Enhancing Digital Ecosystems

Sponsored by SmartStream

PRODUCED BY FINTECH FUTURES MONDAY 23 SEPTEMBER 2019 THE ORIGINAL SIBOS DAILY 27 YEARS AND COUNTING www.fintechfutures.com/sibos

ENHANCING DIGITAL

ECOSYSTEMS AI: Understanding bias and opportunities in financial services Nadia Sood CEO of Credit Enables analyses how AI offers immense benefits but can equally help perpetuate unhealthy biases.

Tech vs. humans: Can fintech have it all? Zac Gazit at Cogress answers the question of whether interacting with a person over an algorithm is help or a hindrance.

Digital transformation for today’s challenging landscape

Stand Q131 Contents

07 News Breaking fintech news from across the globe

10 Insight Uncovering the hidden costs of liquidity

11 Industry comment 16 Increased regulation and market Fintech timeline structure complexity is shifting sell-side FinTech Futures guides you infrastructure. through the biggest fintech events across three centuries. 12 Guide to London Your entertainment guide to London

15 Insight Confirmations bring peace of mind to cross-border payments 20 16 Analysis AI: Understanding bias and Fintech timeline opportunities in financial services 20 Spotlight Nadia Sood CEO of Credit Enables AI: Understanding bias and opportunities analyses how AI offers immense in financial services benefits but can equally help perpetuate unhealthy biases. 23 Insight Why AI will decide the winners and losers in open banking

25 Insight Accessible and international SME banking 26 Focus 26 Tech vs. humans: Can fintech have it all? Tech vs. humans: Can fintech have it all? 28 Thought leadership Making banking human again. Zac Gazit at Cogress answers the question of whether 31 Interview interacting with a person Dissecting digital transformation with over an algorithm is help or a Appian’s very own problem solver hindrance.

MANAGING DIRECTOR REPORTERS MARKETING MANAGER The Daily News at Sibos is an PRODUCED & PUBLISHED AND EDITOR-IN-CHIEF Jane Conolly David Taylor independent publication, wholly BY Tanya Andreasyan Alara Basul [email protected] owned by KNect365, Fintech Futures +44 (0)20 701 75379 [email protected] an Informa business. Maple House +44 (0)20 7551 9010 SALES MANAGER 149 Tottenham Court Rd London W1T 7AD Jon Robson MARKETING EXECUTIVE & © Daily News at Sibos 2019 EDITOR [email protected] UK DESIGNER All rights reserved; Daily News at Sibos Sharon Kimathi +44 (0)20 3377 3327 [email protected] Kiran Sandhu material may not be reproduced in any [email protected] PRINTED BY +44 (0)20 7551 9010 form without the written permission of +44 (0)20 7017 7377 the publisher. Hobbs the Printer Ltd BUSINESS DEVELOPMENT Hampshire,UK REPORTER EXECUTIVE Ruby Hinchliffe Sam Hutton ONLINE www.fintechfutures.com/sibos [email protected] [email protected] Published by +44 (0)20 7017 5709 +44 (0)20 7017 7017 NEWS | DAILY NEWS AT SIBOS FINTECH Editors note FUTURES On occasion, your computer, laptop, tablet or mobile device will ask you to re-start it as it downloads the latest updates. So too will your wardrobe, kitchen or other-half – albeit without words – to “spruce things up”. With that in mind, I’d like to introduce you to the new look and feel of the Daily News at Sibos as we decided to give it the “London- look” to honour the conference being hosted in the English capital for the first time. In a similar vein, financial institutions are also going through a makeover as banks and corporations update various legacy systems to make way for new tools that accommodate artificial intelligence and machine learning to make processes more efficient. Nadia Sood CEO of Credit Enable highlights how AI has benefitted finserv but it could also do with an update on its bias, whilst Zac Gazit, business development direct at Cogress, thinks it could use a human touch. Carl Slesser and Hanaa Bengtsson at Nasdaq emphasise the importance of embracing emerging technologies, as it leads to advanced applications in areas that can uphold market integrity. Feel free to check out our website for more stories on AI, legacy system updates and this year’s latest Sibos news.

Editor, Sharon Kimathi

Why operational excellence in payments is critical to your future success

Live at Sibos with Red Hat Thursday September 26th at 10 am Moderator: Sharon Kimathi, Editor of Fintech Futures Improving your operational efficiency is on Speakers: the forefront of competitive advantages. And it’s 1. Tim Hooley, Chieg Technologist for EMEA Financial your leadership that is helping you thrive in this Services at Red Hat hyperconnected world. But could you be doing more? Should you be considering different approaches? 2. John Cowan, Senior Vice President at CBIC Banking Join us for this virtual fireside chat from Sibos with Red Hat, CIBC and Nordea Bank and learn: 3. Sophia Wikander, Head of Mobile Pay, E-commerce and Business Innovation at Nordea • Steps taken to improve the design of their Bank payment operational processing The webinar will be live on the FinTech Futures • Strategic tips and lessons learned in building and BrightTALK channel on 10 October. Sign up on the executing payments strategy FinTech Futures BrightTALK channel to tune-in to • How technology that simplifies complexity can the discussion. also help create a more agile culture?

www.fintechfutures.com/sibos | Monday 23 September 2019 | 05 NEWS | DAILY NEWS AT SIBOS FairMoney raises €10m to build Banking Circle helps local banks reach challenger bank in Nigeria global markets Financial utility Banking Circle aims to help Digital banking start-up FairMoney “After backing digital two and three tier banks compete in the has raised €10 million in its Series A banks in the US, UK, Latin global marketplace with Virtual International investment round, accelerating its America and South Asia, we Cash Management, reports Jane Connolly. project to build a new digital bank in are excited to support one of the first companies to Nigeria, as reported by Ruby Hinchliffe. In a follow-up to June’s white paper, Financial bring this model to Africa,” Inclusion for Europe’s SME’s: Building a Circle of says Flourish principal Trust, the research explores how banks are already The round was led by The Omidyar Group’s and new FairMoney board changing and can change in the future to bring barriers down for SMEs. venture Flourish, DST Global partners and member, Ameya Upadhyay. He adds: “Reducing the cost and time involved Banking Circle has commissioned MagnaCarta existing seed investors Newfund, Speedinvest and He adds: “We believe that customers will ask a lot in business banking and cross border payments is Communications to produce a series of reports, to increasing global financial inclusion. In turn, this Le Studio VC. more of their banks – to be relevant, banks will have shed light on the issues and opportunities faced by allows more SMEs to compete in the international Beginning as a micro-credit offering three years ago, to move from service providers to become financial real businesses around the world. marketplace alongside the bigger players, improving FairMoney now has more than 200,000 customers, the mentors for their customers. That’s where we see “The insights we have gained throughout this their valuable contribution to global economies.” majority of which are small businesses. a massive global opportunity for FairMoney, which ongoing research project have been invaluable, You can read the full report, Circle of Trust or out of giving us an accurate picture of how we can bring Having already secured a licence to lend in Nigeria combines a top-notch banking infrastructure with a the loop? here. Banking Circle will publish three more the industry together in an ecosystem model and created an in-app payment function which can culture of obsessive customer focus.” papers in the coming months; the next, focusing on of collaboration, not competition, to deliver the payment innovation, will launch at Money 20/20 top up phone subscriptions, buy mobile data and pay FairMoney’s CEO Laurin Hainy wants to see the solutions which meet the needs of real businesses,” in October. electricity or internet bills, the soon-to-be neobank is fintech become a “one-stop-shop” for mobile banking. says Anders la Cour, co-founder and CEO of now working on a digital wallet and savings account. “Think digital bank for emerging market consumers,” Banking Circle. says Hainy. © Google Play Greenlight raises $54m to release debit card for kids Children’s debit card and app start-up families and help Greenlight Financial Technology raised parents prepare their $54m in a Series B funding round children for healthy led by Drive Capital and joined by financial futures,” says Sibos 2019 Community Session Greenlight’s CEO JPMorgan Chase and Wells Fargo, as Timothy Sheehan. reported by Ruby Hinchliffe. He adds: “In the near EBA CLEARING community future, I hope that this The Atlanta-based fintech’s app can monitor generation of kids grow children’s spending, set savings goals, request up to spend wisely, learn the importance of saving getting ready for R2P, cash and send children alerts when a guardian and feel confident investing to build wealth over loads money to their card, all the while ensuring the long-term.” kids can’t overspend and guardians have full the missing piece of the puzzle control over spending categories such as stores, For Wells Fargo, Greenlight’s “rapid growth” restaurants and websites. has been impressive. But most importantly, it’s the financial literacy element which drove the With other participation from TTV Capital, Live investment, says Wells Fargo’s head of strategic Tuesday, 24 September 2019 Get insights on how to take SCT Inst to the next level from Oak Bank, and Relay Ventures, Greenlight wants to partnership investing Thomas Richardson. From: 12:15 –13:00 (local time) the users of RT1, which today extends reach to over 65% use this investment to improve children’s financial ExCeL London, of PSPs providing SEPA payments. literacy, starting with the half a million parents and Sheehan says that the with the help of Conference Room 2 kids who have signed up. Richardson and his team, future versions of the app will feature educational layers and some • How will R2P unlock the full potential of instant payments? “We’re thrilled to partner with our Series B form of investing functionality to rival digital investors to bring Greenlight to millions of new • What beneﬁ ts does it hold that make it the missing piece bank competitors. EBA CLEARING @ Sibos: of the puzzle driving mass adoption of instant payments? Stand Y110 • How can users leverage this evolution? www.fintechfutures.com/sibos | Monday 23 September 2019 | 07 JP Morgan and Societe Generale invest in trader fintech Wematch

JP Morgan and Societe Generale He adds: “Everything have invested in fintech for traders we build is designed Don’t let legacy technology to support the trader’s Wematch, which is changing the decision, giving them the way voice-traded financial markets tools to make the right operate, as reported by Ruby call with confidence impact your customers. and certainty.” Hinchliffe. Wematch secured its investment after going The Israeli company has created plug-and-play through JP Morgan’s in-residence programme and The world of payments technology which finds the best trading opportunities Societe Generale’s Global Markets Incubator. and gives users an opportunity to negotiate and Having previously just been users of the fintech’s is moving quickly. Are you ready? manage trades with the audit and control benefits of platform, now JP Morgan and Societe Generale will be electronic tools. investors in it. Wematch now has 40 banks and more than 750 JP Morgan’s markets lab head, Pasquale Cataldi, traders using the platform, bringing e-trading to another is proud to be an early supporter of WeMatch. traditionally over-the-phone sector of investing. “The platform showed real potential to transform “We are delivering the next generation in trading the interbank interest rate dealing market through We enable banks and financial protocols, with an intuitive graphical user interface (GUI) automation, resulting in audit and control benefits. The and workflow tools to give voice trading professionals the level of market adoption has already been encouraging institutions to move from their edge,” says Wematch CEO, Gregory Mimoun. and we’re delighted to continue the journey with them,” says Cataldi. siloed, legacy payments © Google Play infrastructure to a cloud-native single API payments platform. Nationwide invests in digital lettings Process ACH, real-time and agency Bunk international payments through a

Nationwide Building Society has In a climate where half single point of access and scale announced its latest investment in of all landlords manage on demand. digital lettings agency Bunk, which uses their properties alone, open banking to offer services such Nationwide’s deputy chief executive, Tony Prestedge as deposit-free rentals for tenants and believes: “The service that Compliance, regulation, rent management for landlords, all for a Bunk offers could support maintenance and security monthly fee, as reported Ruby Hincliffe. them, ensuring they’re on top of their obligations and is all built in, insulating you from Representing both landlords and renters, this strategic providing a better service to their tenants”. future changes. investment for Nationwide will aid its campaign to Bunk also offers landlords regulatory advice and improve the rental market on both ends of the spectrum. support. For example, the platform can automatically list As part of its £50 million Venturing Fund set up last a landlord’s property on reputable sites, verify tenants year, Nationwide wants to expand its partner network and verify the landlord’s proof of ownership. out to early stage start-ups in a bid to create more As well as offering deposit-free rentals to tenants, the innovative products. platform also prevents landlords taking more than five “We want to build something the rental market has weeks’ rent as a deposit, as well as using Experian to We want to hear about your business never seen before,” says Bunk’s CEO, Tom Woollard. give tenants who pay rent on time a better credit score. “Landlords are facing reduced margins coupled with As well as Experian, Bunk also integrates with and where you’re headed. increased regulation and there has never been a Rightmove, Zoopla, the National Landlords Association better time to make their lives easier through the use of (NLA), the Property Redress Scheme (PRS) and Client www.form3.tech technology.” Money Protect (CMP).

SIBOS Advert.indd 1 22/08/2019 17:30 INDUSTRY COMMENT | DAILY NEWS AT SIBOS

Increased regulation and market Uncovering the hidden structure complexity is shifting sell-side infrastructure costs of liquidity By Carl Slesser, head of global business development, Nasdaq By Nadeem Shamim, head of cash and liquidity management, SmartStream & Hanaa Bengtsson, head of sales, sell-side execution technology, EMEA, Nasdaq Liquidity is paramount and real time “Robust strategies, 86(1) of the European Banking liquidity is now a must-have. Without it, Authority’s Capital Requirements Changing market structure and evolving most value to clients. As a result, many financial institutions cannot meet their policies, processes Directive IV, which calls on financial industry standards have driven an “Looking ahead, we firms are turning to external partners settlement obligations or proactively institutions to have “robust strategies, increasing number of banks and brokers to implement more agile infrastructure, manage risks (counterparty, market, and systems for policies, processes and systems for to evaluate their existing ways of doing see technology that which allows them to focus their resources or own institution stresses). Those the identification, measurement, business and look for new paths to growth on its core revenue generating business institutions that actively manage the identification, management and monitoring of to secure their futures. Heavier regulation is growing ever- activities – helping to boost efficiency and liquidity and know its position at any liquidity risk over an appropriate set and technological development combined reduce operational costs. given point in the day, are better measurement, of time horizons.” Regulators are with diminishing margins is driving more sophisticated, The industry is still in the early stages placed to deal with market risks and management and not just concerned with institutions’ companies to re-evaluate their priorities of fully benefitting from emerging uncertainty and to minimise the hidden ability to monitor and report their and business models to adapt to an ever- including cloud technologies. If firms are able to harness costs of liquidity. monitoring of liquidity liquidity usage: There is now a need changing market structure and remain the power of technology and leverage the The days when financial institutions for them to clearly demonstrate competitive. computing and abundance of technology solutions to build could rely on cheap and abundant risk over an appropriate active management of their liquidity We see three key areas and measures efficiencies while proactively managing liquidity are coming to an end. Interest at regular intervals (hourly or more that are affecting the evolution of sell-side machine intelligence.” regulatory demands, new growth market infrastructure: opportunities can emerge. Managing these rates are on the rise again as central set of time horizons.” frequently). - Carl Slesser & Hanaa Bengtsson two challenges, while reassessing existing banks tighten monetary policies, which - Nadeem Shamim Drawing on the Basel Committee 1) Proactive approach to managing business models and infrastructure needs regulation saw rates in zero or negative territory for Banking Supervision’s (BCBS) will be at the foundation of futureproofing for more than a decade following the Monitoring Tools for Intraday Liquidity The Markets in Financial Instruments our industry and shaping the capital impacts their profitability. Other into large technological infrastructure 2007–2008 global financial crisis. As Management (April 2013), active Directive (Mifid II) is just one example of markets of tomorrow. interest rates volatility continues, so estimates suggest that a 30% intraday liquidity management a regulation that has and will continue solutions. Looking ahead, we see too does the cost of liquidity. reduction in collateral costs is now a priority for a growing to radically shake up market structure. technology that is growing ever-more Some estimates suggest that the through optimised intraday liquidity number of financial regulators Designed to introduce more transparency, sophisticated, including cloud computing cost of intraday liquidity to financial management could net financial globally. The UK was one of the it has nonetheless affected markets, and machine intelligence. When firms institutions could be as high as $100 institutions a saving of at least €4 first jurisdictions to implement the slashed prices, and driven the need to embrace emerging technologies, they can million to $300 million annually. These million a year. BCBS’s recommendations and remain competitive. The unintended advance application areas such as market surveillance and data analytics methods, costs will be even higher as interest remains at the forefront of the drive impact of Mifid II has forced some firms to Regulators sharpen their focus technologies that allow us to uphold rates rise. The cost is compounded to manage intraday liquidity risks. In look beyond their regular course, while it market integrity. as many financial institutions rely on In addition to reducing the hidden February 2018, the UK’s Prudential has opened opportunities for others. Firms need to embrace a proactive approach in collateralised overdrafts, which incur costs of intraday liquidity, active Regulation Authority (PRA) stated 3) Re-evaluate business models and how they navigate the market post Mifid additional costs. Opportunity costs intraday liquidity management allows in its recommendations for Pillar II infrastructure needs II to create long-term advantages through financial institutions to demonstrate Regulation has changed information can also arise from tying up liquidity liquidity risk assessment that it would regulatory compliance. and collateral unnecessarily. control of liquidity and settlement consider the quality and the full flow in the industry, and with margins Is there an opportunity for banks risks. Eleven years on from the extent of institutions’ intraday liquidity 2) Embrace emerging technologies continuously squeezed, firms are 2007–2008 global financial crisis, to avoid these hidden costs? Why management tools: from detailed While regulation is forcing firms to look looking for ways to lower operational maintain unnecessarily high liquidity regulators continue to stress the metrics and operational processes, elsewhere for business opportunities, costs to focus on creating and retaining buffers or borrow at the last minute, importance for institutions to maintain through to stress testing and risk technological development continues a competitive advantage. Meanwhile, when there’s liquidity needed to adequate systems and processes to frameworks, and the internal policies to disrupt industry norms and drive market infrastructure is becoming ever fulfil your settlement or regulatory support the active management of governing them. innovations. While emerging technologies more complex. The need to evaluate obligations? intraday liquidity. The more that financial institutions are creating markets that are more how technology can help us retain a competitive advantage will continue Feedback from our customers In its guide to the internal liquidity can demonstrate to regulators that accessible, and making transactions faster to drive innovative solutions. In the suggests that by actively managing adequacy assessment process they have real-time visibility and than ever, firms are grappling with how issued in November 2018, the to harness these technological advances. wake of increased regulatory oversight, their liquidity, financial institutions control over their intraday liquidity, the technological advancement and pressure could reduce their liquidity buffers by European Central Bank reiterated less likely they will need to maintain The technology that powers the world’s capital markets is becoming so advanced on cost, firms must re-evaluate their as much as 90%, which significantly the requirements laid out in Article high liquidity buffers. that it is increasingly transforming existing business models to deliver the

Tower Hill and St Katherines dock (5.0 miles) Buckingham palace, Big Ben Houses of Parliament and St Pauls to name a few. To enjoy the view with a drink day or entertainment guide Jump on the DLR all the way to Tower Gateway and night head to one of the five restaurants and bars located enjoy the iconic view of Tower Bridge to the left-hand 31 floors up. side and explore the quiet marina of St Katherines dock, Head to Bank station in the heart of the city for the By Kiran Sandhu, digital marketing executive, FinTech Futures hidden behind a building. It’s an incredible way to enjoy a contrast of historical buildings against the newest drink while the boats moor and grab a bite while watching architectural skyscrapers. Head to the Bank of England the world going by from an abundance of eateries. Try to see their collection of 40,000 items spanning over London has a rich culture and historical standing, Emilia’s Crafted Pasta, a family run Italian restaurant using 1500 years. Across the road is the Royal exchange which so why not take advantage of what the city has fresh ingredients and authentic homemade pasta. Before has now been transformed into a boutique shopping to offer whilst you’re at Sibos? Here are a few you leave don’t forget to check out the Gloriana, the destination and home to Fortnum and Mason Bar and Queen’s Rowbarge, which marks the Queens Diamond Restaurant. It has a store on site which is handy for highlights – written by a true Londoner. Jubilee in 2012. stocking up on the Queen’s favourite tea and biscuits. Stop off at the Tower of London to see the iconic Stop by The Ned – set in the former Midlands Bank and Canary Wharf (3.0 miles) Greenwich Peninsular (3.4 miles) Beefeaters and ravens guarding the tower. The Tower is now part of the Soho house group – whilst taking in the holds a plethora of secrets from tales of imprisonment opportunity to dine in one of their nine restaurants on site Head to the business district in Canary Wharf, which Jump on the Emirates airline (cable car) at the Royal and execution to torture. Don’t forget to grab the chance from British classics at Millie’s Lounge, to The Nickle Bar is not only home to some of the world’s top banking Docks and head over to the Greenwich Peninsular, to view the magnificent Crown Jewels and the Queen’s serving old fashioned American Classics. Not up for the giants, but where you can immerse yourself in some of home to the famous music venue the O2. The journey Coronation Regalia dating back to 1661. food? Then head to the roof and take a dip in the rooftop the local culture at the Museum of London Docklands. takes a maximum of 15 minutes from the ExCel, with Tower Bridge, the most iconic bridge in London, is pool with views of the city. With the expansion of London’s Underground, comes the added bonus of some scenic views. often mistaken for London Bridge which sits parallel. Iconic Borough Market – The oldest food market in the new Crossrail plaza which is in the West India Quay Head up to the Royal Observatory in Greenwich, Built between 1886 and 1894, the historical bridge is still London dating back to the 12th Century. Grab a coffee dock walk, along with a striking rooftop garden. home to the Prime Meridian Line and the UK’s largest in use today with bridge lifts happening twice a day. You from Monmouth on the south side of the market and Canary Wharf is also home to 300 shops, refracting telescope. While you’re up there, take a can look out across to Westminster on one side and the make your way to Bread Ahead for a perfectly filled restaurants, bars and leisure facilities. Start your day look over Greenwich park before walking down to the dockland on the other heightening the feeling of being doughnut from pistachio cream to salted caramel with off right with breakfast at The Breakfast Club. For famous Old Royal Naval College and the hidden gem of part of the heart of London. honeycomb. For a full course meal head to Padella, a lunch, keep it simple at Birleys Salt and Beef Bar or its newly restored Painted Hall. modern bistro serving homemade pasta with the perfect keep it traditional with Canteen serving up homemade Take advantage of the Thames Clipper from the London Bridge, Bank and Borough Market (5.9 miles) pairing of wine. British Food. Topping it all off for dinner – Gaucho – on Greenwich pier which will take you along the Thames Top apps to help you get around: the riverside terrace, or for dinner with a view, head for an astounding view of London’s landmarks. Look Head up to the top of the Shard, London’s tallest to Plateau restaurant, bar & grill, which has a out for views of the Tate Modern, Shakespeare’s Globe building for a 360-degree panoramic view of the city • City Mapper London French-style penthouse restaurant. For a night cap, and the London Eye. You can use an Oyster Card on for 40 miles where you can grab a spot to see the • TFL Oyster App head to Bokan located on 38th floor of the Novotel, or the service, which is a great way to get off and explore sunset over the London Skyline – a great way to see • Visit London Official App Davy’s at Canary Wharf with the famous centuries old the sights. wine merchants.

© Brichuas - stock.adobe.com 12 | Monday 23 September 2019| www.fintechfutures.com/sibos www.fintechfutures.com/sibos | Monday 23 September 2019 | 13 Confirmations bring peace of mind to cross-border payments Rising client expectations. Sponsored insight by Swift

including non-gpi banks. To make financial institutions, as resource “We know that this possible, all Swift-enabled that was previously used to chase Earnings pressure. institutions will be required to payments is freed up. confirm payments once they’ve been Swift has been working with customers aren’t credited to the beneficiary’s account. the software community to make Swift has set a timeframe in which to sure confirmations solutions can LetÕs get real Cost containment. just asking for this, achieve this as a community: the end be prebuilt into existing payment pega.com of November 2020. applications and have designed Serve clients bettetheyr. expect it,” “It’s similar to when you send a a range of tools to help financial package via a delivery company,” institutions build payment - Fabien Depasse, head of Swift says Fabien Depasse, head of Swift confirmations into their existing Regulatory demands. gpi customer success. “These days operations. you don’t just expect to be able to For bigger organisations, Swift Work smarter. track your package’s journey, you will provide automated services also want to know that it’s arrived that will be integrated into existing Sound familiar? Swift’s global payment initiative safely. And that’s exactly what applications and message flows. (gpi) has rapidly become the new corporates and individuals want to For smaller organisations, they are standard in cross-border payments. know about their payments.” developing a “basic tracker,” a light Meet the #1 digital transformationToday, nearly 60% of Swift cross- Swift says that this fairly simple version of their full gpi tracker. This Let’s talk solutions: border payments are sent via gpi. change will have a big impact, will be provided for free and will There are more than 3,500 financial allowing every financial institution allow banks to confirm payments platform for banking. institutions that have committed on the Swift network to see the manually by clicking a single button. to gpi who are processing the final status of each payment and Swift says confirmations will equivalent of 300 billion dollars access reliable, up-to-date tracking enable the financial industries to every day. information. develop a range of digital services. The service was created to enable “We know that customers aren’t “Confirmations will enable banks Stand # D121, Sibos banks to meet the growing demand just asking for this, they expect it,” to innovate. For example, many for fast, trackable and transparent Depasse says. banks are already making their services. Since gpi’s inception in “They want to be able to say, confirmation data available via an 2017, Swift has continued to innovate ‘I’ve done the trade, I want to know API or similar technology. Customers and enhance the cross-border that the payment has arrived.’ For can see their payment activities via Let’s talk solutions: payments experience. The next example, if I am a corporate and you internet banking or a mobile app step, says Swift, is through the new are a supplier, you will only ships in real-time. This allows banks to To meet the industry’s biggest challenges, leaders universal confirmations initiative. goods that I’ve purchased after be fully transparent on payments, at top-tier ﬁnancial institutions are turning to Pega. Financial institutions currently receiving my payment. Confirmation something which customers really sending payments through is an essential element to satisfy appreciate,” Depasse explains. Our uniﬁed platform maximises revenue, minimises costs, gpi benefit from tracking and the supplier but also, importantly, to Swift says full end-to-end payment confirmations, allowing them clear allow corporates to build a reliable tracking and confirmations are the and rapidly scales global operations. Join us at Sibos and sight of where their payments are supply chain.” foundation upon which they are learn how to combine intelligent automation with smarter and when they’ve reached the Confirmations also reduce the developing many more innovations. intended recipient. need for manual intervention in Ultimately though, all Swift gpi decision-making for real, lasting transformation. Universal confirmations will cross-border payments. This leads services have the same objective at extend these benefits to all financial to big steps forward in customer their core: making payments fast, institutions on the Swift network, experience, and reduces costs for transparent, trackable and certain. pega.com/sibos www.fintechfutures.com/sibos | Monday 23 September 2019 | 15 ANALYSIS | DAILY NEWS AT SIBOS

2008: Global financial crisis. Some spectators believe that this purported the growth of fintech, as Fintech Timeline it resulted in post-crisis regulatory reforms, more The evolution of fintech goes back centuries. That’s why FinTech Futures is bringing agile operational teams, distrust in the old financial you a whistle stop tour through some of the key events which transformed the game for institutions and the development of technology such financial institutions and brought us to where we are today. By Ruby Hinchliffe 1983: The ‘Big Bang’. London as smart phones to solve infrastructure mismatches. Stock Exchange changed its 1973: The Society for rules, leading to old trading 1866: First transatlantic cable 1950: The first independent Worldwide Interbank Financial firms being taken over by is lined connecting Europe payment card company in the Telecommunication (Swift) is large banks that were both and the Americas. world is founded – Diners Club set up in Brussels to establish foreign and domestic. 2009: Kickstarter International (then known as common standards for financial introduced a reward- 1995: Virgin Money is the Diner’s Club). transactions and a shared data based crowdfunding first ‘challenger’ bank to platform, allowing processing. © Norman Chan establish itself in the UK. fintechs to gain Initially established as a more momentum personal finance company from crowdfunding 2007: M-Pesa launches under the name of Virgin business models. Direct, the Virgin Money mobile-based payment

© AP brand itself was introduced solutions for large 1878: First commercial 1980: United American Bank is 1967: First Automated Teller later, eventually being sold to amounts of Kenya. telephone services are the first to offer online banking Machine (ATM) installed the Clydesdale and Yorkshire set up in New Haven, services, including bill pay, in London. Inventor, John Banking Group. Connecticut in the US Shepherd-Barron, pitched account balance checks and and London, UK. the device to Barclays who loan applications. accepted it immediately.

©Vodafone

1964: IBM unveils its first mainframe computer. It’s believed Barclays was one of the first UK banks to adopt mainframe technology. 1985: Rock Financial 1998: PayPal 2007: Markets in 1973: American Motorola is founded. This founded in US. Financial Instruments 1871: Western Union researcher Martin Cooper company, now Directive (Mifid) is introduces its money invents the first mobile known as Quicken introduced. transfer service phone. Loan’s Rocket based on its extensive Mortgage, would telegraph network become a top US 2005: Klarna founded in 2008: Payment across the US. mortgage lender Sweden. The first fintech to System Directive 1981: Bloomberg is founded. today – completely introduce the pay later model led to the Michael Bloomberg went online. in three monthly instalments freedom of real- 1968: Bankers’ Automated Clearing on to develop and build for online purchases. time payments. Services (Bacs) was behind the his own computerised clearing and settlement of UK system to provide real-time automated payment methods market data and financial 2009: Square founded, paving the way to 1933: Telex is set up by Direct Debit and Bacs Direct Credit. calculations to Wall Street 1987: The stock market crash contactless payments with cards in St. Germany’s Reichspot, firms. sets into motion a trend Louis, US and e-wallets such as Apple the country’s postal of digitisation, leading to Pay. San-Francisco-based Stripe was service. These point- 1971: The world’s first electronic stock program trading, which allowed founded a year later. to-point teleprinters market, Nasdaq, is founded to help thousands of buy and sell orders were used by Western reduce the difference between the to be matched very rapidly, Union to offer a bid price and the ask price of stock. without human intervention. precursor to email. © Collection of the Museum of American Finance © CC BY-SA 3.0

2014: UK challenger Starling Bank is founded 2010: Challenger Metro Bank by former Allied Irish 2018: The Markets in is founded, setting the record 2012: European Market Bank’s COO Anne Boden, Financial Instruments for the first high street bank Infrastructure Regulation (Emir) receiving its licence in Directive II (Mifid II) is to launch in the UK in over is legislated by the EU, which 2016. legislated by the EU, allowing 2018: The world’s fintechs 150 years. established common rules for the cost of research and raise a record $39.6 billion central counterparties and trade trade execution to become across the globe. repositories, allowing new companies more transparent. This has 2016: The word ‘blockchain’ to input this regulatory obligation now prompted a boost in becomes popularised as it attains without having to go back and make regtechs and fintechs, as a 13.5% adoption rate within extensive changes. clients can no longer rely on financial services in this year, their banks to provide them according to Accenture. 2015: UK challenger bank with research. Monzo is founded, setting one of the quickest crowd- 2011: Internet finance funding campaign records in 2016: Virtual financial assistant 2019: The FCA confirms that marketplace Lufax 2013: AI data analytics history, raising £1 million in Abe AI is founded, integrating PSD2’s Secure Customer founded and starts P2P developer Kensho is 96 seconds on Crowdcube. with Google Home, SMS, Authentication (SCA) lending from China. founded. Future clients Facebook, Amazon Alexa, web rules for e-commerce would be JP Morgan, and mobile. Bank of America, Morgan transactions will be delayed Stanley and S&P Global. by 18 months.

2014: First UK digital challenger bank, Atom 2016: German challenger Bank, secures its licence bank N26 launches with its to launch. own banking licence. 2010: Chinese 2018: Benchmark Regulation becomes multinational applicable. As lots of loans and debt conglomerate 2013: Financial Conduct are tied to soon-to-be closed London Alibaba introduces Interbank Benchmark Rate (Libor), a loans to SMEs on its Authority (FCA) set up and operated separately lot of banking systems will be affected, e-commerce platform. 2015: UK fintech Revolut from UK government to pushing regtechs to innovate with is founded, offering a regulate financial firms. solutions to help detect any mention of prepaid debit card, currency 2016: Securities Financing Transaction Libor in documents. exchange, cryptocurrency Regulation is legislated by the EU, exchange and peer-to-peer demanding transparency of securities payments. financing markets and thus of the financial system, pushing banks to 2018: Second Payments Directive (PSD2) update their legacy systems. is legislated by the EU, requiring strong customer authentication on the majority of electronic payments and demanding 2012: Digital currency exchange common and secure communication (CSC). Coinbase is founded, allowing 2013: Financial Services Act 2017: Bitcoin surges causing people to buy and sell bitcoin comes into force, making it far other cryptocurrencies, such as through bank transfers. This same easier to set up a challenger Litecoin and Ethereum, to go up year Ripple is also founded, another bank and break up the ‘big four’ in value. cryptocurrency exchange. banking model in the UK.

18 | Monday 23 September 2019 | www.fintechfutures.com/sibos www.fintechfutures.com/sibos | Monday 23 September 2019 | 19 © Kalawin - stock.adobe.com SPOTLIGHT | DAILY NEWS AT SIBOS AI: Understanding bias “This kind of technology and opportunities in not only benefits the bank using it, but financial services also helps reduce the By Nadia Sood, CEO, CreditEnable likelihood that nefarious organisations penetrate the institutions that the It is undeniable that our lives have been made Part One better by artificial intelligence (AI). AI technology AI in financial services: The good allow us to get almost anything, anytime, anywhere rest of society” From using predictive analysis to forecast in the world at the click of a button; prevent disease consumer spending and advising on personal wealth -Nadia Sood epidemics and keep them from spiralling out of management, to underwriting loans and transaction control, and generally just make day-to-day life a bit monitoring – AI’s footprint in financial services can be easier by helping us to save energy, book a babysitter, seen everywhere. manage our cash and our health all at a very low cost. AI that has focused on better understanding of AI’s penetration into systems and processes in customer’s needs and security can have substantial virtually all sectors of business and life has been benefits for consumers and several banks have rapid and global. The speed and scale at which AI is already introduced innovation in this space. proliferating does raise the question of how at-risk we In 2018, Goldman Sachs acquired a personal may be that the AI we are building for good can also finance app called ClarityMoney. The app pulls users’ be introducing damaging bias at scale. transaction information to remind them of spending In this two-part series, I explore the issues with subscriptions in just a few steps. This What can go wrong clubs. The software also downgraded goals, flags transactions that it finds unusual for a kind of technology revolutionises graduates from two all-women AI constructs, the good bad and the ugly and how While this technology offers given account, and also moves money into savings tracking personal finance. colleges. This issue stemmed from the we can think about shaping a future through AI in immense benefits, it can equally help for users. It also calculates how much users could NetOwl is a suite of entity analytics fact that this software was trained on financial services that helps lift people up rather than perpetuate unhealthy biases. Imagine save if they cancel some recurring fees in their bank products used by Royal Bank of data submitted by mostly men over scaling problems up. that your expense tracking software account and even allows users to cancel unwanted Canada (RBC). It analyses big data in a ten-year period. Despite attempts was used by your bank to determine the form of reports, social media, as to fix the bias, Amazon eventually whether you should be eligible for well as structured entity data about lost faith in the impartiality of the a loan product, but filtered out all organisations and places. It uses system and abandoned the project. people over the age of 50 because the tools such as semantic search and Commenting on this issue, John Jersin, algorithm was constructed by a young discovery, compliance monitoring, VP of LinkedIn Talent Solutions stated technologist assigning a value in an cyber threat monitoring and risk that AI is not ready to make a hiring algorithm and who just assumed over management. It can even translate decision on its own – the technology 50s didn’t need loans? This would not names written in foreign languages, is not ready just yet. The real issue bring a benefit to over 50-year olds or perform name matching, and identity with the AI that was deployed wasn’t to the banks who would be missing out resolution. RBC uses the company’s that it wasn’t ready, but rather that the on a huge part of a creditworthy pool tool EntityMatcher as part of its fraud starting point was flawed. The data set of customers. detection and prevention efforts. used should have included an equal Real world examples of this type Using this software, RBC is able to set of data on women and on men, of bias creeping in with detrimental screen potential new customers and because it didn’t, the eventual consequences to women and against a large set of individuals who decisioning tool that was constructed minorities have already occurred and have perpetrated fraud against such by Amazon ended up with an inherent at scale. organisations in the past. NetOwl bias against women. In 2014, Amazon developed an is able to quickly and accurately A similar issue has occurred in internal AI tool for selecting the most match newly identified perpetrators the area of AI for facial analysis. A promising candidates by examining against millions of records. This kind computer scientist and MIT graduate, their job applications, particularly their of technology not only benefits the Joy Buolamwini, found that facial CVs. However, the software quickly bank using it, but also helps reduce the analysis software from tech giants taught itself to prefer male candidates likelihood that nefarious organisations such as IBM, Microsoft, and Amazon, over female ones, penalising CVs that penetrate the institutions that the rest could not detect her dark skin. Her included the words ‘women’, which of society needs in order to function. face was only detected when she would often refer to women-only © sdecoret - stock.adobe.com © sdecoret 20 | Monday 23 September 2019 | www.fintechfutures.com/sibos www.fintechfutures.com/sibos | Monday 23 September 2019 | 21 © metamorworks - stock.adobe.com

Why AI will decide the winners and losers in open banking Sponsored insight by Pelican Open Banking is creating a more problem of plenty. Additionally, there “Machine learning would open and level playing field for is no single standard for connecting to financial services, providing customers over 4000 banks in Europe, with several derive insights from past with greater choice, and increasing competing standards proliferating, some competition for traditional banks, with regional, some per-country and some user behaviours and offer new Challenger banks and innovative proprietary per-bank. product and services best Fintechs entering the marketplace. Another challenge is to access The challenges of Open Banking are and serve millions of new customers. suited to the individual also accompanied by significant growth A key factor separating successful customer.” opportunities however. organisations will be the ability to be - Pelican One significant impact of Open fully customer centric - be able to attract Banking is the democratisation of and retain customers, to be able to offer “AI in banking is not immune to this risk” data – the obligation to make access to meaningful services to customers that Customer Engagement -Nadia Sood bank account data and enable payment will engage and delight them, and initiation services accessible to all above all have a hyper-personalized Offering personalised product and authorised third-parties – from small offering using the data windfall of Open services would be a good start, however fintechs, the large banks and other Banking - will decide who will perish and the next challenge to be addressed put on a white mask. This is not especially in the area of gender. the individual to repay debt. AI can financial institutions. who will thrive. is that of ensuring customers are surprising as these systems are often Gender bias in banking services help eliminate the discrimination Traditionally, the banking sector has engaged while using the system as API Interoperability tested predominately on white men. is clearly seen around the globe. arising from cases such as this. operated as a walled garden. Banks, well as when there is a problem. Again After testing facial recognition from A European study found that At a societal level AI stands the rather than their customers, have been Some industry players are addressing Artificial Intelligence is here to help. these tech giants on various faces, businesswomen are less able to chance of democratising the access the sole custodian of consumer financial the multiple API challenge using Natural Language Processing and Voice Buolamwini found that all companies access loans from banks than to capital for women and minorities. Recognition has evolved significantly to performed substantially better on businessmen. Male entrepreneurs But AI needs to be developed in a data and made little active use of the aggregation services by creating their male faces than female faces and in Europe are 5% more likely to consequent thoughtful manner for this insight that it offered. For banks, that own new API standard. However, what enable us to talk to the mobile app or darker-skinned female faces did successfully get a loan for their promise to be delivered on. meant a captive and stagnant market. is truly required is an API Interoperability the desktop as an interface in a unified substantially worse. For lighter skinned business from banks than women. In the second part of this series, I With Open Banking, the focus has solution that would allow the use of manner along with touch, mouse and men, she found an error rate of less Even those women that are able to explore how AI can be applied as a now shifted to the Customer, and as a some of the existing popular standards keyboard – not necessarily as a chat bot. than 1%. However, this figure rose to access loans are subjected to higher force for good by financial institution consequence, customer engagement like UK’s OBWG, STET and Berlin Group This facilitates interaction in a normal 35% for darker skinned women. These interest rates, with an average of to expand the pool of clients to be will be a key driver for success. Now to access all the banking APIs. An human manner – let’s talk! AI systems also failed to correctly 0.5% more on a business loan than more inclusive. that the monopoly that banks held over interoperability platform will make the Also use of natural language and voice classify the faces of Oprah Winfrey, men. It is not the case here that An objective analysis can highlight customers data is being brought to an Open Banking truly open. interface can help with customer support Michelle Obama, and Serena Williams women are worse at business than what gender biases may cloud – and end, we can expect to see a number of Greater access to data will also and self-help systems – valuable support despite the fact that these women are men and so present worse credit banks would thus be less likely to filter important market changes. Number one enable a variety of Artificial Intelligence while serving millions of customers. some of the most famous people in risks – the average venture-backed out women-owned businesses without would be Information Symmetry. With technologies to play a leading role. Pelican AI uses machine learning the world and generate some of the technology company run by a woman first being made aware of their merits everyone having access to the same Machine learning would derive insights and natural language processing most significant number of images on is started with a third less capital yet and creditworthiness. With time, information at near-real time speeds, from past user behaviours and offer integrated with a pan-European the internet. yields annual revenues that are 12% AI can be a transformative tool in we will see an increasing number of product and services best suited to Interoperability platform to deliver In both these examples, the higher than those run by men. shrinking these biases. innovative financial services appearing the individual customer. Use of natural several Innovative digital apps that institutions building the AI could have The substantial social benefit of Stay tuned for Part Two on on the market, both from small fintechs language techniques would enable overcome the challenges and embrace been smarter about the datasets AI if applied properly is that it can the opportunities. With its “across-the- fintechfutures.com and from the banks themselves. systems to harness the vast amount they used to form their conclusions help spotlight the strong performing, of free-format information to derive spectrum” offering of intelligent Account Challenges and train their AI and better about good eggs in the lending basket. meaning and provide context. Management, Payment Transfer, Liquidity including more diversity in the groups For instance, it can read between However, significant challenges remain. It is clear that API Interoperability and view and deep intuitive financial health of people who were building the the lines in deciding whether to lend The ability to process huge amounts of AI will be transformational forces within analysis and risk metrics will ultimately systems. to an individual earlier excluded data at near real-time speed, to harness it this space and will allow nimble industry fulfil the rising needs of customers while AI in banking is not immune to this by a lending officer because the and then to be able to use it effectively, is participants who understand and harness enabling industry participants to offer risk. The trick is going to be how to entrepreneur is a woman, especially a significant challenge that many industry AI technology within the Open Banking exciting new products and services to develop AI that doesn’t perpetuate since the gender of the entrepreneur Nadia Sood, CEO, players will face. It is a quintessential ecosystem to emerge as true winners. their customers. widespread bias that exists today has nothing to do with the ability of CreditEnable

Accessible and international SME banking MANAGE CASH, WHEREVER IT FLOWS. Sponsored insight by Banking Circle

Banking is failing small medium are realising that if they get an SME enterprises (SMEs). Options available on board, they will be loyal and bring to SMEs vary dramatically yet rarely fit multiple cross-selling opportunities.” the bill. With no two SMEs alike, banks As our report shows, bringing about – be they incumbent or challenger – real change and better financial are not always able to provide SMEs inclusion for SMEs requires market with the flexible, fast-paced banking participants to work together and solutions they need. And, so far, few develop joint solutions, collaborating fintechs have taken on the challenge. to build bridges between individual Banking Circle has spoken to innovations already in the market. hundreds of SMEs and start-ups, and Roger Vincent, general manager found that application and set up takes (UK&I) & CIO of Trade Ledger too long, costs are out of reach, credit commented: “We are creating a repayments are inflexible. new ecosystem of financial services As a business that’s passionate providers, in partnership with other about increasing financial inclusion providers such as Banking Circle, for SMEs, Banking Circle recently to establish a new era of financial commissioned MagnaCarta services which will better service Communications to carry out research customers and SMEs in the banking into these potentially fatal issues. The space. If we better serve the banking first report was published in June 2019: space through the incumbents, then ‘Financial inclusion for Europe’s SMEs: the SMEs will benefit greatly as they Building a circle of trust’. can access the services they want.” A second report – ‘Circle of trust However, as our latest report or out of the loop?’ – will be launched shows, the progress and potential at Sibos 2019. This includes insights achievements will remain limited until from some of the people working in further collaboration, communication the midst of the challenges and the and joined-up thinking becomes solutions hitting the market today. commonplace within the financial Speaking to these experts gave services industry. Banking Circle first-hand insight, As with any ecosystem, it must uncovering where changes are be perfectly balanced in order to happening, the opportunities that function effectively. Only with all exist, and where barriers are beginning types of providers working together in to come down to improve SME collaboration, not competition, will the financial inclusion. banking ecosystem be able to bring financial inclusion to its peak. Broadening SME banking horizons Visit BankingCircle.com to register Bank on us Valentina Kristensen, director for the new Banking Circle Insight of growth and communications at Paper which will be launched at Sibos With our Virtual International Cash Management solution you can now offer OakNorth Bank said: “SMEs are 2019, and to download the report your corporate clients local collections and payments worldwide. still not top of the agenda for most ‘Financial inclusion for Europe’s SMEs: financial services providers, but many Building a circle of trust’. are waking up to the benefits. They

THE NETWORK FOR GLOBAL COMMERCE © Graphic in Motion - stock.adobe.com © Graphic bankingcircle.com www.fintechfutures.com/sibos | Monday 23 September 2019 | 25

BC-VICM-PCN-A4.indd 1 23/08/2019 08:47 FOCUS | DAILY NEWS AT SIBOS Tech vs. humans: How convenient is too “Investing is as emotional as it is convenient? logical, and I wonder whether the Convenience is the human trait Can fintech have it all? driving the disruption happening industry doesn’t mistakenly place around us. If you want your new By Zac Gazit, business development director, Cogress. product to catch on, it needs to too much emphasis on younger prioritise the people using it. And if you’re innovating for customer investors’ ability to create a experience, making the customer The world today is a very crash saw investors lose interest in Is there still room for people in work less is the way to do it. balanced portfolio using only apps? ” different one to the world I grew up traditional banking systems, and it’s investing? But that doesn’t always mean in, or even the one I first started my an attitude that persists to this day. automation. We know the success The lesson? Successful disruptors A human also understands that career in. From Amazon to Uber, A 2018 study by Legg Mason found I think so. of fintech’s big disruptors is down make life easier for their users, but preferences, goals and risk profiles Just Eat to Tinder; technology has that 48% of investors’ behaviour is A recent report by investment to their ease of use. Fast, agile those users still want access to the will change over time, and aren’t revolutionised how we live and how still overshadowed by the crash. firm Vanguard UK noted that, models that allow users to trade, people behind the platform. My own always predictable. As investors, we interact with each other. It was this environment that while younger investors will adopt budget, save, deposit, or transfer personal experience with family we’re increasingly reliant on And our finances are far gave rise to the alternative robo-advice, they specifically seek money across continents with the offices and high net worth investors, algorithms and platforms; but we from immune. Underneath the finance industry. Categorised by out and place higher value on that swipe of a thumb. Endless venture especially in my current role with don’t fully trust them, yet. There’s proliferation of fintech, regtech automated platforms belonging of people. That this generation capital funding and a slew of Cogress, is that many still consider something missing, and its humans. and the countless other neologisms to peer-to-peer lenders and of digital natives value human five-star reviews suggest they’re talking to a person they know as As the fintech sector continues currently doing the rounds, sits crowdfunders, this sector connects interaction is telling. Investing is worth the hype. But take a look at the ultimate convenience. And it’s to boom, I think the brands that the quiet dawning of a new world investors with the opportunities as emotional as it is logical, and the poor customer reviews, and important for investment providers, will go the distance are the ones order; one where low interest rates, that used to belong exclusively to I wonder whether the industry the gripes come predominantly too. People reveal more over the brave enough to draw a line in the poor bond yields and sustained high street lenders, family offices doesn’t mistakenly place too from a perceived failing in course of a relationship than they sand. The ones who know when to economic growth coexist. and investment houses. Only now much emphasis on younger customer service. would likely divulge to an algorithm. automate, and when not to. But the deflationary influence we aren’t buying stocks and shares investors’ ability to create a of disruptive tech is a focus for in faceless FTSE companies, we’re balanced portfolio using only apps? another day. I’m interested in the investing directly in small startups Automated investment, whether impact it’s had on our perception with visible, engaging founders. its all you know, or you have as consumers and investors. In a Technology has brought experience with human advisors, world where you can build a fully investors closer than ever to their is still incomplete. It’s missing the funded and functional investment portfolios. Online brokers have trust and reassurance of the human portfolio in a few hours, order a opened the equities, commodities element. At least until technology taxi with the push of a button, and and FX markets to retail traders learns how to empathise. dinner with a few clicks, we’re who can place a trade online in The fact that an entire automated becoming increasingly expeditive. seconds. While lean structure investment sector – alternative That being said, is human service makes trading with them relatively finance – has grown up around still relevant? And is interacting cheap, it does so at the expense of investing in human endeavors, if not with a person over an algorithm a human interaction. There’s no with human advisors, proves that hindrance, or a help? buy-sell recommendations, we still need human interaction to professional feedback or tailored prompt investment decisions. Technology and investing customer service. The internet made the financial markets accessible, giving many investors the opportunity to “The internet made the financial markets research and self-administer at least a portion of their portfolio for accessible, giving many investors the the first time. Whether this trend towards self- opportunity to research and investing would have been taken self-administer at least a portion of up quite so vigorously without 2008’s global financial crash is their portfolio for the first time.” debatable. I suspect not. The © Artram - stock.adobe.com © Artram 26 | Monday 23 September 2019 | www.fintechfutures.com/sibos THOUGHT LEADERSHIP | DAILY NEWS AT SIBOS

“A bank with both a clear view of the business data, as well as the human needs of the owners, can see SMEs for their unique requirements and potential.” - Kam Chana

SMEs on its individual journey, as these evolve from payables could be deferred, offering discounts to small traders to larger corporates. A bank with both customers for paying early and providing short a clear view of the business data, as well as the term credit options – as well as invoice finance human needs of the owners, can see SMEs for its – all ranked by which options other customers unique requirements and potential. found most helpful to their business. This creates The power of data cannot be understated. It a win-win scenario where the customer grows a will not only help banks understand what SMEs healthy business and continues to provide revenue need and when it needs it, but also provide unique opportunity for the bank. For the business owner, it insights into its journey as a business. saves them the time and the headache of worrying By far the most powerful use of data is to facilitate about how to stay afloat and allows them to focus a data-driven approach. This helps the bank on building prosperity. make decisions which are better aligned to the The banking sector is evolving. It is beginning SME’s aspirations, and helps the bank provide to realise that cloud-native, agile technology Making banking recommendations for the right products. Data holds the key to create a more human and can be analysed from the SME and from other personalised approach to customer engagement. businesses with a similar profile – enabling Recent research by Temenos and the Economist decisions based on successes not guesses. Intelligence Unit (EIU) shows that AI is becoming human again Leveraging data can also help banks better a key part of the new technology mix, improving understand and provide automated guidance to personalisation and enabling more tailored By Kam Chana, Temenos SME customers in real time. As it continues to offerings. It shows that 61% of banking executives evolve the way that it serves SME customers, banks globally think AI will create better value for should begin to take advantage of explainable customers by 2025. It might sound like a contradiction, the right skills, products or services, to contribute £241 billion to the UK AI – artificial intelligence that offers banks, their There are certainly still challenges to overcome. but technology needs to make but then start drowning in the economy by 2025, a 19% rise from customers, and regulators These challenges stem from legacy culture banking human again. After years of admin, bureaucracy, regulation, and 2018. SMEs are the backbone of the transparency into how and why decisions are and a lack of skills to apply insights. There are not knowing how to create the most management required to run and grow economy, yet often don’t receive made. By capitalising on explainable AI, banks can brave organisations, particularly challengers like engaging digital banking experience, a business. enough attention. engender trust by ensuring SME customers know Judo Bank, who are trying different things like banks today are beginning to realise Do I have enough cash? How can I SMEs require a different style of why the proposed product or advice is right for experimenting with design thinking to instil more their true potential by combining data, make it last? Does my bank care about banking than larger businesses. While them. humanity in banking. Placing relationship banking at advanced analytics and my business? Do they understand large corporates have a culture, SME owners do not have time to gather data and the heart of its strategy, Judo Bank uses a digital- artificial intelligence. me? They are charging me how much SMEs have individual personalities. A make comparisons, as they don’t have access to first, API-first approach to lower costs and increase Although progress has been interest?! Do I have control over my standard, siloed corporate banking data on other businesses. But banks do and can the value of services and products to best serve its made, there is still much work to costs? solution may not work for them, and offer great value by doing the heavy lifting for their customers. do, especially in the small medium- Banks cannot afford to miss out on they may need something more robust customers, taking the burden off their shoulders. SMEs have long been the engine room of the size enterprise (SME) sector. Digital the huge opportunity that the SME than an enhanced retail offering. In By understanding the individual business and economy, quietly surviving and growing as best banking is ubiquitous today, and every sector represents. In the UK, there order to best serve SMEs, banks need performing a smarter analysis of cash flow, banks these can with limited support. But times have banker recognises that the experience are about 5.7 million businesses, of technology that bridges the worlds of can help SMEs to not only project future positions changed – SMEs are empowered and challenging is key. But do banks really know its which 99% are SMEs. In fact, SME business and personal, providing the but also to highlight pinch points and foresee when old ways of doing business. SMEs form a SME customers? And how can banks businesses generate almost half of the agility to respond to either’s needs as working capital might be insufficient. burgeoning market with diverse needs – one which innovate to help SME customers solve country’s revenue and provides 30% they pop up. Banks can tailor activities specific to the SME’s requires a more human approach than ever to real-world challenges? of all employment. They represent Banks can harness the power of needs based upon future expected commitments banking - one that meets the disruptive, customer- A small business owner may have a growth segment that is forecast data and advanced analytics to join and revenue data. This includes highlighting which focused nature of each SME business model.

28 | Monday 23 September 2019 | www.fintechfutures.com/sibos www.fintechfutures.com/sibos | Monday 23 September 2019 | 29 ap_FinServ_A4_ad_210x297.pdf 1 9/5/19 11:33 AM

INTERVIEW | DAILY NEWS AT SIBOS

Dissecting digital transformation with Appian’s very own problem solver By Martin Morris, senior staff writer, FinTech Futures

Ahead of Sibos 2019 FinTech Futures But as Heffner has previously stated, discussed how challenges posed by “We are always open when it comes to digital transformation digital transformation are resolvable with to learning new things there is no one-size-fits all solution, Mike Heffner, Appian’s global industry with no technology vendors selling group leader. He believes that it’s simply a – and that could be a digital-transformation-as-a-service matter of putting innovation into practice. solution. As leader of the global industry group new ways of selling, For financial institutions C at Appian, Mike Heffner is a problem implementation of a successful M solver – his team being responsible for that could be new digital transformation that delivers engaging with customers, partners, and on strategy, increases operational Y solutions you’re offering, analysts to solve digital transformation efficiency, reduces operating risks and CM challenges in all key verticals, including that could be really fosters higher levels of interaction and MY the public sector, life sciences, integration, requires “an organisational

CY healthcare, energy, insurance, banking, understanding what your culture that fosters a focus on and capital markets. customer centricity and a dedication CMY A speaker, author and thought leader, customer’s needs are,” to breaking down the silos that K the key to Mike’s approach is bringing traditionally exist between business innovative solutions to problem solving, - Mike Heffner, Appian’s global industry and IT.” In the absence of a cultural shift group leader. based on his extensive leadership efforts may flounder. experience in operational efficiency and But as financial institutions embark business transformation. upon their digital transformation Prior to Appian, he was managing journeys technologies such as robotic director, business transformation at State process automation (RPA), artificial Street Corporation, held management seen in the digital economy is of course intelligence (AI), and machine learning roles at Charles Schwab & Co, and a major consideration. Indeed, systems (ML) can help aid them. Accenture’s creating-financial-markets- built five, ten or twenty years ago can no Heffner says that “by combining RPA advantage executive group. Mike holds longer meet the expectations of today’s with cognitive technologies such as a BSBA in Economics from University demanding customers. ML, object character recognition, chat of South Carolina, and an MBA from Appian’s digital transformation bots, and natural language processing, Babson College. platform unifies a business’ data, financial institutions can automate He was attracted to Appian because mobilises everything, makes IT its higher-order tasks with intelligent it fosters a culture that encourages innovation team, and creates more automation that in the past required the employees to stay curious. productive employees and more perceptual and judgement capabilities “We are always open to learning new engaging customer touchpoints. of humans.” things – and that could be new ways “When I visit with our customers in “This technology can increase of selling, that could be new solutions financial services, they are all talking operational agility, improve customer you’re offering, that could be really about the necessary fundamental service-level agreement (SLAs), reduce understanding what your customer’s transformation of key parts of their processing time and improve regulatory needs are,” he says. “Ultimately, it’s about business like what they will need to compliance,” he adds making lasting relationships and acting undergo in order to reduce costs, with a spirit of generosity,” he adds. enhance customer experience, support Mike Heffner is presenting at Sibos Helping financial institutions adapt to digital innovation to remain competitive,” with Goldman Sachs: Mon, Sep 23 - the incredible amount of change now says Heffner. 10:00 to 10:30 | Open Theatre 2 © mirexon - stock.adobe.com © mirexon www.fintechfutures.com/sibos | Monday 23 September 2019 | 31 Digital transformation for today’s challenging landscape

Our customers tell us that they need to use transformative digital strategies to remain relevant in today’s challenging financial landscape. Strategies that will allow them to improve operational control, reduce costs, build new revenue streams, mitigate risk and comply accurately with regulation. To help you make the journey towards digital transformation, we provide a range of solutions for the transaction lifecycle. AI and Blockchain technologies are now embedded in all of our solutions, which are also available in a variety of deployment models. Digital transformation. Reaching the summit just got a little easier.

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