Fintech Interview with David Guedalia, Data Scientist and CTO at Blue dot

It has become mandatory for high-growth firms to streamline their tax analysis and filing process in the dynamic global workplace. What is the way ahead?

1. Could you give us a brief background of your career before Blue Dot?
Before my role at Blue dot, I held the position of CTO and VP of R&D at iSkoot Technologies Inc. I was the co-founder of Happy Cloud, LLC, a researcher at Mobileye, and VP of Technology at Qualcomm’s Innovation Centre, where I developed algorithms to analyze human contextual behavior in the multi-sensor IoT environment. My Ph.D. studies are in neural computation from the Hebrew University, specializing in Machine Learning and Artificial Intelligence.

2. What is the most challenging part of working in the fintech industry?
Many fintech companies are facing dynamic regulatory challenges as many national governments tighten their financial oversight. In addition, consumer behavior is constantly evolving. As the norms across the broader financial industry evolve, such as the growing prevalence of decentralized banking, digital currencies and consumer spend, both institutions and regulatory bodies must learn how to adjust and rise to the challenges presented. Keeping up with continuous technological progress in a sector that requires rapid acceptance of new rules and regulations that address evolving consumer behavior has had a significant impact on our business priorities and operations.

3. What are your perceptions about the evolution of payment methods over the last couple of years?

The payment industry, though historically slow to change, has been forced to mature quickly to match the speed of digitization – growth that has only been bolstered by the ever-increasing number of players in the ecosystem.

Physical payment methods have significantly decreased due to the widespread adoption of smartphones and smart payment terminals, such as Apple and Google Pay. At the end of the day, this trend facilitates the evolution of payments on a global scale, empowering individuals and changing consumer behavior even within enterprises, this in turn requires more regulatory oversight.

4. How are Blue Dot’s integrations benefiting businesses considering expense management?
63% of high-growth companies have already adopted a “productivity anywhere” workforce model, ushering in a new era of consumer-style enterprise spending and, with it, new challenges for businesses looking to maintain tax compliance along with expenditure regulations. Additionally, expense report processing and management are costly and complex, with the majority still done manually by individuals within a company, consuming time that could be better allotted to critical business tasks.
Blue dot offers a reliable, accurate, and automated solution to accelerate financial processes — such as expense management — and ensures tax compliance and VAT recovery across these expenses. Blue dot has partnered with expense management platforms, including Rydoo and Yokoy, whose customers now have access to Blue dot’s database of rules and regulations and best practices across national and domestic jurisdictions updated in near real-time to ensure compliance.

5. Could you share some insights on Blue dot’s solutions benefiting various industry domains?
Mid-size and large-scale clients have no physical way of covering their troves of financial data, creating an opportunity for automation to organize and extract insight. In fact, our solution discovers a greater amount of data and delivers more value, such as high-profile issues, than any other solution in the market.
Our solution benefits enterprises across all industries by automating their taxable expense processes, with over 90% of invoices being fully automated. This allows corporate finance teams to extract and understand more about transactions than their competitors, meaning our solution analyzes not only the breadth but also the depth of company expense data. Companies benefit from these deep insights and organized reporting as a structured and well-defined way to deal with internal policies as well as tax requirements in the event of an audit.

6. How is Blue dot helping businesses to remain compliant considering the tax payments?
Blue dot streamlines the tax analysis and filing process, which has become necessary for high-growth companies in the dynamic global and dispersed workplace. Our automated platform identifies areas of potential oversight in tax compliance for employee-based transactions and allows companies to reduce exposure, avoid compliance risk and gain complete visibility.
Our solution is constantly updated according to region-specific VAT regulations and rules to ensure improved cross-border compliance and decreases the likelihood of enterprise businesses falling prey to unexpected fines and audits. Blue dot’s Taxable Employee Benefits solution allows companies to reduce exposure, improve compliance, and gain complete visibility over employee taxable expenses.

7. Can you give us insights into the role of AI and ML in VAT optimization?
The rise of robotic process automation (RPA), artificial intelligence (AI), and machine learning in corporate finance has showcased the role digitization can play in our industry. The word trend implies a transitory state, but for today’s business finance companies these new tech-heavy solutions — such as automating accounts payable and expense tracking — can and will help in managing transactions, streamlining audit processes, and maintaining compliance in the long term.
In today’s market, our clients have recognized the adoption of AI and ML-powered tools as a strategic component of business, especially regarding corporate finances. When it comes to AI’s role in tax technology, we’ve seen how necessary sophisticated machine learning algorithms are to meet the diversification and decentralization of corporate spending across the enterprise.

8. Can you give us a sneak peek into Blue dot’s development plans?
First and foremost is our dedication to continued excellence in what we do, increasing our core functionality and performance will continue into 2023. In addition, we are looking to release a new tool that will provide our clients the flexibility to address their specific needs. Beyond structuring a transaction and generating a report, this new tool will enable our clients to discover and analyze their unique transactions.
For example, entity specific policies that interface with evolving common behavior. We saw this need develop when COVID work-from-home policies generated new types of expenses. Now we are generalizing that capability to enable customizable policies that are sensitive to local regional behaviors.

9. What is the biggest piece of advice you would want to give to company leaders?
It is important to continue to grow and evolve in kind with the plethora of technologies entering the ecosystem. Faced with threats of a global recession, enterprises will focus on investing in the best tools and strategies to improve business processes and raise the bottom line. Automation tools will become part and parcel of our industry and necessary to produce actionable insights from corporate financial data.
More and more fintech companies will behave like data companies, focusing on data quality and analysis efficiency, to enhance their decision-making capabilities. My advice is to be wary of overfitting a data solution to past experience. The world is a vibrant dynamic place, change is constant, and yesterday’s data will not provide the solution to tomorrow’s problems.

10. How do you stay motivated? What are your key learnings from your career so far?
The rapid change in the world and our ability as humans to adapt constantly amaze me. I am excited to look at the complexity of life, how it manifests in our sphere of commercial transaction, and the beauty and elegance in our solutions. Complexity transforming into beauty motivates me to continue adding value to that equation.

11. What movie/book has inspired you recently?
Recently I read The Many Lives of Stephen Leeds by Brandon Sanderson, he describes human complexity, the many aspects we each have, and our complex set of identities. This inspired me to think about how to learn to manifest my different identities, separately at first, yet recognize that they form a complete sense of self. This give-and-take between the parts and the whole in a complex system is a never-ending source of fascination. At Blue dot, we play this game as well when we fully deconstruct the elements of the transaction and then reconstruct the entire transaction to generate a report.