The second of two episodes recorded in partnership with Banking Circle Group at Money20/20 Europe, took place in Amsterdam on 7-9th June 2022. We recorded a series of interviews at the Banking Circle booth with a number of speakers from the conference. Our guests for this episode were:
1/ Kahina Van Dyke, Global Head, Digital Channels and Data Analytics, Standard Chartered
2/ Jakob Pethick, Chief Commercial Officer, YouLend
3/ Iana Dimitrova, CEO, OpenPayd
4/ Andrew Considine, VP, Head of SMB and Clover EMEA, Fiserv
5/ Mariana Gomez de la Villa, Centre Expertise Lead for Distributed Ledger, ING
6/ Daniel Kjellén, CEO, Tink
7/ Joanne Dewar, CEO, Global Processing Services
8/ Teo Blidarus, CEO and Co-Founder, FintechOS
9/ Rogier Schoute, Chief Product Officer, Mollie
Russ: [00:00:03] Welcome to the Knowledge Circle a podcast brought to by Banking Circle.
My name is Russell Goldsmith, and this is the second of the two shows that we recorded at Money20/20 Europe in Amsterdam, where we invited a number of the speakers from the conference to our exhibition booth to record a series of short interviews with the aim of providing you with a real flavour and understanding of the topics and issues being discussed at the event. In this episode, you’ll hear from senior representatives of Standard Chartered, YouLend, OpenPayd, Fiserv, ING, Tink, Global Processing Services, FintechOS and Mollie.
And to kick things off, I was joined by Kahina Van Dyke, Global Head, Digital Channels and Data Analytics at Standard Chartered
1/ Kahina Van Dyke – Standard Chartered
Russ: [00:00:30] Kahina, first of all, well done, because I understand you’ve literally just flown in today from New York.
Kahina: [00:00:40] I have. I’m fresh. I’m fresh from sleeping on the plane and fresh from the stage of Money20/20.
Russ: [00:00:46] And you’ve already done a session today. So, let’s talk about that. The talk was on the rise of fintech transforming the next generation of banking. How did it go? What were the key points that you spoke about?
Kahina: [00:00:57] You know, this is one of my favourite topics, transformation, because it’s actually what drives me to be doing what I’m doing, which is the fact that we are in a constant state of change. But right now, it feels like there’s a collection of forces that are really accelerating transformation. And it’s coming from the fintechs and it’s coming from the banks, and it’s coming from data science and analytics and blockchain and all of these convergences. And it’s just a really exciting time. I’ve been in this industry, parts of this industry for 25 years, and I think this is the most exciting time.
Russ: [00:01:29] And what about in terms of now, are there any specific challenges that you see for the industry? And if so, how are they going to be overcome?
Kahina: [00:01:38] Yeah, I think people are getting very tied into the lines and the boundaries of what is a bank, banking versus fintech, right. Every single bank in the world is a fintech company. And if they don’t realize they’re a fintech company, they probably won’t be a bank in ten years. I mean, technology is driving what we’re delivering in financial services. Technology is digital, it’s data, it’s user experience. The real time nature of how do we make decisions, how do we onboard customers, how do we serve customers? Everything is changing. That’s on the banking side. Every bank is a fintech. On the fintech side, ten years ago, people thought these were really cute experiments. Well, those cute experiments are literally market movers now, those cute experiments are $10 billion, $20 billion valuation companies that have a responsibility in a new ways that they really didn’t prepare for. And the regulators are now looking at them and saying, wait, do you have compliance? Do you have KYC? Do you have AML? What are your algorithms? How do you identify risk and make sure that you have liquidity, all those boring banking things, right, that they didn’t even really think about when they started out. So, it’s a really interesting time because the boundaries in our head of what a banker looks like, what does a fintech, founder look like he wears sneakers and a t-shirt. Everybody is in financial services and all financial services is fintech. So, it’s just I find it really fascinating how people are trying to pit the two against each other when actually they’re converging.
Russ: [00:03:05] Now, you mentioned new technologies, new ways of doing things. I want to ask you about sandbox. Now, this is a partnership that you’ve recently announced, and it’s to create metaverse experiences. This is something I’m really excited to hear about. Tell us about that.
Kahina: [00:03:20] Well, listen, I am very cautious of buzzwords, only because the metaverse is really interesting, but it’s really nascent, right? Quantum computing has the opportunity to change everything we know about blockchain, and we’re still just figuring out how blockchain is going to roll out at scale. So, I actually think that the experimentation is a perfect example of partnering with a fintech to learn something that banks don’t traditionally wouldn’t lean into and don’t have the talent to lean into. So, the metaverse is an area, you have to be innovating. You have to be trying new things. And that’s where a bank and a fintech partnership can be really interesting. But I think you have, in the same vein, you have areas like blockchain and DLT that are now ready for scalability in the institutional world where three years ago, four years ago, nobody really on the corporate side was looking at how can digital assets actually create more liquidity in the financial markets, not just trading crypto guys, we’re talking about blockchain as a platform. And so, the banks have been spending time and the institutions have been spending time, but the metaverse is a perfect example and nobody until, you can credit, Facebook, Mark Zuckerberg talking about the metaverse has made it like top of everybody’s mind. What does that actually mean, though, for banking? Undetermined at this time.
Russ: [00:04:38] Well, I was going to ask, I mean, can you see how big an opportunity it is going to be for the sector or not?
Kahina: [00:04:41] No, I can’t. It’s too early. It’s kind of like when you ask me about blockchain. Somebody was talking to me about crypto, ten years ago, and I was on one of these money stages, right? And they’re like, well, what do you think is going to happen with crypto? And I was like, Bitcoin, it wasn’t crypto, they called it. It was just Bitcoin. And I was like, I mean the government’s not going to release their control of currencies, right? It was like unfathomable about what was going to happen. But the reality is, is trial and error, people kept investing in it. People kept working on use cases, regulators got comfortable with it. And we’re now in a completely different space. When I was at Ripple three years ago, the regulators, I was traveling around the world talking to regulators. Most of the regulators didn’t even want to meet with you. Now they’re regulating and saying this is part of the financial system. And the same thing with the metaverse. We’re just going have to lean into it and try a lot of things and fail and figure out what sticks.
Russ: [00:05:33] We’ve touched on a number of technologies. Are there other ways that technology will shape the future of banking and financial services, do you think?
Kahina: [00:05:40] Technology is going to lead financial services. Digital, listen, the new building blocks of a financial services company, artificial intelligence, blockchain, big data, cloud. All of these areas that traditionally have not been part of banking are now going to be required to compete and be successful and deliver clients’ real time solutions. So, with that being said, technology is going to lead us. But technology needs operators. It needs people who understand the tools. So, if you think about it, when I started in banking, I’m going to age myself. I had a calculator on my desk that was a tool, the calculator – nobody said Oh, the calculator is going to lead banking, but you needed a calculator to do banking. Then we moved to Excel. It was like, oh, okay nobody thought Excel was going to lead banking. It was a tool for operators who were fluent in Excel to make faster, better decisions. As the machines get better, human beings can be smarter. But what we have to do is we have to not believe that this is about technology. Technology is a tool for human beings who are creative, who are in environments where they’re allowed to innovate and fail. You cannot be creative without failure. It’s trial and error. It goes against the traditional certainty of banking. Right? Banks like certainty. They want predictability. And all of a sudden, we’re moving into this world where predictability is not promised, where people can have an artificial sense of precision about what’s going to happen in two or three years. But the reality is a bunch of smart people leading in, in safe ways and adapting as new information comes. That is the cultural shift and the mind shift that has to happen to really embrace the future and what the future is going to bring? It depends on how many smart people are going to be in that room.
Russ: [00:07:28] Fantastic. While we’ve got you here, any other projects, initiatives that we should know about that Standard Chartered are working on?
Kahina: [00:07:33] I mean, listen, we are working on trying to be the largest fintech in emerging markets. What does that mean? We need a platform that is reliable, scalable and delivers the same set of solutions to a client in Rwanda that we have to a client in Hong Kong. That’s what we’re trying to do. And the great thing about Standard Chartered and why I came to Standard Chartered is because we’re in 50 countries. There’s no other bank that serves as many countries, and especially the small countries who really need these tools. They really need digital and data and easy solutions because people are trying to buy houses, people are trying to start businesses, governments are trying to build bridges and develop their countries. And we need to be there, show up and let’s not forget the word financial services. We’re supposed to be in service to people and markets and economies, and that’s what we really need to focus on.
Russ: [00:08:19] Kahina Van Dyke, thank you so much for joining us.
Kahina: [00:08:21] Thank you, it was fun.
2/ Jakob Pethik, YouLend
Russ: [00:08:24] We’re here with Jakob Pethick, Chief Commercial Officer of YouLend. Jakob, we’ve heard a lot about embedded finance here today. Just tell us a little bit about what actually is embedded finance and also why should our listeners and everyone who’s here, why should they be interested in it?
Jakob: [00:08:40] Embedded finance is a buzz word you will hear a lot. To me, embedded finance is a trend that we’re seeing where applications, software providers are embedding financial services and finance in particular into that application. So, for example, in the ecommerce space, you see companies like Amazon, like Shopify, like eBay offering financing at the point where buyers and sellers need it. You also see it in the Epos space where companies like Toast, for example, will be providing financing. So, in general, embedded finance refers to this trend where finance is put into other applications.
Russ: [00:09:12] Would you say it’s specifically relevant at the moment given the current economic climate? I mean, there’s talk that we’re going into a potential recession at the moment.
Jakob: [00:09:22] Yeah, it’s a tough environment at the moment. Rising inflation, supply chain disruption, rising rates. And I think embedded finance can be a real driver for good in that case. You typically see small businesses struggle with working capital and traditional providers pulling away from providing that capital. Embedded finance providers, they often take a broader view of the customer, they don’t just care about making money on the loans they’re issuing. They care about keeping their customers alive, thriving. And I think a lot of the embedded finance providers we see today will help small businesses access finance in a time of need. So absolutely. I think more broadly, it reflects this trend that a lot of the companies that are offering financing today care just about more than the financing. And I think in the long run, that’ll be good for the small businesses.
Russ: [00:10:04] And do you see measurable benefits for those businesses and the merchants themselves?
Jakob: [00:10:10] Absolutely. So, the enterprises that offer embedded finance, they tend to want to keep their customers on their platforms. So, we see churn half roughly. We tend to see the underlying businesses grow a lot as well. So, we tend to see them grow 20, 30% faster in the six months after they obtain financing. The small businesses that access finance are often excluded by traditional institutions and being able to access some form of growth capital can really help them take off.
Russ: [00:10:36] What are some of the kind of more interesting industries where you’ve seen embedded finance used?
Jakob: [00:10:42] Historically, embedded finance has been provided by payment companies and e-commerce platforms in particular. We are shortly to announce a partnership with a food delivery company who help takeaway companies deliver food. And I think you are going to see a lot more of these vertical specific applications of embedded finance where a company who understands the end customer is seeking to also offer financial services.
Russ: [00:11:03] Jakob Pethick, thanks for joining us.
3/ Iana Dimitrova, OpenPayd
Russ: [00:11:06] So I’m here with Iana Dimitrova, CEO of OpenPayd. Let’s start with a quick introduction to the company.
Iana: [00:11:12] Russell, great to be here. Thank you for having me. OpenPayd is a banking as a service provider, we are a provider of infrastructure for anyone that wants to build embedded finance to grow their business.
Russ: [00:11:23] Now, I know you’ve had a particularly busy day. You spoke at a session earlier about API quality in open finance and banking. Tell us a little bit about that session and what were the key takeaways?
Iana: [00:11:34] Yes, indeed. Absolutely fascinating session. I’m surprised that the audience wasn’t asleep by the end of it. A very technical topic on the face of it, but actually very important for the development of the industry, because if you think about it, ultimately businesses are not interested in the infrastructure, businesses are not interested in the pipes that power whatever financial solutions they’re using. They’re ultimately interested in growing their customer base and delivering better customer experience. But in reality, the only way to do that is by ensuring that there is a level playing field and that there is interoperability amongst the different systems that are connected to one another to complete a full transactional cycle. So, there was a very healthy debate, I think, on the panel about the benefits of standardization and whether standardizing APIs is killing innovation, whether it’s killing that last mile that is really making the difference. I think in the end we all agreed to disagree on the topic, and we’ll agree that a healthy level of regulatory standards are required so that we can achieve a minimum level of system interoperability, ideally to have that on a global scale, not just in regions, whether it’s in Europe or the MENA region. And then from there onwards, I guess we all agree that the last mile of innovation, the proprietary development, the proprietary APIs are what really makes a difference for the user experience and ultimately for generating value for the end customer.
Russ: [00:13:08] Now, I understand that the csuite podcast has had a bit of competition today because you’ve been doing your own interviews here at Money20/20. What have you learned from all those conversations that you’ve had?
Iana: [00:13:17] You know, the event this year is absolutely fascinating. I met so many partners, so many friends, so many former colleagues from the industry. And frankly, it’s great to see that the industry is evolving. I think we’re moving more and more into an interconnected ecosystem. And as the economy is demanding more and more fully integrated solutions to be able to grow faster, I think, we as the industry are really forced to work even more closely together. So, I think there are few overarching themes. Obviously open banking is still very topical and the applications of open banking and how to actually generate value out of the standard set by the open banking legislation, embedded finance and whether we are going to see embedded finance really take off is another big topic that people think about. And of course, crypto and the current market conditions. But I’d say a very, very healthy mix of innovation and partnership as well.
Russ: [00:14:21] Yeah, I think Embedded Finance has definitely been the key topic for us today, certainly in the conversations we’ve had. So, I certainly agree with you on that one. Now, one of the things that I know you’ve announced here today is this partnership with Yapily. Tell us a little bit about that, how it came about and what was the thinking behind it.
Iana: [00:14:39] Very happy to. So, we’re very proud to be selected by Yapily as their, I guess, exclusive provider of embedded financial solutions. You mentioned that this is a hot topic, has been a hot topic for you during the day. I think this is a prime example, an illustration of the power of embedded finance. We are providing to Yapily the payments account infrastructure as well as the fully automated FX infrastructure. We are integrating the two platforms so our systems into their product and platform capabilities and therefore enabling them to go to their own customers with a wholesale and I guess holistic payment solution that allows their customers not just to initiate payments but also to store value to do FX to really manage the end-to-end payment flows better. So, in a way, if you think about it, it’s moving payments and payment accounts and FX from being a commodity or being a cost centre for any business to placing them at the forefront as a driver of revenue and driver of growth for someone like Yapily. So again, I think these are the first maybe baby steps for some would say, but the first steps in embedded finance.
Russ: [00:16:00] Right. Just finishing off Iana, in terms of the future, the evolution of payments. What are you seeing there?
Iana: [00:16:07] That’s a very difficult question to answer. I think, there is this disconnect between all of us here on the floor in Money20/20. And then when you step out of the industry and talk to businesses. And the reason why I’m saying this is because here we tend to talk about payments, about embedded finance, but ultimately businesses are focused on solving customer problems, improving customer experience, and driving growth. And they don’t really think about embedded finance in the terms that we use. They don’t really label this, but they’re looking to solve problems and they’re looking for solutions. So, I think the future of payments is really becoming a solution for businesses in becoming an enabler for growth. And this is what I would very much like to see. So, using the payments infrastructure to drive better automation, to drive better customer experience and ultimately to drive growth in the wider economy.
Russ: [00:17:06] Iana Dimitrova, thank you so much for joining us.
Iana: [00:17:09] Thank you for having me. Pleasure.
4/ Andrew Considine, Fiserv
Russ: [00:17:11] So next up, Andrew Considine, VP, Head of SMB and Clover EMEA at Fiserv. Andrew let’s start with a quick introduction to your company.
Andrew: [00:17:20] Thanks Russ. Yeah, so great to be here. So, Fiserv provides technology to the financial services industry, so everything from small to medium businesses to enterprise and also to financial institutions as well. So, US headquartered company. But we work worldwide.
Russ: [00:17:34] Great. And we’ve asked a few of our guests this. Anything in particular that you’re hoping to see here at Money20/20 this year?
Andrew: [00:17:39] Yeah, so meeting partners and also clients as well. But I think probably like a lot of people looking to see what’s coming next. We’ve talked a lot about the pandemic and the impact on the industry and technology. And I think everybody’s kind of planning for what the next kind of years will bring. So, it’s interesting to see that there’s a plethora of companies here. It’s interesting to see what’s coming next from all of them.
Russ: [00:17:56] All right. I’m going to pick you up on that then in terms of what do you see as the key trends in the whole fintech e-commerce payments area?
Andrew: [00:18:04] Yeah. So, we operate heavily in the payments space, everything from merchants that are running cafes and restaurants all the way through to big enterprises. I think what we’re seeing is there’s been a change in consumer behaviour from a payments’ perspective, obviously driven by the pandemic. And what we’re seeing is that behavioural change is coming through beyond the pandemic as well. So, I think what we’re seeing is a consumer expectation of being able to pay anywhere through any channel anyhow, any way they like. And so, by providing the technology to make that feasible, that’s really where Fiserv is playing at the moment. And so, whether it’s online or whether it’s card present, there’s a lot of talk around the conference here, around the Internet economy and, the companies that are working in that space. But there’s still a big payments presence and card presence, people in shops and physical locations. So, the link between those two and making that a seamless experience, whether you’re a consumer paying for a coffee or somebody buying food from a fast-food restaurant all the way through to making payments for large services and large products as well. So, it should be a seamless and simple experience for everybody.
Russ: [00:19:05] And what about when it comes to omnichannel commerce? Any particular challenges that you’re seeing there?
Andrew: [00:19:09] Yeah, I think, it’s interesting, the industry is still talking about data. It’s amazing that ten years on, the challenges are still there. And it’s only getting more so as well. So, I think as the industry opens up and we’re talking about ecosystems and interoperability and companies working together and becoming more open, I think the data challenges just increase with that as well. So, whether you’re a small merchant or whether you’re a large enterprise, some of those data challenges can be common the whole way through. So, I think that’s going to be a challenge. And then really the customer experience side of things, again, we’re still talking about that ten, 15, 20 years on. Right. And again, as more platforms integrate, it becomes more open. It’s harder to share the data and it’s harder to provide a seamless experience for consumers. And so, consumers are expecting to be able to, like I said before, pay anywhere, pay any time, but at the same time be treated as an individual. So, companies, whether it’s e-commerce or whether it’s, in a physical location, they’re linking of data and customer experience is going to be one of the key challenges going forward.
Russ: [00:20:08] Fiserv have recently announced a partnership with ExxonMobil to enable people to pay for petrol using Alexa, which I’m really intrigued about. Tell us about that.
Andrew: [00:20:18] Yeah. So, we’re going to see more and more innovation coming out like that. And it goes again towards kind of moving beyond payments, but then, allowing payments from anywhere. And as we see the paradigm shifting of, people paying for EV cars or services for those cars as well, and that could be in the vehicle itself or at a charging point or in a shop or location and linking the data between all three of those experiences, one of the key things that we’re building with that partnership. We’re going to see more and more innovation coming out this year. So, we’ve just recently or had recently announced at the Apple Worldwide Developer Conference this week that we’re partnering with Apple on the tap to pay capability with iOS. So, we’re going to be launching our SoftPoS capabilities with Clover in the SMB space and then we’ll see more and more connected data and payments capabilities across the industry. So, Apple will be one. We partner with companies all over the world to enable things like Cross-Border payments, whether it’s digital or supplier payments all over the world. And that’s what a company like Fiserv and what we offer is having that breadth of global coverage means that we can partner with people and bring them into the ecosystem to enable payments anywhere, anytime.
Russ: [00:21:22] Something else you also recently launched, which was Carat. Tell us a little bit about the thinking behind that.
Andrew: [00:21:27] So, Carat was, it’s our enterprise brand and really the whole thinking behind Carat is providing an operating system for the enterprise world. So, again, the ability to be able to hook into a single platform with common interfaces and integrations, a common data stack, and all of the areas like risk and compliance and security and fraud management, all controlled within one environment, allows enterprises to be able to hook into that platform and benefit from a company of the size of Fiserv. So, everything from companies in the retail space into the restaurant space and to the franchise space, coming into a single platform means that whether they’re operating in Spain or in the US or the UK or Australia, it’s a common platform that operates worldwide. So, Carat was really set up to be the operating system of the financial industry for enterprises.
Russ: [00:22:16] We got through quite a lot very quickly there, but Andrew Considine, thanks for joining us.
Andrew: [00:22:19] Thanks for having me. Thanks, Russ.
5/ Mariana Gomez de la Villa, ING
Russ: [00:22:23] So I’m now joined by Mariana Gomez de la Villa, Centre Expertise Lead for Distributed Ledger at ING. Mariana, thank you so much for joining us. Quick introduction to the company.
Mariana: [00:22:33] Yeah, thank you very much, Russell, for the invitation. ING is a financial institution, it’s a bank headquarters in the Netherlands. But we obviously have also a wholesale and retail business. It’s across the globe in [over 40] countries. We have quite some business in retail.
Russ: [00:22:46] Now, you spoke at the conference yesterday on two sessions, so a busy day for you. Let’s take each in turn. The first was titled Gender Equality Today for a Sustainable Tomorrow. Do you want to just talk through what was discussed and also what needs to happen in banking and financial services to ensure this equality?
Mariana: [00:23:03] Well, I was really pleased to be invited to that panel specifically because obviously I’m a woman and I’m a woman in technology and I don’t know if you’re aware, but I’m also Mexican. So, then that means that it’s like a double minority sometimes, it can be seen as. But on the other hand, as well, I realize how lucky I am to work for a Dutch Bank, ING. We have a specific target with regards to diversity and inclusion and we look at diversity not only for the point of view from whether you are a female or a male. But as well we look at diversity and inclusion from the point of view that you need to have 70%, for example, of the team could be from the same gender but also from the same age group or from the same nationality or background. That means that normally, for example, you would need at least three people in a group of ten, so the other 30% that needs to be from a different gender, from a different group of age or from a different background in order to really change the conversation, to really influence a little bit more towards a better target, let’s say. And we have seen that by having these target teams actually improve a lot in the way they make decisions. They are more inventive. And when you actually feel supported and feel empowered, you thrive. And when you are free to be yourself as well, it’s a better way to reach actually your purpose which is one of the things of our strategy is from ING. One of the points of our strategy. So then having realized how advanced we are in that sense in terms of diversity and inclusion, makes me feel really proud. I also see it obviously not only at my level of what I do but I also see on the board, in the board, we have as well female colleagues that are also different colleagues are from a different cultural backgrounds. So, you start seeing obviously that we’re applying those and achieving those objectives and principles. There’s a lot to happen still, I think in the financial industry as a whole. So not only in tech but as well, in certain institutions in the payments industry, such as, for example, what we’re seeing right now, you see a huge amount of males being here. But I think we’re on the right path. And I realized that as well yesterday. So, it made me feel really nice.
Russ: [00:25:23] Yeah. I mean, it’s interesting you say that because you only have to look around the room and you do see that. But what was the feeling in the session, obviously you’re proud of what you’re achieving at ING, but other people in the room, do they feel the industry is moving quickly enough?
Mariana: [00:25:36] I think there’s still some struggles indeed. But the fact that you could actually pinpoint and be at a level of having part of that decision making, it gives you a lot of room to play. For example, in that session, I also mentioned a few of the things that I’m doing myself with my team. You can imagine us being technologists, sometimes you want to share the knowledge that you gather throughout experimentation and the learnings that you have achieved, and we share them with a wider audience. We publish, for example, white papers, and a lot of the times you also have these biases in academia. So, it’s not only the financial industry or the payments industry, it’s academia as well. A little bit of bias, is there. So, we have implemented certain types of policies like for example, whenever we publish white papers, we make sure that you don’t add your full name, but you just add your initial like M in this case. And then the last name, Gomez de la Villa. So, then people wouldn’t know if you’re a female or a male and then they would quote you. Because we have seen as well from research that when you are a woman, you are less likely to be quoted by ten times. So then in this case, applying those kinds of things, whatever is in your power and as little as it might seem, it already starts changing things. And not only things within your team, but things, you start also permeating those types of ideas to wider colleagues, for example, within your own institution. And then you start growing more in the ecosystem, etc. Another thing that I think was quite unique, at least from my perspective, is the fact that we have the centralized autonomous organizations in the blockchain industry, and these are also a mechanisms where you can actually vote for a proposal of something happening within that ecosystem. Whether that’s a code change, whether that’s an upgrade, whether that’s an update, anything needs to happen. it’s voted upon, but it is voted upon pseudonymity. So, people are pseudonymous in these organizations. And it doesn’t matter which age you are, where you’re coming from, where you are located, which gender you have, it doesn’t matter anything because you are pseudonymous. So, then they don’t know these items from you and then you can just propose a change and then they might vote only on your contribution. So, it’s really content related, and I’m happy to see that at least this industry where I’m really lucky to be in, which is a blockchain industry, then it’s moving ahead with gender bias, diversity and inclusion.
Russ: [00:27:57] Clearly an area that you are very passionate about because it’s coming through. And no, honestly, it’s great to hear. Now, your second session yesterday was on moving the regulated market to DLT, so distributed ledger technology, how are financial institutions being challenged by their clients now in terms of new technology?
Mariana: [00:28:16] I think we have always been challenged by clients. Otherwise, you cannot improve. So that’s a given. And we see a lot of opportunities as well because we are a customer centric organization. You look at CX, customer experience, we have accommodated and organized ourselves around that as well. So, we have, instead of product managers, we have what we call customer journey experts, and they map the journey and then they see actually where are friction points, as you can imagine, obviously in the area of blockchain, cryptocurrencies, the metaverse and all these web3 like type of layers that you may have in this ecosystem, there are a lot of friction points, so there’s a lot for us to do. And one of those friction points could be, for example, seen as regulation, then you have as well, the other side from DLT, this related technology per se, that is regulated. So, when you took a nice a real-life asset such as a bond or such as a security, and you put it on the blockchain that is already regulated, you can already do that, for a really long time we have done so as well. For example, in trade finance we have done so in other use cases. So those are the regulatory aspects are already considered. So, you make a compliant by designed type of solution. I guess the question is more the part of the ecosystem which is not 100% regulated yet, but I think we are going that way. We have obviously the oversight of the European Union, the European Central Bank, which are looking into this mechanism, such as creating, for example, MICAR, such as the EU as well, doing some experimentation by utilizing DLT in a lot of different aspects in the infrastructure actually. And as well, for example, we see it on the central bank digital currency topic. So, it’s getting there.
Russ: [00:29:59] Any other risks that exist that need to be overcome?
Mariana: [00:30:02] Well, risks on the segments of the market which are not regulated, for example, decentralized finance, for example, cryptocurrencies. There obviously are a lot of risks. There are risks because there is no consumer protection. And obviously, financial institutions need to ensure that yeah, whenever you provide services, those services are at par with your regulation. That you have to appeal, whether that’s retail, wholesale, whatever it is. So, the risk is obviously, that your customers might be scammed in one of these markets or that they might have investments, that are not actually properly provided on a later stage, etc. But that consumer protection, that duty of care that we have as financial institutions is exactly the one that is dictating our compass and is ensuring that whatever we do, whatever experimentation we do, is followed with our ethos and with our values. In everything we do, we need to follow that regulation. We need to ensure that we are protecting our customers. We have to ensure that we are protecting the financial ecosystem because we are systemic institution. So yeah, there’s no turning around.
Russ: [00:31:09] Just to finish off then, any other emerging technologies that you’re focusing on at ING?
Mariana: [00:31:13] Yeah, I think now it’s this area where you have seen obviously this related technology or blockchains, being there for over a decade by now. So, what we are started seeing that is really interesting which is other technologies such as machine learning, such as artificial intelligence or quantum being merged. So, complementing actually the solutions that we are deploying in production. So, for example, there has been also as well this advancement, let’s say, in quantum and now you are starting to see people experimenting with making quantum resistant protocols. Or, for example, having a machine learning algorithms that are put to make better decisions. And then those decisions being recorded on the blockchain and then feeding back again, another decision-making protocol and then going back into the blockchain, etc. So, you start seeing how they indeed start complementing each other, how you can plug and play with them, and then see which other parts of your journey towards your customer may be improved by connecting the dots.
Russ: [00:32:15] Fascinating stuff. I’m sure we could talk for a long time. But Marianna for now, thank you so much for joining the podcast.
Mariana: [00:32:20] Thank you very much for inviting me. Bye.
6/ Daniel Kjellen, Tink
Russ: [00:32:24] So we’re now joined by Daniel Kjellén, CEO of Tink. Daniel, thanks for joining the podcast. Do you want to just start with a very quick introduction to Tink?
Daniel: [00:32:32] Hi. And thank you so much for having me. So Tink is a European open banking platform where we stitch together some three and a half thousand banks into one platform. And on top of that, we build products to help our customers who are always financial institutions, to get the most out of this underlying infrastructure, both to aggregate data and also to make payments.
Russ: [00:32:55] Yesterday at Money20/20, you sat down with Charlotte Hogg, CEO of Europe at Visa for your session. I’m going to ask you about the session in a second, but do you still have to pinch yourself that you’re now part of that company?
Daniel: [00:33:07] I mean, to be honest, I think one of the perks or the curse of being an entrepreneur is that you always believe in yourself and think that you’re on the verge of doing something amazing. So, we’ve always felt that we deserved to be part of a great organization like Visa or to remain independent. But yes, obviously, we are super proud. We’ve been venture backed for the past ten years, which has served us great when you need to do the trial and error and all that. But I think it’s pretty clear now that we want to be the global open banking platform. We want to power the pioneers. We want to give everyone access to this amazing infrastructure, which is based on people’s bank account, because we think it’s going to increase competition, innovation and eventually consumer choice. And I couldn’t really find a better home in order to achieve that vision and dream than Visa being a global company, having seen first-hand the upside of building financial infrastructure and how that can benefit individuals and societies and businesses, if you get it right that it can take time to build it and have the stamina to do it, but also have the brand and the global organization. It’s a perfect place to be.
Russ: [00:34:20] Why did Visa decide to buy Tink? And also, why did you agree to the acquisition?
Daniel: [00:34:26] Well, so we’ve been in and out of fashion for the past ten years. Sometimes it’s been the cool thing and certainly we’ve been like absolutely not cool. Past few years we’ve been fortunate enough to have some people come knock on our doors and we’ve always looked at this with the same lens like is this going to increase the likelihood of us being able to be the global open banking platform? And the answer previously was no, and the answer now was yes. I think that we met a team at Visa that both culturally had a match with us, and I think that was important in both sides that had set high bar for themselves, big ambitions. But as I said before, I think that they’ve also seen first-hand the enormous potential, if you have the stamina to build out a global payment network or in this case, an open banking network, and the upsides that comes both from a business perspective, but also then also from a consumer and societies.
Russ: [00:35:18] So what do you think now that you are together, what’s this going to enable both parties to do in the future?
Daniel: [00:35:23] I think for us, we can have a slightly more long-term horizon. We can probably go global faster than we could have done otherwise. You can say that you’re independent, but it’s also that you rely on your investors to continue to invest in you. And I think that with Visa, we have a slightly more long-term horizon, but also to leverage their organization and knowing about cybersecurity, how to build trust. I mean, I think that every single customer that we want to work with is probably the existing customer of Visa today.
Russ: [00:35:54] And what message do you think it sends to the rest of the industry?
Daniel: [00:35:57] I think it’s a little bit of a testament that this is an important movement, and that Visa wants to continue to invest in this platform.
Russ: [00:36:05] Okay. Now, I just want to finish off with an announcement that you guys have made here at Money20/20, which is a new European payment partnership with Revolut. Tell us about that.
Daniel: [00:36:17] Well, it’s so exciting because, I mean, we take pride in doing the boring, heavy lifting, the plumbing, if you want. We said we want to power the pioneers and they might be everywhere. They might be the two-man band in the garage, the scale ups at Revolut or even the big banks. Traditional banks. But truth be told, there will be only be a handful in the banking segment that has both the scale, the capacity to innovate, to bring new products and processes to the market, and where everyone else will look and say, and I want to be a follower, to be honest and Revolut will be one of those. They will also be one of the most picky partner selecting processes you’ll ever see. So, I think all of these things combined makes us very, very proud partners of Revolut.
Russ: [00:37:00] Fantastic. Well, exciting times for you guys. But for now, Daniel Kjellén, thank you so much for joining us.
Daniel: [00:37:05] Thank you so much.
7/ Joanne Dewar, Global Processing Services
Russ: [00:37:07] So I’m here with Joanne Dewar, CEO of Global Processing Services, very late in the day. So, thank you, Joanne, for joining us. Do you want to start by just giving us a quick intro to your company?
Joanne: [00:37:17] Global processing services or GPS, we are an issuer processor, which means we’re the technology behind the card payments processing for many of the world’s leading fintechs, challenger banks and digital banks such as Revolut, Starling, Curve and many others around the world right now.
Russ: [00:37:37] Now you were in a session today about the rise of the orchestration layer. So my first question has to be, explain what an orchestration layer is?
Joanne: [00:37:46] An orchestration layer is really a technology layer that sits in an organization to help manage the many dependencies and many integrations that an organization needs to have in order to be able to manage a program. The fintech ecosystem is extraordinarily complex. Even when you’re working in one market, you need maybe eight or more different partners in order to be able to bring a program to life. When you are then building out a capability across multiple markets, in multiple geographies, very often those partners cannot provide the support across all the geographies. So, you need a more variety of partners. So, you can either be in a position of having lots and lots of point-to-point integrations, which creates like a spaghetti matrix of integrations. Or you can put an orchestration layer in the middle which enables you to have point to point integrations that are more simple to, to manage, to support, to bring other players in or ultimately to upgrade over time.
Russ: [00:38:53] And what was the key takeaway from that session?
Joanne: [00:38:55] So we were looking in the session about both the merchant acquiring side and the issuing side, and we concluded that thematically the issues are the challenges, and the opportunities are exactly the same. So certainly, from the issuing side, the types of benefits it’s easiest to be able to describe by giving you a real example. In our relationship with Revolut, we’ve been able to support them to gain scale at speed and efficiently from a cost perspective. And so, we’ve been able to support them in going live in 42 different countries with ten different card manufacturers, with four different issuing banks, with two schemes in three continents, all running on a single API integration, a single interface into us. So that enables them to provide a single user experience, a single mobile app-based experience consistently globally, without having had to develop lots and lots of different integrations. That really is pretty special. It’s pretty unique. It’s enabled them to scale geographically very quickly without having huge cost. And, you know, they’re able to leverage the advantages of having multiple partners and multiple suppliers, whether it’s from a resiliency perspective or also a cost management perspective as well.
Russ: [00:40:22] Why has there been such transformation in the payments ecosystem, you know, in recent years?
Joanne: [00:40:26] I think it’s ultimately, it’s customer demand, whether it’s customers – the consumers or businesses. There is a clear drive to move away from cash. There’s a generation that is expecting everything can be done in an instant. Everyone’s got a, you know, a mobile phone. They’re expecting that their relationship with their bank can be instant and available at the touch of a button. And one of the things that’s been really apparent through the pandemic is it’s the same experience in every geography across the world. And if anything, there’s been an acceleration. I mean, who would have imagined that you’d have the World Health Organization saying, we recommend you move away from cash and use digital banking experiences. So, you know, there’s been this huge acceleration at the same time across the world, and that creates huge opportunities for us.
Russ: [00:41:19] You mentioned how many countries you’re working with Revolut in. For other businesses entering global markets, what challenges exists and how are they going to be overcome?
Joanne: [00:41:28] The challenges are really that when you’re working with a regulated entity, there is jurisdiction boundaries and most of the fintechs in the world, they’re thinking big. They’re thinking beyond national boundaries. They’ve got all got ambitions for global domination. And in order to be able to provide an offering across multiple markets, you need to find multiple service providers, whether it’s the issuing bank, whether it’s a KYC provider or whether it’s card manufacturer. And so, you need to pull together that collaboration of an ecosystem for each market that you’re going into. Now, we’ve been really fortunate in Europe to date. If we put Brexit to one side in that we’ve had the CEPA agreement, which means that you can access all the markets across the single European payments area whilst being registered in one market and then passporting that license across. And that’s really why originally so many of fintechs started in the UK where we had a very supportive regulator, and they were able to passport that out. When you start to look outside Europe into Asia-Pac or MENA or other geographies, actually you need to grow, well you need to build out your capabilities and your licensing on a market by market basis, which means that for each country you’re needing to find the partners to be able to support. What an organization like GPS does is help navigate that complexity because as in the case of Revolut single integration with us, that’s technical taken care of. And then you can just find the issuing relationships, the contractual relationships that you need to be able to service that market.
Russ: [00:43:10] Joanne Dewar, thank you so much for joining us.
Joanne: [00:43:12] You’re very welcome.
8/ Teo Blidarus, FintechOS
Russ: [00:43:15] So I’m now with Teo Blidarus, CEO and Co-Founder of FintechOS. Teo, thanks for joining us. Shall we start with a very quick intro to your business?
Teo: [00:43:22] So we started four and a half years ago with this crazy idea that every company is becoming a fintech company. I guess now looking at the present moment, I think it’s really, really happening, and our job is to help any company launch better, faster, cheaper financial services and products into the market. We’re working with banks, we’re working with insurers, we’re working with retailers, e-commerce, telcos, infrastructure players. So, everybody is becoming a fintech company and we are pretty much in this motion.
Russ: [00:43:56] And in terms of that, I mean, just wandering around Money20/20, over the last couple of days and what have you seen, any trends that have highlighted for you?
Teo: [00:44:05] I think it’s pretty obvious that the trend of the show is anything linked with embedded finance from embedded payments to BNPL even embedded insurance. And as I said, we’re also very much in the middle of that. I think, with the, Apple Pay later happening and with us showcasing for example, here our buy now pay later accelerators in various business models that we’ve deployed across Europe and UK. I think it’s obviously the embedded finance, I would say it’s ‘the’ topic.
Russ: [00:44:39] Now you’re speaking on a session tomorrow around Open Source Tomorrow, is what it’s called. Can you give us a little preview on what you’re going to be talking about any sort of key highlights that you can share?
Teo: [00:44:48] Yeah, sure. I mean, I think open source has become a source of innovation for the banking sector. We at FintechOS, we also contribute to open source, but we also embed and work with open source technologies. So, I’m part of a panel. I have two open source specialists in the panel that are very enthusiastic about it. I’ll try to be a little bit more controversial around certain areas. I’d like to bring the topic from open source more towards open innovation as in, right, so the open source is interesting, is accelerating, is producing best of breed, but how are we actually enabling more people to innovate? And this is where, for example, our strategy is around, no code, low code and offering composable building blocks that are pre-built, and you can easily orchestrate in order to build best of breed financial products and services. I will be pushing more into that direction as a broader topic rather than just open source.
Russ: [00:45:48] And what do you think banking and financial service companies need to be mindful of when they’re embarking on their journey of digital transformation?
Teo: [00:45:57] I would frame it in a couple of simple sentences. So, the most important thing is that nobody wants to buy a mortgage, right? Everybody wants to buy a house, and this is where our focus collectively as an ecosystem of financial services infrastructure should be. And yes, sure, the house brings together a mortgage, probably a term life, insurance, and refurbishment loan and, I don’t know, a household protection and even a pet insurance if you’re a pet lover. But I think the main idea here is that customers are looking for ambient financial services, personalized, differentiated. And I think there’s a huge opportunity for the whole ecosystem, the traditional incumbents, but also the newer players to participate in that. Customers are also looking for end to end customer digital journeys rather than not only, the tip of the iceberg. And I think looking at the digital customer experience, but coupling it with, better personalized products and lean core operations, it’s a win win win. Because at the end of the day, customers are happier. But also, the financial institutions are being able to drive more efficiency, which is, as we know, very, very important today.
Russ: [00:47:24] Now one of the things that I wanted to talk to you about is a recent announcement that you at FintechOS made, and that’s that you’ve been selected for PWC and Microsoft’s digital banking solution, tell us a little bit about that collaboration.
Teo: [00:47:36] Yeah, sure. I think it’s a fantastic achievement for a company like ours who is 4 years old into quite a mature market and being effectively backed up by two of the largest, if not the largest institutions who are playing here, a tier one consulting company like PWC and arguably the most important technology provider. So, I think everybody understands that at this point when we’re talking about digital banking services, just having an off the shelf solution may be cloud based off the shelf solution is not good enough. So, what PWC has been looking after has been looking for what we call a fintech infrastructure as a service. So, an infrastructure that is very flexible, can be operated through no code, low code to be able to empower people to do more, to innovate faster. Technology that is composable so they can effectively tailor the infrastructure to suit the reality of the customers. And some customers might have a gap in their innovation in core processes. Some of them would have gaps of innovation in customer journeys. And FintechOS is that glue in the middle that helps PWC, and Microsoft orchestrate best of breed fintechs partnerships.
Russ: [00:48:55] Is a good indication of where the business is going.
Teo: [00:48:57] I think it’s a tremendous endorsement for us. We’ve been selected and we’re working with other tier one consulting companies. And I think everybody understands that in the world where every company is a fintech company, there’s a new category of technology that has to dwell on both flexibility and cost efficiency, but also starts from the customer perspective when designing financial services. And this is where we think FintechOS can really play a real great part.
Russ: [00:49:32] Yeah, well, congratulations on that collaboration and best of luck with developing all that. But for now, Teo, thanks so much for joining us.
Teo: [00:49:39] Thank you very much as well.
9/ Rogier Schoute, Mollie
Russ: [00:49:41] So I’m here with Rogier Schoute, Chief Product Officer of Mollie. Rogier, let’s start with a quick introduction to the company.
Rogier: [00:49:47] Cool. Thanks, Russell. So, yeah, Mollie is an online payments company headquartered here in Amsterdam, active in seven European markets and serving over 150,000 retailers and customers.
Russ: [00:49:57] Now, you were taking part in a session today, and that was all about your new partnership with Plaid. Tell us a little bit more about that and what it means for both companies.
Rogier: [00:50:06] Yeah. So, Mollie is using Plaid’s open banking APIs to further improve the onboarding experience of our customers. So as a regulated institution, we need to, of course, perform the necessary checks before our customer can go live. Mollie has always been very true at making that process as seamless as possible. And using Plaid’s technology, we can now make that process real time instead of having this take a couple of days. So, we’re really excited about that. For us, it means a better experience for our customers. For Plaid, that of course, means partnering with one of the leading European fintechs and proving value with open banking, which is slowly starting to happen in the industry.
Russ: [00:50:42] What precedent would you say this partnership sets for Mollie and also for the industry as a whole?
Rogier: [00:50:47] I think for Mollie, it’s really about building yourself what is core to the business, right? We know really well what we’re good at. It’s our online payments products, making sure that we deliver the best value to our customers, but also really being conscious that there’s many companies out there with specialism and great technologies and be a bit conscious around what do you build yourself versus where you partner in the interest of your customers? So, I think the precedent for the industry will be that hopefully we’re going to see a little bit more partnerships that actually deliver value for customers as opposed to companies trying to build it all themselves and not deliver a compatible solution for their customers.
Russ: [00:51:24] Yeah. I was going to ask, would you say these kind of partnerships are part of your wider strategy then moving forward?
Rogier: [00:51:30] Well, absolutely. I think that, again, we want to give an integrated experience for our customers, so they don’t necessarily have to see those partnerships. And for them, it’s Mollie delivering the front facing product solution. But at the end, it’s around delivering the best value and best products for your customers. And partnerships are absolutely a part of that, especially if you look at the speed of innovation here in the fintech industry. You’ll need to partner with the best specialists in order to deliver a complete product to your customers.
Russ: [00:51:54] I want to ask you about the market in general. Fintech stocks are down considerably this year. What are your thoughts about this and how is Mollie placed to withstand that kind of volatility in the space?
Rogier: [00:52:06] Mollie is very fortunate that we have a very viable business that’s growing really, really rapidly. So, we’ve a proven business model. So, in that sense, we’re in that sense very, very lucky. What you will see, though, is a year ago you could raise money based on an idea without having a product. Right. And that is now really, really changing. And I think there’s more pressure on delivering value for customers and having viability into the core offering, which really is to our advantage. Right? Because we have a viable offering, we’re growing really rapidly and yet we’re delivering the best technologies in order to deliver value for our customers. So yeah, it’s in that sense it’s some more humility in the fintech industry is good and we really support it.
Russ: [00:52:43] And any other trends that you’re seeing in the sector in general? And also, how do you see the whole fintech sector evolving?
Rogier: [00:52:50] A couple of things like what we see in online payments is that the use of payment types by consumers across our different markets is actually rapidly changing. Last year it was the year of buy now pay later grew over 180% within our portfolio and we see new trends coming up in all the different markets. So, the next generation of bank payments is already starting to emerge here in the Netherlands. So that’s certainly one trend. The second piece that we’re really observing is that the lines between offline and online payments is blurring during the pandemic, but also with the employee shortages that you see across the sector, we certainly see Mollie being used at all kinds of physical locations that deal with employee shortages, which is really, really interesting. And we foresee a future of software-based point of sale system. And three, I think you’ll see more partnerships as opposed to the conception of building the single operating system without choice for SMBs. There are some companies trying to do just that, but we believe that SMBs want their services to be compatible. They want their accounting, tax and financial services, software, and payments software to work together and they don’t necessarily care about who serves that. They care about having the best product. So, we’ll foresee more partnerships and again compatibility between those services and as opposed to the single stop shop that builds it all.
Russ: [00:54:09] Great stuff. Listen, Rogier, I’d love to talk to you more, but I know we’ve got busy schedules, so for now, thanks for joining us.
Rogier: [00:54:15] Great Russell. Appreciate the time. Great, great being here.
Russ: [00:54:20] Well, that wraps up this second episode from Money20/20 Europe. So, thanks again to all my guests who took the time to chat with us at the event. If you have enjoyed the show, please do give us a positive rating and review, but for now, thanks for listening and goodbye.