FOLIO Revolutionizes Asset Management (Part 2)
The importance of asset management has been emphasized for some time, and we’ve all heard the necessity of ‘asset formation over savings’. It’s also true that many of us feel that investing is too difficult and complicated. Changing that environment is FOLIO (https://folio-sec.com/), the online brokerage platform that makes asset management easy and fun, so the user can continue to engage. (Part 2)The importance of asset management has been emphasized for some time, and we’ve all heard the necessity of ‘asset formation over savings’. It’s also true that many of us feel that investing is too difficult and complicated. Changing that environment is FOLIO (https://folio-sec.com/), the online brokerage platform that makes asset management easy and fun, so the user can continue to engage. A beta version has been made public since November 2017. FOLIO has been attracting plenty of attention as an independent domestic stocks stock brokerage firm. After all, it's the first online brokerage firm to open in ten years. In January 2018, 7 billion yen in funds were collected during the series A2 round, with third-party allocation of shares underwritten by LINE, Goldman Sachs, Dentsu Ventures, Mitsui & Co., SMBC Venture Capital, DCM Ventures, and Draper Nexus Ventures. The company reached a total of 9.1 billion yen since the seed round, two years after it was established. The value of money is slowly but surely becoming more relative; the concept of value itself has diversified greatly to the present. FOLIO's mission is to realize "barrier-free asset management" by creating and popularizing a financial platform for future generations that interconnects these different values. CEO Shinichiro Kai founded FOLIO in December 2015 by taking advantage of his ten-year experience of being a trader, and has kindly answered the questions we all want to ask: what are the reasons behind all the attention your company is receiving, and what are your plans for FOLIO?
-- I believe security is seen as a serious concern in the FinTech world, especially regarding problems like theft from the cryptocurrency exchange operator Coincheck. What measures have you taken to fortify security?
First off, the security mechanism for virtual currency and online brokerage is different in certain aspects. However, the fact that there cannot be a trade-off between security and convenience is fundamental to both. As a basic rule, the maintenance of robust security must be the number one priority.The compliance, system, and human resource conditions for being registered as a brokerage firm are extremely strict. It took one year of deliberation with the auditors to register FOLIO. We needed to have detailed preventative measures and solutions in advance to prepare ourselves for possible risks.On the other hand, we also needed to ensure our user convenience. This was made possible through our well-thought-out user experience design. For example, the user is required to put the product in a “shopping cart” before purchase. This fulfils two things: first, we cannot allow users to purchase investment products with one click, according to the financial products regulations. Secondly, putting products in a “shopping cart” can add more fun to the experience of shopping. Basically, we have taken advantage of certain limitations set out by regulations as an opportunity to provide convenience and enjoyment to the user.
-- Now I understand anew, that you prioritize safety while also pursuing smooth UX. I heard you are planning to set up FUN, an institute that researches on advanced technology, in order to expand your business. Please tell me about this idea.
There are three fields of study that will be the institute's core research: financial engineering, machine learning, and blockchain. The trigger for this idea was an in-house company study session in which staff members could study a topic of their choice. We decided to set up a research institute by combining our company’s accumulated technology and the staff’s interests. We anticipate that a synergy between FUN and FOLIO will be created, as FUN's direction closely corresponds to FOLIO's vision.Blockchain technology is especially influential. Eventually, anybody will be able to issue and distribute crypto assets, as anything can be made into an asset, without even going through inspection. That means crypto assets will also become part of asset management, and therefore easily exchangeable using FOLIO’s platform. That’s when FOLIO will truly reach its goal of “barrier-free asset management.” That’s the future I have in mind.To be honest, I don’t know what will happen in five years’ time. After all, I had no idea we would be forming a partnership with LINE when I founded the company two years ago. However, I’m absolutely certain that advancement in technology will continue to grow exponentially. We will see changes in the next five years that will be incomparable to the changes we have seen in the past five. There are still many technical issues with blockchain technology and initial coin offering (ICO) using that technology, but I’m sure a solution to that problem will be found through new technology.
-- What vision do you have for FOLIO as the world goes through such rapid changes as you have described?
To make FOLIO a platform usable for anybody is our immediate goal. Our next goal is to make this a reality so that a diverse range of people will actually be using the platform. We aim to increase users by spreading awareness of FOLIO and make it a familiar part of the daily life of ordinary persons through our partnership with LINE.
-- I believe FOLIO is indeed the first-mover and major player in the Japanese financial sector, and it will continue to revolutionize the way we interact with money. Thank you for sharing your story with us.