FinTech Magazine - December 2023 by FinTech Magazine

December 2023 | fintechmagazine.com

Cryptocurrencies of 2023 GFT

On strategic tech alliances

2024 FINTECH TRENDS

The immediate future of fintech

J.P. Morgan Payments

Transforming Treasury with Technology J.P. Morgan’s Michael Brady explains how treasurers can leverage APIs for digital transformation

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The FinTech Team EDITOR

LOUIS THOMPSETT CHIEF CONTENT OFFICER

SCOTT BIRCH MANAGING EDITOR

NEIL PERRY CHIEF DESIGN OFFICER

MATT JOHNSON HEAD OF DESIGN

ANDY WOOLLACOTT

SENIOR DESIGNERS

REBEKAH BIRLESON SAM HUBBARD FEATURE DESIGNERS

JULIA WAINWRIGHT EMMA WALLER ADVERT DESIGNERS

DANILO CARDOSO CALLUM HOOD ADRIAN SERBAN VIDEO PRODUCTION

LEAD DESIGNER

MANAGER

VICTORIA CASEY

KIERAN WAITE

DIGITAL VIDEO PRODUCERS

ERNEST DE NEVE THOMAS EASTERFORD DREW HARDMAN SALLY MOUSTAFA PRODUCTION DIRECTORS

GEORGIA ALLEN DANIELA KIANICKOVÁ PRODUCTION MANAGERS

JANE ARNETA MARIA GONZALEZ YEVHENIIA SUBBOTINA KENDRA LAU MARKETING MANAGER

EVELYN HOWAT

MEDIA SALES DIRECTORS

JAMES WHITE MANAGING DIRECTOR

LEWIS VAUGHAN CEO

GLEN WHITE

FOREWORD

CHARTING A COURSE FOR THE FUTURE OF FINTECH IN 2024 If 2023 was a year of consolidation for the fintech industry, how will 2024 come to be defined? We chart the course for fintech’s future and analyse the key trends to expect in 2024

“AS MACROECONOMIC CONDITIONS CONTINUE TO SHIFT IN UNPREDICTABLE WAYS, WHAT WILL THE IMPLICATIONS BE FOR FINTECHS AS WE HEAD INTO 2024?”

FINTECH MAGAZINE IS PUBLISHED BY

With venture capital investment receding and fintech firms entrenching their market positions, 2023 may well be remembered as a year of consolidation in our industry. But as macroeconomic conditions continue to shift in unpredictable ways, what will the implications be for fintechs as we head into 2024? In this month’s issue, we look at the biggest trends to expect next year and ask how the industry could be affected by changes in cybersecurity, AI, open banking, mobile and welltech. We’ll also delve into the latest technologies in payments, and how a rising consumer need for speed and convenience is defining a new era of innovation. What’s more, we’ll be casting our eye over a resurgent cryptocurrency market, as it looks to restore public trust following the mammoth crash of XRP in 2022. Remember also to stay tuned to our website, as we bring you the best from our keynote speakers and panelists at FinTech LIVE London this November. And, if you’re still not full of our content, you can catch more interviews from industry leaders when we visited Las Vegas in October to attend Money20/20 USA, with videos continuing to roll out this month. Just head to fintechmagazine.com for all our latest from the world of fintech.

LOUIS THOMPSETT

louis.thompsett@bizclikmedia.com

fintechmagazine.com

CONTENTS UP FRONT

12 BIG PICTURE

Germany’s economy set for small contraction this year

14 THE FINTECH INTERVIEW

Tyler Seydel, Chief Financial Technology Officer at Sunrise Banks

22 LIFETIME OF ACHIEVEMENT IN FINTECH Jamie Dimon, CEO at JPMorgan Chase

22 12

26 PEOPLE MOVES

The latest people moves in the world of fintech

28 THE MONTH THAT WAS

High-profile investment hits the headlines

000 50 6

December 2023

DECEMBER 2023

CONTENTS 32 EVENT REVIEW

Highlights from FinTech LIVE London

50 TOP 10

Cryptocurrencies in 2023 by market capitalisation

62 FINTECH IN 2024

The big questions answered

84 J.P. MORGAN PAYMENTS

Transforming treasury via technology

94 DIGITAL PAYMENTS

What does the future hold in store for payment technologies?

102 GFT GROUP

GFT’s data platform modernisation accelerates the AI journey

102 fintechmagazine.com

In Association with:

THE TOP 100

LEADERS OUT NOW

Championing leaders from global organisations, celebrate those who elevate the industry day in, day out.

Read now

DECEMBER 2023 118 CRYPTO

Can trust in crypto be restored?

128 ISLAMIC INVESTMENT

118

the rise of Shariahcompliant apps

128

fintechmagazine.com

Knowledge Partners

THE TOP 100 COMPANIES IN FINTECH Discover the companies leading the way, setting the pace and inspiring global business change.

READ NOW

BIG PICTURE

December 2023

Germany’s economy set for small contraction this year Frankfurt-am-Main, Germany Bull and bear: two familiar foes meet outside the German Stock Exchange in Frankfurt-am-Main. There are fears that Europe’s largest economy could be headed for a deeper recession than first predicted, despite a let-up in interest rates. The International Monetary Fund (IMF) believes that Germany’s economy will contract by 0.5% this year and will grow by less than 1% next year. The IMF blamed the pessimistic forecast on sectors that are particularly prone to high inflation, as well as a slowdown in trading partner demand. Indeed, German exports fell by 1.2% in August amid weak demand from China.

THE FINTECH INTERVIEW

TYLER SEYDEL Interview with Tyler Seydel, Chief Financial Technology Officer at Sunrise Banks Q. DESCRIBE YOUR ROLE AND YOUR BACKGROUND. HOW DID YOU GET TO THIS POINT IN YOUR CAREER?

» My role today is the Chief Financial

Technology Officer. Within the four walls of Sunrise Banks, this role has elements of business development, sales, client relationship management, national product operations – like bringing national products to market and sustaining growth – and core banking operations like teller support. I started my career on the compliance side of the equation and eventually took on director of risk operations, supporting our operational team. Eventually, we grew these operations and my responsibility in fintech.

Q. WHAT OR WHO INSPIRES YOU IN FINTECH TODAY?

» Fintechs are exciting because they’re 14

December 2023

innovative and iterative. They’re looking at how to do things differently. The most innovative fintechs focus on customer acquisition processes that create an experience. The real differentiator in the future will be the experience behind the scenes. Think about Instagram and Facebook. They started in the same place in terms of posting pictures. But Instagram outpaced Facebook because it took fewer clicks. Instagram is a different experience.

Q. WHAT FINTECHS DO YOU REGULARLY USE YOURSELF?

» I’m going to date myself a little.

I’m a prolific PayPal user. When PayPal started, they were a fintech – and they still are, maybe, an old-world fintech. On the new-world fintech side, I love Ripple. I’m very forward in the cryptocurrency space. Ripple is trying to solve real-world problems, including money movement and settlement. It creates a lot of opportunities to tokenise that ecosystem, adding clarity and automation.

“ Improving our communities starts with finance. If you try to be everything to everyone, you’re going to devolve into being nothing for no one”

THE FINTECH INTERVIEW

“ Socially responsible lending means we pick a side, the side of how to lift people up” Q. WHAT’S THE BEST PIECE OF ADVICE YOU EVER RECEIVED?

» First, don’t take things personally.

Second, speak from a place of knowing when you’re speaking in a public setting. When I was in grad school, a mentor helped me overcome a fear of public speaking by sharing this perspective. And lead with something embarrassing to break the ice and make everyone comfortable.

Q. IF YOU HAVE ANY WORDS OF WISDOM FOR YOUR EIGHT-YEAROLD SELF, WHAT WOULD IT BE?

» Don’t be afraid of failure. You’ve got

to risk it for the biscuit. Don’t focus on the fear of failure but the joy of success.

Q. CAN YOU TELL US ABOUT SUNRISE BANKS’ SOCIALLY RESPONSIBLE LENDING MISSION, HOW THAT PLAYS OUT IN YOUR GROWTH PLANS, AND HOW IT DIFFERENTIATES YOU FROM MAINSTREAM LENDERS?

» Socially responsible lending means we pick a side, the side of how to lift people up. For example, small-dollar lending allows us to extend credit to folks without a qualifier like a credit score. Often, a credit score can stand 16

December 2023

in the way of someone who has a low-to-moderate income and is underbanked. This impacts the options available to them and their quality of life. So, when we talk about socially responsible lending, this is our differentiator and growth driver. We’re looking at quality-of-life improvements and products that support our community.

Q. WORKING IN AN ENVIRONMENT WHERE YOU’RE IMPACTING PEOPLE’S DAY-TO-DAY LIVES MUST BE A REAL HONOUR. IS THERE A PERSONAL ACHIEVEMENT YOU’RE PARTICULARLY PROUD OF IN THE LAST FEW YEARS?

» I was part of the team that built out

our national lending products, including our credit builder product, which is unique

because it’s secured with a certificate of deposit (CD). When you pay off your credit builder loan, you get the money in this CD plus a margin. That is the most synergistic moment I’ve had because we built something that is sustainable and streamlined from an oversight and support perspective – plus, it delivers real-world value that’s consistent with our mission. fintechmagazine.com

FIVE MINUTES WITH...

Q. WOULD YOU LIKE TO SEE MORE PURPOSE-DRIVEN LENDERS IN THE MARKET? IS THERE A NEED RIGHT NOW?

» Yes. Improving our communities

starts with finance. If you try to be everything to everyone, you’re going to devolve into being nothing for no 18

December 2023

one. With our mission, Sunrise Banks is able to focus and create opportunities we might not have had otherwise, like ESG and net zero deposit lending. Being a purpose-driven lender allows us to scale and deliver in ways others can’t deliver on because we specialise.

THE FINTECH INTERVIEW

TYLER SEYDEL TITLE: CHIEF FINANCIAL TECHNOLOGY OFFICER COMPANY: SUNRISE BANKS INDUSTRY: BANKING

Q. WHAT VALUE DO YOU SEE AS THE ‘BIG WIN’ FOR FINTECHS AND BANKS WHEN THEY PARTNER UP? DO YOU HAVE ANY EXAMPLES OF GREAT PARTNERSHIPS YOU CAN SHARE WITH US?

» The big win is when we open up an

underserved market by combining the

EXECUTIVE BIO

LOCATION: SOUTH DAKOTA Tyler Seydel is Chief Financial Technology Officer at Sunrise Banks, a role he has held since May 2022. In total, he has been at the bank for over a decade in various senior compliance and operations roles. He holds an MBA from Colorado Technical University and his leadership mantra is ‘progression not perfection’.

fintechmagazine.com

THE FINTECH INTERVIEW

trust, equity and money movement from the bank with the reach of a fintech. That’s where synergy starts to happen, and you’re impacting people’s lives by bringing them into a larger ecosystem.

Q. HAS THE RECENT ECONOMIC VOLATILITY AFFECTED THE COLLABORATION ECOSYSTEM? DO YOU THINK IT’S MORE IMPERATIVE THAN EVER TO BE COLLABORATIVE, OR PERHAPS YOU’VE WITNESSED A COOLING OF SENTIMENT?

» Collaboration is not cooling off;

it’s moving to a fever pitch. The macroenvironment impacts collaboration – higher interest rates, thinner margins, inflation – and this is being passed to consumers, who are also facing higher costs and economic pressure on things like food and gas. The result is product abandonment. As a result, we’re seeing partners who want to co-create and build a value proposition that’s sustainable, that captures margins for everyone equitably, and that fits our mission.

Q. WHEN IT COMES TO ROBUST COMPLIANCE, PEOPLE TEND TO THINK OF IT AS A BOX-TICKING EXERCISE. IS THERE MORE TO COMPLIANCE THAN THAT?

» In some respects, it can be viewed

as box-checking, but this is a dated and possibly dangerous perspective – risk and risk posture changes. There isn’t a firm box or one-size-fits-all approach. You need to build mechanisms throughout your first and second-line controls. Take it out of compliance and put it in more of a change management, dynamic space that’s fluid and makes it more of a conversation driver. 20

December 2023

“ Fintechs are exciting because they’re innovative and iterative. They’re looking at how to do things differently” Q. DO YOU EXPECT WE’LL SEE MORE BANKING REGULATION POST- SILICON VALLEY BANK (SVB)?

» No – but we’ll start to see more active

regulators who are more interested in the financial condition of banks.

Q. WHAT MAKES YOU GET UP AND GO TO WORK EACH DAY?

» Building products and new things.

Looking at the marketplace and doing something different. Creating solutions to problems that create value for people.

Q. DESCRIBE YOURSELF IN THREE WORDS.

» Competitive, self-reflective, swears a lot!

Q. WHAT WAS THE LAST GOOD BOOK YOU READ, AND WHEN?

» Radical Candor by Kim Scott is

about creating a mechanism for having tough conversations but not losing your humanity. Secondly, I just started Hesiod. I love old poets.

fintechmagazine.com

JAMIE DIMON

CREDIT: RICCARDO SAVI

LIFETIME OF ACHIEVEMENT

This year, the influential CEO of JPMorgan Chase is celebrating 18 years at the helm of the investment bank. Some people say it’s time he made the step up…

ou could say that Jamie Dimon grew up in a banking dynasty, although not in the traditional sense. Born in New York City in 1956, both his father and grandfather worked in the city as stock brokers. His grandfather was Panos Papademetriou, later Dimon, who emigrated to the United States in the 20th Century, making his grandson a third-generation migrant. At first Papademetriou found work as a busboy in one of the city’s many restaurants, before landing a job at the Atlantic Bank of New York. “My grandfather was fascinating,” Dimon would later recall to podcaster Miles Fisher. “He spoke six languages, he walked miles a day, and he read a lot.” This is something that Dimon has taken to himself, waking up early every morning to get started on new reading material. Dimon says he learned a lot from his grandfather – not least, how to treat people fairly and how to stand up for right over wrong. He is a firm believer in the power and importance of so-called emotional intelligence, not just intellectual intelligence, and it has stood him in good stead for his career to date. Vast experience in New York’s banking scene Before becoming CEO at JPMorgan Chase in December 2005, Dimon was CEO of Bank One – one of the many mergers and acquisitions throughout JPMorgan Chase’s history. Indeed, the group today is built on the foundation of over 1,200 predecessor

institutions, some of which date back to the late-18th and early-19th centuries. When JPMorgan Chase acquired Bank One for US$58bn in 2004, it was a homecoming of sorts for native New Yorker Dimon, who had relocated to Chicago to lead the rival bank. He was appointed COO of the newly merged entity, with a timeline of succession that would see Dimon take up the CEO role. Dimon had previously worked at Citigroup and was seen as a shoe-in for the CEO role there, before being usurped by Deryck Maughan, the protégé of thenCitigroup Chief Executive Sanford I. Weill, who had, in 1998, merged his Travellers Group with Citi for an even bigger sum than JPMorgan Chase’s buyout of Bank One two years later.

JAMIE DIMON TITLE: CEO COMPANY: JPMORGAN CHASE INDUSTRY: BANKING LOCATION: UNITED STATES Jamie Dimon has been CEO and President of JPMorgan Chase since December 2005. A former Citigroup executive, he left to take charge of Chicago’s Bank One Corporation, before that was bought out by JPMorgan in 2004.

fintechmagazine.com

LIFETIME OF ACHIEVEMENT

This illustrious background at some of America’s largest financial institutions, as well as close to two decades at JPMorgan, have obviously made Dimon a leading figure in the country’s banking scene. He regularly speaks out about issues affecting banks and businesses, named in Time magazine’s list of the 100 most influential people anywhere on planet Earth and amassing a fortune estimated at US$1.6bn. Artificial intelligence ‘will add huge value’ His finger is still on the pulse of new developments in the American economy, telling Bloomberg earlier this year that the rise of artificial intelligence (AI) might lead to many Americans being able to enjoy more downtime. “AI is real,” Dimon told Bloomberg’s Emily Chang, pointing out that thousands of computer scientists all around the world are already working on real-life 24

December 2023

applications. “Every single process – so errors, trading, hedging, research – every app and every database is going to be employing AI. It might be as a co-pilot, it might be to replace humans – for example, AI is doing all the equity hedging for us for the most part. It’s a little bit of everything. “Technology has always replaced jobs. Your children will live to 100 and not have cancer because of technology, and they’ll probably be working three-and-a-half days a week. Technology has done unbelievable things for mankind, but planes crash and pharmaceuticals get misused,” he added, referring to the weaknesses in every new technology or advancement in society. “There are negatives and one of the biggest negatives in my view is AI being used by bad people to do bad things. I do think eventually you’ll have legal guardrails around it. It’s kind of hard to do, because it is new. But it will add huge value.” He predicted that, within JPMorgan Chase, where AI replaces jobs,

“ TECHNOLOGY HAS ALWAYS REPLACED JOBS. YOUR CHILDREN WILL LIVE TO 100 AND NOT HAVE CANCER BECAUSE OF TECHNOLOGY, AND THEY’LL PROBABLY BE WORKING THREE-AND-AHALF DAYS A WEEK” those people would be redeployed into other areas of the business. A political candidacy in the making? It’s no wonder, given Dimon’s shrewd thinking and his pedigree in New York’s business scene, that he’s often compared with the likes of Michael Bloomberg and Donald Trump. Both went into politics – albeit with different political styles and flavours that often clashed with each other. Dimon himself has often been urged to run for US president, including most recently by the billionaire hedge fund manager Bill Ackman, although Dimon has often distanced himself from these suggestions. There’s no doubt that Dimon would be a popular choice among New York’s bankers and investment managers – but would he consider a run to be leader of the free world? “I thought about thinking about [running for president],” Dimon previously told 60 Minutes cryptically. “But I talked to one

person and I decided to think no more.” It was never revealed who the other party to that conversation was, but Dimon later clarified that he would “probably not” run for public office in future. He has taken aim at political infighting and economic stagnation, but it’s clear how well a Dimon candidacy would compute in the minds of voters. In the run up to another sure-to-be fiercely contested election campaign, the idea is once again on the lips of political observers. Dimon is undoubtedly successful in his field and should earn the respect of the electorate, were he to run, but his style is probably not radical enough to secure the nomination of either of the two main parties. Besides, even at this early stage, the 2024 US Presidential Election looks like it will be a rerun of last time out with the same candidates, meaning there is no space on the ticket for someone like Dimon – not this time round, at least. fintechmagazine.com

PEOPLE MOVES

THE LATEST PEOPLE MOVES IN THE WORLD OF FINTECH When it comes to fintech, we tend to talk more about mass layoffs rather than celebrate noteworthy appointments. But these movers and shakers are the latest recruits to the industry

“ Our experience innovating in payments and building a global network tells us that we must continue to take steps to safeguard the digital economy today and for the long term. Jeremy will be a valuable partner as we continue to secure the financial system” TIM MURPHY

CHIEF ADMINISTRATION OFFICER, MASTERCARD

December 2023

SIR JEREMY FLEMING JOB FROM: L EAD OF GCHQ JOB TO: S ENIOR ADVISOR OF DESIGN – MASTERCARD Mastercard has named Sir Jeremy Fleming as its new Senior Advisor. Coming from GHCQ, the UK’s intelligence, cyber and security agency – which he led – Fleming brings extensive experience to Mastercard. Alongside this experience, Fleming will also help guide Mastercard’s public policy initiatives, as the payments company looks to drive higher security standards for its card users. Leveraging Fleming’s expertise, Mastercard will look to drive investment in technology and solutions to protect against risk and deliver greater trust, as well as encourage the same for the public sector.

PIYA KHANNA JOB FROM: M ANAGING DIRECTOR – CREDIT AGRICOLE JOB TO: C TO – PEEL HUNT Investment bank Peel Hunt has appointed Piya Khanna as its new Chief Technology Officer. With over 20 years of experience is driving business efficiences and technological transformation, Khanna will be charged will overlooking all aspects of the firm relating to technology.

CHRIS TYRER JOB FROM: H EAD OF EUROPE – FIDELITY DIGITAL ASSETS JOB TO: B OARD OF DIRECTORS – ASSET REALITY Chris Tyler has been appointed to the Board of Directors at Asset Reality, a platform helping government and authorities manage digital assets. Tyler’s appointment comes after a four-year tenure at Fidelity Digital Assets, where he was recently Head of Europe. He also spent 13 years at UK bank Barclays.

SAMANTHA ROADY JOB FROM: C OO – MONEYLION JOB TO: C EO OF US – SIMPLY BUSINESS The former COO of MoneyLion, Roady joins Simply Business as its new US CEO. Bringing

25 years of C-level experience in building, scaling, and managing complex global technology businesses to Simply Business, Roady will oversee the company’s growth and revitalise cultural values.

DEAN MICHAELS JOB FROM: C SO – CO-OP SOLUTIONS JOB TO: P RESIDENT/CEO – CO-OP SOLUTIONS Co-op Solutions has appointed Dean Michaels as its new President/CEO following the departure of Todd Clark. Michaels was promoted to the role vacated by Clark from his previous position as Chief Strategy Officer. He will be responsible for continuing Clark’s success, success, having grown Co-op Solutions’ revenue prior to his arrival by over 90% in 2022.

UGNE BURACIENE JOB FROM: C EO – PAYABL. GROUP JOB TO: J OINS BOARD OF DIRECTORS – TECHLSLAND Ugne Buracience, CEO at payabl. has joined Techlsland’s Board of Directors. One of the leading women in fintech, Buracience will offer her expertise to Techlsland to help drive investment in the Cyprus-based tech hub, attracting entrepreneurs and leading tech talent in the process.

THE MONTH THAT WAS

UAE CENTRAL BANK LAUNCHES AANI PLATFORM (ABU DHABI, UAE) The Central Bank of the UAE (CBUAE) has launched a new instant payments platform called Aani in partnership with its subsidiary Al Etihad Payments. It follows in the footsteps of FedNow and will “transform the landscape of digital payments in the country”, CBUAE says.

READ NOW

VISA LIFTS LID ON $100M HONEYPOT (SAN FRANCISCO, US) Visa intends to invest US$100m in companies that are using Generative AI to build innovative new technologies and applications within commerce and payments. The company has made available the nine-figure fund as part of an initiative led by its corporate investing arm, Visa Ventures. READ NOW

METRO BANK GETS FUNDING AT 11TH HOUR (LONDON, UK)

AIRWALLEX AGREES TO ACQUIRE PSP MEXPAGO (MEXICO) Fintech unicorn Airwallex has agreed to acquire MexPago, a PSP based in Mexico. The acquisition will allow Airwallex to enter Latin America, after the firm recorded solid growth in the Americas. It has recently made several senior hires at its regional headquarters in San Francisco.

READ NOW

The UK’s Metro Bank has raised £325m (US$398m) in rescue funding to help it avoid becoming the latest banking failure of 2023. The money will shore up the challenger bank’s finances, but there are still questions about the company’s insistence on expanding its presence on the high street.

READ NOW

fintechmagazine.com

The Portfolio

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RECA

EVENT REVIEW

FinTech LIVE London graced the QEII Centre in the heart of Westminster, London, this November. For those who missed out, read below to catch our highlights WRITTEN BY: LOUIS THOMPSETT

eld at the QEII Centre in Westminster on 6-7 November, FinTech LIVE London 2023 was the leading industry event connecting C-suite leaders and industry experts with all the latest trends in the world of fintech. With keynote speakers, fireside chats and panel discussions across two stages, this hybrid event saw guests attending both in person and online. Hot topics on this year’s schedule were the growth of digital ecosystems in an era of open banking, the proliferation of embedded finance, the importance of fraud & ID verification, the resurgence of cryptocurrencies, and much more. FinTech LIVE London: Day one Proceedings on day one were full of keynote speeches and panel discussions, with Saphyre Co-founders Gabino Roche, Jr. and Stephen Roche, opening the show on Stage 1 as headline sponsor for the third year running. On the return of Saphyre, Scott Birch, BizClik’s Chief Content Officer, said: “It’s always a pleasure to welcome Gabino Roche, Jr. and Stephen Roche from Saphyre to our stage. They’ve been our headline sponsor for the last three years and, once again, they kicked things off with a dynamic, entertaining session on day one.” fintechmagazine.com

Stephen Roche, Saphyre

Scott Birch, BizClik

Gabino Roche, Saphyre

EVENT REVIEW

Gabino Roche, Jr. and Stephen Roche at Saphyre on Project Zero at FinTech LIVE London 2023 WATCH NOW

Indeed, it had already been a busy week in early November for the Saphyre Co-founders, who picked up the gong for ‘Fintech of the Year’ at The Trade Awards. On receiving the accolade, Stephen Roche told us: “To achieve this is awesome. We’re very thankful to The Trade for recognising us with such an award. We’re back here at FinTech LIVE London, and we couldn’t be off to a better high between FinTech LIVE and this award from The Trade.” The importance of digital ecosystems Gabino Roche, Jr. was also present for our first Stage 1 panel discussion of the fintechmagazine.com

Knowledge Partners

THE TOP 100 COMPANIES IN FINTECH READ NOW

EVENT REVIEW

The Digital Ecosystem Forum at FinTech LIVE London 2023 WATCH NOW

day, focusing on the growing ubiquity and importance of digital ecosystems in fintech. He was joined by Matthijs van Voorst, Strategic Partnerships Director at ABN AMRO Bank, Ayca Tunc, VP and Head of Banking & Capital Markets at Genpact, and Venkatesh Varadarajan, Financial Services and Insurance Partner at Infosys Consulting. For Tunc, the value of partner ecosystems is all in service of solving specific problems. “One thing that tends to get overlooked quite often is why we get together,” she told us. “For me, it’s important to be very specific when it comes to solving a problem. “At the end of the day, you either have to fix or improve your customer experience or user experience. So that’s the reason for getting together.”

Ayca Tunc, Genpact

The heart of fintech: Customer service Of course, Stage 1 didn’t have all the action on day one. Over on Stage 2, fintech leaders discussed why customer-centricity is so intrinsic to the products and services companies offer today. Guests included: Russell Fisher, COO of Admiral Pioneer; Alex Orechoff, Senior Director of Financial Services and Gaming fintechmagazine.com

EVENT REVIEW

THANK YOU TO

OUR SPONSORS DIAMOND SPONSOR

WORKSHOP SPONSOR

GOLD SPONSOR

Saphyre leverages exclusive US Patent-Approved AI technology to structure all pretrade data and documents, creating a cloud-based golden copy of reference data for use in trading and post-trade. Saphyre’s provides pre-trade workflows for multilateral counterparties: between asset owners and buy-sides/custodians, buysides and their brokers/ prime brokers/custodians. It encompasses KYC, credit risk, legal amendments/ negotiations, tax review, operational configurations and more. Furthermore, Saphyre is the only platform that combines pre-trade custodian and prime broker data with broker-dealers, including auto-enrichment of standard settlement instructions, which benefits trading and post-trade.

Confluent is pioneering a fundamentally new category of data infrastructure focused on data in motion. Confluent’s cloud-native offering is the foundational platform for data in motion – designed to be the intelligent connective tissue enabling real-time data, from multiple sources, to constantly stream across the organisation. With Confluent, organisations can meet the new business imperative of delivering rich, digital frontend customer experiences and transitioning to sophisticated, real-time, software-driven backend operations.

Sage Intacct is a sophisticated and powerful cloud-based financial management system that delivers the automation and controls around billing, accounting, and reporting that finance need - to reduce errors, stay audit-ready, and scale their business.

December 2023

SILVER SPONSOR

BRONZE SPONSOR

JT is a government-owned fullservice triple-play operator and global connectivity and business enterprise provider. Their Mobile Intelligence Division provides innovative global identity and fraud protection solutions that are being used to detect and prevent mobile enabled frauds including SIM Swap fraud, Account Takeover and Authorised Push Payment fraud. Partnering with a network of global MNO’s JT leverages CRM data and device intelligence to help organisations strengthen their KYC checks and create robust friction-free identity verification and secure customer authentication. As a Mobile Network Operator and triple play service provider they know how trust and loyalty is built firmly upon great customer experiences.

Atradius Collections provides commercial invoice collection services in 96% of the countries across the world. Its wide breadth of services, ranging from accounts receivable management, third-party collections to legal collections, helps companies around the globe recover unpaid invoices and improve their cash flow. Atradius Collections forms part of GCO, one of the leading credit insurers in Spain and worldwide.

Neil Perry, BizClik

The Customer Centricity Forum at FinTech LIVE London 2023 WATCH NOW

December 2023

EVENT REVIEW

Left to right: Russell Fisher, Admiral; Alexander Orechoff, Worldpay; Anton Padmasiri, WealthOS; Jill Docherty, Nium

at Worldpay; Anton Padmasiri, Founder and CEO of WealthOS; and Jill Docherty, Head of Customer Success, EMEA at Nium. “Customercentricity means different things to different people,” said Fisher. “At the heart of what we believe is that you should design, build for and serve your customers, whoever they are, and to do that you absolutely have to understand them. “It’s not just about the products you create; it’s about the service you offer, the experience you provide, and it has to all come from the customer.”

What’s next for crypto regulation? Hot too on the Stage 2 agenda was our Crypto Currency Forum, featuring insight from: Christian Rau, SVP of Crypto and Fintech Enablement Europe at Mastercard; Odelia Torteman, Global Digital Finance Specialist, IFC at The World Bank; David Palmer, Blockchain Lead for Vodafone Business IoT; and Michela Silvestri, VIP & Institutional Business Development Manager at Binance. They discussed today’s regulatory landscape in crypto, which is particularly important when it comes to the future potential of central bank digital currencies (CBDCs). As Torteman puts it: “I think CBDCs represent a great gateway towards the fintechmagazine.com

EVENT REVIEW

Left to right: Christian Rau, Mastercard; Odelia Torteman, The World Bank Group; David Palmer, Vodafone; Michela Silvestri, Binance

December 2023

The Crypto Currency Forum at FinTech LIVE London 2023 WATCH NOW

citizen side of things. Regulation has been a challenge and continues to stay one because it is very much dependent on time and space in different regions. “We are seeing it evolve, however, it is extremely complex and varies a lot between different jurisdictions, which makes everything much more challenging. I do think CBDCs on that aspect represent a great door towards the institutional side.” FinTech LIVE London: Day two Day two of FinTech LIVE London 2023 saw our annual conference end on a high.

Leading lights from across the industry had further opportunities to showcase their latest strategies, projects and innovations, while attendees were able to soak up valuable insight and expertise. Proceedings began on Stage 1 with the Women in Fintech Forum, an important discussion asking what must be done to further advocate and advance gender equality in the sector. Painting an honest picture, Jenny Wood, Director of Strategy, Transformation and Architecture at NatWest Digital X, said: “You can’t be what you can’t see is the cliché everyone has. Having role models and seeing people who are successful in fintech is fundamentally important. fintechmagazine.com

EVENT REVIEW Left to right: Jennifer Wood, NatWest Group; Kamila McWilliam, GoCardless; Odelia Torteman, The World Bank Group

The Women in FinTech Forum at FinTech LIVE London 2023 WATCH NOW

December 2023

“We’ve been working on this for a long time and it needs a systemic shift in the way people see the role of females, but also in societal understanding of technology.” Confluent: Building real-time fraud detection solutions Over on Stage 2, software developer Confluent detailed how financial services firms can build context-aware, real-time fraud detection solutions to combat the rising tide of malicious activity across financial ecosystems. “The core of what we do is run a datastreaming platform,” explains Peter Pugh-Jones, Director of Financial Services at Confluent.

“For many years at banks, we’ve seen battery-powered data tools run on-screen. So, the concept of data streaming is that, instead of trying to find the right data through large stores, let’s look at it rightaway as it is generated.” Applying real-time use to this data is what has allowed Confluent to develop real-time fraud detection solutions. Pugh-Jones added: “Our platform is a way for businesses to create tailored fraud prevention from data immediately processed in the data stream – something that can be used and shared to other parts of the business and other companies which could be a part of your ecosystem partnership.” fintechmagazine.com

Saira Khan at HSBC on Customer Centricity at FinTech LIVE London 2023 WATCH NOW

December 2023

EVENT REVIEW

Saira Khan, HSBC

HSBC: Exploring customer-centricity Saira Khan, Head of Innovation & Partnerships at HSBC, delivered her Stage 1 keynote on the importance of striking a balance between technological innovation and the human touch for legacy players looking to digitise their offerings. “For any organisation, small or large, we’re all trying to drive customer experience to be the best,” said Khan. “I often think the importance of the customer can be overlooked when technology comes into play. “However, currently, incumbent banks are looking at what the customer really wants, and tailoring solutions and technology to

fit the needs of customers. I think this is perhaps the most important development happening in fintech and across financial services today – a focus on the customer.” Capital One: Embracing Cloud and SaaS in banking Capping off a fascinating series of sessions on Stage 2 was Michael Anyfantakis, Chief Architect and Head of Product UK at Capital One. He discussed the proliferation of cloud technology across financial services over the past few years, running through the long-standing debate of cloud adoption at incumbent banks. “Ever since cloud softwares emerged at the likes of Amazon, Google and Microsoft, the question was whether banks should fintechmagazine.com

Michael Anyfantakis, Capital One

December 2023

EVENT REVIEW

Michael Anyfantakis at CapitalOne on Cloud and SaaS at FinTech LIVE London 2023 WATCH NOW

start to use more of those cloud services that were making tech firms so successful,” Anyfantakis continued. “Initially for banks, it was about moving away from mainframe data centres into distributed types of technology – which could be interpreted as a private cloud. “Today this has evolved significantly with the rise of fintechs, into something where banks are shifting priorities to start using public clouds.” FinTech Magazine would like to thank all our guest speakers, pannelists and presenters for joining us, as we continue to drive digital connections in our industry. Stay tuned on our website at fintechmagazine.com fintechmagazine.com

CRYPTOCURRENCIES IN 2023 BY MARKET CAPITALISATION FinTech Magazine takes a look at the top 10 cryptocurrencies in 2023 by market capitalisation, with our number one entry worth a whopping US$561.3bn 50

December 2023

TOP 10

WRITTEN BY: LOUIS THOMPSETT

hether you like it or not, crypto is only getting bigger. Data from Mordor Intelligence predicts the crypto market is expected to reach US$5.03tn by 2028, growing at a compound annual growth rate (CAGR) of 30.4% during a forecast period of 2023-2028. One cryptocurrency is already worth in excess of half a trillion dollars and the value of other cryptocurrencies continues to grow at a rapid rate. Find out the most valuable cryptocurrency on the market today in our list of the top 10 cryptocurrencies ranked by market capitalisation. fintechmagazine.com

SOL (Solana)

Market cap: US$9.5bn

TRX (TRON)

Market cap: US$7bn Valued at US$7bn, Tron is a blockchain that runs DeFi applications and smart contracts. The platform operates a proof-ofstake algorithm, which is powered by TRON’s native cryptocurrency, TRX. Founded in 2017, TRON is managed and supervised by the TRON Foundation, a nonprofit organisation based in Singapore. Established by Justin Sun, TRON has over 165.5 million user accounts and more than 5.81 billion total transactions. In 2022, TRON was registered as the national blockchain for the Commonwealth of Dominica, representing the first partnership between a public blockchain and a sovereign state. 52

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Leveraging a proof-of-stake mechanism, Solana is a blockchain platform providing smart contract functionality through its native cryptocurrency, SOL. First opening in March 2020, Solana’s blockchain was designed for supporting decentralised apps and smart contracts. In 2021, the company sold US$314m of its native SOL to funding groups led by Polychain Capital and Andreessen Horowitz. While crypto markets have fluctuated following FTX’s bankruptcy, Solana’s last reported market valuation stood at US$7bn. Today, its market cap stands at US$9.5bn having dropped from its 2022 high when it was valued at US$55bn.

TOP 10

Dogecoin

Market cap: US$10.8bn

ADA (Cardano)

Market cap: US$10.7bn Public blockchain platform Cardano operates an opensource, decentralised blockchain platform that facilitates peerto-peer transactions with its internal cryptocurrency, ADA. The platform’s development was led by Ethereum Co-founder Charles Hoskinson and is overseen by the Cardano Foundation in Switzerland. Much like Solana and TRON, Cardano employs the use of a proof-of-stake model, a more sustainable and environmentallyfriendly option than proof-of-work models. Launched in 2017, Cardano reached a record-high market capitalisation of US$77bn in 2021, the fourth highest of any blockchain platform at the time. It is now valued at US$10.7bn.

Dogecoin, which was created by software engineers Jackson Palmer and Billy Markus, is an altcoin traded against fiat and other cryptocurrencies. Initially founded as a joke, or the world’s first “meme coin”, Dogecoin has developed into a legitimate investment prospect. The altcoin’s value boomed in 2021 by more than 800% in the space of 24 hours – and has been subject to turbulent crypto market conditions ever since. This even includes a price increase when X owner Elon Musk temporarily changed the X app’s logo to a Doge logo.

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05 XRP

Market cap: US$36.3bn

USDC (Circle & Coinbase)

Market cap: US$26.4bn Founded by Circle, USD Coin (USDC) is a stablecoin attached to the US dollar. The cryptocurrency is managed by a consortium called Centre and includes Coinbase members as well as members from Bitmain, a Bitcoin mining company with investment in Circle. USDC is a private crypto stablecoin – unlike central digital banking currencies (CBDCs) – despite its affiliation with centralised US currency (USD). Available as an Ethereum ERC-20 token, USDC can be bought, traded and held on blockchains including Solana, Stellar, Polygon and Avalanche.

Employing its native cryptocurrency, XRP, Ripple operates a cryptocurrency exchange, remittance network and real-time gross settlement system. Ripple provides its customers with solutions to source crypto and facilitates instant payments, including for XRP, as it looks to fulfil its mission of building crypto solutions for an economically borderless world. Ripple remains robust in many global markets, despite facing scrutiny after the US Securities and Exchange Commission (SEC) launched a class action against the crypto platform provider for falling foul of US Howey requirements.

TOP 10

Tether (iFinex)

Market cap: US$83.8bn

Binance Coin

Market cap: US$37.7bn BNB is the proprietary cryptocurrency of the trading platform Binance and one of the most frequently-traded crypto assets in the world today. At the time of its founding, Binance launched two of its own cryptocurrencies, Binance Coin (BNB) and BinanceUSD (BUSD). Initially starting as an Ethereum token, BNB later moved to Binance’s proprietary blockchain, Binance Smart Chain (BSC). This later merged with the older Binance Chain, creating the BNB chain. BNB Chain operates a unique ‘Proof of Staked Authority’ model, a combination of proof of stake and proof of authority.

Launched in 2014, Tether is an asset-backed stablecoin with a market value of US$83.8bn. Based in Hong Kong, Tether is owned by technology company iFinex and its cryptocurrency is minted on ten protocols and blockchains. Today, it is the largest stablecoin in terms of trading volume and market capitalisation, with 64% of the market share, surpassing Bitcoin in 2019 as the most traded cryptocurrency in the world. As a stablecoin, Tether’s coin valuation was initially designed to match US$1 and holds US$1 of asset reserves for each stablecoin issued.

02 Ethereum

Market cap: US$220.2bn

In second place on our list of the top 10 cryptocurrencies by market capitalisation is Ethereum, valued at a lofty US$220.2bn. A blockchain and smart functionality platform, Ethereum’s native cryptocurrency is Ether. With fully open-source software, Ethereum was first conceived in 2013 by Vitalik Buterin. The crypto platform allows users to deploy permanent decentralised applications onto it, with which

other users can interact. In addition, Ethereum users can create and exchange NFTs on the platform. Many crypto platforms utilise the Ethereum blockchain on top of the ERC-20 token standard. In recent times, Ethereum transitioned to a proof of work mechanism from proof of stake in a bid to stay sustainable. Ethereum called this process ‘The Merge’ which, following completed, allegedly cut its energy usage by as much as 99%.

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December 2023

Bitcoin

Market cap: US$561.3bn Topping our list of the top 10 cryptocurrencies by market capitalisation is, unsurprisingly, Bitcoin, with a gargantuan valuation of US$561.3bn. Invented in 2008 by an unknown individual or group using the pseudonym Satoshi Nakamoto, Bitcoin has been described as its own economic bubble by recipients of the Nobel Memorial Prize in Economic Sciences, and has also become synonymous with ‘crypto’. Built on open-source code,

Bitcoin is a public-domain platform as well as a digital asset within its own class. Today, Bitcoin’s platform is the largest computer network on earth and offers tools, products and services to the public in order to manage, buy and trade their crypto assets. In 2021, El Salvador adopted Bitcoin as a legal tender and, more recently, Ukraine has been accepting Bitcoin donations to fund its resistance against the Russian invasion.

fintechmagazine.com

FINTECH IN 2024: THE BIG QUESTIONS ANSWERED In this roundtable, we ask how the industry could be affected by changes in cybersecurity, crypto, AI, open banking, mobile and welltech going into 2024 WRITTEN BY: LOUIS THOMPSETT

December 2023

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fintechmagazine.com

FinTech Magazine asks industry experts the big question on key areas that could impact the fintech market going into 2024, featuring: MANUEL SANDHOFER SVP & General Manager at Nium YASUHIDE MATSUMOTO Senior Director and Subject Matter Expert (AI) of the Technology Strategy Unit at Fujitsu VILLE SOINTU Head of Solutions & Strategy for Mobile Financial Services at Ericsson ANDY CEASE Director of Product Marketing at Entrust ELIAS GHANEM Global Head of Financial Services at Capgemini Research Institute We look at how a heightened focus on cybersecurity could impact the market, the rapid rise of blockchain and cryptocurrency markets, the continued application of AI and machine learning, evolutions in open banking, further adoption of mobile payments and a potential boom in partnerships between fintechs and welltechs.

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Can we expect a heightened focus on cybersecurity in 2024?

Ville Sointu All eyes – from end users to providers – will undoubtedly be on cybersecurity as we enter 2024. The surge in digital payments brings an elevated risk of fraud, particularly in the backdrop of the industry’s rapid integration of cuttingedge technologies like AI that can be used for malicious purposes. This year, we observed global leaders convene at the G20 summit to voice their concerns over the rising threat of AI-driven cyber attacks, malware, scams, and data manipulation. They called for the development of robust mitigation strategies against advanced persistent threats (APTs). This conversation is only the beginning and is poised to become increasingly intricate as technology continues to advance. Put simply, cybersecurity will undeniably take centre stage in 2024, prompting a more vigorous drive towards establishing global cooperative frameworks. These frameworks can help curb risk and ensure a financial landscape that is not only transparent and trusted, but also held accountable. Andy Cease Financial institutions face mounting pressure to adopt digital technologies, from both consumer preferences and a rapidly shifting competitive landscape. Customers increasingly seek seamless

mobile and online experiences from their banks, while new fintech disruptors gain ground with digital-first offerings. However, digitalisation increases the need for banks to focus on cybersecurity, as these processes also expose banks to new cyber risks if they are not approached strategically. Per IBM, data breaches and fraud could cost more than US$4m per incident, severely damaging trust and reputation. As banks reshape operations, balancing security and experience is paramount.

How fast will blockchain and cryptocurrency markets continue to grow?

Elias Ghanem The growth outlook for blockchain technology remains positive as global companies continue to actively explore potential use cases. However, the cryptocurrency markets stand at a critical juncture amid a prolonged crypto winter. Financial institutions are actively engaging in pilots related to blockchain technology, with a pronounced focus on enhancing infrastructure for central bank digital currencies (CBDCs) and bolstering blockchain interoperability. Meanwhile, key use cases – such as cross-border transactions, credit scoring and lending, deposit tokens, purposebound money and more – are steadily gaining traction on a global scale. These developments present significant utility fintechmagazine.com

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potential, and more pilot programmes will continue into 2024. The unexpected collapse of multiple large crypto firms such as FTX, Blockfi, Celsius and Voyager marked the beginning of a prolonged crypto winter. Investor trust has waned, and regulatory clarity will be crucial to restore confidence, without which renewing mainstream growth for crypto might prove to be difficult. A key development that could renew mainstream cryptocurrency growth includes the upcoming implementation of the Markets in Crypto-Assets (MiCA) regulation in the European Union (EU) that aims to enhance consumer protection and transparency for EU crypto activities. Additionally, if more traditional financial institutions and wealth management firms expand their involvement in the cryptocurrency space by offering new services related to digital assets, it could serve to bolster investor confidence as they see the support of a reputable institution behind it.

How will the application of AI and machine learning continue to advance?

Yasuhide Matsumoto It is speculated that AI will greatly evolve not only in industrial fields such as manufacturing and finance, but also in areas more familiar to us in our daily lives. First, as AI advances, the scope of data use will broaden. In addition, as data sets expand and diversify, AI systems and applications are expected to improve beyond their traditional scope. For example, AI and machine learning fintechmagazine.com

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are expected to make transportation safer and more efficient, such as with self-driving cars and drones in the future, which will impact our everyday lives. The most important key trend will be generative AI. GenAI is a technology that is different from existing AI and is expected to have a significant impact not only on the tech industry, but also on our society in the coming years. In particular, use of GenAI in the future is expected to reduce development work hours using conversational AI and coding automation, as well as in the design spaces, where videos, game production, web 68

December 2023

pages and other tasks will be generated automatically, reducing work-hours and increasing work efficiency. AI and machine learning are projected to have the following effects in these three traditional industries in the next few years: • Healthcare: It is expected that the use of material informatics will greatly shorten the drug discovery process, and that data analysis of genetic information and disease history will enable individualised improvement tailored to each person, and the use of such data will enable early detection of diseases and more effective treatment with more effective therapies.

• Finance: By evaluating market data and executing transactions at fast speeds, it is expected to achieve risk avoidance, such as fraud identification and risk assessment, as well as optimise investment strategies. • Manufacturing: Data utilisation is expected to greatly improve productivity. In addition to optimising supply chain/logistics and resource allocation, the use of data can be considered in the area of predictive maintenance, which has been overlooked by humans in the past, enabling data-based analysis to predict equipment failures and achieve leaner production schedules.

It is no exaggeration to say that AI ethics and explainable AI will be most central to the future development of AI and machine learning technologies. Discrimination and bias, in terms of ethics, and transparency, in terms of responsible AI, are particularly important. It is necessary to clarify where the responsibility lies with regard to accountability for AI decisionmaking, and it is essential to work hard to develop guidelines and regulations that are tailored to individual situations, as has been discussed with many other countries and companies. fintechmagazine.com

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Ville Sointu AI and ML are still in their early stages when it comes to their applications in financial services (FS). Currently, AI excels at efficiently sifting through mountains of data, making it a valuable tool for fraud detection and first-generation robo-advisory services. Notably, this year we’ve seen how GenAI has begun to reshape the “front office” of FS by enhancing customer service capabilities through supporting tools that can provide much better situational awareness to customer service agents in call centres, resulting in reduced operational costs. In 2024, as AI and ML continue to proliferate, the industry will focus on refining and advancing these use cases. Expect to witness the emergence of more dynamic, AI-assisted customer service agents with “superpowers” that will work in tandem with human agents to ensure high-quality, efficient and compliant customer service. This will be done with the power of realtime analysis of every customer interaction and suggested next action-type activities. AI will also be able to monitor for compliance and data protection in real-time. It is crucial to note that all this must – and will be – done in a privacy-preserving way, where no sensitive data is stored or exposed to anyone who the customer doesn’t give consent to. Additionally, AI will be harnessed to empower individuals lacking appropriate credit ratings or residing in regions with inadequate markets, endowing them with an AI-generated credit score and paving the way for more global participation in financial services. However, as these advanced use cases come to the forefront in 2024, ethical 70

December 2023

“ Only 46% of Gen Z feel confident about their financial knowledge, a figure lower than that of baby boomers, Gen X and millennials” ELIAS GHANEM

GLOBAL HEAD OF FINANCIAL SERVICES, CAPGEMINI

considerations pertaining to AI will consequently assume a more prominent role. More questions will be raised globally about how to ensure that AI-based financial decisions remain explainable and transparent. Effective AI implementation hinges on the availability of large amounts of data which, in turn, raises concerns about privacy, consent and ethical standards. To unlock the full potential of AI, while preserving trust and credibility, countries will grapple with the necessity of establishing regional rules and regulations to govern risk compliance. Andy Cease The most secure technologies often assist in streamlining the verification process customers want using AI and machine learning. For instance, integrating ID verification into the mobile experience accelerates onboarding by enabling features like form autofill. This not only enhances customer satisfaction, but significantly

fintechmagazine.com

reduces application abandonment rates. It also provides secure verification without a paper trail by authenticating the customer’s ID with cloud-based AI, encrypting and storing the digital ID only on the customer’s mobile device. Elias Ghanem GenAI has emerged prominently, garnering widespread attention and interest on a global scale. While its impact on data security and privacy remains a point of contention, banks are taking an optimistic, yet cautious approach, embarking to identify the most valuable use cases of GenAI. However, the cost of not participating in the GenAI revolution will be more significant than the cost of grappling with potential risks as the technology develops. Banks are actively conducting pilot studies to assess the impact of GenAI technology on various facets of their operations. A notable aspect is that many banks are using internal data to power use cases, improving employee output and productivity, but are not venturing to use customer information keeping in mind privacy and security concerns. Use cases, particularly around code development and testing, and in assisting customer service teams, are increasingly being implemented. We expect more use cases and applications to emerge focusing on middle and back-office tasks in 2024, while, in the front-office, GenAI will be utilised for improving customer experience. As these pilot programmes continue to deliver promising results, particularly in improving the productivity of lower-skilled employees, it is essential to acknowledge that this adoption is not without its costs. The demand for AI infrastructure, especially data centre services, currently 72

December 2023

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surpasses supply due to the resourceintensive nature of developing and operating large language models. Critical strategic decisions facing banks include the decision of whether to build AI capabilities in house, partner with external providers or adopt a hybrid strategy. Banks will also have to re-look at their talent pipeline and prioritise hiring and upskilling staff in AI skills and capabilities. Finally, ethics will be a key consideration as the GenAI landscape matures. While most banks have existing governance frameworks, they need to account for new risk elements that emerge. Clear governance frameworks around policies, ethics and usage will be crucial for deploying GenAI and large language models.

How will open banking continue to evolve in 2024?

Ville Sointu In 2024, open banking will reach unprecedented levels of interconnectedness as insights and solutions from traditional financial institutions, fintechs and businesses converge more seamlessly. From a provider perspective, the widespread distribution of APIs is levelling the playing field, fostering increased innovation, new revenue streams and robust competition. For consumers, the seamless flow of data among these entities translates into expanded opportunities and more control over their financial wellbeing. However, compliance and safeguarding customer rights will emerge as pivotal concerns in 2024. Navigating the intricate web of sanctions and regulations across fintechmagazine.com

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“ While digital innovations provide attractive improvements, robust security is critical for maintaining customer trust and protecting bottom lines” ANDY CEASE

DIRECTOR OF PRODUCT MARKETING, ENTRUST

different countries poses formidable complexities and substantial costs, especially in regions where these regulations remain fluid. This dynamic creates serious legal and operational challenges for multinational providers. Moreover, providers are still taking steps to ensure that adopting the open banking API concept does not compromise the consent or rights of their customers. Expect a state of play that is largely in flux and agile as new laws, regulations and norms come to the forefront. Ultimately, we’ll eventually reach a point where embedded finance will be the keyword of 2024. By capitalising on the API distribution capabilities and protocols facilitated by open banking, providers will increasingly break down the silos separating data and employ it across various functions to enhance the financial wellness of all. Andy Cease There are several key processes that banks are zeroing in on to innovate and win customers while developing better offerings. 74

December 2023

Improving the account opening and customer onboarding process is a priority for any bank deploying open banking. Research indicates consumers are only willing to spend 90 seconds to five minutes verifying identities and completing applications. Exceeding this brief time period often leads to users abandoning sign-ups before establishing the high-value relationship that banks need to achieve primary account status. The move towards digital card issuance will be a key change. Traditionally, newly opened accounts came with physical debit or credit cards mailed to users’ homes,

forcing customers to wait days or weeks before transacting while raising risks of mail fraud and theft. Leading banks now increasingly offer instant digital card provisioning directly through customers’ mobile banking apps, allowing transactions to begin immediately. While this introduces potential cybersecurity risks, innovations like tokenisation and biometric authentication help mitigate those concerns. Capabilities like digital wallets, wallet push provisioning and card controls also improve security by avoiding physical card information sharing.

Elias Ghanem The EU leads the path for open banking. With its regulators actively shaping the frameworks and governing policies, it has provided a blueprint and practical evidence for further global adoption. Recently, the EU has introduced proposals for PSD3 and PSR, marking an update to the PSD2 aimed at improving open banking competitiveness among other objectives. Globally as well, open banking has been growing. A significant development is that, in the US, the CFPB is working on a new personal data rights rule intended to give consumers the right to control their personal fintechmagazine.com

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financial data, with the regulation expected to come into effect in 2024. The CFPB’s framework mandates that banks should provide qualified third parties with access to consumer financial data using APIs. With many banks using legacy backend systems, partnerships with fintechs could see a boost. While the path to open data is still long, regulations paving the way for open finance are now starting to emerge, such as the Financial Data Access (FIDA) framework in the EU, indicating a step in the right direction. The gradual shift towards open data will enable banks to increasingly transform themselves into lifestyle partners by becoming more embedded into the non-financial customer journeys, allowing them to go beyond offering core financial products and services.

How close will we be to the widespread adoption of mobile payments in 2024?

Ville Sointu Mobile payments will continue to explode in 2024. Recent findings from Juniper Research reveal a compelling forecast: the total value of digital wallet transactions is set to rise by a staggering 77%, from $9 trillion in 2023 to $16 trillion by 2028. The private sector, in particular, is stepping up to offer new and advanced services like ‘buy now, pay later (BNPL) options, microloans, and personalised investment opportunities. These innovations are resonating with increasingly diverse and engaged user bases across both developed

and emerging markets. We’ve seen this from our own platform. The Ericsson Wallet Platform currently supports more than 400 million registered mobile wallet accounts across 24 countries, from emerging nations in Africa to developed countries in the Middle East. It facilitates almost three billion transactions, totalling more than US$40bn, each month – and these figures are growing by the day. Much of this remarkable growth can be attributed to the cashless movement, which gained accelerated traction during the COVID-19 pandemic. From an environmental perspective, producing and transporting physical cash, which often requires armoured trucks, is substantial compared to the simplicity and eco-friendliness of tap-and-go solutions. Moreover, high-denomination cash can circumvent financial regulations and fund illicit activities due to its complete anonymity. However, it’s essential to underscore that mobile payments and cashless solutions will not completely supplant cash in 2024. Expect to see more public players entering the space in order to bolster resilience and prevent excessive consumer reliance on private-sector solutions. Countries around the world are raising public dialogue around the development of central bank digital currencies (CBDCs) as a means to adapt to our increasingly digital age. For example, the European Central Bank is actively exploring the potential introduction of a digital euro, with a definitive decision expected to materialise some time in 2024. Andy Cease Realising the full benefits of mobile payments requires evaluating and mitigating fintechmagazine.com

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accompanying risks. Partnering with experts in financial security, identity and data protection provides access to sophisticated capabilities needed to safely transform digitally. Banks can reinvent processes with a dual focus on experience and resilience. As consumers demand digital capabilities, institutions that embrace innovation thoughtfully can build trust and loyalty despite cyber threats. While digital innovations provide attractive improvements, robust security is critical for maintaining customer trust and protecting the bottom line. Elias Ghanem The adoption of mobile payments will continue to grow in 2024. Key drivers include the rise of mobile wallets, contactless payments, the increasing prominence of account-to-account (A2A) transactions and tokenisation. For mobile wallets, it is estimated they will grow at a rate of 15% from 2023 to 2024, signalling compared to growth of 12% during the previous year. Furthermore, looking ahead to 2026, it is estimated that more than 60% of the global population will be using digital wallets. This projection underscores the continued momentum and increasing ubiquity of mobile payment methods. Contactless payment has also been on the rise and is expected to grow at a rate of 7% from 2023 to 2024. Amid heightened public health concerns during the global pandemic, contactless payments gained ground as a safer alternative. A2A payments surpassed $525bn in transaction value in 2022. They serve as a driver for widespread adoption of mobile payments by offering a seamless and direct 78

December 2023

transfer of funds between bank accounts, bypassing traditional payment networks and providing a faster and more costeffective way to make transactions. Tokenisation will be another driver for wider adoption since it allows consumers the convenience of swift transactions without the need for physical cash or cards. Tokenised cards are fast growing in volume. It also provides enhanced security, replacing sensitive information with a surrogate value, ensuring a safe and seamless payment experience.

Will welltech see a boom, particularly those focusing on financial health?

Ville Sointu Welltech focused on overall financial wellbeing is the next frontier of financial services. However, on a global scale, the year 2024 will maintain a strong emphasis on the convergence of financial inclusion and financial wellbeing. Retail investors in particular stand to reap the key benefits

of the boom. The rise of robo-advisory services means customers previously unable to access human advisory services will be empowered to invest and grow their wealth. Power is being handed to the people, and participation is rising as a result. Digital wallets and payment apps are increasingly offering a wider suite of investment services, which is attracting retail investors in emerging markets who can invest small amounts, purchase digital bonds, buy digital gold, trade shares and more. A recent example of this in action is at MTN Uganda. The company’s late2022 m-IPO initiative in partnership with the Uganda Securities Exchange (USE) helped position Uganda at the forefront of digitising capital markets for Africa. As the country’s first paper-free IPO platform aimed at retail investors, more than 21,000 investors were able to participate at the outset. More than 80,000 customers – a steep increase from the 20,000 pre-IPO account base – have since opened Securities Central Depository (SCD) accounts using the MTN USSD and MoMo App platform, enabling them to apply for shares seamlessly, check their balances for all listed companies, monitor transactions and know their brokers. In short, in 2024, we’ll see this momentum continue and more people than ever will have the tools to enhance their own financial wellbeing along with that of their communities. The digital divide will continue to narrow, and the aspiration for a globally equitable financial landscape will steadily transition into a tangible reality. fintechmagazine.com

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“ It is imperative for both customers and providers to possess a comprehensive understanding of the AI decision-making processes and not simply rely on AI blindly” VILLE SOINTU

HEAD OF SOLUTIONS & STRATEGY FOR MOBILE FINANCIAL SERVICES, ERICSSON

Elias Ghanem In a world characterised by significant economic challenges, including geopolitical instability, market volatility, rising living costs and escalating interest rates, the financial wellbeing of individuals is facing unprecedented challenges, leaving 69% of retail banking customers classified as financially unhealthy. Personal financial management (PFM) apps are an increasingly important part of the strategy for banks to deepen their relationships with customers. From 2022 to 2023, the personal finance software 80

December 2023

market size grew at a rate of more than 6%, and this upward trend is forecast to continue, with the market size reaching US$2.2bn by 2027 at a steady CAGR of more than 6%. PFM apps enable customers to access a consolidated view, including bank accounts, credit cards and loans empowering customers to take control of their earnings and spending. Banks are going beyond this now to provide more value for customers, from leveraging AI to provide smart insights and tailored investment advice, to offering financial planning tools.

There is a convergence in financial health and wellness as well, with banks starting to allow customers to track their emotional and physical wellbeing as well in a single dashboard. Further, they are leveraging gamification to incentivise healthy financial and fitness habits among customers through various rewards. Finally, banks are also creating experiences to educate customers on leading more sustainable and healthy lifestyles. Fintechs play an important role in this ecosystem as well, and a survey revealed

that more than 40% of customers prefer PFM services from non-bank providers. Open banking is a key driver for this since it allows third-party financial providers to access customers’ financial data, reducing friction. Financial literacy is another crucial area of focus. Only 46% of Gen Z feel confident about their financial knowledge, a figure lower than that of baby boomers, Gen X, and millennials. To engage this younger demographic, fintechs are incorporating innovative features such as short-form videos and personality tests for tailored advice. fintechmagazine.com

BANKING

Are there any other trends you feel will be particularly noteworthy in 2024?

Manuel Sandhofer In the world of realtime global payments, we’re already seeing a widening pool of use cases for financial institutions, payroll platforms and online marketplaces as demand for faster, cheaper, more transparent cross-border pay-outs continues to rise. In 2024, we expect to see this drive even more traditional banks to partner with fintechs in order to stay ahead of the curve and meet the needs of their business customers. In addition, next year we hope to see the materialisation of reforms that have been under way for some time, such as the EU’s Payment Services Directive 3 and New Payments Architecture (NPA) in the UK. Regulators’ and policymakers’ commitment to fintech reform over the last few years has been clear and catalysed by the onset of open banking, the publication of the Kalifa Review, and more recently the creation of the Centre for Finance, Innovation and Technology. While 2024 may not be the year for a Big Bang 2.0, it will be the year that the industry builds on these foundations and continues to grow with confidence. Ville Sointu Next year, anticipate the term “explainable AI” to permeate the collective consciousness and emerge as a key concern within the financial sector.

December 2023

This concept took centre stage at the G20 summit, where leaders resoundingly called for global oversight and heightened transparency surrounding the rapidly evolving field of AI. Increasingly, crucial decisions are being delegated to AI assistants, like credit scoring and determining loan approvals. However, it is imperative for both customers and providers to possess a comprehensive understanding of the AI decision-making processes and not simply rely on AI blindly. People should have the capacity to understand the reason behind their eligibility for or exclusion from specific services on a more profound level than “because the AI said so”. In 2024, more strides will be made on a country-by-country basis to establish the foundation for transparency and accountability, with the goal of establishing a collaborative global framework. Additionally, 2024 will witness a burgeoning adoption of self-sovereign identity (SSI) systems in response to widespread concerns over financial data privacy and autonomy. Pilot projects such as the European Digital Identity Wallet (EUDI) – the lead initiative of the EU Commission’s recent eIDAS 2 Regulation – will grant crossborder e-ID available to any citizen of an EU member state who requests one by 2024. This marks a dramatic shift away from traditional paper-form systems, and citizens, governments and businesses alike all stand to benefit. EUDIs will be interoperable across the EU, giving wallet holders unprecedented choice and security over their data, and will unlock an array of online and offline public and private services like easily opening a bank account, filing tax returns, proving age,

applying for a bank loan and more. Once fully implemented, people will find it much easier to access services and validate their financial status in new countries – a process that has proven challenging despite our increasingly globalised and mobile world. Andy Cease Identity verification and e-documentation will be increasingly implemented, ensuring regulatory compliance while reducing fraud risks beginning at onboarding.

Ongoing monitoring later assesses account usage and transactions, combining AI and machine learning with human oversight to catch bad actors before attacks occur. Specifically, capabilities like biometric authentication, device fingerprinting, behavioural analysis and risk scoring enable layered monitoring throughout the customer lifecycle and will become main players in the future. By identifying suspicious patterns early, banks can take preventative action. fintechmagazine.com

J.P. MORGAN PAYMENTS – TRANSFORMING TREASURY VIA TECHNOLOGY AD FEATURE WRITTEN BY: SCOTT BIRCH PRODUCED BY: GLEN WHITE

December 2023

J.P. MORGAN PAYMENTS

Michael Brady, Executive Director, Liquidity and Account Solutions at J.P. Morgan Payments, explains how Treasurers can leverage technology transformation

s a leader in payments with nearly 150 years of experience, J.P. Morgan Payments has a deep understanding of the impact of technology on Treasurers and their partners. This technology, when implemented correctly, can enhance a Treasurer’s ability to perform their core responsibilities, and their value to the organisation. Michael Brady, Executive Director, Liquidity and Account Solutions at J.P. Morgan Payments, says better technology and data leads to more informed decision making, resulting in better forecasting and improved control. “At their core, a Treasurer is responsible for ensuring the company has the right amount of money, in the right entity, in the right currency, in the right location and at the right time to ensure financial obligations are met,” says Brady. “Having the right technology infrastructure can unlock the data and insights necessary to more accurately view current cash positions and forecast future cash needs. This ultimately leads to freeing up working capital, improved FX hedging, and overall improvements in capital efficiencies. Additionally, technology can reduce operational risks associated with manual processes and, ultimately, free up resources.” The key phrase there is “the right technology”. With so many solutions on the market, Treasurers can easily find themselves swamped with disjointed 86

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systems that lead to unnecessary complication and inefficiencies. Brady backs this up, saying that the issue J.P. Morgan Payments hears of most often is fragmented platforms that lead to lack of both centralisation and visibility into cash positions globally. “This lack of controls results in excess cash buffers, which has become increasingly punitive in an elevated rate environment,” explains Brady. “Along with lack of control/visibility, we also see an increased focus on the move towards real-time data to help further reduce idle cash. The main reason for these challenges is twofold. First, lack of understanding the art of the possible and keeping up with new trends in treasury technology, and second, lack of availability of resources on the treasury and technology side of companies.” Application programming interfaces, or APIs, allow applications to speak to one another and can therefore support digital transformations such as real-time payments and real-time visibility into cash positioning. These innovations can be good news for both partners and Treasurers, but they do require Treasurers to have a foundational understanding of APIs – as well as which ones are most useful when it comes to meeting business goals. Treasurers need to be able to communicate confidently about APIs with technology leaders within the organisation.

US $9.8 trillion daily payments processed

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countries & territories

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Michael Brady, Executive Director, Liquidity and Account Solutions fintechmagazine.com

J.P. MORGAN PAYMENTS

“ Here at J.P. Morgan Payments, we have built our virtual solutions platform in-house, which makes it more flexible, and we are continuing to invest in it to suit our clients’ needs” MICHAEL BRADY

EXECUTIVE DIRECTOR OF LIQUIDITY AND ACCOUNT SOLUTIONS, J.P. MORGAN PAYMENTS

“The world of Treasury has shifted and is rapidly moving towards real-time to reduce capital buffers and create operational efficiencies. APIs are a tool that is driving this evolution,” says Brady. “In a rapidly changing economic environment with elevated rates, the benefit of having real-time insights into cash positions is invaluable, and the flexibility the APIs provide will be transformative. “APIs are really the present and the future. Where we see the biggest challenge is with the understanding of APIs and how powerful they can be in a company’s treasury transformation journey.” APIs are on a rapidly evolving journey with the ability to monitor and initiate payments in real-time to transform Treasury. All of this of course comes with a cost, particularly when working in a legacy technology environment. The technology investment and resources need to be carefully taken into consideration, but the adoption of APIs is becoming more and more streamlined and may be easier and more powerful than some Treasurers realise. 88

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Of course, Treasurers are rightly concerned with cost when it comes to capital expenditure on new technology, and while virtual solutions are not new, there has been an increased focus and investment in them thanks to the cost benefits they can bring. Brady, however, believes there is a bigger picture to consider. “When it comes to virtual solutions, the number-one driver from clients is cost reduction as a result of account rationalisation,” he says. “Can there be a cost benefit? Sure, but we encourage clients to think more broadly. What is the art of the possible? If you could have the

most granular level of reporting, insights, and visibility, what would that look like? What resources would that free up? How much working capital could you free up with better reporting? What operational efforts or risks could be reduced or eliminated?” Brady says virtual solutions can facilitate subledgering of funds within a single physical account, resulting in the ability to slice and dice transactions within that account to create the ultimate in flexibility in reporting. Historically, companies had to open hundreds or thousands of accounts to get this level of visibility. The improved visibility not only creates natural business

MICHAEL BRADY TITLE: EXECUTIVE DIRECTOR, LIQUIDITY AND ACCOUNT SOLUTIONS COMPANY: J.P. MORGAN PAYMENTS

Michael Brady, Executive Director, is a Liquidity and Account Solutions Specialist at J.P. Morgan. Michael is a liquidity subject matter expert with more than 13 years’ experience in various roles in the payments space.

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insight benefits, but also limits idle cash as concentration is native within virtual structures. Lastly, virtual structures can significantly reduce the burden of cash application and manual reporting processes. “The key with virtual solutions is creating a flexible structure and having a partner that is continuing to invest in their platform as technology and adoption of virtual solutions evolve,” says Brady. “Here at J.P. Morgan Payments, we have built our virtual solutions platform inhouse, which makes it more flexible, and we are continuing to invest in it to suit our clients’ needs.” 90

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Treasury transformation is not a onesize-fits-all, one and done approach. It is important to not just think of what you need to solve now, but rather to consider what is the art of the possible, and work backwards from that. There will inevitably be low-hanging fruit, and there will also be heavy lifts. When thinking of the heavy lifts, keep in mind the return in terms of unlocking capital, freeing up resources or gaining more insights to drive business. View it as a journey, which, as technology advances, will be ever evolving. That is why flexibility is so important.

J.P. MORGAN PAYMENTS

When it comes to the best strategy for creating a digital ecosystem to enable and accelerate digital transformation, again, there is no single ‘silver bullet’ solution. “Does it make sense to invest in the most robust treasury management system? Maybe. Maybe not. What features are you realistically going to use and is it worth the investment?” asks Brady. When it comes to the potential benefits, there are a few key aspects to consider. First, what manual processes can you replace? This should be assessed both from an operational risk perspective and also a resourcing perspective.

Second, how much working capital can you unlock, and what is the most efficient way to deploy it? With rates elevated, the benefits can be significant, but it is also important to perform sensitivity analysis around yields to ensure ROI projections are accurate should current economic conditions change drastically. Lastly, and less tangible, is the importance of flexibility of your tech ecosystem. The secret of a successful digital transformation lies in fluency between Treasurers and Chief Technology Officers (CTOs). Only when these vital functions are aligned will the organisation truly evolve. fintechmagazine.com

J.P. MORGAN PAYMENTS

“We encourage clients to think more broadly. What is the art of the possible?” MICHAEL BRADY

EXECUTIVE DIRECTOR OF LIQUIDITY AND ACCOUNT SOLUTIONS, J.P. MORGAN PAYMENTS

“With many companies evolving into new lines of business or expanding into new markets with globalisation, we are seeing increased alignment between Treasury and the Business lines as a result of the cash implications of these evolutions,” says Brady. “As the demand on Treasury increases, Technology must also have a seat at the table to understand the implications the Treasury infrastructure has on the overall working capital of the company. Treasury should view Technology as a critical partner and involve them in project decisions so that Technology not only understands the language of treasury, but vice versa as well. “With resources limited on both sides, it is important to have a clear sense of the implication of projects and decisions on one another.” There are pressures on both sides to deliver transformation via technology in a cost-effective manner, which is why due diligence is essential to enable smooth project delivery and ROI. This is where the Treasurer and CTO can work in tandem to secure the best business outcomes.

fintechmagazine.com

December 2023

DIGITAL PAYMENTS

WHAT DOES THE FUTURE HOLD IN STORE FOR PAYMENT TECHNOLOGIES? The advancement of technology, coupled with rising demand for speed and convenience, is defining the future of paytech with a new era of innovation WRITTEN BY: ALEX CLERE

ayment technologies define the way we pay for, and receive, goods and services. As new ideals of speed, convenience, affordability and connectivity become possible with the inevitable march of technological endeavour, so too new payment technologies will enter our lives. So, how will the future of commerce be shaped by the payment technologies of tomorrow? “The future of payments is unfolding in ways that were once considered unimaginable,” explains Paul Staples, Head of Embedded Banking at ClearBank. “Technological advancements, shifting consumer preferences, and evolving regulatory landscapes are fundamentally reshaping the way we conduct financial transactions across any business, person, or indeed machine.”

Payment speed is not the only consideration Staples continues: “Innovation in the space for the past 20 years has been about speed, in both domestic and crossborder payments, but we’re now bumping into diminishing marginal returns when looking only at speed as the innovation driver. Payment speed remains a critical consideration, but we believe payment safety stands out as a crucial concern in the payment landscape of the future. “The modern payment ecosystem is a dynamic space characterised by an array of options, from mobile wallets and digital currencies to contactless payments and biometric authentication. The need for speed has been a prevailing narrative. Consumers and businesses have come to expect rapid, convenient transactions that

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DIGITAL PAYMENTS

“ The quest for seamless, secure and instantaneous transactions is pushing the boundaries of what is achievable” PETER WOOD

CTO, SPECTRUM SEARCH

reflect the pace of our interconnected, digital world. It’s a hygiene factor. “However, the future of payments will pivot on the principle of safety. In an era marked by increasingly sophisticated cyber threats and data breaches, security is of paramount importance. Consumers want financial information protection and to know their transactions are safeguarded against unauthorised access.

“While speed is essential, it should not come at the expense of payment security. A payment system that is both speedy and secure is the perfect solution. Technology must rise to the challenge of providing a balance between these two crucial aspects of the payment experience, but these are often treated independently.” Peter Wood is a seasoned tech founder and current CTO at Spectrum Search, who looks at the current situation through the lens of having spent over a decade in the tech industry. He predicts: “In a rapidly evolving digital landscape, payment technologies are undergoing an irreversible transformation. The quest for seamless, secure, and instantaneous transactions is pushing the boundaries of what is achievable.” fintechmagazine.com

December 2023

DIGITAL PAYMENTS

Three main drivers behind future of paytech Wood adds: “The future of payment technologies is ostensibly anchored on three pivotal axes: cryptocurrency, artificial intelligence (AI), and blockchain. “Cryptocurrencies, spearheaded by bitcoin, are progressively being recognised as a legitimate alternative to traditional currencies.” “The irrefutable allure of cryptocurrencies lies in their decentralisation, which extricates transactions from the clutches of traditional banking systems, thereby mitigating fees and augmenting transaction speed. However, the mass adoption of cryptocurrencies is fettered by regulatory scrutiny and a lack of understanding amongst the general populace. “On a parallel trajectory, the blockchain – the underpinning technology of cryptocurrencies – is showing promise in enhancing payment systems by fostering transparency and reducing fraud. By creating an immutable ledger of transactions, blockchain curtails the propensity for financial misdemeanours and accelerates the verification process, which is imperative in a world where the velocity of transactions is escalating exponentially. “AI and machine learning (ML) are the linchpins in the evolution of payment technologies. My tenure as a visionary at Spectrum Search, an AI and ML-led recruitment agency, and the pivotal role I play at the Outlier Ventures accelerator, have reinforced my belief in the transformative power of AI in payment systems. AI can streamline the payment process by predicting consumer behaviour, detecting fraud, and automating routine tasks, thereby ameliorating the user experience and bolstering security.”

“ The future of payments is unfolding in ways that were once considered unimaginable” PAUL STAPLES

HEAD OF EMBEDDED BANKING, CLEARBANK

Indeed, the prevalence within financial services of these three technologies – once the stuff of sci-fi-induced fever dreams but now the hottest topics in boardrooms around the world – is a testament to how the industry has embraced cuttingedge technology. Of course, they all have their detractors. However, business leaders throughout the financial world are embracing change and deploying the technology that is powering it. It is helping to tackle long-standing issues within the industry, as well. According to research from American Express, nearly a third of businesses (29%) have seen an uptick in payments fraud over the last year. They are responding. Nearly half (45%) of those companies have introduced new security and anti-fraud measures, while a third (34%) have taken steps to bolster their existing payments security capability. These firms are spending an average of 7% of their annual turnover on fraud protection. It’s not just fraud, either, although this is a clearly advantageous use-case. Over the past two years, seven in 10 (69%) businesses have adopted or considered fintechmagazine.com

adopting automation with a view to saving time, minimising errors, and reducing expenditure. “Secure and seamless payments are more important than ever for businesses so it’s not surprising to see firms investing in this area and seeking out partners who can support them in this area, particularly as more B2B spending digitises,” explains Stacey Sterbenz, Vice President & General Manager for UK Commercial at American Express. What does the future of paytech look like? “Looking forward to the payment landscape 100

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20 years from now, several trends and developments are poised to shape the future of payment technology,” continues ClearBank’s Paul Staples. “We can expect biometric authentication methods such as facial recognition and fingerprint scans to become even more prevalent and directly part of the payment journey. As quantum computing advances, encryption methods will need to evolve to ensure the security of payments. Encryption and tokenisation will align to protect user information. “As we move into a more interconnected world, payments will become seamlessly

DIGITAL PAYMENTS

“Secure and seamless payments are more important than ever for businesses so it’s not surprising to see firms investing in this area and seeking out partners who can support them” STACEY STERBENZ

VICE PRESIDENT & GENERAL MANAGER, UK COMMERCIAL AT AMERICAN EXPRESS

integrated into the Internet of Things (IoT), such as cars, appliances, and wearables that will make transactions part of our daily lives – with invisible payments, the challenge will be how we monitor, control and manage these as they all come back to a business or individual. “Sustainability and environmental considerations will also play a key role. Payment technologies will incorporate more eco-friendly solutions to minimise the carbon footprint of financial transactions. “In conclusion, the future of payments will be marked by a delicate balance

between speed and safety. While speed is a valuable feature, ensuring the utmost security of payments is of paramount importance. A future characterised by biometric authentication, quantum-resistant encryption and ESG will redefine the payment landscape. “In this brave new world, payments will be both fast and secure, enhancing our daily lives while protecting our financial wellbeing. As we move forward, the focus on safety will be the cornerstone on which future payment technologies will be built.” fintechmagazine.com

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GFT’S DATA PLATFORM MODERNISATION ACCELERATES THE AI JOURNEY WRITTEN BY: HELEN ADAMS PRODUCED BY: LEWIS VAUGHAN

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David Tuppen, GFT’s Head of Data and AI, discusses strategic technology alliances, Gen AI and helping customers to accelerate their AI journey

FT is an international technology service provider with strong expertise within banking, financial services and insurance. It has over 10,000 employees globally, across the UK, Poland, Spain, Canada, Germany, the USA, Vietnam, Brazil and many other countries. “I would say our differentiator is that we pride ourselves as being precision engineers across a multitude of domains; including platform modernisation, cloud computing and neobanking services, with a strong focus on AI and Data,” explains David Tuppen, GFT’s Chief Data Officer. David Tuppen and GFT’s data team are developing the GFT AI.DA marketplace, which can support and accelerate GFT’s clients’ journeys utilising AI. “GFT is maturing the AI landscape in the industry, helping many organisations that are focusing on their investments into AI,” he shares. Specifically, GFT is doing something a little different – GFT has been placing a lot of emphasis on its AI.DA marketplace, which allows clients to see AI use cases, plus AI and data journeys, through to a modern data platform blueprint of architecture design. “We firmly believe that there is a connection between AI and the data that goes with it,” says Tuppen. “From integration, storage and management of data processing and analytics; building specific end-to-end pipelines is as important as generating the AI itself.” fintechmagazine.com

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“ If you examine the data, the industry is moving towards a democratised domain-led architecture” DAVID TUPPEN

HEAD OF DATA AND AI, GFT

For Tuppen, data platforms are evolving – they have changed over time and will continue to evolve. “There are various architectural patterns which are needed and these vary according to each business and client domain,” he says. “There’s not one single solution for a modern data platform. So, from the big trend on data mesh and democratised type architectures, to traditional centralised data stores, there needs to be a specific pattern for each business unit and each client.” This is what GFT provides, a data strategy that fully aligns with an organisation’s AI goals and aspirations. “Data strategy is fully dependent on the business strategy in order to demonstrate true value for the business,” he emphasises. A solution needs to start with business value first; after that comes data lifecycle, data management and governance, data and technical architecture, data science and AI visualisation, then finally, data literacy and change management. “Each one of these steps is needed to a certain degree, for controlled and secure insights.” Tuppen sees the data pipeline prior to AI projects as being very important. 106

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“You need to move from front to back,” he says. “As I mentioned, you start with the business and then move backwards to the IT backend. You need to look at how to change the impact and what change the impact of adding intelligent automation has on your business. How will the users view and access those insights from the AI? How is the data stored and processed? How is the data integrated into the platform?” Tuppen sees that if a customer removes any of those considerations, they might land

DAVID TUPPEN TITLE: HEAD OF DATA AND AI COMPANY: GFT LOCATION: LONDON

themselves in a data integrity issue, which could cause processing issues and an increase in time and cost. Ensuring that data is clean, relevant and suitable for AI Along the pipeline of a modern data platform, there should be defined data models, or at a minimum, one that has governed data assets (or data products), regardless of the data quality (DQ) tooling or process used.

David Tuppen is the Head of Data, Analytics and AI at GFT. He has been working in the data space for over 20 years, from technical development through to business development. His area of expertise is enterprise data strategy, with a focus on hybrid data architecture patterns and applications. His career experience includes working at the Bank for International Settlements in Basel, Athene Holding in Bermuda, and Milliman Actuarial Consultancy in London.

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Smart DQ, also known as Intelligent DQ or Rule-Based DQ, without management and governance can compromise the underlying input data. “One will always have various levels of data quality and a lot of people will focus on rule-based or Smart DQ but forget about the governance and management that’s needed,” Tuppen explains. On top of that, it’s necessary to control the data being used by the AI models. “Focusing on the integrity of the input data will mean that your insights from the applied AI will be much more trustworthy.” 110

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As with architecture, Tuppen says that there is no single answer for how to store your data. “If you want a playground or a sandbox environment, where you can run generalised analytics against raw data; that’s where you’d have, for instance, a data lake which may not have been modelled.” Tuppen advises that if a business wants to slice, dice and drill down reporting capabilities, then they may typically need a relational database.

GFT is present in more than 15 markets

GFT has over 35 years’ experience of delivering deep technical IT engineering and consulting services

“If you want an event-based architecture, then potentially you’d use something like NoSQL – it really depends on the business case and the client as to which architecture is best to use.” There are a range of challenges and solutions involved in the data integration process – and Tuppen has seen them all. “Data integration, which is getting the original source data into the new platform, can follow a multitude of paths,” he said. “This is the Extract, Transform and Load (ETL) process. It really does depend on the

architecture and whether transformation is required. Does the customer need streaming capabilities, or can they run a batch without considering that option?” Tuppen encourages businesses to carefully manage their data as it will be likely to explode over time. This includes duplication and replication of data over and over within the entire environment of the business. “Again, this increases both cost and time,” he says. “Maybe having all that data is necessary and maybe you are fintechmagazine.com

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able to store all that data. But if you expect a lot from the data over time, building a decomposable architecture with, for instance, a layer that has schema bound API’s, will give a certain degree of surety on the data as it moves down your pipeline.” GFT addresses data governance and compliance issues, especially in industries with strict regulatory requirements. “If you consider each layer of a modern data platform, you will inherently need to adhere to regulatory compliance,” Tuppen explains. “For example, if you look at BCBS239, and consider Principles 1 and 4.” Principle 1: Aggregated data and reporting need to have governance. Principle 4: Accuracy and integrity of data.

“Focusing on the integrity of the input data means that insights created from the applied AI will be much more trustworthy” DAVID TUPPEN HEAD OF DATA AND AI, GFT

“If you have a data governance model in place and data management in place across your pipeline, you will be following Principle 1 and Principle 4, which includes accuracy and integrity of data,” Tuppen advises. When an organisation moves their data into their data models, that will inherently force integrity on that data and ensure the accuracy of it. He continues: “So as soon as you start building that layered approach in your architecture, you will start becoming regulatory compliant inherently, rather than having to build it from scratch.” fintechmagazine.com

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Data infrastructure scales have had to adapt to handle increasing data volumes. Tuppen saw many companies ‘lift-and-shift’ their data into the cloud a few years ago, which at the time was not unusual. “Many businesses originally lifted and shifted all of their data into the cloud, with the ambition of addressing existing challenges later down the line,” Tuppen says. “The challenge (and benefit) with that, is that the cloud scales very easily, so you don’t have to consider the ever-growing infrastructure behind it.” As such, GFT has seen data explode over time, which means that data processing time and costs have now multiplied. “I frequently talk about the data strategy, but having your data strategy up front – which means designing a targeted solution,

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“ GFT is able to help customers accelerate their overall AI journey” DAVID TUPPEN HEAD OF DATA AND AI, GFT

including archiving and deletion of data, data modelling and sandboxing, is crucial to cover all your bases,” he explains. With this approach, businesses can process their data faster, which will produce input data quicker and allow them to run AI solutions more efficiently. GFT’s strategic technology alliances and a focus on Gen AI GFT has a multitude of technology partnerships, including major cloud providers and many independent software vendors (ISVs).

“We are in fact building accelerators with our ISV partners on the cloud,” says Tuppen. “From building large language models (LLMs) and Gen AI accelerators on GCP, through to streaming capabilities on AWS, we spend a lot of time carefully selecting our partners, based on synergies between their capabilities and our clients’ requirements.” For instance, MongoDB is a leader in the data technology space and GFT has used their technology for a number of clients. “We often utilise the streaming capabilities of Confluent, where we advise on the implementation of the technology for our clients, who are looking for enterprise-grade trusted real-time processing of data.” fintechmagazine.com

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David Tuppen, GFT’s Head of Data and AI, on Strategic Alliances and Accelerating AI Journeys WATCH NOW

Over the next 12 months, Tuppen anticipates a huge focus on AI and data. “GFT is investing heavily into its AI.DA marketplace, which includes industry specific use case libraries, AI and data journeys, blueprint solutions and accelerators, through to the modern data platform design patterns; all accessible through the AI.DA marketplace,” Tuppen shares. “We are going to enable our customers to accelerate their AI journey even faster.” As for insights into future trends in AI and data platforms, Tuppen sees that Gen AI is the hot topic currently in everyone’s search history. “People want to know – how can we integrate Gen AI with our existing landscape? How can we use LLMs and AI? The reality is that unless you have a trusted data platform in place, this is always going to be a difficult challenge.” AI is fed by data, so users must have a trusted data source in place. 116

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“If you look at data, the industry is moving towards a democratised domainled architecture,” Tuppen suggests, “So, isolating each functional domain into an end-to-end data product is becoming the go-to standard.” Meanwhile, GFT’s data science team is seeing increased uptake of smaller taskoriented language models. “Model ops for governance is a trend that we’re beginning to see,” he says. “We are actually seeing prompt engineering becoming less of a trend, due to optimisation frameworks already being built.” At GFT, the focus continues to be on AI and Data, how to accelerate AI solutions and the benefits these bring, whilst always maintaining an eye on the ever-evolving data and AI requirements of the future.

GFT GROUP

“Data strategy is fully dependent on the business strategy in order to show true value” DAVID TUPPEN HEAD OF DATA AND AI, GFT fintechmagazine.com

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CRYPTO

CAN TRUST IN CRYPTO BE RESTORED? Volatility has seen faith in cryptotraded assets plummet for asset holders and those yet to trade in digital assets; how can trust be restored? WRITTEN BY: LOUIS THOMPSETT

t goes without saying that crypto markets have gone through their fair share of volatility, ever since Bitcoin announced itself as the first coin on the blockchain. But, after crypto exchanges saw their worth soar in 2020 to US$826.6m, perhaps the biggest, and most reputably damaging blow to crypto’s integrity as a stable investment is FTX’s bankruptcy in November 2022. FTX’s valuation – standing at a mighty US$34bn – was wiped out almost overnight after major investors including Sequoia Capital and Softbank wrote their investments down to zero. So shocking was FTX’s collapse that Forbes says it represented crypto breaking its social promise, to deliver “a better, safer and more inclusive financial system, of the people, by the people, for the people.” FTX collapse: One volatile swing too far? However, if you ask UST’s Director of Innovation and Global Head of Blockchain, 118

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CRYPTO

“ As more and more players of all industries start leveraging the technology, trust will naturally surge” JANIS HEIBEL

HEAD OF CRYPTO AND DIGITAL ASSETS, SYNPULSE

Daniel Field, crypto’s social promise “had been scuppered long before November 2022”. For Field, “It had become a game of chicken over who and when, not if. This is not to dismiss the aspiration, but a reflection that promises from shady characters don’t count for much. “Paradoxically, that promise can only be fulfilled when people no longer believe in it and are more critical, more suspicious and more exacting.”

Perhaps then, crypto’s own mythology has contributed to its downfall. For IDnow’s Global Head of Crypto & Fintech, Jason Tucker-Feltham, XRP’s collapse “highlighted the importance of an unambiguous and robust regulatory structure in crypto”. However, framing it in a positive light, Tucker-Feltham feels the collapse offered “the industry an opportunity to build from the ground up all over again, but this time with trust as one of its cornerstones”. Herein lies the question: How can trust in crypto be restored? While its heartbeat may still be strong, as suggested by the Head of Crypto and Digital Assets at Synpulse, Janis Heibel, it is now about how the ‘industry can gear up for the next highs’ with trust being a central driving force. fintechmagazine.com

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“ Consolidation appears to be a natural force in the crypto markets and so some kind of authoritative vigilance over the largest actors is called for” JASON TUCKER-FELTHAM GLOBAL HEAD OF CRYPTO AND FINTECH, IDNOW

Crypto’s dwindling trust: Not just XRP But first, while XRP’s collapse may have damaged trust in crypto-traded assets, it’s not the only area where trust itself has either declined or failed to materialise in the first place. UST’s Field feels the issue lies in people’s intentions for entering into the crypto space. He says: “Some crypto investors bought into the tech, others into the mythology of it and more just came for the returns. “When Bitcoin fell from its all-time high (ATH) crypto lost much of the latter group, who didn’t really care whether their capital was in stocks, crypto or commodities. Those who had really bought into the doctrine, overly emotionally invested and lacking experience, waited and bore the brunt. “The mood switched from complacency and self-congratulation and has been tinged with an undertone of hopeful desperation since. These signals are picked up by the wider population who are consequently much more cautious.” Meanwhile, for Tucker-Feltham, crypto’s 122

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innate anonymity has offered fraudsters a platform to thrive, dissuading many from taking an interest in decentralised digital currencies. As he puts it: “Anonymity was initially a major attraction in the world of cryptocurrency, but as it’s become increasingly clear that exchanges with lax controls are being exploited by bad actors for illegal activity, that has understandably decreased the level of trust.”

CRYPTO

How can trust in crypto be restored? It’s clear that issues of trust concerning crypto go beyond XRP’s collapse alone. How, then, can trust be restored? Synpulse’s Heibel – much in the same vein as Tucker-Feltham – believes it is legal clarity that is lacking. “We need legal clarity, particularly in the US, where regulatory waters are muddy,” says Heibel. “Institutional adoption, as we’re seeing in Switzerland or with the Blackrock Bitcoin ETF, will bolster confidence.”

To achieve adoption on an institutional level, Tucker-Feltham suggests an extension of the European Transfer of Funds Regulation (TFR) could assist in rebuilding trust in crypto. He adds: “At its heart, the TFR would identify the senders and beneficiaries of all crypto assets. Solid KYC procedures and digital identity verification would play a big part in this as they add a further level of trust to transactions.” fintechmagazine.com

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While more comprehensive regulations may offer a framework from which greater crypto trust can flourish, Field noted the importance of striking the right balance between such regulations and crypto idealism. “Either an authority curbs reckless behaviour and cavalier attitudes to others and ends up with some kind of regulation, or the investors collectively have to find increasingly sophisticated ways to mitigate the cost of bad actors – combatting both more sophisticated fraud and betterdisguised consolidation of the market which create systemic risk,” he says. 124

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“A happy medium needs to be found. Consolidation appears to be a natural force in the crypto markets and so some kind of authoritative vigilance over the largest actors is called for. At the same time collective, constructive criticism from the investor community is healthy and should be welcomed and not shouted down by partisans.” Crypto: the case for widespread regulations While consolidation may be the way to appease all players in the sphere of crypto, the consensus of our contributors is that this will undoubtedly involve greater regulation.

The next chapter of crypto UST’s Daniel Field looks ahead to the future of crypto, in which its mythology may be stripped away as the industry comes to see its value as a tool. “With the exception of those early to the crypto party, who for one conviction or another held long enough to turn a profit, the vast majority of investors who have done well were those who knew least and cared even less – they saw a trend, booked their returns and moved on to other investments. “A little learning is a dangerous thing, and the remainder have been harangued continuously with emotional appeals intent on mythologising the technology, creating a sense of belonging and of being privy to some esoteric enlightenment. “We will see this stripped away in the next chapter of crypto where technology will be seen as a tool, its users and creators as flesh and bone and benefits will be realised for the many, not the few. “The social promise may well be met, not through beating the system, but reforming it: the same but cheaper, more secure, more useful.

“This comes from taking those incredible inventions for what they always were: ledgers for accounting, automation to execute conditional transactions and applying them right to where the whole world needs them most: collecting our pay cheques, paying our bills, saving for the future and buying goods. “But it can’t interact with that world without agreement on some essential rules designed to protect society from fraudsters and the economy from systemic risks. UST, building on Quant technology, delivered the CBDC prototype for Project Rosalind, an experiment in API prototypes for CBDC from the Bank of England and Bank of International Settlements. “We witnessed how the private sector can innovate on top of a light central bank ledger and build new capabilities that retained privacy – things like lower costs to borrowers, quicker cross-border payments, safeguards for parents of minors or better citizen protection for online retail. “Fear not. This and all the other tokenisation projects around the world are not trying to kill crypto but breathe life into it. Follow the builders, consider yourself as a user, invest rationally, scrutinise judiciously and think for yourself.”

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Field believes that to improve the current tensions between crypto idealism and regulation, easy wins can be achieved. For him, “the easiest points are at the interface with banking, and particularly with stablecoins”. “Ensuring that stablecoins are adequately collateralised and avoiding monopolies will ensure money doesn’t leak from the system. Next, the exchanges need to be held to the highest standards of fair play,” he adds. “Finally, attention needs to be paid to healthy fragmentation. A healthy system can self-regulate, but only if the dice aren’t loaded from the start.” Meanwhile, Tucker-Feltham reminds us of the Markets in Crypto Assets (MiCA) framework, calling it the benchmark from which other markets will judge broadranging crypto regulations. He notes: “Across the Atlantic, the US is likely to be keeping a close eye on how the MiCA and TFR frameworks are implemented, as similar versions are likely to be put in place there if they prove to be successful in Europe. “Following Brexit, the UK has the freedom to undertake its own in-depth look at these trust issues, rather than adopting the EU-wide approach and HM Treasury this year released a consultation paper that placed the importance of investor safety at its core.” However, while it appears inevitable the future may hold stricter regulations. “Clarity, transparency and enforcement of those rules are paramount,” Heibel warns. “History proves it: in the 1930s, the US curtailed gold possession, leading many to hoard even more. Overly stringent rules might just exacerbate current challenges rather than resolve them.” 126

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CRYPTO

“The vast majority of crypto investors who have done well were those who knew least and cared even less” DANIEL FIELD

DIRECTOR OF INNOVATION AND GLOBAL HEAD OF BLOCKCHAIN, UST

Crypto: Evolution over the next decade So, with crypto’s decentralised identity and regulation in the balance, how will crypto look over the next 5-10 years? Hiebel believes it will be an established asset class by this point. “As more and more players of all industries will start leveraging the technology, trust will naturally surge. In fact, many people will interact with “crypto-powered” technology without even being aware of it. This development has already started.” Field agrees, believing digital currencies will become mainstream in the next five to ten years. “It’s the convergence of multiple efforts from different fields across the commercial and financial sectors,” he says. “That includes CBDC, and private stablecoins, tokenised commodities and other tokenised assets. It will start with high volume commerce and filter down to individuals over a slightly longer horizon.” So, while crypto is set to be the digital asset class of the future, for now, it’s about striking the right balances to restore trust in a digital asset class currently in the doldrums of public opinion. But, fear not cryptonites, for this digital asset class will have its heyday. fintechmagazine.com

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ISLAMIC INVESTIN

THE RISE OF SHARIA COMPLIANT APPS A new breed of Shariah-compliant investing apps and platforms are helping to open up the capital markets to a new demographic WRITTEN BY: ALEX CLERE

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he gradual democratisation of capital markets has seen more and more people investing in stocks, shares, and recently cryptocurrencies. Indeed, according to The FINRA Investor Education Foundation, there was an influx of armchair investors during the COVID-19 pandemic – and they tended to have a more diverse makeup than previous generations of investors. But there is still one particular demographic that risks being left behind when it comes to access to investing. Because of their religion, there are strict rules facing Muslim consumers when it comes to how they invest. It has, in recent years, prompted a flurry of technological innovations specifically designed to meet the need for Shariah-compliant investing. What is Shariah-compliant investing? As Ibrahim Khan, Co-founder of IslamicFinanceGuru (IFG), explains to FinTech Magazine, there are generally three separate requirements that operators must be aware of in order to attract Islamic consumers. “Muslims must not invest in haram (impermissible) practises contrary to the tenets of Islam,” Khan tells us. “Obvious prohibition points to the exclusion of investments that derive profits from impermissible verticals like alcohol, weapons, non-halal foods, and more. “Certain types of income like interest are also not allowed in Islamic law. For instance, a buy-to-let mortgage or highly over-leveraged stock or bond would not be Shariah-compliant, because making money from interest is impermissible. “Lastly, a good example of ancillary prohibitions would be ‘gharar’, an Islamic concept that means ‘uncertainty’ or ‘risk’ fintechmagazine.com

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ISLAMIC INVESTMENT

“ There is a big difference between the number of Muslims in the world and how many of them actually invest their money” KATE LEAMAN

CHIEF MARKET ANALYST, AVATRADE

in Arabic. Openness and certainty are integral to Islamic finance, so insecure or intangible financial practices such as insurance are also not permissible.” It is clear to see, then, why Muslims wanting to participate with the stock market have been underrepresented for too long, as a result of operators failing to cater to these beliefs. But a new generation of investing apps like Zoya and Wahed, which aim to be Shariah-compliant, are helping to address that imbalance.

How many Muslims participate in the stock market? The historic lack of options for Shariahcompliant investing is still reflected in the number of Muslims who own stocks and shares. Muslims make up nearly a quarter of the world’s population, yet barely 1% of financial assets qualify as Shariah-compliant. “There is a big difference between the number of Muslims in the world and how many of them actually invest their money in a way that follows Islamic rules,” says Kate Leaman, Chief Market Analyst at AvaTrade. “This gap is because many Muslims might not know about these investment options, or they might not be easy to access. However, there is hope that special investment platforms that follow Islamic rules can help more Muslims become involved in the stock market.” fintechmagazine.com

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“ I think Islamic investment options will likely become a mainstay of major banks as the Muslim population and their wealth grow” IBRAHIM KHAN

CO-FOUNDER, ISLAMICFINANCEGURU

IFG’s Ibrahim Khan points out that there are other reasons that explain why Muslims globally under-index so heavily in terms of ownership of financial assets. “The global Muslim population is on average younger and comes from developing nations,” he says. “We expect these numbers to change quite significantly over time, as the burgeoning middle class starts to develop in places like the Middle East, North Africa, Pakistan and Indonesia.” Indeed, of the countries that Goldman Sachs believes will be the 10 largest economies by 2075, five of them – India, Indonesia, Nigeria, Pakistan, and Egypt – have sizeable Muslim populations amounting to more than 850 million people. “Muslims are generally not as well educated when it comes to investing, and this is partly due to a lack of available options for them as Muslims. Even basic information pertaining to Shariah-compliant investments is often not available to most of the Muslim population.” 132

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Will Islamic investing products become mainstream? As the Shariah-compliant investing proposition becomes stronger, will we see more mainstream providers adopt – or acquire – solutions aimed at the Islamic population? Will Islamic investing become less of a niche offering and more of a mainstream one, and if so, what will this mean for the small investing startups that have so far pioneered the space? “I think Islamic investment options will likely become a mainstay of major banks as the Muslim population and their wealth grow,” Khan tells us.

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“It is possible for big banks and financial institutions to offer investment products that follow Islamic rules and still stay within the guidelines,” AvaTrade’s Kate Leaman continues. “They can create separate parts of their business just for this, and they need to be very clear and honest about how their products follow the rules. Additionally, they need to make sure their staff understand the rules and they should have experts check that everything stays in line with Islamic principles.” As the market inevitably grows, there are some things that she would like to see happen, which will inevitably make the

market stronger. “First and foremost, people need to know more about it, which is why there should be more educational resources on the topic,” Leaman says. “There should also be a wider variety of investment choices to fit different goals and risk levels. “It would help if there were global rules that everyone followed, and strong rules to protect investors. Making Islamic investments easier to get into, and using technology to make it simpler, can attract younger Muslim investors. These changes can help the Islamic finance and investment market grow and provide further options while still following Islamic principles.” fintechmagazine.com

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Ibrahim Khan adds: “Right now, all of the Muslim wealth is sitting in limited spaces that cater for Muslim finances because the options available for Shariah-compliant investing are so scarce. “We need to see more support from mainstream financial companies and providers to Muslim finances as part of their wider social responsibility and obligation to support diverse populations. “The products currently on the market are scarce and unable to meet the increasing demand of the largely underserved Muslim population across the world. To put this into perspective, there isn’t a single Islamic home insurance provider in the UK. It’s always good to see new Islamic finance products on the market, and this needs to accelerate sooner rather than later.” 134

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“ Making Islamic investments easier to get into, and using technology to make it simpler, will attract younger Muslim investors” IBRAHIM KHAN

CO-FOUNDER, ISLAMICFINANCEGURU

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