THE FINTECHTIMES.

COM EDITION 33

THE WORLD'S FINTECH NEWSPAPER

COVID-19 COMPLIANCE TECHNOLOGY JOBS IN FINTECH

Will the pandemic change how we Mainstreaming cryptocurrency Coding with context The Fintech Times selection
make decisions? by Simudyne page 12 by Elliptic page 15 by Vacuumlabs page 30 of top jobs this month page 32

G U E ST E D I TO RS

It’s time
Are you serious about strategy in
the financial services world?
asks Dr. Ruth
Wandhöfer

for digital
and David
Birch
page 4

currency
Opening up finance
by Yoni Assia, Chief Executive
Officer of eToro page 6

From technologists to business Red herrings and

strategists, economists to national China’s CBDC
and international regulators: by Richard Turrin, a fintech
innovation expert
all eyes are on the coming page 8

era of virtual payments The emergence

of the digital
security ecosystem
by Graham Rodford, Chief
Executive Officer at Archax page 18

Charge ahead, you

don’t need to stop
selling to stop fraud
by Shabab Muhaddes, General
Manager at Vesta Asia Pacific page 23

Bringing organisations
into the self-service
digital era
by Mambu’s Managing Director
(APAC) Myles Bertrand page 28

Read online at thefintechtimes.com

 G U E S T E D I TO R S’ N O T E S
THE FINTECH TIMES

IT’S TIME TO TALK

BRINGING FINTECH
DIGITAL!
TO THE WORLD
Editorial Enquiries
[email protected]
Chief Executive Officer
Jason Williams
Editorial Director
Mark Walker
Business Development
Deepakk Chandiramani
Terry Ng
Ania del Rosario

I
Editor
n this edition we are years. Continuing with of the trade finance With everything digital
Claire Woffenden
going deep into consumer payments, we ecosystem to remove happening around us,
Editor-in-Chief everything ‘digital’! will also explore the inefficiencies, paper and it would be amiss if we
Gina Clarke With all the stuff evolution of banking in the fraud of the past is truly didn’t talk about artificial
going on around us context of rebundling transforming this market intelligence (AI). In fact,
Art Director
– the pandemic being services, similar to what we and we will read about the apart from the many
Chris Swales
the biggest force of are used to across the latest trends in this space. ‘narrow’ or ‘general’ AI
Digital change – digital is being world of music, TV, The next area to explore solutions that we already
Manisha Patel accelerated, implemented shopping, and so on. is the growing crypto use in our daily lives, we see
and embedded in almost Naturally, the next topic currency and digital asset broader AI applications
all aspects of our life. closely linked to digital ecosystem. Sticking with emerging, that are starting
Published by An obvious change that payments is, of course, cryptocurrencies, a market to address the deeper
many have had to adapt to digital identity. This is a that has seen increasing challenges, such as how
is, of course, money, which growing space for fintech activity during the uncertain governments should plan
is no longer accepted in and in particular, as most times we find ourselves in, we for pandemics or how
Rise London, 41 Luke Street some shops as physical cash activities have now moved will discuss the critical corporates should manage
London EC2A 4DP notes and coins (at least not online, leading to significant importance of good controls their supply chains in
United Kingdom in the UK). This is where our growth in e-commerce in this space to ensure that times of severe uncertainty.
cover story begins, with a transactions, the role of no money laundering or other Agent based simulation
focus on central bank illegal activities take place. has emerged as the
digital currencies (CBDCs), The role of digital With the extension of the most effective means to
CONNECT a big topic that, depending
on implementation, has the
identity is becoming regulatory framework to
cryptocurrency exchanges
benchmark models (and
decisions) used by AI and
WITH US potential to not only
redefine how we consumers
crucial in the fight and wallet providers,
technical solutions will need
machine learning using
a synthetic environment.
/fintech-times use money but also how against fraud and to be in place to ensure With help of this, technology

/thefintechtimes
banks manage the identity theft compliance. More and more companies, institutions
payments and money space. interesting providers are and governments can
Another obvious topic digital identity is becoming playing in this market and we transparently and more
/thefintechtimes that continues to make the crucial in the fight against will hear from one of them on effectively make decisions
headlines is, of course, open fraud and identity theft what they are seeing and that benefit humanity
thefintechtimes.com banking. Here, we will look as well as bringing the working on. Continuing the instead of, for example,
at the angle of payments for much-needed user ease digital theme, we will also a small group of special
the gig economy on the one of use and control of their have the opportunity interests at the expense
hand and we will also shed identity data. One of our to welcome the first, about to of humanity.
This Newspaper was printed by light on what the European articles will explore exactly be regulated digital asset We will complete this
Park Communications Limited, payments regulatory that in the context of digital exchange of the UK. latest edition with a
London using its environmental print framework of Payment identity for corporates. Expanding the universe of forward-looking piece on
technology, on 100% recycled paper Services Directive 2 (PSD2) The space of trade cryptocurrencies with digital the future of finance, which
has so far yielded for the finance is also undergoing assets of potentially any will be a function of where
Copyright The Fintech Times 2020. payments fintech sector. In a digitisation spree, which kind is an exciting prospect innovation lies across
Reproduction of the contents in any manner is not particular, the third-party is worthwhile exploring. as we see our capital industry, government
permitted without the publisher’s prior consent. providers that have brought The combination of new markets slowly but surely and society.
‘The Fintech Times’ and ‘Fintech Times’ are registered a lot of innovation to the technologies and processes reinventing themselves for Dr Ruth Wandhöfer
UK trademarks of Disrupts Media Limited. market over the last few with the increased drive the digital future. and David Birch

www.thefintechtimes.com | 3
 COVER STORY
THE FINTECH TIMES

It’s digital
currency
time
Dr. Ruth Wandhöfer, Partner at Gauss
Ventures and David Birch, Author and
Advisor on digital financial services

From technologists to business

strategists, economists to national and
international regulators; all eyes are
on the coming era of digital currency

S
team engines were known about When we first began discussing
in ancient Greece but were used digital currency a few years ago,
as toys. The raw materials for while Ruth was looking at it for her
steam engines (iron, coal and PhD research and Dave was boring
so forth) were widely available to many people senseless with talks about the
civilisations around the world. The relationship between digital money and
need for mechanical work to increase digital identity, we both felt that something
productivity must have been evident was about to change. We knew that the way
from time immemorial. that money works is a temporary
So why did steam engines for institutional arrangement and we knew
commercial use arise in England at a that it must change in response to
particular point in history as an technology, businesses and societal
inefficient and energy-intensive way to change. But when would it change and
get water out of mines? Well, there are what would it change to? As the former
all sorts of complicated explanations to governor of the Bank of England, Mervyn the International Monetary Fund (IMF).
do with the availability of capital, the King, wrote in his book The End of Alchemy, Yet the dollar still dominates international demographics, the fact is that it’s digital
transition from a feudal economy, the ‘although central banks have matured, trade’. In his speech, Carney went on to talk currency time.
proximity of supply and demand and so they have not yet reached old age. But their about the international monetary system So, what is digital currency? The first
on, and so forth. In a way though, it is extinction cannot be ruled out altogether. using some kind of ‘synthetic hegemonic thing that we need to be clear about is,
simple and sufficient to say that steam Societies were managed without central currency’ (SHC) instead. That’s a pretty big and we make no apology for this,
engines arose because it was steam banks in the past’. deal, frankly, because it means that a terminology. Ruth is German and Dave is
engine time. Hold that thought. Fiat currencies managed by central proportion of the world’s financial a nerd, so it drives both of us to
One of the hottest topics in fintech banks are only one way to organise the transactions stop being dollar distraction when we see presentations
today, other than more efficient steam world and there are others. Yet our denominated and the demand for dollars that intermingle and abuse the terms
engines to mine Bitcoins, of course, is discussions about new ways to organise the falls. As Robert Kaplan, president of the digital money, electronic cash, crypto
digital currency and it’s not hard to see financial system may have seemed to some Dallas Federal Reserve, said recently: “The currency and digital currency. We’re
why. Few people interested in the future of observers a trifle speculative, to say the dollar may not be the world’s reserve going to use these terms in utterly
financial services can have failed to notice least. Well, they were. Until Mark Carney, currency forever, and if that changes, and specific ways. Broadly speaking
the contrast between the United States then governor of the Bank of England, gave you tack on 100 basis points to $20trillion electronic cash is a specific kind of digital
Treasury mailing out physical stimulus a speech at the Jackson Hole economic [that is] $200billion a year and all of a money that allows value transfer without
cheques in the post at the same time that symposium in Wyoming last autumn in sudden we’ve got a tremendous problem.” intermediaries, crypto currency is a
the People’s Bank of China began its beta which he said that a new form of global So that’s why we are talking about digital mechanism for such value transfer and
testing of a national digital currency in digital currency could be ‘the answer to currency. Not because technologists like digital currency is a mechanism for such
four cities. We think it’s impossible to the destabilising dominance of the US Dave or bankers like Ruth are talking about value transfer that links the values being
undertake any serious strategic planning dollar in today’s global monetary system’. it. But because central bankers are not only transferred to some external benchmark.
or even scenario building about the future The problem that Carney and others are talking about it, but starting to pilot it and Where that external benchmark is
of this industry without understanding alluding to is that the US dollar’s global explore different architectures. another currency, or basket of currencies,
three crucial things about digital electronic hegemony which, as the Wall we then have what people refer to as a
currency: why we are talking about it now, Street Journal noted, ‘made sense after It’s digital currency time ‘stablecoin’. The graphic opposite will
what exactly is it and what it means not World War II, when the US accounted for For a great many reasons at the show you what we mean.
only for the fintech industry but for the 28 per cent of global exports. Now, the intersection of fintech and regtech, A globally-acceptable SHC in the form
global monetary and financial system. figure is just nine per cent, according to economics and politics, demand and of a digital currency made from digital

4 | Edition 33
 COVER STORY
THE FINTECH TIMES

money denominated in a synthetic unit of fiat. The People’s Bank of China (PBOC) of China have made clear in their recent Note that this does not mean that
account sounds a little like Facebook’s has been looking at a digital currency pronouncements, these will soon store other countries’ implementations of
much-discussed Libra. While Libra has strategy to replace cash for some years. the ‘DC/EP’ (digital currency and CBDC will be the same as the Chinese
dominated the headlines, it will Three years ago, the then-governor of electronic payment), the Chinese digital implementation, in which the PBOC
undoubtedly be only the first of many PBOC, Zhou Xiaochuan, very clearly set currency that is being tested in four cities: retains central control over
attempts to create a global digital out their thinking about digital currency, Shenzen, Chengdu, Suzhou and Xiong’an. transactions. Other models that
currency, about which we will have more saying that ‘it is an irresistible trend that The deputy governor of the PBOC, emphasise privacy, for example, are
to say later on. paper money will be replaced by new Fan Yifei, recently gave an interview to more in sync with the approach of
From a payment perspective alone, products and new technologies’. He went Central Banking magazine in which he Western economies.
Libra is interesting but not a revolution. on to say that as a legal tender, digital expanded on the two-tier approach, noting The contrast brings into focus the
Facebook just launched its new payment currency should be issued by the central that this approach allows ‘more effective new ‘Cold War’ that Ferguson talks
system in Brazil without it, in fact. We bank and after noting that he thought it exploitation of existing business resources, about. What he means is that if the
think that a frictionless Facebook would take a decade or so for digital human resources and technologies’ and Alipay and WeChat wallets become
payment system could be beneficial. currency to completely replace cash went that ‘a two-tier model could also boost the widely used by a couple of billion
The ability to send money around on on to state clearly that ‘he has plans how to public’s acceptance of a CBDC’. people, starting with those along the
the internet is clearly useful and gradually phase out paper money’. He went on to say that the circulation ‘belt and road’ trading corridors, they
there are all sorts of new products What would be the impact of phasing of the digital yuan should be ‘based on may well begin by using their own
and services that it might support. out paper money? Yao Qian, from PBOC’s ‘loosely coupled account links’ so that currencies but they will pretty soon
A currency, however, has more far technology department wrote on this transactional reliance on accounts could shift to the digital yuan if it does indeed
reaching implications than a subject back in 2017, noting (as I have be significantly reduced’. What he means offer speed, convenience and person-to-
payment system. What if, for done) that CBDC would have some by this is that the currency can be person transfers. A trader in Africa may
example, the inhabitants of consequences for commercial banks, so transferred wallet-to-wallet without going soon find it more than a little
some countries abandon their that it might be better to keep those through bank accounts. Why? Well, so that convenient to order goods from a
failing inflationary fiat banks as part of the new monetary the electronic cash ‘could attain a similar Chinese partner via WeChat and settle
currency and begin to use Libra arrangement. He described what has been function of currency to cash. The public via Alipay. And, if they can settle
instead? The ability of central called the ‘two-tier’ approach, noting that could use it directly for various purchases, instantly with their Chinese digital
banks to manage the economy to offset the shock to the current banking and it would prove conducive to the yuan’s currency (or, to be fair, Libra or
would then surely be subverted system imposed by an independent circulation’. (We cannot help but draw something similar), then they will soon
and this must have political digital currency system (and to protect attention to the fact that the first find themselves accepting the same in
implications. Hence it is the investment made by commercial implementations seen out in the wild do payment. This is not necessarily a bad
unsurprising that both the banks on infrastructure), it is possible to indeed include this person-to-person thing for some countries. In a very
international Financial Stability incorporate digital currency wallet offline transfer functionality.) interesting recent paper on this topic in
Board and the UK’s Financial attributes into the existing commercial We agree with a recent Fortune 2019, Raskin, Salah and Yermack
Conduct Authority have said they will bank account system ‘so that electronic magazine article, that the shift to what highlight ‘the potential for private
not allow the world’s largest social currency and digital currency are we call ‘smart money’ will reward first- digital currencies to improve welfare
network to launch its planned digital managed under the same account’. mover economies. As the article notes, within an emerging market with a
currency without ‘close scrutiny’. selfish government’. Along the belt and
People refer to the new currency as road then, not only might digital
Facebook’s Libra but as Mark Zuckerberg currency be acceptable, it might be
testified to the House Finance highly beneficial.
Committee, Facebook is merely one of the We could see a new kind of Cold War
21 members of the Libra Association that as digital currency blocs battle for
launched in Geneva. The association control of the international money and
recently issued its new white paper in financial system, with Novi facing off
which it talked about creating stablecoins against Alipay on the one hand but, more
tied to national currencies (e.g. Lib$ and importantly, the digital yuan facing off
Lib£) alongside the original ‘basket’ against the digital dollar. This means
stablecoin. The white paper says that the that the virtual money debate is no
consortium hopes ‘as central banks longer about electronic money vs. digital
develop central bank digital currencies This is not a uniquely Chinese China will quickly integrate its digital cash, about hash tables vs. smart chips
(CBDCs), these CBDCs could be directly approach. Many researchers and currency into hundreds of ‘blockchain’ or about proof-of-work vs. proof of stake.
integrated with the Libra network, organisations (including the IMF and the projects in which autonomous digital Whether you think it might be a good
removing the need for Libra Networks to European Central Bank) have highlighted sensors and devices directly exchange thing or not, the dollar’s dominance
manage the associated reserves’. At the this two-tier approach as the way information and money. Removing gives America the ability to use the
same time. Facebook renamed its Calibra forward. On to the third key point then. intermediaries from these device-to- international payments system as an
digital wallet to Novi, presumably to device transactions will allow China arm of its foreign policy. The real and
emphasise that its ambitions extend Why is digital currency to automate entire internet of things serious implication of replacing the
beyond simply serving as a personal such a big deal? ecosystems, bringing efficiency gains existing payment systems with the new
storage mechanism for Libra value. We agree with the noted historian Niall to smart cities, supply chains and infrastructure based on digital currency
(It was noticeable, incidentally, that Ferguson, who stated plainly in The electricity grids. is that no clearing and settlement means
when it launched, the Libra Association Sunday Times that ‘if America is smart, it Meanwhile, back in the US, the Digital no transactions going through the
did not include most of the payments will wake up and start competing for Dollar Foundation, led by Chris Giancarlo international banking system, and no
organisations that had been identified in dominance in digital payments’. He is (former chairman of the US Commodity transactions going through the
initial discussions, such as PayPal and concerned about hegemony and argues Futures Trading Commission), has international banking system means
Visa, but did include the organisations that a good way for America to rival released a white paper putting forward a that America’s ability to deliver soft
who are users of payments, such as Uber Chinese initiatives, such as Alibaba and suggestion for the US CBDC. It suggests power through the Society for
and Spotify.) Tencent, is to support the aforementioned following the Chinese approach with a Worldwide Interbank Financial
Is Libra the world digital currency of the Libra, an argument repeated by David ‘two tier’ CBDC, which means that while Telecommunication (SWIFT)
future? Maybe, but let us now switch Marcus, the head of Libra. Right now, the Federal Reserve will regulate and disappears. We think that deserves
attention to what is (in the opinion of Alipay and WeChat wallets store control the digital dollar, it will end up in attention and if you are serious about
many observers) the most important renminbi (RMB) exchanged in and out of consumers’ pockets (in their mobile strategy in the financial services world,
current initiative in the world of digital bank accounts, but as the People’s Bank phones) through the commercial banks. it deserves your attention, too.

www.thefintechtimes.com | 5
 F E AT U R E S T O R Y
THE FINTECH TIMES

Opening up finance The Fintech Times asks CEO Yoni Assia to reflect on eToro’s founding mission to make
investing simple as the trading platform approaches 15 million users worldwide

is proud to be a ‘well-funded, profitable volume. In the first half of this year, global Recent months have seen investors
About Yoni Assia business’ that is growing both in terms of trading volume reached over $600billion. look to cryptoassets, such as Bitcoin,
Yoni Assia is the CEO geographical coverage but also product Furthermore, we saw a 400 per cent as long-term investment opportunities,
and founder of eToro, range. The global multi-asset investment increase in new users globally, making given widespread fiscal stimulus and
the world’s leading platform, founded in 2007, enables people their first deposit on the platform in the half performance that has dwarfed most
social trading platform. around the world to easily invest in shares, of the year compared with traditional equity markets.
Yoni has shown interest commodities and cryptos, either directly, the same period last year.” eToro has seen an eToro says it expects to see
in finance and by copying the investment strategies of According to Assia, this trend gather steam as
computer science since youth and so others or in a portfolio. while Covid-related market uptick so far this coins, such as ADA and
decided to merge his passions. Yoni is a
member of the YPO and was included by
The idea is to be more of a community volatility played a part, year in terms of new Ethereum, of which the
where people can share ideas, like a social he believes the growth is latter is undergoing its
Financial News in its prestigious Fintech network for traders and investors to also driven by the launch registrants to eToro own raft of technical
40 ranking and by City A.M. as a Fintech
100 top influencer. He holds a B.Sc. in
execute trades, but also see what others
are doing and talk to each other.
of eToro’s zero commission
stocks offering with
and also trading improvements, join Bitcoin
as assets at the forefront
Computer Science and Management eToro is regulated in Europe by the Cyprus stock investments on volume. In the first of investors’ minds.
and an MSC in Computer Science. Securities and Exchange Commission, by the
Financial Conduct Authority in the UK and
eToro quadrupling in H1
compared with last year.
half of this year, Assia says: “Over the
past decade we saw
by the Australian Securities and Investments In the first half of 2020, it global trading different rates of adoption
Commission in Australia. It is a FINRA also saw an increase in new of crypto in different
member in the US and also has a distributed people from across the globe volume reached markets but today we
ledger technology (DLT) licence in Gibraltar. coming to the platform over $600billion see interest in investing
Despite the difficult and unpredictable to copy more experienced in cryptoassets across all

‘‘W
hen we started eToro time for global markets during the global investors, compared with the same period of the markets where we offer crypto.
our goal was to open coronavirus pandemic, eToro says the last year. Equally, the number of copy I would say the most advanced crypto
up finance,” begins growing financial effect of the virus has positions on its platform globally has grown markets are the US and the UK.”
Yoni Assia. “We wanted generated increased interest in global by 155 per cent in the same timeframe. For eToro, crypto – and the blockchain
to change the way people think about markets for many people worldwide – with During the month of June, customers technology that underpins it – will have a
trading and investing, ultimately reducing the largest increase in activity since the 2017 globally favoured coins with proof of stake huge impact on global finance in the
dependency on traditional financial to 18 crypto boom. The eToro community mechanisms behind them. Bitcoin future, facilitating the greatest transfer of
institutions and make trading and itself has now reached more than 14 million remained in top spot as the most popular wealth ever seen, not from one group of
investing more transparent and fun. This registered users from over 100 countries. cryptoasset on the platform globally that people to another, but from privately held
mission remains our guiding light and we Assia says: “One thing we noticed this month, while in altcoins, eToro saw a clear databases to publicly available distributed
will continue to evolve both organically year was the pandemic-induced market trend from investors towards blockchains ledgers – the process of tokenisation.
and by acquisition in order to bring our volatility has put the topic of investing front that have proof of stake mechanisms. “Tokenisation will convert the rights of
customers the very best experience.” of mind for many. Because of this, eToro Cardano’s ADA saw a month-on-month ownership of any asset into a digital token
At a time when other fintechs claim to has seen an uptick so far this year in terms increase in investment on eToro, up 11 which is then available on the blockchain"
be not targeting profitability, eToro says it of new registrants to eToro and also trading per cent in June, compared to May 2020. Assia says. "This may seem complex but in

6 | Edition 33
 F E AT U R E S T O R Y
THE FINTECH TIMES

The Coronavirus Rollercoaster

essence, tokenisation will mean ownership of
traditional asset classes will be more easily
transferred and more securely stored. Perhaps
most importantly, markets for more niche
asset classes, previously the reserve of the
wealthiest, will be made far more accessible. How currency exchanges have coped during the Covid-19 pandemic

I
Just as eToro has opened traditional markets
n the wake of a global pandemic, market uncertainty has and even four-fold, mainly because users have more time to spend
for investors, in the future, we want to do the
plagued financial transactions – both fiat and crypto. For the at home. This along with the state of various economies across the
same in a tokenised world.”
gatekeepers of digital currencies – online exchanges, such as world, people are seeking refuge in crypto assets as a hedge
So, what’s next for eToro? Currency.com, CEX.IO and Bitcoin.com – Covid-19 has either against the inflationary tactics being employed by central banks
“We’ve spent the last 13 years building the pushed clients and traders towards them or held them back. globally, that’s partially why we’re seeing a rise in decentralised
operational scale to support a global business One thing that has emerged from the pandemic is a global finance (DeFi) right now – a lack of trust, over heated markets etc.
and we have ambitious plans for our future conversation around the benefits of digital currencies, with the US “Generally, I believe Covid-19 is an accelerator for adoption
growth particularly in the US," comments Congress debating the use of digital dollars to help distribute cash both for cryptocurrencies and for blockchain technology as a
Assia. "In 2018, we launched our US crypto to citizens. Back in March, the US government committed to an whole. While cryptocurrencies are usually discussed on the
offering and added our unique copy function immediate fiscal stimulus of just under $2trillion but as there are payment system and store of value context, I believe that a big
last October. We’re excited to announce that approximately 14 million adults (or six per cent of all households) impact will be made on the digital identity industry as well.”
we were granted a FINRA licence so in the in the US that have no primary bank account, these cheque Dmytro Volkov, CTO at CEX.IO, comments: “Trading volumes in
future we will be able to offer commission-
payments were of limited use. Compounded by delays and the risk July doubled compared to June. This is due to the increased
free stocks to US retail investors.”
of infection while banking a cheque, discussion continues as to interest in the Ethereum (ETH) market to DeFi and the imminent
“Opening up markets is not just about
providing investment options it is also whether digital dollars could eliminate these problems. release of Ethereum 2.0. In addition, volumes in pairs with ETH
about financial education. We offer our Experts believe that a digital dollar already technically exists have grown several times over the past few weeks. If earlier, in
clients a virtual portfolio where they can today and, therefore, Congress should have no problems in relation to the BTC / USD currency pair, the volumes with ETH were
practice investing without actually having putting a case together, but there are other things to consider. slightly less than half, now it is 80 per cent of the volume. It is safe
to risk any of their hard-earned cash. Dave Hodgson, chief investment officer at NEM Group, said: “The to say that ETH is now the driver of the cryptocurrency market
We host regular webinars and work use cases for a digital currency are broadly similar to those growth. Bitcoin is confidently moving towards the $11,000 mark.
hard to produce informative materials occupied by the US dollar (USD) in other forms, or most USD Such movement of this main cryptocurrency was fairly predictable
from commentary on the latest market denominated cryptocurrency stable coins like Tether, Paxos and after a bullish trend formed around two months ago. The
movements to simple explainer guides on Binance USD. Those use cases could range from online or cryptocurrency has been gradually going upward, passing one
the different asset classes. We also recently electronic payments, savings, other financial products, money level after another. The strengthening of the Bitcoin rate was also
launched a podcast. There is a lot of
markets and almost anywhere else fiat is used right now – with facilitated by the increase in the USD emission. With the release of
information on investing out there but as an
the exception of physical funds transfer." cheques by the American government in Spring earlier this year,
industry we need to continue to challenge
ourselves to make this accessible.” “The important differentiation to make with a digital dollar is the purchase level of cryptocurrencies went up sharply. This means
whether it is controlled by the state, or if it is decentralised and that Americans are increasingly thinking about alternative sources
MOST INVESTED STOCKS BY outside of government control. If the former, then it really isn't of investment, and cryptocurrencies are one of them.”
CLIENTS GLOBALLY ON THE ETORO
INVESTMENT PLATFORM – JULY 2020 much of a change from today, however the latter moves the
July Stock Percentage June economy towards a more open, less controllable economic I believe Covid-19 is an accelerator for
rank change in rank model. The move to such a model would likely require multiple adoption both for cryptocurrencies and
trading smaller steps and I personally will be surprised to see state actors
activity MoM give up that control or power over the citizens’ lives whom they for blockchain technology as a whole
1 Microsoft 14% 1 are meant to serve.”
And it’s not just digital currencies that are pushing forward with
2 Amazon 71% 7 Still, the concept of a decentralised currency is the reason why
mainstream adoption. The use of blockchain, the technology
3 Tesla 105% 13 millions of people across the world continue to drive the digital
behind cryptocurrencies, could also be used to facilitate a safe
currency market, often crossing over to cryptocurrencies when
4 Apple 29% 3 and secure digital identity for online users.
trading globally. But these types of assets are essentially
5 Facebook 21% 2 Lior Yaffe, co-founder and director of Jelurida, explains:
investments, so how have both fiat and crypto exchanges coped
6 Netflix 64% 9 “Coronavirus might finally convince us to stop using pen and
during the crisis?
7 Advanced 32% 6 paper to prove our identity and to stop the archaic and
Currency.com analyst Mikhail Karkhalev, says: “Cryptocurrencies
Micro Devices environmentally harmful ritual of print, sign and scan to sign
have always been risky. The pandemic, like any other negative
8 Nio 183% 20 digital documents. In addition, the global government response
macroeconomic event, forces investors to switch from risky assets
9 Google 15% 5 to the pandemic expands the discussion on
to safe havens. We have seen this in mid-March, when the markets
privacy and the use of personal info.
10 Alibaba 63% 14 collapsed, including cryptocurrencies. The pandemic is holding
Lastly, existing digital signing
MOST INVESTED CRYPTOASSETS BY back the growth of the market, not just the crypto market, but all
certificates are too complex and
CLIENTS GLOBALLY ON THE ETORO of the markets. There is no doubt that as soon as Covid-19 is over,
expensive for mainstream adoption.
INVESTMENT PLATFORM – JULY 2020 and economies begin to recover, investors will come back to risky
Blockchain is a perfect infrastructure for
July Cryptoasset MoM June assets, including crypto markets. Another thing is that many
rank change rank creating a decentralised ID platform, as we
investors consider Bitcoin as some kind of an alternative asset or a
can see from initiatives like QualiSig,
1 Bitcoin 7% 1 digital equivalent of gold. Therefore, there is also a chance that
funded by the Austrian government,
2 Ethereum 89% 2 the value of cryptocurrencies will grow in the near future. As a
and aimed at solving Covid-19
3 ADA 97% 4 response to the challenges in the traditional economy, the
patients information
4 XRP 77% 3 transition to digital seems reasonable. Simply put, the crypto
sharing – and this trend
5 Tezos 170% 5 market is expected to gain force either in the coming months or
will continue
6 Binance Coin 521% 15 after the end of the pandemic.”
to accelerate.”
7 Zcash 294% 13 Danish Chaudary, Bitcoin.com exchange managing director,
8 Stellar 72% 7 says: “Crypto has been seeing increased volumes and activity ever
since the Covid-19 lockdown was enforced across various
9 MIOTA 15% 6
geographies. As an exchange, we’ve seen our volumes grow three
10 Litecoin 80% 11

www.thefintechtimes.com | 7
 D I G I TA L C U R R E N C I E S
THE FINTECH TIMES

Red herringgs and China’s CBDC

Richard Turrin is a fintech innovation expert

Can China’s central receivable and tax filing, greatly simplifying

a paper and time-intensive process. Right
bank digital currency now, transacting on these digital platforms
replace the dollar? can save time and money for trade
companies, but these are just the beginning.

C
hina’s coming launch of its Alibaba owned Ant Group, the world’s
breakthrough central bank largest fintech, is working with China’s
digital currency (CBDC) is causing largest port operator to build a blockchain-
quite a stir. Across the globe, based platform to carry out completely
pundits are asking the same question: digital import-export transactions. When
‘Can China’s new digital renminbi (eRMB) China’s digital trade systems are complete,
replace the dollar as a reserve currency?’. the preferential terms for digital-RMB
It’s undoubtedly an exciting question, users and access to fast-track customs
but frankly, it’s the wrong one. and delivery will make it hard for many
With some 60 per cent of the world’s to say no. China is going to do for trade
currency reserves and 80 per cent of with the eRMB what Alibaba did with
international trade denominated in US fintech and e-commerce sales in China. It
dollars, it’s easy to take for granted that will put international trade on a platform
the dollar will be the currency of choice for Party, said it very clearly: “By taking directly into China’s factory system. The that makes it irresistible to use, take
years to come. So, the question of whether advantage of the dollar’s global monopoly digital RMB, in no small degree, changes the payment away from the established
the digital yuan can replace the dollar is a position in the financial sector, the US rules of what China can do to entice users. SWIFT network, and make the amount
‘red herring’, or, to put it a different way, will pose an increasingly severe threat of RMB held by central banks irrelevant.
akin to a magician’s sleight of hand. The to China’s further development.” China’s CBDC will allow access to a global The ‘red herring’ is exposed.
question is designed to distract from the China’s CBDC and fintech are now part of trade platform that will model Amazon’s So, the real question is: ‘Can the eRMB
real issue, by refuting the possibility that a much larger geopolitical game than when Flywheel. A ‘virtuous cycle’ that improves help increase the use of the RMB in trade?’.
the digital RMB will change the game by conceived in a laboratory six years ago. cost structure and prices for imports Here, the eRMB’s impacts will be more
challenging the dollar. Most articles then What pundits are missing with the dramatic and, frankly, with the digital trade
go on to confirm that the dollar’s reign as eRMB is that it’s not a play to replace the systems coming online, the answer is that
the reserve currency is secure and dollar in international financial markets. they can. A brief analysis of RMB usage with
emphasise that the RMB’s holdings in Instead, the eRMB aims to provide access Belt and Road Initiative (BRI) countries
global central banks are at only two per to an entirely new platform, the likes of gives a good indication of what is possible.
cent of the worldwide total. The pundits which the world has not yet seen. If China BRI countries have $1.34trillion in trade
smugly predict that there is nothing to can’t beat the US on the old playground, it with China, conducting only 14 per cent in
fear, the status quo will be maintained and will build a new one, with better slides, RMB. Increasing this to 50 per cent would
the eRMB will be a failure, inasmuch as it swings and climbing frames. It will give result in eRMB usage that was 1.6 times
won’t challenge the dollar. the users a host of benefits from that of the Japanese yen in all global trade.
Source: Amazon
preferential exchange rates and trade For perspective, this could potentially boost
2.0% China’s yuan is
4.4% Yuan loans through digital logistics systems Evidence for how this system will work is the RMB to roughly third place in the
only 2% of global
Pound that speed shipments through customs. easy to find in China’s existing SWIFT league tables above. Is such a rise in
5.7% central bank’s
China’s digital RMB will use a game blockchain-based digital trade finance eRMB use reasonable? Last year RMB use
Yen reserves
plan taken straight off the internet: entice systems. So far, the three major systems within BRI countries increased by a range
5.8% users to use it with free services, convenience – run by the PBOC, China Construction of 35 per cent to 230 per cent, so in five
Other currencies
62.0% and good value. Like Alibaba, it will be a Bank and a CITIC / Bank of China initiative years, anything is possible.
20.1% U.S. Dollar digital platform offering multiple services all – have processed $63billion in trade finance Traditional currency analysts are getting
Euro
bound together to form an ecosystem. transactions. These systems allow for it wrong, frankly. They see the digital RMB
Source: Amazon’s flywheel at a country-wide level. end-to-end digital trade finance, accounts as nothing more than a repackaging of the
IMF, Bloomberg
China’s CBDC is going to give users access to RMB. They ignore the associated benefits
Not so fast. The digital RMB was never a new attraction in global trade, making 1 USD 43.37% of the digital trade ecosystem. Former US
intended to dethrone the dollar in global transacting with China as easy as buying on 2 EUR 31.46% Treasury Secretary Hank Paulson stated
financial markets. Chinese officials have Amazon or Alibaba. Buying from China will 3 GBP 6.57% that: “A central bank-backed digital
never issued a statement along these lines. be a breeze and potentially act as a counter 4 JPY 3.79% currency does not alter the fundamental
The launch date of the digital RMB, now in to a world that is actively looking to 5 CAD 1.79%
APRIL nature of the RMB.” I agree with him
testing stages in Shenzhen, Suzhou, ‘decouple’ from China. 6 CNY 1.66% 2020 completely. At the same time, I can’t blame
Chengdu and Xiong’an, is still unknown. Unlike internet companies, where the cost 7 AUD 1.45% him or other analysts for being myopic.
Its use in global trade will only initiate of supporting free services, whether email or 8 HKD 1.25% Their view of currency is formed by years
9 SGD 1.15%
after fine-tuning in domestic markets. So, bank accounts, is born by investors, the of experience where currency played by a
10 THB 1.05%
the dollar’s dominant position as a global PBOC and the banking system will pay for 0.87% predefined set of rules and only worked on
11 NOK
leader won’t see a challenge for a few years the services offered on this platform. The 12 CHF 0.82% the existing US-built financial system, the
to come – good news for the dollar. real costs, however, are exceedingly low and 13 SEK 0.72% 80-year-old playground. By now, we all
The People’s Bank of China (PBOC) easy to support when compared to the 14 PLN 0.50% RMB’s share should have learned from cryptocurrencies
is working meticulously to ensure benefits to China of increased use of the 15 MYR 0.43% as a global that digital currencies don’t follow the
the launch of the currency goes off RMB and trade. For example, preferential 16 DKK 0.37% payments currency rules, they make new ones. The recess bell
without a hitch. Furthermore, it considers rates on RMB foreign exchange and free 17 ZAR 0.31% The flow of RMB in trade is ringing on the global currency market
internationalisation of the RMB a top money transfer are easy to support on a 18 NZD 0.30% starts to looks a bit better and its hierarchy of players. China’s CBDC
long-term goal – a defensive goal. Zhou Li, digital system that is closed to currency 19 EGP 0.29% than central bank holdings. ushers in not just a currency, but an
a former deputy director of the Communist speculators, and the RMB exchanged will go 20 MXN 0.28% Source: SWIFT RMB Tracker entirely new trade ecosystem.

8 | Edition 33
 D I G I TA L C U R R E N C I E S
THE FINTECH TIMES

technology, with the unique

Thomas Trepanier,
capabilities of distributed
Director of Business
ledger technology (DLT) at its
Development, Apifiny
core. Blockchain-based
US digital currencies make online
transactions, such as money
dollar done transfers and payments,
easier and more transparent;
right is better and cross-border currency
than ‘done now’ exchange becomes a level
playing field between

‘I
t’s not a race’. economies via a simpler,
Remember when more standardised
your grade school online exchange.
teacher would say One innovative solution
that to the class while you gaining traction is that of an
were taking a test? That instant global settlement
seems like an appropriate network for banks, central
reminder to the many banks and other ecosystem
interested parties partners. Just as DTCC
– stakeholders and provides settlement for US
observers alike – awaiting equities, for example,
the arrival of a central blockchain-based settlement

PATIENCE IS A VIRTUE
bank digital currency networks, such as Ripple,
(CBDC) in the United Roxe, and Copper, have
States. As traction the potential to provide
grows for CBDCs in near-instant settlement for
more and more countries, global fiat currencies and
it’s tempting to urge momentum’. Read just a little Meanwhile, a CBDC has the role in foreign exchange be decentralised and built digital assets. Entirely new
America to push that further, however, and it also power to transform financial transactions, bank funding, on a blockchain? How many remittance and payment
pencil a little faster and notes that ‘successfully value transfer for many imports/exports, central transactions per second products could potentially
complete the exam. creating (a universal digital payment categories, bank foreign exchange (TPS) does the network be developed for the digital
Launching the US CBDC dollar) is an enormous including cross-border reserves, international infrastructure need to dollar, which would work
isn’t about doing it at top undertaking and needs to be payments, international loans and more. support? How will it scale seamlessly with other
speed, despite the myriad use done carefully, thoughtfully, remittances, retail and up? How is settlement participants in the network.
cases and benefits that and deliberately’. So, what wholesale payments, and The US CBDC challenge finality defined? Can
a national digital currency should dictate the US timeline peer-to-peer payments. In a Launching a CBDC is transactions be revoked if Replacing first place
presents. However, it’s not here – the need for speed, or time when many traditional daunting enough when necessary? Is the model Solutions like this stand to
hard to understand why the proceeding with caution? financial networks have the global economy rides interest-bearing? How do transform the way commerce
pressure is ramping up lately. been overwhelmed by the on its successful execution. we integrate this seamlessly is done. However, patience
The clock started ticking A competitive landscape Covid-19 pandemic, payment Consider that a high- with the United States’ is needed for US regulators,
a little faster when the The world’s central banks of government benefits via a functioning CBDC requires existing retail payment due to the necessity of
Digital Dollar Foundation, a are making CBDC inroads. CBDC could be measured in near-flawless technical system and banking evaluating advanced
not-for-profit organisation In a survey issued by the moments, instead of months. excellence a myriad of ecosystem? What role technology like instant
promoting public discussion Bank for International These CBDC benefits moving parts, and planning is a US dollar-pegged global settlement networks.
about a US CBDC and Settlements (BIS), 70 per are pretty much universal, the digital dollar becomes stablecoin, such as USD Ultimately, what
consultancy Accenture, cent of the banks that which is why the adoption of even more complicated. Coin (USDC) already regulators want is assurance
published a recent white responded indicated that a US CBDC would appear to playing, having surpassed that they can control their
paper with proposals. they are engaged in, or be inevitable. However, there Launching a CBDC a $1billion market cap just system. Once they see
Dubbed the Digital
Dollar Project, the 50-page
planning to begin, work on a
CBDC. In Asia, for example,
are unique considerations
that take precedence as
is daunting enough 21 months after launch?
CBDCs are extremely
that blockchain can
head off many potential
document lays out a serious studies and pilot America charts its path to when the global challenging mechanisms CBDC hazards like double
comprehensive outline for
how a US CBDC might look,
projects are underway in
Japan, Cambodia, South
a digital currency. The US
dollar is much more than
economy rides to create and deploy. In
the US and everywhere
spending, while providing
transparency and global
while noting the distinct Korea, Malaysia and just a medium of exchange on its successful else, the officials and interoperability, US
role such an instrument
would play in the global
Thailand, among others.
China is even further along,
and store of value for US
citizens – it functions as a
execution administrators steering a
CBDC’s development have
regulators will be more open
to DLT. From there, they’ll
economy. Many people announcing recently reserve currency worldwide, A CBDC optimally a responsibility to scan the see how these innovative
pushing for its benefits that trials of the digital with proven stability against balances a wide range of horizon for the tech and technologies will allow them
– improved time and yuan will start in Beijing most other currencies considerations. Privacy, resources that can help them. to maintain the structure
cost efficiencies, broader at McDonald’s, Starbucks making it central to resilience, business partners, New platforms and they expect, from the
accessibility to central and Subway restaurants. international transactions. cost model, user experience, protocols are constantly wholesale level to retail.
bank money and payments, The global interest in With great power and security must all being developed in the All of this shows why
a smooth transition to CBDCs is understandable comes great responsibility, be taken into account private sector, which sees a the race to launch a
a cashless society, and because they address key however, which is why it’s during the design phase. growing opportunity to CBDC isn’t a race at all.
support of USD as the gaps in traditional finance no wonder that the US From there, more key support the US on its path A sense of urgency is
world’s reserve currency today, including security, Federal Reserve is taking questions unfold for the towards a digital dollar definitely warranted for the
– see the white paper as an transparency, cost, speed a deep look at the digital Fed’s decision-makers, launch. Identifying and US to move it forward, but
immediate call to action. and access. A CBDC dollar. America’s central including: How best to incorporating the right it’s not only about finishing
One part of the paper’s effectively prepares next-gen bank has extra research achieve universal access? innovations can be key to first. The result of a digital
conclusion states that digital economies to meet to do before it adopts a Should the core architecture maximising cost efficiencies. dollar done right – in the
‘this wave of digital token their payment needs as CBDC because it stands to be fully centralised, or Most CBDC models are right time frame – is a
innovation is still gaining cash use gradually declines. play a very outsized global should some components designed using blockchain win-win for all involved.

www.thefintechtimes.com | 9
 CEO INTERVIEW
THE FINTECH TIMES

W Mobile money
ing (Cambodia) Limited has to trust the brand and make sure
Specialised Bank was they’re OK with using its services. The
launched in 2009 to help second is self-confidence. Most of the time,

firm Wing is
people with little or no when you are looking at the unbanked
access to financial services use their customers, they may lack self-confidence
mobile phones to make person-to- in using these services. For example, what
person payments, transfers and we see is that, if an unbanked customer

pushing to make
pre-paid purchases. Now, just over a gets paid $200 in one month and half of
decade later, Wing is the Cambodia’s that goes to their parents back home in
leading mobile money and electronic the village, they might not feel confident
payments service provider. That top enough to carry out the transaction

Cambodiia the next

status includes 100 per cent district themselves, thinking they might make a
coverage through a national network of mistake and send a substantial amount of
almost 8,000 Wing Cash Xpress agent money to the wrong person. So, they hand
outlets and partnerships with 40,000 over the cash to the agent and ask them to

Asian fintech hub

merchants and global industry leaders, send it, even though that incurs a fee and
such as Mastercard, MoneyGram, doing it themselves would be free.
Alipay, WeChat Pay and Western Union. The third thing is the profile of use case
Today, Wing is led by Manu Rajan, who – there are certain use cases that are
first joined the company in December
2018 as chief commercial officer. Last
Manu Rajan, CEO of Wing, Cambodia’s leading better supported by an agent, such as
bill payments, but others, such as bank
year, he took on the role of CEO from his mobile banking services provider, talks about transfers, where it’s more convenient
predecessor, Jojo Malolos. Before joining to do it yourself. So, we have created more
Wing, Rajan held top positions with finding the right formula and how going use cases in the past two to three years
multiple telecommunications and
mobile banking companies across
digital can build a better Cambodia that are more suited for self-usage,
which led to a decrease in agent banking
Africa and the Asia Pacific. That as a percentage of our transactions.
includes time at telecoms operator MTN things, we launched the first mobile fintech other vital networks driving financial That has been a gradual shift that we
in Liberia and Zambia and also with app here, the first plastic card and first inclusion and digitisation in Cambodia. hope to accelerate in the coming year.
telecommunications giant Bharti Airtel, Mastercard for the unbanked, a new line Apart from our agent ecosystem, Wing
in Kenyan and then in Airtel’s Ghana of remittance services with partners like has also built a 40,000-member-strong TFT: How do you think digital currencies
group office managing 17 countries MoneyGram, Western Union and many network of merchants who use our various are going to affect traditional payment
in Africa. He later helped manage the others that now allow customers to send products to operate more seamlessly. systems in Cambodia?
Digicel Group in Papua New Guinea. and receive money from more than 200 We provide these merchant-partners MR: Looking back 40 years ago, during the
In this interview with The Fintech countries. One of the biggest challenges with online and offline payment solutions civil unrest here, the currency of the day was
Times, Rajan speaks about Wing’s we faced in the recent past was when through WingPay, Masterpass, Alipay abolished, and Cambodians were using rice
commitment to improving lives by competitors started a price war attempting and WeChat Pay. We’ve created a lot, to barter. Jump forward to today, and we are
providing financial inclusion to the to capture market share. Wing followed but we still see many new and unfilled one of the very few countries in the world
unbanked and under-banked population suit and matched prices, but the market opportunities in the market. that has a blockchain-based interoperability
of Cambodia. value crashed, leaving Cambodia’s mobile platform, called Bakong, to facilitate digital
financial services and fintech market one TFT: How do you think the mobile phone payments. So, we can say Cambodia as a
THE FINTECH TIMES: How has Wing of the lowest priced in the world. We are has developed in Cambodia as popular country has already come a very long way in
evolved since launch and what now committed to keeping it that way vehicle for payments and transactions? adopting digital currencies, and we are all
challenges has the organisation faced? because most of our target audience MR: We have about 128 per cent mobile quite proud of that.
MANU RAJAN: Wing started off in 2009 includes all the country’s unbanked penetration in Cambodia and high internet Wing was the first fintech to be on board
as an experiment between the National population. Being accessible and affordable usage as well. In so many places, whether when the National Bank launched Bakong.
Bank of Cambodia and ANZ Royal Bank. is key to our vision of bettering the lives in Cambodia or any developed country, the Cambodia today has more than 100
They had looked at Kenya to study how of every single Cambodian using mobile mobile phone has become like an extension financial institutions, so to have a unified
(mobile-based money transfer service) financial service products. of the self. Here, many people always carry platform like Bakong will facilitate a lot of
M-Pesa enjoyed big success in driving The way we are structured means Wing their phones, even in the villages. That integration between these disparate FIs.
financial inclusion and they wanted to enables a lot of transactions. Wing’s total might not always be a smartphone, but we Bakong can also bring great
replicate the same success, or at least try transaction volume last year was almost do see smartphone penetration is relatively complimentary value to companies like ours
a pilot in Cambodia. For the first three 90 per cent of the national GDP. After high and a lot of people, especially young in terms of linking that platform’s access to
years we didn’t do well at all. In fact, we reaching that kind of scale, the biggest people, are already comfortable enough to funds from different FIs to our expansive
jokingly say Wing led many firsts in challenge for us is to plan what comes pick up and use Wing services on their own. customer base through our agent network.
Cambodia over the years, including being next. This includes constantly re-thinking We have learned the three important factors It’s worth noting that Bakong is not a
the first failed fintech operation. The our positioning: Are we a money transfer that drive the adoption of digital payments cryptocurrency. It is a digital currency,
company was eventually sold off by ANZ company, or are we something else? That are trust, self-confidence and use cases. backed by fiat currency, that is enabling
Royal to the Royal Group of Companies. was the biggest challenge, considering In Cambodia, what has become these transactions.
It was the Royal Group Management the bigger perspective. We were a money successful are agent-led or assisted digital
that introduced the now famous agent transfer company, yes, but moving payments, but the increasing mobile TFT: How do you see the rise of other
banking model for Wing that turned forward, we are really looking at ourselves penetration and especially the smartphone digital currencies in other countries?
around our fortunes. The idea there was as an ecosystem builder. Already, we penetration tells us the younger generation MR: Simply put, there are two types of
that, if customers did not want to use have built an amazing agent-driven will be more likely to use these services economies – those with high banking
their phone or smartphone to send banking ecosystem of almost 8,000 themselves. The median age for Cambodia penetration and those with low banking
money, an agent could do the digital agents who cover every single district and is about 25 years and more than 50 per cent penetration. For economies with high
transaction for them through an OTC almost every commune in Cambodia. of the population is younger than that. banking penetration, it is easier to
(over-the-counter) transaction. That Interestingly, 80 per cent of these agents maintain a digital currency because your
was the tipping point. From there, we are women, who are stay-at-home mothers TFT: How easy is it to predict customer access to funds can also be digital as well
became profitable in 2013 and have earning a second income for their families. behaviour? Have you noticed a difference by linking to a bank account. But when you
remained profitable thereafter. They are functionally some of the most between individual and agent usage? have an economy with low banking
In that time, we have made a lot of firsts successful SMEs (small and medium-sized MR: That comes back to those three things penetration, the challenge is finding that
in the Cambodian market. Among other enterprises) here. But then we looked at the I just mentioned. First is trust. The person physical point where cash can change

10 | Edition 33
 CEO INTERVIEW
THE FINTECH TIMES

hands. That is where the agent banking downturn. They called on us to help, so
model players like Wing are going to come now, using our Wing network, we’ve been
in. Even if you are a large player wanting to able to send funds to the accounts of
launch a digital currency in Cambodia, the more than hundreds of thousands of
question will be: What is the source of the poor people. We want to do our part to
funds? How are you going to cash in or help, so we don’t charge the government
cash out? For this second types of economy, regular fee for this service. In this time,
there is a journey to make before we reach many migrant workers have returned
a place where these digital currencies to Cambodia. The government hopes
dependent on bank accounts as funding to integrate them into the domestic
source can compete. agriculture sector, so Wing is facilitating
a public-private joint venture to
TFT: In the UK, we talk about open create an agri-commerce platform that
banking and open data as the key to will provide farmers with access to
support financial and social inclusion. technology, finance and markets. Before
Does that resonate with Cambodia? Covid-19, our agents stayed put, and
MR: Yes, and I think we are far ahead when our customers were mobile. Now, with
it comes to open banking. On the Wing many people hesitant to go out due to
platform, we have close to 200 APIs Covid-19, it will be interesting to see if
connected. We are trying to package these that changes how our agents operate.
APIs into a bundle to help the industry, In the end, some businesses are
so they don’t have to go and individually just there for the money. But for
integrate with different operators. So, if us, our business must be beneficial
somebody wants to do a phone top-up, to the community.
then we will offer a bundled package
and they can just integrate with the AT A GLANCE
one API. Staying open-minded to open
banking has really helped us drive WHO WE ARE: Wing (Cambodia) Limited
financial inclusion in the market. Specialised Bank is Cambodia’s leading
mobile banking service provider.
TFT: Has anything changed in
the way Wing does business
Launched in 2009, Wing is committed to
during the Covid-19 pandemic? providing financial inclusion to the
MR: Yes, certainly. The pandemic unbanked and under-banked, granting
has changed mindsets, perspectives every Cambodian access to services
and our approach to the market.
We are lucky we are not one of those
including local money transfers, bill
countries that was severely affected payments and phone top-ups, online
by Covid-19, so we did not have a shopping, QR payment and instant
lockdown except for a little bit of international money transfer from more
a travel restriction in April. But
even before the travel restriction
than 200 countries. Wing remains at the
started, we had prepared for the forefront of the mobile money and
worst. We had to think about electronic payment services market in

Some businesses are

generating income for the people Cambodia with 100 per cent district
who are most affected and, here,
one group that was immediately
coverage via a nationwide network of
hit were the tuk-tuk taxi drivers
and tourist guides. Tourism
just there for the money. almost 8,000 Wing Cash Xpress outlets.

But for us, our business

is a big revenue generator in
Cambodia thanks to the millions
COMPANY: Wing (Cambodia)
of people who visit each year, so Limited Specialised Bank
when the borders closed, tourism
and related industries were hit
must be beneficial FOUNDED: 2009
CATEGORY: Mobile banking
to the community
hard. Seeing this, we worked with
others and created a marketplace and mobile payments
for food delivery services with the
KEY PERSONNEL: Manu Rajan, CEO
hope of helping these people whose
livelihoods were impacted. Siem Reap, HEAD OFFICE: Phnom Penh, Cambodia
a popular tourist city, almost closed
ACTIVE IN: Global
entirely, so we also started fundraising
for tour guides there. WEBSITE: www.wingmoney.com
Tourism is not the only industry
LINKEDIN: linkedin.com/company/wing-
here that was affected by the
pandemic. We also have about cambodia-limited-specialised-bank
1 million factory workers in Cambodia TWITTER: @wingcambodia
who had problems first when supply
from China was disrupted and then
when closures hurt demand in their
biggest markets, such as Europe.
With much at stake, the government
decided to send out relief funds to people
who lost their jobs due to the global

www.thefintechtimes.com | 11
 MARKETS
THE FINTECH TIMES

Will the pandemic

change how we
make decisions?
Simulations are useful when markets
are going both up and down

Justin Lyon, CEO at Simudyne

T
he world is irrevocably different.
We know we will continue to deeper understanding of how systems
experience highly amplified behave. ABMs simulate how all kinds of However, rather than people dying,
shocks as the world becomes agents, which can be people, governments, value is destroyed. Modelling and competitive edge to sectors, such as
more global and interconnected. We regulators, corporations, banks or simulation help us explore these issues banking and finance, fraud, healthcare,
as a society cannot continue to ignore markets, interact with one other and how in detail. And, what we’ve discovered transportation and government policy.
the utility of modelling and simulation that interaction could cause specific is that financial markets are harder to Modelling and simulation can also be
to help our leaders solve or mitigate things to happen to them and to the escape than burning buildings – much used to develop strategies for restarting
problems, such as the pandemic. There economy more broadly. Let’s look at harder. In fact, without simulation it is cities, economies and trade and for
is too much at stake. human behaviour by comparing an asset almost impossible. confronting a host of multi-disciplinary
Fire sales and the resulting whipsaws price collapse with escaping a burning That’s because, in our example above, problems, such as:
in pricing are endemic to the herding building. They are strikingly similar. as prices collapse, the number of people
behaviour that both amplifies and in danger can rapidly increase as ● Responding to natural disasters
reinforces them. It is a trend that A market on fire participants in other markets get drawn like earthquakes, climate change
will get worse if institutions abdicate Just a few months ago we again experienced into the crisis. And, unlike a building, the and increasingly frequent extreme
their understanding of potential a rapidly falling market, that is, an asset exits in financial markets shrink when weather events
protective measures. price collapse. Getting out of one during a prices collapse. That’s because liquidity ● Addressing complex policy challenges;
But if leaders and policymakers time of crisis is, oddly enough, much like seizes up, no one wants to buy your assets, for example, mass migration,
augment their decision-making with escaping a fire. In a fire, three key things and it’s as if the exits are getting smaller strengthening the economy and
simulation and agent-based modelling determine whether you live or die. and smaller. You can’t escape. reducing healthcare costs
(ABM), solutions can be found and When liquidity seizes up, the markets ● Establishing effective foreign
agreed early enough to make a difference ● First, how many people are get more and more flammable and the policy; for example, striking the
by preventing much of the damage we in the building? time to escape gets shorter and shorter. right balance of competition and
inflict on ourselves. ● Second, how many exits are there A rapidly falling market is like being cooperation between nations
Models are simply representations of and how many people can get stuck in a burning building with the doors
objects and things seen in the real world. through them every minute? slammed in your face while fuel is poured It is an increasingly complex and
They can exist only in our minds and ● Third, the more flammable the onto the fire. It’s bad. Getting this right is interconnected world that our leaders
can be simple mental models. They building, the less time there is to escape critical for institutions everywhere. must contend with. Now, more than ever,
can also be codified into software when they need to embrace modelling and
they are written as formulas and code. During a fire, people panic because Preparing for any crisis simulation. Post Covid-19, the utility
These computer models are used to they are faced with a life or death decision. Agent-based modelling and simulation modelling and simulation provide will
simulate and understand what the model So, engineers use computer simulation are one of the most effective means of help leaders make better policy decisions
is trying to capture. to study this and to build safer buildings making decisions. By building computer and a better world for us all.
They help translate data, observations that take into account our tendency to models to make decisions, we can explore a
and assumptions into forecasts. They panic when faced with death. We can much wider range of potential conditions About Justin Lyon
are also used as testing environments for use the same science to design resilient across a vast number of synthetic futures. Justin is the CEO of
ideas, decisions or strategies. Importantly, institutions and markets. Once again, That is, governments and institutions Simudyne, a simulation
they also help decision-makers question we have three things to track: can essentially create a virtual version technology company
behaviour or sets or behaviours. Computer of the real world. Decision-makers can based in London.
models expose our assumptions, reveal ● Market concentration, like the people interact with and train in a hyper-realistic Simudyne uses advanced
cognitive distortions and uncover biases in the burning building, consists of synthetic environment. analytics and AI alongside
that are impossible to see in mental the number of people in the market Ultimately, companies, institutions agent-based modelling and simulation
models. When the underlying formulas ● Exiting a position is defined by liquidity and governments can transparently and to help institutions, exchanges and
and code of computer models are – how easy it is to buy or sell an asset more effectively make decisions that governments solve complex problems
made publicly available, as they should be, ● The flammability of a financial benefit all of us instead of, for example, and make better decisions.
then they are well-suited to supporting market is intimately tied to the a small group of special interests at the
democratic decision-making. amount of leverage present. Leverage expense of humanity.
ABM is a useful technique for typically triggers forced selling Agent-based simulation opens up new
modelling complex systems to gain a during a price collapse opportunities by providing a significant

12 | Edition 33
 BANKING
THE FINTECH TIMES

THE REBUNDLING OF FINANCE

With a disconnected world of money, customers want to simplify fragmented financial
services into one place again, says Shachar Bialick, Founder and CEO of Curve

T
he commonly held belief in make the right choices. In addition, now So, what will be the type of product that money and move banking to the cloud,
finance today is the inevitability no one company has a complete view of wins the rebundling race? We believe it is which is what Curve has done. It requires a
of what people refer to as the their customer. unlikely that the incumbent banks will be different strategy that fits better with the
‘rebundling’ of finance and its Additionally, when analysing the jobs the rebundlers. They are often vast, need to manage the multiple offerings
movement into a few platforms that incumbent banks do, we found that complex businesses with archaic processes used by consumers today.
will act as your financial control centre the only real job of the bank is to keep and legacy infrastructure. To change what
across retail and SME banking. customers money safe, and they do a pretty they have done successfully for decades Going over the top
The common banking growth strategy good job of it, with little appetite from would be too much of an undertaking. History teaches us that most successful
so far has been to follow the traditional customers who want to move accounts From organisational change to conflicting rebundlers started by building an ‘over-the-
banking paradigm: acquire customers via from trusted bank accounts to rival banks business models, there are predictable top’ layer on existing technology, thereby
a (loss-making) debit account, build a or challenger banks. In fact, only around patterns and reasons that Walmart did not providing a better way of accessing existing
relationship, move to cross-selling and 10 per cent of current account holders become Amazon and Warner Group Music products and behaviours. For instance,
upselling more (lucrative) financial have switched banks since the Current did not become Spotify. WhatsApp did not create a new mobile
products and services. This approach is an Account Switch Service launched in 2013. Several startups have realised the need for network, it used the prevalence of internet
extremely competitive business model and Speaking to The Fintech Times in June, change and, as they are more nimble, have connected smartphones to build a new way
many incumbents are well established Samantha Seaton, CEO of Moneyhub, started to develop new banking experiences. of sending messages, focusing on seamless
with multiple products, geographical argues that while the challenger banks Companies, such as Monzo, Starling, N26, user experience. Similarly, Netflix did not
coverage and brand awareness. might have succeeded in changing early and Chime, have all tried to do banking initially create its own new media content
The greatest strength of challenger banks adopters’ behaviour through supplementing better; building fully regulated banks with and Amazon did not publish its own books.
is also their greatest weakness; they’re traditional banks, they are yet to make any an accompanying app that provides people The winning rebundlers are consistently
new. When it comes to savings, people want real headway in replacing them. with a better banking experience. However, companies that build their business as an
safety, predictability and security. “People get paid into their traditional as previously discussed, people don’t tend to over-the-top layer providing better, faster,
Traditional banks have a track record and bank account, so are spending their main change accounts or break banking cheaper experience on top of existing rails,
customers trust them. There are still many outgoings from that account,” relationships easily. products and behaviours. This in turn
customers, especially the digitally sceptical, she says. “People tend provides a greater level of insight based on
that will require challenger banks to the data and habits of those that use the
work even harder to gain their trust and platforms, enabling them to see pain
ultimately, their funds. The banking points of processes and improve the
incumbents know this and are already overall experience based on that data.
investing heavily in revamping The rebundlers in each category
infrastructure, building better – Netflix, Amazon, Spotify – are all
experiences, and promoting offers to customer-focused data companies.
stave off the threat of newer banks. Sixty-five per cent of the profits in many
businesses are in distribution of
Not a better bank, but a products and services, not in
better banking experience ‘manufacturing’ of products and services.
In the past, our parents bundled all of their Similarly, in banking, the future rebundler
finances together in one place – their bank. will be the company that is focused on
However, advances in technology and the distribution, has the highest access to data
ways in which banking services are being and builds the best, fastest, cheapest, most
distributed have meant a change from this
bundled market position where global
People’s expectations in delightful user experience on top of it.
Curve is just that. It does not ask the
banks own a significant share of the banking are no different to The introduction customer to change the products they
market, to an unbundled market where of challenger banks implies that incumbent are using. It does not ask customers to
many players and new entrants offer better,
their expectations in other banks are doing a poor job of keeping trust it with their money – only with their
faster, cheaper banking services. aspects of their lives – They people’s money safe. The challenger banks attention. This approach provides Curve
Firms, such as BlueVine and Kabbage, are also choosing to compete directly with with a phenomenal access to data with the
introduced new models and experiences in want it simple, affordable, huge, established, incumbent banks, who ability to move money between accounts at
business lending; TransferWise introduced and always available won’t go down without a long, expensive the touch of a button, putting Curve in
fee free money transfer and foreign fight. It also disregards the fact that we use prime position to distribute financial
exchange; Robinhood is offering fee free to transfer a small portion of any ‘spare many financial services, from shopping products and services while creating
trading; Affirm simpler lending; Habito cash’ into their challenger account, which online with PayPal, to using rewards credit incremental value to its customers and
faster and cheaper mortgages. That’s just a they will use to spend on day-to-day small cards, to business expense cards. partners. A good example for that is Curve’s
fraction of the offerings available today in costs, like going to the pub or out for dinner. Unless the challenger banks think they’d latest announcement of Curve Credit
banking. There are tens of thousands of People will often feel safer bringing out their be able to compete with all these businesses – which enables its customers to go back in
fintechs today, providing faster, cheaper, challenger bank card if it has a much smaller and replace them, their solution disregards time and ‘pay later’ for any transaction
and better financial services that compete amount on it, rather than their main bank the financial world of the average Joe. All in made on Curve, thus accessing favourable
directly with the incumbent banks. card where there is more to possibly lose.” all, by becoming a bank, challenger banks payment terms with a tap of a button.
This unbundling has made money will spend more money, make more A true rebundler must be agnostic of
complicated, difficult to access, and can Rebundling banking enemies and find it more difficult to where the customer’s money sits and
end up being more expensive. Although People’s expectations in banking are no attract customers because they opted connect it all together into one interface.
consumers are offered more choice, they different to their expectations in other for a banking route, which requires The over-the-top paradigm, which Curve
now need to learn about these new aspects of their lives – listening to music, people’s trust and the displacement of introduced into banking, is the way in
financial products and services, weighing watching TV and shopping. They want it their money or the services they’re using. which Curve believes the rebundlers will
up the advantages and disadvantages to simple, affordable and always available. The winning strategy is to rebundle emerge in the ‘Western world’.

www.thefintechtimes.com | 13
 PSD2
THE FINTECH TIMES

W
ithout
payments
legislation,
starting
order to craft
recommendations to the
industry about how APIs
should be designed. A final Let payment This is an insurmountable
barrier for the provision of
AIS, because users having
several banks managed by
some devil in the detail of
the EBA opinion and worst
of all, they could not resolve
the 90-day reauthentication

fintechs strive
with the first Payment list of recommendations was the same TPP would have to problem, which means
Services Directive in eventually adopted by all go through several different that we now need an RTS2
2005, we would have not stakeholders and serves as a SCAs, at different points in to overcome this and
seen the incredible rise template for ‘what good time and with completely some other unintended
of fintech in Europe and looks like’ for APIs. The different user experiences. consequences of the existing

with PSD2
arguably we would have ‘recipe for success’ is hence In essence, TPPs have to legal text. Strangely, direct
not been able to disrupt there, but banks to date start from scratch and debit mandates allowing
what has ever since have resisted implementing onboard their customer money to be taken off an
the beginning been the these recommendations. base at least every 90 days. account are valid for life,
domain of banks alone. Ralf Ohlhausen, vice chair Unfortunately, the EBA has whilst just looking at an
The second Payment of the European TPP National regulators need to step up the not removed this problem account requires SCA at
Services Directive (PSD2), Association (ETPPA), who and only advises national least every 90 days and
in force since 2018, has was one of the three TPP pace to enforce API improvements required competent authorities with some banks even every
the objective to further reps in that group, recounts: by the European Banking Authority (NCAs) now to encourage day. What is the sense of
increase competition in the “We started off hopeful ASPSPs to at least use the that? Where is there more
payments market in a way with a long wish list of API By European Third Party Providers Association (ETPPA) SCA-exemption that avoids risk? This requirement
that ensures better choice functionalities, which the the need to do this daily. should be taken out
and more security for all bank reps negotiated down Another important completely. Hopefully, the
users. The arrival of third to the bone over almost one observation is the national regulators will now
party payment providers year. It was really hard widespread lack of data hurry up in enforcing the
(TPPs), which allowed users work to reach an agreement parity between the ASPSPs’ API improvements required
to make seamless digital at the end, and I am still user interfaces and their and requested by the EBA.”
payments over the internet gobsmacked that the bank APIs, both in terms of data All of the above means
and via their mobile groups defining the API fields and data quality, that PSD2 is not yet
applications and other standards then refused which means that the TPPs providing the regulatory
channels as well as manage to implement it.” firstly cannot provide the certainty and enforcement
information across different TPPs have so far spent same functionality and to enable TPPs to compete
types of payment accounts, significant resources quality, and secondly with banks. Instead, many
were a welcome addition to onboard the bank cannot mitigate fraud as consumers that have
to the increasingly vibrant APIs, but as of June 2020 well as before. This is enjoyed using different
payments landscape in the low quality and despite the work and types of TPP services in the
Europe. PSD2 level one availability of bank APIs recommendations of the past are often encountering
text was carefully crafted has been a challenge. API Evaluation Group difficulties to do so since
to be technology neutral But this is not all. There specifying what is PSD2 is being implemented.
and thereby protect TPP are other important issues necessary data for TPPs. Some users receive message
business and product that need to be addressed At the time of writing, alerts in the middle of the
continuity. PSD2 therefore urgently in order to allow card-based payment night asking them to
plays a crucial role in setting the fintech TPP community systems, where increased authenticate themselves,
a level-playing-field between to survive and strive. security would be most fearing that fraudsters
these new types of payment For example, many required, continue to enjoy have tampered with their
service providers (PSPs) and banks or ASPSPs have made the postponement of SCAs online accounts – even
the incumbent banks. their life easy and their rates and the quality of most banks, which removes across Europe (until end though it is clumsy banks
However, through customer’s life difficult the service that can be from TPPs their (existing) 2020) with further national requiring extra checks
second level legislation, by implementing strong provided to them. possibility to design good delays in the UK (and before TPPs can provide
represented by the European customer authentications Furthermore, the practical user experiences and also maybe soon some other alerts to their customers
Banking Authority’s (EBA) (SCAs) for every login rather application of the SCA slows down the payment countries) going beyond on account balances,
Regulatory Technical than only once every 90 provisions have shown flow, has also resulted in a that date. This creates an incoming payments or
Standards (RTS) adopted days as legally required. that ASPSPs tend to require significant reduction of unlevel playing field better deals elsewhere. Is it a
in 2018, TPPs needed to And, they are also not additional SCAs for account conversion rates. The ETPPA misaligned with the paradox that strengthening
migrate their access-to- bothered implementing information services (AIS) is therefore very supportive political objectives of PSD2 of Europe’s key payments
account technologies to this without disrupting and payment initiation of the EBA’s recent and this has also been innovators – TPPs – is
dedicated interfaces, more automated TPP services. services (PIS), API access clarification that redirection publicly recognised by being made so difficult in
commonly known as This non-compliant and consent confirmation, cannot be more cumbersome some of the regulators. light of the importance for
application programming introduction of SCA has meaning that for simple than the equivalent in the Ohlhausen welcomes the Europe to become more
interfaces (APIs), which have required TPPs to add a third payment initiation, the ASPSP’s own channel new EBA opinion, saying: competitive with US and
to be built by banks (also technology layer quickly, user is prompted to respond although that is setting “We are very glad that many Asian big techs.
called account servicing because regulators did not to up to four SCA requests the bar still far too low. of the issues we have raised
payment service providers or react to escalations and for a single transfer through Another big problem for over the past two years have About ETPPA
ASPSPs). It is crucial that the have still not intervened a payment initiation TPPs providing AIS is the now been addressed and ETPPA is the European
quality of such APIs is at a now nine months later. service provider (PISP). obligation of customers to clarified. Several obstacles trade association
level that can ensure TPP As a consequence, where The recent European re-authorise their TPP at are now recognised as such representing the interests
business and product TPPs were previously using Banking Authority’s (EBA) least every 90 days - if not and banks will have to take of bank-independent TPPs.
continuity. To avoid the one access technology clarification is therefore very every time. Every single them away. In particular, Website: www.etppa.org
creation of obstacles, the API successfully, they are now important, which stated that bank requires this to be those relating to user
LinkedIn: www.linkedin.
Evaluation Group, an obliged to use up to three for both AIS and PIS-only performed by them, despite journeys, like unnecessary
com/company/etppa
industry-wide stakeholder different types, leading to payment journeys no more the fact that PSD2 specifies redirections, multiple
group, was set up in 2018 at much higher cost and than one SCA is required. that it is the TPPs managing redundant SCAs or manual Twitter: @etppa_org
the initiative of the significant deterioration The introduction of the consent and that PSPs IBAN entries. It’s not all
European Commission in of the user conversion mandatory redirection by in general can perform SCA. good news though, there is

14 | Edition 33
 COMPLIANCE
THE FINTECH TIMES

MAINSTREAMING CRYPTOCURRENCY
David Carlisle, Head of Policy
blockchain. This digital footprint is
immutable, making crypto transactions
Europe’s Fifth Anti-money Laundering
Directive (5AMLD) and Singapore’s
market. Typically, risk policies have put
all crypto in the ‘bad’ category and banks
and Regulatory Affairs, Elliptic infinitely transparent. Payment Services Act (PSA) both came haven’t had the reliable data needed to
Building trust in this Blockchain analytics firms like Elliptic
gather this blockchain data from public
into force in January 2020. Crypto
businesses have responded by bolstering
develop meaningful risk parameters.
Banks can now risk score crypto
emerging asset class records and use sophisticated algorithms their crypto AML operations, with businesses with tools, such as Elliptic
to recreate the money trail. The recent enterprise-grade blockchain analytics Discovery created for this very purpose.

B
itcoin, the first cryptocurrency, Twitter hack in which the criminals tools such as Elliptic’s transaction and By assessing risk associated with
was understood by few in its laundered money via Bitcoin in an wallet monitoring solutions and crypto crypto businesses, banks can open
infancy, only coming into elaborate web of transactions risk scoring. their doors to offer cash accounts
existence in 2009. Early demonstrates blockchain analytics at work. It would be remiss of banks to think and other services, just as we've seen
adopters saw the potential in this This kind of headline story gives crypto crypto doesn't impact them. Banks have with JPMorgan. Banks in Singapore
new ‘digital money’ as a more a bad reputation, but illicit activity is down exposure to laundered funds, as criminals and Canada are also early movers
efficient means of value transfer and to less than one per cent of Bitcoin trading will eventually try to cash out their crypto in offering direct crypto products
investment than cash. They pushed volume, compared to 35 per cent in 2012. and services.
boundaries and conceived a new Despite contrary belief, the crypto With the recent news out of the OCC,
asset class at lightning speed which community is ‘compliance first’ by nature US policymakers are catching up fast to
is now valued at around $250billion, and in its business operations. ensure their financial system remains
according to CoinMarketCap. Crypto businesses are bound by some of competitive and innovative.
Once dismissed as a curiosity, the same anti-money laundering (AML) And, the best is yet to come. The
cryptoassets are now capturing the conditions are ripe for financial
attention of global financial institutions, institutions to engage in the crypto
who increasingly see opportunities in space: mature regulation is in place,
this exciting technology. The biggest crypto AML tools are widely available
news in the mainstreaming of crypto and proven, crypto businesses are taking
story is a letter published by the US Source: Elliptic, compliance seriously, and there is an
Treasury’s Office of the Comptroller reconstruction of appetite for a new, efficient means of
of the Currency (OCC) to an unnamed the Twitter hack value transfer and investment.
Bitcoin money trail,
bank last week, clarifying that banks If that is not convincing enough,
23 July 2020.
in the US can provide crypto custody the World Economic Forum’s (WEF)
services. This clarification is vital platform on blockchain and digital
in giving US banks the confidence assets, in which Elliptic is recognised
in offering crypto-related services. as a 2020 Technology Pioneer, established
JPMorgan is one bank that has the Digital Currency Governance
been early to the game by offering Consortium earlier this year. This
banking services to two of the collaboration with the WEF will drive
world’s largest crypto exchanges, forward policy that welcomes crypto into
Coinbase and Gemini. the global financial system, in a way
Why all the hype? Bitcoin had a rocky that protects society, governments
start as it attracted attention from regulations as other financial institutions. and business.
criminals for being ‘anonymous and The last few years have seen regulatory
untraceable’. This was more media milestones put into place, starting with
hype and lack of understanding of the Financial Action Task Force (FATF) into a fiat currency account. If the link is About David Carlisle
Bitcoin, which is by no means Guidance for a Risk-Based Approach: not made between crypto and fiat David is the Head
anonymous. At the core of Bitcoin is a Virtual Currencies, issued in 2015. currency accounts, it raises the question of of Policy and
public, online ledger recording Since then FATF has been reviewing whether financial institutions are wholly Regulatory Affairs
every transaction, for all the progress of virtual asset service fulfilling their regulatory responsibilities. at Elliptic, a provider
to see, known as the providers (VASPs), especially in relation Eventually, there will be a convergence of cryptocurrency
to Travel Rule compliance, bringing the where banks will need to have the same forensics and
expectations of VASPs to the same crypto AML tools in their compliance tech compliance solutions,
standard as other financial stack as crypto businesses have. where he leads engagement
institutions. Another question banks face is whether with regulators and other external
to diversify their portfolio by offering stakeholders. With over a decade of
banking services to the crypto experience in AML, counter-terrorist
financing compliance and
regulatory matters, he previously
worked as a policy advisor at the
US Department of the Treasury’s
Office of Terrorism and Financial
Intelligence. He is an associate
fellow at the Royal United Services
Institute, a UK think tank, where
he has authored reports on terrorist
and criminal use of cryptocurrencies
and policy responses.

www.thefintechtimes.com | 15
 ECOSYSTEM
THE FINTECH TIMES

Futureoffinance Values and a financial ecosystem that is evolving to create a better future
Hazem Danny Al-Nakib, Partner at 7BC Venture Capital and Dr. Ruth Wandhöfer, Partner Gauss Ventures

T
he world of society, government and the global financial crisis, digital social contract that the often-cited clerics of The dramatic potential is
finance is industry, and is powered by the repeated misuse of will shape and transform innovation that have tried clear – entire states are
changing. With technological developments consumer data and the the future of finance to place technology into developing digital
the onset of – values across each group stifling of innovation in that powers the digital historic and future waves, infrastructure programmes
digital and the internet help identify the trajectory of payments because of economy and permeates those being Kondratieff because technology allows
we have all been witness any possible mode because it outdated regulation. every area of our lives. waves and Šmihula for better, automated digital
to and participated in ultimately determines what As it relates to finance, A few areas of what is waves, the wave we are delivery of services and
accelerated change over is valuable to or valued by we have seen astounding valuable include privacy, now in is the ‘wave of trust’. goods for virtually every
the last several decades each group and is the basis advances in automation, sustainability and area, but on the other hand
that has begun to for a digital social contract analytics, prediction and wellbeing, each derived Technology as it also enables mass
explore areas of digital between the three groups. digitalisation, but we have from one value – trust. an enabler surveillance.
sovereign currency, This in turn helps not seen a modal shift into We need to ask ourselves: We are using and Large platforms
digital identity and technologists, economists, the digitally native similar how do we want to contributing to the growth themselves are becoming
decentralisation policymakers, entrepreneurs to what we have seen reimagine the financial of the digital economy in more and more similar to
more realistically. and customers better with information, such sector in a way that reflects our day-to-day lives. states – we call them
New technologies are consider good innovation, as with photographs our collective values? Transactions, exchange digital states – and it is
being used to both which comes at the and books, much earlier We are at a critical and communication because of the technologies
enhance privacy by alignment of what is on in the beginnings of inflection point where we operates in the form of data at their disposal that
design, such as valuable to each group, the digital economy. need to collectively decide in a more global way while enables them to expand
zero-knowledge proofs, whereas bad innovation Everything is becoming what the future of finance more is being invested in into every area of the
but also routes around comes at the misalignment digital, automated and will look like. To build on tech than ever before. digital economy.
privacy protection. This is between them. Examples of data-driven and we need a The potential to lead to
also seen with the this misalignment include core set of values for a good or bad innovation
decrease in regulatory in areas of privacy,
barriers to the provision of We need to ask ourselves: how do we sustainability and wellbeing
certain products and are more present than they
services leading to the
want to reimagine the financial sector have ever been because
trend from ‘banks’ to in a way that reflects our collective technology enables it.
‘banking’ and digital
platforms entering values? We are at a critical inflection point Society values trust
financial services. where we need to collectively decide In recent years, there has
But, as people, we are been a greater emphasis
not particularly savvy what the future of finance will look like placed on the value of
at predicting what and trust, particularly
how these changes will amid such accelerated
affect our day-to-day technological
lives until they have change and the shift
reached maturity. from the physical
Our shortcoming We are the to the digital.
comes in not being able recipients of With the digital
to identify the mode in tools like robo- transformation, more and
which that change takes advisors, decentralised more information about
place. But what we can systems, online banking people, processes and
do, is equip ourselves and machine learning businesses is accessible
with the tools to better models geared to anticipate and more occurs digitally,
understand some of our wants and needs and to hence the digital economy.
those possible ways on sell us products and services. Trust has emerged
the basis of ‘values’ that Technology can be good or as a fundamental value
lead to knowing what is bad. For example, a platform in all societies as they
‘valuable’ as we attempt built that is not private by entrust their information,
to reimagine the future of design allows a certain type their wellbeing and the
the financial sector with of behaviour. The type of Earth to organisations,
technology as its enabler. behaviour displayed by governments and each
providers, operators or other in a digital and
Values and the digital nefarious actors depends on global forum. All the while
social contract their values and what they relationships themselves
Change in the financial find valuable. Misalignment are being rewritten and
sector operates at the of what is valuable can reconfigured digitally.
nexus that is the lead to exploitation and Trust is an interesting
intersection between so can trade-offs. thing, it drives people to be

16 | Edition 33
 BANKING
THE FINTECH TIMES

PAY360
able to act in a particular Although, many the mode and the vehicle
way without the suspicion governments have played that it operates through
of being taken advantage fundamental roles in the will continue to change.
of, that their possessions, creation of technologies, We can spend our time

goes virtual
property, home and like the internet, they failing to predict each
identity will be treated have also adopted of those, or we can
safely if entrusted to outdated regulations, spend it ensuring that
another party as part of such as in payments. value alignment is
their social contract. The Governments are in place and moving
question is simple: ‘are they beginning to feel the toward continuous
operating in our best fundamental nature of good innovation that
interest in a way that trust as a measurable builds and strengthens Bringing together the paytech
garners trust?’ requirement and trust across society,
This can also manifest precondition for pursuing government and industry community to shine a spotlight
differently. It could be a just digital society in order to cultivate on payments innovation
about knowing with where alignment of more of what is valuable,
certainty that one’s values is necessary. such as privacy,
Now in its eighth year, PAY360 is the
data is not being tracked This has been obvious sustainability, wellbeing
or not being resold in with recent dialogues and much more. flagship annual conference of the
aggregate data sets. surrounding track and We will share deeper Emerging Payments Association, the
Or it may be that long trace applications. insights into this journey UK’s trade body for the emerging
term behaviour of the in the book that we are payments industry. This event is a true Attendees will benefit from more than
entrusted party Industry values profits currently working on that celebration of payments innovation 10 hours of unique content presented
demonstrates that they Industry values profits will be published in early and we’re very excited that amid all the by a plethora of expert speakers from
are operating in the best and is looking for new 2021. Stay tuned! chaos and uncertainty of the last few leading companies, including Visa,
interest of their citizens, ways to capture new months, that the show will still go on Revolut, Citi, HSBC, Mastercard and more.
users or customers. It could or existing markets, About 7BC – as a virtual event – on 4 to 5 August. The agenda covers all the hottest topics,
be that intermediaries increase productivity, 7BC Venture Capital
The second quarter of 2020 was such as mastering the post EU Payments
are not extracting fees reduce costs and generate exclusively focuses on
unprecedented. Rewind to this time last Services Directive (PSD2) landscape,
at every turn. But it could greater profits. Examples investing in and
supporting the digital
year and no one had even heard of winning the digital transformation
also be that organisations of this include large
are not benefiting from digital platforms being economy using frontier phrases like ‘lockdown’ and ‘social battle, digital identity and the power
behaviours that negatively interested in global technologies, including distancing’, but now they are very much of partnerships. And, of course, no
impact the Earth digital currencies, which artificial intelligence, part of our day-to-day vocabulary and conference would be complete without
and that governments would allow them to fintech and software reality. But throughout all the ups and some handshaking and deal-making,
are disincentivising extract revenue from infrastructure technology downs of the last few months, the so our attendees can expect plenty of
such behaviour. transactions they currently companies connecting payments industry has remained resilient. networking opportunities with fellow
Trust is measurable only facilitate, and to and underpinning the Consumer behaviour is changing. People paytech innovators before, during and
and has a direct influence have access to more digital economy. are spending less overall, particularly in after the event itself. Well, not actual
on loyalty, use, support, and better data. Website: 7bc.vc some sectors like hospitality and travel. handshaking of course, but the virtual
perception, profits, For as long as what is most Cash payments have seen a steep dive equivalent we are now all used to.
and more. Trust itself valuable to industry remains
following World Health Organisation We will also be announcing the finalists
has value. constant, there will be
(WHO) recommendations that consumers for the Emerging Payments Awards at
continued value misalignment.
Government For as long as what is use contactless payments to limit the PAY360. The Awards celebrate innovation
values growth valuable remains the
About Gauss spread of the virus via cash. However, and collaboration, recognising companies
For governments, long same, little of practical
Ventures this decline in some areas of payments that have made significant advances
Gauss Ventures packs is also partially offset by an increase in in how we pay today. With 20 hotly
having been seen as the change can happen.
over 100 years in
slowest to change and more Where to now online spending and a shift towards contested categories including Best
cumulative experience
lately being predominantly The future of finance will contactless payments. People may be International Payments, Best Financial
in building successful
focused on cutting costs be a function of where staying at home, but they still need to Inclusion Payments Initiative and Best
businesses, running
and driving economic innovation lies, which is at pay for their basic goods and services, B2C Payments Programme, the finalists
major international
growth have primarily the nexus between society, so some sectors of the industry have seen will be announced at PAY360, with the
banks, and investing
had a laissez-faire government and industry. a corresponding upswing. winners announced and celebrated
into transformational
approach in general. We want that modal
companies. We The long-term impact of Covid-19 at the Awards ceremony in November.
Yet, what they find change to be comprised of
specialise in hands-on on the global economy remains to be We at the EPA are proud to host this
valuable is engaged good innovation that is
domain specific seen, but there is no doubt that it will be event every year, to provide a forum for
in a few ways. The first based on the alignment of
investments in fintech profound. Preparing for this new normal payments pioneers to come together to
relates to their use of values on the one hand, and
and smart industry now will help us to come out the other collaborate and drive innovation, which is
technology itself to how that correlates
companies. We stand side, stronger and more innovative needed now more than ever. With more
deliver what it needs to to what is valuable across
by our companies;
deliver for its citizens each group on the other than ever before. And, that’s where than 115 members and growing, EPA
rolling up our sleeves
and its economy, such as hand. This should PAY360 comes in. members come from across the payments
and providing ongoing
protection, economic constitute the basis for the In partnership with Visa, PAY360 brings value chain – payments schemes, banks
support
growth and regulation. formation of the digital together the leaders in the emerging and issuers, merchant acquirers, payment
to each
Governments and social contract, the payments community to discuss the service providers, retailers and more.
and every
regulators often have foundation of a fair and future of our industry. We expect an These companies come together at
company we
difficulty grappling trusted digital economy
work with. audience of more than 800 C-level PAY360 to learn and share ideas, and it
with and understanding and financial system.
Website: executives to join us to learn about future gives us great pleasure to see the event
certain technologies, The finance sector
their support of them, has been around since www. innovations and to gain insight into what continue to thrive and grow, especially in
and their use of them. bartering began and gauss.vc is driving the industry forward. these turbulent times.

www.thefintechtimes.com | 17
 D I G I TA L S E C U R I T I E S
THE FINTECH TIMES

THE EMERGENCE OF THE DIGITAL SECURITY ECOSYSTEM access to the same transactional information central limit order book is not the ideal If you believe, as we do, that this means all
Graham Rodford, CEO, Archax instantaneously. Gone are the days where marketplace for every type of asset, but a asset classes can benefit from tokenisation
Growth predicted as entities would need to reconcile all their
individual books and records with each other.
landmark property, say, that currently trades
once every several years could benefit from a
and will move ‘on chain’ in the short to
medium term, the market opportunity is
traditional financial Also, since digital securities are all held quarterly auction, for example. actually made up of every tradeable asset
within digital wallets, it is possible to Next, these assets often have access to class in existence (see graph, below).
institutions push deeper monitor holders/owners of an asset on a limited pools of capital. Landmark While that may seem farfetched, if you
into digital assets real-time basis, allowing for enhanced
capital table management and an improved
buildings, again, trade at size and are only
discussed by institutional investors. It’s not
work through each of these assets, most of
them have already started to transition onto

W
e’ve recently seen a slew facilitation of corporate actions. While that other investors aren’t interesting in a blockchain already, either actively or in a
of announcements by central bank digital currencies are not the participating, it is more a question of test environment. Digital assets are obviously
large financial services focus of this article, it is worth noting that a accessibility and size. A fractional share in a natively on chain, central bank currencies are
incumbents regarding government-backed CBDC that can move landmark building would be an interesting being considered by various central banks,
their work with digital securities. along these rails further enhances the investment for a lot of investors. individual stocks are being looked at by
HSBC has put $10billion of private benefit of this technology. For example, Finally, the efficiency points we the likes of SIX, which is reimagining the
placements onto a digital ledger, SocGen dividends paid across a blockchain can use discussed above are also beneficial to the way existing securities should trade and
has performed a digital securities the information to identify holders and issuer. Therefore, an efficient issuance commodities, such as gold, are being
transaction using an European central immediately send a CBDC to a holder’s with the potential for increased liquidity expressed with products like CoinShares’
bank digital currency (CBDC) and Nasdaq wallet in a fraction of the time and cost of and capital raising is going to be really DGLD and Tether Gold. Finally, real estate is
has announced that it will be building a traditional distribution. appealing to many issuers. probably one of the most oft talked about
blockchain native platform on R3’s Corda Since these efficiencies exist, why is it If you look at semi-liquid assets like tokenisation opportunities. Therefore, when
technology. So, what are digital securities that we are seeing such a large volume of hedge funds, they don’t necessarily need you start walking through the products out
and what is required to move this nascent illiquid assets becoming digital securities the liquidity as much as the illiquid assets there, you realise that asset tokenisation is
space into one of mass adoption? and fewer large assets? The answer lies in do, they already have perhaps monthly happening a lot faster than most predicted.
the liquidity spectrum below. redemption cycles or may be listed on
What are digital securities? Efficiency
the junior market like the Alternative Accessibility
Benefits

Digital securities are a digital Investment Market (AIM). But they can As efficiencies go up and costs go down, as
representation of an asset that happens to Capital raising still benefit from the efficiencies we have with any product, accessibility also increases.
be a security. When a ‘security’ is tokenised Liquidity discussed as well as the access to new pools Capital markets were only available to those
using blockchain technology to create llliquid Semi-liquid Liquid of capital that digital securities can offer. entities that could afford the fees associated
digital tokens that represents fractions of l Property l Hedge funds l Listed For liquid securities, such as Apple, with a fund raising, engaging a sponsoring
Asset class

that asset – these tokens are termed digital l Private l Listed SMEs securities Amazon and Vodafone, they don’t need any broker and other significant counterparties,
securities. They are, as confirmed by the equity l Debt l Commodities more liquidity and they probably don’t and listing onto a trading venue.
funds l Other
Financial Conduct Authority (FCA) in its need to raise capital from new sources With new entrants moving into all these
l SMEs traditional
consultation paper CP 19-03, just like l Art instruments either. However, they can still benefit from verticals, we are seeing a complete
traditional ‘securities’ from a regulatory efficiencies, such as efficient corporate disruption of the capital markets value
standpoint. That is, they meet the Liquidity spectrum actions or cap table management. For chain that will ultimately lead to improved
definition of a specified investment as set these types of companies though, there is democratisation of capital markets. For
Time
out in the regulatory activity order and a also the interest in benefitting from the example, Globacap is assisting companies
financial instrument under the Markets in If we plot assets on a ‘liquidity spectrum’ technological efficiencies DLT can bring with enhanced cap table management,
Financial Instruments Regulation (MiFID with illiquid assets on the left and liquid from the market infrastructure providers, Nivaura is automating legal documentation,
II). Therefore, we should consider that assets on the right, most of the activity such as the traditional regulated markets, Securitise is allowing creation and lifetime
digital securities are not actually a new in the space is currently occurring on the particularly in the post-trade space. management of securities and Archax is
asset class, but just a new way of digitally left of the spectrum – so this is also a good Therefore, we think a lot of the pressure on providing a natively digital secondary
representing any existing asset class. representation of time. The reason that we the left-hand side of the liquidity spectrum market. The result of this is that a company
believe this is happening is that for these will come from the issuers and companies can now approach many of the firms in
Efficiencies illiquid assets there exists the largest number like Archax, who are trying to democratise the space to create a digital security,
So, what exactly is the difference here? A key of benefits in creating a digital security. financial markets, whereas on the raise money, track shareholders, process
difference is in the technology. Distributed Firstly, for illiquid assets there is the ability right-hand side pressures will come from corporate actions and facilitate trading
ledger technology (DLT), of which to facilitate liquidity. Note that we are not current market incumbents, like the for a fraction of the cost previously.
blockchains are a type, is the technology saying that everything will suddenly become London Stock Exchange (LSE) or the SIX
being used to underpin these new digital liquid, but if there is pent up liquidity, having Swiss Exchange, which are looking to Movement
instruments, and this new technology a secondary market can expose this liquidity improve their trading workflows. This hasn’t been lost on the current market
provides a much more efficient way of and allow people to discover its depth – and $542tn incumbents, which is why we are increasingly
handling financial instruments. While as a result, hopefully some price discovery $217tn Derivatives
seeing the names of the large players
Global market
many people have heard of things, such as too. It may also be the case that a 24/7 $215tn real estate associated with this movement. The London
Public debt
24/7 trading or fractional ownership, these Stock Exchange Group (LSEG) invested and
$1.6tn $90tn
are not truly advantages caused directly by $1.6tn USD in All money participated in the FCA’s sandbox with
the technology. These were possible in the Amazon circulation $69tn Nivaura, SIX in Switzerland is building
Stock
traditional world, but the drive that has $811bn $37tn markets SIX Digital Exchange (SDX) on R3’s Corda,
Real-estate funds
been brought about by the movement PhysicaL
currency
Nasdaq is building issuance, trading and
of DLT proponents has led to them being $667bn $7.6tn settlement on Corda too, SocGen and HSBC
Private debt
Gold
considered new initiatives. There are a are performing test DLT transactions, and
$647bn
number of specific advantages, however. Other funds $2.8tn the Depository Trust & Clearing Corporation
Private equity
Creation of a digital representation of an $340bn (DTCC) has announced two new initiatives
asset on DLT technology first allows a trusted All crypto-
currencies $1.9tn to improve post-trade settlement in public
record of any transactions to be shared. So, Apple and private markets. The list goes on, and
$205bn
when a trade in that asset takes place, for Bitcoin notably this isn’t confined to one sector or
example, all participants involved have location, this is a global movement.

18 | Edition 33
 D I G I TA L S E C U R I T I E S
THE FINTECH TIMES

Making transaction data

actionable in real time Are you maximising operational and business agility?

T
ransaction involved can be a the box. INTIX transforms production systems, internal systems, formats supported,
data has become challenge. Additionally, transaction details into whilst recognising all past transaction semantics, including market
a strategic transactions can get real-time analytics. and current financial messaging formats and standards, such as SWIFT
asset. Accessing blocked in one of those As regulatory scrutiny messaging formats. They e-channels. With improved MT, MX (ISO 20022) and
transaction data is systems for a myriad of on financial institutions need an instantaneous transaction visibility FIX, including domestic
critical for client service reasons – usually without increased drastically system with the ability and control, financial standards. Custom or
and compliance teams, notice – even as the system during the last decade, to search and produce institutions serve their proprietary formats are
and it is increasingly is reported to be running, the pressure on regulatory ad hoc reporting with clients better and track their covered through the
fuelling automated leading to additional compliance officers easy navigation through operations more effectively. definition of a custom
processes that rely on costs and reputational increased considerably. One huge data sets. Seamless They develop a competitive format dictionary.
transaction details to xTRACE picks up the
support both operational xTRAIL: indexed (sets of)
and market level payments and securities
decision-making. data is being tracked,
Business teams within enriched and correlated
wholesale banking need or consolidated for use
continuous insights on by a range of destination
their past and ongoing solutions and domains.
business activity while This way messaging data
operations teams require turns into actionable
access to transaction insights across transaction
details for business life cycle for business
activity monitoring and activity monitoring,
alerting on operational transaction integrity
incidents. Similarly, surveillance and service
compliance officers level monitoring. Data is
need continuous access tracked, alerts on any
to transaction data for damage. The institution of the main obstacles in this integration with legacy advantage which drives discrepancy defined by you
scrutiny. Increased then needs to investigate function is related to data systems while minimising client satisfaction and flag up and actions and
regulatory mandates and localise the problem, accessibility which is often technical integration is a business growth. tasks are allocated to the
make effective which takes avoidable depleted due to legacy must to guarantee data The non-intrusive INTIX relevant source in the right
information management time and effort. INTIX technology or dependency integrity. Financial technology breaks down context and time.
no longer optional. makes this seamless. on other departments. institutions can increase the organisational silos
As transaction banking Financial institutions Financial institutions are their level of responsiveness that typically exist within About Marc Braet
is witnessing a flurry of are hungry for analytics under immense regulatory when all the needed data financial institutions to
digital innovations, one as this allows them to pressure to analyse sources become available provide a complete picture
major value proposition grasp their own operations transactional flows and at their fingertips. of an institution’s financial
stands out: maximising and own client behaviours. spot suspicious activity. INTIX addresses the transactions across a
visibility and control on Therefore, business This is why compliance challenges faced by myriad of data sources
end-to-end transaction teams heavily rely on officers are continuously financial institutions and data formats.
processing. analytics and insights on scrutinising transactions. such as accessing and xTRAIL comfortably
Monitoring the internal transactions processed To achieve this, they require consolidating transaction meanders amid existing
processing of financial by their own institution. access to all transaction data from multiple technology in your INTIX co-founder, CEO
transactions is critical However, business teams details. It has become vital internal systems and transaction environment & member of the board,
to ensure flawless often face technical and for compliance officers to delivering real-time and breaks down Marc co-founded the
operations and straight- operational challenges as get easy single window analytics and insights. organisational and company in 2011 with
through processing from transactions are processed access to all the required Thanks to real-time access technical silos that typically Wouter Van Santvliet.
front- to back-office. by a multitude of internal original transaction data to transaction details, the exist within financial At INTIX, Marc is
Financial transactions, systems in different, often which is what INTIX INTIX technology provides institutions to provide a responsible for the
such as payments, foreign complex, formats. delivers in standard. end-to-end business complete picture across a company’s commercial
exchange, trade finance Manual aggregation of Both operations and activity monitoring myriad of data. Real-time strategy, profitability
and securities, are transaction details leads to business teams along with which serves transaction access to messaging data and growth.
processed and executed delays and is prone to errors compliance officers benefit processing operations as enables high performance
by a multitude of which is why technology from data management well as enhances detection search, access, reporting WEBSITE: intix.eu
specialised systems. has become vital to produce technology to help them of collusion fraud. and dashboarding. LINKEDIN:
To obtain a real-time enterprise-wide analytics in access original transaction INTIX shields end users The savviness of the www.linkedin.com/
overview of all systems real time. INTIX delivers details from long-term from the complexity solution lies in the unlimited company/intix
and of all granular flows real-time analytics out of archives and from of handling numerous array of data sources and TWITTER: @IntixNv

www.thefintechtimes.com | 19
 ARTIFICIAL INTELLIGENCE
THE FINTECH TIMES

Covid-19 accelerates digital banking transformation

Jung Seok Kang, designed to accommodate
vast amounts and varieties
CEO of AIZEN of data in real time.
discusses the This helps banks and
companies to leverage
redesign of digital vast amounts and varieties
banking with an of data to launch more
customer-centric services,
operating system boost customer retention,
powered by and drive more margin.

artificial intelligence Our digital banking

transformation roadmap

M
any financial The world is now
institutions reinventing digital banking,
are now and incumbents and
re-evaluating new entrants are finding
their strategies and the partnerships critical to
associated risks arising have a bank account, If we take a closer look at banking operating system typically made with an success in achieving scale.
from the Covid-19 global according to KPMG. business to consumer (B2C) (ABOS) designed to annual review process, but They will operate away
pandemic. It made the Many companies, on the companies, they have a wide automate key decision- this traditional approach from branch-heavy,
need for reduced operating other hand, want to diversify range of data sources beyond making processes in can sometimes hinder product-centric approaches
costs and improved revenue streams by offering traditional financial data that accordance with the credit banks from assessing and move towards more
digital experiences more financial services via their make up one’s financial life. cycle, from product the risks in advance consumer-centric products
important than ever. own channels, but not every This includes telecom, utility, planning, risk acceptance and making the right and services and adopt
Banks need to revisit their firm is afforded to obtain tax and different payment and approval, to account risk-mitigation decisions more scalable and nimbler
existing business models a banking licence. They transaction history that all maintenance and collection. in a timely manner. technologies to achieve
and try to embrace an have to satisfy a series of connect to one’s ability and By offering new banking ABACUS radically economies of scale
innovative mindset with tough prerequisites, such willingness to pay services, companies can improves credit and in the data economy.
an agile digital stack, as the minimum capital information. With the rise increase stickiness on their operating costs by enabling Over the last four years,
as the pace of competition requirement, regulatory of the data economy and open platform, attract new banks to better understand AIZEN has obtained
in digital banking is compliance, and security application programming customers via more choices potential risks, while different use cases in
likely to accelerate. and data protection. They interfaces (APIs), it is now and, therefore, increase remaining cost-effective by digitisation projects with
Asia is at the forefront tend to make alliances easier to connect data from revenue. Banks can also achieving economies of major banks, retail payment,
of reinventing banking with traditional banks that different sources. easily extend their footprint scale with AI. We provide and insurance companies,
service in the digital age. can disburse loans from Using proprietary artificial by simply providing their early indicators of credit successfully validating
Hong Kong has already their balance sheet. Yet, intelligence (AI) technology balance sheet (i.e. disburse risks and diversifies the the business impacts of
gone ahead and licensed many banks fail to offer and business know-how, loan) while keeping risk degree of risks so that banks AI in loan underwriting,
eight virtual banks, and a fully digital onboarding we help companies to costs low. The benefits are can dynamically adjust product development,
Singapore is set to issue five experience due to the legacy assess customers’ financial ultimately returned to their risk acceptance fraud detection and
digital bank licences process, hence losing health with a more holistic customers as better products, criteria and the aligned more. We will continue
in the second half of this qualified customers even view, by combining multiple services and pricing. risk-mitigation strategies. to accelerate financial
year. Sooner or later, ‘every before they approve the loans. sources of data and They can easily validate and institutions’ digitisation
company, even those that converting into ‘credit’ ABACUS ‘neural processing update with an optimal efforts across the value
have nothing to do with Banking as a service that information in finance. unit’ in financial services model when the model chain and in different
financial services, will have basically changes banking A better understanding of AIZEN’s ABOS is powered performance shifts, which is industries including
the opportunity to benefit Different functions in the applicants enables banks by a proprietary AI engine, particularly crucial during medical and healthcare.
from fintech for the first finance are now being to make more informed ABACUS. It is an automated these times of uncertainty. We have recently secured
time’. (Every Company Will disaggregated into underwriting decisions and machine learning platform In terms of operating funding from a state-led
Be a Fintech Company, a16z) independent ‘as a service’ offer the most appropriate that automates the core efficiencies, ABACUS fintech innovation fund
This inevitably increases infrastructure. AIZEN loan before approving decision-making processes radically shortens the (K-Growth) led by major
pressure on the margins and focuses on providing it in real time. Our AI in banking, retail payment traditional modelling Korean banks to roll out
market share of existing retail banking services, multi-dimensional models and insurance. It is like a lifecycle without having to banking-as-a-service in
banks as they contend with specifically in lending. We also enable banks to ‘neural processing unit’ go through a month-long Southeast Asia. We aim to
fierce competition from new are redesigning digital measure profitability (NPU) in financial services project to build and offer more affordable and
fintech players. They strive to banking in Asia by bridging not only from individual that operates like a update a single model accessible banking services,
attract new customers either the gap between traditional credit risks but also from human brain in making to re-evaluate the risks. and most importantly
by spending heavy marketing banks and companies prepayment, upsell and real-time decisions. This further expedites facilitate credit in
costs or partnering with who are looking to be a cross-sell opportunities. It can process thousands product development underserved markets
customer-facing channels financial services company. With our banking as a of AI models in parallel, cycles from hypothesis together with existing
like e-commerce. However, We serve as an intermediate service model, companies which in turn reduces setting, testing to banks and emerging
banks find it difficult to facilitator by providing are able to launch banking the burden on building, full deployment, so companies.
design a product that ‘banking as a service’, products faster and monitor validating and updating that banks can easily
caters to their risk appetite designed to allow companies each product, segment and models in accordance launch more competitive
using non-traditional to launch banking services channel. This is operated with the fast-changing banking services and
data, especially in Southeast faster, boost customer along with a robust risk customer dynamics. attract more customers.
Asia where only 27 per retention and create new management framework In retail banking, the ABACUS’s modern
cent of the population revenue streams. under our automated credit policy decisions were architecture is specifically

20 | Edition 33
 T E C H N O LO G Y
THE FINTECH TIMES

The evolution of exchanges

Stephen Stonberg, COO & CFO of Bittrex Global exchanges, with key players constantly regime, as an attempt to ‘strengthen its
reviewing and reviving the token listings international standing and to become a
The highs and lows available to their customers. Opportunities for global standard-setter’, while in
new listings has grown across the industry Liechtenstein, where Bittrex Global is based,
of the last few years – we recently added BTC-FOR, ETH-CRO token the Blockchain Act is a pioneering regulatory digital asset investment and infrastructure
Apart from mining, after the release of pairs and ECOchain to our exchange platform; framework that will do much to encourage develop at scale. We anticipate incumbents
the Bitcoin white paper in 2008 and this is great for the industry as it means innovation in the space and is a model that to accelerate the overall growth in the
Genesis Block in 2009, the only way to innovative ideas and talented teams are others are likely to adopt. The Act allows for market, providing further opportunities for
obtain Bitcoin was through forums or recognised, driving development. the tokenisation of any asset allowing that exchange development and expansion.
internet relay chat networks. Trading During the reviewal process, many aspects the underlying asset to be held and traded
need to be carefully evaluated and every 2010 until now
has since gone a long way from this, digitally. By integrating the physical with the Overall, the evolution of exchanges has been
with the development of the first project must pass compliance, legal and digital world of tokens, Liechtenstein legally
technical due diligence before it can be that of continuous growth. While some
exchange in 2010 bringing the sector its recognises that tokens can be lost or stolen. would claim it to be slow, it’s important to
own marketplace and, with it, a flurry listed. Compliance and regulation will always For consumers, this is an important
remain a prominent element of the understand the maturation of the sector
of customers keen to invest and trade. development, signifying the evolution of a which is necessary to build investor and
As one of the oldest digital asset evolution of exchanges which is ultimately a mature and trustworthy asset class where
positive sign. With this legacy concrete in the corporate confidence and develop at a
exchanges, Bittrex Global has been at market participants are required to play by sustainable rate. The progression and
the forefront of growth. This enables a minds of project directors and creators, we the rules. A sound regulatory environment
expect this trend to continue, with project increasing interest of Big Techs underlines an
first-hand experience of how platforms will bolster consumer trust and inspire encouraging prospect for what is to come.
have evolved as well as providing key offerings expanding. investors, and institutions can provide the As we believe that the potential of digital
insights into what the future holds. Sustainable maturation most significant flows of capital and currencies can only be fulfilled by larger-
This includes the vast opportunities for Another high point of the evolution of larger-scale growth; while the greater focus scale adoption, the growing flurry of
innovative listing projects, regulatory exchanges is the maturation of the digital on anti-money laundering, know your regulation will stimulate this. As regulatory
changes causing maturation of the market asset space. This is driven by two mutually customer and asset protection is both environment which inspires trust from
and the subsequent growing number supporting trends, namely the increase in improving the sector’s reputation as well as investors and institutions will provide the
of Big Tech entrants within the sector. regulation and anti-money laundering providing investor confidence. This will most significant flows of capital and so
Rife with opportunities initiatives. We have seen both individual drive the institutional investment on. Big larger scale growth. It is a necessary piece of
A key indication of development across any nations and trade blocs begin to develop Tech, such as Facebook’s Libra and the puzzle and is the key to the evolution of
sector is the diversity and quantity of new more robust regulatory frameworks. The Samsung’s Blockchain Wallet, are just a few the market into a mature asset class that can
ideas and projects. This has been evident in European Union plans to create a regulatory examples of what is likely to come as both support all types of investors.

FINTECH INDUSTRY, IT'S TIME TO UNITE.

IN. REAL. LIFE.

EUROPE.MONEY2020.COM

EUROPE
22-24 SEPTEMBER
AMSTERDAM

www.thefintechtimes.com | 21
 COMPLIANCE
THE FINTECH TIMES

Travel rule solutions

are key to advancing the
crypto economy’s future
Ways to support the adoption the recommendations on their own; should also cover transactions generated compliance with prevailing regulations
the Travel Rule itself is not a regulation as part of smart contract execution and contribute to the mass adoption of
and implementation of and does not include specs for enabling blockchain technology overall.
technologies for compliance In addition to these overarching Giving companies the ability to analyse
new recommendations on ● Implemented regulations must operate principles, effective implementation of and manage risk at scale means they can
detecting and preventing in conjunction with existing local travel rule technologies should remain operate successfully in the crypto space.
regulations, such as the General Data consistent with the FATF’s technology- Coinfirm’s core customer base ranges
illicit activity via virtual Privacy Regulation (GDPR) in the EU neutral approach. In other words, they from the largest cryptocurrency exchanges
asset transactions ● Not all transactions take place via
VASPs from end-to-end, creating
should not assume the use of the
blockchain or other digital ledger
that actively use its capabilities, such as
Binance, to major protocols, such as XRP,

A
nti-money laundering (AML) the potential for pockets of technology running in parallel to the as well as banks, financial institutions and
and regulatory compliance has unregulated or underregulated activity blockchain. Using commercially available national governments. It serves any entity
been sitting at the forefront of technology, as well as open standards, that interacts with blockchain assets and
debate in the cryptocurrency Six guiding principles are needed will better suit public and private market wants to operate legitimately in a regulated
market, including the Financial Action for Travel Rule implementation participants. It will also enable the FATF environment and in markets across the world.
Task Force’s (FATF) virtual plenary and standardisation. These principles to realise its goals around transactional “A complete ecosystem for the
meeting in June around the so-called should form the cornerstones of any transparency more effectively. transparency and protection of
‘Travel Rule’. technical solution that will facilitate Coinfirm is a company leading the way cryptocurrency transactions is essential
For a few years now, a select few have compliance with the Travel Rule. in providing standard setting AML and to the growth of the crypto economy,”
been addressing these needs and fulfilling risk analytics solutions. A known player says Coinfirm’s co-founder and CEO
them through advanced technological
solutions that exceed the standards set
by those in the traditional industry.
1 Data minimisation Limiting the
collection and use of personally
identifiable information about parties to
in the crypto space since it was founded
in 2016, its regulatory solutions for
blockchain are helping bring the
Paweł Kuskowski. “We’re providing a core
component for the legitimate and mature
economy of virtual asset exchange.”
In simplest terms, the Travel Rule covers a virtual asset transaction will help technology into the regulated market. Coinfirm will release an end-to-end
Virtual Asset Service Providers (VASPs) ensure compatibility with local data solution dedicated to meeting the
such as cryptocurrency exchanges and privacy legislation requirements of the FATF Travel Rule this
digital wallet providers, and custodians,
as well as some traditional financial
institutions transacting in virtual assets.
2 User consent Both senders and
receivers must consent to the transfer of
information between VASPs
year for obligated entities engaging with
cryptocurrencies. It will provide
counterparty risk analysis for the purposes of
It ensures that originators,
intermediaries and beneficiaries of virtual
asset transactions disclose a minimum
3 Local compliance Each party and
intermediary owns the responsibility
of complying with local data protection
AML, with views for regulated VASPs and for
regulators. This visibility will directly enable
compliance and oversight needed to make
standard of customer data. Names and rules even when technical solutions Travel Rule recommendations a reality.
wallet addresses of the remitter and are international in scope Beyond the Travel Rule solution, Coinfirm
beneficiary can identify financial crime
risks, such as international financial
sanctions, money laundering, and the
4 Common standards The data set
and messaging standards should be
compliant with ISO standards. There is
Most known globally for its AML and
analytics platform, Coinfirm has been
is expanding operations in the US and in
Asian markets while strengthening
operations in European markets, especially
financing of terrorism. The rule is not yet a consensus on which standard to providing comprehensive real-time risk Switzerland and the UK.
comparable to well-established industry apply (i.e. whether ISO 20022 or others) analysis and tools that automate and “For 2020 and beyond, our aims are
rules for international wire transactions
in fiat currencies, such as those
transferred via the Society for Worldwide
5 Non-VASP participation Solutions
and regulatory considerations may
only apply to VASP-to-VASP transactions
streamline the AML and regulatory
compliance aspects of cryptocurrency
transactions. Its market leading blockchain
high,” says Coinfirm co-founder Paweł
Aleksander. “Continuing to deliver usable,
scalable solutions that the crypto market
Interbank Financial Telecommunications at first, but this represents only a starting coverage that includes XRP, BTC, ETH, needs will keep us positioned as a leading
(SWIFT) system between banks. point. In future, tests, such as transaction ERC20 tokens, Dash, Hyperledger and more company in the continuing growth and
Complexities quickly begin to emerge size, volume and account size, should be than 1,400 others has been used by many global adoption of cryptocurrency.”
from behind those simple terms, however. able to trigger travel rule requirements industry players around the world.
for transactions involving unhosted (i.e. The ‘blockchain agnostic’ platform has About Coinfirm
● VASPs do not all currently have the P2P) wallet transactions. Eventually, allowed it to make history multiple times by Coinfirm is a global leader in AML and
requisite technology in place and there implementation must extend to becoming the first provider of AML and risk analytics for cryptocurrencies and blockchain.
are no shared standards for the non-custodial wallets, to decentralised analytics for many blockchain protocols. Since being founded in early 2016,
capture, transfer and analysis of exchanges provided they do not hold Examples include 2019 when it became the Coinfirm has created the most powerful
customer data. Blockchain, AML and private keys, to smart contract operators provider of AML analysis for XRP and, more AML and analytics engine for blockchain.
compliance companies, such as which transfer value, and to owners or recently in June 2020, Tezos. Such Website: www.coinfirm.com
Coinfirm, are currently building administrators of protocols integrations allow protocols and its LinkedIn: linkedin.com/company/coinfirm

●
solutions to address these
technological gaps
By design, individual regulatory
6 Transaction scope While the FATF
does not provide a formalised
definition of a transaction, in the context
commercial users to be compliant and
operate in regulated markets through the
Coinfirm AML platform. The versatility
Twitter: @Coinfirm_io

regimes have latitude in interpreting of blockchain transactions, the term and scope of such solutions enable

22 | Edition 33
 CYBERCRIME
THE FINTECH TIMES

CHARGE AHEAD
Online fraud is growing in Southeast Asia, but you don’t have to stop selling to stop fraud
merchants in the region is operating costs, lost If we tell our customers a provider of fraud focus on growing revenue.
1.75 per cent of revenues. revenue and poor customer transaction is safe to management and payment This solution supports
Card not present (CNP) experience, as merchants in approve, it is, and we stand technologies. We were the e-commerce, telco and
fraud remains APAC’s APAC spend an average of behind that with our first to guarantee fintech stakeholders ready
number one fraud driver in $3.45-$3.52 on fraud payment guarantee. e-commerce transactions. to embrace the latest in
terms of losses, accounting mitigation per $1 of Vesta’s guarantee To this day, our solutions artificial intelligence,
for between 85 to 95 per cent transaction volume. approach has been proven remain unmatched. machine learning and
of all card fraud within Simply put, organisations with telcos, e-commerce, Vesta delivers payment automated decisioning.
the region. While CNP in Asia are leaving revenue money transfer businesses acceptance rates up to Payment Protect is ideal for
transactions make up less on the table, declining too and payment gateways. three per cent-plus higher digital banks, challenger
than 15 per cent of total many transactions, seeing than competitors, while banks, e-wallet providers,
purchase volume worldwide, too many chargebacks and “Southeast Asia protecting your revenue with prepaid platforms, digital
it accounts for 54 per cent
of all losses to fraud.
relying on low-grade
technology that do not
stands to lose our no-fraud guarantee. marketplaces, money
transfer services, payment
Shabab Muhaddes, General Mitigating fraud while solve for these challenges. $260million to Our products enablers and all sectors

online fraud with Payment

Manager at Vesta Asia Pacific ensuring valid transactions Merchants need fraud Guarantee: of e-commerce.
are approved poses a unique protection solutions that Backed by our 100 per Partner with Vesta

S
outheast Asia is challenge for traditional deliver on the following to Thailand, Vietnam cent no-chargeback due to enhance approvals
home to the world’s organisations (e.g. telcos, overcome the fear of fraud: to fraud promise, Payment and eliminate the fear
fastest growing e-commerce merchants, and Indonesia Guarantee is a managed of fraud.
e-commerce money remitters) and new ● Increase in approval rates expected to service that leverages our
markets and that growth is entrants alike (e.g. fintechs, ● Reduce losses and cost best-in-class machine About Vesta
increasing exponentially. challenger banks, digital ● Drive customer be the most learning and analytics Vesta is a fintech pioneer
In 2017, research from wallets, payment enablers, acquisition
Google and Temasek marketplaces), as the heavily affected” to pinpoint and isolate
fraud while maximising
in fraud protection
and fully guaranteed
predicted a $200billion fear of fraud often results A guarantee ASEAN POST approved transactions. payment technologies,
internet economy in the in turning away good approach versus score Payment Guarantee helping online
region by 2025 – but by customers. The Covid-19 As bad actors innovate and Our promise: Every supports online merchants merchants, major telcos,
2019 it was already past the pandemic has exacerbated come up with new fraud approved transaction is seeking a proven solution payment processors,
$100billion mark. There are this challenge by driving attacks, merchants find covered by Vesta’s 100 per to risk-free revenue and acquirers optimise
360 million internet users a significant increase in it extremely challenging to cent fraud chargeback growth, including telcos, revenue by eliminating
in Southeast Asia and 90 CNP transaction volume keep up. Rules-based fraud guarantee. If we are wrong, airlines, marketplaces, the fear of fraud. The
per cent of them connect across all geographies. solutions can only prevent the fraud is on us. We money transfer, payment company’s flexible,
primarily through their a small percentage of fraud eliminate the fear and, enablers and all sectors scalable solutions
mobile phones. More than Solving fraud pain related chargebacks and most importantly, the cost of e-commerce. enable companies to
40 per cent of consumers in points in Asia Pacific do nothing to of fraud – all with zero risk Payment Protect: grow their businesses
the region use mobile Most organisations in Asia prevent false and zero liability for you Payment Protect delivers a by focusing on revenue
devices several times a are not equipped to manage declines. 26%
Acceptance
and your business. risk assessment score for rather than risk,
week for e-commerce and these emerging threats on rate Our technology: For more all transactions, allowing delivering secure,
nearly half have at least their own, relying on than 20 years, Vesta has led you to protect payments frictionless transactions
two active digital wallets reactive strategies, using the way in combatting from fraud and raise that maximise
on their mobile device. This
explosion of e-commerce
manual safeguards and
low-tech (rudimentary and 76%
Acceptance
fraud with our proprietary
and patented solutions,
approval rates. Powered
by our advanced machine
acceptance and improve
customer experience – all
growth also provides a ripe rule based) models. For rate increase using machine learning, learning intelligence, backed by a zero-fraud
opportunity for fraudsters. example, it is estimated real-time fraud analytics deep link analysis and liability guarantee.
Online fraud in Southeast that Southeast Asia and deep link analysis. unmatched consortium
Email apacsales@
Asia accounted for 40 per merchants review 42 per Our unmatched technology data, Payment Protect
trustvesta.com or visit us
cent of Asia Pacific’s cent of orders manually, At Vesta, our one simple keeps us a step ahead empowers you with the
at www.trustvesta.com
(APAC) total fraud losses in after which only 98.5 per goal is to allow our partners of the bad guys. insight to accurately filter
2019 and the average cent of reviewed orders are to increase revenue by Our experience: Since 1995, fraud from your online
overall cost of fraud for accepted. The result is high eliminating the fear of fraud. Vesta has been the premier transaction system and

www.thefintechtimes.com | 23
 OPEN BANKING
THE FINTECH TIMES

Cloud uptake spurs open banking innovation Making it work

Only by utilising
For open banking to be
the latest cloud successful, it must ensure
technology can consistency in data consent,
visibility and data security.
we build the bank Consumers must understand
where their data has been
of the future shared, and they must know
their data is protected within
Dermot O’Kelly, every application they use.
Head of Europe at Finastra Third-party developers must
have a clear framework

O
pen banking within which to develop
and application applications, safe in the
programming knowledge their product
interfaces (APIs) will be compatible with
have enabled fintech data security standards.
startups to support Open banking also
critical functions ranging demands a consistent
from payments to approach to liability.
investment banking, and access to credit. previously regarded as $266.4billion in value. As operations to be scaled up Everyone in the ecosystem
enabling a superior For open banking to candidates for cloud. artificial intelligence (AI) is or down remotely, which is must know who is
customer experience at a realise its potential, Through a deep dive with assimilated into banks’ critical in a volatile responsible for the data
lower cost for traditional it needs a foundation a client, we garnered some technology stacks, cloud economic environment. at what point, and when
banking services. technology that can enable detailed metrics about the computing will become their liability ends.
According to a Finastra scalable innovation and benefits one bank expects even more necessary to Open banking needs Open banking will enable
survey of 774 financial accessibility – cloud. to gain from moving to a manage the data involved open platforms greater access to a wider
institutions around the cloud-enabled environment. in digitised banking. Open banking, cloud and range of data. This could
world, 86 per cent of The role of cloud They anticipate a 30 per Cloud is therefore a APIs enable a decentralised create highly personalised
global bank respondents Cloud enables financial cent saving on IT costs and critical foundation financial system creating pricing models, and
are looking to use APIs institutions to avoid the the opportunity to grow technology, but it’s taken flexible business models consumers must all be able
to enable open banking burden of managing revenue by 50 per cent, an extraordinary event to characterised by to benefit, particularly
capabilities in the next 12 infrastructure on-premise, fuelled by an improved accelerate its adoption. The innovative, low cost when some may be
months. Open banking and and to integrate third-party ability to consume Covid-19 pandemic has collaboration between more technologically
APIs have democratised fintech creativity via APIs. innovation and get ahead brought the future forward. fintechs and banks. savvy than others.
financial services, but Cloud can also improve in the marketplace. A platform replaces Open platform ecosystems
can the confluence of operational efficiencies Small wonder then that The impact of Covid-19 traditional one-to-one will facilitate collaboration
Big Tech, traditional through enhanced European banks are now The pandemic has triggered relationships with an between developers and
financial institutions automation and resilience. investing billions of euros a dramatic increase in online ecosystem, in which fintechs, lowering R&D costs
and fintech create an These benefits will affect to modernise their IT, banking and contactless multiple relationships can and encourage innovation.
ecosystem benefiting all the way banks evolve their opting to move more of payments. In May, PayPal be created, allowing At a time when communities
end users? The answer lies operations. Many banks are their business onto the rolled out QR codes for fintechs to establish are being kept apart, we
in how data is protected, still operating on-premise, cloud. That has helped to touch free transactions, relationships with many must support the technology
shared and managed. but more are now using a drive uptake for Big Tech and according to Capgemini banks simultaneously. In bringing them together,
Open banking is based hybrid model for cloud giants like Google, and Efma’s World Retail some cases, banks have encourage a collaborative
on the principle that the applications, such as Microsoft and Amazon, Banking Report 2020, 57 made their proprietary multi-stakeholder,
data related to financial customer relationship according to a Bloomberg per cent of consumers platforms available, multi-modal platform
services customers is safely management (CRM) and survey conducted earlier chose internet banking exposed their APIs and approach and keep the
owned, used and controlled HR, connecting these to this year. This month, amid Covid-19. Earlier in invited fintech application financial ecosystem moving
by those customers. On a their on-premise core. Alphabet’s Google and the crisis, Stripe raised creators to collaborate and and innovating.
basic level this enables Established banks are Deutsche Bank AG have $600million for product accelerate innovation.
more holistic financial starting to use private agreed to form a long-term development following An alternative model is About Finastra
services in payments and clouds, where they can take partnership that will see the growth in online and when vendors offer open Finastra unlocks the
account aggregation, but advantage of the distributive Google provide cloud mobile commerce. technology and a critical potential of people and
more importantly, the processing power that cloud computing capabilities to In addition, remote mass of banking businesses by creating
digitisation of data allows provides while moving Germany’s largest lender. working has become customers, and act as an a platform for open
fintechs and banks to off-premise and simplifying This is a sign of things to the norm. In the US, intermediary between innovation in the world
readily collaborate, their IT infrastructure. come. According to 46 per cent of businesses financial service providers of financial services.
bringing the financial Until recently, larger Gartner, 28 per cent of had implemented remote and application creators.
Website:
ecosystem closer together. banks’ readiness to adopt enterprises will be using working policies by An example of a
www.finastra.com
Open banking offers the cloud was constrained by the cloud to support more early March 2020. technology enabling this is
potential to improve the data sovereignty concerns. than half of their This behaviour-shift FusionFabric.cloud. This LinkedIn: www.linkedin.
integration of payments Today cloud providers have transactional systems of underscores the need for open, cloud-based platform com/company/finastra
and accounting platforms become more flexible in record by 2022. Gartner has banks and businesses to enables collaboration Twitter: @FinastraFS
for small and medium terms of where they locate also predicted that the transform digitally. This is across the banking and
enterprises (SMEs) and to their data centres. This has global cloud computing best enabled through fintech ecosystem by
enable the digitisation of created opportunities for market will grow by 17 per cloud-backed software as a enabling banks to tap into
data for managing risk banks in territories not cent this year, hitting service (SaaS). This allows a community of innovators.

24 | Edition 33
 INVESTMENT
THE FINTECH TIMES

O
n the surface, the
public stock market by
definition is a broadly Democratising from attractively priced primary
share offerings can often form a
strong component of alpha. When

Alpha
inclusive marketplace, analysing the aftermarket
where investors of all shapes and performance of listed companies
sizes ranging from large pension that completed retail offerings
funds and asset managers all through the PrimaryBid platform
the way down to the individual in recent months, it paints an
retail investor can easily buy and Close to one year since interesting picture. Two-dozen
sell shares of listed companies retail offers were completed
from one another. Outward VC invested, through PrimaryBid between the
A recent wave of innovative PrimaryBid has revolutionised months of April to June 2020.
digital stockbrokers has driven Based on closing prices on 17
commissions for retail investors public markets by becoming July 2020, the retail offers have
down to zero, while an array of
publicly available information
the UK’s go-to solution generated a blended average
return of 19 per cent. Benchmarked
remains easily accessible so that for retail offerings against the average returns of
retail investors are able to make relevant indices over the period of
well-informed decisions. It is two per cent this implies an alpha
important to note however that return of 17 per cent, which is
what I have just described above impressive by any standard.
reflects the secondary capital Now, it is important to keep
markets, where investors buy and in mind that PrimaryBid is not
sell shares already listed on the providing recommendations
public stock markets. When to retail investors on its
companies issue new shares in platform, it is simply providing
order to raise capital, through access to these deals that
either an IPO or a discounted were previously inaccessible.
follow-on equity issuance, this Secondly, there is absolutely no
level of inclusivity has generally guarantee that discounted share
broken down. Historically, these prices and a fresh capital raise
attractively priced deals were will lead to a company delivering
offered almost exclusively to large positive returns. It is therefore
institutional investors, effectively imperative that sophisticated
shutting out retail investors. retail investors are able to assess
Now, before the proverbial finger each opportunity on its own
is pointed at investment banks, merit. That being said, it is
who typically advise and control difficult to deny that the
these processes, it is important to so-called democratisation of
note that there were valid and primary markets provides the
entirely rational reasons behind potential for retail investors to
why this was the case. This largely Creating more of a generate alpha returns that
boiled down to two key factors
– timing and certainty.
level playing field for were previously only available
to large financial institutions,
Institutional-only capital raises retail investors in the As industries still come to creating more of a level playing
can be launched and completed
without a prospectus in a matter
last four months than terms with the profound impact
of Covid-19 on societies and
including other household names
such as Ocado, Aston Martin and
field for retail investors in the
last four months than has been
of hours. When retail investors has been seen over economies, this speed and William Hill with international seen over the last four decades.
are added into the mix, this certainty has never been more expansion also well in its sights. We therefore feel incredibly
typically would extend the deal
the last four decades important in the context of It is not hyperbole to say that excited to see how far PrimaryBid
timeline to days or even weeks chip institutional investors as raising capital, as listed the impact of PrimaryBid on and other innovators in the space
while introducing significant part of the same accelerated companies in their droves seek to public markets has been can go in driving capital markets
complexity around retail process and, most importantly, raise record breaking levels of transformational. Firstly, it is forward to a place where it is
distribution, order management on the same discounted terms. capital in order to protect their providing listed companies with truly transparent, open and
and regulation. With speed and Once a deal has been launched futures, and in some cases, seize the ability to engage with and inclusive to all of its participants.
certainty absolutely critical to the and publicly announced to the opportunities for growth. efficiently include its retail While it is still early days, the
majority of these deals, it is no market, retail investors wishing The last four months in shareholder base in the capital data would suggest that they
surprise that listed companies to participate have a window of particular has seen PrimaryBid raising process and respect are on the right track.
opted for institutional-only offers. opportunity to place an order grow rapidly to become the UK corporate governance principles
This is a significant problem that through the PrimaryBid app with market’s go-to solution for retail relating to the fair treatment of About Outward VC
unfairly affects retail investors their debit or credit card. offerings and effectively all shareholders, which simply Outward VC is a venture
and one that resonated strongly Individual orders are then revolutionise the public markets was not possible before. It is also capital fund backing the next
with the Outward VC team, aggregated by PrimaryBid and in the process. In May 2020, democratising access to the generation of European fintech
which is a big reason why almost routed to the company as a single Compass Group became the first primary markets for retail and enterprise technology.
a year ago we invested in order in guaranteed, cleared FTSE 100 business to carry out a investors, and in doing so,
Website: https://outwardvc.com
investment platform provider funds. This entire process retail offer alongside an democratising the potential for
PrimaryBid to support its mission addresses the complexity issues accelerated institutional capital ‘alpha’ returns. LinkedIn: www.linkedin.com/
of ‘democratising equity capital of old, delivering both time raise, with PrimaryBid acting as Alpha measures the company/outward-vc
markets’. PrimaryBid provides efficiency and certainty for listed the conduit to access retail performance of a stock against a Twitter: @OutwardVC
publicly listed companies with a companies and investment banks investors. PrimaryBid’s relevant market index and is a key
technology platform that enables as well as a level of access for technology has since been used metric in assessing the
retail investor participation in individual investors that the by dozens of companies across performance of an actively
capital raisings alongside blue market has lacked for decades. the FTSE 100, FTSE 250 and AIM, managed fund, where returns

www.thefintechtimes.com | 25
 PA Y M E N T S
THE FINTECH TIMES

REIMAGININGPAPERWORK
Speeding up digital transformation
in financial services with a
no-code development platform

T
he financial Eran Shirazi, CTO, Tal that come equipped with easy-to-complete, branded, builders can bring of business objectives with
services industry Daskal, CEO, and Omer advanced functionality that digital customer journeys. organisations into the the customer always put
is still heavily Shirazi, COO, at EasySend would be very difficult to EasySend also provides a self-service, digital era in front and centre for any
reliant on manual, build quickly in-house, set of tools for continuously and enables business company aiming to grow.
paper-based and such as remote assistance, optimising digital journeys, users without advanced EasySend is actively
customer-facing processes permissions, integrations, improving efficiency and technical knowledge to expanding in Israel, the
that must be digitised. validations, change maximising ROI on digital quickly build complex US, Europe, the Middle
Traditional financial management and security. channels. The platform is digital customer journeys East and Africa and Asia
service providers, such as In addition, advanced data built with the highest without having to resort Pacific with enterprise
insurance companies, now analytics, AB testing, security and compliance to lengthy and expensive customers who have
need to compete with agile, personalisation and standards and integrates development projects. Data already transformed their
digital-first newcomers comes to customer data optimisation capabilities. with any internal system, visibility and optimisation operations by digitising a
and tech innovators, collection for core EasySend is a no-code third-party tools, apps tools help business leaders wide range of processes. Its
including insurtechs. processes, such as customer platform for building and and services. continuously improve future roadmap includes
Chief information officers acquisition and onboarding, optimising enterprise- By reducing the friction efficiency, customer more advanced features,
often think they can build it the process must be built grade digital customer associated with paperwork, it satisfaction and revenues. such as auto-optimisations,
themselves. However, IT numerous times with minor journeys. Its mission is to helps clients make customer Such digital transformation more flexibility in design
leaders can underestimate adjustments – making it put an end to inefficient data collection, processing, with a no-code development and a wider range of
the complexity or don’t an ideal candidate for internal processes and and product delivery platform is absolutely pre-made templates.
anticipate the issues that arise no-code development. frustrating paperwork in simple and enjoyable. necessary for modern
after the customer-facing Yet, it’s often only after the insurance industry A comprehensive solution organisations to achieve About EasySend
digital journey has been developing a few processes and financial services. to all customer-facing increased customer Founded in 2016 , EasySend
deployed in production. in-house, and wasting millions It empowers businesses challenges, EasySend experience. Modern is based in Tel Aviv, New
Today's digital journeys of dollars and enduring to quickly and easily build aims to transform the way organisations can’t get away York and Frankfurt.
are complex. When built months of delays, that complex digital journeys insurers communicate with with outdated, manual and Website: easysend.io
with code, these journeys enterprises realise the true with a powerful drag their customers, from the paper-based processes;
often take more than a year hardship of coded solutions and drop builder and bottom to top, empowering rather, the Coronavirus LinkedIn: www.linkedin.
to build, don't address and the value of no-code Kadabra AI, a proprietary true digital transformation proved that remote com/company/easysend
organisational bottlenecks development platforms. artificial intelligence and agility in a traditionally servicing is a must. Digital
and remain extremely No-code tools help create tool that accelerates the slow-moving space. transformation must come
costly to maintain. When it user-friendly digital journeys development of customised, Simple to use, no-code from within the framework

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26 | Edition 33
 PA Y M E N T S
THE FINTECH TIMES

Unleashed in the US
B4B Payments is primed to shake up antiquated expense management processes across US businesses.
Here Paul Swinton, CEO and co-founder of B4B Payments, discusses his company’s move from the consumer
and scrap metal market to helping organisations on both sides of the pond with purchasing and payments

A
dapting to change and doing unheard of in this type of environment, Migrant Help assists victims of modern Moving into the US
things differently is something and we were allowing them to load funds slavery and human trafficking with The next ‘significant leap forward’ for B4B
frequently associated with onto prepaid cards while providing the money one of the biggest hurdles in Payments is its expansion into the US, with
fintechs, with the coronavirus whole electronic footprint that was the process since displaced or exploited a new office in Boston, Massachusetts due
pandemic only accentuating the required by the legislation.” individuals often do not have the to open this August.
importance of digitisation and leaner, “Once we were able to take a breath, we facilities to open a typical bank account. B4B Payments has also struck a strategic
agile operating models. But for many realised that this approach was applicable Previously, the charity was required to collaboration with Visa in the US to
organisations across multiple sectors, to dozens of other industries that were make hand-to-hand payments of cash, introduce its technology to organisations
adapting to new ways of communicating either using cash or cheques and our but this was understandably too who have previously found difficulty
and collaborating with their customers platform supported a better way for high-risk during the pandemic. managing issues associated with traditional
during the Covid-19 crisis has been a companies to pay recurring payments or “Refugees and migrants will arrive with payment methods, such as employee
steep learning curve and, often, an one-off payments.” no access to bank accounts and will often expenses or third-party payments.
unnerving process. Since then, B4B Payments has literally walk around with cash in their “The US is a huge, huge market and,
Helping businesses to quickly evolve to ‘continuously improved and evolved’ to hands all week,” says Swinton. “Then, when interestingly, when you look at the
new ways of working is something digital provide ‘innovative, flexible, and time- Covid-19 came along, the charity did not payment systems or the evolution of
payment specialist B4B Payments thrives saving solutions that streamline and want staff to be giving money out to lots of payments in the States, they are a few
on, having evolved its business continually eliminate antiquated finance and people and equally, shops at the same time years behind us and there’s still a massive
to cater for societal needs since entering the accounting processes’. didn't want cash either. So, we solved two prevalence of cheques,” explains Swinton.
prepaid card market more than 14 years ago. things very quickly by distributing cards to “Now is the right time for us to unleash our
The pandemic may thousands of recipients that were in hard platform into the US market and help
Cash for scrap encourage more businesses times to ensure they were getting companies free up their time from the
When the UK banned the use of cash to charitable donations weekly.” sometimes-antiquated expense management
pay for scrap metals in 2012, many dealers to adopt cashless solutions According to B4B Payments, its technology processes in the same way we have in Europe.
were put off by the high costs and insecurity is also particularly useful for agile digital We are looking forward to achieving similar
of using cheques and wanted greater
in the future so they can companies without the resources to employ levels of success by collaborating with Visa to
convenience for their customers to make stay ahead of the curve, full-time administrative staff, or who employ take our product forward."
use of their funds immediately. B4B remote or gig economy workers and “Furthermore, if you look at the banking
Payments (under its former name Payment rather than waiting for contractors, because payments can be system in the States as well, there's over
Card Solutions) quickly transformed its them to be enforced tracked and made as needed without 10,000 banks. Some of them are small with
consumer-based pre-paid offering into the needing a central interface. limited functionality, so there is a massive
Bread4Scrap service that enabled scrap In 2017, the company was granted The company believes the gig economy is opportunity here to go and talk to them
metal dealers to issue their customers with Authorised Payment Institute (API) status set to grow massively and businesses that about their processes and introduce our
prepaid Mastercard cards and instantly load by the Financial Conduct Authority are now looking to life beyond lockdown products in that market marketplace.”
the cards with funds previously paid in cash. (FCA) and it now has more than 1,000 are considering more remote working As Swinton says, it is ‘exciting times
Paul Swinton, CEO and co-founder of customers in Europe, with churches, arrangements in comparison to pre-virus ahead for B4B Payments’.
B4B Payments, explains: “Around eight schools, charities, sports organisations times. It hopes to provide these businesses
years ago, the UK Government changed – including the England and Wales ‘with a swift, secure and easy-to-use
the law around scrap metal merchants, Cricket Board – among its client base. platform that gives them more time and About B4B Payments
which meant they could no longer take effort to focus on their trade, rather than Website: www.b4bpayments.com
cash anymore. This presented an Supporting charities their administration’. LinkedIn: www.linkedin.com/
opportunity for us overnight and we very Its ability to quickly respond to establishing “The crisis could trigger a shift towards company/b4bpayments
quickly got into that marketplace, a viable and convenient method of paying more home working and it’s going to be a Twitter: @B4BPayments
developing a product that was suppliers when cash is prohibited proved new paradigm for everybody,” says
implemented really rapidly to around 100 crucial during the Covid-19 crisis. B4B Swinton. “The pandemic may encourage
of the big scrap yards across the country.” Payments has worked with Migrant Help, a more businesses to adopt cashless
“We suddenly had thousands of charity that supports vulnerable migrants, to solutions in the future so they can stay
customers using an online know-your- provide prepaid cards as a primary payment ahead of the curve, rather than waiting for
customer (KYC) process, which was method and a more suitable alternative to cash. them to be enforced.”

www.thefintechtimes.com | 27
 BANKING
THE FINTECH TIMES

Collaboration key
to thriving in
the digital era
While ‘digital transformation’ is often viewed as
an enormous, standalone project that must be
completed by a set date, it should really be viewed
as an evolution. The organisations that position
their digital transformation as an ongoing
process of improvement will be the ones that
ultimately succeed in this new digital era
Myles Bertrand, Managing Director – APAC, Mambu

I
n the banking and finance sector in becomes more reliable, and banks,
particular, collaboration and a quest fintechs and challengers begin to
for continuous change are the key realise the size, scale and potential
components of a successful digital of the digital opportunity, the global
evolution. Banks and financial financial services industry is undergoing what the API does, 30 seconds to identify
institutions around the world are a period of intense change. the entry point and how it is used, and less
currently facing a crossroads of sorts; APIs, in particular, are destined to play than three minutes to create an account on clouds of secrecy in siloed operations
either accept that the future of banking a significant role in the digitisation of the portal, gain access and start using it. for decades. However, these banks need
is digital and embrace new technologies, incumbent banks, as they allow banks to We are seeing that banks are increasingly to shake off their fear of working with
or keep working towards goals that may gradually replace their old technology, using APIs to enable access to technology others and embrace the opportunities
have been set decades ago, using legacy rather than undertaking a risky and that can transform the experience they can that collaboration can bring.
systems that are outdated, expensive expensive ‘knockdown/rebuild’ digital offer their customers, as well as the When banks think and operate more
and incredibly complex. transformation project. rewards they can share with investors. like fintechs – leveraging technology, such
While this may not seem to be much as APIs, and collaborating with
of a choice, having faced minimal Agility and adaptability Power of collaboration high-performing cloud and technology
competition for decades, many large Agility and adaptability are key when partners – they can streamline operations,
and established banks have become
are key when building a building a digital technology platform, and automate processes and significantly
complacent and resistant to change. digital technology platform it is essential that it allows for collaboration. reduce the overall cost of doing business.
But now, threatened by new entrants to As we move forward in this digital age, In the current climate it is more
the market in the shape of innovative and it is essential that it banks will need to increasingly cultivate apparent than ever that banks and
fintechs and new challengers, incumbent allows for collaboration a collection of trusted collaborators and financial institutions that proactively
banks are at real risk of being left behind partners, with each organisation bringing plan how they are going to ride the
if they don’t innovate and digitise. In While banks have historically spent their particular expertise to the party. digital wave are the ones that will thrive
fact, McKinsey & Co estimates that huge sums of money on developing custom Challenger banks are leading the way in in this new era.
legacy financial institutions that fail to software and bespoke legacy systems, by terms of collaboration and tend to work
evolve digitally will see profits decline embracing API technology they can quickly with a carefully selected group of fintechs About Mambu
by up to 60 per cent by 2025. That’s a and easily access new technologies offered that provide best-for-purpose solutions Mambu is the only pure SaaS digital
sobering thought, and ought to serve as by fintechs, including artificial intelligence, in a range of functions, leaving the bank banking platform available that operates
good motivation for traditional banks to data analytics and cloud, all on a itself free to focus on providing the best exclusively in the Cloud. The centrepiece
get their digital strategies in place. software-as-a-service (SaaS) basis. This is service it possibly can. of Mambu’s product portfolio is a
Even while economies are suffering not only more cost effective, it also enables Embracing APIs is the key to collaboration powerful cloud-native platform that is
and business is uncertain due to the the bank to be more responsive to changing for legacy banks wanting to compete with provided as a cutting-edge SaaS model
Covid-19 pandemic, banks need to move market conditions and customer demand, challenger banks on a level playing field. to customers in more than 60 countries
forward with their digital strategies while also being able to focus more APIs allow banks to collaborate with third worldwide. Alongside this platform,
to ensure they’re not left behind when resources on fine-tuning their core business. parties, such as fintechs or other Mambu customers have access to
the world eventually settles into the API technology is not new, having been technology providers, while also making it best-in-class-services via a vast range of
‘new normal’. The biggest mistake around for about 20 years now, however it possible for banks to leverage all of their individual specialised connectors
any bank can make right now is to do must be noted that modern APIs are vastly advantages – trust, security, customer available in the Mambu Marketplace.
nothing– they need to look at how they different to the APIs of old. While old APIs loyalty, data, sector knowledge and brand Find out how Mambu can help your
can evolve with the times and capitalise were notoriously unwieldy, today’s APIs are awareness – and connect with technology organisation on its digital evolution at
on the available opportunities. secure, lightweight and easy to understand, that delivers all of the functionality that www.mambu.com.
and developers don’t need special training to the challenger banks are offering.
The allure of APIs access and implement them. What’s more, Collaboration may feel like a very new
As mobile and application programming the majority of modern APIs meet the 3:30:3 and foreign concept for legacy banks,
interface (API) technology matures and rule. That is, three seconds to understand many of which have operated under

28 | Edition 33
 TRADE FINANCE
THE FINTECH TIMES

Forces that operational processes will have the ability to ‘purchase or sale’ financing
to leverage low cost secure and bind their are all coming together
are steadily jurisdictions. In effect, the policies online and real as an interlinked world.
reshaping the processes didn’t change, time for all their business

world of trade
just the cost of those steps
did. To make matters
worse, it’s not only banks,
needs and hence be able
to digitally share those
policies with processors 10 Own vs. use
One of the most
fundamental

I
t is remarkable how but even corporates who who could a) ratify the use changes we have seen in the
‘unchanged’ the find trade finance ‘painful’. of the policy and b) avail of last few years has been the
world of trade has Inflection events, such as the limits under the policy shift to ‘own’ versus ‘use’. In
remained over the the 2008 financial crisis, the to process transaction, our personal lives we seem
last 100 years. The same Middle East social unrests, online and real time. to have made that leap, and
documents, the same or the current Covid-19 that’s starting to emerge in
protocols between buyers
and sellers, and the same
trade letters of credit and
documentary collections,
that form the bedrock
pandemic, have led to
disruptions that accentuate
how broken the process is.
In their wake, these events
make liquidity dearer and
7 Audio and video
We will see a far
greater influence of
audio and video tools
interspersed in our lives. For
the banking world as well.
Why buy when one can use?
Why spend on capex, when
managing through opex is
easier. Why bother with
of trade worldwide. processing a lot tougher. example, when instructing the upkeep of the entire

Trade.
While most of our daily on documentation or infrastructure, when it can
lives today have gone digital What lies ahead? accepting discrepancies be done more effectively
– from ordering transport The past cannot continue – it would be perfectly in a ‘pay as you go’ mode.

Reimagined
(Uber), to booking a holiday and with the technologies acceptable for voice
(Airbnb), watching movies
(Netflix), and domestic
purchases (Amazon), trade
finance has unfortunately
continued to wallow in
available today, processing,
does not need to be
frustratingly restrictive
anymore. Let us review some
of these exciting changes
Sameer Sehgal, CEO of Traydstream
responses to not only be
recorded as proof, but also
admissible in the courts
as evidence. The same will
be true of video recording of
11 Interoperability
Systems being
developed today
are being built in an
interoperable manner.
paper. Not much has that are starting to deep root conversations within It won’t matter whether
changed from my first day as trends and behaviours: buyers place orders that paper-based payment the transaction digest as a transaction has been
in trade banking in the go straight into the seller methods have given way to buyers, sellers and the initiated on paper, on
1990s when all I did was
stamp documents all day
long. It’s high time that it
changed for the better!
1 Online processing
Trade has always been
believed to be complex;
hence rationalising the
need for extensive manual
enterprise resource planning
(ERP), ‘through an order to
cash process’ and into
production – just-in-time. In
the years ahead, what is
online products thereby
improving efficiency.
Processing has become
industrial and costs are a
fraction of what they were
other constituencies in
the ecosystem would
benefit from an online
AV response embedded
in the document file.
a block chain network,
electronic bank front end
system, SWIFT or any
other mode. Systems will be
flexible to operate between
The last three intervention. That might likely to also to take place is a few decades ago. Trade each other i.e. the ability to
decades in trade
Trade financing is a
fundamental need for most
corporates since it covers
working capital – buying
potentially be true, however
looking closer the proverbial
80/20 rule applies here as
well. The run-of-the-mill
transactions can today be
the seamless information
flow from these commercial
processes onto bank
systems such that the two
processes overlap and
is headed in that direction
with online processing
available today along with
logistics and insurance.
8 Blockchain
We are at very early
stages of the evolution
of blockchain or specifically
the distributed ledger
take on transactions and
instructions in any medium
and be able to auto convert,
process and probably
hand over to a completely
or selling. Not surprisingly
as it has been around for
centuries and today is quite
commoditised, putting an
checked on systems and
platforms much better than
in the physical world. On
our Traydstream platform,
synchronise, making for
a much faster end to end
process financing overlay. 5 Convergence of
logistics and finance
This is a most exciting
convergence that’s being
technology (DLT). If there is
one area where DLT should
be most applicable it is trade.
One can see an interlinked
different medium in the
next step. The capability to
be ‘megnostic’ (agnostic to
the medium) – is going to be
enormous pressure on
pricing in determining if a
flow is won. But how does one
price competitively, when
every transaction needs
with optical character
recognition (OCR), machine
learning (ML), artificial
intelligence (AI) and a
whole raft of advanced
3 Digital documents
Erstwhile
transactional trade
banking has depended on
paper. However, with the
catalysed by technology.
So as logistical systems
converge onto ERP and
banking/trade/payment
systems, booking of vessels
world where parties work
of the same chain to add
to and consummate a
transaction end to end, with
checking ‘processors’ in
the true defining attribute of
technology going forward.

Conclusion
These are all exciting trends
manual review, is paper technologies, we can run application programming could be online real time, built at each stage to review that are impacting our world
based, time and resource these transactions faster interface (API) tools while financing for those and verify the transaction. of trade and banking today.
consuming. Logically, one and more accurately than available today, a safe, transactions would be real Rome was not built in a day,
would strive for economies
of scale, however, without
automation, that’s really
challenging, since an
increase in revenues requires
in the physical world. More
so, systems remember and
constantly evolve meaning
that banks and corporates
can process far more, far
seamless and scalable
manner of connecting
systems is possible such
that documents need not
be ‘physical’, As examples,
time as well. The same
information of the cargo on
the vessel as the goods made
their way from the buyer to
seller would be available to
9 Ecosystems
We have already
started to operate in
‘ecosystems’ in our personal
lives. When we book a hotel,
and so with these forces,
they are steadily making
their way into our banking
lives. And as they do, our
lives are getting changed
a corresponding increase in cheaper, in a more accurate Bolero an Enigio provide all parties to make intelligent we get directed to sites – indelibly. The decision then
operating headcount. and compliant manner, a few excellent solutions decisions on financing and which offer transport rests with each one of us. As
What’s hidden right at the with lesser usage of working in this space, and we have risk mitigation. In fact, means for our trips or vice Socrates mused: ‘The secret
bottom of this cost pyramid capital than ever before, the UNCITRAL model technology would be smart versa. Adjacent offerings of change is to focus all your
is a thick layer of expenses in a standardised manner. framework as a backdrop enough to indicate the best bundled together to make energies not to change the
that are misplaced to to work from. It is not far logistical route and the the experience of the user, old but to create the new’.
start with. These costs,
linked to the processing
of transactions, in the
past had to be accepted
2 Suppliers and buyers
connecting online
This is already
happening and with
when corporates and banks
would be sharing a digital
trade ‘digest’ with all
documents to process.
most optimal financing
solution available for the
underlying transaction.
easier and effective. It is
now rapidly reshaping
the business to business
(B2B) space as well. For
Isn’t then the best way to
predict this amazing future
of an online real time,
invisible an interconnected
with little choice. The
only way to reduce costs
was to benefit from labour
arbitrage i.e. outsource
situations, such as
Covid-19, the need for such
connectivity increases
furthermore. Today, 4 Digital processing
We’ve seen it during
our lifetimes as
6 Convergence of
insurance and finance
As insurance gets
digitised, buyers and sellers
example, as corporates
use ERP – corporate
contracting, banking,
logistics, insurance, point of
trade world, to join hands
in making it happen?

www.thefintechtimes.com | 29
 T E C H N O LO G Y
THE FINTECH TIMES

Coding with context in a remote-ready world trusted remote workers to

By Marcel Klimo, Fintech your internal team is that
Evangelist, Vacuumlabs there is less chance of your
The importance developers becoming
demotivated. It is recognised
of having trusted that developers can get
remote fintech dispirited doing the same
thing repeatedly with the
developers on same sort of project, whereas
your team remote developers have the
option of switching projects

A
s the coronavirus over time. For example,
spread around the encouraging our teams to
world, national for hire networks, it is easy Insider knowledge It is all about culture build our own cryptocurrency
containment to find and hire a developer When working with You need to make sure that wallet Adalite as a passion
measures, including that works remotely but the financial services people feel connected and project eventually led to a
lockdowns, quarantines real question is whether technology, you need to thus build trust. Cultural fit collaboration with Emurgo
and curfews, essentially they understand your have a couple fintech is also particularly in Japan. “By providing us
forced a global experiment company, your brand and projects under your belt to important. Sometimes, the flexibility of an extended
on remote working with your values. And, more build with purpose and companies will work with team that feels and works
millions of small, medium, importantly, writing code intention. If a developer an external vendor but find as one of our own, we see
and large businesses left to without understanding the has integrated a payment they are too keen to please ourselves working with
grapple with the realities industry is a recipe for gateway card processor or the client all the time and Vacuumlabs for a long time,”
of a flexible workforce. disaster. By knowing the core banking system of any do not suggest alternatives said the CTO of Emurgo.
An understandably Three challenges context, you can ensure kind before, they’re going to or other ways of working. We built a custom Cardano
cautious approach to address for faster delivery and more start to see patterns and We like to challenge crypto wallet and continue to
towards returning to remote working precise solutions. quirks of each one. And, assumptions and ask a lot work with them and others
the office means remote Choosing the right only then can they make of questions. It’s better to on projects, which started as
working is likely to
become the new norm,
1 Get connected –
managing the logistics technology and
understanding the impact
critical decisions to
speed up time to market
spend a week designing the
solution and another week
passion projects and grew to
full production builds.
even when restrictions on
movements are eased.
2 Feel connected –
getting to know each
other and building trust
of a service can be a difficult
task for fintechs. When
and build it right.
About two years ago,
coding it rather than
rewriting the codebase
All of this results in
developers that have their
Just like Slack, Twitter we were approached by when we kicked off a large eight times in six weeks just creativity enhanced because
and thousands of digital
companies around the
3 Stay connected –
developing team
and company culture
subscription management
service Cledara, it knew
project in Hong Kong, we
immediately made
to find out that it doesn’t
actually solve a problem.
they can build something
from scratch or start
world, we all collectively what it wanted to build recommendations on Our collaboration with something new. Rather than
moved to a remote-only meetings. But when things but needed a guide to help vendors and steered the travel and airline booking just to keep tweaking a
workplace basically return to a new normal, we build its minimum valuable architecture to prevent app Kiwi.com has been going service a little bit day in
overnight. Unlike others, still want to meet people in product. We did just that problems we have seen in on for years because our and day out, they are more
our teams at Vacuumlabs person. What might remain and got it live in just under the past. Similarly, when cultures meld so perfectly likely to think about how
have been training for this is that remote-ready now two months, which resulted working with ‘buy now, pay together. Its vice president of something can be done
for years. We were never opens the doors to bringing in an industry award and an later’ service Twisto, we search couldn’t have said it differently, or how it could
‘remote-first’ but we have on people who we previously investment from Techstars utilised our card processing better: “They are acting more be made quicker or snappier.
always been ‘remote-ready’. might not have considered. and BBVA a year later. As and payments knowledge to like colleagues or even as We believe companies like
Our developers and team Companies that have an a design and development make customer registration friends. It’s not just about yours can benefit from new
members have been in-house team may want to company focused on and service 75 per cent cooperation on development, blood, new people coming
building and engineering either innovate and scale fintech, we believe in a more efficient than before. but they are always happy to in from the outside.
software across three faster but do not have longer-term collaboration Our team members discuss and improve even
continents juggling calls enough capacity or and we are happy Cledara typically join existing delivery processes.” About Vacuumlabs
between the US, Europe complement their team continues to work with us squads to boost capabilities There’s a mindset within Vacuumlabs partners with
and Asia for years, so with additional skill sets years later. And, many or we can take full end-to- our company to constantly clients, providing full-stack
staying connected via and experience. Managing others continue because end responsibility for ask questions because engineering teams and
online tools became a remote development team they trust that the only delivery of specific developers that have an product designers to build
second nature to us all. goes further than logistics. way to move fast, learn functionality. We jump on understanding of the third leading products in the
There are immediately It will also involve careful and iterate is with a team daily stand-up meetings party providers find it a lot fintech, payments and
obvious advantages to consideration to ensure you that understands the and attend retrospective easier to work within their challenger banking spaces.
remote working – the cost are getting the right people context of what they are sessions to work together team, and confidently Every step of the way,
saving of no longer needing with the right knowledge building from day one. better as a team and not as communicate with the Vacuumlabs experts
huge office spaces or the and in our industry, the Since we provide a typical vendor and client requirements of the project collaborate and guide
chance to boost the talent right fintech experience. individuals or full teams delivery cycle. It is all about and the customer they’re clients, allowing them to
pool, for example. Having a of software engineers building the stuff you need working with. Feeling move fast, learn, and iterate.
remote team also reduces Understanding the context and designers with years and reducing the noise that connected is about making Website:
distraction levels that you At the very beginning, you of experience building comes from lack of clarity people confident, making www.vacuumlabs.com
have in a company office need to make sure that you fintech, the CTO can spend and understanding. For people heard and building
LinkedIn: www.linkedin.
– that human nature of get connected with the less time looking for quality our project managers, the trust among a team.
com/company/
wanting to talk to other right people and sort out tech talent and more time goal is to bring peace of
vacuumlabs
people, have conversations the logistics of how you will on delivering features mind to our clients, so that Motivation is key
or hold meetings about work together. With people for their customers. they can focus on growth. Another advantage to hiring

30 | Edition 33
 T E C H N O LO G Y
THE FINTECH TIMES

Options for fintechs Anatoly Kaptsan, Chief Software Architect, Compass Plus

How the technology

choices you make today can However, what if the platform described
drive future business success above already existed? Step forwards
the SOA-based platform, offering a fully

T
he rise of fintechs has been well functional, reliable, well-structured and
documented over the past to take this route, documented application programming
decade, with global investment but only single digits interface (API) that supports modern
into this sector reaching a huge have been successful. standards and technologies for
$35.7billion in 2019, according to The development of payment integration embedded into the DNA
Innovate Finance. Initially, their applications is a very complex task that of the system. This kind of platform
product offerings differed requires very unique experience and will offer a new way of development:
substantially from that of traditional qualifications. The global market has a ● Customers need the opportunity to freely through a customisation layer.
financial institutions (FIs), to the finite number of specialists that are capable create their own differentiating services On top of such a platform, fintechs
extent that those successful were of building payment systems from scratch. on the platform, while continuing to or the platform vendor, based on
labelled disruptors and challengers. Development from the ground up takes receive platform updates without requirements, can create and develop
With the number of fintechs applying years and has insurmountable risks – from compromising their own developments their own customisation layer, where
for banking licences increasing over the time it takes to build a full payment ● Development tools should, on one they can implement any unique features
the last couple of years, and the application from scratch, the potential is hand, be modern and recognisable they want in order to offer competitive and
transition from value-added service high that the initial idea will already be to developers, and on the other, differentiating payment services.
providers to payments giants, many obsolete and no longer make business focused on being fit for purpose for the With this kind of development method
are now being seen as legitimate sense. By and large, this route is only payment industry there are distinct advantages. For example,
competitors to traditional FIs. applicable to giants with near unlimited ● The developer must have the freedom of there should be no restrictions on what
It is clear that we have reached a new resources, such as Apple, Google, Facebook, creativity, but the system being created is can be done in the custom layer. As the
era in the payments industry – a sector that finance the payment part from a business critical and must be protected fintech will have access to the development
that was once limited by technology is completely different business domain. as much as possible from human error tools the software vendor uses, they
now enabled by it. The industry has Designing a payments platform is a very should be able to do everything that the
evolved from an era that embraced the significant task with the need to find and The choice of how you implement platform vendor can, without exception
mass distribution of standard services, to constantly maintain a delicate balance your platform – whether to build, buy or limitation, such as create their own
one led by the creation of unique financial between conflicting requirements. or a combination of the two – is not an objects, transactions, interfaces, batch
services and, as such, there have been easy task to undertake as the business procedures, workplaces, reports, etc. Also,
fundamental changes to the approaches ● The platform should enable the quick decisions you make today will affect by utilising the replicability inherent in the
for building payment services. The main creation of new services, but at the same the future of your business. However, platform, fintechs do not have to reinvent
driver of development is the penetration time strictly meet the requirements it is obvious that a fintech looking to the wheel so can concentrate on solving
of financial services into every aspect of associated with security, performance, go-to-market quickly with new and truly their business problems and not waste
people’s lives, creating a digital economy. fault tolerance, scalability and innovative products cannot use a system time re-implementing standard functions.
The fundamental mission of any compatibility with industry standards whose skeleton was created at the dawn Rather than spend years building the
challenger in this industry is to bring ● The platform must be extremely flexible, of the payment industry as a payments right system for a product offering that
creative and fresh thinking that truly but it must not be a do-it-yourself design. platform – as such a ‘box’ is not only could already be outdated before the
disrupts the norm of the ecosystem. For It should make it easy to implement expensive to maintain, requires a lot platform goes live, fintechs should realise
many fintechs, they believe they can do standard functions using standard tools, support and offers no vendor that there are options out there. But
this is by building their own platform and enable the fintech to focus on the independence with potentially slow before jumping in head first and seeking
in-house, to maintain control and truly development of innovative functions moving development queues. It also out a platform that can give them a
differentiate. If a fintech is determined to ● The development tools provided cannot adequately represent the objects quick win today, it is important to truly
independently develop and implement all by the platform should allow any and functions of a modern payment evaluate the market to find a platform
their main systems, starting with front end idea to be implemented. However, environment, nor effectively interact that will fit their needs, not only for
applications for customers and ending the implementation of a new function with other systems in a service-oriented now, but long into the future. Only then
with a transactional engine, this approach should not start from scratch every architecture (SOA) and does not do will they have the sufficient margin of
can potentially give them maximum time; all objects, functions and well in a dynamic cloud environment. flexibility and strength to guarantee
freedom to innovate alongside vendor services in the platform should be Perhaps most importantly, it also does the fintech’s unhindered development
independence. However, many have tried available to the developer not enable rapid development. for years to come.

www.thefintechtimes.com | 31
 JOBS
THE FINTECH TIMES

JOBS IN FINTECH
The Fintech Times selection of
TOP fintech jobs this month
Chief Technology Officer, Senior Data Scientist, Inside Sales Representative,
London at Copenhagen at London at

Banking Circle is a new bank, that is fully licensed

2 yet free from the legacy systems that can make
SmartStream Technologies, a global software

2 The chance to work for a leading regtech

organisation based out of London. With a
traditional banking slow and expensive. Banking
Circle financial infrastructure is built for payments
2 and managed services provider to the world’s
top banks, asset managers, custodians and
remote working mindset and a mission of businesses and banks. Do you want to push the
broker-dealers has a new opportunity for a driven
transforming the traditional banking and insurance frontier of how data can be used to fight financial
and talented individual who is looking to excel
scene, Storm2 uses an AI/machine learning-driven crime within the payments industry? We are seeking a
within an inside sales representative role.
approach that will combat one of the financial Senior Data Scientist in our advanced analytics team,
market’s biggest headaches – cyber fraud. to help strengthen Banking Circle’s financial crime The purpose of this role is to cold call prospective
compliance using data-driven methods. business leads and book in meetings for our sales
It is looking for an experienced CTO who is able to teams to attend, who ultimately sell relevant
lead its technology function through strategic THE JOB products and services. Therefore, you must be
thought, strong personnel leadership and You will play a crucial part in building a modern confident with making 75-100 sales calls per day and
stakeholder engagement. machine-learning-based system that can detect must be comfortable in a KPI driven environment.
If you are looking for a dynamic environment, a suspicious financial behaviour in near real-time and
chance to take on a large team and responsibility work with an ensemble of machine learning models THE RESPONSIBILITIES:
and make a genuine impact in an ongoing issue – to detect fraudulent payment patterns based on The focus of this position will be on lead generation
this is for you. internal and external data. The models are built on and qualification. We are looking for a confident
tabular and a network-based data representation. telephone person who can qualify and nature our
THE ROLE AND REQUIREMENTS: The day-to-day work is done in close collaboration leads through BANT process to then pass onto the
l You will be responsible for driving its with people across the business, including sales team. Other duties will include:
vision for the core platform and products anti-money laundering (AML) monitoring analysts
l Achieve quarterly metrics that represent our
and compliance. You will understand financial crime
l Accountable for a team of 25, growing team’s coverage, quality of work, and ability
drivers and model them to allow automated
over the next 18 months to drive tangible outcomes
detection of suspicious patterns dealing with
l This team will be spread across engineering, l Navigate through CRM(s) to manage
currently 100k+ payments/day.
DevOps, QA, test and data science teams through leads and accounts
l The role will be hands-on, from architectural YOUR SKILLS & PROFILE l Ensure strong data quality and confidentiality
design to maximising existing and new products l Strong engineering/maths background (PhD or MSc) l Partner with the sales teams to establish
l You will need a high level of experience in l Full stack interests/capabilities and a DevOps a strong business rhythm
technical leadership roles approach to working l Sales development – making roughly
l You will have demonstrated an ability to l Strong Python skills and experience 75 to 100 calls per day
liaise with stakeholders effectively l Extensive ML experience with some of: Pandas, l Engage with new prospective customers in
l You have a previous track record of building Sklearn, Keras, PyTorch or Tensorflow order to provide a positive first experience
and scaling high-performing teams l DevOps experience with some of: Git, Docker, l Explore their business while helping to identify
l You will ideally have experience Azure, Kubernetes, SQL, Flask or Django potential solutions to solve business needs
in the fintech space l Extra plus: Neo4J/Cypher, JS, Airflow, Luigi or C++ l Build customer trust by being an expert in
l You are inquisitive and curious marketing industries and landscapes
THE BENEFITS: l You care about your team members and their success
l Equity options
WHAT WE OFFER YOU KEY SKILLS
l Excellent pension scheme l Comfortable in goal driven environment
l A collaborative and inclusive team with full
l Family health insurance and attaining goals with broader team
autonomy
l Flexible working l Closing skills
l An ambitious, growth-embracing culture, that is
l Generous parental leave policy committed to help you grow personally and l Bachelor’s degree with strong
professionally academic background
l A company imbued with entrepreneurial spirit and l Experience with cold calling
passion, where open communication and
collaboration are supported THE BENEFITS:
l An opportunity to work and make an impact in a l Competitive salary
rapidly growing and technologically changing sector. l www.smartstream-stp.com/Careers
l A competitive benefits package
l A community of passionate, collaborative and
professional colleagues

32 | Edition 33
 C U LT U R E
THE FINTECH TIMES

Introducing
Meet Michael Moore
Chief compliance officer New roles at Wirex
Why did you choose to work at Wirex?
Compliance analyst
Wirex has a world-class compliance
It’s rare to find the words cryptocurrency
and compliance used in the same sentence,
2 function and this is a great
opportunity for someone with a passion
but after meeting the founders of Wirex
for financial crime who wants to progress
and hearing their ambitions to bring
their career. We have many examples of
cryptocurrency into the mainstream, along
successful stories within the compliance
with Wirex’s revolutionary product
team at Wirex and we always look for
offerings, I couldn’t pass on the
ambitious individuals to grow with us.
opportunity to build a world-class
With our international expansion, this
compliance programme looking to
team is growing rapidly so it’s an excellent
encompass crypto.
time to join a business that can offer
you a genuine scope for progression.
What does your role involve?
I maintain oversight of Wirex’s global
compliance function, with teams in Europe,
Performance
Asia and North America that are responsible marketing manager
for financial crime controls, regulatory This is an extremely broad role
applications and ongoing adherence to
those regulatory requirements. I also
2 covering all paid channels,
programmatic, affiliates and SEO. Being
provide crucial advice to the board of the first performance manager on the
directors to support Wirex’s ambitions to team, this person will be tasked with
expand globally into other key markets. leading the strategy and managing
membership application with Mastercard operates in the crypto space, but has multiple agencies to deliver on return
What’s the most exciting project – a world first for a crypto-friendly shown our vision of bringing crypto into on investment. The view for this role
you’ve worked on at Wirex? company. The process for having an the everyday is now being embraced by is to take ownership over performance
I was the primary stakeholder in obtaining application approved by them is other leading companies in the marketing within Wirex and start to build
our recently announced principal challenging, especially for a company that payments and financial world. out a world-class team.

WHO IS WIREX... Wirex was created in 2014 by CEOs 54 million locations around the world Finance manager,
Wirex is a worldwide and regulated
and co-founders Pavel Mateev and
Dmitry Lazarichev, with the core aim
using the Wirex debit card.
Wirex has over 200 employees based
Ireland
Wirex recently launched in
institution that has forged new rules in
the digital payments space. A proven
of making it as easy as possible to
use cryptocurrency in everyday life.
in London, Kyiv, Singapore, Tokyo,
Toronto, Dallas and Atlanta. With
2 Ireland and are looking to scale the
team across multiple functions, with
industry pioneer, in 2015 Wirex With more than three million ambitions to continue incorporating finance at the heart of this. Working
developed the world’s first payment card customers across 130 countries, we the next generation of payments directly with our managing director in
that gives users the ability to seamlessly offer secure accounts that allow infrastructure with blockchain and Ireland, this role would involve leading
spend digital and traditional currencies in customers to seamlessly store, buy rapid expansion into new territories, the financial side of our new European
real life, as well as the first Bitcoin rewards and exchange multiple traditional Wirex is seeking to support this by licensing applications, while having great
programme, Cryptoback™, in 2018. and cryptocurrencies at more than growing its world-class team. exposure to commercial operations.

www.thefintechtimes.com | 33
 BOOK REVIEW
THE FINTECH TIMES

CLASH OF THE CASHLESS

I
n years to come, historians may well
look back on the week earlier this
year, when the US Treasury started
mailing out physical helicopter
money cheques to its citizens and the
People’s Bank of China commenced
testing a digital fiat currency (CBDC) in
four cities, as the moment when the US
By Philip Middleton, Chairman of the
OMFIF Digital Monetary Institute
David Birch is an international thought
leader on digital money and digital
identity and understands the
technologies, their complexities,
their strengths and weaknesses
development. This is not the decentralised,
opaque and unregulated utopia of the
cryptocurrency zealots, still less the
uncontrolled speculation of tulip mania.
But it is a world in which money,
cash and currency are no longer
the sole preserve of nation states
and their central banks; it is a
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dollar reached its zenith and its slide down to his fingertips. The world of potentially millions
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Business Models
Monetary and Financial System (IMFS) Cryptography, Hash Rates community-based and private, or
by Alessandra Tanda
started an irrevocable decline. and Hegemony and global and fiat with much in between. & Cristiana-Maria
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of humour. This is a page turner of a between these entities may increasingly
book for anyone with even a passing be conducted by bots and algorithms
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Facebucks, via miscreant moolah and evolve from being inert and ‘dumb’
Byzantine fault tolerant protocols, to being ‘smart’, that is capable of
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technical and academic papers to Star conducted in real time. Start-ups On
Trek. The starting hypothesis is that the We stand on the threshold of a Getting Investors
IMFS – as we know it, the ‘Washington complex set of changes which may be To Say YES.
Consensus/Bretton Woods order’ – is smoothly progressive, or dangerous by Julie Barber
staggering on its last legs and about The Currency Cold War and disruptive. Changes to money will
Available: Kindle
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drivers of this change will be economic
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& Paperback
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imminent demise of physical digital money in all its forms potential future which is both intriguing Bhatti, Akber Datoo and Drago Indjic
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will simply become irrelevant because potentially underpin them. But the will be those who seize
nobody will either accept it or wish to author is also at pains to argue that the commanding heights
use it. Money, the author repeatedly this revolution should not be driven of digital money, then
reminds us, is not a fundamental law of by the technologists but rather should perhaps, as David Birch
nature: it is a convenience, a convention arise from a considered debate – ‘the suggests, for the US
and something, which after a couple future should be what society wants, government to encourage
of millennia, is ripe for change. Many not what technologists prescribe’. major US technology
voices are now calling for the efficiency, He is also insistent that currently firms to develop and roll out
effectiveness and transparency of trusted gatekeepers – central dollar denominated digital
the way we define and use money to banks, regulators, policymakers currency on social media
be changed and advocating a shift from – are not absent from the debate, platforms might be extremely
the physical to the digital. but play full roles in guiding smart politics.

34 | Edition 33
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