Crypto lures more bankers as sector grows up

TORONTO – Jillian Friedman was first drawn to the crypto world a decade ago by the idea of ​​building a new open source financial system, but unstable structures and a lack of diversity in the early days pushed her into a career traditional bank.

She recently took over as chief operating officer at Ether Capital Corp. in a return to what she says is a substantially changed industry.

Cryptocurrency investor Jillian Friedman in her office on Wednesday, April 27, 2022, in Montreal. THE CANADIAN PRESS/Ryan Remiorz

“There is a much higher degree of professionalism. There are so many more people working in this industry representing a diverse group of people, including women, so I’m pleased to say it has changed.”

Friedman is just one of many people who have left traditional finance careers in recent months to join the burgeoning field of digital finance as funding and activity in the space, fueled by a surge in cryptocurrency prices during the pandemic, continue to rise.

LinkedIn data released in mid-April found that, at least in the US, cryptocurrency net hires were up 73% last year from a year earlier, while net hires in traditional financial industries were down. one percent during the same period.

In Canada, it’s not hard to find examples of people leaving the financial services industry for new decentralized finance companies, including the higher ranks of traditional Bay Street firms. Rod Bolger, for example, who resigned as CFO of Royal Bank late last year, took over as CFO at crypto-lending platform Celsius Network in February.

The rise in high-profile hires has helped erode some of the stigma around the space, said Adam Dean, president of Dean Executive Search.

“That changed the market perception of talent entering a space that was considered under the radar or not fully understood, or seen as third rail.”

The push for cryptocurrencies is similar to past waves of interest in alternative sectors such as cannabis, private equity and the early days of the internet, he said.

“What happened is similar to what happened 20 years ago in the dot-com era … that was a market that investment bankers and management consultants were also fleeing to because they were chasing dreams, and those organizations were eager to attract that kind of horsepower.”

The world of cryptocurrencies continues to evolve rapidly, but there is increasing integration with existing financial frameworks to make the transition into the space from traditional finance more seamless.

Friedman said she felt more comfortable joining Ether Capital because it is listed on the public Neo Exchange, which provides a level of governance controls that separates it from some of the more dubious corners of the space.

“There are actually some similarities in terms of the level of rigor, professionalism and standards that you would expect from other regulated financial institutions,” he said.

But in other ways the work is radically different. National Bank has more than 25,000 employees, while Ether Capital has six, including Friedman. She says that change and the pace of change is like going from a cruise ship to a speedboat.

“There are a lot of similarities to an early-stage technology company, where the engine is built as it flies. It is very exciting to be there on the ground floor.”

The excitement about people moving into the space is a marked change from even a couple of years ago, said Nako Mbelle, founder and CEO of Fintech Recruiters.

“Two years ago, I would walk up to someone and they would tell me my wife would kill me, are you kidding me, like there was no way… today, it’s totally different.”

He said that while crypto companies look for people with a variety of backgrounds, the smaller startups he works with are also especially interested in people with an entrepreneurial side, which doesn’t always fit with people used to working with a focused approach. sometimes more conservative. of big banks.

“Most companies want people who have startup experience and who can work at a fairly fast pace, without a lot of bureaucracy, with a lot of autonomy. And sometimes it’s hard for people in banks to transition to that kind of culture.”

Didier Lavallée was at RBC for the last eight years, but his work in sales and business development in various departments prepared him to jump into the startup side. He said that while he wasn’t actively looking, it was two weeks from when he was approached before it was decided that he would take over as CEO at Calgary-based Tetra Trust Co., which he did in early April. .

“I found the opportunity to go and learn more about this growing industry fascinating…my dad built a business and I’ve always had that big entrepreneurial mistake inside of me.”

After working with financial custody and foreign exchange in traditional banking, Lavallée said he was struck by how outdated some of the current systems are.

“There are a lot of mechanisms going on in the background that are incredibly manual, time consuming and quite frankly inefficient… And to me, there is absolutely no doubt that blockchain technology will massively change the way our financial industry works.” “.

This report from The Canadian Press was first published on May 4, 2022.