#33: Democratizing Access to Investments – Story of Software Podcast

Padraig Coffey, CEO at Zartis and podcast host, is joined by Juha Ristolainen, CTO at Upvest, as they discuss technology-enabled democratized access to investments.



On Investments

The Guest – Juha Ristolainen, CTO at Upvest

Juha has 34 years of programming experience and two decades building digital services for a living. He has worked in big companies and has enabled small ones to scale across sectors such as travel, automotive, logistics, eCommerce and fintech.

Juha is currently the CTO of Upvest and working on an exciting new product that will enable easier access to investment for everyone – not just a few. 

Understanding The Investments Landscape

Juha shares his expertise on using technology to enable access to investment. 

Some of the topics covered include:

  • The main challenges of enabling access, as well as the opportunities.
  • Tokenization, the new asset classes.
  • Robinhood and Gamestop.
  • What is next for the world of investing? 


Episode Highlight


Transcript (abridged version): 


Juha, maybe to kick off, you could tell us a little bit about yourself and what you’re working on right now?

Yeah alright, thank you and happy to be here. So, as you mentioned, I’m one of these lucky people who had a hobby which turned into a career. So I knew from a pretty young age that this is what I’m going to be doing for a living. So I was born in the 70s and when I got my first computer, probably around 1986, we used to have these magazines and program listings at the end of them, and you type that into a Commodore 64, and so something happened on the screen. Pretty soon you started tweaking those and changing the numbers from the listings and seeing things change on the screen, and that was magical to me. That’s why I already knew that this is what I’m going to be focusing on, building things with software for a living. That’s pretty much what I’ve been doing for the last more than two decades now. I’m originally from Finland, but I spent the first part of my career on the consultancy side when I joined a small Finnish consultancy when they were small. With that company, I had a chance to grow and see a lot of different sides of building software for other companies, which also allowed me to travel to foreign countries and be a part of actually setting up in both Germany and the UK, which is where I’ve spent the last eight years. Currently I’m in Berlin. I just moved here from London last summer. I think Berlin is a great mixture, not as big as London, but great startups in a really international way. But yeah, after that first consultancy, I’ve been working in different kinds of companies building digital services, from ecommerce to travel, water, logistics and quite a lot of blockchain stuff, and fintech for the last few years. So just before I joined Upvest last summer, I was in London, leading the B2B engineering for Wise, one of these FinTech unicorns over there, where the B2B side was actually really close to what I’m doing right now, where we had great capabilities on the platform. But then we wanted to allow other companies to embrace those capabilities right into their own products. So basically, using the Transferwise API to allow easier, cheaper and faster cross currency transfers to banks like Monzo and N26 and these kinds of companies. So that was my sort of start in this API and embedded finance journey, which we are now continuing at Upvest. Basically, we are building an investment API platform. The product is an API. So other companies who are our customers would integrate our API into their own products and allow them to offer all kinds of capabilities to their end customers building whatever it is that they want to build, from just traditional investing in buying stocks,  ETFs  and underlying cryptos as well, but doesn’t have to be just building the next neo broker.  It could be that we just want to do a different kind of a loyalty program, for example, where you don’t get points, but fractional shares, for example. So we don’t really want to build the next big wealth management app ourselves, we’ve enabled the next 20 of those by providing an API platform for them to focus on what they need to do, instead of having everyone do the same difficult bits all over again.




What are the challenges and risks that you need to bear in mind when you’re going the route of trying to democratize access?

This is a heavily regulated industry, so we have to follow all the regulations that are mandated on us, which always poses its own challenges. How can we make a regulation but in the most low barrier way to our clients? How can we make it easy for them to achieve this? How can we streamline these processes? These processes have been in place for a long time, but you can always do things a bit differently,and as long as you meet the requirements, our job is to try to automate as much of that as possible. So obviously, there’s a bare minimum that you want to do. But we also always want to go beyond what is required from us, our end goal is always to focus on what is the best outcome for our clients. How can we make it easiest for them, but on the wider picture, like democratizing access to investments, I think there’s a lot of misconceptions  if you ask a normal person in Germany, for example, what do they think about investing? They might say that it’s for the well off, or the rich. I think financial literacy and education is one thing that we need to get  into more people’s heads – that it’s okay to start investing with just putting 10 euros a month aside, it’s a start, it’s not something for the rich. But then, with education, you have to always keep in mind that yes, there are risks involved. Investing always carries risk. So not to put in more than you’re willing to lose, for example. So our job is to provide all these building blocks for companies to take and provide. If it’s a neobank for example and their end users are mostly millennials  or even younger, they don’t want to learn the ins and outs of investing, but they know that they want to start saving or investing. We provide the tools so that they can build a savings plan, just set up a regular savings plan with 10 euros a month aside, and then that’s the extent that they need to know.




I’d like to ask you about IPOs. So over the past couple of decades, there has been a decline in the number of companies for initial public offering. Juha, do you have any perspective on how that may have impacted the investment landscape?

Well, like you said earlier, I’m not an investment expert of any kind. I’m building systems for investment experts to build their investment assets. But like we’ve already discussed, there’s quite a lot of new kinds of asset classes coming up now with blockchain, kryptos, and all these kinds of tokenizing, real world assets and non fungible tokens and all these kind of things that actually, I’ve noticed that in recent years, some companies have opted to go via the direct listing approach. Like my previous employer Wise is doing, they’re not looking to raise more money, they just want to widen their ownership. I think Deliveroo did this a year ago as well. So to me, I think the investment space is just widening and growing with all these new technologies right now.


Juha, I’d be very interested in your opinion on the Robin Hood GameStop situation that surfaced in recent months. What’s your opinion on what went on there? 

Yeah, I mean, to me, it’s interesting and it’s a good example of the power of the masses, and the now 24/7 connected world where people get together, and then sort of this Reddit meme investing. I was watching from the sidelines, but I think it is an interesting phenomenon of the age. The situation with RobinHood, for example, probably would have been mitigated if the financial infrastructure that’s underlying all this was more modern. Currently, when you do these kinds of transactions, money actually settles only a few days later, when the actual transactions are made. So companies have to build up a risk buffer to cover the positions and all that kind of stuff. If you had sort of an immediate settlement and using blockchain technology for this kind of infrastructure underneath, it would mitigate some of those risks, making it more transparent to the whole market. But yeah, I mean, I couldn’t comment on what went on there. It was just an interesting phenomenon. 


Right. My final question for you Juha  is, what’s coming next  in the world of investing?. So without violating any kind of client confidentiality, could you tell us a little bit about what we can expect?  For, you know, millennials and younger, what type of investing opportunities are we going to see? How is technology going to enable that?

So, like we already saw in banking, all these new neobanks, Monzos, and Revolutes of the world, sort of came in there and shook the industry a bit. I think the same thing is happening in investments. So there are all these Robin Hoods and trader publics making it much more accessible to people. So I think the same thing is now happening in the investment space. But in the long term, I still see  blockchain and the technology allowing a much easier access to investing in non-public companies as well as all these kinds of crowdfunding platforms. So there’s a lot of things that could benefit from using these sort of next generation infrastructure technologies and being able to invest in earlier startups without them being bogged down, and all these kinds of things. This gets me excited about where the whole industry is going in the future.


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