Accelerating Blockchain Adoption from Media to Banking | KBW 2023

[Music] good morning everyone rise and shine thank you for joining our session which is accelerating blockchain adoption from media to banking now all of us are working hard in web 3 we're building businesses Building Technology and asking when will Mass adoption happen now a reminder for certain Technologies how long it took to reach 50 million users phone it took 75 years radio 38 TV 13 internet 7 years so we're getting faster iPod 3 years Facebook 2 years Twitter only 9 months and Pokemon go only took 19 days to reach 50 million users so adoption of technology is happening faster but but we have a debate here as we're all building in a bare Market do we hunker down if we build it they will come and be patient or can we design our businesses and products to accelerate Mass adoption so I'm really excited to introduce you to our two guests today who are building incredible businesses and thinking about this every day we have Archie rabish Shankar the founder and CEO of cogy the first digital blanking platform with integrated digital assets and web 3 Serv serves on a single platform it was founded in 2018 and it's been called a super wallet with lifestyle services in 2020 Archie was appointed the youngest board member to the center of advanced defense studies in DC an organization that works to defeat elicit networks that threaten National Security using interconnected sets of information systems and data and the world's largest open source intelligence organization so it's really important work we also have Paul Kim this the CEO and vice chairman of grip laabs and yes 24 so he's got two jobs grip Labs is new Ming smart news app it curates only real issues in media and from different perspectives at leverages AI provides context for news and fosters important Community discussion yes24 is an internet bookstore that was founded in 1999 with 37% market share it's huge it's been called the Amazon of Korea but they also do Music Live Events online advertising publishing media and community and I'm your moderator Swan sit I used to be the global head of digital marketing at companies like Nike Revlon and Estee laer I now work as an adviser on web 3 and create education for an audience of three and a half million followers let's go welcome guys now let's start with a question about your businesses cuz I told everyone a little bit about it but I don't think people understand how unique your approach is so let's fast forward 10 years from now when your company's a Deca corn what does the media write about you in the history books What Makes You Different Archie um we start as a traditional Financial Services um and growing up I always felt that you know assets has to be democratized you know very select few people have access to uh you know attractive asset classes and if we could bring those asset classes to an average consumer a lot more efficient and transparent way there's so much opportunities there and in especially in the United States um you know we don't have a super app because all these apps are siloed as one single apps unlike in Asia and my biggest belief is that if you have to build a super app ecosystem it can only happen in web 3 and the monetization and and and ownership of digital assets I'm talking about non-financial digital assets or reward points or benefits if that could be democratized and people can have ownership of that independently that is a big win uh for this generation and we would love to play a very uh small role in in accelerating that adoption incredible you're being modest but let's see what happens in 10 years now Paul I mean media's really broken so based on what you're doing what will history say about you in 10 years um let's say U we're aiming to be a web3 news media platform and most importantly like it's it should be decentralized so I want to probably start by asking you a question that how many of you have heard of the um the what the Trump Trump a president former president Trump's um fake news um happening in like last April so this AI generated picture of trump getting arrested became a steer in like several countries but no one was able to find out if whether that's the fake news or not until someone clarified it but but let's say the um 70% of Korean people have consumed one or more fake news in 2020 about about 40% of US citizens they admit that they unwillingly shared any fake news in year 2020 so so we are so we are we need a lot of time we're spending too much of our thought process dedicating to decode the news stat we are watching on the portal or the media is the real news or not at the moment so the so the only way that we think that to solve the problem is making a web three product that everyone is kyc and be able to figure out or trust what the kind of news that we're providing is always right and always real so in about 10 years I hope that I would be the my company would be considered as the one of the first web three based Community News content provider that were the first to uh be a first Milestone to the credible Digital Society that web3 all the web3 uh technology is like aiming to be that's what my wish is thank you amazing well I look forward to reading the headlines about you guys in 10 years I've done a lot of research about Mass adoption and there's three things more than three things but minimum three things that we need to have hide the technology and even if you hide the technology you have to make it easy to use but the third thing is you have to solve a problem or fill a need right if you look at cloud computing right AWS started in 2006 Microsoft and Google didn't even launch their products for 5 years but even though Amazon had a first mover advantage of 5 years nothing really happened until in 2008 you had startups trying to disrupt their Industries so when spot Spotify Netflix and Airbnb started using cloud computing AWS took off so you need the technology but you also need to start a solve a problem and it's funny we were out there and someone just asked me they're like you know this panel is interesting these guys are super accomplished but Banking and media like how how are these on the same panel and I say well at the end of the day the end consumers are just people yes we're doing a lot of work to change Industries we're building a lot of tech but at the end of the day the same consumer reads news and accesses Financial products so talk to me a little bit about how important it is to understand the consumer and the work that you're building for them you know in the United States um there are a lot of underbanked people um and there are are people who are banked reasonably okay but they don't have access to very unique asset classes and most of the consumers that we work with are who are our clients they live hand to out right they make uh you know they pay the mortgages they pay the bills they're left with less cash in their bank account um by the end of this month and for them getting into web 3 that learning curve is just way to too high they don't have time to go back when they finish their work and learn about web3 crypto custodial non-custodial wallets stable coins they don't understand that and our main goal was you know when we provide Financial Services banking which is something that everybody needs now we got around thinking how can you make that average consumer reduce the learning curve and make the usability so easy that they can interoperate between Banking and web3 Serv a lot more easier so the first thing that we did we we I mean it was last year when you know we closed our series a we were thinking should we go custodial should we go non-custodial these were uh I would call it billion doll questions because that defined who we are as a company that defined our ideology as a business and what is our opinion about blockchain we chose the non-custodial route so when somebody does a kyc we they get a bank account and a non-custodial wallet within a bank account account on a single platform so that's the first thing that we did um so you don't have to go download have the learning C they already had it with their bank account the second thing we did was the kyc data so we have all the kyc information so when you get a bank account you have to do AML pep sanctions and ofac to decide who you are as a person so we took all the kyc data and turned them into a non transferable nft into the wallet so when you get a bank when you apply for a bank account you have a bank account with with all your banking requirements as satisfied but you also have this additional feature which is a non-custodial wallet and your kyc data already moved into the non-custodial wallet as an as an as an encrypted NFD the whole idea was as we develop that market place of daps coming into the platform they don't have to do kyc again the kyc is a big barrier so for us every time we think about a functionality we think about interoperability between the web 2 aspect which is the Fiat aspect of the traditional banking but also helping them go into this exciting news space of web three and totally reducing the learning curve as easy as uh making it as easy as possible so these are the steps that we have taken to allow for that interoperability to happen reduce the learning curve it is part of their everyday experience and then slowly we have a product road map for the next one year which is it's not very aggressive it's very slowly embedded into their existing application even the user experience we didn't change the user experience on in a fortnite the user experience changes very slowly so people can understand exactly what they're doing allowing them to play little bit on the web 3 side themselves so they are self motivated to do that because what's in there and then slowly adding functionalities to allow for that easability to happen between both in traditional Banking and web3 services so that's how we approach this problem and we take very slow uh considerate steps because numbers give people dish fatigue and we do not want to have dishan fatigue with our customers uh one of the things with web 3 um it grew so fast in in in in in in in 20 in in 2019 and then regulations came in so hard so we as a you know digital banking platform uh you know we our our our bank accounts are FDIC insured anything that we communicate to our consumer are have to be have to go through a whole bunch of compliance ecosystem because you cannot misrepresent your products Services because they hold their their their salary in your bank account so we've been very careful about any functionalities that we launch that people understand exactly what they're getting into the second thing that we focus on is design so that design reduces their cognitive overload and allows them to easily use the platform and self motivates them to learn U you know YouTube videos are great the crypto native people use it people who are in the trading ecosystem learn about it every single day but if you go to an average consumer they just quite they just find it so complicated so that is a cohort that we are really going after um and and we see a uh an amazing opportunity there that makes sense hide the tech make it easy to use and solve a problem now Paul you have the same approach for your businesses right and both of them um yeah unlike the banking bus business this news media business in Korea and some other countries are kind of monopolized with the news portals or the portal sites but the problem of being that is that the portal is monopolizing all the data sets or the revenues or profit from the users of the system and the uh what the contributors or the um contents providers that do not get any of the information nor the um well the right amount of compensation so but the point of web three is all about power back to people so we believe or we made the concept of a keyword as a public property which is like in Korean it's it's a similar as toi Kum so it's uh keyword Kum so that everyone has a chance to advertise what they want to advertise the people by getting the help from the other peers so let's say you have a problem or beef with some big company that spends millions of dollar in advertising on our platform and you have a problem with them you need to talk to the people or let the people know what kind of a hardship that you're getting because of this big company but right now in Korea if you want to do it then you have to go to or find some Community website and try to tell them what happened and let's just hope that will steer the um everything and the major media will pick up and show it but in our platform if you can say to the say the people the peers and they understand that they will lend you the point and be able to buy the cord that you want to buy and unlike the other portals the keywords that that the people buying will come to the as a result with the um the same company or the keyword that you want to show so EX exct same um what the the users or the um the consumers for that specific keywords are going to see your um hardship so another one that we're trying to do is that the uh we created new type of polling using the AI so we kind of borrow the name from the um generative AI so we call it generative polling so the poer survey it's historically been um topped down so all the surveys all the questions are structured in a way polling you already have the given selection so if you have different kind of opinion you won't be able to say it or you won't be able to get caught by whoever is giving you the poll but we made a system that uh you can actually put the comment on any selection that you have and the AI would uh Automatic Auto medically group those like similar answers and give you the sub selection under such a selection so I give you example so let's say our gener poing system ask you that which political party that do you um support party a or party B up until now like all you can do is I either a or b or maybe C Etc I support this minor um party somewhere or there's no way of you to give like additional like opinion on like what I really want from you but for our using our system you can choose party a and I only uh support you because I don't like B I only support to you because of your recent um decision making on S some kind of legislative measure so we create a new system that the um the bottom up type of um opinion iing is enabled so so we are actually focusing on um making a new way of uh mediums that the people even the smallest one would be able to op opinione whole mess or mess public in a way that everybody can have equal power so that's the um I think the Core Essence of the web 3 it's beautiful how you guys put your ethos of consumer first into your product design with accessibility with giving everyone a voice so consumers of course they're the end users are important but let's also talk about the industries because Banking and media are massive and they do not want disruptors they do not want newcomers so how important is it for you to think about your place in an industry is your industry embracing Ai and web 3 and if so does it make it easier because everyone's doing it or are they not embracing it and now you have a first mover Advantage yeah AI is actually not a good thing in the media industry because I see some of the reporters here but you know well that the um the illustrating business or illustrating industry is now taken over by the AIS so um so the web 3 is not embraced in our industry as well because the media industry in Korea is very conservative as well we the the we have uh we're working with six out of top 10 news media companies in Korea which is first time in the history probably I don't I haven't heard any any kind of this thing happened in anywhere in the world and we gave out 5% of share to each of the um the content provider or news media company to make sure that we are decentralized even on the um shareholders side and and um that is actually uh what we're seeing that is the um the initialization of changing things because not as the portal but the media company is coming front to start to change the um the industry itself because like like I mentioned before this fake news AI generated news the algorithms tempering of the comments and the replies in the the current system is inevitable it's not it's inevitable in Web 2.0 but by making the system web three then we we believe that there is a mean and measures to control what is happening in the PF of more people I mean Archie banking I mean these guys are cutting people off who are in crypto and saying we're not going to bank you but then they're investing in crypto assets right and how many of us have tried to wire transfers something after 5:00 p.m. on a Friday so the industry sort of embracing maybe not what's it like to be in such a big industry taking on the big guys um well it it's very highly regulated for sure right but you know now we have fed now already being implemented so obviously uh you know you have instant transfers in other part of the world but um us has implemented fed now so you can make immediate transfers um regulation is always a um is a biggest killer in in banking Innovation um you know I think banks are the original Big Data companies in the world they have an immense amount of data um I always say Google is a Google has a lot of data of ambiguity the banking data is a data of certainty because if I take three months of your transactional data I could write an essay about you a very accurate essay about you and and when you do a kyc you know exactly where you live and you know how much you make you know you can map out your entire your where you're going to spend your next uh your $100 or $1,000 in the next week we you know it's going to be in restaurants or know you have that data set within the web to space you really cannot monetize that data set in the banking world you cannot advertise that data set uh to the consumers it's it's illegal to do so um but this data is is anonymized and and sold to quantitative hedge funds Y and that data is monetized traditionally by the Banks anonymized data but in the web 3 world this data could be owned by the consumer that benefits them so you don't have to go through an intermediary to reward them with such benefits so these benefits could go from a brand to the consumer directly not to a search engine which is which is an exciting opportunity if you look at it for a banking ecosystem that they can provide more value the whole reason for banking is not only to keep your money safe but at the same time provide you more value for your buck that has always been the fundamental thesis and and we think we genuinely think that at cogne that we would be able to provide that service to the consumer while regulation plays a a very hard role in this so we've been very very careful uh since the day we decid to go into web 3 we became the first digital Bank in America to launch a non-custodial wallet uh and people keep coming and asking to us how did you manage to do it you know it depend it just goes back to the fundamentals of your you know fund flow and and and and how you disclose to a consumer your basic fundamentals have to be right right people ask me hey why are you in New York not in San Francisco the reason why we decide to go in New York is that we have a better informed team that understands compliance and regulation the talent pool is quite there in New York city so we took a lot of constructive approach in hiring the right talent and making sure that we work with our banking partner the processor the kyc provider and keep The Regulators informed on what we are doing from day one and and obviously that there are a lot of misconceptions that happen of less understanding that happens uh in DC but lot of funds have been put um lot of Lobby groups have been set up to educate and and help people understand um uh what benefits that web 3 can bring while this adoption is very slow um it is also being thought across for the entire ecosystem that people can actually benefit right if things go wrong people lose their money uh we have seen that happen in in in 2020 a lot of people lost their you know crypto assets they lost their Coachella nfds as well and and we don't want that to repeat again so while I think that um the regulations play as a blocker but it is a it is it is a very good uh you know good good opposition to overcome so that helps you take all the boxes so as a banking platform we really try to make sure that um not only that we are very compliant we we make sure that the consumers understand that you know your Fiat currencies are FDIC insured your digital assets on chain are not and those things are very important uh to do that so while you might say that they are a blocker but they put us sometimes in the right spot but ignorance um among certain group is obviously uh disrupts uh it does not help with Innovation and that has to be overcome for this industry to really um stripe and and also you know the regulations across multiple Nations is in is in different levels of development right and we live in a much more of an interconnected world and I think if any country that needs to be in par with the rest of the world will have to up their game uh to have a much you know even playing field otherwise what's really going to happen is is you're going to be left behind and that is something that we should avoid uh for whichever country uh whether it's it's in in the American region or Asia or in Europe that to come to an understanding of you know you know informed regulation what I like about what you both said is that there's now a concept of a new data economy where where in web 2 the companies who own the servers and the data were selling it the web 3 Model is consumers own it whether they're the ones influencing what goes in Media or to your point Archie the who owns the data Now controls the power and it's even for Brands too because at Nike I was so frustrated not being able to track my supply chain or when people bought high heat shoes the special Jordans they would buy them on stockx or all the resellers or even if you want to buy pair of shoes and you can't go to Nike you go to Foot Locker or lot now the problem is Nike doesn't know who that consumer is but if you chip a shoe and consumers tap it to verify its authentication Nike can look in a wallet and see 20 pairs of rare Jordans and they can airdrop saying thanks for being such a fan of Nike here's a free pair of custom Jordans and you can choose whether you want to kyc yourself to Nike to give them access to your your life and your data now that shoe costs Nike $30 to the consumer it's worth 300 and that Arbitrage used to be made by all the middlemen and now it's direct consumer true direct consumer and you don't have to kyc you just authenticate through cogne and cogne decrypts it for you in seconds even and it saves you $7 Yeah we actually trying to make a blockchain system for not the grip L for the s24 that I'm like ceoing with at the moment that we're selling the um tickets to the concert and the people are selling it back at like you know 10 times of the price exactly and we're we're trying to um employ the blockchain system that you know the difference between whatever the ticket buyers that they have to sell the ticket and the half of the difference like whatever the amount of difference will go back to the artist or the where the um charity uh uh organization where the artists kind of directed it to to go so in that case that the those like you know buyers or won't be able to get the those kind of like not a good profit out of it y secondary markets and how consumers behave with Brands is about to be completely disrupted now we're rounding up on time so I'm going to ask you guys for one piece of advice you would give the audience in thinking about Mass adoption of web 3 cuz Malcolm Gladwell said that the success of any social epidemic with which is spreading something virally is dependent on people with a rare set of social gifts salespeople connectors people who know a lot of people and mavens which is people who share their knowledge willingly with others how do you think about this or any other piece of advice that you would give the audience in thinking about accelerating Mass adoption yeah so you know cogni does both traditional Banking and web3 services and M adoption to these both segments is very very different as you would know the first segment looks at you know uh social media um ads and very specific benefits on the web three side it's always people sharing their knowledge for free their friends their family hey do you know how to you know get yourself a wallet uh do you know what is ethereum do you know what is bitcoin so that's how people get educated so from our side from at least from cogne that we have you know while we have traditional uh marketing methods we are a big believer of people openly sharing that idea and uh their you know what is their opinion of that information Paul last thoughts um I think that Koreans are like the fastest or the smartest people when it comes to the mass adaption about 10 15 years ago I think I remember the Facebook guys were saying that oh our service kind of copyed side world of your carea from '90s but we interpreted in different ways so I believe this web three um community service if it starts and if it become uh like what def factor of everywhere it should start from Korea because like Korean people have like genuine interest in what other Koreans are thinking or the how they're doing and we kind of thought it as a well the people who kind of move moves in a group that in order to you know belong in the group like imaginary group that Korean people think us so uh so our generative polling system would be able to give the people what the knowledge of what other people are thinking or the um the news or the fake news how they comment or replies if they want to see the real how real people are thinking that they would come and uh uh check our uh new service so I believe that the um this um Mass adaption um case of like the mass adaption I think we have a a good chance of the being the first one to be the biggest one biggest community in the world one last thought if anyone pushes back on web 3 in the US I remind people remember when you said you would never get an iPhone because you could not live without the blackberries buttons or when you would never buy anything on the internet because if we took an Uber or a cacao taxi you not only bought that online you got an A strangers car so web 3 is not as far as we think and a huge round of applause to these gentlemen that are building businesses that solve tomorrow's [Applause] [Music] problems