YASIN QURESHI, founder of the NAGA GROUP and the youngest person in Europe ever to have obtained a banking license, chatted to us about the shortfalls of the banking industry, and how he and his company are helping to change things for the better.
Tell us a little bit about yourself. How did you start out in the finance industry?
Having Indian roots, I was born and raised in Hamburg. I began to study Arts and then business administration at the University of Hamburg, but dropped out after I figured out that experience is the only worthwhile study. I got kicked out of every job I had as a student for trying to implement more efficient ideas. Then, I founded and ran my first algo trading company, which later turned into an investment bank. I was turning my passion into money (which is today’s mission of my current company, NAGA). Most likely I ended up in this industry thanks to my obsession with the relationship between numbers and psychology – a chart of a financial market represents fear, hope and greed in a fascinating mathematical, and sometimes logical, way. It represents an attempt to grasp and make sense of an incredibly complex wider reality.
How does it feel to hold the record for the youngest person in Europe ever to obtain a banking license?
I think it’s both a privilege and incentive at the same time. Getting a banking license involves a very complex and long process of inner planning and preparing, as well as constant reporting to regulatory authorities. I was working during the day on the business and working on the application at night myself because I couldn’t even afford a proper law firm, being just a college drop out with a small algo trading business. I had to adapt to an ever-changing and increasingly regulated environment. But above all, gaining public trust is paramount, and this can only be ensured by embracing the higher regulatory and reporting burden, to demonstrate your ability in meeting the challenges. That said, I think that regulations within the banking space have run out of proportion. Compliance paranoia has made people scared of their own shadows and banks are hence unable to move, and have forgotten about innovation. This complete over-regulation is one of the reasons I quit banking. Looking forward, regulations etc. should be implemented within technology (like smart contracts that trigger certain actions), rather than wasting billions of dollars in human capital and brain resources on accounting, audit, tax and compliance, that do nothing else but dissolve within themselves in an artificial, self-created and zero value generating world of entirely useless self-administration.
However, back then when things were still reasonable, trust was given to me when I was 25 years old. I take pride in this, of course, but more than that, I feel great responsibility and take it as a source of motivation for the ongoing realisation of my new projects.
Do you feel a responsibility to ‘pass it forward’ and help make the industry more accessible and diverse?
As innovators and providers of financial technology, we have to have the responsibility to make the industry more accessible and diverse. This includes not only creating and providing new financial disruptions within the entire banking sector, but, moreover identifying, acknowledging and mitigating potential negative risks on the very global audience we aim to serve. A lack of transparency, greediness and other factors have led to a huge level of distrust in the financial industry. The new technological advancements, however, have given the industry a second chance to change the perception of the customers and end users. The structure of society is constantly changing, and with it, behaviours and expectations. As clients are becoming more accustomed to the customer experience provided by global companies such as Amazon or Facebook, they expect the same level from their financial services providers. Customer centricity, therefore, should become the main priority in driving and shaping the financial industry to the better.
Tell us about NAGA and what made you start it?
Me and my colleagues were keen on bringing technological disruptions into the financial industry and to create exciting new applications, markets and products for billions of people, that function on the basis of apps, digital platforms and smartphones, all coming together in a one-stop experience.
By including asset classes like virtual goods or cryptocurrencies that are used by billions of people, NAGA enables people to turn their passion into wealth and participate in the financial markets. We’ve built and are further expanding a comprehensive ecosystem that unites financial, cryptocurrency and virtual good markets.
How do you choose which projects to support?
The greater the impact of the project, the closer you have to look at the structure, plan and the people behind it before sticking your thumb in the air. We at the NAGA GROUP consider ourselves a family in which decisions are taken by consensus. Everyone looks independently at the projects we might support, and in the end we come together, discuss the issue in detail and trade off the pros against the cons. In this field of business, you cannot make decisions by guess, as your decisions may affect a large crowd of people.
Which financial products that are out there at the moment do you think are likely to make a real change in the industry?
I think Social Trading will make a real impact on the structure of the current industry. So far, analysts, bank consultants and financial journalists have told us where to invest your money best. This concept is highly patronising and reflects a vertical relationship between different sets of stakeholders. Social Trading, however, has made it possible for anyone to manage an online investment portfolio exactly like an experienced investor would, with easy-to-use platforms. Just like with any other social media platform, social trading allows you to copy or follow those that you admire (for their successful trading). This concept empowers individuals and will lead to a more horizontal banking industry.
The second concept is AI and machine learning. Human beings have certain weaknesses, inconsistencies and biases that algorithms, AI and ML don’t have. I personally started coding my own strategies in hard wired algorithms because I often found myself unable to consequently execute them for different reasons (which were basically just ‘being human’). By merging these two concepts of ML and AI, as well as wisdom of the crowd, you will benefit from the best of both worlds.
Do you think blockchain and crypto technologies are likely to make the finance industry more inclusive?
Without any doubt, yes! The NAGA GROUP, including me, are absolutely convinced by the potential of blockchain and crypto technologies in making the financial world more democratic and, thus, inclusive. Just like the African continent skipped landlines and went straight to mobile phones, a lot of users will go straight to digital wallets without ever having had a bank account. The only thing you need is a smartphone or a laptop, and here the internet is globally more evenly spread than income. Our company is working on creating a framework for financial inclusion in which you can turn passion into wealth – whether in financial markets, cryptocurrencies or virtual goods. For instance, imagine a World of Warcraft gamer in India will be able to use his in-game acquired weapons or tools as collateral to buy apple shares and load the profit on the NAGA CARD to do grocery shopping at his local supermarket. Blockchain technology makes it possible.
What do you imagine is the bank of the future, say, in 10 years’ time?
I am pretty sure the traditional banking sector has had its day. Today’s global connectedness and the increasing movement of people is absolutely at odds with the way old financial institutions use and think of finance. We need an entire reconceptualisation in this sphere, and the transformation is already taking place. The bank of the future will not necessarily exist on a certain spot, but will instead be available to anyone with a laptop or other mobile device. Neither will the banks of the future have their focus on the traditional asset classes – investment will evolve into virtual assets like cryptos or virtual goods. So far, we have only scratched the surface of the behemoth investment banks’ businesses, but this is about to change.