FinTech Magazine - April 2021 by FinTech Magazine

April 2021 | fintechmagazine.com

Zurich: Building brighter futures through insurance

2021’s Angel Investors to watch

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Cybersecurity: Expert insights from: Kaspersky, IBM, PwC, FIS and Van Scoyoc Associates

Going cashless: Are banknotes in danger of extinction? LEARN MORE

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CUSTOMER CENTRICITY João Dias, Chief Digital Officer of NOVO BANCO, on the bank’s customer-led digital transformation

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The FinTech Team EDITOR-IN-CHIEF

WILL GIRLING DEPUTY EDITOR

JOANNA ENGLAND EDITORAL DIRECTOR

SCOTT BIRCH CREATIVE TEAM

OSCAR HATHAWAY SOPHIA FORTE SOPHIE-ANN PINNELL HECTOR PENROSE SAM HUBBARD MIMI GUNN JUSTIN SMITH

PRODUCTION DIRECTORS

GEORGIA ALLEN DANIELA KIANICKOVÁ

VIDEO PRODUCTION MANAGER

MEDIA SALES DIRECTOR

DIGITAL VIDEO PRODUCERS

SALES AND MARKETING DIRECTOR

KIERAN WAITE

OWEN MARTIN PHILLINE VICENTE JENNIFER SMITH

SAM KEMP EVELYN HUANG MATTHEW EVANS TYLER LIVINGSTONE

PRODUCTION EDITOR

DIGITAL MARKETING EXECUTIVE

PRODUCTION MANAGERS

JENNIFER SMITH

EVELYN HOWAT

PROJECT DIRECTORS

JAKE MEGEARY MICHAEL BANYARD JOE PALLISTER

RICHARD TURNER

JASON WESTGATE MANAGING DIRECTOR

LEWIS VAUGHAN

CHIEF OPERATIONS OFFICER

STACY NORMAN PRESIDENT & CEO

GLEN WHITE

EDITORS LETTER

Digital payments are the great equaliser in finance In a recent Top 10, we counted down the countries still most reliant on cash. While it’s clear that some are further ahead than others in their attempts to set up a fully digital economy, it’s still very heartening to observe that innovation is everywhere.

“Alternative payments solutions can unlock inclusion opportunities and empower underserved communities”

FINTECH MAGAZINE IS PUBLISHED BY

In fact, even the country that occupied the top position, Romania, is poised to become a leader on the Eastern European frontier of fintech, with next-gen companies like PayByFace introducing revolutionary biometrics solutions. Other countries like Ukraine, the Philippines, and Vietnam are displaying similar levels of promise. The effects of the COVID-19 pandemic in accelerating the uptake of digital payments cannot be overemphasised, and it is in this regard that a silver lining to the crisis can, perhaps, be glimpsed. Alternative payments solutions can unlock inclusion opportunities and empower underserved communities. Furthermore, as companies focus more intensively online, merchant’s willingness to adopt region-specific transaction methods is likely to also increase. It’s incredible to think that broadening one aspect of finance could impact so much, yet this is the exciting potential for developing economies and unbanked populations. As the disruptors of today become the incumbents of tomorrow, we can’t wait to find out how innovation will play a continuing role in connecting the globe.

WILL GIRLING

william.girling@bizclikmedia.com

fintechmagazine.com

CONTENTS

Our Regular Upfront Section: 8

Big Picture

10 The Brief 12 Global News 14 People Moves 16 Timeline: The birth and rise of UK challenger banks 18 Legend: Jeff Bezos 20 Five Mins With: George Brintalos

24 NFP

Timely digital transformation

Fintech

What does finance cybersecurity look like in 2021?

Banking

How to implement Virtual Account Management (VAM)

Dell Technology

Security in digital transformation

Going cashless: Are banknotes in danger of extinction?

Building brighter futures through insurance

Payment Solutions

Zurich International

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FinTech Magazine is proud to launch a celebration of women in Global FinTech. Brought to you in association with:

A BizClik Media Group Brand

Creating Digital Communities in FinTech

Venture Capital

Does AI equal intelligent investing?

104

Novo Banco

Digital transformation led by customer centricity

120

132

Angel Investors to watch in 2021

Brighter Thinking: Raising growth capital in the TMT market

Top10

Menzies

BIG PICTURE

Africa emerges Africa

Africa looks set become the next, major global fintech hub. In early 2020, figures showed that VC funding for African fintech startups had risen by 51% with capital being generated for virtual banking projects, consumer credit checks and finance apps. Later in the year, reports announced more growth, as new fintechs raised almost $350m during the first quarter of 2020.South Africa led the way with $112m in investments, followed by Nigeria, which raised $74m, Kenya at $62m and Egypt at $51m. Innovation is at the heart of this meteoric rise. The Cape Town-based fintech startup Stitch Money, for example, is helping more enterprises launch with its full access API that connects apps to financial accounts. In February 2021, the company announced its seed round of $4m, making it the largest round raised by any API fintech startup in Africa today.

April 2021

fintechmagazine.com

THE BRIEF “In Western Europe, banks are closing regional branches and removing cash services from a large cohort of their remaining branch network, which will reduce the availability of cash in society”

BY THE NUMBERS FinTech community poll from Linkedin

With some bank branches closing down for good, what is your response?

Kealan Lennon

CEO, CleverCards 

Branches are still superior

“We attracted investment without promising any AI or ML. VCs look for good opportunities” Robert Hartley

ACII and co-founder, Dinghy  READ MORE

“Growing globalisation, organisations that can benefit from this technology” Conor Colleary

Group VP Oracle Financial Services  READ MORE

April 2021

92%

I prefer online banking

39% 46%

of fintech industry deals take place outside the US, the UK, and China

of people exclusively use digital channels to manage their finances

that’s the number of fintech unicorns globally as of February 2021

Did you know Over 50% of Social Fintechs globally are located in Africa. The second and third most popular locations for Social Fintech are North and South America.

 REVOLUT The company reports having 11 million customers, and is adding an estimated 11 thousand accounts a day.

BRANCHES

Why should I care? Because they could go extinct. But bricks and mortar are so yesterday. Really? What happens when the chatbot can’t answer your question? Easy. Banks could implement facetime calls. The human touch doesn’t have to involve a counter person that you visit. You may have a point. However, young account holders often need to visit a branch to complete certain tasks. But fintechs are gaining ground and offering great services, without the need for a physical base. True. So where does that leave branch endangerment? Interestingly, in much the same position. How so? Because digital banks will likely be required to have a physical presence in economically disadvantaged areas… Hah! So they are essential. Knew you’d admit it in the end...

 WALMART Following its investment in fintech and hiring two ex-Goldman Sachs executives, is Walmart poised to capture the finance market?

 BARCLAYS The bank reported a 30% fall in pre-tax profits to £3.1bn for 2020, down from £4.3bn in 2019.

 NATWEST Formerly the Royal Bank of Scotland and still 62% taxpayerowned - Natwest posted a pre-tax loss of £351m and set aside £3.2bn for bad loans.

GOOD TIMES BAD TIMES

 KLARNA Recently secured $10.65bn valuation and will move towards a public listing by 2023.

APR21

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GLOBAL NEWS 2

USA

Finastra goes green Leading fintech Finastra announced its new partnership with Climat First Bank. The collaboration will generate a new full-service eco-friendly and sustainable community bank.

AFRICA

Sub Sahara continent is a new fintech hub Figures show that VC funding for African fintech startups rose by 51% in 2020 with funding being generated for virtual banking projects, consumer credit checks and finance apps.

April 2021

UNITED KINGDOM

New post-brexit visas The UK government has announced that it will be launching a new range of visas specifically for the fintech industry. The move comes following an exodus of talent back to the European continent after some EU nationals were no longer eligible to stay in Britain.

EUROPE

Dutch unicorn invests in payment solutions The Amsterdam-based fintech, Mollie, which has a strong presence in five European fintech hubs, announced it will expand operations to the UK following a new payment solutions demand created by Brexit.

ASIA

Hong Kong’s Citibank debuts new platform Hong Kong’s Citibank has launched Citi Plus, a new banking system aimed at capturing digital natives with its new mobile banking experience. The app is geared towards making sensible money management easier and fun.

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PEOPLE MOVES PETER GERLACH FROM: BOSTON CONSULTING GROUP TO: AMNUS TREASURY SERVICES WAS: SENIOR ADVISOR NOW: M EMBER OF THE BOARD

Gerlach is a well known face on the Swiss Fintech scene. He left Julius Baer after a range of positions including strategic projects for the CEO and sitting on the board of Seba, representing a minority stake the wealth manager bought in the crypto bank three years ago. He joined Boston Consulting Group as a senior adviser last year and this month signed with Amnis Treasury Services where he is on the board of directors.

April 2021

"I am looking forward to joining this exciting company and working together with a great management team!"

CAROLINE STEVENSON FROM: SAINSBURY’S BANK TO: BURGESS PAULL WAS: HEAD OF LEGAL NOW: H EAD OF FINANCIAL SERVICES REGULATORY TEAM

CAREY O’CONNOR KOLAJAH FROM: AU10TIX TO: REVERENCE THEREPEUTICS

Caroline Stevenson is dual qualified to practice law in both Scotish and English law. A graduate of the university of Aberdeen, she also has a degree in French law. She also trained at Semple Fraser and moved to Sainsbury’s Bank in 2013 where she set up the regulatory and products legal team and was accountable for legal sign off on the migration of products for savings, mortgages and loans and for some of the cards migration and the new loans platform. Stevenson has also helped implement pilot technology within UK banks and has assisted with the development of a number of apps for use in the industry.

WAS: CEO NOW: SENIOR VICE PRESIDENT Carey O’Connor Kojala is a fintech and payments thought leader and entrepreneur. Throughout her career, she has been known as an innovator, disrupter and operator who can drive from startup to scale-up. She says, “For 25 years, I’ve explored the intersection of payments, identity and adaptive technologies with great curiosity. It’s my intention that each of these experiences and moments contribute to the creation of a better, safer world, one that is powered by technology, curiosity and purpose.” fintechmagazine.com

TIMELINE THE BIRTH AND

RISE OF UK

CHALLENGER

BANKS 2014

2015-16

2017

The UK's first app-based bank, Atom Bank, which is based in the north of England, broke the UK banking mould and spawned a new industry.

Revolut was second on the scene launching in the UK and was swiftly followed by Monese and Tandem. In 2016, Monzo, launched as ‘Mondo’. Monzo’s founding team met while working at rival fintech Starling Bank. The move spawned tensions between Monzo and their subsequent rival - as Starling Bank emerged as a challenger months later.

Starling Bank joins the flock - the fintech’s launch was delayed so that it could receive its banking licence from regulators before opening for business.

April 2021

2019 A new wave of B2B challenger banks emerge, as tensions in the sector arise due to in-fighting and criticisms. These digital banks took a more focused approach, targeting smaller subsets of customers and offering more streamlined financial products, cross-selling features from the very start to maximise profits. One example is Allica Bank which specialises in business banking for established SMEs. Launched in 2019,

2020-21 Brexit and German bank N26 pulled out of the UK on 15 April 2020, having launched a beta version of its current account to UK customers in October 2018. The challenger blamed the UK's exit from the EU for it’s departure. In 2021, Monese, Revolut and Monzo three of the challenger bank mainstays - have risen through the ranks to become market leaders. Atom Bank is also set to raise £40m from existing investors, and is planning an initial public listing in 2022.

fintechmagazine.com

LEGEND

Jeff

BEZOS W

orth an incredible $182bn, Jeff Bezo’s meteoric rise to uber-wealthy began in 1994 when he founded Amazon. The idea came to him - so the story goes – while he was on a cross country road trip driving from New York to Seattle. Born in Albuquerque, New Mexico to a teenage mother, Jacklyn Gise Jorgensen, and his biological father, Ted Jorgensen, he grew up and went to school in Housten and Miami. Bezos later graduated from Princeton University in 1986 with a degree in electrical engineering and computer science. As a young graduate, started working on Wall Street, and dabbled in several financial and investment sectors until his 1994 road trip epiphany. Bezos married his first wife, MacKenzie Bezos, shortly before Amazon was founded. The couple have three biological children and one daughter, whom they adopted from China. Their marriage broke up in 2019 after 25 years of marriage following news that Bezos was in a relationship with Lauren Sanchez, a TV host and 18

April 2021

10%

Amazon ownership of North American ecommerce

$10bn Amount donated to charity

helicopter pilot who, along with her husband, had been friends with the couple. Despite being classed as one of the world’s richest men, Bezos is a far cry from the archetypal workaholic with nothing else on his mind than the investments of the day. Instead, according to those close to him, he takes life at a relaxed pace, preferring to put his family commitments ahead of any work duties that are pending. A firm advocate of the benefits of a good night’s sleep, Bezos insists on getting eight hours of shut-eye every night and never schedules meetings before lunch, preferring to spend his mornings in a relaxed manner with his family. His hobbies include buying up companies (a recent acquisition was The Washington Post in 2017). Another passion is diving for space treasure. Bezos spends time combing the oceans for discarded NASA rocket ships. Parts of NASA rocket ships detach from space shuttles mid-flight and the boosters are dumped in the oceans. Bezos works with teams in submarines to retrieve the space programme relics. According to reports, he once spent three weeks on a single underwater rocket hunt.

fintechmagazine.com

FIVE MINUTES WITH...

GEORGE BRINTALOS CO-FOUNDER, STORFUND Storfund is a payment solution platform that transfers funds globally and enables users to make easier, swifter and cheaper payments. It currently manages services in over 200 countries and recently launched a new service for Amazon vendors. Q. WHO WAS YOUR CHILDHOOD HERO AND WHY?

» Nikola Tesla. I remember reading about

him in my primary school physics class and really admired him for being an engineer and inventor ahead of his times. A college dropout who emigrated to the US from the Balkans, he made unprecedented strides in electricity and telephony. He was a real futurist, fearless in his drive for prediction and invention and made me want to be a computer engineer.

“ AS KIDS WE DIDN’T HAVE ANY FANCY SUITS OR GEAR, WE WOULD JUST DIVE WITH A SPEAR AND A BIG ROCK TO GET THROUGH THE BUOYANCY” 20

April 2021

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

» Learning how to thrive in volatility. I had

to work to get through high school, college and grad school and had an appetite from early on for identifying opportunities and moving into emerging spaces. Being quick in catching waves and having the patience to wait out storms were skills I improved as an investment banking trader of complex derivatives and which I still value now as a fintech entrepreneur.

Q. WHICH ACTIVITY ARE YOU MOST LOOKING FORWARD TO DOING WHEN THE PANDEMIC IS OVER?

» Free-diving spearfishing. I grew up on

the island of Crete where you learn how to swim before you even start walking. As kids we didn’t have any fancy suits or gear, we would just dive with a spear and a big rock to get through the buoyancy. There is nothing like the deep blue of the Mediterranean and the focus and clarity of mind you get from having to hold your breath for two minutes.

Q. IS THERE A PERSONAL ACHIEVEMENT FROM 2020 OF WHICH YOU ARE PARTICULARLY PROUD?

» I am very proud of putting together

our Storfund team, a group of incredible, creative and motivated folks who care for our client and our product and make our work a real joy. In 2020 we turned an idea on a piece of paper to become a cash flow positive company within its first six months of operation, attracting the attention of traditional banks and closing an

investment round uncommonly large for a company at our stage.

Q. WHAT INSPIRES YOU IN FINTECH TODAY?

» Tech can fix lots of the problems of

traditional banking and finance, ranging from legal and regulatory rigidness to new innovative trading strategies. Not that long ago, opening a bank account would take weeks and a lot of paperwork.

“ NOT THAT LONG AGO, OPENING A BANK ACCOUNT WOULD TAKE WEEKS AND A LOT OF PAPERWORK” Wiring money internationally and in different currencies would take days and cost a lot too. Today this is virtually instant and at a small fraction of the cost. fintechmagazine.com

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Timely digital transformation

WRITTEN BY: JANET BRICE PRODUCED BY: JAKE MEGEARY

April 2021

NFP

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NFP

Agile insurance broker builds vibrant future for global clients with virtual engagement through the pandemic

y definition, insurance is financial protection from uncertainty. The uncertainty of the global pandemic has made businesses and individuals much more risk averse. While our outlook to taking out insurance may have changed due to the effects of COVID-19, NFP’s timely digital transformation has armed their employees to successfully work remotely within the new business landscape and helped them engage with clients around the world. “I think there is now an appreciation for protecting yourself against risks that you may not foresee,” said Mike Goldman, President and Chief Operating Officer of NFP, speaking from their offices in New York City. NFP is regarded as a growth company driven by its ability to attract high-performing firms, expand their community and be a catalyst to elevate value for their clients. It prides itself on having a personal touch and makes it clear they ‘start the conversations that create a more secure future for everyone’. As a leading insurance broker NFP specialises in property and casualty, corporate benefits, retirement and individual solutions and continuously empowers businesses to ‘build from their foundations to grow and flourish’. Founded in 1998 NFP has offices in the United States, Canada, Europe and Puerto Rico with teams specialising in all industries

April 2021

Mike Goldman

NFP

fintechmagazine.com

NFP

Mike Goldman from NFP talks about Insurance Technology

from sports to healthcare and transport. They enable client success through the expertise of their professionals, investments in innovative technologies

“ I think we have an incredibly collaborative environment and people are really focused on getting the best possible results for clients. That’s enabled us to be a very innovative, nimble company” MIKE GOLDMAN

PRESIDENT AND CHIEF OPERATING OFFICER OF NFP

April 2021

and by establishing enduring relationships with highly rated insurers, vendors and financial institutions. A former attorney, Goldman joined NFP in 2001 and served in a number of diverse roles before becoming the head of Mergers & Acquisitions in 2005. He became chief operating officer in 2013, and in 2018 he added president to his title while also taking on NFP's emerging InsurTech/FinTech/ Digital Health Venture Investment Fund, driving the company’s active and deliberate investment in technology. NFP’s philosophy is that innovation starts with inclusivity. While technology brings innovation to life, they think that true innovation brings value to everyday lives by solving problems, enhancing convenience and reducing costs. Timely digital transformation NFP started the digital transformation of the business four to five years ago – which was

NFP

MIKE GOLDMAN TITLE: PRESIDENT AND CHIEF OPERATING OFFICER INDUSTRY: INSURANCE LOCATION: NEW JERSEY

EXECUTIVE BIO

a timely move in light of how the pandemic accelerated remote working practices for their 5,800+ employees. “We feel pretty lucky because a couple of years ago we made some very significant investments on the technology side of the equation,” said Goldman. “We moved all of our operations to a common agency management system and we moved everyone to Salesforce on the front-end of the house, investing a lot in our technology platforms. We moved to a place where we could effectively have our entire workforce go remote without missing a beat. “We were able to put people on Zoom and Microsoft Teams and have them in front of clients even from their homes. It proved to us that you can get stuff done even in remote environments. It showed us that our employees could collaborate and service our clients just as effectively as before,” commented Goldman. “We could also see the real benefit and resulting business value of the systems we'd invested in like Salesforce, and being more forward thinking about where our pipelines were. I do think it helped accelerate some things for us,” he said. “I'm proud of how we have shown a lot of resiliency in the environment. We’re pretty optimistic that as vaccines roll out, we'll be

As President and Chief Operating Officer of NFP, Mike Goldman directs initiatives that empower NFP to strategically expand within an extremely efficient, regionalised operating structure. To ensure NFP offers the most complete services possible to clients, he is involved in bringing in new acquisitions and guiding the integration of their employees and unique skill sets. Goldman, a former attorney, started at NFP in 2001 and served in a number of diverse roles before becoming the head of Mergers & Acquisitions in 2005. He led the company’s emerging InsurTech/FinTech Venture Investment Fund and became President in 2017.

The Digital Future of Insurance Is Now 2020 drove the industry to a turning point where the traditional ways of doing business are in the rear view. The road ahead is built on open technology. Mobilizing operations on the go. Taking you to new customer service destinations. Exploring uncharted business opportunities and operational speeds. Trust Applied to be your technology partner of the future to light a digital path of productivity, simplicity, intelligence and value. Let’s get there together.

appliedsystems.com

Applied Systems: Your indispensable partner of choice

Watch Applied Systems speak about their Partners

Powering the business of insurance through innovative cloud-based software makes Applied Systems a global leader Applied, the leading global provider of cloudbased software that powers the business of insurance, is the indispensable partner of choice for NFP.

Applied is recognised as an innovation leader in insurance automation and is the world’s largest provider of agency and brokerage management systems.

“We’ve been a partner with NFP for more than 10 years - our companies have grown together throughout the US and Canada, said Trevor Bunker, Chief Customer Officer at Applied.

Bunker said independent agencies are attracted to Applied because they offer scale and expertise. “We bring expertise around digital connectivity – gone are the days of closed systems. Independent agents want choice and the flexibility to innovate. Our open architecture provides flexibility and easier access to more quickly integrate third-party applications so independent agencies can be in control of their own tech destiny,” he said.

“We provide that digital ecosystem or digital platform, by which they run their business and help support their customers. Our goal at Applied is to really be that essential partner to customers like NFP, who look out for their customers to help them protect what matters most,” said Bunker. “Our internal mantra is to be an indispensable partner - to be that partner of choice. We strive to be that partner you want to bring into the room every day - we focus on being the easiest company to do business with,” he said. For more than 35 years, Applied has led an industry which they helped to create with a mission to continuously improve the business of insurance. Since 1983, the company has been at the forefront of insurance technology.

Commenting on industry trends, Bunker said today’s customer expectations are driven by big tech – shaped by their experiences interacting with companies such as Google, Uber and social media platforms. “We are helping our customers continue to stay ahead of those innovation curves,” he said.

Learn more now

NFP

getting back to a more normal environment. When you look at what played out in 2020, which entailed a lot of risks for people, the value of the services and the products we provide really stood out in this environment and helped protect our clients and enable them hopefully to get through this,” he said. Goldman pointed out that NFP found themselves advising clients on an increased array of services than what they were doing before the pandemic. “We held seminars around availing yourself of small business loans, addressing cyber vulnerabilities, proactively supporting employee well-being, creating policies for employees working from home and other challenges and opportunities emerging from the pandemic. We felt we had the ability to introduce experts to our clients and help them navigate through this environment.

“ We moved to a place where we could effectively have our entire workforce go remote without missing a beat” MIKE GOLDMAN

PRESIDENT AND CHIEF OPERATING OFFICER OF NFP

“I think that the biggest message is if you're thoughtful about protecting yourself and your business against risks – and you take a long-term view – even when there are bumps in the road like we hit this past year, you'll get to the other side of them stronger than how you went into them,” he said. Innovation and venture Goldman said NFP formed both an innovation lab and a venture fund to stay informed 32

April 2021

NFP

1998

Company Founded

5,800+ Number of employees

270+

Offices across the United States

40+

International offices

Transactions with total acquired earnings making it the biggest year in NFP history – highlights included NFP’s Rose and Kiernan acquisition and the Fiduciary Investment Advisors acquisition (FIA)

DiMeo

DiMeo and Associates (an owned NFP company) to recently rebranded Fiducient Advisors

fintechmagazine.com

Excellence through technology As a Microsoft Gold Partner, Maureen Data Systems (MDS) aims to digitally transform businesses with the use of cloud infrastructure, security, data analytics, and managed services. MDS is a woman—owned business, embracing a culture of inclusivity, diversity, and consistent learning.

LEARN MORE

NFP

NFP—You’re Only Human

and play an active role in solving client problems with innovative solutions. “The thought process behind that was there were so many new technologies coming to market and things that frankly we thought could be advantageous from a client perspective,” he said. “We really wanted to be thoughtful, consistent and deliberate about how we evaluated opportunities. We wanted to have a central place to funnel ideas, evaluate them and make decisions about supporting them and promoting them to our clients.” This led to NFP investing in Indio – a company that simplifies the insurance application process to make it fast, collaborative and easy for the client to use. “We rolled out Indio across many of our offices in the fall,” said Goldman, who pointed out that NFP’s philosophy is to invest in companies that add real value

and create solutions that will be helpful to clients’ businesses. “We were able to help them drive to a much more positive result and it ultimately ended up in a very successful acquisition for them. That's just one example, but what really differentiates us is our ability to solve the holistic problem of how our clients interact with insurance carriers and how data is exchanged throughout that process,” he said. Goldman pointed out the insurance and financial services industry has tended to lag behind in the introduction of new technology citing how onerous the manually intensive process to acquire life insurance was in the past. “The goal and the expectation is that you get better and you improve and you make it more seamless for people. That's really how we've been thinking about things and fintechmagazine.com

NFP

Technology as a problem solver Goldman pointed out that during NFP’s digital transformation the impetus was put on how technology should be used to solve problems and make the insurance buying process easier for clients. “We did decide to move all of our own information to the cloud because we thought it was a much more nimble kind of process. We continue to have a flexible environment around technology so we can plug things in or out as they become better for us and for our clients. It’s been our philosophy to be as flexible as we can with technology because the pace of change isn’t slowing down,” commented Goldman “We’ve been very fortunate to work with a number of companies that share our views on what it means to be a good partner and provide leading technical solutions. Applied Systems, which provides insurance agency management software, Mitel on the cloud VoiP telecom front, Maureen Data Systems (MDS) and Motifworks on our cloud infrastructure and application strategy –

how we can expedite that process and make it much easier. If that involves making investments or getting behind solutions, coming to market and helping show the insurance carriers why those solutions are better, then we can be a real expediter in that process,” said Goldman. “Our clients are able to look back and learn from their own data and get it in a digestible way that can inform decisions that impact their business. Our perspective is that we are the advisor and we have a unique vantage point in really seeing and improving the full chain of that process.”

“ I think when you look at what played out this year, which entailed a lot of risks for people, I think the value of the services and the products that we provide really stood out in this environment” MIKE GOLDMAN

PRESIDENT AND CHIEF OPERATING OFFICER OF NFP

fintechmagazine.com

NFP

“ I think we have a unique vantage point in really seeing the full chain of that process” MIKE GOLDMAN

PRESIDENT AND CHIEF OPERATING OFFICER OF NFP

April 2021

these stand out as organisations who see every interaction as a collaboration. They listen and work really hard to earn and maintain trust, and it shows in their results.” Competitive advantage NFP has the advantage of being an agile private company, giving them a competitive advantage. “We've had a consistent investment group that's been with us since 2013 and wants to continue with us. They understand

NFP

our business, they understand our strategic vision, and frankly, they allow us to execute with little to no distractions,” said Goldman. “We were a public company for a long time and I think most public company leaders would agree that there are plenty of distractions – we just don't have those now.” Goldman stressed that NFP also stands out from its competitors due to the fact the company has an engaging culture and listens to its employees.

DID YOU KNOW...

HOW NFP MAKES THE DIFFERENCE • People-first culture driven by recognition, community, well-being, development and inclusion • Open and transparent communication with a willingness to listen to new ideas • Proactive collaboration that inspires the celebration of all successes • Team-driven sales enablement based on where the industry is headed, not where it’s been • Consistent recognition as one of the best places to work in insurance • An integration process that minimises business disruption and maximises value • A global network of expertise and solutions across business lines and industries • “What if” innovation connecting problems with solutions to enhance outcomes for clients • An agile, growing brand defined by deep relationships, expertise and community • Sales growth potential supported by national buying power and operational efficiency • Continue to advance D&I within our business, our industry and the communities we serve, making focused efforts to attract, support and grow diverse talent while educating and building awareness throughout our workforce so we can create a more inclusive workplace for everyone. Robust technology makes it easier and more secure for our clients to do business.

fintechmagazine.com

NFP

“The level of engagement and passion that our people have for serving clients and for supporting each other is really great. I think we have an incredibly collaborative environment and people are really focused on getting the best possible results for clients. That has enabled us to be a very innovative, nimble company.” Goldman outlined the key challenges posed by the pandemic from remote working to welcoming new employees who have to embrace the NFP culture over a Microsoft Teams meeting. “We continue to operate in a somewhat unnatural environment and everyone is still, for most aspects of their work life, working remotely. “The challenge is really to continue to keep people engaged and focused. You

Supporting your remote and hybrid workforce. LEARN MORE mitel.com

April 2021

NFP

have to be very deliberate about what your communications are and make sure that you're communicating frequently with each other because you don't have the ability to just stop by someone’s office or serendipitously run into people in the hall to exchange ideas and thoughts. “You really have to be very proactive in reaching out to people and communicating. We are also consistently bringing new people into the company. So, getting those people up to speed and getting them to feel the culture is just more difficult in this environment,” he said. Importance of collaborations According to Goldman the hallmarks of a great collaborator or partner company is a willingness to share data. “Securely and

efficiently sharing data is a really important part of our evaluation of who to partner with. We ultimately want to be able to use the data that we have for the benefit of our clients,” he said. “If we have a concern the data is going to be held up by somebody else or that there could be any impediments to us being able to analyse and use that data, we'd be hesitant to really partner with somebody like that. If they're solving a problem in the value chain that we think has independent value and they're willing to allow us to use the data for our client's benefit, then I think we feel good about that from a collaboration standpoint.”

fintechmagazine.com

FINTECH

WHAT DOES

FINANCE CYBERSECURITY

LOOK LIKE IN 42

2021?

April 2021

FINTECH

In a special roundtable feature, we explore the state of cybersecurity in finance with experts from Kaspersky, IBM, PwC, FIS and Van Scoyoc Associates

WRITTEN BY: WILL GIRLING

ow seems like just as good a time as any to consider the topic of cybersecurity in financial services. Digital transformation has been on all our minds for a long time, no more so than when COVID-19 made it virtually essential to operating in a ‘new normal’ that’s been sustained for over a year now; but what use is exciting and agile new infrastructure if it isn’t properly protected? In a roundtable with a panel of security, tech and financial services experts, we examine the current status, potential developments, and challenges of modern cybersecurity. Our contributing experts are: David Emm, Principal Security Researcher at Kaspersky; Ian Benson, Partner at PwC and UK Financial Services Cyber Security team lead; Corey Hamilton, Financial Services Sector Partner at IBM Global Security Services; Limor Kessem, Global Executive Security Advisor at IBM Security; Kara Hill, Corporate CIO at FIS and Chair of the American Transaction Processors Coalition (ATPC); and Norma Krayem, VP and Chair of Cybersecurity, Privacy & Digital Innovation at Van Scoyoc Associates, as well as Director of ATPC’s Cyber Council. fintechmagazine.com

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

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FINTECH

In brief: Conclusions from the conversation Aside from the obvious pressures already placed on organisations during the pandemic, our panel highlighted the flourishing trend of remote working as being one of the most obvious factors increasing security vulnerability. New technology introduced to accommodate this and other tech-based changes were also cited. That cyber attacks are only going to increase seemed to be beyond doubt, with banks and crypto exchanges in particular danger if only because they present valuable targets. Side effects of the pandemic like an acceleration towards ‘cashless societies’ have made it all the more important that both consumers and companies are wellversed in cybersecurity best-practice, even if the solutions are simple reapplications of pre-existing measures. The finance sector should steer clear of treating the issue as a purely technological

one, however, as executive-led culture that trickles through an organisation until it reaches the end-user is fundamental. In addition to his answers, Hamilton closed by submitting a plea for everyone to consider security teams on a personal level, particularly in the current environment: “One topic I believe is very important and doesn't receive enough attention is the well-being of security teams. As a leader of a global team, it's now more important than ever to take the time to check on colleagues, figure out what is working from a workplace and team dynamic, and also to inquire about their family and non-work life. Building relationships, rapport and trust will be more critical than ever when it comes to collaborating in a crisis situation.” fintechmagazine.com

FINTECH

Corey Hamilton

Ian Benson

FINANCIAL SERVICES SECTOR PARTNER, IBM GLOBAL SECURITY SERVICES

PARTNER, PWC “I’ve been working in cybersecurity for over 20 years. As a team, we are in the

“I specialise in the financial services industry

enviable position of being able to work with

and am responsible for working with banks and

some of the UK’s most systemically important

other financial institutions around the world to

but also transformative financial institutions,

help identify and address their greatest security

challengers and startups. We help our clients to

risks in order to protect customers, data,

solve cyber security challenges that range from

processes and reputations.”

cloud adoption to the design of security functions

Limor Kessem GLOBAL EXECUTIVE SECURITY ADVISOR, IBM SECURITY “At IBM, I provide counsel to CSOs, CISOs, and

and operations so that they can operate with confidence in a digital world.”

David Emm PRINCIPAL SECURITY RESEARCHER, KASPERSKY

CIOs at the world’s largest corporations and governments on managing cybersecurity risks.

Emm is an expert in security and threat

In addition to being an information security

management solutions. In addition to an extensive

professional, I’m also a podcast host, speaker

cybersecurity background, he has a strong interest

and author.”

in malware, ID theft and the human aspects of

VP AND CHAIR OF CYBERSECURITY, PRIVACY & DIGITAL INNOVATION, VAN SCOYOC ASSOCIATES; AND DIRECTOR OF ATPC’S CYBER COUNCIL

aspects of online security.

Kara Hill CORPORATE CIO, FIS; CHAIR ATPC CYBER COUNCIL

“In 2005, I created one of the first-ever

“I have over 20 years of experience in the

cybersecurity practices at a major international

financial technology Industry, serving in

AmLaw 100 law firm when most practices

executive leadership roles in both cybersecurity

only focused on data security or privacy. I

and risk management for the past 15 years.

specialise in working with owners and operators

As the chair of the council, I partner with

of critical infrastructure on global cyber

Norma Krayem, Executive Director, to set the

risk across technical, policy, regulatory and

multi-year strategy and annual objectives for

compliance issues.

the council.”

April 2021

THE ROUNDTABLE SPEAKERS

Norma Krayem

security, and is a knowledgeable advisor on all

FINTECH

ROUNDTABLE: WHAT DOES FINANCE CYBERSECURITY LOOK LIKE IN 2021? How will the events of 2020 shape financial services’ cybersecurity plans in 2021 and beyond? Corey Hamilton: There’s no doubt that some CISOs (Chief Information Security Officers) and their security programmes received a shock when their budgets became significantly restricted or cut as a result of the pandemic, particularly as companies refocused on digital transformation. In 2021 and beyond, I expect financial services sector (FSS) security programmes to be hyper-focused on their ROI. Limor Kessem: The financial sector suffered a crisis during a very shaky 2020. Alongside change on the political front, financial entities were one of the pillars nations depended on the most for assistance and relief funds. As demands increased during the pandemic, the financial sector had to move its workforce out of offices and branches, relying more heavily and more rapidly on cloud infrastructure in the past 12 months. The rise in digitisation and demand for contactless services are changing the ways we work and how customers will consume services in 2021 and onward. Ian Benson: A shift to home working and accelerated digital transformations are two clear outcomes of the pandemic. Cloud adoption has been key to enabling home working and while this can bring many security and resilience benefits, many of them depend on organisations configuring cloud environments correctly with security built-in. Ransomware attacks continued to grow in prevalence through 2020 and it’s a trend that shows no sign of slowing down. All indications are that organisations will continue to support more flexible working beyond the pandemic,

so security teams need to ensure they are replacing any temporary solutions put in place to deal with this ‘new normal’ with more permanent ones. Kara Hill: Over the past 12 months, I have experienced first-hand how important threat intelligence, threat modeling and information sharing across fintech firms was in 2020. It is critical that cybersecurity plans include significant focus on threat modeling and information sharing in 2021 and beyond so that we can work together to anticipate and plan for new techniques that may be used against us in the future. That’s proving very difficult: banks and cryptocurrency exchanges, for example, seem to be particularly susceptible to cyber hacks. What can they and others do to minimise their attack surface area? Ian Benson: I’m not sure either are inherently more susceptible. Banks and crypto exchanges are both highly attractive targets for attackers due to the large volumes of cash and assets that they process and hold, and criminals always follow the money. For banks to minimise their attack surface area, especially with their large IT estates, fintechmagazine.com

FINTECH

they should have a good understanding of their underlying infrastructure; clear visibility of assets and an ability to manage them effectively and consistently are key foundations for good cyber security. Cryptocurrency exchanges should aim to perform detailed threat modelling against their main business processes, especially around transfer and withdrawal processing. A good strategy is to make sure they do not store more funds than necessary in hot wallets, as well as make it difficult for attackers to infiltrate and approve transactions, even if they are able to acquire a high level of privileged access. Limor Kessem: For-profit cyber criminals are not about to slow down these attacks, take for example a mass-extortion campaign launched in 2020 against more than 100 financial-services companies across the world. The goal for companies should be to continually simplify users' access while more securely adopting web, mobile, IoT and cloud technologies. Metrics should reflect striking a balance between usability and security through the use of risk-based access, single sign-on, integrated access management control, identity federation and mobile multifactor authentication. Norma Krayem: We need to differentiate between banks and cryptocurrency exchanges. Banks will always be targeted by attackers but have robust cyber protections in place to manage and address cyber risk and are heavily regulated to do so. Cryptocurrency exchanges are complicated and vary greatly in who runs them, how they are set up and what types of protections they have in place Cryptocurrency exchanges are top targets and we have seen hackers and nation states successfully steal cryptocurrencies around the world, but they are doing that using the same tools, tactics and procedures we see in aspects of the financial services sector. 48

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Corey Hamilton: I think it really goes back to the fundamentals of strong cyber security hygiene. Many organisations have got new devices coming into their environment, but when was the last time a vulnerability assessment was conducted? Has the organisation reevaluated its patch management policies? Is there an accurate inventory of assets? Have escalated permissions been reviewed across the organisation? These are all important but often overlooked. As we progress towards a cashless society, how can digital wallets be adequately secured? Could we be approaching an era of frequent ‘cyber muggings’? David Emm: COVID-19 has certainly accelerated the shift towards a cashless society. However, it’s important that

FINTECH

consumers take the following steps in order to guard themselves: Protect all devices used for conducting transactions with a comprehensive Internet security product Only use a secure Internet connection for financial transactions Use a password manager to secure the password to your online wallet; or, better still, use a cold (offline/hardware) wallet that encrypts your private keys Consider using multiple accounts – specifically, keeping a separate account for normal transactions – just as you might have current and savings accounts in the real world Limor Kessem: Unfortunately, we are already deep in a ‘cyber muggings’ era. Account takeover fraud rates skyrocketed 282% between Q2 2019 to Q2 2020. Establishing digital identity trust quickly and

transparently after a person logs in to the account can limit the scope of an attack. Ian Benson: Around US$3bn was stolen from blockchain wallets in 2020 (at current values). Many of the same principles for traditional online banking, around maintaining security of personal devices by not clicking on suspicious links or installing untrusted applications, apply here too. Norma Krayem: We do not need to think we will approach an era of frequent ‘cyber muggings,’ but we do need to be clear that everyone who is part of this complicated ecosystem must manage and address cyber risk. That includes the hardware and software providers in the system, the smart phones the digital wallets sit on, the cloud where data is stored and for the users themselves. With all new digital innovation there are risks that must be managed together; we no longer live in a world that can or should separate innovation from managing risk, they are mirror images of each other. Cybersecurity is a systemic risk that will have to be addressed head on so that the benefits of a cashless society (i.e. greater financial inclusion) can be enjoyed. fintechmagazine.com

FINTECH

Corey Hamilton: I believe the strongest control has yet to really make inroads and that is around security education for customers. The most vulnerable are those that leapfrogged the desktop based ‘online banking’ platforms and jumped right into mobile. Cyber criminals are well aware of the lack of focus we as a society have while being mobile, and unfortunately, I don’t expect this to change without some significant focus. What role does automation have in mitigating risk? Which other technologies could form a stronger, more coherent threat response? Norma Krayem: Automation helps standardise protections and focus on machine-speed solutions across a wider swath of the network. At the same time, industry must also focus on not just the tools that exist now, but the new ones that need to be created, too. Attackers can learn quickly how to get around the existing tools and use technology to create new backdoors. SolarWinds is an example of an attacker that methodically learned which tools and

systems were used to protect networks and then used those same structures against the US government and the private sector. Cybersecurity is an enterprise risk management issue; it must constantly change and adapt to the threat environment. Corey Hamilton: Poorly tuned security platforms, instead of focusing on the highest risk and greatest ROI, are often geared towards ‘low hanging fruit’ or quick wins that are of lower concern. At IBM, we have introduced a Cloud Pak for Security (CP4S) as many customers have a vast array of tools and technologies already deployed. However, they lacked a single pane of glass that covers threat intelligence, event monitoring, and automation across today’s on premise, hybrid cloud, and multi cloud environments. Ian Benson: Rather than focus on a single technology, what we need to consider is how we can design systems to be resilient and secure within the environment that we expect them to operate. In the same way that we consider financial risks and rewards when launching a new product or working with a new business partner, we should also consider how tech changes can alter an organisation’s risk profile. Automation and orchestration undoubtedly help increase the speed and repeatability of response, but it’s important that we don’t forget the ‘hard basics’ like access control, active directory hygiene, security patching and configuration, and asset management. Finally, is there a cultural barrier to solid cybersecurity? Do stakeholders have an in-depth understanding of the risks inherent to modern finance? Limor Kessem: Cybersecurity needs to become a ‘universal culture’ in every business.

April 2021

FINTECH

Every single person plays a role in securing the enterprise, regardless of whether they employ a security role or not. No other sector is more data rich, digitised, or more targeted by cybercriminals than the financial sector. If there is one thing I think we still stand to get better at, it’s not technology and it’s not the number of tools we have going at one time - it’s collaboration and coming together more than ever. David Emm: I think there’s a very mixed picture here. On the one hand, some of the well-established financial institutions are well-versed in the threats facing this sector. Yet, on the other hand, there are many new financial organisations who have neither the experience nor the expertise in securing their systems. In addition, for obvious reasons, business continuity may be prioritised over security, especially if the organisation has so far not faced major incidents. Ian Benson: A sign of a mature organisation from a security perspective is not when the

CISO is invited to IT strategy meetings, but when they are included as a standing attendee at business strategy meetings and committees at the request of executive committee members. Currently, in many organisations, we are not even at the stage where the former happens consistently. Kara Hill: I don’t see a cultural barrier to solid cybersecurity. I think everyone wants to do what they can to protect themselves. That said, I think there is an important opportunity to increase cybersecurity education for the general public. As consumers, we have become accustomed to fast, low friction, online experiences. We can do more to bring cybersecurity awareness and education to children and adults of all ages. I think classes on cybersecurity and online safety should be offered as part of elementary and high school curriculums, because the more education and awareness we can raise the better protected we will be. fintechmagazine.com

BANKING

HOW TO IMPLEMENT VIRTUAL ACCOUNT MANAGEMENT (VAM) Speaking to Conor Colleary at Oracle, with added comments from Vipul Pal at Deloitte, we explore VAM’s place in modern banking and how to implement it

WRITTEN BY: WILL GIRLING

o say that modern banking processes are ‘complicated’ is an understatement, and the larger or more dispersed a company’s network of cash deposits becomes the problem is exacerbated further. With corporate account architectures soon spiralling into costly and time-consuming labyrinths that necessarily grapple with separate liquidity and regulatory requirements, which are also sometimes managed inefficiently by outdated manual means, it’s clear that the traditional approach to account management isn’t working. As usual, digital technology has provided the answer: Virtual Account Management (VAM). Simplified, VAM works by allocating transactions within a ‘master’ physical

April 2021

BANKING

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Oracle, Virtual Accounts Identifiers

account into several virtual subledgers. The effect is a significantly more comprehensible method for tracking finances in an integrated, seamless and holistic manner, yet also with a firm degree of granular oversight and control over each subledger or ‘virtual account’. This in turn can unlock: • Greater access to funds • More accurate cash forecasting • Liquidity optimisation • Lower cost-of-funding To learn more about the transformative potential of VAM for banking, we spoke with Conor Colleary, Group Vice President of Oracle Financial Services. Working directly with global financial institutions, Colleary helps them develop solutions to maximise their use of data in the digital economy. His résumé also includes prior executive positions at Misys and Thomson Reuters, making him ideally placed to answer our five questions on VAM.

Special thanks also goes to Vipul Pal, Principal at Deloitte Consulting, for his added contributions to our research on this subject.

FINTECH’S FIVE QUESTIONS Before an organisation decides to implement VAM, what considerations should it take into account? Conor Colleary: Historically, Virtual Account Management has been a solution for large corporates who have complex structures of physical bank accounts spread across the globe. With growing globalisation, organisations that can benefit from this technology are no longer defined by their size, but by complexity and the breadth of their business. This might include companies handling payments and collections in various fintechmgazine.com

currencies or managing funds for neweconomy platforms like gig workers and service providers. What do you consider VAM’s main value proposition? Conor Colleary: Banks have started to realise that the traditional VAM techniques of virtual IBANs and reference numbers only address a small portion of corporate challenges relating to receivables management support. The second generation of VAM solutions we are seeing in the market support the deployment of a wide range of banking services that help corporate customers easily access their cash positions and manage working capital at any time. 56

April 2021

For instance, today’s solutions can address additional business propositions for payables and receivables management, in-house banking, and client money management with self-service capabilities. In addition, corporates are looking to combine traditional liquidity management with virtual accounts. This will allow them to build off physical sweeping (including relationships across multiple banks) with realtime cash concentration (via virtual accounts) into hybrid physical and virtual structures. Which technologies enable Oracles’ own VAM solutions? Conor Colleary: Built on Oracle Cloud Infrastructure (OCI) and an adaptable

BANKING

“ With growing globalisation, organisations that can benefit from this technology are no longer defined by their size, but by complexity and the breadth of their business” CONOR COLLEARY

CONOR COLLEARY

GROUP VICE PRESIDENT, ORACLE FINANCIAL SERVICES

TITLE: GROUP VICE PRESIDENT COMPANY: ORACLE FINANCIAL SERVICES

microservices architecture, Oracle Virtual Account Management Cloud Service empowers banks to offer better transaction services, including:

Oracle’s cloud-based offerings allow banks to easily implement a digital solution with minimal implementation times, so that it is possible to focus on a Minimum Viable Product and collaboratively engage with pilot customers to build out an offering.

• Efficient liquidity management • Managing receivables and payables in real-time • In-house banking, and • Client money management.

VIPUL PAL

MEET THE SPEAKERS...

Since corporate clients’ cash flow priorities are constantly changing in the unpredictable global financial environment, these services are critical. Oracle’s modern, componentized solutions allow banks to choose the features that address their precise needs, with both tactical options for faster time-to-market and strategic options for the longer term. When paired with the Oracle Banking Digital Experience, Oracle’s VAM provides clients with self-service capabilities so they can perform the same actions as a banker, such as independently managing liquidity structures, making transactions, and forecasting cash flow. Furthermore, our product is flexible and system-agnostic: capable of integrating with any core banking and payment systems that

TITLE: PRINCIPAL COMPANY: DELOITTE CONSULTING I’m a Principal in Deloitte’s banking and capital markets practice with over 20 years of experience. I help clients address their operating model challenges in the evolving marketplace through digital innovation, new product capabilities and a data-driven approach to profitability enhancement.

fintechmgazine.com

BANKING

Deloitte’s practical guide for adopting VAM Prior to implementing virtual accounts, Deloitte recommends a four-fold strategy to manage variables and expectations for a highly powerful tool: • Assess your objectives thoroughly before beginning • Determine the optimal configuration for virtual account structures • Similarly, virtual account identifier for the organisation must be appropriate • Discuss integration into TMS/ERP (treasury management systems and enterprise resource planning) Vipul Pal adds, “Banks should understand the implications of all aspects of a VAM environment as part of their implementation roadmap and how VAM can enhance their product offering in the market. For example, banks simply looking to use VAM to simplify their internal cash reconciliation operations should also consider extending VAM as a new product/service offering to clients as a means to attract greater deposit balances.”

the bank uses. The cloud VAM solution also ensures high levels of system availability, scalability, performance, and data security. How would you characterize the challenges of implementing VAM? Conor Colleary: As with any financial services project, the integration of a new solution can be complicated. This is particularly true here because VAM interacts with so many areas of a bank, therefore it requires many touchpoints with the bank’s systems. Oracle’s goal has been to follow standard integration models and use industry standard data exchange based on ISO20022 to help ease the integration challenge.

April 2021

BANKING

Describe the effect that VAM could have on the broader banking industry? Conor Colleary: With VAM, corporates stand to reduce cost and complexity and introduce new levels of automation through the alignment of their banking accounts and internal accounting systems. They also benefit from real-time visibility and control of their working capital. Many also centralise their non-core business from subsidiaries to shared service centers and global treasury operations. Banks, in turn, can strengthen customer relationships and generate new revenue streams by offering new services that address corporate customers’ pain points while reducing their own operational costs.

Vipul Pal on the transformative impact of VAM "While VAM has been around for a number of years and adopted in the transaction banking sector, the broader application of virtual accounts across global banks could enable buy-side firms to better manage cash positions in a multi-bank environment. It could also provide improved transparency and controls around client segregated cash and expand capabilities in capital markets functions such as collateral management."

fintechmgazine.com

DELL TECHNOLOGY

April 2021

DELL TECHNOLOGIES

SECURITY IN DIGITAL TRANSFORMATION We hear how security and digital risk management have only become more necessary for digital transformation in 2020 WRITTEN BY: WILLIAM SMITH

n a fast-changing world, the imperative for digital transformation has never been clearer. Effecting that change while managing digital risk and prioritising security requires expert assistance. “Our intention is to be a strategic partner to our customers, an essential technology vendor and a one-stop shop for organisations as they undergo digital transformation,” says Arash Ghazanfari, CTO (UK), Dell Technologies. “Events in 2020 have proven that every business has to become a technology business in order to survive the unique operating environment we find ourselves

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in. The need for digital transformation is stronger now than ever before. We’re finding that our customers have had to accelerate their digital transformation projects to take advantage of the emerging digital economy,” says Ghazanfari. “Our clients have recognised the need to leverage technology to create best-in-class experiences for their customers. Additionally, they need to empower a diverse, and in most cases distributed but connected workforce to collaborate on digital platforms with the ability to create value regardless of where they are. All of this means the amount of value you unlock from your data can fintechmagazine.com

DELL TECHNOLOGY

Digital Transformation Index 2020

directly contribute to your competitive differentiation. It is now more important than ever before to consider your cyber resiliency and enterprise security as a matter of board level priority.” One of the major transformational megatrends is the adoption of cloud, an area in which Dell Technologies specialises as an essential infrastructure provider. “As organisations think about adopting cloud operating models, it’s really important they understand the cost and operational implications of where they place their data,” says Liz Green, Cyber Security Specialist UK, Dell Technologies. “We help our clients to make sure they’re mitigating risks and costs and are able to understand what workloads fit best in the cloud.” The cloud landscape entails many choices, but that needn’t be an issue as Ghazanfari explains. “Businesses are increasingly adopting a multicloud strategy and we help our customers by delivering a consistent software defined enterprise 62

April 2021

architecture, so that workloads can be deployed in the empowered edge, or in existing on-premises and distributed private cloud environments, or in the public cloud ecosystem. Our multicloud strategy delivers a consistent software-defined architecture underpinned by a consistent and platformagnostic operating model helping IT departments deliver consistent value

DELL TECHNOLOGIES

“AS PART OF OUR WORK REDEFINED PROGRAMME, WE FOCUS ON THREE KEY AREAS: PRODUCTIVITY, TRUST, AND SAFETY” LIZ GREEN

CYBER SECURITY SPECIALIST UKI, DELL TECHNOLOGIES

ARASH GHAZANFARI TITLE: CHIEF TECHNOLOGY OFFICER (UK) COMPANY: DELL TECHNOLOGY (UK) INDUSTRY: I NFORMATION TECHNOLOGY AND SERVICES Passionate about transforming great businesses in the digital age, experienced in start-ups and large corporations. Currently serving as a Chief Technology Officer, supporting the overall go to market strategy across the full breadth of the Dell Technologies Ecosystem in the United Kingdom.

EXECUTIVE BIO

added services to their lines of businesses and achieve unparalleled flexibility, control and choice. We believe this is the most optimum approach to maintain the security of and keeping control over application and data supply-chains.” The number of subsectors experiencing digital transformation has led to a security landscape that is something of a headache for companies. “The security market is highly fragmented and there are many point solution providers out there. Historically, businesses have also made tactical and reactive investments in cybersecurity,” says Ghazanfari. “The result is a proliferation of disjointed security controls that don’t necessarily talk to each other - adversely impacting the security posture of the enterprise. The approach that we take within the Dell Technologies ecosystem of capabilities, with VMware technology being at the heart of it all, is to focus on delivering more foundational and proactive security measures by delivering security by design intrinsically within our pre-validated solutions. Building security controls intrinsically into our software defined capabilities reduces the need for bolt-on, threat centric and siloed approach to security.” Among the trends in the transformation

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April 2021

WWT and Dell Technologies: partners in financial security World Wide Technology’s Chris Konrad and Matt Berry on the partnership with Dell Technologies and changing security needs in the financial services space World Wide Technology (WWT) is one of the world’s premier technology solution providers. “Revenues right now are approaching $13bn in 2020, encompassing our digital strategy, innovative technology, as well as supply chain solutions to a variety of different customers in the public and private sectors around the globe,” explains Chris Konrad, Director of Security for WWT’s global business. “We’re hyperfocused on providing secure business outcomes for our global clients,” adds Matt Berry, Principal Security Advisor, Global Financials. “We deliver solutions in the area of data governance and strategy, security platforms and tool operationalisation. We also address AI and ML model security and enterprise security architecture. Regardless of what the challenge is, our goal is to bring together business acumen with a full stack of technical know how to develop solutions that address our customers’ most complex cyber needs.” Security in the financial services space has been made only more necessary by the ongoing challenges around the pandemic and the transition to remote working. “Financial institutions are being forced to deal with their technical debt as non-digital processes are being digitised,” says Berry. “Often these workloads are being moved into cloud environments, for instance.” That shift in technology comes alongside a rise in cyber attacks. “Threat actors are getting smarter, they’re getting more organised and they’re becoming increasingly innovative in their tactics and technologies.” With those challenges in mind, WWT tailors its solutions for customers. “We architect our solutions and services around these business outcomes and offer strong consultancy combined with the technical competency.” WWT’s reputation has led to a strong partnership with Dell Technologies. WWT is a $1bn partner of Dell Technologies’ and their first ever Titanium Black partner. “We’ve leveraged about 25 years of partnership expertise to do everything from designing to testing and delivering best-in-class integrated solutions that really help accelerate digital and security transformation journeys,” says Konrad. “Working

with Dell Technologies ensures that as we speak to our financial services customers, we’re going to have the right technical solutions to offer, regardless of whatever business outcome we’re solving,” adds Berry. The partnership extends to the wider Dell Technologies ecosystem, with WWT having recently secured its largest managed services deal in partnership with Secureworks, a leading Cybersecurity Managed Services provider that is a strategically aligned business within the Dell Technologies portfolio of capabilities. “It’s a three-year programme broken out across 10 different key work streams, with the goal of working with this financial services customer to accelerate their security maturity by the end of next year,” says Berry. WWT also has invested $500mn in an advanced technology centre for clients to try technology before buying, as Konrad explains. “They can do proofs of concept, testing, and validation with the entire Dell technologies portfolio of capabilities. And then we also have a digital Dell desk that we’re able to offer our customers.” Going forward, Berry sees the partnership evolving to continue addressing current trends. “The digital landscape is at war and the commodity that is being fought over is data. Bank accounts are stored in ones and zeros, and proprietary algorithms and financial projections are all digitised and accessible from anywhere on earth - organisations need to know where their data is, at speed and at scale across a very complex ecosystem.” The answer is a focus on data discovery, classification and protection, as well as cloud everywhere security competencies. “Going into the cloud creates additional challenges,” says Berry. “Organisations need flexible security solutions that can adopt a cloud-agnostic approach to security. If you have sensitive data, wherever it is, however it’s stored, it needs to be easy to protect with simplified policies that are applied as code.”

DELL TECHNOLOGY

of security is virtualisation. “We’re seeing big transformations in network security, specifically in virtualising networks,” says Green. “Going from a physical to a software-defined network presents a lot of opportunities for greater levels of visibility and security. Micro-segmentation as an example, is a great way to prevent lateral progression of advanced threats,

LIZ GREEN TITLE: CYBER SECURITY SPECIALIST UK COMPANY: DELL TECHNOLOGY (UK) INDUSTRY: INFORMATION TECHNOLOGY

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Data Protection and Cyber Recovery Strategist helping organizations to safeguard their most important asset, their data. Passionate about helping drive human progress through technology. Enthusiastic technical and financial sales leader that loves to work collaboratively towards common goals to drive positive outcomes for our clients.

April 2021

“GOING FROM A PHYSICAL TO A VIRTUAL NETWORK PRESENTS A LOT OF OPPORTUNITIES FOR GREATER LEVELS OF VISIBILITY AND SECURITY” LIZ GREEN

CYBER SECURITY SPECIALIST UKI, DELL TECHNOLOGIES

DELL TECHNOLOGIES

a common trait seen in modern destructive attack patterns.” The fintech industry has kept up one of the fastest paces of transformation. “Programmability, extensibility and visibility have played a major role in the success of open banking. What’s going to make organisations even more successful down the line is how they secure data and how they make sure that their customers understand how their data is being used and how the data is secured. We’re going to see a huge focus on security and

resilience for the fintech industry, but also as a huge catalyst for change across every sector.” All of this has only been accelerated by the pandemic, which has served to catalyse new approaches and new understanding of security, with Dell Technologies offering a Work Redefined pathway for the new normal. “We’re seeing fundamental shifts in operations, and how we talk to customers and clients in all industries. As part of our Work Redefined programme, we focus on three key areas: productivity, trust, and safety,” says Green. fintechmagazine.com

DELL TECHNOLOGY

April 2021

DELL TECHNOLOGIES

Bearing those tenets in mind allows businesses to thrive, as Ghazanfari explains. “It’s about assessing the risk of adoption of new digital technologies and providing a consumer-like, persona-driven experience

“OUR CUSTOMERS HAVE HAD TO ACCELERATE THEIR DIGITAL TRANSFORMATION PROJECTS TO BE ABLE TO TAKE ADVANTAGE OF THE EMERGING DIGITAL ECONOMY” ARASH GHAZANFARI

CTO (UK), DELL TECHNOLOGIES

that effectively makes the complexities around delivering a digital workspace disappear and enables businesses to focus on delivering business value.” Having that increased awareness of risk can then lead to better outcomes. “Organisations didn’t always have a comprehensive digital strategy. Now, it’s essential that they do. With that comes a need to look at how risk is being mitigated and managed effectively, but this can actually be a really positive thing. The more that we assess and evaluate digital risks, the faster and better organisations can transform digitally.” From this viewpoint, security acts as a catalyst for, rather than a barrier to, innovation. “In order to achieve that outcome, you need to have visibility of your threat landscape and your risk profile,” says Ghazanfari. “We can help our customers understand every aspect of their business architecture so that they have the end-to-end visibility fintechmagazine.com

DELL TECHNOLOGY

“ORGANISATIONS DIDN’T ALWAYS HAVE A COMPREHENSIVE DIGITAL STRATEGY. NOW, IT’S ESSENTIAL THAT THEY DO” ARASH GHAZANFARI CTO (UK), DELL TECHNOLOGIES

April 2021

that they need to maintain and manage risk, and then make calculated decisions around the steps that they need to take towards innovation. Fundamental to all of this is the recognition that we can’t secure the future in the same way we secured the past. Modern applications can have several cross platforms and complex lateral dependencies, a connected digital workspace can and will lead to the erosion

DELL TECHNOLOGIES

of traditional perimeters and a distributed data consumption model. This requires a context centric and unified approach to security transformation.” Dell Technologies will continue to help companies make the most of technology in more flexible ways, as Ghazanfari explains. “We are seeing many businesses value and embrace consumption models. We recognise our customers are looking

at consolidating, simplifying and de-risking their vendor relationships. Our broad ecosystem and open approach, as well as our diverse and inclusive consumption models, has put us in a position to serve the needs of our customers and the unique challenges they face in 2020.”

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April 2021

PAYMENT SOLUTIONS

GOING CASHLESS:

ARE BANKNOTES IN DANGER OF EXTINCTION? The use of cold hard currency is swiftly dwindling in our post pandemic world. But are global digital payment solutions the answer? WRITTEN BY: JOANNA ENGLAND

n 1987, the fabric of payment systems globally began to change. In June of that year, the very first debit cards in the UK – featuring a magnetic strip on the reverse and holographic security features – were introduced by Barclays Bank. By 1993, debit card payment machines in retail were a commonplace feature, and Mastercard launched Maestro – its international debit card. From then on, it's been an increasingly steep slope towards the eradication of cash altogether, prompted by internet shopping, mobile banking, the development of e-wallets and blockchain, and now, the COVID-19 pandemic. Digital payment solutions are faster, safer and (according to the WHO) cleaner than solid currency. Indeed, earlier last year, following the COVID-19 pandemic announcement, the WHO advised the public to wash their hands after handling money. “Banknotes may be spreading the new coronavirus so people should try to use

contactless payments instead,” the World Health Organisation said. Since then, the circulation of cash has fallen dramatically. According to a report from The Bank Of England, in 2019, cash remained an important part of the UK economy, with an estimated 9.3 billion cash payments made that year and 2.1 million people mainly using cash for their daily transactions. The report confirmed that “both the volume and value of cash withdrawn from the ATM network overseen by LINK, a private not-for-profit company run on behalf of its commercial members, were approximately 60% lower in late March 2020 than the same period in 2019. “Cash withdrawals from ATMs increased slowly over subsequent weeks but remain well below previous levels. By the second week of October ATM volumes and values were still about 40% and 30% lower respectively than the previous year.” Critically endangered Kealan Lennon, CEO at CleverCards, a leading fintech that is partnered with Mastercard, says there’s no doubt about the swiftly diminishing circulation of cash. He says, “Cash usage has been declining across the globe in the past decade and that has been accelerated by the COVID pandemic over virus concerns and a shift to online commerce.” fintechmagazine.com

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“ Cash withdrawals... remain well below previous levels. By the second week of October [2020] ATM volumes and values were still about 40% and 30% lower respectively than the previous year.” BANK OF ENGLAND Lennon says that in the past year alone, CleverCards has experienced a 10-fold growth rate – a situation that would be largely unheard of in pre-pandemic times. “In Western Europe, banks are closing regional branches and removing cash services from a large cohort of their remaining branch network, which will reduce the availability of cash in society. In addition, the availability of low cost point of sales terminals and mobile phone point of sale enablement will help small business shift to digital payment acceptance.”

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Some countries are already embracing the cashless society, with Sweden predicted to be ‘proudly’ cash-free by 2023. Currently, according to the Swedish Central Bank, 80% of Swedes use cards, and only 6% of the population still use cash. Lennon says, “I think that the trends in digitally advanced countries like Norway and Sweden illustrate that very low levels of cash usage are possible and the above conditions are broadly met. Within the next decade it is likely that some of the Nordic countries may shift to 100% cashless society.” But these shifts are still in the minority, as cultural climates and banking markets vary greatly between nations. “Certain countries will not go completely cashless for the foreseeable future for cultural reasons, such as low trust in banks and government and a large black market cash economy,” points out Lennon. fintechmagazine.com

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Digital Contactless Payment Solutions

Developing nations are still markedly entrenched in cash usage, often because incumbent banks are undeserving large proportions of the population. While China and South Korea are leading Asia in going cashless, Indonesia and the Philippines economies are heavily dependent on tangible currencies. Indeed, even in developed nations like Portugal, cash is still widely used, mainly because the ATM system is so well developed that it poses stiff competition to digital payment solutions. Blockchain technology And while much is made of the ease and security digital payments provide, implementing such solutions require global cooperation on a global scale. Lennon believes the technology exists for the world to be entirely cashless, but there are still a lot of processes to work through. “Blockchain is a very interesting technology and has potential broad usage 76

April 2021

in financial services from smart contracts to trade settlement and FX transactions,” he says. “However, in order for blockchain to become the future basis of payment

“ In order for blockchain to become the future basis of payment services, central banks across the globe will need to adopt digital currencies and facilitate the creation of a blockchain ecosystem” KEALAN LENNON CEO, CLEVERCARDS

PAYMENT SOLUTIONS

services, central banks across the globe will need to adopt digital currencies and facilitate the creation of a blockchain ecosystem.” Kris Sharma, Finance Sector Lead at Canonical, agrees. He says, “Although blockchain has strengths, which include improved network transparency, traceability and enhanced security, blockchains have often struggled with both speed and scalability.” He explains, “For mainstream adoption, blockchain still has a long way to go and will need the same sort of leaps in innovation that allowed wireless technology to be deployed across society. If blockchain technology is going to be used more widely, new point-of-sale systems that accept cryptocurrencies and are suitable for a variety of transactions may be needed.” Sharma adds, “In the absence of any dominant blockchain technologies, there are still plenty of opportunities for innovators to secure their stake in this vision of a cashless society.” Payment solution trends Lennon points to the fact that there is much diversity to be found in payment-solutionland, and that 2021 will see an impressive upsurge in adoption as consumers become more open to new ideas. He says, “I think mobile wallets will accelerate rapidly in usage as consumers become aware of the no spending limits and security benefits of tokenisation. Multiple reports have revealed a sharp rise in digital wallet payments over the past year and Capgemini expects the trend to continue, with digital wallet adoption to reach four billion people by 2024.” Lennon also believes that convenience and speed are the ultimate motivators, and

Cashless conditions Kealan Lennon, CEO at CleverCards, says, “In order for a society to shift to zero cash payments environment there must be the following conditions: • High societal trust in banks, government and regulators • Effectively 100% mobile phone penetration for ages 15+ • 100% uptime of mobile 3G/4G/5G connectivity and widespread broadband availability • 100% penetration of digital point of sales terminals amongst business and sole traders • Facilitation of elderly and vulnerable people in society • Low tax evasion / black market

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PAYMENT SOLUTIONS

Pros and cons of going cashless CASHLESS PROS Security: Digital payments are safer than actual currency. Today’s payment solutions eliminate the risk of carrying cash. Budgeting: Digital transactions are so well tracked that it’s much easier to keep track of spending habits and put savings measures in place. Accurate: Gone are the days when breaking into a £20 note means the rest has disappeared. Exact payments tend to stop funds from being frittered. Lost cash: An astounding, estimated $62m disappears from the US economy every year due to small change loss – cash that goes down the back of the sofa or is accidentally thrown out. More sustainable: Cold hard cash uses up resources in the minting process. These include paper, copper, nickel, zinc and the manufacturing cost. Additionally, there is the real estate space required for ATM machines to provide access cash. CASHLESS CONS Loss of anonymity: The tracking of digital transactions gives financial institutions, governments and banks far-reaching surveillance capabilities. Data on the flow and liquidity of capital and the purchase decisions people make is information that institutions can use to judge individuals. Underserved communities: Many developing countries have large swathes of the population that are currently classed as unbanked. Although

April 2021

fintechs are addressing these issues by providing services to minorities, going cashless could allow retailers and restaurants to discriminate against segments of the population by upcharging or denying service. Industry losses: Service workers often rely on cash to boost their income, especially in the hospitality industry. Other sectors of society such as undocumented migrants and homeless people who don’t have access to technology, would struggle if cash were to disappear completely. Higher spending: Some studies show that digital payments result in customers spending more, with some credit card facilities encouraging overspending. Cash usage can act as a guardrail to keep people out of debt.

PAYMENT SOLUTIONS

that even industries that haven’t embraced the digital transformation as fully as others, will be forced to rethink their strategies. “Mastercard research shows that 42% of consumers are more likely to stay with an insurer that pays within minutes. As consumer expectations rise, organisations – including the insurance industry – will have to adapt if they are to retain their business.” Sharma predicts great innovations are to come in the digital payments sector – many of which will be launched this year. “Another solution we’ll continue to see grow is connected commerce and in-vehicle payment systems,” he says. “Connected cars will soon have payment mechanisms incorporated and will use saved payment methods for tolls, gas or even

“ Another solution we’ll continue to see grow is connected commerce and in-vehicle payment systems ” KRIS SHARMA

FINANCE SECTOR LEAD, CANONICAL

drive-throughs without the user having to lift a finger. To this effect, frictionless payments will grow exponentially as industries that are less payments-oriented look to incorporate a frictionless payments experience for their customers. Sharma adds, “The mobile Point-of-Sale (or mPOS) market will continue to grow because it enables retailers to speed up the checkout process and reduce queues and lines – critical as society looks to transform in the aftermath of COVID-19.” fintechmagazine.com

ZURICH INTERNATIONAL

Building brighter futures through insurance WRITTEN BY: WILL GIRLING PRODUCED BY: JAKE MEGEARY

April 2021

ZURICH INTERNATIONAL

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ZURICH INTERNATIONAL

April 2021

ZURICH INTERNATIONAL

Peter Huber, CEO, details Zurich International’s digital transformation journey and explains why maintaining a strong customer commitment today is crucial

Peter Huber, CEO, Zurich International

stablished in 1982 as a registered arm of industry heavyweight Zurich Insurance Group, Zurich International has since developed into a bona fide success in its own right. Based on the Isle of Man, with branches also located in Argentina, Bahrain, Hong Kong, Qatar, Singapore, the UAE and a life insurance entity in Luxembourg, the company currently manages approximately US$13bn worth of assets and serves over 600,000 corporate and retail customers worldwide. “I joined Zurich International because it's very multifaceted, very international, and there's a lot of opportunities for growth,” explains Peter Huber, CEO. “I've been with Zurich for a long time, and so I've performed many different roles across multiple locations.” Indeed, Huber’s journey began in 2013 as CEO of Zurich Life Singapore, then running the Zurich business as President Director in Indonesia and subsequently taking on his current role in 2017. Prior to this, he built an impressive résumé of executive experience at several premier global insurance institutions. That Zurich has managed to create a reputation for its diverse portfolio is hardly surprising: now approaching its 150th year, the company has committed itself to reinvention and adaptation throughout all that time, which Huber claims it can afford to do because of strong capitalisation and a customer-centric focus. “We do what we say on the tin and deliver what we promise,” he states. “The insurance industry generally has always been more introverted rather than extroverted, but Zurich has dedicated a lot of its investment fintechmagazine.com

ZURICH INTERNATIONAL

Peter Huber from Zurich International talks about Insurance Technology

towards consumer engagement, always focused on delivering against evolving customer needs.” To this end, the company has also been pursuing maximum transparency by publishing annual life and disability claims payment percentages, which Huber notes have consistently remained >90% for years.

“ I joined Zurich International because it's very multifaceted, very international, and there's a lot of opportunities for growth” PETER HUBER

CEO, ZURICH INTERNATIONAL

April 2021

It has been Zurich’s adherence to portfolio diversity and its culture of support for both customers and employees alike that has seen it weather the COVID-19 pandemic with aplomb. Far from being a time of disruption, the last 12 months have served to reinforce the values that Zurich holds true. These same qualities, Huber claims, will continue to guide it throughout 2021 and beyond, “We’re obviously still living through a health crisis; getting through that will be our first priority, but the second will be to continue our efforts of being a strong partner to customers, employees and distributors alike.” Technology will have a decisive role to play in Zurich’s attainment of this goal. In line with its vision for greater customer engagement with its products and services, the company has developed its Global Business Platforms (GBP) unit. This unit, launched in 2020, aims provide a fully digital and streamlined consumer experience, that

ZURICH INTERNATIONAL

PETER HUBER TITLE: CEO INDUSTRY: INSURANCE LOCATION: ISLE OF MAN Peter Huber is the Chief Executive Officer for Zurich International since 2017. He joined Zurich in 2013 as Chief Executive Officer for Zurich Global Life Singapore. From 2015 he was President Director and CEO of Zurich Topas Life (Indonesia). Peter has over 20 years of industry experience, and joined Zurich from Swiss Reinsurance Company Ltd, where he was Managing Director in the Reinsurance division. Prior to that, he was Regional General Manager, Life & Health for Allianz SE Asia-Pacific. Peter has a Masters degree in commercial law from the University of St. Gallen, Switzerland and in Finance from London Business School. In 2005, he attended the Advanced Management Program at the Harvard Business School.

EXECUTIVE BIO

will deliver new propositions and services through complementary partnerships and channels. At Zurich International, the digital transformation started as a response to fast changing customer expectations as well as regulatory change, mainly in the Middle East. “Crucially, we didn't want to just digitise paper processes, that would be to miss the point entirely. Instead, Zurich looked at processes end-to-end and asked, ‘What is it we’re trying to achieve?’ The answer was an experience that delivers against customers’ needs, is intuitive and engaging.” Inadvertently hastened by the pandemic, which saw the insurance industry embrace digital to maintain continuity, this served to boost Zurich’s transformation of its global business and meet the fast-changing needs of its customers. With regards to its efficacy, Huber reports that Zurich International’s focus on digitisation has proven “very fruitful” so far. “We redesigned the end-to-end process for getting a product quote, how it’s priced, underwritten, and ultimately even the way customers can pay. The results speak for themselves: a process that previously might have taken 20 days from enquiry to receipt of policy has been shortened to potentially three days. “Simple solutions can be enacted instantaneously,” Huber continues, “and our transaction net promoter score, which measures whether our customers would recommend Zurich to their friends and family, has seen a big increase.” Striking the right partnerships that can enable this and future aspects of Zurich’s transformation is paramount, “the future is about being able to connect different partners and solutions within your tech stack.” Cloud, Huber says, cannot be overestimated in terms of its importance to agile and flexible IT infrastructure. Other tools such as 360F’s ‘ProVestment’ use

ZURICH INTERNATIONAL

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GLOBAL BUSINESS PLATFORMS AND LIVEWELL

“ Today, insurance needs to be present wherever customers want it” PETER HUBER

artificial intelligence (AI) to remove human bias from data by processing millions of scenarios in mere seconds and then advising a holistic solution based on the customer’s investment needs. Notably, one of the company’s key partners during this time has been Reinsurance Group of America, Incorporated (RGA). By using RGA’s automated underwriting system, AURA NEXT, Zurich has been streamlining its customer experience even further. “During our medical underwriting, for

DID YOU KNOW...

CEO, ZURICH INTERNATIONAL

The Global Business Platforms unit consists of six entities, including Zurich International itself. One that Zurich International works particularly closely with is LiveWell. Launched in 2020, LiveWell is a global unit that offers mobile health solutions to inspire positive change and provide impactful services that encourage customers to improve their mental, social, financial and physical health. Helene Westerlind, CEO of LiveWell, said, “Our objective is to provide personalised, evidence-led and innovative services and solutions to empower each individual to take charge of their own health and wellbeing, leveraging our digital capabilities to offer them easy access.” Find out more at LiveWell’s website: livewell.zurich.com

fintechmagazine.com

ZURICH INTERNATIONAL

“ Zurich has dedicated a lot of its investment towards consumer engagement, always focused on delivering against evolving customer needs” PETER HUBER

CEO, ZURICH INTERNATIONAL

example, we'll ask some very personal but relevant questions and, depending on how the customer answers, the tool is dynamically

built to add more or fewer questions. It’s a very smooth, interactive process and customer uncertainty has really diminished. This type of innovative, collaborative approach is why Zurich loves working with RGA so much.” Fundamentally, Huber makes it clear that Zurich understands a vital truth about digital transformation: it is only by fusing technology with a culture that businesses can achieve optimal outcomes. Moving towards a fully digital way of thinking has also transformed Zurich’s methodology for product design; whereas before it employed waterfall project management, the company now opts for faster, sprint-driven agile delivery using ‘pods’. “Pods deliver two-week sprints, and in working in this way we’ve become ruthless at prioritising things,” he explains. Essentially, if a pod doesn't deliver its target within the time

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April 2021

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ZURICH INTERNATIONAL

“ We redesigned the end-to-end process for getting a product quote, how it’s priced, underwritten, and ultimately even the way customers can pay” PETER HUBER

CEO, ZURICH INTERNATIONAL

AMAZON PAYMENT SERVICES

CEO STATEMENT

“Zurich International fully appreciates that when ensuring a slick end-to-end process for our customers, a robust payment gateway integrated within our environment is vital. Amazon Payment Services (APS) have proven to be a strong partner and provided us with an effective solution that performs well in terms of security, integration and cost effectiveness. Using APS, our customers can now digitally pay insurance premiums across all our products, in local currencies, without incurring currency conversion fees on their cards. Payment can be made on any day of the month they choose with the highest levels of customer data security.”

Walter Jopp, CEO of Zurich in the Middle East, added: “Partnering with Amazon Payment Services has enabled us to provide a seamless digital payment experience for our customers that offers more payment flexibility while improving data security and optimizing operating costs, ultimately benefitting the end customers. Zurich’s instant life and critical illness insurance solutions, YourLife and YourCare, can now be purchased online in a matter of minutes with absolute peace of mind.”

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ZURICH INTERNATIONAL

1982

Founded in

700+

Number of employees

$100m+

Consistently delivered Business Operating Profit over USD100m over the last 3 years. 90

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period it will be ‘retired’ and Zurich’s focus will shift to another priority. This allows the company to maintain momentum and innovate on a larger scale within a ‘learn-fast’ environment. “Everyone in the insurance industry has been very shy at experimenting. I always remind people, ‘We don't fly planes; we don't do open heart surgery. We don't need perfection, because if something goes wrong it can be fixed easily. Funnily enough, not many things go wrong at all; I guess it’s in Zurich’s DNA to go for getting it right the first time.” What Huber is alluding to is a general change in consumer attitudes, which are now far more tolerant of ongoing

ZURICH INTERNATIONAL

DID YOU KNOW...

ZURICH: SERIOUS ABOUT SUSTAINABILITY Although COVID-19 is still dominating headlines around the world, Zurich is aware that the greatest threat (and insurance’s biggest challenge) remains climate change. Natural disasters caused $76bn worth of insurance losses in 2020, a 40% increase on 2019’s figure. In response to the increasing incidence of weather-related catastrophes, as well as their dedication to build a brighter future, the company has developed a robust policy on sustainability.

“Finding a sustainable business model is so important and we all don't have much time. Zurich is really leading the way and I think it's great to work for a company that has made such a strong commitment to sustainability. The plan itself comes from our Group CEO Mario Greco, who has been very vocal about this for a number of years already. Everyone in our organisation is keen to support it.”

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ZURICH INTERNATIONAL

April 2021

ZURICH INTERNATIONAL

updates and improvement, such as the Android / App Store experience. Bug fixes and improvements are pushed to the users on a daily basis and the acceptance of these has become normal. Gaining a better understanding of customers has allowed Zurich to innovate in a new way, and this is an advantage it intends to use continually. The implications of COVID-19 on service have also reshaped the company’s approach, “We retrained some of our staff to become virtual agents so that we could offer our customers an additional access point to get in touch with us.” Taking his cue from the convenience displayed by e-commerce innovators, Huber’s philosophy is that Zurich’s customers should be able to communicate through any means they see fit, “It's not up to me to tell them, that's the old way of thinking. Today, insurance needs to be present wherever customers want it.” Zurich’s enduring legacy throughout its long history has been to improve the lives of its policyholders and deliver brighter futures for all. Although the method for achieving that ideal may change through the decades, its commitment to positive customer outcomes remains undiminished. It is ultimately Zurich’s culture that Huber identifies as its key

“ Everyone in our organisation is keen to support [sustainability]”

competitive differentiator, an advantage that it carefully directs towards its employees, too. “Throughout the pandemic, Zurich didn't furlough or dismiss people. We paid them as usual, including bonuses, and stood by them. We will continue to do so,” he proudly states. As the ‘new normal’ becomes ever clearer, Zurich International stands ready to use its trademark mix of technology, partnerships and culture to bring customers the cover they desire.

PETER HUBER

CEO, ZURICH INTERNATIONAL fintechmagazine.com

VENTURE CAPITAL

Does AI equal intelligent investing? ARTIFICIAL INTELLIGENCE IS THE NEW BUZZ-PHRASE IN TECHNOLOGY STARTUPS. BUT IS THE KEY TO INVESTMENT SUCCESS? WRITTEN BY: JOANNA ENGLAND

recent report by Forbes heaped damp praise on the trending nature of artificial intelligence (AI) in fintech startups. The gist of the piece was that AI has become so trendy that new businesses are using it to plug their ideas to keen investors, regardless of its value in the venture. AI undoubtedly has a swiftly expanding number of use cases, and is trending for good reason across many sectors. But whether its contribution is the Holy Grail to business success depends greatly on how it is used. Trending technology Despite sounding next-generation, AI is not a new idea. In fact, computing historians would say it's currently enjoying its third wave of popularity. In the first wave, when computers were embryonic, research into AI was mainly government led. A second wave of AI interest emerged in the early 2000s, driven by venture capital and corporate interest. But undoubtedly, this current third wave is the biggest yet, as funding for AI has reached eye-watering

April 2021

VENTURE CAPITAL

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Investor Priorities for 2021 (Episode 1) | SFF 2020

levels and governments (especially in China) have driven the market to new levels of enthusiasm and now, critical interest. Robert Hartley ACII and co-founder at the US-based insurtech Dinghy, says AI is not a prerequisite for VCs considering investing, but that there was a time not long ago when it was viewed as a ticket to raising funds. He explains, “There was a wave a few years back, of everyone saying they were ‘AI/ML/ blockchain’ fintechs and asking for money. Thankfully the noise seems to have dropped, but certainly people were using these terms to try and open doors with investors. “But you won’t attract better investment by doing this. The good investor is the one who buys into your vision and wants to support you. If you dupe them into thinking you have something that you don’t they won’t be a good investor partner.” Today, Hartley believes insurtechs that don’t use AI or ML have just as much of an opportunity with investors as those who

“ MANY INSURERS HAVE TURNED TO DIGITAL TRANSFORMATION TO INCREASE CAPACITY AND STREAMLINE CUSTOMER SERVICE, WITH ARTIFICIAL INTELLIGENCE (AI) SOLUTIONS ONE ASPECT OF THIS SHIFT” DAVID KUHN

INSURANCE SOLUTIONS DIRECTOR, MENDIX

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VENTURE CAPITAL

use the technology. He says, “We attracted investment without promising any AI or ML. VCs look for good opportunities. Insurtech covers a wide range, from parametric triggers, drones for claims handling, B2B platforms etc. that AI / ML are not required. They may be relevant to the solution you are building but you shouldn’t go “keyword stuffing” a deck if you’re not really using it.” He points out that AI cannot add value on its own merit and must be used as part of the bigger picture. “It only adds value if it’s being used correctly. Just having “AI” isn’t a value add on its own.” Marcus Bartram, General Partner of Telstra Ventures agrees, saying “For VCs, regardless of the technology being used, we are ultimately looking for extraordinary entrepreneurs and companies that are solving problems in large existing markets or creating new markets, both of which will drive a return on investment.” He explains, “Many companies that we see claim to be using AI/ML to help promote their 98

April 2021

business. It is the responsibility of the investor to ask good questions and conduct good diligence to figure out if the company is really leveraging AI/ML capabilities or not. Nothing turns an investor off faster than a claim that the entrepreneur can’t stand behind.” However, genuinely innovative applications of the technology are a truly exciting prospect for potential investors, he confirms. “If the problem solving requires crunching through enormous data sets and interpreting this data then there is definitely a place for AI/ML. It can be used to help identify patterns in the data and understand what the data represents.” Fintech sectors under pressure As a sector of fintech, the insurance market has been slow in its transformation to digitised

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AI startup value

platforms. David Kuhn, Insurance Solutions director for Mendix, says AI has never been so badly needed as an increase in claims has ramped up the pressure on an industrywide scale. “Over the last year, the insurance sector has been under increasing pressure with more claims being made than ever before. As the industry is traditionally paper based, this increased demand has been particularly difficult to manage,” he explains. “Many insurers have turned to digital transformation to increase capacity and streamline customer service, with artificial intelligence (AI) solutions one aspect of this shift. AI can be used by insurers to automate customer interactions, reduce operational costs, provide expert assistance, enable predictive customer engagement and improve

Oliver Richards, partner at MMC Ventures, says a large proportion of new companies are still considered valuable by investors even if they don’t utilise AL and ML. “In our State of AI report 2019, we mapped over 1,600 AI startups across Europe and found that 40% did not show evidence of AI being material to the company’s value proposition. Any investor experienced in investing in businesses that are applying AI is going to spot companies overselling their AI capabilities pretty quickly, so I'm not sure how ultimately successful it is.”

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VENTURE CAPITAL

FIVE AI trends for 2021 The use of AI is permeating into an increasing number of vertical solutions within the enterprises. Digital advertising and demand forecasting is now often optimised with AI. This is a trend most experts expect to continue – to a point where most software solutions that use large volumes of data have some element of AI. 1 | Driven Dynamic Operating Models (DDOM) The digital transformation drive in 2020 caught many companies by surprise. COVID-19 will be seen as a significant inflection point in human history, changing human behaviour and perception. Dynamic operating models driven by AI predict crisis points quickly so that companies can react in a dynamic environment and lower the expense of decision making.

2 | Edge intelligence Tough environmental industries such as mining, oil and gas and off-shore operations will benefit from the rise in edge computing. Rugged on-site data centres will manage an increased number of sensors and features to maintain optimum operating ability and maintenance. Real-time data will apply solutions to potential problems before they occur.

3 | Integrated AI-driven microeconomics for financials Many industrial companies are yet to model the microeconomics of engineering operations into their financial outcomes. This situation is likely to change soon because of the highly competitive landscape, constant pricing pressures, and fluctuating demand cycles

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that industrial and engineering enterprises routinely face.

4 | Data analytics in computer vision Computer vision is a discipline of AI that sees computers gain high-level understanding from digital images or videos. From an engineering point of view, it attempts to analyse and automate tasks that the human visual system usually manages. With more than a third of companies globally operating in adaptive growth mode with the work-fromhome directives, this form of AI helps combat workplace disruption.

5 | AI and OEMs Original equipment manufacturers are set to increase their collaborative alliances with Deep Sensor AI partners to improve performance on low-risk decision making operations. Automating processes in as many areas of manufacturing as possible will streamline businesses and improve productivity levels. Edge computing and AI solutions will become commonplace.

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“ IT ONLY ADDS VALUE IF IT’S BEING USED CORRECTLY. JUST HAVING “AI” ISN’T A VALUE ADD ON ITS OWN” ROBERT HARTLEY

ACII AND CO-FOUNDER, DINGHY

productivity, all of which further personalise the customer experience.” Kuhn says the technology is essential because it drives innovation where it is needed most. “This also increases efficiency and gives employees back time that can be spent on tasks that require a human touch, which is really important at this busy time.” However, he points out that guidance is required in terms of selecting the correct solutions. “Companies need the right set of tools and processes to foster this low-cost, high-value experimentation. This is where low-code can save the day. Acting as the glue that keeps these technologies together, low-code enables cross-functional teams of professional developers, citizen developers, and functional staff to easily collaborate and connect multiple applications for end-to-end solutions. This means AI initiatives can get off the ground in a fraction of the time without the need for additional resources.” Startups and AI While startups don’t necessarily require AI to attract investors, there are elements of AI that generate interest from potential

funders. Oliver Richards, partner at MMC Ventures, leads early-stage investments at Seed and Series A and manages a portfolio that includes a range of transformative technology businesses in fintech and B2B enterprise SaaS. He recently led MMC's investments into Yulife, Snowplow, Copper and TreasurySpring and recent investments into his portfolio including Safeguard Global and Peak AI. He says, “The current levels of VC excitement regarding modern AI generally relates to a set of techniques called machine learning (ML), where advances have been rapid and significant. ML is a sub-set of AI, enabling programs to learn through training, instead of being programmed with rules. By processing training data, machine learning systems provide results that improve with experience.” Richards says the attraction of the technology lies in its broad use cases. “ML can be applied to a wide variety of prediction and optimisation challenges, fintechmagazine.com

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from determining the probability of a credit card transaction being fraudulent to predicting when an industrial asset is likely to fail. “From our perspective, VCs should be interested in seeing how AI can be leveraged for different use cases. We’ve invested in a range of businesses applying AI, from decision intelligence (Peak, Signal) to

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predictive maintenance (Senseye) and food box delivery (Gousto). Our view at MMC is that AI is an enabling technology and we are currently investing in the infrastructure and data layers of a typical enterprise technology stack.” However, he says, “AI is certainly not a prerequisite for VCs investing in insurtechs. There are many business models where

“ FROM OUR PERSPECTIVE, VCS SHOULD BE INTERESTED IN SEEING HOW AI CAN BE LEVERAGED FOR DIFFERENT USE CASES” OLIVER RICHARDS PARTNER, MMC VENTURES

the application of AI is not core to the potential success, such as direct-toconsumer insurance brands. AI should only be used when there is a clear prediction or optimisation benefit to be realised.” Despite this, Richards points out that the capabilities driving the current ‘third wave’ of AI in industry, cannot be downplayed, and that by applying ML, fintechs can add value by automating processes, pricing and customer analytics. “The third wave of AI is based on the capabilities of another subset of AI, deep learning. Deep learning effectively works by recreating the mechanism of the brain in software and has unlocked significant new capabilities, particularly in the domains of vision and language such as autonomous vehicles and voice recognition systems in smartphones.” Bartrum agrees, but goes on to say that the continuation of trends have been in motion for years. “Rapid advances in cloud computing and falling costs making it cheaper to store vast amounts of data; advances in AI/ML technology to process and interpret the data; and the rise of opensource platforms such as TensorFlow from Google and DSSTNE from Amazon that reduce the time and effort to build and implement ML systems.” He adds, “These factors have combined to help companies and entrepreneurs tackle problems that were seemingly impossible to solve a decade ago, driving innovation and investment in the fintech and insurtech sectors.” fintechmagazine.com

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Digital Transformation Led by Customer Centricity

WRITTEN BY: JOANNA ENGLAND PRODUCED BY: MICHAEL BANYARD

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João Dias, Chief Digital Officer of NOVO BANCO, discusses how the bank’s customers are vital components in its digital transformation story

Joao Dias

reating a customer-centric banking culture is a priority for Joao Dias, Chief Digital Officer of NOVO BANCO. One of the organisation’s newest leaders, Dias joined NOVO BANCO following a 17-year stint with McKinsey & Company, and has extensive management consulting and business transformation skills. As the Chief Digital Officer, Dias has had the task of orchestrating the digital transformation of NOVO BANCO, and managing new core competencies required to support the effort, such as service design, agile and data science. It’s a task that has been meteoric in terms of changes required, but Dias is quietly confident in the current trajectory. Indeed, he says, NOVO BANCO has seen more innovation, growth and change in 2020 than in any other recent year. “Last year in 2020, was probably the year we have done the most in terms of digital output and innovation – and that was mostly done with remote teams and people working from home. So far we have implemented working practices that allow teams to be very good at collaborating and working together,” Dias says. He believes that by keeping as closely to the pre-pandemic positive work practices and habits as possible, his agile teams at NOVO BANCO have maintained a good sense of camaraderie and working goals. It is this factor that has enabled the bank to innovate, digitally transform and grow, despite the thoroughly challenging situation posed by COVID-19 all over Europe. He explains, “Instead of having physical meetings we are constantly on Teams meetings. The growth fintechmagazine.com

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NOVO BANCO’S Digital Transformation

and innovation has been made possible through discipline – and keeping to the rhythm of the ceremonies that allow us to be agile and adapt. Those are very effective at keeping teams together at a distance with technology.” The process hasn’t been without its challenges, and more continue to arise. But Dias is unflappable in his approach and places a great deal of emphasis on the value of his workforce being comfortable and communicative. “The challenge is to keep that [team camaraderie] going over the long run because at some point, people start losing the social connectivity – which is the social fabric that makes great teams great,” he emphasises. “That’s something we are working on very hard to maintain. “The next issue is incorporating new people into teams. We now have a few new people who have joined the bank and they’ve never had any actual contact with 108

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any other team members. So the onboarding takes a lot of effort to make sure people are well integrated with the organisation.” Customer-centric ecosystem As a leader, Dias believes in transparency and listening to feedback from colleagues, especially those on the front line. In recent months, NOVO BANCO has implemented a number of changes to increase the availability of online banking services, which have been used more during the pandemic. NOVO BANCO’s digital strategy is to reinvent and personalise the key customer journeys for customer excellence, transition to digital channels and automate processes for efficiency, and start exploring new business model opportunities with open banking and ecosystem plays. Core to this strategy is customer centric design. “One of the aspects that is often talked about in digital transformation is to be really customer focussed and centric,” he explains.

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“And it's hard because the understanding of customer needs, jobs to be done, what makes a great experience for customers; all of that requires competencies that are not traditionally in banking. It requires a mindset shift that is at times hard for banking managers and employees. “That is not specific to banking – I think a lot of the incumbent industries have that kind of issue. But it's something we are constantly struggling with and investing in. And we find ourselves getting completely surprised about how some customers pick up on some things.” Nurturing a new mindset towards customer-led banking isn’t easy - but it is the future, says Dias. “Embracing curiosity about what really matters to customers is on one hand really hard – but once you have embraced it, you find it’s really interesting and fulfilling. It's about shaping the solution towards customer experience and benefits – it's one of the aspects that is talked about in a high level manner, but when you go down into the weeds it is really hard. However, it is also one aspect that we are finding particularly fulfilling.”

JOAO DIAS

CHIEF DIGITAL OFFICER, NOVO BANCO

TITLE: CHIEF DIGITAL OFFICER INDUSTRY: BANKING LOCATION: LISBON AREA, PORTUGAL As the Chief Digital Officer of NOVO BANCO since 2018, João is the orchestrator of the Digital Transformation of the bank, working in coordination with all departments across the bank, to transform the way customers are served and the way to work for the digital world. João is also Non-Executive Board Member at Best Bank in Portugal, and previously was a Partner in Digital McKinsey in Cologne and a leader of the Digital Services practice for 17 years. Throughout his career, he focused on transforming businesses, operations and technology in financial institutions across Europe.

EXECUTIVE BIO

“ At NOVO BANCO we are working through a roadmap to transform the top customer journeys – from home buying to financing small businesses and SMEs”

JOAO DIAS

NOVO BANCO

2014

Year Founded

4,500 Number of Employees

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Secure digital services As the world becomes more digitally connected, transformation has meant companies and organisations have had to increase their levels of security to keep customers and data secure. Dias says that banks have invested significantly in technology and processes to prevent cyber-attacks seeking data and malicious disruption; it’s the customer and their security that concerns him the most “We’ve been increasing investments in security to combat these issues. Even before the pandemic, there had been an increase in phishing attacks on customers. These are scams that seek to steal digital banking credentials from users in attempts to move money away from them.

“Our strategy is to have a great mobile-centric, omnichannel banking experience” JOAO DIAS

CHIEF DIGITAL OFFICER, NOVO BANCO

“One of our key role is to support and educate our customers not to be tricked into those types of fraudulent events. We have a lot of communication with our customers and we have ramped up processes internally to deal with that.” “The good thing though is that many new solutions that are emerging are actually making digital banking safer. For example, we are in the process of introducing new, strong customer authentication methods that are more secure than the typical SMS one-time fintechmagazine.com

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LEVERAGING INSIGHTS IN DIGITAL BANKING RETAIL BANKING

SME BANKING

OPEN BANKING

Welcome to a new, more intelligent breed of banking that understands the individual needs of the customer and provides relevant advice. Your relationship banking toolkit, based on smart financial decision-making.

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SUPPORTING NOVO BANCO IN ITS DIGITAL TRANSFORMATION Novo Banco, one of the most innovative banks in the world, chooses Strands to build its award-winning BFM solution, the first of its kind in Portugal.

T PAGE OLD The Challenge

Novo Banco was looking for a technological partner able to provide small business owners with the best digital banking experience in Portugal. The bank performed an in-depth analysis of the SME banking landscape in the country, and realized SMEs were being largely underserved by ﬁnancial institutions. Novo Banco soon realized that the key to position themselves as leaders in the SME banking segment was building a highly personalized and easy-to-use business ﬁnancial management platform. And that’s how its partnership with Strands began.

The Solution Novo Banco’s strategy was based on a thorough assessment of the issues affecting small businesses. These banking customers need a tool that takes the uncertainty out of money management and allows a 360º vision of all bank accounts, aggregating their entire financial picture on one platform. Strands’ business financial management (BFM) solution was embedded into Novo Banco’s digital banking system Nbnetwork+. With this solution, which includes invoicing features and a categorization engine, Novo Banco allows its SME customers to keep track of their financial situation.

A real-time engine was also one of the bank’s top priorities. Novo Banco’s customers’ accounts are automatically updated whenever a transaction is processed. By oﬀering the most up-to-date account information available in one single platform, this feature empowers SMEs to stay on top of their accounts and also helps further protect users from potential fraud.

Strands: Leveraging Insights in Digital Banking As one of the world’s largest providers of innovative banking solutions, Strands’ software, which allows banks to offer personalized digital experiences to their customers, has been implemented in more than 700 financial institutions in 30 countries. Through Strands’ Engager engine, BFM is capable of generating insights. This is incredibly helpful for those companies that require some financial advice. For instance, the solution’s personalized alerts let SMEs know about expected payments, potential liquidity issues, or cash flow forecasts. By combining this technology with features such as a calendar and BFM’s transaction categorization engine, SME owners can easily understand where their money is coming from and where it is going.

Visit strands.com

NOVO BANCO

password. This is an example of innovation that helps make it safer as well as better for user experience. “I think the key message is that banks put a lot of emphasis on keeping customers safe. We put a lot of emphasis on helping them, and on how to deal with these kinds of incidents. This is something people should take away with them. Digital banking is remarkably secure compared to almost anything else that is in people’s lives.”

“ Banks put a lot of emphasis on keeping customers safe” JOAO DIAS

CHIEF DIGITAL OFFICER, NOVO BANCO

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Banking, Portuguese-style One of the most challenging aspects of managing NOVO BANCO’s digital transformation, has been rooted in some cultural traits of the Portuguese society. As Dias explains, in terms of payment solutions and the adoption of online banking, Portugal is behind northern Europe for two reasons. “You have two things that are different from most other countries – specifically with northern European countries,” says Dias. “One is the level of e-commerce in Portugal, which is much lower compared to adoption in the UK, for instance. The pandemic is changing that. E-commerce has increased significantly over the past few months. But whilst people are used to using the internet – and use it as much as in any other European country, when it comes to more sensitive

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areas like online shopping, people don’t have the tradition or the habit.” Dias believes there is a natural suspicion regarding online shopping, because the e-commerce infrastructure is not as developed as it is in other European nations. “For example, if you purchase something online, there is always the risk that it won’t go well, and you’ll have to return it – it’s a hassle. “I used to live in Germany, and it was super easy – you could buy everything online with free delivery and you could return things for free if they were not good. It was easy – and completely normal and most people feel very comfortable with that. “But in Portugal, because the e-commerce market isn’t so developed, it’s a bit more clunky and expensive, and therefore people feel it’s a bit more hazardous. This mindset

has translated into the way people do their banking. Most customers are fine doing basic stuff with their banking apps like transferring money and making small deposits. But when it comes to more complicated features, people shy away from that because they prefer to interact with a human being.” Dias believes that banks can overcome these barriers by creating slick, personalized customer journeys that make complex needs easier to fulfil in an omnichannel way. “At NOVO BANCO we are working through a roadmap to transform the top customer journeys – from home buying to financing small businesses and SMEs. These journeys are being transformed by cross-functional teams that start with the customer needs and have capabilities to change processes and develop technology.” fintechmagazine.com

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How should culture and leadership work together to achieve optimum outcomes? You need to lead people to form a culture of freedom and responsibility so they can achieve their individual objectives in a coordinated fashion that is in harmony with the objectives of the whole company. Can you summarise the major change that increased digitisation will bring to banking? The major change will be around the way we do business. It’s going to become increasingly a technology intermediated business and that will require big changes in the way we organise things and the core competencies that we have.

FOUR KEY QUESTIONS...

What are the traits of a great leader in these uncertain times?

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Be clear about the context, the objectives and the goals. Be caring with people. Be open to what people think and say because they tend to be much closer to customers and their problems, and they tend to know better than we do hich workplace trend originating W from COVID-19 is here to stay? A: Working remotely is here to stay. We will probably go into a hybrid model of colocation, days of the week and remote days of the week. I think that is here to stay.

April 2021

ATM networks Dias also points out that the current ATM network in Portugal is a force to be reckoned with. It’s so convenient for customers, he says, that has turned out to be digital banking’s biggest rival. “We have by far the best ATM network in Europe. It was historically built by a cooperative company that is owned by the banks. It has a lot of functionality. You don’t have to pay anything to use it, you can transfer money, you pay your taxes through it – you can even buy tickets to the opera via the ATM. It does everything – it’s very impressive. “These are things that can be done in any corner of any city in Portugal for free

NOVO BANCO

“ Embracing curiosity about what really matters to customers is on one hand really hard – but once you have embraced it, you find it’s really interesting and fulfilling” JOAO DIAS

CHIEF DIGITAL OFFICER, NOVO BANCO

because there is always an ATM available. We segment our customers around their behaviour regarding digital services. The ATM lovers will go to a terminal eight or nine times a month to carry out basic services. And you talk to them and they say – ‘hey, you know, I was on the way to the coffee shop so I just stopped at the ATM to do my banking, so why do I need an app?’” Dias says that to overcome this bias NOVO BANCO is heavily investing in its mobile app, so that the convenience of the smart phone can surpass the convenience of ATMs. “Our strategy is to have a great mobilecentric, omnichannel banking experience. For this we have just launched a new version of our app – NB smarter, that is extremely intuitive, personalized through extensive use of data science, commercial and co-created with users. We are confident that the increased convenience of this experience will persuade more customers to migrate to digital channels.

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“ We need a leadership style that relies on clarity of context and objectives, and that focuses leaders on supporting and unleashing the teams” JOAO DIAS

CHIEF DIGITAL OFFICER, NOVO BANCO

Cash versus digital But what does this mean for the future of online banking in Portugal, which is at a different stage in online servicing compared to other countries? “Of course it’s changing,” says Dias. “With the pandemic, people prefer not to step out of the house these days. But it's still very prevalent. If you talk to a Portuguese digital banking expert, they will tell you that their biggest competitor is the ATM network.” The result is that cold, hard cash has a wider circulation and use within Portugal, another aspect that sets it apart from other nations. So what does the future look like? “The long-term strategy is similar to other European countries in making digital payment methods more accessible,” says Dias. “We have a very successful peer-topeer in-store payment

acceptance scheme called MB Way and it's very widespread. A lot of people use it and it is helping to reduce levels of cash. Because of digital banking, making payments and doing bank transfers has become so much easier, this has also reduced peer-topeer cash transactions. The EU regulations around interchange fees made the usage of cards much more economical for stores and merchants – so that is helping too.” Dias says that although Portugal offers a unique banking climate, the strategy to transition payments to digital, is the same as it would be for other countries. “NOVO BANCO’s strategy is to make payments convenient and rewarding for people. We have a large small business and SME franchise and we also are giving them lots of options to accept digital payments,” he explains. Technology partnerships The rolling out of new services requires strong partnership support, he points out. “As with all companies, we work with a lot of providers. Strands has a personal finance management and business financial management product that can be white labeled and can be used as a plug and play into our apps and websites. So we’ve been working with them to develop our Personal Finance Management (PFM) and our Business Finance Management (BFM) offerings. And they have been quite important for us on that journey. “Deloitte is another big partner and has been our overarching business partner in terms of digital transformation. There is also a Portuguese fintech/regtech – called LOQR – that has been very important for us.”

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TOP TEN

ANGEL INVESTORS TO WATCH IN 2021

This year looks set to be a major event for fintech globally. We profile the Top 10 angel investors with a penchant for innovative technology WRITTEN BY: JOANNA ENGLAND

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he global fintech market was worth US$127.66bn in 2018, and has a predicted annual growth rate of 25%, which will continue until 2022, to $309.98bn. With such a burgeoning marketplace, the environment for new insurtech startups is fertile and brings with it many new investment opportunities. The term ‘angel investor’ refers to typically high net worth individuals who, in exchange for equity in the company, invest in the early stages of a startup. Angel investors typically require a 20 to 25% return on the money they invest in a company. But Venture Capitalists may take even more, especially if the product is still in development. For example, an investor may want 40% of the business to compensate for the high risk it is taking by investing in a startup. The purpose of an angel investor is also usually a one-time funding injection, and the main focus is on the entrepreneur launching the business and seeing through a brilliant idea, rather than a usual investor who is concerned with long-term business gains.

TOP TEN

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Ty Danco

No. of investments: 125 Capital in: Stitch, Localmind, Crashlytics, Codeship A former two-time Olympian competing as part of the USA winter Olympics Luge team, who later had a career on Wall Street, Ty Danco is used to life in the fast lane. The investor turned entrepreneur has founded two major fintech companies and facilitated an estimated 125 investments to date. Danco was also director of Techstars, an American seed accelerator founded in 2006 in Boulder, Colorado, but now classifies himself as a ‘retired entrepreneur and private investor’. A cancer survivor, he now focuses much of his energy and funds on projects that support the health profession.

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Peter Kellner

No. of investments: 127 Capital in: Social Finance, LearnVest, Beepi, Contactually, Polymorph Peter Kellner is an investor in earlystage technology companies across five continents. He’s also co-founder of Endeavor and has been a Startup lecturer at Princeton University for the last 14 years. A true believer in the power of technology and progress, Kellner has invested in a broad market space throughout his career. His interests lie in clean technology, consumer internet enterprise software, personal finance, e-commerce, mobile commerce, finance technology, financial services and more.

TOP TEN

Scott Banister

No. of investments: 130 Capital in: iLike, Zappos, Wavii, Vamo, Uber, ToutApp, Topsy Labs California resident Scott Banister is an American entrepreneur, angel investor and startup founder. He co-founded the anti-spam company IronPort, and he was also an advisor and board member at PayPal. A technology buff from the get go, Banister started his career as an innovator in the email business. He then became the founder and vice president of technology at ListBot, the largest ASP for business email list hosting. Today, Banister is the co-founder and chairman of Zivity, a social networking site, and was an early investor in Facebook.

Mark Cuban

No. of investments: 138 Capital in: The Mobile 360, Superfeedr, Soundwave, Ranku, Meta Saas Mark Cuban has a net worth of $4.3bn and is an American entrepreneur, media personality, media proprietor, and investor. Cuban also ranked number 177 on the 2020 Forbes 400 list. An entrepreneur and pro sports team owner, Cuban is markedly diverse in his business interests. The bulk of his wealth was generated in the 1990s through the sale of his business startups, Broadcast.com and MicroSolutions. He showed his entrepreneurial spirit, when, at the age of 12, he set up a stall selling refuse waste bags so he could buy a pair of shoes that he liked.

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FinTech Podcast Listen Now Listen Now

TOP TEN

Paul Buchheit

No. of investments: 154

06 Wei Guo

No. of investments: 148 Capital in: tbh, YesGraph, Worklife, VetPronto, Verbling, TalkIQ One of China’s most prolific startup investors, Wei Guo has backed numerous companies through his firm Wei Fund. He later launched Uphonest, his $50m second investment fund. Guo’s exits already include Scout, Chariot, Worklife, Virtroid and tbh. One of his main goals is to help companies globalise their operations. Guo is listed as a Forbes 30 under 30 investor whose portfolio includes startups such as Lime and Boom and several companies based in North America and China.

Capital in: reMail, lvl5, Zesty, Wufoo, Weebly, Virool, URX With an estimated personal fortune of $600m, Paul Buchheit is the American computer engineer and entrepreneur who created Gmail. Bucheit also developed the original prototype of Google AdSense as part of his work on Gmail. Along with three other former Google employees, he then co-founded social network aggregator FriendFeed. He now runs Y Combinator Core and decided to shift his focus towards angel investing following FriendFeeds acquisition by Facebook in 2008.

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No. of investments: 158

No. of investments: 168

Saad AlSogair

Capital in: Abra, Onfleet, Ripple, Skykick Tovala, Wefunder, Spire A graduate from the University of Jordan, who is currently residing in Saudi Arabia, Saad AlSogair is a wellreputed dermatologist, who is also a founder of two startups. In addition to being an angel, he has made more than 150 investments in wellknown startups including Buffer, Unsplash, and Notion. AlSogair continues to practice dermatology and specialises in aesthetics alongside his investment commitments.

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Talmadge O'Neill

Capital in: Abra, 500 Startups, Facebook, Hitch, Linkedin, Mattermark Talmadge O'Neill is currently the general partner at JuvoCapital, a VC firm that has invested more than $40m in both start-ups and late-stage companies. Exits include Facebook, LinkedIn and Tesla Motors. His investments range from startups like LoveIt.com to pre-IPO companies like Chegg and SolarCity. O'Neill also has a particular interest in space travel, digital currency, cryptocurrency and blockchain markets. O'Neill made his fortune after co-founding MeziMedia with fellow investor, Harry Tsao. It operated coupon and comparison-shopping websites and the company’s first website, CouponMountain.com, cost just $10k to launch. Five years later, MeziMedia had a turnover of $100m in revenue and offices in 10 countries, at which point Tsao and O'Neill sold it to Valueclick for $300m.

TOP TEN

Naval Ravikant

No. of investments: 200

Capital in: Vurb, Visually, Uber, Twitter, Trusted, Topguest, Tinychat An Indian American investor and entrepreneur, Naval Ravikant is the co-founder, chairman and former CEO of AngelList. A Fellow of the Edmund Hillary Fellowship, he is also a podcaster who shares advice on pursuing wealth and happiness. Though he is yet to reach billionaire status (his current wealth is estimated at $60m) his key passion is connecting investors and entrepreneurs. Following a short stint as a venture capitalist, Ravikant discovered he enjoyed investing in start-ups the most and found his calling. Since then, he has provided capital to some ultra-prominent companies including Twitter, FourSquare, and SnapLogic. As an investment mentor, one of his best-loved quotes is, “Forty-hour work weeks are a relic of the Industrial Age. Knowledge workers function like athletes — train and sprint, then rest and reassess.”

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42 Questions: How Fabrice Grinda & FJ Labs

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TOP TEN

Fabrice Grinda

No. of investments: 245 Capital in: spotflux, eve Sleep, ecomom, Zesty, Xango.com, WiseStamp Named the number one Angel Investor globally by Forbes, French entrepreneur Fabrice Grinda is classed as a ‘super angel’ with more than 240 investments around the world, including Alibaba Group, Airbnb, Beepi, FanDuel, Palantir, and Windeln. Grinda also has served as CEO for three multinational companies and is currently running the startup studio and venture fund FJ Labs.

Before FJ Labs, Fabrice co-founded OLX, one of the largest classified websites in the world with over 300 million unique visitors per month. The company operates in 30 countries and has over 5,000 employees. He says, “The most important impact on society and the world is the cell phone. Cell phones have actually been one of the primary drivers in productivity improvements.”

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MENZIES

Brighter Thinking: Raising growth capital in the TMT market PRODUCED BY: GLEN WHITE & CAITLYN COLE

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Alexander Duffy, Director of Corporate Finance, discusses the virtues of ‘Brighter Thinking’ for SMEs in a highly challenging market

s the world sets about recovering from the coronavirus crisis, the spotlight is on thriving Technology, Media and Telecommunications (TMT) businesses, many of which rely on thirdparty finance to further their strategic growth plans. Just when access to funding is critical however, the cumulative impact of Brexit and the pandemic has created a perfect storm for the business lending marketplace. While more established TMT companies are shoring up their portfolios and streamlining existing assets, others are facing more significant challenges. From startups seeking initial seed funding, to growing businesses in need of venture capital, it’s become more difficult for innovation-led businesses to access the finance they need to thrive. With many investors sharing a ‘risk off’ approach, there is a chance that businesses seeking funding are left to sink or swim. Under these conditions, businesses need access to a team of trusted professional advisers. They can help by providing guidance and supporting the development of a dynamic business strategy – one that’s capable of weathering today’s challenges and those that might arise in the future. Providing just this type of support, Menzies LLP, is a leading firm of accountancy, business, and financial advisors, with expert knowledge of a variety of market sectors. Its expertise extends from 134

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healthcare and hospitality, to manufacturing and technology, the company’s 400+ advisers are adept at driving company performance. Combining cutting-edge diagnostic tools and good old fashioned people skills, the firm’s experts get under the skin of the businesses they support. To find out more about how Menzies LLP operates and the value it brings, we spoke with Alexander Duffy, the firm’s Corporate Finance Director and Head of its TMT advisory team. He explained that the firm’s brand is rooted in what it calls ‘Brighter Thinking’, which means applying the knowledge and ingenuity of individual experts and their teams to solving real

“I WAS DRAWN TO MENZIES BECAUSE IT REALLY BELIEVES IN THE MANTRA OF BRIGHTER THINKING – IMPROVING OUTCOMES AND HELPING SMES TO SUCCEED, REGARDLESS OF THE CHALLENGES THEY ARE FACING” ALEXANDER DUFFY

DIRECTOR OF CORPORATE FINANCE, MENZIES

MENZIES

Alexander Duffy Director of Corporate Finance, Menzies fintechmagazine.com

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Digital Transformation during the COVID-19 pandemic | Alexander Duffy | Menzies

“MENZIES HELPS COMPANIES CREATE NEW GROWTH STRATEGIES AND IMPLEMENT THEM SUCCESSFULLY. AS WELL AS UNDERSTANDING AND SUPPORTING THEIR GROWTH PLANS, THIS OFTEN INVOLVES STREAMLINING OPERATIONS AND STAYING AHEAD OF COMPETITION” ALEXANDER DUFFY

DIRECTOR OF CORPORATE FINANCE, MENZIES

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world business problems. For the Corporate Finance team, more often than not, this means utilising professional networks and investor relationships to secure growth capital for entrepreneurial TMT businesses. Here’s what he had to say: Can you describe your career path so far? What led you to Menzies? “Before joining the Menzies’ team in 2018, I held managerial roles at RBS and RSM UK, founded Gold Lion Consulting, and was an Associate Director at Waypoint Partners. I was drawn to Menzies because it really believes in the mantra of Brighter Thinking – improving outcomes and helping SMEs to succeed, regardless of the challenges they are facing. “I specialise in advising businesses on raising capital to reach the next level of growth as well as mergers and acquisitions in the TMT market. Supporting entrepreneurial businesses in this way is so important to me: I really believe in it.”

MENZIES

Despite how volatile the post-COVID market is, why is it so important for SMEs to be developing a robust growth strategy at the moment? “Coming from an investment and corporate finance background, I know that if companies don't take action to drive growth and innovate, they will go into decline and lose sales. Maintaining market share and finding a way to build on it has always been important. “Keeping the momentum going, even during tough times, is paramount. However, it’s a mistake to keep operating like nothing has changed. In the past, tech-led companies have struggled to compete with those in other high-profile sectors, such as property, retail or travel. But the pandemic has reversed this relationship as physical spaces lost value while digital markets such as DaaS (Data as a Service), video streaming services and ecommerce platforms saw market demand soar. “Digital tech businesses aren’t constrained by the physical – an attribute which has become all the more advantageous during the pandemic and in the immediate aftermath of Brexit. These businesses tend not to be exposed to the borders or tariffs of physical trade; software-as-a-service (SaaS) doesn't operate within borders per se, so

Revenue

1912

Year founded

400+ Number of employees

TITLE: DIRECTOR OF CORPORATE FINANCE INDUSTRY: ACCOUNTING LOCATION: LONDON Alexander Duffy heads up the TMT division of the Menzies’ Corporate Finance team. Seen as a leader within his field, Alex’s previous TMT experience, both within the UK and internationally, includes: • Corporate Advisory – providing business strategy advice/planning; • Corporate Banking – providing restructuring services; • Corporate Finance – providing capital raising and M&A services; • Financial advisory – providing corporate restructuring and recovery services; and • Investment Banking – providing growth capital and M&A services. Alex also has experience in raising and advising on fundraising amounts of up to £150m.

EXECUTIVE BIO

£43m

ALEXANDER DUFFY

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integrating with these relatively Covid and ‘Brexit-proof’ industries is essential.” It is clear that you’re fully immersed in the TMT ecosystem; you mentioned speaking at tech conferences around the UK. How does this benefit your clients? “I have a passion for technology and if I can assist founders in taking their organisations – or even just a concept – to the next stage, then that feels like a win for everyone involved. It’s not just about running with an idea and becoming successful, it’s also important to translate that into something of value for the rest of society. “It’s no longer enough for an adviser to claim that they have TMT experience. TMT has so many sub-markets and specialisms that you need to understand how they 138

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marry up. You need to know the associations between specific sub-markets and spot opportunities for growth and expansion. “Of course, sectoral experience is incredibly valuable to businesses that might be seeking funding. As well as recognising the immediate needs of the company, the adviser must be able to articulate the bigger picture and the market opportunities that might exist now and in the future. You also need to nurture relationships with investors, so you understand which client propositions will be most attractive to whom.” Do you see a fundamental shift in the investment community? If so, is there any insight and advice for TMT businesses? “In 2020, it was reported that investment in UK tech start-ups was up by a whopping

MENZIES

“KEEPING THE MOMENTUM GOING, EVEN DURING TOUGH TIMES, IS PARAMOUNT. HOWEVER, IT’S A MISTAKE TO KEEP OPERATING LIKE NOTHING HAS CHANGED” ALEXANDER DUFFY

DIRECTOR OF CORPORATE FINANCE, MENZIES

34% between March 23rd and April 27th. The industry has since gone on to achieve record figures, with tech start-ups and scale-ups in the UK now valued at £422.55bn collectively. Technology is advancing so quickly in many areas – driverless cars, AI and machine learning, AR and Big Data to name a few, and there is so much overlap that this is creating new market opportunities. “The TMT space is still considered quite niche however, especially when it comes to raising capital and understanding the nuances of a range of investors. From angel rounds all the way up to Series F or private equity involvement, understanding funding processes and matching them to the business’ lifecycle is vital. “When presenting an organisation to investors, it is important to do so in the fintechmagazine.com

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DID YOU KNOW...

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The British Venture Capital Association states that £43bn has been invested in more than 3,230 companies over the last five years. In 2019, 87% of those investments were directed at SMEs. Investments in TMT soared to £10.1bn in 2019, representing a £3.1bn increase on the previous years’ already impressive figures. On a global level, London was placed fifth when ranked by venture capital funding amounts by Dealroom.co. It was a mere $100m behind Shanghai.

April 2021

MENZIES

“DIGITAL TECH BUSINESSES AREN’T CONSTRAINED BY THE PHYSICAL – AN ATTRIBUTE WHICH HAS BECOME ALL THE MORE ADVANTAGEOUS DURING THE PANDEMIC AND IN THE IMMEDIATE AFTERMATH OF BREXIT” ALEXANDER DUFFY

DIRECTOR OF CORPORATE FINANCE, MENZIES

most compelling way possible. As well as understanding the core proposition, investors want to know who the competitors are, how the market is evolving and where the most fruitful returns are likely to arise.” What makes Menzies LLP’s ‘Brighter Thinking’ approach to raising growth capital different? “Menzies helps companies create new growth strategies and implement them successfully. As well as understanding and supporting their growth plans, this often involves streamlining operations and staying ahead of competition. It’s a benefit of being a smaller company with a long track record of success and it’s something that can be lost when you go into the larger firms. fintechmagazine.com

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“It’s all about investing time in developing strong client relationships, which stand the test of time. This doesn’t have to be based on lots of face time, at Menzies we believe in providing a digitally-enhanced customer experience, while maintaining a strong sense of collaboration. We very much view ourselves as a large family and community, something we’ve been careful to preserve during the COVID-19 restrictions, through the extensive use of video conferencing platforms. “I think many other professional services firms have suffered from not having that connection with their clients and colleagues. Menzies has really transformed its digital presence online and is continuing to invest in digital transformation. “When it became clear that we were going to have to get used to living in a world with COVID-19, it was no surprise to me that life,

as well as the tools we use every day, would need to change. Our social habits, the ways we work, and how we consume content were always going to have to adapt – the ‘Golden Age of Tech’ was already underway before the pandemic but it’s now just being spurred on even further.” How can Brighter Thinking help SMEs and other businesses to plan for the future? “Brighter Thinking is essentially ‘business advisory done better’; the concept is based on innovation, collaboration, and developing empathy with clients. We listen to the client’s needs and then, by thinking outside the box, find a solution that will help them, in the short and longer term.” Significantly, what Menzies’ approach highlights is a shift away from ‘one-sizefits-all’ solutions: every client has different

M E N Z I E S #BrighterThinking

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circumstances, goals, and means. To say that business strategy has become more complicated over the last 12 months is an understatement. However, companies can’t afford to sit back and wait for things to happen; they must take action to adapt in order to survive and thrive. However, taking decisions about how the business strategy must change can be difficult to do in isolation, so businesses need access to skilled advisers. The Corporate Finance team at Menzies LLP is growing to meet demand from local businesses. The team is both successful and highly experienced, having completed a wide variety of deals across many markets, as well as being recognised as the 2020 Transaction Services Team of the Year at the Insider Southeast Dealmakers Awards. To summarise, what is your vision for the future of the TMT sector and how can Menzies LLP help? “TMT businesses were already growing rapidly before the crisis and many of the shifts in behaviour that have taken place during the pandemic have played to their advantage. London remains the financial capital of the world and the European capital for technology.

“BRIGHTER THINKING CAN UNDOUBTEDLY HELP TMT BUSINESSES TO THRIVE AND HELP TO DRIVE THE UK’S ECONOMIC RECOVERY”

“From an advisory and corporate finance perspective, Menzies LLP has an important role to play in supporting these businesses in cementing their business plans and securing the finance needed to realise their commercial potential. “Brighter Thinking can undoubtedly help TMT businesses to thrive and help to drive the UK’s economic recovery.”

ALEXANDER DUFFY

DIRECTOR OF CORPORATE FINANCE, MENZIES

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