You joined Trade Republic just over two years ago. What is your role here?
Our aim is to create a global company. When I say global, I'm not talking about size, but about its reach, its footprint.
Google, Meta, Uber, Stripe or Coinbase, are global companies. Everyone knows them and it's not a question of size, but of standards and the ability to impose themselves on their market.
I like to start with that because that's why I'm here in Berlin. I came to Trade Republic so that we could become a global company that transforms the way we invest.
Do you think Trade Republic will succeed in disrupting its industry like Uber or Netflix?
Every situation is different. I believe in Trade Republic's success because finance is a highly regulated industry. When you're in a less regulated environment, or even one that's not regulated at all, it's a lot more complicated to compete with the Americans who have a lot more capital.
The advantage of a regulated activity like finance is that it creates a common framework for everyone. You can't have an Uber or an Airbnb arriving and imposing its rules. This is an opportunity for European players.
How do you see Trade Republic?
We are a company that enables people to invest their money in the best possible way over the long term. This is a fundamental issue. Your money represents your work, all the time you've invested. In the United States, this subject is taken more seriously than in Europe.
Does Trade Republic give advice?
No, our role is not to tell people what to do, but to enable them to do it.
Trade Republic is not a bank, but you don't like being thought of as an 'investment app' either. What are you then?
That's a very good question. We don't want to become a bank with a mobile app, nor do we want to be an investment app with a banking licence.
We're convinced that the investment world is going to undergo a revolution, and we like to think of ourselves as the "Booking" of investment.
That is?
I'm old enough (40, ed.) to remember my first holidays when I still went through travel agencies. In those days, and they still exist, they would provide you with packages including hotel, plane, and all that would cost you 2%, 3% or even 4% commission. It's the same thing in the financial world.
Today, you're able to invest your money directly, just as you can book your own hotel, take your own plane...
Is it as simple as that?
No, of course, you also obviously need to have the right product, the right design, to have as few costs as possible. We have a simple system at Trade Republic that sets us apart from the competition: it's 1 euro per transaction whatever the volume.
Is this the only thing that sets you apart from the competition?
When I arrived in 2020 to take over as head of data/engineering at Trade Republic, Tech represented 40 people. Today there are more than 200 of us, and we've invested a lot in this area (there are 700 employees at Trade Republic, editor's note).
You raised $900 million in 2021 at a time when the markets were euphoric. Isn't it too complicated with this Bear Market?
Everyone is affected, there has been a drop in activity, but we are cautious. Paradoxically, the fall in the markets is also encouraging people to invest. They're telling themselves that now is the right time. That's why we've had a very good start to 2023.
Germany has a strong fintech culture. How do you explain this?
The German economy is the largest in Europe. If you add to that the fact that there is a real savings and investment culture, in any case more than in the rest of Europe, as well as a lot of engineers, you have quite fertile ground for the development of fintech.
Who are you talking to?
If I tell you to everyone, you won't believe me, even though that's the case.
Of course, we're targeting working people who want to invest, but also retirees, and from that point of view there the current debates in Europe on pensions show just how crucial the management of long-term savings is, and of course also younger people who are attracted by alternative products and crypto-currencies in particular.
Trade Republic allows you to invest in crypto-currencies. Why? What do you think of this universe?
Lots of good things. Let's face it, cryptocurrencies have become a major topic. Individuals are interested, businesses are interested, even governments! The toothpaste is out of the tube and no one will be able to get it back in.
Look at what's happened in the last few days. Several US banks have just fallen, people are looking for an alternative financial system and cryptocurrencies are part of the answer. Especially for the new generation.
Cryptocurrencies are still quite volatile. Don't you have a duty of care about what you offer on the platform?
We allow you to buy and sell more than 50 cryptocurrencies, in a secure environment. It would even be a mistake on our part not to do so if, as is our case, we are convinced that we offer the best framework for doing so.
You allow cryptocurrencies to be bought and sold, but not withdrawn or sent. Why is that?"
There's a balance to be struck between ease of use and security. We don't want to do what some people do and expose our customers. As I said, we're in a regulated industry and so we want to follow regulation.
Take the case of the exchange platform Gemini. They launched by following US regulation step by step, they were the good pupil, everything was going well, and then afterwards they wanted to go faster than the music, and we know what happened next (nearly a billion dollars are stuck with a provider linked to the FTX collapse, editor's note)...
Europe is in the process of setting up crypto regulation, MiCA, which is a very good thing. We're going to wait until it comes into force to launch new products, offer new features.
We also need to be aware of one thing: in 2023, sending and receiving cryptos is a nightmare in terms of compliance and anti-money laundering. And I'm not even talking about taxation. These are real obstacles that we're going to have to simplify.
Speaking of obstacles, you've seen that the US securities regulator (SEC) has decided to hit the crypto industry hard. Isn't this an opportunity for Europe?
Yes, of course, but you have to bear in mind that Europe moves slowly. Everything is slower in Europe, which means we can make fewer mistakes, but also seize fewer opportunities. It's a real choice! As far as crypto is concerned, Europe has a head start, so all the better. But we need to keep that lead.
What could prevent us from keeping it?
Turnarounds, new laws that would ban, for example, Proof of Work (bitcoin's energy-intensive consensus algorithm, edlr), or fragment the market as the US is considering doing by treating bitcoin as a commodity and all other cryptos as conventional financial assets... With that you create a two-speed market, and you break the machine.
What do you think could accelerate the adoption of cryptos?
There are many factors, but I see one that is never mentioned even though it is important: deglobalisation. With geopolitical tensions, trade between certain zones is going to become increasingly complicated. This is already the case between the United States and China and between Russia and Europe. In this context, the only way to continue transferring value is by using cryptocurrencies.
You are European (Greek, ed. note) and have worked in several major US technology companies. What has this taught you?
Technology companies are very different from traditional companies.
The margins of Tech companies, especially in the US, are off the charts, so as long as you manage to grow, you don't need to be efficient, you make money easily if I may say so. It's after that that things can get complicated, as we're seeing today with certain tech giants (Meta has just announced it's cutting 10,000 jobs, editor's note).
What's also very different is that tech companies attract a lot of talent. And that's what it takes to create giants like Netflix or Google.
How do we get these giants to be European?
Not simple (laughs) . To create these major groups, we need to be able to attract the best people and keep them. And to do that, you have to be able to pay them well. Until we understand that in Europe, we won't succeed...
Imagine, today the biggest European technology company is called Booking, and it weighs less than 100 billion dollars (Thanasis Noulas worked there for 2 years, editor's note). Do you really think that the Americans are afraid of Booking or other European players of this size? They hardly even know we exist. That's why Europe needs to get moving.
The philosophy behind Web3 is one of decentralisation, but yet people use centralised players a lot to buy cryptos. What do you think of this paradox?
Today we talk about decentralisation when the Web3 universe is particularly centralised. There are no official figures, but a large majority of crypto holders are via platforms, and for some they have no idea how it works.
How can we change things?
We need a use case that will tip hundreds of millions of users. I think that this will involve digital wallets, which are still complicated to use today.
We tend to forget this, but the first "mobile" phones date back to the 1980s. They were reserved for big bosses and traders. At the time, we wondered what they could be used for by the general public. 30 years on, that kind of question would make anyone laugh.
Speaking of use cases, you couldn't have missed ChatGPT, which is the sensation of the start of the year. They've just released the new version (ChatGPT 4). Is this a topic for you?
Of course, but we're very clear about artificial intelligence: we don't want to become a robo-advisor, so we need to be very careful with tools like ChatGPT when it comes to investment.
For the rest, what's certain is that artificial intelligence will enable us to improve things internally, in terms of processes. A lot of tasks can be automated!
