Future of Finance: PwC’s Oliver on how ‘fintech is becoming crypto’

John Oliver has spent more than two decades at PwC, where he is a partner and co-head of fintech trust services in the US. Over the past few years, the firm has made a bigger push into fintech, which has increasingly meant a bigger push into blockchain and crypto.

We discussed everything from improving the efficiency of payments to empowering the unbanked to, perhaps most importantly, using blockchain to eliminate filing business expense reports. Also: There may be an explanation why American politicians time and again fail to pass meaningful crypto legislation.

(This interview has been edited for length and clarity.)

How do you describe your job to people?

I wear many hats, so it depends on who I’m talking to. I lead our fintech practice. I am a career auditor at PwC. I have been in our banking and capital markets group. We decided a little over three years ago to create a fintech practice that combines our technology people with financial services – specifically banking and capital markets people – and have one team that I co-lead with a partner of mine in our technology practice. And crypto has become a much larger component of what technology really is.

So, just to be clear, was it a fintech push and later it has come to include crypto and blockchain, or was that originally part of the thinking?

I would say it was a fintech push, and crypto has become increasingly dominant as part of what fintech really means. When we first started this, people were looking for faster payment rails. And what has emerged as the answer, in some ways, is crypto. I remember probably about 2 1/2 years ago, I was like, “This is really emerging” – you know, fintech is becoming crypto.

I saw you completed a blockchain class at Wharton. What were some big takeaways?

I took the course when I first came into this role. Basically, I knew enough about crypto to be dangerous at the time, and I really wanted to find an immersive experience. It was a great program, with a group of other individuals, and we really learned from each other and pushed each other further and further.

So there were mostly financial professionals in the class?

They were there, but apparently there were also crypto-natives who came the other way, wanting to learn the financial side. And I think there were some lawyers. People’s different experiences mixed together made the course so much richer.

How has this led to helping clients? What trends do you see?

I would say that the demand was much higher on the crypto-native side nine months ago. The VC/private equity space was flush with capital going to crypto-natives, and crypto-natives were in the capital markets. So the stock markets opened up, there was kind of a rush to “Let’s get ready and go public.”

We got a lot of requests to help build controls, help make sure the accounts are correct, help build infrastructure – so last fall it really fell off a cliff. And not only did it drop off in what we saw in public markets, but funding froze. There is limited funding going into crypto right now, so more requests are coming from traditional financial institutions that are using this opportunity to build out their own infrastructure. They build proprietary blockchain systems that they use in their own customer networks.

If I can give you a tangible illustration, Consensus, one of the big – if not the biggest – crypto conferences was a couple of weeks ago in Austin. If you sat in a chair and watched people walk past you, the volume of sport coats this year compared to last year was dramatically increased. It is traditional money. That dynamic has changed quite a bit.

You have mentioned one of the notable trends – traditional finance – that is among the PwCs top five for the industry this year. After the FTX collapse and several other bankruptcies, is it fair to say that we are already seeing TradFi play a bigger role?

Yes, right now the most widespread companies are starting with intercompany payments. They start with: “Can we create a blockchain and digital payment mechanism for our own settlement processes between companies?” In fact, we are looking at it at PWC. When we master it, and solve the kinks, we take it back to our customer network. And then once we master that, we can expand that and potentially go to a decentralized blockchain network.

Then number two is on the custodial side – big investments in security, risk management and working on how we can get to some kind of proof-of-reserve statement to confirm to people that assets are safe.

So after mastering some of these concepts internally, can you then take them to clients?

More than that: We have implemented a new travel system with a supplier that uses a blockchain. It’s a phased implementation, but we’ve started, and the way it works will eliminate the need for employees to submit expense reports. If I book a flight, I take the flight, it gets registered on the blockchain. Now it is known. It also goes to the airline. So we eliminate the need for employees to do expense reporting, and we eliminate the need for a separate payment structure between us and the airline. We do not go through a travel agency.

To go back for just a second to the five 2023 trends noted by PwC – we discussed the highlights of TradFi a bit – is there one of the five that may not be quite where you thought it would be at this point?

I have to start with regulation. It’s not where I thought it would be. I say that, and I feel a little stupid, because I probably should have known that we wouldn’t have made any progress with regulation. I’ve been thinking a lot about, “Is our lack of regulation taxing us?”

When I really think about how the history of America has evolved, in any cycle of innovation that we’ve had, we haven’t had regulation—regulation usually lags behind. I actually think it promotes innovation. And while I know a lot of people want that—and I want that too, because I think it creates some barriers for us—I think it’s also a means of promoting innovation.

Would getting one bill through Congress create a kind of snowball effect—other laws might follow more quickly?

No. Just look at how Congress works right now. It’s not a snowball of anything. I don’t think it will be the catalyst. It’s going to be a tough push and Europe is ahead of us at this point, the UK is ahead of us, Singapore is.

What does it mean for the future of finance?

The major players that exist today in finance, I do not see that they are disintermediated. I see them adopting and innovating and acquiring and being part of the future of finance. There’s always a handful of new players that really come to the fore, but I think for the most part the traditional big, big names are still going to be there.

What I think is fascinating, and people don’t seem to latch on, is what we just went through. We went through a crypto wave, then this metaverse wave, and now we’re over to generative AI. And there might be another thing after those things, but they’re going to start to converge. And the real future is a digital experience with digital assets as the exchange mechanism, accelerated by generative AI. We are living through it right now. We see a bit of that. I don’t know about you, but I don’t have much of a wallet anymore. I pay with my watch, my mobile. We are not that far away from completely digital assets. When I think about the future, there is no paper money.

Is there anything else our readers should know about what PwC is doing in this area?

We are starting to do some things that are interesting in bringing together the ESG concepts and the blockchain. We did a project to evaluate the carbon footprint of a particular blockchain, and we were actually able to show that if you use it correctly and integrate it with your company’s financial systems, with the systems you can eliminate, you are net carbon negative. There’s been a big wave of “Crypto is terrible because it uses all this electricity,” but we’ve moved on from that.

From a socio-economic point of view, how can we bank the unbanked? How can we get resources into the hands of people who cannot get financial resources without paying exorbitant fees? It could turn crypto from, you know, a “greedy thing” into a social good, and I want to be a part of that.