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  • Thierry Spanjaard

Creating confidence!

We all know payment is all about confidence. This has never been demonstrated as well as during the present edition of Money20/20. Confidence is probably the word that comes up the most often to the lips of the speakers!

In the session titled “the Evolution of Identity” with Vesey Ventures and Monnai, the conversation was not about identity per se. The whole talk revolved around confidence. Data, and especially ID data are the fuel for financial systems. And the better the data, the better the services one can develop from them. But to collect data, one has got to raise confidence. Users are now increasingly conscious of the value of their personal data, and they will only give them to institutions they trust. Interestingly, the same trust considerations apply to KYB (Know Your Business) as to KYC (Know Your Customer), even if a KYB is actually often just an enhanced KYC, especially in economies with numerous small businesses.

The “Meet the Three Pillars of Disruption: AI, Open Banking and Instant Payments” session actually focused on disruption rather than on technologies. Speakers insisted on the trust relation that has to be established between financial institutions and regulators to make the regulatory environment evolve in the right direction. Banks must be proactive in their negotiations with regulators.

Perhaps, the best confidence-inspiring speaker today was Ali Nikman, the CEO of Bunq. Having built one of the most successful Fintech and Neobank, with a bank license since 2014 in the Netherlands, Ali Nikman has a simple and straightforward way of presenting his business: “we build what customers want.” All companies would be happy to follow such a rule if they could only understand what customers actually want! He added that Bunq is a combination of profitable products and offers, which has built a healthy business, while some of its competitors have set up their business by giving away freebees ... And going back to fundamentals, Bunq has set an example in their way of executing AML (Anti Money Laundering) controls: they have won a case in the Dutch courts allowing them to use AI technology to run AML checks rather than executing the questionnaires used by traditional financial institutions. Ali Nikman says Bunq has been innovative from day One as they developed all their technology internally rather than using a BaaS (Banking as a Service) engine and adding customization as some Fintech do. Starting from its European base, Bunq is expanding to the United States, but Ali Nikman declined to give a precise schedule.

But sometimes confidence is misplaced! Dan McCrum, investigative reporter at the Financial Times, was given the opportunity to get back on Wirecard case. And again, the most interesting part was confidence building. Wirecard came at the right time when everyone was looking for the next big thing. Wirecard was headed by people inspiring confidence, deploying modern management methods, looking good, etc. Some of them showed their influence by posing with stars such as Bill Clinton, Tony Blair, … And the fact that Wirecard was a German company was even adding to the confidence level. But, at the same time, the company structure was complex and unauditable, and a different corporate culture began to settle in! Little deviation after little deviation, a fraud culture settled in. A major question remains: were everyone in Wirecard conscious this was going wrong? We know the end of the story. While the whole industry works at building confidence, as this is the only way to run payment businesses, at the end of the day, confidence relies on humans. Not all of them are to be trusted!

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