Houston fintech founder: It's time to rewire our digital infrastructure

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As the United States looks to reopen from an unprecedented shutdown caused by a global pandemic, conversations amongst government and policy bodies are slowly switching to how they will support the economy in the long term. There is a need to improve infrastructure, strengthen the supply chain, increase economic resiliency, etc.

Indeed, the speed of the economic shock caused by COVID-19 highlighted the fragility of many key systems and processes, impacting the ability of the federal and state governments to distribute economic relief funds, manage healthcare capacity, and support small businesses.

There is no better illustration of this fragility in the system than the sudden spike in demand for COBOL programmers. COBOL is a decades-old programming language that was used to write mainframe applications. Apparently over half of the states in the U.S., including California and New York, rely on applications written in a language first introduced in 1959 for their critical state systems.

There is clearly a need to modernize the public services technology infrastructure, not only in expectation of future pandemic-driven disruptions but to increase efficiency and reduce costs nationally. The private sector can and should play an important role in bringing modern technology into the critical parts of the economy.

But that requires a closer collaboration between state governments and technology firms to identify the best and most efficient way forward. Technologies such as artificial intelligence, blockchain, and the Internet of Things can dramatically reshape and improve public sector technology infrastructure while providing broader benefits to the state economies.

The critical first step in building this public-private partnership is to educate and engage state officials and legislators on specific technologies that can be put to use.

On April 29, I attended a virtual meeting organized by Texas Blockchain Committee (TBC) and hosted by the office of State Representative Tan Parker. In attendance, there were individuals and organizations based in Texas that are involved in developing practical applications of blockchain technology. What was also encouraging was that there were quite a few members of the State Legislature in attendance.

Here are a few key points that are worth highlighting from the meeting:

There is growing recognition and acceptance that blockchain is a technology that has wide applications outside of the cryptocurrency world. In fact, during the meeting, no one mentioned Bitcoin or crypto-trading.
Texas is aiming to explore ways to be at the forefront of blockchain technology adoption and be the leader among the states in promoting Blockchain innovation. Back in 2018 at the height of ICO and cryptocurrency mania, The Brooking Institution labeled Texas as reactionary when it comes to blockchain. Since then the state attitude has changed, in many ways thanks to Representative Parker and his push to initiate a proper study of blockchain's applicability at the state level.
There are many Texas-based companies with deep technical expertise and know-how in the blockchain. Some even moved their operations from other parts of the country to Texas in order to scale their businesses.
Whether it is related to the distribution of relief funds for businesses or individuals impacted by COVID -19, improvements in the way the healthcare industry handles patient data or other areas that require secure and transparent record management, blockchain is gaining attention as a technology to modernize critical digital infrastructure.
Particular attention was given to the efforts in other countries to bring blockchain technology into mainstream adoption. For example, China launched its nationwide Blockchain Services Network (BSN) in April of this year and is looking to bring digital central bank currency online early next year. The Chinese BSN is a result of joint efforts by the government, regulators, and private sector companies – a model that could work very well in the U.S. and in Texas.
It is worth noting that at the federal level there are currently over 30 blockchain-related bills in the U.S. House of Representatives and Senate. While a majority of these bills are focusing on the regulation of cryptocurrencies, there are a few that aim to promote the study of blockchain usage more broadly.

As a Texas-based fintech company that has been using Blockchain for the past three years, we are very encouraged by the broad interest in this technology. The Texas Blockchain Committee, led by Lee Bratcher and Karen Kilroy, has managed to pull together many individuals and companies to participate in this exciting effort.

If the last few weeks have shown us anything, it's how important the resilience of our digital infrastructure is, our reliance on data, and the power technology has to help us during challenging times. However, in order for us to leverage technology during harder times, we need to invest in properly applying it during stable times.

I believe this is a step in the right direction for Texas, and I hope we are able to expand the adoption of this technology, where relevant, at a national level. A coordinated national effort to study how technology, blockchain or otherwise, can help us be better prepared for our country's future.

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Rashad Kurbanov is the CEO and co-founder of Houston-based iownit capital and markets, a digital investment platform for private securities.

The music industry has adapted to the digital age — so should financial securities. Getty Images

The financial industry needs to digitize not tokenize, says this Houston expert

Guest column

One of my favorite movies growing up was Empire Records. It was the mid-1990s, and the closest we got to Instagram feeds was who had the best mixtapes. If you're not familiar with Empire Records (or what a mixtape is), I recommend watching the movie, but you don't have to worry too much about mixtapes any more.

Since Empire Records was released in 1995, the way we purchase and consume music has fundamentally changed. The physical music store was displaced by iTunes, and then the music industry evolved even further into a streaming economy. It took 24 years, but music evolved and it now operates in a fundamentally different way. Digitization of music was initially viewed as an existential threat to the industry, but in the end, music was digitized globally and the music industry very much survived.

The music industry has evolved and adapted to the digital age. The same happened across countless other industries, including financial services. Today we can invest in publicly traded stocks through a mobile app for free. However, a critical segment of capital markets has not evolved yet. The private securities space.

Transactions in private securities are still done on paper (no, DocuSign does not count as securities digitization.) Administrative costs are kept high due to the amount of paper that is processed and pushed through this system. As long as the foundation of private securities is paper, there is no amount of administrative technology out there to create an efficient market.

Public markets took the plunge into digital long before music did, and digitization of public markets enabled exponential growth globally. Trading volume, access to capital, and liquidity have all increased, and a large part of that can be attributed to the efficient and transparent nature of most public exchanges.

Efficient markets rely on price transparency and information equality. Currently, the private securities markets do not offer either of these characteristics. This is nothing new to people in the alternatives space, but how to reach these lofty goals, to create liquidity and reduce costs, is what I am excited about.

The reduction of cost does not relate only to commissions. There are administrative costs associated with private securities. Information distribution is slow and unilateral, forcing investors to depend on antiquated systems in order to track their investments. Nearly all of these costs are absorbed by the investor, and most efforts to date have not helped address the core issue, analog private security transactions.

Digitization of private securities is fundamentally different than tokenization. Tokenized securities are considered bearer securities. A digitized security, on the other hand, maintains its original status as a registered security, as long as its digitization is implemented in a manner that fits current regulatory requirements. Until recently, that had not been possible in a scalable way. Blockchain changed all of that.

Initial attempts at utilizing blockchain for private markets applied tokenization. Essentially, this configuration took securities that had clearly defined ownership records, anonymized them and put them on a public blockchain such as Ethereum. While there are some benefits to this approach, it also opened doors to significant fraud and securities regulation violations. Tokenization may provide liquidity, but the long-term risk far outweighs the value of liquidity for any prudent investor.

Blockchain does provide a framework that supports compliant digitization of private investments, it's simply not tokenization. The solution lies in using private permissioned blockchains that allow an appropriate degree of technical security while also ensuring transparency and accountability.

Blockchain enables us to maintain a statement of record that is both compliant, and scalable. Across the financial services industry, and across most other industries, blockchain is being deployed to help solve problems that were previously unmanageable. The blockchain is even helping farmers track their crops through IBM's blockchain. iownit has integrated blockchain at the core of our technology, proving that compliant digitization of private securities is possible and scalable.

The United States has a free market economy, so in the end, winners are determined by the market. It is our belief that the digitization of private securities is the responsible way to help this industry evolve. If you're still skeptical, just look at how the public securities markets have evolved since the '70s when electronic stock trading was enabled and the first digital public security trade was placed. Now try and imagine how private security markets will look in four years.

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Yosef Levenstein is the head of marketing at iownit, a Houston-based financial technology firm that is democratizing how investors and private companies transact.

Houston-based iownit.us got the green light from the Financial Industry Regulatory Authority. Getty Images

Houston blockchain-enabled investment platform gets regulatory approval

green light

For Rashad Kurbanov, this day has been a long time coming. The founder of iownit.us has been building his digital investment platform for two years, and now the company has been approved for membership by the Financial Industry Regulatory Authority.

As a FIRA member, IOI Capital and Markets LLC, a wholly owned subsidiary of iownit.us, the company can be placement agent for digital private securities that are issued on the iownit.us platform.

The iownit.us' blockchain-backed technology allows for a more simplified and streamlined process for securities investment, making it easier on both the investors and the companies seeking investment.

"We believe our platform will reduce friction in the market and reduce costs for all market participants, while importantly providing appropriate investor protections," Kurbanov says in the release.

Kurbanov indicates in the release that the length of the approval process wasn't that surprising.

"As any new technology being introduced in financial markets, blockchain had to be thoroughly evaluated by the regulators to ensure its application in compliance with regulations that made the U.S. capital markets envy of the world," he says. "We spent a significant amount of time with FINRA and SEC Staff on productive discussions working through the use of distributed ledger technology and how it can be implemented to provide convenient yet secure platform."

Iownit.us represents a more modern approach to traditional investing processes in an increasingly digitized world.

"We are not here to 'revolutionize' investing, but we do intend to make it vastly more modern and less complicated for both issuers and investors to engage and transact," he says in the release.

In June, the company closed a $4.5 million Seed round of investment. Kurbanov said that those funds would be use to wrap up this approval process. Now that it's all squared away, the remaining funds will go toward business development and marketing initiatives and technological advancements.

Houston-based iownit.us secured $4.5 million to grow its platform. Getty Images

Houston investment platform completes a $4.5 million Series A round

Money moves

A Houston-based digital investor infrastructure platform closed an investment round of its own. Iownit Capital and Markets Inc. announced that it has closed a $4.5 million Seed round of funding.

The round was lead by a group of private investors who were not identified in the June 26 release. While iownit.us CEO Rashad Kurbanov has been working on the platform for two years, he still awaits regulatory approval.

"This funding shows the demand for a platform like this in the marketplace, and will be crucial in making sure our platform meets regulatory requirements," Kurbanov says in the release. "We're doing everything we can to get this correct from the very start — unlike many firms who say, 'better to ask for forgiveness than permission,' we ask permission first because we don't want to ever be in a position where we're asking for forgiveness."

The primary function of the funds will go to wrapping up this approval process to insure the company has all of its required licenses. After that's all squared away, the remaining funds will go toward business development and marketing initiatives and technological advancements.

Iownit.us uses private blockchain and ledger technology to transact traditional investment deals securely on its digital platform.

"We realized there's a big section of the overall capital market that has not necessarily been touched by technology, and that's the space of private securities," Kurbanov tells InnovationMap in a previous interview.

Kurbanov says the convoluted process of private securities investment has meant that startup companies are much more likely to focus on receiving funding venture firms, because they want to have a one-stop-shopping experience.

When entrepreneurs add in multiple investors, they end up juggling too much of the logistics side of things, rather than running their company. Iownit's platform, enabled by the JOBS Act, plans to simplify this process, which then allows for a diversity of investments in the ecosystem that's in the past been dominated by huge VCs.

"What we do, and where technology helps us, is we can take the entire process of receiving interest from investors, signing the transactions, issuing the subscription agreements, and processing the payments and put that all online," says Kurbanov.

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Houston-area lab grows with focus on mobile diagnostics and predictive medicine

mobile medicine

When it comes to healthcare, access can be a matter of life and death. And for patients in skilled nursing facilities, assisted living or even their own homes, the ability to get timely diagnostic testing is not just a convenience, it’s a necessity.

That’s the problem Principle Health Systems (PHS) set out to solve.

Founded in 2016 in Clear Lake, Texas, PHS began as a conventional laboratory but quickly pivoted to mobile diagnostics, offering everything from core blood work and genetic testing to advanced imaging like ultrasounds, echocardiograms, and X-rays.

“We were approached by a group in a local skilled nursing facility to provide services, and we determined pretty quickly there was a massive need in this area,” says James Dieter, founder, chairman and CEO of PHS. “Turnaround time is imperative. These facilities have an incredibly sick population, and of course, they lack mobility to get the care that they need.”

What makes PHS unique is not only what they do, but where they do it. While they operate one of the largest labs serving skilled nursing facilities in the state, their mobile teams go wherever patients are, whether that’s a nursing home, a private residence or even a correctional facility.

Diagnostics, Dieter says, are at the heart of medical decision-making.

“Seventy to 80 percent of all medical decisions are made from diagnostic results in lab and imaging,” he says. “The diagnostic drives the doctor’s or the provider’s next move. When we recognized a massive slowdown in lab results, we had to innovate to do it faster.”

Innovation at PHS isn’t just about speed; it’s about accessibility and precision.

Chris Light, COO, explains: “For stat testing, we use bedside point-of-care instruments. Our phlebotomists take those into the facilities, test at the bedside, and get results within minutes, rather than waiting days for results to come back from a core lab.”

Scaling a mobile operation across multiple states isn’t simple, but PHS has expanded into nine states, including Texas, Oklahoma, Kansas, Missouri and Arizona. Their model relies on licensed mobile phlebotomists, X-ray technologists and sonographers, all trained to provide high-level care outside traditional hospital settings.

The financial impact for patients is significant. Instead of ambulance rides and ER visits costing thousands, PHS services often cost just a fraction, sometimes only tens or hundreds of dollars.

“Traditionally, without mobile diagnostics, the patient would be loaded into a transportation vehicle, typically an ambulance, and taken to a hospital,” Dieter says. “Our approach is a fraction of the cost but brings care directly to the patients.”

The company has also embraced predictive and personalized medicine, offering genetic tests that guide medication decisions and laboratory tests that predict cognitive decline from conditions like Alzheimer's and Parkinson’s.

“We actively look for complementary services to improve patient outcomes,” Dieter says. “Precision medicine and predictive testing have been a great value-add for our providers.”

Looking to the future, PHS sees mobile healthcare as part of a larger trend toward home-based care.

“There’s an aging population that still lives at home with caretakers,” Dieter explains. “We go into the home every day, whether it’s an apartment, a standalone home, or assisted living. The goal is to meet patients where they are and reduce the need for hospitalization.”

Light highlighted another layer of innovation: predictive guidance.

“We host a lot of data, and labs and imaging drive most treatment decisions,” Light says. “We’re exploring how to deploy diagnostics immediately based on results, eliminating hours of delay and keeping patients healthier longer.”

Ultimately, innovation at PHS isn’t just about technology; it’s about equity.

“There’s an 11-year life expectancy gap between major metro areas and rural Texas,” Dieter says. “Our innovation has been leveling the field, so everyone has access to high-quality diagnostics and care, regardless of where they live.”

Aegis Aerospace appoints Houston space leader as new president

moving up

Houston-based Aegis Aerospace's current chief strategy officer, Matt Ondler, will take on the additional role of president on Jan. 1. Ondler will succeed Bill Hollister, who is retiring.

“Matt's vision, experience, and understanding of our evolving markets position us to build on our foundation and pursue new frontiers,” Stephanie Murphy, CEO of Aegis Aerospace, said in a news release.

Hollister guided Aegis Aerospace through expansion and innovation in his three years as president, and will continue to serve in the role of chief technology officer (CTO) for six months and focus on the company's technical and intellectual property frameworks.

"Bill has played an instrumental role in shaping the success and growth of our company, and his contributions leave an indelible mark on both our culture and our achievements," Murphy said in a news release.

Ondler has a background in space hardware development and strategic leadership in government and commercial sectors. Ondler founded subsea robots and software company Houston Mechatronics, Inc., now known as Nauticus Robotics, and also served as president, CTO and CSO during a five-year tenure at Axiom Space. He held various roles in his 25 years at NASA and was also named to the Texas Aerospace Research and Space Economy Consortium Executive Committee last year.

"I am confident that with Matt at the helm as president and Bill supporting us as CTO, we will continue to build on our strong foundation and further elevate our impact in the space industry," Murphy said in a news release. "Matt's vision, experience, and understanding of our evolving markets position us to build on our foundation and pursue new frontiers."

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