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Educational Alpha
S3: Conversation with Eoin Motherway Independent Chair and INED to Funds, Management Companies, Fin/RegTechs, eMoney Institutions and Digital Assets/Tokenisation
00:39:51
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- [00:05]
Bill Kelly
Welcome to Educational Alpha. I'm Bill Kelly, your host, bringing you on the ground conversations with business leaders, educators and industry colleagues from around the globe. Educational Alpha is sponsored by iCapital, the financial technology company with a mission to power the world's alternative investment marketplace. Part innovator, part educator and part navigator of the alternatives industry, iCapital offers intuitive, scalable digital solutions that have transformed how private market and hedge fund investments are bought and sold. With iCapital, financial advisors, wealth managers and asset managers around the world now have access to everything they need to deliver the return and diversification potential of alternatives to high net worth investors. To learn more, visit icapital.com.
- [01:01]
Owen Motherway
In this episode, Bill welcomes Owen Motherway, a seasoned finance professional whose career spans investment banking, fund accounting and digital asset management. Owen recounts his path from chartered accountant to head of a major asset management platform and now to a portfolio career bridging Tradfi and DeFi. They explore the impact of regulatory change, the rise of tokenization and the increasing intersection of technology and finance. Owen also shares insights on port governance, financial literacy and the evolving role of independent directors in today's tech driven financial landscape.
- [01:35]
Bill Kelly
Owen Motherway, welcome to Educational Alpha.
- [01:38]
Owen Motherway
Thanks Bill, Nice to be here. We've been talking about it for a while, so nice to get it on the docket.
- [01:43]
Bill Kelly
It is great and we cross paths often at IOB and Certified Investor Fund Director forums and we're going to get into what that all means. But I think the last time I saw you, maybe I didn't order it, but it was over eggs Benedict in Cork and I had spent some time with the university doing a guest lecture and it seems like you are either the de facto or maybe in reality the mayor of Cork. You seem to know everybody there and it was great to see you in your home territory in that particular county where I have relatives way back when too. So maybe the love of Ireland, mine and yours, will come out in the course of this as well. But true to form, in terms of structure, I do ask the guests to maybe give a little bit of the background. As I said to you before the microphones came on, you have a very interesting background because I would describe it as something that was deeply involved in tradfi and then it seemed to have flipped immediately to DEFI without any direct segue and I may have misread it or misstated it a bit, but as you tell me a little bit more about the background, maybe some of these pieces will fall into place.
- [02:49]
Owen Motherway
I started my career in a very boring way in that I'm an accountant. I trained as a chartered accountant with Deloitte. I went to college and university in Cork, trained as an accountant in Cork and at a certain age, in my mid-20s, my mother had seen enough of me and it was time to go to London. I was quite fortunate, I think. I landed into investment banking in London in May 1998 and I had secured a role in back office Controllers with Goldman Sachs. And it was a really interesting period of time I spent there. I managed to stay in London for six years and throughout that time I kind of saw one crisis after another. From the Russian debt crisis in 98, the euro conversion project where we collapsed, I think it was nine or ten currencies into one new central block currency, followed by the Y2K, followed by the traumatic events of 9 11, followed by the tech bubble bursting and all the way through that. It was just voracious learning. And I think having spent six years in one place, I probably learned more in six years not job hopping around than I would have in 10 years had I gone from one place to another. So in 2004 I came back to Ireland. The funds industry in Ireland was just about 10 years old. So coming out of an investment bank and coming back to Ireland into the funds industry, it was like having Willy Wonka's golden ticket. There was lots of firms looking for external experience from outside of Ireland, particularly from London, which at the time was and out and out the dominant center for financial services. So I went into a Boston led firm called Investors bank and Trust, which was subsequently bought by State Street. As is the way with my career. I've been through maybe four acquisitions over time. Two as the acquirer and two as the acquired, which will come out as I run through them. I left State street to go to bank of New York for two reasons. One, the role was really interesting. It was to head up fund accounting for Ireland and run teams generating an industry that was really, really growing exponentially at the time. And the second really significant factor was that bank of New York had just opened a regional office in Cork, which is where I'm from. So it was the chance to move home. So for the next eight years I was involved in running fund accounting across Ireland, Luxembourg, the uk. We outsourced work into India to Poland to Manchester. We had passed the book models using teams in Florida, New York. It was thoroughly, thoroughly interesting. So I kind of described it as my mortgage was in Cork and my career was where I woke up because I ended up with teams all over the globe and it was great to be able to travel and learn how some people are doing the same job, but doing it in very different ways. And all the way through that, of course, was the start of, I think, what the industry would call digital transformation. So where stuff first got digitized, taken off paper, then it would go through automation routines. And in the current climate, we're probably really hitting digitalization, and I think we'll probably come back to that in due course in about 2016. After a career of 12 years in fund accounting, I didn't see any other milestones for me to hit in that particular sector. So at the time, a very significant piece of market practice from the regulator was in its second consultation period, and that has only happened two or three times in the history of regulation in Ireland. And it was consultation paper number 86, colloquially known as CP86. It has a big, long formal name like Fund Management Governance, but everyone, including the regulator, calls it CP86. And it's basically how you set up a fund management company, how it should be run, what the designated roles in there are, how the board should work and all those kinds of things. So at the time, I went to work for a client, which was Willis Towers Watson. I had a long interview with the guy who was starting a digital asset management platform for Willis Towers Watson, and at the end of the hour I said to him, look, there's this thing in regulation right now called CP86. It's going to be significant. In three or four years time there will be a retrofit coming. Why don't you get ahead of it and put your management company into Ireland? And I said, if you want to do that, I'm very happy to work on it. My only condition is that I would base it in Cork and not in Dublin. So there was a long pause and the pause was probably only two or three seconds. It seemed like an eternity because I was really putting all my chips on black. He came back and said, well, I grew up in Kerry, next door, so that would be no problem. In the blink of an eye, we had reached an accord and I spent a good seven years building out the Asset Management Exchange. We were the biggest asset manager outside Dublin, which had many advantages because we had zero attrition, we had lots of really good resources looking to come and join us because we were the only big one outside Dublin, and we have lots of international colleagues who wanted to relocate from the us, from London, continental Europe, et cetera. So it was a great journey to build something from scratch. It's a highlight of my career. I think because we had a greenfield site, we didn't necessarily have to adhere to any existing corporate culture. We could build our own. So it was a very flat structure. Nobody had an office, everyone sat on the floor. We had an org chart which really was for HR purposes and comp purposes, but it really was very, very flat. The banter, as you're well aware, Bill in Ireland was absolutely merciless. So we had great fun and we worked damn hard. We built that platform to $60 billion. It was about 15 billion in prop assets and that was across equities, buy and hold fixed income, Smart beta hedge. We had funds under AIFMD, we had funds under UCITS and we had about 45 billion in third party assets. So we were one of the few on the market that was a hybrid management company and we exited that business to the Karn Group and post integration. So that was my fourth instance of acquisitions. So we had acquired PNC and Mellon. When I was in Bank New York, I had been acquired when State street bought ibt and this was Karn buying amx. So post integration, mapping over all the clients, keeping all the clients, which was important. I wanted to look for something new. I've now left about two years, I think what you technically call a portfolio career, I'm building that out, so I'll pause there to see where you want to go next.
- [09:52]
Bill Kelly
So I appreciate the background and maybe just a couple of general takeaways. And I think you said this earlier on in maybe your stay at. I think it was at Goldman and I came out as a cpa, so maybe the same as a chartered accountant. So I'm certainly not going to knock that as a good place to start. And maybe like you, I didn't love it, but nobody's going to ever look down on you for understanding how to read a balance sheet and understand how a business works. But you mentioned the various crises the world faced, every financial institution did when you were at Goldman. And I do want to highlight maybe for some of the younger earlier career listeners, that there's a concept in alternative investing called Crisis Alpha where you try to make something out of a crisis. And whether that's real or not, I'll leave aside, but I think it's also true of a career as well. And the Chinese proverb, living in interesting times, you can learn a lot. And as you're going through the pain and anguish of these periods and they're not a lot of fun, you can get a lot of learning packed into maybe a very nasty segment of a short but brutal bear market or crisis. And these are learning moments and you seem to have benefited strongly from them as opposed to bouncing out and trying something else. That crisis alpha, from a career standpoint, I think you've demonstrated, is alive and well and much more of an asset as one looks back upon it.
- [11:18]
Owen Motherway
There were external crises, there's also internal crises. I spoke to a university class recently and my big takeaway from my career would be run to the chaos. Very early on when I joined Goldman, I had a really epiphany moment in the first few weeks that I was there, which was May 98. I all thought to run a marathon was something enormous, something almost impossible. When I arrived on the floor, there was about 95 on my floor. 90 of them were accountants. It was all sorts of countries and sovereignties there. And there were six people running the London Marathon. So 6% of the floor running the marathon is quite high. So I had said to the guys, how come you're running the marathon? And they looked at me a bit as if I was stupid and they said, well, look mate, we're in London, there's a marathon on. Why wouldn't you? And up to that point I had worked my ass off in college. I had worked my ass off in a training contract where you're paid very little because the reward is the outcome of you qualifying. And you almost got to the point of you were grateful for the next opportunity. And here were these guys saying, no, no, no, you're looking at this the wrong way. Nothing is impossible here. Different things have popped up in my career where there's a problem, everything is solvable, but I stuck on a problem and solved it. Then when I saw another problem, I said, I'll take that. And then people were bringing you problems. So I would say running to the chaos and solving problems has absolutely powered my career to different ways.
- [12:53]
Bill Kelly
I'll just underscore that as well. And I briefly worked for Mellon before bny. They bought the Boston Company, where I spent probably about six or seven years in the formative earlier years of my career. And it was an interesting place because every Monday morning things were up for grabs and there were assignments and responsibilities delegated down and sometimes to me was which I had no business saying yes, but I said yes every single time, knowing that failure might be an option. But what should they expect if they gave it to an early 30 year old who's never touched this before? So I think that's also equally good advice to run toward the crisis and be part of the solution and you really have no downside and it's only up. But I think people say, well, you know, I'm not so sure. I can't handle that. I just don't think that's the way to get ahead. And maybe that's a good segue. Owen, to this next segment of the portfolio part of your career, and I would say by US standards, and I've used myself as an example, and I'm in this level of my career too. It seems like you're coming at it much younger than I would see, maybe in the States, but maybe that speaks to a different transition period for people in the eu. But as I look at these various assignments, for the most part you've graduated into a portfolio career that seems to be primarily represented by DEFI in terms of opportunities. So maybe you can respond to that. There's a lot there.
- [14:26]
Owen Motherway
Yeah, there's probably a couple of reasons for that. So when I was in college, I did accounting and it. I always have seen it as being the great enabler of everything that we've done. I mean, that was back in the last century. Since then, I've done a fintech certification in Oxford. I'd highly recommend it. It brings a lot of current thinking to how things work. Part of the reason I've ended up doing some DEFI work or some fintech and regtech work is I've always had this undercurrent of technology to finance. There is also some situational stuff in that when I came out to start this portfolio career in 2023, almost the week after I left, with absolute worst timing in the world, all the interest rates went up 12, 13, 14 times. So what happens when that happens? All new projects get canceled, all new roles and expansions and things change. There wasn't huge opportunity to go back into a senior executive role that I found interesting. So I took some time out to kind of really sit back and go, well, where am I going to go from here? Because I've done investment banking in London. I've given fund accounting and fund administration a decent shot. For 12 years, I've done asset management. What's coming next? The big thing that's coming across many different sectors is the continuous digitalization of any business. And what was also starting to happen in some quarters is the whole area of tokenization and digital assets. And I mean digital assets, not crypto assets. We can come back and split those apart in a minute. Technology and finance is kind of, in my view, where it's at. My portfolio is quite Balanced in that I'm on the board of Coinbase, which obviously is a benchmark name in the crypto asset space. I sit on their electronic money institution along with the electronic institution for rippling. That's very much finance and tech coming together. I also do traditional board work like I do with Wiltshire or Holborn or other clients that I'm talking to. And that still is my bread and butter of funds and asset management. I've tried to balance it out though in that I also do two roles for the state. So I sit on the investor compensation company for the central bank which is the fund of last resort for consumers who are victims of fraud. And I chair the investment committee for the Western Development Commission which is an Irish sovereign investment fund in the west of Ireland. And that's really interesting grassroots stuff of sponsoring and investing in startup businesses and localities. I'm going from the really minutiae all the way back up to the big crypto piece. And then I have two Fintech and regtech firms who themselves are not regulated but they sell product into the regulated financial services market. All of which reporting is ever changing. The advent of DORA in Europe has been a huge lift for firms for the last year. That still isn't solved. It still has ripples coming through it. I would firmly, firmly believe that within the next two to three years, just over the majority of funds will have some degree of tokenization, particularly on the investor units side of the fund, maybe not the portfolio. I think it's completely applicable in private assets. It's harder to apply it to mainstream global equities and fixed income, but it's very applicable to the investor units in a fund. And then of course we see three or four benchmark firms in Fidelity, Franklin, Templeton, Blackrock tokenizing money market funds. And when we think about money market funds, NAV is one. It's effectively an asset backed stablecoin. So the ability to tokenize money fund means it can be pledged as collateral and there's lots of meetings coming in that direction. So technology is the way forward I think for a lot of finance. I hope that combining technology and finance and one person skillset is actually hard. But I've been at this kind of mix for a long time so I can talk finance or talk tech and hopefully get to talk both in the one meeting.
- [18:38]
Bill Kelly
It's hard to take the other side of that. I agree with everything you've said Owen, but it's interesting if I look at it through a US lens and maybe Ireland is in the same boat and Maybe most of the world is as well. But this democratization trend that is not only alive, it's accelerating, where the big bulge bracket PE firms, just to pick on them for a moment, recognize that fund X +1 is going to have more and more individual assets in those funds. So they are very aggressively building out wealth management platforms to work with the IRAs and gather as much assets as possible. And, and they're using intermediaries like Moonfair, iCapital, Case, et cetera. But essentially it's the same structure, but rather than a drawdown fund, it's an interval fund. Where I would like to think, and maybe this happens in fantasy land, if we slowed things down a little bit and said, okay, the average investor is responsible for their own retirement, they should have access to a part of the economy where asset formation is happening. The home of yield is now in the private markets. But how do we effectively accomplish that? And I think if anybody understood even a thimble full of what blockchain can do, then the power of that and tokenizing assets as opposed to creating liquidity sleeves inside of an interval fund, it would be a much better solution. I fear that this move toward retail access is happening in a way that's not going to be as successful to investors. And if we go down this path, trying to retool the distribution mechanism into tokenization, utilizing blockchain will be all the more difficult. So your thoughts on what I view as perhaps the industry around democratization moving too quickly as opposed to embracing and understanding maybe these next generation tools.
- [20:42]
Owen Motherway
I think where I probably start, Bill, is financial literacy. If you have a conversation about wealth or retirement with the average US person, they understand the whole concept of the 401. They understand about stocks and buying. You talk to the average person in Europe, they don't. So in many ways, financial literacy across various countries varies quite a lot. And there are financial literacy initiatives in Irish funds, there's a government one starting, and all of that is to try and upskill how you plan for your own retirement when you get in then to the democratization. I think it's interesting in the private asset space right now we have new products in Europe called the ltif. In the UK it's called the ltaf. And the narrative is to retailize, that is make private assets available to the retail investor. The retailization of assets. In the Web three world they use your term, they use democratization, but it's essentially the same thing. So how do you get A investments and B tokenized version of the investments into the hands of the retailer. And that's quite hard, except for the up and coming generation who completely get the whole world of doing stuff on your phone, having stuff in your wallet, using your Revolut account. Some of this is going to be a generational shift. And if you talk to the top 10 asset managers, they're quite concerned about the outcome of what a wealth shift from one generation to the next will actually do to their product. Because the wealth will, they think, remove itself from traditional vehicles and end up in more modern, flexible, tokenized vehicles. Which is why you see the likes of Blackrock and others, WisdomTree 2 doing such lengths when it comes to tokenization and wallets. So I think there's a lot to play out. Some of it is linked to financial literacy on a country wide basis. Some of it then is generational and some of it is I still trust the traditional way over the new way.
- [22:51]
Bill Kelly
When you're in the early stages of some of this technology, there are a lot of frauds, fakes and just outright criminal activity. And if I look at just the non fungible token as an example, I think that that is today and tomorrow's stock certificate full stop on a blockchain. But instead we come out with NFTs on silly artwork that is sold at a certain price and the goes to zero. And it sort of lets the air out of the balloon of something that is a very, very good idea. But then it gets wrapped in all this crap around virtual yachts and artwork that really at the end of the day made the seller very rich. But the buyer of those tokens has really nothing left to show for it. So maybe taking that statement how you want to run with it, how do we marry proper regulation? Because ultimately we have to give the investor access, but we have to find a way of protecting them from an area. And any new area is going to involve this. A lot of potential fraudulent or less than transparent activity.
- [23:58]
Owen Motherway
Who knew that a picture of a bored ape would be worth so many millions? If you come back to grassroots for a second, there is a brilliant example of tokenization that has been around for decades and it is probably still the fastest growing product. And that is an ETF unit. When you buy into an etf, you're not buying the underlying securities. The fund is, you're buying an ETF unit that trades on an exchange. So that ETF unit is actually a token that represents a basket of stocks. And if we can keep that simplicity in mind, then we can understand how we can bring investors along with us. I think Part of the challenge you've seen this is where you get into the differentiation maybe between crypto assets and digital assets. We've seen the various horror stories with crypto assets, but there are still some really good crypto assets that are not fakes and scams. How do you protect the investor is what this all comes down to. Whether it's a traditional finance investment instrument, a digital asset investment instrument or a crypto instrument like the Bitcoin etf, or there's a fund by DARE Capital in Luxembourg and the portfolio is all crypto assets. How do you protect the end investor? Which comes back to regulation. So where is the regulation barometer globally? So clearly in the US in the last 100 days, it's been a complete U turn in terms of embracing crypto assets, digital assets. Various lawsuits have been dropped or folded and there's a real embracing of how do we move that industry forward. In Europe you have the market in crypto assets regulation. I really wish they called it market in digital assets and not crypto assets, but hey ho, we're there. That is now live. So across the block of 27 countries we have a homogenous set of rules where virtual asset service providers must become crypto asset service providers by the 31st of December this year. We're in a transition period. What does that do? MICA or the market in crypto assets? MICA is to digital assets what aifmd usets are. The 40 act regulation in the US is to traditional funds. It's a piece of regulation, homogenously drafted, marginously enshrined on a country by country basis where there is no regulatory arbitrage between the 27 countries inside the block. The advent of MICA I think is important. There are detractors to MICA for various reasons, particularly around stablecoins and particularly around DeFi. There will be a Mica 2 just like there was a USITS 2. That'd be a Mica 5, just like a UCIT 5. But the important point is Europe has actually started. So is the uk. The UK has various bits of pieces in train and has a blockchain, sandbox and various other bits and pieces. So I think we're only at the start bill of where this will all go. In Ireland, we've recently set up digital assets Ireland, which is a grouping of virtual asset service providers which must become crypto asset service providers. And when you come back to the customer and protecting the consumer, the lift here to go from a VASP to a CASP is considerable. You're going from a regulatory registration to a full prudential authorization as though it were a management company or a bank or a Fund or a MiFID firm. So there's more and more regulation in terms of rules they have to adhere to, officers of the firm that carry PCF badges and various other obligations in terms of capital and substance, all designed for consumer protection. I think it's coming. We've got a bumpy six months ahead on the road to make sure it all happens. But I do think we're off to a good start.
- [27:53]
Bill Kelly
Maybe one follow up. Owen before we leave this point, I look at this current generation of senior leaders and go all the way up to the recently announced retirement of Warren Buffett in his 90s. I think most investors that have been successful have had obviously access, which is important, but they've done their research and they've made their investments and they diversified their holdings. And as Buffett said, his favorite holding period is forever. And I think the most successful investors are ones who have a certain amount of conviction. They put their money where their mouth is and then they don't day trade themselves to what is most likely going to be a very, very different outcome. And we've seen this in the US with traditional mutual funds, that investors are trading them on a very regular basis and they're really indicating that they're not investors, they're traders. And when it comes to accessing the private markets, we're giving them liquidity windows to play into their worst instincts to probably sell when they should be buying more. So I do worry as we have Robinhood and apps to trade digital assets 24,7 are we creating a generation of traders? And when this generation of traders turns 65, 70 years old, what's going to be in their portfolio? Will they have accumulated enough wealth to get them through their retirement years?
- [29:21]
Owen Motherway
I don't know. I guess there's four types of investor buying whatever asset it is, whether it's a global equity or whether it's a cryptocurrency. The four buckets I would put them into are funds where most of the investors there are pension schemes, insurance, corporate treasury and then individuals. In the case of the pension schemes and the insurance, they're just putting their cash reserves to work. Particularly insurance is a degree of liquidity that's needed for various claim payouts and stuff like that. So that kind of triggers some of the trading in and out. But generally speaking, those monies sit and grow. The corporate treasury piece that's always going to be churned because the business circumstances of any business changes, quarter to quarter. The investor piece, I think is the smaller part of it now. It's probably not the smaller part of it when it comes to crypto assets. It's probably flipped around. What will they end up with? I don't know. It's probably too early to tell. I do think, though, it won't all be day trading in crypto assets. I think the advent of newer technologies and walleting and various apps and the generational shifts that we talked about, moving from traditional assets to more flexible assets, but still being in the traditional asset classes, how those are housed in wallets individually, maybe in a segregated account model rather than a fund model, I think they will sit side by side with the crypto piece. What the percentage split will be I think will change.
- [30:49]
Bill Kelly
And it's probably maybe more of a US phenomena where the defined benefit structure really doesn't exist anymore for most people in the us unless you work for a municipality as a teacher, firefighter, et cetera. But the average person working in the private sector does not have that. So they have various options to choose from. And I think that list will get longer. There'll be digital offerings on there and they'll be able to access these on a regular basis. And again, I think too much choice and too much 24 by 7 by 365 trading is not necessarily a good thing. But maybe part of what I've seen, and I think this is going to continue, we're not going to have TRADFI in one side of the street and DEFI in the other. I think we're going to start to see, and we're seeing this already more and more of a convergence. And I think there's going to be probably somewhere down the line a fair amount of M and A activity where TRADFI is waking up and saying, I need to have more and more of these tools and they've got the balance sheet to bring them in and maybe that's how we reach the promised land.
- [31:53]
Owen Motherway
One example I'd use if you just stay in cash, forget about securities for a second. My daughter texted me one day and she was in the canteen in school and she wanted to get soup. She had no money. By the time she got to the top of the queue, I had revoluted her five Euro instantaneous transfer from my wallet to her wallet and she got the soup. The downside, which I think is where you're pointing, is that the 247 model 365, if you think back to the major crises that you and I have lived through, in particular the collapse of Lehman in 08. Every firm that went into chapter 11 over that six to ten week period, it always happened on a Sunday evening. So you had the two days of the weekend as a safety valve to get stuff in order to get stuff in line to make the market announcements, to manage the exchanges. That's not there anymore. That's the only thing that worries me about all of this. Progression and connectivity and speed. All great. But what when something goes wrong, where's the safety valve to take a deep breath, have the crisis call, get the team assembled and come out of the gates with a resolution plan? That's the bit that worries me.
- [33:06]
Bill Kelly
It'll probably take one big crisis to figure out what those stopgap measures might be. In the remaining minutes we have, I want to talk about where you are today. More specifically in the boardroom. And we're both trained accountants. And having somebody that can be an audit committee, financial expert and run a proper audit committee used to be one of the desired traits and still is, hopefully for me and also for you when it comes to board structure. But I think more and more of these boards are thinking about the role of technology and there may be some organizations that view it as a cost center and if they do, they do that at their own peril. And I think they're already writing their own obituary. It is a strategic imperative and it's getting more and more complex. And as governors sitting in that chair, we may be overseeing certain risks that we didn't encounter in the entirety of our career. And I think you mentioned that that through the European Central bank and the Irish Central bank as well, there is some either suggested or more specific regulation about really needing to have a technology expert on the board, which, if I've stated that right, I think it's excellent. But what is the state of play of technology in the boardroom? And how well do you see the average board suited to take on some of that risk oversight?
- [34:30]
Owen Motherway
I think I'd probably start with how much different is it being a board member to an EMI or a payment firm than it is to being on a fun board? And the reality is it's actually not that different. They both are regulated, they both have control frameworks, they both have risk appetites, they both have a compliance person, a regulatory person, an operations person. They're very, very similar. The only thing that's different is the actual product and how you look at that product and govern that product can actually use all of the same old skill sets. I think for the last 15 years, in any board meeting when there's an error, the board will always ask, well, is that going to be automated? So it's usually a manual process failover or a handover between one piece of the business and another falls over. It's generally not a technology issue. It's more of an absence of a technology issue we've kind of lived through. Is that being automated, is that being reconciled? I think where we're moving to is it's no longer about have you reconciled something? It's about, have you verified something? Has this been verified as true and appropriate and can it be used? In February of last year, the European Central bank did issue what I would term an expression of expectation. So it's not regulation, it's not law, it's a short pamphlet expressing an expectation. And the verbose version of it is we expect NCAS to expect of those that they supervise to have an independent director who understands technology or a savvy in technology in straight English. Currently, that means we expect the central regulator of a country in Europe to expect of their bank board to have somebody who has some technology savvy and is independent to the board. It's inevitable. When you think about tokenization, fractionalization, walleting and all that's going to happen with DEFI and tokens and stablecoins, and particularly in my view for the funds industry, the tokenization of investor units, it's inevitable that any good board should have an INID on there that understands technology or blockchain or programming or something, and not just I'm a regulatory expert or I'm a law expert or I'm an ops expert. To me, it's inevitable that that expression of expectation for banks will trickle down through every form of regulated activity if there's an end consumer to be protected.
- [37:06]
Bill Kelly
This is maybe a good exclamation point. You've created a new startup with our mutual friend Giles Swan from the iob, and I think it's called Quarried. And it's basically as you described it before he came on the tinder for Ineds. And I don't know if that has a technology linked to it. And maybe if there are aspiring ineds out there that want to get onto this platform, you could tell them how they do it because it might be a commercial play, so to speak, but having more qualified ineds is a better outcome for all investors.
- [37:39]
Owen Motherway
To me, there's two things. I think there's absolutely a shift towards Ineds being certified, whether that's with IOB or insaid or FT or whomever. To have a qualification of an inid, I think is a good grounding basis in terms of how you look at things. What Giles and I are trying to do is take skill sets, knowledge sets, specialisms and individual personal criteria and create data and then match that with the job spec that's being sought by the regulated the regulated board, whether that's a fund or a bank or a management company. It's the automation and using data rather than sweeping pros. And to combat potential unconscious bias, there's ways of viewing the data in a blind way. So you just see the data, you don't see the person or their picture or their voice and so forth. So it's coming later in the summer. We hope it'll be a good marketplace to help good ineds get good roles and for good regulated boards to get a good board in place. Because ultimately it's about protection of the end consumer and how you skill set and organize and educate oneself continuously. It is fundamentally a case of lifelong education as a profession of financial services.
- [38:52]
Bill Kelly
Now I agree and if there's a proper link, we can include that when we post this episode. So great conversation. I appreciate you being a constant kernel of curiosity. I think it served you well and hopefully our listeners well too. And I look forward to seeing you hopefully in September for the CIFD gathering in Dublin. I will be there again this year, but if not, maybe somewhere in Cork once I get my Irish passport.
- [39:20]
Owen Motherway
Bring you to the what what we call the real capital.
- [39:24]
Bill Kelly
Outstanding. I look forward to that. Thanks Owen.
- [39:27]
Owen Motherway
Thank you very much.
- [39:31]
Bill Kelly
Thank you for listening to Educational Alpha. I'm your host Bill Kelly. Learn more about the Chaya association and subscribe to the show@caia.org that's C A I a.org See you next time.