Fintech Magazine - January 2023

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ONWARDS AND UPWARDS

We’re diving into 2023 with unbridled enthusiasm

The past three years have been tough on all levels. It's fair to say that no-one has emerged unscathed in some form or another. But, as we step into a new year, it's time to look forward with optimism and hope.

New innovations continue to transform the fintech industry and bring evermore exciting products and services to the marketplace. New regulations are establishing themselves, and also establishing trust – a key component to investment success.

There are massively dynamic changes happening too in the metaverse, in gamification and the crypto space as NFTs flourish and blockchain technology advances, providing greater opportunities.

This month, we’re focussing on demcratising wealth management, and we take a look at what’s in store for 2023.

So, welcome back, Happy New Year – and we hope you enjoy the issue.

joanna.england@bizclikmedia.com

regulations are establishing themselves, and also establishing trust - a key component to investment success”

JOANNA ENGLAND

Let’s digitalize the lending process

Lending industry dynamics and consumer financing habits are changing rapidly and a whole new breed of financial institutions is fundamentally redefining the industry’s modus operandi.

Now more than ever, meeting customers’ needs and speed are crucial factors, and this applies to both lenders and borrowers alike.

A fully digital experience

There are 4 key aspects that should drive any financial institution’s decisions:

1. Client expectations are always more demanding in terms of the overall experience

2. More and more alternative lenders are disrupting the industry

3. Regulatory requirements are increasing

4. Operational challenges have to be faced, both from a technological and operational perspective.

CRIF supports lenders on their journey to a more efficient and productive operating model, traditionally providing information, advanced analytics, and innovative solutions to help their business grow.

Thanks to the continuous search for cutting-edge technological solutions, CRIF launched a new native-cloud Digital Lending Platform built in partnership with Microsoft, which allows lenders to easily activate a digital channel for the entire lending process.

Delivered in an as-a-service model only, reducing IT complexity and effort, the CRIF Digital Lending Platform takes advantage of all CRIF data, analytics, and solutions, providing a fully digital end-to-end customer experience, with customer onboarding, profiling, and instant decisions, complete with all regulatory checks such as KYC/KYB and AML.

With the CRIF platform, lenders can easily activate an online channel both for consumer and business requests, providing them with a fully digital experience and reducing the time taken to evaluate their applications.

CRIF is a global company specializing in credit & business information systems, analytics, outsourcing and processing services, as well as advanced digital solutions for business development and open banking.

Through continuous innovation, the use of state-of-the-art technology and a strong information management culture, CRIF supports 10,500 banks and financial institutions, more than 600 insurance companies, 82,000 business clients and 1,000,000 consumers in more than 50 countries across 4 continents.

For more information: www.crif.com

BIG PICTURE

FTX collapse wreaks market havoc Bahamas

Sam Bankman-Fried, former CEO and founder of the FTX crypto exchange, faces eight criminal charges in the US, including wire fraud, money laundering and conspiracy to defraud. He also faces civil charges including misleading investors who put more than $1bn into the company.

FTX saw customers clamour to withdraw massive funds and has left many investors unable to access their deposits in the exchange.

The company’s collapse has shaken the cryptocurrency market to its core: it’s already sparked international regulatory inquiries and a lawsuit against both the company and the celebrities who promoted it, including Larry David, Naomi Osaka, Gisele Bündchen, and Shaquille O’Neal.

Sam Bankman-Fried

THE BRIEF

BRACE FOR THE ONGOING CRYPTO WINTER

2022 wasn't kind to crypto. In fact, the price of every leading currency has fallen significantly as a result of the global economic downturn. The fallout has caused a freeze within the industry in terms of expansion, as well-known players such as Coinbase have rescinded offers and shed staff.

Unfortunately, many crypto-related fintechs are now facing financial difficulties. Some are obvious, as in the case of FTX; others are yet to be revealed, though the fallout of the crypto crash is ongoing. Furthermore, this period of continuously lowered prices looks set to continue, with the fiat financial markets also struggling for stability.

The downturn is ongoing and the prices on the vast majority of the largest 100 cryptocurrencies by market cap have fallen by double-digits year-to-date.

The last crypto winter – which occurred in 2018 – saw the price of Bitcoin fall by over 50% from its all-timehigh in the middle of a bull market in traditional finance.

Winter is here, and it’s already looking more serious than the last.

BY THE NUMBERS

43 CHALLENGER BANKS LAUNCHED IN 2022

Despite the global marketplace experiencing a downturn, the launch of 43 new challenger banks globally sees a rise of 17.5% on 2021 figures

VODENO’S HEAD OF PAYMENTS TALKS BAAS

Krzysztof Hoffman, Head of Payments at Vodeno, discusses the future of BaaS in an unstable economy and its impact on fintech

UAE - BASED PYYPL RAISES $20MN

FOR ITS MOBILE FINSERV PLATFORM UAE-based fintech Pyypl has raised US$20mn in Series B for its mobile payments platform and may consider extending the round due to strong interest

 WISE

The international money transfer company, previously known as TransferWise, bagged a US$3.4mn debt facility, making it one of the biggest funding round winners of 2022 

COPPER TECHNOLOGIES

The London-based cryptocurrency custodian Copper Technologies secured $196mn in a Series C funding round in Q4 of 2022

 FTX

The leading cryptocurrency exchange experienced a serious blow following allegations of financial mismanagement, resulting in the failure of a buyout and the bankruptcy of the company 

KLARNA AUSTRALIA

The former industry-leading BNPL Klarna Australia has reportedly haemorrhaged AU$56mn in losses last year.

G O O D T I M E S B A D T I M E S

TIMELINE

THE JOURNEY OF AML REGULATIONS

1920

AL CAPONE AND

GANGSTER

PROFITS

The term, anti-money laundering, was first coined 100 years ago – but the history of policing the space and preventing illicit gains from criminal behaviour goes back centuries.

It wasn’t until the advent of prohibition, though, that money laundering regulations took off in the US, with alcohol’s illegality giving rise to a profitable black market.

Anti-money-laundering measures have existed for centuries. But as technology lifts crime to a new level, we track the regulatory development of the space

1970 BANKS TRACK TRANSACTIONS

The first official regulation against money laundering practices began in the US with the Bank Secrecy Act. The legislation aimed to curb money laundering and organised crime by requiring banks to report significantly large cash deposits amounting to more than $10,000.

2021 AND BEYOND

TRANSPARENCY AND ECONOMIC SANCTIONS

The 2020 Anti-Money Laundering Act was passed in 2021 – and, to date, is the most radical overhaul of the US financial regulatory space since the Patriot Act in 2001. Called the Corporate Transparency Act, the legislation makes it much more difficult for black market criminals to utilise shell companies as a cover for illegal money laundering activities.

REGULATIONS

1974 WATERGATE

According to reports, The Supreme Court in the US supported the Bank Secrecy Act by upholding its constitutionality.

The term ‘money laundering’ then became widespread and well-known in light of the Watergate scandal.

1980S

DRUG TRAFFICKING AND TERRORISM

As drug trafficking rose significantly in the 1980s, further measures were put into place. These were expanded upon in the 1990s as financial monitoring technology became more advanced and adept at recognising illicit deals. In 1989, money laundering gained greater global recognition as terrorism escalated.

In 2021, Robinhood hit the headlines for all the right reasons. The investment brokerage, which catered mainly to armchair investors looking for small but lucrative funds, almost broke Wall Street.

Small-time investors had rallied on Reddit and then used the online trading app – among others – to launch their offensive after a GameStop sharebuying frenzy.

The stock-buying surge followed calls to action on Reddit’s wallstreetbets subreddit and was then facilitated via online trading portals, including the commission-free stock trading and investing app Robinhood.

GameStop’s share price soared as the cheap stock was shorted by hedge fund giants jumping on what they saw as an ideal opportunity to profit from a dying company.

Leaders of the world watched in astonishment as the event unfolded –resulting in then British Prime Minister Boris Johnson and US President Joe Biden making public statements as the situation escalated.

Within hours, the armchair traders were curtailed, with Tenev criticised for his handling of the affair. He later admitted Robinhood could have communicated the situation to investors "a little bit better".

The Gamestop shares debacle was a David and Goliath moment for the giant hedge fund operators in the world’s busiest exchange, and the aptly named Robinhood has become synonymous with the power and potential fintechs can provide for the little man.

A mathematical mind

Originally born in Bulgaria, Europeannative Vlad Tenev moved to Washington DC at the age of five with his parents, who were both employed by the World Bank.

Given his parentage occupation, it's hardly surprising that the young Vlad had a talent for numbers. He attended Thomas Jefferson High School for Science and Technology in Fairfax County, Virginia, and proved to be an excellent student, excelling in both maths and computer science. Indeed, prior to his foray into investment platform exchanges, Tenev also earned a BSc in Mathematics from Stanford, and even launched two fintech startups.

Once he’d graduated with honours from Stanford, he, along with his friend and college roommate Baiju Prafulkumar Bhatt, decided to try their hand at building a finance company. Their first project, called Celeris, created high-frequency trading (HFT) software. But despite their enthusiasm, they dropped the project and decided to build a second, called Chronos Research.

Chronos sold lowlatency software to large investment banks and trading firms

– and was showing signs of success until 2012, when they abruptly closed this business, too, and Tenev switched his attention to an unfulfilled area of the market where demand was increasing –namely, the consumer domain.

Essentially, he and Baiju decided that the younger population, although interested in entering the stock market, didn’t have a platform to cater to their needs.

Tenev creates an app

The first step in addressing the marketplace gap was to design a portal that would be easy for young people to relate to, as well as use.

Tenev, who also had some technical experience, decided to design an app that would make the basis of their brokerage platform. The company's name comes from its co-founders’ mission to "provide everyone with access to the financial markets, not just the wealthy".

The idea was that their brokerage would offer commission-free investing and trading opportunities in ETFs, stocks, and cryptocurrency, thus making it an attractive prospect for small-time traders.

He and Baiju published their app on

Robinhood CEO Vlad Tenev on the free-trading app going public

the AppStore in 2014 before an official company launch in 2015.

Rise to success

The project proved to be an unmitigated success. Both Tenev and Baiju took on roles as co-CEOs and co-founders.

Due to its simplicity and efficiency, Robinhood grew its user base from 500,000 to 22.8mn in less than a decade. Today, the app has 3.23mn monthly downloads and is one of the largest online trading apps globally.

Robinhood has also raised a total of $6.2bn in funding over the course of 27 investment rounds. The company’s latest capital boost took place on May 13, 2022 from a Post-IPO Secondary round.

A family man

Despite the money and the fame, Tenev enjoys a relatively grounded existence, having married his college sweetheart, Celine Tenev. The couple have a daughter, born in 2017, and live in Palo Alto, California.

Arik

5SHTILMAN

The co-founder of payments platform Rapyd didn’t realise what he was getting into when he first set foot in fintech – but a little bit of can-do attitude got him through

Q. DESCRIBE YOUR ROLE AND YOUR BACKGROUND. HOW DID YOU GET TO THIS POINT?

» Before Rapyd, I wasn’t involved in payments or fintech, I was a cloud expert and entrepreneur. After three years in the military, I decided that I wanted to skip university and start my own company. Me and three other co-founders bootstrapped the business and built it into a multimillion-dollar organisation. The company ran for 10 years and we sold it in 2013.

After that, I craved another challenge. The same group of co-founders moved forward to the next venture. It was 2015 and one had come back from a trip to the Czech Republic, shocked at the FX fees he’d paid while he was away. We initially had an idea for a consumer wallet that would phase out physical exchanges, but we completely underestimated how complex the financial services sector is. We spent almost a year trying to launch in the UK, and the amount of investment and infrastructure we had to build was so big for one market that it just didn’t make any sense for us to continue, as becoming global would be too complicated with all the different regulations.

We discovered a gaping hole slowing down the global commerce industry: there was no platform that enabled businesses to accept and send payments without having to build their own infrastructure.

That’s when we had the idea for Rapyd – to build a scalable fintech to provide financial services and infrastructure for other businesses to build on top of. Now, we’re building the world’s most expansive global fintech platform.

Q. WHO WAS YOUR CHILDHOOD HERO AND WHY?

» Michael Jordan. He had a fearless mentality, an endless drive to win and always worked hard to be the best. And he always took responsibility in the last few seconds of the game to try and win.

“WE ARE CONTINUING TO GO FROM STRENGTH TO STRENGTH, DESPITE THE CURRENT ECONOMIC CONDITIONS. I’M PROUD OF THIS”

Q. WHAT’S THE BEST PIECE OF ADVICE YOU EVER RECEIVED?

» I joined the military when I was 18 years old. Our instructors always drummed into us that there’s no such thing as ‘I can’t’. That mindset stuck with me; I make the idea living in my head come to life and maintain a growth mindset.

Q. WHAT MAKES YOU PROUD ABOUT THE BUSINESS YOU’VE BUILT?

» We are continuing to go from strength to strength, despite the current economic conditions. I’m proud of this. While many other fintech organisations had to recede and slow their growth in the last year, Rapyd continued to expand globally. In the past year, we opened a technology hub in Dubai and were the first Israeli organisation to be regulated by the UAE to open up for business in the country. We also finalised our acquisitions of Neat in Hong Kong and Valitor in Iceland – and we’re only continuing to grow and expand our global operations.

“OUR INSTRUCTORS IN THE MILITARY ALWAYS DRUMMED INTO US THAT THERE’S NO SUCH THING AS ‘I CAN’T”

Q. WHAT ONE DEVICE COULDN’T YOU LIVE WITHOUT?

» Apple AirTag. It completely changed my life. My kids don’t lose their stuff anymore.

Q. WHAT’S ONE FINTECH YOU USE YOURSELF ON A REGULAR BASIS – APART FROM RAPYD, OF COURSE?

» I mainly use Paypal and Wise.

Q. WHAT’S THE BIGGEST CHALLENGE YOU’VE ENCOUNTERED IN FINTECH?

» In the early days, while we were building Rapyd, we learnt that dealing with compliance and regulation was a bigger hurdle than we’d anticipated. Compliance differs from country to country, so working

on a global scale made this incredibly challenging. That said, it also made us realise that we needed to be the compliance and regulation problem solvers so that other organisations didn’t need to worry about it. We handle all of this today. Our initial learnings taught us that organisations looking to operate across borders need a platform like Rapyd – one that provided them with the necessary infrastructure to scale globally and would take the stress out of these kinds of issues.

Q. DESCRIBE YOURSELF IN THREE WORDS

» Self-assured, eloquent and ambitious.

Q. WHAT PIECE OF ADVICE WOULD YOU GIVE YOUR 5-YEAR-OLD SELF?

» Work hard, play harder.

Q. IS THERE A PERSONAL ACHIEVEMENT FROM THE LAST 12 MONTHS YOU’RE PARTICULARLY PROUD OF?

» Opening up our technology hub in Dubai was an incredible feat for our entire team, because we were the first Israeli organisation to be regulated in the United Arab Emirates. This was no small feat. We launched in Dubai, covering every single billboard on Sheikh Zayed Road – and now everyone in the city knows our name. We’re incredibly proud to be building the future of fintech in Dubai and to be opening doors for other organisations, from Israel and beyond, to lay down roots in one of the most influential technology regions in the world.

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

» The story of Israeli politics by Amit Segal. I read it a month ago.

REMOVING FRICTION FROM CROSS - BORDER PAYMENTS

WRITTEN BY: ALEX CLERE

PRODUCED BY: BEN MALTBY

When Christine (Jang) Tan talks to us from her office in Singapore, she has just returned from Sibos – the landmark financial conference held in Amsterdam. It’s a major event for J.P. Morgan. Indeed, several of the company’s executives participated in panel discussions and debates at the conference, held in person for the first time in three years.

J.P. Morgan showcased Confirm powered by LIINK, a global account validation service designed to enhance the efficiency of crossborder payments. Confirm runs on the ONYX platform, the firm’s blockchain division. Confirm is the world’s first bank-led, production-grade, peer-to-peer blockchain network that has the ability to verify over 2bn bank accounts from over 3,500 financial institutions1,2

“We are propelling solutions that address the demands of customers globally – that means they need to be agile, nimble and frictionless,” says Jang. “We have that ability, as we can leverage global infrastructure and incorporate local best practices to our solutions, customising them to the specific client and industry segments, including strategic partnerships to enable an endto-end payments ecosystem. We also featured our cross-currency proposition customised for banks, fintechs, corporates, and non-bank FIs.”

1 Expected estimates on number of institutions, number of accounts and number of corridors on Confirm are calculated based on projections from market research and incoming clients in Confirm’s pipeline and are subject to change. 2 All estimates on number of institutions, number of accounts and number of corridors include data from J.P. Morgan as a Responder and Inquirer on Confirm.

Example of an image caption

J.P. Morgan utilises a full arsenal of technology, including on-blockchain data exchanges

J.P. Morgan, led by the ONYX team, also attended the Fintech Festival in Singapore. As a key foreign bank, the team is working closely with various central banks around the world, including the Monetary Authority of Singapore. The aim of this is to support new areas of innovation leveraging blockchain technology, with the goal of enabling the movement of money to be faster, better, more cost effective, and take place in a secured manner.

CHRISTINE (JANG) TAN Head of FIG Sales APAC, J.P. Morgan Payments

“WE BELIEVE THAT SEAMLESS AND SECURE PAYMENT SOLUTIONS CAN HELP OUR CLIENTS AND THEIR BUSINESS… TO GROW, DIVERSIFY, AND THRIVE”

Jang works in J.P. Morgan’s Payments business, heading up Financial Institutions Group Sales in APAC. Not only is Payments a key part of J.P. Morgan’s push in redefining the future of finance, APAC is also a region that has historically been at the forefront of innovation with real-time payments and continues to be a torchbearer to this day.

Impressive credentials underline J.P. Morgan’s scale

“We operate with in-country presence in 16 markets,” Jang says. “We support 18 markets from a client segment standpoint within Asia.”

And then of course they move their flows on a global basis. In APAC alone, the Payments business operates hubs in Manila and Mumbai, which facilitate

some of the treasury services and trade processing that J.P. Morgan carries out on behalf of its clients.

J.P. Morgan is regarded as the number one US dollar clearing bank globally, processing almost US$10tn a day in payments.

With such large volumes at stake, the company is keenly aware of its responsibilities around cybersecurity and protecting clients’ money. “That cybersecurity aspect is very critical and in our connections with all the banks, that's one of their key priorities – to have not just a

trusted partner who innovates, but the ability to execute securely,” Jang says. “That's very critical, particularly in Asia where you've got a lot of central banks as well as regulators and a complex landscape.”

Sheer volume means cyber becomes key focus

That duty of care comes with expected levels of best practice: large financial institutions and emerging fintechs alike expect their partners to act impeccably, particularly when it comes to complying with legal

CHRISTINE TAN (JANG)

TITLE:

MANAGING DIRECTOR

HEAD OF ASIA PACIFIC – FINANCIAL INSTITUTIONS GROUP (FIG) SALES, PAYMENTS

Christine (Jang) Tan is Managing Director and Head of Asia Pacific – Financial Institutions Group for J.P. Morgan Payments, based in Singapore. In this role, she has leadership responsibility for banks, broker-dealers and non-bank financial institutions portfolios across the region, providing strategic advice and growing the business with both existing and new clients.

Prior to this position, Christine was Head of Treasury Services, ASEAN responsible for embedding the endto-end Treasury Services model across Indonesia, Malaysia, Pakistan, Philippines, Singapore, Thailand and Vietnam, ensuring resilience and robustness in product offering, service model and control environment.

She was also Head of Multinational Corporates (MNCs) for Asia Pacific for five years and has a wealth of MNC experience in the region across multiple key markets.

Christine joined J.P. Morgan from Bank of America Merrill Lynch (BAML), where she was Head of Regional Treasury Sales for South Asia, with responsibility for developing and executing the

sales strategy for pan-Asia subsidiary businesses of multinational clients and for large corporates in the region.

Prior to her time at BAML, Christine spent 12 years at Citi in a number of regional roles, including head of the Hong Kong Global Subsidiaries Group.

Christine also worked as an analyst covering Asian airlines and airports earlier in her career, where she also engaged in aircraft financing through structured trade finance, global cash management and fuel hedging for airlines.

Christine holds a Master of Business Administration and a Bachelor of Science in Business Administration from the

and regulatory obligations or safeguarding systems from attack. “While we do share best practices, we also expect the same in terms of the companies [that we partner with] actually adhering to certain standards. It's really to protect the entire community.”

When she looks at how J.P. Morgan is likely to invest its resources in the future, Jang says: “We have to keep developing, and there has to be a cyber component that we continue to invest in. On blockchain, the use cases will continue and we've leveraged Confirm as one of our applications for banks, non-bank financial institutions, corporates and fintechs to use.

“We also just recently had the announcement with VISA B2B, who will be leveraging Confirm to facilitate their payment flows cross-border as well.”

When you’re working at such an astronomic level, it takes some bright-shining stars to inspire you. Within J.P. Morgan, Jang says she looks up to Takis Georgakopoulos, the Global Head of J.P. Morgan’s Payments division. “He was previously my boss when he ran the MNCs Corporate Banking business, and brings a unique strategic background to his current role. His vision of bringing together four discrete businesses under a single Payments umbrella is what differentiates us today, enabling the bank to provide end-to-end pay-in, pay-out cash management and trade finance capabilities to our clients. Today, we process almost US$10tn in payments daily in more than 120 currencies and over 160+ countries across the world, and we’re only getting started on this journey.”

A Singaporean native, Jang takes inspiration from the country’s late founding father and first prime minister, Lee Kuan Yew, as well. “Mr. Lee put Singapore on the map, and the financial services industry

CHRISTINE (JANG) TAN Head of FIG Sales APAC, J.P. Morgan Payments

“WE

thrived under his leadership,” Jang says. “It's been growing as a key financial hub globally so I’m really inspired by his journey running the country.”

J.P. Morgan’s ‘three Cs’ approach to payments Within its payments business in APAC, J.P. Morgan takes an approach that Jang calls the ‘three Cs’: client, collaborator and competitor.

On a client side, the firm is obsessively focused on innovating to support its clients with the rollout of new features and functionality. J.P. Morgan is a co-founder – alongside Singaporean bank DBS and sovereign fund Temasek – of an entity called Partior. The vision for Partior is to facilitate multi-bank settlement on the blockchain in multiple currencies. The firm has facilitated live transactions settling Singapore and US Dollars, and is in the process of adding settlement banks to facilitate additional currencies – including Euros, Japanese Yen and Chinese Renminbi.

CHRISTINE (JANG) TAN Head of FIG Sales APAC, J.P. Morgan Payments

“THE CYBERSECURITY ASPECT IS VERY CRITICAL AND IN OUR CONNECTIONS WITH ALL THE BANKS, THAT'S ONE OF THEIR KEY PRIORITIES”

For J.P. Morgan, collaboration is key to growth in the Payment business. A prime example is the partnership with European car manufacturer Volkswagen to create Mobility Payments Solutions, focused on the future of cars and how payments can drive innovation through the auto segment. The company continues to look at additional partnerships that it might leverage in Asia – whether that’s with fintechs, aggregators, financial institutions, nonbanks or corporates. The firm also conducted strategic acquisition and alliances with Cleareye.AI, and the latest in-region partnership was with In-Solutions Global (ISG), a leading payment solutions provider.

“Those are collaboration aspects where we would look at whether we want to partner with them, invest in them, and then leverage their technology to support our solutions at the end of the day,” Jang explains.

Finally, on competition, J.P. Morgan does not allow its size or scale to cloud its judgement of rivals in the market. “Clearly we do face competition, with fintechs these days becoming more prevalent,” Jang elaborates. “But I do think having competition is healthy. Ultimately, it’s about benefitting the consumers who have the ability to choose their payment options – whether it's through banks, wallets or fintechs. And J.P. Morgan wants to be part of partnerships that deliver for clients.”

Blockchain a key driver behind payments

Jang is a firm believer in the possibilities brought about by blockchain, and expects the decentralised technology to form a key pillar of J.P. Morgan’s strategy as the company prepares for the future of payments. Jang explains: “We are working globally on opportunities to leverage the technology and apply them to various requirements and solutioning

– whether it's on the markets front, tokenisation, real-time movement of money and cross-border payments.”

In addition to using SWIFT and ISO as the payment rails for cross-border transactions, J.P. Morgan is seeking to improve the sharing of data in real-time with Liink – the world’s first bank-led, productiongrade, peer-to-peer blockchain network for information sharing – and Confirm, an application for global account validation. This will reduce timescales for banks, cutting down on laborious tasks that need to be carried out manually while lowering rejection rates at the same time.

The company is working with a lot of different companies to facilitate cross-

border exchange of that data into different corridors, particularly when it comes to demand for remittances associated with overseas workers, who want to send money back home to markets like Indonesia, India, Bangladesh and Sri Lanka to support their family and communities. J.P. Morgan is expanding the service into the Philippines, Vietnam and Thailand.

As she looks ahead to a promising future – one in which J.P. Morgan will play an undoubtedly pivotal role – Jang neatly summarises the pin-sharp focus of its Asia Pacific payments team: “We believe that seamless and secure payment solutions can help our clients and their business to grow, diversify, and thrive by enabling rails for companies, financial institutions, and

consumers to pay anyone by any method or channel from anywhere, anytime.” It’s not a straightforward brief – end-users want everything, and they want it now – but if any company has the track record behind it to make it happen, it’s J.P. Morgan.

Cyber security trends in 2023

– what to expect

WRITTEN BY: SAMMIE EASTWOOD

Cybercrime is on the rise. With digital transformations being a major concern for businesses globally, the attack surface grows exponentially. And, if recent events have taught us anything, it’s that people will always try to take things that don’t belong to them.

The fact is that cybercrime is more organised than we think. With a staggering rise in Ransomware-as-a-Service (RaaS), Hackers-as-a-Service (HaaS) and Access-asa-Service (AaaS) lowering the bar for entry, it’s never been easier. Gone are the hoodiewearing loners huddled in basements mining data for cash. Now, it’s men in suits who, for all intents and purposes, operate like legitimate businesses. With more systems requiring ever increasing access to data in order to function, new vulnerabilities spring up daily that must be continuously beaten down like whack-a-mole.

As The Art of War states: “If you know the enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for every victory gained, you will also suffer a defeat”. As 2023 commences, we must study the expected cybersecurity trends in order to best prepare ourselves for what may lie ahead.

Ransomware and malware on the up

There is a reason that ransomware has stood the test of time, because it exploits the best vulnerability there is – human error. All it takes is one inadvertent click on the wrong link or connecting to unsecured WiFi, and an entire

SUN TZU

As we enter a new year, challenges in the cybersecurity space look set to cause continued disruption. We look at the latest trends

THE ART OF WAR

“ If you know the enemy and know yourself, you need not fear the result of a hundred battles”

KYC AND AML SOLUTIONS FOR FINTECHS

Harness the power of data and leading-edge technology to turn existing know your customer (KYC) and anti-money laundering (AML) compliance challenges into opportunities

DISC OV ER MOR E

system can be compromised in seconds.

The EU Agency on CyberSecurities annual Enisa Threat Landscape Report found that ransomware and attacks against availability rank the highest during the reporting period, with phishing being the most common vector for initial access.

Another report found that 55% of financial institutions were hit by ransomware within the last year, a 62% increase on the previous year. According to the same research, financial institutions received some of the lowest payouts from insurance companies following breaches, meaning it really is important to launch a good counter-defence to cyberattacks.

A way to safeguard against ransomware attacks is by using regular backups, both in-cloud and on premises, allowing quick recovery of data – though this can’t defend against the very real possibility of having your data leaked on the dark web or threat actors exploiting other vulnerabilities.

ENISA THREAT LANDSCAPE REPORT EU AGENCY ON CYBERSECURITIES

“

55% of financial institutions were hit by ransomware within the last year, a 62% increase on the previous year”

The problem is continually getting worse, with enterprises more and more reliant on outside providers”

STEVE ZALEWSKI DEPUTY CISO, LEVI STRAUSS

Software supply chains under threat

Another major attack vector is supply chains, where attackers aim to target businesses on a mass scale through compromising thirdparty products. A recent incident was the SolarWinds Breach, where hackers were able to hide malicious code within an update to an IT monitoring system that was used by more than 30,000 public and private organisations, including the US Government.

This is an extremely vulnerable area as many developers use modular-build software packages that come from many different sources, any of which could be compromised. “The problem is continually getting worse, with enterprises more and more reliant on outside providers,” says Steve Zalewski, deputy CISO at Levi Strauss. “What we need is an international chain of trust [...] where we can all agree on a global set of tools and practices.”

One such solution could be the use of an SBOM (Software Bill of Materials), which staff can use to help them identify if malicious software has been entered into a system. This solution, however, only works if the people managing the system understand the components within well enough to identify discrepancies.

War on talent in cybersecurity

Unfortunately, weaknesses can be introduced to a system just by plain old ignorance. Nevertheless, another major problem facing businesses is the lack of available talent, leaving them unable to manage their cybersecurity needs in-house. This can be exacerbated by a lack of clear direction during the hiring process.

Hiring managers should know what skills they need to hire, where to find them, the appropriate remuneration, and above all else, have good and timely communication.

The Facts

1) Organisations with fully deployed zero-trust architecture saved 43% on data breach costs

- Teramind

2) 80% of data breaches are the result of poor or reused passwords

- Verizon

3) 55% of financial institutions were hit by ransomware within the last year - Sophos

4) Organisations using AI and security automation were able to detect and contain data breaches 27% faster - Teramind

This requires an adequate understanding of the needs of the business, so ensuring hiring managers are briefed correctly before even posting a job vacancy is essential.

Lack of understanding can leach out to other staff, who may not be trained on how to identify potential attack vectors. A fact that became especially apparent during the pandemic, when remote working forced many staff into managing their own system security: With a distributed workforce working remotely, staff have to pay more attention to cybersecurity threats themselves", says Cyber Security firm, Kaspersky. It’s therefore important that all staff understand basic security procedures.

Upskilling current staff is a great way to approach this, since it is cheaper than leveraging salaries to attract talent and has the added bonus of keeping employees engaged. Staff are more likely to stay with a company where they feel they have forward momentum, which is attractive to other potential employees.

Many businesses looking to digitally transform their operations will need to mount a strong defence when it comes to cybersecurity, meaning it’s more critical than ever to curate an IT team who will know the best way to implement this.

Zero Trust models are in fashion

One such defence could be a zero-trust model, which has become a popular alternative to password protection. It’s stated in the latest Verizon Data Breach Report, that 80% of data breaches are the result of poor or reused passwords. In a zero-trust model, users are treated as potential threat actors and must verify their right to access data every time.

The traditional ‘Castle and Moat’ model using a heavily guarded firewall is great, but once breached, it leaves the entire system

PIERRE DELCHER SENIOR SECURITY RESEARCHER, KASPERSKY’S GREAT

vulnerable. The idea of zero-trust is to establish roadblocks that prevent bad actors from moving laterally within the system. You might breach one wall, but there will always be another one blocking access to the rest of the system. Giving the organisation more time to detect and defend against an attack.

According to a study published by Teramind in 2021, organisations with fully deployed zerotrust architecture saved 43% on data breach costs. It’s also the simplest and most effective way to manage the security of remote workers. Zero trust can take many forms, including multi-factor authentication, continuous validation, smart monitoring (AI), least privilege, and micro-segmentation.

The role of AI in cyber defence

In addition to smart monitoring, there are lots of other ways that AI can be implemented to help keep data safe. Correctly deployed AI is the well-trained guard dog whose keen ear will detect and alert you to any unknown visitors in the vicinity.

The AI is trained to perform cognitive functions like tracking suspicious activity in a bank’s systems, such as an employee trying to view files they normally wouldn't, or a credit card used outside of the customer’s usual daily routine. Anything outside of the norm will be flagged to allow for intervention.

These are all things that can be done by a human, but the scale required to provide this service 24/7 around the globe would be almost impossible. AI can be left running indefinitely, constantly monitoring for suspicious behaviour and ready to raise the alarm. According to the Teramind study, organisations using AI and security automation were able to detect and contain data breaches 27% faster.

With so much at stake, it's never been more important to stay vigilant.

“ With a distributed workforce working remotely, staff have to pay more attention to cybersecurity threats themselves”

ESG AT THE HEART OF DIGITAL

WRITTEN BY: BECCI KNOWLES

PRODUCED BY: KRIS PALMER

DIGITAL TRANSFORMATION

CENTURY OLD TOWN PRAGUE – MGALLERY

Spearheaded by Group Chief Information Officer Wojciech Łącz, a digital transformation is taking place at AccorInvest with the entire company’s involvement

In a conversation with FinTech magazine, AccorInvest's Group Chief Information Officer, Wojciech Łącz, provides an insight to the company's digital transformations and explains why the entire workforce needs to be 100% onboard and engaged for the company to reach its ESG goals and deliver a consistent and outstanding customer experience.

But first, let’s take a look at AccorInvest’s story and its current status as the leading* hotel operator and owner in Europe, mainly in the economy and mid-scale segments, with a presence in Latin America and Asia also.

The AccorInvest Group was created in 2017 as part of a reorganisation of the Accor Group, which owns internationally recognised brands such as Sofitel, Novotel, Pullman, Mercure, ibis. The objective of this reorganisation was to place the real-estate assets and hotel operation activities within a dedicated structure to enhance their value and development.

Today, AccorInvest distinguishes itself with the complementary nature of its two businesses, which combine realestate value and operating performance: the management of hotel properties and businesses, and the operation of these assets under hotel 14 brands owned by the Accor Group, covering a total of 122,000 rooms, and generating a high volume of annual revenues.

After the 2020-2021 crisis years, AccorInvest's strategy grew into consolidating its leadership within its geographical scope (Europe) and asset range (economy and midscale). It aims to promote new Group dynamics to transform its hotels from transit locations into key players in their regions, able to demonstrate strong commitment to all of their stakeholders, facilitate social cohesion, and respond to current and future environmental challenges.

With more than 23,000 team members covering hospitality and real-estate expertise, the global team is dedicated to AccorInvest’s success and growth with a “One Team” approach.

When it comes to changing the status quo, 23,000 team members is no small amount of people to convince. Such type of complexity and Wojciech Łącz previous experience and leadership qualities created perfect match as the man for the job.

ESG at the heart of digital transformation

WOJCIECH LACZ

TITLE: CHIEF INFORMATION OFFICER

INDUSTRY: HOSPITALITY

LOCATION: WARSAW/PARIS

Wojciech Lacz is Chief Information Officer at AccorInvest, a position he has held since March 2021. After various experiences at L'Oréal and then for 8 years at Danone, Wojciech joined the Accor Group in 2018 as Director of IT & Digital Services for Eastern Europe. During this experience, Wojciech was responsible for defining and supervising key IT and digital projects for the Eastern Europe region (16 countries). Then he was appointed as SVP Technology and Digital and Executive Committee member for Accor Northern Europe. 6 months after he has joined Accorinvest as a Group CIO and ExCom member.His experiences in digital services and organizations, including building different scope of the shared services, major international infrastructure consolidation and execution of cloud strategy are key

Oracle and IBM Deliver Real-World Results to Clients on Oracle Cloud ↷

For 36 years, IBM and Oracle have partnered to deliver business value. IBM offers solutions tailored to both industry and business processes, from consulting to implementation and managed services, employing the combination of Oracle platforms with emerging technologies.

IBM and Oracle deliver AIG hospitality services on the cloud

Leaders from IBM and Oracle discuss their partnership and the combined strengths that enable cloud migration of AccorInvest Group’s global hotel network.

Hotels require great communication and accountability between departments, both in the office and in the foyer. In the digital era, hotels leverage technology to expand their offerings and encourage seamless operations across a network of branches. AccorInvest Group (AIG) is a key investor, owner and operator of a network of premises including those of Ibis, Novotel and Mercure. The company prides itself on creating more interactive guest experiences and leverages the Oracle-IBM partnership to facilitate its transition to integrated cloud services.

Oracle has a critical role in AIG’s digital transformation, providing its Oracle Cloud Human Capital Management (HCM)— leveraging its benefits for human resources (HR)—and Oracle Cloud Enterprise Resource Planning (ERP), which also provide advantages in financial planning.

“We led similar, successful projects at Hilton and Marriott, so we have strong capacity to advise and support clients to carry out that transformation,” says David Mihala, Vice President Applications for France at Oracle.

“I am excited by the power of the Oracle and IBM partnership,” says Robert Churchyard, who leads the Oracle practice inside IBM Consulting. “Together we are delivering enterprise-wide business transformation through the deployment of Oracle ERP & HCM Cloud.”

Raising transformation capabilities

IBM is working with Oracle on the AIG transformation, delivering solutions to manage the maintenance and construction of its hotels, improving the employee and customer experience as well as the integration of Oracle cloud solutions to facilitate financial transformation.

Susana Rodriguez Puerta, VP Alliances EMEA Applications at Oracle†, highlights the three key differentiators of the company: focus on customer needs, developing innovation that matters, and commitment to customer success.

“IBM understands the customer needs very well, offering industry and business process tailored solutions from consulting to implementation,” says Rodriguez Puerta.

Concluding, Olivier Reine, Partner—Global Business Services at IBM, says “IBM has the experience—and the right skills and knowledge in new cloud solutions from Oracle—to deploy the right tools.”

Are you ready to transform your business with the IBM Cognitive Enterprise for Oracle Cloud?

† Susana Rodriguez Puerta has moved into a new role as COO Applications ECEMEA but was the former Alliances VP for Applications at the time of the interview.

MERCURE KRAKÓW STARE MIASTO

WOJCIECH LACZ CHIEF INFORMATION OFFICER, ACCORINVEST

Meet Wojciech Łącz, Group Chief Information Officer, AccorInvest Knowing from the beginning that he “would be an IT guy”, Wojciech Łącz tells me that he started work in IT administration in 2005 after graduating from the Warsaw University of Technology.

After various experiences at L’Oréal and then for eight years at Danone, Wojciech Łącz joined the Orbis Hotel Group managing the Eastern Europe Accor hotel portfolio in 2018 as Director of IT & Digital Services, responsible for defining and supervising key IT and digital projects for 16 countries in the region.

In October 2020, Łącz was appointed Senior Vice President (SVP) Technology and Digital and ComEx member for Accor Northern Europe. Just six months later, in March 2021, he was appointed AccorInvest Group CIO.

AccorInvest ESG strategy

From a more sustainable acquisition and renovation to a more sustainable operation of its sites, AccorInvest's Environmental, Social Governance (ESG) strategy is present

“IN VIEW OF TODAY’S CHALLENGES, BE THEY ENVIRONMENTAL, SOCIETAL OR ECONOMIC, ACCORINVEST TAKES VERY SERIOUSLY THE FACT THAT IT MUST BE COMMITTED AND RESPONSIBLE”

Your technology partner for market-leading connectivity solutions

High-availability internet connection of your locations, setup and operation of your infrastructure and intelligent networking with SD-WAN and digital guest services such as WiFi landing pages, Inroom TV and Digital Signage – we combine all of this in one powerful platform

the sustainability, efficiency and resilience of its hotel portfolio

AccorInvest, Accor and m3connect have partnered to launch a pioneering hospitality project, which gives AccorInvest’s global hotel portfolio unique access to industryleading technologies.

The achievements and future scope of the digital transformation project

Shaheen represents a complete cloud transition project, bringing with it an exceptional degree of digital transformation. Through the partnership, AccorInvest has been able to create more efficient, sustainable and resilient processes, which it is now working to deploy across its entire portfolio. In fact, the transition to the cloud has unlocked huge benefits for AccorInvest, including some invaluable sustainability improvements.

Behind the scenes, hotels contain a lot of hardware. But, AccorInvest has optimised these operations by streamlining the required hardware down to the minimum.

one device for everything,” Dragas added.

“After we’ve finished this project, the hotel will have one cabinet. We will have saved up to 70-80% of power consumption in the server room. Plus, you are able to have one standard everywhere, which makes support and maintenance easier as well.”

And, for the next phase of the project, AccorInvest and m3connect will keep working to deploy the new cloud system across the former’s whole portfolio.

“Now that we’ve started, there’s no limitation,” says Ahmed Disokey, Group VP Hotel Technology at AccorInvest. “Right now, we’re creating a full ecosystem that not only focuses on the hotels, but also the back office, to be a corporation where everything interfaces with each other, in line with our ESG approach and initiatives. And that’s one of the key pillars for us,” Disokey outlined.

“We have a big journey up until 2025, and we are looking to build a strong relationship with really committed partners. So far, we are really satisfied with what we are doing with the majority of our partners, and, indeed, with m3connect.”

“THE DIGITISATION OF THE COMPANY IS CORE TO IT TAKING CARE OF ITS PEOPLE”

WOJCIECH LACZ CHIEF INFORMATION OFFICER, ACCORINVEST

throughout all of the Group activities and involves all of its employees.

Wojciech Łącz makes it clear from the very start of the conversation that for either the Group’s ESG strategy or its digital transformation to be a success, the two must work hand in hand.

“In view of today’s challenges, be they environmental, social or economic, and through its responsibilities as owner, investor and operator, AccorInvest takes very seriously the fact that it must be committed and focus, taking it as an important factor in any company action” says Wojciech Łącz.

As a young company, AccorInvest published in May 2022 its first ESG report, with the aim of sharing its ESG performance with all its stakeholders and in which it shared its ambition to achieve carbon neutrality by 2050.

“Our ESG strategy is linked to the identity of the company we are and the company we would like to be in the future, which is about helping both our guests and our employees to make the right choice in where to work, or where to go,” says Wojciech Łącz. The ambition is clear: AccorInvest will be recognised as a benchmark ESG player in its sector.

Three pillars, eight commitments and 19 challenges certainly sounds very robust. “It is,” says Łącz, adding: “The first pillar is about us acting as a responsible Group. The second is about respecting people and the environment - so how to boost the employee’s development and how to constantly reduce the environmental footprint. And last but not least, the third pillar is to deliver positive hospitality; positive not only from the customer experience point of view, but also in the way we are perceived by our customers, not only as hoteliers, but as part of the ecosystem in the city, by connecting with different

NOVOTEL LONDON CANARY WHARF

core communities and enhancing the environment for them.”

Acting as a responsible group, AccorInvest has four main commitments. This includes “a commitment to having the right governance in place, which will also serve our investor relationship,” says Łącz. “The second is about compliance and ethics; to ensure compliance we demonstrate our ethical values across the portfolio. The third is about responsible investment; every time we begin a new construction or renovation, we make sure that our properties are competitive from an ESG point of view.” The fourth, says Łącz, “is about monitoring ESG risks in the supply chain” to make sure that all suppliers comply with the Group’s values.

Digital for the employees

Employees are at the heart of AccorInvest, “so, the second pillar is something that we are really looking at from the people point of view. We strive to foster employees’ development and welfare, and constantly reduce our environmental footprint."

For Łącz, IT and digital transformation is key to transforming the employee’s experience of the workplace. For example, taking repetitive and manual tasks and automating them so that they can focus on other more enjoyable aspects of the job.

Digital for the environment

Respecting the environment, reducing the carbon footprint, and implementing circular economy practices is another area in which digital and IT can really help, says Łącz. “We have already started to sync the different sensors to monitor and manage water and energy consumption. This allows us to discover a water leakage for example, before it is too late” says Łącz, pointing to the unexpectedly high utility bill we all dread coming.

“AT THE HEART OF ACCORINVEST IS ITS PEOPLE”

WOJCIECH LACZ CHIEF INFORMATION OFFICER, ACCORINVEST

As part of the goal to eliminate single use plastic by the end of 2022, AccorInvest is on track to substitute plastic room cards with those made of more sustainable materials. Łącz and his teams are looking at the possibility of getting rid of the room card all together and using the Internet of Things (IoT) to do everything it did and more. This, he says, “would enable us to detect the guest inside the room to manage the electricity, the humidity, the air conditioning

and so on - another example of how IT could contribute to the ESG strategy and the guest experience.”

We strive to foster employees’ development and welfare, and constantly reduce our environmental footprint. A key part of the hotel digitalisation plan is to move the majority of services and content into the cloud, using different cloud providers to deliver the same experience or better for hotel staff and our guests, while reducing its environmental impact.

NOVOTEL PARIS VAUGIRARD MONTPARNASSE

ESG + Business Digitalisation = positive hospitality

The last one of the pillars is about delivering positive hospitality, which AccorInvest does together with the manager, Accor. “This is about taking care of the guests, their comfort, their well being, the way in which they perceive innovation inside the hotel, and improving accessibility to hotel services.”

There are two main systems in the hotels right now – a property management system

ALWAYS KNEW I WOULD BE AN IT GUY”

WOJCIECH LACZ CHIEF INFORMATION OFFICER, ACCORINVEST

(PMS) and a point-of-sale system (POS), the latter of which manages everything ecommerce related. “In order to give our staff the possibility to develop themselves, we want to be able to move them between the hotels, without having to learn from scratch. So, the systems need largely to be the same in each hotel. The most important thing then is this concept of homogeneous use, an ecosystem, which gives us the possibility to plan the different external services into it.”

Łącz uses the contactless journey of the guest as an example. “I don’t need to go to the reception desk in order to register myself and obtain the room card. Instead I can do it myself and enroll a digital key on my mobile device. The system could recognise me from the past and thanks to that I can check myself in, I can check myself out, I can order some services, in or out of the hotel.

“For us, what’s happening around the hotel is important. So, in terms of ESG, it’s how we can integrate with the social life of the city. By being homogeneous and open, we can start to integrate some additional services in the hotel, which could be delivered by our hotel staff, or by anybody else and fully embedded into the guest experience and journey. Our property, if needed, could an electric car charging point, standalone restaurant, meeting point etc. that is fitting in the concept of the location we are present.”

“I

Identifying the need, meeting the demand It’s all about need and demand, but unless you are close to the operations, it’s difficult to decipher. “That's why when I'm travelling, every time I am trying to stay in different hotels,” says Łącz, adding that members of the IT team are also visiting various hotels and seeing for themselves if the tools they have deployed really work in action.

“The solution we are putting in place needs to be a solution in which hotel teams who have never had any hospitality experience will be able to deliver the basics of hotel operations within a few hours of self-learning.

"The same applies to our F&B service – this

their food and drink from their mobile phone. The technology also comes with different language options making life easier for international staff and guests."

Robotics to assist staff

At the back end of 2021, AccorInvest realised there were a set of the different processes in the hotel that were still being carried out manually by staff members. “Some were painful, for example, the night audit. As you can imagine, consolidating all of the data and closing down the day in all the systems

IBIS STYLES SZCZECIN

STARE MIASTO

manually was taking two-and-a-half hours of our team members' time”. That particular job in some of the hotels is now being done by robots with no involvement of staff, which is complementary to human work, and we will be rolled out across the remaining portfolio. “So at that time, around midnight, the team member could be doing something else or getting some sleep,” in another example of IT and digital feeding into the company’s ESG strategy.

Asked if guests like the digital innovations they see, Łącz is very clear: “Yes, but I think

it's not even that they like it, it’s gone beyond that, they demand it. Therefore, we need to meet this expectation. But at the same time, we can't just binary switch from a more analogue way of doing things to fully digital, because we still have different types of customers to cater for. It was natural that the digitalisation demands of the customer would increase during COVID-19. And I think the area in which this is most visible is payment. People do not want to pay by cash anymore.

“In some areas of the business I still believe we should work in parallel modes for a period, or we face losing customers who are not so comfortable with digital. For example, in some countries, there is no

phones in the rooms because this is part of the services that need to be delivered for the proper categorisation. However, in some other countries, like the UK, this is not a requirement. But even in those countries, for people who are less used to technology and need to call for emergency, we implement a specific type of the solution, which can be used for other hotel services too.”

New partnerships

AccorInvest Group (AIG) works hard to create interactive guest experiences. With help from Oracle and its professional services partner IBM, they can transition to integrated cloud services.

Oracle has a critical role in AIG’s digital transformation, providing its Oracle Cloud Human Capital Management (HCM)— leveraging its benefits for human resources (HR)—and Oracle Cloud Enterprise Resource Planning (ERP), which also provide advantages in financial planning.

Having successfully bid on the joint project with IBM two years ago, Oracle supports AIG from a cloud migration perspective, enabling the second stage of transformation involving HR and Finance operations at AIG.

“I am excited by the power of the Oracle and IBM partnership,” says Robert Churchyard, who leads the Oracle practice inside IBM Consulting. “Together we are delivering enterprise-wide business transformation through the deployment of Oracle ERP & HCM Cloud.” The conversation moves on to future partnerships, with Łącz telling me that in addition to consolidating suppliers and collaborating with different suppliers, by the time people read this article, thanks to creating homogeneous environment between new Oracle Fusion ERP and Oracle Hospitality, Accorinvest will improve operational performance leveraging smoother processes execution and data

extraction which offer “flawless operations” from the lobby to the back office. “I believe the digitisation of the company is core to it taking care of its people,” says Łącz, adding that ecosystem that is built on Oracle product will connect distribution, guest rooms management, Point of Sales (POS), finance and HR, delivering the integrations AccorInvest requires to offer a seamless experience for staff and very satisfied guests. This would give AccorInvest a market competitive advantage having all the data in one place and accelerate any decision taking process increasing company agility in the fast moving environment. “The companies that are flexible will survive,” he says adding, "we are creating this opportunity, this agility, for the future and this includes our innovation initiatives making sure we can customise and integrate solutions to meet our needs now and in the future.”

I ask Łącz what the next 12 to 18 months look like from his perspective. He smiles and says, “I'm smiling because it's what I'm repeating almost every month to my teams, that the next 12, 24 months will be the year of delivery". We know exactly what we'd like to achieve, thanks to the executive committees of each of the companies we were able to achieve our specific plans. Now we just need to deliver. And I'm saying that with a smile, because you can imagine how easy or not easy it is to deliver for almost 800 hotel properties within such a short period of time. So yes, we need to deliver the things that we scoped, both on site which right now, is 80% of my attention through the different suppliers, through the different partnerships at our core or in order, really, to be perceived as the modern and competitive hotel owner and operator for guests, and the first choice of our employees.

“Also offsite, looking at what we do with the data, how we track the customer experience being moved between the different properties and understand their likes and dislikes. And maybe we could be much more proactive than we are right now.”

Łącz is keen to point out that the success of this digital transformation is not down to just one or few people coming from IT, but the entire workforce, “because only that way you can do something which is sustainable and that really brings value.”

So that's key, the entire workforce needs to be completely onboard with what AccorInvest is doing and why it is doing it in order for it to reach its ESG goals and what it wants to reach in terms of delivering an outstanding customer experience - it all feeds back into the team.

CROSS-BORDER AND FINTECH

BORDER PAYMENTS INTEGRATION

Cross-border payments will soon be seamlessly integrated with other fintech services, such as open banking and embedded finance

WRITTEN BY: JOANNA ENGLAND

Consumer behaviour is changing and, with it, requirements regarding the efficiency of the payments space. This places additional strain on B2B finance as vendors and merchants opt for streamlined methods and businesses must keep up with the trend.

But B2B transactions – particularly those that require crossborder flexibility – are complicated by the different international regulations governing and securing financial transactions. In an ever-changing and developing industry, where speed and agility of transaction are paramount, the challenges are vast.

According to a recent study by Rapyd on digital transactions in Europe, the international payments space has a raft of fresh demands. For example, in Denmark, 71% of respondents reported a recent online purchase using Danish mobile payment apps.

Alongside this, only 5% of Germans chose credit cards as their top online payment method, while more than two-thirds of Spanish spenders said they used PayPal for a recent online purchase.

POWERING THE FINTECH REVOLUTION

Our enterprise technology platform combines networking, edge cloud, collaboration, and security to protect, accelerate and modernize your financial applications.

Let’s talk about our transformative technology services and strategies today.

lumen.com/financial-services | 800-871-9244 © 2022 Lumen Technologies. All Rights Reserved.

BEN AIER VP PRODUCT, YAPILY

Technology and cross-border innovation

While streamlining this complicated space is no picnic, technology and innovators are working hard to solve the issues. Ben Aier, VP Product, Yapily, points out that there are many dynamic operators in the current marketplace driving disruption. “For me, the most exciting changes happening in this space today are at the intersection between embedded finance and open banking.”

Aier says that managing payments when doing business internationally “presents a huge challenge for merchants”. Very often, the endcustomer is charged with an international payment fee and receives non-competitive rates when paying an invoice in a different currency from their own. “What’s more, lengthy settlement times are leaving merchants waiting for their money and the end-customer waiting for the delivery of their goods and services.”

She goes on to say that better understanding and implementation of cross-border payments within open banking and embedded finance are leading to streamlined cooperation between finserve providers.

“Open banking payments enable the instant flow of cash from one bank account to another, bypassing card fees, lengthy settlement times, and risk of card fraud. International open banking payments currently use SWIFT to facilitate cross-border transactions.”

But, currently, this process is expensive and slow, and cross-border payment fintechs need banks and regulators across Europe to move faster to match demand for a cheaper international payments’ alternative.

How open banking is easing the way

While these challenges will take time to overcome, combined open banking and embedded finance solutions are enabling payment service providers and merchants to access an entire payments ecosystem through a single connection. Aier says: “Using embedded finance, open banking platforms like Yapily can enable businesses to collect domestic payments, perform cheap foreign exchange interchange, initiate instant payouts and refunds, and streamline reconciliation.”

Greater visibility over payment status, more control over the distribution and flow of funds, and reduced costs when it comes to accepting and transferring cross-border payments are just a few of the benefits, as these “enable businesses to focus more resources on expanding globally whilst saving both time and money”.

Crypto and borderless DeFi transactions

Meanwhile, cryptocurrencies have risen within the cross-border space as payment methods that aren’t required to meet the strict regulatory requirements of fiat currencies. Transactions in crypto carried out on the blockchain currently enable buyers and sellers relative freedom from government interference, as well as personal privacy.

But many countries still don’t allow crypto transactions, thus preventing it from comfortably occupying a mainstream position, and the regulation of DeFi will almost certainly tighten up over the coming decade.

Jurijs Borovojs, CTO of Transact365, says the crypto landscape has remained largely unchanged by external events, making it a popular option for the cross-border payments space. “Crypto’s flexibility means it is not as heavily impacted by country or regionbased economic landscapes. Although cryptocurrencies can undulate in value, they are more robust to exterior changes.”

“While financial problems persist in Europe, merchants operating in and from fast-growth ecommerce landscapes can take advantage, using global payment gateways to facilitate the scale-up of their businesses. With an increase in ecommerce merchants enabling alternative finance payments, alt-fi sectors may gain more customers who wish to purchase online without using assets temporarily stored and secured in mainstream bank accounts.”

Cross border payments in China

Each country handles its cross-border transactions differently, and China – the world’s biggest supplier of goods and services – has implemented its own regulatory requirements that benefit trade while also taking AML and security measures into account.

David Messenger is the CEO of leading China-born fintech LianLian Group. The company’s purpose is to connect merchants globally through two-way channels whereby companies both within and outside China can have a streamlined transaction network.

JURIJS BOROVOJS CTO, TRANSACT365

He believes that global economic instability has contributed to the popularity of digital currencies in the international payments space because they are easily transferable assets that fly above the fiat regulatory requirements of individual countries.

Messenger tells us: “When you look at fintechs in China, really, there are two areas of regulation. One is the People’s Bank of China (PBoC) and the financial regulations; the other is the Cyber Administration Authority of China, which is the data security, data privacy regulations. In China, what often happens in new areas is that the regulations are left flexible to let a market and solutions develop. Then, once the position is clear, the regulator brings in regulations that are broadly in line with the same objectives that regulators have all over the world.”

The process is, he says, a method that ultimately works best for the business climate and the customer because it closes areas of vulnerability, making the environment safer for business by providing greater stability in the financial system, data security and data privacy.

KIAT-SENG LIM GLOBAL HEAD OF SALES, J.P. MORGAN

CROSS BORDER MEGATRENDS IN 2023

According to J.P Morgan, there will be three megatrends disrupting cross-border payments space in 2023. To remain competitive, fintechs and banks will have to deliver cost-effective, fast and secure cross-border payments options to merchants and vendors, alike. But to do this, they will have to contend with:

#1 New payment methods: These will consist of faster, more streamlined and agile payments that cater to multi currencies including crypto. Kiat-Seng Lim, Global Head of Sales for J.P. Morgan, says: “To remain competitive, companies must leverage infrastructure that supports instant payments, lower costs and greater transparency to make them adept in the realm of cross-border payments.”

#2 New technologies: Faster, more innovative technologies and an increased use of APIs is transforming the space from a software and hardware perspective. Cross-border payments require greater transparency, efficiency and visibility.

#3 Greater risks: As the space becomes ever more digitised, the risks rise in terms of fraud, money laundering and cybercrime. Providers must adopt the most secure means possible to build trust within the marketplace

Aier concludes: “In 2023, we can expect to see more fintech collaboration and partnerships evolving between players providing these disruptive technologies. In turn, businesses will be able to unlock exciting and innovative open banking use cases for their customers, remove even more friction, and create new growth opportunities.”

HOW CHANGE MANAGEMENT TRANSFORMS THE CUSTOMER EXPERIENCE

WRITTEN BY: JOANNA ENGLAND

PRODUCED BY: MICHAEL BANYARD

Creating a better customer experience, generating a healthy, workplace culture, and ensuring all talent is gainfully used are challenges that can make or break a business these days.

Alongside this is the drive to take businesses – especially banks – entirely online. Branches are closing at a rate of knots, while customers are facing the prospect of their troubleshooting being carried out by increasingly sophisticated, AI-driven chatbots. Although theoretically streamlined, it cuts out the human touch – an element essential to any business that wants to garner loyalty within its customer base.

It is these elements and more that have fallen in the job jar of Santander UK’s CTO and Head of Operations, Jas Narang. A veteran of the bank with 25 years’ experience, the former engineer is a passionate advocate of healthy workplace culture and the needs of the customer.

Narang is also a brilliant strategist who has led extraordinary changes within Santander UK’s digital journey. It is these changes that are leading the bank towards a unique, hybrid challenger definition that considers all the needs of its customers and staff.

Santander UK’s CTO, Jas Narang, outlines the bank’s innovative strategy to fulfil better customer experiences

Jas Narang

TITLE: CTO

COMPANY: SANTANDER UK

INDUSTRY: BANKING

LOCATION: UNITED KINGDOM

Jasmeet (Jas) Narang is currently Chief Transformation Officer & Head of Operations Community at Santander UK.

As part of the CTO role, Jas and team are responsible for and working with teams across Santander UK & Group to build core capabilities including Customer Interactions, Digital, Process Re-engineering, Data, Agile Way of Working, Supply Chain Management & People/ Organisation levers to help set the foundations for the bank to grow in the future whilst maximising productivity. He also manages the federated operations functions and acts as the central owner for both Regulatory and Group responsibilities.

Change management and a new, agile approach

Though many organisations claim to be agile and flexible, internal structures often restrict staff movement between departments. This results in the under-utilisation of talent in addition to the restriction of inter-company communication and cooperation.

To counteract this, Santander UK is employing a unique internal structure called ‘Change Management’. The system enables complete interaction and cooperation between the bank’s multiple teams, along with fluid movement between departments for staff, so that the workforce can be interoperatable and multidisciplinary. Talent isn’t static; rather, it is shared across the organisation, boosting ideas, innovation, and job satisfaction.

Workforce agility in full effect

The radical transformation of Santander UK’s internal structure began in 2020, involving 250 small to medium-sized initiatives. This makes the structure much more resilient compared with one that relies on the more usual model of, say, 10 initiatives. The idea is that the company is neither top-heavy nor bottom-heavy, but instead operates with a small, central team, surrounded by many flexible, interoperable teams.

Narang explains: “We've got a very light central team, but the involvement

of a fair few hundred people across the organisation at various levels – from the front-end, customer-facing colleagues through to the C-suite. It's about cutting across the organisation and making sure that we involve as many people as possible and generate as many ideas as possible across the organisation, reimagining those processes and customer journeys.”

The benefits of such a radical approach are already evident, with faster implementation of ideas among many more innovative plans being generated across the organisation.

JAS NARANG CTO, SANTANDER UK

“I'm very, very passionate about the Change Management aspect and the involvement of people. That’s the cornerstone that differentiates us from other banks and organisations”

“Change Management has helped us to create a very strong foundation for people passionate about change, who want to make a difference to the customer and, therefore, are not only coming up with ideas, but are also being involved in the implementation of those ideas.

“That's been a cornerstone of our Change Management strategy over the last couple of years. By no means am I saying it's ultraperfect; there's always more that you can do to get the organisation to come along the journey with you. But the idea and the strategy has been to broad base that, rather than have a small team of people who direct from the centre. It's been the key for us.”

JAS NARANG CTO, SANTANDER UK

“You can't have a cookie-cutter approach because people deserve better. I always say, ‘You can’t stack them high and sell them cheap’”

Driving innovation through Change Management

The benefits of Change Management

While the immediate benefits of Change Management see a well-distributed and agile body of talent throughout Santander UK’s internal structure, the solution has numerous additional advantages. One of those benefits is employee inclusion in the digital transformation process. While many companies cite employee resistance to change as one of the stumbling blocks of transitioning to a digital system, Santander UK’s staff can comprehend the impact their performance has on the peripheral teams and are far more invested in driving forward the company as a whole, according to Narang.

“We set up various work streams for the transformation, involving vertical business units due to the traditional structure in a bank, but also with horizontal capabilities such as data and process re-engineering in the conversion from legacy to cloud.

“We’ve combined vertical and horizontal work streams with a work-stream leader and initiative owners with the various initiatives or projects under each of those work streams.”

The system is enormously experimental and involves more than 250 people across the organisation to physically lead each of those projects.

“Because they were leading those projects, they got intimately involved in

“There is a particular section of our society that does like to walk into a branch for some specific piece of advice or certain types of transactions. They feel more comfortable dealing with a human being, rather than via a piece of equipment”

JAS NARANG CTO, SANTANDER UK

this whole big chunk of the transformation of a programme.”

Removing roadblocks to encourage project owners to deliver their own ideas and prioritising investments and resources while having the backing of the organisation are pushing new innovations over the finish line.

“A result of that is that people have been led to participate in it – we've trained them along the way to make sure that they understand what change and transformation means. For example, over the past couple of years, we've been able to promote 27% of the people involved in transformation, compared with promotions for the entire organisation, which stand at between 12 and 13%.”

It’s a startling success story that has more than doubled the number of people involved in digital transformation, thereby maximising talent and innovation in that space. Through Change Management, staff are exposed to a wider view of their role within the bank, and this has expanded their appreciation of their impact across Santander UK.

A future that involves bank branches

Another dramatic shift that has emerged as a result of Change Management is a growth in the keen understanding of the needs of customers.

Unlike other market-leading banks, Santander UK does not have plans to close all its high-street branches. Instead, the plan is to examine customer requirements, and respond to their demands, a concept that some may see as swimming against the tide in an increasingly digitised industry – but Narang is confident in the strategy.

He explains: “Santander UK is the fifth largest bank in the country. We think of

ourselves as challenging the big four of Lloyds, Barclays, HSBC, and NatWest.

“Basically, our vision and mission is to be a digital bank with a human touch. Our purpose is to help businesses and our customers prosper – that's what we exist for.”

Catering to the needs of customers

Part of this purpose is to ensure that all customer requirements are met. The bank’s recognition that, despite the widespread digitisation of the banking industry as a whole, people prefer to interact with people rather than bots is allowing Santander to set itself apart. Of course, it’s a radical move – but one that Narang takes pride in.

“During the pandemic, the banking sector saw a huge amount of change. What was going to take somewhere between 7 to

10 years – in terms of digital adoption by customers – has happened in the course of the last 18 to 24 months.

“It's a huge shift in how customers want to bank, right? Everybody wants to bank on their phone rather than walking into a branch. And that’s multiple times a day for various different requirements and needs that each customer has.

“But the reality is also that there’s a segment, or particular section of our society, that does like to walk into a branch for some specific piece of advice, or for certain types of transactions where they feel more comfortable dealing with a humanbeing, rather than remotely on a piece of equipment.”

The plan is for Santander UK to balance its developing digital journeys at scale, which caters to all customer’s needs. “We're aiming

JAS NARANG CTO, SANTANDER UK

to be a digital bank with a human touch, or you could call it a digital bank with branches. That's what our goal is and that's what we're going to be steadfast on in the coming foreseeable future.”

Partnerships for success

To assist Santander UK in its strategies, the bank is partnered with three companies especially in the customer service and technology area, namely: Concentrix, which assists in customer journeys; Genpact for operational services; and Coforge, which handles IT fulfilment. Unlike other organisations that collaborate with a wide spectrum of businesses within the digital ecosystem, Santander UK has reformed its partnership network and chosen to form alliances with companies that can assist them across a wide range of verticals.

“It's about cutting across the organisation and making sure that we involve as many people as possible, generating as many ideas as possible across the organisation to reimagine those processes and customer journeys”

“Traditionally, we've had a core set of Top 20 partners, and then a very long tail that deals with hundreds of individual businesses or partners for small tasks. The endeavour today is that we're going to partner with fewer – yet more strategic – partners in the ecosystem,” says Narang.

This enables Santander UK to build deeper and more meaningful relationships with their ecosystem partners – but also strike a balance between relationship and risk: while fewer partners does mean a greater concentration of risk, this can be more than manageable with the right strategy in place.

A bright outlook for the future

As the next 18 to 24 months unfold, Narang is quietly confident about how the market will affect Santander UK. He believes a solid strategy will help the bank weather the storm. While rising inflation rates are a concern for all financial institutions, because Santander UK is a retail bank, and not an investment bank, they have not been subject to the highs and lows that other organisations are facing.

“We are largely a retail bank, not a big investment bank. Therefore, we haven't taken crazy bets on some sector A or

derivative B or product C. The bulk of retail bank business is mortgages. And the reality is that when the times are tough, customers think about paying off their mortgage before a credit card or a personal loan – or any other type of borrowing. Everybody wants to protect their house first as a natural human behaviour.”

Customers deserve a flexible approach in hard times

A responsibility towards helping customers through difficult times is a priority for Santander UK. In this, personalisation is key, because economic instability requires a flexible outlook.

“You can't have a cookie-cutter approach because people deserve better. I always say, “You can stack them high and sell them cheap." Customers don't go for that any longer. That used to be the case 10 years or 15 years back, but not any more.”

His own experience as a consumer influences his take on how products and services should be managed. “I want to feel I am wanted by the bank. You're personalising stuff for me that is tailored to my needs here and now.”

Ultimately Change Management has contributed extensively to Santander UK’s agile customer experience.

Narang adds: “I'm very, very passionate about the Change Management aspect and the involvement of people. That’s the cornerstone that differentiates us from other banks or other organisations.”

“Because they were leading those projects, they got intimately involved in this whole big chunk of the transformation of a programme”

JAS NARANG CTO, SANTANDER UK

Fintech regulation and the changing climate

WRITTEN BY: JOANNA ENGLAND

The past few months have been turbulent for fintechs. With tanking economies, falling investment interest and an extremely long crypto winter, change has become a familiar state of being.

But, as the industry continues to mature, more changes are expected – this time in the form of regulations that will seek to stabilise and secure fintechs by building trust in the space. Here, we take a look at the top four fintech sectors set to experience new regulations.

Cryptocurrency and DeFi regulatory changes

Since US President Joe Biden formalised his intentions to regulate cryptocurrency and the decentralised finance space in 2022, much debate has been aired about exactly how such a task could be done without compromising the privacy and autonomy of the space, which has made it so successful with investors. James Corcoran, Chief Growth Officer of KX, explains the quandary. He says a common worry in the industry is that, once the regulators and additional technology get involved in the crypto sphere, innovation will slow down.

“Regulation is inevitable – the IMF has said crypto assets are no longer niche and regulators need to catch up. The European Central Bank has urged eurozone countries to harmonise different rules around crypto regulation before EU-wide laws come into force at the end of 2023. The US is also pushing for more regulation, with the US Treasury encouraging new laws to address crypto regulation gaps.”

As new regulations come into force across a number of sectors , we look at the areas most likely to be affected

He continues: “When you strip everything back to its bare essentials, the fundamentals behind trading crypto are similar to how traditional financial markets operate. Introducing regulation will bring greater stability, security, and efficiency, which it can be argued will lead to more – not less –innovation, competition, and choice. Better oversight and governance will also further strengthen its role as an additional form of currency, silencing the doubters who say it is like the Wild West.

JURIJS BOROVOJS, CTO, TRANSACT365

More regulation of incumbents in the digital space

As cyber threats soar and security becomes an increasingly frontof-mind consideration, traditional financial institutions are finding themselves out of touch with the latest innovations, technologies and regulations required to secure their systems. Jurijs Borovojs, CTO of Transact365, explains that 2022 has been particularly turbulent for traditional financial institutions.

“On one hand, we’ve seen large legacy institutions punished for a lack of compliance and due diligence; as was the case with Citi Group’s £12.5mn fine for a lack of effective monitoring of trading activity and the £63.9mn fine for HSBC, which had underperformed in its anti-money laundering due diligence.”

But he points out that traditional financial institutions have come to the aid of countries with increasingly unstable economies – most notably, the Bank of England’s intervention after the sterling price plummeted following governmental tax cut announcements.

“ Customers are struggling to maintain trust in traditional finance forms … it is important they rebuild this trust quickly or risk increased alt - fi market penetration ”

“Ultimately, it’s all about giving choice and security to both existing players and new market entrants.”

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“Businesses and customers are struggling to maintain trust in traditional finance forms. For these institutions, it’s important they

opportunities for growth, awareness and increased trust from people whose faith in trad-fi institutions has waned.”

“ ... fundamentals behind trading crypto are similar to how traditional financial markets operate .

Introducing regulation will bring greater stability , security , and efficiency ”

JAMES CORCORAN, CHIEF GROWTH OFFICER, KX

Anti-fraud regulations for the banking space

As part of a drive to prevent increasing rates of fraud within the financial space, the UK – the world’s second largest fintech hub –is exploring the introduction of a national fraud strategy.

In response to the Labour party’s calls for a national fraud strategy Daniel Holmes, SME Fraud Prevention at Feedzai , explains that such a move is needed because fraud losses continue to increase year-on-year.

“Money lost to fraud and scams has long been cited as a risk to national security, but now more than ever, as we enter more

economic hardship, it is becoming clearer that the impacts on consumers themselves are just as devastating.”

He continues: “Banks typically receive the majority of the burden when it comes to regulatory change, but the bill proposal shouldn’t overlook the fact that there are many other parts of the payments and digital ecosystem that play a key role during a scam.”

Holmes goes on to explain that the latest Payments Systems Regulator (PSR) regulation announced in October is a positive step in the right direction, as the proposed changes will force banks to work as a collective more than ever before.

“

If the proposed regulation makes its way into reality

consumers will benefit from enhanced liability protection ”

DANIEL HOLMES, SME FRAUD PREVENTION, FEEDZAI

“If the proposed regulation makes its way into reality, consumers will benefit from enhanced liability protection, meaning they are out of pocket less often. Additionally, banks will have to fundamentally rethink their approach to monitoring not only payments leaving their bank, but also payments that they receive.”

Buy Now Pay Later (BNPL) to adhere to new rules

The largely unregulated BNPL space has been navigating stormy waters of late. With inflation driving up costs of living, the post-pandemic economy is seeing more people turn to loans, and BNPL is expected to feature prominently as consumers reduce their immediate spending and turn to it as a mechanism for essentials.

By mid-2023, providers will face harsher regulatory procedures. The new directives will necessitate BNPL providers carrying out in-depth credit checks on consumers to ensure that they can afford to take out loans. Furthermore, lenders must also be approved by the Financial Conduct Authority.

,

Placing people and culture at the heart of business growth

WRITTEN BY: ALEX CLERE

PRODUCED BY: JAKE MEGEARY

Unless you find yourself working for a software company, or a pure-play technology company, the CTO is an oftentimes undervalued commodity. They are seen as chief doers, heads of getting-things-done. They are told what’s needed from them, then expected to go away and accomplish it.

So it speaks volumes about United Wholesale Mortgage (UWM) that its Chief Technology Officer, Jason Bressler, is smiling from ear to ear when he talks about his role. “I actually have a seat at the business table and I help run the strategy of UWM,” Bressler enthuses. “It’s great. My leadership is so invested in our technology and our technology team that it’s been the most rewarding thing of my career, for sure.”

For over 30 years, United Wholesale Mortgage has been connecting mortgage brokers and homebuyers with the right credit to meet their requirements. The company focuses exclusively on the B2B channel, something that it is passionate about. “We want to show consumers that brokers are better, and the choice is better,” Bressler says. It’s an approach that is definitely yielding results: UWM is the largest wholesale lender in the US, according to data from Inside Mortgage Finance, and when Bressler talks to us from his office in Michigan the firm has just officially become the largest mortgage company in the world.

UWM’s upward trajectory has seen it through an IPO to become the largest mortgage company in the world – but it’s still grounded in its people and culture

JASON BRESSLER

TITLE: CTO

INDUSTRY: IT & SERVICES

LOCATION: DETROIT METROPOLITAN AREA, USA

Chief Technology Officer leading more than 1,300 information technology professionals at the #1 wholesale mortgage lender in the nation, UWM. With 24+ years of experience in IT, Jason manages the strategy and implementation of technology to increase information accessibility and integrated systems management. Passionate about leadership and building teams. Committed to developing technology solutions that make the mortgage process easier for brokers and borrowers across the country. Skilled in application development, cloud computing, network security, DevOps, and more.

A member of the CNBC Technology Executive Council and Detroit CIO Governing Body. Recognised as HousingWire’s 2018 Vanguard Recipient.

Placing people and culture at the heart of business growth

JASON BRESSLER CTO, UNITED WHOLESALE MORTGAGE (UWM)

In January 2021, UWM made its Wall Street debut when it went public in an IPO. For Bressler, a financial services stalwart who has been with the company since 2016, it was a validating moment. “It's incredibly rewarding,” he says. “It's allowed us to really invest in our technology team and really start to build out products, not just for the mortgage space but the entire fintech space, that can be utilised for consumers, for brokers, and then obviously for us as well.”

Bressler has more than 25 years’ experience in the financial services industry. Before joining UWM, he was CIO at a retail lender, Guaranteed Rate, and CTO at The Federal Savings Bank in Chicago. But he is a Michigander at heart, growing up here before attending Eastern Michigan University in Ypsilanti, near Detroit.

A seasoned tech executive with vast experience

“

My leadership is so invested in our technology and our team.

It’s been the most rewarding thing of my career, for sure”

How did UWM become the #1 Lender in the country?

The #1 Borrower Intelligence Platform had a lot to do with it.

Find out for yourself today.

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Like many in business, he’s inspired by the late Apple boss Steve Jobs. And though mortgages may seem far removed from the gloss and glamour of the world’s most idolised company, Bressler claims there are still parallels. When a homebuyer is looking around houses and neighbourhoods, they know what they want. It might be a large yard or a master bedroom. But when it comes to mortgages, they very rarely understand the choice available to them. They know they want a mortgage, but that’s about as far as it goes. This is one of the defining characteristics of the broker market that help explain why UWM is so squarely and unwaveringly behind it – brokers can provide a personal service and guide applicants through the process.

When Steve Jobs delivered that nowiconic presentation from Apple’s Cupertino headquarters back in 2007, most consumers –

like mortgage applicants today – didn’t truly understand what they wanted. They knew they needed an upgrade on the early iPod, a better mobile phone, a new way of accessing the internet. But when Jobs announced that, in the iPhone, Apple had incorporated all three into a single device, thus overhauling the smartphone market forever, there were whoops and hollers from the assembled masses. Consumers didn’t know what they wanted, they didn’t know what options were available to them – but like the visionary he was, Jobs still managed to give them what they needed. For an applicant, that is also the key ingredient in a broker-lender relationship.

Recognising the importance of personal development

Bressler says he subscribes very heavily to a build-over-buy approach – perhaps

JASON BRESSLER CTO, UNITED WHOLESALE MORTGAGE (UWM)

“

I study flashcards of my team with their pictures and facts about them, so when I pass them in the hallway, I know who they are”

JASON BRESSLER CTO, UNITED WHOLESALE MORTGAGE (UWM)

a divergent mentality in an industry that is sometimes obsessed with bolt-on acquisitions. They build everything themselves in-house, deploying as often as seven or eight times a day. Bressler prefers both to recruit skilled talent and bring in external trainers or instructors, but also wants UWM team members to act as coaches and mentors around a particular skill or area of expertise. This means sharing the knowledge that is already present within UWM to the rest of the organisation. This whole approach contributes to a culture of continuous improvement.

Bressler heads up a team of around 1,200 employees and takes it upon himself

to know each one by name. He reveals: “I actually study flashcards at night with their pictures and facts about them, so when I pass them in the hallway, they know that I know who they are.”

Given this personal approach, it’s no surprise that UWM invests significant resources in its staff – or its “greatest asset”, as the business refers to them. For most companies, this means giving each employee a paltry budget and telling them to go away and find some training course to do. But for UWM, it goes so much deeper. Of course, they still pay for their employees to be curious and to learn new skills. But one thing that the firm does differently is

“ We want to show consumers that brokers are better, and the choice is better”

investing in entry-level staff, who might be earning $15 an hour, and equipping them with the skills they need to embark on an entirely new career course. They might only have a high school diploma, but UWM trains them from the ground up to become developers, business analysts and DevOps professionals. “I tell everybody if we were a hospital, we'd be a teaching hospital,” Bressler quips.

Some businesses, without the courage of conviction that UWM has, would be scared of investing in staff only for them to take those new skills to pastures new. Sometimes that happens, and when it does it’s inevitably unavoidable. But UWM finds that, when they

invest in their staff, their staff invests in them. This is evident in the levels of staff retention. Bressler recalls the oft-quoted adage of a CFO in conversation with a CEO: “What happens if we invest in our staff and they leave,” the CFO asks. “What happens if we don’t and they stay,” the CEO replies.

Bucking the trend for remote and hybrid working

One aspect of UWM’s culture that sets it apart is its attitude towards remote working. An increasing number of lenders and financial institutions are offering their staff the chance to work from anywhere. UWM is staunchly not among them. Instead, it insists on staff being

present in the office during working hours, and it believes the benefits outweigh the cost.

“We are all on one campus and we do not have hybrid work,” Jason Bressler explains. “All of our team members that work at this company are in the office every single day. From a technical standpoint, that has allowed our level of collaboration to be so high. It really is our secret sauce, having everybody in the office every day and not dispersed around the country or around the world.”

Bressler laments the social interactions we lost during lockdown – a hangover that many hybrid or remote companies are still dealing with. Instead of sending a message over Teams or Slack, employees at UWM have the security of knowing that they can just turn around and ask the question instead. There are signals that staff pick up on in the office that just aren’t available when everybody’s working from home.

Of course, this policy has its toll. “At times it hurts,” Bressler says. “But it was too important to the culture of what we had already built over those first 31 years before the pandemic hit that when we felt it was safe to have everybody come back in, we did it.”

Emergence of high-tech reflects a city in transition

It makes it harder for UWM to recruit. After all, the company only has access to the local jobs market in southeast Michigan, while other lenders have an unlimited pool of talent open to them internationally. It’s even enough to put some local jobseekers off. But Bressler is unrepentantly committed to continuing with this approach, saying that it helps to ensure new hires are a good cultural fit for the organisation among other benefits. Besides, there are plenty enough graduate prospects nearby: as well

as Bressler’s alma mater, the University of Michigan and Michigan State University are both within a 60-minute radius, offering courses in both technical and engineering disciplines.

The Detroit metro area used to be known as ‘Motor City’, owing to its legacy as the centre of America’s automotive industry. Indeed, the suburb where UWM is located lends its name to one of the most iconic auto brands the US has produced, eventually being subsumed by General Motors in 2010. Slowly, as auto jobs have packed up and left, a burgeoning technology sector has taken root. Today, the area is sometimes dubbed ‘Automation Alley’. As well as car makers, there are 17 Fortune 500 companies in Michigan and the state’s economy is worth almost US$500bn a year.

“

All of our team members are in the office every single day. It really is our secret sauce”

JASON BRESSLER CTO, UNITED WHOLESALE MORTGAGE (UWM)

“There has been a cultural shift that's happened in Michigan,” Bressler explains. “I grew up here. Everybody in Michigan was very blue collar, because it's all about automotive. You put your head down, you go to work, and that's it. We've really started to shift. We're still very blue collar, but we've really started to shift into this white-collar, heady, highly technical and highly educated mix. That's been fantastic to watch.”

The challenge posed by fraud increases as you scale

At the heart of UWM’s rise to the top is an obsessive focus on understanding and meeting customers’ needs. Sometimes, that is even separate from revenue or sales. “We started building large scale fintech products for the broker community and their customers, obviously specific to the mortgage industry,” Bressler says. “We gave them away for free to all of the brokers and we said you didn't even have to use us.”

The reason, he explains, is all about providing brokers and borrowers with the tools they need to find the right product. When you’re operating in the wholesale space, brokers can shop up to 20 or 30 different lenders at a time – so there’s no guarantee that brokers will use UWM in spite of making these convenient tools available, but nine times out of 10 they do.

“It has built up a ridiculous amount of loyalty from our clients,” he continues. “They truly feel like we have their best interest at heart, so that loyalty carries over when rates are high and when rates are low.”

As UWM has scaled, the risk posed by fraud has increased. Lenders are in the business of risk, so mitigating that risk is an important factor in improving your bottom line.

Bressler says: “We've invested very highly in data science and business analytics. We use a lot of our modelling and our data to predict behaviours. The biggest risk to a mortgage company typically is fraud from a consumer or from a loan officer. We have so many technology guardrails around everything that we do here, and then using that on top of our data scientists, we've been able to model and predict where we would see fraud and how we would detect it ahead of time. From the front end all the way down to the back end, we're constantly analysing the data and serving that up to our teams to make sure that we're protected.”

To give an indication of UWM’s capabilities in fraud detection and prevention, the company’s information

security team is over 70 team members strong. The security function is deeply embedded within UWM’s application development, so even the code that gets written has security in mind from the outset. Bressler acknowledges that, as a lender scales, the target on its back becomes much bigger for fraudsters and bad actors. However, he explains, the nature of risk within mortgages remains somewhat l inear. For UWM, it’s about making sure they manage everything that’s thrown at them and stay ahead of the risk as much as possible.

JASON BRESSLER CTO, UNITED WHOLESALE MORTGAGE (UWM)

Looking ahead to the next couple of years, Bressler says that they are full steam ahead on growth. “In this high interest rate environment, we are still continuing to take more and more market share because we're doing such a great job of educating consumers that choice is better and brokers are better. Most of the brokers in the wholesale space use UWM. We really want to capitalise on what we've just accomplished by continuing that growth.”

“

There has been a cultural shift that's happened in Michigan. Everybody was very blue collar, because it's all about automotive, but we've really started to shift”

Democratising wealth: how do we encourage people to invest?

WRITTEN BY: ALEX CLERE

The proliferation of fintech has opened up new opportunities around investing, giving occasional investors the chance to invest their savings for the first time. According to a Gallup poll from earlier this year, a staggering 58% of Americans have money invested in the stock market either through individual stocks, a stock mutual fund, or in a self-directed 401(k) or IRA. This number has picked up in the last few years, with a noticeable uptick since the beginning of the COVID19 pandemic – although, curiously, it’s still a couple of percentage points lower than at the turn of the century. In the UK, just a third of Brits own shares, according to a 2020 survey from financial comparison site Finder, with 2.2mn people subscribed to a stocks and shares ISA.

Gone are the days when investing was the preserve of the rich. With new fintech platforms at our fingertips, how do we make investing more inclusive?

Avoid the Top 5 Most Common Open Source Vulnerabilities Within Financial Organizations

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Fintech investing platforms have made it easier than ever for consumers to invest in shares from their smartphone, breaking down barriers to entry and helping to democratise wealth management. Banks have been particularly instrumental, bringing investment tools and managed funds to a larger customer base than ever – one that is frequently curious about investing but lacks the confidence to jump in at the deep end.

Incumbents bring investment to their large bases

According to James Hewitson, Head of Wealth and Investing at HSBC UK, banks have been successful in attracting new retail investors because they have focused in equal measure on simplifying both the digital journey and the product mix.

JAMES HEWITSON HEAD OF WEALTH AND INVESTING, HSBC UK

stocks in a really simple, accessible way has been a key pillar of our strategy when it comes to democratising wealth,” Hewitson says. “However, it is just one example of a range of solutions we’ve designed to combat barriers people face when beginning their investment journey.

“One of the biggest drivers of growth in our novice investor base has been our investment into digital, creating a journey that’s accessible on-the-go directly through the mobile app. In December 2021, we launched ‘Funds on Mobile’, and we are now

“Presenting

“ Presenting stocks in a really simple, accessible way has been a key pillar of our strategy when it comes to democratising wealth”

seeing that two-thirds of our total customer base invest through this journey. Since the launch, we’ve seen a large increase in novice investors. In September 2022, the number of customers joining our investment platform had more than doubled compared to the same month last year.

“Another big priority for us is ensuring investing is affordable. We have reduced the entry point to investing to £50 to create an accessible entry point for more people. We know that one of the barriers to investing is the perception that it is for the wealthy and a lump sum is required to get started – we want to combat this.”

Yumika Brewster, COO at retail investment community Finimize, summarises the progress towards democratising wealth management: “Commission-free trading, fractional shares, app-based platforms – all these features mean that investing is less for high-net-worth individuals, who can call up their broker everytime they want to buy something. But you need access to the knowledge to start, and that, unfortunately, is still much more prevalent in privileged and wealthy groups.”

How important is education in popularising investing?

“Education is 100% the key to getting more people financially engaged,” Brewster continues. “I view investing as a way to catalyse your financial prosperity. Leaving your money in a low-interest savings account – or worse, your current account – means your money is literally losing value with inflation where it is, but if you don’t get exposed to these principles and philosophies, it can be so overwhelming that you don’t even know where to start. Engaging education is really the only way you can take people on the journey of financial freedom.”

There is a sense within investtech circles that, although fintech has given consumers the means to invest, there is still a knowledge gap when it comes to ‘everyday’ retail investors. Clearly, appetite exists – eToro, Robinhood, Stash and Investing.com have amassed more than 20mn downloads across iOS and Android in the past 12 months, according to app intelligence company Apptopia. Yet, despite having the means to invest, many consumers feel they lack the confidence or expertise to make informed investing decisions.

Jason Hollands, Managing Director of Bestinvest, agrees that education is massively important. “For most people, investing is

JASON HOLLANDS MANAGING DIRECTOR, BESTINVEST

“ A majority of people are uncomfortable with the concept of computer-driven financial advice”

not an abstract hobby. The purpose is to achieve something real like retiring comfortably, paying off a mortgage or funding their kids' university fees. A large part of what our coaching team does is help educate customers on how to become better investors. They provide knowledge, hints and nudges so they can be more confident in their approach. This also helps avoid common mistakes like overreacting to short-term market noise or buying investments that have been tipped in the media without having an overall strategy or taking an inappropriate level of risk.”

Will algorithms and roboadvisors replace humans?

As we look towards the future of retail investing platforms, it seems inevitable that the advancement of technology will continue to change how, and where, we invest. But will the investing space become a race to the bottom?

Where, once, asset management firms clamoured to have the best human investment manager, will investing fintechs race to develop the most accurate algorithm or jostle to create the best-performing robo-advisor?

HSBC, for one, doesn’t think so. In the UK, the bank has launched a live chat function as part of its existing advice service, called My Investment. The aim is to allow users to have on-screen conversations with ‘wealth engagement officers’, who are specially trained in discussing issues related to

wealth management

YUMIKA BREWSTER COO, FINIMIZE

“ Education is 100% the key to getting more people financially engaged”

and insurance. The human touch, driven by demand from hesitant retail customers, is at the heart of that.

“While many people are happy to use online services to explore and educate themselves, a majority are uncomfortable with the concept of computer-driven financial advice,” claims Bestinvest’s Jason Hollands. “On an emotional level, there is a big difference between booking a flight or

ordering a box of wine online, and deciding what to do with your retirement fund. People want the reassurance of speaking to a knowledgeable human as part of the process.

“Pure ‘robo advice’ is quite limited in scope,” he adds, “essentially providing a decision tree to select an investment strategy that meets a particular risk profile and goal, such as income or growth. This

“ Human advisers will not become obsolete – far from it. But the way they deliver that advice and interact with clients will change”

JASON HOLLANDS MANAGING DIRECTOR, BESTINVEST

nearly always ends up with an investment strategy that uses low-cost, passive funds that track general market movements rather than seeking to select stocks and shares that might deliver superior returns. There is indisputable value to this, but it simply doesn’t address the broader needs of the customer, which will only be flushed out through a discussion with someone knowledgeable.”

Finimize’s Yumika Brewster concurs: “I don’t think that robo-advisors will ever replace people who want to be hands on and involved. It might cannibalise other passive forms of investment, but what I think our retail investor audience finds exciting is understanding what’s going on, making sense of it and seeing the opportunity come out of it.”

‘Human advisers will not become obsolete – far from it’ Instead, technology will continue to play a supplementary role in investment decisions but there will be little crossover between the occasional and institutional ends of the investing spectrum. Hollands continues: “Human advisers will not become obsolete – far from it. But the way they deliver that advice and interact with clients will – and is – changing. For example, even within traditional, face-to-face wealth management businesses, the pandemic forced firms to adopt virtual meetings. It accelerated the pace of change by several years. While many of their clients now prefer to return to meeting in person, the alternative of virtual

meetings continues to be part of the way business is done, because of convenience. “Likewise, wealthier clients who want a very tailored and personalised experience rightly expect to be able to access information on their investment portfolios 24/7 through apps and online portals. Better use of technology like this, cutting out the mundane and manual processes, can mean traditional wealth managers focus more of their time on advice and relationships and less on administration.

“We don’t see digitally led services competing with traditional wealth management, other than at the margins. The latter services are predominantly aimed at high-net-wealth individuals with more complex tax affairs, who require a more bespoke approach to the management of their investments. What the emerging generation of digitally led, hybrid services can bring to the table is the democratisation of ‘advice’. It widens access to wealth management for the broader population because technology can improve efficiency, affordability and is scalable. We think this is powerful and exciting, because it will bring a benefit to society as well as a commercial reward for the firms who are successful.”

The banking landscape has been reshaped by a plethora of challenger banks, neobanks and digital players. These are the 10 most downloaded in the past year

MOBILE BANKING APPS

MOBILE BANKING APPS

What is a bank?

That used to be an easy question to answer. If it had a licence, it made the grade. Although the requirement for banking licences hasn’t changed, the advent of fintechs and the rise of digital-only banks has made the idea of a bank more opaque.

We’ve partnered with Apptopia, the market leader in mobile app competitive intelligence, to understand the most downloaded banking apps of the past year. It was a cut-throat process. We’re not including any mobile apps from bricks-andmortar banks – they’re just customer service tools. Nor are we including digital wallets or payment

WRITTEN BY: ALEX CLERE

apps like PayPal (97mn downloads, if you’re interested). We’ve even excluded some superapps, like WeChat (105mn downloads), that do so much more than just banking. So, without further ado, here’s our top 10 banking apps of the last year ordered by number of downloads. If you’re a keen follower of fintech, it probably won’t surprise you to discover where six of these 10 apps originate.

Nequi

DOWNLOADS: 11.9MN

The race for 10th place was a tight one, with just 50,000 downloads separating Colombian digital bank Nequi and its closest competitor. Nequi demonstrates a common trend within the South American banking sector: incumbent banking institutions launching completely new, all-digital brands. This offering from Bancolombia was founded in 2016 but has shot to prominence in a relatively short time, accumulating over 11mn

PAGBANK

DOWNLOADS: 12.8MN

complete bank” offering free digital accounts, PagBank – from payment company PagSeguro – has established itself as one of Brazil’s most popular banking apps. In fact, nearly 13mn users downloaded PagBank in the last year – an impressive feat for such a competitive banking landscape. PagBank, which is one of six Brazilian apps in our top 10, offers all the usual features you’d expect from a bank including money transfers, credit and debit cards, mobile top-up, insurance and

CHIME

DOWNLOADS: 13.9MN

The lone US representative on our list, digital bank Chime was founded in 2013 by Chris Britt and Ryan King. Like many apps, it initially struggled to build an audience: it took Chime five years to attract its first million customers, but only another 12 months to reach four million. Today, it offers a number of features that appeal to users including a fee-free overdraft up to $200, seamless peer-to-peer transfers, and access to direct deposits up to two days earlier.

DOWNLOADS: 14.4MN

Another South American challenger created by an incumbent, Brazilian digital bank iti was born out of the banking conglomerate Itaú Unibanco, which was formed in 2008 from the merger of two of the country’s biggest banks. One of its standout features is the relatively low age requirement: teenagers as young as 14 can sign up for iti, helping engage them in financial literacy from an early age. The app also offers credit cards, savings goals, loans and fee-free transfers.

DOWNLOADS: 15.2MN

Inter describes itself as “much more than a digital bank”, which is an existential problem for this list – but we’ve decided to include it anyway! The popular super-app combines a variety of digital features with zero fees. It offers a virtual credit and debit card, personal loans and payroll credit, an investment platform, fee-free transfers, insurance and a free kids’ account that allows parents to engage their children in key life skills such as saving and budgeting.

TINKOFF 05

DOWNLOADS: 15.8MN

Russian digital bank Tinkoff was formed in 2006 and named for its founder, Oleg Tinkov. The app combines features that are familiar to banking – like savings accounts and transfers – with some that are not. You can pay utility bills, traffic fines and toll road fees; take money out of ATMs using a QR code; and scan receipts using your smartphone’s built-in camera. Thankfully, Tinkov’s vocal opposition to Vladimir Putin doesn’t appear to have dented his namesake’s popularity: the app was downloaded 15mn times in the past year.

BANK 04

C6

DOWNLOADS: 17.9MN

A familiar name, digital bank C6 uses sleek, pared-back branding to make an impression among young Brazilians. It must be working: the app was downloaded nearly 18mn times in the past 12 months. It offers credit and debit cards with a choice of personalisation; accounts and money transfers; investments and multi-currency accounts; plus insurance and even dental plans.

C6 Bank was founded in 2018 by Carlos Fonseca, Marcelo Kalim and Leandro Torres and today employs nearly 4,000 people.

PICPAY 03

DOWNLOADS: 20MN

PicPay is one of those fintechs that flies under the radar, with a modest reputation that belies the fact it was downloaded 20mn times in 12 months – the first app on our list to pass that milestone. Despite the name, PicPay is undoubtedly a fully digital banking app. With their free digital account, users can send and receive money, pay bills (including in instalments), earn cashback on purchases, top up their mobile phone or public transport card, and buy credits for digital services like Uber or pay-TV.

REVOLUT

DOWNLOADS: 21.1MN

The indisputable king of European fintechs – founded in 2015 by Nik Storonsky and based in London – Revolut’s position has been cemented in recent months by yet more features and a glossy television campaign.

Often dubbed a super-app, it’s worthy of its place on this list. More than 21mn customers have downloaded the app in the past year, discovering features such as instant payments, global transfers, virtual cards, crypto trading, and cashback on some of their favourite brands.

Revolut : Your Way In (Transfers)

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A BizClik Brand

NUBANK

DOWNLOADS: 50MN

By far the most downloaded banking app on this list, boasting more than twice the downloads as Revolut, is Nubank. It was founded in 2013 by founders David Vélez, Edward Wible and Cristina Junqueira –who was named FinTech Magazine’s Top Leader for 2022

In less than a decade, Nubank has established itself as a banking behemoth – the world’s seventh most downloaded finance app, mixing with the likes of PayPal and Alipay. Its user-friendly features include personal loans, credit cards and a free digital account.