Cultural differences experienced by Roger
What is PolicyDock?
Is South Africa one of the most innovative countries?
PolicyDock’s business model and unique selling point
What is Point in Time insurance?
What does growth look like for PolicyDock?
Insurance Is Reverse Banking
Managing Risks and Providing Better Customer Service
Navigating Through Differences
Read the best-effort transcript below (This technology is still not as good as they say it is…):
Michael Waitze 0:02
Hi, this is Michael Waitze. And welcome back to the Asia Tech Podcast. Today we are joined by Roger Ying, a Co-founder of PolicyDock and I cannot thank you enough for coming into the studio and doing this. You can see right that face to face feels different.
Roger Ying 0:16
Yeah, no, this is great. Thanks so much for having me here. And it’s amazing equipment and the screws are quite a setup you’ve got Yeah, so it was super impressed.
Michael Waitze 0:23
I liked the way you found the office yourself, right? Because you’ve got to come into the sixth floor. Get up to the seventh floor. We’re just kind of bumped into each other, which is super cool. Yeah,
Roger Ying 0:30
Yeah. No, 100% people so helpful. And this digital Park is really amazing.
Michael Waitze 0:34
True digital Park is pretty amazing. Yeah, I’m here every day.
Roger Ying 0:37
Oh, man. Okay, lucky guy.
Michael Waitze 0:39
I love it. I love it. I love it. Before we get into the central part of conversation, why don’t we get a little bit of your background for context?
Roger Ying 0:45
Yeah, sure. So most people find that a bit surprising. I’m actually born and raised in South Africa. I grew up the finish high school diploma college in the US and on the west side. Okay, so California managed to finish with a master’s from Stanford, and then I had to
Michael Waitze 0:58
I like the way you just throw that out?
Roger Ying 1:00
Yeah, you know, I gotta, I gotta legitimise myself. Right. So,
Michael Waitze 1:03
So this is, this is like one of my favourite stories, and it’s very old, but like my brother, who is the valedictorian of his class, and is also a neurosurgeon smart kid. Yeah. went to visit Harvard when he was in high school, right? And he’s on the campus. Okay. And he’s asking because he was applying to go there. And he’s asking one of the kids there one of the students there, have you seen the Admin Building? Like, how do I get to the Admin Building? Yeah. And the answer was very similar to what you just said he was the kid was like, I’ve seen it around, which is like, just like, I got a master’s degree at Stanford. Like it just randomly have it. Yeah. I want to ask you this, though. You said it’s weird to be from South Africa. Why is that so strange?
Roger Ying 1:37
Oh, well, you know, when you outside of South Africa, and you meet people on your location, and you tell people, you’re from South Africa? Yeah. I expect a 30 minute conversation to you all the time. How did you get there? Why were you there? How did you grow up? What was it like? Why you not, you know, why you’re not different skin tones? It’s a real, it’s a real kind of it’s a good conversation starter. But you know, after 15,20 years, it gets tiring. Yeah.
Michael Waitze 2:04
I’m not gonna unless you think there’s something relevant to that experience, right. In other words, because you went there for high school, you said and stuff like that. But they went to the States for full both undergrad and masters. Yeah. So was that a thing that a lot of your peers were doing as well? No, no,
Roger Ying 2:17
you know, so I did quite well, on the final exams in South Africa. Only a handful of us in my class, maybe three or four went overseas, actually. So really, really fortunate actually, to have the opportunity to go
Michael Waitze 2:30
did going to school in California has surprised you. Do you notice because you have this vision like my daughter is now 20 something years old? She’s American, basically where I grew up her whole life in Japan and in Thailand. Yeah. And the only American she knows is the one she sees on TV kind of thing. Right? Surprise you when you got there.
Roger Ying 2:47
Yeah, to a certain extent. You know, I think sense of humour is a bit different, a little bit cultural. This was cultural nuances. Do you think okay, well, we all speak English, or when you’re living overseas for the first time and your jokes don’t land then? And don’t you know, people wanted different things, right? Yeah, the biggest thing for me it was actually in South Africa, everything you can do drinking or driving or handling a gun or cetera, et and you can drink already. So when I was in college in the US, for the first three years, it was quite a big deal that if someone was to buy alcohol or somehow get alcohol and and things like that, which culturally was quite different for me.
Michael Waitze 3:21
It’s weird, right? Because America feels like this land of freedom. Right, right. And there are weird places where it’s very puritanical. And there are restrictions. So it’s not like what it appears to be in a lot of cases.
Roger Ying 3:31
I mean, a lot of my classmates were saying, Well, you can handle a gun at 16 and drive, but you can’t you know, you can’t drink and you can’t gamble. Until you’re 21. Right. So you can shoot someone, but you can’t. You can’t do a shot. Yeah, you can’t do a shot.
Michael Waitze 3:44
I just made that up anyway. It feels kind of funny to me, but nobody else is smiling. You’re smiling. Nobody can see it. It doesn’t matter. Because then what did you do after you graduated? Do you go back to South Africa? Stand United States
Roger Ying 3:56
and work? Yeah. So I graduated at the peak of the financial crisis. 2007 2009, nine 2009. So the biggest crisis? Yeah, the crisis? Yeah, it started 2008 And then peaked at 2009. So I remember in Oh, eight, we had like 20 investment banks come and hire for interviews, right. And then subsequently, I was only to like, yeah, nevermind. Yeah, never mind. But yeah, I had some internships in China. I worked while I was at Stanford, and I worked in a venture capital firm. And we also started the first cross collaboration class between Peking University and Stanford University for the design school, which was super fascinating. And it really opened my eyes to China. Right. And kind of opportunity. Had you been to China before that? I had, and that was on a family trip in like 1996, which was a really long time ago, where people still riding on bicycles. Yeah,
Michael Waitze 4:48
my first time in China was 1990. I want to get this right. 1991 or 9092. Okay, so not that not that long before you were there. Right. Yeah, a very different place. I mean, Pudong was nothing. There was nothing there. Yeah, it literally looked across the room. Then you’re like hinterland Yeah, no 100% Anyway, but that’s interesting, right? What is it like being a person of Chinese descent? I’m presuming, yeah. In China, where again, the expectations are reverse where people just look at you and think, oh, you should know all of this stuff. Yeah, I don’t I mean,
Roger Ying 5:16
no 100% Like it was kind of funny because obviously I speak Chinese with not a local accent or in China, there’s so many different accents. And in inverted commas, Chinese, some have kind of the most some kind of racist in a certain way that you got to be from the same village. Yeah, as someone to really, you know, get close in the general sense. That’s funny. Yeah. So they used to call me in Chinese you know, there was like of love fake knockoff phones. So they called me sons. I sounds like Chinese person, because I’m like a fake knockoff Chinese guy, right. That is, so
Michael Waitze 5:53
what are the what are the characters? Do you know?
Roger Ying 5:55
Yeah, so can’t describe it to you right now by another character? Yeah.
Michael Waitze 5:59
Okay. Okay. Because you know, I speak Japanese. Okay. And all of the Japanese kanji are derivatives of Chinese. Exactly, exactly. So I like to know what the characters are. Because the meaning then is slightly deeper. Okay. Right. Yeah. sounds it
Roger Ying 6:12
sounds like it’s just like fake. It’s usually fake knockoff, if you buy a knockoff watch phone, or look at.
Michael Waitze 6:17
That’s interesting. And you know, when you go, I always say like, reverse culture shock is harder than culture shock in a way. Right?
Roger Ying 6:25
Right. Right. When so what’s interesting on that is when we did the design class with Peking University and Stanford, the premise of the class was that you learn more about your own culture by exploring someone else’s culture. Go ahead, because you see all the cultural differences, cultural nuances, and by understanding those differences, you get a heightened sense of awareness. Yeah. And you can design better for your own culture. What do you think I thought it was magic. You know, it was seeing the growth of the students in the class was quite amazing. It
Michael Waitze 6:53
really argues right for these intercultural exchanges, like, right, I don’t think individuals have enemies. It’s a little bit of a philosophical conversation, right. But I don’t think individuals have enemies, no matter which country you’re from, no matter which religion you believe, no matter what, like your philosophies of life, right. I think governments have enemies. Yeah. Which create individual enemies. Yeah, I didn’t. I think you see this in this collaboration between Peking University and Stanford. No. Yeah.
Roger Ying 7:16
Right. No, 100 cent, right. The way people kind of relate. So classic example. Right, as on the American side, you know, they’re really very individual. You know, me there’s that which is not wrong, by the way, right. But on the Chinese side was at that time was very group with so what are we? Yeah, where are we going to eat someone one person orders for the table? Right?
Michael Waitze 7:36
How does that affect us?
Roger Ying 7:37
How does it affect us, basically, right. So am I doing things in context of the group? That’s better for the group’s so interesting, right? Yeah. Yeah, it’s
Michael Waitze 7:44
really it’s and you’re right, neither one is better or worse, right. But they just are no, 100%. You have to know that. Yeah. I want to talk about how you got into what you’re doing now. Sure. So what is PolicyDock
Roger Ying 7:54
Yeah. So PolicyDock, we’re an InsurTech enterprise b2b. So we’re selling to insurers, mgas brokers and technology companies, okay. And we provide them a digital core infrastructure to launch new products build new products. So the overarching vision is to democratise technology in insurance, what we found is that insurers are very slow to adopt technology, and then don’t have the relevant kind of connectors to integrate all the disparate systems under one roof. Do
Michael Waitze 8:23
you think that insurers are any slower or faster than basically any other company? Because I’ll pause it? I don’t think that they’re slower. Sure. I really don’t. I worked at big investment banks. Yeah. And boy, sometimes internally, just convincing someone to change like the spreadsheet that they were using. Yeah. Was just so time consuming.
Roger Ying 8:42
Yeah, in general, they’re creatures of habits, but I think we’re coming to a time where they realise a need to change, right? And if you look at the macro insurers, it’s almost like a dying population, because there’s an ageing population of people working in insurance, your new graduates, are they going on new technology graduates? Are they going to work in insurance companies, or they’re going to work at fintechs?
Michael Waitze 9:03
Let me ask you this, though. So when you were at Stanford, right, and you said in 2008 20 investment, I’m trying to remember the number 20 investment banks came to recruit. Yeah, because that’s where you would go you want an MBA or master’s degree holder from Stanford? Yeah, get it? Yeah. How many insurance companies came?
Roger Ying 9:16
Oh, like three or four.
Michael Waitze 9:18
But at the peak, you’re saying at the peak in the next year in 2009? How many came like zero? I’m just just curious to me, like the way the insurance industry looks at how attractive it is itself. Right. Right. Because like becoming an actuary, it’s not easy.
Roger Ying 9:32
Yeah. No, 100%. Right. But as a technologist working for an insurance company, if you’re an UCS major from a top university, is your goal to work in an insurance company to get the best experience? Probably not. Yeah,
Michael Waitze 9:44
and I always ask myself, why right? Because insurance, the more you learn about it, yeah, the cooler and interesting it becomes No,
Roger Ying 9:50
you know, so my previous life in China, where I spent 10 years was in FinTech and disrupting banking and democratising banking certain ways what we actually do doing. So I ran one of the first fintechs in China doing peer to peer lending, which is a while, which now is a kind of a swear word.
Michael Waitze 10:09
We work in this world.
Roger Ying 10:10
Where the peer Yeah, turn off the rug. Right. Right, right. And I can go into a whole long story, but you know, probably for another day. Okay, so But basically, you know, where banking was 10 12 15 years ago. I personally see the same in insurance right now. Because I remember back in 2009, running around China and telling people while online consumer finance before it was called FinTech, right? This has to happen, right? This this is like a no brainer, right? In terms of people who don’t have access to funding, the service isn’t great. You wait one hour in a bank you for you know, just to get make a deposit or do something well, opening an account. It’s ridiculous. And even certain parts of the world today still opening a bank account? It’s like a scary half a day. Yeah. It’s
Michael Waitze 10:57
like, I have a bank account. Yeah. In New York, right. I haven’t used in a while. And I just don’t want it to get closed. Not exactly. I just don’t want to be like, whatever. You don’t close it. Right. I’ll put three bucks in there. I don’t care. Yeah.
Roger Ying 11:08
So if you look at it, is that just by design of these banks, they’ve been averse to taking risks and evolving products, right. So innovation, and I’m not talking about a new app or a new, new thing. But I’m talking about innovation in terms of, hey, this is a consumer loan product for people working in a digital Park, right? Or this is, you know, like a savings product for these people who don’t have access to banking. Right now, those products, despite the FinTech wave of all these different types of apps and ways of distribution, etc. There’s been a lot more products, right? One example in the US SAS financing, right? Revenue financing for SaaS companies 15 years ago, not there 10 years ago, not even possible
Michael Waitze 11:49
to do right, because there was no way to be able to track all the river right away that made sense in a way that was verifiable. But now we can do that. So technology allows us to do that.
Roger Ying 11:57
Exactly. Right. Right. And so after spending 10 years and in China kind of developing, we did a while a bunch of different types of products. We were actually one of the first companies to Finance Finance going back distressed debt, right. So we saw a lot of the real estate guys in 2015 2016. Super cool. And we were financing a lot of those larger assets. But we also did microfinance where we were financing organic pig farmers in Yunnan, right. So seeing a large spectrum of it. And essentially, it really comes back to the there’s a famous business school case of the capital one case where your financial product should fit the person like a glove. Right? Right. So that’s what’s happening in the loan and savings and investment industry. In insurance. I see this trend happening within the past three to four years, right. So this trend of it should be targeted niche products for different types of classes or niches of consumers. For example, if you want to buy cyber insurance, right? If your traditional restaurant, why are you buying the same cyber insurance as someone who’s an ecommerce store?
Michael Waitze 12:55
Because the risks are completely diverse? 100%. But here’s a here’s the thing that I want to know, right? In the banking world. First of all, everybody’s bank, at least in the United States, right? Is FDIC insured up to a certain amount. Yeah. And what you do in your bank account has almost no impact on what happens to me in my bank account, so I can create personalised services for you because again, tech allows me to do it. What I can’t do is have 15 people serve you. Yeah, because that’s impossible. It doesn’t scale, but in the insurance industry, and again, tell me where I’m wrong here. It’s naturally pooled. So what happens to me does actually impact you in a way, right? Because my risk is somehow being subsidised at some level by your risk as well.
Roger Ying 13:30
So if you think of insurance, it’s just reverse banking. Right? Yeah, banking, you get the loan first, but insurance you pay the interest or the premiums, yep. And you get paid the pool, right? So the bank should actually they should actually be your money is pulled anyways. Right? So both both credit pool funds now as hard as funds are kind of pulled and managed and actively risk adjusted for different types of events that are happening. And that’s a good point. Because through my, you know, my previous company Panda, we were actually the first FinTech company to work with insurance in China. Panda Panda. Yeah, so panda. I got it.
Michael Waitze 14:05
That’s why I said it twice. Yeah.
Roger Ying 14:06
To point out No, got it. Like one means loan in China. I understand. Okay, but so you’re making a pawn in three different ways. But, you know, when it came to understanding risk, what I found in that journey was that people really understand risk in the world in my personal view, and kind of thing is other reinsurance because if you think about Sure, the reinsurance or insurance, the insurance, the insurance, insurance, bank loans insuring the banks, and some of them are creating our products, but ultimately, all that risk is somehow shifted off to the reinsurer the risks that can get reinsured. Right, right, and there’s no there’s no one back stopping them.
Michael Waitze 14:40
Hopefully the syndicates that they create right will then backstop them. In other words, their diversification on who reinsure something right would protect them at some level
Roger Ying 14:51
know exactly, exactly right. So they have created syndicates but at the forefront.
Michael Waitze 14:55
Absolutely. Yeah. Yeah. They’re the they’re the frontlines of Yeah, risk taker.
Roger Ying 15:00
So if you asked me coming back to your question about the insurance come to recruit from Stanford, you want Yes, they did. I was like, this was three years two or three. And they only recruited the PhDs,
Michael Waitze 15:10
of course, because they know, but that’s the thing is that it’s so hard, right? That mathematically, it’s actually quite sexy. Oh, no, very. Right. And this is the point that I tried to make to people because I, you know, I talked to incompetent jurors InsurTech all the time. Yeah. And all of them said to me, well, it’s not so sexy. I’m like, it only isn’t because you say it
Roger Ying 15:27
isn’t? Yeah, no, it’s super interesting stuff. Right? Yeah. Yeah. Like if you’re standing at
Michael Waitze 15:31
a bar, and you’re like, Oh, I’m broken. I’m stupid. And I’m like, who’s going to talk
Roger Ying 15:34
to you? Yeah. So for example, I always say to people is like, do you know that South Africa is actually one of the most innovative insurance industries in the world? Why? Well, if you can take risk in South Africa, you can take risk most places. Sure. And another thing is, today, people talk about route insurance, which is that pay as you drive? But do you know that insurance product was developed in South Africa? It was already in the market in the early 2000s. I didn’t know that. Exactly. Right. Yeah. But it has the kind of vitality programme, which is the healthier you are the premium car. Right. So this has been done. So behavioural insurance was invented in South Africa. I didn’t know that. Yeah. So it’s very interesting.
Michael Waitze 16:09
I’ve already like I can turn off the recorder. Now I’ve learned enough.
Roger Ying 16:13
Which goes on to my next point is that the engineers that we’re working with a policy doc have been building for this insurance for the past 30 years.
Michael Waitze 16:21
So how South African is your team?
Roger Ying 16:23
So the core insurance team is in South Africa? We also have engineers in South Africa. Yeah, go ahead. Yeah. So about 50% of the engineers on South Africa. Wow. And you have other engineers in the US as well. But you said
Michael Waitze 16:33
30 years of building this stuff. So do the engineers that you’re working with come from other insurance companies and even other insurtechs to then work on policy,
Roger Ying 16:41
they actually came from an IT solutions business that was building was contracted by insurance technology for them. So they’ve been working for the likes of marsh Santam and other blue chip insurers in South Africa, Constantia guard risk, and that’s ultimately what we were PolicyDock what PolicyDock like has inherited. So we’ve actually inherited a lot of experience. And at the core of this is a very abstract flexible data model for insurance. Did you build your own database model? Yes. 100%. Interesting. So like, I don’t want to bash the rest of the industry. But what I found is a lot of InsurTech, they approach it from the user experience, and go to the back office, we started from the back office. So we’ve got this really, I mean, to be very geeky and nerdy is super dynamic data model, which allows us to build any type of insur ance product, whether it’s multi risk, multi item, multi parametric, as well, parametric, parametric, easy, parametric, like real time data, or real time data and analyse it. So completely data driven, flexible data model with upgrades, you know, in terms of we can do multiple versions as a fully modular and customizable product in a simplified way. Think of Shopify, for insurance, you know, you want to launch your InsurTech, you can launch this micro service, but then you can also launch it with multiple products on one platform, multiple micro servers, etc, etc. So so is
Michael Waitze 18:01
the goal of PolicyDock to be a platform that’s kind of white label that sits in the background that other insurers use, or is it more like Shopify, where the insurance come to you? And you have this kind of global marketplace? Right? Yeah, where people can post their products, their posts is the wrong word. But like, connect their products there in the same way that like, I can have an e commerce Store there. You can have an e commerce Store on Shopify, any people we don’t know can do it. Right. And then we can have competing products there, where you become the marketplace for the products. And then and then just like on Shopify, you can have companies like Shogun, which builds page builders. Yeah, which Delphi doesn’t want to build. Right? So they outsource it in a way to a company that just raised money at a $750 million valuation. Right last year, probably. But using the Shopify platform to build their own gigantic company, is this something that policy doc thinks about as well? You know what I mean, will you become the platform for the industry
Roger Ying 18:54
at the moment where startup so yeah, no, no. So at the moment, we’re completely doing white label, actually, and so are okay. So we’ll see how it evolves. Basically, we already come with a lot of integrations that people do need and continuously ask us for. So you know, we’re taking it one step at a time when the grand vision is really, how do we make insurance more technology? savvy and tech nimble, right, digital agility, if you wanna throw buzzwords and all that all that type of thing, right?
Michael Waitze 19:22
Can we talk about the tech a little bit? Yeah, sure. Are these all microservices, all microservices and all all API first, completely API first, cloud native cloud native cloud native, so developed in the cloud not migrated to the cloud, but cloud native
Roger Ying 19:35
cloud native cloud native, interesting on AWS, and fully modular, which means I can
Michael Waitze 19:40
buy this and not touch that or I can use all of these. You can use
Roger Ying 19:42
all this when it comes to rating as a full policy administration policy admin as well. Okay, so you really did start in the back office? Yeah, the full policy admin, so not just red coin unbind but also renewals, cancellations endorsements,
Michael Waitze 19:55
do you find the back office part is the hardest part to wean the incumbent insurers off because their policy is already sitting there. And to get off of that they wonder like, what if something gets lost? Or what if you know what I mean? Because we did this in the investment banking business trading side, if we switched trading applications, yeah. And the app itself had a database that had all of our existing trades in it, right? The fear was, is it going to feed the back office system the way it’s supposed to
Roger Ying 20:20
write so we can be standalone or we can augment the legacy where we reconcile the data back into the legacy is, so that’s really the beauty of being API first, is that you can have the best of both worlds, run your old team with the old stuff, run your new team with with new things. So you know, having that connectivity is in my personal view, because the way I look at after being like in FinTech and, and this all financial companies are dated companies now, they should be ready. Yeah, they are, they have to be they have to be right, you know, you you build a competitive edge more so than your competitor by understanding data better
Michael Waitze 20:54
that you already have your authority, or that you’re getting in real time.
Roger Ying 20:57
Leveraging, you know, one of our investors actually happens to be one of our competitors in the US. Yep. How does that work? So he’s no longer involved in that. But he started ran it for a long time. And then you still kind of the chairman. But we’re adjacent markets, right? And but basically, from his point of view, the way he kind of described it as like, we have a great platform for point in time insurance and being data driven point in time insurer, what does that mean point in time. So point in time, when things happen instantly, when changes need to happen instantly, when you need to draw data from different multiple data sources. Something that happens quite often in the US, at least is a thing called out of sequence endorsements. What does that mean out of sequence, other than sequence endorsements means you have a policy, say a commercial policy, and then you talk to your broker, you want adjustments, and three months later, you want to make more adjustments. Four months later, you make more adjustments, guess what, a lot of the changes that were reported to the broker, were not instantaneously updated data insurer. Got it. So this is what it calls on out of sequence. I understand. Yeah, that’s kind of interesting, right? It’s super interesting. This is a very fascinating problem. And then to be even a bit more nerdy, an insurance product is very complicated, right? So when it comes to doing all these different types of functions. So if you think of FinTech and you think of loans, loans, there’s only a certain amount of variability. But insurance, there’s so many different types of products, right, with different types of coverages, multiple items, etc. So when it comes to making changes to that, you really need to have a robust data model. And what we find is a lot of insurtechs have the passion to say, hey, why don’t we build this all ourselves? And after iteration one, they haven’t encompassed a lot of the new business cases that arise, right? So, for example, so case, one InsurTech, has not built renewals into the platform. They just assumed that the policy right so as a new user, with a new policy, you know, these are these are really like basic things. And that’s kind of where we talked about democratising technology insurance is that if we can help that back office become so much more simpler and empower insurtechs, brokers MGS carriers to deploy these microservices very, very quickly, when they don’t have to think is going to be $20,000,000.03 year engagements. Right. This is how it kind of we believe that the industry evolves really, really quickly. Yeah, I
Michael Waitze 23:20
think so to where does climate change Netcat? Cyber, all this stuff come into what you’re building?
Roger Ying 23:27
Well, the climate change angle is life insurance. Really infamous for using a lot of paper? So even to this day, you still have to fight? You know, you have to do pay per signature. Yeah,
Michael Waitze 23:37
I did it in I did both. Actually. It’s certain countries. You can look over there. See my laptop? Yeah. Underneath that. You see the orange folder? Oh, my gosh, that’s my that’s my health insurance policy. Oh, gosh. Anyway, we won’t go through it later. But
Roger Ying 23:47
I’m just saying like, Hey, I just signed that. Then someone had to
Michael Waitze 23:50
sign it. Somebody took a picture of it. But also I did some digital stuff, too. So I did. But anyway, yeah.
Roger Ying 23:55
Yeah, yeah. So one of the largest paper ways to industries when it comes to paper and having a policy and a lot of this is not their fault. It’s a lot of regulation and things like that. When it comes to cyber cyber is constantly evolving. So a lot of our first initial traction came from cyber insurance, that are launching new programmes, for example, was just happened Ukraine via cyber threats and risks and ransomware has gone up exponentially. So people are constantly changing, coverages changing pricing changing, how hard
Michael Waitze 24:24
is it to do this? So we had we had the guy from pentamatic zone. Yeah, we also had gene you from black panda. Everybody wants to have panda in their name, by the way.
Roger Ying 24:33
Yeah, yeah, Panda. Yeah,
Michael Waitze 24:34
I mean, it’s a panda. It’s
Roger Ying 24:35
so lovable creature, right?
Michael Waitze 24:36
Maybe. Unless you’re a piece of bamboo then maybe it’s not so lovable. But but we had them on. We talked a lot about cyber but from your perspective, right, like, first of all, do you work with those guys at all? Not those guys in particular, but other cyber people
Roger Ying 24:49
and we work so that’s another interesting point. We are going to start working with them. Actually, with with Blackpanda. We’ve actually co collaborate For the past six, seven months Oh, wow. Well, it’s brilliant. Yeah, we’ve been mainly working with David. Yeah. And so we’ve had a cross collaboration. We were approached by Merkle science Merkle. Yeah, about six, seven months ago. And they liked what we did and cyber insurance. So we were approached by Merkle science, but six, seven months ago, okay. And they saw an opportunity to develop hot wallet, crypto types of protection and insurance products. Interesting. So, and it’s been a cross collaboration between us a top tier global law firm, Black Panther, and a few others to develop this type of where we actually just made an announcement last week, where we have a strategic partnership with Microsoft, Blackpanda, a hot wallet crypto insurance product.
Talk to me a little bit more about Merkle maybe for people that don’t understand fully what they do, because it’s super interesting stuff. What Merkle science is doing. Yeah, right. They actually went through the Lloyds lab programme to Yeah,
yeah, right. Right. Right. So Merkle science is a blockchain analytics company, right. And a lot of people, you know, when it comes to money laundering and KYC, AML, what they don’t understand, you know, when people use cash is not traceable, right, zero, but a blockchain is 100% transparent, right. So they’re adding a lot of analytics, as well as investigative services and different things on monitoring and assessing the blockchain. And who is a sanctioned entity who’s a bad actor,
Michael Waitze 26:20
right? They’re basically trying to base look at essentially cash flows or movements on blockchains that they can see and track them without knowing. Like, they don’t necessarily know that it belongs to you, right? But they can tell that these five wallets have been doing some pretty sketchy stuff, right? And that even if this wallet itself hasn’t been doing anything sketchy if they go back and check the transactions from where it originated, yeah, this one was so that means maybe you shouldn’t there’s a lot of pattern recognition on shortcuts. If this looks the same as this, then maybe these people are not trustworthy either.
Roger Ying 26:49
Right? And that technology has come a long way in the past five years. Yeah. Funny, funnily enough, my Co-founder, actually started a blockchain analytics business before. So we already have this type of experience within PolicyDock to develop this type of product. How hard is it to ensure that though, yeah, so that’s, it depends what you’re insuring. And so we’ve found a unique way to kind of look at not only on the risk of a wallet, but also is it a sanction into years of not the behavioural characteristics, and then we’ll provide a lot of services, additional services, such as wallet screening. So take this, for example, if you’re if you’re Michael Waitze, and you maybe you transact with ISIS, or ISIL sends you money by mistake, right. And you try to register for a new exchange, you will be sanctioned. And then if you transfer that money to another wallet to do it, they will trace that back.
Michael Waitze 27:38
But this is interesting, because who’s doing the sanctioning, right, because it’s not governmentally regular because today, right? If I launder money from my city bank account to your like JP Morgan account, the government, right, so the Federal Reserve Bank, the FDA is all these people are going to be involved, right? And they’ll sanction me. So but who does it in the crypto world because it’s not really regulated by anybody, per se,
Roger Ying 27:58
per se, I’d say, you know, if you look at the top exchanges larger, you know, in the world, you know, the biggest kind of thing that’s happened in the past five, six years for them is KYC and AML. And, you know, they’re self regulated, the self regulated, but then also in constant talks with law enforcement and the regulator. So it’s not like the self regulated, but they are regulated in a way
Michael Waitze 28:19
they can call it like unregulated, like operating in the wild west. But the reality is that the the really big and substantive exchanges, right want to be regulated because they want more people to trust them.
Roger Ying 28:32
Exactly. Yeah, exactly. And also, you know, if you think about it, too, as for example, with your credit card, if if someone just swipe your card, or there’s a transaction that gets through, right, you know, you get an alert immediately saying, Oh, someone in Romania, just try to spend $200,000 on your credit card. That’s happened to me before, actually. Right,
Michael Waitze 28:50
Roger Ying 28:51
someone in Romania.
Michael Waitze 28:53
I had some guy in New York tried to spend 1300 bucks at today’s man. Oh, right. Okay. Yeah, in 1980 1991, or 1990. But yeah, go ahead.
Roger Ying 29:02
But so you have a crypto wallet, one day you wake up and suddenly the the money’s gone, right? And you’re like, Whoa, what happened to be right? There’s no alert service, there’s nothing, there’s nothing. So that’s an additional service that we’re having. But also to my previous point that if you did transact with a sanctioned entity, you would no longer be allowed on any legitimate type of Coinbase, Kraken or etc. To convert that coin into Fiat or they would actually refuse your services before you even
Michael Waitze 29:30
before even try and try it. Yeah, yeah. You just be blocked. Is there a Metaverse angle to this as well? Yeah, no, 100%.
Roger Ying 29:35
Right. Right. For example, this product is basically answering the question, what do you do when you’re what happens when you get hacked? Right? What do you do? Yeah, I
Michael Waitze 29:42
don’t know. I wouldn’t even know who to call it even know who to call. Right? Yeah. I wouldn’t know who to call. And if you had a call, say the police, right? They don’t know what to do. They don’t want to do. You don’t want the call. They’re like hanging up on.
Roger Ying 29:53
You call the lawyers like well, we need evidence and it’s very expensive.
Michael Waitze 29:56
Right? Right. It’s also not solved law yet. But yeah, Once your complications, right,
Roger Ying 30:01
right, right. And so laws actually evolving quite quickly in that space. Okay, you know, so you call it cyber guys, but they can’t do anything legally for you. Right? Right. So we’ve created this cross collaborative team that will help you go through that entire process, right of understanding what happened to your coin. Whereas, how can you go after legally? And just if you were to do this on your own impossible, but it will cost you at least $100,000. To get started, just to get started? It doesn’t even
Michael Waitze 30:27
matter, right? Because we talked before about like, could you create bespoke bank products and bespoke insurance products? And the answer 1520 years ago was no, even if you wanted to, even if you had the capability to create that product, you couldn’t serve it because technology wasn’t around yet that would allow it to scale. Right, right. But the question here is now like now that technology has allowed all these things to scale, it just means all the things that can happen and can go wrong can go wrong more often, which means that the regulations have to keep up with it. They’re like chasing, you know, in a way to do it. But also the legal infrastructure around this only happened like three times before. So the litigation around it didn’t take that much time. It wasn’t that expensive. So whatever. But now, it’s happening all the time. You
Roger Ying 31:08
think the bad guys don’t know this? The old? Of course they do. So this is like You’re like number one victim? Yeah. And number one target, right. Yeah.
Michael Waitze 31:15
That’s super interesting, though. Because this because the scale goes both ways. Right? It’s like it allows us to do so many more things in such a more personalised and creative way. And on top
Roger Ying 31:23
of that the foster react the high percentage chance you actually have recovery basically. Yeah, exactly. Right. Because we can’t get stopped. If you wait one month, your money’s gone.
Michael Waitze 31:31
Yeah, for sure. Because like, it’s not even a statute of limitations, but using that as a concept, right? Like, if you do something wrong to me, and two years later, I sue you, everyone else was like, what were you doing for the past two years? 100 is like you lose that right? But in the world, now. Everything moves so much faster. It’s like, Well, that happened six weeks ago. Yeah. Why do we care? You didn’t,
Roger Ying 31:47
you can do it in two days, right? Where it is being transferred right now. And you can immediately go after the guys. Right? So yeah, and at least there’d be some sort of recourse to these guys. Right. Yeah. And then on another flip side, is if you ask most of people who are not in crypto, why you’re not in crypto? Well, it’s not safe,
Michael Waitze 32:04
right? Yeah. Yeah. The same way. I’m not an astronaut. Yeah. Because we can seems really cool, right? But what happens if I get up there and something goes wrong?
Roger Ying 32:10
Yeah. I mean, when you when you have some bitcoin, you transfer $1? Easy. $50? Easy. $1,000? Okay. 50,000 50,000 100,000. I mean, there’s that wallet address the, you know, the right address, right? Yeah.
Michael Waitze 32:24
Well, to be fair, I had to pay somebody in Singapore a couple of weeks ago. Yeah. And it’s a tonne of money, right. But I’d never done it using this method wherever the method was before. Yeah, I was like, let’s just do $1 First. Yeah, we did. And then she was like, Yeah, I got it. And then we did the balance. Okay, that’s a smart way to do it, actually, just to see, yeah, because if I send like, 1000s of dollars, somebody goes to the wrong place. Like, what’s my recourse? Ya
Roger Ying 32:46
know, and, and I mean, you know, even in the banking system these days over $50,000, it takes a while, right? There’s only orders, but
Michael Waitze 32:53
again, in the old days, right, I’d call my banker. Yeah. And just go, Look, I need to send money to Roger, or what’s Rogers account number? What’s his bank number? What’s his routing number? Right, right. But just like the just like, on my own travel agent, yeah, I’m not my own banker, my own insurance broker, my own my own crypto trader, my own everything. And that role engenders risk, if you get a number of same thing that I want my banker to do, which is just like, do a test transaction. But remember, I come out of sales and sales, trading and trading background. And because I had all this back office experience, I know how that works. I did it a Morgan Stanley. Sure. Right. So I know how to tell someone who’s not from someone who’s not from that world just goes talking with them more. So their exposure is different. And their understanding of that exposure is different to
Roger Ying 33:31
Yeah, one day and after one day, they find the second day, the third day. Yeah, okay. Yes, we’re funded. Yeah. So we’re funded by 1982 Ventures and a bunch and a bunch of angels actually from the industry. So how long have you been building this? So the initial product to build took close to eight months, actually, so it’s working well? Seems about 10 people I know yours. Yeah. Yeah. And but we’ve, and that’s the thing is like, with us, I find as we’ve bought a lot of technology, and sometimes when you pitch insurance, we don’t believe you. So it’s it’s interesting, because if you as a startup, we’ve leveraged over 30 years of technical expertise and experience from this industry in one of the most advanced markets in the world to make this happen. And part of what we’re doing so with the crypto side is that, you know, we had some good success in cyber, which is a very data driven product, and with this crypto product is extremely dangerous. Right? And yeah, well data but also collaborating with different parties and etc. and can be one of our flagship products, basically, that not only can we help underwriters get into this market, they all want to get into this market, we can help crypto businesses create their own self Captive Insurance Fund to do self insurance, but they can turn a for example, your investigative and compliance team. There’s a cost centre and a crypto business right? Why don’t you turn into a revenue generator, turn it into an insurance operation, you guys still do your work. You manage your fund. You managing risks, providing a better customer experience. And you’re making money. It was the product builder database.
Michael Waitze 35:07
What was the first piece of tech time aside? Where’s the team started to build? Was it the database is a
Roger Ying 35:11
very complicated fully attracted data model. Right? Remember, it’s also the team built this, you know, when when data was really important to conserve efficiency, right? Or to optimise right. With the with the cloud, he says you can be more careless and use more cloud resources. So there’s a very well oiled data model, per se.
Michael Waitze 35:31
Interesting. I was on the I was on a call yesterday before I can’t remember now I released it. It’s coming up today, actually. So I was doing it last night about a company called clever top and the clever top guys told me that the first thing they built was their own database model, because that was the core of their whole business that if the database model wasn’t right, that anything else that they built on top of that didn’t 100%. Right, yeah. So I want to ask you the same thing.
Roger Ying 35:52
And we view it exactly the same way. Right? The interesting thing, anyone can build an app. But you know, when you want to a core system, or like a various that can scale that you’re not putting a lot of patchwork on top. Yeah, you know, later down the line, your engineering resources will scale will need to scale as a proportion. Right. But if you’ve got a well oiled database model, that’s extremely powerful, because
Michael Waitze 36:13
you can leverage that many times over forever. Exactly. Exactly. If you build it right the first time. Right, right. What does growth look like to you? Yeah,
Roger Ying 36:21
that’s a great question. Right. So on the InsurTech side for us as we learn and expand within our clients, so typically, what we see is we’ll do something really basic, and then our larger insurance, client insurance clients will want to do more. But when it comes to growth and scale coming from the China side, I’m not used to long sales cycle industry, right. So I think, especially with this crypto product, where we can drive a product, but also so when we go to a potential underwriter clients, you know, we’ve we’ve done a lot of work for them, you know, basically you need to turn it on we have we’ve calculated you can price it, you can risk adjust it however you’d like. But we have all the tech or the partners, or the TPAs, the claims flows, etc. And you really don’t need to do much basically in
Michael Waitze 37:04
colour. The last thing I want to ask you before I let you go, although I feel like we could do this for hours, right? Yeah, is that as a kid from South Africa, you go to the United States, and you first for the first time, maybe you experienced this like cultural difference and try to figure out how to navigate that, right? You’re at Stanford, and then you say, I’m going to work in collaboration in China with Peking University. And you said, I thought that was super cool, like learning about somebody else’s culture shines a light on how your culture is different. And then, like, what’s the right word accelerates? how deeply you can understand what you’re thinking from a cultural standpoint, right? All of the companies with which you deal have their own separate cultures. Do you lean on all the things that you learned basically, from when you were 17? Until you did that thing at Peking University with Stanford about this cultural awareness to then understand how to deal with your clients as well? And also how to build prod? Definitely
Roger Ying 37:50
yes, I’d say it’s more on the communication side different risk tolerances of what people have, but actually why I started this company, it’s actually a my previous company Pandai was a very localised company.
Michael Waitze 38:03
We talked about it before we started recording. It’s a gigantic market, super influential, very highly technologist, but very domestic.
Roger Ying 38:09
Exactly. Right. But what we’re doing PolicyDock every single insurance company across the planet, yeah. needs, needs what you’re building Yeah, exactly needs what we have, right. So on that census of the soul about different countries and the way to navigate it in terms of the go to market but also technology aspect, data’s data, right policies or policies.
Michael Waitze 38:29
Thanksfor doing this. Roger Ying, Co- founder of PolicyDock,that was awesome.
Roger Ying 38:32
Yeah. Thanks, Michael. Thanks so much for having me in the studio. Yeah.