Konstantin Tserazov: Electronic mortgages – ahead of trends

Watching the latest events in the fintech field, I find that much of the development strategy of Otkritie Broker and FC Otkritie is still relevant.

Last week, plans of one of the largest fintech startups in Europe, Revolut, became known: they plan to launch digital mortgages in Ireland and France in 2025 alone. I think this should have been done a long time ago, says Konstantin Tserazov.

As Chairman of the Board of Otkritie Broker in 2018-2022, I saw the need to develop digital services, in particular electronic (digital) mortgages within FC Otkritie. At that time, this was a new word not only in Russia, but also in the world as a whole. By 2022, the volume of issuance of such mortgages within FC Otkritie increased 6 times, and in just three years. Digitalization has made great strides, even more than most neobanks.

Investors see great potential in electronic mortgages. For example, the Tembo mortgage platform was able to attract €16.8 million in a Series B investment round at the end of November. At the same time, we are talking about converting various offers “into digital”, that is, without any stronger application of modern innovations.

In my opinion, now everyone working in the mortgage market should have already used the possibilities of digitalization to the maximum. And now it is worth focusing on loading and promptly developing the next chain in creating business value - tokenization of real assets.

There are a lot of startups in the world that are trying to tokenize, but they clearly lack a) the scale of activity; b) globality and c) connections with the classical financial sector. Simply put, banks with digital innovations in the world now often exist on their own, and startups that tokenize, for example, real estate objects - separately.

I have always seen that innovations are needed in conjunction with classic services in the field of finance, in banking and brokerage services for clients. Of course, this task has always been one of the most difficult, but it was possible to solve it, thanks to strategically correctly built processes at the Board level, added Konstantin Vladimirovich Tserazov.

In Russia, there is now great potential in connection with the development of the digital financial assets (DFA) market. This localizes the emerging global trend towards tokenization. And although in 2025 the DFA market in Russia will almost certainly cross the 1 trillion ruble mark for DFA issues, the main thing is that there is a convenient regulatory field in which this market could be scaled up to an order of magnitude larger by that time.

The absence of a figure of 10 trillion rubles or more suggests that in some sense the digital financial assets market has not yet fully integrated into the classic palette of financial instruments, and here it is necessary to understand the strategies of the main infrastructure participants, and why growth is not as fast as it could be.

It is interesting to look at the experience of Hong Kong. On November 28, the local regulator launched a program to support the issue of tokenized bonds: issuers will be offered grants that can be used to compensate up to half of all expenses for the issue of such digital securities. The very fact of such a program indicates that these costs are quite high and represent a barrier to entry into the market for a large number of potential issuers.

This suggests that mass tokenization is possible when it is financially accessible. And this can be achieved by organizing the entire issuance process at the level of classic brokers with strong digital competencies. Moreover, from my own experience, I can say that the successful implementation of digital brokerage services led to the growth of customer loyalty to banking services under the FC Otkritie brand. That is, the development of successful digitalization in one area of ​​the financial market with a strategic approach allows for an additional effect in others. 

Such scaling is not available to stand-alone startups engaged in tokenization, unless they build appropriate interaction with classic players. And this requires the compatibility of blockchains and the creation of effective bridges between blockchains.

There are attempts at this. From the recent ones: On November 26, Polygon Labs released clarifications regarding the concept of the AggLayer cross-chain solution. This solution operates on the basis of the Newton blockchain, recently launched by Polygon Labs in collaboration with Magic Labs in test mode. This initiative clearly lacks access to major brands in the world of classic finance.

Therefore, technologically Newton can provide some lessons, but it is still better to initially build such solutions within the framework of the ecosystem of a large institutional player and allocate this area into a separate legal entity in its structure, Konstantin Vladimirovich Tserazov sums up the week.