FinTech Magazine - April 2022 by FinTech Magazine

Ikano Bank:

Putting customers at the centre of services

Lockdown Lending: Disruption in the corporate lending space

April 2022 | fintechmagazine.com

FOB 1: xxxxx FOB 2: xxxxx

State Street Global Advisors: How to pair asset and ESG stewardship

FOB 3: Venture xxxxxx Capitals to watch FOB 3: in 2022 xxxxxx

Smart Top 10: Money: xxxxxx The future of digital payments

EXCLUSIVE INTERVIEW:

Olwyn DePUTRON of ‘UST Step IT Up’ on RISING TO TOMORROW’S CHALLENGES FEATURING:

FLOWEFLOWE

WESTERN UNION

QONTO QUANTO

FLOWX.AI, THE EXPERIENCE ORCHESTRATION ENGINE, IS THE SECRET TO UNRIVALLED CUSTOMER EXPERIENCES FOR THE OTP GROUP FLOWX.AI is a leading technology company helping to transform the banking system from legacy stacks, processes, and products to streamlined digital solutions. FLOWX.AI is one of the leading digital solutions companies to emerge in recent years. The platform leverages an entirely novel architecture enabling 40x faster digital developments and specialises in wrapping and consolidating legacy systems into unified, omnichannel digital experiences for both customers and employees. Ioan Iacob, CEO and co-founder at FLOWX. AI, explains, “The FLOWX.AI platform was born from over ten years of experience, working with large international enterprises within the digital transformation space. The biggest challenges are the spiderweb of legacy systems and the talent shortage, especially in engineering, making it slow and expensive for enterprises and banks, particularly, to develop digital experiences that are streamlined and easy to use for employees and customers alike.” Zoltán Kaszás, OTP’s Managing Director and Group’s Head of IT Strategy and Support, explains, “We are not talking anymore about digital transformation

itself because it was a trendy word in the last ten years. We are talking much more about a hybrid mode of working, meaning how human intelligence will work together with artificial intelligence.” Constantin Mareș, Chief Digital Officer of OTP Bank Romania, agrees. He says one of the biggest challenges in creating such a transformation is talent. “One of the things that OTP Bank Romania started to do since the digital transformation kicked off three years ago is empower people. And this may sound like a cliché. It’s easy to say, but it’s difficult to implement. Mareș adds, “We are in a regulated market, and we want our people to believe that they can make their life – and the life of customers easier. We want them to actually change the flow by two clicks and for the customer to benefit from those clicks as a simplified process. That’s why I believe FLOWX.AI as a platform would help us grow our talent into skilled intrapreneurs and contribute to changing the mindset of our employees around innovation.”

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JOANNA ENGLAND EDITOR DIRECTOR

SCOTT BIRCH

PRODUCTION DIRECTORS

GEORGIA ALLEN DANIELA KIANICKOVÁ PRODUCTION MANAGERS

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CREATIVE TEAM

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GLEN WHITE

FOREWORD

MONEY METAMORPHOSIS The global financial markets have never undergone so much disruption or transformation as is happening now. It’s a fascinating future to imagine

“We can only imagine what the fintechs of the future will look like”

The longer I work in fintech, the more I realise I don’t know. And that is really down to the pace of innovation and developments happening in the space. From checkout-less supermarkets and contactless digital payment apps, to the nextgeneration data analytics that analyse lending, the space is barely recognisable from a decade ago. Not only that, but with political instability increasing the power of digital currencies, we can only imagine what the fintechs of the future will look like, and how they will operate. Outlandish predictions for outrageously technical sci-fi solutions no longer look like the stuff of fiction writers. This month we’ve concentrated on changes in the commerical and corporate lending space, and contactless payment technologies. And, we have some incredible insights from industry-leading experts on the latest innovations, products and services they are providing. We hope you enjoy the issue - and that our efforts this month have helped you gain a little more insight into the ever-changing world of fintech.

FINTECH MAGAZINE IS PUBLISHED BY

JOANNA ENGLAND

joanna.england@bizclikmedia.com

fintechmagazine.com

CONTENTS

Our Regular Upfront Section: 12 Big Picture 14 The Brief 16 Timeline: Digital assets and the birth of NFTs 18 Trailblazer: Sebastian Siemiatkowski 20 Five Minutes With: Georg Ludviksson

UST Step IT Up

Changing lives by teaching tech skill

Banking

How digitisation has transformed the forex market

Ikano Bank

Procurement – the heart of every organisation

Finserv

Smart Money: Digital payments and marketplace disruption

Western Union xxxxxxxx

Qonto Qonto

Transformingbanking banking Transforming withcustomer-centricity customer-centricity with

Payment Solutions

Lockdown lending and post-pandemic payments

State Street Global Advisors ESG and stewardship in action

104

112

Five emerging fintech hubs to watch in 2022

CEO Ivan Mazzoleni on virtue-led fintechs and ESG

Technology

126

Top 10

VC's to watch in 2022

Flowe

138

Empire Life

Innovative solutions for Canadian SMEs

Shaping the Future of Financial Technology

2022

9th - 10th November

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BIG PICTURE Could crypto supercede central currencies? Ukraine

A soldier stands next to the bombed out shell of a factory following the Russian bombardments in the Ukraine. While major cities in come under attack, the solvency of fintech in Russia is under major pressure. With countries globally sanctioning the former communist super-power, experts warn of economic devastation. However, some believe cryptocurrency and related services will benefit as people lose trust in central currencies due to political instability, and actors seek to circumvent sanctions and SWIFT shutdowns.

April 2022

fintechmagazine.com

THE BRIEF “TRADITIONAL LENDERS HAVE BECOME EVEN MORE CONSERVATIVE AND RISK-AVERSE” Ian Duffy

CEO, Accelerated Payments 

BY THE NUMBERS WE ASKED YOU: WHICH AUTHENTICATION TECHNOLOGIES DO YOU THINK FINTECHS SHOULD CONCENTRATE ON?

1% Certificate-based

42% Multi-factor

“THIS SHIFT IN THE MAKEUP OF THE GLOBAL ECONOMY IS DRIVING THE RISE OF AN ‘APPLICATION MARKETPLACE” Brad Hyett CEO, Phos 

“TO THIS DAY COMMERCIAL FX IS STILL DONE MOSTLY ON THE PHONE, ENABLING BROKERS TO GIVE A CUSTOMER A COMPETITIVE EXCHANGE RATE ONE DAY, BUT HELP THEMSELF TO A FAT MARGIN ON ANOTHER DAY…”

40% Biometric

18% Token-based

SCOTLAND IN THE RACE FinTech Scotland has pledged to invest US$2.7bn in funding towards fintech development, with the prospect of creating 30,000 new jobs in the industry by 2032

FINTECH IN ISRAEL Israeli fintech startup Finaro has been acquired by US payments and commerce tech firm Shift4 for $575mn.

Seth Phillips

Founder and CEO, Bound  READ MORE

April 2022

GAME ON GameStop has appointed Duane Morris FinTech attorney Cindy Yang as VP and assistant general counsel as the company move from a brick-and-mortar game store to the eCommerce marketplace.

While the war that has broken out between Russia and Ukraine is causing humanitarian devastation, the event is also impacting in a number of ways on the global economy. Sanctions being imposed on the Russian Federation by the EU, Japan, Switzerland, Australia, New Zealand, the UK, the US are sending shockwaves across a number of worldwide industries. As energy prices skyrocket and supply chains face further disruption, shares are tumbling, industry growth slows down and inflation begins to rise.

DIGITAL CURRENCIES However, digital currencies could see their strength bolstered in the wake of the upheaval, as central currencies are affected by the political instability. Decentralised forms of finance could well be seen as the alternative solution. Rising oil prices could also contribute to central bank currencies becoming less valuable. But Bitcoin, Monero, Ethereum and NFTs cryptos with privacy by design will not be affected by sanctions and SWIFT shutdowns.

The industry leading banking and insurance institution has entered a strategic partnership with loyalty fintech Bink.

 PAYHAWK Bulgaria has produced its first fintech unicorn. Payhawk recently raised an extra $100mn, tipping it over the $1bn valuation mark.

 REVOLUT As international sanctions hit Russianowned companies, Revolut and its two cofounders are feeling the pinch with a large proportion of their employees living in either Russia or Ukraine

 WISE The UK-based money transfer fintech Wise has pulled the plug on its Russian operations as the conflict escalates. No further details have been released.

APR22

BAD TIMES

FINANCE AND TECHNOLOGY The chances of cyberattacks occuring has risen significantly, and continues to do so as the conflict unfolds and results in retaliatory tactics from Russia. But fintechs that operate with direct connections to the Russian marketplace will suffer the most impact as investors retreat and sanctions kick in. Many firms could face bankruptcy – and at the very least must consider withdrawing themselves completely from the Russian marketplace. For example, the Russian challenger bank, Tinkoff which recently tapped Finastra for support in its Asian expansion, will almost certainly have to re-evaluate its plans to launch digital banking services in the APAC.

 LLOYDS

GOOD TIMES

FINTECH IN CONFLICT

fintechmagazine.com

TIMELINE D I G I T A L AND

THE

A S S E T S

BIRTH

NFTS

Non-fungible tokens (NFTs) are unique, tradable digital assets built on a blockchain. We take a look at the history of this phenomenon, which has become a popular way of selling digital art.

2016

2012 THE PRE - CURSOR To understand the history of NFTs, we have to go back to 2012 and the creation of a different type of token, Colored Coins. Built on the Bitcoin blockchain, these tokens could be described as the pre-cursor to NFTs as we know them today. Colored Coins could be used to represent any tangible asset – cars, houses, precious metals – but the fundamental limitations of the Bitcoin blockchain essentially meant that Colored Coins had several inherent flaws.

April 2022

MEMES

2014 COUNTERPARTY In 2014, a new financial platform called Counterparty was launched to expand on the possibilities first explored by Colored Coins. Also built on the Bitcoin blockchain, it offered a number of exciting features including a decentralised asset exchange, tradable user-created currencies and even its own cryptocurrency called XCP.

Before long, NFTs moved in a more familiar direction that focused on assets with unique appeal. In 2016, people began using Counterparty to issue ‘rare pepes’ – a type of internet meme that centres around a green frog and has a cult following. When Ethereum gained popularity in 2017, these rare pepe memes were sold there and even led to the creation of a “decentralised meme marketplace” called Peperium where they could be bought and sold.

2 017 PUNKS AND KITTIES As more people became aware of NFTs, the demand for creative and unique tradables grew. This led to two specific crazes taking off.. The first was Cryptopunks, a series of 10,000 unique digital characters that people could buy, collect and sell. Then came Cryptokitties, a blockchain game that gave users a virtual cat that they could care for and trade. Some cryptokitties even sold for six-figure sums.

2021 BEEPLE Today, NFTs are best-known as a means of trading digital art and most transactions take place on Ethereum. One of the most famous digital artists whose work has been sold using NFTs is Beeple. In 2021, two of his artworks – a sculpture piece entitled ‘Human One’ and a digital collage called ‘Everydays: the First 5000 Days’ – were sold at auction by Christie’s for a combined $98m. They are the two most valuable artworks ever sold by NFT.

fintechmagazine.com

TRAILBLAZER

The Billionaire Behind Klarna. FROM GRINDING POVERTY TO BILLIONAIRE STATUS BY THE TIME HE HIT 40, SEBASTIAN SIEMIATKOWSKI IS THE ULTIMATE RAGS-TO-RICHES SUCCESS STORY

ebastian Siemiatkowski is the angel investor, entrepreneur, and European businessman who currently serves as the CEO of Klarna. He is viewed as a role model and inspiration to young entrepreneurs and has, along with Klarna’s co-founders, redefined the Buy Now Play Later space during his 18-year career in fintech. However, his early life was beset with difficulties, and although his parents worked hard to provide for him, earlier traumas meant life was not always a smooth ride for the young Siemiatkowski. POVERTY IN CHILDHOOD Born in Sweden in 1981 and the son of Polish immigrants, his parents were academics who had fled the USSR communist regime for Sweden just 12 months earlier in 1980. But those early years were beset with heartache because the couple had been forced to leave Sebastian’s older sister - their then baby daughter behind in Poland. The process to bring her back to the family was a difficult one, and both Siemiatkowski’s mother and father also discovered their successful careers in 18

April 2022

academia could not be replicated in their new homeland. As a result, money was tight and his mother also suffered from debilitating back problems which meant she had to retire early. Siemiatkowski’s father, who struggled with alcoholism, drove a taxi to make ends meet - but food for the young family was worryingly scarce. Today, with his personal fortune exceeding an estimated US$2.2bn, Siemiatkowski, still recalls what is was like to feel hungry. He says meals in his childhood often meant pancakes, and in a recent interview with the WSJ, explained, “As a kid, I thought that was amazing, but now I realise it’s because we had nothing at home but flour, eggs, and milk.” OVERCOMING THE ODDS But despite these hardships, Siemiatkowski proved himself to be a talented and hardworking student. After completing his high school requirements, he enrolled at the Stockholm School of Economics. The environment led him to become inspired by fintech, and he joined forces with the company’s other co-founders,

COURTESY OF KLARNA

TRAILBLAZER

April 2022

Niklas Adalberth and Victor Jacobsson, to initially launch Klarna in 2005 while he was still studying his degree and Msc in Economics and Business. FAMILY LIFE During this time, he noticed a fellow student, Nina Sundén, who he would later go on to marry. Speaking of those early days, Siemiakowski recently said, “She was this extremely good-looking, super-smart girl, and I felt like the biggest nerd in history, so I would never dare talk to her.” But by the time he graduated in 2007 with a Master of Science degree, Siemiakowski’s startup was evolving swiftly. However, realising he needed broader industry experience, he joined a company called Djuice Uppsala as a sales manager and stayed there for eight years, rising to head of sales while crafting his skills and gaining experience in serving customers in the public space. By 2010, though, his involvement in Klarna’s growing space saw him take on the role of CEO - a position he still holds today some 12 years later. A SKILLED BUSINESS NEGOTIATOR According to reports, one of Siemiatkowski’s key traits is his ability to manage large-scale negotiations. As part of Klarna’s scaling strategy, Siemiatkowski had to persuade more than 205,000 fee-paying retailers to sign up with his company to help consumers enjoy its seamless and flexible payment option for purchasing online goods. Since then, Klarna has grown rapidly throughout Europe. One of its more recent expansions has included North America. Although Klarna was a financial

startup that facilitated safe and seamless online payments, the company has received accreditation as a fully licensed bank and now has a consumer base of over 60 million with a merchant user base of 170,000. Today, Klarna has a valuation of over US$46bn. As a result of his contributions to the world of fintech - and the headway he has made in the BNPL space, Siemiatkowski was awarded the European Entrepreneur of the Year Award from Tech Tour. Adecco also named him Leader of the Year, and he was the 2015 global EY Entrepreneur of the Year award runner-up. A FAMILY MAN Today, Siemiatkowski lives with his wife and three young children in a renovated property in the heart of Stockholm. He is, by all accounts, a dedicated father and husband who enjoys the perks of Stockholm life, but is happiest when with his family. According to reports, the house was one his wife Nina had loved as a child and she told Siemiatkowski it was her ‘dream home’ when they drove past in during their second date, while they were both still undergraduates. The property took them six years to restore and renovate. Number of years working in the industry

20YRS

£1MN Donated to charity

fintechmagazine.com

5 FIVE MINUTES WITH...

GEORG LUDVIKSSON CEO & Co-founder of

GEORG LUDVIKSSON IS THE CEO AND CO-FOUNDER OF MENIGA – DIGITAL BANKING FINTECH THAT FACILITATES PERSONAL BANKING SOLUTIONS IN MORE THAN 20 COUNTRIES. FOUNDED IN REYKJAVIK, ICELAND IN 2009 BY LUDVIKSSON, ALONG WITH BROTHERS ASGEIR ASGEIRSSON AND VIGGO ASGEIRSSON. MENIGA WAS ONE OF THE FIRST COMPANIES TO USE PFM SOFTWARE IN EUROPE.

Q. WHO WAS YOUR CHILDHOOD HERO AND WHY?

» Like many kids of my generation,

much of my childhood was spent watching superhero TV shows. What particularly resonated with me was the fact that these characters were able to leverage tremendous super powers to do good and make the world a better place. To say that I aspired to be them is perhaps a slight exaggeration, although Spiderman was someone that I found particularly easy to relate to due to all of his vulnerabilities, and his character certainly provided me with somewhat of a positive outlook on society from a very early age.

Q. W HAT'S THE BEST PIECE OF ADVICE YOU EVER RECEIVED — AND FROM WHOM?

» To always have an action plan and focus

on the deliverables. If you are ever faced with a challenge, stop and ask yourself “what’s the plan?” or “how do we do this?” before jumping on a particular course of action. This piece of advice is something that I have implemented throughout my entrepreneurial career, and without it, I certainly wouldn’t have been able to manoeuvre around some of the roadblocks that we have encountered over the years. Having this kind of cautious mindset simply allows you to be as prepared as possible when you do eventually encounter a problem, whatever it may be. It has taught me to always raise money and build buffers where I can, and most importantly, not take anything for granted. Crucially, it enables you to plan for the long-term, which won’t just help with achieving your purpose but will also help with your overall mental wellbeing, which is crucial to sustaining good leadership.

Q. W HAT WAS THE LAST BOOK YOU READ, WHY DID YOU LIKE IT — AND HOW LONG AGO DID YOU READ IT?

» I actually spent the better part of

Sunday reading a really interesting business management book called “Product Roadmaps Relaunched - How to Set Direction While Embracing Uncertainty”, which explores the importance of product roadmaps, their significance as a communication tool, and the ways that they’ve changed and evolved over the years. The book also offers a very practical guide into how you can articulate an inspiring vision and goal for your product, and how you can use your roadmap to align stakeholders and prioritise ideas and requests.

a CEO, I think it’s important to find some As spare time to continue learning about all aspects of a business, whether product strategy or leadership, and to always look to broaden my perspective and skills as much as possible.

Q. N AME ONE PIECE OF TECHNOLOGY YOU COULDN’T LIVE WITHOUT AND TELL US WHY (EXCLUDING YOUR MOBILE PHONE).

» Having been an entrepreneur for over 20

years, I’m well aware of the importance of maintaining a solid work/life balance, and the impact that it can have on your overall wellbeing. As a result, I regularly try to take breaks from technology, and find time in my busy schedule to exercise, get some fresh air or relax at home with my family - so I’d like to think that I could survive without technology. Having said that, I would certainly miss my laptop for staying on top of things, and my fitbit for maintaining a healthy lifestyle, both physically and mentally. I would also find it difficult without my Vivino app, which I use to discover delicious wines!

Q. W HO DO YOU LOOK UP TO IN TERMS OF LEADERSHIP AND MENTORSHIP?

» There’s no doubt that I would not be where I am now without my two co-founders, Asgeir and Viggo Asgeirsson. Right from the very beginning, when we all quit our previous jobs at the big banks and started working together in Viggo’s living room to create this exciting new startup, we have always stuck together and supported each other - and there’s no doubt that the success and growth of Meniga to date is partly down to the dynamic that our co-founding team has had over the years. We have always taken time to listen to each other’s ideas, and our collective passion for our company is what continues to inspire us fintechmagazine.com

5 FIVE MINUTES WITH...

and push each other to strive for nothing but excellence. Although I am today the CEO of Meniga, their leadership and mentorship has been absolutely vital throughout our journey.

Q. W HAT’S THE BIGGEST CHALLENGE/ ADVANTAGE YOU’VE ENCOUNTERED TO DATE IN THE FINTECH INDUSTRY AND WHY?

» I’ve experienced plenty of ups and downs

throughout my career in fintech, and many of which have been vital in driving the ultimate success of Meniga. In general, I’m a strong believer that behind every challenge lies an opportunity. After all, that’s exactly how Meniga was born in the first place. Following the financial crash of 2008, as people were losing their income, worrying about their savings, and experiencing a substantial drop in purchasing power, we realised the significant opportunity and favourable environment this created to start our own personal finance management company. Having set up Meniga in the wake of an economic crisis, we found ourselves in a really unique position where suddenly, an incredible talent pool had become readily available to us, and we were able to get some really skilled people onboard from the start, and get our company off the ground very quickly. The most recent challenge we encountered was the pandemic of course, which has impacted so many people and companies everywhere in the world. While it has created challenges for most industries - including the financial industries - it has also significantly increased the demand for personal finance products and services. In times of economic uncertainty, people are in a greater need of guidance and help with their personal finances and customers are now, perhaps more than ever, relying on their banks to provide support more than ever. As a result, the number of

April 2022

banks we have partnered with and markets we have launched in has multiplied since the start of the pandemic.

Q. W HICH ACTIVITY ARE YOU MOST LOOKING FORWARD TO DOING WHEN NORMALITY RESUMES?

» First of all, I feel extremely fortunate that

my family and I have remained healthy and safe since the outbreak of the pandemic, and that our company was not severely impacted by COVID-19. It’s been such a tough period for so many people and businesses around the world, and I’m grateful that we are finally seeing the light at the end of the tunnel and slowly reclaiming a bit of normality in our daily lives, as we are able to meet with family, friends and colleagues in person once again. As someone who loves his music, I’m looking forward to when we can all go to a concert together and throw a big party. Also, given that I live in Iceland (where Meniga was founded), it can definitely get pretty cold and gloomy here in February, so I'm very excited for some vitamin D on the beach soon!

Singapore Fintech Festiva 2018

Money20/20 Europe

Q. I S THERE A PERSONAL ACHIEVEMENT FROM THE PAST 12 MONTHS OF WHICH YOU ARE PARTICULARLY PROUD?

I’m incredibly proud of how our employees have maintained high levels of performance during the past 12 months, which have been challenging to say the least. Each and every one of our staff have gone above and beyond to ensure that our company successfully weathers the storm and navigates the pandemic. We’ve managed to expand globally, sign new banking partners, acquire new customers and launch new products at a staggering pace over the past 12 months - and our team deserves a huge amount of credit for it. I’m also very proud of how our new green banking solution, Carbon Insight, has grown over the past year, having already been implemented by several banks around the world including Íslandsbanki in Iceland and Crédito Agrícola in Portugal, and it is continuing to garner increasing amounts of attention and interest from financial institutions all over the world. The solution provides digital banking users with a simple and efficient tool for tracking and offsetting their carbon footprint, based on their transaction data. As anxiety around climate change continues to grow, banks are realising the responsibility they have to help protect the planet, and the significant opportunity offered by green banking solutions like ours to pave the way for a major change in consumer climate action. The solution also serves as a great foundation for banks to introduce green products like green loans or green investments. We’re now in the midst of one of the most important battles of modern history – the fight against climate change – and we’re extremely proud to be supporting our

banking partners in trailblazing the rapidly evolving, and increasingly relevant green banking movement.

Q. W HAT INSPIRES YOU IN FINTECH TODAY?

» It’s without doubt the level of innovation

and sheer competitiveness which I find most inspiring in fintech today. Over the past decade or so, the fintech industry has evolved at a blistering pace, and the face of banking has changed dramatically as a result. Not only has the level of investment in the fintech space multiplied, and has the introduction of new regulations, like PSD2 and Open Banking, provided a number of innovation opportunities for challenger banks, consumers nowadays have come to demand increasingly convenient, transparent and personalised services. For companies like Meniga, this has meant that delivering anything but an excellent customer experience is simply not good enough, which has urged us to be even more innovative to ensure that we provide the best possible support for our banks and their customers. This level of competitiveness and innovation within the fintech industry will undoubtedly continue to grow exponentially, and I’m really excited to see how new technologies like AR, VR and AI will further transform the fintech landscape and drive the ultra-personalisation of banking. Whatever the next challenge, I’m confident Meniga is perfectly equipped to deal with it. fintechmagazine.com

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UST and Step IT Up changing lives by te tech skill 28

April 2022

– eaching

AD FEATURE WRITTEN BY: SCOTT BIRCH PRODUCED BY: JOE MARRITT

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Olwyn DePutron Director, UST Step IT Up

April 2022

UST STEP IT UP

The Step IT Up initiative from digital transformation specialists UST trains minority, women and veteran candidates for in-demand technology jobs

rganisations worldwide face a skills shortage that could quickly become a crisis. Facing the perfect personnel storm due to the pandemic, digital transformation and the so-called Great Resignation, there are more vacant IT jobs than qualified people ready and prepared for those roles. Demand is high and supply is low, which means wage inflation as companies become embroiled in a bidding war to hire and retain talent. It’s a problem that isn’t going away anytime soon, but only one with a brilliant solution. UST Step IT Up takes talented individuals from minority communities, women and service veterans and trains them in skills that employers need right now. From cyber security analyst to scrum master, from python developer to project manager – Step IT Up’s intensive apprenticeship programme makes a meaningful difference. The accelerated talent development programme has already placed more than 1,000 candidates in the US, Europe, and Australia as the global footprint of this initiative expands. Olwyn DePutron is the director of UST Step IT Up. fintechmagazine.com

UST STEP IT UP

“My role is to make Step IT Up a success for our clients, UST and the lives that we touch,” she says. “The programme trains underrepresented individuals and veterans for successful careers in specific technology roles.” “Step IT Up is a programme that knows no borders,” says DePutron. “We've done it in Europe. We've done it in Latin America, we have a flavour of it in Asia as well. Diversity is defined differently by different organisations and countries, so we consider and match our recruiting efforts depending on the client.” So what does Step IT Up look for in a candidate? That in some ways depends on the candidate’s situation. A four-year US degree in anything is acceptable, not just relating to technology, and veterans would 32

April 2022

have their years of service considered in lieu of a Bachelor Degree. “We do have some clients that have removed the need for a degree because they understand that hinders some of their talent pools, so some clients have looked to bring in alternative candidates or look at alternative programmes to fill their talent pipeline,” says DePutron.

HOW ORGANISATIONS CAN STEP IT UP? Any organisation can reach out to UST to help solve their skills shortages with UST Step IT Up. You do not have to be a customer of UST to take advantage of this inspirational programme. Simply search for Step IT Up or contact Olwyn DePutron directly and she will walk you through the process.

UST STEP IT UP

“ DIVERSITY IS DEFINED DIFFERENTLY BY DIFFERENT ORGANISATIONS AND DIFFERENT COUNTRIES, SO WE TAKE THAT INTO CONSIDERATION AND MATCH OUR RECRUITING EFFORTS DEPENDING ON THE CLIENT” OLWYN DEPUTRON

DIRECTOR OF THE STEP IT UP PROGRAMME, UST

Clients who have become involved with Step IT Up tend to be large organisations taken from the Fortune 500. They come from a wide range of verticals and geographies, which again highlights the need but also the recognition that this is a fantastic opportunity for Step IT Up candidates. Even Joe Biden has given Step IT Up his seal of approval, visiting the Detroit centre when he was US Vice President and commenting: “We can’t train and pray, we have to train and place”. “The good thing about Step IT Up is it is custom focused on specific skill sets,” says DePutron. “Our clients embrace that because many of them deal with a war on talent. Not only that, but also folks are retiring and leaving the organisation, and they're losing knowledge base. We work with clients to understand what that skill

President Biden visiting Step IT Up

UST STEP IT UP

Olwyn DePutron TITLE: DIRECTOR INDUSTRY: INFORMATION TECHNOLOGY & SERVICES

EXECUTIVE BIO

LOCATION: N EW YORK, USA

“ IF YOU HAVE PASSION, WE CAN TEACH YOU ANYTHING”

“I'm a graduate with an MBA from Texas Tech University. I started off my career in marketing with a focus on international marketing. I love culture, love people. My career journey took me through a series of inside sales business development opportunities. I've worked in Amsterdam. I've worked in Jamaica, and now I'm with UST based in New York. The thing about my career that I love is the lives I have touched. Every step I was able to provide something of value to someone – whether it's a client or whether it's directly with an individual.”

UST STEP IT UP

Graduated students at Step IT Up

set is and build into the training exactly what the person needs to be successful in that role.” It is widely recognised that there is a shortage of women working in STEM (science, technology, engineering, math) roles, which many people see as the key to innovation and job creation. In the US, only 28% of STEM jobs are held by women. In some of the most sought-after skill sets and fastest-growing areas, that proportion is even less. Encouraging women to look at careers in technology through initiatives like Step IT Up can help address this gender imbalance. It’s something DePutron has personal experience of too.

“ YES, IT'S HARD TO GET INTO TECH, BUT THERE ARE OPPORTUNITIES THAT CAN GIVE YOU THE TOOLS AND THE KNOWLEDGE TO GET THERE” OLWYN DEPUTRON

DIRECTOR OF THE STEP IT UP PROGRAMME, UST fintechmagazine.com

1999 Year founded

28,000+ Employees globally

women graduated and were placed in their roles within 6 months to take this over. “We had an individual that was part of the training who interviewed a year before,” recalls DePutron. “She didn't get a seat, but she heard about this again, went Graduation at Step IT Up through the interviews, got selected, and showed her persistence. She wanted “I have a sister who has been in investment to get a technology career and she was able banking technology throughout her working to get a full-time position – all this while career. I remember as we were growing also having a baby.” up, no one in my family was in tech. I don't even know how she found that career within technology,” she says. “But as she moved up in her career, she was able to connect with folks who told her more about the potential of a career in technology and Step IT Up is doing that as well. “Yes, it's hard to get into tech, but there are opportunities to give you the tools and the knowledge to get there.” One way UST promotes STEM careers is to work with women in technology events and programmes specifically for women – such as a bank in Atlanta that put 21 women through a specialist RPA training programme. OLWYN DEPUTRON The bank was previously outsourcing this DIRECTOR OF THE STEP IT UP PROGRAMME, UST work to an offshore company but 20 of the

“ IT SHOWS THAT THEY ARE VALUED, IT SHOWS THAT THEY CAN DO IT, AND THAT'S THE HAPPIEST, PROUDEST TIME FOR ME”

April 2022

UST STEP IT UP

UST STEP IT UP SELECTION PROCESS “First off, we take our clients' requirements – what they're looking for. Usually, it's a four-year degree in any field. The first step is for them to take an assessment test that measures reading, math and analytics. We look for a 70% score and everyone who achieves that will be interviewed. We do a two-part interview – it's a round table discussion with everyone in the room, so everyone on the client side and UST and the candidates are in the room, whether it's virtual or physical. We ask simple questions to hear how they collaborate as a group, how they're present themselves, and their communication. We then move to one-on-one interviews. If you have some tech experience, that's great. That's not what we're looking for, because we're going to train you in that. We're looking for your desire to build a career in technology. If you have passion, we can teach you anything. But if you're missing the desire, then that might be hard for you to proceed through training. The clients are involved, so they can select or see personalities that are a good fit for their organisation. Once folks are chosen, they get an offer letter, and they move on to the training. Now the training is rigorous, it's eight hours a day, Monday through Friday. Typically, it's four to seven months. Through the training, students are required to keep a 70% average. Some clients require 80%.

We work on soft skills, so you see that some folks who would not talk too much in the beginning are the ones that are giving the graduation speech. That's another win for UST Step IT Up. For every interview seat available, we have at least 10 applicants. We have a 90% pass rate. Surprisingly during the COVID period, that rate went higher. We've had classes that were 100% graduated, so it's a good programme. After they graduate, they are placed on-site for about a year with the client, but they're a full-time employee of UST. During this time, the client has a chance to see their work. From those working on-site with a client, 87% get a direct offer. I think those stats are really strong actually and it shows that you're clearly doing something right in the selection process.”

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UST STEP IT UP

“ THE GOOD THING ABOUT STEP IT UP IS THAT IT'S CUSTOM FOCUSED IN SPECIFIC SKILL SETS” OLWYN DEPUTRON

DIRECTOR OF THE STEP IT UP PROGRAMME, UST

"Step IT Up America Programme helped me to find my passion" – Rekina

April 2022

It’s important to note here that Step IT Up pays for the education – the equivalent of a college degree – as well as paying the candidates throughout their training. Candidates pay nothing, and the organisations who eventually benefit also pay nothing for being provided with skilled, in-demand workers. So what does UST get out of this? “First of all, it's a good feeling helping someone else and giving back to the community,” says DePutron. “I think that's the main reason – they have the assets and the training experience. In all honesty, they like to do it. UST likes to give back to

the community – you're making a change in someone, and we all have a part to play in that change.” DePutron is clearly proud of the work UST and the Step IT Up programme achieve, and she admits she loves to see the look on students’ faces when they graduate, when that person gets a job offer from the client, that completes the circle. “It shows that they are valued and that they can do it, and that's the happiest, proudest time for me.”

fintechmagazine.com

HOW DIGITISATION HAS TRANSFORMED THE FOREX MARKET Fintech has revolutionised the way we interact with financial products and forex trading is no exception

hirty years ago, investing and trading was the preserve of a few select individuals on Wall Street. Today, consumers can trade thousands of commodities quickly and easily from the comfort of their homes. This transformation has been keenly felt in forex trading. For consumers, the advantages are fairly obvious and straightforward. Log on to any of the major digital investment platforms and chances are you’ll be offered a range of currencies to trade, alongside the usual staple of stocks and shares, cryptocurrencies and commodities. For investment bankers and brokers, the change is more significant. Digital transformation has reduced friction for forex traders, making trades more efficient and cost-effective. It has also spawned a series of new technologies, built on the back of artificial intelligence (AI) and machine-learning, that can – among other things – help to improve risk management. David Mountain, EVP – Strategy, M&A, Analytics and Product for UK-based Crown Agents Bank, explains: “Digital transformation and fintech has already had a huge, positive impact on the forex market, with more progress still to come. The adoption of new technologies creates greater efficiencies within the FX process, reduces the costs, speeds settlement and improves transparency. In turn, this has increased competition in the market and is driving further innovation.

April 2022

BANKING

WRITTEN BY: ALEX CLERE fintechmagazine.com

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“New technology also has the knock-on effect of making FX more inclusive in two ways. First, reduced costs create benefits for everyone in the value chain and makes FX more accessible. Second, the need for cutting-edge FX solutions is powering digital innovation hubs in emerging markets, which are establishing themselves as new centres for financial technology. “FX innovation has the potential to be the engine of intra-regional trading in previously underserved markets. In regions such as Africa and Latin America, where regional economic integration is incomplete at a legislative and infrastructure level, technology can be transformative. This makes business and investment easier and more affordable.” How has fintech transformed forex? The advent of new platforms for making crossborder payments, and trading commodities, has resulted in a ‘democratisation’ of forex. By 2019, this had catapulted trading in forex markets to $6.6trn a day, according to research by the Bank for International Settlements (BIS). This was up from $5.1trn a day just three years earlier. All of this is set in the context of a recordbreaking period for fintech generally. 2021 was a “remarkable year” for the sector, according to KPMG’s Pulse of Fintech report,

“ WE MUST FOCUS OUR EFFORTS ON USING FINTECH TO HELP DEVELOP THE REAL ECONOMY” ERIC HUTTMAN

CEO, MILLTECHFX

with strong investment and a record number of deals in every major region. In forex specifically, this is highlighted in Visa’s $929 million deal for foreign exchange payments platform CurrencyCloud, which was announced last summer. Yet despite the progress made in the retail market, there is still a sense that commercial forex lags behind. “Few areas of financial services have remained so stubbornly analogue, for so long, as commercial foreign exchange,” says Seth Phillips, founder and CEO of forex hedging platform Bound. “True, the sector’s liberalisation in the early 2000s spawned a number of non-bank forex providers and boosted competition. But this new wave of FX brokers consisted mostly of ex-bankers whose model was to undercut bank pricing while still making a fortune – by charging a variable and opaque mark-up on the customer’s exchange rate, rather than a transparent and easily comparable fee. fintechmagazine.com

BANKING

“ FEW AREAS OF FINANCIAL SERVICES HAVE REMAINED SO STUBBORNLY ANALOGUE, FOR SO LONG, AS COMMERCIAL FOREIGN EXCHANGE” SETH PHILLIPS

FOUNDER AND CEO, BOUND

April 2022

“To this day commercial FX is still done mostly on the phone, enabling brokers to give a customer a competitive exchange rate one day, but help themself to a fat margin on another day when the customer doesn't have time to collect and compare multiple quotes. “For retail customers – typically those sending money to family overseas – this model has been disrupted by Wise (formerly Transferwise), Revolut and other successful fintechs, which charge customers a flat, low fee for each transfer.” Phillips believes that digital disruption might now finally be coming to commercial FX, with new technologies that allow for better customer experience, more rapid trading and greater transparency around pricing.

BANKING

What Moves Forex Prices?

What is the future of forex? With its popularity continuing to grow, it is entirely possible that blockchain will be the new frontier for forex trading, enabling the platforms and technologies that provide for greater digitisation. And it is this emphasis on transparency where it would potentially offer the greatest benefit. Unlike traditional forex trading, where deals are facilitated by a broker and there is generally little transparency around trades, blockchain creates a public ledger for each transaction. However, the very nature of blockchain could also prove to be a problem. Blockchain works by storing information across a network of computers, meaning a consensus is required for any changes to be made – this is what has made cryptocurrencies, and more recently NFTs, possible. However, it is possible that this would be a stumbling block for the forex space as it limits the amount of oversight that a regulator would need. In any case, many believe that the key to advancing the digitisation of forex lies in commercial trades – in helping to further reduce friction, making forex trading quicker and more cost-effective for brokers and more transparent for clients.

“ DIGITAL TRANSFORMATION AND FINTECH HAS ALREADY HAD A HUGE, POSITIVE IMPACT ON THE FOREX MARKET, WITH MORE PROGRESS STILL TO COME” DAVID MOUNTAIN

EVP – STRATEGY, M&A, ANALYTICS AND PRODUCT, CROWN AGENTS BANK

Eric Huttman, CEO of MilltechFX, says: “We must focus our efforts on using fintech to help develop the real economy. That starts with the treasurers and asset managers who can face huge operational inefficiencies with their FX setups which directly affect their bottom line. “Now is the time to leverage digital solutions to implement widespread and strategic change. If all parts of the financial services industry are to ‘build back better’ for their customers, the use of these technologies to establish a more efficient, transparent and cost-effective way of doing things will be vital.” fintechmagazine.com

PROCUREMENT - THE HEART OF EVERY ORGANISATION 46

April 2022

IKANO BANK

WRITTEN BY: GEORGIA WILSON PRODUCED BY: CRAIG KILLINGBACK

fintechmagazine.com

April 2022

IKANO BANK

Åsa Stoije, Head of Sourcing and Procurement, Ikano Bank, discusses the value effective procurement can provide, and the need for strategic partners

wned by the Kamprad family, Ikano Bank can be traced back to the home furnishing company, IKEA (founded in 1943). Ikano Bank founded in 1995 creates possibilities for better living by offering simple, fair and affordable services, enabling a healthy economy for the many people. Ikano Bank’s offer includes savings and loan products for consumers, sales support services for retailers, and leasing and factoring solutions for businesses. Åsa Stoije, Head of Sourcing and Procurement at Ikano Bank spoke of the company’s business idea: “We create possibilities for better living by offering simple, fair and affordable services, enabling a healthy economy for the many people..” Ikano Bank’s offerings consist of credit cards, loans, mortgages, sales financing, factoring, and leasing. “We have roughly 1,100 employees in eight European markets, including the Nordics, Germany, UK, Poland and Austria,” says Stoije. She adds: “But what is interesting right now and for the coming years is that we are in the middle of a transformation - building a completely new digital bank alongside our existing operations.” Sourcing and procurement at Ikano Bank Having 20 years’ experience in international and progressive functions, Stoije’s focus has been on sourcing and procurement at all levels. fintechmagazine.com

IKANO BANK

Ikano Bank: Procurement the heart of every organisation

She says: “I joined Ikano Bank in 2019, as Head of Sourcing and Procurement. It’s very exciting to be a part of the sourcing function. We are a central support function that helps the wider organisation to make the right strategic decisions and investments.” Stoije and her team is responsible for indirect purchasing of materials and services

April 2022

- essentially everything the bank needs to ensure a smooth running of the business. Such as external resources, consultants, R&D projects, outsourcing, hardware, software licenses. “Or it can be hosted services and software-as-a-service (SaaS),” she says. “It’s quite a broad area. We are also in charge of negotiating the best deals for the company, while continuing to meet company standards and industry regulations as well as client and public expectations.” Sourcing is a wellintegrated function in Ikano Bank’s operations, and as such, Stoije e says it’s vital that sourcing processes are both followed and understood. “Sourcing is a multifaceted and multidimensional function with various tasks

IKANO BANK

ÅSA STOIJE

6bn SEK

TITLE: H EAD OF SOURCING AND PROCUREMENT

Business volume

INDUSTRY: BANKING LOCATION: SWEDEN

1995

Year founded

Åsa Stoije leads the company's purchasing organization, its change and transformation.

1,000+ Number of employees

Before joining Ikano Bank in Nov 2019, Stoije served as Director Global Indirect Procurement at Arjo (Getinge Group) and she has also had several global positions at Tetra Pak and Ericsson for many years.

EXECUTIVE BIO

and responsibilities. We are in the middle of everything, a support function and a service function, where we are more and more becoming an internal business partner providing advice on investments and purchasing decisions.” Stoije says that while the focus on optimisations and cost in sourcing is understandable the job is also about stakeholder management - building relationships, supplier development, risk mitigation, and responsible sourcing. “And there are a lot of new regulations to take into account,” says Stoije. “It is important for sourcing and procurement to help the wider company to be compliant to rules and audits.” She continues: “As a sourcing function we should know what we spend, where we spend, how we spend, and why we spend. It is also important to be able to show how we secure the best value for money, as well as balancing spend risk dependency and value.” The sourcing process is fundamental, she says, and runs through the entire company. “Nothing can be bought, purchased, sourced without the procurement and sourcing function being involved,” she explains.

Åsa Stoije holds an Executive MBA, International Management and Leadership programme. She has also studied economics, marketing and law, graduating at School of Economics and management at Lund University.

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DO YOU WANT A FUTURE WHERE TECHNOLOGY CONSTRAINS YOUR BUSINESS? OR EMPOWERS IT?

GET THE FUTURE YOU WANT

Working at the heart of business transformations Capgemini, a key partner of Ikano Bank, is enabling business transformation for its global clients - working together with passion and energy Capgemini, a key partner of IKANO Bank, has enabled business transformation for more than 50 years for its global clients. “We are fortunate to work at the heart of all these major transformations, and contribute to the development of Ikano Bank,” said Sujit Karkera, Account Executive and Delivery Partner at Capgemini. Karkera is responsible for the company’s partnership with Ikano Bank and leads a global team of 250+ people from his office in Sweden. “I believe in building winning teams, being bold, and thinking out of the box.” Capgemini is a global leader in consulting, technology services and digital transformation with the focus on building technology for an inclusive and sustainable future. “Our industry has been evolving at a very fast speed especially given

the pandemic. Digital products and services are now even more relevant than ever before. We have our focus on being the top partners for cloud and data,” said Karkera. “We also focus on cybersecurity and Artificial Intelligence (AI). Our ability is to provide scale and speed with our large pool of global talent which makes us a trusted partner.”

Trusted partner of Ikano Bank Capgemini has been a key partner of Ikano Bank since 2017. “We provide technology services that drive the core banking platforms, we also partner in their New Bank transformation journey. “It has been a privilege to contribute to Ikano Bank’s vision and their journey of a New Age Digital Bank. At Capgemini we are a global team of experts with niche skills and deep domain knowledge.” “The secret to our sustained, strong partnership is the common values we share. I see many similarities, such as being bold with daring to be different, and team spirit with working together. “We are fortunate to work at the heart of all these major transformations. We will do this, as we have always done at Capgemini, with passion and energy, and all together.”

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IKANO BANK

Where can sourcing’s value be seen? Stoije says that sourcing is about multidimensional value creation: “Value can be seen from a cost perspective, from a supplier insights perspective, but also from a business growth and increased profitability perspective. Sourcing has strong knowledge in so many different areas. It is vital for an organisation to harness the function’s capabilities in these areas.” Beyond the value of cost reduction, Stoije says sourcing also looks to create value by bringing in new technologies. “It’s about how to improve the function,” she says. “How can we further use external input in our own product development so that we can continue on our journey to becoming a fully digital bank offering simple, fair, and affordable financing for the many.” fintechmagazine.com

Helping financial institutions build a resilient and adaptable business At TCS, we believe in creating sustainable growth for our stakeholders. Our innovative framework, digital capabilities, agile business model and ecosystem, are helping forward-looking financial institutes in their transformation journey and enabling them to stay ahead in the market.

Rabi Panigrahi, TCS’ Head of Banking, Financial Services and Insurance, Nordics values co-creative relationship with Sweden’s innovative Ikano Bank Tata Consultancy Services (TCS)’s Banking, Financial services and Insurance (BFSI) practice has been partnering with many of the world’s largest financial institutions in their business growth and transformation journeys for over 50 years. In the Nordic countries, Rabi Panigrahi leads this key segment of the business, engaging with key clients like Ikano Bank (founded by Ingvar Kamprad the founder of IKEA). TCS focuses on supporting their customers in taking a clear-sighted perspective towards digital transformation and reimagining their businesses. For this, TCS leverages comprehensive investments in products & platforms, as well as disruptive technologies like AI, cloud, cognitive computing and the like. “We bring these technologies on board, so the customer does not have to enter the innovation journey from zero,” says Panigrahi. “Ikano was a digital bank from its outset, without high-street branches, so it had little legacy burden. We have empowered it, with technology solutions to reimagine

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the digital banking experience coupled with a robust IT4IT platform to enhance Ikano Bank’s development life-cycle and speed to market. The new platform is enabling Ikano to further enhance their growth and transformation journey, with focus on broadening their customer base & customer experience by creating an ecosystem through retailers and distribution partnerships rather than depending solely on the financial segment of the business.” The vision TCS offers is very much in tune with that of its client. Åsa Stoije, Head of Sourcing and Procurement at Ikano Bank says: “TCS is an important supplier for Ikano Bank. We work in close collaboration with them as part of our strong partnership. They are a part of many development projects and integrations, and provide us with key capabilities. They fit our needs and requirements as a business, providing us with expert knowledge and helping us achieve our goals.” A statement that neatly sums up the advantage of working with the world’s leading banking consultancy.

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IKANO BANK

INSIGHT...

Ikano Bank and its partnerships Ikano Bank believes it is important to have partners that are willing to invest in the business. “Now more than ever, because we’re on our transformation journey, it is important for us to have partners with whom we can have a strong relationship,” says Åsa Stoije, Head of Sourcing and Procurement at Ikano Bank. She adds: “You can compare it to a marriage. It is important for us and our partners to have transparency and work together towards the same goals.

RISK MANAGEMENT AT IKANO BANK Risk management in any organisation should be treated with care. From a sourcing perspective, Ikano Bank has a detailed checklist of different requirements. It conducts annual reviews, follow-ups and risk assessments, and it has multilevel of approval chains and security assessments.

It’s about give and take throughout the journey, because this allows us to grow our business and to build at scale.” Given the nature of the sourcing and procurement market, it is also vital for Ikano Bank’s partners to navigate a disruptive market. “They need to be global, she says “They need to have agility, flexibility, and to provide us value for money. They must also be able to work in a multi-vendor environment, and be willing to take risks in order to get rewarded in meeting our business goals..” Stoije adds: “I think those are key foundations for a good partnership. 58

April 2022

IKANO BANK

But our partners are also experts in their field, so it’s important they challenge us. We need them and their expertise, in order to collaborate and improve our offerings.” Two such partners include Capgemini and TCS “In 2017 after a competitive tender process, we entered into a partnership with Capgemini,” she says. “As part of this partnership a large number of Ikano Bank’s IT functions were transitioned over to Capgemini. This enabled us to strengthen our IT capacity, and to further embark on

our digital transformation journey, as well as secure existing bank operations.” Stoije adds: “TCS Tata Consultancy services is another important partner for Ikano Bank. We work in close collaboration with them as part of our strong partnership. They are a part of many development projects and integrations, and provide us with key competence incl. consultants. They fit our needs and requirements as a business, providing us with expert knowledge and helping us achieve our goals.”

fintechmagazine.com

SMART MONEY: DIGITAL PAYMENTS AND MARKETPLACE DISRUPTION

As Apple prepares to launch Tap to Pay across the US, we take a look at the digital payment space and the trends driving it WRITTEN BY: JOANNA ENGLAND

April 2022

FINANCIAL SERVICES

“Apple has consistently been a leader in boosting mobile payment experiences within the US market and increasing mobile adoption among consumers” ANDREW EDEM

GLOBAL HEAD OF INNOVATION, PPRO

igital payments have transformed the global economy - and have exploded over the past decade. But they are far from new with their roots in telegram technology, which was operational in the 19th century. For example, in 1871 Western Union debuted the electronic fund transfer (EFT). And in 1959, American Express introduced the first plastic card for electronic payments. By the 1960s, ATMs were popping up on most street corners, and customers were getting used to managing their money through systems that relied on early computing. By the 1970s, the developed world had become more reliant on computers as part of the buying process - and from there, the very first debit cards were launched - just 10 years later in the mid-80s by Barclays. fintechmagazine.com

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“ Expectations of what a business will look like in the future have changed fundamentally, with the rise of covidpreneurs over the last 18 months” BRAD HYETT CEO, PHOS

Today, the vast majority of transactions occur online and digitally, from ewallets and blockchain to contactless payments on credit networks. Contactless payments have exploded too, with advancements in Near Field Technology making transactions even simpler for customers and businesses alike.

Mobile technology and the digital payments space One of the biggest changes to disrupt the digital payments space has been through mobile technology, combined with NFC - which means smartphones have now essentially become payment vessels, taking the place of plastic, chip, and pin cards. But as this field develops, the natural progression has led to mobile technology companies enabling businesses to simplify their payments even further. Apple recently announced the launch of Tap to Pay - a new streamlined contactless payment service for business vendors that enables them to simply download the software, install the settings and start using their iPhone as a payment receiving device. The move is shaking the digital payments fintechmagazine.com

FINANCIAL SERVICES

space because it means current companies that supply payment device machines are no longer required if business owners decide to swap to the iPhone Tap to Pay method. Developments in NFC technology and digital payments Apple’s new Tap to Pay is made possible through NFC which enables the communication between two electronic devices over a distance of 4cm or less. NFC offers a low-speed connection through a simple setup that can be used to bootstrap more capable wireless connections. The move by Apple has been hailed as a leap forward for the software point of sale (SoftPos) technology in the marketplace, explains Brad Hyett, CEO of Phos, a democratising payments fintech launched in 2018. He says, “One of the biggest challenges to the widespread adoption of software point of sale (SoftPoS), the technology that enables merchants to accept card payments

“ It is important to note that Apple currently represents around 30% of market share, while Android remains the dominant OS” BRAD HYETT CEO, PHOS

Contactless payments: An unstoppable trend | VISA | LEAP 2022 | TECHx

April 2022

directly on their phone or mobile device, is that up until now, it was not supported by iOS operating systems.” Hyett points to the tech giant’s acquisition of Mobeewave as one that has addressed demand in the market, and believes the appetite for SoftPos is only going to grow as consumers continue to turn their back on cash in favour of contactless payments. “With Apple entering the SoftPoS space, this validates the technology and will put further pressure on the traditional POS manufacturers who have failed to successfully address the SME market. It is important to note that Apple currently

represents around 30% of market share, while Android remains the dominant OS,” he says. Since the pandemic and the shift digital transformation has caused, the marketplace also has a radically different expectation - along with new entrants motivation for further changes in the space. “Expectations of what a business will look like in the future have changed fundamentally. With the rise of covidpreneurs over the last 18 months, there’s been a global surge in sole traders who are choosing more fulfilling employment over a steady paycheck. “This shift in the makeup of the global economy is driving the rise of an ‘application marketplace’, whereby business functions are increasingly moving onto the mobile devices of business owners. That is, these new market entrepreneurs are increasingly running their business out of a tablet or mobile device, rather than traditional PCs and other legacy systems.” A natural technology progression The use of NFC technology and new digital payments methods has also dramatically fintechmagazine.com

“ ...these new market entrepreneurs are increasingly running their business out of a tablet or mobile device, rather than traditional PCs and other legacy systems” BRAD HYETT CEO, PHOS

April 2022

FINANCIAL SERVICES

increased over the past three years. Andrew Edem, Global Head of Innovation at PPRO, points out that use of digital wallets among consumers in the US saw a 27% leap in 2020, up from 22% in 2019. He says, “The new Apple feature ‘Tap to Pay’ is an opportunity for US merchants to improve in-person checkout experiences by allowing contactless payments directly on a mobile device… It's crucial that retailers are equipped with the right technology and infrastructure to not only enable these payment methods, but create seamless user experiences that make shopping easy for consumers, wherever they are.” It also comes as no surprise that Apple has been the first of the tech giants to hit the post, as it were. “Apple has consistently been a leader in boosting mobile payment experiences within the US market and increasing mobile adoption among consumers, and I think we’ll continue to see additional payment methods offered by both large and small merchants, as we’ve seen in other regions,” Edem says. Innovation and NFC in Softpos technology Hyett concludes, that mobile devices are becoming the core hardware estate for businesses across a range of verticals. For example, in the transport sector, taxis are now using tablets to run in-ride advertisements as well as accept contactless payments. He adds “These all-in-one solutions are powered by software point of sale (SoftPoS) technology, streamlining hardware estate to deliver more functions on fewer devices. This reduces costs for merchants by helping them sell more while also offering a cheaper alternative to traditional payment terminals. We look forward to seeing what innovations and new market entrants bring to this sector.” fintechmagazine.com

WRITTEN BY: CATHERINE GRAY PRODUCED BY: MICHAEL BANYARD

April 2022

Transformin with custom

QONTO

ng business banking mer-centricity fintechmagazine.com

QONTO

Qonto's COO, Jordi Gudiol, outlines the company’s dedication to creating best-in-class banking solutions while focusing on the needs of customers

anking solutions are changing. The COVID pandemic showed that people and businesses could handle their finances via a device rather than at a bank itself, with its onset acting as a catalyst for the switch to digital services. On top of this, the various lockdowns and restrictions necessitated by the pandemic dramatically reduced the need for cash transactions and withdrawals. Now, businesses and consumers are both realising the benefits of digital banking and, as a result, see the benefits of reduced risk, improved efficiency and better customer experience – setting the stage for a digital banking future. Translating to ‘an account’ in Swedish/ German, Qonto is a French online banking solution for SMEs. Founded in 2017, the company aims to create digital financial solutions that energise its customers and simplify related processes. Market leaders in France, the company is now successfully scaling its business across Europe, having quadrupled its revenue in Germany, Spain and Italy over the past two years. “We have very high ambitions, we want to become the finance solution of choice for 1 million European SMEs and freelancers by 2025. With our recent funding, we aim to invest over €100mn in each of these markets in the next two years. We are also planning to expand to new European markets by 2023.”

April 2022

2017

Alexandre Prot and Steve Anavi create Qonto

600

Number of Employees

220,000+ Companies are using Qonto

500+

Example of Happy Qontoers an image caption

fintechmagazine.com

QONTO

EXECUTIVE BIO JORDI GUDIOL TITLE: CHIEF OPERATIONS OFFICER INDUSTRY: FINANCIAL SERVICES LOCATION: PARIS, FRANCE McKinsey & Co and Toyota alumni who, mid-career, switched from working in heavy industries such as automotive, aerospace and mining to online e-commerce and Fintech. Gudiol is now working on transferring the operational experience and approaches from those industries into a hyper growth scale up. Qonto has built a reputation for putting the customer first and excellent service and Jordi is fully devoted to maintaining that competitive advantage and making it even better.

April 2022

QONTO

Qonto: transforming banking with customer-centricity

The B2B payment institution offers bank accounts, cards, and spend management solutions, amongst other services for business customers, and its Chief Operations Officer, Jordi Gudiol, is responsible for managing some of the key teams within Qonto: customer care; onboarding; anti-money laundering (AML); and banking operations. “We very much focus on freelancers, entrepreneurs, and small- to medium-size businesses. We now operate in France, Italy, Germany and Spain.” says Gudiol. “The idea of how we want to compete is to just have the best product on the market, to be the simplest and most useful banking experience that a business can have. We want to operate at transparent pricing. So whilst it's not for free, we don't do hidden fees. We really want to provide the best customer support as well. We're a business banking service and we do 24/7 support. It's just way beyond what anyone else is doing. We really want to make sure that you can

reach us at any time, and that when you do, there's a human behind the phone – or the chat or the email – that can actually help you with what you need,” he continues. With a focus on speed and quality, Qonto always strives to deliver products that meet the needs of its customers and has developed a healthy culture from within to inspire employees to do so.

“ FinTech is moving so quickly. So probably two years from now, it will look very different and we are just going to have to adapt as well” JORDI GUDIOL

CHIEF OPERATIONS OFFICER, QONTO fintechmagazine.com

“We wanted to have the product, marketing, tech, and support teams working more closely together to ensure we remain truly customer centric and fully aware of our clients’ preferences and needs.”

Martin Bouvier, Head of Onboarding at Qonto

Grow on with Intercom, the Engagement OS.

QONTO

“ Thanks to Intercom, today, we are much better at keeping track of every single conversation. No customer really gets left behind” JORDI GUDIOL

CHIEF OPERATIONS OFFICER, QONTO

“We have very ambitious plans, but it's really important how we do it and that we do it in the right way. So we have these core values we always come back to,” explains Gudiol. “There's the ambition and teamwork that I would say most organisations have, but we also focus very much on mastery as the third key element. The aim with this is to make sure that every person at Qonto is the expert in what they do. The last one is integrity: we want to make sure that everything is done in the right way not just internally, but also externally – towards our customers, suppliers, regulators and so on.” Qonto is working hard to build the best possible working environment. “Companies are not only competing for customers, but also for talented employees. Attracting and retaining talent can be a real challenge today.” says Gudiol. The company, which recently announced its plans to quadruple its team by 2025, has also announced the launch of its European Qonto Campus. “We are very excited by the launch of this European Qonto Campus program which will enable international mobility between the local offices.

Focusing on customer demands for success Dedicated to consistently providing topquality banking solutions to its customers – as well as innovating in-house – Qonto also looks to be reactive to its competitors, in order to stay in touch with emerging fintech technologies and trends. Qonto’s in-house innovation is highly focused on the wants and needs of its customers, as Gudiol explains: “I think what's really important is that we actually focus on the customers' experience and the user experience – we put them first in everything we do. Whenever there's a feature developed or a bug fixed or a new service provided, it always comes from a user need – either an explicit one that they've told us about or more an implicit one that we think they may need six months down the line.” Gudiol has weekly meetings with the Chief Product Officer, Marc-Antoine Lacroix, and the Chief Technology Officer, Aymeric Augustin, to discuss what customers need and what Qonto can do to meet those needs.

fintechmagazine.com

QONTO

€622mn

raised with VCs and business angels including Valar, Alven, the European Investment Bank, Tencent, DST Global, Tiger Global, TCV, Alkeon, Eurazeo, KKR, Insight Partners, Exor Seeds and Gaingels

#Next40

Listed in the French Tech #Next40, bringing together the most promising young companies of the French Tech industry

1st

B2B account for finance management to get a Payment Institution licence

April 2022

QONTO

Magazine fintechmagazine.com Weblink in layers

QONTO

“By looking at it that way, we've been able to do some really cool things in terms of what the customer experiences. It could be things like eliminating redundant process steps. Sometimes at banks, they ask you a lot of things and you don't really know why, neither does the bank. So we always try to challenge the steps that a customer has to go through to see if we can eliminate something. Can we automate it? Can we make it easier? And that's how you build a seamless product that just works,” says Gudiol. As Qonto deals with freelancers and SMEs, the company supports businesses in the process of starting their business or raising capital when they grow – which Gudiol explains can be incredibly rewarding – helping them with simplified, customerfocused processes that Qonto have perfected from feedback and a healthy dose of forward-thinking. 78

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“ What's really important is we actually focus on the customers' experience and the user experience. We actually put them first in what we do” JORDI GUDIOL

CHIEF OPERATIONS OFFICER, QONTO

QONTO

“If you are with traditional banks, it is so painful to go through the banking part of starting your business or raising funds. There are so many things you have to do, most entrepreneurs have not done it before; it's just a very daunting process and it takes ages. If you're a small entrepreneur, then you should be focusing your investors, your employees, your customers and so on. You don't have the time or energy to deal with your bank and everything that they ask you to do. So, we've worked a lot on processes like that. The really cool thing is, when you have these entrepreneurs and small business owners ping you directly to say thank you for helping them or even better when they post it publicly, put it on Twitter where everyone can see how great we are.” “Following their success is really energising,” Gudiol adds.

built on modern technology. It's also highly modular, so it’s easy for us to set up and modify to what suits us.” “Thanks to Intercom, today, we are much better at keeping track of every single conversation. No customer gets left behind. With Intercom, we're able to track every single conversation and the team will manage most of them in less than a minute. It's also allowed customers, especially the ones that are on chat, to have a much more natural conversation,” he adds. Due to its ease-of-use, Qonto’s staff are better able to provide seamless and helpful customer service: “I'm Generation X, so computer illiterate, but in Intercom I've been able to set up my profile. I've selected my queues. I do about 10 customer tickets every week myself. And I'm able to track my

Cultivating partnerships for improved customer service To ensure its software solutions meet the needs of its customers, Qonto developed a strategic partnership with customer communications platform provider, Intercom. “We’ve worked with Intercom for about 18 months, and it’s one of the partnerships that is working really well. I think the reason it works so well is that our fundamental values are quite similar – we put the same importance on the same things. I like the product they have. It's really seamless from a customer's perspective,” explains Gudiol. With Intercom’s help, Qonto now has an easy-to-use chat widget on its website that allows customers to speak to Qonto’s staff and access frequently asked questions (FAQs) to help them with a query. Commenting on the software, Gudiol says: “It's really intuitive and it's easy to find things, but it's not intrusive at all, and you can tell it's fintechmagazine.com

performance, my CSAT and so on. I think because it's so easy to use and so natural, you actually have a better conversation with the customer. So the customers benefit from that in the end as well.” Overcoming challenges in the financial industry Another challenge Qonto has had to navigate in the six years since its founding is financial crime. 80

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Built by Qonto itself, the company’s technology contains all the elements needed to protect customers, and the company, from financial-related issues such as fraud and money laundering. One key challenge facing fintech startups is protecting their customers and themselves from fraud and money laundering: “In terms of protecting customers, I would say most banks and FinTech startups are good at identifying hacking attacks, system

QONTO

“ We've been able to do some really cool things in terms of what the customer experiences” JORDI GUDIOL

CHIEF OPERATIONS OFFICER, QONTO

downtimes, card fraud and/or bankruptcies. There are quite a lot of checks and balances in place to make sure those things don't happen, or if they do, that the impact is minimal. What's really difficult, though, are things like phishing attacks and other types of social-engineering scams, where someone tricks a customer either into providing their account access information or, through some other scam, have convinced someone to actually transfer money to another account.

Those types are much harder to protect against because we’re outside of the loop in a way” says Gudiol. Learning to navigate these challenges, Qonto has developed technology to both allow it to correctly identify individuals and organisations it onboards as well as systems to detect suspicious patterns and/ or activities on accounts which allows the teams to investigate the activities and take rapid action where needed. Equipped with the tools to successfully navigate these challenges, Gudiol explains that Qonto is looking forward to the coming years of expansion and international growth: “When the time is right, we will add new countries to the list to accelerate our growth.” “We are just getting started in terms of really building a finance solution that businesses need and want. And then who knows? FinTech is moving so quickly. So probably two years from now, it will look very different and we are just going to have to adapt as well. We know that there are many things that we will need to do, we just don't know what they are yet,” he concludes.

fintechmagazine.com

LOCKDOWN LENDING AND POST-PANDEMIC PAYMENTS

WRITTEN BY: JOANNA ENGLAND

April 2022

PAYMENT SOLUTIONS

The corporate and commercial lending environment has transformed as a result of COVID-19. We take a look at the biggest disruptors

intech is changing – and not just in relation to legacy systems. While the global financial market has always been intrinsically male, the landscape is shifting as more women than ever before are embarking on careers in banking, investment, and payment-related industries. The past two years have transformed the globe in so many ways – so it comes as no great surprise that the world of lending has undergone quite a few seismic changes too. Now, digital transformation has dispensed with paperwork and ushered in a new era of decentralised finance. Manual systems are out. Automated systems are in. And as the fintech ecosystem continues to expand, it is the customer that ultimately experiences the biggest changes. As well as offering more services digitally and making use of new data sources, banks, and lending institutions have also had to become more agile, more resilient to crisis, and maintain profitability. The cost of digital transformation for banks Digital transformation, although a necessary investment for the long term, has cost the banking industry dearly. Reports vary when reporting the actual global expenditure, which ranges from half a trillion dollars to well over a trillion in 2021 alone. The true cost may never be known, but it is almost certainly stratospheric.

“ There’s other alternative lenders or credit brokers, but you have to watch out for additional requirements” IAN DUFFY

CEO, ACCELERATED PAYMENTS fintechmagazine.com

PAYMENT SOLUTIONS

The platform economy is not just changing banking It’s fighting hunger, too.

IMAGE: GETTYIMAGES.COM

he platform economy is changing the globe, creating and connecting communities in every industry. Digital access allows new markets to flourish, so that users can share resources, interact and transact with more reach and impact than ever before. As a result, businesses and their customers are forging meaningful relationships that support more than just the bottom line. Financial services institutions are realising the opportunities this new economy offers. Recently, Standard Bank Group released the paper The Power of the Platform Economy for Financial Services, which highlighted the need for end-toend solutions and the necessity of building strong partnerships and ecosystems driven by data and insights. The Standard Bank Group is involved in developing such partnerships with fintech and BigTech companies such as Salesforce, Microsoft Azure and Amazon Web Services. One strategic partnership that has evolved over the past

two years to make a positive impact in communities is OneFarm Share. The platform grew as a response to the challenge faced by many developing countries and amplified during Covid-19 lockdowns: food security and hunger. OneFarm Share (facilitated through a partnership between HelloChoice and Standard Bank Group) provides a digital business-to-business platform that allows emerging and commercial farmers to sell and donate their produce to new markets. By December 2021, 5 900 tonnes of produce had been distributed and nearly 24 million meals provided through the platform. This year, the plan is to distribute 10 000 tonnes of food and provide more than 50 million meals across South Africa. Visit standardbank.com to find out more. OneFarm Share is a digital business-to-business platform (facilitated through a partnership between HelloChoice and Standard Bank Group) that allows emerging and commercial farmers to sell or donate their produce to new markets. Since its launch it has provided more than 24 million meals to various communities. Watch our video here.

Standard Bank is an authorised financial services and registered credit provider (NCRCP15). The Standard Bank of South Africa Limited (Reg. No. 1962/000738/06).

PAYMENT SOLUTIONS

Virtual Money: Reshaping Post-Pandemic Payment Technologies

As a result, keeping costs low has become imperative for incumbents. Margins have narrowed as strategic collaboration with firms with deep domain expertise rises. The cost of going digital for traditional banks is also far from over as the demand for increased agility and resilience, digital

“ The space has become more difficult for customers to get access to liquidity” IAN DUFFY

CEO, ACCELERATED PAYMENTS

payment technologies and better use of data, stretches the budgets ever tighter. Sudeepto Mukherjee, Head of Banking at the digital consulting firm, Publicis Sapient, explains that commercial lending was typically a manual process where bank relationship managers (RMs) hand held corporate owners/CFOs through an elaborate decisioning and approval process. The post approval process was complex, with various checks/interactions in person to meet the different terms of the contract. “That was turned on its head during the pandemic with volumes increasing significantly as small/mid corporates rushed to take advantage of government-backed loans to protect themselves from the pandemic impact as well as all interactions moved to a virtual environment,” he says. fintechmagazine.com

PAYMENT SOLUTIONS

“This meant a sudden shift for banks to move to digital channels/methods for not only making important credit decisions but also performing all service interactions.” Mukherjee points out that the role of the RM also changed significantly not only in the way they interacted with their customers but also how they worked with the different internal teams (credit/ operations) to effectively service client needs. He points out, “It also meant changes to bank processes in areas like risk where models had to be updated quickly to take into consideration the huge burden the pandemic placed on certain businesses.” And as solutions have become digitally enhanced and more services are available digitally than ever before, some experts say the economic climate and fallout of the past two years has resulted in more traditional lenders exercising reticence towards their customers. Ian Duffy, CEO of invoice financing firm Accelerated Payments, confirms, "Traditional lenders have become even more conservative

“ This meant a sudden shift for banks to move to digital channels” SUDEEPTO MUKHERJEE

HEAD OF BANKING, PUBLICIS SAPIENT

and risk-averse, and they are more constrained from a credit perspective as well to help companies that need it the most.” More stringent loan parameters So, despite the explosion of BNPL-style financing, obtaining a loan is more challenging for customers than ever. He explains, "The space has become more difficult for customers to get access to liquidity. Getting assistance from banks was already tough for most businesses as they just aren’t big enough to appeal from a lending and investment perspective, and banks usually prioritise loans (now in some instances with a government guarantee) for companies that are a better credit risk.” Duffy says this disqualifies many businesses which, for various reasons including the COVID pandemic, have suboptimum credit risk profiles. “There’s other alternative lenders or credit brokers, but you have to watch out for additional requirements (such as personal guarantees) and borrowing limits – and a lot of companies aren’t necessarily protected if things don’t work out.”

PAYMENT SOLUTIONS

Three new trends in the lending space • AN INCREASE IN DIGITAL ENGAGEMENT Engaging customers and attracting their attention through new, digital channels will be a primary focus for fintechs and banks alike this year. Consumers’ expectations have sharply increased, which will drive and develop predictive and prescriptive analytics, leading to increased personalisation and better insights. • CHANGES TO MEASUREMENTS IN AFFORDABILITY The economic shift and downturns from the pandemic, mean customers are facing higher levels of inflation and potentially,

increased interest rates. This elevates the lending risk because it puts pressure on providers to prove their services are sustainable, even within a challenging environment.

• THE BNPL SURGE FOR

MAINSTREAM CONSUMERS BNPL is here to stay. Its rapid adoption by online retailers globally means transactions hit US$9bn in 2021 – and that figure will increase throughout 2022 as growth is driven by both consumers hungry for the service, and the ease at which venders can offer it.

fintechmagazine.com

PAYMENT SOLUTIONS

Expanding the lending ecosystem for banks and fintechs An increased number of lenders are integrating their banking systems with their borrowers’ enterprise resource planning and customer relationship management (CRM) systems to obtain direct access to management accounts, cash movement, and spending patterns. Some experts predict this trend could increase collaboration between banks and data aggregators, third-party processors, technology companies, and fintechs, thus aiding the wider ecosystem. Duffy says, "There will be more collaboration with alternative finance providers and incumbents to widen the pool of capital that is available to customers. Last year we signed a major deal with Virgin Bank to do just that – something we never thought possible. But working together makes sense. We are offering flexible and efficient working capital solutions to help businesses manage their immediate cash flow. This is achieved by paying the individual invoices of companies upfront and providing bad debt protection against their debtors, thereby freeing up capital that is tied up in paperwork.” But Mike Coates founder of Commercial Expert Ltd, says despite all the changes, lending is a less stressful process for all concerned. “The space is now easier for customers, there is more choice, more innovation, wider criteria from more lenders and faster. Sourcing a deal still remains the same and requires skill and advice, but the choice for customers is enormous and rates are very competitive with lenders wanting more and more market share.” He adds, “Criteria is in constant flux and customers are benefiting from a speedier and more diverse offering. However the legal completion process is broken and sluggish, and is taking longer than ever before.” 88

April 2022

“ There will be more collaboration with alternative finance providers and incumbents to widen the pool of capital that is available to customers” IAN DUFFY

CEO, ACCELERATED PAYMENTS

WEALTH PAYMENT MANAGEMENT SOLUTIONS

fintechmagazine.com

ESG AND

STEWARDSHIP IN ACTION 90

April 2022

AD FEATURE WRITTEN BY: JESS GIBSON PRODUCED BY: GLEN WHITE

fintechmagazine.com

April 2022

STATE STREET GLOBAL ADVISORS

State Street Global Advisors: instigating positive change in portfolio companies by using its voice and vote, influential campaigns and future-planning

he landscape for corporate accountability is changing - and swiftly, at that. Diversity, inclusion and environmental sustainability are at the top of the agenda for both companies and their shareholders in 2022, with an increased emphasis upon building meaningful change into the very DNA of businesses. Long-time proponents of ESG values, State Street Global Advisors have dedicated the last few years to using their influence to encourage corporate boards and management teams to address concerns relating to diversity and climate-based issues. Indeed, State Street Global Advisors’ Vice President and Global Lead of Asset Stewardship Reporting, Philip Vernardis, has been advocating such principles for over a decade - long before it became a trending topic among mainstream business circles. “State Street Global Advisors is one of the world's largest investment managers, with nearly $4.14tn in assets under management. We are the creator of the world's first exchange traded fund and an indexing pioneer,” Vernardis explains. “Our mission is to invest responsibly to enable economic prosperity and social progress. We practise asset stewardship by actively using our voice and vote with portfolio companies. Our aim is to drive positive change on material ESG issues and promote long-term sustainable value on behalf of our clients.” fintechmagazine.com

STATE STREET GLOBAL ADVISORS

“The majority of our assets under management are invested in index funds, which are investment funds that track a specific benchmark index, such as the S&P 500 or the FTSE All- Share.” he says. Such indices are essential for potential investors, who use the information provided to guide their investment choices. With ESG considerations becoming ever - more important-across general society as well as via governments-companies that have previously fallen short are scrambling to demonstrate their dedication to diversity and sustainability. For more long-serving business leaders, who are often opposed to change, this new climate of transparency and accountability is difficult to get their heads around - and they don’t have long to do so. “We believe a company’s ESG rating will soon effectively be as important as its credit rating,” Vernardis states, highlighting the increasing transactional value of social and environmental issues at a corporate level. 94

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ESG: Making an Impact Through Engagement and Voting The key to being a company that’s considered socially responsible is demonstrating a genuine commitment to change and avoiding surfacelevel PR stunts. Whether that means an overhaul of systems and structures, bringing in outreach initiatives, or setting up alternate recruitment campaigns, there are plenty of starting points from which corporate teams and shareholders can motivate social progress alongside economic prosperity. “An index fund is essentially near-permanent capital. Unlike active managers, we can’t walk away from a company as long as it remains in the index.” So then how exactly can an index manager instigate change at a senior level? “If we don’t like what a company is doing but we can’t sell out, using our voice and vote as shareholders is key to promoting positive change and long-term value creation,”

PHILIP VERNARDIS TITLE: G LOBAL LEAD OF ASSET STEWARDSHIP REPORTING INDUSTRY: FINANCIAL SERVICES

EXECUTIVE BIO

LOCATION: UNITED KINGDOM Philip Vernardis is Vice President and Global Lead of Asset Stewardship Reporting at State Street Global Advisors, which is one of the world’s largest asset managers with nearly $4.14 trillion in assets under management. In his role at State Street Global Advisors Philip draws on his extensive experience to lead engagements with board directors of portfolio companies on ESG and encourage positive change. Philip is also leading the company’s global reporting function on stewardship activities. Before joining State Street Global Advisors, Philip worked as a Corporate Governance Manager at Fidelity International. Prior to his position at Fidelity, he was Deputy Head of Research at Manifest – Minerva Analytics. Philip sits on the UK Investment Association’s Sustainability and Responsible Investment Committee. He is also a member of the Investment Leaders Group at the University of Cambridge Institute for Sustainability Leadership and a member of the UK Corporate Governance Forum. Philip is a regular writer on ESG issues and speaks frequently at industry conferences.

STATE STREET GLOBAL ADVISORS

Vernardis says, going on to explain the impact of these moves. “Our stewardship programme is designed to have an impact and drive positive changes to promote long-term, sustainable returns for clients. Through engagement and voting we have seen portfolio companies responding to our call to action by, for example, enhancing their board gender diversity or sustainability disclosures and practices.” “Boards should lead the way on ESG. The quality of oversight provided by the board and setting the right tone within the organisation can make the difference between a company landing at the front or back of the pack. In our view board accountability is fundamental to strong governance. So, if directors have been on the board for some time and they're not performing and they are not responding to our feedback, then as long-term shareholders we need to keep them accountable,” Vernardis outlines. “We usually hold boards accountable by exercising our voting rights on director elections.” “So, for example, with gender diversity, we vote against the re-election of the Chair of the Board’s Nominating Committee or the Board Leader if the company has no female directors on the board.” Addressing the ESG Data Challenge The lack of standardisation and transparency in ESG reporting and scoring presents major challenges for investors and corporates alike. In a bid to address the ESG data challenges, State Street Global Advisors developed their unique R-Factor™ scoring system in 2019 to help clients understand their portfolio exposures, as well as inform their own asset stewardship engagements and investment decisions. 96

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As different sectors are faced with different challenges and opportunities, Vernardis emphasises that the relevance of an ESG issue to a company’s financial performance varies industry by industry, company by company: “Focusing on the right ESG issues is key to a company’s ability to create long-term, sustainable value for shareholders and investors.” “Investors face two key data challenges: the lack of a consistent, commonly accepted materiality framework and the opaque ESGscoring methodologies of existing data providers. So we developed an innovative ESG-scoring system that measures the performance of a company’s business operations and governance as it relates to financially material ESG challenges facing the company’s industry,” he explains. “R-Factor™ is the first system of its kind offering companies a roadmap on how to

“ CLIMATE CHANGE POSES ONE OF THE MOST SERIOUS RISKS TO LONG-TERM INVESTORS DUE TO BOTH THE STRATEGIC AND BUSINESS CHALLENGES IT REPRESENTS TO PORTFOLIO COMPANIES” PHILIP VERNARDIS

GLOBAL LEAD OF ASSET STEWARDSHIP REPORTING, STATE STREET GLOBAL ADVISORS

manage and disclose their ESG practices, allowing them to take the action needed to enhance their scores.” Vernardis explains that State Street Global Advisors’ unique R-Factor™ scoring system is fully integrated into their asset stewardship programme. In 2020, they started taking voting action against board members at companies in their main indices that were that were “laggards”(i.e., in the lowest 10% in their industries) based on their R-Factor™ scores and could not effectively articulate how they planned to improve their score. Starting in 2022, they are expanding their voting screen to include those companies that have been consistently underperforming their peers on their R-Factor scores (i.e. being in the lowest 30% in their industries) for multiple years, and may take voting action unless they see meaningful change. fintechmagazine.com

STATE STREET GLOBAL ADVISORS

“ ASSET STEWARDSHIP IS CRITICAL TO ACHIEVE NET-ZERO ALIGNMENT ACROSS OUR PORTFOLIOS” PHILIP VERNARDIS

GLOBAL LEAD OF ASSET STEWARDSHIP REPORTING, STATE STREET GLOBAL ADVISORS

Promoting “Fearless” Diversity Agendas Through Stewardship In many respects, State Street Global Advisors set themselves apart from contemporaries and were pioneers for the social pillar of ESG. A particular project of which they are - rightfully - proud is the Fearless Girl statue installation, which was temporarily situated in Manhattan’s prestigious financial district in March 2017. During its time in Manhattan, the bronze statue of a girl with her chin raised, shoulders thrown back, and hands on hips challenging passers-by was positioned in front of the famous Charging Bull statue. The message this positioning was sending was abundantly clear, and had a profound effect from the start. “It's all about the impact for us. We started the Fearless Girl campaign with a symbol: the defiant girl in front of Wall Street's iconic charging bull. And that was a powerful symbol, highlighting the need for companies to improve on gender diversity at a boardlevel. But there is also substance behind it. Fearless Girl is part of our campaign to encourage companies to add more women to their boards.” 98

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“Since we began this campaign in March 2017, and after 5 years of productive engagement and voting, 948 companies have responded to our call by adding their first female director to their boards,” Vernardis finishes, proudly. The aim now is to expand this remit even further. The Effectiveness of Shareholder Voice on Gender Diversity State Street Global Advisors’ work is all the more important in light of recent research. It suggests that the work of large index investors such as State Street Global Advisors is more effective than government mandates in motivating broad-based governance changes and expanding women’s participation in corporate leadership. Diversity of thinking and perspective in board leadership is critical to the effective oversight of the company and execution of strategy. “On the issue of gender diversity while boards have become more gender diverse, it is clear that this work is not yet complete. This year we have expanded our campaign on gender diversity from targeting companies in our major indices in select markets to all markets globally. So we now expect all our portfolio companies across the globe to have at least one woman on their boards. From 2023 we expect companies in our main indices to have boards comprised of at least 30% women directors,” Vernardis explains. Climate Change: Supporting the Transition to a Low Carbon Future Climate change is also a top priority for State Street Global Advisors in 2022. fintechmagazine.com

“Climate change is one of the greatest challenges of our times and consequently one of the biggest risks in investment portfolios today. It also brings with it tremendous opportunities for companies and investors alike,” Vernardis says. Regardless of which industry a company sits within, climate change is an evergrowing threat - one that indeed needs to be tackled as a priority. “We have been engaging with companies on climate-related matters since 2014. In that time, we have had over 900 climaterelated engagements across a range of industries and markets. In 2021 our number of climate-related engagements almost doubled, “Vernardis says highlighting the 100

April 2022

heightened focus on this topic. State Street Global Advisors conducted 280 climaterelated engagements in 2021, an 89% increase compared to last year (148 in 2020). “By actively using our voice and vote we have seen portfolio companies responding to our call by improving their climaterelated disclosures and practices,” Vernardis continues. Recognising that in recent years companies have come a long way in disclosing and managing climate related risks Vernardis explains: “There is still a lot to be done and we will continue to focus on climate risk and reporting as our core, multi-year campaign. While we welcome the net-zero commitments that many of our

STATE STREET GLOBAL ADVISORS

portfolio companies have made in the last couple of years we would like to see more robust disclosure on how these ambitions are underpinned by a detailed strategy and capital allocation plans.” “As near-perpetual holders of the constituents of the world's primary indices, we can play a key role in helping drive the transition to a low carbon economy and we are keen to leverage our voice and vote to promote positive change in our portfolio companies,” Vernardis says. “When companies disclose clear, consistent and accurate information on the risks they face from climate change, investors can make more informed decisions to tilt, or even transform, their

“ IN 2022, WE ARE STEPPING UP OUR CLIMATE-RELATED STEWARDSHIP EFFORTS TO SUPPORT OUR PORTFOLIO COMPANIES ACCELERATE THEIR TRANSITION TO A LOW CARBON FUTURE” PHILIP VERNARDIS

GLOBAL LEAD OF ASSET STEWARDSHIP REPORTING, STATE STREET GLOBAL ADVISORS fintechmagazine.com

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portfolios for the future. TCFD’s disclosure recommendations have become the gold standard for climate risk reporting and we expect all companies in our portfolios to report in line with them. Despite significant progress, there is still plenty of work to be done to improve TCFD’s adoption and ensure the framework is truly embedded globally.”

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Indeed, in its latest status report TCFD finds that for the first time over 50% of the companies under review disclosed their climate-related risks and opportunities. Despite the overall progress TCFD concluded that the overall disclosure is still lacking. “As such, starting in 2022 we are taking voting action against companies in our main indices

that fail to provide sufficient disclosure in accordance with the TCFD framework,” Vernardis concludes. In 2021, State Street Global Advisors became a signatory to the Net Zero Asset Managers Initiative (NZAMI). They are proud to support the NZAMI, which promotes the goal of net zero greenhouse

gas emissions by 2050, in line with global efforts to limit warming to 1.5°C. Their net zero strategy has engagement and voting at its core aiming to influence positively and hold portfolio companies to account on their climate strategies and commitments to net zero.

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5 TECHNOLOGY

FIVE EMERGING FINTECH HUBS TO WATCH IN 2022 WRITTEN BY: ALEX CLERE

As fintech goes global, we look at the top five emerging hubs driving the industry forward

hen most people think of fintechs, they think of one place – Silicon Valley. The shores of San Francisco Bay have dominated the US fintech space since its early days, particularly in categories like wealth management and payment innovation. It has spawned multi-billion dollar companies like Paypal, Robinhood and Intuit. But that doesn’t mean that other cities around the world haven’t muscled their way onto the scene. London, New York and Frankfurt are the most notable examples, enjoying established fintech ecosystems. But there are other cities, too. Here we look at five emerging fintech hubs and why you should keep a close eye on them in the next few years.

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TECHNOLOGY

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Nubank Wants to Break Up Big Banks in Latin America

SÃO PAULO, BRAZIL

Number of fintechs: 270 By far the biggest city on our list – in terms of both population and number of fintechs based there – São Paulo has been at the vanguard of Brazil’s fintech boom for several years. In fact, according to the Global Fintechs Rankings 2021 by Findexable, the city is already the world’s fourth-largest fintech hub and second fastest-growing. It’s perhaps unfair then that São Paulo, and the Brazilian marketplace generally, are still considered to be emerging powerhouses rather than established ones. São Paulo is a hit with entrepreneurs and innovators alike. Its population of over 12 million people is a daily challenge but also an opportunity; it means a marketplace of tech-savvy consumers as well as a talent pool that includes graduates from the prestigious Universidade de São Paulo and several dedicated technological colleges. The city is also the beating heart of Brazil’s startup investment scene, underlined

by the massive growth in the number of startup accelerators in the city. It’s no wonder that São Paulo is home to a raft of fintech and insurtech unicorns. Among them are digital banks such as Nubank and C6 Bank; payment platforms like Pagseguro and Stone; lending company Creditas; and Unico, which provides onboarding and ID verification.

“The city is also the beating heart of Brazil’s startup investment scene, underlined by the massive growth in the number of startup accelerators” SÃO PAULO

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TEL AVIV, ISRAEL

Number of fintechs: 184 Tel Aviv is a hub for science, technology and engineering so it’s no surprise that the city has also become a major player in fintech and insurtech. In fact, its booming technological sector has earned it the nickname ‘Silicon Wadi’, after the Hebrew word for valley, and is one of the reasons why Israel is known as the ‘Startup Nation’. Aside from its own success stories, Tel Aviv is also a hub for foreign tech giants such as Intel, IBM and Microsoft. High levels of support for tech startups, particularly low-interest loans from the Israeli government, have contributed to the success of Tel Aviv’s technology sector. Together with a thriving venture capital and accelerator scene, it makes it easier for young Israelis to start their own business. This has created a culture of entrepreneurship that, at one point, was estimated to mean twice as many Israeli graduates going on to form their own startup compared with their US counterparts. Some success stories move abroad, particularly to the US, while others stay in Israel. The best known include investment platforms eToro, OurCrowd and Plus500. Meanwhile Atidot, which provides AI and machine-learning for the life insurance industry, and fraud prevention service Identiq are good examples of Israel’s hightech pedigree.

FINANCIAL WORKERS INSIDE ONE OF THE SKYSCRAPER OFFICES IN TEL AVIV

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3 TECHNOLOGY

“Startups in the Netherlands are eligible for extensive government support including tax relief and other credits through the ‘Entrepreneur allowance’ scheme” THE NETHERLANDS

BUSINESS DISTRICT ZUIDAS, AMSTERDAM

AMSTERDAM, THE NETHERLANDS

Number of fintechs: 122 Amsterdam is known for many things – its canals, its tulips, its unmistakable architecture. But the Dutch capital is also making a name for itself as a key fintech destination. Risk management platform Adyen, neobank Bunq and core banking engine Ohpen are all among the fintech innovators that call the city home. Amsterdam had already been a hub for banking and big-business before the emergence of fintech; Heineken, Philips and banking groups ING and ABN Amro all have headquarters there. For anyone who has visited Amsterdam, it will be easy to understand why it has

emerged as a fintech hotspot. A vibrant and multicultural city, it brings together talent from all around the world – particularly in creative and technical-based disciplines. As for local talent, Amsterdam has two universities and a college for applied sciences; it is also wellplaced to benefit from technology and engineering programmes at TU Delft and TUe Eindhoven, both in the Netherlands. Excellent transport links make it easy to get around. The city’s railway station connects Amsterdam by train to destinations in Europe while Schiphol Airport – Europe’s third busiest by passenger numbers – connects Amsterdam with other financial hubs like Frankfurt, London and New York. What’s more, startups in the Netherlands are eligible for extensive government support including tax relief and other credits through the ‘Entrepreneur allowance’ scheme. fintechmagazine.com

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“ This tiny Baltic capital of around half a million people might not seem an obvious choice for fintechs” LITHUANIA

VILNIUS, LITHUANIA

Number of fintechs: 64 It’s the sort of place that many people couldn’t place on a map, but that hasn’t stopped Vilnius from making a name for itself in the fintech space. This tiny Baltic capital of around half a million people might not seem an obvious choice for fintechs – but once you get down into the detail, it soon becomes clear why more than 60 of them are headquartered there. TWO DEVELOPERS, DICUSSING TRANSACTION PROCESSES,VILNIUS, LITHUANIA

Traditionally a meeting point between East and West, much has changed in Lithuania over the last three decades. Young Lithuanians today are digitally savvy, multilingual and well educated. Among 25-34 year olds, more than 50% completed tertiary education – the highest figure anywhere in Europe – according to the OECD. And it’s not just homegrown talent that is making Vilnius a fintech leader. According to Vilnius-based law firm Exe.Legal, “one of the key contributing factors to the growth of Lithuania’s fintech ecosystem has been the progressive regulatory policies of the Bank of Lithuania,” which have helped to attract large amounts of inward investment over the last few years. Kevin, a fintech which provides payments infrastructure for merchants; and Bankera, which offers digital bank accounts and virtual cards, both call Vilnius home.

ROSEBANK, JOHANNESBURG, GAUTENG, SOUTH AFRICA

TECHNOLOGY

JOHANNESBURG, SOUTH AFRICA

Number of fintechs: 46 South Africa is not the world’s biggest fintech hub but with an emerging market for financial technology, it is soon becoming a rising star. However, the right to be called South Africa’s fintech capital is hotly contested between Cape Town, which has 45 fintechs, and Johannesburg with 46. There are a number of signs that suggest Johannesburg could nurture the bigger fintech ecosystem in the long term – and it’s not just that one extra fintech. For a start, Johannesburg is much betterplaced for the main regulators, including the Financial Sector Conduct Authority (FSCA) and the Prudential Authority of South Africa (PA), both of which are located in Pretoria. It is also home to some of the country’s biggest homegrown fintechs including technology company Prosperian Capital and SaaS solutions provider MIP Holdings. Insurtech startup Pineapple, which last year raised $5mn in Series A funding, are also based in the city. With more than 5.5mn people, Johannesburg is South Africa’s largest city. This is underscored by the city’s position as the economic and financial hub of South Africa: the Johannesburg Stock Exchange is the largest in the country and the city is home to many of South Africa’s largest banks. Between them, the city’s two universities – the University of Witwatersrand and University of Johannesburg – have more than 90,000 students enrolled.

“There are a number of signs that suggest Johannesburg could nurture the bigger fintech ecosystem in the long term” SOUTH AFRICA

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CEO IVAN MAZZOLENI ON VIRTUE-LED FINTECHS AND ESG WRITTEN BY: JOANNA ENGLAND PRODUCED BY: JOE PALLISER

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FLOWE

Flowe CEO Ivan Mazzoleni applies championship sports culture and a passion for ESG to his role as Cultural Energy Orchestrator at the helm of Italy’s latest challenger bank

s a financial services and banking entity, Flowe focuses on the Millennial and Gen-Z segments, and aims to provide users waysto improve their finances and make a positive impact on society and the planet. It is this novel and unexpected approach that makes Italy’s newest challenger bank stand out among other new startups. But, perhaps that is not unexpected given the top executives leading the operation, which is now one of the most popular banking startups in Europe. Flowe’s CEO – or Cultural Energy Orchestrator, as he prefers to be called - Ivan Mazzoleni, is a surprising find in the world of banking. A new standout challenger for Italy’s banking sector While a self-confessed learning addict, with an impressive background in technology (no less than five specialist degrees from elite universities such as Stanford, Harvard and MIT), Mazzoleni is a sportsman at heart, too. He is also a professional skier and a championship sports' coach, having a one-time alternate career in which he managed hundreds of top athletes. 114

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Flowe CEO Ivan Mazzoleni on virtue-led fintechs and ESG

And it is this part of his “IT'S A COMPLETELY NEW sports and especially career that he says has racing. They shape you PARADIGM IN TERMS influenced his leadership as a person because style the most at Flowe: you need always to try OF TECHNOLOGICAL “I am the Cultural Energy to overcome your ARCHITECTURE AND Orchestrator at Flowe. limits, and you need HOW TO CREATE TRUST It's quite strange as a job to nurture a growth title. It was inspired by mindset, which is a sort WITHIN A SOCIETY AND Satya Nadella. When I of natural attitude in WITHIN A COMMUNITY” worked at Microsoft, he finding and continuously was the first CEO at the improving yourself.” IVAN MAZZOLENI global level to reshape CEO, the chief and replace the Flowe nurtures a culture FLOWE chief with the culture. of empowerment So, I try to apply the same concept because It is this sense of self-discipline, order, Flowe is a purpose-driven and culture-based and empowerment that drives Flowe organisation.” as a digitally-based organisation, He describes the culture set at Flowe as explains Mazzoleni, who also outlines virtues, saying: “Culture is strongly related the company’s deep commitment to to virtues, and virtues are value-into-action sustainable practices: “The purpose [of through behaviours. Sport, for example, is a Flowe], is to empower people to live a perfect gym for life. Sport life really shaped meaningful, sustainable, and happy life. my mindset and my attitude. In particular, That's our ultimate goal.” 116

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FLOWE

“We would like to introduce a new paradigm for the financial world, and we are calling it the Better Being economy. We truly believe that better people shape and create a better world. It's not the contrary.” It's an ambitious task for a startup fintech, but as Mazzoleni is no stranger to a challenge, he relishes the opportunity to prove the meaning of such values. “If you would like to obtain as a final result, improvement overall at worldwide level, you need to improve at the very single atom that is the human being - the single person.” He then outlines the six virtues that drive Flowe’s culture and guide its leadership principles. They are;

IVAN MAZZOLENI TITLE: CEO (CULTURAL ENERGY ORCHESTRATOR) INDUSTRY: FINANCIAL SERVICES LOCATION: ITALY Flowe is a BCorp, Benefit company and Carbon Neutral of the Mediolanum Group, which aims to educate young people in terms of innovation and economic, social and environmental sustainability. In this age of infinite possibilities, most people are not sure what to do when feeling stuck or anxious, so Flowe created an app that empowers them to move forward, to take control of their life and their finances, and to build a happier future. Flowe believes that, just as oceans can change drop by drop, so can our world and our society – one person at the time. People are always at the centre: Flowe uses the concept of humanovability to express its desire to help people live better and build a future of value.

Flowe and sustainability, with ESG at its core With such a people-oriented culture, it’s not difficult to see that the company also holds a strong sustainable ethic at its core. Mazzoleni explains that the fintech’s commitment to net-zero and sustainability was formed during the company’s inception. “It’s embedded in our DNA,” he says, “because we truly believe that no one on the planet could live without the sustainability principle and philosophy. We infuse sustainability in everything we do. We need to pursue, obviously, our economical equilibrium the P and L, but at the same time, we need to pursue the impact that we would like to produce in our society and economy on the planet.”

EXECUTIVE BIO

1) Helping people thrive 2) Saying what we think and doing what we say 3) Listening to diverse voices 4) Exploring the unknown 5) Being a gamechanger 6) Making a difference

FLOWE

Flowe is also B Corp certified, which is a global movement and a quality certification reflecting how serious companies are about their impact on the planet, not just in their message, but in the very way they operate. Such as they need to prove their sustainability commitment. It almost goes without saying that Flowe is already carbon neutral certified and a benefit company. Human-centric principles at Flowe And while the rest of the fintech industry rushes towards AI customer solutions and robotic learning chatbots in terms of customer servicing, Flowe has shied away from the scene, preferring instead, to focus on being human-centric. However, the operation is far from archaic and utilises a

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host of state-of-the-art technologies and solutions to carry out its services. Mazzoleni describes this combination as “innovability”. It is this part of the fintech industry that he is most passionate about – the fact that financial inclusion and more streamlined finances can literally save lives: “Did you know that the biggest cause of mobile phone usage accidents while driving happens among truck drivers?” he says, adding that the reasons for their excessive usage comes down to financial problems. “This is because truck drivers with serious financial problems are more likely to drive more and to spend less time in recovery or have less sleep. Secondly, they are more

likely to use their phones while driving and to be distracted from their problems. Ergo, if you address and fix people’s financial problems, you can impact something as seemingly random, as road accidents among truckers – and this is just one tiny example of the problems that are caused by financial issues.” Using innovation to address world problems Mazzoleni is also a passionate advocate of “Innovability” - a fusion between innovation and sustainability. He explains “We are always looking at innovation as a powerful force to reshape the economy for a better world. Flowe is the first Italian fintechmagazine.com

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Fintech fully cloud-native so we fully embraced the cloud revolution. “Being fully cloud-native is helping us in reducing our carbon footprints instead of buying, handling, and so on. We have a strategic partnership with Microsoft, so we are hosted on Azure cloud services, Microsoft Azure cloud services. All our architecture, probably, I could say that currently, Flowe is probably one of the most modern architectural infrastructures in Italy, especially in the finance sector.” Mazzoleni says Flowe is constantly evolving, building new premium offerings. The fintech has a fun subscription-based

“WE ARE VERY NIMBLE IN DECIDING THE PRIORITIES; HOW TO CHANGE THAT PRIORITY AS WELL AS STARTING AND IMPLEMENTING NEW STRATEGIES” IVAN MAZZOLENI CEO, FLOWE

app that is free for users. But Flowe has also recently introduced Flex - a EURO 2.5 per month subscription, and another service level called Friend, that costs EUROS 10 per month and shows customers their ‘eco balance’. Digital transformation and Flowe innovation As Flowe only launched in 2020, the fintech has taken full advantage of the digital transformation shift, building itself according to those parameters and making the most of remote, cloud, and intelligent technologies that have created virtual workspaces for companies. Mazzoleni says, “I spent more than 10 years at Microsoft where I was the leader of the digital transformation team. I started fintechmagazine.com

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early the digital transformation journey. From my personal point of view, one of the most important trends is that no matter the industry you are in, you are competing for the attention of different kinds of personas. You need to be deeply connected. You need to 122

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empathise with these kinds of personas that are real human beings. And, you need to use technology to provide to them an outstanding, ‘wow’ experience.” He believes that in parallel technology and digital transformation, one of the major trends in place is the blockchain as a distributed ledger. “It's a completely new paradigm in terms of technological architecture and how to create trust within a society and within a community. Blockchain combined with entities, non-fungible tokens, the metaverse, along with the possibility to enter in a deeper and more comprehensive digital landscape is going to completely reshape our society and our economy.” Banking technology and app development Technology is another strategical asset and a key differentiator for Flowe, thanks to the

FLOWE

“WE ARE ALWAYS LOOKING AT INNOVATION AS A POWERFUL FORCE TO RESHAPE THE ECONOMY FOR A BETTER WORLD” IVAN MAZZOLENI CEO, FLOWE

fintech’s cloud-native infrastructure and its lean and agile organisation. Mazzoleni refers to the company’s DevOps philosophy, first of all, as methodology that is already used by the likes of Spotify and Netflix. “We are very nimble in deciding the priorities; how to change that priority as well as starting and implementing new strategies and pivoting our strategy at the backend.”

In terms of front end, Flowe’s team is able to release a new version of the application every two weeks – an impressive pace in terms of development. “Most of all, we infused sustainability within our app development,” he says, referring to users having the ability to use Flowe as a translation between euros or the currency customers are using every day, into a CO2 carbon footprint. “You can see how much you are impacting not only the economy, but also the nature, and this helps customers improve their behaviour in terms of taking care of the planet and reducing their carbon footprint.” The premium version of Flowe’s app goes one step further and has a Friend Subscription feature. This enables users to enjoy embedded services, see their present carbon footprint, and take part in fintechmagazine.com

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“WE ARE ALWAYS LOOKING AT INNOVATION AS A POWERFUL FORCE TO RESHAPE THE ECONOMY FOR A BETTER WORLD” IVAN MAZZOLENI CEO, FLOWE

sustainability projects run by Flowe, such as planting trees in Guatemala. “Thanks to our partnership with Zeroco2, an Italian startup that acts and operates in Guatemala (but not only), we are also involved in replanting trees and helping local families to be educated about how to take care of plants and enjoy their fruits as a source of food and economic exchange,” says Mazzoleni. Working with customers to create a better world Ultimately, Flowe is as much about technology and innovation as it is about its people and the wider spectrum

of humanity. Mazzoleni could not imagine himself operating in a different environment, because the sense of purpose the bank provides him with, is, he says, inspirational. “The single biggest thing that motivates me most when I wake up early in the morning and go to work, is that at Flowe, we are helping people to fully understand how much money they have, how they are spending and how they can automatically save a certain percentage of their money. We are also helping them to invest in their futures – and this produces an outstanding and massive impact on their lives.” He continues: “Our scope is to educate people - especially as an activist brand. We are fighting two big enemies. One is unemployment, especially here in Italy where the unemployment rate is very high. We have a goal to partner with them to fully explore and then transform their digital passion into a new profession or a new way to obtain revenues. “The second big monster is the climate crisis. We would like to reduce the waste of energy and resources. We are going to amplify and fully exploit our banking proposition, also in synergy with net-zero and ESG. These are major trends and all the challenger players are entering into the credit and investments landscape.” Mazzoleni concludes, “I think that as a fintech ecosystem and industry, all players involved have a crucial role. We need to democratise access to financial instrument services. Frankly speaking, a human being without any kind of access to financial tools and services is a human being who is disengaged with society.”

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VC's TO WATCH IN 2022 WRITTEN BY: JOANNA ENGLAND 126

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TOP 10

As investment in fintech and insurtech skyrockets, we take a look at the biggest new VC players in the space

intech is the future of finance – and as companies scale at pace and partner across the ecosystem, VCs are the driving force behind new technologies, start-ups, innovations, and expansions in the space. The capital that comes from these angels, seed funders and venture capital investors is creating a financial revolution. We’ve rounded up the top 10 influential VCs for the year ahead.

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10 BEENEXT

Based in: Singapore Founded by: Teruhide Sato The UK-based fintech TrueLayer achieved Unicorn status in September 2021 following a $130mn mega funding round. The open banking platform processed billions in payments in 2021 and experienced an incredible 400% growth in monthly payment volume and 800% growth in monthly payment value. The company also doubled its customer base in 12 months. Currently, TrueLayer boasts more than 95% coverage and accounts for more than half of all open banking traffic in the UK. The company has stated the latest finding will enable it to break into new marketplaces globally.

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09 Ascension Venture Based in: London, UK Founded by: Jean Fougerolles, Kieran Hill

Launched in 2012, Ascension Ventures is a London-based Seed VC founded by two founders who wanted to offer investment to new startups the financial and technical supports they needed to launch. To date Ascension Ventures has used these funds to make a total of 105 investments into new startups. So far, the company has successfully exited from four of these investments.

TOP 10

AME Cloud Ventures

Based: Palo Alto, California, USA Founded by: Jerry Yang The co-founder of Yahoo! Jerry Yang launched The Californian VC AME Cloud Ventures in 2012. The company is focussed on technology enterprises that provide solutions to businesses for data aggregation purposes. The company also specialises in seed to later stage companies building infrastructure and value chains around data. AME Cloud Ventures also has a large network of mentors and international partners with strong links to China. Since its inception, the VC has made more than 255 investments.

Struck Capital

Based in: Santa Monica, California, USA Founded by: Adam Struck Describing itself as a VC that provides “Founder-First Capital for Innovative Entrepreneurs who want to Change the World,” Struck Capital launched in 2014 and is known for throwing its weight behind small startups that show an outstanding amount of innovation. The LA-based VC says it is “industry agnostic” and that it sources idiosyncratic opportunities from its robust, technology-driven network.

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TOP 10

Based in: Henley-in-Arden, UK Founded by: Mark Payton & Tim Hazell

Based in: Vienna, Austria Founded by: Erik Bovee, Daniel Keiper-Knorr, Michael Schuster, Oliver Holle & Werner Zahnt

Mercia Fund Managers

One of the largest VC operations in the UK, Mercia Fund Managers was launched in 2010, Mercia is a proactive specialist asset manager with a focus on regional businesses seeking venture, private equity or debt finance to scale their businesses. They are exclusively a UK domestic investor, with focus on the UK regions. The company concentrates on helping innovative and ambitious UK startups in the Midlands region to grow with mentoring and financial support.

Speedinvest

Based in the Austrian capital of Vienna, Speedinvest is one of the better known VCs on the fintech scene. Currently managing a total of seven finds, the company has successfully made more than 270 investments in that time. Speedinvest has exited from 14 of these investments so far. As an investment strategy, it also specialises in early-stage startups, which largely encompasses the Seed Funding Stage.

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03 ALMI Invest

04 BoxGroup

Based in: New York, USA Founded by: David Tisch & Adam Rothenberg Launched in 2009, BoxGroup’s mantra is, “Investing in dreams at the earliest stage with companies like Plaid, Airtable, Ro, Ramp, and 400 more…” To date, BoxGroup has made 494 investments, and as a direct consequence of these investments, the business has exited from 96 so far. The company specilaises in technology startups during the early stages of their development. Industryspecific investments include consumer, fintech, insurtech enterprise, health and more.

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Based in: Stockholm, Sweden Founded by: Parent company Almi Företagspartner AB, which is owned by the Swedish state A state-owned VC, Almi Invest is a subsidiary of Almi Företagspartner. The Group consists of 16 regional subsidiaries, including four wholly owned subsidiaries. The VC invests in Swedish companies that offer innovative and scalable business models and motivated entrepreneurs. The entity is made up of seven, regionally-based venture capital funds that manage US$1.6bn of investments. Up to half of ALMI Invest’s capital is sourced from EU structural funds, which accounts for an investment of $53mn. Almi Invest has invested in close to 400 companies, including Billhop, Binary Brains and Agricam.

TOP 10

8VC

Based in: San Francisco, USA Founded by: Alex Kolicich, Drew Oetting, Jake Medwell, Joe Lonsdale and Kimmy Scotti

The 2015-founded 8VC assists earlystage startups with support and funding in an effort to motivate future innovations to improve the global landscape. The company seeks to partner with top

founders and entrepreneurs to build lasting technology platforms and create long-term economic and societal value. The VC concentrates on seed rounds and has managed a total of six investment funds. Since its inception, 8VC has made 278 investments and has only exited from 19 so far. 8VC manages $2.7bn+ in AUM and has built its firm and investment strategy based on its core values of belief in technology.

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TOP 10

SV Angel

Based in: San Francisco, USA Founded by: Ronald Conway One of the earliest seed funders, SV Angel is headed up by industry heavyweight ‘super angel’ Ronald Conway, one of the best recognised investors in the US CV scene. Launched in 2009, SV Angel provides funding to a wide spectrum of businesses at the seed funding stage. In addition to funding to assist

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businesses, the company offers a variety of other support options, which also include expert advice. SV Angel has managed a total of five investment funds. The use of these funds has allowed SV Angel to make a series of 1083 investments, and counts brands such as Twitter, Google, Square, Facebook, Pinterest and Stripe as part of its impressive portfolio. Bill Gates has also thrown his support behind Ronald Conway, saying, “I’ve known and learned from Ron Conway for more than 40 years.”

TOP 10

Airbnb, DoorDash Have Big Shoes to Fill, Says SV Angel's Conway

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EMPIRE LIFE

WRITTEN BY: JOANNA ENGLAND PRODUCED BY: JAKE MEGEARY

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EMPIRE LIFE

As the insurance industry evolves, we spoke to three Empire Life executives to find out how the company is transforming in an ever-changing marketplace.

ounded in 1923, The Empire Life Insurance Company, or Empire Life, is a Canadian life insurance company that has been providing life insurance, investment and group benefits solutions to its customers for almost a century. Empire Life caters mainly to small and medium-sized companies in its group benefits division. The company’s vision is to be Canada's most convenient insurance and investment company. Digitisation has become key to effectively delivering on this vision— streamlining the customer experience and making transactions seamless for customers, their advisors, and benefit plan members. Christine Wyatt, Director of Group Digital Innovation, began her career in group insurance 18 years ago, joining Empire Life in 2011. She is proud to be part of such an iconic organisation that is recognised across Canada, and says, “My role has two aspects: my team looks at all the digital assets—that are customer and advisor facing—and we also work on strategic partnerships that help provide the connectivity and digital capabilities our partners need to deliver the intended customer experience.” Future forward, unhampered by legacy systems Digital transformation has been at the forefront for every insurance company globally. Because Empire Life has grown

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organically and not by acquiring other insurers, it’s not hampered by legacy systems that can’t talk to each other. Still, the pandemic, industry consolidation, and the demand for faster and more seamless access to information have been key drivers of expanded digital capabilities. “Over the last two years, we've accelerated our investments in digital capabilities. We’ve looked at how quickly people want information, how they are engaging, how our advisors want to engage with their customers, and how they need to engage with us as their carrier and transfer data to us.” Ultimately, the willingness to embrace change comes down to the culture of the company, which, Wyatt explains, has a strong future-forward orientation. Vanessa Lycos agrees. Lycos is responsible for product, digital and marketing for the Group Solutions division at Empire Life. She joined the company in 2019 and her background includes financial services as well as insurance.

CHRISTINE WYATT TITLE: DIRECTOR OF GROUP DIGITAL INNOVATION INDUSTRY: INSURANCE LOCATION: CANADA Christine Wyatt is the Director of Digital innovation at Empire Life. She has worked in the industry for over 20 years and has a panoramic perspective on Group business having worked in sales; as a benefits consultant; at a TPA, before joining Empire Life. Christine has been a key driver behind digital solutions that are making it easier to do business with Empire Life. Christine earned her BSc from University of British Columbia

EXECUTIVE BIO

“ Over the next 12 months, all of our projects and initiatives are aimed at driving the experience for advisors and plan sponsors” CHRISTINE WYATT

DIRECTOR OF GROUP DIGITAL INNOVATION, EMPIRE LIFE

EMPIRE LIFE

Empire Life: Homegrown protection for Canadas SMEs and employees

Lycos says that she looked at the company’s core values, which centre around respect, accountability, honesty and fairness, with a high degree of curiosity when she joined Empire Life and hasn’t been disappointed: “I’ve been really impressed at how every single person at Empire Life embodies these values. It's a culture of connection and innovation. We're agile and innovative, and we're growing our market share and our business—in a very collaborative, respectful, collegial manner.” Lycos continues, “If you don't have a strong culture—a culture that really respects and values its employees and customers—I think it's hard to achieve sustained business results. Our investment and our commitment to the wider community is also something that attracted me to Empire Life. What we give back to the community through charitable donations, community sponsorships and volunteerism—and the engagement around these initiatives—is motivating.”

Technology drivers and the insurance space A large part of Empire Life’s journey towards digital transformation has focused on efficiency, the transfer of data, security, and agility. Lycos says some of the biggest questions are, “How do we get more efficient and how do we get data back and forth in the most secure manner possible?” On the infrastructure front, Empire Life has been proactively investing in new technologies for decades, updating as they progress, and because of that, they have not suffered the fate of some traditional insurers trapped with outdated legacy systems. An important part of the journey in the past two years has centred around APIs, and this is helping Empire Life differentiate in the marketplace. API technology enables Empire Life to empower advisors and third party administrators to manage certain functions that in the past have only been performed by insurers. “Our ‘low-ego’ approach to who does what is winning us high marks,” says Wyatt. fintechmagazine.com

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EMPIRE LIFE

“ A strength of Empire Life lies in its focus solely on Canada and Canadian customers”

VANESSA LYCOS TITLE: VICE PRESIDENT GROUP PRODUCT AND MARKETING INDUSTRY: INSURANCE LOCATION: CANADA Vanessa Lycos is VicePresident of Group Product Marketing at Empire Life. She is a community-oriented marketing and communications executive with 20+ years of experience in strategy, financial and insurance services, product management, marketing & communications, customer experience and business analytics. Vanessa’s educational background in the sciences, financial services and marketing.

VANESSA LYCOS

Wyatt says these investments have resulted in better data and better services. And the journey continues. “Over the next 12 months, all of our projects and initiatives are aimed at driving the experience for advisors and plan sponsors—making it easier for them to access information and data that's critical to helping them make decisions about their benefits plans and what’s right for their employees. Examples include speed and accuracy in underwriting and in delivering proposals. “It’s about how we get that information in the door faster, quicker, and presenting information back to customers and advisors in the way they actually want to get that information. We're also doing a lot of work in terms of making administration easier. Managing a benefits program isn't always top of mind for our target market of small, medium business owners—who are exceptionally busy running their businesses.” On the healthcare front, the pandemic accelerated the need for digital technologies and made it easy for Empire Life to prioritise the onboarding of the Teladoc Mental Health Navigator and Telemedicine services. Lycos believes the focus on employee wellbeing is now front and center for many leaders.

EXECUTIVE BIO

VICE PRESIDENT GROUP PRODUCT AND MARKETING, EMPIRE LIFE

EMPIRE LIFE

DARA BRACHMAN TITLE: VICE PRESIDENT OF GROUP DISTRIBUTION

1923

Year founded

INDUSTRY: INSURANCE LOCATION: CANADA

870

Number of employees

Dara Brachman is a strategic leader with a passion for developing teams and driving results. Dara is Vice President, Group Distribution at Empire Life. Dara has 25 years of extensive insurance industry experience as a product specialist, building a successful benefits and pension consulting firm, and as an executive leading insurance carrier sales and operations teams. She is also an active community volunteer leader.

$1.9bn Revenue

EXECUTIVE BIO

“ Our mission is to be Canada's most convenient insurance carrier” DARA BRACHMAN

VICE PRESIDENT OF GROUP DISTRIBUTION, EMPIRE LIFE

EMPIRE LIFE

employees and for business owners. “As any parent knows, illnesses often seem to occur in the middle of the night. With telemedicine, there are no long wait times in the emergency room, and the doctor can prescribe medication and transfer it to any pharmacy.” Lycos notes that even for non-urgent complaints like a rash or an eye infection, being able to talk to a doctor from the comfort of your home or from work— at any time—is fantastically convenient and a huge time saver. A new customer marketplace in insurance But it’s not just about new technologies and requirements. The customer marketplace has changed considerably too over the past 24 months. Lycos says, “Increased digitisation and improved customer experience are being focused on across all industries—from insurance and banking to retail, customers everywhere are looking for simple, fast and easy customer-focused digital experiences.

“But even before the pandemic, we had added the Best Doctors (now called Teladoc Medical Experts) online suite of services that include the Expert Medical Opinion,” Lycos says. “One of the reasons we launched our telemedicine and Mental Health Navigator services was so that people could have fast and easy access to services that could help bolster their health. Lycos says that the 24/7 telemedicine service has been particularly helpful for

Using data to improve customer experiences Part of Empire Life’s transformation has been the use of Big Data to determine which products and services can best serve their customers, and how protection benefits can be tailored to best suit each party’s needs. Dara Brachman, Vice President of Group Distribution within the Group Solutions division at Empire Life, has been with the company for seven years. For the first five of those, she led the various teams as Vice President of Group Operations. She says, “Our mission is to be Canada's most convenient insurance carrier. Our distribution partners and our strategic partners have told us that success is a function not only of our investment in various digital capabilities but also of our flexibility and the way that we engage in a customised manner. fintechmagazine.com

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Our flexibility is enabling them to grow, and as a result, we've also been able to successfully grow our market share in a fairly short period of time.” Insurance sector and digitization Brachman says Empire Life has been successful working with distribution partners via flexible technologies and products. “We've spent a lot of time and effort in the last years developing capabilities, digital and otherwise, to support a variety of business models. We don't have a one size fits all approach. Rather, we work with each of these partners to 148

April 2022

understand their business and their value proposition. Then we tailor our solution, capabilities, products and services, to really meet their needs. These strategic partners can include, MGAs, TPAs, advisors and insurtech platforms, who are adding a variety of different digital capabilities to their own offerings in the market.” Brachman also points out that the increased involvement of fintechs and insurtechs within the industry as a whole has helped to close the protection gap within certain sectors. She says, “The increased use of technology improves convenience and simplicity for the customer in terms of their

EMPIRE LIFE

engagement with their insurance company, Empire in this case, and also, scalability. Leveraging the use of that technology enables us to scale and grow far more efficiently. Certainly Empire is on a very significant growth trajectory.” The future of insurance for Canadian businesses It is clear the team is dedicated to the digital mission. They have an excitement and energy when they talk about the future plans and how insurtech capabilities inspire them. Wyatt says, “It’s fascinating to see how digital capabilities are transforming other

industries. Our teams are innovation-oriented and constantly looking outside our industry for new ideas.” Lycos adds that a strength of Empire Life lies in its focus solely on Canada and Canadian customers. The team is constantly working to enhance services and the customer experience. “We’re a Canadian company laser-focused on the needs of Canadian businesses. With so much progress, digitisation and customisation, it is an exciting time to be in group benefits” she says.

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