in Emerging market crises and in Wall Street corporate culture; the one that Michael Lewis describes in Liar`s Poker.
I left Manhattan and Wall Street right around the turn of the century, as I married a diplomat and had a family. I then worked with a California based hedge fund who was taking advantage of the Asia crisis with distressed debt and equity funds while in Europe (Dalton Investments). Another bottom. I taught part time at McGill, Real estate finance, right as the subprime crisis of 2008 exploded.
It was in the aftermath of the 2008 crisis, that I changed and decided to become a self-taught Fintecher while living in Switzerland. Learning by doing Shaping my vision which combines heart & brain to reshape finance with technology. Technology is impacting society and naturally the way the agents and participants in the economy interact. By being part of this evolution, I see myself as one (of several) activists in this transformation. As a strategic advisor and thought leader, I have the influence and the responsibility to move.
I’ve only lived and worked in the West, where Banking and Finance are mature but not fair and inclusive. I am a Michael Lewis kind of character, a bit cynical, (we both paid dues at Salomon Brothers) so I like to think of the Western financial sector as one coming with a lot of baggage, Efi Pylarinou
Q: You are included in several lîsts, 2019 Onalytica Top 100 Wealth Management Influencer list & 2019 Onalytica Top 100 Gender Equality and Diversity Influencers, 2016 & 2017 Innovate Finance Women in Fintech Powerlist, Women in Fintech DACH social ranking, The Planet Compliance Top 50 RegTech Influencers. What matters for you more as an influencer thought leader?
A: I have been a writer all my life. Published books with Frank Fabozzi about fixed income, like Investing in Emerging Fixed Income Markets, a satiric fiction about life on Wall Street (albeit in Greek), and then joined Bernard Lunn as a co-founder of Daily Fintech, a labor of love. I am also a contributing author in the WealthTech book by Wiley.
Daily Fintech and my book (to be published by RethinkPress) are my contribution to the ecosystem and one of the ways I have earned media. I have a global following especially on Linkedin of over 180,000 followers, that is a community built around my content and dedication to innovation.
Unfortunately, today we still live in a financial services culture which remains entirely male dominated. And I am not referring to the percentage of women in leadership positions, I am more referring to the fact that the culture remains Transactional – you are as good as your last trade – ; Opaque & Boys Club politics – assertiveness from women is interpreted totally differently than assertiveness from men -; and a very short term culture persists.
Q: Over your career, Banking / Finance has changed dramatically. Can you pinpoint what has changed?
A: I’ve only lived and worked in the West, where Banking and Finance are mature but not fair and inclusive. I am a Michael Lewis kind of character, a bit cynical, (we both paid dues at Salomon Brothers) so I like to think of the Western financial sector as one coming with a lot of baggage. When I juxtapose the Street with other corporate sectors and their cultural ‘défauts’, my experience has been that those traits were exacerbated on Wall Street, the wholesale part of financial services. At the same time, however, the Street had attracted a lot of smart, creative, and ‘misfit’ personalities (albeit often for the wrong reasons) which made it a great innovation ecosystem.
In the beginning of the 21st century things started changing, with a lot of talent leaving the Street to go for the hedge fund industry. This was a shift enabled by technology, allowing them access to data and an overall reduction to the monopoly of the informational asymmetry that Wall Street had for decades.
Then came the subprime crisis, which crippled the industry and tainted its reputation. In my opinion, this went overboard. Today I say that it was unfair to point to Wall Street as the ‘Black Sheep’ – when ‘the Mother of All Evils’ was actually the monetary policy that made it all possible in the first place.
Q: Can you tell us the main areas that you think will drive the next 5 and 10 years for the financial industry?
A: Fintech is pushing the boundaries, but in the West, its business model has not changed much, mainly because it is like trying to steer the Titanic. So, we have ended up admitting that banks have the customers, the distribution channels and Fintechs have to collaborate or spend huge amounts of VC money on Customer Acquisition costs – CAC.
Don’t get me wrong. Fintech has benefited directly and indirectly the end consumer, me and you. We pay lower fees by the day, have more freemium tools than ever before; we are being spoilt 24/7. Customer is king and incumbents and fintechs are ‘fighting’ for our attention, to serve us, and to sell to us.
Q: Financial wellness still does not acknowledge the strong tie between Money and Mental Health, is that right?
A: Indeed. And Financial Wellness is highly linked to another area in which I still see a huge deficit, Financial Inclusion.
Financial inclusion has many dimensions and versions. The problem is that we Westerners should stop aiming to retrofit developed markets financial services to developing countries. Impact in Emerging markets has to be down on the ground, designed and delivered in an inclusive way so that it serves the people. We Westerns cannot export Fintech to Africa, Latin America etc.
Q: How can AI help in Financial Wellness and Inclusion?
A: Can we use Artificial intelligence (an umbrella term) to tackle these two social issues, Financial inclusion and Financial wellness, which are paramount? Will banks disappear and rebrand themselves as Wellness service providers? This is the change I want to see. Challenger banks, neo banks, mobile-only banks are not built as wellness platforms. They are upgrades but not breakthroughs.
Q: What are your views on blockchain and crypto?
A: Can we make sure that we keep the core principles of Satoshi Nakamoto, and deploy them for societal good? Only if we use blockchain or DAGs or blocks alone, in ways that solve our large-scale societal problems, will we have accomplished something significant. We all acknowledge that we have the resources to tackle climate change, poverty, education etc. but we can’t sit around a table and arrive to a consensus on `How` to solve them.
If you circumvent the deadlock of taking large scale decisions in a more natural way, an organic and more inclusive way, then we have innovated in a sustainable way. Sustainable, remember, means to Stop Borrowing from the Future.
If on the other hand, we just create new exchanges (for digital assets and tokens) and new investment banks and funds for the new asset class; then we will have missed the opportunity to organize and collaborate in a different way. I already see the risk of just creating the next generation of Structured products, the next generation of Financial engineering – for tokens and digital assets – and forgetting about the inclusiveness, bottom-up and transparent processes.
One of the main reasons that I have decided to write a book on Blockchain, is to draw the attention of a large audience (outside our relatively small group) about the gifts of Blockchain with a loud and clear calling to get involved with your head, hands, and heart.
We have to make an effort to spread the message and the core vision to more people, beyond the small group that is currently involved. Raising awareness through spreading the word and educating people, is the way.
At the moment, I am really passionate about blockchain because I truly believe that inclusion is one of its main attributes and I want to be an ambassador of this attribute.
Only if we use blockchain or DAGs or blocks alone, in ways that solve our large-scale societal problems, will we have accomplished something significant.
Q: What has your experience of decades in the finance / fintech / wealth management industry taught you? What are its major challenges and opportunities for the near future?
A: In business, I spend all of my time with people involved in Fintech innovation. I have a global outreach and I relentlessly connect and interact online and offline. I participate in conferences and events. I read, I listen, I connect dots. I operate in a two-way fashion.
I work as an Advisor with Fintechs and blockchain companies; strategic advice and business development are my areas of expertise. Fintechs in wealth and asset management are my sweet spot. Fintechs that are looking to deploy blockchain to improve their business processes, especially in capital markets. I look for projects that believe in sustainable transformation and capitalism with a purpose.
I work as an Ambassador. My main KPI is to have Impact. Tell me what is your biggest problem? Tell me what the Elephant in the Room is for you, without thinking of budgetary constraints? I will tell you when and how we can tackle this together.
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