www.financialit.net • Summer 2021

CREATING AMERICA’S NEXT GENERATION ECOSYSTEM Serge Elkiner, Chief Executive Officer, YellowPepper

THE DIGITAL AS MANUFACTURER Mark Jenkinson, Co-Founder and Director of Strategy, Chetwood Financial

ARE YOU BEING SERVED? Maria Nottingham, Managing Director, Compass Plus

Craig Ramsey, Head of Real-Time , Product Management, ACI Worldwide INSTANTINSTANT PAYMENTSPAYMENTS REVOLUTIONREVOLUTION ININ PERUPERU PERU’SPERU’S BANKSBANKS MOVEMOVE TOTO REALREAL TIMETIME PAYMENTSPAYMENTS ANDAND ISOISO 2002220022 Banking Circle’s proprietary technology enables Payments businesses and of any scale to seize opportunities, compete and grow. From multi-currency accounts to real-time FX, international payments to local , we’re quick, low-cost, and secure. Bypass old, bureaucratic and expensive systems and enable global banking services for your clients.

FINANCIAL INFRASTRUCTURE YOU CAN BANK ON bankingcircle.com Back to the Table of Contents

BC-FinancialIT-DPS-420x297mm-AW-220520.indd 1 23/05/2020 12:16 Banking Circle’s proprietary technology enables Payments businesses and Banks of any scale to seize opportunities, compete and grow. From multi-currency accounts to real-time FX, international payments to local clearing, we’re quick, low-cost, and secure. Bypass old, bureaucratic and expensive systems and enable global banking services for your clients.

FINANCIAL INFRASTRUCTURE YOU CAN BANK ON bankingcircle.com

BC-FinancialIT-DPS-420x297mm-AW-220520.indd 1 23/05/2020 12:16 2 Editor's letter

THE ELEPHANT IN THE ROOM

What is at the front of mind of entrepreneurs The topic that is not being and executives who work at that part of the mentioned global economy where and technology meet? There is something very large that is clearly If you only have two minutes or so, skim not front of mind for our contributors and read every article and advertisement in this advertisers. edition of Financial IT. That very large thing is the return of Give yourself no more than five seconds to inflation. reduce each of the articles and advertisements On 12 May 2021, the Bureau of Labor to a single and simple message. Statistics (BLS) reported that the Consumer Then arrange the messages into an order Price Index in the United States had risen that provides a logical flow. by 0.8% in the month of April and by 4.2% The result could be something like this: year-on-year. • There is an unstoppable move towards real This was the largest 12-month increase time and cashless payments, in developed since September 2008. countries and in emerging markets. The BLS’ index for all items less food and • Partly for this reason, and partly because of energy – its measure of “core inflation” – Open Banking, the number of transactions increased by 0.9% in April – the largest one that will take place digitally will boom. month increase since April 1982. • Related to this are as many opportunities Andrew Hutchings, as there are new companies that can clearly Widely discussed in the financial and Editor-In-Chief, Financial IT identify a competitive edge or unique mainstream media, the inflation is the selling proposition. result of money that has been generated by • The competitive edge may well come from Quantitative Easing (QE) finding its way into manufacturing the right offering for retail the real economy. or corporate customers. QE involves central banks (in this case • New technology can resolve numerous the Federal Reserve or Fed) buying bonds challenges – such as reducing cyber- from commercial banks. security risks and compliance with In that transaction, assets side of a environmental, social and governance ’s balance sheet is boosted by (ESG) requirements. the bond purchase. • The new technology includes blockchain. The liabilities side increases by the same amount – being the commercial banks’ The Covid-19 pandemic continues to be deposits with the central bank. mentioned in most articles. Those deposits form a part of money Unlike, say, a year ago, it is no longer being supply. seen as a major accelerator of change or an QE was introduced by the Fed and some unprecedented challenge. other central banks in response to the Rather, it is seen as a problem that is being global financial crisis of 2008-09. resolved (albeit at different speeds in different However, the resulting rise of the money places) and something that provides context/ supply did not cause inflation. background for other changes that are This was because the velocity of money underway in financial services and IT. – being how often it is spent each year in a

Back to the Table of Contents Summer 2021

WHAT WILL HAPPEN AT THE INTERSECTION OF FINANCIAL SERVICES Although Financial IT has made every effort to ensure the accuracy of this publication, neither it nor any contributor can accept AND IT AS THE WORLD any legal responsibility whatsoever for consequences that may arise from errors or omissions or any opinions or advice given. RETURNS TO INFLATION? This publication is not a substitute for professional advice on a specific transaction. transaction – fell from around 1.8 in 2009 to in developing countries, means that it is No part of this publication may be 1.4 in 2019 or by a little over one fifth. easier for people to buy goods and services reproduced, in whole or in part, without Then the velocity of money in the United – and to do so quickly. written permission from the publisher. States fell from 1.4 to 1.2 – or by 14% or so Faster payments will be of huge Entire contents copyrighted. Financial IT – over the course of 2020. importance to businesses, who risk seeing is a Finnet Limited publication. This did not result in falling prices – the real value of accounts receivable being ISSN 2050-9855 deflation – because the Fed increased the eroded by inflation. money supply by around one third – from The payments industry may actually Finnet Limited US$15 trillion to US$20 trillion or so, as it exacerbate inflation, for a while, because it 137 Blackstock Road, London, N4 2JW, responded to the pandemic. can boost the velocity of money. United Kingdom Second, demand for digital wallets and +44 (0) 208 819 32 53 Looking forward other solutions that make it cheap and easy to move money from one currency to Editor-In-Chief The Fed is now looking for the United another (or to a crypto-currency) will likely Andrew Hutchings States’ economy to expand by 6.5% in real surge. [email protected] terms in 2021. Surprisingly high inflation usually means Even if the money supply does not surprisingly high interest rates. Publisher increase any further, a return in money Surprisingly high interest rates normally Chris Principe volatility to the levels that prevailed prior produce surprisingly large financial crises. [email protected] to the Covid-19 pandemic would produce Surprisingly large financial crises tend inflation in the United States that is well to generate surprisingly wild swings in Project Coordinator, Managing Editor into double-digits. currencies. Katherine Emirosan Similar forces will likely be at work in Third, advances in technology to handle [email protected] many emerging markets too. AML/CFT and KYC requirements will make There are opportunities and challenges it easier for financial institutions to enrol Content Editor/Events for traditional financial institutions and new clients – and to do so remotely, with or Nilyufar Sodikova fintechs in all this. without a Zoom call (or similar). [email protected] The return of inflation is a huge change Those new clients will be looking for – and ends roughly 40 years of falling/low investments that preserve wealth at times Multimedia Editor inflation. of inflation. Bekhruz Khazratov The return of inflation is taking place at a The investments will not be limited to [email protected] time that national economies are integrated gold, gold stocks and gold exchange-traded globally. funds (ETFs). Production/Design No-one has really experienced the The corollary is that it will be much easier Timur Urmanov scenario that is now unfolding. for imaginative companies to manufacture However, the opportunities outweigh the and distribute financial products that are Founder challenges. geared to a new era of inflation – and to do Muzaffar Karabaev First, people usually react to inflation by so at scale. [email protected] trying to spend their money on goods and So far, inflation has been the metaphorical services more quickly (i.e. before it loses elephant in the room – present but never value). spoken about. The rise of real-time payments Expect that to change over the next everywhere, and greater financial inclusion three-to-six months. 4 Featured Story DIGITAL OR OPEN BANKING

Just the other day, I was talking with a banking friend. We were discussing the changes that have happened and what tomorrow may bring. He commented that Digital Banking will drive future change. As soon as he said that I had this feeling that digital is such an old term. It seemed to me that Digital Banking has been around for a long time. Digital can no longer be the future of banking. I say that because we have past the age of the Digital Bank. If your bank is not digital by now, then either it has closed or will be closing. Today the future is Open Banking. Banking relevance is to progress past being a Digital Bank and moving into being an Open Bank. This is the new path for banking success. Let’s examine briefly what Digital Banking and Open Banking are. Digital Banking combines online, mobile and ATM banking services as the banks business strategy. Digital Banking is really made of three words: quick, easy, and seamless. Banking is now done by computer, tablet and more importantly by smartphones. Today’s consumers do not want to stand in line at the bank. They want banking accessible on their terms, when and where they need financial services. Digital Banking provides this. The system of allowing access and control of banking and financial accounts through third-party applications is Open Banking. There is the potential to reshape the competitive landscape and experience of the banking industry. Open banking provides a unique opportunity for customers and companies by transforming how to manage their finances. It is a way to revolutionize the banking industry. Here’s the math equation that represents Open Banking: (Online + Mobile + ATM = Digital Banking) + API Access = Open Banking

Back to the Table of Contents Summer 2021 Featured Story 5

by Chris Principe, Publisher, Financial IT Open banking allows third parties to access the bank through the use of application programming interfaces (APIs). Fintechs represent a variety of possibilities, from microloans to easy payment gateways to e-wallets. Banks applying Open Banking are no longer traditional institutions with locks and keys. By providing a customer-centric approach to financial services, banks can become bank as a service and bank as a platform. There is the opportunity to offer financial services that the bank didn’t have initially. Customers and business can manage their finances more efficiently which is a big benefit of Open Banking. The key for banks is their core banking system. The core banking solution is the technical foundation of the bank. Everything that happens inside the bank is connected to the core banking application which is the general ledger, accounting, and system of record. It is more important today for banks to make smart choices selecting their core banking vendor. There are several large companies that provide this software such as Fiserv, Finestra, Fidelity, Temenos, etc. These companies and others like them provide good solutions but without the flexibility to enable most banks to personalize and innovate. Their customer base relegates most banks to being just a number on a long list. It is understandably hard for these companies to provide the quick, easy, and seamless experience of Digital Banking with the accessibility enabled by Open Banking. This is not a recipe for banking success. Open Banking is the fuel of innovation for both the banking and fintech industries. This allows new technologies to grow and re-shape how financial services are consumed. Banks want core banking providers that provide business personalization with support to match. This is what will enable most banks to compete with the financial giants. The same is true of the core banking providers. Path Solutions is doing just that for Islamic core banking systems. In conventional banking, DataPro is a strong provider with their e-IBS core banking solution. Core banking solutions only become robust from years in the market. Combining SaaS hosting with the latest in digital technology plus the APIs of Open Banking is truly a winner. With the ever-increasing competitive pressure banks are under today from fintech’s and other banks every edge is required. The innovation of Open Banking, huge savings from SaaS deployments and best in class support allows banks to meet market challenges as part of a superior bank-vendor relationship. Banks in the era of Open Banking have to be more competitive in order to win customers. This results in a wider choice of options, better customer service, and improved quality of financial services. Banks that adapt to new technologies will have more success. Open Banking with Digital Banking and SaaS hosting allows banks to compete directly against fintech’s, third-party institutions, and bank incumbents. This leveraging of innovation is the path for banks to remain competitive in this rapidly evolving industry. 6 Contents

EDITOR'S LETTER PUBLISHER'S LETTER FEATURED STORY

2 THE ELEPHANT IN THE ROOM 4 DIGITAL OR OPEN BANKING 8 REAL-TIME PAYMENTS FOR Andrew Hutchings, Chris Principe, CORPORATES: DARE TO DREAM Editor-In-Chief, Publisher, Financial IT Jon Levine, Financial IT Co-Head of Institutional Banking at , Payment Networks Banking Circle LEAD STORY 26 SURVIVING THE PAYMENTS COVER STORY BOOM in a Real-Time World 12 CREATING Nick Botha, LATIN AMERICA’S NEXT Senior Sales and relationship manager-Banking and Payments, GENERATION PAYMENT AutoRek ECOSYSTEM Around the world, a series of trends are propelling a technological evolution in Serge Elkiner, 30 CONNECTING YOUR payments. What does this mean for banks and national infrastructures? In this Chief Executive Officer, ORGANIZATION TO DRIVE COST YellowPepper TRANSFORMATION new eBook, explore the future of real-time with new stats and learnings from global Nice Actimize 16 THE DIGITAL BANK AS markets throughout the world. MANUFACTURER 32 AUTOMATION AND ARTIFICIAL Mark Jenkinson, INTELLIGENCE CAN HELP Co-Founder and Director of COMBAT FINANCIAL CRIME Strategy, Eric Marts, • View five-year real-time growth Chetwood Financial Principal Marketing Manager, Financial Services, expectations for 43 global markets 20 ARE YOU BEING SERVED? Red Hat Maria Nottingham, Managing Director, 36 MEETING THE CYBERSECURITY Compass Plus CHALLENGE • See which new payment types, Ahmed Ghoneim, Area Sales Manager, including Request to Pay and mobile ITS 10 INSTANT PAYMENTS wallets, payment network operators REVOLUTION IN PERU INTERVIEW 42 HOW FINANCING HAS BECOME Craig Ramsey, EVEN MORE ESSENTIAL AT THE must offer Head of Real-Time Payments, TAIL-END OF THE PANDEMIC Product Management, ACI Worldwide 24 USING BLOCKCHAIN TO Yaacov Martin, BOOST ACCESS TO FINANCIAL Co-Founder and CEO, SERVICES GLOBALLY Jifiti • Get insights into the modernization Dr. Alina Kornienko, 44 THE ‘SOLID’ CLOUD IS THE COO and Co-founder roadmaps for banks and payment Quppy HYBRID MULTI-CLOUD Dom Poloniecki, Vice President & General Manager, network operators 28 THE UK GOES CASHLESS Western Europe and Sub-Saharan Kaushalya Somasundaram, Africa, Head of Payments Partnerships & Nutanix Industry Relations at Square, UK • Learn how governments and banks can 46 HOW TECH-ENABLED FINANCE 38 ACCELERATING DIGITALIZATION WILL ACCELERATE THE work together to deliver real-time, Ben Yang, TRANSITION TO NET ZERO Vice President – Financial Services CARBON EMISSIONS digital-first payment experiences Business Unit, Enterprise Group, Huawei Lutamyo Mtawali, Chen Kunte, Sustainable Finance lead for IBM's Chief Digital Transformation Officer Global Business Services – Financial Services Business at Huawei Enterprise BG 48 HAS THE PANDEMIC CHANGED THE WAY WE MANAGE Download your copy by visiting INVESTMENTS? Profile Software aciworldwide.com/ 52 RBR’S BANKSEC 2021 ETURNS RealTimePaymentNetworks TO LONDON IN OCTOBER Jeni Bloomfield, RBR

Back to the Table of Contents © Copyright ACI Worldwide, Inc. 2021 Payment Networks in a Real-Time World

Around the world, a series of trends are propelling a technological evolution in payments. What does this mean for banks and national infrastructures? In this new eBook, explore the future of real-time with new stats and learnings from global markets throughout the world.

• View five-year real-time growth expectations for 43 global markets

• See which new payment types, including Request to Pay and mobile wallets, payment network operators must offer

• Get insights into the modernization roadmaps for banks and payment network operators

• Learn how governments and banks can work together to deliver real-time, digital-first payment experiences

Download your copy by visiting aciworldwide.com/ RealTimePaymentNetworks

© Copyright ACI Worldwide, Inc. 2021 8 Featured Story

REAL-TIMEREAL-TIME PAYMENTSPAYMENTS FORFOR CORPORATES:CORPORATES: DAREDARE TOTO DREAMDREAM Back to the Table of Contents Summer 2021 Featured Story 9

Jon Levine, Co-Head of Institutional Imagine how the payments landscape Overcoming hurdles through Banking at payments bank, Banking and business potential will change as collaboration Circle, explores how the real-time real-time technology is applied. Suddenly payments revolution can benefit a batch of corporate payments get The need is urgent to make instant corporate banks and their customers. parcelled out over the payment schemes payments for corporates – large and small to run disbursement in the fastest and – a top priority. But for some institutions Instant payments have become the norm most cost-effective way. Balances in the – particularly the smaller, local banks – for retail customers, but the same real- effectively drop to zero, the cost and upheaval of re-engineering time benefits are not yet widely available cash flow is maximised; businesses have their underlying systems is too big a for corporate customers, especially for the liquidity they need to flourish. It challenge. Finding a different route to cross border transactions. However, should be absolutely game- changing. achieving the same end goal of helping change is on the horizon and I believe the corporates benefit from instant payments real-time payments revolution will soon Re-engineering critical is, therefore, crucial. begin to benefit businesses of all sizes. Working with alternative players that Most countries are developing or have But why isn’t this game-changer for are able to help banks service the needs already launched new schemes to provide businesses large and small already being of their corporate clients could be the real-time payments. For example, there are delivered? For many banks, it comes down answer. For example, partnering with Faster Payments in the UK, SEPA Instant to the inherent legacy systems on which new cloud native specialist banks means in the Eurozone, FedNow in the US (from their operations are built. that financial institutions can use their 2023) and other programmes and solutions Certainly some institutions are already infrastructure to join instant schemes in India, Australia, Singapore and more. leading the way, and those that can be at that will deliver real-time payments for Those schemes that have yet to launch will the start of this revolution are going to their corporates. And all the essential be live within the next few years, meaning be winners. But for others, re-engineering pipes and plumbing, connecting to the most banks and their customers will soon is needed to take full advantage of right payment rails and integrating the be addressable over these instant schemes. instant payments for corporates. That necessary sanctions screening can be part That will be revolutionary. re-engineering can be complex: from the of the solution too. In addition, ISO 20022 is set to vastly connections between banks’ payments The idea of collaboration to fix internal improve the data exchange, reducing the engines and local schemes and intelligent challenges is already gaining considerable requirement for manual review, creating routing to get payments to the lowest cost ground. Research we conducted last year higher straight-through-processing rates and fastest payment rail applicable, to the amongst C-suite bank executives across and fewer delays. all-important KYC and AML processes. Europe found that half already have The significance of the change we will And that’s where the challenges arise. partnerships or planned to work with an see in the next few years should not be For example, there are often issues external provider within the next month; under-estimated. It will be fast, it will be connecting the front-end applications another third have partnerships on the a paradigm shift, and afterwards we will delivered by banks, what the customer agenda for the next 12 months. wonder how we previously coped. But sees, through to the instant payment The expertise of specialist banks with whilst many changes are happening and schemes themselves. If a bank has niche expertise as well as a commitment more are in the pipeline, there are still recently signed up to Faster Payments, to building the payment rails for instant some significant roadblocks. Much still is the corporate banking ledger yet piped payments, has a real appeal. It means needs to change before real-time payments through to Faster Payments? And does that banks can offer corporates access become more widely adopted for corporate intelligent routing exist to decide which to affordable, friction-free, real-time use, especially for cross border business. payments go to Faster Payments, which cross border payments that will bolster go to CHAPS, which go to BACS, etc? international economies at a time when Supporting the COVID-19 There are other challenges too – such as they are in great need, as we recover from bounce back managing liquidity by bank treasuries the economic impact of COVID-19. outside of normal working hours. There Businesses of every size need all the help is also the dreaded payment repair queue, they can get to bounce back from the where an issue in a payment prohibits impact of COVID-19 and acceleration of straight-through-processing. These the real-time payments revolution is a issues diminish the benefits of instant crucial piece in the jigsaw. payments. Corporates today have immense funds tied There’s also sanctions screening. Most up in the payments system. Always. That is banks have sanctions screening engines vast sums of cash that are inaccessible, and that cannot look into payments processed unusable. For large companies that adversely via the instant payment schemes. Instead impacts working capital metrics. For smaller the screening engine looks at the SWIFT companies the issue is much more critical. message traffic. But instant payment A delay in cash flow can have far more schemes often don't integrate with banks’ significant consequences. SWIFT gateways. Craig Ramsey, Head of Real-Time Payments, Product Management, ACI Worldwide Craig has over 30 years' experience working with banks with their corporate payments and banking needs. He has been with ACI for over 20 years, providing specialist consulting and solutions to wholesale banking customers. Through the initiatives of the , SWIFTNet, CLS, TARGET2, SEPA, and being a member of the Faster Payments Council Advisory Board in the US, Craig has helped customers leverage the power of the ACI solutions to ensure that the business needs are met.

Back to the Table of Contents Summer 2021 Cover Story 11 INSTANT PAYMENTS REVOLUTION IN PERU PERU’S BANKS MOVE TO REAL TIME PAYMENTS AND ISO 20022

An Interview with Craig Ramsey, Head of Real-Time Payments, Product Management at ACI Worldwide

Financial IT: Craig, ACI Worldwide and Mastercard formed an – such as Zelle and The Clearing House in the USA, about half of alliance to develop real-time payment solutions around the the UK’s Faster Payments network and 75% of Hungary’s world in September 2020. The partnership with Cámara de network. Compensación Electrónica (CCE – The manager of the national payments system in Peru) is the alliance’s first customer. What is Financial IT: Taking a three year view, how do you think that the being offered to CCE? payments landscape in Peru will change? Craig Ramsey: CCE’s challenge is to facilitate banks’ access to the Craig Ramsey: The collaboration between ACI Worldwide, Mastercard new real time payments (RTP) system. Mastercard is providing its and CCE should accelerate three trends. One, obviously, is the Immediate Payments Service (IPS), which will modernise CCE’s growth in demand for RTP in Peru. existing infrastructure. Industry testing will begin later in 2021. A second trend is innovation. ISO 20022 will provide the ACI Worldwide’s Enterprise Payments Platform will speed up banks and financial institutions with much greater data about and simplify the participation of Peruvian banks and financial their clients than is presently available. The banks and financial institutions in the new RTP system, which will be ISO 20022 institutions should be able to use that data to develop new services compliant. for their clients. Perhaps most importantly, our work with CCE will advance the Financial IT: What are the key features of the Immediate Payments cause of financial inclusion. By a number of measures, Peruvians Service and the Enterprise Payments Platform? are unbanked. However, most have access in some way to mobile Craig Ramsey: First of all, I’d note that ACI Worldwide and phones and, therefore, mobile wallets. The potential for RTP should Mastercard are working with CCE at a time that demand for RTP is boost the use of those wallets. surging in Peru. The number of instant transfers handled by CCE Taken together, the changes that are taking place in Peru’s rose from 580,000 in January 2020 to 2.8mn in January 2021. payments system amount to a revolution – and in a part of the world Many positive changes are now possible. We are bringing modern where several other countries are moving towards RTP and widespread APIs for Peru’s banks and financial institutions. For them, there adoption of ISO 20022. We are delighted to be a part of that. should be a much easier transition to ISO 20022 payments than would otherwise have been the case. They will be able to develop exciting new offerings for their customers once they can provide ACI Worldwide delivers the software and solutions that power the 24/7 RTP as a service. global economy. Its mission-critical real-time payment solutions enable corporations to process and manage digital payments, power Financial IT: What were the greatest challenges that had to be omni-commerce payments, present and process bill payments, and overcome? manage fraud and risk. Craig Ramsey: The main challenge arose from the fact that the banks In short, it is driving the digital transformation of banks, merchants and financial institutions in Peru are not homogeneous. Each and billers to help them meet the real-time payment needs of their had its own and particular way of connecting with the payments consumers and business customers. system overseen by CCE. Connecting all of the banks and financial institutions to the new RTP system was analogous to making a fine patchwork quilt from numerous and different pieces of fabric. Fortunately, ACI Worldwide has deep and relevant experience. Our solutions support 18 RTP domestic schemes around the world 12 Lead Story CREATING LATIN AMERICA’S NEXT GENERATION PAYMENT ECOSYSTEM An interview with Serge Elkiner, YellowPepper’s Chief Executive Officer

Financial IT: Could you please tell us more We started in the USA. With the about YellowPepper and your career creation of a couple of applications, we path that brought you to launching the commenced our expansion into Latin company? American countries. I had never been to Serge Elkiner: Growing up in , I Latin America at that time, but I could moved to the United States 22 years ago see the opportunity, as mobile phones for education purposes. were widely used there as well. I have always been drawn to technology Texting was a lot cheaper than and changes that it can bring to the world. calling, which explained the relative The question I posed to myself was how popularity of SMS. we can transform the world through We first started doing few things technologies to better everyday lives of with TV channels and different people. brands using text messages for After few years, at college and with an interactive communication between Israeli company, I decided to launch my them and their consumers. Soon later, own company in technology. we were approached by banks and It was focused on usage of mobile devices they asked if there is something we and text messages: we looked to create an could do for financial institutions as application for value-added services. well.

Serge Elkiner, Chief Executive Office and Co-Founder, YellowPepper

Serge Elkiner is the CEO and Co-Founder of YellowPepper. participation from Visa, achieved a spot on the prestigious Recognizing the high level of cell phone penetration in Latin The Fintech 250 list by CB Insights and expanded the America and the Caribbean, Serge saw the potential for the company into Brazil. deployment of a successful digital finance ecosystem in Today, YellowPepper’s technology is live in 9 countries in the region. Under Serge’s leadership and innovative vision the region and powers 565M transactions annually. YellowPepper is leading the revolution in Latin Born and raised in Brussels, Serge has been politically America by partnering with banks and retailers to bring the active since the ripe age of 16 when he was selected as future of payments and banking to consumers in the region. leader of one of Belgium’s largest youth movements. In 2018, he spearheaded the company into a new strategic Serge Elkiner earned his B.S. in Accounting from Boston direction, secured a series D funding round of 12.5M with University.

Back to the Table of Contents Summer 2021 Featured Story 13 14 Lead Story

That was the moment we looked With one connection to YellowPepper, expand globally – away from our Latin at the possibilities of using mobile a customer receives 100% integration American base. technologies in financial services in with the network(s). different places in the world like the Clients – be they individuals or Financial IT: Latin America and the South Africa and the Philippines. We merchants – can be added to our Caribbean, as a region, is a leader started developing different mobile platform in four weeks or so. We are when it comes to digital payments banking applications in Latin America, looking to bring that time down to one- and this creates huge opportunities specifically Ecuador, at that time. to-two weeks. for companies. Is the region reaching About a year after that, in 2008, our the end of cash? What are the main focus shifted 100 percent, to financial Financial IT: YellowPepper joined Visa's challenges? services integrated with mobile family last November. Tell us how the Serge Elkiner: I would describe it technologies in Latin America. acquisition helped to strengthen Visa's differently. The pandemic has reduced and YellowPepper's role in the market? the resistance of people to digital Financial IT: What is unique about Serge Elkiner: Visa has had the strategy of payments (as opposed to payments YellowPepper? How does it stand out “network of networks”. They understood in note and coin). A lot of merchants, relative to other payments solutions in the last few years that it would be banks and others are still wedded to the providers? impossible to move every transaction old ways of handling payments. Serge Elkiner: There are couple of thing just through Visa. Transactions will The banks and merchants tend to that make us stand out. The first is the come in different networks. However, see each other as competitors. We resilience of the company. Visa can play very important part in provide the opportunity for them to be As soon as we focused on in Latin terms of security and value added collaborators. America and financial services in 2008, services. Financial IT: How the regulatory our clients never changed. Banks have They can add value to a transaction landscape is impacting Latin America’s always been among our clientele. even if it is not in Visa’s network. mobile payments industry? The second unique feature of As I mentioned, since YellowPepper Serge Elkiner: We work hand in hand YellowPepper is that we decided to moves money through different with regulators across the region. We focus on real time payments. networks and we add value to the help them to understand what is needed Hopefully, within 10 years the most services. Therefore, we fit right in with to develop a better payments ecosystem of the movement of money will be in Visa’s strategy. – linking FinTechs, merchants, banks real time. From YellowPepper’s point of view, and governments. Latin America is a place where, there are two other aspects that are The regulators have a very positive traditionally, cash is exchanged for important. view. goods and services. Payment has been First, we had been a small company, instant. That is the standard that yet part of the core infrastructure of Financial IT: What's next for is required of a payments solutions payments in particular countries such YellowPepper? provider in the region. That is as Peru. Serge Elkiner: We are bringing a lot of something else thqt we deliver. Banks saw us as being risky. Now that value added services to the platform. Moreover, we have to make sure that we have been acquired by Visa, that is For instance, we are including new digital payments we conduct in real no longer the case. They know that they security features and tokenization. time needs to be accepted everywhere. can continue to add infrastructure that Visa gives us access to new solutions We also have the advantage of is linked to our platform. that can be offered to clients. connectivity. We deliver banks and The second change is that, as a As mentioned, we have the capacity merchants the potential to move money part of the Visa family, there are to expand beyond Latin America. in real time. much greater opportunities for us to

Back to the Table of Contents Summer 2021 Featured Story 15 16 Featured Story

Mark Jenkinson, Co-Founder and Director of Strategy, Chetwood Financial

Back to the Table of Contents Summer 2021 Lead Story 17

THE DIGITAL BANK AS MANUFACTURER Interview with Mark Jenkinson, Co-Founder and Director of Strategy of Chetwood Financial

Financial IT: Chetwood Financial This is at a time when API banking Products that are developed tend to be (Chetwood) was launched in 2016 and and low-cost cloud systems present huge generic. In trying to please everyone, the gained a full at the end opportunities for the financial services bank ends up truly pleasing no-one. of 2018. What was the motivation to industry. Here at Chetwood, our approach is start a new challenger bank in the first completely different. place? Put another way, what were the Financial IT: Great. So what makes you First, we do an enormous amount of problems of banking customers that you different? data analysis to understand particular sought to solve? Mark Jenkinson: Most traditional (and groups of retail clients that we have Mark Jenkinson: We are indeed a new some challenger) banks are focused on identified as being prospective. kind of digital bank, fully licensed here ownership of the client. I’d stress that the clients who are in the UK by the Prudential Regulatory Often the client is attracted to the most likely to use SmartSave (our Authority (PCA) and the Financial institution in question by a ‘loss leader’ savings deposit product), are very Conduct Authority (FCA). product that is very generic and adds different to those who are most likely to Both myself and Chetwood Co-Founder little value to anyone. use LiveLend and BetterBorrow (our two Andy Mielczarek wanted to do a better The traditional bank then looks to products). job for customers who aren’t being best cross-sell more valuable products to the Second, we use the data that we have served by existing financial providers. client. to offer the clients better terms than This has been supported by private In this business model, the institution they would otherwise be able to obtain. equity group, Elliott Advisors, since 2018 focuses on ownership of the client. Third, we use technology to give the with an investment of approximately The brand of the institution is clients the best and simplest possible GBP120 million to date. important, because it reinforces the customer experience. Despite huge leaps in technological relationship with the client. At this point, I’d note that a client capability in other sectors, existing banks The problem with this business model who deals with us does so digitally. haven’t really changed the fundamental is that it does not differentiate between That’s important, because digital is products they offer for decades. different clients (and potential) clients. faster and cheaper. 18 Lead Story

Partner with Chetwood for your Banking as a Service solution

You’ll get so much more than

Financial IT: That’s one of your core with whom we have a mutually beneficial like any other bank. If our loan book white-labelled technology beliefs, along with the idea that one can relationship over the long term. It is grows, the deposits book must grow never have too much data. reasonable to spend something to buy accordingly. Mark Jenkinson: That is correct. As you can that relationship. In order to ensure that, we continually With Chetwood, you’ll benefit from: see, we also believe very strongly that focus on our relationships with the right product must be developed for a Financial IT: So, in other words, you have distributors and on client experience. particular target market. a business model in which you can easily It is not enough for our clients to be • Our experience as a fully regulated bank, We are also determined that, in partner with other businesses. offered the best products. They must feel from a team with deep financial services explaining the products to the clients, Mark Jenkinson: That’s right. We call that that they are getting the best products, expertise and strong conduct principles Chetwood’s conduct is beyond reproach. partnership Banking as a Service (BaaS). combined with the best service in the Finally, I’d add that one has to ensure Currently, we reach our depositors/ market. Innovative products designed for and tested that the technology is capable of getting savers and borrowers through our Many of our key performance • with your audiences the data, interpreting the data and network of digital distributors. indicators (KPIs) are those which would delivering the product to the targeted They own the client, and we be used by a traditional bank. An end-to-end customer experience client. compensate them when their client uses Net Interest Margin (NIM) is the key • that enhances your brand offering Make no mistake: getting the one of our products. source of profit for us, plus many more technology right is central to what we There is no reason why we couldn’t insights that our technology provides us Faster routes to market and reduced costs do. The technology gives us a scalable take the same approach with a large and with in real-time. • business model. We have about 150 very traditional institution. We also focus on how we are reviewed to launch people on our payroll and as the business Their clients would have access to on Trustpilot. It is gratifying to read the A range of commercial business models, grows, this number is unlikely to expand products that are superior in that they are comments of our customers and to know • significantly. designed to meet the exact needs of the that we are really improving their lives. including the choice to use your balance clients as a group. sheet or ours. Financial IT: What about branding? What The institution is, of course, Financial IT: What are the main changes about owning the client? compensated for our access to the clients that you expect in the coming year or so Mark Jenkinson: We are brand agnostic that the institution owns. for Chetwood? Find out more about our BaaS solutions here at Chetwood. Our products are Although we call this approach Mark Jenkinson: Like any manufacturer, we at [email protected] named according to what our customer Banking as a Service, it would work expect continuing improvement in the research tells us so our brands are equally well with a large way we use data and technology to design designed alongside their input. company. and deliver our products, both existing We do not see owning the client as and new. paramount. Financial IT: One might say, then, In the coming year, we are also working Taken together, these ideas mean that Chetwood is a manufacturer hard to establish new partnerships – that we spend little on “above the line” that collaborates with a variety of under the BaaS model – with traditional advertising – with our name on billboards distributors – and in relation to specific institutions to bring our market-leading, in railway stations or on the sides of products which are the result of a lot of innovative products to a broader buses. market research. customer base, across industry verticals We do, however, spend money on Mark Jenkinson: Exactly. Make no mistake, As ever, we will be focusing on niches acquiring clients through our distribution though, we are a FinTech bank and not where we can add value to specific We’ve successfully launched many model. A client is someone whose just a FinTech. groups of customers, making them services directly relate to a product and We have to manage our balance sheet financially better off. of own products in recent years. Let’s help you do the same. Back to the Table of Contents Summer 2021 Featured Story 19

Partner with Chetwood for your Banking as a Service solution

You’ll get so much more than white-labelled technology

With Chetwood, you’ll benefit from:

• Our experience as a fully regulated bank, from a team with deep financial services expertise and strong conduct principles • Innovative products designed for and tested with your audiences • An end-to-end customer experience that enhances your brand offering • Faster routes to market and reduced costs to launch • A range of commercial business models, including the choice to use your balance sheet or ours.

Find out more about our BaaS solutions at [email protected]

We’ve successfully launched many of own products in recent years. Let’s help you do the same. 20 Lead Story ARE YOU BEING SERVED? The technologically underserved in a market A false sense of having options full of options From the outset, it may not be obvious where the issues lie, Traditionally the word ‘underserved’ is reserved for the B2C especially for newer entrants. Surely, the clear option is to choose sector of financial services, however, this terminology has become a set of vendors, each individually suited to collectively serving an increasingly relevant to the financial institutions themselves, FI’s current needs, and keep adding and dropping them as business whereby they are being underserved by their technology partners. grows. Underserved FIs often underserve their customers. Many FIs, large and small, convince themselves that this is the Whilst there is no doubt over the proliferation of technology only workable approach, but this is short-sighted. products available across vendors in the payments industry collectively, this may not be as advantageous as it seems, and Choosing a set of vendors instead, offers a false sense of having options. The procurement process for just one vendor is a substantial FIs are being underserved by their vendors for a multitude of undertaking; choosing a set of vendors is not for the faint- reasons. Most of which come down to two key areas: the age of the hearted. From using different technology and architectural software and the availability of deployment models. principles, as well as various project methodologies, to working The technology running the majority of the world’s core mission- to different timelines and release cycles, vendors come in all critical systems today predates the 21st century, born in the age of shapes and sizes, with varying objectives and cultures that may the card, and not the e-commerce, alternative payment, mobile- not match. The heavy-lifting of making it all work is down to the first, API-driven world we find ourselves in now. Although some FI, which is very resource-heavy, time-consuming, and requires providers have been reasonably successful in stretching themselves extremely experienced people. Far too often, the FIs will have to meet modern demands with the help of wraparounds and other to work with yet another vendor just to perform overall system tricks, the pace of change is relentless and there are significant orchestration. limitations to the sustainability of this approach. Once the initial project has been successfully navigated, there On the other hand, there are exciting new technology vendors will always be more obstacles to overcome for any new venture, powered by venture capital, who have modern technology stacks, as well as for BAU, and the cost of maintaining the system will but lack the breadth and depth of products, the problem-solving forever spiral. expertise that comes with decades of experience, are limited The more vendors involved, the more challenging it becomes geographically, and are not proven. As such, these vendors are to launch new products and services. The more complex the rarely deployed to drive mission or business-critical processes. system, the more integration is required; which leads to longer The second area offering a false sense of choice is deployment testing cycles and a system with multiple points of failure. It models. The majority of both established and new vendors is often the case that requirements that could be met by one or struggle with offering multiple and interchangeable deployment two vendors, are split amongst numerous providers just because options. For example, it is nigh-on impossible for vendors this is how it was always done, adding rather than removing offering processing services to move to a license model. For those complexity. traditionally offering licensed software, it would be resource and time-heavy, taking years to build and certify a multi- Serving an FI’s current needs functional processing centre, and even longer to become experts All FIs have the ambition to expand their business. Many in operations and compliance. A handful of vendors have tried to vendors are able to scale and provide value adds, however, there resolve this by partnering with data centre providers, but this does are some high-profile examples whereby a company started out not make for a seamless, coherent and cost-effective service, and offering card products and within a few years wanted to move leaves FIs essentially paying two suppliers to receive one service. into acquiring, soon realising that their current processor’s Many processors only offer the default option of the SaaS model, reach doesn’t extend beyond issuing. Another example is where with few venturing into PaaS, sought-after by innovators and a very well-known European FinTech decacorn with a platform disruptors, established or wannabe market leaders. developed in-house was faced with the inability to expand So, why do vendor limitations have such a huge knock-on effect internationally using their technology stack, even though it was on FIs? relatively new.

Back to the Table of Contents Summer 2021 Featured Story 21

Maria Nottingham, Managing Director, Compass Plus 22 Lead Story

When an FIs faces expansion, whether geographical or business Vendors lock-in is rife. The ability to quickly manoeuvre between focused, the incumbent vendors may hinder this growth, resulting vendors is at best not feasible, and at worst, plain impossible. Once in a deadlock. The FI is forced to develop new systems internally you have built something mission-critical, ripping it out is no or start shopping for a new vendor to then integrate into their mean feat. This is why so many brick-and-mortar banks are still existing systems. Alongside the aforementioned issues, problems using systems from the 80s, navigating siloed technology stacks can appear a lot earlier with FIs wanting more control over their and engaging in fringe innovation in labs disassociated from the system and more vendor independence. main business rather than at the system core causing integration Those who start with the SaaS deployment model will have nightmares. a natural inclination to move toward PaaS, others will be more geared toward bringing parts of their system in-house, Cohesive, future-proof partnerships especially those generating competitive advantages. A few FIs may opt to reverse the flow and go from licence to outsourcing, Whether new or old, large or small, universal or niche, FIs need from PaaS to SaaS depending on real-world challenges, or as a vendors that are able to support their business come what may. strategic play. Whilst all parties hope for business growth, the future is unknown, Too often FIs are blinded by their need to choose a vendor and FIs should consider partnering with vendors that offer the that perfectly fits their current or short-term needs. The future flexibility to grow and adapt to their business. This isn’t only is imminent and locking themselves into a partnership with an about transaction volumes and complementary services, but also expiration date will have immense implications on ROI, and for deployment models, flexible vendor independence controlled some, their survival. by the FI, as well as support for new business lines and cross- functionality. Adding and dropping vendors In the modern payments landscape, working with multiple It seems reasonable to assume if one or more vendors are no vendors is unavoidable. Ultimately, FIs need to carefully select a longer fit-for-purpose, an FI can easily drop them, replace them handful of technology partners to form a cohesive environment to and pick-and-mix as their business evolves. This is not the case. support their current and future business requirements.

Is your payments Compass Plus is a strong technical company that has platform produced a visionary product future-ready?

Compass Plus is passionate about payments technology and architecting it properly for the needs of today and tomorrow. From start-ups and industry disruptors to recognised innovators and market leaders, our exceptional technology puts our customers in the driving seat and ultimately in control of their payment ecosystems. Together, we deliver ground-breaking and industry-leading Back to the Table of Contents products and services with uncontested ease and proven time-to-market. www.compassplus.com TODAY, FINANCIAL CRIME INVESTIGATIONS ARE INEFFICIENT, COSTLY AND TIME CONSUMING. ENTER ACTONE EXTEND, A BETTER WAY TO:

Consolidate all alerts into a centralized system for a single view of risk Guide alerts to the right people at the right time Investigate in a timely manner, using a comprehensive view of risk Manage your operations with accurate measurement and monitoring DOWNLOAD OUR EBOOK NOW FOR MORE INFORMATION.

[email protected] | niceactimize.com/blog @NICE_actimize | /company/actimize | NICEactimize 24 Interview

USING BLOCKCHAIN TO BOOST ACCESS TO FINANCIAL SERVICES GLOBALLY

An Interview with Dr. Alina Kornienko, COO and Co-founder at Quppy

Financial IT: What services do you offer? Financial IT: What currencies does Quppy keys as far as other important information What is the Unique Selling Proposition support? and the access to the user account of Quppy? Dr. Alina Kornienko: One of the core exclusively on the user device. This means Dr. Alina Kornienko: Quppy is a fast- competitive advantages of the Quppy that neither Quppy nor other parties have growing European . Since 2017, neobanking app is the fast opening of access to it one hundred per cent: this together with my co-founders, we have a digital IBAN account in and feature prevents user information and been building a financial, payment, social sterling that enables the whole range of funds from being hacked or stolen. and investment ecosystem. integrated services including inbound The ecosystem brings together such and outbound third-party instant Financial IT: Please briefly describe your services and operations with traditional transactions. client onboarding process. and digital currencies as wire transfers, US dollar support will be available to Dr. Alina Kornienko: To verify your exchanges, digital currency instant the Quppy customers within a quarter. account in the Quppy app and get your purchase and selling, payments, top-ups, digital IBAN in euros and British pounds, recurrent payments, donations, salary Financial IT: Does the product comply with you have to pass through the KYC projects, gift card primary and secondary AML/KYC? verification procedure. The whole process markets and many others. Dr. Alina Kornienko: All Quppy services from opening the app and getting your ID Thus, at Quppy, we are working on are fully compliant with all the European ready to being able to receive funds takes providing a unique digital personal Union’s financial regulations. no longer that 10 minutes. banking experience to save time and open Quppy has its own KYC and AML The customer simply needs to fill in more financial cross border opportunities. procedures that are performed together the personal data. After that the customer Being part of a financial world, I see that with our partner – SumSub – one of the chooses a document (preferably an ID a lot of people, especially in developing best verification services that currently card or international passport) to prove regions, need not only more inclusiveness exist on the market. the identity. in the world financial system but also a Quppy has its own highly professional Then the customer uploads photos general financial education. Compliance Team that constantly of him/herself, along with the front and I believe that due to fintech and monitors all the transactions and back of the document. paytech achievements we can soon performs all the necessary actions. When the information is complete, the increase the quality of life and the quality Quppy customer will see the successful of financial awareness all around the Financial IT: How secure is the web and verification status on the same screen. globe. mobile app? What can you say about the And, today at Quppy, we are already technology that makes it secure? Financial IT: What is your geographical contributing to the important goal Dr. Alina Kornienko: The Quppy all- footprint? Recently Quppy announced by bringing together disruptive in-one neobanking app is built on a the company’s entry to the LATAM technologies, classical tools and all the decentralized storage technology that market. Why does this region look possible financial services and activities provides the highest level of customer attractive to you? in one app to make all of them accessible funds and information security. Dr. Alina Kornienko: Our home market is, and understandable as far as comfortable The decentralized Blockchain of course, the European one. It’s where we and easy-in-use for everyone. technology enables keeping all the private grew up as a project and as a technology,

Back to the Table of Contents Summer 2021 Interview 25

got our first paying customers and earned Thanks to this, we are now doubling talent and showing it to the world. our first revenue. our net revenue every month. WomenTech Network is the world's The European market will always While expanding our range of services, largest community for women in tech remain the one where we deliver our entering new markets and obtaining with more than 4,800 ambassadors newest solutions first. regional financial licenses, we will be representing 137 countries. Since 2018, Yet, we see Quppy as a global solution soon opening another investment round. its founders have engaged over 100,000 for customers from all over the world tech specialists to join in building a whom we can bring together in a financial Financial IT: What are the challenges that diverse global community inspiring and way despite closed borders, miles, time you faced during pandemic? What's your reaching more than 1 million people in zones, cultural and economic differences. business strategy for the next 2-3 years. 2020 alone. Of course, Quppy is a digital place for Dr. Alina Kornienko: The pandemic One of the best things all of us can equal financial, payment and investment helped us to grow, while helping our do to make this world a better place is opportunities. customers to get on with new everyday sharing. Sharing what we have, what Thus, we are constantly working on life conditions. we get, what we know, what we feel and localising and expanding our solutions Among our key goals for the current believe. Mentoring within the network, to new regions while gaining regional 2021 year is to deliver plastic cards to and thus exchanging your professional, partnerships, obtaining regional licences, both our EU and non-EU users – as well social and philosophical experience is opening local offices and hiring local as obtaining our own EMI license. extremely important. specialists. In the next quarter, we will start Being a Founder Institute Mentor, I For example, entering the Latin supporting US dollars and SWIFT see how many brilliant and promising American market marks an important payments for EU based customers. founders, ideas and personalities remain step in the Quppy ecosystem Within a year we will also be entering unrevealed around the world. In these development as it secures cross-border the African market to serve both banked hard times of world crisis, mentoring payments and strengthens financial flows and unbanked customers helping and sharing become core and key points between Europe and Latin America – them with our integrated saving and that world help us survive this pandemic reuniting families, connecting friends, investment customized mentors and situation. opening opportunities to local specialists. tools. WomenTech Network is hosting the The Latin American region is a fast- Over the next two years Quppy services second edition of the largest virtual tech growing market for digital currencies will be offered in Asia and in North conference for women, minorities, and and payments. This constantly rising America, while we significantly expand their allies in technology. popularity is related to the national our AI based solutions. WomenTech Global Conference currencies’ volatility. Over 2022, the Quppy social financial 2021 will take place on June 7-11. The As a result, the Latin American region services feature, including integrated conference is aiming at uniting once is among the first ones around the globe donations and joint purchases will again 100 000 women in tech from all in terms of digital currency investment become available to all our customers. over the world. volume. The theme for this year’s conference is Quppy opens a lot of benefit to its Financial IT: Quppy actively supports evolving around the Future of Work, Open regional customers especially by offering WomenTech Network, please tell us more Collaboration, Tech Innovation, and how digital IBAN opening in euros and about the event and its mission. we as a community can make an impact sterling – yet with linkage to a local bank Dr. Alina Kornienko: I am so happy to see and change in the world. account with the local currency. that many female founders and female This year, I will be covering the topic industry leaders today. I believe in the of financial disruption in the post-COVID Financial IT: Please share the latest recent years we have performed a great world. news about Quppy?(Quppy closing its effort to make the tech sphere way more All kinds of specialists and professionals investment B round) diverse and accessible to specialists of all (including scholars) are invited to join this Dr. Alina Kornienko: I am proud to share races, genders and ages. event to learn and exchange ideas – as well that, together with my co-founders, we Nevertheless, female leaders still face as to find or present job opportunities. have successfully completed the B-round discrimination in terms of positions, financing. This is despite the pandemic. salaries and even attitude. We have so We raised $35 million. much work to do in the recent future to While the pandemic was taking over overcome it. whole countries and regions, at Quppy we In particular, far more is expected of managed to provide instant mobile top- women than of men in the raising and ups in digital and traditional currencies running of families. directly from the app. We helped This is one of the problems we are customers to stay in touch with their trying to solve at the Women Tech beloved ones. Network – encouraging, empowering, A Quppy account can now be linked to stimulating female brilliant specialists, the owner’s PayPal account. bringing together their expertise and 26 Featured Story

Nick Botha , Senior Sales and relationship manager- Banking and Payments

As the Senior sales representative for Banking and Payments firms at AutoRek, Nick is responsible for managing client relationships within these sectors and engaging with stakeholders to ensure AutoRek’s product offering is in line with the market demands. He previously worked in one of the largest private banks in South Africa and has worked with some of the biggest financial institutions in the UK and Europe since joining AutoRek in 2019.

Back to the Table of Contents Summer 2021 Featured Story 27

SURVIVING THE PAYMENTS BOOM ARE CHALLENGING BANKS TO TRANSFORM

Although the dust has settled in the media on the €3.5 Billion cheap. Although the crisis has affected the purchasing power of Wirecard scandal that shocked not only the payments industry but consumers and businesses over the past 6 months this has allowed for the financial services sectors around the world, the operational a time of reflection, understanding and progression. Consumers and nightmares are just beginning for those organisations directly businesses have shifted away from traditional means of doing things. affected. More organisations have adopted a work from home strategy, a The latest tendency has been to use partnerships as a key success migration from on-premise to cloud facilities, online retail purchases driver to overcome challenges in the payments industry. Payments have grown… firms are making use of Payment Service Providers (PSPs) and other … and it is no different for payments. firms to ensure their customers’ expectations are met and exceeded. • People and organisations have had no choice but to learn and In turn, this has increased competition and the industry as a whole understand how to adopt digital payments. is beginning to experience the positive impacts. Although not all • Digital wallets are becoming a more popular choice than bank payments firms and banks were affected by the Wirecard incident, accounts. acknowledging that there may be other incidents in the future that • New technology such as Open Banking APIs and real time could affect your organisation is key. payments are making transactions faster than ever before The UK’s Financial Conduct Authority (FCA) defines operational • New regulations are streamlining the safety and efficiency of these resilience as the ability of firms, infrastructures and payments. the financial sector to prevent, adapt, respond, recover and learn • No payments article would be complete without the mention of from operational disruptions. The UK regulator expects firms to be blockchain and the potential to shift the sector to the next level. operationally resilient by having a comprehensive understanding and mapping of their people, processes, technology, facilities and With all these advancements, a better understanding of the capability information necessary to deliver each of its key business services. of these new technologies and increased trust in payments firms If we compare what the European Banking Authority’s (EBA’s) combined with the return of purchasing power of consumers and guidelines outlined through the Payments Services Directive 2 business alike, the next few years could see a massive BOOM within (PSD2) or the Information And Communications Technology (ICT) the sector. and the Payments Services Regulations (PSRs 2017) framework aims to achieve, we can see that there is a clear drive from regulators to How will installing a solution for operational install the idea of operational resilience through regulation. resilience benefit these organisations moving Let us look back at the FCA’s definition of operational resilience forward? and ask which firms recovered and which firms are still feeling the pressure. When one of the world’s largest fintech organisations While profits are generally the main focus for firms working with files for insolvency off the back of one of the biggest fraud cases of tight margins, the focus needs to be placed on systems and processes our time- one could say that it would be impossible to prevent, but that will allow these firms to handle the challenges the sector will organisations such as Revolut that were able to “adapt, respond to, face in the volume of transactions and ever changing regulations in recover and learn from the operational disruptions”. the next few years. Firms working with manual spreadsheets, outdated technologies, Where are we in the payments industry? large requirements for full-time equivalent (FTE) employees and zero flexibility are bound to fall short when the economy is back up to full It's safe to say that most industries consider 2020 a year to forget. flow. With the adoption of new technologies and the right partners, With a massive downturn in the economy, the amount of payments firms will be able to ‘prevent, adapt, respond to, recover and learn transactions have significantly reduced. from operational disruptions’ that are evidently upon us and will Technology combined with low margins have come about due to allow firms the flexibility and transparency to handle the pressures customer expectations for transactions to be simple, easy, fast and that the payments BOOM will have on the sector. 28 Interview

THE UK GOES CASHLESS THE IMPACT OF THE COVID-19 Discover the AutoRek PANDEMIC ON PAYMENTS IN THE UK Banking Solution Interview with Kaushalya Somasundaram, Head of Payments Partnerships & Industry Relations at Square, UK

Financial IT: What are the latest changes Financial IT: Will online payments continue to pivot our business in some ways during towards payments and the retail industry to increase once restrictions lift? If so, why? the pandemic. But we’ve remained true to AutoRek works with leading high-street during the pandemic? How do small What will drive the momentum? our purpose of economic empowerment. businesses manage those changes? Kaushalya Somasundaram: With the UK’s Our priority has been on supporting our banks, challenger organisations and Kaushalya Somasundaram: Over the last roadmap for easing lockdown restrictions sellers however we can, to enable them to year, the pandemic has had a significant underway, businesses nationwide are continue to adapt and grow during start-ups to deliver timely, accurate impact on the way that goods and services looking to adapt once again. This requires the pandemic. were sold and bought. Our own research a bit of a balancing act between how they The past two years have seen big found that cashless transactions rose by keep open new revenue streams discovered shifts for retail and its relationships with and robust financial data control. more than 4 times between February 2020 during the pandemic, such as online consumers, with the number of businesses and February 2021 and that the number of payments, whilst also meeting customer accepting online payments almost businesses accepting online payments saw expectations around a renewed interest in doubling from February 2020 through to a 79% increase in the same timeframe. pre-pandemic shopping experiences. February 2021. This shift was driven by businesses Whilst the “re-opening” of the UK signals We’re encouraging our sellers to moving online in response to the a positive step towards things returning to take an omnichannel approach to their restrictions placed on the indoor use some sort of normality, some consumers businesses. We want to ensure that Square of brick and mortar locations for and may still not feel comfortable doing their is continuing to provide the right tools changing consumer payment preferences shopping in physical stores yet. For other and platforms for our sellers to thrive in AutoRek.com during most of 2020. consumers, they have become used to the whatever way they choose to operate. Consumer research commissioned by convenience and ease of online shopping. Square to supplement the report found that Both these factors mean selling online will Financial IT: What is the latest news about the majority of people in the UK bought be important across sectors in the months Square? What have you got in the pipeline more goods and services online during the ahead. That’s not to say that in-store that you can tell us? pandemic than they did prior to it. purchases won’t be a priority for many: the Kaushalya Somasundaram: Just last week, What’s more, for over a third, this shift latest ONS retail sales figures for March Square launched in Ireland! This is our to online will be permanent, with 38% found that the proportion spent online first new market entry in four years, since more likely to buy online in the future decreased to 34.7% in March 2021, down launching in the UK. It’s also the first time than in physical stores. Despite this pivot from 36.2% in February 2021 with spending we’ve launched a full stack of integrated to online, the research found that over in-store starting to increase at a faster rate business tools in a new market. It has half of UK consumers would still like as shops began to open again. been a truly global effort to bring our cash to exist as a payment option. That’s By being flexible with payment options, omnichannel solutions to Irish sellers and because when it comes to buying goods or sellers will be able to better optimise their we’re excited for what’s next. services on a day-to-day basis, they feel business in order to reach current and new they would be impacted by an entirely customers. Financial IT: Where do you see Square after cashless society. the pandemic? In 5 years? 10 years? Managing these changes in consumer Financial IT: What are the challenges that Kaushalya Somasundaram: As a business we spending and payment habits won’t happen Square faced during the pandemic? What's have a number of growth strategies across overnight. Businesses have been and your business strategy for the next 2-3 different products and markets but our core will continue to streamline the payment years? goal is to continue to support businesses process for their customers to make buying Kaushalya Somasundaram: As with all of all sizes and sectors around the world convenient both online and in-store. businesses around the world, we have had through economic empowerment.

Back to the Table of Contents Discover the AutoRek Banking Solution

AutoRek works with leading high-street banks, challenger organisations and start-ups to deliver timely, accurate and robust financial data control.

AutoRek.com 30 Featured Story CONNECTING YOUR ORGANIZATION TO DRIVE COST TRANSFORMATION

The release of the FinCEN files in 2020 is going to leave its mark on Fraud units tend to have multiple systems that are used to manage the financial services industry and our financial crimes programs different financial products and channels. Financial products tend to for some time to come. The exposé showcased to the world that our be change across the many business lines, such as retail, commercial, current financial system continues to be vulnerable to bad actors that investment, wealth, treasury, and can include payment types that are move illicit funds all over the globe. clear and settle in real time or in days, such as wires, checks, ACH, The FinCEN files have already started having an effect across the SEPA, P2P and RTP. globe, including more public scrutiny, changes to regulations, new KYC and customer due diligence systems tend to be aligned to the investigations, and calls for more transparency and accountability. business lines and product types, while AML transaction monitoring This is going to put more pressure on regulated institutions as and sanctions tend to be more a corporate back-office function. in-house financial crime programs will need to demonstrate risk Trade and communication surveillance requires communications, frameworks that show a certain level of maturity, show consistency in recording and archival systems to meet compliance requirements. processes and ability, and ensure that executive leaders will be more Similarly, tools deployed to support this are typically aligned to the directly accountable to the financial activities that make use of their different trading desks for each asset class and by jurisdiction. institutions. Siloed risk operations teams are challenged to make decisions quickly and accurately but may not all have a comprehensive set Connecting the Organization with Case of information available to them. They may not see the related Management risks for a transaction, customer, counterparty, a relationship, the account or a related account if they are not manually reaching out There is no debate that having a single view of financial crime to a colleague in another part of the organization. This leads to risk is extremely helpful when investigating potential crimes. It’s a inconsistency in processes and time consuming manual efforts when huge benefit when we’re able to give our analysts and investigators investigating and identifying financial crime risk. The situation is immediate access to information about customers, their account not necessarily dire. The opportunity to consolidate this information history, and tools to investigate links to related entities. Intelligence does exist and having a standardized enterprise case management helps our analysts and investigators make better decisions. These system to centralize the risks and related information will not only better decisions that can prevent terrorist financing, prevent make a single view of risk a reality, but it will also bring process trafficking, short-circuit fraud attempts, and stop money laundering. standardization to all of the operations teams, while maintaining the How can anyone argue against that? best detection systems in each risk domain area. However, many institutions run the risk of having a “failure of intelligence” by lacking the ability to connect the dots. Many financial Driving Cost Transformation with Case services organizations are structured in a way where information is Management very disconnected, which creates intelligence gaps that impact the analysts and investigators working on financial crime – whether The other challenge with risk and compliance operations is that it it is KYC, AML, sanctions, fraud prevention, or trade surveillance. is always under pressure to do more while simultaneously cutting Historically, systems have been set up to serve different purposes costs. In a recent ACAMS Compliance Effectiveness and Risks across multiple dimensions—business lines, financial products, Survey, almost a third of the respondents believed that the FinCEN risk domains, front-office versus back-office, and geography. This leaks would lead to more regulatory scrutiny, and many financial has resulted in a siloed mess since many of these systems do not institutions voluntarily improving their compliance programs. necessarily talk to each other. Disconnected systems and technologies are directly impacting the

Back to the Table of Contents Summer 2021 Featured Story 31

operational excellence demanded of financial crime teams. Now is staggering. While financial institutions will have to continue to spend the opportunity to consolidate systems and to drive efficiencies with to run day-to-day operations, they will be looking to cut costs and significant savings. make investments to help recoup this expenditure. This situation calls for application rationalization, a strategic Here’s how to get started: exercise to identify business applications across an organization to 1. Work with your IT team on starting the application rationalization determine which should be kept, replaced, retired, or consolidated. exercise. This exercise identifies systems that would be categorized as part 2. Start an inventory of all the systems used across Financial Crime. of the “long tail”—systems that are redundant or not strategically 3. Document what internal systems are used, who uses them, what important—that can be eliminated providing savings related to IT they’re used for, and what they’re connected to. hardware, software and costs related to personnel maintaining these 4. Document what external systems are used, who uses them, what systems. “Long tail” systems would typically identify less important they’re used for, and what they’re connected to. legacy systems and point solutions. At the same time, the application 5. Look for commonality and categorize the system into a) strategic rationalization exercise identifies the core strategic, high-value investments, and b) elimination candidates. enterprise assets that the business should invest in. 6. Select the enterprise case manager that will meet current needs One core strategic enterprise asset that all AML, fraud and and adapt for future financial crime requirements. surveillance teams use is an investigations and case management platform. This is the “common denominator” that provides a holistic Selecting the right enterprise case management system to combat single view of risk, manages workflows, supports investigations and fraud and AML should consider the type of staff, skill set, and ensures oversight. Investing in one centralized case management resources available to the organization. Case management systems system will certainly save the interested financial institution on its developed for financial crimes have the advantage of pre-fabricated run-the-bank costs. displays, workflows, and controls that support these programs Besides the overall cost savings, the other potential benefits are: and will get operational teams working faster than generic case • Process standardization provides consistency and auditability management systems. • Completeness of financial crime risk information helps analysts Does your organization have a “build-culture”? If it does, then a and investigators collaborate and make better, faster decisions specialized financial crimes enterprise case management system can • Leveraging analyst and investigator feedback for AI detection provide both the benefits of the traditional “buy vs. build” decision. models Look for a platform that provides an open architecture that supports integration to your detection systems, internal systems, external In fraud management, consolidating systems and information systems and services, and reporting and governance systems. Good into one enterprise alerting and investigations platform can case management platforms will have a myriad of tools to enable help release payments faster and quickly approve applicants for integration and automation that includes: financial products, creating a better overall customer experience. • User Experience Framework – to modify and customize the look Consolidation provides more completeness of customer data and and feel of investigative interactions and to extend functionality to cyber-intelligence across the different financial products and bespoke processes channels. A centralized case manager can also support a streamlined • REST API – to allow applications to initiate and call the services of SAR filing approach and auto-populated forms, all in coordination the case management platform programmatically with the AML team. One enterprise case management platform • Software Development Kit (SDK) – to create your bespoke also helps the operational workflow for KYC, AML and sanctions services or actions at different points in a workflow, which could be teams align to risk policy and frameworks, create better governance, leveraging the case manager’s functions or interacting with other improve management oversight and reporting, and ultimately provide systems senior management confidence in their compliance program. • Robotics Process Automation (RPA) – use low-code option This means uniting the information between the front-offices and to automate manual processes where more robust integration back-offices to provide a true holistic view of customer risk. through APIs is not available. Examples: some websites, legacy Trade compliance will similarly benefit for the same reasons. systems without APIs, applications that lack developer support Additionally, a centralized case management platform will connect • Adapter Framework – supports connectivity to an ecosystem the different trading desks to access consolidated communications of financial crimes data intelligence providers and innovative and see linkages between employees and related accounts. Trade technology that enhance detection or enhance the investigation compliance can also benefit from better visibility of securities that process are traded in multiple jurisdictions across the globe by ingesting trade information to a central case manager, even when the trade Choosing to consolidate on a single enterprise case management information is monitored in different systems and residing in platform will pay dividends over time that allow your organization to different locations. invest in new capabilities and new intelligence that will help combat future changes in fraud and AML. Getting Started

In all likelihood, your information technology (IT) leaders are already looking at ways to eliminate business application redundancies. Consolidating on one enterprise case management platform is obviously easier said than done, but the financial benefits can be 32 Featured Story AUTOMATION AND ARTIFICIAL INTELLIGENCE CAN HELP COMBAT FINANCIAL CRIME

By any measure, 2020 was a year of indication of subsiding for the foreseeable and actionable decision-making process. change. Combining the shift in working future. Increasing the number of investigators from home with an all-digital commerce The sheer volume of transactions flowing could certainly provide a short-term fix, but model, businesses needed to quickly through the global infrastructure presents a is not a scalable or practical solution. adjust to a new reality as a means of tempting target to criminals attempting to Simply stated: investigators need better survival. Increasingly clear is that many of exploit and evade in-place controls. Existing tools that leverage technological elements the changes might become a permanent surveillance approaches were strained as cyber criminals increase the number of part of our lives. This combinational prior to the pandemic, and continue to attempts and sophistication in concealing shift has also been a time where cyber face challenges as criminals relentlessly their crimes. crime has accelerated, with the growing maneuver to find new ways in avoiding sophistication of opportunists leading detection. Adding the AI "co-pilot" for many in the payments industry to invest With threat of both reputational and payments automation in new technology to better detect and sanction risk, how do organizations fortify ultimately prevent financial crime in this defenses against these nefarious activities The application of artificial intelligence (AI) new environment. in an economically sustainable way? in the transaction screening process is a useful addition in combating transactional Too much of a good thing can The limits of traditional anomalies. As criminals become more be a bad thing banking automation adept at concealing their activity, the bank requires the ability to detect seemingly In retrospect, the payments industry Existing payments automation techniques unrelated transactions beyond which might was on track to process up to one trillion focused on intelligent routing and be possible through human examination payment transactions globally by the end better presentation for review by fraud and interpretation alone. These emergent of 2020. Displaying remarkable resilience, investigators, with a goal to make the scenarios are perfectly suited for tools it has continued to prosper even in the process more efficient and transparent that can learn and adapt to hard-to-detect face of a global public health and economic when suspicious payment instructions patterns of concealment. crisis—with the movement to non-cash were encountered. By making the relevant However, it would be unwise for based payments accelerating, and no information readily available, it enabled investigators to rely solely on a transaction decisions to be made more quickly—and score, because to maximize the immediate growing volumes didn’t necessitate and long-term effectiveness of the AI an increase in the number of people implementation, visibility into how the AI performing review. elements reached their end conclusion is These optimizations, while efficient needed. under prior scenarios, have increasingly With the ability to see how the approached their sustainable limits, intelligence was applied to the transaction, with volumes exceeding the manageable the investigator can be more accurate in work queue capacity of investigators their determination of fraudulent activity. and their ability to support a thorough Additionally, feedback from the investigator

Back to the Table of Contents Summer 2021 Featured Story 33

Eric Marts, Principal Marketing Manager, Financial Services

Eric Marts is a financial services leader at Red Hat. Prior to joining Red Hat, Eric shaped solutions globally in the and business at HSBC. He has more than 20 years of professional experience across both startups and incumbents. He is particularly interested in unlocking new market opportunities and making financial services simpler and more inclusive for customers with cloud technology. 34 Featured Story

can potentially be used to train and tune AI seeking to implement preventative and of banks utilizing algorithmic techniques detection efforts moving forward, increasing responsive measures to criminal activity. from data supplied across industries and their effectiveness and efficiency, and Delays in adjusting infrastructure, communities—all of which aids in the mitigating shortages in staffing resources. tweaking machine learning models, or end goal to better identify patterns in updating/implementing integrations not seemingly unconnected data. In the spirit of Using better payment data to only contribute to frustrations in the cooperation and desire for shared learnings, improve detection with AI financial institution’s potential to adapt, there are now multiple open source they also present the very real risk of communities to select from that make this One of the challenges in uncovering leaving vulnerabilities in-place against type of information available. In the never- transactional crime is the availability increasingly nimble foes. ending struggle to stay ahead of criminal of up-to-date, robust, and accurate Data needs to be more fluid, systems activity, it is a necessity for banks to use information. With a portion of processes more malleable, and human resources externally sourced data—especially from not occurring in real time—whether more flexible with differentiated skill sets. a cross-industry community—to refine AI through sheer volume of transactions, or Cloud technology coupled with effectiveness and detect deviant patterns. because of reliance on batch processing— enterprise open source infrastructure the opportunity to use these inherent that is engineered to access modern Looking ahead – 2021 and delays (and the presence of outdated data) methodologies and innovations can make beyond can be exploited as a criminal advantage. it easier to adapt and respond, leaving Additionally, to provide maximal hard-to-change legacy configurations in It seems without question that the effectiveness, there is a need to capture the past. Banks will need to examine how increase in volume of digital transactions multiple attributes of the transactional they organize infrastructure elements, will continue unabated in 2021. The rise of data to be able to present a more complete including cloud-native microservices real-time domestic payments in markets set of data points for the AI to analyze and and/or container architectures to fully including the United States, Mexico, highlight discrepancies in out-of-norm unlock the value of cloud technology and Brazil, and India will undoubtedly put instances. Without them, the AI will be reduce potential threats inherent in legacy pressure on existing systems and processes limited in its determination and ability platforms. for detecting financial crime—spurring to present insights. These conditional infrastructure activity and investment. existences—data delay and reduced AI and the need for a Enabling the transition from batch capture of data attributes—can circumvent community to real-time processing is one strategy even the most sophisticated artificial organizations can make use of, but in intelligence tools. The utility and effectiveness of any AI effort light of the sheer volumes of transactions is entirely dependent upon the breadth involved and scalability obstacles, they will Open infrastructure and depth of the data that is available also have to bring artificial intelligence components allow increased to train it. As noted earlier, within an closer to those processes. Preventing flexibility and adaptability individual system, multiple instances of financial crime will be increasingly defined data points strengthen the AI’s ability to by how well automation incorporates Traditional infrastructure and connectivity form cross analysis and interpretation. artificial intelligence and the cloud have been historic obstacles to banks Looking ahead, we see an increased number technology that supports it.

Back to the Table of Contents

36 Featured Story

MEETINGETHIX NEXT THE GENERATION CYBERSECURITYUnlock the Potential of Fintech!

CHALLENGEETHIX NG by ITS is a web-based retail and corporate banking solution designed to support banks and financial institutions in the Digital Economy. The Next Generation Web Based solution addresses the challenges of regulatory and dataThe security, financial sector is an whilstattractive target supporting financial institutions seamlessto protect themselves collaboration with Fintechs, achieved through an API for cybercriminals because “that’s where the from cybercriminals. layer that provides moneyeasy is”. integration withITS’ internal partners are world classor technology external systems and allows a ‘plug and play’ approach. Hackers target financial institutions to vendors and leading organisations in the obtain illegal access to clients’ sensitive Gartner Magic Quadrant. ETHIX NG also optimizesPersonally Identifiable and Information automates (PII), a • Working business with these partners, processes,we offer reduces human error, and delivers a positive and lucrative prize. solutions for: seamless customer Thejourney surge of mobile bankingacross and online all potential• Application Monitoring touch & Protection points. banking has increased the challenge for • Threat Intelligence financial institutions. • Software Usage Analytics Discover ETHIX NG Thisfor: is because the “attack surface” that • Enterprise Key Management can be targeted by cybercriminals is a lot • Identity-Based Segmentation larger than it would otherwise be. • DDoS Defense Dynamic ControlsPut anotherfor way, Customizations digitalization has • Network & Web Application Firewalls Digital customer onboarding resulted in better products and more user- • Breach & Attack Simulation friendly services for customers but… • SOAR Comprehensive Core… a growing opportunityManagement for • ComponentsManaged Detection & Response Digital Lending Platform cybercriminals. • SIEM Comprehensive Loan/FinanceIn the meantime, financial institutions Origination • Network Sandboxing 360 view and dashboards for customers and accounts have to keep up with the ever changing • Browser Isolation requirements of an “alphabet soup” of • Mobile Threat Defense Dynamic Businessagencies Model that monitor data Definition security. • Data Sanitization These agencies include: the national • Endpoint Detection and Response organisations which enforce the European • Secure Web Gateways Union’s General Data Protection Regulation • Autonomous Cyber Artificial Intelligence (GDPR); the US Federal Financial • Email Threats Protection Institutions Examination Council; the US • Managed Security Services Securities & Exchange Commission’s Office • Vulnerability Assessment of Compliance Inspections and Examinations • Penetration Testing (OCIE); and the Industry Reach out to ITS today to find Followout more us More Information Security Standards Council (PCI SSC). about how we can secure your bank.

Cyber Security solutions

Here in the Middle East and North Africa, ITS has a proven track record of helping leading www.its.ws [email protected]

Back to the Table of Contents Summer 2021 Featured Story 37

Ahmed Ghoneim, Area Sales Manager, ITS 38 Interview ACCELERATING DIGITALIZATION HUAWEI’S I5 FRAMEWORK TRANSFORMS CUSTOMERS’ DIGITAL JOURNEY

Interview with Ben Yang, Vice President – Financial Services Business Unit, Enterprise Group at Huawei and Chen Kunte, Chief Digital Transformation Officer – Financial Services Business at Huawei Enterprise BG

Themed “Accelerate Financial business models. services are Digitalization New Value Together”, this required to be digitized to reduce year’s annual Huawei Intelligent Finance time-consuming staff interactions and Summit in Shanghai on June 3–4 was offer customized products. There is a again packed with insightful information, need to get payment systems digitized case studies and discussions of trends. to accommodate broader use of digital A highlight of the summit was Huawei's payments. Banks must accelerate introduction of its I5 framework and digital transformation to speed up the elaboration on how it will work with trend towards cashless transactions. its partners and customers to build an Agility: The pandemic has been a innovative financial ecosystem through real test for companies and banks. five upgrades. Huawei executives Ben Yang Banks are needed to build agile and Chen Kun Te discuss with Financial capabilities to serve customers and IT how banks and financial companies can maintain their operations while benefit from the five upgrades using the I5 protecting employees. All operations framework. and departments, including IT infrastructure, software development, Financial IT: What are the main product services and business lines, challenges financial services face have to be agile. Without question, the post-pandemic? How should financial organization and culture must be agile services respond to these challenges? to support the business. Ben Yang: In the post-pandemic period, Risk control: During the pandemic, there are five major challenges faced by lockdown and company shutdowns financial services – digitization, agility, have inevitably led to a decline in risk control, cybersecurity and the lack asset quality. After a lag time, there of customized solutions. will be an increase in the rate of Digitization: The customer’s journey non-performing . The financial needs to be digitized even more with industry needs more efficient risk new experiences, scenarios, and management to meet this challenge,

Back to the Table of Contents Summer 2021 Interview 39

including credit risk and business • Robotic Infrastructure – a green, continuity risk. It also requires better secure, simple, and agile use of big data and AI technology. infrastructure that consists of data Cybersecurity: Online transactions storage, networking, computing, and and interactions have increased power system for Huawei’s customers significantly with the wider use in financial services, of mobile applications since the • Agile Innovation – a cloud-native 2.0 pandemic. With the growing threats stack that is “application-centric,” to cybersecurity, implementing including Operator Service Center fraud detection and scam prevention (OSC), Application Service Metric programs is vital. (ASM), Multi-Cloud Platform (MCP) Lack of customized solutions: Big tech and Cloud Container Engine (CCE) firms around the world are still trying turbo. This enables banks and to adapt their extensive capabilities financial institutions to upgrade and resources to accelerate entry into their services to deal with multiple the payment field and other areas scenarios, full-process security of finance. With highly customized and trustworthiness, application needs, the financial industry will modernization, and full-stack data Ben Yang, need to find its own way to navigate intelligence. Vice President – Financial Services Business Unit, Enterprise Group, through such challenges. • Data intelligence – a system that ensures Huawei all stacks are being intelligent and Financial IT: What exactly is Huawei’s secured with high performance, low Ben has 10 years+ experience in ICT I5 framework, and how has it evolved latency and a high usable ratio in the industries with proven leadership from your previous offering? And how lifecycle of data, unleashing financial and sales track record in the United is Huawei’s I5 framework positioned to institutions’ potential to use data. States, China, Middle East and Africa. progress with customers’ current and • Financial Inclusion – a solution that Ben oversees the Financial Services future needs? includes digital payment, wallet, and Business Unit’s sales, branding, partner Ben Yang: Huawei I5 is a reference microfinance that helps banks to ecosystem and global service. framework for accelerating the financial reach more “unbanked” people and service industry’s digitalization, businesses, especially SMEs. especially for banks. It includes Robotic • Industrial Finance – a mechanism Infrastructure, Agile Innovation, that leverages IoT, 5G, blockchain Data Intelligence, Financial Inclusion and other innovative technologies and Industrial Finance. It provides a to allow banks to have “always-on” completed solution for our customers to and secured data management ability meet their needs in every stage of their to access the full process of their transformation journey. financial activities across multiple For customers that focus on improving locations and thousands of terminals their operational efficiency, the Robotic or devices. Infrastructure will play a significant role. For customers migrating their Financial IT: How is the I5 framework workload to the cloud, our Agile different? Have you got examples of I5 Innovation and Data Intelligence are the working in practice? How are clients right choices. Our Financial Inclusion benefiting compared with previous solution is a good fit for those looking systems? at expanding their business to drive Chen Kunte: The I5 framework empowers financial inclusion. Some customers our customers in several new ways. may also deploy all five I’s in their For instance, our Financial Inclusion transformation. This doesn’t have to offering features a touchless and be in sequence, so we call it a reference contactless payment feature that framework. enabled KBZ Bank in Myanmar to grow Chen Kunte, We are currently working with a lot of its mobile user base from almost zero Chief Digital Transformation Officer – partners in each of the I’s to tailor our to more than six million within 18 Financial Services Business, solutions according to their needs. months. This ecosystem also features Huawei Enterprise BG the participation of more than 200,000 Financial IT: Explain each of your five retailers, making a huge difference, Chen is ex-CIO of the China Merchant upgrades and their benefits. from user experience, to business Bank and ex-President of the Ping An Ben Yang: Under Huawei’s I5 reference competitiveness for various parties Bank. Chen has more than 35 years’ framework, the five upgrades include: during this pandemic. experience in finance and technology. 40 Interview

The largest bank in Latin America, enablement platform. We have three Financial institutions need to find a Itaú Unibanco, has been working with types of partners in our ecosystem: path according to their own capabilities Huawei to upgrade its infrastructure • technical partners who work with and needs. They should consider whether using an all-flash storage and our infrastructure platform with a to join existing platforms or develop their networking system for better operational focus on areas such as performance ecosystem. The “platform” I mentioned efficiency and improved reliability. optimization; refers to an organization that provides This upgrade enabled the bank to lower • partners who leverage the platform eCommerce connections at a wide scale operation costs with enhanced service that we build for banks to provide for relevant parties in an ecosystem: from quality in the long run. financial services applications to our individuals to merchants, subscribers Other examples include the creation customers; and to publishers, service users to service of systems to capture business • industry partners who have deep providers; fund platforms connecting opportunities and discover risks by know-how and have close working wealth management businesses to mining and analyzing massive data sets. relationships with Huawei, who can fund providers connecting with fund Huawei has supported ICBC Argentina, help to add more financial services demanders, etc. These are all ecosystems one of the largest banking flagships of support for customers. in the digital economy. ICBC outside China, to deploy a faster The key to a successful business and more stable wireless network. The Overall, we want to build a truly model is achieving a large and profitable aim is to improve processing efficiency, open and win-win ecosystem with our scale. The profit comes from either the implement real-time handling of diverse partners, providing a platform for each platform itself or the value created by business demands, and minimize partner to showcase their strengths and the customer traffic and data that the system operating costs. Now, the bank's capabilities. platform attracts. It needs to introduce new wireless network has laid a solid high-frequency services to acquire foundation for the fast provisioning of Financial IT: Describe how you perceive customers, such as digital payments, and ever-more innovative banking services your financial ecosystem evolving? What low-frequency services like investments, as well as the rapid implementation of timeframe do you see this evolution mutual funds, and wealth management more extensive digital transformation taking place? How is Huawei positioned to cash out. needs. to meet these developments? The development of 5G will create new The I5 framework is highly Ben Yang: In the digital world, connecting standards, open more doors, offer wider customizable, and can be configured people to people, people to companies, connections to the digital world, and into various applications to address and companies to companies is critical. expand the market. To capitalize on such the needs of banks and financial The internet giants have already evolution, banks need to actively explore institutions. devised scenarios for a seamless flow and embrace the changes. of people with the requisite logistics Expert help is at hand. Banks and Financial IT: How will Huawei work with and capital for extending the scope of financial companies can easily plug partners with I5? How do you foresee business, anticipating an ever-expanding into Huawei’s extensive infrastructure them interacting to provide more ecosystem. and access our network of connections, versatility to your framework? With the development of 5G and covering 5G, cloud, ecosystem, partners Chen Kunte: As noted earlier, we work the advancement of technology, more and supply chain. Huawei, with all- with partners across the globe in each scenarios will be connected to the digital rounded service offerings and expertise, of the I’s. At Huawei, our focus is on the world in the future. Financial services will is well-positioned to assist in the length platform, particularly the infrastructure be further digitized and become part of and breadth of digitized financial layer, cloud platform and the application all aspects of digital economic activities. communications.

Back to the Table of Contents Summer 2021 UNITED KINGDOM UNITED STATES FRANCEFeatured StoryFRANCE 41

Nik Storonsky Kathryn petralia Cédric O F. Villeroy de Galhau State secretary CEO President Governor for digital affairs Revolut Kabbage Banque de France French Government

FRANCE FRANCE UNITED KINGDOM UNITED STATES

Diony Lebot Antoine Sire Nikhil Rathi Craig Vosburg Head of Company CEO Deputy CEO CPO Engagement Financial Conduct Société Générale Mastercard BNP Paribas Authority

30/06 & 01/07 FRANCE UNITED STATES SWITZERLAND UNITED STATES

Panels & interviews

Jacques Richier Scott Walchek Marianne Haahr Colin Walsh Executive Director CEO CEO CEO Green Digital Allianz France Trov Varo Bank Interactive roundtables Finance Alliance

UNITED KINGDOM FRANCE UNITED KINGDOM Speakers after hours

Virtual exhibition hall Simon Paris Geoffroy Guigou Julian Teicke Elizabeth Rossiello CEO Co-founder & COO CEO CEO Finastra Younited Credit Wefox AZA Finance 1 to 1 Networking

GERMANY FRANCE HONG KONG

Matchmaking

Miriam Wohlfarth Bertrand Dumazy Jonathan Larsen Ali Niknam Chairman Founder CEO CEO Ping An Global Banxware Edenred Bunq Voyager Fund

A Collection of Hybrid events all across 2021 25 march - 15 aPril - 30 june - 01 july - 12 october - 13 october - 18 november - 02 dEcember

Program & Registration Early Bird -30% parisfintechforum.com 42 Featured Story

HOW FINANCING HAS BECOME EVEN MORE ESSENTIAL AT THE TAIL-END OF THE PANDEMIC

Vaccine roll-out efforts and additional Consumers saved during saved earnings and stimulus money by financial stimulus measures have provided COVID-19, and are now eager engaging in ‘revenge shopping’ according the economies of developed countries a to spend to McKinsey. way to quickly bounce-back from last year’s COVID lockdown crash. Economic In the first few 4 weeks of lockdown in Ecommerce sales continue to projections in the U.S. show an eminent the U.S. more than 22 million workers lost surge as retail returns boom not seen since Ronald Reagan. their jobs. Many others saw their salary During the COVID-19 pandemic Buy reduced, with self-employed citizens Following the closure of brick and mortar Now, Pay Later (BNPL) services that allow and small business owners on decreased stores at the start of the pandemic, there consumers to divide single purchases up incomes. However, as stimulus programs was an immediate shift towards online into four interest-free payments hit their and “enhanced unemployment benefits,” commerce. Ecommerce sales shot up by stride. Consumers relegated to shopping rolled out across a number of states like 40% in the US after a state of emergency at home and living off of stimulus checks California and New York, many people were was declared across all demographics. In or unemployment benefits sought to able to save money as they began looking the months to follow, that figure rose to make their lives more comfortable under for remote-working jobs. 44% and is expected to decrease slightly as lockdown, and BNPL services provided a By the end of March 2020, more than people seek to return to stores to shop. way to divide lump-sum payments into 80% of freelancers surveyed said they lost The novelty of finding new places to manageable “bites” to fit people’s adjusted thousands of dollars in wages to COVID-19, shop based on recommendation, personal spending habits. but as vaccines finally started rolling out discovery, and physically exploring a Now, as major developed economies in late January of 2021, consumer spending shopping area will be drivers of new began to reopen under expanded vaccine took off sharply as workers in restaurants consumer spending as the spread of the rollout efforts and additional financial and retail stores were able to come back to virus winds down to manageable levels. stimulus measures, banks have entered the work. A study monitoring trends across fray once dominated by Silicon Valley- With the money that they saved during specialty and boutique food retail in the based pay-by-installment companies to the pandemic, consumers in the year UK and Ireland, where vaccine efforts now provide people with additional funding as ahead are now eager to ‘get even’ with the allow people under the age of 30 to book an the economy recovers. deep malaise of 2020 by unleashing their appointment to get inoculated, indicates

Back to the Table of Contents Summer 2021 Featured Story 43

that consumers have been drawn back gain from this knowledge, as they have in droves to shop in person based on the the wherewithal and experience to offer notion of ‘getting out’ of the house. best-in-class BNPL services under stringent regulatory guidelines while making sure People will spend less their customers don’t end up taking on upgrading furniture and they can’t afford. technology as vacation destinations reopen Lenders must ensure that appropriate financing is During lockdown, consumers spent a lot of available to retailers money on big-ticket purchases upgrading the decor in their homes to maximize Lenders must work with retailers to ensure their time spent inside. Purchases on TVs, that consumers have enough choice video game consoles and in-home exercise for financing in-store as well as online. equipment also took off during this period. Consumers want to see clear repayment During the pandemic 36% of US internet plans laid out in easy-to-understand users said they were awaiting the number installments. of cases to subside either globally or Large banks, such as Citizens Bank, nationally before taking a vacation, and have begun offering installment payment now that the number of both has fallen in options to retailers, like their Citizens Pay Yaacov Martin, developed countries, consumers may soon plan. Andrew Rostami, president of Citizens Co-Founder and CEO, shift to spend saved up cash on a trip. Pay, explains in an interview with Retail Jifiti Now, as consumers begin looking ahead Dive that people, “want to be able to live to a vaccinated world, and Europe moves their lives and make the purchases that to allow travellers with vaccine passports are important to them, but also want to access to Eurozone holiday destinations, big understand how they’ll pay them off.” ticket purchases such as sofas and exercise Additionally, if lenders and retailers are bikes are soon to be replaced by package already offering installment loans, they vacations to destinations where tourists should look at adding a ‘line of credit’ can either get vaccinated or where the option, which would allow customers to vaccinated can revel in some post-pandemic complete individual purchases over time, fun. and pay-back only the amount that is spent in monthly payments. What can be expected after COVID-19 Bottom line – What to expect

The pandemic saw a boom in the use of As the economy returns to normal, BNPL services that allow consumers to consumers will begin to seek new ways pay for items in interest-free installments. to finance the big-ticket purchases that This boom resulted in a widespread call for they put off during the pandemic. This regulation of the industry in Australia, the will include vacations, trips to restaurants and the UK, on the grounds and retail stores that they haven’t been that the Silicon Valley companies lending able to visit under lockdown conditions, the money to consumers don’t have the and ‘experiences’ such as music festivals, decision engines in place that large retail package vacations, cruises and amusement banks do when it comes to issuing debt. parks. Although the Fintechs profiting from this Merchants seeking to capitalize on this boom would prefer the traditional tech- new wave of consumer spending yet to model of zero government interference be fully unleashed should keep in mind a and self-regulation, consumers have stated persistent trend in consumer saving that is that if the industry was regulated and expected to continue even as things return made more transparent, it would actually to normal. increase consumer confidence in a way Financing options at checkout offered that would translate into more spending. by BNPL fintechs are a great way to lure Consumers don’t want to find themselves customers, but their high fees might make in large amounts of debt accrued by them undesirable to some retailers. As companies offering them loans they banks expand into the BNPL market, they may not be able to actually repay. Large stand to expand their footprint by offering traditional financial institutions stand to these payment options as a new service. Dom Poloniecki, Vice President & General Manager, Western Europe and Sub-Saharan Africa, Nutanix

THETHE ‘SOLID’‘SOLID’ CLOUDCLOUD ISIS THETHE HYBRIDHYBRID MULTI-CLOUDMULTI-CLOUD Back to the Table of Contents Summer 2021 Featured Story 45

At some point during the early mists of cloud under different governance restrictions, ‘manufactured’ for a defined market. Often computing (pun intended), we thought all on different licenses and with different consumed by one group of customers at one virtualised or containerised applications consumption model billing agreements. defined price and through one quite static were intended to be delivered from public By strategically bringing together a hybrid channel, the old way of doing business is fast cloud compute-and-storage resources. But multi-cloud deployment, organisations can disappearing. very quickly and collectively, users and the reap the highest potential levels of portability Organisations can now harness the technology industry itself got to grips with and flexibility. Put into practice, this controllable and flexible nature of hybrid the need to offer some cloud resources portability means that applications and data multi-cloud to create new economic models outside of multi-tenant public cloud workloads can be portable across any vendor’s capable of rapid change when conditions facilities in the form of private cloud. hardware and across any vendor’s cloud. require. Users follow this dynamism and start Not all mission-critical data is suited to to find new ways of working and demand the undeniable flexibility and service breadth Eschewing traditional three- new application functions and services; but offered by public cloud, so naturally where tier infrastructure the hybrid multi-cloud organisation has sensitivities exist due to privacy or various already come to anticipate change, so it sees forms of compliance legislation, the private To close the loop and make that portability this behaviour as part of the virtuous cycle of cloud steps up to the job. achievable, organisations will gain maximum improvement. Over time, we had learned to develop control by using the software-defined power Such an organisation can then act to a more sophisticated degree of balance of a hyper converged infrastructure, which ensure computing resources are allocated and equilibrium in our adoption of cloud eschews the traditional three separate silos or reallocated accordingly. This is because computing, a seasoned and reasoned of compute, storage and networking to an IT team that uses hybrid multi-cloud approach that has given rise to the bring all resources under a single software architecture can instantly deploy new popularisation and proliferation of hybrid umbrella. infrastructure, whether in the public cloud cloud. Without the simplicity of unified or private cloud. Response times of hybrid management offered by a hyper converged multi-cloud IT teams are much faster than A coalition of combined cloud infrastructure, cloud operations teams those of traditional on-premise IT teams. power find it naturally much more complex and troublesome to manage and run highly Brighter than just ‘keeping the By now, adopting a combination of public, distributed computing environments. lights on’ private and hybrid cloud resources, Any single instance of cloud needs to be organisations in every vertical can capable of being instantiated in the public Architected and orchestrated prudently rationalise, optimise and operationalise cloud and then portably moved to a hybrid and professionally, the sum result of this themselves for maximum business growth (or indeed private-hybrid combination) move to hybrid multi-cloud enables the and profit. In doing so, these same firms operational environment at any time. No IT department inside any business to start who adopt the use of hyperconverged business wants to go through the pain and doing more than just keeping the lights on. infrastructure (HCI) technologies put rigour of the ‘lift and shift’ refactoring This is the point at which the IT function themselves in a differentiated position needed if clouds can’t seamlessly move to can start to develop and prototype Proof of versus their peers by building the foundation where workloads need to be executed. Concept (PoC) innovations to create real required for a unified experience on premise value-add, rather than just being a support and in the public Cloud, ie: a unified hybrid Core validations for a hybrid utility for the business. cloud experience. multi-cloud world There is very little one-size-fits-all in But let’s stop and consider how many business, so adopting hybrid multi-cloud cloud types, instances, forms, shapes, Whilst founded on the power of micro- is a natural means of enabling a path services and specialisms we’re potentially processors and the strength of software- towards embracing the flexible benefits of a talking about now. defined infrastructure, the benefits of hyperconverged infrastructure for maximum This is not just hybrid cloud as a adopting a hybrid multi-cloud approach business agility. combination of public and private cloud translate directly to the world for businesses in 1 +1 = 2 equation; the modern forward- where constant change is the accepted norm. thinking organisation will be using hybrid Leaving legacy IT infrastructures behind multi-cloud options to gain the flexibility enables businesses to elevate themselves offered by different clouds, with different above and beyond outdated economic benefits based on their native cloud services, models where one product or service is 46 Featured Story

HOW TECH-ENABLED FINANCE WILL ACCELERATE THE TRANSITION TO NET ZERO CARBON EMISSIONS

On the path to global net zero carbon and exit from carbon intensive investments – investment decisions driving positive change emissions, the finance industry is a key driver. such as fossil fuels – can significantly reduce for communities, investors and business. Meanwhile, technology is an enabler of carbon emissions. Financiers are responsible for safeguarding sustainability. Unfortunately, assessing climate risk is not business interests and minimising climate- To make meaningful progress to mitigate so simple or straightforward. Finance and related financial risk, improving decision- climate change, the global finance industry businesses encounter issues with climate data making, defining and delivering financial needs technology to quantify climate risk and availability and quality, methodologies and strategy to reduce carbon emissions. mobilise investments. Financiers also must capabilities to capture relevant climate data Assessing climate risk and financial adopt collaborative, secure and trusted data and enable financial impact analysis. impacts is complex and requires the right platforms, and upskill. Other challenges include ongoing ESG data, tools, and skills to derive actionable Together, the finance industry and public performance monitoring, inconsistent insights. Finance practitioners encounter and private sectors can accelerate climate application of sustainability reporting challenges with translating data into resilience and sustainable infrastructure standards, metrics and benchmarks. There meaningful insights and are unable to provide through technology-enabled platforms. is increasing pressure from investors and the analysis needed to support near real-time regulators for greater consistency and decision making. The role of sustainable finance standardisation of climate related financial In most cases, existing finance and business disclosures, with the aim of improving decision processes are slow, manual and Progress in delivering UN Sustainable comparability and data insight from laborious, relying on disparate systems or Development Goals (SDGs) has been very slow organisations’ operations, customer base and incomplete datasets. Technology enhances to date and requires urgent action. Significant supply chain. climate risk analytics through dynamic data collaborative effort across Global Finance is Innovative and secure technology systems capture and automated, intelligent, faster required during the UN’s decade of action and intelligent processes can help address processes. to 2030, to address environment and social these issues by enhancing data management, That means improving climate and ESG impacts aligned to The Paris Agreement. connectivity and collaboration between all impact assessments aligned to standardised Increased scrutiny from investors, value chain participants. KPIs, benchmarks and performance regulators, consumers and employees to That should simplify financial systems, monitoring allowing consistent climate- demonstrate accountability on sustainability streamlining and automating processes – to related financial risk disclosures. performance means there is a clear role improve ESG data capture, analysis, monitoring For example, IBM and The Climate Service for the financial community to assess and and reporting. In turn, organisations can alliance supports financial institutions and communicate on companies’ climate risk. rapidly scale innovative solutions and create corporations to better measure and quantify But finance is a critical factor to drive new opportunities that address climate change climate-related risks. As part of the alliance, climate change actions, through redirection in accelerated timelines. the companies have developed the TCS of significant investment capital to build back Climanomics® platform. better, greener and resilient economies. Climate risk analytics, due By analysing climate risk exposure on Increased investments in smarter and diligence and climate resilience assets, the platform allows organisations to cleaner technologies – such as renewable quantify and disclose the financial impact of energy, electric vehicles, energy efficient The role of technology platforms in climate change in terms that can form the buildings, and sustainable infrastructure – making climate impact is intrinsic to global foundation for investment decisions.

Back to the Table of Contents Summer 2021 Featured Story 47

Financing renewable energy and collaboration across ecosystems partners with sustainable infrastructure with added transparency. digital marketplaces A recent example of this type of digital platform is with Raise Green’s collaboration Investment in infrastructure of USD $6.9 with IBM Global Business Service (GBS). trillion per year is needed to meet global Together, Raise Green and IBM developed development needs through to 2030 (OECD1) a software solution designed to empower with developing countries accounting for the entrepreneurs, regardless of experience majority of these investments. or income, to start their own solar energy This infrastructure needs to be designed, businesses. built and operated in sustainable ways to The Originator Engine is a digital platform secure a net zero future for the world and that connects customers, investors, and resilience to climate change. To achieve this ecosystem partners to help navigate the goal, there must be an open and collaborative process of securing financial investment for approach to data sharing and innovation from new businesses in the solar energy sector. The trusted sources enabled by secure, yet open new digital platform was deployed using Red technology platforms. Hat OpenShift on IBM Cloud, and enables For projects as small as community Raise Green with the flexibility to evolve the Lutamyo Mtawali, rooftop solar panels and as big as large- platform as they continue to grow and expand Sustainable Finance lead for IBM's scale international infrastructure projects, into areas beyond solar. Global Business Services sustainable finance is a challenge that secure Shaping sustainable finance policy and skills and scalable end-to-end digital technology development Lutamyo leads IBM’s Business platforms can help address. The lack of global consistency, incomparable Transformation Services on Exponential and innovative technologies and differences in sustainability standards Sustainable Finance, focusing on are essential to accelerate climate finance due to numerous existing frameworks Banking & FS. He specialises in investment. Digital platforms will enhance is challenging for finance practitioners strategic digital transformation process efficiencies and data insights, reducing as preparers of climate related financial initiatives leveraging technology to accelerate and increase sustainable risks and complexities in the value chain, disclosures and reviewers (e.g. investors, finance, enhance climate risk whilst creating equitable benefits and value regulators). analysis and climate-related financial add for all participants. Technology specifically The latest global financial regulatory disclosures (TCFD). He has extensive is an enabler of measuring and analysis impact updates on climate reporting and role of Banking & FS experience, and of climate and values of assets. technology call for the need for financiers to expertise in Sustainability, Finance Key benefits of digital finance platform constantly grow skills and training programs and Technology. He leads business solutions include intelligent processes, to deliver long term industry change to development, client delivery of large standardisation, increased trust and build cleaner and resilient green economies. and complex global transformation transparency, reduced duplication, and Technology can help provide transparency programmes with Tier 1 Global Banks, Institutional Investors, DFIs advanced analytics, security and auditability in sharing real-time changes in the latest and International Development and enhanced reporting. global policy and regulatory developments in Organisations to enhance ESG data The pathways to enabling technology to sustainable finance, as well as relevant climate capture, analysis and reporting; and mobilise investment and achieve net zero technology and analytics. alignment with UN SDGs. also involve improving the quantification, By upskilling finance professionals to better qualitative analysis and comparability understand technology tools, information of climate-related financial risk and the analysis, ESG impacts and sustainability transparent disclosures of those risks and the standards, the finance industry builds capacity opportunities. at large to improve consistency in decision- Technology can also create new digital making and disclosures that could align with marketplaces to mobilise sustainable the Green Finance Education Charter, backed investment. Digital platforms that serve as by BEIS.2 online marketplaces can connect climate Overall, technology can be a catalyst in entrepreneurs and funding, institutional the toolbox of global financiers to accelerate investment with well-structured projects, action and progress on sustainability goals by and facilitate public and private financing for mobilising investments, quantifying climate sustainable infrastructure. change risk, digitising the marketplace for These types of end-to-end digital platforms financing sustainable infrastructure, and can speed up highly manual and inefficient equipping finance professionals with the skills documentation processes, deal flows, and and digital tools for a sustainable future.

1 http://www.oecd.org/finance/Sustainable-Infrastructure-Policy-Initiative.pdf 2 https://www.youtube.com/watch?v=wYdqsRt5heI 48 Featured Story HAS THE PANDEMIC CHANGED THE WAY WE MANAGE INVESTMENTS?

The and Wealth Management industries have experienced a turbulent year. At the same time, with a new group of people looking to leverage their assets in investments—many of them for the first time—there has been a growing need for professional financial advice.

According to Accenture’s recent survey, • Hyper personalisation as a reminder for the industry to revisit C-level executives in wealth management • Move to value generation with support its priorities, to appropriately tackle these affirmed they want to focus on responsible from technology challenges, and it has been successful in leadership and strategy, differentiated • Personal data management doing so, by accelerating the adoption of client experience, intelligent operations • Rise of platform ecosystems technology for WealthTech. and technology, and empower talent and Over the past year, client communication change, by 2025. 40% admit that nurturing WealthTech as the accelerator has been affected, however, with a strong culture for change and embracing for optimised customer technology being a pivotal element to new ways of working are challenges. engagement rejuvenation, peoples’ interaction is In this survey, participants are expecting expected to change, forming a blend of the following trends to affect the Wealth According to Finextra, prior to the remote and face to face, using a range of Management Industry thus making their pandemic, the wealth management sector digital platforms and tools. business more dynamic and offering was facing multiple challenges, arising Personalisation is becoming a key greater value to their customers: from digital disruption, evolving customer priority with data management despite • Emergence of new technologies segments, and shifting competitive the paradox that might this create due to • Environmental considerations dynamics. The pandemic has merely acted compliance issues for security and privacy. Technology can easily address these concerns. According to Nasdaq, the industry has been historically slow in shifting from traditional infrastructure to more agile processes like microservices and self- service onboarding that would create a more customer-driven communication. However, today’s trend to use modern devices to communicate turns the desire to a necessity for many firms. Embracing change with the support of technology can lead to more profitable results.

What lies ahead for the Investment Management Industry

In the recent Mckinsey research, Wealth Managers “expect normal operations to

Back to the Table of Contents

50 Featured Story

resume by June 2021, assuming lower virus transmission rates, vaccine rollouts, and reduced capital markets volatility. Private banks have focused recent efforts on activating contingency cost reductions, enabling relationship managers to work remotely, and developing new products and digital functionalities. On the strategic agenda, organic growth remains a top priority, with cost reduction second (compared to eighth at the end of 2019).” Private Banking and Wealth Management firms are expected this year to see a change in their profits, their operational approach and agile distribution models, making them more responsive to customer needs. Which means that although the pandemic may have affected the industry, it has delivered a different dynamic to approach this change and more assets to invest. and spend more time enhancing their The above points are not new to the overall client service. industry; however, they have become Key points and takeaways 3. Utilise self-service onboarding and paramount to compete effectively. agile technology. Invest in elevating your technology and Given all this literature what should wealth Hybrid advice and customised reports automation in communication to increase management firms need to look out for enable firms to differentiate and offer your clientele engagement. this year and prepare for a more profitable to customers an intuitive experience, Partner with a firm that has developed and agile 2022? empowering rapid response to market and delivered innovation over the past 1. Improve value proposition through changes and customer requests. years and has helped firms during ESG strategies. 4. Invest in ground-breaking technology. pandemic to experience real value via its This may include diversity and ESG IoT, Augmented reality and AI will digital platform of investment. practices. Identifying alternative plans enhance virtual meetings, reporting, Check out Profile’s latest developments to invest and to develop a long-term profiling, and best practices on client in investment management with new winning strategy based on specific communication with automated additions on onboarding, portal and trends and parameters can help firms functions where applicable, so as to custody features to enhance their overcome similar situations. The deliver operating cost reduction and customer journey and deliver true agile pandemic highlighted that many firms improved customer experience. operations for the modern Private Banking had to adjust to the market needs they 5. Active presence through popular organisation or Wealth Management firm. trade in and be able to refresh quickly digital channels. Profile’s Axia is a proud Category Leader enough. In addition, new technology Firms need to actively engage and in Chartis Quadrant report for Wealth and new solutions allow investment produce content on social media Portfolio Management Suites: Desktop managers to deliver strategic asset since customers tend to visit advisors’ Advisory solutions.2021! allocation and simultaneously profiles and check out experience, Download our Axia brochure now by incorporate investors’ ESG investing more on digitising business clicking here! requirements, developing a significant profiles! competitive edge and secure long-term market presence in this growing space. Conclusions 2. Adopt omni-channel and personalised communication. Technology will enable unique service The latest generation of HNWIs have delivery across wealth bands with bespoke an increasing familiarity using mobile counselling (family office), dedicated devices and digital channels. To meet discretionary investments and advanced this market needs, firms need to focus advisory investments. on delivering hyper-personalisation Cloud technology will replace aging so as to offer advice on setting and in-house infrastructure and firms can meeting financial goals. Technology leverage shared services to reduce middle- provides wealth managers with an office costs. Adopting advanced cloud array of opportunities to make best security would enable privacy, security and and compliant use of customers data meet compliance concerns.

Back to the Table of Contents

52 Featured Story

RBR’S BANKSEC 2021 RETURNS TO LONDON IN OCTOBER

On 12th and 13th October, senior bank executives and industry partners secure than an office-based network. Multiple household members will come together at RBR’s BankSec 2021 conference to discuss how logging on to the same network could also potentially expose devices to banks and ATM deployers can best protect themselves from physical and malware. Additionally, the increasing use of remote access technologies logical attacks. We caught up with Jeni Bloomfield, who is managing the such as virtual private networks (VPN) and the remote desktop protocol conference agenda, to find out more about the latest security threats and (RDP) may allow new opportunities for threats to penetrate IT systems. how the industry can work together to overcome them. More broadly, as banks rely increasingly on outsourcing parties, so the opportunity for attack goes up. The SolarWinds hack in December Financial IT: Will BankSec 2021 be returning as an in-person event this 2020 highlighted the vulnerabilities of supply chains, with around year? 18,000 customers being affected. In light of this, ING will deliver a Jeni Bloomfield: Yes, BankSec 2021 will take place as in-person event presentation on third party risk management and how banks can ensure in London. We are all very excited to resume in-person events again, they are not left vulnerable to attack via their suppliers. and this feeling is echoed by our clients and bank partners. We have an exciting line-up of presentations exploring a range of self-service Financial IT: Self-service security features prominently on the security, access control and cyber topics; for instance, Dankse Bank programme. Have you found COVID-19 has also impacted this area will speak on red teaming and Nationwide on the latest cybersecurity of banking? trends. Jeni Bloomfield: 2020 was an unusual year for ATM crime. National lockdowns and border closures restricted movement, but despite this Financial IT: Cybersecurity seems to be a big topic on the BankSec 2021 mobile organised crime groups continued to operate across Europe. agenda. How has the COVID-19 pandemic impacted cybersecurity Logical and malware attacks rose in number over 2020 and although trends? the number of physical ATM attacks fell, the value stolen in explosive Jeni Bloomfield: One trend which the pandemic has accelerated is the attacks increased. We have an interesting presentation on this very growth of digital payments. National lockdowns restricted movement topic, with West Midlands Police providing a look at trends in ATM and access to cash, while concerns about the transmission of the virus crime in the UK. via cash further limited its use. As a result, more consumers turned to Meanwhile, the US saw a rise in the number of physical ATM digital payments, and unsurprising online payments saw a particularly attacks. The decline in withdrawals made ATMs a more attractive prize steep rise as people stayed at home. This increased the opportunities while civil unrest provided a backdrop for opportunistic attacks. “Hook for bad actors to target consumers. For instance, phishing attacks – and chain attacks” – in which thieves use chains attached to vehicles in which criminals use emails or websites that appear legitimate to to wrench open the ATM – saw a particularly steep rise, with criminals trick victims into handing over sensitive information – rose sharply typically targeting off-site drive-through ATMs. during the beginning of the pandemic as criminals looked to exploit consumers’ uncertainty and fear. Financial IT: How can events like BankSec 2021 help in the fight against financial crime? Financial IT: How can banks protect their customers from fraud? Jeni Bloomfield: To keep one step ahead of criminals, collaboration and Jeni Bloomfield: A multi-layered approach is needed to tackle phishing the sharing of information is crucial. Banks need to develop broad and protect customers’ data. One important tool is the use of additional strategies to engage with governments, other banks, their clients and forms of authentication, meaning that even if a static password is stolen the general public. BankSec 2021 does just that, bringing together a bad actor still cannot access a customer’s funds. Additional forms of security professionals from around the world to share their knowledge, authentication range from biometric data to one-time passwords sent present case studies and discuss best practice with their industry peers. to mobile phones. Increasing the layers of authentication can negatively impact customer experience, however, and so a balance must be found Financial IT: How can our readers get involved in BankSec 2021? between security and ease of use. Stringent security requirements can Jeni Bloomfield: There are a variety of ways in which readers can get even affect user adoption, a topic which will be explored by Guaranty involved in this event. We are always looking to add interesting Trust Bank during BankSec 2021. bank case studies to our agenda and would love to hear from anyone interested in presenting. We have a range of exhibition and sponsorship Financial IT: Does the rise of remote working have security implications packages for companies that would like to promote their brand and for financial institutions? meet potential customers and, alternatively, individual delegate tickets Jeni Bloomfield: There are some risks associated with remote working, can be purchased. For more information, contact jeni.bloomfield@ with internet set up in staff’s homes generally being more difficult to rbrlondon.com or visit www.rbrlondon.com/conferences/bsec/

Back to the Table of Contents EVENTS EVENTS EVENTS 2021BankSec Branch2021 Transformation

London 12-13 October 2021 London 30 November-1 December 2021

self-service security branch design access control customer experience logical and cyber strategy www.rbrlondon.com/bsec www.rbrlondon.com/bt

Meet our conference partners RBR’s events bring together the world’s leading banks, fintechs and industry experts to learn, explore and network – join our growing partner lineup...

banking payments context

LOGO - VERTICAL

ATM Software



Member of Bank Audi Group

learn | explore | network www.rbrlondon.com/conferences

RBR event partners 210x297 May-21.indd 1 28/05/2021 14:27:46