Lawrence Ma is Co-founder and Chief Executive Officer of eMALI, an enterprise technology company that develops compliant blockchain and distributed ledger applications to solve real world challenges in the FinTech, InsurTech and LegalTech industries. Dr. Ma is also Founder and President of the Hong Kong Blockchain Society, a non-profit organization dedicated to building a vibrant blockchain community and ecosystem in Hong Kong, and a Committee Member of China’s Central University of Finance and Economics’ Da Xin Blockchain Research Center Expert Committee.
Dr. Ma’s prior experiences include serving as Chief Executive Officer of Fortel Solutions Limited, Director of Orbrich (China) International Factors Limited, Senior Advisor to Bain’s International Market Model Project with the Bank of China, Head of Quantitative Research at Man Drapeau Research, and a Lecturer in the Department of Mathematics at the National University of Singapore. Dr. Ma received a BA in Mathematics from Yale.
The Politic: Tell me a bit about your background in mathematics at Yale, Stanford, and Cornell! Any notable differences in environments, cultures, or opportunities?
Dr. Lawrence Ma: I studied pure mathematics and my thesis was in the area of chaos systems and fractals. The three schools I went to were all top schools. I think the difference was more about being an undergraduate versus graduate student. As an undergraduate, you get to explore a lot of different things. So, I really enjoyed the opportunities at Yale and learning mathematics.
The one thing I have to say is that among the three schools I attended, in terms of the relationships with professors, Yale turned out to be the best. When I graduated from Yale and went to Stanford, at that time, the relationships between graduate students and faculty wasn’t that great, whereas at Yale, I could go to the Math Department afternoon teas. At Cornell, it was a little bit different because there was a lot of pressure trying to finish my thesis.
I got a key to the math library. That didn’t even happen when I was a graduate student at Cornell or Stanford. I spent a lot of time in the Math Department. I really appreciate the amount of time professors spent with me. All the faculty there are really top notch. There was a very famous mathematician, yet he and the other faculty were still willing to spend time with me. They talk to you at office hours for a half hour or even a whole hour.
How did you get involved in blockchain?
I first encountered blockchain through Bitcoin. In 2012/2013, a former colleague of mine from the hedge fund space said we should get into Bitcoin. He asked me to take a look at it, and even then, I didn’t quite understand the concept. At that time, blockchain wasn’t even in motion. I looked, and I put Bitcoin aside. I was doing something else.
The next time I saw Bitcoin again was in 2014 when I was talking to some professors. People were talking about Bitcoin mining, and some of them wanted to see if we could build a mining gateway. I thought there must be something there. I found the concept really interesting, but I just couldn’t wrap my head around it.
In 2015, there was a famous article published in The Economist called “The Trust Machine.” I read the article and noticed that Bitcoin would be groundbreaking because it solved an internet problem: the need for a trusted third party. In other words, how can different people work together and trust each other without a third party?
Then, in 2016, blockchain started coming up, and I really spent a lot of time reading to understand its capabilities. I arrived at some idea that the technology could be very big, so I decided to really try and learn more about it.
I had some students intern for me in the Summer of 2016, and we started trying to learn about blockchain together. Then, in August of 2016, I co-founded a company in Hong Kong called eMALI trying to explore the space. The really exciting part was that AIA (the largest public listed pan-Asian life insurance group) started its global blockchain challenge in September of 2016, asking people to submit projects to solve problems through blockchain. We didn’t know anything about insurance. We just said, “Wow, we should see what blockchain can solve,” and we looked into some of the inefficiency of insurance claims. We submitted three projects, and we ended up winning all three of the top prizes.
Then, we were admitted to the AIA Accelerator program. They started to really teach us more about the technology’s potential. We asked them why we won the top prize, and apparently we solved a longstanding problem in the insurance industry: ”Inefficiency, Error and Fraud in medical claims.” So, that’s how I got started in the blockchain space for the insurance sector.
In the beginning, I didn’t quite understand Bitcoin. I can see why someone would be interested in Bitcoin, but I don’t see the potential there. Satoshi Nakamoto published the Bitcoin whitepaper in 2008. I tried to understand the paper by learning about Bitcoin’s properties. I spent 2014 to 2015 learning about its properties by myself, and I found the process really helpful. When I picked up the technology again from 2015 to 2016, there was quite a bit of cryptography, and because I had studied it before, I was better able to understand what the cryptographists were trying to do. I was able to break it down and see what problem they were trying to solve.
Trying to understand your background a bit more– any reason why you switched from the more traditional path of Bain to the less established path of blockchain? Any differences/similarities in the work?
I wasn’t doing a full-time job with Bain. What happened was that Bain needed someone who understood all the mathematics behind complex derivative products in 2008. They were consulting the Bank of China (BOC) on BASEL II market risk management. They needed someone who really understood finance and derivatives, and they couldn’t find anyone at BOC. They didn’t have anyone. So, an ex-colleague of mine introduced me to Bain’s people, and I helped them consult on their project.
Could you tell me a bit about eMALI? I saw you have some university partnerships, for instance, with City University of Hong Kong and Hong Kong Polytechnic Institute.
I co-founded eMALI in August of 2016, but I’m also President of the Hong Kong Blockchain Society, which I founded with some others in 2017/2018. After a short while, we realized that one of the real challenges of the whole area is the lack of general education. We don’t have enough people that known about blockchain, and it’s hard to really learn. The universities don’t have classes, and the professors don’t really know. In 2016, there was hardly anyone at all that really knew about blockchain the universities. We believe that, as a society, we should concentrate on training and educating young people, especially with respect to this emerging field, because we strongly believe in its potential.
We offer training to our university partners. We conduct workshops from three different angles. First is the technical side, so we teach them some of the technical parts of blockchain such as blockchain programming. Second is the business side, and we think that’s important because that’s the training these students often lack. It’s one thing to know how to code a smart contract, but it’s a totally different thing to know what to do with it once you’ve coded it, or what kind of problem you’re trying to solve, especially when blockchain is so new and decentralized– so different from the traditional centralized approaches. There’s also the legal and compliance side of the equation. That’s how the Hong Kong Blockchain Society spends its time working with universities, organizing workshops and seminars.
When I look at your partnerships, conferences, and so on, it seems like there’s a real global focus to your work and a lot of global demand. Could you tell me a bit more about that?
Last year, we organized our first blockchain competition. There were teams from all the local universities in Hong Kong. We co-organized with the City University, and we invited all of the universities in Hong Kong to participate. We just finished one last week. We were a little more ambitious, so we did a global kind of competition. Schools from the U.S., Thailand, the Philippines, Canada, Taiwan, and other countries all came to Hong Kong and participated in the final competition a week ago.
I think there are some partners who want to sponsor this event and make it annual. For our recent event, there were 60 entries altogether from around the world. We selected 30 entries, 20 of which were from overseas. They all flew to Hong Kong for the final, three-day event. Prior to the final three-day event, we organized a few online and offline blockchain events, teaching them the fundamentals of both the technical and business aspects of the blockchain space.
The first day, we gave advice on their projects, i.e., how they could make improvements. The second day, there was a poster presentation where each team would work on a poster board for their project, and then our judges would come around asking them questions. At the end of the second day, we picked 18 entries to attend the Sunday finale and present their final 10-minute pitch. After each presentation, the teams would answer questions from our judges. Finally, that Sunday, we also picked the winners from the finale. It was quite successful actually. We were amazed by the quality of the projects. Not to mention, people were also maturing by the end.
What were some of the winning projects?
The winning project this year was very impressive. The team that won was from Michigan. Their plan was to use blockchain to address the issue of structural abuse. The second place team was comprised of some students from the Philippines. They did a pretty interesting project which looked at using blockchain to combat the problem of illegal drugs. The third place team was from Canada. They were using blockchain for vaccines. Another team was quite interesting, too. They were using blockchain to optimize space in aircraft containers.
Who were the judges?
The judges are typically academics, bankers working on innovation, experts in intellectual property, investors, or consultants from firms like PWC. We have a very high quality of judges. They ask questions like, “Why does your project need blockchain?” or “How will you make money from your idea?”
Do participants pay to attend?
We help them pay. For example, some of the Canadian or American teams will get funding from their alumni associations to cover the airfare, but we’ll also help subsidize teams that can’t completely afford the costs of participation.
What drives the bankers and consultants to come judge?
These banks are looking for young talent as part of their recruitment efforts. Maybe some of the local companies want to hire students as interns, too. It’s quite interesting. I remember one or two years ago, when I went around and talked to the insurance companies, a lot of the management departments weren’t sure if blockchain was worth exploring. Only a year later, management doesn’t even ask if they need blockchain. The real question on their minds is when to make the transition: In one year? In two years? So, all the insurance companies have some kind of blockchain initiative at this point.
We were mostly doing insurance because that’s the history of the AIA. Recently, though, we’ve been working with some of the banks. It’s interesting. They’re not looking at FinTech applications of blockchain; they’re looking more at the payment side of things. They’re doing this to get some data from the insurance sector.
How do you cover such a broad array of FinTech needs? (e.g., insurance, digital identity, fraud prevention, etc.)
After working in this space for two or three years, we’ve always been looking at potential blockchain applications. Right now, we believe that the best use case of blockchain technology relates to digital identity– an application which applies horizontally to many sectors. If you think of companies like PWC, the first step is always about identifying the various parties to a transaction. You need to verify whether the person behind the transaction is real and whether he has the authority to make the transaction. That’s really the basic question, right? It’s fair to say that the identity-verification problem isn’t really solved at all, and that’s what we’ve been focused on for the past two years.
For example, AIA actually wants to pilot our winning solution from 2017. After a while, I realized how important the problem was when you consider the sheer number of patients who could use this technology. There are solutions to the identity problem, but they all have lots of holes in them. So, we pulled back and spent quite a bit of time just trying to deal with that issue. Now, we can really stop some of these issues, and provide patients with a better chance to live.
Here’s one example. When it comes to insurance, the idea is that you’re a policy-holder. In Hong Kong, you either carry a physical medical card, or whatever. The problem is that a card is a card. You can give it to somebody else or even create a fake card. On top of that, when you do a patient claim after someone checks into the hospital, a lot of time is spent verifying the identity of that patient, what their insurance covers, and how they’ll pay for the medical bills. That actually takes hours. Not to mention, the patients themselves are very uneasy because they don’t know whether and when they’ll be discharged from the hospital, or whether the insurance company can really cover the cost of the medical bills. There’s a lot of uncertainty. The journey is very bad.
By using digital identity technology, we can identify the person. We have a solution where, before you even enter the hospital, the doctor will contact the insurance company and receive approval for the surgery. That’s because he knows the kind of surgery you need before you arrive. So, the insurance company will say, “This is the amount we will cover on your behalf.”
That pre-approval is really helpful. The patient can put it on his mobile phone, so instead of spending hours to call the insurance company, he can immediately tap his phone with a QR code and know exactly how much the insurance company will cover. That enables very smooth, real-time tracking.
Discharge is another key area right now. When you go to pay your medical bills, you need to do all the insurance claims, you need to get the bill and have the doctor sign off, etc. But, all of these things we currently do can be done at your bedside. The doctors and hospitals can check you out by looking at your credentials and your payment, and then sending it through the blockchain.
I read something about you working on university-based blockchain develop labs. That seems really interesting– what’s the scoop?
We talked about it, but we haven’t really started yet. We’ll definitely get around to it this year. I was at the University of Waterloo recently. They just started a blockchain lab funded by Ripple– one of the major cryptocurrencies. Especially now that we’ve had this recent competition and have built an international position, we’re starting to build a relationship with some of the students overseas. We want to have this lab that you mentioned, starting in September. We weren’t really able to do that in the past year. It’s difficult. We don’t have that many resources overseas. But now, since we have the relationships with students overseas, we can use them as a starting point for building a lab or something.
One thing, for example, is the racial scandal. We have a solution. We have a solution that we’re going to push out in September. After talking to most of the universities in Hong Kong, they’re interested in academic credentials for students. When they graduate, instead of receiving a piece of paper, we’ll give them something that’s digitally signed by the universities and the students. That way, the next time they apply, instead of going back to the university, or instead of going back to the overseas university, they can simply verify that by themselves. It’s much more efficient. Imagine you have an event where the students, when they participate, could issue attendance credentials. Next time, whoever needs to can verify that these students were here doing these things.
We think about the technology in terms of the “in” and “out.” The “in” is the beginning of the transaction. You need identity. And the “out” is the end of the transaction. You might want some payment. Those are the two we really want to focus on. In the middle (e.g., the business process), there are so many applications. But, we’re a startup without resources, so we would rather have other people do the middle part.
We really focus on the identity aspect. I think one thing that’s a big issue right now is–as you mentioned–data privacy. Look at the GDPR or California’s Personal Privacy Act. I think people are getting more and more concerned about data privacy. Our solution might involve passing personal data to the service provider. Our tools are built to track and comply.