August 2023

fintechmagazine.com

CREDIT UNION
OF AMERICA:
Upholding values
amid a fast and
furious tide of
innovation

LENDERS
BY TOTAL MSUFCU:
FUNDING Innovating the
community

HSB CANADA:
A history
of digital
transformation
within insurance

ALVAREZ & MARSAL:

TRANSFORMING
TECHNOLOGY
SERVICES
Jeremy Zung discusses improving employee experience by
deploying leading technologies and transforming existing systems
The World’s Fastest
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The FinTech Team

EDITOR-IN-CHIEF FEATURE DESIGNERS DIGITAL VIDEO PRODUCERS PROJECT DIRECTORS
ALEX CLERE SAM HUBBARD MARTA EUGENIO JAKE MEGEARY
REBEKAH BIRLESON ERNEST DE NEVE
EDITOR MIMI GUNN THOMAS EASTERFORD MEDIA SALES DIRECTORS
LOUIS THOMPSETT DREW HARDMAN JAMES WHITE
SOPHIE-ANN PINNELL
HECTOR PENROSE SALLY MOUSTAFA
CHIEF CONTENT OFFICER MANAGING DIRECTOR
SCOTT BIRCH JULIA WAINWRIGHT PRODUCTION DIRECTORS LEWIS VAUGHAN
ADVERT DESIGNERS
GEORGIA ALLEN
MANAGING EDITOR CEO
DANIELA KIANICKOVÁ
NEIL PERRY JORDAN WOOD GLEN WHITE
DANILO CARDOSO PRODUCTION MANAGERS
CHIEF DESIGN OFFICER CALLUM HOOD JANE ARNETA
MATT JOHNSON MARIA GONZALEZ
VIDEO PRODUCTION
YEVHENIIA SUBBOTINA
HEAD OF DESIGN MANAGER
ANDY WOOLLACOTT KIERAN WAITE MARKETING MANAGER
EVELYN HOWAT
LEAD DESIGNER SENIOR VIDEOGRAPHER
SAM HUBBARD HUDSON MELDRUM
 FOREWORD

BUILDING A
BETTER WORLD
THROUGH FINTECH
For people who work inside the financial services
industry, it can be easy to forget on a day-to-
day basis what we’re building towards. Hopefully,
“IN SOME PARTS in most cases, that should be greater financial
OF THE WORLD, inclusion and equity

PEOPLE ARE By 2030, it’s estimated that the top 1% of wealthiest

people will own two-thirds of the world’s wealth
MORE LIKELY while the bottom 50% will have just 2%. That leaves
almost 50 underdeveloped economies facing “serious
TO HAVE A impediments” to their economic progress, according to
SMARTPHONE the United Nations.
Despite our best intentions, financial inclusion is still
THAN A BANK a huge issue for the global financial system. In this issue
of FinTech Magazine, we take a look at underbanked
ACCOUNT” populations and ask what can be done to improve the
fortunes of people in developing countries. We take
stock of the progress financial technology has made
in bettering their lives, and whether it has empowered
traditionally underserved communities.
We also reflect on some of the core innovations that
are driving our industry forward, from open banking
and blockchain to the emergence of biometrics. We
hope you enjoy the content in this month’s issue!

FINTECH MAGAZINE
IS PUBLISHED BY ALEX CLERE
[email protected]

© 2023 | ALL RIGHTS RESERVED

fintechmagazine.com 7
 CONTENTS
UP FRONT
14 16
14 BIG PICTURE
Germany becomes latest
European country to incentivise
culture among young adults

16 LIFETIME OF
ACHIEVEMENT
Pieter van der Does,
CEO of Adyen

20 INTERVIEW WITH 20
John Myers,
CEO of IDVerse

136

000
8 August 2023
 AUG 2023

26

FEATURES 48
26 ALVAREZ & MARSAL
Transforming
technology services

48 BANKING ECOSYSTEMS
Why financial ecosystems
are a growing must for banks

60 MSUFCU
Innovating for
your community

76 CARD PAYMENTS
Will digital cards and
digital wallets kill off plastic?

88 HSB CANADA
A history of digital 60 76
transformation within insurance

fintechmagazine.com 9
The World’s Fastest
Growing Fintech
& Crypto Event
8 - 9 November 2023
QEII Centre, London

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 AUG 2023
CONTENTS
100 BLOCKCHAIN
100
Assessing the adoption
of blockchain in
financial services

110 CREDIT UNION

OF AMERICA
Upholding values amid a fast
and furious tide of innovation

126 HELPING THE

UNDERBANKED
Meeting the changing needs
of underbanked populations

136 TOP 10
Fintech lenders
by total funding

110

126
fintechmagazine.com 11
The Portfolio

portfolio
o ad

WORK WITH US
 BIG PICTURE

14 August 2022
 Image credit:
Buena Vista Images

Germany becomes
latest European country
to incentivise culture
among young adults
Berlin, Germany
An exhibition hall within the Pergamon Museum
in Berlin. Germany has become the latest
European country to offer a free ‘cultural pass’
to citizens turning 18 in a bid to incentivise
spending on culture and the arts. The initiative,
which launched in June, provides €200 towards
the cost of museum and gallery admission, live
events and theatre. Italy was the first country to
offer such a scheme seven years ago, followed
by France and later Spain. The latter imposed
limits for different types of spending, following
criticism that vouchers weren’t being used on a
diverse enough variety of cultural experiences.

fintechmagazine.com 15
LIFETIME OF ACHIEVEMENT

BUILDING
ONE OF THE
NETHERLANDS’
MOST SUCCESSFUL
FINTECH EXPORTS
The co-founder and long-time CEO of Adyen,
Pieter van der Does, has carved himself a place
among Dutch business nobility

P
ieter van der Does is the Forbes magazine. This make
Co-Founder and Co-CEO of him the fourth richest person in
Dutch payments company the Netherlands, Forbes says (and
Adyen. He founded the ‘Schuijff’ the third), bettered only by
business in 2006, long a small handful of entrepreneurs and
before the word ‘fintech’ was common industrialists – including Charlene de
parlance. A graduate of the University Carvalho-Heineken, heiress to the beer
of Amsterdam and Harvard Business fortune; and Frits Goldschmeding, the
School, he worked for a couple of banks founder of temping agency Randstad.
including ING and RBS before founding
the business almost 17 years ago. Adyen is a company in transition
Back then, van der Does recognised In February this year, it was announced
that payment providers were offering that Adyen was promoting CFO Ingo
services based on a patchwork of Uytdehaage to the role of co-CEO –
systems that were built on outdated a move that was accompanied by a
infrastructure, and – together with fellow broader shakeup of Adyen’s executive
founder Arnout Schuijff, who stepped team. Uytdehaage is a company
away from the business a couple of years veteran, having been CFO for 12 years
– set about trying to change that. and consequently been present for
In the intervening years, Adyen has
experienced astronomical success.
Today, it has over 3,000 employees
across 27 different offices worldwide PIETER VAN DER DOES
– from Amsterdam to Sydney, and San TITLE: CO-FOUNDER AND CO-CEO
Francisco to Dubai. Its clients include COMPANY: ADYEN
household names such as Uber,
INDUSTRY: FINANCIAL SERVICES
Facebook, H&M and eBay, who all benefit
from Adyen’s end-to-end payment LOCATION: NETHERLANDS
capabilities, data enhancements and
EXECUTIVE BIO

financial products all packaged into a Adyen is the financial

single solution. technology platform of choice
A diverse team comprising over 115 for leading companies. By providing
different nationalities helped realise end-to-end payments capabilities,
€767.5bn in processed volume last data-driven insights, and financial
year – and its long-serving chief exec products in a single global solution,
has reaped the rewards of that success Adyen helps businesses achieve
over the years. Pieter van der Does is a their ambitions faster.
billionaire, worth US$2.2bn according to

fintechmagazine.com 17
 LIFETIME OF ACHIEVEMENT

more than two thirds of Adyen’s time on my health. With Ingo as co-CEO,
growth journey. He had previously I can do that while Adyen stays its course.”
been a finance director at Dutch Many onlookers will also point out
telecommunications firm KPM, and is that, with van der Does at the helm for all
presently a non-executive director at of Adyen’s history prior to February, the
money transfer business Wise. company was in desperate need of a clear
But Uytdehaage’s appointment doesn’t succession plan – one that it now has.
necessarily spell the end of Pieter van
der Does at Adyen. Instead, the two will Adyen founder wants to build culture
share roles. It is the formalisation of an In an interview with The Telegraph
arrangement that is already working in way back in 2017, van der Does – who
practice, van der Does says, one that will is relatively sparing with his media
give him more time to concentrate on his appearances, particularly in an industry
health if required. that is quick to rush into the limelight
“I had to balance my time between – explained that Adyen avoids email
being at our Adyen offices and my health wherever possible because it helps to
for a month or two in November,” van der build corporate culture. In the modern
Does said when Uytdehaage’s promotion workplace, where people have numerous
was confirmed to the press. “What I digital communication tools at their
learned is that, should it be needed in the fingertips, employees often omit or
future, it’s important to be able to spend overlook the personal touch.

18 August 2022
 In an interview with Bloomberg in
“SHOULD IT BE March 2023, van der Does also revealed
that Adyen was currently undergoing
NEEDED IN THE a recruitment drive. The labour
market, particularly for engineers, had
FUTURE, [INGO become somewhat less competitive,
he explained. “So let’s sign them up!”

UYTDEHAAGE’S However, this had an inevitable effect

on Adyen’s profit margin, which has

APPOINTMENT been dented slightly, but once the

company was fully staffed-up then

AS CO-CEO] IS this should return to normal.

Recruitment should slow down

IMPORTANT again next year, he intimated, meaning

that its profit margin would “trend

TO BE ABLE TO in the other direction”. This would

be particularly convenient timing,
given the current emphasis within
SPEND TIME ON the financial industry on long-term
sustainability and profitability over
MY HEALTH” near-sighted acquisition and growth.

fintechmagazine.com 19
 INTERVIEW WITH...

JOHN MYERS
With fraud on the rise across the financial sector, identity verification
has become all the more important. For IDVerse’s CEO, John Myers,
helping people and businesses feel secure is imperative

Q. CAN YOU WALK US me ‘we want to build the world’s greatest

THROUGH YOUR JOURNEY TO verification technology, and we want you
BECOMING CEO OF IDVERSE?? to build the business around us’, so they
» Becoming IDVerse CEO has been an could focus on the tech while I ran the
incredible journey. For the last 25 years, operational side of things.
I’ve built a business that helps other I was flattered. And, even though
businesses grow. One of the things I couldn’t quite grasp their tech
that I did in the early days of my career proposition, they used big words in their
is launch a venture-build business PowerPoint presentation and made the
alongside our consulting business. It slides really easy to understand, so that
was only small, consisting of 150 people definitely helped! And that was the start
in seven countries. It was designed so of OCR Labs, now IDVerse.
that we could invest in founders who As the business grew and we took
had a cultural fit and alignment with us. hold in Asian-Pacific (APAC) markets,
It meant we could put our arms around it became clear to me that this wasn’t
them, share our skills and embark on the a fractional or part-time role. I was too
same adventure with them. engaged in the business to let anyone
Then, around 13 or 14 years ago, two else be a part of it other than myself. I felt
young men, Matthew Adams and Daniel a responsibility as the custodian of these
Aiello (OCR Labs Co-founders), came guys’ tech, so I removed myself from my
into my office because they wanted main business, and put different people
help setting up their business properly. in charge of the venture-build business
Fast-forward a few years and Matt and while I continued to manage what was
Dan were looking to move on from that then OCR Labs, and I’m still here to
venture. We sat down and they said to this day.

20 August 2022
 INTERVIEW WITH...

“MY CAREER
TOOK ME TO A
PLACE WHERE I
REALISED THAT I
Q. WHY THE CHANGE FROM LOVED GROWING
OCR LABS TO IDVERSE??
» It was actually hard for us to shift away HUMAN BEINGS”
from OCR Labs. It was something we
were quite emotionally invested in, but
JOHN MYERS
we felt the name didn’t quite reflect the CEO, IDVERSE
full extent of what we could offer to our
customers. What’s more, the identity
verification space has changed so much
since OCR Labs was launched. Fraudsters
are becoming smarter, they’ve got more
ammunition in their armoury. So we four or five years, and our customers
made the change to IDVerse to reflect can get that as part of their package.
the expanding marketplace – it allows Bringing customers on board quickly
us to really state what the product is: and seamlessly is something the industry
a universal identity verification service. needs to pay close attention to. It instils
greater trust in the product, and it’s
Q. WHERE DO YOU SEE THE important for clients with data breaches
GREATEST NEED FOR IDENTITY occurring everywhere. Particularly today,
VERIFICATION SERVICES? biometric verification by means of facial
» Fraud is growing everywhere, so in that recognition is a crucial piece to help solve
sense, the need for an IDVerse is only some of those issues.
getting stronger. Our engines are now
fired up with generative AI to deal with Q. WHAT KEEPS YOU MOTIVATED
growing fraud use cases. What that means IN THE HUNT FOR SUCCESS?
is that they learn organically how to be » The first thing that motivates me is
stronger and better, to protect people making sure there is constant capacity
and help the user experience be a little bit in our tech to keep people safe, helping
more seamless. And I think it’s our use of businesses change the way they operate
this AI that’s so important at the moment. so they and their customers are both
Fraudsters have all kinds of abilities to use protected. To do this plays into my
deep fakes, they’re not scared to try any second motivation, because people
means necessary. We have a deep fake always say the security requirements
defender that’s been in production for they need can’t be achieved. I love to

22 August 2022
prove people wrong, which, for zones mean I find myself in
the most part, is proving the worth different time zones quite often!
of our technology. So for me, keeping everyone aligned,
Internally at IDVerse, what motivates spirited and driven in the same direction
me is the ability I have to change is probably the biggest challenge I have
people’s lives and be the custodian of day-to-day.
this fantastic project. I love growing
businesses and growing people. It’s Q. IS THERE ONE PIECE OF ADVICE
people that drive businesses forward. THAT’S STUCK WITHOUT YOU
For me, this is the most soul-nourishing THROUGHOUT YOUR CAREER?
experience anyone could have. » I was told in my early career that I
could be more than one thing, which
Q. WHAT CHALLENGES has been sound advice as it’s helped me
DOES YOUR ROLE THROW expand my role and the businesses I’m
AT YOU DAY-TO-DAY? involved with. But the one thing that has
» Given that we’ve tripled in size in a really stuck with me is a phrase spray
very short amount of time, my biggest painted as graffiti in a tunnel near Sydney
challenge now is making sure we keep Harbour: “action is eloquent”.
cultural alignment, especially when This really stuck with me. For me, it
we have teams growing at an equal means just do what you say you’re going
pace across different regions across to do. Be pragmatic, and get whatever it
the globe. It definitely keeps things is you need to do done. And I’ve carried
interesting. Offices in different time that forward with me ever since.

fintechmagazine.com 23
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ALVAREZ & MARSAL:

TRANSFORMING
TECHNOLOGY
SERVICES WRITTEN BY:
ALEX CLERE
PRODUCED BY:
JAKE MEGEARY

26 August 2023
ALVAREZ & MARSAL
 ALVAREZ & MARSAL

Alvarez & Marsal (A&M) is improving employee

experience by deploying leading technologies
and transforming existing systems

S
upporting a global professional Founded in 1983, A&M provides advisory,
services firm that enables world business performance improvement, and
class organisations presents many turnaround management services to a
opportunities and challenges diverse range of clients – from corporates
for an Information Technology and government agencies to private equity
function. Supporting such an organisation firms and law practices. The business has
requires intense focus and high flexibility. been expanding rapidly of late and now boasts
These environments leave little time to be more than 7,500 people, who provide services
introspective and require a CIO to make across the world.
instantaneous decisions and constantly Based in Florida, Zung joined A&M in July
evolve their thinking. Working in such a 2021 following a 30-year career at professional
highly dynamic and fluid environment has services firm PricewaterhouseCoopers (PwC).
never been a problem for flexible CIOs such After college, Zung’s first job was as an actuarial
as Jeremy Zung, Chief Information Officer associate with Coopers & Lybrand – where he
(CIO) for Alvarez & Marsal (A&M). could never have imagined the diverse jobs
“When I joined A&M during COVID, there he would hold during his career. Those roles
was no playbook or manual to tap into,” he included multiple client-facing and internal
says. “It became very clear, though, that our roles including being the US Advisory IT leader
primary focus needed to be about stabilising for 12 years, leading 13 acquisitions.
the core – this included not just technology, It was a big career move when he made the
but our staff. We had a lot of technical switch to A&M – but Zung himself is not afraid
debt that had built up, similar to many of change, given that his career has been about
companies.” continuous improvement and transformation,
As global CIO, Zung is responsible for and his 30 years at PwC had prepared him for
all internal IT matters including all back- this opportunity.
office technologies and systems. Once the “One of the things that really attracted me
core was stabilised, it allowed the focus to A&M was its history based on relationships
to quickly move to improving services to and not relying on commercials or TV ads,”
A&M’s growing base of global professionals. he explains. “It’s a people business. That
Transforming the IT department required really stuck with me – that its work is through
a change of mindset to operate IT as referrals, word-of-mouth, people saying what
a business. we’ve done for them.”

28 August 2023
 Jeremy Zung
CIO, Alvarez & Marsal
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 Arribatec supporting Alvarez & Marsal with ERP expertise
Arribatec has provided a full range of services One example of how Arribatec works with
to Alvarez & Marshal (A&M), from integrating partners comes in the form of its work with
software across banking systems to enabling professional services firm Alvarez & Marsal.
upgrades to HR solutions As Mark Bloomer, UK MD of Arribatec
Business Services describes, Arribatec
Since being founded in 2015, the offered A&M a full range of services, from
Arribatec Group has provided digital integrating ERP and banking solutions
solutions, services, consultancy and to consolidating HR systems.
infrastructure for companies looking
to simplify and optimise. “A&M has quite a large, sophisticated team,
but they needed ERP-specific expertise in a
Its department dedicated to business number of areas,” Bloomer adds. “Over time,
services simplifies the path to the we have built a mutual trusting relationship,
goal for clients by implementing, and we’re able to blend in seamlessly into
adapting, maintaining and supporting their own teams.”
the entire business landscape with
ERP as the core engine. For Vandezande, central to the future for
Arribatec is around bringing its solutions
“We can look after our clients’ business- to the global market.
critical systems, whether it’s ERP, CRM or
HCM, plus DBI and analytics,” explains Tom “Our tagline is We Simplify Complexity,”
Vandezande, EVP at Arribatec Group and he explains. The idea is to take the headache
Global Head of Business Services. away from the customer and provide an
integrated end-to-end solution covering all
“We can also advise clients on the their angles: looking at everything from the
infrastructure side, whether they want people side of things, the process side of
to move to our cloud or one of our partner things, the business-critical systems side
clouds. Finally, we can overlay all of this of things, as well as infrastructure.”
with our enterprise architect, business
process and organisational changement
management services, provided by our Learn more
EA & BPM Business”.
“The key benefits for Reducing the amount of technical debt
One of the first challenges when he joined
us in automation are A&M was reducing the amount of technical
debt that the company faced. “During the
reducing manual last few years prior to my joining, we really
fell behind on a lot of things – just like
processes, reducing most companies,” Zung says. This technical
debt consisted of old laptops, servers,
manual mistakes, infrastructure components that were
and improving our reaching their end of life, and slow adoption
of cloud services. All of these things were
efficiencies” directly impacting A&M staff.
“We focused on eliminating critical points
of failure – not just systems – but our talent,”
JEREMY ZUNG
CIO, he continues. “We had key areas which were
ALVAREZ & MARSAL vulnerable when a person went on vacation

32 August 2023
 ALVAREZ & MARSAL

JEREMY ZUNG
TITLE: CIO
INDUSTRY: PROFESSIONAL SERVICES
LOCATION: UNITED STATES

or happened to be sick. We really looked

at that as part of our stabilisation efforts. Jeremy Zung is the Chief
“We also needed to improve Information Officer (CIO)
performance and reliability across our for global professional services firm
environment, and institute and improve Alvarez & Marsal. Leading a team of
our governance around our project IT personnel, Jeremy is responsible for
management portfolio. We had a growing the management of firm standard core
systems, networking, infrastructure,
EXECUTIVE BIO

number of project requests backing up.

We implemented a governance model cloud and data centre services.
including a Portfolio Review Board (PRB) Jeremy has a 30-year record of
to help decide where to invest firm success in multiple client-facing and
resources. We can’t do every project back-office roles including: Actuary,
that gets requested, so we had to create 401(k) Manager, Director of Network
a structure to evaluate each request Services Architecture and Design, and
including its impacts to the business, PwC US Advisory Advisory IT Leader.
costs, and expected value to the firm.”

fintechmagazine.com 33
Solve what's next with
your complete IT partner
Think of SHI as your personal technology concierge
connecting your team to IT solutions and services for
growth, security, and employee experience. From modern
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and IT cost optimisation, our 6000-strong team is ready
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Get in touch
SHI & Cisco: Accelerating digital transformation together
Ian Young, Market VP of Field Sales, explains how “SHI has a unique approach to digital transformation
SHI is working alongside Cisco to help customers in collaboration with Cisco,” Young adds. “SHI
get maximum value out of their investments leverages Cisco’s extensive range of cutting-edge
products and services, and aligns its engineers
With its global team of 6,000 employees, including and resources to assist customers in achieving
around 1,000 technical resources, SHI specialises their desired outcomes.
in helping customers take a smarter approach
to their technology strategy. The result is more “A&M is fully utilising the potential of Cisco’s
efficient and effective IT operations across the products and services, while also benefitting
entire technology landscape. from the exceptional customer experience
provided by SHI. They know they’re in capable
Thanks to its concierge approach and in-house hands with SHI and Cisco.”
expertise, SHI has become a trusted partner of
countless organisations, including professional A trusted technology partner
services giant Alvarez & Marsal. Ian Young, Market
VP of SHI Field Sales, explains: “Working alongside SHI’s reputation as a trusted technology partner
Cisco, we are helping A&M tackle critical business is the result of its comprehensive portfolio
and technological challenges through a strategic of products and services, complemented by
approach, driving favourable results.” an exceptional team of engineers and subject
matter experts who are dedicated to serving
Accelerating digital their customers.
transformation together
“We value being involved in strategic planning,
As a Cisco Gold Partner, SHI’s longstanding technology roadmaps and technology assessments,”
partnership with Cisco ensures exceptional customer continues Young. “We aim to complement these
support. Cisco has recognised SHI’s performance, efforts with solution design services so that our
naming it US security partner of the year in 2022. customers realise the return on their investments.”
Such is the strength of the relationship, close to
100 of SHI’s 1,000 engineers are Cisco-dedicated,
including subject matter experts, pre-sales engineers, Get in touch
solution architects and renewal specialists.
 ALVAREZ & MARSAL

In a growing business, challenges are

always popping up. Manual processes that “While AI gets all the
worked fine when the firm was much smaller
suddenly became nightmares when you’re
fanfare right now,
talking about roughly 8,000 employees and I still believe most
third-party staff.
“Moving to a two-year laptop refresh cycle
companies who
is really generous and we knew our end users haven’t gone through
would love this change,” Zung explains, “but
it created a big problem in IT. We had over a transformation can
85 different laptop makes/models in our
environment! Working with resellers Insight
see bigger cost savings
and CDW along with our laptop providers by automating all the
Dell, HP and Lenovo, we shrunk that down to
under 20 to have a common build process little things”
developed by Camwood. When you factor
in new hires in addition to our existing staff, JEREMY ZUNG
that’s about 5,000 machines a year to image CIO,
and issue. The legacy process for doing that ALVAREZ & MARSAL

36 August 2023
 Use more image
captions as often
as possible

involved taking the computer out of an end- time with an IT staff member. At the
user’s hands for 4-8 business hours – and heart of the configuration and build
significant manual tasks for our IT team. “We process, we leverage cloud services from
quickly identified we would need an army Microsoft including Autopilot which
of IT staff to meet this need, if we did not allow the user, within 30 minutes after
completely rethink our tools and processes.” powering up, to be up-and running for
New processes were devised – and it most of the applications they use. In
involved automating “pretty much anything terms of returning their old machine,
and everything”. The process now starts with they’re given a short grace period to
an automated survey, which gives each user ensure everything is working properly,
advance notice that they’re due to receive a and then they use a supplied shipping
new machine soon. In that survey, colleagues label to return their old laptop to A&M
choose from approved models to meet where it is securely cleansed and
their needs. “Some prefer a specific brand, disposed of.
some want a larger screen and some want a “We’ve gone from spending 20-40,000
lightweight model for example,” Zung says. hours of lost hours per year for our
The user also selects where they want users to a fraction of that. When you’re
their new laptops shipped – rather than in a consulting firm, that’s a lot of hours
having to come into the office and schedule to put back into serving our clients.”

fintechmagazine.com 37
 ALVAREZ & MARSAL

“A&M’s work is based moving that to the cloud saves us significant

people time and increases our agility,”
on relationships. It’s Zung says.
Cloud usage has improved system uptime
a people business” and availability. “It’s quite beneficial for us to
leverage the big investment budgets that our
JEREMY ZUNG cloud providers have!”
CIO, “The key benefits for us in automation are
ALVAREZ & MARSAL
reducing manual processes, reducing manual
mistakes, and improving our efficiencies,” Zung
Improving performance, continues. As the business has grown, so has the
reducing downtime IT department, but he recognises that successful
Another part of Zung’s focus when he joined businesses need to find ways for support
A&M was around improving performance functions to grow at much smaller levels than
and reliability. A lot of this involved the growth happening to the rest of the firm.
transition to cloud and taking advantage of
the capabilities that cloud service providers ‘IT has to operate like a business’
bring. “For example, if you think about a A&M is a business built on its relationships –
physical file server or component, where our both those it enjoys with clients, obviously,
staff have to manually take care of issues, but also those that it has with internal

fintechmagazine.com 39
 ALVAREZ & MARSAL

stakeholders. This is reflected in the care • Implementation of managed services

and diligence that it puts into internal
programmes, like changing out laptops every • Migration to cloud services
two years to keep frontline technology fresh.
But that mindset extends to A&M’s • Implementing new
technology vendors as well. From his Tampa, technologies and capabilities
Florida office, Zung tells us what he looks
for in an external partner. He doesn’t just • Reduced talent costs
want ‘yes-people’ that do what’s asked of
them. “More times than we want to admit, • Increased support capacity
we’re wrong with our internal thinking or
sometimes have hidden biases,” he explains. • Reduction of duplicative
Instead, he wants vendors that guide A&M systems/processes
towards the right solutions and processes
that are fit for growth. SHI and Cisco have helped A&M
Zung wants to partner with vendors who navigate through extended supply chain
are upfront and honest about their products challenges, manage the accelerating nature
and capabilities. He wants them to speak up of technology, manage a growing firm
when A&M is headed in the wrong direction, footprint and end-of-life/end-of-support
or when the company is about to make a concerns while also working to decrease
mistake. This creates long-term relationships administrative tasks by leveraging more
built on mutual trust and understanding, cloud products. They are trusted providers
rather than short term relationships where that are relied upon to help forecast and
the supplier may not raise best practices or roadmap audio/video, voice, network
focus on long term strategy. and infrastructure services. The tight
A significant part of his approach has been collaboration between SHI and Cisco allows
to establish and grow strategic relationships A&M to recognise and understand emerging
with key providers such as Arribatec, services and technologies much earlier than
Camwood, CDW, Cisco, Dell, HP, Insight, if they had to go it alone.
Lenovo, Microsoft, NewRocket, ServiceNow, Another top priority has been to recommit
and SHI. The benefits come in many forms to A&M’s ServiceNow (SNOW) platform
but include: and leverage that investment. Besides
SNOW incident and ticketing management,
“You can’t just be the A&M has enabled space reservations,
security/operations, and hardware asset
smartest IT guy in management. Zung and team are also
in-flight implementing software asset
the room and be a management, migrating multiple back
good CIO anymore” office and client service teams away from
legacy email and Excel-based incident ticket
management and tracking to SNOW.
JEREMY ZUNG
CIO, “We view SNOW as a key piece of our
ALVAREZ & MARSAL technology enabling capabilities and not

fintechmagazine.com 41
 ALVAREZ & MARSAL

just a ticketing system or back-office tool. Our relationship with Microsoft has been
Our journey would not have been possible especially beneficial, when we think about
without the full support of ServiceNow the SME’s they bring to the table. From pre-
and NewRocket. They have carefully sales to post sales activities, Microsoft has
and patiently listened to our needs and always been there for us to help introduce
unique challenges and avoided just and explain new services and offerings
recommending all of their off-the-shelf while listening to our unique needs. They
offerings.” have supported our journey to leverage
Arribatec adds bench strength to more cloud tools including migrations from
A&M’s ERP support and project teams, Sharepoint on-premise to Sharepoint Online,
which have allowed the introduction of improved usage of the Power Platform,
new features and enhancements, while migration to Autopilot and so much more.
increasing support capacity with expanded “For most of my career, I never thought
hours and capabilities. Arribatec’s of IT as a business”. But now, he believes
approach to understanding A&M’s growing that the leaders of IT departments need to
global needs and requirements has helped possess broader skillsets than ever. “The
to simplify and implement solutions for breadth and scope of what we support has
a growing pipeline of project requests. grown exponentially, and it’s probably not
“They provide us the ability to handle going to stop.
projects in multiple locations around the “We’re not just supporting a finance system
world while enabling our current support or an HR system. We do so much more. We
model and capabilities.” negotiate contracts with vendors for supplies

42 August 2023
 Use more image
captions as often
as possible

and materials. We’re taking those supplies isolation, small accomplishments –

and materials and making them into some like enabling key cards for office printers,
sort of technology product. We’re managing which activate the machine and prevent
relationships to our business units and the need for long credential strings – may
providers. We’re managing finances, we’re seem relatively insignificant, but those
managing projects. The amount of things small changes all contribute to a much
we do, we really are like a business inside greater effect.
a business, and I think that’s an important “If you save somebody 15 minutes a week,
shift that I don’t think’s going to stop. assuming they work 45 weeks a year, and
“I think future generations of CIOs are
going to be required to be more than just an
IT guy. You can’t just be the smartest IT guy in “It’s taken me the
the room and be a good CIO anymore. CIOs
tend to have a much broader offering. They
majority of my
understand finances, business operations, career to realise it,
and how a company works. They’ve probably
held multiple different roles previously that
but IT has to operate
allow them to really operate a business.” like a business”
Spotting how end-users work – and adapting
JEREMY ZUNG
Ultimately, everything that Zung and his team CIO,
achieve are with a view to productivity. In ALVAREZ & MARSAL

fintechmagazine.com 43
 ALVAREZ & MARSAL

multiply that by thousands of employees –

boom, all of a sudden you’re talking about
millions of dollars in time savings. Even
something that’s a 5 or 10-minute task for
end users can scale up to be over a seven-
figure benefit to the company right away.
“While AI gets all the fanfare right now, I still
believe that most companies who haven’t
gone through a transformation can see much
bigger cost savings and cost avoidances by
automating all these little internal things first.”
It’s in this spirit of ‘watching the pennies’
that A&M’s IT function runs an innovation
award, which recognises team members
who find new ways to eradicate inefficiencies
and boost productivity in the workforce. It
increases engagement with the company’s
technologies, and ensures rank-and-file staff
are aware that every little improvement is
part of a much bigger picture.
To this end, A&M has begun deploying
custom mobile applications to allow staff
easier access to information they need.
One of the recent innovations is a mobile
application called People Directory. It allows
colleagues to look up coworkers in different
offices or different countries, and filter and
sort details including staff level, business
unit and more. People Directory replaced
manually created PDFs full of pictures and
hierarchies that were necessary before.
And the company isn’t going to stop
innovating there: later this year, A&M intends
to roll out a mobile-based self-service
password reset application which will not
only reduce the time spent by IT resources
but also speed up the reset experience. “It’s
a big part of our strategy,” Zung concludes,
“of listening to how our people work and
helping them out.

44 August 2023
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WHY FINANCIA
ECOSYSTEMS
ARE A GROWIN
MUST FOR BAN
Financial ecosystems are critical to the future of
banking, but, at present, many legacy banks are
slow to join them. We explore the finer details
WRITTEN BY: LOUIS THOMPSETT
 BANKING ECOSYSTEMS

F
ive years on from the revised
Payment Services Directive (PSD2)
– the regulatory framework that
started an era of open banking
across Europe, and a market-
led push proliferating data sharing at
banks in the US and Europe, among other
jurisdictions – innovation in the sector has
started to bear fruit.
Notably, open banking has laid the
foundations for banks to create, or join,
partnered ecosystems – a network of
financial providers offering a one-stop-shop
for all customers’ financial services needs
including lending, payments, investments
and insurance.
It is in this way that financial ecosystems
play into the core tenet of open banking,
shifting focus from the product to the
customer and promoting convenience,

AL
choice and efficiency. With each specialised
provider contributing its expertise through
APIs – be it a bank, fintech or insurer – data
can be securely and functionally exchanged
to enable a single entity within the ecosystem
to offer the services of its partners.
For example, “a customer could access
their bank account, apply for a loan from
a different provider, and invest in financial

NG
markets through another specialised entity –
all within a unified ecosystem,” says Seshika
Fernando, VP, Head of Banking and Financial
Services at WSO2.

NKS
Yet, while the revenue-boosting
possibilities for ecosystem partners are
seemingly obvious, less than a third of the
world’s biggest banks are meaningfully
investing in banking ecosystems at present,
according to a study by Boston Consulting
Group’s Henderson Institute. In fact, the
same study suggests nearly a quarter of large
global banks are not investing in ecosystem
models at all.

fintechmagazine.com 49
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manual processes and slow
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 BANKING ECOSYSTEMS

“THE FUNDAMENTAL
CHALLENGE WILL
BE WHETHER A
BANK’S IN-HOUSE
TECHNOLOGY
CAN SUPPORT THE
DEVELOPMENT OF A
DIGITAL PLATFORM” institutions struggle to adopt, having
historically built walls around customers’
finances and data.
JAMES ALLUM “Banks have jealously guarded their
SVP FOR EUROPE,
PAYONEER customer data against any external
sources,” says Fernando. “With the
While open banking may have forced introduction of open ecosystems, banks
the issue for reluctant banks to foster face a new challenge: opening their data
financial ecosystems, particularly those to third parties while ensuring customer
with extensive data pools that may be time- consent. This concept was counterintuitive
consuming or costly to integrate into a and initially intimidating for banks. The idea
financial ecosystem, the question remains: of sharing customer data with external
why are some banks reluctant to foster or entities went against the long-standing
join financial ecosystems? approach of protecting data within their
fortified systems.”
THE FEAR OF LOSING CONTROL It seems, then, the slow uptake of open
For Fernando, the slow adoption rate of ecosystems at legacy institutions is as much
financial ecosystems at legacy banks comes a philosophical issue as it is a practical one,
down to a shift in mindset, one which many with the need to embrace openness and

fintechmagazine.com 51
 BANKING ECOSYSTEMS

collaboration a significant hurdle for banks

to overcome.
While concerns regarding data security,
privacy and maintaining regulatory
compliance were once paramount for banks,
banking ecosystems have flipped this model
on its head, necessitating data sharing with
third parties.
As such, security models need updating
to guard customers’ data across an entire
ecosystem.
Prakash Pattni, Managing Director of
Digital Transformation at IBM Cloud for
Financial Services, notes: “In order to
connect to an ecosystem, a bank needs to
give partners access to its system. Open
banking is great, but you really need to
be able to do this in a secure way. It can
take fintechs and startups 18-24 months
to onboard with banks because the
bank has to complete due diligence and
security checks.”
The status of a bank’s legacy technology
can, therefore, have a significant bearing on
its willingness to join an ecosystem. As noted
by Payoneer’s SVP for Europe, James Allum:
“The fundamental challenge will be whether
a bank’s in-house technology can support
the development of a digital platform that “WE’RE ALREADY
allows the onboarding of partners and
accounts, while addressing associated
SEEING BANKS
security concerns around data sharing MOVING
and privacy.”
The difficulties legacy banks face, which
EVERYTHING TO
predominantly need to overhaul their THE CLOUD, IT’S
existing tech, is why Allum sees banks with a
small geographical focus, featuring products JUST A LONG AND
“defined to meet local needs”, as more COSTLY PROCESS”
readily adapted to integrate into broader
ecosystems. They typically have smaller tech
stacks, less customer data and a greater will PRAKASH PATTNI
MANAGING DIRECTOR
to integrate into a wider ecosystem to meet OF DIGITAL TRANSFORMATION,
their growth aims. IBM CLOUD FOR FINANCIAL SERVICES

52 August 2023
 RAPHAEL BIANCHI
SENIOR PARTNER AT
SYNPULSE AND PRESIDENT
OF THE OPENWEALTH ASSOCIATION

BRYAN GAYNOR
EU CEO AND VP
OF PRODUCT, BLUESNAP

However, given the extensive timescale implies a growing willingness from legacy
legacy banks face when onboarding the institutions to hasten their open banking
services of fintechs and other relevant capabilities and enter wider ecosystems.
partners, it’s a matter of when, not if, most
legacy banks will integrate into broader IS BIG TECH A THREAT?
ecosystems. “We’re already seeing banks As more banks cotton on to the financial
moving everything to the cloud, it’s just a ecosystem ball, it’s small wonder McKinsey
long and costly process,” says Pattni. has estimated the future of banking
“At IBM, we’re taking a hybrid approach, to represents a US$70tn opportunity for those
help some banking clients accelerate a tech who break up their services into broader
upgrade, moving relevant operations over to cross-industry platforms. Banks are coming
the cloud.” Though an expected undertaking to terms with the importance of financial
from one of the world’s biggest technology ecosystems in providing revenue-boosting
providers, IBM’s work with banks firmly opportunities.

fintechmagazine.com 53
 BANKING ECOSYSTEMS

For Pattni, the key to maximising revenue

from an ecosystem harks back to open
banking’s core tenet: ecosystems are largely
driven by customer expectations.
He says: “Big techs are constantly enhancing
the richness of their platforms, integrating
multiple payment options. People have
gotten used to that level of service and are
now expecting that from their financial service
providers across the board, whether it’s for
offering loans or mortgage products.”
The adaptability and rate of evolution at big
tech firms can be attained by “the ecosystem
play”, according to Allum, “which allows banks
to adapt to a changing financial system as
the margins from traditional products like
payments shrink.”
The slow migration of banks joining
ecosystems – despite their willingness – has
led to suggestions that big tech firms, which
already have a foothold in digital payments
(Apple Pay and Google Pay for example), could
look to capitalise on this and launch their own
banking services.
Despite these claims, banking is not
something Fernando thinks will interest big
tech firms. She says: “It is important to consider
that big tech makes more revenue from banks
through its advertising, media and cloud
services. In many cases, big tech firms generate
more significant revenues by partnering with
or providing services to big banks rather than
directly becoming banks themselves.”
This view is shared by BlueSnap’s EU
CEO and VP of Product, Bryan Gaynor,
who believes tech firms will be put off by
the amount of “glue needed to manage
regulations and cash-in accounts”,
something which banking infrastructures
are traditionally built to accommodate. Tech
companies are used to “moving significantly
faster with their agile infrastructures”,
Gaynor adds.

54 August 2023
THE STATE OF OPEN BANKING
AROUND THE WORLD

Banking ecosystems are being formed as a by-product

of open banking, or third-party data sharing between
banks and other financial providers worldwide. Below,
we look at the two approaches to open banking in
different markets across the globe.

Regulatory-driven
Open banking is enforced by regulations in both the
UK and EU. After the revised Payment Services Directive
(PSD2) was passed in 2018, it became mandatory for
large banking institutions to share data with third-party
financial services providers. The passing of this regulation
paved a path for challenger banks, notably Revolut,
Monzo and Starling in the UK, to streamline open banking
and foster digital ecosystems in financial services.
Outside of the EU, though, Hong Kong and Australia
have both adopted a regulatory-driven approach to open
banking too. In 2018, The Hong Kong Monetary Authority
issued an Open API Framework, with a four-stage
approach for banks to integrate open APIs. Unlike the EU,
banks in Hong Kong must restrict access to third-party
providers they partner with.
Meanwhile, Australia’s Consumer Data Right Act
allows consumers to share their data with third parties
of their choice. Unlike the EU, this is a data policy
as opposed to a financial one, with a focus on
customer-centricity.

Market-driven
In markets including the US, India, South Korea and
Japan, open banking is driven by the markets. After
regulation in the EU and other markets, many banks in
other jurisdictions have opted to share third-party data
in order to generate revenues as they look to stay ahead
in the digitisation of the global banking industry.
Major US banks are already developing API-based
offerings, entering into third-party contracts to attract
new customers and gain a competitive edge.

fintechmagazine.com 55
JAMES ALLUM
SVP FOR EUROPE
AT PAYONEER

PRAKASH PATTNI
MANAGING DIRECTOR OF DIGITAL TRANSFORMATION
AT IBM CLOUD FOR FINANCIAL SERVICES

SESHIKA FERNANDO
VP, HEAD OF BANKING AND
FINANCIAL SERVICES, WSO2
 BANKING ECOSYSTEMS

“WITH THE INTRODUCTION OF OPEN

ECOSYSTEMS, BANKS FACE A NEW
CHALLENGE: OPENING THEIR DATA
TO THIRD PARTIES WHILE ENSURING
CUSTOMER CONSENT”
SESHIKA FERNANDO
VP, HEAD OF BANKING AND FINANCIAL SERVICES, WSO2

There is no appetite for tech firms to even necessarily have to build

become mired in a pool of regulations; ecosystem models from scratch.
they are able to remain agile “by walking As Fernando notes: “Ecosystems
the tightrope” of compliance, avoiding have already been formed, driven
an incurrence of full-blooded regulatory by the emergence of fintech startups,
requirements according to Pattni. big tech firms, and other players
He notes: “If big tech goes too far, these within the financial services industry.
firms are going to become fully regulated, Instead, banks can participate in these
and then they’re going to have to spend ecosystems by leveraging APIs and
all this time and money on all the things connecting their systems and services
banks do. But they’re trying not to cross with external partners.”
that threshold, their margins stay higher There is a warning, though, for those
that way.” that don’t integrate their services into a
So, while the threat of big tech swooping broader digital ecosystem – they may get
down to eat the lunch of legacy banks may left behind in this era of digital revolution.
not be in the interests of technology firms, Raphael Bianchi, Senior Partner at
it is still imperative that big banks reposition Synpulse and President of the Openwealth
their systems to operate across ecosystems, Association, says: “To be part of the digital
lest they be outmuscled by challenger banks. revolution, companies must stick to what
Most banks know it too, it’s just a case they do best and focus on joining existing
of updating legacy systems as quickly as ecosystems to help them integrate
possible to keep pace with technology seamlessly with providers and help
and customer expectations. Once they do, provide clients with the digital experience
though, the future of banking as part of they expect.”
a financial ecosystem looks bright. Despite the ever-hastening need for
banks to join ecosystems, for Pattni, it’s just
THE FUTURE OF BANKING: “a matter of time”. He concludes: “As banks
FINANCIAL ECOSYSTEMS get all the pieces of the jigsaw into place,
In fact, once banks reposition themselves we’ll definitely start to see more adoption
to a secure data-sharing model, they don’t of ecosystem models in the coming years.”

fintechmagazine.com 57
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60 August 2023
 MSUFCU:
INNOVATING
FOR YOUR
COMMUNITY
WRITTEN BY: PRODUCED BY:
LOUIS THOMPSETT GLEN WHITE

fintechmagazine.com 61
62 August 2023
 MSUFCU

Benjamin Maxim, Chief Digital

Strategy & Innovation Officer
at MSUFCU, on helping drive
innovation to better serve
local communities

I
t’s not often you find someone who
has worked at one company for
over a decade, but Benjamin Maxim,
Michigan State University Federal
Credit Union’s (MSUFCU) Chief
Digital Strategy & Innovation Officer,
is one of them.
Now in his 16th year at MSUFCU, Maxim’s
first role there was as a web developer.
Joining at the height of the recession after
the collapse of global housing markets in
2007, Maxim says he was “just happy to
have a job” at the time.
Initially “planning to stick it out until
finding something else” he wanted to do,
little did Maxim know he had already landed
at the organisation that would define the
rest of his career.
“I immediately fell in love with the credit
union mission of people helping people and
felt it gave meaning to a career in technology
that might be absent at other bigger tech
firms. I had only ever had an account with
a credit union, never a bank, so it was
probably meant to be.”

A series of mini careers amid

professional and business growth
From web developer to Chief Digital Strategy
& Innovation Officer, Maxim has been able
to keep his drive by being challenged with
new experiences during his time at MSUFCU.
“I have a leader who I’ve reported to
for most of my career, who has been so

fintechmagazine.com 63
 supportive and allowed me to follow
“WHAT’S UNIQUE a path of technology and innovation in
ABOUT THE CREDIT a series of mini careers along the way.
I haven’t just done the same thing for
UNION INDUSTRY 16 years,” explains Maxim.
From web development to iOS
IS THAT WE LIKE development and then development
TO SHARE AND management, Maxim has been involved
with almost all MSUFCU has to offer.
COLLABORATE, Helping build the credit union’s internal
WHICH FOR ME IS web operations, Maxim then found himself
building MSUFCU’s new digital banking
REALLY EXCITING” solution, a transaction solution “similar
to Venmo or PayPal”, and mobile remote
deposit capture software.
BENJAMIN MAXIM
CHIEF DIGITAL STRATEGY Working across the credit union’s broad
& INNOVATION OFFICER, MSUFCU technological infrastructure, Maxim was

64 August 2023
 MSUFCU

BENJAMIN MAXIM
TITLE: CHIEF DIGITAL STRATEGY
& INNOVATION OFFICER
INDUSTRY: BANKING
LOCATION: UNITED STATES

Ben Maxim joined MSU Federal

Credit Union in 2007 and
currently serves in a dual role as Chief
Digital Strategy and Innovation Officer
for MSUFCU and as Chief Technology
Officer for MSUFCU’s wholly-owned
CUSO Reseda Group. He is responsible
for assessing emerging business trends
and technologies, providing strategic
direction for existing and future digital
channels, and facilitating innovation
throughout the Credit Union including
then asked to lead MSUFCU’s innovation leading their innovation center The
programme, after building UX, QA, and Lab at MSUFCU. He is also responsible
development teams, the latter of which for the technology and product pillars
is now 25-person strong. Now three years of Reseda Group and its subsidiaries.
into the role, Maxim has already helped Maxim began work initially as a Web
develop an innovation lab and an MSUFCU Developer and in 2014, he became
investment arm – Reseda Group – where E-Commerce Manager before moving
Maxim serves as Chief Technology Officer. into roles including Assistant Vice
President of Software Development.
EXECUTIVE BIO

Growing alongside the credit union,

Maxim is grateful he gets “to be involved in He earned a bachelor’s degree from
everything from start to finish”. And, although Michigan State University and a
admitting his dream job would have seen professional certificate in Innovation
him at a major tech company like Apple & Entrepreneurship from Stanford
or Google, he “would’ve been a little fish University. Maxim was honored as
in a massive pond”. At MSUFCU, Maxim Finopotamus’s 2022 Tekkie Awards
gets to be a big fish, and as he grows, Technologist of the Year.
so does the pond.

fintechmagazine.com 65
 MSUFCU

Leveraging tech to improve

financial access and literacy “THE GOAL IS TO CREATE
It is in this way that Maxim and MSUFCU
have become one and the same after 16
NEW PRODUCTS THAT
years, with a joint path for progression. As TAKE ADVANTAGE
Maxim puts it: “Our mission and focus now
is to increase financial access, increase OF ALL THESE NEW
financial literacy, and among many of the
other things we are trying to do, build up our
INNOVATIONS THAT
communities, making them a place people HELP YOUNGER
want to live, work, and enjoy.
“This gives me an aim to build innovations MEMBERS GET THE
around these values, putting our
technological focus into ways of serving our
PRODUCTS THAT ARE
communities and ultimately our members.” THE RIGHT FIT”
With the spread of fintech innovation
on an ever-upward trend, industry-wide
BENJAMIN MAXIM
conditions are perfect for Maxim and CHIEF DIGITAL STRATEGY
MSUFCU to achieve their goals. Many & INNOVATION OFFICER, MSUFCU

68 August 2023
 Use more image
captions as often
as possible

fintechs are designed to offer ways of Not content on providing ways to just
improving financial access, which Maxim take MSUFCU above the competition,
leverages to support underserved areas of for Maxim, it’s important to share new
the credit union’s different communities. innovations and tech products with the
“At MSUFCU we have a lot of student wider credit union ecosystem.
accounts. The question is how do we keep “What’s unique about the credit
them interested and engaged including after union industry is that we like to share and
they graduate? How do we get them excited collaborate, which for me is really exciting.
about credit unions when they think all they It’s great to have a community, rather
need is a Venmo instead of a bank account? than having a singular focus, to talk
“For me, the goal is to create new about innovations, share ideas, and work
products and digital member experiences together to move the whole credit union
that take advantage of AI, machine industry forward.”
learning, blockchain, and other emerging
technologies that help personalising the Sticking to your roots
experience for younger members (and really Although sharing innovations between banks
all members) to get them products that are and other financial institutions is typically
the right fit and are the most convenient considered counterintuitive, for Maxim,
for them.” this is only natural for credit unions.

fintechmagazine.com 69
 MSUFCU

“Innovation is the core of what credit

unions are. When credit unions first
popped up as a result of anti-bank
sentiment following the Great Depression,
they were considered an innovative way
to deliver financial services to people –
members had control.”
“At MSUFCU, we were an early adopter
of ATMs, and in the 1950s-1960s, we
had one of the first female CEOs in the
financial industry at the time. Today, our
chatbot, Fran, is named after her.”
Serving students, faculty and staff, and
alumni, MSUFCU sticks to its roots, having
been founded by a selection of Michigan
State University (MSU) faculty and staff
in 1937.
Finding financial solutions for all
university campus goers is part of the
ethos and not just MSU. MSUFCU has a
partnership with Oakland University, too
as Oakland University Credit Union, and
has recently launched two digital-only
brands to further support students in
their life’s financial journey in AlumniFI
and Collegiate Credit Union.

Personalising a service
Now serving a range of community
sectors, including government, hospitals
and local SMBs, and a wide range of ages
from birth to over 100, the aim for Maxim
and MSUFCU is to personalise services for
each individual and business.
Of course, finding the right mix of
products for a potential member is
doable following consultation, but in
an era of speed and technological
innovation, Maxim says it’s important
to know the right product for the right
person soon after they walk through
the door – data and technology help
us do just that.

fintechmagazine.com 71
 MSUFCU

Partnering with over 30 fintech vendors

and integrating their services has improved
both the speed and efficiency of MSUFCU’s
digital member experience.
Maxim says: “As financial institutions are a
key enabler of people’s lives, we end up having
a lot of data that we struggle to leverage on
our own. One of the most innovative fintechs
we’re working with is called Exagens, which
specialises in the behavioural banking space.
Their solution helps us unlock this bank-owned
data and addresses a challenge common to all
credit unions – engaging members beyond just
transactions, to help grow their finances and
the communities we serve.”
“They’ve become a core part of our
experience strategy and together we’ve
unlocked new value from our bank-owned

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72 August 2023
 Use more image
captions as often
as possible

“OUR MISSION AND

FOCUS NOW IS TO
INCREASE FINANCIAL
ACCESS, INCREASE
FINANCIAL LITERACY, But, while leveraging tech will help find
the right financial product mix for a member,
AND BUILD UP OUR another intuitive means of achieving this
is improving the financial wellness of
COMMUNITIES” communities by providing access to financial
education and promoting financial literacy of
BENJAMIN MAXIM individuals and businesses.
CHIEF DIGITAL STRATEGY
& INNOVATION OFFICER, MSUFCU
A credit union made in the education
system, MSUFCU provides the community
data, and provide some 90 different highly with a large team of financial educators.
individualised money-related engagement “We send them to schools and colleges,
scenarios to our members, to know and to be the education focus for students
serve them better” at all levels of understanding money
Just one of MSFUCU’s many partners, management. We even lead a preretirement
marrying fintech innovation with its own financial education service, education
proprietary data has supported the credit for buying a house, car, and various other
union in growing its member base. budgeting tools.”

fintechmagazine.com 73
 MSUFCU

DID YOU KNOW...

Compliance front of mind
While implementing AI alongside machine then that stops us running our business.
learning and other tech innovations can As a result, we focus heavily on getting the
boost customer satisfaction and backend right balance between our different vendor
processes, an important part of integrating partners. But, we want these integrations as
fintech partners is to ensure technology it makes us a stronger company and helps
is streamlined to the specific regulatory make them a stronger partner.
requirements partnering with a credit “We really want to nurture these bonds
union entails. and share them with the greater credit
Maxim notes: “When fintechs want to union industry. That’s why we formed
work with us, MSUFCU may be the only our wholly-owned Credit Union Service
credit union they’re partnered with. So, Organization (CUSO), Reseda Group,
along the way we are teaching them what to start making investments in fintechs,
it means to work with a credit union; what to make sure we have the right partners
our regulations are, what our examiners on board and be a strategic advisor for
care about; and what our compliance them too.”
needs are.”
For Maxim, it is therefore important A fintech future
to make sure the onboarding process is With a new branch recently opened
robust and thorough. “We’ve built extensive in Detroit, MSUFCU is keeping its
compliance, risk and legal teams here commitment to an in-person credit union
at MSUFCU. So, for us, it’s imperative we experience, alongside the implementation
thoroughly analyse any new partnership of tech to create an omnichannel customer
to make sure there are no data privacy experience.
concerns, no reputation risk, and if Maxim hopes the credit union’s growth
we’re using data, it’s important we’re will only continue. He concludes: “One of
permissioned properly.” our major focuses is on branching, opening
up in new markets while improving the
Nurturing an ecosystem offering in the places we’re already in.”
Establishing partnerships with fintech “So, we’re all about scale at this stage
vendors is one thing, but nurturing an and we plan to overhaul all our digital
ecosystem, where each vendor plays into channels to better support the fintech
MSUFCU’s wider orchestral tune is another. partnerships we have. This will make it
While some vendors are commoditised, the easier for us to play, test new technologies
“key differentiators”, as Maxim calls them in our ecosystem and pull it back if it
(businesses tied to MSUFCU’s core banking isn’t working.”
solutions), are imperative to the credit “As we rework our website, online
union’s functionality. banking, our iOS and Android apps, we
“With a payment provider for example, believe at MSUFCU that this will enable
like Visa, if they don’t do well or integrate us to move forward significantly with
into the broader scope of the credit union our technology offering.”

74 August 2023
Augmentation, not replacement “But you always have to measure this
Furthermore, Maxim is all too aware of the with the members’ needs and understand
dangers that trudging too far down the tech what their feelings are. Are they going
path leads to — community disconnect. This to use it? Are they going to be receptive
is why when launching the likes of chatbot to it?”
Fran, Maxim is always careful to make sure One thing Maxim feels will further
“it’s an augmentation of customer service, enhance the effectiveness of MSFCU’s
not a replacement for it”. customer experience is a further
He adds: “Our approach now is combining augmentation of the credit union’s
digital and human service together, to create chatbot with generative AI.
an experience that is both digital and human. “Leveraging AI, we are able to improve
Look at the pandemic. We all learned how our member service with our chatbot to
to use video technology because it was the answer simple questions. It’s just about
only choice. framing what the right use case is for the
“Well, we now have a video banking technology. With Fran, you can even just
solution, to more easily connect to our type “agent” and it will instantly redirect
members to our employees. This is how you if that’s what you want to do, so it’s
we combine technology to better serve just about providing choice.”
and connect with our members, not
distance ourselves.”

fintechmagazine.com 75
 CARD PAYMENTS

WILL DIGITAL CARDS A

76 August 2023
KILL OFF
AND DIGITAL WALLETS
PLASTIC? fintechmagazine.com 77
 CARD PAYMENTS

The way we pay for goods and

services is changing rapidly.
So will the rise of smartphones
and smartwatch payments
make physical cards obsolete?

WRITTEN BY:
ALEX CLERE

T
he advent of new technologies
– including mobile wallets and
smartwatches – as well as the CATHARINA EKLOF
residual effects of the COVID- CHIEF COMMERCIAL
OFFICER, IDEX BIOMETRICS
19 pandemic mean that digital payment
methods are on the increase. But will that
mean the end of cash or even plastic cards?
“When people discuss the future of
payments they tend to predict the end of
cash,” say Marion Laboure and Jim Reid,
authors of Deutsche Bank research into
the future of payments published in 2020. FRAZER HARPER
This is not a vision they agree with, but they VP OF PAYMENTS
PRODUCTS, DOJO
do accept that, while cash will remain in
circulation, “the coming decade will see
digital payments grow at lightning speed”.
Indeed, Deutsche Bank’s research shows
that consumers in six major markets intend
to rely less on cash and cards in favour of
contactless and mobile payments. Paying
for goods using a cheque is expected to PAT PHELAN
become less commonplace in five out of MANAGING DIRECTOR
the six markets – only China sees a future UK&I, GOCARDLESS
for cheques as a payment method, the only
country witnessing a net positive increase
in all payment methods that Deutsche Bank
asked about, perhaps reflecting the country’s
emerging middle class and rising levels of
disposable income.
Cash is expected to decline as a payment
method in three of the six countries – the DR STEPHEN
WHITEHOUSE
UK, France and Italy – but not in the US, PARTNER IN OLIVER
China or Germany. The latter is among the WYMAN’S RETAIL

78 August 2023
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banking with Mambu's SaaS
cloud banking platform.

Learn more
 CARD PAYMENTS

most cash-loyal nations in the world, with

“IT’S IMPORTANT consumers preferring to pay using physical
currency in over half of transactions.
WE DON’T Contactless payments are expected to

EXCLUDE become more popular, driven by the highest

rates of growth in the UK, France and Italy.

PEOPLE AS A Smartphone payments and smartwatch

payments will also rise in popularity; in both
CONSEQUENCE cases China is expected to see the highest
rate of growth. Of course, this research
OF TECH does not take into account the boom
effect experienced during the pandemic,
INNOVATION” when contactless payment methods were
considered favourable due to hygiene
and public safety considerations – so it’s
FRAZER HARPER possible that Deutsche Bank’s initial findings
VP OF PAYMENTS PRODUCTS, will actually be accelerated because of
DOJO
the pandemic.

fintechmagazine.com 81
 CARD PAYMENTS

Will digital wallets and

payment cards replace plastic?
The obvious question, then, is whether
emerging payment methods will replace
the old-fashioned way of paying for goods.
“Technologies such as digital wallets,
virtual cards and embedded finance
are already replacing cards,” proclaims
Pat Phelan, Managing Director UK&I
at GoCardless.
“You don’t need to look far to see it
happening – walk onto public transport
and see people tap and go with their
phones at the barriers, or use their device
to pay for dinner at a restaurant. It’s only
a matter of time before plastic cards are
redundant. However, current payment
options are mostly still linked to a physical
payment card, even if that card never
leaves the wallet. It’s likely this will change
too, particularly if and when these digital
wallets become linked directly to a user’s
bank account or other payment methods,
leaving the payment card fully behind.”
However, not everybody is so convinced.
Some observers believe there is room
for plastic in a digital economy, even if in
small quantities. “Digital technologies may
one day replace physical cards, but this
isn’t likely to be anytime soon,” says Frazer
Harper, VP of Payments Products at Dojo. “IN 10 YEARS,
Although there is unquestionably
appetite for digital payments, there are still
CARD PAYMENTS
drawbacks to the technology that could
prove to be deal-breakers. “Not only is
WILL BE FASTER,
it a payment method reliant entirely on
device battery life, it’s also one that could
SAFER AND
leave people behind,” Harper continues.
“It’s important we don’t exclude people as
MORE DIGITAL”
a consequence of tech innovation – and
with traditional card usage still high, we see DR STEPHEN WHITEHOUSE
PARTNER,
these physical cards playing a key role for OLIVER WYMAN’S RETAIL AND
the mid-to long-term.” BUSINESS BANKING PRACTICE

82 August 2023
 This is something that Dr Stephen particularly from a fraud perspective, is
Whitehouse, a partner in Oliver Wyman’s biometrics. This is a catch-all term used
Retail and Business Banking practice, to refer to several different technologies
concurs with. “While digital finance is on – including fingerprint recognition, which
the rise, plastic cards will likely stick around is already popular but expected to grow
for a while, especially in areas where digital in the coming years; facial recognition,
solutions are less accessible or accepted,” which is benefitting from the improved
Whitehouse says. reliability of AI; voice recognition and
voice authentication, which, inspired by
Will biometrics become the popularity of virtual assistants, are also
cards’ security standard? on the rise; and iris scanning, an emerging
Despite their enduring popularity, there technology that takes advantage of the
are still areas where the physical payment uniqueness of the iris, the colourful part of
card could evolve. One of the most exciting, the eye surrounding the pupil.

fintechmagazine.com 83
 CARD PAYMENTS

Biometrics provide a fine balance “Looking ahead, we believe consumers

between convenience and security. will become even more interested in non-
Recent research from GoCardless shows card payments that have extra security built
that nearly 70% of consumers would in. One example is open banking payments,
abandon a checkout process if it was overly which have seen volumes nearly triple in
complicated, while 80% would abandon the just one year. These payments use bank-
process if the security arrangements didn’t grade security, requiring consumers to log
feel safe enough. This means biometrics into their online banking platform – often
can tick off two important boxes for with biometrics – before they can make a
consumers. payment. This hurdle is much harder for
“Businesses can enter this ‘goldilocks fraudsters to overcome compared to entering
zone’ by providing consumers with the stolen card details into a checkout. It makes
ability to make a payment using simple open banking payments more appealing for
biometrics, such as fingerprint or facial fraud-conscious consumers.”
recognition,” GoCardless’ Pat Phelan says. Biometrics is the future of card security,
“Most of the time this can be easily done, believes Dojo’s Frazer Harper: “In a decade’s
and on a device that payers use all the time time, I see a world where biometrics such as a
such as a smartphone. person’s face or their fingerprint becomes the

84 August 2023
 “I SEE A WORLD WHERE
BIOMETRICS SUCH AS
A PERSON’S FACE OR
THEIR FINGERPRINT
BECOMES THE
PRIMARY METHOD
OF AUTHENTICATION
FRAZER HARPER
VP OF PAYMENTS PRODUCTS,
DOJO

primary method of authentication, providing have the potential for exponential

access to funds without the need for growth well-beyond 2023.”
knowledge-based card numbers and PINs.”
And finally, Catharina Eklof, Chief What does the future hold
Commercial Officer at IDEX Biometrics, in store for card payments?
tells FinTech Magazine: “Following an Our evolving payment habits, coupled
increase in demand for card payments, and with the scope for greater use of biometrics,
more specifically contactless payments, mean that the card payments industry could
biometrics have become an unparalleled be completely reshaped in the course of the
means of authentication. As user behaviour next decade. But there are still things holding
changes, so do the standards for user us back from greater adoption.
protection. Fingerprint biometrics can These can be categorised into three
provide near-instant authentication of buckets, Frazer Harper believes: “Regulation,
payments and identity, making consumers’ while acting as a key guardrail, will always
lives more convenient and providing them slow advances in technology while the
with more choices for confirming their industry ensures it’s being deployed in the
identity. With definitive advantages to both right way. Consumer adoption always takes
users and issuers, biometric payment cards time, as there’s a requirement to educate

fintechmagazine.com 85
 Use more image
captions as often
as possible

HOW IS OPEN BANKING

DISRUPTING THE OUTLOOK
FOR PAYMENT CARDS?

By Todd Clyde, CEO of Token.io

Open banking-enabled account-to-account

(A2A) payments might not kill cards entirely
– but the threat they pose is indisputable.
A2A payments has emerged as a powerful
contender and is claiming volume from
cards. In Europe, credit and debit cards’
combined share of ecommerce transaction
value is forecast to decline from 40% in
2022 to 35% in 2026, as analysts predict
a bold future for A2A payments (often
called ‘pay-by-bank’).
A2A payments move money over
national clearing systems. 74 countries
already have, or are, in the process of
upgrading these systems to instant or real-
time. This trend, combined with the easier
access to these systems that open banking
enables, is a catalyst for the emergence of
a next-generation and lower-cost network
for processing payments.
For some time, merchants have been
sounding the alarm over rising card fees.
Pay-by-bank presents an attractive, lower-
cost alternative. A2A payments also
outperform cards when it comes to UX.
Consumers approve payments directly in
their banking app, benefiting from bank-
grade security with a smoother payments
experience.
Merchants also benefit from instant
settlement and an unparalleled ability to
maximise acceptance. A2A payments can
be used by anyone with a bank account,
and now also deliver better success rates
than cards in many markets.

86 August 2023
 CARD PAYMENTS

users around new technologies and

facilitate change around existing habits.
“Finally, there’s always work to do to
build trust when we’re discussing new
technologies around payments. How
can we demonstrate the new tech is
safe and secure to build that trust? The
combination of all three of these factors
always takes time on a population-
wide scale.”
Despite these immediate obstacles,
our experts still believe the future looks
promising for the card payments sector.
“In 10 years, card payments will be faster,
safer and more digital,” predicts Dr
Stephen Whitehouse. “Picture biometrics
replacing PINs, digital wallets becoming
the norm, and plastic cards dwindling
– but persisting in tech-limited regions.
Expect a digital-first, security-focused and
highly convenient payment world.”
Pat Phelan continues: “We expect to
see card payments decline relative to
bank-based payments. As consumers and
businesses, we hold most of our money
in our bank account, and as technology
continues to make it easier to move money
directly from one account to another, we’ll
all realise the benefits – namely, cheaper,
faster and more secure payments.
“We’re not the only ones who believe
this. Just look at the number of card
players that are wading into this space;
Visa and Mastercard are both, for example,
exploring opportunities in bank payments.
Over time, it’s likely that others in the card
ecosystem will develop some kind of bank
payment proposition.
“From a consumer perspective, the
built-in security and convenience of bank
payments will drive further adoption.
We’re already seeing a move away from
physical cards, and this will continue.”

fintechmagazine.com 87
88 August 2023
 HSB CANADA

A history of digital
transformation
within insurance
WRITTEN BY: PRODUCED BY:
ALEX CLERE JAKE MEGEARY

fintechmagazine.com 89
 HSB CANADA

HSB Canada has evolved as a business and kept

pace with societal changes and shifts in consumer
demand during its near-150-year history

W
hen a company has been HSB Canada. “We have a lot of fantastic
in business for almost subject matter experts who are, I would say,
150 years, you would the de facto experts in Canada, particularly
expect to encounter on the inspection and engineering side.
some change along the There’s a lot of great talent that has been
way. Founded in 1875, HSB Canada started brought into the business, so it’s a really
life at a time when pressure boilers were exciting time to be here.”
the primary engine powering equipment Becoming part of Munich Re 15 years ago
and machinery in industry across Canada. – the latest chapter in a long and storied
The technology was relatively new history for the business – has only helped
and explosions were quite common, to accentuate that. “You certainly feel you’re
until companies like HSB Canada started part of a bigger group that has some amazing
deploying engineers to routinely inspect this talent across the globe,” Scarbeau adds.
prone equipment. At the time, this was an
extremely novel approach, but the insurance How has insurance evolved in 148 years?
industry has come a long way since 1875 – A lot of things have changed since HSB
and HSB Canada with it. Canada was founded in 1875. There have
Today, the Toronto-headquartered been seven British monarchs (from Victoria
business provides inspection, risk to her great-great-great-grandson Charles
management and IoT technology services, III); 13 new American states; and 23 prime
as well as insuring a number of specialty ministers of Canada (all but one term, in fact,
lines, including equipment breakdown cover as the company was started just eight years
– a nod to the company’s heritage, which after the formation of the country).
is still reflected in its logo – as well as cyber A lot has changed from a technological
insurance cover, a huge area of need in an viewpoint, as well as a social one, as HSB
increasingly volatile world. Since 2009, HSB Canada’s Vice President Client Solutions
has been a part of the Munich Re Group, and Innovation, Lasith Lansakara, explains:
giving it access to a wider pool of expertise – “I think there has been an evolution of
and the company acknowledges that talent technology with the introduction of
is one of the things that sets it apart. connected technology, like internet of
“The people here are one of our biggest things (IoT) devices. There has been quick
differentiators,” proclaims Mike Scarbeau, transfer of data, and there’s been increased
Vice President Information Technology at proliferation of data available.

90 August 2023
“Today the biggest
cyber threat to
businesses is
cyber extortion “From an insurer’s perspective, it’s allowed
or ransomware. us to create new products and assess risks
better. I think those changes in technology,
The exposure for and even an evolution in consumer habits,
are shifting the nature of risk. So if you take
your customers cyber insurance for example, a couple of
years ago a hacking incident would have
and as a business meant business interruption for a couple of
days. Today that has evolved, and now there
are significantly is the risk of extortion due to stolen data.

higher”
“It’s that evolution of the nature of risk that
has created the need for these new products
and requires insurers to be a bit more agile,”
he says.
LASITH LANSAKARA
VICE PRESIDENT, CLIENT SOLUTIONS The way that consumers transact has
AND INNOVATION, HSB CANADA also changed – not just in terms of the

92 August 2023
 HSB CANADA

LASITH LANSAKARA
TITLE: VICE PRESIDENT, CLIENT
SOLUTIONS AND INNOVATION
INDUSTRY: INSURANCE
LOCATION: CANADA

Lansakara leads client-focused

innovation and engagement
for new solution development and
adoption focusing on enhancing
strategic engagement with clients. He
acts as an innovation facilitator within
HSB Canada to support achieving its
ambitious growth and development
propensity to pay with coins and notes, but objectives. Lansakara oversees the
also what level of service they expect from New Solutions practice and the
their insurer. “They’re looking for a seamless, Digital Distribution team.
frictionless experience,” Lansakara says. Lansakara joined HSB Canada
This evolution has inevitably resulted in with over 10 years experience in the
some side effects. There are upsides, sure; insurance industry and prior to joining
the connectedness of our world results in HSB Canada, Lansakara was National
EXECUTIVE BIO

improved access and availability of data, Commercial Insurance Practice

with sensors allowing insurers to gather Leader, Senior Manager with a leading
data in real time and mitigate risks sooner global consulting firm.
and faster. Lansakara holds a Bachelor of
But there are also downsides. “It’s created Science degree in Computer Science
another layer of risk, and it’s an area that is from Illinois Wesleyan University, as well
constantly changing,” Lansakara continues. as a Master of Business Administration
We have more IoT devices in our homes from New York University.
and our work premises than ever before

fintechmagazine.com 93
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 HSB CANADA

“We intend to
be a dominant
player in the
cyber insurance
space” The state of digital transformation in Canada
Despite being over 200 square miles larger
than the US, Canada is often overlooked
MIKE SCARBEAU in favour of its older, more southerly
ICE PRESIDENT, HEAD OF INFORMATION neighbour. The country sometimes does
TECHNOLOGY, HSB CANADA
not receive the credit or attention that it
deserves, particularly for big discoveries
or breakthroughs – insulin being one of
– over 25, in fact, in the average American the most famous examples, discovered by
household, according to research published scientists at the University of Toronto.
by Deloitte. This creates an additional So are we overlooking the progress that
vulnerability that cyber criminals are Canada’s insurance industry is making
constantly seeking to exploit. towards digital transformation? In short, no,
“Today the biggest cyber threat say Scarbeau and Lansakara, who believe
to businesses is cyber extortion or that the Canadian insurance ecosystem
ransomware,” Lansakara says. “The exposure lags behind comparable countries when
for your customers and as a business are it comes to digitisation.
significantly higher. This is where I think “When I talk to other CTOs or CIOs,
insurers, and even various technology I feel like some common problems are
vendors, need to focus their efforts to apparent in the trends and transformational
solve the evolving risk challenges.” goals that they have. But everyone seems

fintechmagazine.com 95
 HSB CANADA

MIKE SCARBEAU
TITLE: VICE PRESIDENT, HEAD
OF INFORMATION TECHNOLOGY
INDUSTRY: INSURANCE
LOCATION: CANADA

Scarbeau has extensive

experience in senior
management roles leading and
developing high performing teams and
worked as a Director of IT at a large
mutual insurance organization before
joining HSB Canada. Prior to that, he to be at a different place in the journey,”
worked within the same capacity Scarbeau tells us. He accepts that most
in the banking and the provincial Canadian insurers are not at the fully
government. The Board of Directors digitised end of the spectrum.
appointed him Vice President in 2021. “I think the Canadian market is probably
behind the curve a bit,” Lansakara adds. “If
you think of things like digital quote and bind
rate comparators that are available, the UK
certainly leads the pack. The US, I’d say, is
not there but definitely catching up. I think
EXECUTIVE BIO

Canada is gradually moving there.”

He believes that the company’s global
footprint – including the beneficial
relationship it shares with Munich Re –
means that HSB Canada is able to incubate
ideas faster and create opportunities for
new technologies or new insurance models,
like embedded insurance, faster than locally
grounded players can.

96 August 2023
 Lansakara has a theory why Canada How is HSB Canada adapting to change?
is looking up the track towards other As the custodian of all of HSB Canada’s
countries. “As with a lot of digitisation technology initiatives, it falls with
journeys, there’s a bit of a lag until you see Scarbeau to orient the business’ tech stack
the results,” he says. “Markets like the UK for future success. “In terms of the IT space,
and US probably made those investments I’m constantly looking for opportunities
a couple of years before we did here in to adopt the philosophy of low-code and
Canada, but I believe the players here no-code, self-service for the business, and
are feeling that competitive pressure not becoming too reliant on IT all the time,”
[to evolve].” Scarbeau tells us. “But we have to have a
Transformation is slowly happening, really solid foundation to do that.
driven by relentless consumer demand, “Thankfully for us here at HSB Canada,
and both our interviewees are keen to see we’ve already gone over to the cloud and
what future transformation this causes in we’re on scalable infrastructure that affords
the Canadian insurance landscape. Perhaps that type of responsiveness.”
in another 148 years, future generations will Lansakara believes the insurance industry
be scoffing at the notion of cyber insurance is “on the cusp of drastic disruption.” It is
or scratching their heads about the way constantly evolving, but right now it has
cyber risk is insured. reached an inflection point, he says.

fintechmagazine.com 97
 HSB CANADA

“Working at HSB Canada, you

certainly feel you’re part of a
bigger group that has some
amazing talent across the globe”
LASITH LANSAKARA
VICE PRESIDENT, CLIENT SOLUTIONS
AND INNOVATION, HSB CANADA

“The current situation creates the risk landscape and look to strengthen our
opportunity for insurers to provide offerings offering in the space. We intend to be a
that predict, prevent and mitigate risk before dominant player in the cyber insurance
it even happens,” he says, referring to the space,” Lansakara says.
prevention-led models that have become “We are also going to continue evaluating
ubiquitous across the insurance sector as traditional risk products and see how we
it evolves. could better take advantage of some of this
“That means insurance is no longer a IoT technology, if there are opportunities
paper product or a financial recovery when to embed some of it in insurance offerings
an incident happens; it is about avoiding so data received becomes part of the
an incident in the first place, and then if it underwriting process or part of the
does happen you know you are covered. coverage solution.”
That’s what we believe at HSB and that’s Scarbeau concludes: “From an IT
why we are making all the investments we perspective, we’re continuing to scale our
are making in IoT capabilities, data and our cloud infrastructure, and our real-time
technology offerings.” digital capabilities support that. For me, it’s
That’s why HSB Canada is investing all about working closely with and his team,
majorly in automation, a “game changer” prioritising the best opportunities, and really
that allows insurers to reduce time spent on trying to find ways that we can accelerate
manual processes within the claims journey, the innovation trend internally.
providing a “leapfrog” effect that propels As things evolve, we’re continuously
businesses forward in time. Emerging looking at the skills we have, what
technologies within the field of automation, frameworks we’re using in IT, and
like generative AI, will assist underwriters consistently shifting on the back end
with decision making, expediting the process in the parts of the business that most
and increasing the quality of risk assessment. people don’t get to see.”
So what will the future hold in store
for the Toronto-based insurer? “We are
going to continue monitoring the shift in

fintechmagazine.com 99
ASSESSING THE ADOPTI
OF BLOCKCHAIN
FINANCIAL SERV

100 August 2023

 BLOCKCHAIN

Blockchain is the backbone of crypto

asset trading platforms, but how much
further can its usage go in the broader
financial services industry?

B
WRITTEN BY: lockchain has been somewhat of
LOUIS a quiet revolutionary. Essentially
THOMPSETT a distributed database
containing an ever-growing list
of ordered records – blocks –
its introduction as the enabler of crypto
asset trading heralded the beginning of
decentralised finance.
But, while blockchain and
cryptocurrencies may appear synonymous
with one another, the truth is blockchain’s
reach is far more extensive – and can be
used to monitor supply chains, create digital
IDs and enable data sharing.
So, while blockchain’s association with

ION crypto is well-established, the question

remains: is it being used to its full potential
in the wider financial services sector?

N IN Understanding blockchain
To gauge blockchain’s potential in
finance more broadly, it’s important

VICES
to first understand how it works.
A board member at the Casper
Association, Ralf Kubli likens blockchain
to a series of remote computers “working
together to create a trustless independently
verifiable, decentralised ledger”.
He continues: “Every computer on the
network, or ‘node’, can see every transaction
that has ever occurred, and all of this
information is encoded cryptographically,
decentralised so that any participant can
simply run the maths themselves, and
confirm that all values are correct.”

fintechmagazine.com 101
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 BLOCKCHAIN

“TOKENISATION OF
REAL-WORLD ASSETS
COULD ONE DAY BE
A MULTI-TRILLION-
DOLLAR MARKET”
YUVRAJ SIDHU
PRINCIPAL CONSULTANT,
LAB49

While for cryptocurrency, certain nodes Most tokens have a simple embedded
on the network – miners – are tasked PDF that defines its terms and conditions,
with ordering batches of transactions into meaning human intervention is still
blocks (rewarded for their efforts with required to calculate cash flows, which,
newly created crypto assets), Kubli notes according to Kubli, “can introduce errors and
that blockchain doesn’t have to be used discrepancies, and also prevents this digital
this way. “It can be a ledger for virtually capital from being truly automated”.
any type of data.” As a result, Lab49’s Principal Consultant
Yuvraj Sidhu admits the mass adoption of
Blockchain’s reach across blockchain in traditional financial services
the financial industry is still far off, “especially in the institutional
Kubli continues: “While financial landscape, [where] regulatory uncertainty
institutions such as BlackRock, Siemens and questions regarding unproven tools and
and even HSBC are touting tokenisation infrastructure have created barriers”.
as a paradigm shift for the economy, with Yet, despite these barriers to adoption,
vastly improved systems for delivery Sidhu feels a need for secure, accurate and
versus payment (DvP) settlements, current instantaneous settlement in the financial
tokenisation platforms are not digitising services industry is driving many banking
the underlying liabilities or cash flows tied institutions to explore ways of leveraging
to the assets themselves.” the benefits of blockchain.

fintechmagazine.com 103
 BLOCKCHAIN

RALF KUBLI
BOARD MEMBER AT
THE CASPER ASSOCIATION

YUVRAJ SIDHU
PRINCIPAL CONSULTANT,
LAB49

PETER GREIFF
DATA AND ANALYTICS TEAM
LEADER EMEA AT DATASTAX

“BLOCKCHAIN CAN’T
He adds that blockchain adoption
can proliferate across traditional services
MEET SOME OF
once four key barriers are overcome: THE TRANSACTION
privacy preservation, regulatory clarity,
standardisation, and scalability. THROUGHPUT
For Peter Greiff, Data and Analytics
Team Leader EMEA at DataStax, the OR ANALYTICS
issue of blockchain’s slow cross-market
extension is simpler; it’s a matter of trust,
REQUIREMENTS THAT
or more specifically, too much trust. “Using COMPANIES HAVE”
blockchain is ideal when there is less trust
between the parties involved.
PETER GREIFF
“In finance, the number of use cases DATA AND ANALYTICS TEAM LEADER EMEA,
where all those transactions take place DATASTAX

104 August 2023

without trust is actually small. Banks and it comes to crypto, financial services firms
financial institutions rely on compliance are understanding the wider potential of
regulations and backing by governments, blockchain “slowly but surely”, according
which is why they are trusted.” to Sidhu.
So, while Greiff can see blockchain being However, before this potential can be truly
useful for records over time and providing actualised, Kubli feels “the implementation
tracking for transactions, its use for secure of open banking standards, ultimately
monetary transactions isn’t strictly necessary introducing ‘smart financial contracts’ as
at established financial institutions. a means to remedy” the current barriers
to adoption, will enable legacy institutions
Bringing blockchain to finance to begin implementing blockchain-based
Given blockchain’s use in traditional financial innovations.
institutions could look markedly different He adds: “Ensuring standardisation via
from its function as a fraud safeguard when smart financial contracts will enable things

fintechmagazine.com 105
 BLOCKCHAIN

like an entire mortgage process, including the

underlying obligations, to be placed on the
blockchain and become machine-readable,
executable, and automated.
“This will bring about the true financial
potential that is currently missing, and
even bring new stability to the existing
finance world.”
The possibilities blockchain can bring
to traditional financial services don’t stop
there. Sidhu believes asset tokenisation will
become “an effective way to automate the
security issuance process and democratise
access to previously illiquid asset classes”.
“Private equity is a good example –
currently, private firms such as start-ups
have limited options when raising capital.
Tokenisation provides a pathway to open
new markets and liquidity to these types
of firms,” he adds.
Post-trading clearing and settlement, too,
is something Sidhu feels blockchain can help
innovate, calling the current process highly
inefficient and fragmented.
“The industry currently spends over
US$130bn annually in this area, so,
unsurprisingly, organisations such as the
Federal Reserve and Bank of England are
experimenting with blockchain technologies
to automate these processes.”
For Greiff, combining blockchain
technology with distributed databases and
streaming technologies will allow financial
institutions to “get real-time updates for
on-chain transactions, and the ability to apply
analytics to that data in real-time as well”.

Scaling blockchain: the drawbacks

While the scope for blockchain’s use at
traditional financial institutions is evident,
should barriers to adoption be overcome,
it will need to scale significantly from its
current models of use.

106 August 2023

 With this comes problems, though.
Crypto data mining has faced criticism for
the amount of energy it consumes through
the traditional Proof of Work (PoW) model
employed by the likes of Bitcoin and other
crypto networks.
However, the more energy-efficient
Proof of Stake (PoS) mining model could be
the way forward for financial institutions.
Crypto trading platform Ethereum recently
switched from the traditional PoW to a
PoS model and reported a 99% drop in
the amount of energy needed to secure
the network.

“ENSURING
STANDARDISATION
VIA SMART
FINANCIAL
CONTRACTS WILL
ENABLE THINGS
LIKE AN ENTIRE
MORTGAGE
PROCESS,
INCLUDING THE
UNDERLYING
OBLIGATIONS, TO
BE PLACED ON THE
BLOCKCHAIN”
Use more image
captions as often
RALF KUBLI
as possible
BOARD MEMBER,
THE CASPER ASSOCIATION

fintechmagazine.com 107
 BLOCKCHAIN

THE FUTURE OF BLOCKCHAIN

So, while blockchain’s path to mass

use in traditional financial services is
still a bit murky, the standardisation of
blockchain-powered financial assets,
such as CBDCs, is something Kubli feels
we are destined to see.
He adds: “As regulations tighten,
any assets that don’t embrace
standardisation will be at risk of non-
compliance. There could be exceptions,
of course, but any projects that want to
be adopted by major financial players
will likely adopt this approach.
“Once implemented, tokenised
financial assets can bring in improved
liquidity and new forms of financing for Notwithstanding the perks of PoS models,
the entire economy.” a switch in mining models is just one barrier
Sidhu agrees, saying the timing of to scalability. As Greiff notes: “Blockchain
when tokenised financial assets hit the can’t meet some of the transaction
market will depend on the institutional throughput or analytics requirements that
sector. “Wall Street firms such as JP companies have.
Morgan Chase, BlackRock, Fidelity “For example, Bitcoin has around 19.3m
and Goldman Sachs are defining their coins and sees 500,000-650,000 global
approach to blockchain technology, transactions per day. Ethereum reached
while 114 countries including the UK a maximum of 1.9m transactions on one
and US are exploring CBDCs. day but tends to be around the 1.2m
“Tokenisation of real-world assets transactions per day level globally.
could one day be a multi-trillion- “In comparison, banks, retailers and
dollar market. However, if blockchain payment systems providers cover billions
and crypto are to become the norm of transactions per day, which is an order
in the future, strides in regulatory of magnitude higher.”
harmonisation, standardisation and To reach the next level of scale,
technology are required.” blockchain platforms must innovate ways to

108 August 2023

carry out real-time analysis on a far greater “Once implemented, tokenised financial
number of transactions, to meet anti-money assets can bring in improved liquidity
laundering and anti-fraud requirements. and new forms of financing for the
entire economy.”
The future of blockchain Sidhu agrees, saying the timing of when
So, while blockchain’s path to mass tokenised financial assets hit the market
use in traditional financial services is will depend on the institutional sector.
still a bit murky, the standardisation of “Wall Street firms such as JP Morgan Chase,
blockchain-powered financial assets, BlackRock, Fidelity and Goldman Sachs
such as CBDCs, is something Kubli feels are defining their approach to blockchain
we are destined to see. technology, while 114 countries including
He adds: “As regulations tighten, any the UK and US are exploring CBDCs.
assets that don’t embrace standardisation “Tokenisation of real-world assets could
will be at risk of non-compliance. There one day be a multi-trillion-dollar market.
could be exceptions, of course, but any However, if blockchain and crypto are to
projects that want to be adopted by become the norm in the future, strides in
major financial players will likely adopt regulatory harmonisation, standardisation
this approach. and technology are required.”

fintechmagazine.com 109
LOGO

UPHOLDING VALU
AND FURIOUS TIDE
Credit Union of America’s
(CUA) current branch
design echoes their
modern and streamlined
approach to banking.

110 August 2023

 CREDIT UNION OF AMERICA

UES AMID A FAST

E OF INNOVATION
WRITTEN BY: PRODUCED BY:
LOUIS THOMPSETT JAKE MEGEARY

fintechmagazine.com 111
 CREDIT UNION OF AMERICA

Credit Union of America’s

David Germann and Jon Douglas
discuss the importance of upholding
values while keeping pace with
technology innovation in finance

I
f you would have told Jon Douglas,
Chief Information Officer at Credit
Union of America, that his career would
have taken him into finance after a
20-year stint in the US Air Force, he
wouldn’t have believed you. But, after a
career spent supporting IT and cybersecurity
“from every level starting at the help desk
all the way up to global communications An immersive brand
and security,” Douglas knew his time in the experience, the interior
of every CUA branch
military had to end at one point or another.
provides a cohesive,
Initially moving into education in the state Friendly experience
of Kansas – also the home of Credit Union
of America – Douglas joined Chief Lending
Officer David Germann and has “loved
every minute” of his 16-month tenure,
in which he manages data, business and
technical analysis.
Germann has a more orthodox route into
finance, cultivating an extensive career in
finance and recently entering his 36th year
in the industry. Working at a company for 25
years after leaving college, Germann admits
his story “is probably something similar to
what you hear a lot of in the news,” being
“very successful one Monday after having a
record month” before being told “at 4pm on
Tuesday that the company had been sold,
and I lost my job.”
Although a little down on his luck at first,
reminiscing how “25 years all of a sudden
meant nothing,” it was here Germann
learned some valuable lessons. Moving into
corporate banking, he soon knew working

112 August 2023

 Celebrating success,
the CUA team applauds the
accomplishments of students at
the PANDO awards ceremony
 Empowering young
minds through literacy,
David Germann shares
the joys of reading with
students as part of CUA’s
partnership with the
PANDO initiative

“The fintech industry in a “regimented way” was not for him, and
after investigating credit unions, saw “the
is moving so planets align” in a field of his interest – credit
unions – with an opening at Credit Union
quickly, the horse of America. He says he “couldn’t apply
fast enough.”
has bolted out of
the barn. It’s not Knowing the role is right
Chief Lending Officer of Credit Union of
slowing down but America for over eight years now, Germann
has certainly found a role fit for him. As
getting ever-faster” he puts it, the real joy of the role is being
“empowered to make a difference.”
While admitting this may sound like
DAVID GERMANN
CHIEF LENDING OFFICER, “a tagline, it’s not marketing. I am able
CREDIT UNION OF AMERICA to empower our branch managers, staff,

114 August 2023

 CREDIT UNION OF AMERICA

DAVID GERMANN
TITLE: CHIEF LENDING OFFICER
INDUSTRY: BANKING
LOCATION: UNITED STATES

David Germann is a highly

accomplished banking
professional with over 36 years of
experience in the financial industry.
As the Chief Lending Officer, he
brings a wealth of expertise and
a proven track record in leading
lending strategies for major
financial institutions.
Throughout his career, David
has demonstrated exceptional
proficiency in managing all aspects
of lending operations, including
credit risk assessment, loan portfolio
management, and regulatory
compliance. His comprehensive
understanding of market trends and
economic factors enables him to
make informed decisions that drive
sustainable growth and mitigate risks.
employees and myself.” This comes with David’s leadership skills have
responsibility too, being both the “arsonist been instrumental in building
and firefighter,” because if the credit union and managing high-performing
puts out bad loans, they’ve got to be lending teams. He has successfully
sorted out. developed and implemented
Despite the responsibility, it’s innovative lending programs,
empowerment and trust that Germann resulting in increased loan
origination, improved profitability,
EXECUTIVE BIO

takes pride in. “Whatever we feel is in

your best interest that would help you, and enhanced customer satisfaction.
we’re empowered to do that. And in our His strong interpersonal and
business, that’s very rare. Most people are communication abilities foster
not empowered to truly make a difference. collaborative relationships with key
That’s what I love the best and what I can’t stakeholders, including executive
wait to do every day. But the thing that wakes management, regulators, and clients.
me up in the morning is that I can’t wait to
go and see my coworkers.”

fintechmagazine.com 115
 CREDIT UNION OF AMERICA

A work ethic built on values

This is key to a great working relationship for “We want to
Germann, who has “never worked at a place
where people who work together socialise” embrace as
as they do at Credit Union of America. The
same is true for Douglas, who says “getting
much tech and
up in the morning is not a chore” when
coming to the office; “the culture and people
AI as we can, but
make it a wonderful place.”
Years spent in the military have taught
it’s so important
Douglas to value community in the to undertake
workplace, “a sense of worth and having
great collaboration,” which he has found at the right due
Credit Union of America. On the other hand,
Germann’s values stretch back to childhood, diligence too”
growing up on a farm.
He remembers: “We had cattle, we had
DAVID GERMANN
horses, we planted crops. Cattle are fed in CHIEF LENDING OFFICER,
the morning, cattle are fed at night, they’re CREDIT UNION OF AMERICA

116 August 2023

 Use more image
captions as often
as possible

Preparing the leaders of tomorrow, CUA

management engages in mock interviews
at local schools to help guide students on
their paths to success

fed in a snowstorm, and they’re fed when it’s members putting in US$5 each for loans (or
100 degrees. They’re fed whether or not you so the story goes), Credit Union of America
feel good, whether you’re sick. And so I think has become one of Kansas’ largest, with
the work ethic I developed that influenced US$1.5bn in total assets.
me the most in this world came from that. While aiming to stick to its roots as a credit
“Every day you get up, every day you work, union for teachers, Germann notes today the
and every day you have a job to finish before mission is to be “everybody’s credit union.”
you’re done.” This ethic has helped Germann For Germann, the key to expanding the
consistently achieve, because in lending – reach of Credit Union of America is
much like farming – “you’re only as good using technology.
as your last month.” He adds: “We never want to forget where
we came from even with our growth. But we
Sustaining a legacy, then growing it are a large credit union in Kansas and there’s
A consistent drive for growth is important no reason to be held by the state borders.
when both maintaining and expanding a We want to grow and become one of the
credit union that has been an ever-constant largest credit unions in the Midwest. The
in Kansas since its inception in 1935. Created fear is when you use technology to grow you
by a science teacher in a janitor’s closet forget who you are, and we never want to
at a local high school, with an initial 20-25 forget who we are.”

fintechmagazine.com 117
Embracing fintechs Not one to shy away from a forward-
Embracing fintechs and the advancements thinking prediction, Germann believes the
in technology they bring is, for Douglas, a growth he has seen since joining the credit
reaction to consumer demand. “We want union “will be slow compared to the next
to meet our customers where they are, five years.”
creating an environment where they can In fact, his claim is far from bold. As the
get to us without having to come to us.” proliferation of technology continues across
Partnering with new vendors has already the financial sector, the key for Credit Union
helped Credit Union of America to open of America now is to ensure “that member
online accounts, implement phonebot experience remains no matter where
technology and get parameters in place to they are,” according to Douglas.
create a data warehouse, from which new Part of this is curating the right
fintech vendors can integrate with one omnichannel approach, facilitating both the
another and have immediate access to digital and in-person needs of credit union
pools of data. members. Douglas adds: “We’re trying to
It’s not just about embracing the bring in technology, utilise and build that
technological demands of customers technology so that the member that comes
today, as Germann points out when he into the branch and the member that does
joined Credit Union of America in 2015: things online have the same experience with
“We had just under US$600m in assets us, regardless of how they interact with us.”
then; now in 2023, we’re at US$1.5bn in To achieve this omnichannel approach,
assets. We have more than doubled in Douglas feels it important to not “get too
the last eight years as technology has far ahead and push away the face-to-face
been implemented.” interaction” members are accustomed to.

fintechmagazine.com 119
 JON DOUGLAS
TITLE: CHIEF INFORMATION
OFFICER
INDUSTRY: BANKING
LOCATION: UNITED STATES

Jon Douglas serves as the Chief

Information Officer (CIO) at
Credit Union of America, bringing a
unique blend of military discipline and
technology leadership to his role. His
experience spans more than 24 years
in the information technology industry,
fortified by a notable 20-year active-duty
career in the U.S. Air Force.
Jon spent two decades serving in the
Air Force. He took on diverse roles in
systems operations and IT management,
demonstrating exceptional leadership
while navigating the complexities of
strategic technology operations under
pressure.
During his military service, Jon
furthered his education at the
University of Maryland Global Campus
(UMGC), earning an MBA and an M.S.
in Cybersecurity. These additional
credentials helped him transition
seamlessly into the education industry,
and eventually, the financial services
industry, where he has become known
for enhancing cybersecurity, optimising
IT operations, and driving digital
EXECUTIVE BIO

transformation.

Jon Douglas (Right) and the CUA team attend

the Leukemia & Lymphoma Society (LLS) Gala
to recognise the remarkable efforts that LLS has
made towards the battle against blood cancers

120 August 2023

 CREDIT UNION OF AMERICA

Moving fintech forward

However, while it’s important to keep
a balance between the latest technology
and maintaining personal points of contact
for members, technology can be used
extensively to support and grow both sides.
The key to maximising technology in the
backend for Douglas is using data in the
right way. “Working on our data warehouse
is great because we can already know what
a prospective member is looking for before
they show up. We can get access to their
transaction histories, and maybe they’re
missing a loan service they didn’t know they
could have. Using data in the right way with
Arkatechture as our vendor helps us better
tap into what a customer may need.”
The right use of customer data is
important for members too, as Germann
notes the credit union’s ability to now offer
fast pre-approved loans, whether “it’s a
US$40,000 car loan or a US$25,000 credit
card. It also makes our employees’ lives
easier, so they can focus on other things,
and we’re seeing this grow our numbers,
as it’s speeding up processing that would
have taken far longer before.”

“For us, it’s asking how

we can get even better
implementation;
how we are testing
ourselves or using
external entities
to test us”
JON DOUGLAS
CHIEF INFORMATION OFFICER,
CREDIT UNION OF AMERICA

fintechmagazine.com 121
 CREDIT UNION OF AMERICA

For Douglas, staying on top of the latest

innovations is also incredibly important,
partnering with vendors already using AI
in their products, such as the chatbot that
Credit Union of America employs. He notes
the importance of AI in “building out our
backend to analyse our data faster, and get
those results and products back to members
as quickly as possible.”
There is always scope for further
innovation, as far as Douglas is concerned,
particularly in regard to improved customer
relationship management (CRM) technology
services, which he hopes to improve at
Credit Union of America soon. “We’re looking
for that right CRM that can give us that single
point of access and integrate all our different
systems together in one.
“Having everything brought together in
one place would really help our frontline
staff so they’re not jumping back and forth
between different systems. We’re trying
to get the right vendor in place for that so
we can further streamline our operations
moving forward.”

Cautious innovation is good innovation

Getting the right vendor in place is not an “The fear is
undertaking to be taken lightly, as pointed
out by Germann. “We want to embrace
when you use
as much tech and AI as we can, but it’s
so important to undertake the right due
technology to
diligence too; we need to be very cautious.”
Douglas adds: “We have to hold any
grow you forget
new vendor partner to specific standards. who you are, and
Are they keeping our members’ data safe
when transiting and storing it? Are they we never want to
accredited?”
Security concerns are just as important forget who we are”
questions to answer at Credit Union of
America for Douglas too: “For us, it’s asking
DAVID GERMANN
how we can get even better implementation; CHIEF LENDING OFFICER,
how we are testing ourselves or using CREDIT UNION OF AMERICA

122 August 2023

 Use more image
captions as often
as possible

external entities to test us to make sure Using the example of fintech Clutch as
we’re always improving our security one of Credit Union of America’s partners,
posture as new technologies emerge. Germann notes: “Clutch has helped us
“So in every area that we implement significantly in supplying instant quotes. It
security protocols for, on the digital used to take months to find the right quote for
forefront, security is always front of mind as our members but with Clutch, you just need
it should be. And we’ve got a great team here to input a member’s cell number and the
working on that. That’s what we will continue last four digits of their social security number,
to do as we move forward.” and it can pull up a car they bought and how
much they owe on it, all in a secure way.
Enjoying the fruits of your compliance “So once you get security right, we and
Stringent security requirements and the members can enjoy faster processes
compliance needs shouldn’t detract from and better loan offers.”
a business’ drive for greater digitalisation;
the benefits of partnering with a fintech A fast and furious future
far outweigh the time to complete For Douglas, leveraging the innovations
due diligence. of partner fintechs will become ever more

fintechmagazine.com 123
CREDIT UNION OF AMERICA

Preparing the leaders of tomorrow, CUA

management engages in mock interviews
at local schools to help guide students on
their paths to success
“fast and furious” over the next 12-18
months. “We’re bringing in fintech Narmi to
update our account opening process, driving
quicker wait times for our members and
getting all integrated products set up and
refined for our customers.
“The partnerships that we’ve created with
those fintechs are already starting off on an
awesome foot. And we’re excited to see that
next evolution.”
This wait for the next evolution will not be
too long at all, according to Germann. “Jon
(Douglas) has policies written, procedures
written and passed. But I think by the time
they’re printed and published, Jon will be
writing those policies and procedures, such
is the speed of innovation before we get the
next fintech partner on board. I think the
time scale for innovation is closer to four or
five months as opposed to 12 months, the
industry is moving that quickly.
“The horse has bolted out of the barn. It’s
not slowing down but getting ever faster. I
actually think I’m misjudging the scope of
innovation we’re seeing and the things that
can be achieved over the next few months,
particularly with the introduction of AI at
so many fintech vendors. The speed of
innovation in financial services has been
rapid, and at the current rate it looks like
this pace is set to continue indefinitely.”

fintechmagazine.com 125
 MEETIN
CHANGIN
OF UNDER
POPULA

126 August 2023

 UNDERBANKED

NG THE
NG NEEDS
RBANKED
ATIONS
 UNDERBANKED

The advent of fintech and a rise

in smartphone usage is narrowing
the chasm in respect of financial
inclusion – but to what success,
and at what cost?

WRITTEN BY: ALEX CLERE

W
ith many so-called ‘Western
countries’ facing their own
challenges right now – from
high rates of inflation, riots and political
unrest, to war on the continent of Europe
– it’s easy to forget about the role that
developed economies must play in
contributing towards a fairer society.
Yet, at the same time, many developing
countries are facing similar challenges –
often leading to economic turmoil or the
displacement of people. According to
the United Nations, there is an “inequality
crisis” that risks thwarting the economic
progress of some of the world’s least
developed countries.
A group of 46 countries, representing
14% of the world’s population, face
“serious impediments directly hampering
their ability to progress economically and
graduate from the least developed country
category”, world leaders warned in March.
In fact, such is the size of the wealth gap,
by the end of this decade the top 1% of
the world’s richest people are expected to
own two-thirds of the world’s wealth, with
the bottom 50% today owning just 2%.

WHAT EFFECT HAS FINTECH

HAD ON FINANCIAL INCLUSION?
Despite the obvious financial inequality
that still exists, has the advent of fintech

fintechmagazine.com 129
KYC AND AML
SOLUTIONS FOR
FINTECHS
Harness the power of data and leading-edge
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technologies made any difference on
financial inclusion? Shanker Ramamurthy,
Global Managing Partner for Banking at IBM,
believes that it has.
He tells FinTech Magazine that the sector
has “enabled access to financial services
and products previously unavailable
or inaccessible, reducing poverty and
increasing economic growth.”
He cites the example of the Indian
Government’s Digital India initiative,
which aims to transform the country
into a digitally enabled society. This has
“significantly increased financial inclusion
in India, particularly among the unbanked
population,” Ramamurthy says.
“According to the World Bank, the
percentage of adults with a bank account
in India surged from 35% in 2011 to 80%
in 2021, largely due to the government’s
efforts to promote financial inclusion. It also
provided women with the autonomy

to manage their finances, helping to

“THE RISE OF FINTECH narrow the gender gap from 17% in 2011
TECHNOLOGIES HAS to insignificant in 2021 in terms of bank
account ownership in India.”
UNQUESTIONABLY But it’s not just India where fintech is
making a difference; emerging fintech
LED TO SIGNIFICANT solutions have had a positive impact on
developing economies in Africa, according
IMPROVEMENT IN THE to Babs Ogundeyi, CEO of Nigerian-founded

FINANCIAL FORTUNES finance app Kuda. In part, this is thanks to

high smartphone penetration in developing
OF DEVELOPING countries; according to Deloitte, there is now
a negligible gap in smartphone penetration
COUNTRIES” between developed and developing
countries.
“Countries like Kenya, Nigeria and South
SHANKER RAMAMURTHY Africa are at the forefront of Africa’s fintech
GLOBAL MANAGING
PARTNER FOR BANKING, boom,” Ogundeyi says. “The continent is
IBM home to numerous fintech startups that are

fintechmagazine.com 131
 UNDERBANKED

driving innovation and economic growth.

African fintech startups are taking advantage
by giving their customers a level of access
that traditional banks did not offer. This has
increased financial inclusion, as building
this digital infrastructure for less wealthy
populations is paramount.
“However, it is worth noting that such
infrastructure must be stable and available
throughout developing economies in order
to achieve true financial inclusion.”

WHAT MORE NEEDS TO BE DONE

TO BOOST FINANCIAL INCLUSION?
Despite the fact that fintech has accelerated
progress towards greater financial inclusion
in emerging markets, there is still more that
needs to be done to close the gap. Indeed,
even in advanced economies, the situation
is critical. Two-thirds of Americans live
paycheck-to-paycheck with little room
to save money towards their life goals,
for example.
In order to meet the needs of consumers
in developing countries, service providers
must first understand what those needs are.
Taking Africa as an example, a portion of the
diaspora has moved away in search of work
or have been displaced – as is the case with
“INFRASTRUCTURE
volatile regions like Ethiopia, Eritrea and MUST BE STABLE
Sudan. This means low-cost remittances
are a top priority right now, allowing African AND AVAILABLE
emigrants the opportunity to send money
back home for family or friends.
THROUGHOUT
Fintech still has the opportunity to DEVELOPING
address “financial exclusion, financial
illiteracy and unequal access to education,” ECONOMIES IN ORDER
Shanker Ramamurthy says. “Blockchain,
mobile banking and digital identity
TO ACHIEVE TRUE
verification can help address financial FINANCIAL INCLUSION”
exclusion by providing simple and
accessible financial services to those who BABS OGUNDEYI
are currently excluded. FOUNDER AND CEO, KUDA

132 August 2023

 “Gamification, chatbots and personal the world becomes increasingly digital, do
finance management apps can improve we risk leaving vulnerable and disconnected
financial literacy by providing interactive and consumers behind?
engaging tools that educate and empower According to the World Bank, nearly two-
people to make better financial decisions. thirds of the world today is connected to
And online educational courses and the internet – but those figures belie the
e-learning platforms help overcome barriers number of people, even in rich economies,
causing unequal access to education and who lack access. In the United States, for
provide affordable and accessible education example, 8% of the population don’t have
to people worldwide.” internet access (a segment that accounts
for over 25m people); while in the entire
DO WE RISK LEAVING SOME eurozone, which covers a population greater
VULNERABLE CONSUMERS BEHIND? than the US, the correspondent percentage
Much of the progress towards greater is 13%. This shows that connectivity is
financial inclusion has been informed by still a global problem, not just a matter of
high smartphone penetration rates. So, as developing versus developed economies.

fintechmagazine.com 133
 “Vulnerability isn’t about a minority,”
explains Junaid Mujaver, Partner at Newton,
HOW DO CULTURAL writing in the company’s latest Vulnerability
FACTORS AFFECT Void report. Newton surveyed over 3,000 UK
PROGRESS TOWARDS consumers – including those with specific
FINANCIAL INCLUSION? vulnerabilities such as poor vision or hearing,
learning difficulties or Alzheimer’s disease
– to find out how those consumers interact
By Shanker Ramamurthy, Global
Managing Partner for Banking at IBM with financial services.
“Our research has found that the majority
Overall, fintech adoption in emerging of people in the UK have a characteristic of
markets has been growing rapidly, vulnerability and all of us will have moments
driven by factors such as increasing of vulnerability in our lifetime,” Mujaver says.
access to mobile phones and the The research shows there is a “rising tide” of
internet, a large unbanked population, vulnerability, with neurodivergent diagnoses
and a growing middle class. Some
regions have been particularly active
in fintech adoption.
Cultural factors such as the extent of
smartphone usage and cultural norms
can significantly affect the needs of
countries and the fintech technologies
that are suitable. For example, in
countries where the majority of the
population has access to smartphones,
fintech companies can leverage
mobile apps and online platforms to
provide financial services. In contrast,
countries where the majority of the
population does not have access to
smartphones or the internet may
need fintech companies to focus on
providing services through traditional
channels, such as brick-and-mortar
branches or SMS-based systems.
Moreover, cultural norms can also
affect the adoption and use of fintech
services. For instance, in countries
where cash is king and people prefer
to use physical money, fintech
companies may need to focus on
developing solutions that allow
users to deposit and withdraw cash.

134 August 2023

 UNDERBANKED

increasing and specific factors like the to sustain any one bank or
COVID-19 pandemic and cost-of-living financial institution, multiple different
crisis contributing to respondents’ operators contribute to a shared space
physical and mental health. where services are provided jointly
by competing institutions.
ARE SHARED BANKING There are now calls for more of
SPACES THE FUTURE? these shared spaces to slow down the
Increasing digitisation has rendered brick- discontinuation of physical banking services.
and-mortar branches largely redundant, Mark Aldred, retail banking expert at Auriga,
leading to mass closures, particularly in says: “The call to accelerate the roll out of
Europe. This is an issue that particularly shared hubs is a timely reminder of the slow
affects rural communities. One solution pace and limited ambition of those charged
has been to investigate alternative bank with protecting access to cash and other
branch models, like shared banking hubs. banking services. It seems that the undue
In communities that are not large enough haste with which branches are removed
from communities is not balanced with any
obvious urgency to provide an alternative.”
However, he also admits there are
problems with the current scheme: “The
model adopted to date is slow to roll out
and limited in scope. The sponsors and
stakeholders of the shared hub initiative
must explore different models like those
used in other countries, such as Spain,
which is seeing major investment in
advisors and adapted technology
to help elderly customers.
“There are proven models that could
be more rapidly deployed in existing
spaces to provide an even wider range of
replacement services from all providers,
including important face-to-face
encounters for those who value them most.
There is also some timidity in how these
hubs work with individual bank brands
providing face-to-face services on a rota.
“Banks will say face-to-face services are
costly to deliver. Given rising costs, this is
true, but there are imaginative alternatives
like secure in-branch video and voice
banking to access skilled financial advisers
that can deliver personalised services while
reducing operational costs.”

fintechmagazine.com 135
WRITTEN BY: XXXXX XXXXXXXX

136 August 2023

 TOP 10

FINTECH LENDERS
BY TOTAL FUNDING
FinTech Magazine looks at the Top 10
fintech lenders by total funding
WRITTEN BY: LOUIS THOMPSETT

W
ith macroeconomic difficulties
stretching on for many
businesses and individuals,
the need for fast, affordable lending
options is only growing.
Leveraging AI and data, fintech
lenders are fast becoming the preferred
option for SME and personal loans. With
supplementary tools for financial health
monitoring, and extending credit to
underserved populations, new-wave lenders
are outstripping their legacy counterparts
in all of speed, efficiency and affordability.
Below, we look at the Top 10 fintech
lenders by total funding.

fintechmagazine.com 137
 TOP 10

10
Sunbit
$460m

Sunbit offers buy now pay later

credit for consumers, or, as it likes
to call it “pay-over-time” credit.
Generating US$460m since its
founding, Sunbit offers its services
to local providers and retailers in
the Los Angeles area and has been
crafted to support those facing
unexpected expenses. Designed
with a 90% approval rating, Sunbit
09
says it offers fair and transparent Prosper Marketplace
rates, with no late fees, origination $490.5m
fees or penalties.
Raising US$490.5m over 17 rounds
of funding, Prosper Marketplace
has become a leading online
lending platform, connecting
prospective borrowers with
individuals and institutions who
provide lending services. Its
website, Prosper.com, allows
individuals to take out personal
loans, credit, home equity, and
make investments and IRAs.
America’s first peer-to-peer
lending marketplace, Prosper has
facilitated over US$23bn in funded
loans since its establishment.

138 August 2023

08
Fundbox
$553.5m

Fundbox is a working capital

platform that offers credit and
payment solutions for SMEs.
Based in the tech haven Silicon
Valley, Fundbox has generated
US$553.5m since its founding.
Leveraging AI to power its services,
the fintech is able to optimise its
clients’ cash flows and expense
management systems, offering
07
revolving lines of credit up to Blend
US$150,000. Founded in 2013 by $665m
Eyal Shinar, the business owner
says he was inspired to start Digital lender for supporting
Fundbox after seeing his mother and simplifying applications
struggle with late payments at an for mortgages, consumer loans
employment agency she owned. and deposit accounts – Blend
– sits in seventh on our Top 10
list with $665m in total funding.
The fintech’s solutions for
streamlining customer journeys
is leveraged by Wells Fargo, US
Bank and over 280 other financial
service providers. With low-code,
drag-and-drop design tools,
Blend’s services allow financial
institutions to easily develop new
products for their customers.

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 TOP 10

06
Funding Circle
$746.4m

Generating US$746.4m in
total investment, London-
based Funding Circle offers
lending options for SMEs. With
fast and affordable business
05
loans, and interest-free lines of GoodLeap
credit, Funding Circle leverages $800m
machine learning, technology,
and assistance from SME market The innovative sustainable home
experts for pricing and issuing upgrades provider is perhaps
loans and lines of credit. After the most niche entry on our list.
significant funding in 2013, Partnering with sustainable home
Funding Circle expanded into the improvement professionals,
US, merging with San Francisco- GoodLeap offers flexible payment
based Endurance Lending options to those looking to lower
Network. Typically transferring the carbon footprint of their homes.
funds to SMEs in 48 hours, With one point-of-sale solution
Funding Circle has helped over for all kinds of home upgrades,
13,000 businesses access over GoodLeap has streamlined the
£14.5bn (US$18.43bn) since 2010. process for consumers to make
their homes environmentally
friendly with ease. Based out of
Roseville, California, GoodLeap
provides payment options for
solar panels, battery storage, smart
home devices and energy-efficient
windows, among other sustainable
home improvements.

fintechmagazine.com 141
 TOP 10

04
Better.com
$905m

With US$905m in total funding,

Better.com operates an
online platform for mortgage
origination. Founded in 2016 by
parent company Better Holdco,
Inc., the fintech has funded over
US$45bn in home loans and
US$25bn in cumulative coverage
03
through its Better Cover and Affirm
Better Settlement Services $1.5bn
division. Ranked in first place on
LinkedIn’s Top Startups List for A leader in buy-now-pay-later
2020 and 2021, Better.com has financing, Affirm offers a range of
made huge growth strides, most instalment loans to consumers at
recently raising US$500m in the point of sale. Founded in 2012
2021 with lead investment as part of startup studio HVF, the
from SoftBank Vision Fund. fintech launched an app in 2017
so consumers could take out
loans when paying by mobile at
retailers. A remote-first company,
Affirm adapted to the pressures
of workforce isolation during the
COVID-19 pandemic to retain
flexibility and functionality. A
partner of Walmart and more
recently Stripe, Affirm has
created a partner network for
its instalment loan services.

142 August 2023

 TOP 10

Avant
$2.1bn
02
Credit first financial lender Avant
sits second on our list of Top
10 fintech lenders, generating
US$2.1bn in total across 13 rounds
of funding. With a focus on
alternative lending options and safe
financial products, the Chicago-
based fintech has become one
of the world’s largest. Established
in 2012 by entrepreneurs Albert
Goldstein, John Sun and Paul
Zhang, Avant was initially structured
as a mid-prime lender, using its
own proprietary tech in order to
determine creditworthiness. The
lender’s greatest growth spurt
came between 2012 and 2015
when it generated over US$1bn in
loans through its website – and
received US$1.4bn in investment
during this three-year period alone
from VC firms including Tiger
Global, Victory Park Capital, and
August Capital. Initially operating
in 16 US states, Avant’s services
now extend to the UK and Canada.

fintechmagazine.com 143
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 TOP 10

SoFi
$3bn

With US$3bn in total funding across The success of the programme

19 rounds, SoFi is the world’s most- led to SoFi’S first bout of funding
backed fintech lender. Offering a year later, raising US$77.2m in a
a range of lending and wealth round led by Baseline Ventures. This
management services, from funding was blown out of the water
student and auto loan refinancing in 2013, when SoFi announced it had
to mortgages and credit cards, raised US$500m in debt and equity
SoFi sits on top of the Silicon Valley to expand its funding capabilities for
fintech lender pile. Founded by refinancing student loans.
four Stanford graduates in 2011, the Most recently valued at US$4.58bn,
lender’s inaugural loan programme SoFi sits top of the pile in our list of
was a pilot at Stanford – which Top 10 fintech lenders.
saw 40 of the university’s alumni
loan US$2m to 100 students, for
an average of US$20,000 per pupil.

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