The Fintech Times - Edition 44 by The Fintech Times

THE FINTECHTIMES.COM

EDITION 44

THE WORLD'S FINTECH NEWSPAPER

FEATURE STORY The future of open banking: the UK’s next steps on oversight Page 6

REGULATION Fighting fintech with fintech Navigating regulatory changes page 14

JOBS IN FINTECH The Fintech Times’ selection of top jobs this month page 20

BOOK REVIEW Digital for Good: Stand for something or you will fall by Chris Skinner page 22 IN THIS ISSUE

The British Bank Awards 2022 Voted by consumers, this year’s winners revealed!

page 8

Collaboration in compliance

Evgeny Likhoded, CEO of Clausematch, discusses the importance of regtech page 10

Payments innovation & the race to keep up

An evolving payments ecosystem is leaving businesses on the back foot, says Rene Siegl of IXOPAY page 12

Revolutionising insurance with data initiatives

Innovation in payments:

What’s worth the hype? The trends that don’t deserve our attention and the paytech topics we don’t talk about enough

Read online at thefintechtimes.com

Examining the future of underwriting in the life and health insurance industry by Luca Schnettler, CEO of Qumata page 16

The Card & Payments Awards 2022

Winners of excellence and innovation within the industry page 18

Transparency at Toqio Why we foster a culture of openness, explains Arancha Riestra, VP of people

page 21

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E D I TO R ’S W E L C O M E THE FINTECH TIMES

BRINGING FINTECH TO THE WORLD Editorial Enquiries editor@thefintechtimes.com Chief Executive Officer Jason Williams Editorial Director Mark Walker Editor Claire Woffenden Art Director Chris Swales Features Editor Polly Jean Harrison Business Development Callum Blackwell Deepakk Chandiramani Andrew Furlonger Terry Ng Ania del Rosario Adam Snyder Maxwell Cooper Digital Manisha Patel Megan Palton Journalists Tyler Smith Francis Bignell

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ayments are evolving at an incredible pace with a constant stream of new providers, new platforms and nifty tools providing businesses and consumers with innovative ways to pay, anywhere and at any time. Earlier this year, I had the pleasure of attending both the 10th annual Pay360 event, hosted by The Payments Association in March, and the Innovate Finance Global Summit (IFGS) in April, which put the spotlight on the key drivers of growth for fintech payment companies, the impact of open banking, the expectations for cryptocurrencies, stablecoins and central bank digital currencies (CBDCs) and so much more. In a series of workshops, panels, fireside chats and keynote speeches, industry experts and key players mulled over regulation, compliance, competition, data monetisation, and the cloud. There was a lot to take in! Indeed, if you were to ask me for my overall takeaway from both these events, it would have to be that the

future of the payments landscape is hard to predict! There’s lots to be excited about with growth opportunities in both the consumer and SME sector, and open finance will deliver the ability for better products that help consumers make smarter choices and get hyperpersonalised offers suited to their lifestyle. But it’s also crucial for the industry to work together to meet the needs of all groups of people ensuring that everyone has access to financial products and services in the way that is best for them.

The future of the payments landscape is hard to predict At Pay360, Steve Everett, managing director of payables & receivables client products at Lloyds Bank, raised a smattering of giggles when he revealed during his keynote speech that he still ‘had a soft spot for cheques and cash’. Yet later that evening, on my train journey from London back to Yorkshire, it was

rather ironic that after a day of hearing about exciting new payment tools, a computer system failure meant the buffet car could only accept cash payments. Reading a recent cash census from the Royal Society for Arts, Manufactures and Commerce and ATM operator LINK reveals that despite great strides by fintechs during the pandemic, 10 million adults in the UK would struggle in a cashless society. Almost half the population say a cashless society would be problematic highlighting concerns around the ability to control finances and debt, digital fraud, privacy and increased isolation. More food for thought. In this issue of The Fintech Times, we’ve turned to some of our community’s leading players to see what they see as the industry’s most overhyped payment trends and services, as well as those promising innovations or topics we don’t talk about enough – see page 4. While on page 12, Rene Siegl, founder and executive chairman of

IXOPAY and IXOLIT Group, shares his thoughts on the future of payments and the importance of transparency. We also delve into the future of open banking in the UK. Open banking is undoubtedly a UK success story, with significant take-up and increasing growth; more than five million people in the UK are actively using open banking services. But what’s next? We asked for your view on the evolution and further standardisation of open banking within the UK – turn to page 6. With The Fintech Times team heading to more and more in-person events this summer, we look forward to hearing more of your views on the industry’s hot topics. Hope to see you there! Claire Woffenden, Editor The Fintech Times

www.thefintechtimes.com

COVER STORY THE FINTECH TIMES

OVERHYPED PAYTECH, UNDERHYPED PAYTECH I

t’s universally agreed that the coronavirus pandemic delivered new opportunities for innovation and evolution in the payment technology space. But which of the proclaimed ‘industry’s hottest trends’ are worth learning more about? The Fintech Times has turned to some of our community’s leading players to see what they see as the industry’s most overhyped trends and services, as well as those promising innovations or topics we don’t talk about enough.

“The most ridiculous payment innovation is Bitcoin as a transaction method. I still don’t get it. If you’ve ever bought something using Bitcoin, you’ll understand why it is still (after how many years?) used primarily on the dark web or as a highly speculative investment asset. We can do secure, real-time payments, globally, in any currency. I think Bitcoin aims to fix a problem that does not exist. Granted the investment side is a different matter – but I’m not sure I really trust that bit either. I thought that Bitcoin was destined for the trash can... how wrong was I?”

Phillip McGriskin, CEO at Vitesse, the London-based fintech that offers real-time cross-border payments for businesses

“Despite being first introduced in the 1950s, we still see new debit/credit cards being launched. They all have their unique selling points. Maybe they’ve switched the cold black titanium for a biodegradable natural material or provide bespoke travel insurance for the generation which values experiences over mortgages. Forget what they look like on the outside, on the inside they’re the same Mastercard and Visa products your grandparents used. Like a new expensive gin, another luxury clothing label and other premium consumer goods, marketing and packaging will be key to their success, not technology.”

D E P Y H R E V O

Ralph Rogge, CEO and founder of Crezco, the open banking account-to-account solution for B2B payments

“Hype in startups and especially fintech is nothing new. For some, it has been deserved and in many ways, it helped create the buzz we have in London for the industry. As the founder of a fintech startup myself, that hype has been helpful. Of course, we have seen many over-hyped startups in fintech and our subsection of payments is no exception. Many fail to bring real innovation to their customers, they succeed in driving hype to the investors with the end-game being driving valuations instead of addressing customer needs. In the end, the truth shines through, good marketing is useful but ultimately doesn’t help scale startups if it lacks solid product-market-fit.” Simone Martinelli, co-founder & CEO of Volume, a provider “In our view, one of the most overhyped trends is Web3. of open banking services for e-commerce merchants It’s been going on for nearly 10 years – previously under the blockchain or Bitcoin labels – but there isn’t much to show for it. Dozens of blockchain startups have failed in this space, the only ones succeeding being those that “The most overhyped and, in my opinion, set up trading exchanges, indices or some other piece of most overrated topic in the payments scaffolding. It’s very much like the old days of the Gold industry is machine learning (ML). Rush. The only ones making a profit are the ones selling On the one hand, ML is great for largeshovels and pickaxes. All in all, Web 3 / blockchain feels a bit scale indicative processes like know like a hammer looking for a nail. It’s an intellectually stimulating your customer (KYC) and anti-money piece of technology looking for an appropriate use case. Our laundering (AML). But on the other take on this is that the need for decentralisation is not the major hand, it requires vast amounts of data to draw pain point in today’s economy. Many companies struggle with inferences about demographic preferences or an customer research, cost efficiency, complexity reduction. individual’s decision-making. Payments can Very few of them voice a need for immutability, traceability certainly provide the data, but the data is too and anonymity as their top priority. Add to this the disparate to be useful for that purpose. Simply put, environmental impact of this technology, which is anything taking full advantage of ML is a huge assignment, but sustainable, and you have the ingredients for an much larger than can presently be handled.” overhyped trend, which hasn’t yet reached maturity.” Moshe Teren, CTO of MyChargeBack, a specialist in forensic cryptocurrency investigations and card-not-present transaction disputes

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Louis Carbonnier, co-founder and co-CEO of Hokodo, a B2B buy now, pay later provider

“I think the ease of payments is overhyped. The general idea is that payments flow easily, including cross border payments, and that the structure is there to allow this. I don’t think that’s the case for regular banks, but as non-financial entities, fintech platforms can act with greater agility. Fintech platforms now act as a marketplace for SMEs to access trade receivables financing, raise big money, and step into the role previously occupied by banks in extending credit lines to small businesses and providing a valuable alternative income source.” Morgan Terigi, CEO and co-founder of Incomlend, an invoice financing platform

COVER STORY THE FINTECH TIMES

“Loyalty or rewards points are a form of fiat currency that most of us have at our disposal and represent one of the most ‘underhyped’ payment options available today. Points can be used just like cash or a credit card and offer similar liquidity and less volatility than other alternative payment vehicles. Points are a stable and funded form of currency with limited risk. Retailers that allow their customers to ‘pay with points’ at checkout are providing a better checkout experience, while offering a consumer touchpoint that promotes long-term loyalty, repeat business and brand advocacy. By powering pay with points, retailers, brands and loyalty programme sponsors offer greater purchasing power, allowing consumers to spend points on everyday items rather than saving points for future purchases, like travel or travel-related items.” Len Covello, CTO at Engage People, a firm offering loyalty and rewards programmes

“One of the biggest areas that has been underhyped, overlooked and underappreciated in the payments landscape is the back office. This is especially true with the current, continued growth and adoption of P2P payments and faster payments networks. While today’s businesses recognise the need and benefits they can offer, most are unaware (and unprepared) for the significant changes and investments they really need to make to their back end systems before the benefits can be fully realised. It’s easy to focus on having a sleek, attractive, user-friendly front-end interface or app that starts the payment process, but far too few really stop to consider how those payments are ultimately processed after the button is clicked. The truth is that the back office has a huge impact on the entire transaction’s flow. No matter how quickly a payment moves through a front-end app or network, it must be processed in the back office to complete it, and it’s this that truly determines how ‘fast’ a faster payment really is.” Casey Scheer, director of BHMI, the payments software applications provider

“One of the most promising yet underrated trends in this space is the impact of banking-as-a-service (BaaS) on B2B payments. Thanks to the inception of BaaS and the budding embedded finance opportunity, non-banking businesses can easily integrate white-labelled financial products into their offering, including innovative tools for sending and receiving payments. At a time when payment friction and high card fees abound, SMEs are increasingly exploring how they can tap into the plug-and-play API economy to offer convenient payment options to suppliers and other key business partners – and ultimately avoid cash flow problems. BaaS providers enable these firms to leverage their ecosystem of pre-integrated payment networks and turn the tide on inefficient payments. Embedded finance is setting a new gold standard for B2B payments. No doubt, the proliferation of BaaS spells good news for fast, cheap and favourable payment processing.” Julia McColl, chief product officer at digital bank Chetwood Financial

D E P Y H R E UND “The payments industry has seen an explosion in improvements on the consumer side, with BNPL, digital, and contactless payments taking over by storm. On the B2B front, small businesses, in particular, are still struggling with collaborative innovation. It’s crucial for the payments industry to take advantage of the B2B market and improve the needs of merchants still reliant on checks and wire transfers. The B2B market is 10-times larger and more profitable than the consumer market and implementing new technologies that help businesses pay and get paid faster will lead companies to outperform their business goals. Advancing B2B payments will help companies meet their needs in real-time with more efficiency and less friction.”

“The humble QR code: developed in 1994, the QR code is a machine-readable matrix barcode. With the exponential growth in smart phones adoption over the past 15 years and the adoption of QR codes for payments, you had a near-perfect solution for the customer. You have a contactless, cashless, secure, and quick payment method. What more is needed when it comes to modern-day payments? Technology by nature keeps evolving. This adds pressure to keep re-imagining payment methods, yet we already have something that works well!” Trevor Goott, director Africa & India at Unlimint, the alternative payments firm

“The importance of trust has always been paramount in payments, and the digitisation of the industry has put an even greater emphasis on this in recent years. One of the ways that fintechs are helping to increase trust is by utilising the full arsenal of security measures they have to hand, including virtual credit cards. Instantly generated cards, codes and details that can be disposed of just as easily as they are made is one sure way to help protect a customer’s details, but as it stands it is an underappreciated and undervalued attribute that most of the fintechs offer. Shouting about this could help garner more customers’ trust going forward!” Quentin Ellis, managing director of mobile marketing firm ConsultMyApp

Marwan Forzley, CEO of Veem, the online global payments platform

www.thefintechtimes.com

F E AT U R E S T O R Y THE FINTECH TIMES

UK: The Future of Open Banking Regulators have pencilled in an ‘end of 2022’ deadline to draw up plans for a new entity to lead the further development of open banking. Will this help maintain the UK’s position as a global leader?

pen banking is undoubtedly a UK success story, with significant take-up and increasing growth; more than five million people in the UK are actively using open banking services. Indeed, many other countries have looked to the UK’s approach as they develop their own models. But attention has now turned to how the open banking regime should evolve in the future. At the end of March, the Competition and Markets Authority (CMA) unveiled recommendations for the next steps in the future oversight and governance of open banking. Under the plans, the Financial Conduct Authority (FCA) will jointly oversee the future of the UK’s ongoing open banking implementation, alongside the Payments Systems Regulator (PSR) – with HM Treasury and the CMA lending support. The CMA’s recommendations will be taken into consideration in the design of a future entity to succeed the Open Banking Implementation Entity (OBIE) – the entity set up by the CMA in 2016 to deliver open banking, funded by Allied Irish Bank, Bank of Ireland, Barclays, Danske, HSBC, Lloyds Banking Group, Nationwide, Natwest Group and Santander. The future entity would build on the significant progress made to date by the OBIE to encourage innovation and support competition in retail banking. In summary, the future entity will: ●

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Have effective regulatory oversight, with a new Joint Regulatory Oversight Committee (JROC) to agree and implement the next steps led jointly by the FCA and PSR Have independent and accountable leadership, with a majority of independent directors on its board Be adequately resourced to carry out its functions through a more broadlybased and sustainable funding model

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●

● ●

Effectively serve the interests of consumers and small and medium-sized businesses, including consideration for how these groups will be represented in the governance of the entity Be sustainable and adaptable to the future needs of the sector Have a system to effectively support the monitoring and enforcement of the Retail Banking Market Investigation Order 2017.

Andrea Coscelli, chief executive of the CMA, comments: “Open banking has been a major success in the UK, bringing innovative new services to retail banking and benefiting consumers, businesses and the UK economy. The CMA has carefully considered the appropriate future arrangements to boost open banking so that its significant benefits can be realised even more widely.” While OBIE’s trustee and chair, Charlotte Crosswell, added: “We welcome the announcements by the government and regulators and the endorsement it gives for the future of open banking to our thriving ecosystem. There has been significant collaboration in developing the infrastructure, standards and ecosystem that we have in place today. We now need to drive forward competition and adoption and realise the benefits of innovation for consumers and businesses across the UK. We will look forward to working with the new Joint Regulatory Oversight Committee over the course of this year.”

INDUSTRY FEEDBACK

The CMA’s announcement has been largely welcomed with many saying clarity is critical for the evolution and further standardisation of open banking within the UK. Adam Jackson, director of policy at the UK fintech community body Innovate Finance, said: “We welcome the CMA’s response on future plans for an open banking entity, which we have been calling for to provide the industry with greater clarity on the evolution in the UK. This is an important

step in maintaining the UK’s position as a global leader in open banking.

While, Nanna Saito Nielsen, VP of banking operations at account-toaccount payments firm GoCardless, said: “We’re glad to see the CMA has published new guidance on the future of open banking. It’s not so

much a resolution, however, as it is a signal that we’ve entered a critical phase of open banking development. We can’t afford to lose focus now.

F E AT U R E S T O R Y THE FINTECH TIMES

“While it’s true that we’ve built the foundations of open banking, there are still fundamental issues which must be addressed to enable mass adoption, such as improving API uptime and creating a payer experience that is, at a minimum, good and consistent across banks. These details and how they are implemented are key. Inconsistent or generally non-conformant

implementation will – even if just initially – disproportionately impact new or relatively young market entrants. “We are also pleased to see a commitment to going beyond the original CMA order, in particular unlocking the potential of open banking payments which we believe will be a viable alternative to cards. But there are two areas which must be addressed and refined to ensure the continued success.

The first is the question of funding: while we are encouraged to see a broader funding model, we have yet to see the details. Second, the statement describes the future entity with independent and accountable leadership. We would support a process whereby the joint regulatory oversight committee plays a central role in the appointment of an initial independent chair” Jan van Vonno, research director at open banking platform Tink, said: “At Tink we’re pleased with the consultation response. The UK is the only country in Europe where the competition authority is directly overseeing the development of open banking. The currently bank-funded OBIE stands between banks, third-party providers (TPPs) and the regulators. Although the work of the OBIE has allowed for the creation of granular APIs and a thriving ecosystem, we believe there’s still much that can be done to unlock the value that open banking can bring – especially in payments.” Damien Cahill, co-founder and COO of account-to-account payment solution for merchants firm Vyne, said: “As we are moving closer to the age of open finance, a favourable regulatory landscape is crucial for open banking to thrive. A time when five million consumers and businesses are already taking advantage of open banking services, this announcement is well-timed. Coordination between the CMA and the OBIE is critical for the evolution and further standardisation of open banking within the UK. It will empower users, giving them more control over their data and providing a market rich with competition and innovation to better meet their banking and payments needs. With the cost of living crisis rearing its head, it has never been more important to reduce friction and promote financial inclusion.” Bee Thakur, UK public policy lead at one of the UK’s largest open banking provider TrueLayer, said: “For the UK to maintain its position as a centre of fintech innovation, the focus needs to be on the further development of the open finance ecosystem. We need the future entity that replaces OBIE to be well funded and empowered to hold all market participants to account to achieve this. “That requires robust oversight with governance that is independent from banks and other institutions where access to data

and payments is being sought. This is critical because the incentives of market participants will not always be aligned with the wider objectives of open finance to create competition in financial services.

For the UK to maintain its position as a centre of fintech innovation, the focus needs to be on the further development of the open finance ecosystem “During the transition phase to the future entity, the newly announced joint regulatory oversight committee (JROC) should use its collective powers on pressing issues such as the development of variable recurring payments (VRP) beyond sweeping. This will help us to continue to innovate and develop world class products and services, and in doing so create fair financial markets which give UK consumers the best choices.” Maria Palmieri, head of public policy, Yapily, believes the future of open banking oversight is still unclear. “While it is encouraging to see further clarity from the CMA on the rollout of a Joint Regulatory Oversight Committee, many questions still remain around the future of open banking in the UK,” she said. “With the current mesh of regulators, it is almost impossible for fintechs, banks and open banking providers to plan for the future. “This technology holds the power to transform the financial livelihoods of people and businesses. But to make that happen, we need to see the creation of a formal Open Finance Framework and further guidance on the future role of the OBIE, particularly on monitoring and enforcement. These steps would turbocharge further adoption of open banking solutions ensuring better and fairer financial services for everyone. www.thefintechtimes.com

AWA R D S THE FINTECH TIMES

ank B h s try r it i s B u e d h rs , t n k i n g i n e m u c on s r i t i s h ba y b fo r eB h d t e f t t vo e st o n b e e c h t er 100 p celebrate ds Awar

n Thursday 5 May, Smart Money People revealed the winners of the British Bank Awards 2022, at a glamorous awards ceremony in the heart of London, hosted by comedian Lucy Porter. It was the first in-person awards event for the Smart Money People team since March 2020, when the British Bank Awards were held just days before the country entered into lockdown. This year saw Monzo enjoy success in two of the biggest categories for the first time. Firstly, it scooped the highly coveted ‘Best British Bank’ award, sponsored by Folio, then the Monzo team took home the ‘Best Business Account’ gong. Monzo also secured the honour of ‘Best Banking App’, making the coral-coloured challenger bank the top winner for 2022 in the awards.

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Starling Bank maintained its hold on the award for ‘Best Current Account’ for a fifth consecutive year, and also scooped the award for ‘Best Children’s Account’ for the first time for its Kite account which it launched in 2020. The Fintech Times sponsored the category for ‘Innovation of the Year’, awarded to money management app HyperJar, which launched in the UK in October 2020. Since launch, the app has introduced a range of innovative new features to the market and most recently HyperJar announced it was the first consumer account to offer routed spending, as well as ‘Only’ and ‘Block’ spending features within the app. Commenting on the results on the evening, CEO of Smart Money People Jacqueline Dewey said: “With the awards

100 per cent voted for by consumers, the British Bank Awards truly reflect the best of the UK banking industry, and the commitment and engagement these organisations have from their customers. Both the finalists and the winners of the awards this year should be proud of their achievements.” Now in their eighth year, the awards saw more than 80,000 votes cast across 29 categories over 13 weeks to determine the winners. Voting in the awards was as competitive as ever, with some categories having up to 10 finalists in the run up to the winner’s announcement. The awards are determined by customers voting for their favourite product provider via a rating out of five and then a review on the Smart Money People website. Smart Money People also asks the customer to give a rating for customer service, NPS

(net promoter score), value for money and whether they felt fairly treated. Smart Money People, launched in October 2021, offers a dedicated website for reviews on financial service products, and uses the data collected from these reviews to provide customer insight to companies across the industry, showing them what they’re doing well and benchmarking against their peers. In addition, Smart MoneyPeople runs the annual ConsumerCredit Awards and InsuranceChoice Awards.

AWA R D S THE FINTECH TIMES

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CEO INTERVIEW THE FINTECH TIMES

COLLABORATION INCOMPLIANCE The Fintech Times meets Evgeny Likhoded, founder and CEO of regtech Clausematch, to hear how technology is playing a transformative role in the compliance sector

he regtech industry has experienced rapid growth over the last two years with the pandemic driving demand for innovative solutions to improve collaboration and boost efficiency. Outdated processes and legacy technology previously enjoyed by financial institutions are proving to be unsuitable to meet the heavy demands of today’s regulatory landscape. Clausematch is a global compliance technology company helping both startups and leading financial institutions standardise and automate their processes and workflows in order to manage governance and compliance risks. Its AI-powered software as a service (SaaS) platform is live with top-tier banks, including Barclays, enabling teams to collaborate on documents faster and more efficiently. The company was founded in 2012 by Evgeny Likhoded. After studying law at the University of Exeter and Université de Rennes, Likhoded worked in the European legal and compliance departments of an energy utility and investment bank Morgan Stanley before spotting the need to improve ways that companies can understand and meet their compliance obligations and ensure that compliance is embedded into their business. The Fintech Times recently caught up with Likhoded shortly after he’d participated in a panel discussion on how regulators can encourage regtech adoption at the Innovate Finance Global Summit in London in April. TFT: Tell me a little about

Clausematch and how it helps financial institutions. EL: I started Clausematch about nine years ago, and at the time my idea came from working in large financial institutions or generally large companies creating a lot of documents and a lot of data, which would be very important for regulators and for compliance 10

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departments. But the way we managed that data or that content hadn’t changed in 20 years. If writing an anti-money laundering policy, I would be opening a Word document and creating a policy and sending it to review to 20 or 30 people. They came back with comments and then I would have to do that every year. Ultimately, it results in a PDF document which is then distributed to employees by email or via a document storage system but there would be no track record of why this document exists in this form, who has read it, who has attested to it, or whether it is compliant with regulation or not – all of that valuable data is lost. My idea was that we need to rethink how we create that content, and we need to rethink how we collaborate in a way that is favourable to regulators. At the core of Clausematch is real time content collaboration. So, instead of working on a Word document and sending it via emails, it kind of looks like Google Docs, but it’s specifically adapted for compliance workflow, compliance departments and with an audit trail. It is also a way to communicate to employees via a centralised portal, and to track engagement with your compliance content. TFT: In December 2021, Clausematch

was voted one of the world’s most innovative regtech companies. What do you think you do that stands apart from others? EL: We have managed to become quite a unique company with a unique solution because of the way we help people collaborate in real time, in a compliant way. At the time, when we started working on this cloud-based content collaboration editor working in real time, only Google really had that approach, so it was a daunting task and there still aren’t many companies doing this, because it takes years to actually build it. We have invested time and we have invested into technology, so we’re actually quite far apart from competitors. Because

we believe that regulations will become digital, then it will be much easier to track regulatory change and we are already providing this solution to implement that change internally within an organisation. That’s why we’re often partnering rather than competing with a lot of solutions on the market. We’ve seen that where there is a project and the need for a financial institution or even fintech they haven’t really been competing because we’re quite set apart. There’s been a shift from using one big incumbent solution for everything in compliance and regulatory change, to an approach of trying to pick the best solutions and then integrate them. So, there’s a great demand from our clients for us to integrate with other solutions.

“THERE’S BEEN A SHIFT FROM USING ONE BIG INCUMBENT SOLUTION FOR EVERYTHING IN COMPLIANCE AND REGULATORY CHANGE, TO AN APPROACH OF TRYING TO PICK THE BEST SOLUTIONS AND THEN INTEGRATE THEM” TFT: The last few years has seen

a big upheaval that has led to the introduction of more regulation and changes. What would you say are the current hot talking points? EL: There are a lot of topics that banks and financial institutions and other industries are trying to address. Environment, social and governance (ESG) this year is obviously massive and is only going to become bigger. Then we also have the current financial sanctions regime and what’s happening now in the political arena is changing what’s required to be compliant. It’s changing not just from the compliance point of view, but from a reputational point of

view as well because reputationally companies are now looking at their supply chain, they’re looking at how they’re viewed by their employees, by their customers or by their suppliers and it’s become very important because generally employees want to work for the companies that are driving ESG adoption even without the regulatory push. Supply chains have to adopt ESG regulations and ESG standards, because their customers and big banks are forcing them to do so. Then, there is a whole other part of financial services that is emerging, crypto regulation where there is a lot to talk about but, ultimately, we’re going to see a lot of change. Where there is regulation, there is also the ability for big players in the market to participate. TFT: How would you describe your

leadership style and the culture you have implemented at Clausematch? EL: My leadership style is to lead by consensus. In the last few months, I’ve built out a leadership team, where we work together collaboratively and made decisions as a unit. In general, our culture within the company has always been gratitude, empathy and working together towards a common goal and putting clients first. We have some long-standing team members at Clausematch, who joined the company right in the beginning and they’re still here, which is great to see. When you’ve got people who stay in the company, especially in tech positions which typically has a much higher turnaround, it says something. TFT: Tell us something about you and

what you enjoy doing out of work? EL: While I became a lawyer, my true passion has always been technology and that’s the reason why the idea of Clausematch came about – because I understood what the problems were and also how that conservative technology worked. But, in my free time, I’ve got a little pet project, which is that my entire home is automated. When automating

CEO INTERVIEW THE FINTECH TIMES

your home, you can speak to it, and it does what you’re asking it to do, which is quite cool. Otherwise, I love educating myself so like reading a lot of books. One book that I recently read called Atomic Habits: An Easy & Proven Way to Build Good Habits & Break Bad Ones has had quite an impact on me. Just to understand how we actually form habits and how you can change your habits, as well as notice the habits that perhaps hadn’t realised. TFT: What can we expect from

Clausematch in the coming months? What are the future plans? EL: In 2021, we launched new modules and functionalities that turned out to be very useful for our clients. Our user base has been growing by tens of thousands. We’re planning to further advance our product offering with the use of artificial intelligence and the latest advances in machine learning. Also, the North American market is of strategic importance for us as the demand for compliance technology is ever increasing. Clausematch is going to grow the US team to meet the demand and better serve the market.

AT A GLANCE WHO WE ARE: Founded in 2012, Clausematch is the platform regulated companies depend on to manage policy management and regulatory change efficiently, prove compliance, and stay responsive and agile in an ever-changing landscape. Its founder came from highly regulated industries so understood that the process of passing audits and compliance assessments was costly, inefficient, and time-consuming. The concept for Clausematch was born to enable organisations to run their businesses safely and meet compliance obligations. COMPANY: Clausematch FOUNDED: 2012 CATEGORY: Regulatory technology KEY PERSONNEL: Evgeny Likhoded, founder and CEO of Clausematch HEAD OFFICE: London, UK ACTIVE IN: New York and Singapore TEL: +44 (20) 3397 7366 WEBSITE: www.clausematch.com LINKEDIN: www.linkedin.com/ company/clausematch TWITTER: @clausematch

www.thefintechtimes.com

PA Y T E C H THE FINTECH TIMES

Payments innovation and the race to keep up

An evolving payments ecosystem is leaving businesses on the back foot and constantly playing catch up

t seems that, in the world of online payments, new products and ideas are being announced and released weekly. The rate and scale at which innovation is happening makes it difficult for companies to stay on top. The pandemic drastically sped up e-commerce growth, and many merchants have had to scramble in order to make sure that their payments’ ecosystems were capable of handling such an increased load. The shock of the Wirecard scandal in 2020 left some unable to accept payments and others rethinking their payment setup entirely. The last two years have been a disruptive time. Changes that were expected to take place in five to ten years, happened in a few months.

WHAT PAYMENT TRENDS HAVE WE SEEN IN THE LAST TWO YEARS?

Open-source technology, such as open banking, has seen significant growth. We can expect to see more products and solutions that will aid account to account payments and more. There are discussions in the UK about variable recurring payments, which is a viable alternative for direct debit payments, something that is expected to be available by the end of this year. It is also likely that we will see it grow in jurisdictions where it is not yet mandatory, with financial institutions embracing collaborative opportunities to create revenue-sharing ecosystems. Another payment method that has gained a lot of traction is buy now pay later (BNPL). A challenger to credit card companies and popular among young consumers makes it not only one of the fastest growing payment methods but also one of most controversial. Its champions say it is a great way for consumers to manage their finances without having to resort to traditional loans which accrue interest. Its detractors believe it glamourises debt. Whatever your opinion, its popularity has exploded and is not expected to die down any time soon. We are also starting to see more big players trying to launch their own super-app, the idea of which is to have an array of digital financial and other services in one place. There is already a selection of successful super-apps in Asia, such as WeChat, AliPay and Grab. Companies that are looking to break into this sort of expansion are Square, PayPal and Google. These applications 12

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Rene Siegl, Founder and Executive Chairman of IXOPAY and IXOLIT Group have also come under scrutiny and regulators are critical of the control and monopoly that they have on the market. However, their one-stop-shop approach is popular among users.

WHAT CAN WE EXPECT FROM THE FUTURE?

It is likely that as more and more countries return to some semblance of normality that e-commerce growth will slow down. However, we can be certain that local and alternative payments will continue to gain popularity. Their appeal is simple: they give wider groups access to online payments, such as those who don’t have bank accounts or those who wish to keep their online activities anonymous. We can also expect to see the use of credit and debit payments reduce further due to the SCA (strong customer authentication) regulations that are now in place.

WHAT DO THESE INNOVATIONS HAVE IN COMMON?

All of these trends and innovations have one thing in common. They can all be connected to, via a single application programming interface (API), with a payment orchestration platform. Many have seen that, in order to provide a stable payments setup that has the flexibility to scale, they need an additional layer. This layer, payment orchestration, has become a buzzword in the payments sphere but one that still causes confusion and needs to be defined.

(CRM), transaction management system (TMS), e-commerce platforms and more, giving a truly holistic experience for the merchant and streamlining not just their payment but also their e-commerce setup.

WHY ADD ADDITIONAL LAYERS TO A PAYMENT SETUP?

The idea of adding an additional layer to a payments setup may seem counterintuitive. However, a payment orchestration platform (also known as an online payment management platform or gateway) has a variety of tools that help merchants manage their transactions, from routing to reconciliation. Industry leading platforms have integrated features such as: ■ ■ ■ ■ ■ ■ ■

PCI card vaulting/ (network) tokenisation Transaction routing Automated reconciliation & settlements Transaction risk management/fraud protection Support of recurring transactions Monitoring & reporting/payment analytics Connectivity to multiple payment methods and acquirers

The platform provides merchants with independence and flexibility, giving them an overall view of their transactions, regardless of who processed them as well as access to a PCI DSS (Payment Card Industry Data Security Standard) certified vault. By having all connections in one place, merchants are able to create risk

the platform, saving time and money on building individual integrations.

THE IMPORTANCE OF TRANSPARENCY

There is a lot of movement in the payments industry. Not only is there constant innovation, there is also a large amount of mergers and acquisitions. This is pretty much the same in any industry, however when it can become an issue for the merchants is when a previously independent company becomes related to a larger organisation which has vested interest in which acquirer or PSP you are using. This may hinder who you are able to connect to and makes you less competitive when it comes to negotiation. A payment orchestration platform is an easy, effective and intuitive way to stay up to date with or even ahead of innovation. It gives flexibility, opportunities to scale, and complete control to a payment stack.

About IXOPAY IXOPAY is a payments orchestration platform enabling independent, flexible and global payment processing. As a PCI-DSS certified ‘fintech enabler’, IXOPAY fulfills the needs of large merchants as well as those of ‘white label’ clients: PSPs, acquirers and independent sales organisations. The modern, easily extendable architecture offers smart transaction routing & cascading, state-of-the-art risk & fraud management, fully automated reconciliation and settlements processing, comprehensive reporting as well as plugin-based integration of acquirers, PSPs and alternative payment methods. IXOPAY is part of the IXOLIT Group, founded in Vienna, Austria in 2001. With local entities in Austria and the USA, IXOLIT supports national and international customers across various industry verticals. The company has grown from two to more than 80 employees. Website: www.ixopay.com

Introducing Rene Siegl A payments orchestration layer or platform is a technical layer that sits between the merchant and their payment ecosystem, allowing them to connect to as many payment service providers (PSPs) and acquirers as they would like. It can also connect to multiple applications such as enterprise resource planning (ERP), customer relationship management

rules, routing rules, and analyse their data from one easy-to-use interface. Via one API, merchants and businesses have unlimited access to international, local, and alternative payment methods, enabling them to respond quickly to changes in the marketplace and provide their customers with the most relevant options. All connections are built and maintained by

Rene is the founder and executive chairman of the IXOLIT Group. Since 2014, Rene has led the development of the IXOPAY Payment Orchestration Platform, which addresses the global payment scaling needs of online merchants and licensed payment institutions. Linkedin: www.linkedin.com/in/renesiegl

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REGTECH THE FINTECH TIMES

FIGHTING FINTECH WITH FINTECH

Fintechs are finally on the cusp of disrupting the traditional financial structure. But the expected crackdowns from the regulator this year could derail this progress. So, what can fintechs do to navigate this evolving regulatory landscape?

year on from the Kalifa review and the jury is still out on the true impact its recommendations have had over the last 12 months. The independent review, commissioned by the government and led by former Worldpay chief executive Ron Kalifa, found that the UK’s fintech sector was at a ‘pivotal moment’ but required additional support to realise its potential. Although several recommendations have been implemented, including the establishment of the new industry-led Centre for Finance, Innovation and Technology (CFIT), as well as regulatory initiatives such as the FCA’s sandbox and the Bank of England’s extensive work on digital currencies, we still haven’t seen fintech-specific regulations as a result of the review. In fact, industry-wide calls have been loud and clear – as almost 70 Innovate Finance members penned an open letter to the UK government calling for more to be done in the name of progress in this area. However, if the fintechs demanding more progress are seeing the bigger regulatory picture (and they must!) they should remember: with every piece of red tape cut to stimulate sector growth, the FCA will be considering the impact this has on the consumer as well as the industry as a whole. Innovation doesn’t simply stem from a relaxation of rules, but rather a push and pull balancing act that promotes progress, while ensuring tighter regulation is in place so that the UK remains an attractive location for IPOs. 14

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Ben Richmond CEO and co-founder, CUBE Therefore, the success of the emerging fintech landscape lies in the balance of the regulatory framework that applies to it. While the Kalifa review is designed to promote innovation within the fintech sector, regulations that protect consumers and the fragility of the markets will also be at the top of the agenda for the UK regulator this year – and should not be eclipsed by the narrative surrounding the Kalifa review. Up until now, fintechs have considered themselves largely unconstrained by regulatory requirements more closely associated with that of their traditional counterparts – or have questioned their place within existing regulatory frameworks. But the fintech industry has transformed at breathtaking speed since the Competition and Markets Authority

FINTECHS ARE INCREASINGLY PLAYING AN INTRINSIC ROLE IN THE DAY-TO-DAY LIVES OF CONSUMERS decided the industry would benefit from competition in 2016. Four years later and the services on offer are beginning to mirror those typically associated with large financial institutions, in some instances acting as direct competitors. Fintechs are now unbundling the suite of services typically offered by traditional banks to offer often superior payments and lending products to consumers. The outcome is that fintechs are increasingly playing an intrinsic role in the day-to-day lives of consumers. As such, it’s

unsurprising that, alongside innovation, tighter regulation and compliance are following closely behind. A preview of times to come is the regulators’ latest crackdown on the booming buy now, pay later (BNPL) sector. In 2020 alone, the use of BNPL products tripled to £2.7billion, and as the industry has soared to new heights the regulator has – understandably – closed in. In this instance, the FCA has pulled up certain businesses around the ‘potentially unfair and unclear’ terms within BNPL products, such as repayment plans. This has now been successfully addressed by the companies in question, but this is just the start. The FCA’s statement that ‘we do not yet have the powers to regulate these firms’ – in reference to emerging fintechs – should be seen as a wake-up call as the UK government reviews regulatory options for the sector as a whole. Fintech providers offering financial services products need to ensure they are providing their already overworked compliance teams with the resources and tools to be able to navigate the next twelve months effectively. And in this case, two heads may not be better than one. Adding more manpower to the equation won’t necessarily streamline inefficiencies facing compliance teams in this space. Instead, fighting fire with fire – or, in this case, fintech with fintech – may be the answer. For some fintechs, regtech might be just another accolade better suited to

their traditional counterparts, however, failure to use technology to navigate the successful growth and future of embedded finance could be fatal. Regtech is not a tick-box exercise for compliance requirements, it can support fintechs with customer acquisition, product creation, and ensuring they can expand globally. Without this edge, can these firms ever truly be disruptive? Undoubtedly, this sector will see regulatory changes that promote innovation over the next twelve months. However, the reality that some fintechs have not yet realised, is that the result will be a push and pull of cutting the red tape and cracking down on a sector that has largely flown under the regulatory radar.

About ForwardAI CUBE is a regtech provider empowering regulated financial institutions to meet cross-border compliance challenges head on. It applies leading techniques in machine learning, natural language processing and robotic process automation to make complete sense of regulatory data and tailor it to our customer’s profiles. Website: www.cube.global

PA Y M E N T S THE FINTECH TIMES

Everything merchants need to know about strong customer authentication I

Strong customer authentication (SCA) officially came into effect in March, challenging online retailers to really know who their customers are. Non-compliance has seen many have their online card acceptance capabilities stopped and led to hundreds of thousands of transactions to be declined.

mposed by the Financial Conduct Authority (FCA), SCA outlines a specific set of requirements that promote consumer safety throughout e-commerce. Although originally put forward in the Payment Services Regulations (PSRs) back in 2017, the deadline for full implementation had previously been set back; predominantly due to the effects of the pandemic. However, the FCA announced at the turn of the year that it would accept no further setbacks, and that the final date for merchants to fully comply with the system would come into force on 14 March 2022. The system requires merchants to authenticate the identity of their consumers for all online transactions over the value of £25 through two out of a possible three avenues: ■

■

Knowledge (something only the payer knows) – examples include a password, PIN, passphrase, or secret fact/answer) Possession (something only the payer possesses) – examples include their mobile phone, smartwatch, smart card or a token Inherence (something the payer is) – examples include a fingerprint, facial recognition, voice patterns, DNA signature and iris format

From now on, whenever a customer wants to buy something online that costs above the £25 threshold, they will be asked to verify their identity, for example, through their banking app or a one-time passcode via text or phone call. On 18 January, card issuers started to decline some non-compliant transactions, with all non-compliant transactions being declined after the 14 March deadline. During the first month since SCA became mandatory, 664,000 online transactions worth £130million were declined; equating to £4.3million in lost sales each day. Adam McElroy, director of cyber security at KPMG UK, explains why SCA was considered appropriate for the e-commerce industry: “Recently, financial institutions have been faced with rising fraud rates as well as an intense period of change and uncertainty which has cast doubt in the eyes of the consumer in banks’ ability to keep their assets safe and support them through times of need.

Tyler Smith, Journalist, The Fintech Times “But this newly-added layer of security places more ownership in the hands of the consumer in terms of sharing their personal verification information, helping to restore that all-important trust factor. Facilitated through open banking, banks are now at the heart of the digital economy – strengthening the connection between a bank and their customers through SCA should engender deeper trust and revitalise people’s confidence in modern banking.”

WHY IS SCA REQUIRED?

SCA is required whenever a customer needs to interact with their payment accounts online. If for example, they initiate a payment transaction or carry out an action through a remote channel which may imply a risk of payment fraud or other abuse, their identity will need to be authenticated. The purpose of SCA is to provide online payments and payment activity with an additional layer of security, something that is particularly poignant considering the recent acceleration of online payments. According to UK Finance, 72 per cent of UK adults used online banking and 54 per cent used mobile banking during 2021. But with large levels of participation come even larger potentials for financial fraud and cybercrime. Jana Mackintosh, managing director of payments and innovation at UK Finance said: “Fraud is a growing problem, with criminals stealing more than £750million in the first half of 2021 alone. That is why it is more important than ever that additional protections like SCA are put in place. “For retailers, implementing SCA will provide customers peace of mind that payment processes are more secure. The

industry and stakeholders have worked tirelessly to get ready for this change and we encourage any retailers who have not yet implemented SCA to act as soon as possible to ensure the new protections are available to all.”

THE DOWNSIDE OF SCA

The purpose of the SCA is to stamp-out card-not-present fraud, alongside all of its over derivatives. However, some key industry figures have pointed out how the implementation of SCA makes online payments much more difficult, and may even go so far as to discourage consumers from shopping online. “The new SCA rules add more protections for the consumer – but they also add more friction to the consumer checkout,” Maria Palmieri, head of public policy at Yapily, explains. “As the card payment experience becomes more cumbersome, we can expect to see rising demand for alternative, one-click payment methods at the same time. “Instant transfers made directly from one bank account to another via open banking, for example, are reducing the potential of card fraud as well as lengthy settlement times for the merchant. The direction of travel is clear; the new SCA rules are the latest indication of a growing shift in momentum away from cards towards more innovative, slicker payments processes for businesses and consumers.” “Paying by card got a lot more painful thanks to the implementation of the new SCA rules,” added Siamac Rezaiezadeh, director of product marketing at GoCardless. “Consumers making online payments are now faced with interruptions to their payment journey and asked to take extra steps to verify their identity. These added layers of security are yet another example of the card industry adding

inconvenient bolt-ons to compensate for the fact that cards were not designed for an online world. “We’re already seeing surging interest in payment methods that can solve this imminent headache. Payments that come directly from a customer’s bank account, such as those powered by open banking, are SCA-compliant by design because authentication is built seamlessly into the checkout flow. This offers the streamlined online payment experience people have come to expect, and limits conversion and churns risk for businesses.” As Ed Whitehead, MD EMEA at Signifyd, points out: SCA is by no means the only fraud prevention measure that merchants and consumers will ever need, and there are in fact many areas where the reach of this scheme won’t satisfy. He explains: “The new payments regulation, is a once-in-a-generation change with the potential to massively disrupt an enterprise or to push an enterprise ahead of its competitors when it comes to customer experience. “But while SCA itself will be a vital pillar of protection for merchants and consumers alike, there is more to fraud and more to fraud protection than simply deploying an SCA solution. It is not, as some have mistakenly assumed, the only fraud solution a merchant will ever need, and one only need to look to the European countries where enforcement has begun in order to understand the limits of SCA’s fraud protection. Many transactions are not subject to SCA, and while this is a saving grace for merchants who are worried about online customer experience, it means they will still be vulnerable to fraudsters who will inevitably target the transactions which are exempt from this added SCA layer. “Merchants should also consider the fact that a low-fraud rate will be vital for providing a top-notch customer experience once SCA is enforced, and this is only possible by ensuring they have the most robust defences in place. Fraud rates and risks vary by retailer and even by retail vertical. But as SCA rolls across Europe and becomes enforced in the UK, it is clear that the new regulation is not a be-all fraud solution and merchants will need to consider other fraud solutions to protect their business and maintain an excellent customer experience online.” www.thefintechtimes.com

INSURTECH THE FINTECH TIMES

REVOLUTIONISING INSURANCE WITH DATA INNOVATION Luca Schnettler, CEO, Qumata

Examining the future of underwriting in the life and health insurance industry

o industries, economic sectors or markets have been left untouched by the implacable transformation driven by digitisation, technology and innovation. Financial services are at the forefront of this disruption and transformation, as seen in the explosion of startups and unicorns in the digital financial technology space. Insurance, arguably the last bastion of finance has not escaped this wave of change, with the rise of insurance technology (insurtech) across the globe. The insurance industry has long been dominated by traditional business models, structures, and processes. The industry has been reluctant to change without regulation. A perfect example of this is underwriting within life and health insurance to price applicants, which has presented barriers to change. This process is well-known for its lengthy questionnaires, potential medical exam requirements and slow approvals for applicants. If simplified is deployed, this can lead to additionally loaded products. There are new innovative ways that have been launched to help streamline these processes without major additional risk or cost using alternative data sources, to assist the underwriting process. Underwriting, the process insurers use to determine a fair price for the coverage of the risk is done by medical underwriting in the life and health insurance industry. An applicant’s health or life insurance coverage will be evaluated through an examination of their medical history, a fundamental aspect of the process. The pricing of any subsequent coverage granted is quantified by analysing the risk factors of the applicant’s responses to a series of questions supplemented by their medical history and a lifestyle questionnaire. Self-declaration integrity also plays a big part in the process.

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The process of medical underwriting to price individual policies broadly still follows traditional methodologies deployed and adopted by life and health insurance, and reinsurance firms around the world. Methods deployed can be online or paper-based and can be time-consuming for both policy applicants as well as the insurance and reinsurance companies. Data collection in this manner can differ from country to country. For many insurers and reinsurers, it is time-consuming and a challenge to maintain applicants records and track changes to circumstances. This process can be costly, laborious and daunting to applicants and create an unfavourable buyer’s journey. A result of these relative inefficiencies is variable conversion rates. In the UK, 90 per cent of the UK Life business is written by the intermediated market, by telephone or face to face. Details are keyed in an electronic application by an advisor. In Asia, the process is similar

but usually more face to face by an agent. Conversion here is higher compared to self-service applications directly made online where numbers are high, but conversion is low. Higher dropout rates can be a result of providing hard evidence of medical exams, frustration of the lengthy process and, in many cases, dropouts can simply be influenced by changing consumer habits, where consumers are used to faster, straight through processing and more choices based on price when purchasing goods and services of all types.

DATA-DRIVEN APPROACH

Alternative data is an innovative way to help insurers and reinsurers price policies using individual applicants’ health activity and other digitally stored wellness data, with the added advantage of being almost instantaneous.

This new data-driven way to price life and health policies for applicants is rapidly garnering interest and offers a prime example of digital innovation transforming the life and health ecosystem

Such data is captured from individuals stored data within smartphones and wearables, making use of information that is real, lifestyle driven and readily available. This new data-driven way to price life and health policies for applicants is rapidly garnering interest and offers a prime example of digital innovation transforming the life and health ecosystem. Qumata is a global leader in this transformation of underwriting for life and health insurers, that will improve customer experience and help insurers realise new revenue opportunities and save costs, while maintaining the levels of accuracy obtained by traditional methods. Qumata, founded in 2017 and now with offices across Europe and Asia, uses this alternative digital data to calculate the risk of diagnosis for over 800 conditions and related product loadings based on their Extra mortality & morbidity, saving applicants hours filling out long questionnaires or visiting the doctor.

INSURTECH THE FINTECH TIMES

The firm’s proprietary solution is a semi-supervised machine learning algorithm built on a range of large datasets. The company’s algorithm has been validated by leading academic institutions, as well as insurers and reinsurers across Europe, Asia and the US who are already actively using Qumata’s solution for underwriting. Qumata boasts a track record of positive feasibility studies, conducted in the ‘proof of concept’ (POC) stage with major global insurance and reinsurance firms which are conducted prior to these organisations becoming clients. These POCs have shown the accuracy of underwriting is at least on par with the data emanating from traditional methods, while the speed, ease of use and efficiency provide significant improvements to the process. It is this speed which makes these data driven solutions really stand out.

SPEEDING UP PROCESSES

Studies published in the past few months, including one from Munich Re, show the average underwriting process for the ‘traditional’ method can take several days to process. Even simplified methods, such as those sometimes adopted in the UK currently, require the longer questionnaires to be completed at a later date after a quotation is given. In some markets like India, more than 50 per cent of consumers are asked to go for a medical exam which in turn creates further costs and inefficiencies into the process.

With Qumata, the whole underwriting process can be reduced to under three minutes on average. The company’s API-based solution, once implemented into an insurer’s backend, allows for a new way of underwriting, making it faster, cheaper, and just as accurate. Insurers can use these solutions to provide a more seamless, modern customer digital experience and realise new revenue opportunities. Such revenue opportunities include the ability for insurers to use this alternative data to flag and track circumstantial changes to individuals’ health and wellness activity. This can lead to the identification of valuable new cross-sell opportunities with pre-approval to existing customers or offer an immediate price for new health or life insurance policies. A further potential area of lead generation comes from insurers

expanding their digital partnerships with telecoms or banking firms. A partner platform can send data to Qumata who will create a risk profile which the insurer can use to pre-approve a price for a prospective customer and market to them. For all these journeys, Qumata can also enable insurers to implement dynamic underwriting and improve conversion rates. After a set timeframe, Qumata can reassess the risk of a customer and adjust the price accordingly. Furthermore, Qumata can be used to augment traditional underwriting processes by allowing insurers to identify healthy applicants and provide them with further discounts, or higher sums assured. In essence, Qumata embraces digital innovation to help streamline, simplify, augment and in some cases replace the traditional methods of life and health underwriting. Qumata seeks to propel digital innovation in the following ways:

● The use of AI and data-based technology principles allowing the insurance ecosystem to modernise its underwriting business and its operations but at the same time providing a more positive experience for the buyer. ● Develops new revenue opportunities for insurers and reinsurers and value-added services for the benefit of their policyholders, using consistent tracking of personalised alternative activity and wellness data sources. ● Fosters a collaborative ecosystem where innovative service providers like Qumata, insurers, re-insurers and other partners can cooperate to bring about transformation of the underwriting process which in turn yield higher success rates in policy purchase. Digital innovation is key to accelerating and transforming the more traditional insurance business. Insurtech is growing in terms of importance and digital technology providers like Qumata hold the keys to modernising traditional underwriting in the life and health insurance industry. The vision is to revolutionise the future of underwriting and bring it forth into the digital age.

About Qumata Founded in 2017, Qumata (formerly known as HealthyHealth) is on a mission to transform insurance underwriting – offering a faster way to access individual health forecasts without losing accuracy of traditional questionnaires or medical exams. Our solutions unlocks insights into an individual’s current and future health and mortality risks, for anyone equipped with a smartphone, instantaneously and without medical questionnaires or examinations. We work with Life and Health insurers to help them create a faster, more customer-centric underwriting journey, providing the extra-mortality, extra-morbidity and other parameters for any individual and for 800 medical conditions. Website: https://qumata.com Linkedin: www.linkedin.com/ company/qumata Twitter: @HealthyHealth

www.thefintechtimes.com

S R E ED N N EAL I W EV R

AWA R D S THE FINTECH TIMES

he Card & Payments Awards 2022, one of the leading networking events of the year for the UK and Irish card and payments industry, took place on Thursday 5 May 2022. More than 1000 guests from over 300 different companies gathered together at the evening event at the JW Marriott Grosvenor Square in London. The prestigious annual awards recognise excellence and innovvation across the industry, judged by an independent panel of industry experts. BEST APP UX sponsored by MongoDB Winner: Capital One BEST APPLICATION OF AI & ML Winner: Monzo BEST BENEFITS OR LOYALTY SCHEME sponsored by TSYS a Global Payments Company Winner: American Express BEST CONSUMER CREDIT CARD sponsored by Visa Winner: Ikea & Ikano Bank BEST CUSTOMER SERVICE Winner: TSYS International Thank you Thank youto toour ourSponsors: Sponsors:

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THE CARD AND PAYMENTS AWARDS

The awards, founded by Michael Harty 17 years ago, attracted entrants from credit, debit, prepaid and charge card issuers, co-brands, merchant acquirers, payment processors and other payments companies across the UK and Republic of Ireland. “The awards are all about promoting best practice in the industry and there is also value in everyone entering, whether they are big, small or a medium sized business, as it’s important for everybody to get recognition for their work. Innovation should always be applauded,”

BEST INDUSTRY INNOVATION sponsored by Fiserv Winner: Pay.UK Highly commended: Ikea & Ikano Bank BEST ALTERNATIVE OR DIGITAL PAYMENTS sponsored by GPS Winner: Fireblocks

says Michael Harty, managing director at The Card & Payments Awards. “It’s always a fantastic night and the networking is spectacular.” The 2023 Awards are now open to enter, you are encouraged to contact info@cardandpayment sawards.com for more information and the chance to be part of this prestigious annual event on 2 February 2023. Visit www.cardandpaymentsawards.com to learn more about the awards.

BEST MARKETING CAMPAIGN Winner: GoHenry & Visa Highly commended: Vanquis

BEST SERVICE TO BUSINESS sponsored by Discover Global Network Winner: Elavon

BEST INITIATIVE IN OPEN BANKING sponsored by The Fintech Times Winner: Lloyds Banking Group PCCOB

BEST TECHNOLOGY sponsored by Igenico Winner: Worldpay from FIS

BEST POS SOLUTION Winner: DivideBuy

BEST PROCESSING PROGRAMME Winner: Marqeta with Twisto Highly commended: GPS

BEST PAYMENT FACILITY NON-CREDIT Winner: American Express

BEST PRODUCT DESIGN Winner: Aurae

BEST NEWCOMER sponsored by Mastercard Winner: Hyperjar Highly commended: Swipen

BEST SECURITY & ANTI-FRAUD Winner: Bottomline

PRIME SPONSOR

CHOSEN CHARITY

CHANGING LIVES IN THE COMMUNITY Winner: Vanquis & PFG SOCIAL INCLUSION IN FINANCIAL SERVICES sponsored by TSYS a Global Payments Company Winner: Mastercard INDUSTRY ACHIEVEMENT AWARD sponsored by American Express Winner: Pennies

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JUST SO YOU DON’T FORGET Join us for an opportunity to celebrate industry achievements, whilst meeting the key players from across the sector.

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2nd February 2023

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COMPANY OVERVIEW: FREETRADE

COMPANY OVERVIEW: HAZY

eClerx provides business process management, automation and analytics services to a number of Fortune 2000 enterprises, including some of the world's leading financial services, communications, retail, fashion, media and entertainment, manufacturing, travel and leisure, and technology companies. Incorporated in 2000, eClerx is today traded on both the Bombay and National Stock Exchanges of India.

Freetrade believes investing should be open to everyone. It's one of the best ways to grow your savings, but for a lot of people, investing seems complicated, expensive and remote. Freetrade wants to change all that. A technology company that brings simple stock investing to everyone, it has built a beautiful investing app to trade in real shares, in a fluid, mobile-first experience.

ROLE OVERVIEW: WEB ANALYTICS CONSULTANT

ROLE OVERVIEW: HEAD OF COMPLIANCE

Hazy is the most advanced and experienced synthetic data company. It accelerates innovation while increasing privacy at some of the world’s leading financial institutions. Over the years, Hazy has attracted a team of the best data scientists and engineers in synthetic data and privacy, and with roots in regulated industries. Together they are incorporating cutting-edge research as soon as it’s published into production.

Customer-facing, leadership role intended to bring strategic thought-leadership and analytical rigor to eClerx’s AIR practice, as well as to provide onshore presence and guidance to its offshore delivery model.

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Apply your experience and expertise in quantitative data analysis, problem solving, story-telling and the ability to look beyond the numbers and develop deep understanding of how recommendations impact business objectives Have the ability to perform tasks independently, lead analytics delivery teams, and direct the efforts of junior analytics consultants Own end-to-end management of analytical modeling projects; ensure quality, accuracy, relevance and consumption of analytical results and recommendations Demonstrated expertise and/or knowledge in Digital Marketing, Channels, Campaigns and related data understanding, Exploratory Data Analysis, Actionable Insights and Recommendations Good understanding of Adobe Analytics data, application and its interface/workspace for data exploration Experience with SQL, Python and/or R Working knowledge in Tableau and Power BI Competitive salary, Healthcare, Flexible working and Maternity and Paternity Leave

This role will build on an existing compliance framework and arrangements, taking the company to the next level for growth plans, building a strong and versatile team. Report directly to the VP of Risk and Compliance, the role will be hugely impactful, shaping Freetrade’s approach to compliance through all stages and partnering with the business to drive implementation.

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Lead and grow considerably a team of talented Compliance professionals Work closely with Product, Engineering and other teams to prepare for and deliver key product and change initiatives, providing subject matter expertise both individually and through the Compliance team to guide the business Embed treating customers fairly and broader regulatory understanding across the company Highly skilled in compliance, with extensive experience from working in a senior compliance role in an FCA-regulated financial institution A detailed understanding of the FCA handbook and ideally of MiFID and other EU regulation Ideally, experience in a retail investment services Have deep technical expertise in areas of compliance Share options, Enhanced pension, Insurance Parental leave, Flexible working hours and Cycle to work scheme

ROLE OVERVIEW: PRODUCT OWNER You will interact with customers to understand their needs and industry trends, and with your technical prowess, you will work with your Hazy teammates to craft and deliver an amazing product.

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Work closely with the product team members to shape the future of Hazy products and roadmap Serve as the product ambassador and first point of contact, internally and externally, sharing knowledge and answering questions related to the product Influence your team and cross-functional stakeholders towards alignment and execution. 1+ years of experience as a product owner for technical product teams Understanding of agile software development You know how to inspire, motivate, and support a team to get things done Competitive salary + equity options Generous holiday allowance Cycle to work scheme Day off on your birthday High-end laptop Remote working policy

VISIT THE FINTECH TIMES JOB BOARD – HTTPS://THEFINTECHTIMES.COM/JOB-BOARD/

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Edition 44

C U LT U R E THE FINTECH TIMES

Fostering a culture of openness is key to our success says Arancha Riestra, VP of people at the embedded finance platform

TRANSPARENCY AT TOQIO Tell us a little about Toqio and its offering Toqio is a ready-to-use, no-code, configurable software-as-a-service (SaaS) platform that lets any company, not just banks, build a fintech proposition in days. Our founding team previously built and exited a startup, and with their backgrounds in SaaS and operating in the fintech space, they were given many opportunities, but they kept seeing the same problem. Regulation has changed and bankingas-a-service provided the plumbing for new solutions, but everyone was still building solutions from scratch – rather than using one solution that could rapidly speed up the creation and delivery of new financial products. Toqio provides customers with all the components they need, such as a configurable front end, financial features, readily integrated financial objects, and a no-code workflow configuration system, to quickly set up and deploy their own financial solutions. We also act as a distribution channel – or marketplace – so that solutions built by third parties can be shared and utilised by other customers. What makes Toqio a great place to work? At Toqio we really care about making our team members feel understood, valued, supported and accompanied throughout their careers with us. Our people are what makes Toqio special. At Toqio they have found a project that is challenging and interesting for them and have committed to taking the company to the next level. You can feel it when you sit in a meeting. You feel the proactivity, the energy, the collaboration, the willingness to keep improving and go beyond. Our people are making a difference in our work environment, filling it with positive vibes.

We all are building an environment in which flexibility, tolerance, openness and transparency are key. We believe in a workspace in which people can really have a proper balance between their personal and professional lives and in which they choose every day to work in because they believe in the project but also in the values and culture of the company. Toqio has created different initiatives for them. We have designed a perks package for each of the countries in which we have headquarters, which is focused on satisfying our team member's needs. n We have implemented a continuous feedback system to build a culture of feedback and transparency in our daily work in parallel to our annual and 360º appraisal process and have designed a structured and objective compensation programme so all team members know what they can expect from their contribution to the company. n We are working on a career path process to be sure we can work on the motivations and aspirations of each of our team members and contribute to their development and professional progression. n We are currently starting a culture project to analyse the perceptions that our team members have regarding our culture and values and how they are put into practice. After this analysis, we will design an action plan to keep improving the experience our team members have at Toqio. Tell us about the 4 Cs that are important to Toqio Our culture is one of our biggest assets together with our people and of course, our product. We always have our values in mind when launching

anything either externally or internally, so we are sure they are really reflecting who we are. As you say, we have four core values, our 4 Cs; n Considerate: We're a diverse and multicultural team that brings many perspectives into our workforce. We strive to make Toqio a place where everyone feels welcome and has a sense of belonging to a family. n Committed: People at Toqio don't just believe in our work - they believe in our core values of positive change. Everyone helps shape our company into a more vibrant place to do business, as well as make our society and planet better. n Creative: We believe there are solutions to all problems, so we're seeking out of the box thinkers who face challenges head-on and look forward to innovating their way around every obstacle. n Curious: In our opinion, curiosity is the lifeblood of innovation. The next big idea is out there if we're willing to dive deep enough to find it. That's why we're all naturally curious and see the value in questioning everything. How has your workplace evolved during the pandemic era? We saw an opportunity in the pandemic era. We were used to working from home and remotely and our company, luckily, was not impacted by it, so instead of being negatively impacted by Covid we started to grow. 2020 was special for us, we received investment and hired around 20 people for the team. We started to grow from there, giving the possibility to work remotely to our people, being flexible with the working time, caring about their motivations and professional growth. In 2021 we established our three offices; Madrid, London and Nairobi and started to bring our team members

together as the pandemic rules were removed. Last year we were part of an organised run, and we were able to have a Christmas party, where we all had fun, but most importantly, we were together. This year we have moved our Madrid office, taking on a larger and brighter space, and have plans to do the same in London. The silver lining of the pandemic was that it helped Toqio to grow, and we took advantage of the momentum to get the best of it. Tell us about Toqio's ambitions for the next 12 months? This year we launched in Spain, and at the end of last year, we acquired our first two customers in the US. 2022, is all about establishing our European and US commercial team, driving growth in each market, with a phased geographic expansion – US, France and then Germany. In less than two years, we’ve secured 50 customers with more than 60 live platforms in Europe and US, and we have grown the business internally from 17 people to almost 100 people in 12 months. Our aim is to reach double our team by the end of 2022, hiring across all offices in London, Madrid and Nairobi – as well as US-based talent.

About Toqio Toqio is a SaaS fintech platform that enables any business, not just banks, to create game changing, data driven, finance propositions that can be rapidly deployed to their customers where and when they need it. Offices in: London, Madrid and Nairobi Website: https://toqio.co/ Linkedin: www.linkedin.com/ company/toqiofintech Twitter: @toqio_fintech

www.thefintechtimes.com

BOOK REVIEW THE FINTECH TIMES

TRYING NOT TO FALL: DOING DIGITAL GOOD

ith the world embroiled in one crisis or another, it has never been more important to ‘do some good’, with environmental, social and governance (ESG) no longer an option but a necessity for every industry, including finance. All this has led Chris Skinner – an independent commentator on financial markets, best-selling author and all-round fin-fluencer (fintech influencer for those not in the know) to create his new book Digital for Good: Stand for something… or you will fall. This book takes a look at how banking and finance can play a role in making the world a better place, whether that’s an in-depth lens on the climate emergency and the role banking and green finance has to play, or how fintech can create a more inclusive world for those who live in it. The message here is clear, we have to change, and Skinner emphasises how technology and finance really can save planet Earth and be ‘socially useful, rather than socially useless’. Banks have a responsibility to do good for society by harnessing the opportunities afforded to them during their journey of digital transformation, fuelled in part by the Covid-19 pandemic. This book is about those journeys, and asks: how can we use digital services and finance to transform and do good for society and good for the planet? Digital for good focuses on five main themes: digital transformation, financial inclusion, stakeholder capitalism, transparency and purpose. Skinner helpfully outlines each of these themes at the start of the book, before delving in further. However, rather than being a few hundred pages of purely Skinner’s viewpoint, he instead called upon his friends in the industry – a handpicked group of global influencers, experts and leading authorities – to contribute in the form of essays, chapters and interviews. These contributors include Tom Blomfield, founder and former CEO of Monzo Bank, Jonathan Quin, head of Europe strategy for Ant Group, and perhaps most interestingly, Gail Bradbrook, co-founder of Extinction Rebellion.

By Polly Jean Harrison, Features Editor at The Fintech Times

These essays and contributions boil down to the view that businesses need to have a higher purpose than just making a profit. Though if you asked any businessmen, profits are a large part I’m sure, and as the book says there must be a balance, but at the end of the day these banks and financial services

DIGITAL FOR GOOD: STAND FOR SOMETHING… OR YOU WILL FALL by Chris Skinner

Released as Hardcover on 30th June 2022 companies should go beyond the money and want to contribute something else. They should have a purpose. An aforementioned key theme, the idea of a ‘purpose’ comes up frequently in the book. In fact, Skinner himself writes how he originally intended to title it ‘Purposedriven banking’. It’s clear he believes that companies forging a purpose that current and future customers and employees can relate to is a must. People no longer relate to financial institutions that purely exist for profit, and there are many who believe that banks that only focus on profits to

shareholders may fail in the future. They instead need to emphasise returning value to stakeholders in order to succeed in this new world. Even the tagline of the book, ‘stand for something or you will fall’, is heavily repeated, and succinctly summarises Skinner and his cohorts’ key messages. You don’t need to have a specific purpose, but you do need one. As former CEO of Monzo Tom Blomfield puts it: “The purpose is the why behind any business.” If you don’t have a ‘why’, then your stakeholders will lose interest and you may find yourself without customers. Get a purpose, get values and, most importantly, deliver on them – “you have to walk the walk and not just talk the talk”. What I appreciate most about Digital for Good is that it doesn’t focus solely on the environment. When it comes to ESG there seems to be a tendency in the fintech industry and wider to concentrate solely on the ‘E’ and all but forget about the ‘S’ and the ‘G’. This isn’t the case here, as while the book does go into detail about green finance, climate change and other very worthy topics, it isn’t actually about the climate emergency. It’s not “pseudobabble, gobbledygook, tree-hugging environmentalism” as Skinner himself writes, but rather focuses on how we as an industry need to do some good. He asks that companies stop funding things that harm biodiversity, the planet and society and instead think of the good they can do. In all, this book is a fascinating read that gave me a deep dive into a variety of perspectives as to how development in the financial and technology space can and should impact and improve the world. Looking at the problem through the lens of industry experts themselves makes for a captivating and detailed view into where we go next and where we can take action. It would be difficult to come away from this book and not feel inspired to take action. Whether you’re a bank, fintech or perhaps just an observer, this book challenges you to start the change yourself, after all, someone needs to.

BOOKS TO GET AHEAD IN FINTECH

Cashless: China’s Digital Currency Revolution by Richard Turrin Available: Hardback, Paperback and Kindle

3F: FUTURE FINTECH FRAMEWORK by Kartik Swaminathan Available: Kindle and Paperback

Fintech for Dummies by Steven O’Hanlon and Susanne Chishti Available: Kindle and Paperback

Financing Our Future: Unveiling a parallel digital currency system to fund the SDGs and the common good by Stefan Brunnhuber Available: Kindle and Hardback

FinTech Women Walk the Talk: Moving the Needle for Workplace Gender Equality in Financial Services and Beyond by Nadia Edwards-Dashti Available: Hardback, and Kindle

Edition 44

THE OFFICIAL 2021

FINTECH POWER 50 MEMBERS

The Fintech Power 50 is an exclusive Annual Programme,which acts as a hub for driving change and creativity in the financial services industry. The confirmed participants this year demonstrates an increased geographical spread for the 2021 cohort, with fintechs not just from the UK and Europe, but also North America, ASIA and MEA.

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8 Female-led businesses (out of 40)

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3 Influencers from North America (out of 10)

]

[

]

[

THEODORA LAU

DAVID BIRCH

4 Influencers from Europe (out of 10)

] ]

3 Influencers from Asia-Pacific (out of 10)

EMMANUEL DANIEL

GHELA BOSKOVICH

FERNN LIM

LUCY LIU

CHRIS SKINNER

JIM MAROUS

RON SHEVLIN

LEDA GLYPTIS

VIEW THE FULL LIST OF MEMBERS HERE HTTPS://THEPOWER50.COM/FINTECH/CURRENT-MEMBERS/

FINTECH WEEK L O N D O N

20 22

JULY 11-15

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

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

EXPERT SPEAKERS 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 WWW.FINTECHWEEK.LONDON & FINTECHAWARDSLONDON.COM

The Fintech Times - Edition 44

Articles inside

EDITOR'S WELCOME

THE CARD AND PAYMENTS AWARDS

TRYING NOT TO FALL: DOING DIGITAL GOOD

OVERHYPED PAY TECH, UNDERHYPED PAYTECH

TRANSPARENCY AT TOQIO

COLLABORATION IN COMPLIANCE

REVOLUTIONISING INSURANCE WITH DATA INNOVATION

UK: The Future of Open Banking

FIGHTING FINTECH WITH FINTECH

Payments innovation & the race to keep up