FinTech Magazine - July 2022 by FinTech Magazine

July 2022 | fintechmagazine.com

EAST WEST BANK: A financial bridge between the East and West FINTECH BRANDS IN EUROPE

The Four Forces of Acceleration in the Insurance Industry

GROUPASSUR: Fostering innovation through technology

STANDARD CHARTERED VENTURES: Supporting startups with fintech innovation

NTT DATA introduces its latest Insurtech Global Outlook Report in collaboration with Mapfre

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The FinTech Team EDITOR-IN-CHIEF

JOANNA ENGLAND EDITOR

ALEX CLERE CHIEF CONTENT OFFICER

SCOTT BIRCH

PRODUCTION DIRECTORS

GEORGIA ALLEN DANIELA KIANICKOVÁ PRODUCTION MANAGERS

PHILLINE VICENTE JANE ARNETA

CREATIVE TEAM

OSCAR HATHAWAY SOPHIE-ANN PINNELL HECTOR PENROSE SAM HUBBARD MIMI GUNN JUSTIN SMITH REBEKAH BIRLESON JORDAN WOOD DANILO CARDOSO CALLUM HOOD CHIEF DESIGN OFFICER

MATT JOHNSON

MARKETING MANAGER

EVELYN HOWAT

PROJECT DIRECTORS

KIERAN WAITE

JAKE MEGEARY MICHAEL BANYARD JOE PALLISER

DIGITAL VIDEO PRODUCERS

MANAGING DIRECTOR

VIDEO PRODUCTION MANAGER

MARTA EUGENIO ERNEST DE NEVE THOMAS EASTERFORD DREW HARDMAN MEDIA SALES DIRECTOR

BEN MALTBY

LEWIS VAUGHAN

CHIEF OPERATIONS OFFICER

STACY NORMAN CEO

GLEN WHITE

FOREWORD

TANKING TECH AND INFLATION WOES The fintech industry is facing its first real storm as rising inflation hits leaders

“I’m looking forward to seeing what happens next, and which disruptors stand out from the crowd. It’s an exciting time to be involved in fintech”

The past couple of years have been turbulent for the technology sector, with supply chain issues causing delays. The rising costs for upgrades hit many companies hard. But up until May 2022, the fintech space appeared relatively untouched by the global crisis. In fact, the pandemic accelerated digital transformation and meant that cash reduced its circulation, while companies found innovative ways to make the transactional and banking space more frictionless than ever. Essentially, fintech skyrocketed in the eye of the crisis. So, the news that leading brands are now dropping their valuations – some by as much as 60% – while others have paused their hiring process (and even rescinded recent job offers) has come as a shock to the system. Recessions come and go, and though this period is the first truly turbulent time for the majority of fintech startups, its also a process that resets the business model. Only the most disruptive and resilient companies will weather the drama unscathed, giving rise to more robust entities in the future.

JOANNA ENGLAND FINTECH MAGAZINE IS PUBLISHED BY

joanna.england@bizclikmedia.com

fintechmagazine.com

CONTENTS

Our Regular Upfront Section: 12 Big Picture 14 The Brief 16 Timeline: The birth of the NFT 18 Trailblazer: Nick Molner 20 Five Minutes With: Tom Pope

Banking

The transformation of consumer finance through technology

NTT Data Insurance NTT DATA Insurance introduces Insurtech Global Outlook 2022

Financial Services

Is a cashless world closer than you think?

Pekin Insurance

Pekin insurance leading transformation in insurance industry

Standard Chartered Ventures SC Ventures aims to rewire DNA in banking

100

New fintech-led trends in the small business banking space

Digitalisation to enhance the self-employed experience

Payment Solutions

RedZed

FINTECH WEEK L O N D O N

20 22

JULY 11-15

TH E CO M I N G O F AG E O F TH E

FINTECH INDUSTRY f lagship in-person

Conference JULY 11 & 12

ETC. VENUES 133 HOUNDSDITCH 133 LIVERPOOL ST LONDON

EXPERT SPEAKERS

JULY 13

NETWORKING

EXCLUSIVE MEET AND GREET WITH TOP-TIER SPEAKERS AND MORE

6PM

UNDERGLOBE GLOBE THEATRE 21 NEW GLOBE WALK LONDON

INDUSTRY PARTY

VIDEO ON DEMAND

●

FOR MORE INFORMATION PLEASE VISIT WWW.FINTECHWEEK.LONDON

FINTECHAWARDSLONDON.COM

142

Top 10

114

TOP

Fintech Brands in Europe

Technology

Managing mergers in the developing fintech space

122

GroupAssur

Fostering innovation through technology

154

170

AXA

Gary Ho on Digital Transformation as CTO at AXA HK and Macau

TransUnion

Realising procurement savings and added value

184

Home Credit India

Improving financial inclusion

198

East West Bank A financial bridge between the East and West

Build a Digital Future and Lasting Customer Success Accelerate growth and create wholistic business value with pioneering technology-fuelled digital solutions tailored to the realities of your enterprise and the financial services industry. Inspire customer loyalty and success.

Tech ‘about evolution, not revolution’ - Coforge

It is about delivering business value for stakeholders, including shareholders, customers and employees.”

Gautam Samanta, Coforge EVP and Global Head of Banking and Financial Services, stresses that digital transformation is all about delivering value.

Samanta adds that Coforge’s approach is effective because its solutions also “absorb the realities of our customers’ enterprises” - the reality being that “the old and the new often coexist in business processes that can sometimes be decades old”.

Coforge is a global digital services and solutions provider, and helps its clients embrace emerging and new technologies to achieve real-world business impact. The company’s proprietary platforms power critical business processes across a select number of sectors, and it has a presence in 21 countries, with 25 delivery centres across nine nations. One of the sectors in which Coforge is a key player is banking and financial services (BFS), where it is helping its BFS clients on the digital transformation journey by making the road as straight and smooth as possible. “Digital transformation is an evolutionary process, not a revolutionary one,” says Samanta. “So we do not see it as disruptive.” He adds that having a clear vision of what digital transformation is - and isn’t - is what shapes the solutions that help Coforge’s clients achieve their goals. “For us, digital transformation is not just a marketing phrase to wrap around software services. It is not about the technology.

“One of the things that differentiates us is that we are pragmatic in our approach to helping clients,” Samanta adds. “Yes, we transform with the new, but not at the expense of the old, which often has value.” It helps, too, that Coforge has a deep understanding of what value looks like in BFS, because the company has chosen to focus its attention on this sector, as well as a small number of other verticals. “We focus on very select industries, and have a deep understanding of the underlying processes of those industries, which provide us with a distinct perspective,” says Samanta.

Learn more ›

BIG PICTURE

July 2022

Biometric ‘Wave-to-Pay’ Raises Privacy Concerns Brazil

Mastercard has taken a major leap in biometric verification by launching its new pilot programme, Wave-to-Pay, in five St Marche supermarkets in Brazil. The scheme has, however, raised concerns among privacy experts who say the technology could be detrimental to individuals' rights should the data be compromised or commandeered. In 2021, China’s Supreme People’s Court stated that businesses cannot use facial recognition to identify their customers without consent, while buildings must offer an alternative form of access control for those who would prefer not to use their faces for biometric identity verification. The decision was a response to the growing public backlash towards the widespread use of facial recognition biometric technologies in surveillanceheavy China.

fintechmagazine.com

THE BRIEF “EXPECT THE LIKES OF REVOLUT AND OTHERS TO SUCK UP ALL THE BEST TECHNOLOGY SOLUTIONS AND BECOME MASSIVE GLOBAL BUSINESSES” Michael Buckworth

BY THE NUMBERS WE ASKED YOU:

WHAT IS THE MOST LIKELY OUTCOME OF THE RECENT CRYPTO CRASH ON THE DIGITAL CURRENCY MARKETPLACE?

Founder Buckworths 

90%

Rush on crypto

CBDC introduction

“TRADITIONAL HIGH STREET BANKS OFTEN HAVE A VERY LOW APPETITE FOR APPROVING SMES” Rob Straathof CEO Liberis 

“THE RIGHTS OF CONSUMERS TO CONTINUE PAYING IN CASH SHOULD BE PROTECTED” Udo Mueller

CEO, Paysafecard Paysafe  READ MORE

July 2022

28%

Less crypto investment

49%

More regulations

SIX SME BANKING TRENDS THAT ARE DISRUPTING THE SPACE

75% OF CONSUMERS NOW USING MOBILE WALLETS, SAYS SURVEY

A look at six top banking trends that are transforming the

Digital currency and digital wallet payments are skyrocketing

financial services offered by banks in 2022

in popularity according to a new survey tracking the trend

WHY BAAS IS LEADING THE AGE OF DIGITAL FINANCE Banking-asa-Service is transforming the financial services marketplace by opening up new transactional options for businesses

2025

 REVOLUT

Despite a number of challenges in the present climate, Revolut is now the most valuable fintech in Europe, following Klarna’s recent fall from grace amid rising costs impacting the lending space.

 MONDO

The report, which surveyed 250 senior banking leaders globally to track where they are on their cloud and business transformation journeys, revealed that more than two thirds of the banks surveyed want at least 31% of their applications and data to be in the cloud in three years’ time. The data proves that the adoption of cloud-native technologies is set to triple the rate that is seen today, where only about a third of the institutions surveyed indicated having more than 30% of their applications and data on the cloud.

JUL22

 KLARNA

The Swedish BNPL fintech has fallen off the top spot following inflation and rising costs impacting its lending model. Klarna has reportedly lost 30% of its valuation and is shedding 10% of its workforce as a result.

 CHIME FINANCIAL

Chime Financial may have put its plans to go public on hold following poor results for other fintechs going public as a result of market uncertainty. The ongoing war with Ukraine and the rising cost of living have been instrumental in destabilising the market.

BAD TIMES

A series of studies by Publicis Sapient – in collaboration with Google Cloud – show that the adoption of cloud technologies will triple globally by 2025. Adoption accelerated over the pandemic period, but looks set to increase significantly as banks seek to automate processes, apply advanced analytics to data, and enhance their ability to embed partners like fintechs.

Berlin-based startup Mondu has secured US$43mn in Series A funding for its B2B buynow-pay-later (BNPL) solution. The investment, led by US-based venture capital fund Valar Ventures, will allow Mondu to continue scaling, invest in further product development and pursue international expansion.

GOOD TIMES

CLOUD ADOPTION AMONG BANKS TO TRIPLE GLOBALLY BY

fintechmagazine.com

TIMELINE THE BIRTH OF

THE NFT

NFTs (non-fungible tokens) are units of data stored on the blockchain and can be anything from a simple image to a soundtrack or video

2015 VALUE-ADDED NFTS

2014 NFT QUANTUM The very first NFT was named Quantum and was created by crypto fans Kevin McCoy and Anil Dash. Quantum was essentially a video clip made by McCoy’s wife, which was then registered on the Namecoin blockchain. It sold to Dash for US$4 during a live presentation and was originally dubbed a Monetised Graphic.

July 2022

By 2015, there was enough interest in this niche area of crypto to attract the attention of serious contenders. The very first official NFT project was called Etheria. It was launched in October of that year in London, at Ethereum’s very first developer conference.

2017

MONETISED GRAPHICS IS RENAMED The familiar ‘NFT’ name was first proposed in 2017 by the Ethereum GitHub. Moving to rename these digital assets followed the launch of several more NFT projects that year, including Curio Cards, CryptoPunks and the 2017 online game CryptoKitties.

2021 ETHERIA FINALLY SELLS

2020 GAINING MOMENTUM In 2020, the NFT market experienced rapid growth with its value tripling compared to 2019 figures. The US Patent and Trademark Office also received three trademark applications for NFTs – an indication that creators were taking the space seriously and wanted to protect their assets.

For the first five years, the majority of Etheria’s ‘purchasable, tradeable, hexagonal assets’ remained unsold. But in 2021, renewed interest in the space resulted in what experts have called a buying frenzy. According to reports, within 24 hours, all tiles were sold for a total of US$1.4mn, cementing the success of the NFT space.

2022 MARKET INSTABILITY SEES NFTS CRASH NFTs are now among the most speculative digital assets of the crypto scene. In May 2022, for example, reports of the NFT market collapsing saw daily sales drop by a massive 92%. Already this year, however, the market value for NFTs has surpassed the US$40bn milestone of 2021, suggesting it is simply experiencing a typical crypto bounce and will continue to mature and expand as regulatory practices and new technologies stabilise the space.

fintechmagazine.com

TRAILBLAZER

Australia’s You Fintech Billion A bold email to a global CEO and sheer determination has seen Afterpay CEO Nick Molner become Australia’s youngest billionaire

Nick Molner Co-CEO Afterpay

ungest naire

orn in 1990 in Sydney, Australia, Nick Molner hit billionaire status aged just 30 when his BNPL company, Afterpay, hit the big time when it sold to Square for US$29bn. Afterpay was founded in 2014 by Molner and his nextdoor neighbour, investor Anthony Eisen. But this momentous event was precluded by Molner’s natural, entrepreneurial flair for opportunities in business – a trait that was encouraged by his father, Ron Milner. When he was a young commerce undergraduate at the University of Sydney, Nick Molner began his journey in business by selling jewellery on eBay during his college years. He discovered he had a talent for shifting merchandise fast and also benefitted from his relatively early entry to the platform, just as it was at its peak in terms of popularity. In fact, Molner actually sold the most jewellery of any vendor on eBay in Australia, but despite his success, still hankered after a career in the financial world because he didn’t see his vendor success as a ‘proper career’. A long road to success But despite his keen business instincts, Nick Molner struggled to break into the tough investments job market. In

“ By combining with Square, we will further accelerate our growth in the US and globally, offer access to a new category of in-person merchants, and provide a broader platform of new and valuable capabilities and services to our merchants and consumers”

fact, in the end, it was a combination of his father’s belief in his ability – and his friend – and soon-to-be business partner – Anthony Eisen that helped him get his first break. According to reports, co-founder Mr Eisen, an accountant by training, was putting out the bins one night when he met with Ron Molner at the end of the driveway. Ron Molner suggested Eisen give career advice to his son because he was concerned about the long hours Nick was putting in very late at night as he sold his jewellery on eBay. fintechmagazine.com

TRAILBLAZER

Brunch In Bondi With Afterpay Co-Founder Nick Molnar

Eisen said he’d help – and so, good as his word, Nick Molner got an interview with investment banker Mark Carnegie from M. H. Carnegie & Co. But rather than offer him a job, Carnegie heard Molner’s predicament and unexpectedly encouraged him to see how far he could take his jewellery business. The move prompted him to seek out an online jeweller offshore, and in an unorthodox move, he found out the email of the CEO of one of the biggest jewellers in the US, and sent him an email. 20

July 2022

Taking a chance Molner, who now speaks regularly to young entrepreneurs on the lecture circuit, said the email went something like this: ''Hi Shmuel, Apologies for the cold email. For some context, my name is Nick Molnar, I am a 21-year-old entrepreneur, and I currently sell the most jewellery on eBay in Australia out of my bedroom. I am coming to Las Vegas next week for the jewellery conference and, if you are there, too, I would love to meet for a coffee. Kind regards, Nick'' The gamble paid off and the CEO agreed to meet with him. However,

0 to 1,000,000,000

IN 7YRS

Molner had to book a flight to the US first and rearrange his graduation plans, which was due to take place at the same time. The first big business launch As a result of that last-minute meeting, Molner experienced his first big break into large-scale business. He went on to launch the Australian version of the leading American online jeweller, Ice. com, under local brand Iceonline.com. au. The event was the catalyst that gave him the confidence and means to later launch Afterpay.

Just seven years later in August 2021, Afterpay sold to Block (formerly known as Square) for a record US$29bn. The deal was completed on January 31st this year. A family man Molner is also a keen sports fan. He was a semi-professional rugby player in Australia and is now an avid skier. He married his long-term girlfriend Gabrielle in 2016 and the couple have two children, the first of whom, a daughter, was born in 2018. The family currently lives in San Francisco. fintechmagazine.com

5 FIVE MINUTES WITH...

Tom Pope

Head of Payments and Platforms at Tink tells us all about his favourite reads, his most valued gadgets and how he’s enjoying post-lockdown life. Q. D ESCRIBE YOUR JOURNEY INTO FINTECH. HOW DID YOU GET HERE?

» I was working as a management

Q. WHAT WAS THE LAST BOOK YOU READ - AND HOW LONG AGO DID YOU READ IT?

consultant and came across payments a bit by accident. I was attracted – and still am attracted – by the combination of extreme complexity (you are always learning), the fact that many solutions are nowhere near perfect (so there are great opportunities to make significant improvements), and the sheer size of the market if you get it right.

» I normally have a few on the go at

Q. W HO WAS YOUR CHILDHOOD HERO AND WHY?

» My AirPods! I spend a large proportion

» I grew up by the sea so was pretty

captivated by Ellen MacArthur’s recordbreaking circumnavigation of the globe. Months spent alone, 24/7 racing in all sorts of weather, with little hope of survival if it goes wrong – that takes some grit. It inspired me to absolutely not do anything quite so dangerous myself.

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

» You’re only as good as the team around

you. When it comes to leadership, it’s really important to take on the opinions and ideas from those you work closely with. It fosters an environment of collaboration, which is essential when you’re doing things no-one has ever done before.

July 2022

once. However, the most recent, which I finished a couple of weeks ago, was Adam Zamoyski’s Napoleon biography – fantastically written and utterly gripping.

Q. N AME ONE PIECE OF TECHNOLOGY YOU COULDN’T LIVE WITHOUT AND TELL US WHY? of my day on the phone, so my AirPods allow me to turn ‘dead time’ – commuting, walking somewhere, hanging out the washing – into something productive.

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

» It may be a cliché, but I am a bit of a

disciple of Andy Grove, the ex-CEO of Intel. I think he truly understood how an organisation should function. I am also extremely fortunate to have worked with some very impressive leaders, and I actually grew up with one – my father. One of the most important lessons I learned from him is to be open, fair and human in order to foster trust. This lesson has never been more important than in today’s talent market:

people don’t have to work with you – you have to earn the right for them to do so.

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

» The open finance movement is creating

powerful opportunities for change. Great technology has come along before, but this is great, novel technology coupled with powerful regulation. We are on the side of both consumers and regulators, and that’s a happy place to be.

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

» Perhaps not proudly, but I have

exercised less, eaten and drank more, and generally quite enjoyed not being cooped up in lockdown!

Q. DESCRIBE YOURSELF IN THREE WORDS?

» Energetic, fast, driven.

fintechmagazine.com

Segmentation has never been this rewarding Stop ransomware in its tracks. Boost security performance with Akamai Guardicore Segmentation.

Learn more

Akamai prioritises the future demands of cyber customers Steve Winterfeld of Akamai discusses the company’s university-based founding and how it merged into a leading multibillion-dollar cybersecurity firm Akamai was founded following a competition at the Massachusetts Institute of Technology (MIT), entered by its co-Founder and CEO Frank Thomson Leighton—Dr Tom Leighton. Since that time, the organisation has expanded massively, and in the words of Steve Winterfeld, Advisory CISO at Akamai, the company “continues to solve hard problems.” The cybersecurity company plays a critical role for corporations as it focuses on the future, to determine whether threat motivation will change and how to best combat ransomware attacks, state-sponsored DDoS attacks, and ransomware that could turn into wiperware. “Those are real concerns, and we’re keeping an eye out for those. And so we have probably 15 security capabilities backed up by services, responding to customers’ needs and rapidly growing on the edge compute and cloud side.” “We started out with a web application, or as it is more commonly called now, web application and API protection, and expanded into protecting the infrastructure against DDoS to include the DNS infrastructure and recently added internal infrastructure protection and visibility through micro-segmentation,” explains Winterfeld.

Responding to the cybersecurity needs of the customer As an established cybersecurity organisation, Akamai can now focus on what customers need. Winterfeld explains that, in response to its clients’ feedback, the company has been acquiring the necessary assets and tools to fulfil those needs with the recent purchase of Guardicore. Guardicore’s leading microsegmentation products will be added to Akamai’s comprehensive portfolio of Zero Trust solutions to protect enterprises from damage caused by breaches like ransomware, while safeguarding the critical assets at the core of the network. “We bought Linode, which is a cloud provider. And so now we have an integrated platform to build and perform on as well as secure.” A prime example of Akamai’s ability to meet customer demands, particularly in high-risk environments, is its partnership with First Bank, which is “very concerned about its real-time visibility into its network. We’re partnering with them on a software-based microsegmentation, where they’re able to see those data flows and create segments.”

NTT DATA

July 2022

Global Trusted Innovator

NTT DATA Insurance introduces Insurtech Global Outlook 2022

AD FEATURE WRITTEN BY: İLKHAN ÖZSEVIM PRODUCED BY: MICHAEL BANYARD

fintechmagazine.com

NTT DATA

The IT Service and Consulting firm has just released a new edition of its annual report, focused on the Four Forces of Acceleration of the Insurance Industry

f Insurance is about a compensatory rebalancing of the scales in the event of a specific loss, data is the fulcrum that sustains it. The more accurate the data, the better insurance provisions there will be. In the Insurance world, this is axiomatic. NTT DATA has apprehended this fact, and provides analyses that broaden the horizons beyond traditional players - those assumed, thus far, to be the only players of any substance in such calculations. It may be said that traditionally, the potential data utilised by insurance companies has been quite reductionist in its scope, with methodologies defining rigid and restricted parameters, or ‘pools’ of interest, and generally focusing solely on the obvious forces of Insurance companies and now, Insurtechs. NTT DATA is challenging such assumptions by expanding these borders with a more holistic approach to data analysis, with an understanding that data pools are inadvertently (and vitally), connected to data streams, with the implication of abounding oceans somewhere in the informational distances. As NTT DATA launches its Insurtech Global Outlook 2022 Report, it focuses on ‘The Four Forces of Acceleration’, which expands the ambit of actuarial cause and effect, to including Insurtechs, Insurers and their Digital Garages, New Entrants and Tech 28

July 2022

Giants, and even Regulations, as part of Insurance Liquid Ecosystems. In its basic essence, NTT DATA’s main mission is to help its customers with their digital and technological transformations. “In other words, we support them in identifying and implementing the right technology as a pillar to transform their businesses,” says Carlos Ordóñez, Head of Strategy & Advisory at NTT DATA Insurance EMEAL (Europe, Middle East, Africa, and Latin America). NTT DATA is the 6th foremost IT Consulting Services provider in the world. Head of Insurtech, Richard Calvo says: “The sixth edition of our annual report,” (from hereon ‘the report’), “is the result of many years of learning and experience. We have evolved our originally, solely insurtechfocused report towards ‘The Four Forces of Acceleration’, because we have perceived that just by focusing on the investments in insurtechs, we could be too biased on the real and actual impact that other actors are also having on the Insurance industry.” The Insurtech Global Outlook 2022 Report’s Methodology The methodology of the report highlights its extent as well as its rigour. In the first phase, NTT DATA collected real-time data from over 4,341 startups, 1,076 Insurtechs, 203 insurers and investment arms, 46 Industry and Platform Giants and 25 Regtechs. This was sourced from both the public and the private sectors, additional to the information

$10,169,146,061

$6,364,150,864

$6,590,389,899

$2,229,743,156

$1,266,972,226

$2,130,986,592

$573,364,823

$279,609,748

$69,179,832

$35,910,614

$23,100,004

Insurtech Market Booming in 2021, but Are They Impacting the Industry? 2021 was certainly a prosperous year for the Insurtech ecosystem. Its global investment reached $10B, which represents a 38% increase from 2020. However, the number

of deals has decreased, which signals a consolidation of the market. Noteworthy is the sustained flourishing NTT DATA observed, both in terms of investment attraction by these startups, but also of the intensity of such investments by insurance companies and other players in the arrival of new models and new technologies into the industry. In fact, NTT DATA has identified a sort of ‘herd effect’ when it comes to investment in new business models, considerably multiplying the valuation of these companies and accelerating growth. Among these new product segments and applications for emerging technologies that seem to be leading the innovation in the sector, they have noticed the acceleration of digitisation, IoT (Internet of Things), freelancer models, Cybersecurity and the combination of Life and Wellness, which

$4,123,931,921

gathered through NTT DATA’s asset ‘inttrend’. Their team of specialists in the insurance sector then proceeded to study the four samples, and complement them with top insights based on market-analysis. The final stage consisted of a series of interviews with top Executives from leading insurance companies worldwide. Their perspectives and experiences allowed NTT DATA to build a more consistent and “in-thefield” vision of today’s market and a reliable foresight of the future, with real examples on how the Four Forces of Acceleration are indeed influencing the industry.

12000

450

393

400

10000 358 322

329

+4B IPO

$10B

350 316

8000

316 Deals 300

250

228

6000

200 169

4000

150

102 2000

100

5 2010

0 2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

Money Raised (MUSD) Number of Deals

Example of an image caption fintechmagazine.com

NTT DATA

“ WE SUPPORT OUR CLIENTS IN IDENTIFYING AND IMPLEMENTING THE RIGHT TECHNOLOGY AS A PILLAR TO TRANSFORM THEIR BUSINESSES” CARLOS ORDÓÑEZ

HEAD OF STRATEGY & ADVISORY, NTT DATA

appear to have grown more than the average rate within the insurance market. This new framework showed that the Full Stack Insurtech foundation has created space for specialised and complementary businesses that can widen the innovation space. This growth, moreover, is shown to be moving in two directions: an endogenous comparative growth between companies founded 10 years ago with those founded 5 years ago, and an exogenous comparative growth between Fintech and Insurtech companies. In regards to the latter, 2021 was marked by stock market correction movements in B2C neo-insurers, with a share-price plummeting of over 40%, while Fintech companies registered clear growth. This indicates that Insurtechs have grown too fast in recent years, but have kept a poor stock price performance after their IPOs (Initial Public Offerings), demonstrating little real impact and relatively low value creation or value perception in the market. Other companies that NTT DATA considers value chain disruptors, in comparison to neo-insurers, are those that complement the value generation of insurers under a B2B model, creating real innovation and ensuring long-term sustainability of their businesses. Innovation No Longer Comes Just From Silicon Valley: Europe Stands Out, Asia Remains Steady and LATAM Begins to Emerge Another very insightful fact is Europe’s dominance in the entire investment

July 2022

NTT DATA

Insurtechs in Europe concentration in 2021. Yet with fewer operations, the European continent has raised $1.2B in only three deals (such as Alan, Wefox and ManyPets - formerly Bought by Many), among which is the largest investment round in the year. This sets an indubitable turning point, in stark contrast to previous years’ leadership from North America. The growth of Venture Capital activity in Europe has grown more than three times, which has helped drive new models and attract investment from the insurance industry and Technology Giants in this region, hitherto neglected by the United States. The United Kingdom, Germany and France are the countries with the highest representation, although countries such as Israel, Spain, Switzerland, Denmark and Sweden are also gaining prominence. Magazine fintechmagazine.com Weblink in layers

CESVIMAP

ESVIMAP, the R&D Center for Road Safety of MAPFRE, is the engineering center and Mobility Lab within MAPFRE Open Innovation (MOI), its ecosystem for collaborative innovation. It is a technological center with a sound international reputation for its studies on the redesign, insurance, use, maintenance, repair and recycling of vehicles and other transport solutions using all types of vehicles from Personal Mobility Devices to trucks or autonomous vehicles. With a team of over 120 engineers and technicians, it helps the rest of MOI’s stakeholders build business cases where innovative solutions can be tested and later

introduced into the market under new policies and added-value services for customers. This involves testing IT technology to be applied to Usage Based Insurance (UBI), and AI applied to image evaluation and end-toend automatic processes, transforming the influence of Advanced Driver Assistance Systems’ performance and calibration on loss-ratio, into insurance ratings that impact policy pricing, studying auto cyber risks as a new and emerging threat and guiding MAPFRE in the evolution from car insurance to user-centric multimodal mobility insurance. Transforming batteries from wrecked electric vehicles into second-life Energy

José María Cancer, General Manager at CESVIMAP, explains their Value Proposition

July 2022

CESVIMAP

JOSÉ MARÍA CANCER TITLE: GENERAL MANAGER COMPANY: CESVIMAP

Storage Systems (to promote Circular Economy and to reduce carbon footprint) and measuring the accuracy and reactions of autonomous cars in real-life traffic environments are also part of CESVIMAP’s recent projects. Partners in several R&D projects of an international scope, CESVIMAP has also recently registered 2 new patents concerning safety and security around Personal Mobility Devices’ use and design. CESVIMAP's additional mission is to analyse these new mobility trends to reduce the risk they involve, contributing to the reduction of the negative effects of the automotive sector on society, offering innovative solutions to increase vehicle safety and reduce the human and financial consequences of crashes, enhance the efficiency in repairs and promote circular economy in workshops.

EXECUTIVE BIO

INDUSTRY: INSURANCE José María Cancer is the General Manager of CESVIMAP and Mob Lab Director within MAPFRE Open Innovation. He is also a Board Member in CESVIMAP, CESVI France and Audatex Spain. José María is a Professional Certified Engineer and holds a Master’s degree in Mechanical Engineering and Automotive Engineering. He has over 30 years of experience in the Automotive and Technology industries, having worked as Manager for leading companies such as Citröen, Hyundai and Lexus and has been a serial entrepreneur, receiving several awards. José María currently leads initiatives with Second Life applications with Li batteries from wrecked cars and with connected, autonomous, shared and electrified vehicle insurance policies. He has helped CESVIMAP obtain two registered patents, and received two public R&D grants for relevant research in the Auto industry.

Check out our 2022 report

From Insurtech to the Four Forces of Acceleration DOWNLOAD THE REPORTS

July 2022

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NTT DATA

NTT DATA’s vision: The End of the First Wave of Innovation in the Insurance Industry All the previous information NTT DATA gathered, allowed them to identify a resounding change in the Insurtech industry. While used to seeing a vertiginous and continuous creation of new Insurtechs since 2017, they have observed a continued and accelerated decline in the last two years, indicating an innovation exhaustion in the market. In addition to contextual aspects such as the outcomes of a pandemic situation which inevitably reduced interest in more emergent models, NTT DATA has identified two indicators that signal the end of the first wave of innovation. First, an increased competitiveness in models related to distribution, and second, still-incipient technologies that have not yet found enough use cases (e.g. blockchain), or the adoption and adaptation of the first impacts for the Industry to actually believe in these models. This, according to NTT DATA’s analyses, will begin to kickstart a second wave, characterised by the increased maturity of the aforementioned technologies and the collaboration of ecosystems that will bring competitiveness outside the natural area of the organisation, as well as open the path in investment towards these new scenarios.

RICHARD CALVO TITLE: HEAD OF INSURTECH COMPANY: NTT DATA INSURANCE EMEAL INDUSTRY: INSURANCE LOCATION: SPAIN

EXECUTIVE BIO

Richard is a graduate in PR & Communications from the University of Barcelona and with a master’s in management development and Business Administration and Management from ESADE Business School. He worked for 14 years in AXA Assistance, as Operations Manager, Key Account Manager, Business Analyst and Demand Manager and has experience in entrepreneurship and startups acceleration. Richard is currently the Head of Insurtech at NTT DATA Insurance EMEAL and Product Owner of the strategic initiatives Phygital and Smart Shipments with the mission of defining, developing, implementing and scaling the value proposition.

Insurers and their Digital Garages: Insurers Bet on Transformation Through Insurance-Related Startups According to NTT DATA, Insurers’ activity was also incredibly noteworthy. This presented a sustained increase of over 180% in startup investment, putting almost $18B into these companies in 2021. Although only $3B out of the total sum was directed to Insurtechs, they showed intense interest in startups

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that are linked to the Insurance Industry. Out of the $15B Non-Insurtech investment, almost 60% went to companies dedicated to Financial Services, Cybersecurity or Healthcare; three activities intrinsically linked to insurance. In this sense, there is not only a financial bet when investing, but insurers are seeking impact both on their organisations and on their customers. This aforementioned ‘herd effect’ and the drop in interest rates stimulated investment, making the bet less risky. In addition to investing in startups close to the sector – with the aim of improving their own value proposition – we see how insurance companies are also entering other industries in which they can grow in customer base and incorporate new margins, now easier – since these activities are all occurring at a time when other sectors are entering the Insurance industry. Digital, Hybrid and Embedded Distribution: A Mirror to Today’s Insurance Historically, the concentration of investments and the appearance of

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2021

43% Non Insurance Related

new models, entrants and technologies have always taken part in the Insurance distribution. 2021 has not been an exception and once again this part of the value chain has concentrated everyone’s interest. As opposed to the almost complete interest of insurers in Health in 2020, their investment this year went beyond the

“ THIS IS THE SIXTH EDITION OF OUR ANNUAL REPORT, AND THEREFORE IS THE RESULT OF MANY YEARS OF LEARNING AND EXPERIENCE” RICHARD CALVO

HEAD OF INSURTECH NTT DATA fintechmagazine.com

NTT DATA

Global Trusted Innovator

Carlos Ordóñez and Richard Calvo introduce NTT DATA's Insurtech Global Outlook 2022 Report

“ OUR REPORT FOCUSES ON WHAT WE CALL THE ‘FOUR FORCES OF ACCELERATION’, WHICH CONSISTS OF: INSURTECHS, INSURERS AND THEIR DIGITAL GARAGES, NEW ENTRANTS AND TECH GIANTS, AND REGULATIONS” CARLOS ORDÓÑEZ

HEAD OF STRATEGY & ADVISORY, NTT DATA

July 2022

sanitary crisis. Insurers have proven to invest in Insurtechs within the Commercial line of business, and in business models related to distribution, especially those that leverage Embedded Insurance. They want to package their products in other industries where they are seeking to position themselves and have access to a much wider customer base. If there is one thing that NTT DATA wants to highlight, it is that regardless of the great threat of technologies, entrants and models - there is no current replacement model, but rather a model of coexistence and competition. In the distribution market, despite being something to consider at a regional level (and even on the level of country and city), NTT DATA recognises that the role of the agent is still key, and predominant, as is the need to simplify and interact with customers in digital channels.

NTT DATA

NTT DATA’s Vision: Insurers Do Believe in the Power of Insurtechs as Sources of Innovation and Expansion Either by investing or partnering with them, insurers appear to understand the impact of Insurtechs in the industry as enablers of disruption, and they have come to this conclusion without the lead of any other player, such as Tech Giants. Although they show a little bit of resistance when it comes to Insurance-related companies, preferring consolidated businesses, insurers are increasingly putting money into new business models and growingly opting for early-stage startups. However, they do so only to improve their own value chains, therefore investing overwhelmingly in companies linked to their markets.

TITLE: HEAD OF STRATEGY & ADVISORY COMPANY: NTT DATA INSURANCE EMEAL INDUSTRY: INSURANCE LOCATION: SPAIN

EXECUTIVE BIO

New Entrants and Tech Giants: Industry vs. Platform Giants According to NTT DATA, analysing the impact of New Entrants is not only limited to Technology Giants. They have segmented their analysis into two groups in order to achieve a more accurate and real picture of these players. First, they have what they refer to as Industry Giants, which are big Corporations that are leading a specific industry and where they could find names such as Tesla, Toyota and Daimler (in Auto) or GSK and Roche (in Pharma). On the other hand, they have the Platform Giants, which lead digital platforms for activities such as distribution, where they could highlight some such as Amazon or Tencent, sales, with examples such as Salesforce, or pure technological platforms for creating new products and services, such as the cases of Alphabet and Facebook. In 2021 they saw that Industry Giants invested around $27B in startups and Insurtechs, while Platform Giants, also

CARLOS ORDÓÑEZ

Carlos is a graduate in Telecommunications Engineering with a Master's in Business Administration and a Management Development Diploma from IESE Business School – University of Navarra. He's an executive with more than 20 years of experience in insurance and the digital world, having spent 13 years working at AXA Group in technology and processes management in Spain and Latin America. In 2010, he created and ran a global digital innovation center for AXA Group. After this stage, he led the global digital transformation of MAPFRE Group. Currently, Carlos is the Head of Strategy & Advisory and Innovation & Product at NTT DATA Insurance EMEAL, leading the client advisory practice to enhance decision-making, drive process improvements and develop innovative technologydriven solutions tailored to business needs.

NTT DATA

denominated as Tech Giants, funded almost $460B. This latter’s overall investment in Insurtechs registers around $3B between 2020 and 2021, positioning themselves as the third most important group of investors in Insurtechs, increasingly closing the gap with insurance companies.

services, Analytics, SaaS or AI computing platforms. In this regard, Tech Giants are seeking monetisation of their own technologies by investing in or partnering with startups. Furthermore, they are complementing their technologies, products and services ecosystems and enhancing their innovation power by absorbing more startups into their Ecosystems.

Tech Giant’s Logics: Distribution and SMEs as Top Priorities for Investing, but Also Partnering with Insurtechs The impact of Tech Giants in Insurancerelated startups is low when compared to Non Insurance-related startups. However, it is a comparatively large portion of the total investments received by Insurance-related startups. By these latter, NTT DATA includes businesses linked to the Automotive, Healthcare, Financial Services, Home and Cybersecurity markets, given that 18% of Tech Giant’s total investment is allocated in these sectors. Tech Giants also proved to have a potential role as providers of Insurtech's needs in terms of Big Data analytics, Cloud

The Case of Tesla Tesla’s case is significantly highlighted for NTT DATA, as their approach to the Insurance industry strongly resembles that of a traditional insurance company. Tesla has launched an Insurance policy in Europe, along with Insurtech Qover as enabler, and Helvetia as subscriber-insurer, in addition to Van Ameyde as claims and mechanic’s shop provider. According to NTT DATA’s vision and interpretation of their data analyses, Tech Giants are closing the gap with Insurers for the leadership of the industry. However, they stress the fact that Tech Giants do not 18% Insurance Related industry Tech Giants Investments

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82% Non-Insurance Related industry Tech Giants Investments

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want to compete or substitute insurance companies in the Insurance ecosystems, but do want to participate in the ecosystem, in parts of the Insurance value chain where they can get the margins expected and where they can play a relevant role, providing additional value for their own clients. Regulations as the Motor for Innovation in the Insurance Industry The insurance industry is one of the most regulated in the world. Although it can be perceived as an obstacle to progress on many occasions, regulation is a key factor. When Technology, Insurance and Regulation come together, new possibilities and benefits are born for all actors involved, especially at a time of important and accelerated change. Regulation is also trying to adapt to these new times and, above all, to the speed and magnitude at which these changes are reaching different industries. Regulatory Sandboxes, Regtech companies and the like, are here to stay. With regards to the former, more than 60 Sandboxes have

2019

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Planning

been created in the past six years worldwide, which not only represent a possibility for adapting to technological innovations with the corresponding regulatory compliance, but also shows a consolidation of these test spaces in the Insurance Industry. Likewise, Regulatory Sandboxes ease the adaptation of businesses to the constant regulatory framework modifications, complying with new demands and competitiveness. DORA, IDD, IFSR or GDPR are just some of the ever-changing and constantly growing directives and regulations that insurers must take special care of. In a journey that gets closer and closer to the era of Open Insurance, compliance is a must. According to NTT DATA, regulations should no longer be understood as a source of control, as it has traditionally been perceived, but on the contrary, regulatory legislation has become a facilitator and an impulse for huge innovations in the industry.

fintechmagazine.com

One area of financial services that rarely makes the headlines is the personal finance sector WRITTEN BY: JOANNA ENGLAND

July 2022

BANKING

THE TRANSFORMATION OF CONSUMER FINANCE THROUGH TECHNOLOGY

fintechmagazine.com

t’s hardly surprising that, over the past three years, not much has been said about personal finance services in the media. The world has been entirely distracted by other matters – especially those involving big tech, big pharma and big finance. Digital transformation has enjoyed massive discussions in the context of banking and financial services. But the personal finance sector has been undergoing a transformation of its own. Technology has created a new wave of customers: millennials and even younger customers are embracing a new era of financing, controlled via mobile technology and offering so much more in terms of products and services than ever before. A time of change for personal finances Anthony DiMarsico is the CEO of Banxe, a fully digital, Belgian banking fintech that enables users to monitor the impact of their purchases on the planet. He points out that many more young people now have an interest in investing – a space that was once reserved for the older and upper echelons of the banking industry. Part of this shift is down to the increased popularity of cryptocurrency. 44

July 2022

BANKING

“ CRYPTO WILL BECOME SO BIG THAT IT WILL BE INEVITABLE AND WILL BECOME PART OF OUR DAILY LIFE” ANTHONY DIMARSICO CEO OF BANXE

He says: “Many people, particularly younger people, have become more interested in investing, especially investing in the world of digital currencies. Investments – and DIY investments, in particular – have become more prevalent since the first lockdown, possibly because it allowed people more time to research and pursue what were once fleeting interests.” But the current economic climate has also had an impact on customer attitudes towards their finances. “Inflation and cost of living have continued to increase, reaching record levels, leading once more to people seeking additional revenue streams through digital currencies. Additionally, there is general distrust towards the traditional banking system, mainly due to the outdated banking environment and the inability to provide fast and reliable payment options,” says DiMarsico. New trends in the personal finance space Makala Green, founder and director of Green Wealth Planning, says the demand to integrate services that enable consumers to “unlock” their financial potential and use both cash and crypto has driven huge disruption in the financial services marketplace. “We are seeing a rise in digital investing, such as cryptocurrency, with a huge proportion of investors being Gen Z, which contradicts the traditional age demographic of investing,” she says. fintechmagazine.com

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BANKING

“There has been a surge of businesses opting for contactless-only payments, meaning we are now experiencing the biggest reduction in cash. However, this has also caused the need for further cyber security; many companies need to provide end-to-end encryptions to keep consumers' data safe.”

“ THE MERGING OF CASH AND CRYPTO IS A TREND THAT WILL TRANSITION TO BECOMING THE FUTURE OF PAYMENT” ANTHONY DIMARSICO CEO OF BANXE

She also points out that digital transformation has helped the marketplace develop business models offering better value to consumers, while making pleasing profits. New trends such as virtual meetings via Zoom, Teams and Google Meets continue to hold their position as many people prefer the option of flexible working. There is a growing confidence in the use of technology, too. “People are more confident in using apps to arrange and manage their finances, and are less reliant on high street banks to meet their financial needs, resulting in a given rise to many budgeting and money management apps. We are also likely to see plenty more newcomers in future due to consumer demand,” says Green. DiMarsico agrees with Green and points to the 17,000 cryptocurrency ATMs in operation in America today. “It is clear the appetite for using crypto in the same way as cash is there, be it to pay a bill, buy a meal or use public transport. The merging of cash and crypto is a trend that will transition to becoming the future of payments,” he says. “Using a single access platform that bridges the gap between old and new payments brings an assortment of possibilities and allows users to learn how to buy and trade in crypto.” Political turmoil has caused further disruption “One of the most significant changes that has occurred in the personal finance space since the pandemic has been the accelerated digitisation of risk and compliance functions,” says Stuart Esslemont, global head of legal and compliance at ZEDRA He comments on the fact that the industry is facing a very volatile and rapidly evolving fintechmagazine.com

BANKING

environment (regulatory, political, social and criminal). This is forcing companies to be much more agile and capable of dealing with threats, uncertainties, data requests and data analysis, often with challenging deadlines. Esslemont goes on to say that the recent sanctions introduced concerning Russia are changing the landscape. “Regulators and other overseeing bodies have expected businesses to be able to extract and provide data to them within very challenging timeframes. Situations such as these are time-critical; the potential consequences of inaction can be significant and further highlights that investment must be made into appropriate technologies,” he says. In terms of a solution, Esslemont suggests businesses strive to be more data-driven and seek to avoid having to knit it together from

multiple sources. “Deploying the correct digital tools, linked to the core systems, will reduce the need for manual interventions and decrease the risk of manual error.” Digital Trust in the personal finance industry Like all other areas of finserve, the personal finance sector has been thrown into digitisation because of the pandemic. Resistance has impacted full adoption, but, as Esslemont points out, “with new technologies and a shift away from the human touch, there is an element of trust and understanding of the tech that needs to occur before it is fully adopted”. The cost of implementation, the lack of specialised talent, a high demand for the new technologies, as well as partnering with the right provider in the digital ecosystem to implement the technology, is, he says, fundamental to success. “Firms regulated across multiple jurisdictions may face difficulties when mapping code of conduct handbooks, given possible diverging regulatory requirements.” The future of personal finance Given the massive shifts taking place, predicting how the personal finance industry

“ THE FUTURE OF PERSONAL FINANCE AND FINTECH IS OPTIMISTIC; IT WILL PROVIDE MORE FINANCIAL EDUCATION AND LITERACY” MAKALA GREEN

DIRECTOR OF GREEN WEALTH MANAGEMENT

“ INVESTMENT MUST BE MADE INTO APPROPRIATE TECHNOLOGIES” STUART ESSLEMONT

GLOBAL HEAD OF LEGAL AND COMPLIANCE AT ZEDRA

will look in a decade seems an impossible task. However, there are certain changes that can be expected, says Green, who looks to customer centricity as the defining element. “Customers in the personal finance space demand more control of their financial future. Therefore, the future of personal finance and fintech is optimistic; it will provide more financial education and literacy, and be open to a much wider audience. Consumers can expect more simplicity and efficient tools to help people take control of their finances. I believe this will ultimately force large financial corporations to embrace the change, or they’ll be left behind.”

DiMarsico also believes the growth of the digital currency market will drive significant changes, both for consumers and businesses. He says the most likely scenario involves mainstream adoption globally. “Crypto will become so big that it will be inevitable and will become part of our daily life. Currently, it hasn't reached mass adoption; however, platforms like Banxe are here to change that.” He adds: “Crypto will not replace traditional banking, but the synergy of crypto and fiat will become common in well-developed countries.” fintechmagazine.com

PEKIN INSURANCE

PEKIN INSURAN TRANSFO INSURANCE I

WRITTEN BY: JOANNA ENGLAND

July 2022

PRODUCED BY: JAKE MEGEARY

NCE LEADING ORMATION IN THE INDUSTRY fintechmagazine.com

PEKIN INSURANCE

Amy Bingham, VP and CIO of Pekin Insurance, tells us about digital transformation and app development in the world of insurance

ne of the longest-established insurance companies in the US, Pekin Insurance was founded in 1921 and has recently celebrated its centennial anniversary. Originally launched as a solution to pre-war automobile insurance, the company has grown and expanded its offerings into the P&C market. More recently, it has been tasked with the challenge of digitally transforming its business processes, as well as introducing lean and agile principles to its IT operations. With a robust culture of progression and innovation, Pekin Insurance has made extraordinary progress in this journey, driving forward new IT initiatives while also launching cutting-edge products and services. Bingham joined the company in late 2021, taking on the role of VP and CIO. Her responsibilities include managing the dayto-day operations of the IT department at Pekin Insurance. She partners closely with the business to deliver on the key outcomes and priorities, in alignment with Pekin Insurance’s strategic goals and objectives. With an impressive career prior to joining Pekin Insurance, Amy spent 21 years with the number one P&C insurer in the United States: “With all this experience in IT throughout my career journey, I've been very intentional in pursuing opportunities that really broaden my experiences, exposing me to new facets of IT and the organisation

July 2022

Example of an image caption fintechmagazine.com

PEKIN INSURANCE

Pekin:Title Leading digital change of the video in the insurance industry

as a whole. As a result, I developed a real breadth of experience across IT.” She led delivery efforts across product lines and has extensive experience in test management. She also led in the IT risk and compliance area, partnering closely with information security. Another area of expertise is leading in the infrastructure space and managing two very large data centres in the United States. Later on, Bingham led technology initiatives in sales and marketing – another aspect that has provided her with specialist knowledge of the customer service environment. She says: “When I think about my background, I've been very intentional to really take my career down the path of exposing me to a wide breadth of experience across IT. And I think that's positioned me very well as I've come to Pekin Insurance to lead in the CIO role. I feel that the IT employees here really appreciate the broad 54

July 2022

“ I really want to increase our focus on digital capabilities, improving customer self-service as well as improving overall user experience and ease of doing business” AMY BINGHAM

VICE PRESIDENT AND CHIEF INFORMATION OFFICER (CIO), PEKIN INSURANCE

spectrum of experience that I bring, and they see me really being able to relate to their roles and their work.”

PEKIN INSURANCE

1921

Year founded

800+ Number of employees

PEKIN INSURANCE LEADERS Michael Walsh, Divisional IT Director, Pekin Insurance on Culture & Employee Engagement:“Pekin Insurance IT has been very fortunate to have a team that has always been able to have an open mind to new ideas and is willing to reinvent themselves in order to provide the very best services to our business and insureds. “Part of the magic of Pekin Insurance IT is the teams’ ability to weather new challenges and give consistent feedback on how to improve team engagement. The ability to stay engaged and keep communication channels open, from employee to leadership level, allows for issues to be tabled and resolved honestly and collaboratively.”

DID YOU KNOW...

Transforming a leading legacy company into the digital insurance space With its dynamic and forward-thinking team, Pekin Insurance has experienced a radical digital transformation journey over the past few years. Its newest offerings include a life insurance product that can be issued automatically with zero human touch – an impressive feat when life insurance is one of the most difficult products to translate into a digital solution. “The life company just implemented the first instant issue application that uses rules-based underwriting and e-signature capabilities for a zero-touch experience. And that's really exciting on our journey from more of a legacy-based system to a more digital environment,” says Bingham. Another priority initiative Pekin Insurance is embarking on is the migration of the Guidewire platform into Guidewire's cloud SaaS solution. Guidewire is a leading partner of Pekin Insurance and has been instrumental in the company’s transformation. “After our initial investment in the implementation of Guidewire, we were finding it difficult to really stay on top of those product releases due to staffing constraints and the need to focus on delivery of other priority business initiatives. So as a result, we were missing some of the

opportunities of enhanced functionality that were being offered in the more recent Guidewire product releases.” Guidewire and ValueMomentum both became key integration partners on a plan that's going to enable a full migration to the Guidewire cloud platform. “We're starting on this journey now with plans to complete the migration in Q1 of 2023. And with this migration to a full Guidewire SaaS solution, we're going to realise several opportunities. I look forward to collaborating with our business partners to investigate this enhanced functionality, which includes the ability to seamlessly make changes to underwriting and validation rules without time-consuming deployments. It will enable configuration approaches that fintechmagazine.com

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ValueMomentum: Positioning P&C clients for the digital age Jim Carlucci, EVP, Insurance Business Unit, discusses ValueMomentum’s approach as IT service providers and the partnership with Pekin Insurance Founded in 2000, ValueMomentum serves 10 of the top 25 P&C insurance groups and over 75 P&C (property and casuality) insurers in the US, placing them in the top 10 IT service providers in this segment. Since its inception, the company has grown organically to nearly 5,000 associates in 2022. “We support our insurance customers in their ongoing journeys to transform their technology from product-centricity to customer-centricity, achieving segmentation strategies, and in forming or participating in ecosystems that protect their target segments from operational risk in addition to financial risk. While supporting their growth initiatives, we help build their enterprise digital platforms with modern core, personalised experiences, modern data platforms, intelligent automation and infusing speed and agility in their IT,” says Jim Carlucci, Executive Vice President of the insurance business unit. “We relentlessly focus on customer needs and success above all else, endeavouring to add value to every initiative with relevant skills, experience and advice, which we leverage from our experiences of hundreds of engagements with insurers.

Focusing exclusively on the needs of insurers, we’ve achieved higher reuse and utilisation of our knowledge, skills, and assets,” he adds. Major partnership with Pekin Insurance ValueMomentum’s relationship with Pekin started in 2015, at the start of Pekin’s comprehensive transformation journey. “We’ve worked with them on numerous initiatives involving digital, data, and core modernisation. As one of our critical customers, we’re very proud to have them, and serve as a strategic IT partner, not just an execution partner.” As Pekin expands into new geographies, ValueMomentum will continue to facilitate Pekin’s upgrading of core platforms and systems to the cloud. “We’re fortunate to execute against a cohesive strategy, positioning them for the digital age, achieving product specialisation, speed, and agility, and the support of their customers alongside ongoing growth,” says Carlucci.

PEKIN INSURANCE

will constantly improve the user experience and ease of doing business for our agents, our employees, and our policyholders.” Utilising the Guidewire ecosystem Pekin Insurance will use Guidewire's ecosystem and insurtech integration partners to advance its claims technologies and create a more streamlined experience. The company also has plans to leverage Guidewire's claims analytics, which will allow the optimisation to and improve its process automation functionality with things like subrogation identification, injury severity escalation, total loss determination, and payment approvals. 58

July 2022

Bingham is enthusiastic about the move, which she predicts will be a key element of the company’s digital journey. “These are all new opportunities that we're going to have the ability to explore as we make this migration into Guidewire's cloud,” she says. A culture of opportunity within IT While many legacy companies are struggling to embrace the new digital processes, Pekin Insurance has been an enthusiastic adopter of new innovations. The key is in the culture and core values, which are centred on nurturing talent and providing opportunities. This is one of the aspects that attracted Bingham to Pekin Insurance in the first

PEKIN INSURANCE

“ Specifically, we're partnering with ValueMomentum on geographic expansion”

AMY BINGHAM TITLE: V ICE PRESIDENT AND CHIEF INFORMATION OFFICER (CIO) INDUSTRY: INSURANCE LOCATION: ILLINOIS, USA Amy Bingham is Vice President and Chief Information Officer (CIO) of Pekin Insurance. With over 20 years of Information Technology (IT) experience in the insurance industry, she has led several digital transformation and modernisation initiatives and has IT leadership experience across application development, infrastructure, and IT risk and compliance. She is an expert in Agile and project and product management disciplines and has extensive experience leading the development and implementation of internal, customer, and agent-facing software applications. Amy is also passionate about coaching, mentoring, building relationships, and developing Information Technology professionals.

AMY BINGHAM

place, as she explains: “One of my passions – and likely top-of-mind for every CIO in today's industry and climate – is really that of employee engagement and overall company culture. “Pekin Insurance is not exempt from the challenges most CIOs and organisations are facing, as it relates to attracting and retaining top IT talent. But I really see a great strength of Pekin Insurance IT is that our workforce has always been willing to give feedback and participate in the ideation process to improve our team engagement and our culture. “With that feedback, it then becomes leadership's responsibility to build out the tactical and strategic initiatives that are going to engage our workforce, attract and retain the talent, and continuously develop and upskill the workforce to meet the challenges of the future. This is a key focus for me as I step into the role of CIO for this year and beyond.” One of the first steps in this strategy is to create employee engagement focus groups. Bingham is a big believer in employees being a part of the solution as it relates to improving the culture and employee

EXECUTIVE BIO

VICE PRESIDENT AND CHIEF INFORMATION OFFICER (CIO), PEKIN INSURANCE

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Fisk explains: “Nowadays, we can get nearly anything we want at the touch of a button except, perhaps, most insurance products. Legacy applications and age-old practices have made it challenging for insurers to make it simple and quick for consumers to purchase insurance cover or to pay a claim. This often prohibits them from delivering rich and sustainable customer experiences, hampering their ability to attract and retain new business.” There’s no better time for insurers to accelerate change. Smart Communications’ conversation platform, The Conversation Cloud, empowers insurance carriers to create consistent and engaging experiences with their customers. It’s trusted by more than 250 insurance companies to enable smarter conversations and realise digital transformation at scale. The Conversation Cloud empowers insurers to transform their core operational functions across policy, billing and claims. It enables them to connect with core systems like Guidewire’s InsuranceSuite, increasing efficiency and improving user experience. And it utilises e-signature platforms like DocuSign and OneSpan to create a seamless, end-to-end connected experience – even in the parts of the claims journey that insurers thought were too difficult to improve.

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PEKIN INSURANCE ON PARTNERSHIP WITH SMART COMMUNICATIONS

DID YOU KNOW...

Randy Dray, Assistant Vice President – IT: “The Smart Communications solution has allowed us to scale our business by enabling the creation of electronic policy packets for e-delivery from our rules-based, instant-issue engine. “The Smart Communications communication platform has provided us with the ability to offer our customers options on document delivery. Customers can opt to have the documents electronically delivered or printed. Additionally, we store all documents in a repository for fast, secure, and reliable retrieval for our Customer Service Staff."

Monica Kemper, Underwriting Support Services, Pekin Life Insurance Company: "Smart Communications has allowed us to modernise our policy creation service on Term, Transitional, and Final Expense Products by automatically consolidating all needed corresponding material into one single policy packet and eliminating our old manual processes.”

July 2022

engagement. The focus groups will enable Pekin Insurance employees to generate and sponsor ideas to improve the company culture and employee engagement. The aim for that improved level of input to lead to even more innovation. “We're going to continue to increase our focus on innovation, which we all know is key to attracting and retaining top talent. We're looking at things like hosting innovation events, hack days, and making innovation part of the DNA here at Pekin Insurance. I also want to increase our focus on development for our IT employees. We know that is critical to employees remaining satisfied at work and staying relevant in the industry.”

PEKIN INSURANCE

Taking care of talent One area of focus will be enhanced career-pathing through a talent pipeline so that employees see themselves having opportunities to grow in the organisation. Pekin Insurance is also creating an IT operating model that's product-centric, with an aim to increase IT and business engagement as well as partnership, while at the same time promoting flexibility and efficiency. Making the most of skills and providing new opportunities for talented staff are, she says, of paramount importance. “We often hear from employees that they're really stretched across multiple priorities and they want a say in decision

making, as it relates to their work. This model is going to foster significant improvements related to those employee concerns. This year and in the years to come, we're going to be very intentionally focused on improving employee engagement and developing a value proposition. I want Pekin Insurance IT employees to truly see our company as the employer of choice.” Building a robust IT culture Ensuring a business has a strong talent pool is not the only challenge facing insurance companies that are in the midst of a digital transition. Creating a more robust, productfocused approach to its IT culture is also

fintechmagazine.com

a critical element. Pekin Insurance is a mid-sized company – but it has invested and pursued key product management principles such as user experience, design thinking, and a continued focus on agile practices and maturing those practices. “My vision is simply to take this to the next level, to create an organisational structure that really supports product management, introduces and fosters dedicated teams, and brings more empowerment and decision-making to those teams. This is all going to be done in concert with the business to ensure the creation of better partnerships and that we're solving the right business and customer problems with clear business outcomes in mind.” Digital strategy and expansion Making core changes within any company is a challenging process. But Pekin Insurance 64

July 2022

is also driving an expansion strategy alongside a digital transformation. This means it is entering new marketplaces and creating new products and services while streamlining its internal operations. Bingham is enthused with the process and is clearly relishing the challenge. “It really is an exciting time at Pekin Insurance, because we are embarking on a multi-state geographic expansion, initially focusing on our commercial lines of business. Our first state expansion will go live later this year. We're implementing a repeatable process here in IT to continue to roll out additional states annually until we reach our expansion goals. “The Guidewire platform has well positioned us to quickly make the technology changes that are needed to enable this expansion. Additionally, ValueMomentum is our key integration

PEKIN INSURANCE

partner in this geographic expansion. We've partnered with ValueMomentum to stand up a persistent team, primarily made up of offshore resources to support the expansion in a very cost-effective and flexible way.” With this persistent team model, Pekin Insurance is funding the team and not a specific scope of work or timeline. This will allow Pekin Insurance to scale at its own pace alongside the rollout. It's essentially a flexible model that is enabling the company to quickly respond to any risks it encounters as it grows – which means the speed of expansion can fluctuate according to the climate.

“ We're starting on this journey now with plans to complete the migration in Q1 of 2023. And with this migration to a full Guidewire SaaS solution, we're going to realise several opportunities” AMY BINGHAM

VICE PRESIDENT AND CHIEF INFORMATION OFFICER (CIO), PEKIN INSURANCE

“If we decide to accelerate our expansion, we're going to have the ability to easily ramp up this team to increase the pace. This geographic expansion is truly a catalyst in meeting our company's strategic growth goals. And I couldn't be more excited to be a part of this exciting journey here at Pekin Insurance,” Bingham says. Successful technology partnerships A large part of Pekin Insurance’s transitional success has been due to the strategic partnerships the company has formed. Bingham is swift to point out the benefits that have been reaped by collaborating with technology providers deemed the perfect fit for Pekin Insurance’s growth strategy, saying: “ValueMomentum really has been our key integration partner as we've gone on this journey with Guidewire. “We’re heavily leveraging ValueMomentum while continuing to mature our digital transformation journey and our integrations with fintechmagazine.com

PEKIN INSURANCE

“ This geographic expansion is truly a catalyst in meeting our company's strategic growth goals” AMY BINGHAM

VICE PRESIDENT AND CHIEF INFORMATION OFFICER (CIO), PEKIN INSURANCE

July 2022

Guidewire. We've partnered with them closely to develop models that are very flexible with what we need in our continued maturation journey. They've been very good partners in strategising and aligning us with the capacity and support that we need to continue to support this journey. Pekin Insurance is also implementing Workday financials for its new accounting system. They are migrating from a very manual spreadsheet-based accounting platform to Workday financials, which is a much more robust, integrated solution. ValueMomentum has played a key role in enabling this key initiative. Outlook for the future With so many irons in the fire, Pekin Insurance is set to have a very busy few months ahead

PEKIN INSURANCE

as it completes its digital transition to Guidewire’s cloud platform and launches numerous new products and services. Data is foundational to the insurance industry. The more data Pekin Insurance can leverage to inform business decisions, the more it can capitalise on data-driven advancements, including machine learning and artificial intelligence. This will streamline processes and provide critical data insights to inform key business decisions. The other trend and key area in insurance focuses on customer experience and ease of doing business. Pekin Insurance is making this an imperative as it moves forward and is placing customer centricity at the forefront of success for its organisation. Bingham says: “This year's really all about laying the foundation, putting the proper

organisational constructs in place, improving our development and our delivery practices here in IT. Additionally, we need to deliver our key strategic priorities, including our state expansion and migration to Guidewire SaaS. She adds: “As I look to the next year, I really want to increase our focus on digital capabilities to improve customer self-service, as well as the overall user experience and ease of doing business. Like every organisation, we must increase our focus on data and data strategy to ensure we have the right architecture in place, that we're leveraging data insights and analytics capabilities to improve our processes and inform key business decisions.”

fintechmagazine.com

Is a cashless wo closer th The diminishing role of cold, hard currency is transforming the way the world does business. We take a look at the pros and cons of a cashless economy WRITTEN BY: JOANNA ENGLAND

mere decade ago, a world without coins and notes as currency was unthinkable. Sure, the digitally forward among us could foresee a day when cold, hard cash was no longer a necessity. But it seemed, by and large, to be a pipe dream – because the vast majority of people, globally, held so much faith in cash. Despite the fact that even as far back as 2012, the lion’s share of transactions taking place were carried out via debit and credit card transitions, cash remained king. Then along came COVID, and everything changed. Although digital payments had made significant inroads by 2020, a cashless world was apparently still decades away. According to a study by the UK charity Age UK in October of that year, an estimated 68

July 2022

rld han you think??

FINANCIAL SERVICES

eight million people in Britain alone would have struggled with the concept of a cashless world. Today, with financial inclusion as a leading strategy for the vast majority of digital banks and fintechs, living without clinking sounds of pocket change could very soon be a reality. But what are the pros and cons? Are we ready to go cash free? Despite the advances in blockchain technology and flurries of Central Bank Digital Currency news being released, many leading experts in the field believe we are still some way off from a wholly digital global economy. Udo Mueller, CEO paysafecard at Paysafe, does not foresee the event occurring any time soon: “The current reality is that we are not and may never be ready for a truly cashless society. If cash were to disappear tomorrow, it would only worsen the hardship faced by the most vulnerable members of society, and the levels of financial exclusion would be damaging to the economy. “When government policies in India moved towards encouraging a cash-free society, farmers became unable to buy seeds for their crops and low-wage earners were forced to choose between a day’s work and spending the day queuing to exchange their cash at the bank. “Even countries such as Sweden, where there are higher levels of equality and financial inclusion, had to introduce measures to slow down the change towards fintechmagazine.com

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LEADING CONTACTLESS PAYMENT METHODS

• Credit/Debit cards • Mobile payments • Cryptocurrency

TOP 6 COUNTRIES ABOUT TO GO CASHLESS going cashless to ensure vulnerable and rural people weren’t left behind. This shows that, although the role of cash may change, not even the pandemic has been able to accelerate us towards a truly cashless society.” Expert Market advisor Zara Chechi concurs: “Whilst most people rely on cashless forms of payments, such as Apple Pay and online payments, they can still access their cash by popping to a cash machine. In a cashless society, this won’t be an option anymore and there is a sense that people will struggle without the security of knowing they can physically access their money again.” The cons of a cashless environment Whether we like it or not, access to cash is becoming increasingly challenging for consumers. Banks are withdrawing from their traditional role of supplying or accepting cash in person, particularly in rural areas. Mueller, however, points out that physical currency is still vital for accessing certain services and the wider banking system.

#1 Sweden #2 China #3 Norway #4 The Netherlands #5 Finland #6 United Kingdom

“ There is a sense that people will struggle without the security of knowing they can physically access their money again” ZARA CHENCHI

EXPERT MARKET fintechmagazine.com

FINANCIAL SERVICES

“ As our society becomes increasingly cashless, some advocacy groups have raised concerns about the inclusion of vulnerable groups in the digital economy” SAHAR SALAMA

CEO AND FOUNDER OF TPAY

“Many are concerned that cashless payment methods are dependent on technology, which comes with its own set of risks,” he says. “For example, if there was a disaster causing largescale power outages or broadband failure, the economy would be paralysed with no one able to make payments. “For others, using cash is simply a preference, a choice that enables consumers control over their finances even when making online payments. Furthermore, cash also gives a sense of control over personal data, with many people becoming increasingly concerned over how their data is collected and shared by corporations – cash payments are a way to limit their data trail.” 72

July 2022

The lack of trust in current technologies is not unjustified. With cyber attacks and fraud incidences becoming increasingly commonplace, security for online financial transactions requires ever-increasing levels of protection. This now commonly stretches to biometric methods that track voice intonations, eye markers, fingerprints and more. Sahar Salama, CEO and founder of the full-service mobile payments platform TPAY MOBILE, notes that increased digitisation of the economy is creating a divide between the technologically savvy and disenfranchised groups. She says this requires appropriate government policy so that everyone can

FINANCIAL SERVICES

benefit from the new possibilities of the digital world. “As our society becomes increasingly cashless, some advocacy groups have raised concerns about the inclusion of vulnerable groups in the digital economy. While these concerns are warranted and it’s true that not enough is being done to include everyone in the digital economy yet, the solution should be a collaborative one that involves governments, regulators, financial services and fintech providers all playing an active role, rather than a rejection of the concept of cashlessness. “For a cashless society to be truly successful, digital payments must be accessible and appealing to everyone.”

The challenge of eradicating cash So, while technology is innovating at warp speed, making digital payments faster and more efficient than ever before, it is the reticence of consumers on the ground that makes going completely cashless currently impractical. Mueller says: “Consumers still see cash as an important part of the payments landscape with research showing that 28% of customers wouldn’t consider shopping in a store that didn’t offer cash payments. Not only would a cashless society require a complete economic overhaul to ensure significant groups of the population weren’t left behind, but it would also require a fintechmagazine.com

FINANCIAL SERVICES

significant shift in consumer attitudes – even for those with access to other payment methods.” He points out that eCash is a solution with the capability to bridge the gap. eCash provides a barcode-based cash-in/cashout infrastructure utilising existing retail locations like supermarkets or kiosks – locations well-integrated into the daily lives and routines of consumers – offering a lifeline to cash-reliant consumers in a digital economy. “Lower- to middle-income populations, who are often especially reliant on cash as part of their income (e.g. taxi drivers, hospitality staff, teenagers receiving pocket money, owners of SMEs such as cafés and bars), need an easy and cheap way to digitise their cash to make digital financial transactions and pay for products and services online,” Mueller says. And it's not just about whether or not a cashless world can be achieved, it's also about listening to what customers want. “We believe that, when it comes to payments, choice is critical and access to cash – as well as the rights of consumers to continue paying in cash – should be protected. “The pandemic certainly opened up the payments landscape, but just 10% of consumers said they’d plan to be completely cashless within the next couple of years, which was only a 1% increase on pre-COVID figures, and 50% of consumers plan to make at least 25% of their transactions using cash in the future.” He concludes: “Cash still has an important role in society, especially in terms of financial inclusion. At present, industry figures show 1.5 million adults in the UK are unbanked and 2.2 million rely on cash for day-to-day spending.” 74

July 2022

“ Consumers still see cash as an important part of the payments’ landscape” UDO MUELLER

CEO PAYSAFECARD AT PAYSAFE fintechmagazine.com

SC Ventures aims to rewire DNA of banking

July 2022

WRITTEN BY: TOM SWALLOW PRODUCED BY: JOE PALLISER

fintechmagazine.com

SC VENTURES

Thorsten Neumann, CTO of SC Ventures, details its fintech triumphs over the past three years and its outlook for sustainable innovation

raditional banking is under pressure to adapt as society continues to not only evolve digitally, but also increasingly accelerate via emerging technology and innovation. With digital transformation taking place at a rapid pace, banks are undergoing significant changes to meet the evolving needs of customers and stay ahead of the innovation curve – particularly with fintech moving into the traditional financial services sector. Oftentimes, the out-of-the-box fintech solutions offered by nimble startups have proven their worth to investors and, ultimately, in the adoption by banks. The innovation remains external. It’s not quite the same story for Standard Chartered Bank, though. With a business unit that invests time and money into innovation and start-ups to build pioneering solutions while developing valuable partnerships with a broad spectrum of technology services providers, Standard Chartered Bank has a significant and unique competitive advantage as a result of the SC Ventures’ platform. SC Ventures is the bank’s response to the rapid acceleration of the fintech space, with Thorsten Neumann leading the technology function – which is always in the market for new fintech and technology adoption. Currently, the platform is fully invested in

July 2022

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Three security pitfalls every software business can avoid Secure software is critical for business success today. Here are some common pitfalls every software team can watch out for. 1. Security as an afterthought Having developers create code and involve security at later stages in the development cycle is a losing battle because of the high speed and volume of releases. This approach keeps vulnerabilities from being discovered until it’s too late—resulting in vulnerable code being pushed to production. Solution: Shift security left and scale security efforts to cover all applications, starting from the early stages of development. 2. Silos and Developer-Security friction For developers, issues raised by security might not matter for dayto-day development or may include feedback on a finished project. Fixing these issues only adds stress around rescheduling sprints and effort—making security a roadblock for innovation. For security teams, it can be challenging to explain security risks to developers who don’t have years of security expertise. In the end, poor communication leads to less collaboration and empathy overall. Solution: Make security part of development by

integrating tools into your developer workflow. Promote discussions and asynchronous collaboration between both teams. 3. Security as a checkbox exercise The difference between formal security policies and how they’re put into practice can be confusing and make prioritizing security issues even more complicated. This leads to bad habits like valuing quantity over quality, assuming that developers will fix every logged security scan result, or not measuring value to provide evidence that security improvements are being made. Solution: For an immediate fix, focus on pushing a limited number of real security issues instead of sharing a flood of false positives. On a larger scale, look for security tools that can “codify” new security issues and prevent them from ever being merged into a production branch. Remember: your security tools should actually improve your code.

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SC VENTURES

Title of the video

leveraging the Bank’s capabilities, with a total portfolio of over 30 ventures at different stages working to fill the monetisable gaps in the market. Beyond its activities in internal intrapreneurship and the US$100mn growth-stage fund, SC Ventures focuses on six key high-conviction themes, including: Digital Banking & Lifestyle; Online Economy & Payments; SMEs & world trade; Digital Assets; Capability-as-a-Service; and Sustainability & inclusion. “We are thinking about novel value propositions. For example, by playing to our strengths, we could brainstorm on the agricultural sector by addressing the needs of farmers in terms of seed financing, supply chain, product take-off and logistics solutions to extend the ecosystem in the thematic area of sustainability, and then 82

July 2022

build out a robust and scalable cloud-native platform for stakeholders,” Neumann explains. “We believe we can have a lot more impact in delivering disruptive business models in emerging markets because of the in-house domain expertise, the Bank’s large footprint and deep local market knowledge through our linkage with the Bank.” Neumann joined SC Ventures a few months before the start of the pandemic to lead in the role of its CTO and has witnessed one of the toughest periods for businesses. Based in Singapore, he previously co-founded start-ups in the finance and payments sectors, and worked many years in Africa and SE Asia's emerging markets. He has a passion for technology and his mission is to enhance the competitive advantage of SC Ventures by accelerating innovation.

SC VENTURES

THORSTEN NEUMANN

CHIEF TECHNOLOGY OFFICER, SC VENTURES

THORSTEN NEUMANN TITLE: CHIEF TECHNOLOGY OFFICER INDUSTRY: BANKING LOCATION: SINGAPORE Thorsten Neumann is an entrepreneur and technology specialist with a background in internet services and fintech platforms. He is the Chief Technology Officer (CTO) of SC Ventures, Standard Chartered Bank’s innovation, fintech investment and ventures arm. Prior to SC Ventures, he started his own internet services provider in South Africa, co-founded a Singapore-based payment startup and rolled out a merchant gateway in 13 countries, and led Canadian-listed gold miner’s IT systems in transition from explorer to production mining. He holds a Bachelor in Computer Science from the University of Johannesburg, and a Master's in Computer Science from the University of Pretoria. Thorsten mentors at the German Accelerator Southeast Asia, an advocate for opensource software, and volunteers at Noah’s Ark Cares animal shelter.

EXECUTIVE BIO

“ We work together on start-up ideas, solutions, and of course, play to our strengths of being a bank-backed fintech investment and ventures arm”

DRIVING INNOVATION FOR THE FUTURE OF FINANCE

“Zühlke is a very special kind of innovation partner with high quality, high calibre expertise. We work together on start-up ideas and solutioning – where there's a lot more complexity in their architectures and the performance of the platforms.” - Thorsten Neumann, SC Ventures by Standard Chartered

We bring start-up agility and innovation speed to your teams. Zühlke is a global innovation partner. Since 1968, the world’s leading financial services have trusted us to build next-generation digital products and services.

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SC VENTURES

“ We want to be recognised as an industry leader. We want to be seen as a team that understands that technology excellence is a differentiator” THORSTEN NEUMANN

CHIEF TECHNOLOGY OFFICER, SC VENTURES

Remaining competitive and encouraging fintech growth Staying abreast of the latest financial trends, Neumann and his team are able to bring proofs of concepts to life. While the bank’s branches are leading in this field, the digital transformation of new business models is advanced by SC Ventures as it looks to take the lead in fintech development. “We aim to be recognised as an industry leader. We want to be seen as a team that is trustworthy, that has delivered successfully on a number of ventures, and built strong partnerships to unlock value in our co-creations,” says Neumann. This technology excellence is something that SC Ventures is leveraging as it puts resources into new digital initiatives.

efforts that assisted the Bank to continue to service its clients while socially distanced. A highlight during the lockdown was the rollout of an electronic signatures platform, enabling the global bank and its clients to digitally sign documents securely. Neumann speaks about the visible progress being made at SC Ventures to launch new digital banks as part of its portfolio, but without detriment to Standard Chartered Bank’s traditional model. Discussing the two digital banks – one of them being Mox Bank based in Hong Kong, and new Trust Bank in Singapore – he explains that “digibanks” are the result of differentiating in an underserved segment and tailoring to the needs of the mass retail sector. “‘Why would you be doing this?’ might be the first question that comes to mind. The purpose here is not to replace the traditional banks or cannibalise existing market share, but really to provide a platform for an alternative banking experience – one that’s more of a lifestyle-and-consumerorientated type of customer experience,” Neumann explains, as he goes into detail about the new banking ventures.

Becoming more digital During the COVID pandemic, SC Ventures was quick to act on the pivotal transformation fintechmagazine.com

“It wouldn't be so much as competing with the existing banking business as much as it would be creating a much more novel, focused customer experience. The adoption of modern tech like core banking from Thought Machine, automation by GitHub Actions, and Cloud-native deployment on AWS gives them an agility advantage.” Both Standard Chartered and SC Ventures’ innovation arm are focused on the disruptive nature of fintech to scale its business to a larger footprint across the 86

July 2022

globe. New areas of disruptive technology to be considered include cybersecurity and similar “passwordless” access solutions. “SC Ventures has also made investments into blockchain and distributed ledger technology companies. We've invested into KYC and fraud detection, automation solutions, and a portfolio of thematic-aligned growth-stage start-ups. It's important for us that they are gaining momentum, while minimising rework and avoiding tech debt,” he says.

SC VENTURES

From leveraging technology and having a foothold in these investments, SC Ventures is able to work with some very reputable players in the industry. “We talk to great technology companies, we join calls with venture capital firms, and we learn a lot about what's happening in the market, so to say on where the market is going. This is novel to SC Ventures in being a corporate venture capital (CVC) fund investing into external start-ups, and simultaneously founding our own ventures,” says Neumann. “The benefit to us is not only learning and observing trends in the market, but also that, because we're participating in these investment rounds, we also have skin in the game in their investment returns.”

STANDARD CHARTERED BANK The company is all for reaching net-zero emissions. Standard Chartered Bank (owned by Standard Chartered Holdings Ltd.) is one of the leading banking providers in the financial services industry. The firm is headquartered in London and operates across Africa, the Middle East, and Asia, promoting prosperity among all of its individual and business clients. The company has around 85,000 employees and is driving new commerce and innovation among customers in 59 different markets across 150 countries. Standard Chartered PLC is listed on the London and Hong Kong Stock Exchanges.

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We drive the ‘Digital Tech’ Innovation in Fintech We co-create product ideas from a MVP and scale them to global products through our Digital Engineering capabalities.

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July 2022

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SC VENTURES

“ I think we could have a lot of impact in the ESG space because financial institutions have lots of data” THORSTEN NEUMANN

CHIEF TECHNOLOGY OFFICER, SC VENTURES

Partners drive the future of fintech innovation Another key insight from Neumann is that SC Ventures consciously seeks to work with numerous partners to diversify their delivery capability – from geographic coverage, to accessing best talent, and neurodiversity. As the CVC prefers to de-risk outright hiring during the early stage of venture building, the preference is for the engineering to be facilitated by SC Venture’s partner ecosystem thereby giving the platform optionality. SC Ventures has worked with reputable names as part of its wider partner ecosystem, including firms cited by Neumann, such as Zuhlke, Hi Mum! Said Dad, NESS Digital Engineering, and FPT Software. These partners are not competing for work but

rather find themselves collaborating with SC Ventures, and even each other, on provocative, innovative ideas. "Zühlke is a very special kind of innovation partner — in that we really look to them for high quality, high calibre expertise in bringing sustainable innovation to market success. We work together to design, build and launch next-generation solutions like digital banks with Mox in Hong Kong and the new Trust Bank in Singapore," says Neumann. "Collaborating with partners like Zühlke has enabled us to deliver impactful value with speed and operate at scale after market launch to respond to customer needs for simpler, better banking." In his reference to the Ventures, Neumann shares their differentiating strengths and capabilities. He points out that the SC Ventures portfolio companies range from technically intricate crypto custody solution Zodia Custody, high-performance supply fintechmagazine.com

SC VENTURES

chain platform, TASConnect through to retail plays like mobile-first Shoal. “Shoal, our venture for retail customers to invest exclusively in green and sustainable projects, had significant complexity. We engaged Hi Mum! Said Dad on strategy, design, and delivery of a superior platform. They collaborated with us to take a rough idea on a PowerPoint slide to a successful market launch. From digital bank to this retail platforms, they always prioritise the customer experience,” says Neumann. He adds that SC Ventures looks to our build partners to help not only access the best talents, but also take their input on solutioning for these new technology enabled business models. By example, the robustness of TASConnect in financing US$7bn of accounts payable invoices in its first 12 months. “It enables us operationalise quicker and deliver a more impactful minimum viable product, the MVP, as our first milestone. As a result, what I’ve found is that we've moved away from a traditional corporate vendor engagement model and prioritise partnerships. This allows us to work with individuals placed by our partners who hold the right attitude and show commitment. As Forrester Research describes it, we’ve moved from product to outcome-oriented engagement.” Boldly taking on new opportunities The corporate CVC covers multiple activities across investment fund, in-house venture building, fintech engagement and intrapreneurship, setting it apart from industry peers. Neumann feels that it is the sum of the parts that give SC Ventures a unique strategic advantage. “Performing just one of these activities independently is unlikely to achieve our 90

July 2022

“ It wouldn't be so much as competing with the existing banking business as much as it would be creating a novel, focused customer experience, which can differentiate itself in the market” THORSTEN NEUMANN

CHIEF TECHNOLOGY OFFICER, SC VENTURES

SC VENTURES

expected outcomes. Would we come across great venture ideas without the insights of our intrapreneurs? Would we identify superior investment opportunities if our ventures weren’t seeking out emerging tech partners? We believe that by creating synergies across our activities, we have a higher chance at success,” explains Neumann. Gaining the upper hand in the industry allows the CVC to look deeper into tokenization and push more interest in cryptocurrencies, which in their unregulated states are currently receiving a lot of interest. “We're seeing a lot more innovation in the tokenisation space. Going well beyond cryptocurrencies, but really into institutional custody, tokenised assets and security token assets. This could also be the movement of traditional fund products and entrenched settlement processes onto distributed ledgers,

where we are getting more involved with novel blockchain projects – be it non-fungible tokens, fiat-backed stable coins, or yield generation in DeFi,” explains Neumann. “What we value foremost however is that these ideas are rooted in plausible business models. They can't be vague or just pipe dreams; our ventures need to demonstrate they can create value – by valuation, revenues or both,” he explains. In closing, Neumann cites that the next year for SC Ventures is primarily about scaling its portfolio of ventures. Unlike many other CVCs looking out for the needs of their parent firms, SC Ventures is prioritising to monetise the innovation developments in their individually spun-out fintech subsidiary entities.

fintechmagazine.com

NEW FINTECH-LED TRENDS IN THE SMALL BUSINESS BANKING SPACE WRITTEN BY: JOANNA ENGLAND

From digital payments to frictionless lending, we take a look at the latest trends in small business banking – and how they’re impacting the industry

hile the pandemic and digital transformation have, together, driven many positive changes in the fintech and insurtech industries, small businesses in general have suffered catastrophically. Unable to cope with the costly demands placed on them by lockdowns and enforced closures, many of them took loans to survive. Now, as inflation rises on a worldwide scale, they are struggling against a rising tide again. Banks and financial institutions can offer a lifeline, in terms of new products and services, that can ease the challenges of running a small business in challenging times. But what exactly is on offer? Large enterprise vs small business banking A significant difference between small business and large enterprise banking is that small business owners don’t have CFOs or finance directors to manage most of the financial aspects of running a business and, instead, often act upon gut feeling, according to Rob Straathof, the CEO of Liberis.

July 2022

PAYMENT SOLUTIONS

“ The future looks bright for small business banking” ROB STRAATHOF CEO OF LIBERIS

fintechmagazine.com

Avoid the Top 5 Most Common Open Source Vulnerabilities Within Financial Organizations Learn what open source vulnerabilities are commonly found in financial services organizations.

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PAYMENT SOLUTIONS

“ They can bridge the gap to plug into lenders” ROGER VINCENT

MANAGING DIRECTOR UK AND IRELAND, TRADE LEDGER

“Entrepreneurs are great at dayto-day execution, operating their business and setting the strategy of a business, but when it comes to management of finances, they often need help from their financial advisor or bank. “Usually, the help they need is around managing working capital, getting their invoices paid on time, and making sure they have enough liquidity to pay staff and suppliers versus their incoming revenue. Of course, if they need loans, there’s a plethora of solutions available to them, but the problem is that they don’t have a good enough understanding of what the right products are and whether they’re available to them when they need them.” Roger Vincent, managing director UK and Ireland, Trade Ledger, also points out that small businesses have more in common with consumers than large enterprises and therefore have an expectation of tailored services from their banks. He says: “They may even manage their business finances alongside their personal finances, so they expect the same level of digital capabilities that they experience in their personal lives. Fintechs often understand this better than incumbent banks – and, more importantly, they have the technology and agility to innovate rapidly. This means they can very quickly create new products and solutions that serve the needs of small businesses.” Products and services for small businesses Small businesses also have different needs when it comes to supporting services, and fintechmagazine.com

PAYMENT SOLUTIONS

therefore, banks that provide products to large-scale businesses won’t necessarily be a good fit. Rather, fintechs are generally more suited to helping small businesses because they offer innovative products such as cashflow forecasting, says Straathof, noting that Tide, Xero and Nuula provide cashflow forecasting and instant access to critical business metrics. “They can bridge the gap to plug into lenders with your existing data dashboards and bank accounts through third-party Open Banking providers like Plaid and TrueLayer. They can provide forecasts of cash flow needs, so you know whether you are short of funds, what invoices are still outstanding, and, if needed, help with collections. Kolleno is another excellent example of a fintech that helps small businesses drive short-term working capital cycles.”

“ Digital services are steadily making their way into the small business banking segment” ROGER VINCENT

MANAGING DIRECTOR UK AND IRELAND, TRADE LEDGER

Top Fintech & Payment Trends 2022

July 2022

1. INTEGRATION OF DIGITAL SERVICES One dashboard that integrates with accounting packages and provides an overview of things like transactions, cashflow, outstanding invoices, tax return filings and funding eligibility. 2. SPEED Neobanks provide a bank account setup within minutes, and traditional banks such as JP Morgan, Investec and Marcus are following the trend. For businesses that need funding, Liberis can integrate with their bank account and dashboards to provide access to instant funding that can be retrieved within minutes. 3. SUPER APPS PayPal and Revolut are developing omni-services within their existing ecosystems. For example, through Revolut, users can take out pet insurance, travel insurance, buy commodities and link to their other bank accounts and credit card statements through Open Banking. 4. OPEN FINANCE This provides the ability to aggregate user data from a range of financial apps in one place. Having all bank

transaction, sales ledger and credit bureau data in a single application means customers can get a real-time view of their cash position, and capture any emerging risks to their business or identify working capital gaps before they become critical. 5. DIGITAL WORKING CAPITAL For too long, small businesses have relied upon bank overdrafts or personal credit cards to support their fluctuating working capital cycle. With the emergence of new lending technology, banks, specialist lenders and fintechs are creating new frictionless finance products that use realtime data feeds to assess their eligibility for a wider range of lending products like term lending, invoice finance and asset finance. 6. EMBEDDED FINANCE The ability for financial service providers or specialist applications to embed their propositions into other third parties channels. This may mean that a small business can get access to a range of marketplace solutions in their banking app.

fintechmagazine.com

PAYMENT SOLUTIONS

“ Traditional high street banks often…have a very low appetite for approving SMEs” ROB STRAATHOF CEO OF LIBERIS

How to choose the right bank for an SME Ultimately, small business owners need to shop around for the right banking services and make sure they choose a fintech that best suits their needs. Straathof says the standard functionality needs to be there, but there are a whole host of questions a business needs to ask itself. These are: • Does the bank integrate with Open Banking? • Does it integrate with your accounting packages? • Does it have automated cashflow forecasting? • Do they have adequate SME lending products? He points out that many challenger banks don’t have SME lending products yet, while “the traditional high street banks often do have appropriate lending products available but have a very low appetite for approving SMEs”. It’s not yet an easy task to find the right banking partner. So, the question is, which bank fits specific requirements such as Open Banking, cashflow forecasting, 98

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integration into accounting packages, and business finance? “These can be difficult questions to answer upfront but should be explored nevertheless. Companies like Liberis are agnostic and can work with many different ecosystems to provide the right funding, to the right businesses, at the right time by using and leveraging the data that they have.” The future of SME banking and fintechs “If we look at the trends in retail banking,

then the future looks bright for small business banking,” says Vincent. “Digital services that we see in our everyday lives are steadily making their way into the small business banking segment. We’re seeing financial service providers across the board investing heavily in improving their products and propositions for the benefit of small businesses.” Straathof concludes: “A mega trend for the next two years will be a digitally integrated bank with the functionality

of a ‘Super App’, showcasing products like business insurance, accounting, pay requests, invoicing, crypto acceptance, commodities, stock monitoring etc., along with funding options available to businesses at the right time – all in one dashboard.” He adds: “It requires small business banks to invest in their underwriting practices and make sure they have an appetite to take the risk, to support these businesses for their future growth.”

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WRITTEN BY: GEORGIA WILSON PRODUCED BY: JOE PALLISER

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RedZed’s Paul Dontschuk discusses the history of RedZed and its digital transformation to enhance the customer experience of the self-employed market in Australia

“RedZed offers a personal approach to its services, taking the time to understand the specific needs and wants of its customers” PAUL DONTSCHUK

CHIEF TRANSFORMATION OFFICER, REDZED

ith over 30 years of experience in the financial services industry, Paul Dontschuk, Chief Transformation Officer at RedZed has worked across multiple geographies with a common theme: technology, change and working with great people. As Chief Transformation Officer at RedZed, Dontschuk is accountable for the delivery of the company’s transformation programme. Over the years, Dontschuk has seen enormous change when it comes to technology being used to support both customers and internal process efficiencies. “I've been lucky enough to work for some iconic organisations during my career, such as Ford and General Electric. During that time I have been involved in many innovative projects implementing real-time application systems in the late 80s, early-adopting banking customer service functionality over the web in the 90s, integrating the first in market apply and buy credit card solutions with iconic Australian retailers in the naughties and one of the first contactless mobile payment capabilities in Australia in the early 2010s. My experience has provided me with a great set of tools and expertise that I am able to apply at RedZed.” Formed in 2006, RedZed began as a small business focusing on the self-employed market. “RedZed has provided mortgage finance of over AU$6bn to more than fintechmagazine.com

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Title of the video

“ Whilst focused on appropriate actions to navigate RedZed through a period of uncertainty, management and the board saw the opportunity to continue to support investment in the future” PAUL DONTSCHUK

HIEF TRANSFORMATION OFFICER, C REDZED

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14,500 customers since its inception. In 2006, there were fewer than five employees and, over the company's first few years, it started to use third parties rather than it started to use small tech providers and third parties whilst building internal capabilities” prior to help grow the business,” explains Dontschuk when discussing the company’s history. “This approach was sufficient for RedZed to grow the business to around AU$3bn in total historical assets. In 2019, RedZed identified a new strategy” to be able to accelerate growth. The three pillars of this strategy were to improve and expand the view of customer experience (CX), build capability in people and processes, and deliver technology transformation as an enabler for future growth to support those CX ambitions,” he adds. Reflecting on his own history with RedZed, Dontschuk says: “I joined RedZed a week before COVID lockdowns commenced in Australia (March 2020). During 2020, many organisations took a conservative approach

REDZED

Our Values

PAUL DONTSCHUK TITLE: C HIEF TRANSFORMATION OFFICER INDUSTRY: FINANCIAL SERVICES LOCATION: VICTORIA, AUSTRALIA

EXECUTIVE BIO

to investment and slowed or stopped projects. Whilst focused on appropriate actions to navigate RedZed through a period of uncertainty, management and the board saw the opportunity to continue to support investment in the future. “This included maintaining staff levels and in some cases hiring new areas of expertise that have enabled RedZed to grow. In addition, there was a commitment to using this period of uncertainty to continue delivery of the transformation roadmap. RedZed has continued to grow significantly through the period with record finance volumes achieved in the financial year 2021 and 2022.

Over 30 years of experience delivering significant change via technology, process improvement and people. Strong execution background gained in Financial Services across five continents. Signature strength is aligning customer requirements and business strategy with IT Strategy and subsequent successful execution at scale. Teams of up to 500 with $60M pa project portfolios. Led successful major IT integration & divestment activities from M&A to implementation stages. Utilised expertise and experience to help build multi-billion dollar businesses. Passionate about the possibilities that technology and change enable. Inspired by developing teams that deliver outstanding results and are motivated and excited by the potential of change and technology.

INTELLIGENT ERP FROM SAP Business thrives when you put it all together in the cloud built for your industry. Learn more at sap.com/erptogether

REDZED

REDZED AND ITS PARTNERS In the last two years, RedZed has established multiple relationships across key areas of expertise to support its transformation journey, these key relationships have been with: SAP, Attra, Maven Change, nCino, PwC, Illion. “RedZed will continue to optimise the number of technology partners it deals with and take a cloud-first approach. We need to focus these relationships to match the size of our organisation whilst ensuring that technology scales as we grow.” “RedZed is an organisation of just over 120 people and to optimise scale relies on a number of key partnerships to deliver

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certain services. Therefore the use of partners has been integral to ensure we deliver on the promise of our passion for the self-employed.” “Like any partnership, communication and trust are key. These elements align nicely with the RedZed value to Respect Relationships. In a practical sense, this means ensuring the relationship includes a regular operating rhythm with agreed measures established at multiple levels within each organisation. Most important is the ability to have frank and open conversations about what is working well and what needs to be improved.”

REDZED

“RedZed’s main difference with traditional banks is our focus to ensure we take a common-sense approach to self-employed lending that is simple, fast and fair. By being easy to do business with our selfemployed customers can simply get on with achieving their ambitions,” says Dontschuk. Understanding the Operating Market Currently, Australia builds around 180,000 new homes each year. In 2019, there were roughly 10.3 million homes in the Australian market worth a collective AU$6.6tn. “The median home cost in Australia is AU$955,000 with average loan taken around AU$730,000. The total Australian residential mortgage market was worth AU$2.1trn AU in 2019,” explains Dontschuk. “Australian housing prices continue to grow each year with the median house price increasing by around AU$103,000 in 2021. RedZed’s largest market is in the state of Victoria and the majority of loans are from the east coast states.” With this in mind, RedZed was founded by a team of people with experience in what it is like to be self-employed and is driven to find a better way to serve this market.

“ RedZed’s main difference with traditional banks is our focus to ensure we take a common-sense approach to self-employed lending that is simple, fast and fair” PAUL DONTSCHUK

CHIEF TRANSFORMATION OFFICER, REDZED fintechmagazine.com

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The world of payments is spinning faster and faster. Stay in control by partnering with Attra Keeping pace with evolving payment technologies requires constant updates to systems and processes. This is costly, time-consuming, and risky in terms of compliance and data security. Attra gives you more control over these challenges. We are payment domain specialists focused on providing end-to-end technology services to banks and financial institutions. Over 25 years of experience gives us the edge. Being niche allows us to continuously update our expertise in line with the latest fintech and digital trends.

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If you would like to know more, do connect with us on digitalpayments@attra.com

REDZED

“ Australia builds around 180,000 new homes each year” PAUL DONTSCHUK

CHIEF TRANSFORMATION OFFICER, REDZED

REDZED AND ITS DIGITAL TRANSFORMATION JOURNEY Creating a Core and Central Data Architecture In 2019, RedZed invested in the development of a core and central data architecture known as CoreDB. “CoreDB has been built to support data and reporting. The basis of this design was to create a central source of truth for data underpinned by a common data design,” says Dontschuk.

support team to focus on the needs of customers rather than the technology that supports a servicing system. “The vision being that the interface our customer support team uses becomes agnostic of the technology to deliver the information that best serves the customer needs,” adds Dontschuk. In mid-2020, RedZed implemented the Loanapp platform enabling its brokers to capture loan applications online. Historically, RedZed’s brokers have been largely paper-based, but with the increase in demand for online submissions, the provision of alternate channels was vital. In late 2020, RedZed became the first in the world to implement the SAP C4B platform. “This was an enormous undertaking for an organisation of RedZed’s size,” says Dontschuk. “However, underpinned by our values of Pride In Execution and Bold Exploration, RedZed successfully partnered with SAP to deliver

The Implementation of Salesforce, Loanapp, and SAP C4B In early 2020, RedZed implemented Salesforce for its customer services team. This allows the customer fintechmagazine.com

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“Transformation should begin with alignment to an organisation's purpose and vision. At RedZed that meant delivering solutions that support our passion for the self-employed” PAUL DONTSCHUK

CHIEF TRANSFORMATION OFFICER, REDZED

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We're for the Self-Believers - RedZed TVC 60"

this transformation. The project involved setting up the Cloud for Banking platform for new loans and the migration of over 3,500 loans from the existing legacy platform to the SAP C4B platform.”

loan application origination platform, scorecard, and decision engine with rollout of the platform taking place in early 2022. RedZed’s previous loan application process involved numerous manual handoffs. “In the 1st half of 2022 RedZed rolled out the new originations, scorecard, and decision engine platforms. The nCino solution is built on the Salesforce platform,” explains Dontschuk. “By automating the interfacing of data in the application process, improving upstream validation of data and ensuring data is acquired from common sources the solution will deliver benefits to data quality, traceability and consistency. Importantly it will allow RedZed staff as we scale to concentrate their time on finding the best solutions for our customers in a timely manner whilst continuing to ensure a human is involved in each loan decision,” he adds.

Implementing a New Loan Application Origination Platform In late 2021, RedZed implemented a new fintechmagazine.com

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MANAGING MERGERS IN THE DEVELOPING FINTECH SPACE WRITTEN BY: JOANNA ENGLAND 114

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As M&As for fintechs increase in number, we speak to industry experts about the pros and cons of merging a company within the digital ecosystem

he digital ecosystem has transformed the global financial landscape. As part of the trend of collaboration and partnerships that has emerged during this transformation, mergers and acquisitions have risen considerably. This has been the result of several things. The leading element has been technological development. As innovations have made great leaps forward in a short pace of time and global digitalisation has been made necessary, the expense of switching over legacy systems to digitally-native platforms has resulted in more partnerships, with

larger companies merging with smaller technology entities to scale and upgrade their tech. This strategy is often the more affordable option, given the expense of building new technology stacks and all the transitioning that that entails. Increased funding in the fintech space is also enabling mid-sized companies to snap up innovative startups that are shaking up the marketplace with their disruptive solutions. Marc Kitten – programme director of the Mergers & Acquisitions Executive Education programme at Imperial College Business School and partner at Candesic, a strategy consultants firm – says the merger and acquisitions boom is a natural progression of industry growth. fintechmagazine.com

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

IMAGE: GETTYIMAGES.COM

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

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

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

TECHNOLOGY

“Similar to what started earlier in biotech or with the internet, a combination of the latest technologies – computation power from mainframe to mobile phones, cloud/ SaaS migration, sophisticated sensors, big data, ML/AI – is disrupting traditional banking and insurance. Financing institutions find it easier, cheaper, faster, safer, and even vital to buy innovative teams and products rather than trying to develop in-house.” He continues: “For the teams, it is the access to the customer base and the infrastructure of the established player, especially with regards to ever-increasing regulatory and compliance costs. For the owners, it is generally also a way to cash out, at least partially, in a very competitive and fast changing environment.” Marketplace volatility is another reason why companies would rather merge than invest in new technologies. It helps them to scale and grow, resulting in greater resilience – especially if there is uncertainty. Vivi Friedgut, CEO of Blackbullion, says: “There’s some push and pull happening in the market right now. It’s an increasingly tough fundraising period and it’s going to continue to be for the next 12 months, at least. This makes it a good time for companies to rationalise through M&A.” Friedgut points out that, whereas fintechs have been working towards a strategic exit, forces at play also make it a smart time to sell. “At Blackbullion, we’ve spent a couple of years bedding down our business and now’s the time for us to really accelerate. The reality is, we probably could have built the product we recently acquired but, strategically, it’s more efficient for us to buy it – and we wanted to hit the pedal.”

“ Expect the likes of Revolut and others to suck up all the best technology solutions and become massive global businesses” MICHAEL BUCKWORTH FOUNDER OF BUCKWORTHS fintechmagazine.com

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The pros and cons of mergers and acquisitions While being absorbed by a bigger company can cushion the blow of a tumultuous market and enable smaller brands to launch their offerings in a much wider marketplace, it isn’t without its drawbacks. Michael Buckworth, founder of Buckworths – a UK-based law firm that specialises in advising fintechs and other technology businesses on a range of legal and commercial issues – believes M&As can lead to a lack of independence for business founders. As such, these founders can suddenly find that they have restrictions on their budget, strategy and hiring decisions – far in excess of the controls imposed by their previous VC investors. “Being bought means being owned by the buyer and, in the case of the founders, effectively becoming an employee of the acquirer. For entrepreneurs used to enjoying extensive freedom to operate, this can be a hard transition.” A fight for focus can also be a problem for newly acquired businesses, he says, as larger companies can often make multiple purchases that dilutes the attention they spend on each team. “Once the initial focus on implementation of the acquired business has passed, founders can find that they have to fight to retain the interest of the buyer's management.This can lead to disappointment and challenges in growing the business.” However, the pros of M&A are enticing, mainly because they 118

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“ Often, the strategic priorities of the acquirer change” MARC KITTEN PROGRAMME DIRECTOR OF THE MERGERS & ACQUISITIONS EXECUTIVE EDUCATION PROGRAMME AT IMPERIAL COLLEGE BUSINESS SCHOOL

relieve founders of the day-to-day pressure of running the business in its entirety. For example, there is more opportunity to focus on the business. “Many founders with whom I work are continually fundraising. It takes up huge amounts of their time and focus,” says Buckworth. “Unless they have raised a Series B or C, they probably also wear a number of hats, including HR and legal/compliance. Acquisition often means an end to these dual roles. The buyer manages fundraising and

(hopefully) there are structures and teams in place to deal with HR, legal and compliance. This leaves founders able to focus on the core business and on what they do best.” Kitten agrees, stating that it depends on how good the acquirer is at integrating their smaller acquisition, because many acquirers destroy the value, unwillingly, by lack of a common corporate culture that leaves the entrepreneurs too frustrated to remain. “Often, the strategic priorities of the acquirer change. Sometimes the acquisition was only fintechmagazine.com

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“ It’s an increasingly tough fundraising period and it’s going to continue to be so for the next 12 months” VIVI FRIEDGUT CEO OF BLACKBULLION

meant to kill a cannibalising technology! Some banks like Goldman Sachs have learned from the past and run their own incubators and accelerators, which allows them to identify early innovation and also to build relationships early.” Will M&As continue to be as prevalent as the ecosystem expands? The digital ecosystem has resulted in many more strategic partnerships and collaborations as well as M&As. Smaller startups no longer have to be absorbed by larger entities and can often just form an alliance whereby both companies benefit from each other’s products, services and marketplaces. But Jonathon Parkinson, managing partner at Marktlink, says one of the key benefits of merging with a larger company is the expansion of financial possibilities. “By growing their share of existing customers and gaining access to new markets, utilising cross-selling opportunities is a powerful way to realise revenue synergies and combat competition.” And he points out that, while acquisitions and alliances can achieve similar goals,

partnerships can fail to provide the security that underpins M&A, as they often rely on continuous collaboration and nurtured relationships. “The financial risk encountered by M&A investors, however, encourages greater commitment and a long-term will to succeed.” The future of M&A in fintech Five years is a long time in the fast-growing fintech industry. New changes seem to transform the space from one month to the next. Experts believe the global financial market will look very different in five years’ time, with fintechs being the biggest businesses in the financial services space, acquiring multiple businesses. “To some extent we are almost there,” says Buckworth. “Expect the likes of Revolut and others to suck up all the best technology solutions and become massive global businesses.” Another predicted trend is that bricks and mortar banks will be owned by fintechs, and most branches will close. He continues: “Traditional banks face increased costs due to their bricks-and-mortar branches, as well as high staffing costs. Fintechs don't. I predict that fintechs will acquire traditional banks, or parts of traditional banks, as a way of acquiring customers.” Finally, regulators will play an essential part in supporting innovation and competition, says Buckworth. “Open Banking and the Revised Payment Services Directive have helped accelerate adoption of fintech in the UK by allowing interoperability and third party access to data,” he says, adding, “This has allowed SMEs to compete directly with larger established businesses and will ensure that M&A activity remains strong going forwards.” fintechmagazine.com

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Fostering innovation through technology fintechmagazine.com

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GroupAssur ’s CIO, Frédéric St-JeanMercier, talks digital transformation, technology stacks and the ecosystem

fter 20 years’ experience in the technology industry – 15 of which have been spent in the financial and insurance sectors – Frédéric St-Jean-Mercier has relished the challenges presented by his most recent role as CIO at Canada’s most respected MGA. GroupAssur was founded in 1993, servicing the specialised insurance needs of brokers and customers across Canada. The company provides underwriting services for complex insurance policies on behalf of Canadian insurance carriers, international insurance carriers, and Lloyd's of London insurance syndicates. Headquartered in Montreal, GroupAssur has always been actively involved in new technical innovations and strategies, and, early last year, merged with Evolution Insurance, an MGA and wholesaler specialising in complex risks that offers its facilities, programmes and services to Canadian brokers. The move has ushered in a number of changes, alongside the company’s own technological evolution. St-Jean-Mercier, who joined GroupAssur in 2021, is well-versed in the process and has extensive experience with the transition from traditional technology stacks. 124

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Frédéric St-Jean-Mercier, CIO of Groupassur Inc.

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Jalal Khargou, newly appointed VP of AI & Data analytics, is presenting the team with his vision to take GroupAssur’s existing AI & ML capabilities to the next level.

“Last year, I joined GroupAssur, I felt their vision to pivot to a technology-driven company, combined with their size was a natural fit based on my experience in both large financial enterprises and smaller, nimbler SaaS technology companies. My role is essentially to create value through technology within the organisation and foster a culture of innovation.” St-Jean-Mercier says GroupAssur has taken a unique approach to its technical 126

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transition, in that its teams are redesigning the business first and then putting technologies in place to fit that need. “We're actually rethinking, reshaping our business model and our operating model based on what we can do with technologies, so I work extremely closely with the other executives to really understand their challenges,” he says. “We share the same objectives and KPIs.

FRÉDÉRIC ST-JEAN-MERCIER TITLE: CHIEF INFORMATION OFFICER COMPANY: GROUPASSUR INC. INDUSTRY: INSURANCE

1993

Year GroupAssur was founded

200+ Number of Employees

EXECUTIVE BIO

LOCATION: MONTREAL, CANADA Frédéric is Chief Information Officer at GroupAssur Inc. a Montreal based MGA doing business across Canada and several US states. He designed the company’s long term innovation strategy using the latest and most promising technologies combining world class applications like Guidewire with an innovative artificial intelligence approach. GroupAssur will unquestionably strengthen its place as a market leader under his guidance. Prior joining GroupAssur, Frédéric cumulated 20 years of management experience in the financial and technology sectors. More recently, he participated in the success of one of the fastest growing software companies in Canada and internationally. Frédéric holds a university degree in Management and completed his Executive MBA in 2018.

When your usual course is blocked, how do you ﬁnd new solutions? ey.com/nexus

EY’s Nexus for Insurance leads digital transformation EY is driving innovation in the insurance industry with its latest cutting-edge enablement platform for technology integration, Nexus.

Nexus also includes many other capabilities such as document generation, enterprise content management, and a finance system.

Earlier this year, GroupAssur – one of Canada’s fastest-growing P&C insurance providers – announced it had partnered with Guidewire, ushering in its digital transformation.

Fast deployment and the digital ecosystem

EY’s Nexus platform is a middleware microservices integration layer with extensive service catalogues, API inventories, adapters, and insurance-specific data models that complement Guidewire’s suite of core insurance products. Neil Pengelly, EY’s Canadian insurance consulting leader, is based out of Toronto, Ontario, Canada. He describes Nexus as an enablement platform that brings best-ofbreed capabilities across a broad spectrum of software and business technologies to enable clients. “The Nexus for Insurance platform provides a core system that is powered by Guidewire, with EY’s Nexus assets. This allows the rapid deployment – in a matter of months versus years – of full-stack capabilities that provide them the pricing and underwriting functions they need to be able to deliver on their business, as well as a full-scale set of integrations,”

As technologies rapidly change, companies need to constantly stay ahead of the new innovations, which is why Nexus brings so much value. Based in California’s Silicon Valley, EY’s global insurance technology leader David Connolly says “Insurance companies in many cases are struggling to keep up with the roughly 2000 insured techs that have emerged, let alone all the changes in the existing companies such as Guidewire and Duck Creek and EIS and others. Our selfassigned job is to keep up with all of this and make it very easy for our clients to understand what technology can do for their business, as well as how to enable change at speed without bearing the burden of all the research required to figure out who to partner with.” Pengelly then concludes, “The need for insurance companies to bring more agility into the market and get more products out based on customer preferences has never been stronger,” he concludes. “Nexus is positioned to support that.”

Learn more

Frédéric St-Jean-Mercier giving the opening remarks at the 2022 IT Strategic Planning session. GroupAssur’s IT team is at the core of the company’s ambition to revolutionise the P&C MGA industry with unmatched technology capabilities. The team was therefore presented with GroupAssur’s detailed 5-year corporate strategy plan. They were then able to build their technology roadmap to support the company’s long-term objectives and milestones.

“ Our goal is to create a world-class MGA and expand through the United States” FRÉDÉRIC ST-JEAN-MERCIER CHIEF INFORMATION OFFICER, GROUPASSUR INC.

New marketplace offerings and a robust reputation GroupAssur is the largest Canadian owned MGA in P&C insurance in Canada. The company mainly provides commercial insurance products and has a wide range of products, from General Liability to property. The merger with Evolution Insurance has been a symbiotic move. 130

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“We had very complementary products, so that made us the number one Canadianowned MGA in the country,” St-Jean-Mercier says. “Our goal is to create a world-class MGA and expand through the United States.” Part of this journey is the deployment of new technologies that are set to further enhance GroupAssur’s wide portfolio of commercial products. The innovations are

GROUPASSUR

we do so through several different insurance products - which we design - and build partnerships with them. “This allows us to offer a very broad and diverse range of insurance products, enabling us to cover very complex risks that most insurance companies would not be able or willing to cover themselves.” GroupAssur is, in his opinion, able to assemble a completely different type of insurance offering. Another competitive advantage is the company's financial resources. As Canada's largest MGA, backed by reputable investors, it has the ability to invest in technology at scale, in a way that very few other MGAs can.

adding value to broker services. GroupAssur will be the first MGA in the world to be going live on Guidewire – the world-renowned cloud-native, P&C platform for insurers. It's just one of the aspects that already sets GroupAssur apart from the competition. St-Jean-Mercier explains: “Most MGAs are pretty niche. We are different because we represent most of the national insurers and

Technology adoption in commercial insurance The demand for more streamlined and digitised commercial insurance is high, but a limited number of traditional industry players have chosen to adopt the latest technological innovations. Instead, they have tended to focus on personal lines products. St-Jean-Mercier explains: "This has created a gap between the state of technology for personal lines insurance and that for commercial insurance. Then COVID came, and drastically changed the landscape, so now customers' expectations are even higher when it comes to the digital and self-service marketplace. This puts even more pressure on insurance companies to invest more into personal lines and will most likely widen the gap further when it comes to digital offerings in the commercial lines sector. This situation has provided GroupAssur with the opportunity to be at the forefront of entities investing next-generation services in the commercial lines sector. “Commercial insurance is our core business, this is what we're focusing on. fintechmagazine.com

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Innovation through technology

We're investing in these technologies so that we can bring serious benefits and disruption to the industry through the use of tech in a way that no-one else has done before.” Core values in a changing industry As agile strategies and new technologies rapidly transform the mechanisms and procedures offered by GroupAssur, the company is intent on making sure it retains its core values, which are based in respect and integrity, excellence and unity. “This is really the bedrock of our company. We operate in the financial sector, so our clients and our partners need to trust us. We need to be respectful and have integrity at all times. This is non-negotiable.” 132

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“Excellence translates into the quality of our work, both for what we provide to our brokers and how we represent our insurance carriers. Our KPIs are driven around excellence, as well as the value we can bring to our partners. “This is where the innovation aspect comes in. We deliver experience through technology and innovation. There's no other way to do it. There's a limit to how you can scale using manual processes, pen and paper and people. So excellence is the driver of technology for us.” The final core value for GroupAssur is unity, which is applied to the company’s internal operations as much as to its customer products and services.

Véronique Ledoux & Erica Fargiorgio participating in the 2022 IT Strategic Planning session. Véronique oversaw the successful delivery of GroupAssur’s newly built Data Lake and the migration of all production and financial reporting to a fully automated business intelligence platform. This allows business operations and the management team to have near real-time access to all the company’s KPI and objectives.

“We share all the same objectives,” says St-Jean-Mercier. “Whether you're in technology, operations, underwriting or business development, there are the same objectives across the board. We win together because we're all accountable together. It's very important for us.” Digital transformation and going cloud native GroupAssur is currently in the process of transitioning to a cloud-native model on the Guidewire platform. The integration process will be completed soon, making the insurance provider the first MGA in Canada to operate in this way. “Guidewire is at the centre of the core insurance operations ecosystem that we

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GroupAssur built a small but highly skilled core IT team responsible for overseeing the strategy, conceptualisation, design, architecture, and requirements internally while leveraging external partners for development & execution at scale.

are developing. But around this we're implementing a lot of different technologies – some of which is AI-driven and some of which is centred around automation, data and analytics, as well as business intelligence,” continues St-Jean-Mercier. As part of the transition, GroupAssur’s team built a Data Lake featuring data from across the company’s entire landscape of legacy systems to provide a unified dimension that AI algorithms will leverage to help the business make decisions. “A lot of our transformation is not around replacing the humans – it's around three things: Speed, efficiency, and insight. “Foremost, speed is of the essence. We look at the speed at which a case moves through our pipeline, eliminating any kind of clerical or data entry work for our employees.

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From left to right: Jalal Khargou, VP of AI & Data Analytics. Jean-François Martineau, Solution Architect & Technical Lead. Erica Fargiorgio, Program Manager. Véronique Ledoux, Business Analyst, Data. Frédéric St-Jean-Mercier, Chief Information Officer. Chantale Leduc, Executive Assistant. David Cecyre-Thibert, Business Analyst, Insurance Products.

“ Our value of Excellence translates into the quality of our work, both for what we provide to our brokers and how we represent our insurance carriers” FRÉDÉRIC ST-JEAN-MERCIER CHIEF INFORMATION OFFICER, GROUPASSUR INC.

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“This allows them to focus on doing actual underwriting work without having to go and search for all of the data that they need to make a decision. It's really about simplifying their operation; we're not removing the human from the equation, because we are an underwriting business. “We also think that technology is not at the stage, for the foreseeable future, where it can make underwriting decisions. Those are too complex, especially in the commercial sector. Instead, what we're doing is making sure that our technology routes the right case to the right underwriter – the one who is the most qualified to perform that case extremely efficiently.” GroupAssur’s new processes are made possible through its partnerships and new APIs. The company has forged several alliances with data providers that are already integrated into Guidewire’s platform. The AI-driven solutions extract the information from the different channels that receives submissions. They then feed that straight into Guidewire along with some of its own inferred analysis & insights – thus completely removing the data entry and clerical work portion of the labour. The availability of insights is also essential, says St-Jean-Mercier, because it guides all management decisions in the company’s strategy. “We have already built a live business intelligence hub that tracks all of our KPIs, all of our performances, our markets, our brokers’ performance throughout the years, month by month. We can slice it anyway we want and go back as far as 10 years. It contains unified data from all the different legacy systems that we have, and we designed it so that it can scale with acquisition, because part of our strategy is around acquisition.” 136

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“ When you do underwriting, you want to make sure that you do it right – that you check every box – that you cover every angle, because you don't want to have a bad risk” FRÉDÉRIC ST-JEAN-MERCIER CHIEF INFORMATION OFFICER, GROUPASSUR INC.

Within just a few short months, GroupAssur can bring a legacy system from an acquisition onto the data lake and begin migrating it over to the Guidewire platform. Ultimately, they aim to complete the post-merger integration of the entire system within three-to-six months following a transaction. “That's the gist of our transformation,” St-Jean-Mercier says. “So, what kind of value does it bring to our stakeholders? “If I'm an insurance company and I see that GroupAssur's technology allows faster and more efficient quoting to their brokers - at no additional cost to them and with a loss ratio equal to or greater than the current ratios than it's a no-brainer for these companies to partner with us and create more programs.“ “From the broker standpoint, It's all about giving them flexibility and speed. They don't want to have to enter data on a portal for six different MGAs and four different insurance carriers for every quote. That's not sustainable. So we want to make it easy for them to send

Jalal Khargou, newly appointed VP of AI & Data Analytics & Frédéric St-Jean-Mercier, CIO of Groupassur. Together they are ready to revolutionize the P&C Commercial Insurance MGA industry. fintechmagazine.com

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cases to us, and we want to make it easy for them to conduct their business, even when it is a very complex risk “Finally, when we talk to potential companies that we want to acquire or merge with, in addition to the broad range of insurance products and expertise that we bring, we bring technology that they don't have and that would be very expensive to implement. Their expertise and product range, combined with our competitive advantage, makes it easy for them to choose to join GroupAssur. “They bring us their expertise and their products, and we bring them our tech, our products, our expertise. It's a win-win for everyone.” Key Performance Indicators driving strategy GroupAssur's expansion strategy is guided by key performance indicator (KPI) data that directs our strategy and drives our growth. St-Jean-Mercier explains: “Our two primary KPIs are our loss ratio and our timeto-quote. When you do underwriting, you want to make sure that you do it right – that you check every box – that you cover every angle, because you don't want to have a bad risk. You can't rush the process, but you still need to be fast. So our time-to-quote KPI is

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“ Labour shortages, especially in tech, are really hard because the pace at which technology is evolving has accelerated” FRÉDÉRIC ST-JEAN-MERCIER CHIEF INFORMATION OFFICER, GROUPASSUR INC.

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By managing the KPIs efficiently and scaling fast, GroupAssur has implemented an ambitious growth strategy that will enable it to enter the US market soon. “We want to expand to the US market, we're actually currently looking for MGAs over there that want to partner with us in this venture. St-Jean-Mercier says that, within 3-to-6 months – depending on the original technology stack and processes – an MGA that was relying on legacy systems will be in a position to switch, in its entirety, to a wholly new digital proposition.

counterbalanced by the loss ratio. We want to have a loss ratio that far exceeds anything that insurance companies have because it's important for them. “We represent them, so we have to perform better. Ultimately, one primary KPI is enabling the business to quote faster and provide them with all the data and the insight they need to quote something very efficiently, allowing them to make the right decision at the right rate, using the right facility.

Challenges facing the insurance industry While technology is busy transforming legacy companies to slick, digital operators, it's easy to believe the process has been challengefree. This is not the case, according to St-Jean-Mercier, who emphasises the fact that the war on talent is a very real stumbling block to the insurance industry in general. “It's very hard – and like anyone, we're facing the same challenges. Labour shortages, especially in tech, are really hard because the pace at which technology is evolving has accelerated. You have a hard time finding talent, but a year later you have to find more talent for newer technologies, which complicates the challenge." GroupAssur is managing the situation strategically by designing its core tech team to be composed of high performers with high accountability that are mainly geared toward architecture and business analyst roles. The team conceptualised and designed the high level architecture and then built the roadmap. They have a firm understanding of the company’s strategy and objectives. They are also well-versed in a diverse spectrum of technologies so that, if the need arises, they can be paired with a digital partner to execute a new project. fintechmagazine.com

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Jean-François Martineau, Solution Architect, oversees GroupAssur’s Guidewire implementation with its partner Ernst & Young Canada. Under his technical leadership, GroupAssur is on track to complete the migration of its three legacy insurance systems to the full suite of Guidewire products in under a year. The ambitious project, which kicked off in July 2021 has now successfully completed its UAT phase and is scheduled to go live for all lines of business on June 1st, 2022, making GroupAssur the first MGA in the world to use Guidewire.

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“We want to leverage innovations to revolutionise the commercial insurance and MGA Industry in Canada” FRÉDÉRIC ST-JEAN-MERCIER CHIEF INFORMATION OFFICER, GROUPASSUR INC.

The digital ecosystem has become a key driver for all of GroupAssur’s scaling plans – indeed, St-Jean-Mercier describes it as critical. “There's no way we could have delivered Guidewire in such a small amount of time if it hadn’t been for the support of our ecosystem partners. We partnered with Ernst & Young Canada. They have a phenomenal team, and I’ve been so impressed with how much expertise and talent they can pull in at scale. “This is a prime example of how, when you’re facing a labour shortage, a partner with international scale can pull talents from all over the world and build an insurance application software practice in record time. It’s been eye-opening. “We're talking policy centre, billing centre, producer engage portals, customer engage portals, replacing four different legacy systems, on-track and under budget in under a year – that is just phenomenal.” The other partner GroupAssur has come to rely on is SIA Partners. The French fintech company has headquarters in Canada and has a robust reputation for AI and data science. SIA manages the coding and algorithm building required by GroupAssur as the company continues to scale and enter new markets. “We think it's a really good team. We've been working with them for the creation of knowledge and the first iteration of our AI algorithm, which is currently running in production. So those are just two of the many

great partners we have. But I would say that those are the two primary ones. New horizons for GroupAssur The future is certainly bright for this forward-thinking company that has embraced innovations and technologies, not only to drive their own processes, but to transform the offerings of their stakeholders and customers, too. “In terms of the future, the three areas of focus for us will be completing the transformation that we're already well into, and then pivot to become a technologydriven insurance company,” enthuses St-Jean-Mercier. “After that, we want to leverage innovations to revolutionise the commercial insurance and MGA Industry. That’s our primary focus for the future, as well as consolidating our leadership in Canada.” The move into the US is another big step, and an expansion that is being actively worked upon. St-Jean concludes: “We want to expand that to a point where we become unreachable by the competition. We're actively looking for other MGAs in the US that want to bring their expertise to us, while we bring our technology and expertise to them. The US is a very important milestone for us in our future, and the first.”

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TOP 10

CH BRANDS E U R O P E WRITTEN BY: JOANNA ENGLAND

As fintech companies roll out new products and services globally, we look at the top 10 brands leading in Europe

Fintech in Europe is currently booming, and investors have shown their support by throwing their capital behind some of the fastest scaling companies worldwide. While the UK is still holding tightly onto its position as the top destination for fintechs in Europe – and the second biggest hub globally next to the US – other contenders, such as Germany and Denmark, are swiftly growing their fintech sectors. Indeed, there are now several decacorns emerging in these marketplaces, as well as a wide range of unicorns and aptly-named ‘soon-icorns’. We take a look at the biggest fintechs in Europe and chart their moments of success.

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Starling Bank Valuation: $3.3bn

Launched in 2014, Starling Bank is classed as a digital challenger bank based in London, specialising in current and business account products. Founded by former Allied Irish Banks COO, Anne Boden, Starling Bank is a licensed and regulated bank backed by investment giant Goldman Sachs. Starling Bank recently doubled its valuation to $3.3bn in its latest funding round and will be launching in new marketplaces over the next 12 months

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Bitpanda

Valuation: $4.1bn Austria-based Bitpanda is a digital assets management platform that launched in 2014 and is used to facilitate the selling and buying of cryptocurrencies, factional stocks and metal commodities. The fintech’s mobile app provides access to its trading platform, which provides a cryptocurrency exchange, commodities and securities trading, and ETFs. It also bypasses the complex financial challenges by using digitised assets and blockchain to help users manage their investments in a flexible and cost-effective manner.

08 Pleo

Valuation: $4.7bn Michelle Drolet specialises in cybersecurity, cloud, and virtual CISO services businesses. Drolet grew up in a military family and went on to earn a degree in Political Science and Criminal Justice. Drolet’s initial dream career was with the FBI, however, once the PC revolution hit, she witnessed the rampage of Trojan viruses and malware, so eyed opportunities applying forensics, mitigation and security services to desktops, networks and people. She used her expertise to establish Towerwall as a marketleading cybersecurity service and solution provider in 1999. In 2019, she was recognised as one of the Top 25 Women in Cybersecurity by The Software Report and as one of the Top CEOs to Watch in 2020 by CIO Views.

07 Mambu

Valuation: $5.3bn

Founded by Eugene Danilkis in 2011, Mambu is technically classed as a fintech challenger, but it’s essentially a German software company that provides infrastructure for banks and financial services companies according to the Software-as-aService (SaaS) model. In December 2021, Mambu reached a company valuation of $5.3bn, making it one of the biggest unicorns in Germany. Mambu is a SaaS, cloud-native, API-driven banking and financial services platform

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06 Mollie

Valuation: $6.5bn Founded and based in the Netherlands, Mollie launched in 2004 and is a digital payments platform that provides userfriendly processes for integrating payments into a website or app. The platform’s technology is currently processing transactions with local payment methods such as Mastercard, Amex, iDEAL, VISA, Bitcoin, Direct Debit and more. The tools Mollie offers merchants reduce the complexity of the process, saving time and stress through its powerful API.

05 N26

Valuation: $9bn

Launched in 2013 by Valentin Stalf and Maximilian Tayenthal, N26 was the first German neobank to be launched and is based in Berlin. Its products and services have proven groundbreaking in the European marketplace and it has enjoyed stratospheric adoption in terms of its customer base. Recently, N26 partnered with an insurance giant to expand its products and services into the insurtech space. A true neobank, N26 operates without any physical branches, instead providing all its services remotely via its mobile super app.

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04 Wise

Valuation: $11bn Formerly branded as TransferWise, UK fintech Wise is leading the way in multiple payment gateways for European customers. Launched in 2010, the fintech – which recently reached Decacorn status – enables customers to receive their salaries, pension and multiple other payments without having multiple bank accounts. It also allows users to spend according to the local currency of their location, making travel much less stressful and expensive. Wise customers can also send money to 80 countries through its lowcost and transparent solution.

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03 Klarna

Valuation: $30bn Formerly the biggest fintech company in Europe, Klarna recently hit a roadblock. The Swedish BNPL, which launched in 2005, experienced a drop in revenue caused by borrowing costs rising to their highest levels, while rising rates impacted the company’s debt and equity valuation. This has resulted in Klarna losing 30% of its previous valuation, dropping from $46bn to $30bn. In recent days, this has resulted in the news that Klarna will be reducing its staff to remain on an even keel. Despite these obstacles, Klarna remains one of the world’s most respected fintechs, having revolutionised the digital pointof-sale payments space.

TOP 10

Revolut

Valuation: $33bn

Launched in 2014 – when it originally functioned as a global money app with a prepaid credit card – Revolut is now a leading global fintech that has launched as a bank throughout 10 Western European markets. With services currently available in 20 countries, Revolut’s super app now serves more than 18 million customers worldwide and has operationalised its Lithuania-based European specialised banking licence in 10 European markets. Revolut is a British fintech company founded by Nikolay Storonsky and Vlad Yatsenko, and its rise to decacorn status has been remarkable. In November 2020, the company was breaking even and, with a US$4.7bn valuation, became the UK's most valuable fintech company. In January 2021, it applied for a UK banking licence while also holding a mega funding round in July of that year, raising $800mn, which brought the valuation up to a staggering $33bn – making it the most valuable UK tech startup at the time.

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Checkout.com Valuation: $40bn

Flying the flag for British fintechs, Checkout.com is currently the biggest fintech brand in Europe, with a valuation of US$40bn following its recent Series B funding round in January 2022. The company, which was launched in 2012 by Swiss tech entrepreneur, Guillaume Pousaz, seeks to enable customers to enjoy a truly digital economy. It provides digital payment solutions not only in crypto, but is also seeking to establish itself in the Metaverse as the space progresses. Checkout.com is a leading provider of international online payment solutions. The fintech company is built on 100% proprietary technology and manages every part of the payment process. It also provides total transparency across the entire payment value chain. Currently, the fintech processes approximately 150+ currencies and, additionally, provides the ability to accept all international cards, as well as popular alternative and local payments through one integration.

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Gary Ho on Digital Transformation as CTO at AXA HK and Macau WRITTEN BY: İLKHAN ÖZSEVIM

PRODUCED BY: JOE PALLISER fintechmagazine.com

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Chief Technology Officer of insurance giant AXA Hong Kong and Macau, Gary Ho discusses the relationship between better digitalisation and data

ary Ho, Chief Technology Officer of AXA Hong Kong and Macau, has been in digital technology for over 2 decades. “Having been the Chief Lead Architect, I have a solid technical background, primarily focusing on leading enterprise solutions architecture. I have formulated IT strategies and driven multimillion-dollar transformation projects in insurance firms. Changes in enterprise architecture are inevitable alongside digital transformation, and these projects have helped me to understand how the commercial world and technology could go together to create positive impacts,” he says of his tenure within the digital tech sector. “These diverse experiences have allowed me to prepare for uncertainties and challenges. AXA has a strong emphasis on human values – and it somehow reminds me of my past days in technical consulting, and that we must put ourselves in the customers’ shoes, to work out solutions that resonate with them.” “Recently, in Q1 this year, our team won Asia’s Best Infrastructure Modernisation at the IDC Financial Insight Innovation Awards. This recognition is a very strong external endorsement that we are playing a leading role and are on the right track in strategy, mission, and vision in the IT industry.”

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Gary Ho on Digital Transformation as CTO at AXA HK and Macau

Recipe for success – responsive, present and sustainable In a climate where it seems every business is undergoing some form of transformation, it has to be asked: what exactly are the focuses of AXA’s digital transformation journey that makes them stand out as giants in the industry? Ho says: “There are three focal points that set AXA apart, and these are: responding to trends; always being present; and nurturing an environment for sustainable growth. Taken as a whole, these allow us to deliver our promises for both today and tomorrow.” Being responsive to trends is vital. Customers nowadays are more willing to voice their needs, holding ever-stronger opinions concerning how AXA should approach and communicate with them. “I see this in a positive light,” says Ho. “Yet, the challenge lies in how we can keep up with their constantly changing needs. We want to be the companion of our customers 158

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“ We’re not satisfied with the mere status quo” GARY HO

CHIEF TECHNOLOGY OFFICER HONG KONG AND MACAU, AXA

throughout their lifetime, through the ups and downs, and so we have to understand our customers.” “To achieve this, we must always be present with them – being there for them through their entire journey shows them that we care and that they matter to us. We need to go beyond mere policy, down to even the most subtle details of Customer Experience (CX). ‘Being present’ also extends to the reliability of our systems. We’ve

AXA

invested significant effort in PaaS (Platform as a Service) and SaaS (Software as a Service), supported by a cloud-native architecture that fuels 24/7 operation.” This approach then spills over into many different areas and aspects of business and operations at AXA. “But, of course, we’re not satisfied with the mere status quo,” says Ho. “Digital transformation is an ongoing and constant process for us. We work hard to foster an evergreen environment that encourages and nurtures sustainable growth and on-time responses. It’s also necessary to save the turnaround time spent on systems upgrades and patching so that we can dedicate our resources and time to the applications and CX enhancements.” Developing stand-out products and services with the technology to match Hong Kong possesses a highly competitive insurance market, with many firms trying to make their mark in the territory. AXA tackles this by providing offerings above and beyond those of competitors via a digital system designed to accommodate them. For such market conditions, what does it take for an IT system that can support AXA’s wide spectrum of service and product offerings to be effectively implemented? In short,

AXA aims for a progressively more seamless architecture, for more agile responses to the market and for synchronisation across multiple departments. “The market can be worlds apart between today and tomorrow,” says Ho. “It’s crucial that we’ve got the right tools implemented in the right places to endure any challenges that may arise from this constant shifting, so having the flexibility to upgrade any system efficiently, with as little impact as possible, is central to this adaptation.” “To achieve this, we’ve implemented a Microservice Architecture. We are now able to add or remove any product or component of the system much faster than ever before, and this entire process is also virtually seamless. Since we have a thriving partner ecosystem that involves a hybrid of remote and on-premises teams, an architectural design that includes great adjustability is a better fit for us than the traditional setting. It also sets the basis for the continued development of our services.”

149,000

Number of employees (AXA Group – AXA Hong Kong & Macau is a member of AXA Group)

1816

Year founded

Making use of data-based insights AXA is leveraging the increasing importance of data in an exponentially expanding age of information. Ho says: “No doubt, data has become an invaluable asset in itself. fintechmagazine.com

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IBM uses its expertise to implement transformational change within fintech, partnering with clients on complex organisational and technological challenges.

required business model changes enabled by modern digital solutions which, without reliable partners, would be hard to scale at pace.

A consultancy business is only as good as the knowhow it can impart onto clients. So it speaks volumes that, when asked what sets IBM Consulting apart, Lee-Han Tjioe, General Manager for Hong Kong and Macau, points to its expertise.

An example is IBM’s strong partnership with insurance company AXA, which has endured for many years. Initially, AXA had their applications managed by providers worldwide but was looking to consolidate, recognising that it was hard to achieve consistent levels of service as well as cost effectiveness. AXA brought in IBM to manage those applications and help them innovate.

“We have both business consulting and technology consulting in our scope,” LeeHan says. “We have business consultants that help clients with strategy, new propositions and defining or optimising business processes. That’s one part of our practice. The other part is advising on specific technology topics. We have consultants that are very specialised in key technologies like AI and Hybrid Cloud that can help clients achieve major, technology-enabled operational improvements.” IBM has been a trusted advisory and delivery partner for decades, developing into an ecosystem provider with recent corporate acquisitions to expand its AI and Hybrid Cloud skill sets and support clients with implementing differentiating industry and technology solutions. Today, IBM works collaboratively with companies to achieve

“Our partnership with AXA means we are delivering multi-year support for the business-critical applications that AXA has,” Lee-Han continues. “Those applications are supporting distribution, sales, and key internal operations. We have transferred knowledge of 60 applications within four months and now support about 100+ applications. This is the foundation for our partnership with AXA. We are now helping with further accelerated deployment of APIbased services on AXA’s digital platform to meet rapidly developing market needs.”

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AXA

GARY HO TITLE: C HIEF TECHNOLOGY OFFICER HONG KONG AND MACAU INDUSTRY: INSURANCE

EXECUTIVE BIO

LOCATION: HONG KONG AXA Hong Kong and Macau is a member of the AXA Group, a leading global insurer with presence in 50 markets and serving 95 million customers worldwide. As one of the most diversified insurers offering integrated solutions across Life, Health and General Insurance, our goal is to be the insurance and wellness partner to the individuals, businesses and community. At the core of our service commitment is continuous product innovation and customer experience enrichment, which is achieved through actively listening to our customers and leveraging technology and digital transformation. We embrace our responsibility to create shared value for our community.

“ Digital transformation is an ongoing and constant process for us” GARY HO

CHIEF TECHNOLOGY OFFICER HONG KONG AND MACAU, AXA

Having large data-sets gives businesses an opportunity to understand their users, and then enhance customer experience, thereby boosting satisfaction from a scientific point of view.” Data, scientific approaches and technical sophistication are all potentially linked to human wellbeing. “For example, from existing AXA user-insights, we may offer customers personalised recommendations that could explicitly fulfil a particular individual user’s needs, ultimately increasing customer conversion rates and driving revenue growth,” Ho explains.

“But of course, achieving this is no easy task,” he acknowledges. “First and foremost, a solid data foundation is crucial to this journey. Without it, it’s almost impossible for any organisation to turn their data into an asset. “ “Second, while there is a tremendous amount of data distributed in several data warehouses, not all data is clean nor is it all correct. We could see some of that data as dirty or noisy – which would potentially impact the data model accuracy and the final prediction results. As it turns out, we might spend much more time and effort on data cleansing and pre-processing than expected. “ fintechmagazine.com

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Delivering agility through technology Brian Kealey, GM and VP for MuleSoft Asia, talks technology and cutting edge solutions for the global insurance industry MuleSoft, acquired by leading software company Salesforce in 2018, is the only unified platform for integration, APIs, and automation. MuleSoft makes it possible for IT and business teams to create seamless digital experiences faster than ever before. The core aim of MuleSoft is to help organisations through their digital transformation journey by enabling greater speed, agility, and efficiency. Brian Kealey, GM and VP for MuleSoft Asia, leads the MuleSoft business across Asia, which covers the Greater ChIna Region, Southeast Asia and India. He says, “MuleSoft’s vision is to connect and automate everything. We help organisations to become more composable and agile by unlocking their assets, the data, and the processes they have, and being able to improve their customer experience through technology.”

Transforming customer experiences The trend for focussing on the customer experience is a theme

dominating all industries, and MuleSoft has taken a different approach to achieving its goal. Kealey says, “We saw that more than 70% of customer experiences in Asia have become digital over the last two years. And we’ve seen the pandemic has massively accelerated how organisations think about digital and how critical that is to their growth.” Automation is also playing a big part in MuleSoft’s ongoing strategy. “We allow IT to have the security and governance that they need to make sure the organisation is not at risk,” he says. “Now with automation capabilities, we’re providing the only unified platform that combines the power of integration, API management, and automation on a resilient, secure, and flexible foundation, so companies across industries can easily automate business processes and compose new digital-first experiences, faster.” He concludes, “That’s been the focus for us for the last few years. And we’re continuing to innovate in security and governance and reliability space as well. So very exciting times for us.”

AXA

“ There are three focal points that set AXA apart, and these are: responding to trends; always being present; and nurturing an environment for sustainable growth. Taken as a whole, these allow us to deliver our promises for both today and tomorrow.” GARY HO

CHIEF TECHNOLOGY OFFICER HONG KONG AND MACAU, AXA

“To counter this, we have maintained a robust Data Governance Framework (DGF). Within this framework, we’ve established good standards and policies, like regular data cleansing and data quality optimisation. With a modernised and robust data infrastructure, we are proud to say that we’ve broken the silo between data and wider lines of business, to drive our enterprise forward.” AXA has a Point of Sales System for their distribution partner, iPro, to support the sales journey of its products digitally, with Ho describing the relationship as one where 166

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“iPro helps us to facilitate the sales practices with paperless applications through use of the iPad”. “We are proud to say that we started the journey of handling our new insurance policies through a paperless process, starting from agency sales to transaction completion in the backend. By using iPro, we can empower our financial planners to increase their working mobility and productivity anywhere, anytime,” he says. Developing a strong IT team and preparing for modernisation of legacy apps Meanwhile, AXA is modernising all of its legacy applications to remain in-line with sustainability, efficiency, and digitisation goals. “We believe the cultivation of a cloud-first foundation will uplift the entire technology support to business,” says Ho, “which could deliver a seamless omnichannel experience to AXA customers and colleagues with business value.” In order to leverage their data, AXA has implemented Digital Backbone, which can create 360 customer analysis for the insurance company’s financial planners. It allows them to provide timely data to support the selling strategies to AXA

GARY HO ON THE NEXT STEPS “We are also implementing a multi-level cloud programme in AXA to facilitate cloud adoption within the company. When we’re talking about raising our adoption rate to new heights, we have a very aggressive target – nearly 100% cloud utilisation of all applications in Hong Kong.”

customers, acting as the facilitator to continuously engage its customers. It can also further analyse customer behaviours to support business vision and strategy at the same time. At the foundation of the IT systems, of course, is the IT team. The question then becomes how to build a strong IT team that can support the technology strategy at AXA. Ho says: “It might be a cliché to some, but to AXA, the most important aspect of a strong team has got to be ‘doing the right thing, instead of doing the thing

right’. We should develop a foundation for solutions, to make sure we are on the right track, including in terms of architecture design, solution and vendor selection, and so on. This brings out a further question, which is: ‘How can we be sure if we are doing the right thing?’. The team should understand the business strategy of the company, and why we are working on a particular solution. They should think from the perspective of customers, to provide an exceptional experience with the applications they develop. “ fintechmagazine.com

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“We are making the shift towards a start-up mentality and the principle of courage, in which everyone takes responsibility to contribute to the entire team. We would love to establish a culture with an adventurous ethos, where colleagues are never afraid to take risks and are willing to try something new in the market. All of us should work as an alliance to build a technology-vision that business resonates with, so that business and IT can deliver the most positive outcomes together.” Looking to the future of digital technologies and cloud computing When asked about his views regarding the rising trend of enterprises adopting cloud computing to accommodate this new era

of technology, Ho explains the importance of understanding the reasons behind such moves, saying: “Before we talk about cloud computing adoption, we should understand the reason behind enterprises being so eager to move towards the cloud in the first place.”

“ No doubt, data has become an invaluable asset in itself” GARY HO

CHIEF TECHNOLOGY OFFICER HONG KONG AND MACAU, AXA

Your Data Has the Power To Do the Extraordinary Innovate with your data on any platform, any cloud with our Intelligent Data Management Cloud™ For more details, please refer to www.informatica.com.hk or call at +852 8228 3186. LEARN MORE

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“Legacy systems and on-premises servers are not friendly enough if there is any integration or update needed. Colleagues need to spend a huge amount of time on the operation processes and deployment procedures. Very often, things get complicated, which can take a heavy toll on efficiency – even if we only need to apply a minor change. As a result, we notice that more flexibility is needed to keep up with the fast pace in IT. “ “For AXA, we are using a cloud agnostic strategy to leverage the best capabilities from each solution in the industry. We adopt a multi-cloud model with inter-cloud in order to combine both and create a seamless mass-network for all our applications. We can leverage this model to extract the best of each cloud solution and support business growth in the long run.” He says: “We are also implementing a multi-level cloud programme in AXA to facilitate cloud adoption within the company. When we’re talking about raising our adoption rate to the new height, we

“ We work hard to foster an evergreen environment that encourages and nurtures sustainable growth and on-time responses”

have a very aggressive target, which is nearly 100% cloud utilisation of all applications in Hong Kong. We believe the success of this programme will greatly uplift the performance, stability and availability of technology in AXA Hong Kong and Macau.” In closing, Gary Ho shares his thoughts on coming trends in the technology industry: “The future of the technology industry has to be the adoption of Web 3.0. It’s a brandnew concept regarding the Internet’s next generation, involving the evolution of the decentralisation of the web, and leveraging it to take it to a new height. Users will be able to own and control their creation of online content and their digital assets. “ “With the evolution of Web 3.0, we will be able to leverage the Metaverse to merge and integrate the Internet and virtual world into our lives, so that we can interact in the virtual world. As we always keep up with the latest trends in technology, AXA France has already taken the first step into the Metaverse through the acquisition of virtual land on a platform, and, in the future, we can definitely see ourselves becoming one of the major players in the field, too.”

GARY HO

CHIEF TECHNOLOGY OFFICER HONG KONG AND MACAU, AXA fintechmagazine.com

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Realising procurement savings and added value

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TRANSUNION

WRITTEN BY: GEORGIA WILSON PRODUCED BY: MIKE SADR fintechmagazine.com

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Damon Ascolani, Head of Global Procurement at TransUnion

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Damon Ascolani, Head of Global Procurement at TransUnion, discusses the importance of procurement in M&A activity and how organisations can realise value

1968 Year founded

10.6K+

Number of employees

$3bn Revenue (2021)

ransUnion is a global information and insights company that makes trust possible between businesses and consumers and is one of the three largest consumer reporting agencies in the US. “We provide the information that makes the relationship between consumers and business possible,” says Damon Ascolani, Head of Global Procurement at TransUnion. From credit scores to ID verification, alternative credit data, analytics, marketing, and debt collection strategies, TransUnion is the single source of information for aiding its clients in these areas. Whilst Ascolani’s current stint at the company began in 2017, he previously worked for the company back in 1998. “I was able to see the company before it became a public organisation,” says Ascolani. “20 years ago, the company was private and very back office. Today – and ever since it became public – TransUnion has a very entrepreneurial mindset. It’s an older company, but it acts like a startup with an open-minded and innovative culture. Its mission statement is ‘Information for Good’, enabling financial inclusion to people everywhere in the world.”

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TransUnion: realising procurement savings and added value

“ TransUnion has a very entrepreneurial mindset. It’s an older company, but it acts like a startup with an open-minded and innovative culture” DAMON ASCOLANI

HEAD OF GLOBAL PROCUREMENT, TRANSUNION

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Procurement’s growing importance in M&A activity When it comes to mergers and acquisitions (M&A), procurement is steadily becoming an important process both before and after a merger or acquisition. “In particular, this can be seen in the due diligence process, assessing vendor footprints to build a business case for synergies,” explains Ascolani. “There are also contractual elements, servicing rights with partial divestitures and acquisitions, and I’ve found that the more

DAMON ASCOLANI TITLE: HEAD OF GLOBAL PROCUREMENT INDUSTRY: PROCUREMENT LOCATION: CHICAGO, US

procurement is involved in M&A activities, the more value we are able to provide due to our expertise in vendor spend and dynamic product suites. “In this scenario, TransUnion helps organisations to develop business cases for potential M&A activity – we provide the information that is valuable to that discussion. After the deal is done, its then about achieving those synergies, making sure that all vendors are integrated and that our stakeholders are getting the best rates, terms, and overall value from their spend.”

EXECUTIVE BIO

Damon Ascolani is a highly accomplished, legally trained senior procurement leader with global experience managing purchasing departments with specialties in building procurement departments, M&A, cost savings initiatives, contracts management, and process streamlining. He received a Bachelor’s Degree in Economics from the University of Illinois at Urbana-Champaign and has a law degree from The University of Illinois-Chicago John Marshall Law School and was admitted to the Illinois Bar in 2012. Mr. Ascolani currently works at TransUnion, one of the three national credit bureaus, serving the company’s first-ever Head of Global Procurement. Prior to that, he spent 15 years at HSBC holding a variety of senior management positions in risk and procurement.

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segnellahc s’yadot teem t’nac uoY ecnegilletni reilppus s’yadretsey htiw gnipleh rof seigetarts evit cef fe tsom eht nraeL niahc ylppus mret-regnol dnatshtiw ssenisub ruoy Dun & Bradstreet and TransUnion Dun & Bradstreet/ tsom eh t htiw sksir reilppus eganam dna noitpursid TransUnion: Understanding Dun & Bradstreet and TransUnion have a long history “We’ve .elba liavofa working atad together. evisne herbeen pmoc risk and opportunity Dun & Bradstreet’s Brian Farley discusses the company’s long-standing relationship with TransUnion and what sets their it apart from others Founded in 1841, Dun & Bradstreet has been helping its customers understand risk and opportunities in business for nearly two centuries. As a provider of data and analytics, the company serves its customers by collecting information on a global scale about hundreds of millions of different business locations worldwide. “At Dun & Bradstreet, we are known for providing commercial insight,” says Brian Farley, Vice President and Business Segment Manager of Third-Party Risk and Compliance at Dun & Bradstreet.

“Two of our biggest operating areas are ownership information and financial risk. With the information we gather, we are able to provide predictive indicators and describe the future behaviours of businesses worldwide.”

mutual customers, as well as mutual suppliers for decades. Our services complement each other, with TransUnion focusing on consumer financial behaviours and Dun & Bradstreet focusing on commercial behaviours. Our history has really been about addressing specific customer problems by linking our expertise.”

ylsuounitnoc ruo revocsiD Two key areas where› Dun and ata&dBradstreet detad pu TransUnion are working together include fraud and micro-businesses. “Combining both Dun & Bradstreet’s and TransUnion’s data, we are using information to develop a strong picture of not only the business entity, but also individuals associated with the business to mitigate commercial fraud and misrepresentation of identity,” says Farley. “We have also been working together on a broader area – micro-businesses. This is a trend that is accelerating in our market in the wake of COVID-19; there has been a significant rise in remote working and freelance workers,” he adds. “This new approach to the working model has created these micro-businesses and this is where we are working with TransUnion to combine our mutual strengths to gain a greater understanding of these businesses and how they behave in the marketplace.”

TRANSUNION

DID YOU KNOW...

NAVIGATING COVID-19 RELATED DISRUPTION AT TRANSUNION

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When it comes to navigating disruption, Ascolani explains that much of it comes down to communication. “A lot of it is keeping tabs on all vendors that provide our strategic products and services, as well as communicating any timeline changes internally. This communication allows all stakeholders to understand the dynamics of the industry and plan accordingly,” explains Ascolani. Initially when COVID-19 hit, it was ‘all hands on deck’ for TransUnion. “We had key third parties that supported our business that couldn’t go into the office and didn’t have work-from-home capabilities,” says Ascolani. “We helped get laptops to many places all over the world where we had workers. We also had one staff member physically drive out of state – Chicago, Illinois – to

July 2022

Iowa in search of masks and hand sanitiser that could be brought back to our home office. And in order to ensure that we had safe on-site meetings, we supplied testing kits for our staff. “So, initially, it was this collaborative allhands-on-deck effort as there was not a great playbook for an event such as this; we didn’t have processes in place for this level of global disruption in the supply chain - you would never think that you would actually be living through something like this.” Having good relationships with vendors and stakeholders, TU Procure were able to provide throughout the pandemic and mitigate the issues that arose as best as they could. “We also managed to successfully implement a custom portal for our staff to order the equipment they needed from home to continue to operate,” says Ascolani.

TRANSUNION

“ TU Procure, our internally rebranded global procurement team acts as a centre of excellence for organisations, providing them with a control point to make sure that their stakeholders are getting the best market rates, and the most up to date product and service offerings” DAMON ASCOLANI

HEAD OF GLOBAL PROCUREMENT, TRANSUNION

The need for CEO mandates in procurement “I always say: you would never review a contract from a legal perspective without sending it to your legal department, so why wouldn’t the same apply to procurement for the commercial terms?” says Ascolani.

Procurement is a hard function to integrate throughout an organisation without having topdown mandates. TU Procure, the company's internally rebranded global procurement team acts as a centre of excellence for organisations, providing them with a control point to make sure that their stakeholders are getting the best market rates, and the most up to date product and service offerings. “We drive that discussion when it comes to supplier management and assessment. As companies grow, the economic benefits and the risk management benefits of a mature procurement organisation become increasingly vital.”

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“ At TransUnion, we help organisations to navigate the noise, aggregating that data into manageable and insightful reports” DAMON ASCOLANI

HEAD OF GLOBAL PROCUREMENT, TRANSUNION

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What makes data management critical to procurement When it comes down to being successful or unsuccessful in procurement, quality data is at its core. Whether it's understanding cost savings, predicting demand or managing suppliers, data management is critical. “An organisation can have multiple vendor relationships for a single toolset and central visibility that procurement reporting provides is the key to ensuring tail spend is well managed and vendor synergies achieved in M&A scenarios,” says Ascolani.

TRANSUNION

“At TransUnion, we help organisations to navigate the noise, aggregating that data into manageable and insightful reports. This is also important for our own supplier diversity reporting at TransUnion. He adds: “We have a robust process for analysing our data and classifying it, so in order to make an impact, we have to be able to report against a baseline and if you don’t have good analytics, then that can’t happen. Particularly in a growing organisation, you can quickly lose sight of third-party spend, so bringing stability to that and providing reporting is valuable to the decision-making process.”

DID YOU KNOW...

TRANSUNION AND ITS RELATIONSHIPS Critical to the success of any organisation, particularly when it comes to large-scale initiatives, TransUnion values its relationships. The company selects its relations based on their dedication to the long-term goal: the art of what is possible over time, not just the quick wins. TransUnion looks for relations with those that are innovative and will grow with the organisation. “We have a cloud initiative, a global business system and a customer interaction tool set that we internally call ‘Project Illuminate’ that we are working on,” explains Ascolani. “In order to successfully implement projects like these – especially global ones – you need to have strong relationships with the providers that assist you in that implementation. In my team, we have expanded multiple aspects of our procurement function. One in particular is our risk analytics capabilities, where we have just begun an automation project with the

help of Dun and Bradstreet. We went through an extensive sourcing exercise to select them, and we are very excited to be able to better screen our vendors, customers, and other third party relationships.” Another relationship for TransUnion is Slalom, which helps it from a staffing perspective for a number of critical projects. “Their skillset pairs well with our culture and environment. They understand what we are trying to do and provide us the resources to get us there quickly,” says Ascolani. “We also have a strong relationship with Salesforce, who support our customer journey from a business customer perspective and with whom we have a long-standing relationship. And then we have Coupa Software, our procure-topay (P2P) tool, which transformed us from a spreadsheet-based, manual processdriven organisation into a more structured, cloud-based organisation for our analytics and sourcing.”

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Realising procurement savings and added value A common struggle for many in procurement is the calculation of savings and value, as well as realising it in a way that people can really feel the benefits. “Every conference I go to, this is always a topic,” says Ascolani. “It is not always a straightforward proposition, especially in a rapidly growing organisation such as ours, but I find that being able to realise savings so that they are felt comes down to an organisation's relationship with the finance team and stakeholders. Procurement’s value add to an organisation goes well beyond budgetary savings, but oftentimes, this type of savings is the one that feels most real to budget owners and stakeholders. So regardless of your savings methodology, tying it to the budget is key. Once you’ve established the budgetary savings with validation by your finance team, it is much easier to champion the other aspects of the value that procurement provides such as cost avoidance and tail spend management. This is critical so that all aspects of the procurement teams’ value to the organisation are recognised.”

TransUnion over the next 12 to 18 months Over the next 12 to 18 months, TransUnion will be heavily focused on navigating the complex activities that follow M&A activity. “We’ve conducted a fair amount of acquisitions and divestitures, so there is a lot of work to be done to navigate the challenges of these activities,” says Ascolani. “But we’re up for the challenge! It’s an exciting time – there is a lot to do, we are leveraging a lot of strategic relationships during this time – and, had we not had these relationships, this process would have been significantly more difficult. “So the next 12 to 18 months will include merging the organisations that we bought under a single, common operating model, as well as further navigating recovery from COVID-19.”

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IMPROVING FINANCIAL INCLUSION: HOME CREDIT INDIA WRITTEN BY: JOANNA ENGLAND

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PRODUCED BY: JOE PALLISER

HOME CREDIT INDIA

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2012

year founded

Approx 5K number of employees

65%

increase in numbers of borrowers served – from 8.5MN in 2018 to 14.2MN in 2021

40%

of customers are first-time borrowers with no credit history

67%

Digitalisation has reduced average loan disbursal time by 67%

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HOME CREDIT INDIA

Home Credit India is transforming the lives of its customers through new technologies and products that promote financial inclusion t has been an interesting two years for Embracing digital transformation,HCIN is fast the team at Home Credit India (HCIN). expanding its digital presence and offerings The entity, which operates as a central since 2020, to build an omni-channel bank licensed Non-Banking Finance connection with our products and services. Company (NBFC) while also providing insurance services and other value-added Transforming the Asian services through partnerships, has been financial marketplace operational in India for the past ten years. While India is generally considered a wellThe parent company was founded in 1997 developed nation with a fast-growing in the Czech Republic and has since branched fintech industry and a wealth of technology out into a number of other key markets. talent, it is also home to an extensive HCIN’s core aim is to empower people to unbanked population. A recent report live the life they want now, by focusing on by the Reserve Bank of India revealed financial inclusion and responsible lending. that, with 190 million adults currently Home Credit Group is known for providing operating outside the global financial regulated, trusted financial products and system, India has the second largest services to the ‘unbanked or underserved unbanked population in the world. It is this parts of the population’ through seamless dynamic that makes the region an excellent loan applications, fast credit scoring and launchpad for HCIN’s products and services. responsible lending. Milan Dolansky, Chief Digital Officer or Home Credit India CDO for Home Credit has an employee base India, has been leading of around 5,000 people the institution’s digital and has been consistently transformation for the expanding operations past five years. Formerly since its entry in 2012, the change manager with its services spread for digital products and across 625 cities across services at CSOB, a India. The company has Czech bank in Prague, a strong network of over he has over a decade of 50,000 point-of-sale (PoS) experience in the banking locations and is growing industry, enhancing MILAN DOLANSKY with a customer base of services and driving CHIEF DIGITAL OFFICER, over 14 million customers. technological innovations. HOME CREDIT INDIA

“THERE ARE 1.3 BILLION PEOPLE IN INDIA BUT THERE ARE ONLY TENS OF MILLIONS OF CREDIT CARDS”

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HCIN: Giving back to the community

He says of HCIN: “Our services are simple, easy and fast, with a focus on enhancing credit penetration through responsible lending, which empowers our customers, who generally come from a demographic that is outside of the banking system. Basically, we enable them to access financing or credit easily and safely, in both online and offline modes.”

“WE ARE OFFERING CUSTOMERS APPLICATIONS THAT ARE MEANINGFUL TO THEIR LIVES” MILAN DOLANSKY

CHIEF DIGITAL OFFICER, HOME CREDIT INDIA

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Dolansky points out that the main purpose of the parent HCI – especially in India – is to work on improving financial inclusion and opening access to the financial industry to the unprivileged segment of subprime. “For that reason, a lot of our customers are first time borrowers or new to credit,” he says, referring to the cultural aspect of lending in India, where those who have been bypassed by the traditional banking system, have, in the past, had to rely on loans from their communities, and in an environment where loan shark practices are rife. “In the Indian market, the credit card is an aspirational product,” says Dolansky. “There are 1.3 billion people in India but there are only tens of millions of credit cards. So, a big part of the population is aspiring to have a credit card one day. But the banks are much less flexible on who actually gets one.” It is this rigidity in the traditional financial marketplace that HCIN is attempting to address through a number of innovations.

Milan Dolansky TITLE: CHIEF DIGITAL OFFICER INDUSTRY: FINTECH

EXECUTIVE BIO

LOCATION: GURGAON, HARYANA, INDIA Milan Dolansky joined Home Credit India in June '17 as Head of Online with the aim to build the digital side of the business and bring Home Credit to a digital age. Milan has over 15 years of experience in the banking industry, making online strategies, analysing the scope as well as developing suitable electronic channels. His expertise lies in his project visualisation from a birds-eye view, which helps to detail the project plan & also to analyse & shape further requirements. He believes that having the right team, doing your job with perfection and honesty, and making right decisions at the right time are the key to success. His prior experience involves risk management, process management and business architecture which enhances stability and effectiveness of delivered projects. Milan has worked with CSOB Bank, Absolut Bank, KBC Group and many other leading organisations in the past.

Onboard everyone, but not just anyone

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Higher conversion rates due to HyperVerge’s passive liveness technology.

HyperVerge: The Complete ID Verification & AML Solution HyperVerge’s visionary and dynamic CEO Kedar Kulkarni talks partnership, frictionless onboarding, and rapid growth HyperVerge is a classic Silicon Valley-type start-up. The company started off when a bunch of highly gifted and driven kids found initial success in computer vision AI and came together to solve fundamental problem. Its CEO Kedar Kulkarni says, “The company launched at a moment when financial services providers woke up to the fact that ease of access, meeting the needs of every individual irrespective of their background, location or credit history would be a key driver to success in a competitive market.” Today HyperVerge is delivering results for customers from Vodafone to Home Credit. Headquartered in California, it has its offices in Bangalore and a growing presence in SEA and Africa. “We work with companies that need to onboard users, ascertain the identity of every customer or agent on their platform and cut fraud. Our homegrown AI ensures the customer has a great experience. HyperVerge solves the ‘know-your-customer’ (KYC) imperative for these clients.”

HyperVerge works with Home Credit in India among many countries. Its drive to enable the financially deprived in the world to engage with affordable finance resonates with HyperVerge’s mission to increase accessibility to the left-behind billions in India and across the globe. “Home Credit is a great partner for us, and one we love working with. Our teams are constantly working together to exchange ideas and co-innovate. They were looking for an ally to help them achieve key business objectives with a frictionless onboarding process. We started with their digital channel, but then moved on to their offline channel as well, to improve the back-end processes for their staff. Now we are working together on new strategic initiatives and have a roadmap for collaboration over the next twelve months.” “Seamless customer experience, cost of service, expansion of the customer base and enabling smaller ticket loans are vital goals. At the same time, compliance with complex and variable regulations can also be addressed using HyperVerge technology,” says Kedar Kulkarni – another matter he is now discussing with Home Credit.

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“OUR MISSION IS TO EMPOWER PEOPLE TO LIVE THE LIFE THEY WANT NOW” MILAN DOLANSKY

CHIEF DIGITAL OFFICER, HOME CREDIT INDIA

50K+

digital point-of-sale touchpoints for customers

95%

of retailers are small family-owned businesses

45%

of the consumer loans offered at zero interest

40%

of customers return to us for repeat business

“We see our role as one that brings preapproved lending services to many more people,” he says. As part of the initiative, HCIN has plans for a virtual card launch in the next few months, which will allow their customers to have the benefits of a pre-approved or flexible loan product. “This is definitely an innovation for the market,” Dolansky states. “We are trying to help our customers improve their lives and fulfil their aspirations. A lot of them are buying their first smartphone, their first fridge, their first AC unit. Our mission is to empower people to live the life they want now.” A developing space In March 2020, as part of his role, Dolansky found himself managing the digital transition of a company that had typically served customers face-to-face, and a workforce that was unused to the concept of remote working practices. He explains: “When the pandemic started and the country locked down, we had to move very quickly. But it was a challenge because of the way India operates regarding technology. In most developed fintechmagazine.com

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countries, every home has a laptop or home computer, for example. But although India has excellent mobile technology penetration, it's as though the country skipped a step and “missed out” on the home computer stage.” This factor meant that Home Credit had to mobilise an entire software and hardware operation to ensure it could maintain its operations seamlessly and continue serving its customers. “Very few people have laptops at home,” Dolansky says. “They are all very technically proficient and have fully embraced mobile and IoT technology – but you can't do the same sort of business on a mobile phone as you can on a laptop.” Initially, it was a massive task, as Dolansky explains: “Home Credit went through a period of time where we were literally shipping laptops and desktops all over the country. It was hectic.” But, after just two weeks, the company was fully remote in terms of its workforce and it was business as usual. New opportunities in an emerging marketplace The period has, according to Dolansky, driven forward Home Credit India’s digital transformation strategy. As a result of the transition, there are more innovative systems in place, and this has meant the team has been able to launch new products and services despite having spent the best part of the last two years operating remotely. Over the next few months, HCI will be launching its brand new mobile superapp, which is going to offer customers an entirely new point of service. “The main differentiator is that we are offering them applications that are meaningful to their 194

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lives – and not only the services of financial lending.” Users of the new HCIN super app will be able to manage a multitude of daily tasks directly through the app, from shopping and arranging insurance cover, as well as managing their lending. Dolansky says: “We are building an ecosystem in which the customer is able to fulfil all their daily needs through one platform that functions seamlessly and frictionlessly, through us and financed by us.”

HCIN engaged with three million people on financial literacy via in-house Paise Ki Paathshala or Personal Finance class website

The digital ecosystem and strategic partners As part of HCIN’s digital transformation journey, the organisation has forged a partnership with HyperVerge, a leading AI documentation and data technology company. The collaboration means the application processes for customers have been completely streamlined: documentation is scanned, read

HCIN donated 30,000 respirators and 1.8 million surgical masks to India’s Ministry of Health and Family Welfare at a time of global mask shortages HCIN funded medical and hygiene kits for 10,000 people living in poor areas HCIN partnered with the Don Bosco Network to distribute basic nutrition packages to 20,000 migrant workers fintechmagazine.com

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“WE’VE DEVELOPED AN ENTIRE NEW TECHNOLOGY STACK AS PART OF THE NEW MOBILE APPLICATION” MILAN DOLANSKY

CHIEF DIGITAL OFFICER, HOME CREDIT INDIA

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by AI and then filed for future use. Dolansky says of the partnership: “We were looking for a partner to improve our customer journey. And, at that point in time, we knew that one of the biggest struggles our customers have is to retype information from documents. India culturally is very bureaucracy oriented and paperwork is a big part of life. But the aim of new financial technology offerings is to make all those processes frictionless.” HCIN discovered that HyperVerge’s OCR was already enabled to scan and aggregate the data on Indian documentation. The

HOME CREDIT INDIA

partnerships are in point of sales. As part of our extended digital services, we will also be forging new collaborations with affiliated businesses. We’ve also developed an entire new technology stack as part of the shift to the new mobile application.”

adoption of the technology has enabled customers to take three pictures of their paperwork via their mobile phone, and the software platform does the rest, reading information with an 85% accuracy – which then simply needs checking for confirmation once the online fields are ready to view. “The process takes away the need for the customer to type in numerous details, saving them time and stress,” Dolansky says. Other ecosystem partners have been instrumental in developing the super app with its access to numerous products and services. At the moment, the majority of our

Customer centricity, data and KYC HCIN’s culture is one of innovation through strategy. As part of its developments, the company is seeking advice from its users in the journey towards better products and services. Dolansky believes fintech is as much about bringing the customer needs into sharper focus, as it is about delivering better services. “We are talking to our customers. Our customers are part of every small piece of the development process. Their feedback on an idea, before the development process begins, is critical. Later on when we have a pilot product, we test it again and get their feedback on, for example, how the screen functions – is it user friendly and intuitive enough?” Once the first official production begins, HCIN gathers feedback again. “Working with the customer is the biggest inspiration for innovation in fintech,” Dolansky states. Ultimately, the goal is to bring better opportunities to people who have been shunned by the traditional banking system. “It’s about improving lives,” says Dolansky. “Providing a family with their first laptop or smartphone so they can study better and enabling home improvement loans so they can have a nicer environment. These are things that, prior to our services, were unattainable.”

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EAST WEST BANK

A FINANCIAL BRIDGE BETWEEN THE EAST AND WEST WRITTEN BY: JESS GIBSON

PRODUCED BY: MICHAEL BANYARD

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Parker Shi and Rakesh Nambiar reveal the community ties influencing EWB’s digital journey, the power of consistency, and its dedication to the underserved

ll around the globe, billions of people use and access their bank accounts daily without even a second thought. From checking bank balances and transferring money to depositing funds into savings accounts and applying for loans, it’s never been easier to take charge of your money – for large swathes of the world’s population, anyway. The recent shift to digital banking platforms alongside the creation of fully digital neobanks has only served to enhance accessibility further. But what about those people living on the fringes of society, whose access is limited to both physical and digital banking? Well, it’s in these spaces that financial institution East West Bank has firmly situated itself. Founded in 1973, East West Bank (EWB) opened as the first federally chartered savings institution to base its operations on serving the financial needs of the Chinese American community in Los Angeles. In the years since, EWB has grown along with this market and expanded to become a mainstream commercial bank with over 120 locations across the US and China – cementing it as “the financial bridge between the East and West.” Over the intervening decades, the bank has pivoted to expand its remit to include other underserved communities, such as international students in the US and the Filipino diaspora, while also establishing a digital 200

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Parker Shi, Executive Vice President, Chief Operating Officer, East West Bank

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Hear all about East West Bank’s digital mission

“ OUR GOAL FOR THE FUTURE IS TO BUILD ON TOP OF THE PLATFORM AND ADD MORE CURATED PRODUCTS” PARKER SHI

EXECUTIVE VICE PRESIDENT AND CHIEF OPERATING OFFICER, EAST WEST BANK

footprint to serve the younger populations and changing lifestyles of customers. “We're evolving to meet customers’ changing lifestyles and banking needs by providing them best-in-class user experiences, through both branch and digital touchpoints,” explains Parker Shi, EWB’s Executive Vice President and Chief Operating Officer. 202

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In short, strategic growth and digitisation to serve the underserved has been EWB’s North Star, so to speak – and we think you’ll agree that the bank has more than succeeded. Using technology to build bridges and serve the community Shi and Rakesh Nambiar – Senior Managing Director and Chief Digital Officer – have been integral components of the bank’s

PARKER SHI TITLE: E XECUTIVE VICE PRESIDENT, CHIEF OPERATING OFFICER INDUSTRY: BANKING LOCATION: USA

journey thus far, with their respective roles inherently connected. As COO, Shi is responsible “for the overall strategy of the bank, managing the bank’s enterprise operations and technology, and leading the bank’s retail banking business”, a role that requires him to don a multitude of different hats throughout his working day. Part of Shi’s role includes liaising with the other leaders at EWB to “keep [him] informed and engaged” of any key issues

EXECUTIVE BIO

Parker Shi is Chief Operating Officer of East West Bank. In this role, he is responsible for the overall strategy for the bank, enterprise operations and technology, and the bank’s consumer banking business, including digital banking, retail lending, and wealth management. Previously, Mr. Shi held leadership positions at McKinsey & Company, Accenture, and DiamondCluster International (later acquired by PwC), where he worked extensively with client CEOs to create enterprise strategy, innovate on technology adoption, and drive large scale enterprise transformation. Mr. Shi holds a bachelor’s degree and master’s degree in computer science from Northern Illinois University and Northwestern University, respectively.

FIS® PROVIDES THE SOFTWARE THE FINANCIAL WORLD IS BUILT ON Economies rely on us. Businesses run on us. Innovators build on us. Learn more

ADVANCING THE WAY THE WORLD PAYS, BANKS AND INVESTS™

EAST WEST BANK

“ OUR GOAL FOR THE FUTURE IS TO BUILD ON TOP OF THE PLATFORM AND ADD MORE CURATED PRODUCTS” PARKER SHI

EXECUTIVE VICE PRESIDENT AND CHIEF OPERATING OFFICER, EAST WEST BANK

throughout the day. Nambiar – who focuses on realising “the overall growth execution and the operations of the digital banking business” – reports to Shi regularly keeping him abreast of identified issues and their solutions. “There are three main areas that I am focused on regularly: the first is to make sure that our customers have the best possible experience when they onboard and service their accounts digitally; two

is to expand our digital product sets to support our customers’ ever-expanding needs and meet their financial goals,” explains Nambiar. “Third is to ensure that we can support the bank's digital transformation by leveraging our current platform across all its businesses.” Founded to address underserved communities, EWB also serves as a cultural, as well as a financial, bridge to aid those new to the US or without English as their native language, such as international students, new immigrants and tourists. The bank uses technology to enable and simplify this, providing in-language digital services, a broader range of products to aid students and their families with fee savings, as well as cross-border payment capabilities. Another unique aspect to EWB’s service is the exclusive campaigns it initiates. fintechmagazine.com

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RAKESH NAMBIAR TITLE: SENIOR MANAGING DIRECTOR, CHIEF DIGITAL OFFICER INDUSTRY: BANKING LOCATION: USA

EXECUTIVE BIO

Rakesh Nambiar is Chief Digital Officer of East West Bank. He is responsible for the overall growth, execution and operations of the digital banking business. Prior to joining East West Bank, Rakesh held various roles in the technology space. Most recently, he was Head of Digital Banking Technology, Enterprise Customer Relationship Management and Analytics at U.S. Bank, where he managed platforms leveraged by the company’s consumer, wealth management and commercial businesses. He also held various leadership positions at Wells Fargo Bank, where he led technology initiatives that transformed its online platforms.

“ WE NEEDED TO MAKE SURE THAT DATA WAS AVAILABLE IN REALTIME, ALL THE TIME” RAKESH NAMBIAR

SENIOR MANAGING DIRECTOR AND CHIEF DIGITAL OFFICER, EAST WEST BANK

EAST WEST BANK

“Earlier this year, we completed a Lunar New Year promotion,” says Parker. “Those customers who made new deposits via our digital platform and met the requirements could receive an East West Bank exclusive, limited-edition gift. “In prior years, those customers had to go to our branches to make their gift deposits for the Lunar New Year; this year, many of our customers learned about the promotion by talking to our branch staff and, during the promotion, they actually chose to complete their deposits using our mobile app or online banking portal.”

In 2021, EWB was recognised as the No. 1 Performing Bank in the $50 billion and above asset category in Bank Director’s 2021 Bank Performance Scorecard, cementing its position as one of the best managed banks in the U.S. and highlighting its dedication to serving the community. Embarking on a digital banking journey based on innovative R&D Back in 2017, EWB spotted the benefits both itself and the community it serves could reap from digitisation. “We’d recognised the growing consumer trend of seeking digitallyfintechmagazine.com

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“ WE'RE EVOLVING TO MEET CUSTOMERS’ CHANGING LIFESTYLES AND BANKING NEEDS BY PROVIDING THEM BEST-IN-CLASS USER EXPERIENCES, THROUGH BOTH BRANCH AND DIGITAL TOUCHPOINTS” PARKER SHI

EXECUTIVE VICE PRESIDENT AND CHIEF OPERATING OFFICER, EAST WEST BANK

delivered services that were traditionally delivered in person – that's why we embarked on an innovative R&D process and made a commitment to providing the right user experience,” Parker outlines. “We realised that daily banking services could also be delivered to consumers via digital platforms, particularly as many of our existing East West Bank customers live outside the footprint of our branches. Some may even live overseas.” To do this, however, the bank first had to consider the entire customer experience, the balance of products and services available, and ensure best-in-class digital and in-person services for consumers. Data has been a pivotal facet of this overall process. “Data is at the core of all things the digital bank works on,” establishes Nambiar. “Our core principle during the building of the platform was to ensure that we had a clear data strategy that we were building towards; we needed to make sure that data was available realtime, all the time.” 208

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EAST WEST BANK

Who We Are | East West Bank

Without the strategic use of data to guide decision-making and progress, developing a fully functioning digital platform with fluid omnichannel capabilities would have been impossible. “We needed to make sure that the platform could grow and scale with the business. More importantly, we had to ensure that data was constantly being applied to tangible use cases,” Nambiar continues. “To this end, we engineered the platform to always be collecting data. This was critical because, as we initially started to leverage data, it was largely to build a better transaction experience as a customer navigates through the platform. Over time, though, it proved that the data was valuable for risk and fraud related use cases.” In terms of the changing regulatory landscape – both domestically and internationally – data is integral to the reporting structure for banks situated in multiple countries, with multiple languages fintechmagazine.com

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and a broad spread of user groups – hence why it has been the backbone of EWB’s digital transformation and banking platform. The platform has multiple capabilities specifically geared towards the primary customer base of EWB: it supports multiple languages; has a wide range of functionality, including deposits, business banking, and applying for loans; and a variety of unique products aimed at international students, new immigrants, the Chinese American population, and the Filipino diaspora in the US. “COVID-19 actually proved our strategy. With lockdown initially, we were able to continue to support our customers both locally and internationally, so this is why we're going to continue investing in digital banking and shift even more into omnichannel banking,” says Parker, establishing EWB’s aim to be best-in-class through the utilisation of its unique strengths. An omnichannel future where consistency is key In addition to building a digital bank from scratch, EWB has been focused on improving and expanding the avenues of communication that consumers can utilise, as Shi explains: “Our goal is to provide a consistent omnichannel user experience.” “As we take these customers into an omnichannel banking experience, trying to travel through complex services – whether deposits or wealth management, home, or business banking – the permutations in which we interact with them are many. “Our goal is therefore to make sure that we can work with every customer as a segment of one and meet them during their interaction with us to provide that optimal experience,” states Nambiar. With his extensive experience at some of the most influential organisations in the 210

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world, Shi is well-aware of the importance of consistency, particularly with regards to omnichannel capabilities. Demonstrating reliability and friendliness helps to generate steadfast customer loyalty, regardless of whether they are visiting brick-and-mortar EWB locations or accessing its digital banking platform. Developing a partnership ecosystem All of the progress that EWB has made in recent years, in terms of digitisation and the customer experience, would have been impossible without a sound ecosystem of partners each fulfilling a vital role in the journey. “Our ability to succeed in digital required us to have an ecosystem of partnerships that became a part of what we call our ‘digital core’,” says Nambiar. “This need was important for us – for a bank that we build 212

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in the cloud to be able to have partners who are nimble enough to make necessary changes, be digital-first in their thinking and bring a huge amount of their expertise to the table from the very get-go.” Three organisations with a considerable role in developing digital banking capabilities, omnichannel communication, and digital onboarding are: SalesForce, FIS and Wipro. “SalesForce has been a pretty critical partner for us. They have a purpose-built industry functionality that we’ve been able to fully leverage, allowing acceleration in our pace of innovation,” Nambiar continues. “Initially, they started out purely as a digital onboarding platform for us, but their ability to have complex usecase management for workflows and case management that could be configured

EAST WEST BANK

led to its use in our fraud management systems. Now, our focus is around product growth and commercial banking.” In regard to EWB’s partnership with FIS, there are three different dimensions that Shi explains in detail. “Dimension one is that FIS is our core banking system, our system of record for all of our deposits and long-term information. Number two is we're starting to also be exploring some of the newer capabilities that FIS has; for example, we're evaluating their specialty loan system for our use and completing a wire system replacement using FIS' technology. Parker adds: “Lastly, in regard to FinTech, we are also working with FIS to explore new innovations and capabilities that they’re building. So, for example, we know that they're investigating how to incorporate

crypto into their ecosystem. Once that’s stable, we're definitely going to be working with FIS to see if that is something we can also explore. “We're looking at them as a strategic partner to help us continue to evolve our core systems and transaction processing capabilities.” In addition to being a strategic consultant for EWB’s digital transformation journey, Wipro has also been the bank’s delivery partner. This allowed for the acceleration of EWB’s digital bank launch, while also providing the opportunity to review the new product sets by the Capco team, which is part of Wipro. This partnership with Wipro has, in Shi’s words, helped “ideate new growth strategies” and exposed “some new revenue opportunities to extrapolate” in terms of fintechmagazine.com

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“ WE EMBARKED ON AN INNOVATIVE R&D PROCESS AND MADE A COMMITMENT TO PROVIDING THE RIGHT USER EXPERIENCE” PARKER SHI

EXECUTIVE VICE PRESIDENT AND CHIEF OPERATING OFFICER, EAST WEST BANK

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EWB’s digital banking system – so it’s going to be interesting to watch the evolution of this relationship in the future and the doors it will help open. Projects on the horizon – expanding digital and physical banking footprint EWB’s digital banking transformation began back in 2017, establishing it as a front-runner in ‘going digital’. In that time, it has created a well-structured and architected digital platform that can be easily expanded. But what exactly does the future hold? “Our goal for the future is to build on top of the platform and add more curated products,” says Parker. “To some degree, we want to be a little bit like Costco: whereas it may not have everything in the world, like Walmarts tend to, every single thing in their stores is going to be curated by Costco – which will be something that customers are looking for in the future. “We want to be able to do the same and build a financial Costco for our customers on top of the digital platform.” This plan has three dimensions to it: developing digital capabilities for consumer banking and wealth management; simplifying business banking and the customer experience; and expanding crossborder payment capabilities for companies and corporations. “We are continuing to use data to transform our customer experience, and we'll have many more exciting things to take to market in the near future,” Nambiar concludes, reminding us that none of this would be possible without the strategic use of data.

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