Dr Neumann, you have served as an Ambassador to the UK and campaigned for the restoration of democracy and free markets in your homeland. Many people will be surprised to learn that the West’s financial system has an implicit bias towards companies and individuals from emerging markets.
I think what people need to understand is that emerging markets are generally punished in several ways by compliance systems that are inherently biased. The goal of AML is to increase the systems of checks and balances to spot the illicit financial flows, but also to allow development. So far, poorly applied or biased AML compliance systems are imposed on countries that either don’t have the training or have the capacity to conduct that monitoring, but do their own compliance in a manner that is culturally relevant to them, with their own understanding of local market players and relevant documentation.
It also disadvantages licit financial flows, for business and trade finance, that fund economic development and economic inclusion, which are SDGs of the UN and are also in the stated goals of the World Bank and the IMF. Yet if the country systems don’t have the capacity or protocols to meet these particularly Western protocols and the country gets ‘grey listed’ by the FATF regional body, the country gets punished in several ways. First, good financial flows are disadvantaged, by being delayed or outright blocked. Second, if you are grey-listed by the FATF, the cost of servicing your sovereign debt goes way up and, considering that emerging markets already have higher debt burdens and higher interest rates, it’s a real double burden.
I decided to join the Tintra Board because I’m excited about its mission. I think it applies innovative technologies that remove bias, improve economic inclusion and economic development which are all values that I have clearly stated and fought for during my career. This is a bank that is building its systems from the ground up, rather than trying to impose new technology on a legacy system, with which there is friction. Tintra’s approach is completely innovative. Its frictionless technology will increase the opportunity for entrepreneurs and economic development: both are things I care about.
How do I see my role developing? Hopefully, my credentials in financial integrity and my relationships with multinational organisations like the OECD, FATF, OAS, UNODC will be helpful to bring forth a productive dialogue between Tintra and those organisations. I hope also to bridge nuanced and effective relationships between Tintra and the Western Hemisphere, particularly Latin America.
It seeks to overcome them by having, on the one hand, regional knowledge, and nuance of how those countries work, together with genuine insight on what “good” or proper documentation and identity identification look like, and what are normal and acceptable behavioural patterns of these people doing these transactions. And then, on the other hand, you are also building the technology that will access that knowledge and analyse those factors in a way that is unbiased. I think that’s a very worthy challenge.
Yes, I think so. I think it will be fantastic. As I said several times, the current Western-style system of anti-money laundering causes more than 90% of false positives, flagging people that are not doing anything wrong. It’s very burdensome; it’s very expensive, and yet you still have financing of terrorism and transnational organised crime, while more good and honest businesses and individuals are unjustly punished. This is not only unjust but counterproductive. What we want is to capture more of the illicit financial flows, while enabling (and indeed facilitating and expediting) good financial flows, linked to trade, finance, and development.
AI properly built and applied is key to that. I think that Tintra’s approach is good because they are starting with that, rather than trying to backwards induce an AI system on an older legacy system. This is something I think most banks are finding very challenging. The way Tintra is building its framework ensures that its systems will not only be more efficient now but continue to innovate well into the future. Tintra will be the world’s first bank purpose-built for Web 3.0.
On International Women’s Day 2022 (March 8th), my work with Tintra is particularly satisfying. First, as a woman, who is also Latin American, it's both a great honour and responsibility to bring those twin identities and voices to the board of directors of a financial institution at the forefront of both banking and technology. Second, women are always the ones who struggle the most when there is a downturn, and the pandemic put that into stark relief. As entrepreneurs, particularly in emerging markets, women are severely disadvantaged in their access to capital and financial services. Tintra’s unbiased and always on AI-driven compliance system should level the playing field for female entrepreneurs everywhere – and that is something I will be proud to support.
Small businesses are facing the most uncertain economic time in recent history, yet the Make or Break Report 2017 from Xero examining the opinions and character traits of successful small business owners going into 2017 has revealed irrepressible optimism as a common trait.
Small business confidence was still found to be high, particularly with very young businesses, despite economic uncertainty being the most pressing concern for UK and US business owners. The vast majority of 1 year old (94%) and 2 year-old businesses (84%) said they felt more confident going into 2017 than the previous year, and over three quarters (79%) of small businesses said they felt confident about their business’ survival in 2017. For those going through a tougher time, nearly a fifth said they expected 2017 to be a turnaround year for their business. So why is it that small businesses are feeling so confident?
They want to cut themselves free of the red tape
They are shunning traditional office structures to increase productivity
They are prioritising the health and happiness of themselves and their employees
They see themselves as in control of their own destiny
Keeping grounded
While confidence and optimism from small businesses was found to be the underlying trait of small business owners, the report revealed areas for improvement and viewpoints to consider.
Gary Turner, UK co-founder and managing director at Xero, said: “Our report has revealed a remarkable trait among small businesses to look on the bright side, particularly in the current climate when faced with so much uncertainty. Given the importance of small business health on our economy here in the UK, it is fantastic to see that small business owners are feeling so confident about the future. But, as cash flow and healthy finances have never been so vital, owners must keep a sense of realism and listen to external advice and support to ensure that business continues to grow and prosper through the next few years.”
Josephine Fairley, Green & Black’s co-founder and serial entrepreneur said: “Owning a business is invariably a rollercoaster full of ups and downs and you must learn ways of thinking your way out of difficult situations, so it’s brilliant to see such optimism coming through as a defining quality in an entrepreneur from Xero’s report. Having a concrete plan for your business combined with a can-do attitude can help you to win regardless of what you are faced with.
“While optimism is important, consulting with experts and keeping on top of your data can enable you to make the right decisions for your business that will help you not only survive, but thrive.”
(Source: Xero)