The Fintech Times - Money2020 Europe 2022 Special Edition by The Fintech Times

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THE RAI AMSTERDAM EUROPAPLEIN 2-22 1078 GZ AMSTERDAM THE NETHERLANDS

7-9 JUNE, 2022 AMSTERDAM

We speak to Anders la Cour, CEO of Banking Circle Group

ANSWERING THE BIG BANK DE-RISKING QUESTIONS

Jose Martí

Head of Global Sales @PayRetailers

Nigel Ve

rdon Co-Founder & CEO@Railsr

Building great banking experiences that customers love.

The true cloud banking platform.

www.mambu.com

AMSTERDAM! It's time for powerful connections and thought-provoking conversations as Europe returns for another year

Money 20/20 is designed for ‘committed, innovative, disruptors who rewrite rule books in the financial industry’ – so what are the next challenges on the fintech frontier? Over three days – from 7 to 9 June 2022 – Money 20/20 Europe will serve up a smorgasbord of opinions from an eclectic group of leaders and thinkers. They will tackle critical topics, uncover new trends, share innovative ideas and put the spotlight on best practices. On this year’s agenda:

■ Why it’s time to open and shared technical standards to enable fair competition and radical transparency that will prioritise best interests of individuals over interests of entities ■ Why there needs to be a focus on contexts where the financial component will significantly improve the experience - whether it’s a non-financial environment or the best of breed niche solution in a wider suite of financial products

■ How the payments engine will become the most critical piece of infrastructure for retailers, e-commerce brands, marketplaces and payments organisations ■ How we have to build pan-European standards for the flow of information, currency design, and data ownership that will enable instant verification and exchange between markets, entities, and wallets

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In this Money 20/20 Europe Special Edition supplement, we share insight from some of the companies attending the event and learn about a new name for a certain global embedded finance platform! The Fintech Times will be in full attendance at Money 20/20 – we hope you can join us for a conversation!

United Kindom

CEO Jason Williams EDITORIAL DIRECTOR Mark Walker EDITOR Claire Woffenden ART DIRECTOR Chris Swales BUSINESS DEVELOPMENT Callum Blackwell DIGITAL Manisha Patel

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Deepakk Chandiramani

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Megan Palton JOURNALISTS Polly Jean Harrison

Terry Ng ●

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Ania del Rosario

Tyler Smith

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Richie Santosdiaz

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Adam Snyder

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Maxwell Cooper

Francis Bignell EDITORIAL ENQUIRIES editor@thefintechtimes.com

DESIGN & PRODUCTION www.yorkshirecreativemedia.co.uk IMAGES BY www.istockphoto.com PRINTED BY Park Communications Ltd, London

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Copyright: The Fintech Times 2022. Reproduction of the contents in any manner is not permitted without the publisher’s prior consent. ‘The Fintech Times’ and ‘Fintech Times’ are registered UK trademarks of Disrupts Media Limited. This Newspaper was printed by Park Communications Limited, London using its environmental print technology, on 100% recycled paper.

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BANKING CIRCLE: RISK MANAGEMENT

ANSWERING THE BIG BANK DE-RISKING QUESTIONS Big banks are rapidly de-risking, withdrawing from certain markets and geographies. Creating fundamental threats for smaller financial institutions (FIs), the ripple effects go right through the global economy.

Between 2011 and 2019, the number of active correspondent banks worldwide fell by approximately 22 per cent, due in part to big bank de-risking strategies. This has led to fewer options available to smaller banks and nonbank financial institutions (NBFIs), less competition in the market and nothing to challenge the rising costs of cross-border payments. Our latest research found that in the past 10 years Tier 2 and Tier 3 banks, as well as NBFIs, have faced increasing costs from a network of correspondent banking partners they have had to grow to counteract de-risking actions. Seventy-seven per cent of respondents said they have more relationships now than they did 10 years ago; most feel they have too many. And 80 per cent have seen

Anders la Cour, CEO of Banking Circle Group explores the findings of its latest research and discusses how alternatives to traditional correspondent banking could bring global economic benefits correspondent banking costs rise in the same period. While most have had to take on additional relationships to remain competitive and keep serving diverse customer requirements, many report that they had found themselves let go by their banks – often with less than two months’ notice. Much of the time, the reasons given for ending the relationship

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included no longer meeting eligibility criteria (61 per cent). The consequences are business-critical; banks and NBFIs said that having fewer relationships has led to difficulties offering international payments, and costs have risen still further.

WHEN ONE BANK DOOR CLOSES… The Banking Circle research set out to examine how the de-risking trend is affecting FIs across Europe – the doors it is closing, and the ones being opened. Banks have, of course, been executing de-risking strategies for decades, to reduce and remove risk. However, the past decade has seen the level of activity increase dramatically following the 2008 financial crisis which brought about a shift in the political agenda and that of the regulators. As a result, regulators began to focus more on banks than ever previously experienced. In 2012, HSBC paid US Authorities $1.9billion in a settlement over money laundering, sparking the de-risking

movement that is still affecting the industry today. To protect themselves banks had to introduce new measures or remove clients perceived to represent a higher risk. Such banks often found it simpler to de-risk clients, sectors and regions that sat beyond their new risk appetite. Unfortunately, that left smaller banks, NBFIs and businesses without correspondent banking partners, which can lead to financial exclusion for underlying customers. This situation remains today, and for some it has got worse. Smaller banks and NBFIs are facing a fundamental threat to their operations that could have global societal and economic risks. The results of our latest research, published in our white paper – Big Bank De-Risking: The Invisible Threat to Financial Inclusion – show that banks and NBFIs are dissatisfied with the

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traditional correspondent banking solution. We believe the increasing number of correspondent banking relationships is a reaction by smaller banks and NBFIs to protect themselves from the impact of de-risking by spreading their own risk. However, this is a heavy burden. Our research revealed that correspondent banking costs have increased for 80 per cent of the banks and NBFIs we surveyed. The real-life impact of this is that three in four believe they have lost customers due in part to a lack of access to fair priced correspondent banking partners. Some of the FIs we spoke to have proactively reduced the number of banking relationships they have, and half of these did so for cost reasons. Those who have reduced the number of relationships have since experienced difficulties in offering international payments, and costs have risen. A solution must be found to overcome these challenges, helping increase financial inclusion among businesses and consumers around the

world. Yet less than half of the respondents to the Banking Circle study believe there are any good alternatives to traditional cross-border payments, and 71 per cent feel that an alternative would benefit the global economy.

THE RIGHT PARTNER FOR THE ROAD AHEAD The frustrating and surprising truth is, there is no ‘real’ alternative at all. Access to cross-border payments requires a bank at the top of the chain, with direct access to clearing. There is no getting around this fact, so instead of wasting time trying to find or build an impossible alternative, we need to take a new approach to correspondent banking, and that is just what Banking Circle is doing. We are taking on a job that very few banks want to tackle – investing in integrating a vast network of local clearing and payments schemes to build a unique super-correspondent banking network.

Avoiding a sector or region that appears high risk may be the quick-win option, but this can easily exclude customers and impede the progress of businesses that could be highly valuable to the economy. Even the highest risk emerging market can include customers that are low risk. Through an external partner like Banking Circle, even the smallest banks and NBFIs can capitalise on the opportunities. Banks and NBFIs can provide their business customers with secure, lower cost cross-border payments, connecting to clearing via the Banking Circle payment rails, rather than the outdated and expensive traditional correspondent banking network. Banking Circle is a fully licenced next generation payments bank that is designed to meet the global banking and payments needs of banks and NBFIs. As a technology-first bank we connect financial

institutions to 25 of the world’s major currencies and enable them to move funds efficiently – delivering fast, low-cost payments to their underlying customers. Download the full white paper at bankingcircle.com

About Banking Circle

Banking Circle, the fully licenced next generation payments bank, is designed to meet the global banking and payments needs of financial institutions. As a technologyfirst bank we connect financial institutions to the world’s major currencies and enable them to move funds efficiently – delivering fast, low-cost payments to their underlying customers. Web: www.bankingcircle.com LinkedIn: linkedin.com/ company/bankingcircle Twitter: @BankingCircle

Big banks are rapid ly de-risking withdraw , certain ming from and geogarkets raphies

europe.money2020.com

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Fintech’s power players gather in Amsterdam to debate the future of money and payments

WELCOME TO

Global leaders and tech giants are mingling with new challengers and startups at Money20/20 Europe to share perspectives and spark innovation and opportunities for growth. More than 4,000 people from more than 1,900 companies attended Money 20/20 last year with over 7,000 one-to-one meetings taking place. While last year was all about reconnecting in a post-Covid world, in 2022 Money20/20 Europe in Amsterdam is putting the spotlight on moving the industry forward and shaping the future – ‘powering new strategies and partnerships that transform mindsets’. So, what can you look forward to at Money 20/20 Europe? Topics under discussion include understanding and winning over customers, winning over your competition, and building the most progressive technological and regulatory environment in the world. It's all about: ...Proprietary is out, standardisation is in ...Champions are out, interoperability is in ...Back end is out, front end is in ...Acquisition is out, distribution is in ...Ownership is out, permission is in

There's more than 300 great speakers at this year's show, here's just a taster of what's to come...

TRACEY DAVIES

LOUISE HILL

President MONEY2020

ANDREW ELLIS

CEO GOHENRY

TOM POPE

Head of Payments TINK

KARL MACGREGOR

CEO METTLE

ERICA STANFORD

Founder and CEO CRYPTO CURRY CLUB

CEO VYNE

SENDI YOUNG

Managing Director RIPPLE

SHACHAR BIALICK

JOANNE DEWAR

Founder and CEO CURVE

JESSICA RUSU

Chief Data Information & Intelligence Officer FCA

CEO GPPS

ANNE BODEN

Founder & CEO STARLING BANK

CANOPY: DIGITAL FINANCE

D E D D E D B N M E NCE A A H N I C F FINTE E H T LT LINE U A F

ritise o i r p o t eeds n e c n fina needs d r e e d d m su be ld, em actual con r o w the customer experience, boost of the nd serves s 0 . 2 a L sales, and increase customer t P n ffere e BN i h d t On the other side are loyalty. According to an s ’ e t t a a To cre product th companies who are working Accenture survey of 1,000 a g n business as usual with the same non-financial companies, 88 per i v a h undifferentiated products.

In recent years, few sectors of the market have been as hot as fintech. IPOs like Robinhood, Coinbase and Marqeta in 2021 underscored the value inherent in the modernisation of old payment technologies and legacy banking cores. As the market has cooled, however, the focus has shifted from IPOs to infrastructure. Increasingly, decision-makers across banking and lending businesses are asking questions about everything from issuing and processing platforms to loan management and servicing solutions. This is exposing a fintech fault line. On one side are companies that are successfully making the

The modern infrastructure advantage

Matt Bivons, CEO at Canopy transition to embedded finance. They are providing consumers and businesses with personalised experiences and customised financial products. They are companies like Tandym, which redirects a merchant’s processing fees into a customer loyalty programme, and BHG Financial, which is disbursing BNPL payments using NACHA rails so merchants pay less for processing and receive funds faster.

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Simon Taylor of 11:FS coined what has become a go-to definition of embedded finance. According to Taylor, “it’s finance that shows up just when you need it”. Ten years ago, embedded finance was Stripe – a payments API that made it possible for merchants to accept credit cards by adding a few lines of code to their websites. Today, it’s companies like Canopy, which make it possible for merchants to move beyond generic credit cards and into lending that is personalised, transparent and safer. Thanks to embedded finance APIs, brands can seamlessly offer financing at the point of need and, in doing so, enhance

cent of respondents who had begun to implement embedded finance strategies said they were ‘successful’ or ‘very successful’ at increasing engagement levels. Eighty-five per cent reported similarly positive outcomes around acquiring new customers. API-first technologies allow companies to bypass the legacy technology systems that for decades have defined the products and services offered by institutions ranging from global financial powerhouses to local community banks. Instead of paying three per cent in processing fees to fund loyalty programmes for payment card issuers, merchants who enable customers to pay with a loyalty card powered by Tandym reduce processing costs to just 0.5 per cent. By investing in their own

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loyalty programmes, merchants can increase the frequency and amount of purchases. You could call it loyalty 2.0. APIs are also powering the next generation of BNPL. Trailblazing fintechs like Affirm and Klarna pioneered buy now, pay later as an e-commerce payment option. Between 2019 and 2021, BNPL retail purchases exploded nearly five-fold, according to Cornerstone Advisors. The demand for BNPL revealed an unmet consumer desire for increased financial flexibility – and also, judging by complaints received by the Consumer Financial Protection Bureau, for more transparency around the intersection of credit and lending. BHG Financial’s Nalu Pay

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product delivers both. An example of BNPL 2.0, Nalu Pay offers merchants BNPL solutions that are customised to their business and to their customers’ needs. Unlike BNPL 1.0, which relied on the card rails, Nalu Pay disburses loan proceeds using the ACH network. Merchants who finance customer purchases with Nalu Pay can get paid on the same day. In comparison, credit card payments typically take 48 hours to settle. Nalu Pay and Tandym, too, can provide borrowers with the status of their accounts in real time, correcting one of the biggest failures of transparency in the traditional lending industry. For decades, borrowers who have called customer service to determine their pay-off amounts have been told they have to wait until the next cycle. Because loan management and servicing infrastructure relied on batch processing, there was no way to accurately calculate how

much a borrower owed until a billing cycle was completed.

Embedding better lending practices Embedded finance in nontraditional apps and business processes can be seen as the next major step for the industry, but success hinges on the infrastructure that’s used. What makes embedded finance APIs so powerful – and in some ways inevitable – is that they don’t merely facilitate better financial products. They also enable better lending

practices and, in doing so, support customer experiences that are far superior to what came before. The existence of an industry fault line suggests upheaval and disruption. But with fintech, the weakness created by legacy systems is at least partially cured by the strength of the new technologies that are displacing the old. Embedded finance APIs are not only disruptive, they are also constructive. They enable institutions that still run at least partially on traditional infrastructure to access the benefits of modern card issuing and flexible loan management and servicing. By adopting embedded finance APIs, organisations can launch and service differentiated credit and lending products. They can cross the fintech fault line and join the companies flourishing on the other side. Some of the most common implementations of embedded finance include BNPL at the point of sale for everyday purchases, and point-of-service lending, bringing the concept to another level to help businesses finance more significant purchases. While these are some of the most common use cases, embedded finance can also include other fintech applications like streamlining B2B payments and invoicing. While embedded finance can be applied to many different business operations, and can lend itself to multiple parts of a company’s overall strategy, it’s crucial that engaging with embedded finance helps serve a larger purpose. The trick to making embedded finance work for your

offerings, is to understand exactly what you want to accomplish, and how it’s different from every other solution already available in the market. This requires deep reflection from industry leaders on what their competitive edge is, and how they can better serve the needs of consumers, and other service providers working to make our lives easier. While embedded finance is definitely a step above working through traditional financial channels, like legacy banks and lenders, we have to start thinking of how to make the next version of BNPL, or convertible credit. Through infrastructure that is highly personable and expansive, the fintech ecosystem can create technology that will matter decades from now, establishing a new legacy.

Getting on the right side of the fintech fault line It’s clear that the fintech industry is having its moment in the sun right now, as startups and established brands tinker with how financial technology can best uplift their customers and create more seamless experiences on their established platforms. As the space continues to become more crowded, it’s paramount for businesses looking to embrace embedded finance, and financial technology at large, to wholly understand their goals to be able to decide what would be the best technology solution moving forward. With this understood, companies can stop trying to provide every solution, and create an experience that puts their customers first, driving more long-term loyalty and increasing their longevity as a touchstone in people’s lives.

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Can Payments Orchestration Help Your Business Sing? A strong payments orchestration strategy can deliver robustness and resilience to the payments chain, reduce customer friction and increase conversion rates — helping you to sell more and lose less. Now isn’t that music to your ears?

Scan to learn the top 10 questions merchants must ask themselves about payments orchestration.

NPA Is Poised to Reshape Payments in the U.K. — Are You Ready? Financial institutions must prepare today for January 2023’s planned testing. We’ve got the key notes you need to fine-tune your modernization process and meet your NPA goals.

Scan to download your copy of ACI’s Expert Guide to New Payments Architecture.

ONDATO: KNOW YOUR CUSTOMER

SOLVING COMPLIANCE PROBLEMS Money2020 speaker Liudas Kanapienis, co-founder and CEO at Ondato, outlines the importance of smooth and compliant onboarding processes

that helped our customers focus on their businesses, while Ondato took complete care of all the KYC and verification processes. This became our central idea and we have been developing and expanding it ever since.

Serial entrepreneur Liudas Kanapienis is well-known in the Lithuanian fintech world; he was responsible for the country’s first fintech business in Paysera.

What problems do you solve? As digital technologies and new applications are developed, so too do the risks facing the fintech industry increase, and significantly so! It is a ‘must’ to have robust processes securing financial institutions from people who have bad intentions. In today’s world, it is almost impossible to recognise possible fraud attacks without the use of advanced tools – tools that use, in particular, biometric and computer vision technologies. What we are seeing is that different spoof attacks, for example tampered document attempts, are becoming an every-day issue. This means that if a company isn’t using the right tools in security, then that company will likely not even be aware that an attack has occurred.

After witnessing the challenges of regulatory compliance and identity verification first hand, Kanapienis identified an opportunity to transform compliance from a hassle into a business benefit. Tell us about Ondato Ondato is a tech company that streamlines know your client (KYC) and anti-money laundering (AML) related processes. Ondato provides technological solutions such as digital identity verification, business customer onboarding, data validation, authentication and more. These provide the highest standard available of online – or offline – KYC onboarding for all business and customer types, orchestrated from a single interface. Ondato is turning compliance into a business benefit for its customers, helping to create a better and safer environment for organisations and individuals. Ondato uses state-of-the-art machine learning that analyses received information. Within milliseconds, data is cross-

checked with local and international registries – whether for new account registration or existing customer verification. What was your inspiration behind setting up Ondato? I realised I could combine my knowledge in payments and retail to create tools that would benefit the KYC and verification industries. That’s how we started Ondato. Most ideas and creative solutions are born when facing a particular problem, and that’s what happened to me with Ondato. We saw the need to streamline KYC and AML processes because we experienced how supervisory requirements were getting more and more complicated. It was really difficult to follow everything, and mistakes were happening. That’s when we understood the need to onboard clients quickly and efficiently will be an ever-growing pain point for financial institutions. Because we had the right experience and know-how, we decided to create a suite that would offer solutions for financial institutions and any other business that needs to verify the identities of its customers. In 2018, we started developing unique and resilient solutions

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Share your recent successes For us, the main challenges were always time and speed. Our product quite rapidly found its niche in the market. Once we were on the map, the demand skyrocketed, which also meant that we had to balance out the quality of new features and their timely delivery to ensure that our clients' experience was and is smooth. We overcame these issues thanks to unique working procedures that we adapted

within the company. Thanks to them, we expanded to new markets, still keeping the startup nature and releasing over 50 features and 10 new products a year. We are also proud to launch Ondato OS, which represents a leap to a new category in the KYC industry. Finally, everything that is needed by verification officers has been brought under one interface. Ondato OS is highly customisable and risk-flexible, meaning that our clients can tailor Ondato to suit the risk levels of their customers in a dynamic way. What is the importance of smooth onboarding processes? Onboarding is essentially how you greet your customer, so its importance cannot be overstated. At this stage, a lengthy process and various complications can annoy the customer to the point where they might turn to a competitor. However, its simplicity isn't the only important factor - it has to be compliant with the jurisdiction's laws in which you're operating. The risks associated with identity verification are very real in these industries. It is crucial for both our clients and their customers that onboarding and the associated verification processes are visibly secure and compliant with all local and international laws. It’s also super important that these processes remain in the background, allowing our clients to focus on perfecting the services that they know best.

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INTRODUCING…

Railsr Nigel Verdon, co-founder and CEO of embedded finance experiences platform Railsr, talks about why this Money 20/20 marks a milestone for a company that started in 2016 with just four people, and now has more than 525 based across four continents, in a market where new entrants are putting pressure on the fintechs.

This is a significant Money 20/20 for us, not least because after six years, we have decided to change our name. And this esteemed event seemed a great opportunity to tell the world we will now be known as Railsr and not Railsbank. I must admit to having been a little sad about that at first, but I don't spend a great deal of time looking back. Railsbank has served us well over our startup years, but now, for our next phase of expansion, we need a name which reflects our core activity: embedded finance experiences. And I think Railsr hits the exact spot – it’s also a name which works across all our markets, right across the globe and allows us to operate as either a software only, or a fully financial regulated business.

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leading to banking-as-aservice, embedded finance and now, embedded finance experiences.

HARDEST TASKS A STARTUP CAN FACE

Coming up with a company name is one of the hardest tasks a startup can face, but as I tell all those that ask me advice about being a startup founder – and this is my third, my previous two having been sold to major international companies – one of the traits you need is flexibility. As you build your company, everything will change; nothing remains set in concrete. Railsr was born during the period of the open banking initiative which can be more accurately described as open finance, such was its impact upon a traditional financial services industry that frankly was not fit for purpose in the 21st century. The traditional system was outdated, slow and moribund. Along came the fintechs and showed how it should be done, and central to that approach was that the customer came first. The legacy financial services sector was all about itself coming first, not the customer. But open banking was the opening of the floodgates,

OPPORTUNITIES AND CHALLENGES

Over the last few years, the market has evolved hugely, and is throwing up a myriad of both opportunities and challenges for fintechs. Banks used to be the only players, but they are now having to share the exciting and growing market with specialist fintechs that leverage modern technology and the modularisation of the banking stack. Yet fintechs no longer have the space to themselves. Now companies and consumer brands are claiming an increasing part of the action, creating embedded finance experiences. And fintechs need to readjust to the new landscape to remain relevant and stay competitive.

FINANCE IS MOVING CLOSER TO THE CUSTOMER

The trend is clear. Finance is moving closer to the customer. We see this with day-to-day consumer brands embedding finance. So fintechs are now competing with finance

experiences embedded within a brand’s customer journey, not just standalone financial products. They need to create engaging experiences and communities around their financial products to add real value and compete meaningfully. They need to create experiences, not just products. In short, we are entering a world beyond 'fintech 2.0' and we can see from our customer base how the market is developing. Our customers were traditionally innovative fintechs determined to change things, startups and scaleups. Now it's the non-fintechs, the companies and brands are increasingly coming onto our platform, seeking the level of engagement that embedded finance experiences offers their own customers. There is room for everyone, but innovation, adaptability and the ability to keep the end user as the focus of attention will be the key traits that all players will need to be successful. Website: www.railsr.com LinkedIn: linkedin.com

/company/railsr

Twitter: @RailsR_

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RECRUITMENT: FINTECH TALENT

WILL A SKILLS SHORTAGE HAMPER FINTECH SUCCESS?

Fintechs will struggle to grow if they fail to recruit and retain the right tech talent yet competition for talent has never been fiercer. Can prioritising financial education help solve talent issues and ensure future industry success? The fintech industry is one of the fastest growing sectors post-pandemic, outperforming the wider market by three times, according to recruitment firm Robert Walters. Its latest Global Fintech Talent Report reveals that the global fintech sector has seen a 182 per cent increase in tech job growth for the first quarter of 2022 – with the top eight fintech ‘mega-hubs’ accounting for more than 90 per cent of all new fintech jobs advertised around the globe. Economic resurgence and appetite for growth has piled on the recruitment demand. With one in three new hires within fintechs around the globe going to software engineers and developers, Robert Walters warns that the fintech sector will face major hurdles this year due to an acute tech talent shortage around the globe. Toby Fowlston, CEO of Robert Walters, says: “The forecast for organisations working in the global fintech market is a very positive one, however, their growth will be dependent on their ability to recruit and retain the right tech talent. No country quite has a dominance over technology and given the

remote and mobile nature of the tech industry it seems that all major economies are competing for a slice of the fintech pie. “While the outcome of competition means heightened innovation and consumer choice, from a talent perspective this creates a challenge and as the adoption of fintech products continues to grow at an exceptional rate the concern is whether there is enough of the right tech talent to keep up with the growth.”

WHAT CAN BE DONE? Industry experts say educational changes and better funding are essential ingredients for ensuring the UK stays in the fintech ‘race to the top’. Sarah Williams-Gardener, CEO, FinTech Wales, says: “We need the right skills and talent. We have phenomenal universities and colleges and phenomenal capabilities but we have to ensure we have the right funding. “I have two children and if they had not had a mother who is a fintech founder they wouldn’t know about fintech and nor would their friends; they would still be going into traditional industries. There is huge responsibility on us to talk about

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what this industry is about. In Wales, we are taking the industry to students as these are the skills and talent of the future. We’ve got coding academies and businesses going into school telling them what they are they doing and why. It’s important if we are going to stay at the beginning of the fintech race.” Jeff Parker, CEO at business payments firm WorldFirst, says: “There is a chronic talent shortage in the UK because fundamentally the education system is broken and hasn’t changed for decades; it’s old school. We really need to learn to embed coding, engineering, science and technology into the DNA of our country from an early age. Until we fix that pipeline, it’s going to be really difficult and more and more challenging for the UK.”

SUSTAINABLE FUNDING Research undertaken by the Money and Pensions Service has shown that attitudes towards money are formed as young as seven, proving that financial education provided at a young age is vital for future financial capability. The Centre for Financial Capability charity recently went

to Downing Street to call for better funding for high-quality and effective financial education. It presented a letter signed by companies in the financial education and services industry, including GoHenry, Hargreaves Lansdown and Quilter, urging for a substantial proportion of unclaimed money from dormant accounts (through the Government’s Dormant Assets scheme) to be used to fund financial education for primary aged children. This letter followed The Financial Education Summit, supported by the Centre for Financial Capability, which called for increased attention to the importance of implementing financial education in primary schools, to meet the larger goal of increasing financial resilience throughout adulthood. Stewart Perry, a member of The Centre for Financial Capability, said: “I very much recognise the importance of ensuring sustainable funding for financial education and believe the Dormant Assets Scheme is a commonsense way for industry to work with Government to ensure every child in the UK has access to the necessary financial skills to equip them for later life.”

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Navigating the future. Together. Drake Star is an award-winning global tech investment bank that has completed over 400 transactions since 2013. Drake Star`s team of over 100 senior professionals across ofﬁces all over the world focuses on mergers & acquisitions and corporate ﬁnance.

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PAYRETAILERS: LATIN AMERICA

A scalable payment platform for business success in Latin America PayRetailers is a robust and secure payment platform that drives the digital growth of global companies and financial inclusion in Latin America, with a business strategy aligned to strengthening its local operations where it operates Latin America has become a mecca for payment technology solutions given the lack of financial inclusion and the region’s approximately 300 million online shoppers – a figure expected to increase more than 20 per cent by 2025. Although the innumerable number of opportunities for those international merchants who want to gain territory is directly proportional to the wide range of payment processing companies on the market, not all of the latter have the ability to adapt to the specific needs of every business’ merchants. Consequently, the biggest challenge faced by international companies when expanding

By Jose Martí, Head of Global Sales at PayRetailers their operations in the Latin American market is choosing a technological payment solution, such as PayRetailers, to handle the complexities and face the challenges of each market and the commercial needs of all types of business.

Flexibility and convenience mean know-how Having an integrated payment solution that adapts to your

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e-commerce infrastructure is essential. Taking this into account, PayRetailers offers different types of integrations, such as WooCommerce, and PrestaShop, among others, that adapt to the business model of any industry (SaaS, iGaming, E-learning, Tourism and Airlines, Finance Services, etc.), giving you the possibility to choose the one that best suits the global needs of your business, as well as the same software that is already integrated into your website. The key is choosing a developer-friendly payment gateway that works with end consumers, allowing them to select the payment method by country and local currency.

Aimed at the Latin American market and through single API integration, PayRetailers allows international companies to accept more than 250 payment methods in more than 12 Latin American countries where their buyers are located. Based on a local strategy for each business, merchants will be able to provide an excellent payment experience that is just right. To avoid shocks when operating in an emerging market like LATAM, you need the support of a local partner who knows the regulations of the territory like the back of their hand.

Outreach and localised support Along the same lines, the

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payment provider par excellence must know and work in every one of the countries where the merchant wishes to operate. Although Latin America is a territory with endless business opportunities, to succeed in the region, it is vitally important to thoroughly understand the particularities of each market, such as the economy, compliance regulations, the cultural context, consumer habits, and also consumer payment preferences. Without neglecting the agility, time and security of the payment process, which are critical factors in achieving a significant conversion rate. A clear market understanding means the difference between success and failure for merchants looking to expand globally. Thus, having an experienced local partner like PayRetailers is fundamental to going one step further and succeeding in Latin America. Headquartered in Spain and regional offices with local experts in Colombia, Argentina, Brazil, Mexico, Chile and Peru, the multinational has teams of more than 20 different nationalities and operations in more than 15 countries in Europe and Latin America. In this way, it natively understands the complexities and challenges of the region’s markets, providing localised and strategic support to both the merchant and the end customer throughout the payment process. In addition to its recent acquisition of online platforms, Paygol from Chile and Pago Digital from Colombia, the Spanish-rooted company is focused on reinforcing its position as the leading fintech

europe.money2020.com

payment specialist in Latin America and its commitment to really scale the potential of e-commerce businesses across the continent.

The power of local payment methods Considering that digital payments are intrinsically related to the development of electronic commerce and vice versa, the first step for a good digital payments strategy is to identify the potential markets for your business.

A clear market understanding means the difference between success and failure for merchants looking to expand globally That said, it’s essential to understand where your end buyer is, what they want and what their needs are because a great checkout experience starts with choosing which payment methods to use to make the purchase. In addition to traditional payment methods, it is vital to consider each country’s preferred methods for the facilities these methods offer, such as OXXO in Mexico, PIX in Brazil, Nequi in Colombia, and Easy Payment in Argentina, among others. For this reason, rather than focusing on the number of methods offered by a payment processor, an international company wishing to operate in Latin America must choose the one capable of offering and processing what is necessary, in the right place and with the highest performance.

PayRetailers allows you to quickly enter the Latin American market, offering you the payment options preferred by buyers in local currency, including cash payments, local cards, online banking, QR codes and electronic wallets. In this way, the leader in payment processing closes the accessibility gap between global companies and Latin Americans. The merchants benefit from their knowledge and experience in identifying the power of each country, which allows them to transmit to their clients’ security, trust and a unique localised payment experience typical of the market, with successful payment methods and a settlement of worldwide funds through a single integration.

Scale your payouts in Latam In addition to all the benefits that make PayRetailers the perfect ally for any international company looking to increase its conversion rates in Latin America, the payment processor offers a solution suitable for both single and massive payouts. In this way, merchants can make the necessary payments to their end customers in their local currency, optimising the shopping experience and guaranteeing greater agility and security.

Your customer data is priceless Payment processing requires extreme attention to fraud and other complexities that may arise from security issues. Therefore, when choosing your next payment processor, it is essential to opt for a secure gateway for Latin America like PayRetailers

that can protect its customers’ data with reliable payment security technologies, PCI validated, with a 3D Secure system and tokenisation. Global technology companies are exposed to fraud risks, and chargeback rates are more vulnerable. Therefore, choosing a payment solution with a high-level fraud scoring system is crucial to keeping your business healthy.

About PayRetailers Established in 2017, PayRetailers is a Spanish company and a leader in online payment services dedicated to creating a fast and simple payment process for merchants and shoppers. The company offers a full range of payment solutions to help e-commerce companies accept online payments through single API integration. A clear understanding of consumer behaviour and spending in their specific sector will be the difference between success and failure for merchants looking to expand internationally across certain e-commerce verticals. PayRetailers allows anyone to make online purchases by accepting local payment methods, even if they don’t have credit or debit cards. PayRetailers is headquartered in Spain, with regional offices in Argentina, Brazil, Chile, Colombia, Mexico and Peru. Website:

www.payretailers.com LinkedIn: www.linkedin. com/company/pay-retailers Twitter: @PayRetailers

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PAYNETICS: PAYMENTS

FUTUREPROOFING

BNPL There's no denying buy now, pay later (BNPL)’s popularity – a third of UK adults are estimated to have used one of the schemes. Consumers are now wanting credit that’s easily and readily available to them at the point of purchase. Consequently, more and more retailers are offering this payment option to customers. However, we can’t ignore the concerns around consumer protection and the ability of BNPL schemes to push consumers intodebt. Last autumn, it was estimated that 7.7 million people in the UK had accrued ‘significant’ outstanding balances with BNPL firms. With this in mind, how can we future proof this much-loved way to pay?

Is regulation the answer? Although the market is currently unregulated, the UK government has announced that the Financial Conduct Authority (FCA) will impose regulation and launched a consultation to this end last October. This move is something the market should welcome: regulation is often seen as the restriction of freedom when in reality it provides the foundation for growth. In fact, it’s the current lack

Mike Peplow, CEO, Paynetics, on why buy now, pay later needs to safeguard its reputation of regulation that has resulted in the blurred lines and consumer confusion that we see hurting the sector. When it comes to the nature of these measures, the BNPL market should expect regulation to focus on two key areas. The first is around visibility of terms and conditions: although BNPL firms often do not charge consumers interest rates, BNPL is a credit agreement and there are penalties and consequences for late or non-payment that it’s crucial consumers understand. Regulators like the FCA are likely to require more than a T&C link or a few lines of small print in order to properly communicate these terms and their consequences. The second area of regulation the sector should expect is around consumer credit checks. One way to stop

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consumers from falling into debt is for firms to check they can afford repayments before they’re offered loans. As consumers will be able to take out multiple BNPL agreements, there will need to be an industry-wide checking system in place – either from existing credit check providers extending their offering or new players creating dedicated BNPL services.

Does BNPL need a rebrand? Beyond FCA-mandated change, BNPL needs to think carefully about the way it’s publicly positioned. The fact that one in five UK consumers is estimated to have missed repayment is a future-proofing problem as well as a consumer safety issue. The longevity of the sector relies on consumers understanding that BNPL is a credit agreement that could have implications for future financial agreements such as mortgages. BNPL needs to safeguard its reputation and develop messaging that communicates the benefits of its service without minimising the seriousness of its terms. And there’s an ethical and economic imperative for firms to invest in the financial education of consumers so that lack of knowledge doesn’t lead to debt. With regulation

on the horizon and more and more players entering the field, now is the perfect time for BNPL providers to do both.

What will the future hold? BNPL isn’t a modern invention but a new iteration of instalment plans that originated in the mid-1800s. Paying in full has always favoured those with bigger bank accounts and splitting up payments has a long history of helping those with smaller financial reserves get access to products and services. BNPL is inclusive in another way too. As a form of credit with fewer barriers, it allows consumers to build a healthy credit score even when they aren’t currently eligible for other forms of credit. So, although missed payments could have implications for mortgage applications, a history of properly paid BNPL transactions could conversely support them, in the same way paying off a credit card does. There’s no doubt BNPL will and should be brought into the regulatory framework. However, the regulator should look to support the already thriving sector while providing the consumer with the needed protection. With the right regulation, messaging and consumer education, BNPL can and will be future proof.

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ALTIMETRIK: TRANSFORMATION

BUILD IT BETTER Think small to achieve big benefits in the drive to digital future The events of the past two years have accelerated the move towards digitalisation and as such the demand for support and solutions has never been greater. For the fintech sector there are huge opportunities, but they come with challenges, some of which are of the fintech companies’ own making. As the demand from businesses and consumers increase, there is a growing temptation by fintechs to try and move too quickly and in turn, lose sight of the fact that the creation of a digital business is a journey and one that must be focused to succeed.

One bite at a time Increasingly, there are fintechs which are struggling because they are trying to be all things to all clients simultaneously. Fundamentally, it must be understood that digital transformation is different to being a digital business. What has become clear is that success cannot be realistically achieved by looking to move to a digital model without an understanding of what can be achieved, and more importantly, by when. The solution is to break down the journey into bite-sized pieces. Pieces that can not only be realistically achieved but can be delivered by the necessary deadline to enable the next phase to begin.

By Raj Sundaresan, CEO at Altimetrik Achieving digital maturity is about simplification and automation to create an agile engineering culture enabling speed and scale. As companies ramp up their investments, it is imperative that they focus on quickly delivering value and outcomes. This approach enables a flexible working environment leveraging global resources, gig workers, leading to simplification and automation. Most important, among these is the ability to simplify any business function to create effective end-to-end workflows for collaboration.

The three cores The work we do is built on three cores which together create the foundation for the successful transition from a traditional focus on business and technology to a digital business construct. The first is a focus on simplification. You need to re-evaluate your current business and technology with the intent to make the existing operations efficient and inherently flexible. It creates the building blocks to enable an

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enterprise to create new digital products and businesses more easily for growth. Second is the focus on the small steps to create an environment where the business and technology are committed and aligned to address specific business needs. Avoid a big bang mindset, rather emphasise collaboration for an end-to-end approach to achieve business outcomes. The third is the creation of a self-service business digital platform (BDP) to help businesses and technology in their collaboration and iteration of data from various sources for effective decision making and predictive analysis, with speed and without disrupting current business operations. Data is also at the heart of any successful digital business. There needs to be the capability to collate data from various sources, and effectively analyse the data to create a single source of truth (SSOT). This can be applied to any business function leading to better decision making and transparency. In addition, applying appropriate algorithms like artificial intelligence / machine learning to the SSOT will produce more effective predictive tools and facilitate innovation with speed in a cost-effective way.

Prioritisation for every initiative must be tied to business growth driven by simplification and dedicated teams to implement solutions. The digital business roadmap should be designed so that initiatives will not disrupt current business operations or the end customer. It is also crucial to create a SSOT across every business function of the organisation, enabling better planning and proactiveness, deeper business intelligence, and creating new business models based on insights gleaned from customer needs.

Speed comes with the right foundations Digital business on its own will create unlimited opportunities and business models for growth with speed. But the speed comes from the time taken to ensure that the digital business has been created on the foundations required for today and the future.

About Altimetrik Altimetrik is a digital business enablement company. We deliver bite-size outcomes and accelerate revenue growth without disrupting ongoing business operations. Web: www.altimetrik.com Twitter: @Altimetrik

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FINTECH: PAYMENT TRENDS OVERHYPED Rogier Schoute, chief product officer at Mollie “Metaverse payments are something incredibly overhyped. With payments, there’s still so much growth and innovation to explore in the real world ahead, that to justify investing in a virtual world is very unpredictable. AI-powered is something that today’s fintechs are using as a catch-all to signify their innovation, but it doesn’t have the competitive advantage it once did. Machine learning and natural language processing have been commercially available for the

past 20 years. Companies using AI to detect patterns is the norm.” Oliver Werneyer, CEO and co-founder of Imburse "The most overhyped trend is payment orchestration for fee minimisation. It makes sense to try and minimise the cost per transaction from a merchant perspective but it is at odds with the payment ecosystem more generally. It is just a tiny aspect of what is involved in creating value through payments. So, it isn’t only about cheaper processing fees: bad conversion, high fraud, negative customer journeys and insufficient integration into the enterprise

systems will have significantly higher bottom and top-line impacts. It’s about getting those right too. Alex Reddish, managing director, Tribe Payments “An overhyped trend is the ‘super app’. Positioned as the holy grail of fintech, it allows users to access an entire ecosystem of products and services within a single platform on their handheld device. Nowadays, everyone in the financial space wants to be a super app. But why? We’re used to having smartphones that are designed to support multiple apps for different aspects of our

lives. Fragmentation, when for the right reasons, is a good thing and ensures we are getting the best return on each facet of the product – it’s the principle of best in class across multiple product sets versus an individual app providing mediocre services. Moreover, most of this hype has been influenced by the success of those in Southeast Asia, where the super app is dominant with the likes of Gojek. But the traction and success in that region stems a lot from people going straight from cash to mobile wallets, skipping over card payments. This simply isn’t the case in Western markets.”

bunch of really smart people to figure out how to launder it digitally, but if CBDCs can be designed to be impenetrable, then money laundering could theoretically be impossible. “The challenge here is that governments and reserves need to be equipped to deal with the technology shift, and need to be able to actually make CBDCs impenetrable. Even if they are able to be hacked, CBDCs will still go a long way to helping reduce money laundering.” Michael Mueller, CEO of Form3 “The most underhyped aspect is multi-cloud technology for payment processing. While crucial operations, such as payments move to the cloud,

today’s financial services need to be more resilient than ever. Business continuity and the effective management of cloud-vendor dependency has become essential in every function with operational risks multiplying. As a solution, multi-cloud technology offers a level of resilience and security that is hard to match – let alone beat. And given that payment systems are the one service that all customers use every day, both resilience and security are paramount. In addition, we are seeing financial regulators and industry oversight boards casting a closer eye on banks’ cloud expansion. Being operationally resilient is not just good business sense – it’s critical to survival."

OVERHYPEDPAYTECH, UNDERHYPEDPAYTECH

What are the industry’s most overhyped trends or promising innovations we don’t talk about enough?

UNDERHYPED Hayley Viner, head of product at ClearBank “Embedded finance is likely the first buzzword people think of when it comes to payments. But among common use cases like e-commerce or social media, a notably underhyped embedded finance subset is embedded insurance. “Navigation applications, such as Waze and Google Maps, can leverage the data they hold to offer motor insurance to their users. They hold valuable data around users’ driving habits, meaning it’s possible to offer insurance based on specific insight. Utilising embedded insurance in this way will mean the end user can benefit from insurance premiums that are more realistic and personalised to them. Offerings like this are only set to increase. "

Joe Higginson, CCO at Identitii “Central bank digital currencies (CBDCs) could fit in both categories, but while there's so much noise about them in the market, a lot of it is lip service. They get lumped in with crypto and we still don't have a clear path to making them a viable alternative to fiat for all types of payments. What really makes them underhyped though is the potential financial crime implications and how, if done right, they could fundamentally change financial crime. “Imagine governments decided to completely replace fiat money with digital currency. If you're a criminal and 80 per cent of your business is cash (because it's hard to trace it back to you) , what are you going to do if money isn't being printed anymore? You could hire a

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FINTECH WEEK L O N D O N

20 22

JULY 11-15

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

FINTECH INDUSTRY f lagship in-person Conference JULY 11 & 12 ETC. VENUES 133 HOUNDSDITCH 133 LIVERPOOL ST LONDON

EXPERT SPEAKERS INDUSTRY PARTY NETWORKING VIDEO ON DEMAND EXCLUSIVE MEET AND GREET WITH TOP-TIER SPEAKERS AND MORE

JULY 13

●

6PM

UNDERGLOBE GLOBE THEATRE 21 NEW GLOBE WALK LONDON

FOR MORE INFORMATION PLEASE VISIT W W W.FINTECHWEEK.LONDON & FINTECHAWARDSLONDON.COM