FinTech Magazine - October 2022

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EDITOR-IN-CHIEF JOANNA ENGLAND

EDITOR

ALEX CLERE

CHIEF CONTENT OFFICER

SCOTT BIRCH

PRODUCTION DIRECTORS GEORGIA ALLEN DANIELA KIANICKOVÁ

PRODUCTION MANAGERS

JANE ARNETA MARIA GONZALEZ CHARLIE KING

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The FinTech Team

CREATIVE TEAM

OSCAR HATHAWAY SOPHIE-ANN PINNELL HECTOR PENROSE SAM HUBBARD

MIMI GUNN JUSTIN SMITH REBEKAH BIRLESON JORDAN WOOD DANILO CARDOSO CALLUM HOOD

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JINGXI WANG JOSEPH HANNA

MEDIA SALES DIRECTOR BEN MALTBY

PROJECT DIRECTORS

JAKE MEGEARY MICHAEL BANYARD

JOE PALLISER

MANAGING DIRECTOR LEWIS VAUGHAN

CHIEF OPERATING OFFICER STACY NORMAN

CEO GLEN WHITE

THE ROUTE TO IPO IS PAVED WITH GOOD INTENTIONS

As we speed into Q4, it's easy to look back and only see the negatives. Fintech has had a tough ride. Investment is down. BNPL frontrunners have seen their valuations crash, and companies we expected to IPO themselves into the business history books, have stalled, bucked and shied away at the final hurdle.

It’s hardly surprising, though. Following a period of unnaturally fast expansion, the growing pains have finally caught up with them. The past almost three years has seen the world placed in highly unnatural circumstances that have led to giant changes. Now, the giddy ride is over and, as we return to normality, a sense of reality must prevail.

Innovation requires regulation. Booms inevitably – indeed, always – lead to a bust. And new markets must go through a period of painful maturation before they can safely say they’ve ‘made it’.

But, despite the challenges, all the signs are good; hard times breed resilience and stability in the long term.

These subjects and more are the focus of this month’s issue – and we have some fantastic insights for you to digest.

So, sit back, enjoy the magazine, and let us know your thoughts.

JOANNA ENGLAND joanna.england@bizclikmedia.com

“The giddy ride is over and, as we return to normality, a sense of reality must prevail”

From Open Banking to Open Finance for SMEs

Digital disruption in financial services is already a reality for retail customers but it hadn’t happened yet for SMEs and entrepreneurs, who were still seeing their needs and demands pretty much uncovered. SMEs across the globe are seeking beyondbanking ecosystems, integrating third-party services, that cover their needs in a single, easy-to-use service, allowing them to focus on their core activities.

Simplifying processes to achieve outstanding KPIs

With this landscape in mind, STEP, a global marketplace for financial products for SMEs with the mission of delivering a fullyfledged Customer-Centric digital solution, used CRIF Group’s solutions, among which Strands’ BFM and Engager, enriched by CRIF account aggregation, in order to deliver excellence in every product/service to SME and corporate customers.

Structuring a customized insight driven experience tailored to SMEs, using CRIF’s open banking capabilities and Strands’ advanced analytics, STEP was able to create a competitive advantage in a very simple way, by enabling:

• Account aggregation – first platform to offer it for free to SMEs on European scale

• Invoice reconciliation - retrieve invoices from third party providers such as Quickbooks and many others

• Strands BFM + Engager - for cash flow management and forecasting; business insights to trigger relevant information for a personalized experience.

• Third party products - integrated that allow SMEs to apply for an instant loan, discount their invoices, manage their international payments and FX transactions, acquire payments from customers, ask for an ESG rating, subsidized finance, insurances among others

The solution provided by Strands and CRIF has enabled STEP to achieve unbelievable results since its market launch in October 2021 with more than 4,000 SMEs having chosen the STEP platform in two countries (Italy and Spain) in order to always keep their financial position under control and seek for an innovative fully-fledged financial solution. This customer loyalty has led to a 22,6% cross selling ratio and a pipeline of more than 450 million euros loan and working capital operations already requested.

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

CRIF is currently the leading credit information banking group in continental Europe and a major player in the global market for integrated business & commercial information and credit & marketing management services. Through continuous innovation, the use of state-of-the-art technology and a strong information management culture, CRIF supports 10,500 banks and financial institutions, more than 600 insurance companies, 82,000 business clients and 1,000,000 consumers in more than 50 countries of 4 continents. For more information: www.crif.com

BIG PICTURE

Soaring costs lead to anger and anguish Colombo, Sri Lanka

Rising food and fuel prices and spiralling inflation have prompted a ‘summer of discontent’. Anti-government protests have been seen in Ecuador, Panama and Sri Lanka (pictured). In the latter, protestors stormed the President’s House in Colombo and forced him to flee. In South Africa, thousands of people took part in rallies to decry rising fuel prices, high inflation and rampant unemployment. In the UK, rail workers, bus drivers and criminal barristers all walked out over pay and conditions. Fintech has already felt the pinch, but further inflation and a potential recession could plunge the sector into deeper financial trouble.

THE BRIEF

“PEOPLE ARE LOOKING FOR PAYMENT METHODS THAT OFFER THEM FINANCIAL FLEXIBILITY AND ALLOW THEM TO UTILISE THEIR PURCHASING POWER ON THEIR TERMS”

Keith SERDON

Chief Commercial Officer, Mollie

READ MORE

READ MORE

“IT IS SO IMPORTANT RIGHT NOW TO REFRAIN FROM MAKING ANY RASH DECISIONS THAT COULD LATER DAMAGE A PERSON'S FINANCIAL SECURITY”

Andrew MEGSON Executive Chairman, My Pension Expert

READ MORE

Saudi BNPL fintech Tamara closes US$100mn Series B

Saudi buy-now-pay-later (BNPL) fintech Tamara has raised US$100mn in a Series B funding round led by Sanabil Investments.

The Riyadh-based fintech, which was launched in September 2020, allows customers to spread the cost of a purchase over several interest-free instalments. It is fully Shariyah compliant and has enjoyed early success, despite the broader troubles facing the global BNPL sector. Tamara has seen tenfold year-onyear revenue growth, onboarding more than 3 million customers and over 4,000 partner merchants including IKEA, Adidas, Namshi plus a number of local SMEs.

The latest round also includes participation from Coatue, Shorooq Partners, Endeavor Catalyst and a follow-on investment by Checkout.com. Tamara says it will use the funding to expand its product offering across payments and shopping; expand to new markets; and strengthen the existing customer and merchant experience. CEO Abdulmajeed Alsukhan claims Tamara can help its partners realise a 40% rise in average order value.

“ALL COMPANIES WITH A VISION TO BECOME PUBLIC SHOULD ACT LIKE A PUBLIC COMPANY LONG BEFORE THEY ARE ONE”

Romi SAVOVA CEO, PensionBee



BY THE NUMBERS

36% No – losses too likely

25%

Maybe – I’ll watch the markets

39% Yes –crypto is always volatile

REMITLY TO ACQUIRE ISRAELI COUNTERPART REWIRE Remitly, which provides remittances and financial

ROBINHOOD LAYS OFF 23% OF ITS WORKFORCE

Robinhood CEO Vlad Tenev has said "this is on me", after it laid off almost a quarter of staff. The move reflects a fall in customers.

‘CRYPTO WINTER’ HAS EFFECT ON INVESTMENT FRAUD

A new report indicates that the 'crypto winter' has had a knock-on effect on fraud. Scams have fallen by 65% over the past year, according to TradingPlatforms.com.

JAR

The Indian fintech has hit a valuation of around US$300mn after its latest funding round. Jar raised more than US$20mn in its Series B round, with existing backer Tiger Global leading the investment.



DIGIT INSURANCE

Indian insurtech unicorn Digit Insurance has gone ahead and filed for its IPO, bucking a trend of delayed public listings. It is said to be seeking at least US$440mn, having last been valued at US$3.5bn.



ADYEN

Shares in Dutch fintech Adyen fell by 11% after it missed expectations for net revenue for the first half of the year. Operating expenses rose nearly 50%, driven partly by the addition of 400 new employees.

 STRIPE

Investment fund T. Rowe Price has marked down the value of its stake in Stripe, signalling an end to the company's lofty valuation. The move could mean that Stripe is worth closer to US$75bn than US$95bn.

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

OCT22

WE ASKED YOU: WOULD YOU CONSIDER INVESTING IN CRYPTO OVER THE NEXT FEW MONTHS OR HAS THE PROLONGED SLUMP PUT YOU OFF?

TIMELINE

1970 s

THE BEGINNING OF CONNECTIVITY AND VIRUSES

The Advanced Research Projects Agency Network (ARPANET) became the first connectivity network developed prior to the internet itself.

Engineer Bob Thomas created a program that could move between the Tenex terminals on ARPANET, called Creeper. The code printed the message, “I’M THE CREEPER: CATCH ME IF YOU CAN.” across the network. Not at all prophetic…

How cybersecurity industry began

1979

THE FIRST HACKER WAS A TEENAGER

Kevin Mitnick was just 16 years old when he hacked The Ark – a massive system that was used for developing operating systems. It was located at the Digital Equipment Corporation – a major American company in the computer industry from the 1960s to the 1990s.

Mitnick was arrested and jailed over the incident, becoming the first of numerous cyber attackers to infiltrate commerce over the coming decades.

THE CYBERSECURITY INDUSTRY AND HAS BECOME A CRITICAL BUSINESSES, WITH FINANCIAL INSTITUTIONS OF CYBER FORTIFICATION

THE EARLY 80 s

CYBER ATTACKS BECOME ‘A THING’

With the advent of cyber attacks present, the 80s signalled the start of numerous problems for computer networks. High-profile attacks taking place in this decade included AT&T, the Los Alamos National Laboratory, and National CSS.

In 1983, terms were coined to describe the attacks, including “computer virus” and “Trojan Horse”, the latter in reference to the Greek Trojan War.

How the cybersecurity industry began

INDUSTRY BEGAN FIVE DECADES AGO

CRITICAL COMPONENT OF ALL ONLINE INSTITUTIONS AT THE FOREFRONT FORTIFICATION

2000 AND BEYOND

CYBER WARS AND POLITICAL INFILTRATION

From the early noughties to today, there has been a steady increase in cybercrime and the threat it poses to economic stability. Ransomware and Malware are used by organised criminals to infiltrate and extort data and funds from even the best fortified entities.

The cybersecurity industry globally is now worth an estimated US$140bn. No business is beyond attack, as the SolarWinds breach of 2021 proves, along with thousands of other recent incidents. Cyber infiltration is now considered a form of warfare.

1988

WORMS ARE CREATED

According to some reports, Robert T. Morris – a student studying at Cornell University – wanted to determine the size of the internet as a whole.

To do it, he built the first worm, which was to move through the network and infect UNIX systems. But an error in the design of the program caused it to infect each machine, one after the other. This led to networks that were clogged with information, leading to massive system crashes.

1990 s

ILOVEYOU

By the 90s, the internet had become a global concern and the cybersecurity industry grew with it. The decade saw the creation of Polymorphic virus risks and the first antivirus program. The goal was to increase ways to protect against risks.

As one hacker group developed after another, companies faced a lot of challenges to improve security to minimise hacking. The 90s also saw malicious viruses launched on a mass scale, as ILOVEYOU and Melissa infected millions of computers by targeting Microsoft Outlook.

The Brazilian Banker Billionaire

Born in Medellin, Colombia in 1982, David Vélez comes from a large, extended family of entrepreneurs. His father, who co-owned a button factory, had 11 siblings, all of whom ran their own businesses, providing the young Vélez with an environment that thrived on innovation and disruptive ideas.

But Medellín was also a crime capital where drug wars and the cartels reigned supreme. The family suffered greatly, and an early memory for Vélez was leaving a shopping centre with his family just moments before it was bombed. Later, one of his uncles was kidnapped. The two events resulted in Vélez’s parents uprooting the family to find a safer place to live.

A passion for finance and innovation

At the age of nine, the family moved to Costa Rica, where he flourished, proving to be a fine student – and discovered a passion for the financial markets. Vélez attended a local German-language prep school, graduating as valedictorian and winning admission to Stanford University. By 18, Vélez had moved to the US and started his degree at Stanford, studying Finance. Upon graduation, with a newlyminted MBA, he qualified as a financial engineer.

The time he spent in California saw him explore a range of potential careers in the technology industry – and he considered various startup ideas, as well as positions in Google and Amazon.

As the CEO and Co-founder of Nubank – South America’s largest and most successful challenger – David Vélez has a disruptive reputation

But in 2012, Vélez returned to South America and relocated to São Paulo. He had secured himself a much-soughtafter position as a partner at Sequoia Capital. Then, aged 30, Vélez was hired to establish the VC in the emerging market powerhouse of Brazil. The location was perfect: a young, tech-hungry population, plenty of natural resources and home to the world’s seventh-largest economy.

The project looked exciting and full of promise – but, before it had even got off the ground, it was dropped due to the shortage of computer science engineers graduating in Brazil.

The event was a great disappointment to Vélez, whose entrepreneurial background meant he’d always hankered after launching a dynamic startup. But investors had been discouraged by the sheer lack of on-the-ground innovators coming out of the Brazilian education system.

Plans to donate his personal US$6bn fortune to philanthropic causes

Describing that time in an interview with Forbes, he said: “It was the day before my birthday, and it was a bit of a shock.

“You want to position yourself on the side of the market where there’s scarcity. In the US, there’s an oversupply of good entrepreneurs. Somebody with my experience and background is a commodity. In Latin America, there was significant scarcity.”

Going after the big banks

Following the disappointment, Vélez set his sights on the establishment, which consisted of several, giant incumbent banks that dominated Brazil’s financial industry. The system needed reform – and fast. High fees, poor service offerings and an aversion to technology within the legacy banks meant opportunity was ripe for the picking.

According to reports, the vast majority of Brazilian banks were appallingly un-customerfriendly, charging annual fees for even basic credit cards. They also charged monthly fees for all services, ranging from fraud protection to text-message alerts. Data shows that, even in 2019, fees made up nearly 40% of Brazilian banks’ revenue, compared with 15-20% for banks in other leading South American countries.

Challenging the narrative

It was a brave move in a culture where organised crime and brutal business practices often result in personal harm. Vélez risked stirring up a wasps’ nest – but was determined to see his ideas pave the way for a new style of banking to come to fruition.

Nubank was duly launched in 2013 –and has since survived and thrived its way through myriad disasters, including recession, corruption scandals and the pandemic. Warnings from friends that he was putting himself in danger went unheeded. He was told the incumbent banking fraternity would never allow him to succeed – or, possibly, even live… with Vélez divulging to Forbes that one friend told him, “They’re going to kill you, they’re going to kidnap your kids”.

Success for Nubank

Now one of the world’s most valuable decacorns, Nubank has climbed from success to success. Though less than a decade old, it already boasts over 35 million customers. Much of the success can also be attributed to fellow founders, Cristina Junqueira and Edward Wible, who shared Vélez’s passion for change.

Less than a decade after its founding, Nubank has 45 million customers and is valued at $45bn. It is also backed by some of the world’s biggest investors, including Founders Fund, Tiger Global and Sequoia.

A family man

As well as being a keen philanthropist, Vélez has four children with his wife, Maria, the last of whom was born earlier this year.

A recent Bloomberg report also confirmed that the couple have pledged to give the vast majority of their personal US$6bn fortune to philanthropic causes.

Kim Van Esbroeck

Country Head for Belgium, Aion Bank

“ I am proud of the tenacity and flexibility of my team”

Esbroeck

Kim Van Esbroeck is responsible for growing Aion’s business through commercial activities and business development, directly managing Aion Bank’s Belgian sales and partnerships teams, as well as its flagship branch in Brussels

Q. DESCRIBE YOUR JOURNEY INTO FINTECH. HOW DID YOU GET HERE?

» My career started in the payments industry. I held several different positions from test engineer to head of card marketing at Integri and Clear2Pay, then, at Belgian payment leader Bancontact, I was Chief Operations Officer, then was promoted to Chief Commercial Officer before being named CEO in January 2017.

In 2020, I was looking for a new challenge, and Aion Bank was entering the Belgian market with an entirely new banking concept – fully end-to-end digital, powered by the latest in cloud technology. I was drawn to the company’s mission to offer a better way of banking to people, and its technology is at the forefront of the industry. Looking back, I really didn’t do any career planning, but I followed my gut, and, if a train passed that I found interesting, I jumped on it.

Q. WHO WAS YOUR CHILDHOOD HERO AND WHY?

» I was a big Madonna fan when I was a teenager. Obviously, she’s an iconic performer, but I loved her attitude. She was defiant to carve her own path, no matter

who challenged or disagreed with her. She created a new template for what a pop star could do and say. Looking back at her career, I understand now that, as a woman in the 80s, she needed to adopt an f* you attitude to the male-dominated industry in order to get her voice heard. She is a true power lady!

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

» Becoming by Michelle Obama. It’s actually not the last one I’ve read, but it made an impression on several levels –including how, at the end of the day, your personal and professional selves are one and the same. You bring your personal self to your job everyday; it is a major building block of your professionalism, achievements and drive for results, often weighing more in the balance than all the qualifications you have accumulated.

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

» The most amazing things lie outside of your comfort zone, so force yourself at any moment to step out.

Q. NAME ONE PIECE OF TECHNOLOGY YOU COULDN’T LIVE WITHOUT AND TELL US WHY

» I love the park-assist functionality in my car. The camera and sensors that have spatial awareness sounds like a simple technology because we use it everyday, but, very soon, that same tech will advance, so our cars will be able to park themselves!

Q. AION BANK IS MOVING FROM STRENGTH TO STRENGTH – DID YOU EVER THINK YOUR PLANS WOULD TAKE YOU TO THIS POINT WHEN YOU FIRST STARTED OUT?

» Anyone who has worked at a start-up knows that where you start is almost never where you finish. When I joined Aion, we were just about to launch our marketing efforts for our retail banking business. The big challenge was building a new brand in the middle of a pandemic and lockdown. Across the past two years, our business has grown and evolved, but the core of what we want to achieve has not changed - we want to democratise better banking for people, making it more accessible and fully digital.

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

» I am proud of the tenacity and flexibility of my team. We went through a few shifts and pivots over the past two years – everything from strategy to tactics, to prospects, to marketing, to sales. This can be distracting, but my team kept pace and continues to deliver.

Q. DESCRIBE YOURSELF IN THREE WORDS

» Perfectionist and control freak with a never-give-up attitude

Q. WHAT INSPIRES YOU IN FINTECH TODAY?

» Fintech is constantly changing and disrupting business models. The exciting thing about the next generation of fintech is that Banking-as-a-Service is fuelling further innovation. With BaaS providing the underlying tech, licence, compliance and regulatory needs, fintechs can focus on what they do best – making people’s lives easier with completely new front-end solutions.

Q. WHAT'S NEXT FOR KIM VAN ESBROECK?

» We plan to further invest in our BaaS strategy. What sets us apart in BaaS is our

combination of banking expertise and innovative technology. We offer one of the most comprehensive Retail and SME banking platforms powered via hundreds of open APIs. This platform is also a ‘360’ ecosystem that taps into fast-moving fintech innovation by integrating nearly 90 of the best fintechs. The growth of BaaS leverages strong tailwinds of Open Banking and modern cloud engineering.

Our ability to offer a technical solution alongside our ECB licence, regulatory and compliance expertise uniquely positions us to become one of the top European BaaS players in the next two or three years.

“I was a big Madonna fan when I was a teenager. Obviously, she’s an iconic performer, but I loved her attitude”

Build a Digital Future and Lasting Customer Success

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

Tech ‘about evolution, not revolution’ - Coforge

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

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.

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

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”.

“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 ›

BY:

PRODUCED BY:

As customers look to make their money work better for them, LendingClub is disrupting traditional banking with a new approach

The financial health crisis is here. People are suffering amid a rising cost of living and debts are mounting as disposable incomes shrink to cover spiralling living costs. Saving money and lowering outgoings for millions of households, globally, is now a necessity.

Innovation in finance is driven by disruption, and one contender leading the charge began life as a technology company specialising in data but has now transformed into one of America’s fastest growing digital banks.

Strictly speaking, LendingClub defines itself as a technology/financial services company. Founded in 2006, innovation and marketplace disruption is embedded at its core, says Scott Sanborn, CEO, who joined the company in 2010. A passionate advocate of the work LendingClub does, Sanborn says its services have never been needed more than they are now, as consumers find themselves pushed to – and, in some cases, beyond – their financial limits.

Lower-cost financial options for borrowers

At its core, LendingClub offers lowercost lending services to borrowers than traditional banks. It’s able to do this because it acts as a broker pairing institutional investors with would-be borrowers.

The AI Platform that Generates

Language to Motivate Every Individual to Engage and Act

Persado is the only Motivation AI platform that enables personalised communications at scale. Leading financial institutions including Ally Financial, JPMorgan Chase, and LendingClub rely on Persado to generate hyper-personalised communications. Persado’s top 30 customers have recognised over $1.5 billion in incremental revenue.

Learn more about Motivation AI at www.persado.com

Persado: Motivating customer engagement through AI

Persado’s Motivation AI platform enables personalised communications at scale, delivering incremental value to global brands

It’s one thing to know about your customers, quite another to utilise customer data to motivate and inspire them. Persado’s Motivation AI platform leverages a vast language knowledge base, advanced AI and machine learning (ML), and a decisioning engine, to deliver the precise message that motivates customers to engage and act. The result has been an impressive revenue lift and hundreds of millions of dollars in incremental value for some of the biggest companies in finance, retail, telecommunications, and other fields. Brands like JPMorgan Chase, Michaels, Gap, M&S, Dropbox, LendingClub, and Verizon rely on Persadoto generate hyperpersonalised communications.

Alex Olesen, head of Persado’s vertical strategy practice, says: “We underwrite every client partnership to project how much incremental revenue Persado can drive for our clients. We also build real-time performance reporting so our clients can see the actual uplift we are driving throughout the duration of the partnership.”

Persado is the only Motivation AI platform that enables personalised communications at scale. Digital communications present the largest opportunity to attract and build customer lifetime value. However, digital overload causes conversion rates to degrade quickly.

“It is typically not that an organisation’s offer or value proposition is unappealing, but that the brand needs to go the next step to motivate engagement and action,” Olesen says. “With the

Motivation AI platform, the top 30 Persado customers alone have recognised over US$1.5bn in incremental revenue.”

Marketers are tasked with driving growth and opening up channels of revenue. Few realise that inspiring and motivating customers to act contributes the majority of the conversion attribution. For example, Persado is working with LendingClub’s marketing department to help manage campaigns across all channels and banking products and develop optimised messaging across emails and marketing campaigns.

In 2021, LendingClub drove growth through marketing campaign enhancements enabled by Persado’s Motivation AI platform.

Learn More

LendingClub: Innovative banking for today’s customer

Customers can take advantage of an array of lending products from personal and business loans to auto refinancing and patient solutions.

The system is remarkably effective – and, says Sanborn, routinely cuts loan repayment interest charges significantly, because it puts the customer's interests first regarding their finance requirements.

He explains: “Imagine you’re going to buy a car from a dealership. Currently, in the majority of the sales, you are going to pay more for the finance than your risk would indicate. The dealer adds a markup. There's no cap on how big that markup can be. And they are not required to pass you to the lender that gives you the best deal. They may also be passing you to the lender that gives them the best fee break or rate or incentive. So, you spend all this time picking a car, negotiating the price, but you don't negotiate the cost of your financing. You drive off the lot paying more than you otherwise should.

“That’s where LendingClub comes in: using its technology platform, it can match borrowers with the best lending plans, making them vital savings in the process.”

SCOTT SANBORN CEO, LENDINGCLUB

Consumers now see banking as a thing you do, not a place you go, and they are increasingly saying that the strength of the mobile experience is what should be the driver of choice

EXECUTIVE BIO

TITLE: CEO

LOCATION: SAN FRANCISCO, USA

Scott is the CEO of LendingClub, the only full-spectrum digital marketplace bank at scale, which has helped more than 4 million Americans save billions of dollars since it was founded in 2007.

Appointed CEO in 2016, he is responsible for leading 1,000+ employees to achieve the company’s vision to put members on a path to financial success, as the business evolves beyond its personal loan heritage to serve a broader set of customers’ needs by taking advantage of its technology and data-driven marketplace.

Scott joined LendingClub in 2010 and has been a driving force in the management and development of the organisation. With executive roles as Chief Marketing Officer, Chief Operations Officer, and President, he helped steer the company through a prolonged period of tripledigit growth running up to its 2014 IPO, the largest tech IPO that year. Prior to LendingClub, Scott held leadership positions as the Chief Revenue Officer for publicly-traded eHealth Insurance, President of RedEnvelope, Inc., and SVP at the Home Shopping Network.

He holds a BA from Tufts University.

SCOTT SANBORN

Experian Marketplace: giving financial power to consumers

Experian Marketplace is helping consumers to save money in tough times, thanks to its D2C business, its credit bureau and its partnership with LendingClub.

Within Experian’s direct-to-consumer (D2C) business, Experian Marketplace, it has assembled a network of lending partners who allow the company to serve offers to its broad consumer base. The core Marketplace mission centres around data, personalisation, and how they can be used to improve financial inclusion and restore financial power for consumers.

Marketplace uses its relationship with Experian’s credit bureau to prop up unparalleled advantages, including the ability to scale pre-approved programmes quickly. It also allows Experian to operate across multiple verticals including credit cards, personal loans and – since the acquisition of Gabi in November 2021 – digital insurance.

That variety ensures consumers receive the support they need to save money –something which is really important in light of current macroeconomic conditions.

“Currently, 76% of consumers will see a pre-approved offer,” says Rakesh Patel, SVP – Marketplace for Experian. “We want to take that to 100% of all consumers.”

Forging a fruitful partnership with LendingClub

Patel, who started life at Experian 15 years ago, knows there are parts of the credit ecosystem that are broken: “In the US, when you want to start a credit relationship, the easiest way is to apply and get declined. That’s not a consumer-friendly value proposition. Experian has tackled that by saying people no longer need to get declined for anything in order to start a credit relationship. They can come directly to Experian through Experian Go and start their credit relationship on a positive note.”

Experian has a longstanding relationship with LendingClub, which has allowed it to create unique experiences for consumers. Patel believes the partnership will transform how Experian engages with customers: “LendingClub and Experian Marketplace have a vested interest in putting consumers at the heart of everything we do. With our vision of financial empowerment for all, LendingClub gives us that ability to provide proactive engagement with our consumers around offers they may be pre-approved for.”

SCOTT SANBORN CEO, LENDINGCLUB

Sanborn says that, at a customer level, LendingClub makes significant monthly savings on outgoings. “On average, we're saving customers about $80 a month versus their car loan. Imagine – you drive the same car, pay it off in the same time frame, but have $80 more a month in your pocket.”

Expanding financial services through M&A Clearly, the formula is working. To date, the fintech has helped more than four million

customers and is the US market leader in one of the fastest-growing categories of lending: credit.

In 2021, LendingClub also bought into the banking sector through its acquisition of Radius Bank, where it obtained their bank charter. This event has seen the company expand significantly, transforming its identity within the fintech industry. So, is it a fintech, a digital bank, or something else entirely?

What’s next for financial marketing?

How should finance industry marketers respond to an uncertain economy? Marketing budgets may have been cut, but not expectations for results. Read Quad’s latest white paper, “The New Lending Landscape,“ for a comprehensive review of changing consumer behaviors and strategies that will help FI marketers succeed.

OUT

“I would say we are a technology company… but we're a technology company with a banking charter, making us a fully-digital marketplace bank. We are something truly different. There are some direct-to-consumer banks, but we are becoming a digital marketplace bank at a time where there's a lot of change in consumer preference.”

Sanborn points out that, a decade or more ago, what drove customer preference for banking was the location of a bank branch. The landscape is now significantly different. “Consumers now see banking as a thing you do, not a place you go, and they are increasingly saying that the strength of the mobile experience is what should be the driver of choice. So, our transition to digital

banking is at a time when consumers are valuing the digital experience, and we can therefore provide a tremendous amount of value to our customers.”

The disruption of traditional lending LendingClub has a history of disruption within lending and Sanborn believes the disruption of traditional credit models has been long overdue because, fundamentally, it charges the customer far more than it should. “If you look at credit cards as an example, credit card companies separate their customers into two categories.

Revolvers – those are people who don't pay off the credit card balance; they have a loan. And then there's transactors – those are the people who use the card as a convenience mechanism and they pay it off every month. Those transactors are getting benefits. They're getting rewards, miles, cashback, and all of those things. The revolvers have to pay for that.

“So, you have one half of the customer base paying for the other half of the customer base. That's structural inefficiency. If you just looked at that customer and said, ‘Hey. What is the true cost of credit that you need?’, you'd find that it's lower. That's what we do with personal loans.”

Meeting customer needs

As well as taking a dynamic approach to lending, LendingClub is unusual in that its core business model increases financial inclusion by expanding access to lower cost credit. The company takes the approach that current customers and the system are ripe for a revamp. While LendingClub’s marketplace model enables it to seamlessly serve a broad range of customers, its core customer has a relatively high FICO score of around 700 and an annual income north of $100K. The team focuses on providing borrowers that are charged over the odds by lenders, such as women and minority groups, with a far better deal.

“Our customer is highly banked,” he says. “In fact, they're 100% banked. They're just not well-served. It's working out better for the banks than it is for them. What we are doing for them is providing a nationwide digital solution that disproportionately helps people who are living in areas where bank branches are closing, because more and more bank branches are closing every year.”

LENDINGCLUB HAS SERVED MORE THAN FOUR MILLION CUSTOMERS AND IS THE MARKET LEADER IN ONE OF THE FASTEST-GROWING CATEGORIES OF LENDING: UNSECURED CREDIT.

TransUnion Celebrates

15+ Years of Partnership With LendingClub

From FinTech’s early days, TransUnion has proudly partnered with LendingClub — helping expand financial inclusion to millions of consumers through leading trended credit and alternative data. We celebrate LendingClub’s success and our collaboration which continues to deliver state-of-the-art innovation and growth.

We celebrate our 15+ year partnership with TransUnion. TransUnion has actively listened to our needs and proactively introduced new strategies and capabilities to help fuel our innovation and growth. We look forward to continuing this important partnership as TransUnion introduces innovative data and solutions that help us continue to serve the evolving needs of our members.

– Ronnie Momen, Chief Consumer Banking Officer, Lending Club

Sanborn points to the flurry of global bank branch closures and the fact that certain demographics are penalised by the current system using auto loans as an example, although it is true of all credit. “It's been long documented that women and minorities end up paying a higher price at the used car dealer for their financing than others. So, we're addressing some of those systemic inequities. But, primarily, we're making it easy to access low-cost credit that is structured in a responsible way.”

Becoming a digital marketplace bank has driven this process forwards. “We don't have to support bank branches, which is another structural inefficiency. We don't have any of that – and it creates savings in our

model. We also have the highly profitable marketplace and can pass those savings back to the consumer and still be highly profitable. The combinations of our bank, marketplace and large and loyal customer base is truly unique in banking.

The importance of digital partnerships LendingClub’s stratospheric success has been bolstered by the fintech’s robust network of partners. Currently, they are collaborating with a handful of partners including Persado, Experian, Narmi, TransUnion and Quad, all of which are providing essential services that aid LendingClub as it disrupts traditional banking.

“The amount of innovation happening everywhere, including in financial services, means that being effective requires constant examination of the landscape to see where innovation is happening – and how you can harness it. Persado helps us unlock that with personalised language and content that's driving incremental activity, which is good for the company and – given the nature of our products – also good for the customer,” says Sanborn, who embraces the notion thata digital ecosystem serves the needs of an evolving environment.

“No one company can possibly do everything. There's so much happening in optical character recognition of documents,

SCOTT SANBORN CEO, LENDINGCLUB

fraud prevention and data aggregation using differentiated sources. Part of excellence is being able to have a finger on the pulse of where innovation is happening while also creating a culture, a structure, that can identify partners and implement with them to drive the business.”

Essentially, Persado offers a powerful platform that helps LendingClub pinpoint what is motivating customers so they can find the right product and put out the right message that is tailored to the right audience. “Persado enables us to be predictive in what we’re doing, to drive the right outcome,” he says.

Part of excellence is being able to have a finger on the pulse of where innovation is happening – and creating a culture, a structure, that can identify partners and implement with them to drive the business

LendingClub has been partnered with TransUnion – acting as LendingClub’s primary credit bureau – since it was founded. Recently, they also added Experian to the space where they are embarking on the next growth horizon focused on providing transparency, confidence and relevancy to the consumer.

Other partners include Narmi, a provider of digital banking technology, and Quad, which provides a postal marketing service

that is, Sanborn says, remarkably effective. “Some analogue marketing is still very important. People are often surprised by that, but it's a great consumer experience.”

A banking outlook for the future

As the fintech and all-digital banking continues to expand globally, there are no shortages of opportunity for companies offering disruptive services. LendingClub, since its acquisition of Radius Bank in

SCOTT SANBORN CEO, LENDINGCLUB

Our customer is highly banked. In fact, they’re 100% banked. They’re just not well-served. It’s working out better for the banks than it is for them

February of 2021, is now positioned perfectly for growth. At this point of post-acquisition, the digital marketplace bank has all its lending products in-house and is now issuing them through the bank. “We’re funding personal loans, auto loan refinance, and our purchase finance business through the bank,” says Sanborn.

“We also have launched high-yield savings accounts and CDs. That's gathering deposits to help fund the loans that we hold on our balance sheet. The next big frontier

SCOTT SANBORN CEO, LENDINGCLUB

It’s been long documented that women and minorities end up paying a higher price at the used car dealer for their financing than others

will be working on a core set of banking experiences that are really targeted at our consumer.”

It’s a bright future – not only for LendingClub, but also for their customers, who are reaping the benefits of choice in a climate where controlling outgoings has never been more crucial to daily survival.

“Our core consumers are highly banked with a high income, usually of over 100,000. They have a high FICO score, between 700 and 710. But they're also high debt. We help them lower the cost of their

debt, manage their spending and help them find savings.”

He adds: “We’re moving towards a banking experience that makes it easy for people to spot where in their lives they could find additional savings. If they squirrel away those savings, they won't need to use their credit card if an emergency happens. That’s our core aim – and the big series of investments we'll be making next.”

ATTRACTING

INVESTMENT

ATTRACTING PRIVATE INVESTMENT

intech has enjoyed several boom years, raking in unprecedented amounts of capital and producing a high number of successful scale-ups. But with the economic winds seemingly turning, what will become of fintech and its ability to attract funds? We take a look at private equity (PE), asking what the current market prospects are and revealing what fintechs should know in order to attract the right investor.

What’s the difference between venture capital and

Many fintech founders will be familiar with venture capital. It’s one of the most popular ways for up-andcoming fintechs to secure finance, and because of the relative nascency of the fintech sector until now, it has garnered more attention than private equity. As the name suggests, venture capital is oriented towards smaller, younger startups. Venture capitalists invest in promising companies in return for a smaller stake in the business, in the hope that it will grow rapidly in a short time and

By contrast, private equity is focused towards more mature businesses that have already enjoyed some success and growth. They may be businesses that are enduring some sort of financial difficulty that requires an activist investor or potential restructuring. PE firms tend to take a larger stake, and may take over a public company with a view to delisting it.

“The private equity stage is akin to moving from grammar school to college,” says John Clark, Managing Director at Royal Park Partners. “At this point, the company has demonstrated product market fit –congratulations! The investors at the next stage of a company’s evolution are likely coming out of Harvard Business School or McKinsey, so expect laser focus on the nuts and bolts of the business, such as metrics on customer acquisition cost (CAC), lifetime value (LTV), total addressable market (TAM), cash flow, profitability at a unit economic level and competitive landscape.

THE PRIVATE EQUITY STAGE IS AKIN TO MOVING FROM GRAMMAR SCHOOL TO COLLEGE”

JOHN CLARK MANAGING DIRECTOR, ROYAL PARK PARTNERS

“This group of investors isn’t looking for 10-times cash returns, but a more modest three-to-five times. They are therefore keen to convince you the valuation today is too high and cannot make any money unless they add structure to a deal (downside protection). The rationale is they make fewer but more concentrated investments and look to have a board seat and/or an observer seat as well.

“At this stage, the thinking is ‘how do we get you from US$10mn of revenues to US$40mn or US$50mn in three-tofive years?’ It becomes a tactical and strategy-driven process, focused on professionalising the organisation. This tends to be the biggest shock to founders as they transition from VC to growth/PE investors.”

What is the state of the current PE market?

A lot has been made of the current economic conditions, and whether they’re conducive to investment. It’s possible that the latest economic developments –high inflation and the spectre of a global

was invested in fintech by PE across 144 deals in 2021 – a new record that’s substantially above the prior record of US$5bn in 2018. Fintech’s relatively higher gross margin and cash flow profile make it attractive to PE. It’s also an extremely scalable sector – financial services touch everyone, everywhere.”

Private equity is still dwarfed by venture capital funding, though. VC investment

Fintech report, almost triple the US$46bn the year before. This heightened level of investment may reflect an industry coming of age, or it might indicate that new sub-

Anton Ruddenklau, Global Fintech Leader for KPMG, says: “We’re seeing an incredible amount of interest in all manner of fintech companies, with record funding in areas

such as the increased threat of cybercrime, demand for embedded financial services and the inefficiency of current core banking infrastructure”.

What do private equity firms look for in an investment?

“H1 2022 has seen a somewhat inevitable deceleration in the rate of private equity dealmaking across the board, though Europe has been more resilient,” Lawson continues. “Over the coming quarters, we may see a further reduction in new deals as rising rates, declining GDP, falling consumer confidence and the ongoing war in Ukraine impacts businesses.

PRODUCED BY: STUART IRVING WRITTEN BY: JESS GIBSON

With its many islands hemmed by crystalline waters that wash onto white sand and greencarpeted mountains, Fiji is a vista of immense natural beauty.

The archipelago, made up of over 300 islands and 500 islets, was formed as a result of volcanic activity over 150 million years ago. The two main islands of Viti Levu and Vanua Levu – which contain almost 90% of Fiji’s total population between them –are the beating heart of the economy, with tourism accompanying minerals, sugar cane and fishing as one of its largest drivers, aiding Fiji in being one of the most developed economies in the Pacific.

Despite this, though, the reality of daily life on Fiji’s islands belies the image most of us possess; it is a developing nation, after all – one that’s still battling with the brutal blows inflicted by the COVID-19 pandemic on tourism and the economy. Pockets of rural Fijian communities still function day-to-day with just 2G or, if they’re lucky, 3G connectivity, lacking the infrastructure needed to enhance this further for the time being.

But this is where Vodafone Fiji steps in. The company, which is “the main telecommunications player in Fiji” (with 85% market share), is committed to “enriching people’s lives” and overcoming the obstacles currently plaguing the archipelago.

“When it comes to connectivity, we no longer treat it as a want, but as a basic need for customers now,” establishes Chief Technology Officer (CTO), Vikash Prasad, “especially in a developing country like Fiji, where there's lots of people who still live in these rural or maritime areas.”

Becoming the largest telco network in Fiji Parent company Vodafone is itself a global telecommunications company that dips its toes successfully in a wide array of industry sub-sectors, though it does so with a customercentric ethos that builds “strong customer affiliation and brand loyalty”. It is this approach to which Prasad attributes Vodafone Fiji’s success.

VIKASH PRASAD CHIEF TECHNOLOGY OFFICER, VODAFONE FIJI

“Vodafone Fiji is a dynamic and fast-paced business, operating in an essential industry,” Prasad states, highlighting the differentiating factors of the company. “Our vision is to be the most admired

“IT'S ALWAYS VITAL TO HAVE A GOOD PLAN IN PLACE. IF YOU HAVE A GOOD PLAN IN PLACE, YOU HAVE THE FIRST PART DONE”

At Vodafone Fiji, Vikash Prasad dedicates himself to the pursuit of technological advancement to provide digital equality and equity to those most in need

Hear about the ways Vodafone Fiji is enriching Fijian lives

company in Fiji, and our mission is to enrich people’s lives.”

Prasad also credits the telco’s “exceptional frontline, customer care teams and business account managers” with helping it to stay on top of the competition and reach 95% of the Fijian population. “Apart from the traditional voice, data and SMS offerings, we offer the best ICT solutions in the region, such as Cloud, SDWAN, and many other innovative solutions that are tailor-made for many of our ICT customers.”

In addition to customer-centricity being a defining element of Vodafone Fiji’s success, its recent foray into the FinTech world is opening up new doors.

“We are also an emerging FinTech company, providing digital services in terms of financial and e-business at a national level,” says Prasad. “Being an incumbent, we have to be agile in all our operations, so it's all about creating value in our products and services.”

This approach has enabled steady yearon-year growth for Vodafone Fiji, which the company hopes will continue as it sets out on its 5G journey, becomes more established in FinTech and finds innovative ways to ensure its customers receive the connectivity needed to boost its tourism-heavy economy.

Moulding attitudes for the future of telco innovation

Innovation is essential to the longevity of a business – as Prasad well knows. In the postCOVID age of rapid digital transformation and detailed data analysis, impacted by geopolitical and climate-related events, this is particularly true. But having a skilled team that thinks out of the box requires a change in management and strategy, which is often the product of company-wide cultural overhauls.

So, Vodafone Fiji has invested in its staff – via training, enabling work-from-home capabilities and providing leadership coaching – and employees have, in turn, ‘invested’ in the business, allowing innovation to flourish. “Our staff believe in our vision,” he says.

“One of the things we are also doing as part of our transformation revolves around our workforce – we’re focusing on increasing the capabilities of our people and investing in our talent pool. That means putting our staff through specialised training, and providing for and equipping them so that they strive for greatness in the new digital world,” Prasad states, going on to explain how his personal ethos is woven throughout this process to promote excellence.

“A life lesson that I live by is that we have to do things right the first time, and that what is right to do is not always easy. We need to put in the hard yards now so that we can reap the benefits of it in the future.”

Now, this doesn’t mean that Prasad’s team has no room to make mistakes; it means

VIKASH PRASAD

TITLE: CHIEF TECHNOLOGY OFFICER

Vikash Prasad is responsible for providing leadership direction and innovation ownership to drive overall technology strategy, operational excellence, and innovation for Vodafone Fiji. He is recognised for building strong technology platforms and delivering several network transformation initiatives for Vodafone.

Vikash leads a dynamic team responsible for continued network growth and adopting technology evolution, ensuring Vodafone delivers next generation network initiatives to create the most innovative and reliable networks in Fiji and across the Pacific. In his 19 years with Vodafone, Vikash has successfully driven a number of multi-million dollar mobile network projects. Vikash previously held the roles of Manager Access Networks, Engineer Network Services and Systems Support Analyst.

He holds a Masters in Business Administration (Technology) from the Australian Graduate School of Management at the University of New

BIO

Metric: a powerful platform for network optimisation

Multivision and Vodafone Fiji work together via Metric, an efficient and powerful platform, which enhances the critical role that partnerships play in achieving growth.

Multivision has been a key partner of Vodafone Fiji for almost four years now, with the two companies joining forces in 2019 when Vodafone Fiji subscribed to Metric, a SaaS offering owned, delivered, and remotely managed by Multivision. A company that also provides professional and strategic advice alongside bespoke IT solutions and co-sourcing of IT talents, Multivision has worked with a host of bigname businesses such as Siemens, Unitel, and Ice.net.

Since its inception in 2007, Multivision has based its work around one core philosophy: ‘Grow to make you grow’, which is threaded through each aspect of the company´s daily work.

With Metric and this fruitful partnership, Vodafone has been able to conduct

in-the-field quality audits of network performance. This has allowed Vodafone Fiji to continue its two-year 5G infrastructure build while ensuring that existing connections are stable and secure for even the most rurally isolated Fijians.

Vikash Prasad, Chief Technology Officer for Vodafone Fiji, describes this platform as “efficient and user-friendly, a powerful tool that allows us to have access to almost real-time information out in the field, all of which is web-based,” explains Prasad.

“In addition to monitoring daily network operations, when optimising networks, the platform allows us to efficiently provide automated solutions’ reporting. This information can then be shared with Vodafone Directors and easily related to network KPIs, reducing the need for multiple platforms and screens.”

Vikash Prasad is vocal when praising the Metric team for their “timely and responsive communication, the quality of their support, and their ability to solve a variety of issues, no matter the complexity.”

“Multivision promotes innovation and simplicity, and Metric is a powerful tool for us,” he adds.

that, by investing time in the planning, research, design or training aspects of a task or process, the final result itself will be right the first time. And this thread continues throughout everything Prasad oversees, particularly Vodafone Fiji’s digital transformation. “It's always vital to have a good plan in place. If you have a good plan in place, you have the first part done.”

A popular theme to many a business discussion over the last two years has been the unexpected boost that COVID-19 gave to digital transformation. In some cases, the pandemic merely spurred on a pre-existing idea or sped up the pace; in others, it created an urgent business need in order to survive.

VIKASH PRASAD CHIEF TECHNOLOGY OFFICER, VODAFONE FIJI

“During COVID, there was a surge in demand for data, and this would've been the same story for a lot of telcos around the world. That put a lot of stress on the network, and during that time, the boundaries of our mobile network services were being tested.”

Not only were Vodafone Fiji’s networks being tested in the short-term, but there were also long-term economic effects that created a need for digitisation. “For Fiji, tourism has always been one of the biggest economic drivers. So, when the borders closed down, the economy suffered.”

“DEVICE STRATEGY WILL PLAY A KEY ROLE, WITH ONE OF THE MAIN DRIVERS WHEN IT COMES TO DEVICES BEING AFFORDABILITY”

PARTNERING WITH MULTIVISION

MultiVision has been a partner of Vodafone Fiji’s for four years now. From this fruitful partnership, Vodafone has been able to undergo an in-the-field, quality audit of its network performance, subsequently acquiring the Metric platform for network optimisation. Prasad describes this platform as “efficient and userfriendly”, “a powerful tool” that collates “KPI data with other data” to allow for a correlation of issues.

Vodafone Fiji engineers have so far only worked with those at MultiVision via virtual means, often on other sides of the world – though this will no longer be the case soon. These meetings have allowed the fine-tuning and customisation of the platform, despite the time difference, with Prasad describing the MultiVision team of engineers as “timely and responsive” and providing “excellent support”.

VIKASH PRASAD CHIEF TECHNOLOGY OFFICER, VODAFONE FIJI

This directly impacted the telco’s ability to put the necessary infrastructure in place to support citizens and tourists alike in the immediate wake of the pandemic. “But everything is changing now,” Prasad smiles. “Our customers want connectivity everywhere, so businesses are shifting priorities. One of the buzzwords right now is the cloud and having cloud platforms or migrating to cloud

platforms, but with that comes a lot of risks, as well. Cyber threats are one of the biggest challenges that we face right now.”

As such, Vodafone Fiji is investing not just in its team, but in expanding technological infrastructure across the whole of Fiji to develop the cloud, 5G connectivity and its FinTech arm.

The road to 5G is paved with good intentions Being a developing country situated on an archipelago means progress can be slow. Across Fiji, which is predominantly made up of rural or coastal locations, developing connectivity to wireless mobile networks is difficult – and that’s without considering regulatory requirements, different frequency spectrums, and affordability for all customers, which is why Prasad refers to 5G in that respect as “a double-edged sword”.

“A LIFE LESSON THAT I LIVE BY IS THAT WE HAVE TO DO THINGS RIGHT THE FIRST TIME, AND THAT WHAT IS RIGHT TO DO IS NOT ALWAYS EASY. WE NEED TO PUT IN THE HARD YARDS NOW SO THAT WE CAN REAP THE BENEFITS OF IT IN THE FUTURE”

“VODAFONE FIJI IS A DYNAMIC AND FAST-PACED BUSINESS, OPERATING IN AN ESSENTIAL INDUSTRY”

VIKASH PRASAD CHIEF TECHNOLOGY OFFICER, VODAFONE FIJI

Prasad hopes that, by delivering connectivity to the entirety of Fiji, he can uplift the digitally ‘poor’ – those with basic or limited connectivity, hindering personal progress – ensuring digital equality and, most importantly, equity.

“A lot of focus for us is also about covering these areas, making use of the existing assets that we have, and trying to sweat them as much as possible so that we deliver the connectivity that people are after.”

Vodafone Fiji may be an estimated two years away from full 5G connectivity, but with Prasad at the helm developing and solidifying plans, as well as encouraging his team to think differently, the rollout is likely to be free of any kinks or issues.

IT TAKES TWO (OR MORE) TO MAKE A THING GO RIGHT

“We are always on the lookout for new partnerships. It’s no secret that to succeed, having trusted partners is a must –it’s no longer about operating in a silo.

For a telco & ICT provider like Vodafone Fiji, acquiring accreditation and certifications from world-class vertical companies such as Cisco, Oracle and Microsoft is key for us as we strategise to further enhance our position in the ICT sector

Simply put, collaboration with vertical industries is now the mainstay when it comes to delivering best-in-class valueadded services to our customers, resulting in new revenue streams.

Apart from partners such as ZTE, Cisco, Aviat Networks, we also work very closely with partners such as MultiVision, Ciena, umlaut, InfoBip and many others to deliver the best value not only for Vodafone, but for our customers as well.”

“Fiji is a developing country, so the average user may not spend up to a thousand dollars to get a 5G phone; a normal, basic phone would meet their requirements. And Fiji is also predominantly a prepaid market.

“So having the right device strategy, where we have a pool of low-end 5G devices that are prepaid, will really help.”

But another obstacle to overcome is the Fijian terrain itself, which prevents the telco from “using the traditional mobile towers or cell towers” across every area.

“We needed to think outside the box. And one of the very cost-effective solutions that we have deployed here is broadband satellite: it’s quick to deploy, easy to install, easy to operate, and can be done within days,” Prasad explains.

Shifting priorities and expanding verticals

Ultimately, the company’s approach is not to rush ahead, but instead to “wait, watch and then act”. This will help the team to build an “understanding of the 5G ecosystem and how it will bridge the current digital gaps”, as well as informing them of “any investments needed to fully grasp this”.

As established, affordability for all customers is key to both Vodafone Fiji and Prasad. You see, 5G infrastructure is all well and good, but the vast majority of the devices designed for such capabilities are high-end and, as such, have high-end prices attached.

“Device strategy will play a key role, with one of the main drivers when it comes to devices being affordability,” Prasad affirms.

In the face of globally-shifting priorities, it’s become necessary for businesses to expand their verticals, breaching into multi-cloud terrain as part of their digital transformation. For example, Vodafone Fiji has merged its private cloud with that of Oracle Cloud Infrastructure (OCI), Microsoft Azure and Amazon Web Services, which, in Prasad’s words, is “bringing the best of private and public clouds together with our expertise so that we offer our customers a unified cloud platform for all their needs”.

Arguably the biggest move for Vodafone Fiji in recent years is the development of its Mobile Money platform, which marks the company’s move into the FinTech space to complement the different industries within the local Fijian market and, therefore, the economy.

“Mobile Money is one of the greatest examples and pride of Vodafone Fiji,” Prasad enthuses. “M-PAiSA is an in-housedeveloped digital wallet platform that

VIKASH PRASAD CHIEF TECHNOLOGY OFFICER, VODAFONE FIJI

provides a number of basic financial and digital payment services.

“Launched in 2010, M-PAiSA now processes over $200mn in monthly M-PAiSA transactions, making it a significant player in Fiji’s digital and cashless payment space.”

This bespoke digital wallet platform, M-PAiSA, has established itself as a market leader in the mobile and digital payment space, with “high brand equity” and “trust as a reliable and robust digital payment platform”.

Prasad details the effect this success has had in the years since M-PAiSA’s launch: “One of Fiji’s fastest growing economic drivers is inward International Remittance. Within a space of 12 months, M-PAiSA has gained a 25% market share of all inward remits into Fiji.

“We have taken an advantageous position by being the first to market with our innovative payment services using QR pay. Month-on-month, we see new merchants come onboard with us. Next on the horizon for Vodafone Fiji is to become a scheme

“FOR FIJI, TOURISM HAS ALWAYS BEEN ONE OF THE BIGGEST ECONOMIC DRIVERS. SO, WHEN THE BORDERS CLOSED DOWN, THE ECONOMY SUFFERED”

payment provider. This is a whole new ball game for Fiji as a nation.

“All-in-all, Vodafone is not only a CSP but offers services that can be offered by a FinTech organisation.” Exciting, indeed.

Digitalisation, data and virtualisation

The future outlook for Vodafone Fiji will feature “digitalisation, data and virtualisation” on a large scale, which, of course, includes the continuation of its mobile networks' rollout with focus on 5G and beyond, as well as the development of its FinTech arm. This means “evolving legacy platforms into world class systems that can be supported through cloud” and obtaining “deeper insights through collaboration in terms of analytics and forging partnerships” to allow for “detailed, real-time insights of customers’ pain points”.

At the very core of realising this aim of enabling connectivity in underprivileged rural

and coastal regions sits data and analytics –and in the modern world, data is king.

“When it comes to analytics, it’s a move to fresher, more dynamic ways of understanding our customers using crowdsourced data,” Prasad explains. “It’s no longer just about using data from your OSS & BSS platforms. Detailed insights from near realtime systems gives another level of clarity on what the pain points are exactly.” This means that, no matter where in Fiji someone resides – whether on the most remote islet or the centre of the capital, Suva – they aren’t held back by being digitally poor.

Providing digital equality and equity to those who are underprivileged is a noble endeavour, particularly when the aim is to do so carefully and steadily to make sure it lasts for the foreseeable future.

Customer retention and loyalty programme finance

WRITTEN BY: JOANNA ENGLAND

As the lending environment is impacted by the global financial crisis, service providers are seeking new ways to retain customers

These days, most customers seeking loans are stuck between a rock and a hard place. The cost of living crisis has resulted in less disposable income and, in many cases, essential payments can only be managed with the help of understanding lenders.

However, lenders – fully aware of the plight of customers and rising interest rates – have rolled back many of their affordable products and services, leaving fewer credible options in the marketplace for loan-seeking consumers.

Even when sound agreements are met between banks and consumers, economic instability is a constant source of stress. In the UK alone, inflation is at its highest rate in 40 years – and energy price rises show no sign of slowing down. These elements place additional pressure on businesses and lenders, alike.

Furthermore, spending, as expected, has contracted and savings are also being depleted. So how can consumers protect their financial assets, maintain

their savings and still manage a healthy relationship with their financial services provider?

In an age of digitised, global finance, the humble Credit Union has one lending solution that could well preserve the pocket change of even the most financially challenged borrower – in the form of loyalty loans.

How do Loyalty Loans work?

According to the UK’s Wiltshire & Swindon Credit Union (WASCU), loyalty loans are a style of lending product that protects customers’ savings when they request finance for essential purchases or expenses. Rather than using their own cash to secure a transaction, the lender will provide up to five times the amount the saver has accrued, with the option to pay off the loan within a flexible time frame – and usually with lower interest rates than standard lenders.

“ It is so important right now to refrain from making any rash decisions that could later damage a person's financial security”

ANDREW MEGSON EXECUTIVE CHAIRMAN, MY PENSION EXPERT

Considering the current financial climate, helping customers to maintain their assets while enabling flexible borrowing could well be a lifeline to protect consumer assets while giving them flexibility and spending power. The loans are also based on the amounts of cash the customer has saved on a regular basis, thus reducing risk for the lender while incentivising the customer to save more.

STEVE ZIMBERG DIRECTOR OF MARKETING, NORTH AMERICA, FINTECHOS

Steve Zimberg, Director of Marketing, North America at FintechOS, says market conditions will always fluctuate, and financial institutions must be agile enough to serve their customers and members in those moments of flux.

“Loyalty and savings loans are products that can certainly be useful to support customers/members seasonally or for emergency needs.”

In either scenario, he says that a financial institution's ability to move quickly and be of service to its members is critical. “Organisations with a High-Productivity Fintech Infrastructure (HPFI) can quickly pivot to meet the needs of local and economic market conditions, and rapidly configure and personalise loan products and journeys at scale.”

This can be a real boon for financial institutions of all sizes, especially for organisations that want to enter new areas of opportunity but may not have the resources to execute such a move or are tethered to a legacy banking core and cannot move quickly. “Having the right HPFI helps financial institutions stay relevant in all economic climates,” Zimberg says.

process

a single digital experience ensures that customers can compare

terms and make

decisions”

FINANCIAL

Loyalty loans are also another option in a market where choice is critical to customer servicing. Zimberg points out that customers should explore and examine the terms of each type of loan and decide with their financial advisor the right option for their particular needs.

Conversely, financial institutions need to be prepared to pivot in different economic climates and offer personalised loans –of all types – that meet the needs of their customers/members. “Financial institutions unifying their online and in-branch loan application process through a single digital experience can ensure that customers compare loan terms and make informed decisions.

“

Borrowers will have to prepare themselves for the likelihood of increased repayments, such as higher mortgage rates”

RICHARD EAGLING PERSONAL FINANCE EXPERT, NERDWALLET

“Furthermore, in most cases, by utilising a High-Productivity Fintech Infrastructure (HPFI), bankers can easily customise unique products and journeys, make loan recommendations according to their customer's creditworthiness, and automate decisioning in alignment with their lending criteria,” he says.

Caution must be exercised for borrowers as well as lenders

In light of the current situation, exercising caution when considering borrowing is paramount, says Richard Eagling, personal finance expert at NerdWallet. Not only should lenders be far more circumspect, but customers must also think long and hard before committing to additional monthly repayments that may well rise as a result of interest rate changes.

“Borrowers will have to prepare themselves for the likelihood of increased repayments, such as higher mortgage rates. And, with inflation predicted to continue

rising throughout the year – even with interest rate hikes – many consumers will be understandably concerned about how they can afford to make repayments on top of everyday bills.”

He continues: “Individuals must waste no time in taking measures to prepare themselves. Keeping track of all incomings and outgoings will be critical in helping them identify potential issues or pinpoint areas where savings can be made.”

Andrew Megson, Executive Chairman of My Pension Expert, agrees and says that rational decision making is essential across all age demographics. "It is so important right now to refrain from making any rash decisions that could later damage a person's financial security. Where pension planning is concerned, in times of economic uncertainty, it’s crucial to first review your retirement strategy,” he advises.

“Likewise, a sensible move would be to speak to an independent financial advisor to explore all options available, whether that’s annuities, flexible-access drawdowns, or riskier investments that could offer more favourable returns in the face of inflation.

“

Keeping track of all incomings and outgoings will be critical in helping them identify potential issues or pinpoint areas where savings can be made”

RICHARD EAGLING PERSONAL FINANCE EXPERT, NERDWALLET

There is no one-size-fits-all solution; it's about finding the right approach for your circumstances and your needs."

Loyalty programmes retain customers

Finally, it's also important to consider the fact that good loyalty schemes, such as incentivised saving loyalty loans, create customer retention. A symbiotic relationship is forged between provider and customer, where both benefit from their mutual cooperation. In a time where marketplace choice of services is more competitive than ever before, creating an environment where customers feel safe and valued has never been more important.

FINANCIAL

According to Andy Nemes of loyalty management platform Antavo, customer retention has become an increasingly large challenge for fintechs and banks. He writes that “the reason customer retention in financial services is a pain point for many companies in the industry is that their attention is divided between multiple pressing challenges”.

Nemes points to three key areas that result in customers being lost. They are;

A lack of digital presence - To speed up the process of digital transformation, companies must offer solutions that incentivise online interactions.

2. Increasing competitionWhen fintechs lack effective customer retention tools, it’s too easy for customers to switch to a competitor offering better deals.

3. Valueless loyalty programmesCustomers need relevant benefits if a loyalty programme is to be effective. Loyalty programmes that don’t consistently add value result in poor retention.

Permanent TSB enjoying fruits of strategic supplier management

82 October 2022 WRITTEN BY: SEAN ASHCROFT

PRODUCED BY: CRAIG KILLINGBACK

As one of the leading retail banks in Ireland, Permanent TSB (PTSB) is in the vanguard of businesses who see procurement as a means to deliver strategic advantage.

PTSB’s values have remained unchanged through time. It prides itself on its customer service and traditional, personal approach to banking, which is why its branches remain a common sight on the high streets of Irish cities. Yet these same values are also driving it into a digital future, so it can meet modern business and customer demands.

PTSB sees change not as a problem, but as an opportunity, which is why it embraced the digital reinvention of its procurement function with such passion and focus that the bank has become a poster child for digital transformation, winning two prestigious industry awards.

At the National Procurement Awards, held in Dublin on September 15, PTSB won two awards: Best Transformation Project and Best External Collaboration Project.

A key figure behind the award wins is Rachel Dolan, a dynamic and transformational leader in her role as Head of Procurement and Supplier Relationship Management for PTSB.

Dolan is a straight-talker, a troubleshooter and problem-solver who has not only designed and delivered cost savings,

Permanent TSB’s Rachel Dolan reveals how an award-winning collaborative procurement partnership with Efficio helped save the Irish bank €12mn

Permanent TSB’s procurement and supplier management journey

Her programme and change-management expertise – coupled with a strategic approach to organisational and process improvement –made her the perfect candidate for overseeing one of the most ambitious procurement transformation projects undertaken by any bank in recent times.

RACHEL DOLAN HEAD OF PROCUREMENT, PERMANENT TSB

but has also implemented risk and governance frameworks to support enterprise goals. She is a graduate of both Trinity College Dublin and University College Dublin.

In a 15-year-career, Dolan has developed deep expertise and experience across retail banking operations, service and product development, and organisational design and transformation.

Dolan was tasked with delivering a cost optimisation programme, coupled with the transformation of the processes and technology supporting the entire source-tocontract journey.

Traditional banking in a digital era

“While we are probably one of the only banks anywhere expanding our branch footprint we also plan to satisfy our customers’ appetite for more digital banking,” says Dolan, who adds: “What sets us apart is we want to be part of the communities we serve. We want to remain as a physical bank, with branches where we can meet people and serve their day-to-day banking needs.

“If you're not there yet as a partner with us, let's go on a journey to try and get you there, to try and help”

“Supporting customers and our community is our highest priority, and the procurement team purchases everything we need to serve our customers, such as ATM machines, cash-in-transit services, docket slips, and printed materials. We also procure to serve the needs of employees, including canteen and security facilities, as well as uniforms.”

The Permanent approach to procurement

PTSB’s old-school-new-school approach to banking puts it in a unique position when it comes to sourcing, for not only is it tasked with maintaining and developing traditional banking infrastructures, it is also fully embracing the digital world.

“Technology purchases are high on our agenda as we develop and grow our digital solutions,” says Dolan.

The Bank has enlisted the support of its partners to ensure that its roll-out of technology is seamless and meets the needs of customers. A key partner in its digital transformation journey has been Infosys and its digital banking product, Finnacle.

“Around 80% of our spend is on technology and professional services,” explains Dolan. “This helps us deliver better, leaner and more effective customer journeys through digital applications.”

But PTSB’s digital ambitions go beyond servicing the needs of customers; it is also undergoing an internal digital transformation to help it leverage the power of procurement in delivering strategic advantages.

Enter its award-winning digital transformation project, called Titan: One Team, One Target. To deliver this, PTSB

RACHEL DOLAN

TITLE: HEAD OF PROCUREMENT

INDUSTRY: BANKING LOCATION: DUBLIN, IRELAND

Rachel Dolan is a dynamic and transformational leader currently working in Ireland's financial services sector. In her role as Head of Procurement and Supplier Relationship Management for Permanent TSB Bank, she has put environment and social governance at the heart of her mission. Rachel is a straight-talker, a trouble-shooter and problem-solver who has designed and delivered cost savings, and has implemented risk and governance frameworks to support enterprise goals. She is a graduate of both Trinity College Dublin and University College Dublin.

Efficio is the world’s largest procurement and supply chain consultancy, helping clients to identify, deliver, and sustain improvement opportunities.

Our international team combines unparalleled expertise and industry experience with a unique blend of intellectual capital and technology to deliver results and advance our clients’ procurement capability.

www.efficioconsulting.com

Efficio drives efficient sourcing activities at Permanent TSB

Simon Whatson, Vice President at Efficio, reflects on the company’s partnership with Permanent TSB to drive efficiency in its sourcing activity

As the world’s largest specialist procurement and supply chain consultancy, Efficio was founded in 2000 and has since grown into a global organisation, with 650+ procurement professionals operating in 13 locations worldwide.

Having worked at Efficio for seven years, Whatson leads the work that the company does with Irish bank, Permanent TSB.

“Efficio started working with Permanent TSB about two years ago. Our engagement started with an opportunity analysis. After that, we ran three waves of sourcing activity on specific spend areas to help Permanent TSB achieve the savings it needed,” explains Whatson.

“We have been firmly embedded into Permanent TSB’s procurement team, working alongside and in collaboration with the business to source spend that had either been previously addressed without having achieved full value, or had not been addressed at all over the last few months,” he adds.

“We have also embarked on a ‘sourcing-asa-service’ relationship, where we are helping to drive efficiency throughout its sourcing through our digital platform, eFlow.”

Future plans for Permanent TSB and Efficio

As their partnership expands, Efficio will continue to refine its ‘sourcing-as-a-service’ model to become even more efficient when it comes to strategic sourcing requirements.

“I believe that the future partnership between Efficio and Permanent TSB will become more and more embedded,” says Whatson.

“Efficio and the eFlow platform will also become more deeply embedded in the way Permanent TSB does procurement. And what that brings to Permanent TSB is an extremely efficient engine of servicing procurement requirements,” he continues. “Where previously these mid- to low-complexity sourcing requirements would take up all of the procurement team’s time, now they are largely automated and streamlined through the service that we provide.

“This automation also means the team can focus on more complex and strategic sourcing initiatives with our consultants. It removes a lot of noise and allows Permanent TSB to service those more complex sourcing requirements, which, of course, is where the biggest value is going to be.”

teamed-up with Efficio, the world's largest strategic, tech-enabled procurement and supply chain consultancy, operating across 13 offices in Europe, North America and the Middle East.

Titan was born out of PTSB’s need to find significant savings across its thirdparty spend, and, in just over a year, Efficio had helped it deliver annualised savings of €12mn, much of which sprung out of Titan’s consolidation of PTSB’s large and disparate supplier landscape.

“This enabled us to secure the most competitive resources from selected partners across high-spend categories,” says Dolan. “For example, the IT reseller

landscape was consolidated from 12 to 2 providers, and the IT consulting and development supply base from 29 to 10 providers.

PTSB was founded in 1816 as the Irish Savings Bank in Waterford, before expanding to Dublin and Limerick. This makes it one of the oldest financial services institutions in Ireland.

Following a merger with Irish Life & Irish Permanent, PTSB became Ireland’s leading provider of mortgage services, current accounts and assurance products.

“The approach that our joint PTSB-Efficio procurement team took not only established unprecedented visibility of supplier rates to ensure consistent application across all business areas, but it also encouraged greater collaboration between PTSB and its vendors.”

Dolan says the bank’s procurement team identified several separate, critical projects that were engaging the same key vendors.

“By collaborating with the relevant business stakeholders, we were able to forge strategic partnerships to optimise the commercial model,” says Dolan.

“We undertook a coordinated effort to revise the approach to contracting. We led commercial reviews, seeking outcome-

RACHEL DOLAN HEAD OF PROCUREMENT, PERMANENT TSB

based fixed-fee contracting models, and, on the supplier relationship management front, we also helped facilitate closer integration between parties.”

“Our ethos is very much communitybased and traditional in nature”

are carbon neutral since

years ahead of the

Infosys helps PSTB to strategically digitally transform

Manish Panicker, Associate VP at Infosys, discusses the firm’s strategic partnership with Permanent TSB (PTSB) spearheading the bank’s digital transformation

Founded in 1981, Infosys is a global IT services and consulting firm that enables clients across more than 50 countries navigate their digital transformations. “We currently have over 335,000 associates globally managing US$16bn worth of business. As a firm, we provide end-toend services including business consulting, bespoke development and maintenance of applications, and next-generation technology transformations,” explains Manish Panicker , Associate Vice President at Infosys .

Infosys and Permanent TSB’s (PTSB) Partnership

Dating back to 2019, Infosys has built a close relationship with Permanent TSB (PTSB) over the years.

The relationship started with the selection of Finacle as PTSB’s strategic platform for the bank’s digital transformation.

“Since then, we have helped PTSB launch its mobile account opening capabilities, supported the launch of products and services to rapidly disperse loans during COVID-19, and we are currently working with the bank to transform and digitise their customer journeys,” explains Panicker.

“We have been supporting PTSB across a broad set of digital initiatives. We believe we now have a very strategic relationship – one in which we are a trusted partner and adviser for PTSB.”

Future work with PTSB Infosys sees this relationship continuing to evolve, mature, and broaden over time. “Our primary focus today is to ensure that we deliver the programme of work in the digital space that we are currently engaged in. This is something that is not only important to us, but is of strategic importance to PTSB,” says Panicker.

Panicker concludes: “Beyond that, we continue to have conversations with PTSB to identify further partnership opportunities to help them to adopt innovative solutions such as intelligent automation, AI, and machine learning into their business and IT operations.”

Learn more

“We are trying to support our customers' digital appetites for a more digital type of banking”

RACHEL DOLAN HEAD OF PROCUREMENT, PERMANENT TSB

The significant savings delivered by Project Titan meant that it had also succeeded in another vital area: changing the perception of procurement within the bank. Now, it is no longer viewed as an administrative function but as the bank’s preferred partner in driving competitive and strategic advantages through data-driven cost control.

The programme followed a three-phase delivery roadmap over 12 months: Waves 1 and 2 comprised 34 initiatives, while PTSB expects a further €2mn in savings from Wave 3.

To meet the challenge, the joint PTSB-Efficio procurement team got their collective shoulder behind the ‘One Team, One Target’ ethos. This partnership approach saw both parties jointly define strategic recommendations and deliver against the targets.

“The delivery model was not typical of a consulting engagement,” says Dolan. “It is more usual for consultancy services to be advisory, with the client executing on recommendations. But, with Efficio, we established a supportive, trusting relationship, and the two procurement teams presented as a single collaborative function to the wider business.”

That the project was delivered midpandemic, with all parties working remotely, makes the achievement all the more impressive. But COVID-19 was not the only challenge. To be successful, Project Titan also had to win over PTSB staff.

“Most colleagues were not cost-conscious at that time, and they saw Project Titan as a threat, rather than a means of support for them to reach their own objectives,” says Dolan.

To persuade the doubters, Project Titan leaders worked hard to first understand, and then realign, the prevailing corporate mindset.

“Through a range of stakeholder interviews, we gained a clearer picture of the biggest pain points,” says Dolan. “Bringing the business along on the transformation journey was vital to its success.”

She says that because Titan leaders involved stakeholders, the changes they introduced “felt familiar, and the business developed a greater appreciation of procurement”. Key to this process were a number of strategies, one of which was proactive outreach across different areas of the bank.

“This meant we were able to develop a pipeline of procurement initiatives, which allowed us to mobilise the resources we needed to deliver on our need to source strategically.” Dolan says these new ways of working are now embedded across the Bank and that they will be finessed as the ongoing relationship with Efficio continues to evolve.

She also explains that says the collaboration has delivered improvement to PTSB’s procurement function in areas, including:

• IN-HOUSE EXPERTISE

“Efficio subject-matter experts were available on demand across different initiatives,” says Dolan. “We leveraged their internal benchmarks so we had ‘shouldcost’ benchmarks for supplier negotiations.”

• STRATEGIC SOURCING

“Implementing Efficio’s strategic sourcing methodology revitalised the cost-savings agenda,” Dolan says. “It established cost baselines and analysis of relevant supplier markets, which helped us develop creative sourcing strategies.”

• EMBEDDING NEW TECHNOLOGY

Dolan says: “The communication tools in Efficio’s proprietary eFlow technology simplified the management and tracking of all suppliers.”

On the more general point of supplier relations, Dolan says PTSB is committed to helping them become ESG compliant so that they are suitable candidates for collaboration.

Concluding, Dolan says: “If they’re not there yet as a partner, we like to go on a journey with them and get them where they need to be. In the grander scheme of things, we are a small organisation, and we deal with lots of other small organisations, particularly in the FinTech space.

“There’s an old Irish saying: ‘A rising tide lifts all boats’,” she says. “We don’t want to penalise suppliers for ESG transgressions, but instead educate them to ensure they’re compliant with sustainability regulations and our ethos.

“It's really important we take a partnership approach to helping people in our supply chain, to help them understand how we can help each other for mutual benefit.”

Inflation bites: Consumer finance trends

WRITTEN BY: JOANNA ENGLAND

When a recession hits, consumers are the frontline victims when it comes to financial challenges

As inflation rises globally and the cost of living crunch hits consumers hard, financial service providers are essential in easing the burden and helping their customers stay financially solvent.

We spoke to a range of experts about expected changes in the space, and how fintechs and regulators are altering services to protect consumers.

Inflation and the customer

According to the most recent report from the Bureau of Labour Statistics, as detailed by Pew Research , the yearly inflation rate in May 2022 was 8.6% and at its highest level since 1981, as measured by the Consumer Price Index. Since then, it has risen further still, crippling companies and consumers alike.

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TOM VOADEN STRATEGIC PARTNERSHIPS LEAD, BR-DGE

Fintechs are responding to the global crisis, which has seen household expenses and energy costs spiral – thus wiping out large amounts of disposable income.

“In response to the growing cost of living challenges that our customers are facing and to keep up with changing customer demand, we are working with our lenders to scale our product offering significantly,” says Joanne Robinson, Director of Lenders at the UK auto finance fintech Zuto.

“We’re reviewing our products to make sure we have choices, a range of options for customers with different circumstances –including PCP, personal loans, refinancing products, and Hire Purchase options available over a longer term.”

But are these actions enough to curb the potential spending crash and subsequent depression that may occur?

Neil Kadagathur, Co-Founder and CEO of the UK fintech lender Creditspring, believes the cost of living crisis has led to increased scrutiny on financial services firms from the regulator to ensure that consumers are treated fairly and protected.

PAYMENT SOLUTIONS We welcome the incoming regulation in the UK and other markets as a necessary means to protect consumers

He says an increased focus on the impact to customers should be welcomed by the industry. “The financial services sector has a duty to protect customers, especially in the current financial landscape. Lenders, for example, have long had a poor reputation amongst borrowers – four in ten (43%) people believe lenders encourage them to take out more money than they can afford and

PAYMENT

SOLUTIONS

fewer than one in five (17%) see lenders as responsible businesses that care about their financial wellbeing.”

A result of this is, as he points out, that more responsible and ethical business models are emerging across the industry to meet the demands of borrowers and ensure they are protected.

Kadagathur believes financial services firms are increasingly embracing technology to not only improve the customer experience and boost efficiencies, but also to ensure that vulnerable customers are treated fairly and are better supported. “Utilising technology such as open banking allows firms to more accurately assess the suitability of a product and tailor it to someone’s needs. For lenders, this means being able to more accurately measure affordability and even adapt repayment options based on someone’s current financial situation, enabling them to provide more tailored support to borrowers.”

BNPL and the credit slump

Buy Now, Pay Later services thrived during 2020 and 2021, as a boom in online shopping and embedded finance-facilitated retailers during the pandemic. But, in recent months, trouble has brewed in this superscaling financial sector as valuations among leading BNPL providers, which swelled ten-fold over COVID-19, tumbled back to prepandemic levels.

The problems have been caused by rising inflation and interest rates, as well as customers who are now struggling to pay off the instalment debts they accrued during more plentiful times.

Keith Serdon, Chief Commercial Officer at Mollie, explains: “Whether it’s direct debit, debit card or credit card payments, consumers are not always in a position to pay for goods upfront and in full – particularly

KEITH SERDON CHIEF COMMERCIAL OFFICER, MOLLIE

as we face a prospective recession and economic strain following the pandemic.

“As a result, we’ve seen the rise of Buy Now, Pay Later (BNPL) growing in both usage and acceptance, particularly with the younger generations who are usually more digitally savvy. The latest analysis predicts that the payment method is expected to grow by 50.5% on an annual basis to reach US$29.9bn in 2022.”

However, as Serdon says, this rise in popularity is also leading to increased regulatory scrutiny for better consumer protection, as some critics dub BNPL as just another avenue for debt. A recent UK report using data from the Citizens Advice Bureau suggests that this is at least partly true, as even as far back as January this year, data showed that at least 30% of UK BNPL customers were struggling to repay the loans.

“

People are looking for payment methods that offer them financial flexibility and allow them to utilise their purchasing power on their terms ”

“Still, BNPL is currently used by millions of people worldwide. People are looking for payment methods that offer them financial flexibility and a way that will allow them to utilise their purchasing power on their terms,” Serdon says.

Tom Voaden, Strategic Partnerships Lead at BR-DGE, agrees. He says demand for BNPL services will continue to grow, but that economic strain is already resulting in tighter lending regulations.

“We expect demand for BNPL to continue to grow as merchants look to meet the evolving needs of consumers and support their customers through these difficult times with different payment methods. However,

The financial services sector has a duty to protect customers , especially in the current financial landscape ”

NEIL KADAGATHUR CO-FOUNDER AND CEO, CREDITSPRING

“

“

Consumers moving fully online and trusting an ecommerce site with their money takes a huge leap of faith ”

JAMES BUTLAND VICE PRESIDENT OF FINANCIAL PARTNERSHIPS, AIRWALLEX

PAYMENT SOLUTIONS

the risks of lending cannot be overlooked and it is becoming more important that consumers are supported. Therefore, we welcome the incoming regulation in the UK and other markets as a necessary means to protect consumers.”

Technology will drive growth, despite downturn

Regardless of the economic climate, experts say technology will be key in continuing to drive growth in the fintech space. The past two years have seen millions more customers embark on digital finance and spending journeys –and many will continue to utilise these services. This is for two main reasons: firstly, because better economic choices can be made online – customers can shop around for the best deals; and, secondly, because the digital transactional space is constantly evolving, payments will become increasingly streamlined and attractive.

When asked what technology will be instrumental in driving the sector’s growth, James Butland, Vice President of Financial Partnerships, Airwallex, responds: “In two words: faster payments. Consumers moving fully online and trusting an ecommerce site with their money takes a huge leap of faith, and, with fraud risks escalating, there is more distrust around digital payments than ever before.”

He continues: “Given these concerns, switching to a faster payments solution will actually help to assure businesses, consumers, and suppliers. Faster payments mean that money arrives at the destination before the question of ‘where is my money?’ arises, which ultimately improves consumer trust.”

Butland adds that, given the global nature of most businesses, innovation around technology – which enables faster, or even real-time, payments – will continue driving growth in the sector. “It will also change the global economy for the better, introducing lower cost, more certainty and even greater transparency.”

How low-code composition transformed lender Pepper

has

composition WRITTEN BY: ALEX CLERE

PRODUCED BY: JOE PALLISER

You can get the measure of a man from the way he describes his work. When Steven Meek, CIO of Pepper Money, talks to us from the firm’s state-of-the-art headquarters in Sydney, Australia, it’s well past the end of the working day. Many of his colleagues are heading home and a well-meaning cleaner is hoovering the sparse office. Still, Meek is brimming with enthusiasm about the role he has, describing his job as if it were an honour and not a vocation.

“It’s brilliant,” he says. “I feel privileged to be leading a very talented team, working on digital transformation, data and analytics, and core technology services and solutions. I’ve been fortunate throughout my career to have worked in multiple industries, from IT services and consumer goods to investment banking, helping all of the businesses I’ve worked for through periods of major change.”

That description is no less applicable to Pepper Money, which Meek joined in 2021. Founded in 2000, the lender began with mortgages, focusing on customers who couldn’t access finance through traditional means – whether that’s because they have an imperfect credit history, unpredictable income patterns or a life event that changed their financial circumstances. For more than two decades, Pepper Money has gradually ramped up its lending solutions with new propositions spanning homes, cars, electric vehicles (EVs), equipment, asset financing, commercial real estate, and personal loans.

Pepper Money's rise over the last 22 years is underpinned by its partnership with low-code platform Appian, plus its adoption of automation technologies

STEVEN MEEK

TITLE: CHIEF INFORMATION OFFICER

INDUSTRY: FINANCIAL SERVICES

LOCATION: SYDNEY, AUSTRALIA

Steven joined Pepper Money in 2021 as Chief Information Officer and brings more than 20 years of diverse experience leveraging technology to drive business growth, operational performance, customer experience and innovation in dynamic, complex organisations including Macquarie Group and Coca-Cola Amatil.

Prior to Pepper Money, Steven led the global digital and technology transformation of Macquarie Group’s Principal Investing and Capital Solutions business and was previously the Head of Digital & Emerging Technologies for Coca-Cola Amatil.

Steven is a strategic business partner who combines divergent thinking, product and service development, data insights, and digital solution delivery to create positive results for customers and business performance.

“As a business, we have industry leading turnaround times, innovative technology that has been established over many years, and a team of more than 1,000 people that have helped 327,000 customers from all walks of life,” Meek says. “We're now one of the largest and most trusted non-bank lenders in Australia and New Zealand.”

Incumbent, off-the-shelf solutions weren’t working

Underpinning Pepper Money’s ascent is the fact that, to an extent, it has avoided some of the legacy issues that blight incumbent lenders – partly because, as a relatively young and agile organisation, it has managed to limit its exposure to legacy technology. Today, 90% of its digital architecture flows through cloud and SaaS platforms, ensuring it strikes a balance between resilience, agility and cost efficiency. Every lender is trying to make that application experience faster and more seamless, Meek explains, but success still depends heavily on manual processes for many.

“Our digitisation journey took off in 2018 when it was clear we were facing an increasingly digital and competitive market,”

Year founded

Number of employees

How low-code composition has transformed lender Pepper Money

Meek says. “We recognised early that our incumbent, off-the-shelf lending solutions needed a rethink. Strategically reviewing our digital architecture and unpacking all our frontand back-office processes has been a major focus. As part of this, we made the decision in 2019 to shift towards composable, lowcode digital solutions to rapidly transform our origination channels and increase the level of innovation across the employee and customer experience.”

Among the new capabilities invested in, Pepper Money partnered with Appian, the US-based software company, to completely reimagine its digital architecture. The digital asset finance origination platform that it built, Solana, has led to a 70% increase in business volumes and brings Pepper’s proprietary credit decisioning capabilities to the foreground, using AI-driven analytics to achieve automated approval.

“ We recognised early that our incumbent, off-the-shelf lending solutions needed a rethink. They were inflexible and they weren't responsive enough for a growing and diversifying lending business”

STEVEN MEEK CHIEF INFORMATION OFFICER, PEPPER MONEY

Delivering simplicity, agility, and competitive advantage worldwide.

Across the global financial services industry, Appian is bringing technology and innovation together. Appian is driving measurable business transformation, enabling organizations to become more agile and respond faster to market changes while reducing costs and managing risk.

Application development made 10 times faster: the Appian way

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Appian’s low-code platform lets companies build applications 10 times quicker; for Pepper Money, it meant a mortgage broker platform built in three months.

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rapidly; the resulting applications can be duplicated across other product lines or geographies while remaining easy to integrate with existing ecosystem partners or SaaS components.

Appian proud of its ‘amazing’ partnership with Pepper Money

Sed mauris felis, suscipit eget ultricies quis, facilisis in lorem. Aenean pretium mollis commodo. Duis in efficitur nunc. Quisque rhoncus ac lectus sed vulputate. Aliquam ac faucibus urna. Nullam molestie, sem at accumsan eleifend, velit nunc euismod sapien, sed dapibus purus nunc ut leo. Donec elementum orci mi, sed facilisis.

Rick Browne, Regional Vice President Financial Services APJ for Appian, quips.

That first-hand experience gives him a unique insight into the pains endured by financial service providers. Browne started his career in North America before spending seven years in Latin America, four years in Europe and the last 12 years in Singapore.

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“Appian is an application platform that allows you to do a very complex thing in a simple way,” Browne explains deftly. The low-code platform lets businesses build powerful applications quickly and on an enterprise scale. The business works closely with a wide breadth of financial partners including large banks, capital markets firms, insurance companies and lenders. “We build applications 10 times faster than traditional ways,” Browne tells us. This means that Appian’s partners can scale

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Among its most significant partnerships is the work Appian has done with Pepper Money, the largest non-bank lender in Australia and New Zealand. “The things we’re doing with them today are market-leading.”

First name Last name Title, Company

By opting for Appian, Pepper Money were able to build a new mortgage broker lending application for New Zealand, going from concept to production – in a market where they’d never had a presence before – in just three months.

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Appian’s success has brought growth of about 35% a year; in Asia Pacific, it is doubling that growth rate annually. “We’re looking at a fire hose of growth,” Browne predicts. “As we manage this tremendous growth, a big priority is also retaining our great culture. Clients know we have the best platform, but they also know we have the best people. So we’re looking for the best people to be part of Appian.”

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I wish I’d known about Appian when I was the CEO of a fintech

“Our incumbent solutions were hosted on premises, they were inflexible, and subsequently they weren't responsive enough for the changing needs of a rapidly growing and diversifying lending business,” Meek recalls.

“We needed something that could move at pace and that had all the benefits of cloud-only elastic scalability and security. We wanted something that could enable a marketplace of accelerator solutions, that enabled us to tap into innovation much faster than we could achieve internally. All these factors and the global scale Appian was able

to bring contributed to the partnership we enjoy with them today.”

Pepper Money reaping benefits of low-code composition

For Pepper Money, the advantages of lowcode platforms are fourfold. The first advantage is obvious: low-code builders allow companies to drastically reduce their speed-to-market, which, in Pepper Money’s case, is the time that a consumer is waiting for approval. Nobody applies for credit so they can experience delays and rejection, so making quick and informed credit decisions is vital.

Appian also gives the lender seamless integration with existing infrastructure, because by getting that right, Pepper Money is able to coordinate complicated workflows involving many systems without exposing those systems directly to the endcustomer or employee.

“Once again, the key is in the simplicity of use,” Meek adds. “The Appian building blocks and accelerator components mean that we can realise speed to market without having to build from scratch.

“The last advantage is what we call talent resilience, and to be honest we haven't

unlocked the full potential of this yet. We recognise the longer-term benefit for lowcode is to enable citizen development, where teams across the business with basic IT and coding knowledge can build applications, workflows and processes in minutes.”

Innovation sits at the heart of Pepper Money’s culture

In today’s world, where consumers and businesses alike must grapple with spiralling food and fuel prices, lenders have a more central role than ever. Innovation is paramount if lenders like Pepper Money are to keep pace with their customers’ needs.

STEVEN MEEK CHIEF INFORMATION OFFICER, PEPPER MONEY

“Everyone in the lending industry wants to make the application experience fast, simple and frictionless but, for many lenders, this still depends heavily on manual processes”

STEVEN MEEK CHIEF INFORMATION OFFICER, PEPPER MONEY

Meek explains: “Like many economies around the world, the combined effect of rising inflation and rising interest rates means our customers, brokers and introducers are facing a period of uncertainty. It's a critical time right now for people to have peace of mind, fast turnaround on decisions and flexible loan options. From a digital and technology perspective, that means speed to decision, access to self-service options, transparency right across the digital journey and more automation for our people internally – they're all crucial right now to help our customers with those challenges.”

As an example, he points to the average approval rates for Pepper Money loans reported last financial year: an impressive 85% of all mortgage applications are approved in less than one day, and 42% of asset finance loans are auto-approved –made possible by Pepper fully embracing automation technologies. Rather than resting on its laurels, the lender is continuing to explore new uses for technology and realising new efficiencies as a result.

“Our continued investment in technology innovations – like intelligent

document scanning, digital signatures, biometrics, automated valuations, digital income verification, and things like AI-driven analytics for our credit assessors – will continue enabling us to evolve our products and serve customers into the future.”

From a front-end perspective, that means benefits for Pepper Money’s customers as well. With its digital self-service platform, they can easily see their payout figure, download statements, and control payments in one place. There is also a set of personalised communications that keep them informed throughout their credit journey.

Working towards a clear vision of the future

As Pepper Money continues to scale and thrive, it will seek out new potential to add value. For example, when it comes to electric vehicle finance, Pepper Money has recently

Pepper Money’s team of more than

1,000+ people, has helped 327,000+ customers from all walks of life.

People come to Pepper for a purpose. It's about the broader value we can deliver for them and the service we offer, more than solely just a rate and the credit”

partnered with Evie Networks to offer customers that finance their EV with Pepper Money a public charging subscription package for 12 months at no cost.

“People come to Pepper for a purpose,” Meek says. “It's more about the broader value we can deliver for them and the service we offer, more than solely just a rate and the credit”.

“We're going to continue to invest in technology as the backbone of our business process management, origination, servicing, customer care and corporate capabilities. We want our customers, brokers and introducers to have a fast and frictionless experience, and we want our employees to have the same. They need to trust the data they're working with, and they need to

STEVEN MEEK CHIEF INFORMATION OFFICER, PEPPER MONEY

feel enabled in successfully navigating our increasingly digitalised processes. The lowcode and cloud-first platforms we use are fundamental in continuing to ensure we can scale efficiently as a business well into the future.”

“Over the next 12-18 months we’re focused on unlocking all the continued innovation opportunities available, ranging from tapping into Open Finance to enable new services and more seamless customer experiences, to rapidly expanding our use of automated identity verification, and continued real-time analytics integration that enables our people to have the insights required at their fingertips that drive pricing, product, and customer decisions faster than ever before.”

Clearly, the proof will be in the customer experience. Beyond transparent pricing and a range of products that resonate with them, the main thing applicants want from lenders during the application process is a rapid decision and a clear rationale for whatever that decision may be. Pepper Money has already served 327,000 customers; now it hopes that its roadmap for the future will enable it to empower even more customers to succeed.

“Our continued investment in technology innovations will keep enabling us to evolve our products and serve customers well into the future”

ROUTE TO IPO

WRITTEN BY: ALEX CLERE

There’s little doubt that current economic conditions are having an effect on planned IPOs. Against the backdrop of spiralling inflation, mass layoffs and tumbling valuations, many fintechs appear to be reevaluating their attitude towards going public. The result is a string of cancelled or delayed IPOs.

Fintech downturn leading to cancelled IPOs

Payments giant Stripe was supposedly planning to go public at some point this year but that prospect is looking diminishingly likely. Last November, Stripe Co-founder and President John Collison admitted that an IPO was “not an imminent event”, while this summer he admitted that he “did not know” whether the firm could still justify its US$95bn valuation.

Stripe probably doesn’t need the money, raising the prospect of a direct listing instead of an IPO. The fintech secured US$600mn in a Series H round last March (the same round that gave it that US$95bn valuation) and followed it up with a venture round in June 2021.

Zopa, the British digital bank, was also expected to go public by the end of this year but appears to have put those plans on hold. “We will just have to wait for when the markets are in the right place,” Zopa CEO Jaidev Janardana told CNBC at Money20/20. “You only want to do an IPO once, so we want to make sure we pick the right moment.”

AN INITIAL PUBLIC OFFERING (IPO) IS A LANDMARK MOMENT IN ANY LARGE FINTECH’S GROWTH JOURNEY – BUT CURRENT MARKET CONDITIONS CAST DOUBT ON SOME PLANNED IPOS

Avoid the Top 5 Most

Open Source

Within

Likewise, South Korean fintech Viva Republica – the owner of financial app Toss – is pushing its planned IPO back by two or three years, while BNPL company Klarna seems a long way from a public listing after seeing US$40bn wiped off its valuation.

For some companies, the time is still right for an IPO. PensionBee, which lets consumers consolidate their old pensions into a single plan, had always planned on becoming a publicly traded company. After a period of rapid growth, that moment came in April 2021 during the pandemic –and the timing may have been a blessing rather than a curse.

“Our IPO ran mostly like clockwork,” PensionBee CEO Romi Savova tells FinTech Magazine. “We underwent the entire IPO process during lockdown, which in some ways was beneficial given people’s focus, availability and the efficiency that we could achieve. We were able to use video conferencing with great effect to connect with our team of advisors, often on an hourly basis, and to meet any new investors virtually to introduce them to our story.”

“ALL COMPANIES WITH A VISION TO BECOME PUBLIC SHOULD ACT LIKE A PUBLIC COMPANY LONG BEFORE THEY ARE ONE”

ROMI SAVOVA CEO, PENSIONBEE

When is the right time for a firm to go public?

“High-growth and pre-IPO phases are major stress tests for any company,” says Tony Tiscornia, Chief Financial Officer at business spend management platform Coupa. “An uncertain market environment like we’re seeing now doesn’t help.”

The current circumstances certainly raise the question of when an IPO is right, and for whom. Going public is a sizeable longterm commitment that shouldn’t be seen as a shortcut to extra funding, nor an exit for early-stage investors.

“It’s important for companies to remember that the initial costs of going public can be high, in addition to ongoing costs relating to compliance, reporting and disclosure requirements,” says PensionBee’s Romi Savova. “The extra scrutiny from regulators and investors once public also means that any company pursuing an IPO

must be able to put an effective long-term communication strategy in place.

“If the motivations surrounding an IPO are purely to access capital, options such as private capital or debt financing could be better alternatives. Similarly, if the desire for an IPO is to achieve an exit for early

TONY TISCORNIA CFO, COUPA

“FOR THOSE COMPANIES THAT HAVE DELAYED AN IPO, NOW IS THE OPPORTUNE TIME TO DIGITISE BACK-OFFICE FUNCTIONS”

COUPA

investors, there are private sale options. A merger or acquisition can also produce an exit event with the added benefit of combining complementary skills and knowledge from separate businesses.”

According to research carried out by Coupa, a large number of fast-

growing businesses are delaying IPOs because of the current circumstances. Coupa found that nearly three in four high-growth businesses (72%) believe their financial processes are not robust and scalable enough to support their plans for growth. The firm claims that postponements to IPOs offer the perfect opportunity for a business to reassess and resolve issues that it might otherwise have taken full-speed into a public listing.

“For those companies that have delayed an IPO, now is the opportune time to digitise backoffice functions,” says Coupa’s Tony Tiscornia. “This will not only instil confidence in financial operations and compliance in advance of being ready to list, but also ease the burden of increased scrutiny once they become public.”

Nearly three in four high-growth businesses believe their financial processes are not robust and scalable enough to support their plans for growth.

Advice for fintechs working towards an IPO

PensionBee’s Romi Savova has some firsthand advice for fintechs considering a public listing: “The process requirements are fairly well known and the reasons for seeking the listing should be clearly articulated and well understood,” Savova says. “Every company will go through an assessment process to ensure that all the core areas that are essential to the listing process are prepared in advance.

“The process is inevitably intense because the Stock Exchange has high standards for businesses that are listed, and the highest degree of diligence needs to

be taken in everything that you do. For any other business considering going down this route, it’s important to bear in mind that it’s a big time commitment, in addition to a future commitment to being very public and transparent about everything you are doing.”

Savova says that startups should plan early and understand their strategic reasons for going public, as well as making the decision about what jurisdiction to list in.

“For us, the UK made perfect sense as it reflects both where we operate and where all of our customers are based, and it was

the logical listing venue in the context of inviting our customers to also be a part of our listing. Beyond providing the opportunity to stand out on the highly respected London stage, the UK’s known for being a world-class exchange with high standards of governance, and home to some of the world’s leading technology companies.

“For all companies with a vision to become public, they would be well served to act like a public company long before they are one. Early adoption in company behaviour and mindset, together with an experienced management team and board, helps to ensure a smooth transition without the need for any major cultural shift once the company is listed.

“Lastly, ensuring sufficient management bandwidth is key so that the focus remains on running the business, which continues to be the main priority, especially when being looked at in the spotlight of becoming a listed company.”

“THE INITIAL COSTS OF GOING PUBLIC CAN BE HIGH, IN ADDITION TO ONGOING COSTS RELATING TO COMPLIANCE, REPORTING AND DISCLOSURE REQUIREMENTS”

ROMI SAVOVA CEO, PENSIONBEE

ENABLING BUSINESSES TO ROLL OUT THEIR FINANCIAL SOLUTIONS

126 October 2022 WRITTEN BY: SCOTT BIRCH

PRODUCED BY: JOE PALLISER

Rewind to 1984 and the company that became Masria Digital Payments (MDP) was manufacturing bank cards for the domestic Egypt market. Of course, there was not much in the way of digital back then, with ATMs the most advanced technology that the average customer would interact with. Cash was still very much king.

Fast forward to 2022 and MDP is riding the crest of the digital transformation wave. The company now has a footprint in more than 45 countries, working with 170 banks, and more than 1,200 retailers in the Middle East & North Africa (MENA) region. The rapid transition to digital, accelerated by the COVID-19 pandemic, has seen MDP deliver a staggering 72 million cards in the past three years alone. And with digital payments at the heart of the fintech ecosystem, MDP acts as a catalyst for financial empowerment –providing fintechs with the know-how they need to succeed.

“MDP started out 38 years ago as a consumer card manufacturer. Looking back, the company established several milestones as the first card manufacturer and the leading card issuer with all the major banks in Egypt,” says Ahmed Nafie, CEO at MDP.

Ahmed Nafie, CEO at Masria Digital Payments (MDP), explains how the Egypt-based payments powerhouse has become the first choice for fintechs in MENA

“MDP transitioned to a payments’ infrastructure powerhouse, combining the world of card issuing and processing with advanced APIs that allow card issuers to launch their products seamlessly.”

The MDP journey is a fascinating one, and a classic example of how a business pivots to survive and thrive – something we all became familiar with during the pandemic but a situation MDP faced back in 2011 during Egypt’s revolution.

At the time, MDP had been enjoying success working with the government producing smart cards for public transport, but the revolution changed the economic landscape.

“When the revolution happened, we saw one area of business that was unaffected, which was financial services,” recalls Nafie. “People still needed financial services, so in 2011 we started focusing on the banks.”

Ahmed Nafie, CEO of MDP, on leading fintech solution in MENA

AHMED NAFIE CEO, MASRIA DIGITAL PAYMENTS

MASRIA DIGITAL PAYMENTS

That focus saw MDP broaden its horizons, expanding from just servicing the domestic market to 40 countries today. MDP also became the largest producer of bank cards in Africa. Like all successful companies, MDP did not simply enjoy its market position, but instead looked for new opportunities, and the Next Big Thing.

“We saw a gap in the payment process market in 2017, so we started looking at the idea of doing our own data processing. And that is when MDP was spun off as a separate company dedicated to premium processing – basically allowing banks to issue cards to customers to manage and transact online.”

The next milestone in the MDP story came in 2020, when Nafie realised the potential for fintechs. Even then, he thought that traditional brick-and-mortar banks would be the bedrock of their business, but quickly saw the potential that this new breed of fintech innovators possessed.

“Suddenly, we found a completely new set of companies that really needed our services,” says Nafie. “Before then, our primary business, even on the cards, was for banks. We never projected that small start ups or fintechs would have a growing demand for our digital payments solutions & expertise.”

In the MENA region, MDP is the go-to digital payments partner for the majority of fintechs. Known

AHMED NAFIE

TITLE: CEO

INDUSTRY: FINANCE TECHNOLOGY

LOCATION: EGYPT

Ahmed Nafie, Chief Executive Officer of Masria Digital Payments, has been instrumental in the growth and development of MDP over the years. Having joined the company in its previous form “Masria Card” Nafie took the company from a market base of 4 countries to reach over 37 counties as their Business Development Manager servicing over 127 businesses. With his big picture vision, the company today is one of the largest EMV card suppliers in Egypt and Africa having streamlined processes and applied his astute business acumen in forecasting trends and market need.

In 2019, Ahmed led the transformation of Masria Card to Masria Digital Payments – MDP and brought on the organisation’s digital transformation agenda shaping it into Egypt’s leading payments processor.

Nafie graduated from the American University in Cairo in 2009 with a BSc in Mechanical Engineering and has over the years shared his knowledge through speaking opportunities, trainings, and other networking environments.

Bridging real life to digital.

At BPC, we are bridging real life to digital by equipping our clients with the right technology to create payment services that fit right into the customers’ lives. Real life needs of people who make payments or do business transactions converge into digital services. Is it a traditional card payment, mobile wallet or an instant payment, is it initiated via a mobile, through an agent or embedded into an app via an API? It no longer matters; everyone wants it fast, easy and secure, and not having to think about it.

We have been doing this for 25 years, for more than 350 clients in over 100 countries, using the model that best fits the business objectives – be it in house, managed services or complete outsource.

BPC: Closing the gap in financial inclusion and digital banking in Egypt & the Levant

Creating a connected banking ecosystem is crucial in helping to create better financial inclusion, says BPC COO, Usama Elsayed

Financial services and banking in the Middle East and Levant has undergone massive shifts over the past two years. Usama Elsayed, COO of the global leading fintech company BPC, explains how the transformation is playing out in the MENA region.

With its core philosophy centred on ‘bridging real life to digital banking and payments’, BPC provides banks, processors, fintech’s, transport operators and other ecosystem players with the right technology to create relevant services for their customers.

Egypt is one of the fastest growing payment markets in the region and has a population of 105 million inhabitants. This is more than 25% of the total population of the Middle East and North Africa region. Almost three quarters of the Egyptians are under the age of 40.

“It’s a youthful population,” says Elsayed. “And this means that those people are highly receptive of the digital economy.” He points out that for online commerce, more than 70% of the Egyptian consumers

are shopping more online now than before, since the start of the pandemic.

With an estimated unbanked population of 44 million people in Egypt alone, the task of improving the financial inclusion situation in the region is a challenging one. He explains, “Our motto is bridging real life to digital, and we have always had financial inclusion as a big part of our activities. We create technology for a purpose and we wanted to make an impact on people’s lives.”

New events on the horizon for BPC

BPC has transformed over the years from a payments player there to a digital ecosystem builder and already drives some marketplace initiatives in the Agri sector. The growth and direction of the company in future, will be very much guided by the ever changing demands of the consumer, he says.

Elsayed concludes, “We want to be a force to drive economic growth, people development, and creating win -win ecosystems. You will be able to see us where we feel we can make an impact in the world we live in.”

Learn more

and trusted by Central Banks, MDP is in a unique position to provide a one-stop solution for customer centric payment solutions and has become an enabler of fintechs in the region.

Through their open API card-issuing platform, MDP is powering on-demand delivery startups in the region – disruptors that have boomed in recent years and continue to thrive in developing markets.

“Our focus is to build and invest in the most progressive tools and technology that support the disruptors in the market,” says Nafie. “It is the ease of use and focus on providing seamless customer experiences that will shape the future of payments.”

“FINTECHS NEED TO BE AGILE AND MOVE QUICKLY, SO BEING ABLE TO OFFER THE COMPLETE SOLUTION IS A REAL BENEFIT FOR OUR CUSTOMERS”

AHMED NAFIE CEO, MASRIA DIGITAL PAYMENTS

MDP’s FinTech Enablement Program aims to empower the fintechs of the future, simplifying their digital payments journey that encompasses payments, payout, loyalty, and operational requirements.

By offering a plug-and-play model, MDP makes itself attractive to young startups who need guidance in bringing their ideas to fruition. That is where MDP provides the most value – with its networks, partnerships, and industry know-how.

MDP's solutions have already enabled and powered more than 30 local and

regional fintechs in the area, with success stories encompassing end-to-end digital payment services.

MDP enables enterprises of all sizes to control payment programs and their omni-channel customer experiences. They not only manage the scalable issuing of cards but also the experience when users transact using the card. MDP solutions also include real-time data, fraud protection, analytics and reporting tools that enable companies to access rich data, to empower their customer experiences even further.

The MDP difference

Of course, MDP is not the only player in this market, despite their domination, so what made them rise to the top where others have faltered? What makes MDP better than the competition?

“It's a competitive field,” admits Nafie. “There are players from fast-going startups to legacy pressure – there for 30 or 40

years. Our edge at MDP comes from our customer-centric approach and flexibility to adapt to market needs. Payment processors have traditionally been more rigid and less likely to move at a fast pace similar to startups.

“We realised this very early on: if our customers demanded cards, we were able to deliver at short notice.”

AHMED NAFIE CEO, MASRIA DIGITAL PAYMENTS

Nafie goes on to explain how many of the fintechs they work with appreciate the flexibility and knowledge that comes from MDP’s experience. For instance, a card issued via a startup venture may be redundant just six months later. MDP can anticipate this and be ready to deliver the next generation of solution as and when required.

“At the end of the day, if I have 10 customers, and they're only issuing 1,000 cards each, because I'm being inflexible, then there is no benefit for me,” he says. “But if I actually work much harder for these guys, go the extra mile, and keep changing the product for them, and they enhance their products, suddenly they have a million customers who are making money. This is the bottom line. All I care about is our customer success.”

The second point Nafie is keen to make is the development of MDP’s own APIs –something he describes as the key factor for new digital banks.

MDP has developed an in-house API layer that they are able to manage themselves, without the need to rely on a third party. This allows for greater customisation and using fresh ideas from customers to innovate even further.

The third point of difference that makes MDP stand out from the crowd is the fact it offers turnkey solutions – which is scarce if not unique in the MENA region.

“We have the fulfilment, we have the processing, and we have the APIs,” says Nafie. “So if you want to issue a card, you only need to talk to MDP – no-one else. Everything is in-house.”

“Fintechs need to be agile and move quickly, so being able to offer the complete solution is a real benefit for our customers.”

It is not only the fintech startups that appreciate the full service that MDP can provide – even the central banks turn to MDP as a trusted partner to guide fintech startups through the regulatory processes.

Looking to the future, which countries in MENA offer the greatest potential when it comes to digital payments? The focus previously had very much been on North Africa, but Nafie reveals MDP is looking at Pakistan as a next target market – as it has many similarities to the Egypt market MDP knows so well.

“Pakistan has a very similar landscape to Egypt – a large population, most of them under 25, and tech savvy,” says Nafie. “They have a very advanced central bank which is looking to promote fintech.

“WHEN THE REVOLUTION HAPPENED, WE SAW ONE AREA OF BUSINESS THAT WAS UNAFFECTED, WHICH WAS FINANCIAL SERVICES”

“And this is interesting. We thought initially that some of the central banks would try to support traditional banks and not support fintechs, but that has not been the case in Egypt and Pakistan. This is why we see these two markets as key for the future.”

AHMED NAFIE

CEO, MASRIA DIGITAL PAYMENTS

If understanding the current market and predicting customers’ evolving needs was the first step in the evolution of MDP then the company’s important next step is to scale the business – focusing on payment processing and offering a full suite of solutions that cater to the entire banking and fintech ecosystem.

“We are very clear on what we want to do,” states Nafie. “It’s inevitable for us to get up-close and personal with our clients, our customer-centric approach resulted in sustainable, long-term relationships with key financial institutions and fintechs in the market.

“We are a company that started out as part of a group that has been around for 38 years and we aspire to continue disrupting the market in the MENA region for the next period.”

“MY MAIN GOAL AS MDP’S CEO IS TO FOCUS ON OUR CUSTOMERS’ SUCCESS, WHICH CONTRIBUTES DIRECTLY TO THEIR BUSINESS GROWTH”

Fintech founders

WRITTEN BY: ALEX CLERE

It takes a completely different skill set to run a multi-billion dollar fintech than it does to make a startup successful. That’s why it’s all the more impressive when founder-CEOs remain at the helm, even after many years of growth.

For this month’s Top 10, we’re looking into fintech founders. To keep it fair, we’re only considering founders and co-founders who still lead their business, and we’re excluding crypto or blockchain – we covered that in the August issue. So here they are: the Top 10 founders ranked by market cap with one exception –you’ll find out why when we get to it.

who, having built their business from nothing, have then steered them through

10Eynat Guez

Based in: Israel

Company: Papaya Global Market cap: US$3.7bn

Under normal circumstances, Papaya Global would be an anomalous inclusion in this list. Such is fintech’s gender inequality, the world’s 80-something most valuable fintech is, by our calculations, the largest with a female founder-CEO. Not that this fact detracts from Eynat Guez’s achievements. Along with her two co-founders, she launched Papaya after spotting a technology gap in global payroll. She has transformed it into a trusted partner for over 700 businesses, with US$3bn in payroll under management.

09Henrique Dubugras

Based in: US

Company: Brex Market cap: US$12.3bn

Pedro Franceschi and Henrique Dubugras initially conceived Brex as a VR startup, despite knowing nothing about it. The pair, who had already built and exited a payments company together in Brazil, enrolled in Y Combinator and were soon put back on the right course. Brex’s Brazilian co-founders, who share CEO duties, have built the US-based business into a fintech decacorn that supports startups and new businesses with the financial services they need.

Zach Perret

Based in: US

Company: Plaid Market cap: US$13.4bn

Open banking fintech Plaid has built up a network spanning 12,000 financial institutions across the US, Canada, UK and Europe. It was founded in 2013 by William Hockey and Zach Perret, who continues to lead the business to this day. Perret is rarely pictured without a smile beaming across his face, and for good reason – he has transformed Plaid into a US$13bn business and attracted over US$730mn of investment, earning himself a place inside our top 10.

Chris Britt

Based in: US Company: Chime Market cap: US$25bn

Chime CEO and Co-founder Chris Britt can count himself unlucky to be so far down this list. Although the challenger bank has a valuation of US$25bn, its much-rumoured IPO is likely to rate it more highly. When he launched Chime nearly a decade ago, he had extensive experience in financial services with Visa and Green Dot. So it’s no surprise that he’s built the most popular banking app in the US and attracted US$1.7bn of backing in the process.

Nik Storonsky

Based in: UK

Company: Revolut

Market cap: US$33bn

Revolut’s Russian-born CEO co-founded the business in 2015. As the name suggests, Revolut was designed to revolutionise financial services and has become synonymous with super-app functionality, with features including payments, currency exchange, stocks and shares, and more recently pet insurance. In just seven years, Storonsky has made Revolut one of the most formidable fintechs, raising US$1.7bn in funding and securing a valuation of US$33bn. He is a keen kite surfer, and was a championship swimmer in his youth.

Jack Dorsey

Based in: US

Company: Block Market cap: US$48.1bn

The co-founder of Twitter launched Square alongside Jim McKelvey in 2009, aiming to make it easier for merchants to accept card payments. It originally worked by turning a mobile phone into a card reader, but today it offers both hardware and software solutions for merchants in five major countries. Last year, it changed the name of the holding company, which includes Square and Cash App, to Block. Block has a market cap of US$48bn, although some of that is derived from nonfintech ventures.

Guillaume Pousaz

Based in: UK

Company: Checkout.com

Market cap: US$40bn

Swiss-born Guillaume Pousaz studied mathematics and economics before founding Checkout.com in 2012. In the space of a decade, he has grown it into a fintech giant, raising more than US$1.8bn in funding – the last of which was a US$1bn Series D round in January that secured a US$40bn valuation. For his part, Pousaz is still modest about his fortunes, choosing to fly economy when he travels and giving money to initiatives that improve access to education.

Pieter van der Does

Based in: Netherlands

Company: Adyen

Market cap: US$41.4bn

Adyen was founded in 2006 by a group of entrepreneurs, including Pieter van der Does, who had previously been CCO at Bibit. The Dutchman is a veteran of the payments space, leading Amsterdam-based Adyen to double-digit growth on average every year for the past 15 years. It’s that track record which has propelled Adyen to its most recent US$41bn valuation. The company employs 2,000 people, has offices around the world and processed volume of €500bn in 2021.

David Vélez

Based in: Brazil Company: Nubank Market cap: US$41.5bn

In 2013, frustrated with the state of banking in Brazil, David Vélez decides to build an entirely new financial services startup. He raises US$2mn in seed money from Sequoia Capital and Kaszek Ventures, partnering with co-founders Cristina Junqueira and Edward Wible. Nubank is born. After less than a year in development, the company launches its first product – a no-fee credit card that consumers can manage through an app – before raising another US$15mn from the same investors.

With Vélez at the helm, Nubank goes from strength to strength. It raises around US$400mn between 2015 and 2018, including an investment from Chinese technology company Tencent, and uses the money to roll out new products – a digital savings account, business accounts, insurance products and retail investment options. International expansion is accompanied by another US$400mn raise, this time in the guise of a Series G round, which gives the São Paulo-based business a valuation of over US$40bn.

A BizClik Brand

Patrick Collison

Based in: US Company: Stripe Market cap: US$95bn

Patrick Collison, the CEO and Co-founder of Stripe, set up the company in 2010 with his brother John. But their first business venture together is a world away from this Silicon Valley payments unicorn. Born in rural Ireland, the brothers set up an auction software company called Auctomatic and sell it for US$5mn in 2008. They use the money to fund university degrees, John going to Harvard and older brother Patrick studying mathematics at MIT.

With time to reflect on how difficult it is to set up an online business, the Collisons set out to simplify the process of accepting payments online. They start Stripe before they can finish their studies and it proves successful enough to compel them to drop out. Today, Stripe processes US$600bn in payments every year and is one of the world’s most valuable privately held companies. Patrick Collison continues to lead the company, the most successful founder-CEO of any fintech.