FinTech Magazine - June 2022

Payment Platforms to watch June 2022 | fintechmagazine.com

FOB 1: xxxxx FOB 2: xxxxx FOB 3: xxxxxx FOB 3: xxxxxx Top 10: xxxxxx

SANTANDER: Large-scale procurement transformation

SAPHYRE EXPANDS:

LEADING IN PRE - TRADE INNOVATION AND GLOBAL DEVELOPMENT FEATURING:

NTT DATA FLOWE

FIRST BANK WESTERN UNION

PAYMENT SOLUTIONS: Banking-asa-Service FINSERV: Digital currency and crypto explored TECHNOLOGY: Unicorns, how they hit $1bn

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The FinTech Team EDITOR-IN-CHIEF

JOANNA ENGLAND CHEIF CONTENT OFFICER

SCOTT BIRCH

PRODUCTION DIRECTORS

GEORGIA ALLEN DANIELA KIANICKOVÁ PRODUCTION MANAGERS

PHILLINE VICENTE JANE ARNETA ELLA CHADNEY

CREATIVE TEAM

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GLEN WHITE

FOREWORD

CRYPTO CRASH & THE DEFI DREAM

The news that the cryptocurrency markets had catastrophically crashed has sent investors into a tailspin

FINTECH MAGAZINE IS PUBLISHED BY

The latest drama in the cryptocurrency space has had even the steeliest of investors gripping the arms of their chairs. As Bitcoin took an unexpected tumble – but then duly bounced, other currencies didn’t fare so well.

The so-called stablecoin Terra, for example, proved it was anything but by tanking in value by 99% – a pretty shocking outcome for those banking on its less volatile references. And, although the markets will no doubt recover in due course (if anything can, crypto can) this event looks set to have a seismic effect on the digital currency marketplace.

As the pressure mounts from worldwide governments for increased regulation in DeFi, incidences like this one demonstrate that crypto will always be an uncertain bet for investors.

And herein lies the quandary – because those who started crypto, did so because they shunned regulation and dreamed of a digital economy that could not be manipulated by tin-pot global dictators (sorry – government chancellors).

And yet, the very success of their invention will no doubt be the death knell of the dream they envisaged.

It’s a sad state of affairs for the purists as the commercial crowds clamour for all the benefits digital currency offers, without any of the wild west rides that made it so exciting and rebellious in the first place.

Freedom always comes at a cost – and ultimately, those who embrace crypto in its current state, believe it is worth the risk. Do you?

JOANNA ENGLAND

joanna.england@bizclikmedia.com

© 2022 | ALL RIGHTS RESERVED

fintechmagazine.com

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CONTENTS

Our Regular Upfront Section: 12 Big Picture 14 The Brief 16 Timeline: The story of online banking 18 Trailblazer: Robert Reffkin 20 Five Minutes With: Rachel McShane

40 Banking

Wealth management and the ‘new normal’

28

Saphyre

Disrupting the fintech trade game with AI tech

48

Santander

Banking on dynamic digital transformation

72

NTT Data Insurance

The introduction of Insurtech Global Outlook 2022

66

Financial Services Five key trends driving change in Payments

88

Payment Solutions

BaaS and the age of digital finance

Communication matters now more than ever.

Learn how to effectively communicate with your customers during the COVID-19 pandemic.

Download our eBook

The Cloud Communications Platform

96

Dojo

Taking a customer-first approach to win the market

110

Technology

Is launching a Unicorn easier than ever?

132

Top 10

Fintech payment platforms to watch

TOP

10

118

First Bank

Securing a family-owned business with St Louis’s First Bank

144

Al Rajhi Bank

Ethical banking through fintech and digital transformation

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12

June 2022

Fintech is skyrocketing in Asia APAC

According to the latest reports, Asia is emerging as a hotspot for fintech innovation across all major areas including payments, lending, insurance and investing.

The uptake of fintech was already rising before the pandemic, but the move to digital channels has accelerated the adoption of digital financial services.

Data in the eConomy Southeast Asia Report 2021, produced by Google, Temasek and Bain & Company, reveals that digital financial services usage has increased between 2020 and 2021, with a CAGR from 9% up to 48%. © Singapore Stock Exchange

fintechmagazine.com

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THE BRIEF

BY THE NUMBERS

“STRONG STORYTELLING IS SO IMPORTANT WHEN IT COMES TO FINTECHS LOOKING TO GO ON THAT JOURNEY FROM EARLY STAGE TO BECOMING A UNICORN”

WE ASKED YOU:

'SHOULD ALL BANKS BE ENTERING THE METAVERSE?'

Ewan White

Account Director, Grayling  READ MORE

“A CHANGING OF THE GUARD IS UNDERWAY WITHIN WEALTH MANAGEMENT, WITH A YOUNGER COHORT OF MILLENNIAL AND GEN-Z INVESTORS FORCING FIRMS TO RETHINK THEIR PRODUCT OFFERINGS AND CLIENT SERVICES’ MODEL” Alistair Shipp

48% No

28% Yes

24% It's inevitable

Executive Director, Capco  READ MORE

“BANKING AS A SERVICE (BAAS) HAS BECOME ONE OF THE MOST IMPORTANT STRATEGIC AGENDA ITEMS FOR CHIEF EXECUTIVES ACROSS NUMEROUS INDUSTRIES” Angus Ross

Chief Revenue Officer, Finastra  READ MORE

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June 2022

WHY BIG TECH IS DRIVING FINTECH’S DIGITAL ECOSYSTEM

HOKK FINANCE CEO LAWRENCE HUSTON TALKS DEFI AND FINTECH

WHY ARE BANKS AND FINTECHS ENTERING THE METAVERSE?

A look at how technologies and innovative solutions are motivating

An in-depth interview with industry heavyweight and innovator,

With interest in the metaverse as a financial platform snowballing, we investigate why

growth in the fintech industry, with insights from sector experts.

Lawrence Huston, the CEO of Hokk Finance, on developments in the DeFi space.

augmented reality is attracting large scale banks and fintechs.

THE RISE OF THE

Gamification As the metaverse gains traction, the pressure is on for fintechs that provide B2C services and rely on the loyalty of their users as part of their growth strategy to provide super apps. Leveraging customer engagement is a key element of maintaining and growing a thriving user base.

 COPPER The teen-focused fintech app Copper has raised US$29mn in its recent funding drive, growing to over 800,000 users in less than a year.

It has now raised a total of US$42.3mn since its 2019 inception.

 COMPASS The US real-estate fintech solutions start-up was launched in 2018. A recent valuation set the company at US$4bn – but the results of its IPO in March this year have seen the company’s share prices plummet by 70%.

 BLOCK Block shares experienced a 50% drop in valuation during the last three months, losing more than half its value and retreating to 52-week lows early in 2022.

JUN22

BAD TIMES

Customer experience is now front and centre of all fintech strategies.

And this core philosophy has never been so recognisable than in the launch of super apps.

Named as such because of their multifunction capabilities and ability to bring control to customer fingertips, this new wave of mobile technology is a trend sweeping the industry thick and fast.

Super apps perform a wide range of activities digitally, from booking tickets and paying bills to managing subscriptions, buying items, investing and purchasing insurance. Some are also linked to wearables, providing companies with additional details that result in customers receiving incentives as a result of their performances. These are often linked to a community of users who can support each other in their shared goals, be it for wellness purposes or investing.

Singaporean fintech company Nium is in talks to make an acquisition worth up to $400mn to drive an expansion in Europe.

The news comes amid reports that APAC’s fintech industry is growing at a rate of 48% CAGR.

GOOD TIMES

SUPER APP

 NIUM

fintechmagazine.com

15

TIMELINE 1983

THE STORY OF ONLINE BANKING

UK CATCHES UP The Bank of Scotland became the first bank in the UK to embrace the innovative technology needed for remote capabilities. Their customers were provided with an internet banking service called Homelink.

People had to connect to the internet through their TVs and telephones to pay bills and transfer money.

The connectivity was slow and unreliable – but the disruptive potential of this new ‘telebanking’ service was instantly recognised.

As neo and challenger banks disrupt the digital banking space, we track the timeline of online services from the late 90s to today

1980 COMPUTERISED BANKING The first home banking service was offered to consumers in December 1980 by United American Bank, a community bank with headquarters in Knoxville, Tennessee, United American partnered with Radio Shack to produce a secure custom modem for its TRS-80 computer, allowing bank customers to access their account information securely

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June 2022

1981 NEW YORK CITY ROLLOUT New York City was the second place to test out the provision of remote services.

Four of its top banks – namely Citibank, Chase Manhattan, Chemical Bank and Manufacturers Hanover – made homebanking access available to their customers as a further test pilot programme, aiming to see if the initiative would take off.

1994 CREDIT UNION TAKES ONLINE BANKING MAINSTREAM In 1994, Stanford Federal Credit Union was the first financial institution in North America to provide all of its customers with internet banking. By 1995, Presidential Bank was the first bank in the country to give customers access to their accounts online.

The world’s banking giants looked on with interest, noting the project’s success.

2022 A CONTINUALLY CHANGING LANDSCAPE Recent reports state that 80% of banking customers globally are regular users of mobile banking technology. But today, the very fabric of the financial industry is transforming as a result of DeFi and blockchain technology. Technology is advancing so rapidly that, by 2026, many experts believe numerous western countries will be officially cashless.

2006 - 2010 EXPONENTIAL ONLINE BANKING ADOPTION According to reports, by 2006, 80% of all US banks were providing internet banking services – and the trend has shown no signs of slowing down. In 2009, Ally Bank was founded – the world’s very first all-digital bank.

A study by Fiserve in 2010 demonstrated that both online and mobile banking were growing at a faster pace than even the internet.

fintechmagazine.com

17

TRAILBLAZER

The fintech real estate billionaire

Robert Reffkin, Founder and CEO, Compass

From humble beginnings to CEO and founder of a US$4bn enterprise disrupting the North American real-estate market, Robert Reffkin is a force to be reckoned with

B

orn in 1979 to an Israeli mother and African American father, Robert Reffkin’s early years were far from conventional, let alone easy. But today, the fintech entrepreneur – who has held a number of sought-after positions in the banking world – is blazing a trail across the US real-estate market with his disruptive fintech, Compass.

Humble beginnings His story begins in Berkley, California.

Shortly after Reffkin’s birth, his mother was disowned by her family for having a child with an African-American Jazz musician. Sadly, Reffkin’s father also abandoned the pair not long afterwards, leaving them to fend for themselves.

According to reports, those early years were frugal and difficult as Reffkin struggled to find his place in the world as a mixed race, Jewish boy. High school was not something he enjoyed – but he had a passion for music, which saw the first of his forays into entrepreneurialism take off.

Achieving his goals One attribute that always marked Reffkin out as a future success story was his commitment to a cause. At 11 – or so the story goes – he realised his mother was struggling financially. He made a plan that saw him save up for a DJ kit so he could be hired out for parties and events.

It reportedly took him three years to save up for the kit, but his determination paid off, and he then continued to help out financially by performing at events throughout high school. He was hired for

“ My dream is to create the most inspirational company in the history of the world, and it starts with you” school proms, parties and bah mitzvahs.

He was involved with the Network For Teaching Entrepreneurship as a teenager and managed to save more than US$100,000 of funds during those difficult early years.

Embracing education Despite his less-than-enthusiastic approach to education thus far, Reffkin nevertheless turned his attention to academia around his college years. In 1997, he joined Columbia University, where he was so determined to do well that he completed the four-year degree programme in just 2.5 years.

His performance resulted in him landing a job with one of the global leading management consulting firms, McKinsey & Company, as a business analyst. The role became the launchpad for his career in finance.

In 2003, Reffkin went back to Columbia and completed his MBA. Upon graduation, he began working as an associate at Lazard on Wall Street, later becoming a White House Fellow and acting as an assistant to John Snow, the Secretary of Treasury during the George Bush administration years.

Personal Fortune

US$500MN fintechmagazine.com

19

TRAILBLAZER

In 2011, Reffkin joined Goldman Sachs – but by 2012, he’d risen to be Chief of Staff for Gary Cohn, the former President and Chief Operating Officer.

He ran 50 marathons to raise

Launching Compass That same year, Reffkin founded Compass. Inspired by the gap in the market for streamlined financial solutions tools in the US real-estate industry, he formed the idea after seeing how his mother, a real-estate agent, struggled with a market based on legacy system procedures.

Speaking about that eureka moment, he said: “My mom has been a real-estate agent my entire life, and I saw her move from firm to firm, always hoping that she would get the support and tools to realise her professional ambitions and her dream. She never got either. There's never been a truly great company for real estate agents before, but that’s what we’re building at Compass.

“There are two million real-estate agents in the US, and they are some of America’s greatest entrepreneurs. At Compass, our focus is to empower them with tools, technology, and support that makes them more efficient and profitable.”

concept caters to both customers’ and agents' needs. The fintech company has made it easier for buyers and sellers state-wide. Today, according to reports, Reffkin is the youngest of only eight Black billionaires in the US. Recently, however, Compass experienced some hard times. Its IPO earlier this year resulted in the company losing an unprecedented 70% in share value. But Reffkin, who continues to champion young entrepreneurs through a number of philanthropic programmes, continues to be ebulant about the future.

Reffken has been married to his wife Benis for nine years and the couple have three children together.

A disruptive business Compass proved to be a true innovator for the real-estate market because its

20

June 2022

US$1MN

for charities in 50 states of America

“ There are two million real-estate agents in the US, and they are some of America’s greatest entrepreneurs”

fintechmagazine.com

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5 FIVE MINUTES WITH...

R A C H E L With her hands full as a CFO and mother-of-two, Rachel McShane, Digital Wallets, Paysafe, talks flexible working, and why fintech has become her career passion

Q. W HO WAS YOUR CHILDHOOD HERO AND WHY?

» Growing up, the first time I saw a strong

female character in a world dominated by my brothers’ He-man and Star Wars’ characters was She-Ra – a trailblazer in her own right, paving her own path without any dependency on her male counterparts… in hindsight, she may not have been the ideal feminist superhero, but she was a smart, independent and strong character in a galaxy brimming with male leads, which stood out for me.

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

» Don’t sweat the small stuff (or, in the

wise words of Elsa from Frozen, ‘Let it go…’).

Life’s too short! Oh and ‘Delegate, delegate, delegate’… you know who you are!

will never forget) was ‘A Little Life’ by Hanya Yanagihara – a life-affirming, empowering, heartbreaking story following friendships through adversity. So good, we subconsciously named our second child after its protagonist, Jude.

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

» Does a Toastie maker count?

(Triple cheese for me).

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

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

Jeffers… but before you dive into your local bookshop, it’s a children’s book! The luxury of sitting down to read a novel has been somewhat thwarted by having two under 3... However, the last adult book I read (and

with some amazing, inspirational women.

One common theme amongst all of them is authenticity - they are the same person at home as they are in the boardroom, perhaps with an ironed shirt, but otherwise

» The last was ‘What we’ll build’ by Oliver

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June 2022

» My life, and career, has been sprinkled

M

M C S H A N E

5 FIVE MINUTES WITH...

the same! Their core values transcend both, which in turn builds confidence and trust in their teams, stakeholders and customers. This is something I have tried hard to emulate throughout my career

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

» One of the most refreshing things at

Paysafe is being sat around a truly diverse leadership table. At my first Digital Wallets leadership offsite, I looked around the room and was struck that, as a woman, I was for once in the majority. Having two children in quick succession (following years of juggling fertility treatment to get there) at a pivotal point in my career was tough.

Finding the right balance and managing the guilt of not doing my best at both was a constant battle. With time, I’ve found my rhythm but, as an industry, if we want to develop and retain female talent, we need to get better at enabling a work-life balance that allows you to be a parent and have a seat at the table. If the pandemic has taught us one thing about flexible working, it is that it can be more productive and by no means are you doing any less of the job - if anything you are doing more.

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

» As one of five kids, my memories of

growing up are filled with rooms full of people, chaos and laughter – the last few years were far too quiet for my liking! I’m looking forward to chaotic reunions as well as experiencing more of the world and all the rich culture it has to offer with family and friends.

24

June 2022

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

» My second child was born in the first

lockdown of the pandemic. Going through the majority of the labour whilst my husband sat on the curb outside the hospital in the rain was fairly bleak, as well as not knowing what my newborn was facing…

I am incredibly proud of how we both got through it, as well as the subsequent months together with our newborn and toddler in lockdown.

In the midst of all that, I also made the decision to take the leap into Fintech following a decade in Banking, something that was not an easy decision but absolutely the right one for my career.

Q. WHAT INSPIRES YOU IN FINTECH TODAY?

» After a decade in banking, moving to

Paysafe has been an eye-opener in so many ways. The pace at which the business moves, the relentless customer focus with data-driven insights at the core. There is a constant thirst for leveraging the skillsets and capabilities we have to enhance and

diversify our product offering. For me, this is the backbone of success in FinTech and what differentiates the industry from more traditional sectors.

The direction of travel of

embedded finance, in particular Walletsas-a-Service, is really exciting - paving the way for non-financial businesses to implement seamless payments through a single integration, resulting in a frictionless user journey.

fintechmagazine.com

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23 - 24 JUNE 2022 STREAMED & IN PERSON TOBACCO DOCK, LONDON

SHAPING THE BUSINESS OF TECHNOLOGY 3,000+

Participants

2

Days

4

Zones

60+

Speakers

Get tickets

Sponsor opportunities

A BizClik Media Group Event:

Watch our 2021 Showreel

Join us at TECH LIVE LONDON Showcase your values, products and services to your partners and customers at TECH LIVE LONDON 2022.

Brought to you by BizClik Media Group TECH LIVE LONDON, the hybrid event held between 23rd-24th June is broadcast live to the world and incorporates four zone areas of Technology & AI LIVE, Cloud & 5G LIVE, Cyber LIVE plus March8 LIVE in to one event.

With a comprehensive content programme featuring senior industry leaders and expert analysts, this is an opportunity to put yourself and your brand in front of key industry decision makers.

Get tickets

From keynote addresses to lively roundtables, fireside discussions to topical presentations, Q&A sessions to 1-2-1 networking, the 2-day hybrid show is an essential deep dive into issues impacting the future of each industry today.

Global giants and innovative startups will all find the perfect platform with direct access to an engaged and active audience. You can’t afford to miss this opportunity.

See you on:

23 - 24 June 2022

Sponsor opportunities

DISRU FINTECH GAM 28

June 2022

SAPHYRE

UPTING THE H TRADE ME WITH AI TECH

AD FEATURE WRITTEN BY: SCOTT BIRCH

PRODUCED BY: MICHAEL BANYARD

fintechmagazine.com

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Stephen Roche (Right) Gabino Roche (Left)

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June 2022

SAPHYRE

Twin brothers Stephen and Gabino Roche are driving Saphyre to new heights as its AI-powered trading technology breaks barriers and disrupts trading

T

here must be something in the coffee in New Jersey. No matter what time of day or where in the world they have just flown back from, twin brothers Stephen and Gabino Roche are brimming with infectious energy. I guess that’s what comes from running an award-winning, gamechanging organisation like Saphyre.

We catch up with Stephen and Gabino in the middle of a series of announcements that the disruptive fintech is making – from new hires to high-profile partnerships. Saphyre is clearly on the rise.

Stephen and Gabino admit they have entrepreneurship in their blood, so it was almost inevitable that after successful ‘solo’ careers they would come together to form a Roche supergroup.

“We were excited to try to get into this finance space,” recalls Stephen. “And one thing that we noticed is there's a lot of old, archaic systems in there – things are still in Windows 95 and MS DOS or manual processes. They're using faxes.

“So one of the things that Gabino brings to the table, his expertise with the team that he's built here in Saphyre, is building software products faster. That's one of the biggest secrets to success that we have, because when clients want a new feauture, functionality or want to see a solution, Gabino and the team are very quick at bringing it out – within weeks, not months, not years.”

“We're bringing Silicon Valley tech to finance.”

For anyone unfamiliar with Saphyre (where have you been?), the company leverages patented AI technology to digitise all pretrade data and activities.

Saphyre's platform maintains memory of data and documents, and expedites flow in a digitally structured manner so that it can be consumed and understood by any permissioned counterparty in the finance industry. This allows firms not only to assess risk faster but they can speed their onboarding processes, get real-time readyto-trade statuses per account, and eliminate 70%-75% of redundant or inefficient posttrade activities.

So how did it all begin? Let’s rewind to 2017. Gabino’s experience working at JP Morgan and alongside other leading financial institutions led him to a revelation.

He realised that the opportunity existed to create what he calls the ‘connective tissue’ between these financial titans.

“ We're bringing Silicon Valley tech into finance” STEPHEN ROCHE

PRESIDENT, SAPHYRE fintechmagazine.com

31

SAPHYRE

Saphyre: Disrupting the fintech trade game with AI tech

“In finance, some of the culture that happens is a bunch of sticks – everyone has to follow these rules because you’ve got to make sure things don't break, and so people don't question the status quo and that's why the innovation doesn't happen,” says Gabino.

“I believe, and there's several in the finance world who are with us, that we partner with, when you can challenge the status quo and think outside of the box then you can actually deploy the technology quickly. That's where you change the game. That's where you change the industry.”

“ People don't question the status quo and that's why the innovation doesn't happen” GABINO ROCHE CEO, SAPHYRE

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June 2022

With disruption at its heart, Saphyre is certainly trying to change the industry for the better, but what exactly are they hoping to achieve, and what do these current series of announcements have to do with their so-called ‘endeavor’?

Stephen explains using the analogy of the Windows operating system of finance, that connective tissue that links all of the industry’s “one-trick ponies”. He uses another analogy of cars – one of Stephen’s passions outside of work.

“People are making different components of transportation like a vehicle, right?” he says.

“They're trying to build a car, but they don't know what it is yet, so one company will make the wheels. Another company will make the transmission. Another company will handle the seats. But Saphyre is coming in and saying guys – we really need to bring some intelligence and power in here. We're kind of the chassis and the combustion engine and then here's a car, but people can't envision

STEPHEN ROCHE TITLE: PRESIDENT INDUSTRY: FINANCIAL SERVICES LOCATION: NEW YORK, UNITED STATES Stephen has over 20 years of business development and consulting experience in the IT solution space. Working with Fortune 1000 companies and startups.

He spent eight years in the B2C retail environment successfully helping brick and mortar stores gain market share in the New York City region. In 2003 he transitioned his career with AT&T, working exclusively on B2B IT solutions, streamlining complicated global IT infrastructures with 50+ locations from midmarket up to Fortune 1000 clientele.

Always problem solving, Stephen successfully closed large deals concerning emerging technologies, such as 5G and Internet of Things (IoT) with Volvo Cars. In another example, he rolled out AT&T’s state-of-the-art media room, and the renovation of the IT infrastructure for the newly constructed Yankee Stadium in New York City. With Red Bull Racing, he implemented the latest in racing communication and video technology, along with helping Axis Capital and Wyndham Hotels achieve their strategic IT growth initiatives.

During his AT&T career, he helped establish third-party cloud SaaS offerings for clients such as hosted ERP and ecommerce platforms to realise roughly US$1mn+ in quarterly earnings.

Advising the proper balance between

scaling quickly while maintaining operation costs to a minimum has been one of the hallmarks of Stephen’s engagements.

While co-founding Saphyre and managing strategic relationships with the largest financial institutions in the world, Stephen has leveraged his B2B deal-making experience to build a premier, professional marketing arm of the upstart fintech firm.

EXECUTIVE BIO

SAPHYRE

SAPHYRE

the car yet because they only see the wheels, or they only see the transmission, or the seats.

“So that's what we're trying to bring together. We're not trying to make the wheels too, and put other people out of business.

We may have our generic version just to show what a car concept looks like. If you are Michelin and you make great tyres, we prefer your tyres. We want to be interoperable.

“The thing is, some of these companies are afraid of that. They're afraid of what may come from connecting to something that builds something better, and we've been trying to evangelise over the last five years that things can be done differently, much 34

June 2022

more efficiently, and more intelligently.

That's really the mission.”

This mission was started by Gabino, with Stephen adding his own skill set to the mix.

Now the company is expanding, and the industry has taken notice – with big-name executives signing up for the Saphyre ride.

Gabino always knew it would take time, but now it is Saphyre’s time.

“The penny is starting to drop. It's that snowball effect,” says Gabino. “I knew in the very beginning the foundational work we did to build our technology wasn't going to be appreciated until we had built upon the foundational technology infrastructure to

SAPHYRE

2017 Company founded

US$18.7mn value of the Saphyre Series A funding round

65+

Number of employees

show these financial institutions. Think for a minute. A lot of these institutions have armies of people manually doing stuff in Europe, North America, Asia Pacific. There's been a trend lately in finance that offshoring was the answer, but inflation is making the gross profit margins not much more achievable when you still have the overhead offshore.

“So they're not getting that straight through processing experience and now these institutions see that you do it one time upfront in the pre trade space and you create this connective tissue.

You get all these efficiencies end to end.

Now they're willing to put their names fintechmagazine.com

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SAPHYRE

behind it because they know that as they make this more public and people become more familiar and comfortable with the Saphyre brand that they get the network effect, the big benefit.”

The Series A announcement was a big part of this reputation building and a process that took five hard years. Gabino and Stephen admit there were times when they considered cashing out, when the road became particularly tough. When you have friends and family among the initial investors, the pressure intensifies.

It was tempting to work with people who had different visions or ideas, who wanted to control them, or simply wanted the technology for their own purposes, but they stuck with the original vision. They met with more than 200 lead investors before finally settling on HCAP Partners. That Series A 36

June 2022

round of US$18.7mn was announced in March 2022, led by HCAP Partners, with JP Morgan and BNP Paribas participating.

“In any startup endeavour, it's very easy to get enamoured by these big institutions,” recalls Gabino. “This is not just in finance.

They may back you but then you may not get the profitability you're looking for to grow your company. Ultimately, they want to minimise their costs and look at their upside, so there's a fine balance on how you manage that; playing the long game and finding ways to fund yourselves in the short term until you can get to more like a true Series A like we did.

“I knew if I gave this up and just sold it off then this whole vision would never be fulfilled.”

After the Series A, Saphyre got to work sourcing a new Chief Operating Officer, and secured Raymond Shivers – formerly of BlackRock and with more than 20 years of experience in finance. It helped that Saphyre does a lot of work with BlackRock so Shivers already had knowledge of the business and the brothers.

“Having him as our COO is extremely beneficial for us and powerful moving forward as we look to scale and grow our company,” says Stephen. “He understands

“ Playing the long game and finding ways to fund yourselves in the short term until you can get to a true Series A like we did is a challenge” GABINO ROCHE CEO, SAPHYRE

GABINO ROCHE TITLE: CEO INDUSTRY: FINANCIAL SERVICES LOCATION: NEW YORK, UNITED STATES Gabino has over 20 years of experience in building technology solutions for Fortune 500 companies and start-ups from the 1990s Dot-com era till now.

He’s a former McKinsey & Company firm member, where he learned and was focused on delivering products faster to market. This enabled him to take on a role at NYSE as Managing Director of application development to help their startup division ramp towards a US$1bn revenue goal.

Later, he worked as a Senior VP at JP Morgan executing transformation programs in business operations, overseeing technology and operational process initiatives such as delivering a US$40mn product in their custody portfolio, and helping to revamp the Corporate Investment Bank’s (CIB) KYC/AML operations.

That experience set him up for JPMorgan’s senior management to ask him to take on the Head of Product role at Clarient, a fintech startup consortium put together by JP Morgan, Goldman Sachs, State Street, Credit Suisse, Barclays and DTCC. While there, he oversaw an $80mn budget and transformed the company’s operations, technology, and product with his team in under six months to meet market deadlines.

It was here where he unearthed valuable insights on how to structure pre-trade data and documents, invent an intuitive and expedited onboarding process powered by patented AI in order to resolve many of the trading and post-trade issues, leading to his creation of his own fintech startup: Saphyre.

EXECUTIVE BIO

SAPHYRE

how big financial institutions work with other fintech firms or vendors, how to scale those businesses appropriately, and he's able to predict some of those things. He hit the ground running and was definitely a great key hire, and not the only one. There will be other key hires coming out shortly as well.”

Going back to that snowball effect, the likes of Shivers joining Saphyre has caught 38

June 2022

the eye of other senior executives within the financial industry, and there will certainly be more heavyweights added to the team. As Saphyre’s metaphorical stock rises, is it fair to call them the hottest property in fintech right now? Gabino and Stephen prefer to talk about what they consider to be Saphyre’s special sauce.

“Well, we started off by talking about how we're bringing Silicon Valley tech to finance.

SAPHYRE

“ When clients want a new feature, functionality or want to see a solution, Gabino and the team are very quick at bringing it out – within weeks, not months, not years” STEPHEN ROCHE

PRESIDENT, SAPHYRE

With all these manual processes, people have not appreciated everything outside of trading, and when they did try to address things around trading and operational support, it has been on the post trade side and that's what's making things all work backwards,” says Gabino.

“To be honest, they're basically trying to piece together a crashed plane. You cannot fix your failed trades in the post trade as well as if you just prevent the issues from occurring in the first place, in the pre trade. The pre trade has not been appreciated but it's just like having a good batting swing – if you have the right fundamentals, you're going to be able to hit that ball more consistently, more accurately.

“And that's what we're doing here. We try to explain this and some think we're trying to boil the ocean. But if you just set things up properly in the pre trade space, we’ll realise benefits during trading and post trade. That evangelisation that's been occurring over the last five years is being realised over the last 12 months.”

Saphyre is now able to show people the specific benefits in the post trade. While others are struggling to get into T+1 from T+2,

Saphyre is, in some cases, already achieving T zero. T+2 means trade plus two days, and has been an accepted standard for decades, for those not familiar with the term.

What that effectively means is that manually putting percentages of a block deal into different pots takes time – so you sit around for two days with nothing to show for your investment.

“A number of the big institutions that work with us are seeing a potential 70% operational efficiency, not really changing what they offer their clients, just seeing that operational efficiency gives them a huge gross profit margin and creates a competitive advantage.

“They can even lower their fees, drive more volume to themselves. That's what makes this the hottest fintech product out there.”

It sounds like a classic no-brainer.

Partnering with Saphyre can significantly improve efficiency and deliver a competitive advantage. So what would stop someone from joining this endeavour? ”Politics,” says Gabino. “Some people may not understand the vision yet. And trust me, once the other big players announce that they're doing it, then the others won't want to be left out, to be at a competitive disavantage.

“It's highly regulated, so people are afraid to question these concepts that are out there. But once bigger leaders start adopting the solution and they don't want to be left out, they're going to be quick to run and catch up with those leaders, so they're not left out.”

It’s time to form an orderly queue. It’s time for Saphyre to shine.

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BANKING

WEALTH MANAGEMENT AND THE ‘NEW NORMAL’ NO LONGER THE STUFFY ENVIRONMENT IT ONCE WAS, WEALTH MANAGEMENT IS A SWIFTLY DEVELOPING SPACE AND COMPANIES NEED TO KEEP UP WRITTEN BY: JOANNA ENGLAND

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June 2022

I

n the good old days, wealth management was a stuffy scene inhabited by older generations. It was usually managed by lifelong financial advisors who handled the portfolios and kept the investments ticking over from a discreet distance.

These days, however, the situation is very different. Those interested in managing their wealth effectively are, perhaps surprisingly, getting younger and younger. Furthermore, they are increasingly demanding, wanting to explore the latest financial innovations open to them and obtain everything at the touch of a button, no matter when or where. Nothing is as it was, and it will never be so again.

Cory McCruden is an advisor and thought leader of wealth managers, possessing in-depth expertise for digital transformation, customer experience, and fintech. Through her roles at Fortune 500 wealth manager Waddell and Reed, as Head of Client and Advisor Experience and Innovation, and RBC, as Lead for Client Experience and Digital Transformation, McCruden has helped thousands of financial advisors grow their businesses.

Speaking about disruption within the wealth manager space, she says: “First is demographics.

US$68tn of wealth will transition to Generations X,Y, and Z over the next 20 years. Wealth managers

“ WITH GROWTH EXPECTED TO RISE SIGNIFICANTLY IN THE NEXT 3-5 YEARS, THERE IS A REVENUE OPPORTUNITY LINKED TO THESE ACTIVELY MANAGED PRODUCTS” ALISTAIR SHIPP CAPCO

fintechmagazine.com

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BANKING

“ FOR FAR TOO LONG, THE FINANCIAL SERVICES INDUSTRY HAS EXPECTED THE CUSTOMER TO COME TO THEM WHEN THERE IS A NEED” CORY MCCRUDEN

CHIEF GROWTH OFFICER (CGO), CHIEF EXPERIENCE OFFICER (CXO), DIGITAL TRANSFORMATION LEADER

today need to ensure they are actively engaging these investors and diversifying their client base. Today, less than 20% of advisors are targeting these younger investors.

“Second is digitisation along with consumer and advisor expectations for tools that provide them with more convenient, personalised experiences. COVID rapidly accelerated the extent to which consumers across all segments are comfortable engaging through digital channels.”

McCruden predicts omnichannel is now a requirement and no longer a ‘nice to have’. The bar for more personalisation and customised solutions for that customer will also continue to be raised.

“As our ability to collect information and, most importantly, make sense of the data we garner through engagement improves, so will the customer and advisor experience.”

Capco

New opportunities in wealth management and fintech Many experts point out that embedded financial solutions that facilitate integrated experiences are a huge contributing factor to disruption in the space. McCruden agrees: “For far too long, the financial services industry has expected the customer to come to them when there is a need. It’s an unrealistic expectation of customers, that they should know which financial product they need and when they need it. That’s why payment and credit products embedded in the checkout experience have been so successful.”

Streamlined, frictionless customer experiences are key, she says, because they are there to facilitate what the consumer is trying to do without that consumer having to think about it.

“I think what we’ll continue to see is powerful consumer brands in retail and other verticals expanding into financial services, seamlessly integrating fintech solutions in their offerings. Walmart’s expansion into fintech is a great example of how they are creating a marketplace of financial solutions, designed to specifically meet the highest value needs of their consumer and employee base.”

BANKING

“ COMPETITORS SHOULD RE-EVALUATE THE PRODUCTS CURRENTLY OFFERED AND INCORPORATE DIGITAL ASSETS AS PART OF THEIR PORTFOLIO” ALISTAIR SHIPP CAPCO

New trends in the wealth management space As innovative technologies continue to flood the marketplace, fintechs are under pressure to present customers with the latest, greatest

and fastest offerings at a lower cost if they are to compete.

Alistair Shipp, Executive Director of Capco, explains: “A changing of the guard is underway within wealth management, with a younger cohort of Millennial and Gen-Z investors forcing firms to rethink their product offerings and client services’ model. Driven by evolving client demographics, demand for customised investment solutions, enhanced technology, and industry consolidation, firms that serve the younger generation will be well positioned to capture asset growth.

“A key differentiator will be how firms truly educate and engage these new investors and go beyond any minimum requirements that may be set out as part of the FCA’s Consumer Duty regulations.

“Firms are competing on the next wave of growth within products, including: digital assets, ESG, and custom indexing; client

THREE LEADING WEALTH MANAGEMENT TRENDS hipp outlines three main trends currently S reshaping the space.

They are: Women in Wealth: Despite being regarded as a niche client segment within wealth management, women are positioned to be one of the largest beneficiaries of the multigenerational wealth transfer and are increasingly becoming the primary financial decision maker within households, as evidenced by the younger cohort of Gen-Z and Millennial women.

Women tend to prioritise long-term goals and an increasingly mission-driven view of investing compared to men. Wealth managers must tailor their service model to meet women’s unique preferences, as this growing

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cohort presents a significant opportunity to provide advice and acquire assets.

ESG: Investors are increasingly looking to align their assets with environmental and social goals.

Beyond the social aspects, there are material performance implications for firms that embrace the initiatives. There has also been pressure from regulators, asset managers, and governments to provide better ESG disclosure.

Custom Indexing – The Next Battleground: Direct Indexing is set to outpace the growth of ETFs, Mutual Funds, and SMAs over the next five years, as investors seek customised investment solutions that align with their ESG objectives while optimising tax management.

segments involving emerging high-networth investors and women; and service models comprising holistic advice, digital engagement, and fee modernisation. Against the backdrop of a changing regulatory environment and looming disruption from ‘big tech’, incumbents must balance retaining existing assets with growth opportunities, as firms build and deepen relationships with next-gen investors.”

Shipp says: “With growth expected to rise significantly in the next 3-5 years, there’s a revenue opportunity linked to these actively managed products. Advanced technology, low trading fees, and the proliferation of

fractional shares has democratised access to investors across the value chain. Following the wave of acquisitions in 2020 and 2021, firms are scrambling to integrate these strategies as part of their portfolio.”

Digital currencies a transformative force within wealth management As well as the new raft of demographics to cater to, the financial landscape has changed significantly over the past decade.

With the growth of cryptocurrency – which enjoyed a surging transaction rate of 912% in 2021 compared to rates in 2020 – wealth managers need to make sure they can fintechmagazine.com

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BANKING

provide the most current information and products to their customers.

McCruden points out that, between 2018 and 2020, the number of cryptocurrency users globally increased almost 200%. “There’s still a lot of friction when it comes to actually using cryptocurrencies for day-to-day transactions, 46

June 2022

and it’s largely used by investors today as an investment vehicle or inflation hedge. Other use cases leveraging the blockchain that will reshape financial services include smart contracts and identity verification.”

Shipp says we have only witnessed the tip of the iceberg when it comes to crypto

BANKING

“As firms continue grappling with regulation uncertainty and volatility while advisers remain sceptical of the asset class, clients have invested their assets outside of their primary money manager relationships.”

He continues: “Competitors should re-evaluate the products currently offered and incorporate digital assets as part of their portfolio. We expect to see more strategic partnerships and potential acquisitions between vendors within the digital asset ecosystem and institutional investors, particularly in tokenisation and distributed ledger technology applied to a broader range of asset classes outside digital currencies.”

in the wealth management space. “While the slow pace of crypto adoption by wealth managers has empowered new entrants to engage wealthy investors, the capitalisation of the crypto market now exceeds $2bn and presents a sizeable revenue opportunity for asset and wealth managers.

The future of wealth management As technology marches forward, so too will the continued disruptions, which, at the moment, are mainly seeking to provide customers with enhanced, cost-effective services. Personalisation, predicts McCruden, will be at the heart of the changes.

She says: “We will continue to get better at serving our customers with a level of personalisation we have never seen before.

Most wealth managers use some form of customer segmentation, for example household wealth, or risk tolerance, or age…

Eventually, through data and AI, segmentation will better reflect consumer needs at a more granular level, so we will be able to service clients with the right products and services at the right time on the customer journey.”

“If you think about some of the most successful fintech models, they’re those that are embedded in other customer experiences. Financial services, in and of itself, is not an experience. I think of financial services as electricity, something in the background that you need to power and enable whatever it is you want to do,” McCruden concludes. fintechmagazine.com

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SANTANDER UK

SANTANDER UK BANKING ON DYNAMIC DIGITAL TRANSFORMATION

WRITTEN BY: SCOTT BIRCH PRODUCED BY: GLEN WHITE fintechmagazine.com

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SANTANDER UK

Nick Jenkinson, Chief Procurement Officer at Santander UK, on the challenges faced undertaking a complete digital transformation at the financial giant

F

ew procurement professionals have a career as broad and diverse as Nick Jenkinson, currently driving transformation at Santander UK. While using the word ‘currently’ may seem odd, like referring to your ‘current partner’, Jenkinson is the first to admit that he is constantly striving to make himself surplus to requirements.

“I've worked in procurement for more years than I wish to remember and I've got a slightly strange CV in that I've worked across seven companies and seven industries for more than 20 years,” he says.

“I've learned a lot over 13 years of doing transformation activities, but being able to walk away and know that you have truly left something in a better place than where you found it that's recognised within the organisation, that's recognised within the team, I guess that’s my perfect scenario.

I can walk off into the sunset knowing I've created a great team. I've created the strong leadership. I've created the next step up for people within that team and then I’ll be able to move on to another challenge.”

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June 2022

Nick Jenkinson, Chief Procurement Officer at Santander UK

fintechmagazine.com

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SANTANDER UK

Jenkinson makes references to the New Zealand rugby team and its ethos that made them one of the greatest sporting teams of all time – ‘sweeping the sheds’. The simple act of cleaning the dressing rooms after a game, having that personal discipline and not considering you are above a task and someone else should do it just because you are one of the best players on the planet.

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June 2022

“ We're really undertaking openheart surgery” NICK JENKINSON CPO, SANTANDER UK

“I'm not hierarchical in the slightest from a leadership perspective, so I like to get involved,” says Jenkinson.

“But in those early stages of driving transformation, you will often look around and you haven't got all the people that you want or need within the organisation and therefore you have to look in the mirror or it doesn't happen.”

Automotive roots Twenty years is a long time in procurement, and the rapid digitisation in recent years has only accelerated that. So has the function changed beyond recognition in Jenkinson’s time? He says both yes and no. He started his career in the automotive industry which he admits was probably more advanced than most at that point in time. fintechmagazine.com

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Doxim takes marketing to new level for Santander Doxim, a global Customer Communications Management (CCM) leader, leverages its expertise, alongside its flexible platform to deliver ‘next best action’ email marketing for Santander.

Maximize the impact of your communications - support all digital and print channels with one vendor.

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Doxim provides modern, flexible solutions for CCM James Hall, Commercial Director at Doxim, advocates flexible, accessible print and digital communications for businesses everywhere Doxim is a global customer communications management provider with over 2800 clients, providing both print and digital communications to its customers.

“We provide everything from email and SMS, to a letter in the post,” says Hall, Commercial Director at Doxim. “We have over 20 years of experience in customer communications. Clients are essentially looking to outsource the complexity to Doxim so that they can focus on their core competencies.”

Doxim provides a wide range of solutions that include everything from a document’s creation and personalisation, to its storage and delivery in both print and digital formats – enabling its clients to save money, increase revenue and wallet share, and give their customers the best possible experience.

Asked about industry trends, Hall says: “We’re seeing a shift to cloud-based customer communication management.

Businesses want to move away from large on-premises solutions to save money,

move with the times and be more secure.

AI and data analytics are becoming ever more present in all technology, and this includes the CCM market. There’s also a trend towards communications becoming accessible to those with assistive devices.

Vendor consolidation is a key driver in the CCM market, as businesses look to become more efficient, save money and focus on the customer experience.”

Doxim delivers over half a billion emails for partner Santander every year, with a greater than 99% delivery rate. “The marketing project that we work on with them, is driven by an Artificial Intelligence engine and that helps determine next-best-communications to send the customer,” he says.

“We very much work in partnership with Santander to constantly improve the customer experience,” says Hall. “And, really, the key to success with all communications projects is working in partnership, just as we do with Santander.”

REQUEST DEMO

SANTANDER UK

Jenkinson was in direct materials and says services and indirect materials were seen very much as the poor relation.

It is only since he moved into the world of services procurement where Jenkinson says he recognised a difference as the function and use of technology has evolved.

“I'm not going to say it's more complex as there are just different types of complexity in indirect and direct, and because I've been able to move across different industries, I've been able to see what different industries do well and also, not so well,” says Jenkinson.

“In discussing digital, I can get a bit cynical sometimes because I think people can get confused when defining digital procurement.

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I think people get too lost in AI, RPA, NLP and the future of digitisation without sometimes understanding the drivers within their own organisation and the problems they are trying to solve – I am not a big fan of technology for the sake of technology. Some people are still at the level where they need to get the technology foundation, but whichever way you look at it, we all use technology every day and it has greatly changed our approach.

Nick Jenkinson TITLE: CPO COMPANY: SANTANDER UK INDUSTRY: PROCUREMENT, BANKING LOCATION: UNITED KINGDOM A forward thinking, selfaware, results driven and highly dynamic leader, who has demonstrated an ability to inspire, motivate and drive change through a focus on people, customer engagement and innovative strategies.

Highly inquisitive and has a passion for change and building high-performing teams that can challenge the status quo and deliver tangible and transformative business outcomes.

Key skills and achievements include: • Transformative Procurement • Business leader

EXECUTIVE BIO

• P assion for driving significant change • T rack record of delivering significant, sustainable value • A relentless focus on digital enablers • L eadership of multi-award winning regional and global transformations

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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.

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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 ›

SANTANDER UK

Nick Jenkinson, CPO Santander UK, on digital transformation

“It’s about putting the right people in place, doing the right things, with the right enablers and right positioning and the success will follow” NICK JENKINSON CPO, SANTANDER UK

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We all need balance in our lives.

As a strategic communications partner, it’s our purpose to create better days for you and your team.

We help you deliver at work, so you can deliver for them.

#betterdayswithpcc www.paragon-cc.com/en-gb

Better days at work with

KEY PARTNERSHIPS

SANTANDER UK

A key element of our new operating model is our approach to developing and partnering with a supplier ecosystem who can truly help support and drive our business goals. I’m a big believer in the notion that you are what you eat and, as a result, we have developed an operating model where ~40% of our people are dedicated to supplier collaboration and risk management.

Given this approach and belief, we are working with some great partners across a number of areas to drive our technology, digitisation and talent goals.

Those partners include:

THE SCOTTISH BRAILLE PRESS The Scottish Braille Press is a long standing supplier of alternative format customer communications to visually impaired Santander UK customers.

The Scottish Braille Press is part of the charity Sight Scotland, therefore all profits and fundraising are used to support the charity. In addition, they are an employer that supports people with disabilities.

PARAGON Santander UK has a well-established partnership with Paragon rooted in transactional print, but more recently expanding into the management of our mailroom operations. This has presented an opportunity for us to deepen our strategic partnership through transformation to a digital outsourced mailroom.

DOXIM Doxim have provided a critical service to deliver both operational and marketing email communications to customers on behalf of Santander UK since 2017.

Doxim have been a vital partner in helping Santander transform the efficacy and efficiency of our digital email customer communications.

COFORGE Coforge were selected as a key partner given their expertise in emerging technology, data and digital and through the partnership, have supported a significant global workforce transformation initiative and new customer innovations.

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SANTANDER UK

“ I am not a big fan of technology for the sake of technology” NICK JENKINSON CPO, SANTANDER UK

“Ultimately there are significant technology enablers that I'm bringing into our organisation and really that's all about creating the time, the headspace for people to be able to be more effective in their roles and to be able to drive a different value proposition.

“Despite the access to these significant enablers, I still seem to often hear the same dull conversation of where should we be sat in the organisation. As a function, we can be a bit self-indulgent if I’m honest. We like to

tell everybody else in the profession how well we're all doing but we still come on to some of those same boring conversations which, if we're still having them, then clearly we haven't evolved as much as we should have done.”

Total Transformation When it comes to the challenge at Santander, Jenkinson says the banking giant is going through a major transformation programme.

His own impatience means he admits they are trying to drive change from multiple angles and that is one of the reasons why he was attracted to this latest passion project. fintechmagazine.com

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SANTANDER UK

“I've been able to move across different industries, I've been able to see what different industries do well and also, not so well” NICK JENKINSON CPO, SANTANDER UK

“We're really undertaking open-heart surgery,” says Jenkinson. “We've got a number of different technology upgrades that we're going through. We've really looked at everything to do with the current operating model – including people, processes and systems – and looked at where those challenges are.”

Jenkinson and his team are implementing new tools around sourceto-pay and making a lot of enhancements within risk management and supplier collaboration, not to mention sustainability.

When undertaking such a transformation, it’s essential to understand how these pieces of the jigsaw come together to provide a seamless solution for the user. He is improving processes and then overlaying those technologies in order to drive the agenda forward at pace.

He believes the key element about transformation is about having business confidence, being viewed as a true partner, fully engaged in all areas of the organisation, and seen as driving a broad value proposition. This is backed up, inevitably, with KPIs and scorecards but Jenkinson judges success on a different level.

“For me, it's the human side that’s critical,” he says.

So the big question may well be, when is Jenkinson expecting to move to the next challenge?

“Being able to leave a legacy behind that you're proud of is crucial. I'm very self-aware and self-critical and so I ask myself have I delivered something that I can truly, hand-on-heart say is a great solution I'm proud of. The teams you leave behind are also critical – have I created an environment where they can flourish for the future.. It’s about putting the right people in place, doing the right things, with the right enablers and right positioning and the success will follow .”

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FIVE KEY TRENDS DRIVING CHANGE IN PAYMENTS

I

From BNPL to cryptocurrency, the world of payments is changing – and innovation is at the heart of it WRITTEN BY: JOANNA ENGLAND

I

t’s no secret that fintech is transforming the global financial industry. As incumbent banks battle to keep up with their lightweight, digitised younger competitors and financial operatives jostle to provide increasingly frictionless services, the payments space is also undergoing changes of its own – and they are no less dramatic.

Innovations in digital currencies, blockchain technology and AML regulations have caused a number of disruptive changes to transform the payments space. Security has loomed large, too, as cybercrime has skyrocketed over the past two years. We take a look at five defining trends that are reshaping payments as we know them.

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1. CRYPTOCURRENCY IS GOING MAINSTREAM The news that El Salvador was introducing Bitcoin as a mainstream currency sent shockwaves through the financial markets. But, just under a year later, time has moved swiftly forward, with digital currencies at the forefront of most payment companies’ agendas. Over the past year, there has been a marked increase in M7A in relation to crypto.

For example, PayPal acquired Curv, Nuvei acquired Simplex as well as new partnerships, cryptocurrency feature launches, and significant funding rounds. Take NYDIG and its impressive funding drive in December 2021: It raised $1bn – officially a megaround.

V E FINANCIAL SERVICES

Meanwhile, dedicated cryptocurrency teams are changing incumbents from within, and the adoption of new technologies that support crypto spending and trading have never been so high.

Digital banks are one step ahead of the curve and are already offering payment services that are crypto compatible.

Another indicator that cryptocurrency in the payments sector is about to explode is the US President's declaration that his administration will investigate ways to regulate the space to bring it further into the mainstream.

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2. SAAS PLATFORMS SEE HIGHER ADOPTION RATES The fact that Stripe is now the fastest growing fintech payments startup globally is an indication of just how fast the space is moving. Now worth an estimated $95bn, it is also the IPO to watch in 2022. But all this is a signal that onramps into the payments sector are increasing.

Giant platforms that support online payments such as Shopify and Mindbody have transformed – and are now essentially operating – systems that enable their customers to leverage new and emerging financial services. The platforms are also built with the latest KPIs in mind, offering better customer experiences, faster product delivery and driving business growth. Some are even providing new financial products such as payment cards and loans as a further incentive.

This trend looks set to continue its growth trajectory in 2023, too.

FINANCIAL SERVICES

E

embracing new embedded finance offerings, with 56% of vendors saying they will be launching new products in 2022.

The marketplace has already seen a robust adoption of services such as BNPL, with 74% of European retailers already offering the service at the checkout.

According to reports, embedded finance is seeing a strong adoption across Europe’s retail and ecommerce sector, with over half (56%) of retailers surveyed intending to either increase their offering (34%) or to start offering (22%) embedded finance solutions in the coming 12 months.

4. CONTACTLESS TECHNOLOGY IS REDEFINING FRICTIONLESS PAYMENTS Mobile payments that no longer require contact to take place are also set to

3. BNPL IS SKYROCKETING Despite criticism of the ‘buy Payment and ecommerce trends for 2022 now, pay later’ space, as well as concern that it is encouraging young customers to become embroiled in financial debt, the online trend that allows users to spread their become more commonplace in 2022. For payments into interest-free instalments has starters, Apple announced it is launching never been more popular. A recent survey by Tap to Pay. Also, according to a recent Vodeno revealed that retailers in Europe are report by investment management firm fintechmagazine.com

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R T FINANCIAL SERVICES

Bailard, there’s been a rapid global adoption of a superior form of digital payments. Consumers currently interact with contactless payments through two primary forms: contactless-enabled credit and debit cards, and mobile wallets (such as Apple Pay, Google Pay, and Samsung Pay).

“ THERE'S NO DOUBT THAT SOME OF THE BIGGEST INNOVATIONS IN REGARDS TO MERCHANT PRODUCTS AND SERVICES BEING UTILISED IN THE INDUSTRY HAVE BEEN AROUND CONTACTLESS PAYMENT SOLUTIONS” MICHAEL SCHREZENMAIER CEO EUROPE AT SUMUP

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The steady reduction of cash points alongside the shift towards online banking and modernised payment processes has, according to Michael Schrezenmaier, CEO Europe at SumUp, accelerated the move toward a cashless society in recent years. "There's no doubt that some of the biggest innovations in regards to merchant products and services being utilised in the industry have been around contactless payment solutions,” he recently told FinTech Magazine. “What's more, the onset of COVID-19 and the need for merchants to respect social distancing measures and health

RD S Crypto card payments will increase in 2022 and 2023 Traditional card networks are becoming increasingly open to cryptocurrency as a form of payment. For example, Visa has an estimated 65 cryptocurrency partners set up to issue Visa cards. Furthermore, in the last quarter of 2021, the payments giant enabled more than $2.5bn in cryptocurrency transactions. This looks set to rise in 2022, and there’s likely to be more cryptocurrency cards as well as issuers that experiment with cryptocurrency in its various forms.

guidelines put in place by the government has meant that this reliance on contactless payment solutions has become even more important over the past 18 months."

5. RISE OF THE FINTECH SUPER APP ‘Super app’ is a term used to describe an app within the world of commerce that provides something above and beyond the normally accepted service. Digital transformation has led to a rise in the number of banking super apps now available to customers. These allsinging, all-dancing platforms provide their

customers with a fully-rounded experience that means they never need to leave the app to carry out a task beyond its capability, in terms of financial services. For fintech, the rise of these apps could mean trading in cryptocurrency while managing several savings accounts. The solutions offer swift and cost-free account opening options, along with cross-border payment tools and multicurrency options for complete payment transparency. Digital banks offering soughtafter super apps include Starling Bank, Revolut, Cashplus and Monzo. fintechmagazine.com

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NTT DATA

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Global Trusted Innovator

NTT DATA Insurance introduces Insurtech Global Outlook 2022

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

fintechmagazine.com

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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

I

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 which 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 74

June 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 from 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.

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“ 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 the 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 Does No Longer Come 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

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NTT DATA

Insuretechs 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

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CESVIMAP

C

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

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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

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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 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.

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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 that are

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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 new models, entrants

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43% Non Insurance Related

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

“ 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

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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

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the 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.

of Big Data analytics, Cloud 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

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 want to 18% Insurance Related industry Tech Giants Investments

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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

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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.

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BaaS and the age of digital finance

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PAYMENT SOLUTIONS

We look at the latest changes in the BaaS space, taking into consideration new technologies, marketplace demands and changes in the financial landscape

B

anking as a service (BaaS) is moving up the ladder in terms of important developments in the world of digital banking and fintech. But what does it actually mean, what are the implications, and why is it such a transformative force?

We spoke to a number of industry-leading experts to find out more

“ There’s no doubt that BaaS is an incredibly exciting opportunity for the entire financial services ecosystem” ANGUS ROSS FINASTRA

The BaaS market position The financial services marketplace for consumers has transformed significantly over the past few months. One major disruptive element is BaaS, which provides customers with the opportunity to obtain good quality financial services via channels and brands that they trust.

Angus Ross, Chief Revenue Officer, Banking as a Service, Finastra, explains: “Banking as a Service (BaaS) has become one of the most important strategic agenda items for chief executives across numerous industries – including banking, retail, construction and healthcare. BaaS enables any business to develop new and exciting propositions with relevant financial services embedded into the customer experience.

“Overall, it’s expected to reach a value of $7tn by 2030. Those that act fast and secure priority customer context will experience the greatest upside. Those that wait may very well be left outside looking in.”

“According to recent research, we found that 85% of senior executives are already implementing BaaS solutions, or planning to fintechmagazine.com

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PAYMENT SOLUTIONS

do so, within the next 12-18 months. While Point of Sale (PoS) financing is expected to accelerate by 104% in the banking industry, SME lending and corporate treasury/FX services are poised to gain the highest traction and demand over the next three years – particularly in the banking and healthcare sectors,” he continues.

Finastra’s latest research has also revealed that, while providers and distributors are more mature than enablers, the latter – made up of big techs and fintechs – have sensed the potential and will enjoy the highest growth over the next three years. Ross believes the findings point to one clear conclusion: consumers (retail or corporate) are changing where they source financial services and are increasingly utilising non-bank channels.

BaaS and new regulatory solutions With regulatory complications often plaguing the bank licensing process, banking-as-a-service also takes the strain from many companies looking to expand their finserve offerings. Andrea Ramonio, Chief Strategy Officer at Contis, says BaaS encapsulates organisations that provide regulated solutions through either a banking or an EMI licence.

“While a banking licence enables firms to offer a full suite of offerings such as credit, this licence comes with a certain requirement of regulation. EMI licences are just as powerful, as they enable businesses to provide a wide range of services such as cards, QR payments, payment rails and accounts. The strongest organisations can act as both a provider and enabler of BaaS, providing an intrinsic link between the two,” he explains.

“ I see an evolution of services that will expand to digital assets, including E-wallets or stable coins, with the ability to offer crypto-as-a-service for example” ANDREA RAMONIA CONTIS

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“Historically, BaaS was a buzzword in the industry, but what we are seeing now is the concept reaching a level of maturity where organisations are understanding the true benefits BaaS can offer,” Ramonia says.

New BaaS sector opportunities One sector that is looking at the potential of BaaS is the automotive industry, where leading car manufacturers are even trying to look at ways BaaS solutions can complement the mainstream adoption of electric cars. “The current market offering means that, typically, car charging times can be considerable, which could be perceived as a window of opportunity for sales.

“This could open the door for new partnerships between automotive manufacturers and retailers if implementing embedded finance options, which could help incentivise people to grab a coffee or a bite to eat while their car charges, using their account card in the process.

I expect embedded finance solutions to also become widely available across other sectors such as travel.”

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“ Historically, BaaS was a buzzword in the industry, but what we are seeing now is the concept reaching a level of maturity” ANDREA RAMONIA CONTIS

BaaS in the digital currency market As cryptocurrencies enter the mainstream marketplace and ‘buy now, pay later’ options increase in popularity, BaaS is also proving its worth within the sector – as is embedded finance. “One of the big developments in the BaaS space over the past couple of years has undoubtedly been the explosion of ‘buy now, pay later’ schemes, providing credit at the point of sale. Looking ahead, I see an evolution of services that will expand to digital assets, including e-wallets or stable coins, with the ability to offer crypto-as-a-service, for example,” says Ramonia.

He continues: “Another possibility to consider is how embedded finance solutions could help organisations reach the holy grail of gaining a greater understanding of their customer through richer data collection. Typically, consumer behaviour patterns are established through monitoring website activity or online purchase activity from that retailer.

“However, embedded finance solutions within retailers could mean that, when a customer uses cards provided by that business, they can gain access to where the card is being used outside of that store and

PAYMENT SOLUTIONS

what products are being purchased, rather than this information just being typically available between a consumer and a card provider.”

New trends in BaaS driving fintech solutions As the BaaS space expands and new innovations provide further solutions for companies, new trends are emerging, too. Adrian Cannon, CEO of Omnio, believes BaaS is driving three main trends in the marketplace:

• A reduction of cost. The use of public cloud technology, light touch regulatory structures – such as e-money institutions – and platforms achieving economic scale will cause costs to fall. Fullyregulated banks offering BaaS will need to reconsider their business models and cost base in this environment.

• Liberation of financial services. As the cost base falls, the economics of offering financial services by non-banks becomes more attractive, and we should expect to fintechmagazine.com

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see greater consumer choice as to where they get their everyday banking services from. There will always be a regulated entity involved, of course, but that will be far less prominent than current BaaS solutions on offer today.

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• More deeply embedded services.

The boundaries between non-regulated – such as loyalty and rewards – and regulated financial services will become less clear and the interchange of values between them will become easier.

PAYMENT SOLUTIONS

“ It [the future of BaaS] looks like choice” ADRIAN CANNON OMNIO

This will liberate large scale retailers with established loyalty schemes to reinvigorate moribund loyalty programmes, reduce their balance sheet exposure and, somewhat ironically, increase their customer knowledge.

The future of BaaS and embedded banking services According to Ross, the winners in BaaS will be the pioneers and early adopters that are embedding their products and services into other platforms, while building partnerships with technology enablers and distributors.

“BaaS will give them an opportunity to reach a greater number of customers at a lower cost,” he says.

“Many pioneers are already experimenting with specific use cases – creating partnerships alongside distributors and orchestrators – to see what works and what could be profitable at scale… But, as in any industry that’s being disrupted, there remain many players who are not actively doing anything. These are the ones that should expect to be disrupted in the years ahead. There’s no doubt that BaaS is an incredibly exciting opportunity for the entire financial services ecosystem.”

Cannon believes that BaaS, most importantly, offers a more flexible future for both companies and customers when it comes to financial services: “It [the future of BaaS] looks like choice – choice of where we bank, what brands we would like to have provide our banking services, and the freedom to choose small, local banks and building societies able to partner with BaaS providers to complete their product set and the return of the retailer to retail banking.” fintechmagazine.com

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Dojo: Taking a customer-first approach to win the market

AD FEATURE WRITTEN BY: BLAISE HOPE PRODUCED BY: MICHAEL BANYARD fintechmagazine.com

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London-based payment technology provider Dojo began by eliminating the pain points of customers and developing its product with a customerfirst approach

D

ojo evolved from Paymentsense Limited, a company established in 2009.

The payment-tech provider, based in London, was created to resolve customer pain points. From the products the team builds to the services they provide, everything at Dojo is built with a customer-first mindset.

“You can't really talk about Dojo without mentioning Paymentsense. We're still Paymentsense Limited,” says Chief Technology Officer of Dojo, Nick Fryer.

“It's been around a little while and the core goals of the business haven't really changed throughout: to provide businesses with a better deal when it comes to predominantly face-to-face card processing.”

Fryer explained that, back in 2009, the choices of payment methods and providers were pretty limited. A small number of major banks offered card acquisition with a payment terminal, but it wasn’t a solution fitting for smaller businesses.

The customer service offered by those providers, according to Fryer, wasn't great in that era, either. The company then started to try to improve the boarding process, give these businesses better rates and provide better customer services.

“It’s as simple as that. And we've been super successful doing that for over 10 years.

Our Paymentsense part of the business is

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Taking a customer-first approach to win the market

up to about 85,000 customers with about £16-17bn annual card turnover through our systems – but that's working with third parties, that's working with other businesses to provide the actual payment systems,” says Fryer.

Despite the success, the people behind Paymentsense started to notice that they could use the approach to help businesses further. They would, however, need a new product.

“It was frustrating that we couldn't change the product, which was very similar to everyone else's, and our key sales tools; our salesforce were awesome, but we knew we could do even better by our customers.

So we looked at ways of taking control of the product, trying to make it better and more customer-focused,” says Fryer.

“In the end, we decided we wanted to do it all ourselves. That's where Dojo was born.”

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The customers’ way, the Dojo way The company eventually applied to the Financial Conduct Authority (FCA) and became a regulated e-money institution.

Once direct relationships with Visa, MasterCard, American Express and Diners Club International were put in place, Dojo was ready to process transactions with these card schemes.

“Then we built the software. But, before we started that process, we went through an exercise of trying to list out all the areas in which our Paymentsense product could be improved, as far as our customer was concerned. We put ourselves in our customers' shoes and said, ‘How can we improve the product?’ So we listed it off on a whiteboard,” explains Fryer.

“We started it off at the top by writing down some of the problems, and then we set about solving all of them. It's quite

DOJO

“ We came from a customer's point of view. We wanted a product that we were proud of, apart from anything else”

NICK FRYER TITLE: CHIEF TECHNOLOGY OFFICER

NICK FRYER

INDUSTRY: PAYMENT TECHNOLOGY

CHIEF TECHNOLOGY OFFICER, DOJO

EXECUTIVE BIO

a bold thing, but it genuinely came from a very good place. We came from a customer’s point of view. We wanted a product that we were proud of, apart from anything else.

“We built Dojo with that mission and we pretty much did that. We’ve solved, if not all of them, almost all of the pain points.

As an example, things like settlement time,” Fryer says.

For small businesses, cash flow is key.

The standard settlement time in the industry was somewhere between plus three or plus two days; Dojo, however, was keen to change that.

“That, in reality, means that if you process on a Friday, do a large part of your weekly sales in your coffee shop or your restaurant or your butchers, you don't see your money until the following Wednesday. That is not great. With Dojo, we pay every day from 10:00 AM. So next-day settlement is becoming a thing. It's normally chargeable; ours [is] free. It's the standard process for Dojo customers,” Fryer explains. “So at the beginning of every day, they have the money from the previous day.”

“That's just one example,” Fryer adds.

“Anyone that takes cards knows about PCI

LOCATION: LONDON, UK Nick Fryer has been Chief Technology Officer at Dojo since 2015. He graduated De Montfort University with a Computer Science degree and has worked in software engineering for more than 20 years, including roles at Toyota Motor Sales USA, T-Mobile UK and Euroffice. Nick is passionate about developing large-scale software projects to drive businesses forward, and building the technology teams to deliver them.

2009 Year founded

50,000+

Empowering businesses across the UK

800+

Number of employees

43,000+

Location of deployed card machine

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“ Customers love paying with Dojo and using Dojo because we provide an amazing experience, superfast payments and the ability for customers and consumers to connect, to create better experiences for people to enjoy themselves more” CHARLIE MASTERS HEAD OF PRODUCT, DOJO

DSS. It's the payment card industry’s data security standard that anybody who handles credit card data has to comply with. Whilst it's actually a very healthy thing and a good thing, we realised we could make it simpler for business owners.”

“We were asking a kebab shop to have an information security policy – that's not right.

Their priority is making kebabs rather than managing and updating their information security document every year. So we deployed a point-to-point security process.”

In this system, the data is strongly encrypted right at the source and is not decrypted until it reaches a secure environment back in Dojo’s cloud-based systems.

Dojo emphasises that all customers’ pain points need to be solved, and the focus continues to be on offering a fairly simple fintechmagazine.com

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product that people can easily understand – this is what makes them really popular with the customers.

“We have monthly rolling contracts for most of our Dojo customers. If you don't like our service, give the terminal back. Then we call it a day,” says Fryer. “There's no typical three-, four- or five-year contracts. We got rid of all that.”

“What customers value is speed, simplicity, transparency, and ease-ofuse. And we nailed absolutely all of those,” Charlie Masters, Head of Product at Dojo, adds. “When it comes to the surrounding 104

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pieces of the user experience around the settlement, times fees, transparency and other sorts of contractual or compliance obligations, we make them as easy as we can for businesses – and that is what really adds value to them.”

Premises-based businesses and technology implementation Today, we live in a digital-first world.

We click, tap and swipe our way through the day and increasingly demand personalisation, speed and delight when making purchases as a result.

DOJO

What Dojo is seeing, based on the transaction data of the company’s over 50,000-strong customer base alongside recent business and consumer research, is that this is all leading to increasing importance being placed on memorable experiences when spending at premisesbased businesses on the High Street.

“Premises-based organisations are not digital-only organisations, but they may have a digital experience. So we're talking bike shops, retailers and then even food and beverage premises, including pubs, restaurants that have a premises-based offering where people will come in, you can see them at tables or you can serve them on

CHARLIE MASTERS TITLE: HEAD OF PRODUCT INDUSTRY: PAYMENT TECHNOLOGY

EXECUTIVE BIO

LOCATION: LONDON, UK Charlie is a Product Leader with experience across fintech, adtech and consumer software products. As Head of Product for Payments at Dojo, he leads and empowers a team of Product Managers to deliver valuable outcomes for our customers and theirs. Charlie enjoys the rate of innovation, the complexity of the challenges and the breadth of the impact that can be made in the Payments space.

your premises, but they also have a digital payments experience,” Masters explains.

“So perhaps they're taking payments online via QR codes, or they have an online store and that can be quite useful for customers.

Imagine a bike shop: somebody comes in and they are saying ‘Oh, I really like the look of this bike’. They don't have it in stock, but they do have an online store or presence, which means that they can actually place a preorder or an online order for that bicycle and get it delivered. Then they've had that in-store retail experience, but it's also digital.” fintechmagazine.com

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street looks like. That’s why Dojo is focused on empowering the experience economy by creating the tools and technology that help their customers to turn transactions into meaningful relationships.

“It's great for consumers who have a better experience. And it's great for our customers, who can see repeat spending – they see engagement, loyalty, and they can optimise their offering to be more successful,” says Masters. “Playing on the emotional, the enjoyment wrapping up into the experience of buying things that

Dojo is currently empowering over 50,000 businesses across the UK, deploying card machines in over 43,000 locations.

“Customers love Dojo because we provide an amazing experience, super-fast payments and the ability for customers and consumers to connect, to create better experiences for people to enjoy themselves more,” says Masters.

“You know, we're all humans. We seek enjoyment. Whenever we want to go to the pub or to a shop, we want it to be a positive experience, even if we don't really realise it. Recently, we've done some research and one in three of us are willing to pay more for a better experience, regularly. And that could be up to 25-30% more*.”

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“ We think we have the best payment product in the UK and we're making it better and better with every passing day. The UK is one of the most advanced and one of the most competitive markets in the world.

So we know when we take it abroad, our friends overseas are going to love it, too.

And I think it's going to do even better” NICK FRYER

CHIEF TECHNOLOGY OFFICER, DOJO

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we want and things that we need – that is differentiating us in the market already.”

More expansions Dojo takes the standard face-to-face card experience and ‘removes all the nonsense’, which, according to Fryer, is made up of all the things people don't want. Dojo makes transactions simple, easy and painless.

The plan, however, doesn’t stop there.

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“We use the term – it's not our term – but we use the term ‘experience economy’,” adds Fryer. “There are businesses where it's very difficult to put the offer online or purely online.”

“We've recently acquired a business called WalkUp. It’s a virtual queuing application.

They work predominantly with restaurants, particularly restaurants that don't take bookings – that's their niche, but it’s not limited to that.”

DOJO

“ Recently, we've done some research and one in three of us are willing to pay more for a better experience, regularly. And that could be up to 25-30% more” CHARLIE MASTERS HEAD OF PRODUCT, DOJO

“Part of our expansion is to build the ordering process into that, so you can order ahead of time,” Fryer explains. “You can order whatever you’re going to have at the restaurant and then pay for it before you even turn up.”

“This is what we are terming the experience economy, the growing part of the high street.

But beyond that, we're going to take our great product forward and that's Dojo in its current form.”

Dojo plans to take steps into other European countries, with Western Europe as one of its first targets.

“In terms of card markets, the UK is one of the most advanced and one of the most competitive, as well as one of those with the narrowest, thinnest margins. So we've taken on this really quite difficult environment and our customers really value the productwe’ve created,” Fryer says. “We are hopeful that we’ll do well there, too. So we’re going to expand the product out, add more features and then take it abroad.”

“Trying things out that we know are succeeding in the UK, in markets in different parts of the world. But that also includes expanding our people teams, our product teams, our technology teams in a way that helps us to facilitate greater success for our customers,” Masters adds. “We have such a big ambition to empower businesses to thrive in the experience economy – at home and abroad.”

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IS LAUNCHING A UNICORN EASIER THAN EVER? With new unicorns in the fintech space emerging every week, we take a look at the traits that enable companies to scale at pace WRITTEN BY: JOANNA ENGLAND

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TECHNOLOGY

O

nce upon a time, a fintech company reaching unicorn status was a fairly rare, once-every-few-weeks occurrence. However, today’s marketplace offers fertile ground for ambitious start-ups, with investors recognising the importance of fintech and its potential in the global financial realm.

While pockets are deep (the latest mega rounds prove that) there is a huge amount of discernment among investors. Only a fraction of the number of freshly launched fintechs in 2021, for example, found themselves rolling in new capital.

It takes a certain type of company to attract the big bucks. They must be disruptive, addressing a marketplace gap, and be technically ready to collaborate with the digital ecosystem as they scale.

Pitching the correct concept to the marketplace Every journey starts with a single step, but with truly innovative fintechs, success can often be attributed to the pitch they present to potential investors. Ewan White, Account Director at Grayling and fintech communications specialist, explains, “Strong storytelling is so important when it comes to fintechs who are looking to go on that journey from early stage to becoming a unicorn. All of the success stories in the fintech space have a recognisable brand, a clear identity and a powerful message that they are trying to get across.”

White says the funding environment is so competitive that founders must work hard early on to clearly define what their company is and what it stands for. This will not only help engage investors and fintechmagazine.com

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

IMAGE: GETTYIMAGES.COM

T

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

Pleo values - Working @ Pleo communicate an investable proposition, but it is also key to driving customer acquisition and business growth.

“This complex landscape means that it is more important than ever to be able to stand out from the crowd and be able to tell a story about your company and how it benefits not only the fintech ecosystem but the world at large. Success in fintech is built around a number of things, whether that’s an innovative product or a talented team, but the ability to tell the story is often something that gets less focus and yet is key to achieving scale.”

Have a consistent message for your product Fintech executives that have complete faith in the product they are selling, are far more likely to be successful in the investment space. If a company does not have a clear strategy and keeps changing tack, it will put off potential investors.

“ WHEN YOU’RE SCALING AT A UNICORN PACE, THERE’S A REAL PRESSURE TO ENSURE YOU’RE HIRING THE RIGHT PEOPLE IN STEP WITH THE COMPANY’S GROWTH” ARUN MANI PLEO fintechmagazine.com

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Arun Mani, CRO of Pleo, believes presenting a solid and confident plan showing accurate financial predictions are key in scaling toward unicorn status. Pleo reached unicorn status in July last year, the fintech raised $150mn in its series C, taking them to a $1.7bn valuation. A few months later, in December, they announced their series C extension, which tripled the company valuation to $4.7bn.

“We’ve come a long way since we launched in Copenhagen in 2015 – we’ve now expanded our presence to fifteen European markets, grown our team to well over 500, and launched innovative new features to our platform that aim to simplify expense management and make seamless processes accessible to employees everywhere.

“We’ve got to where we are today by never losing sight of what we stand for and what we set out to do. Throughout our growth, we’ve always brought our people with us on Pleo’s journey, really living our values of transparency and autonomy.

I think investors could see we’d built a company full of people who love where they work – which translates perfectly into what our product is designed to be and do – and that’s something they really bought into.”

Funding and strong core values go hand in hand According to Mani, if fintechs are going to attract meaningful investor attention, they have to start with a strong, ambitious vision of their core values and the milestones they intend to meet.

“For Pleo, it was all about giving ‘Power to your People’, our company motto, and making the world of work work for everyone. From there, we set out a clear roadmap for growth to make sure we’re staying agile and adapting

“ ALL OF THE SUCCESS STORIES IN THE FINTECH SPACE HAVE A RECOGNISABLE BRAND, A CLEAR IDENTITY AND A POWERFUL MESSAGE THAT THEY ARE TRYING TO GET ACROSS” EWAN WHITE GRAYLING

when the market needs us to and ensure our values and our goals are completely aligned with potential investors.”

But it hasn’t been an easy journey, and competition is notoriously stiff in the fintech space. This often means businesses will lose sight of their initial goals in an effort to attract investors at all cost.

“I think because the start-up landscape is so competitive… you can sometimes see companies sacrificing their reputation or

the happiness of their employees in the process,” he says.

Challenges in the marketplace for Unicorns Scaling a company can be a stressful period where balance in terms of staffing, projects, new products and core changes disrupt the equilibrium of the business. Mani says his experience of the process was eye-opening in terms of the challenges it represented. fintechmagazine.com

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“When you’re scaling rapidly, it’s so easy to lose sight of culture. When we were growing Pleo, we were determined to build a company that employees love and where they feel truly recognised. To make that a reality, we’ve had to keep a laser focus on culture and ensure our core values are upheld to a high standard.”

The war on talent is a very real obstacle when it comes to scaling a fintech in the current marketplace. As technologies evolve, specific skills are required to implement them and market demand for the right staff can be extreme.

“When you’re scaling at a unicorn pace, there’s a real pressure to ensure you’re hiring the right people in step with the company’s growth. This becomes even harder when you factor in a war for talent, the likes of which we haven’t seen in decades. In order to win, it comes back again to that crucial point of true employee satisfaction. You can try and draw people in with all the salary and material benefits you like, but what employees are also looking for is compassion, understanding, and a culture of belonging to support their growth and development.”

Unicorns are no longer a rarity As of March this year, the global count of unicorns is now well over 1,200, with a cumulative valuation of $4.2trn. Mani says that although the arrival of new unicorns has slowed down in the last few months after a record-breaking 2021, in light of ongoing trends like the platformisation of financial services and the huge opportunities created by the metaverse, 2022 is set to be another big one.

He also predicts many more unicorns to emerge across Europe over the next few months, as entrepreneurship flourishes

and fintech, which was once almost entirely associated with Silicone Valley, has gone global.

“We can expect to see increasingly more ‘home-grown’ unicorns on this side of the Atlantic … thanks to a surge of entrepreneurship and innovation, there are now over 100 here in Europe.”

He concludes: “I’m a firm believer that achieving meteoric growth, whatever that means to you, is not just about revenuesetting. The secret that the fastest-growing, most successful businesses have all understood is that you need an inspiring vision, and the people to support you in achieving it.”

“ YOU CAN TRY AND DRAW PEOPLE IN WITH THE SALARY AND MATERIAL BENEFITS, BUT WHAT EMPLOYEES ARE ALSO LOOKING FOR IS COMPASSION, UNDERSTANDING, AND A CULTURE OF BELONGING” ARUN MANI PLEO fintechmagazine.com

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SECURING A FAMILY-OWNED BUSINESS WITH ST LOUIS’S FIRST BANK WRITTEN BY: ALEX TUCK PRODUCED BY: GLEN WHITE

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Marc Ashworth, SVP & CISO at First Bank, discusses his role as a leader at the family-run business First Bank, who are helping local businesses thrive

A

t First Bank, the vision is clear: for now and well into the future, they’re looking ahead to identify every available avenue to help nourish and support family-owned and privately held businesses, regardless of their size or tenure.

As a proud, family-owned business with a 100-year-plus history, First Bank specialises in privately held and family-owned businesses, in addition to offering extensive personal and wealth services – so there’s an innate willingness to go the extra mile and partner in their customer’s long-term success. As a fitting example of this, First Bank launched the Center for Family-Owned Businesses to offer tailored resources to serve the unique needs of family business members.

The Dierberg family, along with First Bank’s Chairman and Chief Executive Officer Shelley Seifert, remain committed to establishing it as the bank of choice for families and family-owned businesses, now and well into the future, through continued growth and innovation.

Part of this service, and perhaps one of the most crucial parts for any business in today’s marketplace, is security – whether physical or virtual.

Marc Ashworth is the Senior Vice President & Chief Information Security Officer for First Bank. Under his management remit are four teams: the Networking Support Team; the Information Security 120

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Example of

Beverly Hillscaption Branch an image fintechmagazine.com

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Securing a family-owned business with St Louis’s First Bank

“ We refer to our team of colleagues as being family, so it's woven into all that we do” MARC ASHWORTH

SVP, CHIEF INFORMATION SECURITY OFFICER, FIRST BANK

Group; Fraud Team; and Physical Security.

With the bank now for four and a half years, he has accumulated over 30 years in the industry.

Heritage drives culture at First Bank First Bank, as Ashworth explains, more than understands how best to cater to the needs of other family-owned businesses, as well as their family employees.

“The family focus applies to more than just our clients. We refer to our team of 122

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colleagues as being family, so it's woven into all that we do. And you really feel it when you talk to the owners, as they're really supportive of what you do. It's a lot different when you're with a family-owned business versus just a corporation, in my opinion,” he added.

First Bank is uniquely positioned to understand the needs and challenges of other family-owned and privately held companies, due to four generations of reliable ownership that offer the ability and experience needed to help businesses plan for the long term and ultimately thrive in today's environment. The bank offers consistent and high-quality experiences for their clients that cover a range of topics especially geared to family businesses.

Ashworth adds: “Whether it's succession planning, tax strategy, family, trust issues, estate planning, and more, we have the experience and expertise to support the family-owned businesses with any banking

FIRST BANK

need. We help family businesses thrive across generations and in ways that go beyond traditional banking products.”

MARC ASHWORTH TITLE: S VP, CHIEF INFORMATION SECURITY OFFICER

Issues in cybersecurity for smalland medium-sized enterprises Ransomware has been a big topic for most businesses in recent times, because of the potential destructiveness. According to Ashworth, even when companies have tried to pay the ransom, they may only get a limited amount back, and this exacerbates the need to build an infrastructure around that major threat, so that you can recover and be protected.

“Ransomware in a lot of cases is a symptom of an overall breach, because there's lateral movement going on. So, for me, I'm concerned about lateral movement.

We protect against that and stop it or mitigate it as much as possible.”

INDUSTRY: FINANCE LOCATION: GREATER ST. LOUIS, USA Marc Ashworth, Chief Information Security Officer at First Bank, is an esteemed security professional with over 30 years of experience in cyber security, fraud, IT/security, business strategy, project management, author, and a public speaker.

He is a board member of the St. Louis Chapter of InfraGard, Co-Founder of the State of Cyber Annual Security Conference, and a Lifetime member of FBI Citizens Academy. Possessing security certifications in CISSP, CISM, CRISC, and Security+, Ashworth currently oversees First Bank’s Information Security Department, Corporate Security, and the Network Services Department.

Client Story Bob Brinkman, Brinkman Constructors

1906 Year founded

Our Vision "To help family-owned businesses, their families and employees thrive through the generations." be with First Bank."

EXECUTIVE BIO

"It's just been a wonderful relationship.

They're easy to deal with and they're a family-ownded buisness; they're not a large bank corporaton like some of these people that we've done business with.

But it's been a great ride. We'll always be with First Bank."

Segmentation has never been this rewarding Stop ransomware in its tracks.

Boost security performance with Akamai Guardicore Segmentation.

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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.”

Lateral movement is when an attacker or software can bounce from one machine to another within the network. Bouncing between servers and PCs can mean multiple places to install software that can then trigger at any time.

Attackers can quickly move through a vulnerability – such as an admin area like a password – so Ashworth insists that you want to get them to where they can't go anywhere else, causing them to finally give up and go somewhere else.

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faster than the last guy,” jokes Ashworth.

“One of the main ways that they get in is via phishing. We concentrate on stopping that number one attack vector, as it is crucial for any bank, enterprise, or small company.

“I think with the current international tensions, we’ve seen a move towards pseudo ransomware where there's not a ransom. It's more of just a destructive nature, such as wiper wear, where it basically either wipes the drives or encrypts the data with no way of recovery.

Our team is always on high alert because of what's happening and the warnings by

FIRST BANK

ITM (Interactive Teller Machine)

the federal government. Any CISO needs to worry about this tension; they need to be thinking globally,” says Ashworth.

Clayton Branch

The importance of patch management Patch management and vulnerability management often go hand-in-hand, and it requires watching on a weekly basis, with the security teams providing oversight and guidance to the patching teams.

“For those out patching the systems and the applications, it’s all about keeping the numbers down as low as possible.

Sometimes, it is one step forward and three back -it's a never-ending problem and you have to really measure which vulnerabilities and patches you’re working on.

Sometimes applications are more difficult to patch, so it's a longer process, or maybe the vendor doesn't support it yet. You have to be very proactive to keep these things going, watching those numbers and

“ We help family businesses thrive across generations and in ways that go beyond traditional banking products” MARC ASHWORTH

SVP, CHIEF INFORMATION SECURITY OFFICER, FIRST BANK

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FIRST BANK

making sure you're at acceptable levels, especially on higher risk ones,” said Ashworth.

Training to protect users on the front line of the cyber threat First Bank has several annual training programmes that they offer, from a compliance standpoint. They also conduct monthly targeted phishing campaigns that function as training exercises to keep people informed, alongside training materials, so that if people do fail, there’s refreshers from time-to-time, as well as a weekly newsletter with tips and updates on current events in the cyber world, such as recent breaches.

“It's a learning experience for them and customised so they can share those tips with their families and friends, too.

“We get a lot of great feedback from the employees on these from around the building. That feedback is really valuable, and we encourage involvement with other teams and projects in order to keep the bank safe,” said Ashworth.

For customers, too, there are periodic webinars that are also recorded and put up online, providing a bank of useful tips and cyber advice to protect from various fraudulent scams.

“We post these tips out on our social media feeds and update that on the website, too. We keep our customers and others in our network updated. I'm pretty vocal on LinkedIn as well as Facebook.

It's a group thing. It's not just up to the security team to have to worry about this.

We all have to worry about it,” he said.

Community comes first at First Bank

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Kansas Branch

“ We are here for our customers to help them succeed and to help their employees succeed” MARC ASHWORTH

SVP, CHIEF INFORMATION SECURITY OFFICER, FIRST BANK

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Bogey Branch ITM (Interactive Teller Machine)

Relentless risk management and learning to switch off Based out of the St. Louis area in Missouri, the bank now has a presence in six states, specifically in California, Kansas and Illinois, too.

With this kind of customer reach, one of the biggest aspects of Ashworth’s job is the risk-management side of things.

At times, the volume of risks out there can be overwhelming, but the CISO has ways to handle this.

“It's a constant flow of issues and threats, and it never stops, so it does get overwhelming. I think that's in part why 130

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CISOs have high turnovers,” said Ashworth.

He refers to the latest statistics on this matter, which suggest an average 20-month tenure for a CISO. “I mean, I've been CISO here for four and a half years. I’m able to sometimes stop listening to my podcast for updates and reading articles. I live in nature, so working from home has helped as I can go for a walk or something.”

“What you have to do is constantly monitor. And the pressure to protect your customers, your company and your employees – it's a lot! It is fun, though, as it changes daily. So, because of that, you really have to be willing to adapt and be open to constantly learning,” he said.

“The overall security community is very tight knit, and they're willing to share and talk about their experiences in a sharing infrastructure.

If we can get the government to do that more in terms of mutual data sharing, that would be great, and I think we’ll get there.

It's really a lot of fun and I hope more people jump into cyber,” said Ashworth.

“ Our team is always on high alert” MARC ASHWORTH

SVP, CHIEF INFORMATION SECURITY OFFICER, FIRST BANK

FIRST BANK

Partnerships help handle new challenges First Bank has won recognition by Juniper Networks for the lean processes that they've done, because of how they've automated many things within their core environments.

Silver Peak, which is now owned by Aruba, a global leader in wired, wireless, and SD-WAN solutions that use AI to automate and secure the network from edge-to-cloud, has been instrumental.

“Even Aruba has come back afterwards and recognised what we've done, creating use cases for us and featuring the bank in their catalogue.

Last year, First Bank partnered with Akamai to assist the bank in achieving strategic security initiatives: “Akamai is another great partner for us and they provide a solid suite of security and networking offerings. I’m really excited about this partnership and where we are going with it,” said Ashworth.

“There’s also great local partners out of St. Louis like Network Technology Partners

(NTP), a great vendor that provides lots of different solutions. A good reseller and they work with us really well. They listen whenever you have a problem and can bring in a solution for you,” said Ashworth.

With their customers having faced significant challenges during the pandemic, First Bank pride themselves on building strong personal relationships. With programmes like PPP, they helped many existing customers to get business funding, as well as non-customers who were having difficulties with their current banking partners.

This involved lots of video calls in particular, with physical meetings not possible at the time, but that didn’t prevent First Bank staying focused and dedicated – as Ashworth explains: “We are here for our customers to help them succeed and to help their employees succeed.”

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10

CH PAYMENT PLATFORMS As fintech expands globally, many established and up-and-coming players demonstrate a robust staying power in the market

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From brilliant ecommerce solutions that have transformed the industry to cryptocurrency digital wallets and cross-border providers, digital payment platforms are thriving in the fintech space. Indeed, new innovations over the past decade have not only transformed the industry, but the entire payments culture itself, enabling online shopping and ecommerce to truly flourish, as well as providing new opportunities to small businesses and consumers.

We’ve listed the top 10 to watch this year as they expand and scale into new markets.

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10 BOLT

Founded: 2014 With a valuation of US$8.4bn, Bolt is on a mission to democratise commerce. Its one-click checkout product aims to give businesses the same technology Amazon has been using since 1997. At the same time, the fintech incorporates the use of payments and fraud services that ensure transactions are real and payments can be accepted. As the world's first checkout experience platform, Bolt offers a lightning-fast, oneclick checkout and connects millions of shoppers to retailers through a unified, cross-brand network.

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BILLD

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Founded: 2018 Billd is a Texas-headquartered construction finance company that partners with regional and national suppliers across the U.S. to offer project-based financing to contractors. Its short-term financing solutions facilitate immediate payment to suppliers, while providing contractors the flexibility to pay for material purchases over time. Billd co-founders, Chris Doyle and Jesse Weissburg, recognised how a lack of access to working capital impacts contractors’ ability to operate and grow their business.

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AFFIRM

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Founded: 2012

SPOTON

Launched in 2012, Affirm is a financial technology company headquartered in San Francisco.

The company is a financial lender in the sector of instalment loans for consumers and although the jury is out on its valuation – predictions range between US$1-10bn – it remains an impressive leader in the digital payments space. The fintech business enables users to take out microloans at the point of sale with participating vendors and aims to provide a quick, transparent, and more inclusive lending alternative to credit cards.

SpotOn provides mobile payment technology and management systems for restaurants and small businesses. Launched in 2017 and now with a valuation of US$3.15bn, the fintech startup takes great pride in providing one of the only objective and unbiased merchant account review websites on the internet.

SpotOn’s free app for iPhone and Android devices allows users to check in at events and earn “spots” that can be redeemed for prizes as an additional incentive.

Founded: 2017

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06 CHECKOUT.COM Founded: 2012

With a valuation of US$40bn, Checkout.com is one of the world’s leading payment platforms. It holds a firm position as a merchant services provider for international 'ecommerce' merchants. Checkout.com’s overall product offering is fairly priced compared to competitors, and its platform integrates electronic payments, analytics and fraud monitoring into one frictionless solution. The Londonheadquartered company also processes payments for big clients including Pizza Hut, H&M, and Farfetch, as well as fintechs like Coinbase, Klarna and Revolut.

AEROPAY

05

Founded: 2017 AeroPay is an alternative payments company that allows customers to pay participating businesses through a direct bank transfer. The fintech’s payments solutions are designed to provide businesses with lower costs, faster settlement times, and enhanced security. AeroPay uses its patented payments process to enable 'smart bank transfers' between businesses and their customers (C2B) or other businesses (B2B).

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CLOVER

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Founded: 2011

04 BRAINTREE

Founded: 2007 Braintree is a full-stack payments platform that makes it easy to accept payments via your app or the website. Its service replaces the traditional model of sourcing a payment gateway and merchant account from different providers.

Braintree is often compared to PayPal, but it differs in that it is aimed at higher-volume ecommerce businesses that need a lot of custom control over their payment processes. In contrast, PayPal is designed to be simple and easy to use for merchants with modest ecommerce needs.

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Clover is a cloud-based Android point-of-sale (PoS) platform that was launched in April 2012. The burgeoning fintech offers small business owners the chance to set themselves up as vendors, simply through downloading their app and opening an account on the Clover platform via their mobile phone. Headquartered in Sunnyvale, California, the company was founded by Kelvin Zheng, Leonard Speiser, Mark Schulze and John Beatty, the latter of whom is also the fintech’s reigning CEO. Clover is owned by Fiserv, a leading financial technology company, and has a predicted valuation of US$188bn by 2025 if it continues on its current growth trajectory.

TOP 10

PayPal a 2022 top pick at Morgan Stanley

PAYPAL

Founded: 1998

02

One of the more established fintechs – and perhaps most globally recognised – PayPal was originally founded by Peter Thiel, Luke Nosek and Max Levchin in December 1998 as Confinity, a company that developed security software for handheld devices. However, with that particular business model, the concept failed to take off, so the founders switched the company’s focus to digital wallets.

In March 2000, still struggling to establish itself, Confinity merged with another early internet payment platform: X.com, headed up by Elon Musk. Musk became the CEO of the resulting company – PayPal – and, after much management wrangling due to leadership conflicts, Thiel briefly quit the company before returning as PayPal’s chairman.

Musk continued as the company’s CEO until October 2002, when it was sold to eBay for US$1.5bn in stock.

Today, it is worth more than US$130bn.

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Stripe Sessions 2021 | Keynote

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STRIPE Founded: 2010

The Irish-American financial services and software-as-a-service (SaaS) company, launched in 2010 by brothers Patrick and and John Collison, has revolutionised the ecommerce payment space, providing online retailers with a payment gateway that enables a wide range of transactions to be processed at low cost, and with frictionless speed and efficiency.

Patrick Collison was just 16 when he was awarded Young Scientist of the Year in 2005 – and just 21 when he launched Stripe from his bedroom at his family home in Ireland with the support of his brother, John. Today, Stripe is dual-headquartered in San Francisco.

It offers payment processing software and application programming interfaces for ecommerce websites and mobile applications.

Stripe currently has a valuation of US$95bn and is a globally recognised company that looks set to make its IPO this year – though this news is yet to be officially confirmed.

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Ethical Banking through FinTech an Digital Transformat

WRITTEN BY: İLKHAN ÖZSEVIM PRODUCED BY: JOE PALLISER 144

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AL RAJHI BANK

nd tion

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Arsalaan Ahmed, CEO of Al-Rajhi Bank Malaysia, talks about the bank’s ambitions, digital transformation and ethical banking practices

A

rsalaan (Oz) Ahmed, CEO of Al-Rajhi Bank Malaysia (ARBM) says, “my goal is to serve the under-served". ARBM is a subsidiary of its parent, Al-Rajhi Bank (ARB), which is headquartered in Saudi Arabia, and was established in 2006, marking Al-Rajhi’s expansion into international banking beyond Saudi borders.

One of the core tenets of Islamic finance is the preservation of wealth for people, which needs an economy that works for the majority. There are certain pillars that are required for such an economy, for example, one of the pillars is ensuring people are incentivised to spend money and to keep it circulating. Another pillar would be, what the capital is allowed to be used in; Islamic financing does not allow capital to be invested in industries, products or services that are not beneficial to the society, e.g. gambling, arms, alcohol. From a Shariah point of view, Shariah Compliant Banking is a form of ‘ethical banking’.

“At the moment, Islamic financing still needs to stand up and lead from a moral perspective, and not just keep up with conventional banks,” Oz added. He gave the example of promoting the decision to announce a non-compounding of profit and interest rates on loan moratorium during the Movement Control Order in Malaysia when he was the CEO of HSBC Amanah, which started a movement of other Islamic and conventional banks to follow suit. fintechmagazine.com

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Ethical Banking through FinTech and Digital Transformation

In the early days, before ARB’s inception, its founders-to-be were brothers who began by serving Muslim pilgrims travelling to Mecca and in need of support services, one of which was currency exchange. ARB was eventually established in 1957 and has since grown into one of the world’s largest Islamic Banks by market cap and the largest in the Middle East and Saudi Arabia, with total assets of SAR 624 billion (US$ 166 billion), a market cap of SAR 354.5 billion (US$ 94.5 billion) and an employee base of 9,360+ associates as of December 2021. The Al Rajhi group is deeply rooted in Islamic banking principles and is instrumental in bridging the gap between modern financial demands and intrinsic values, whilst spearheading various industry standards and development.

Speaking of the journey that led him to becoming the CEO of ARBM, Oz says: “I grew up in East London when it was not as nice as it is now, and the first thing I wanted to do was to get out. I noticed that friends of mine were 148

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going to newer and better schools located in other places, and I would often question why they were able to move, and we were not. I later found out the reason was that my parents didn't have access to Faith-Based Home Financing, or in this case, ShariahCompliant Financing so they could move us to better areas with better schools. As I got older, I increasingly saw this trend that people were being needlessly held back and unable to realise their full potential.”

Oz’s first professional foray into financial services was as Strategy Analyst for Accenture, which he began in 2004. Here, feeling as though he had at last moved

“ My goal is to serve the underserved” ARSALAAN AHMED

CEO, AL-RAJHI BANK MALAYSIA

ARSALAAN AHMED TITLE: CEO INDUSTRY: FINANCE LOCATION: MALAYSIA My name is Arsalaan Ahmed, people call me Oz. I’m the CEO of Al Rajhi Bank Malaysia and my role is to work with the great team that we have in order to forward the bank strategy, keep really strong governance and to keep our culture strong and growing.

For our business, what we do is that we provide a place that customers can keep their money safe and they can transact with their money. At the same time, we offer financial services back to customers as well in terms of financing and other financial services to really help them in their journey. The important part of what we do as an Islamic bank is that we only do things that are good for individuals and society.

Our business strategy in the past has been focused on corporate and retail business in traditional banking methods. We will continue to do that and services our customers. But as we go into the future, we’re also launching a digital bank that will give the best-in-class digital experience and a broad range of products and services.

The current projects that the bank is working on: firstly, it’s on ensuring our existing corporate and retail business are doing incrementally better at

EXECUTIVE BIO

servicing our customers. Secondly, we’re focused on sustainability, where we’re trying to align our business activities more closely with the concept of triple bottom line, which is not just about economic prospects of profits of prosperity, but also in terms of impact on people or society and impact on the planet or environment. And our third major project is around developing and delivering a best-in-class digital bank that will be best-in-class for Malaysia, and potentially also in Asia, servicing retail customers who are mass and mass affluent, as well as SME customers.

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Feedzai redefines the fight against financial crime with a RiskOps approach Richard Harris, Head of Advisory at Feedzai talks about the current financial risk landscape and the position of RiskOps in banking and digital payments Internet crime is perhaps one of the main burdens on the finance industry, particularly in the area of digital banking, which has seen rapid development over recent years. As a result, banks now rely on digital solutions to manage risk and protect the increasing amount of data, transactions, and customer identities.

Digital growth requires dedicated financial protection Richard Harris, Head of Advisory at Feedzai, tells us how digital transformation has increased the need for better risk management solutions in finance. “You’ve

got this massive increase in the number of transactions happening digitally, which at the same time creates a vast abundance of data,” says Harris. “The key to success in digitised financial services is identity.”

“The core question we look at in financial crime is ‘are you who you say you are and do you have the permission to do the thing that you want to do?’ That’s fundamentally the challenge that we’re solving and identity is becoming more and more complex and more and more fragmented.”

Harris puts the current digital risk landscape into perspective as he explains “Banks are now encouraged to do continuous due diligence on a very regular basis. They’re moving from doing this activity periodically to daily.

So, having a single platform in one place that can process all that data, keep it all consistent, and remove unnecessary duplication is a game-changer,” Harris says. Feedzai also goes one step further, by managing its services through a standardised RiskOps approach.

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2006 Year founded

500+ Number of employees

beyond the fray of East London’s stifling environment, and still with the ideal of ethical banking practices in mind, he began to formulate his purpose, saying: “I paused to think about what it was that I really wanted to do, and one of those things was to not allow for another child to worry about the problems that I worried about, which meant helping to make access to financing more inclusive.

Obviously, social impact is very important to me. More thematically, I felt that financial services were not really providing what they 152

June 2022

could or should do to society.” He then left Accenture so he could dedicate his career to inclusive banking, particularly Islamic banking.

By his mid-thirties and disillusioned with the direction of banking, Islamic banking and his ability to influence change, Oz openly looked to leave the industry. When he was 36 years old, Oz received a phone call to apply for the CEO role at HSBC Amanah (the Islamic banking subsidiary of HSBC, based in Malaysia), in which his subsequent application was successful. He says, “the gentleman

AL RAJHI BANK

who hired me, who was then HSBC’s Group General Manager, told me, ‘If you want to change the industry, why don't you do it from the inside; from a position of strength?’”

Oz spoke directly about changing the narrative of Islamic banking through working with other industry-players and the Central Bank. They introduced a concept called ‘ValueBased Intermediation’, where they would focus on organisation – and not just on the bottom line, but on the triple-bottom lines of economic prosperity (or profit), people, and planet. This was the society and environment angle, and it eventually started HSBC Amanah on its journey into becoming the first sustainable bank from a mainstream bank.

“I was able to make a positive impact in changing banking. However, the one thing that I noticed,” says Oz, “was that in the face of the speed of the changing landscape, the ambition to really serve people from a real economy perspective – retail and SME – and to meet the changing of the requirements of individuals and society more broadly, banks were not able to adapt quickly enough.

I believe that with the right technology structure, the right brand and purpose, and the right people, financial institutions will be able to service customers better generally, and start to have those people who were

“ When we started speaking about what ARBM was planning to do, it really was about changing the DNA and nature of banking, in order to offer better services for people” ARSALAAN AHMED

CEO, AL-RAJHI BANK MALAYSIA fintechmagazine.com

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“ The thing that sets ARB apart from its competitors, is its authenticity as an Islamic Bank” ARSALAAN AHMED

CEO, AL-RAJHI BANK MALAYSIA

once served and are now increasingly becoming underserved, to be servable now.”

It was then that ARB contacted Oz and asked him to step into a position “that would really allow us to bring about these changes".

What's interesting about ARB is that they have a strategy that they call ‘unbank the bank’, which is now very much their tagline. They also refer to themselves as ‘a bank of the future’.

It was here, at ARBM, that Oz began to work on the kinds of changes that he felt would be more impactful. “When we started speaking about what ARBM was planning to do, it really was about changing the DNA and nature of banking, in order to offer better services for people. Our focus is on digital and being best in class in digital. Another thing that sets ARB apart from its competitors is its authenticity as an Islamic Bank, which is particularly important to Muslim customers and increasingly important to ethically minded customers. Combining the ethical with the digital is a powerful combination in the evolution of banking” “Looking forward over the next five or 10 years, our strategy will align with unbanking 154

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the bank, which is more than just a slogan – it’s a mindset. Coming to ARBM, this means that we have the ability to provide an environment for people to try to do things differently and work in a supportive and agile fashion. ARB, being one of the largest banks by market capitalisation, certainly provides strong financial support to ARBM. On top of this, it’s the mindset support that sets ARB apart. I have worked in other banks and I realised that the traditional mindset of banks is not going to help them achieve the much needed and sustainable change.”

Technological Transformations as Drivers of Change ARB has now moved into digital payment services with its provider, neoleap, with features including a digital wallet, electronic payment methods, an e-market, online stores and rewards points. It has also recently acquired a technology company called Ejada Systems, which is expected to accelerate its digital and economic growth.

“Malaysia is, in many regards, one of the foremost countries in Islamic banking around the world,” says Oz. “So it's important for an Islamic bank to operate well in a jurisdiction like Malaysia. The ARB group is tasking me to turn around the business in Malaysia. As a part of this

initiative, we are launching our new brand – our ‘Digital Bank’ – through our partnership with Oliver Wyman, who have the expertise and skills to build for us, and it will be launched this year.

“ARBM will accelerate its focus on both mass and mass-affluent-customers, as well as SME, particularly small enterprises, and we want to be ‘best in breed’ from a technology point of view. So we’re going to enable a robust cloud-native tech-stack through different providers, made up of the best partner ecosystem, to service our customers through embedded finance so that we can achieve these goals.

“This is the ‘Open-Banking’ and ‘OpenFinance’ part of ARBM’s technology, which seeks to deliver a best-in-class digital tech infrastructure. If we are able to do it correctly, our new tech-stack could potentially be something that we use to look at other jurisdictions in the future.”

In putting together their tech-stack, made up of various providers and managed via microservices called a ‘Cloud-Native-Feed’, a strong security layer will be integral to ARBM’s growth opportunities. On the issue of providing security for customers and the bank, ARBM has partnered with Feedzai, which is FRAML (Fraud And Anti Money Laundering) technology provider – something that’s necessary for their business to grow.

Oz says: “We've been working with new partners and our team to make our organisation safe, because although there are many things that are cool about FinTech from a customer-experience and product-offering perspective on the backend, we need to work to make sure that people and their businesses are protected. Feedzai will help in fulfilling that role.

“Of course, there are lots of other partners that we're working with to help drive our transformation. For example, there’s AWS, fintechmagazine.com

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which not only has a very safe, robust cloud environment, but also understands how to navigate regulatory considerations when it comes to cloud-computing. With their focus on providing education and skills for companies to operate in a new environment, this will help our workforce be better skilled for technology.

“Then there’s Thought Machine, which is a core-banking platform provider and a fantastic cloud native core banking provider, and what's excellent about Thought Machine, is that their technology gets you as close to owning your own IP as possible – and that's the ideal state.

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Particularly though, because of the way their technology works, it can also help a lot of Islamic banks that have to deal with certain nuances related to Shariah contracts and details in achieving their objectives.

“The agility that comes from their system and the empowerment they can provide to an organisation through their technology is absolutely fantastic, and will help us drive our digital growth, and in time, hyperpersonalisation for our customers.

“When we talk about our digital bank, we’ve had incredible support from the

AL RAJHI BANK

ISLAMIC BANKING ARBM, a wholly owned subsidiary of the world’s largest Islamic Bank, Al Rajhi Bank Kingdom of Saudi Arabia (KSA) was locally incorporated in October 2006. Following its official launch in 2007, ARBM became the first Arab bank to start its operation in South East Asia, as part of a Shariah compliant banking group that is instrumental in bridging the gap between modern financial demands and intrinsic values, whilst spearheading numerous industry standards and development. Today, ARBM operates through a distribution network of 13 branches nationwide.

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partners we’re working with. One of our partners is also Bank Negara Malaysia, which is an incredibly progressive regulator.

“It was very clear to me that we needed to do a greenfield setup and that’s what we did.

We’ve got a banking licence but it doesn’t stop us from having a completely digital bank, and we wanted it to be cloud native. Initially fully native from our app, we hope to deliver a basic set of products and services, which we hope to ramp up over time.

“An interesting side of the digital bank is around potentially supporting other institutions with financial services because we have a best-in-class tech-stack which we can offer as banking-as-a-service. This model enables us to help other institutions that are yet to have the suitable products or necessary support. For instance, this model is particularly beneficial to institutions that are not so familiar with Islamic financing and lack the know-how to manage it. In Malaysia, which has a large Muslim population, they would want to offer a Shariah-compliant solution and that’s where our new technology can come into play and support them in achieving that.”

ARBM’s modern new workspace at Menara Hap Seng 3 When Oz first joined ARBM, the office workspace was traditional. “Workspace is very important, especially when it comes to launching transformational change. You need an environment where people can change their mindset and learn how to do things differently; a place where they can augment their knowledge and leverage it to create change,” he says. “Once there is a mindset change, you need people to collaborate.

The best collaboration is done through rich communication. We wanted a space where, post-COVID, people would want to come to work and not remain remote, because 158

June 2022

“ Malaysia is in many regards one of the foremost countries in Islamic banking around the world” ARSALAAN AHMED

CEO, AL-RAJHI BANK MALAYSIA

sparks of innovation and new ideas are often made in unplanned interactions.”

Menara Hap Seng 3 is based in Kuala Lumpur, Malaysia, and will be used to house ARBM’s teams – including their digital bank team – to further grow their Digital Bank initiative, with their aim to be digitally fully-native.

Oz says: “Confucius said that our purpose is to bring the order of the heavens down to the earth, or from an Islamic perspective, we are God's agents on the earth. So surely our purpose should be trying to make the earth as close to heaven as possible. What does that

mean? It means making continuous progress to improve life for the largest number of people possible. I think that in order to make that progress and change, we need to spark ideas and innovation, and people bouncing off each other creates that kinetic energy. Menara Hap Seng 3 is about bringing people together on common ground, where innovations can occur, and those who have helped to design this space are playing an incredibly important role in making such innovations happen.”

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