In Conversation with RealPort’s General Counsel: Conqueror of the FinTech Scene
The following interview is a discussion between RealPort’s General Counsel, Sandra Kumhofer and Director of Market Outreach, Ina-Alice Kopp. This piece is a part of our “In Conversation with RealPort” series.
Ina-Alice Kopp: I’m going to jump right in with the first question, what is your area of responsibility at RealPort?
Sandra Kumhofer: My area of responsibility is the entire regulatory and legal setup of the company, alongside all internal processes regarding compliance and risk. I am in charge of ensuring that RealPort is legally and regulatory compliant. When we go live, we don’t run into any “black spaces of regulation”. We must be within the “white zone”, where everything is viable and we are legally allowed to execute all the actions we need to, in order to construct our vision.
How does this relate to your expertise? Can you give us an overview of how you got to this point?
I’m an Austrian lawyer and I passed my bar exam around 10 years ago. I worked for almost six years with an international law firm, DLA Piper, in Vienna. I was working in the litigation and regulatory department, often serving financial institutions — this is where I became involved in my current field. In 2013, I moved to Berlin and began conquering the FinTech scene. Over the past 7 years, I have been a part of building 20 FinTech companies — including N26, Solarisbank, Element Insurance, Clark Germany and so on. This is where my responsibilities at RealPort and past experiences intersect.
I’m a company builder by heart. This is why I joined RealPort, as it is a new-to-build company within a fascinating field of the financial market. This really excites me.
How would you describe the RealPort product and what do you think makes it so unique? You just said that you were excited about this new space FinTech, so how do you see RealPort within that context?
RealPort lies within the newest generation of FinTech. When the FinTech bubble began to emerge, all the organisations were based in the payment sector, companies such as Klarna and PayPal. It largely involved organisations providing checkout processes and payment providers. This was the first generation of FinTech. Following from this the Neobank generation began; you had the creation of banks like Revolut and N26. In this context, you also have Solarisbank — who are a license provider to other FinTechs. Simultaneously, to the Neobanks movement, there also came the insurance tech wave.
However, you cannot build up an investment brokerage platform as easily as a Neobank, as you need to have the context, the network and the expertise. From a regulatory point, it is considerably more complex. Reputation also matters to a significant degree, when it comes to creating a platform like RealPort. A company such as ours is never allowed to make a mistake, or to be perceived as weak or untrustworthy, as it is all about building credibility. It is a new generation of FinTech. This is one reason why I chose to work at RealPort, because I thought the idea was both interesting and profound.
That’s a really interesting perspective — I have never really looked at the FinTech space in such stages before. In relation to our core value proposition, which we refer to as “The Partial Exit”, how do you view that in terms of the potential that it offers?
From a regulatory perspective, it works well and it makes sense. For the asset manager, it is a good opportunity. As it is a unique selling point, it is something that RealPort will be able to go out and sell. In my experience over the years, it is always beneficial to have something special which you can then use as a USP. It makes sense to inhabit a niche space within the financial sector.
How do you think the RealPort product is an expression of our inner core virtues?
I think the product we are creating aligns with all of our core values. Integrity, inclusiveness, trust and sustainability, all coincide well here for me. I would interpret the relationship in the following ways. The product is sustainable in and of itself. It will be trustworthy, if we build it in the correct way. When building our product, the relationship with inclusiveness comes through engaging with a new class of investors; we are giving them access through our smaller ticket sizes, when they would not normally have such investment opportunities. I love this, to me it embodies inclusivity. The last value I want to mention is integrity; this really comes together with trust and reputation.
My last question is, what resonates the most with you about working at RealPort and what is it that excites you going forward?
For me, the regulatory aspect is the most exciting part. My greatest hope is that one day we can obtain our own licence. If possible, the valuation of the RealPort would increase significantly and we wouldn’t be as dependent on all the various partners. I am really looking forward to building up a secondary marketplace, because this is something that I do not yet have on my CV. The ultimate goal for the future would be to build up an exchange. It is the most complex regulatory financial instrument or institution on the scene. This is one experience that I would really love to gain.
Additionally, there are legislative papers in relation to e-securities set to soon be released. The German government and legislators are even considering the abandonment of physical securities. Once such e-securities are active, everything will be a lot simpler and RealPort will be at the front of the queue for accessing such digital securities. I predict that these regulations will come into effect in the next 2–3 years and RealPort will be there ready and waiting. We will be able to obtain all the licences we need ourselves. For me, this is a thrilling prospect because it is something new and unexplored.