Join FinTech’s greatest event when Money20/20 Europe returns to Amsterdam’s RAI Arena June 3-5
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FinTech Strategy is proud to be a media partner for Money20/20 Europe 2025.
Launched by industry insiders in 2011, Money20/20 is the heartbeat of the global FinTech ecosystem. Some of the most innovative, fast-moving ideas and companies have found their feet (and funding) on its show floor. From J.P. Morgan, Stripe, and Airwallex to HSBC, Deutsche Bank, and Checkout.com.
Furthermore, this is where you’ll find new connections, business-critical insights from inspirational speakers, innovation, and partnerships you need to ensure your business succeeds for whatever comes next in money.
The Agenda for 2025
Come and create the future for financial services at Money20/20 Europe… This year’s agenda tracks cover Beyond FinTech, Digital DNA, Embedded Intelligence and Governance 2.0. Expert speakers include leaders from Mastercard, Monzo, Bank of England, Visa, IBM, Starling Bank, Revolut and more offering key insights on everything from agentic AI and cross-border payments to open banking and embedded finance.
Why Money20/20?
FinTech Strategy spoke with a host of leaders from across the FinTech spectrum. They all agreed on one thing, Money20/20 Europe is ‘the’ place to make connections and build your business.
“It’s the first time I’ve attended Money 20/20 and, we’ve had some fascinating impromptu conversations that will lead to great opportunities. All the big names are here and it’s clearly a popular event from a thematic perspective – payments is a big theme this year. I have a very high regard for the quality of what’s on offer and the way the event has been organised – it’s a great customer experience, the way it’s all been structured, at scale, is actually one of the best I’ve ever seen. The response has been fantastic…”
Stephen Everett, MD Payables & Receivables, Lloyds Banking Group
“The majority of people at Money20/20 genuinely get up in the morning with a growth and innovation mindset. Therefore, you have to balance and recognise that when you walk into this big venue that there will be some wacky ideas. From my experience, I have seen many infant ideas turn into successful ventures, whereas I have also seen some ventures becoming unsuccessful despite having great innovation ideas. Fintechs will fail. Innovation will fail. Experiments will fail. And that’s fine. That’s what Money20/20 is all about.”
Michelle Prance, CEO, Mettle (NatWest Group)
“It’s good for Mettle to come here because we are a fintech that was incubated inside a large bank (NatWest) for fintechs. Quite often their route to market, route to capitalisation, is by going into a main bank being acquired. So, it’s that marriage between a big organisation and the small nimble fintech. People are really interested in what we’re doing because big incumbents want to be fast and nimble. They don’t always have the capital to invest in something like we’ve been able to do with Mettle. So, they’re interested to know the right route to go down. Do they incubate in house? Or do they buy it in? And what’s the right way to do that without killing the culture? These are the types of interesting conversations we’ve been having here.”
“The great thing about Money20/20, here in Europe, and in Asia and the US, is the good division between buyers and sellers. So, you have all these service providers like AirWallex, Amex, Stripe… And then you have the Heads of Payments from companies like Booking.com, Minted and Summit who are coming here with their team to meet with providers. If you think about that from a sales perspective, those meetings are very hard to get outside of this environment. But over a week you get 15 different meetings each day with that would normally take months to arrange. So, the ROI from this week is really powerful just from being able to have these conversations.”
“Paymentology is homegrown out of the UK so it’s important for us to make sure we’re representing the business across Europe. This is the centre of the world for banking innovation. We have customers here from Singapore, Dubai, Saudi Arabia, Ghana and beyond. People look to this event to really learn about what’s happening in the industry globally and discover what trends are going to come up. What should we be doing? How can we innovate together and learn from each other? That’s one of the things I really love about Money20/20; the talks in all of the panels are so interesting and I always leave knowing more. Being in the payments industry, and especially being an issue processor, it’s important for us to learn from the industry and understand where we need to move so that we can stay at the forefront of developments.”
“This is my sixth straight Money20/20 and it gets busier every year! It’s great to learn more about the ecosystem at large. You can see developing trends each year, and it’s always a little bit different. You build relationships at Money20/20 that stay with you for the rest of your life. And it’s a perfect opportunity to meet people in the flesh that you might normally only see on screen. You can get a pretty direct read on what they’re working on and it’s exciting to be here making new connections.”
Melinda Roylett, Managing Director of Merchant Services at Lloyds Banking Group, on how the UK’s small and medium sized businesses can navigate the payments maze
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Cashflow is the lifeblood of any business, yet it remains one of the most unpredictable aspects for SMBs. According to the Federation of Small Businesses, half of UK businesses have experienced cashflow problems. Many cite late payments as a major issue. Thankfully, banking and payment providers are stepping up with innovative and integrated services that make every transaction count.
At the recent ‘Payments Disrupted’ event, co-hosted by Lloyds and Visa at the Shard in London, they revealed exclusive business sector trends and consumer spending data. It highlighted areas of opportunity for SMBs – provided they have the tech and expert support to guide them.
The most recent Lloyds Business Barometer shows that business confidence has rebounded to the highest level since August 2024. Nevertheless, firms still cited rising costs and economic uncertainty as major obstacles to growth and investment. These challenges are not new. However, many SMBs could be overlooking an effective way to deal with them through unified payment solutions.
With the right strategies and tools, businesses can navigate complexities and unpredictability with confidence. Furthermore, they can unlock data-driven insights, cost savings, and the increased operational resilience and adaptability to cope with whatever the future throws at them.
Cashflow challenges
Sectors like retail and hospitality, where many businesses are operating on razor-thin margins, are particularly affected. Supply chain disruptions, the need to invest in growth, and seasonal fluctuations, like summer holidays, or peak sales events like Black Friday, can strain available funds.
For instance, businesses may experience cash-rich periods during peak seasons but struggle to meet operational expenses during quieter times. And with inflation still relatively high, the rising costs of materials, transportation, and labour further exacerbate cashflow challenges.
Cashflow problems inevitably have a way of seeping into other areas of the business. When cashflow is constrained, it prevents investment in the tools and tech businesses need to function properly. And they could miss out on new services that could streamline operations and lower costs.
Payment method and integration complexities
In a world of e-commerce, customer loyalty is not just about offering the best products or services. It’s about delivering a seamless and personalised experience at every touchpoint. According to UK Finance, 85% of UK consumers now use contactless payments – mobile wallet transactions are expected to account for 39% of all POS transactions by 2025. However, only 60% of small businesses have fully integrated digital payment solutions, leaving many at risk of falling behind.
Businesses can feel bewildered when confronted with the array of payment services that have emerged. Today’s customers expect seamless, secure, and diverse payment options, whether they’re shopping online or in-store. From contactless payments and mobile wallets to QR codes and pay-by-bank solutions, businesses must keep pace with these trends to remain competitive.
A smooth checkout experience, for instance, can be a significant competitive advantage. According to Visa, 59% of consumers consider a good checkout experience as important as having the best products. And 57% say a poor payment experience is enough to make them switch to a competitor.
However, integrating the payment methods that customers want can be complex, especially for SMBs with limited resources and expertise. Lloyds’ own research found that 49% of businesses say they find the choice of payment gateways in today’s market overwhelming. Considering the many data security and compliance obligations they’re facing, it’s no wonder that SMBs are asking for more help from their payment providers.
SMBs can navigate payment complexities with the right partner
To overcome these complexities, SMBs can partner with payment providers like Lloyds Merchant Services that offer integrated payment solutions, spanning point-of-sale (POS) and omnichannel acceptance. Such solutions not only simplify the payment process but also provide valuable insights into customer behaviour, enabling businesses to tailor their offerings and enhance the customer experience.
There are other benefits of working with integrated payment solutions. Independent Software Vendors (ISVs) are increasingly powering a lot of the business decisions that SMBs make. For example, to foster loyalty, businesses must go beyond basic payment processing and offer value-added services such as loyalty programmes, personalised discounts, and data-driven insights.
By analysing spending behaviours, businesses can identify trends and tailor their offerings to meet customer needs. For instance, a restaurant might use payment data to identify its most loyal customers and offer them discounts to encourage repeat visits. So, being connected to these ISVs is increasingly important to ensure consistent payment performance.
Lloyds Merchant Services has fostered partnerships with leading ISVs and tech vendors to offer the most comprehensive service range in the market. From our partnerships with PayPoint and extending our services to its 60,000-strong merchant network, to our POS device and infrastructure relationships with Fiserv, FreedomPay and Epos Now, we cover almost every business need, with scalability built-in. With Epos Now’s advanced POS, offering a powerful end-to-end solution, SMBs have access to payment acceptance technology that is robust yet flexible and can adapt changing customer needs.
That includes our flexible Merchant Cash Advance offering which provides quick access to capital based on future card sales. Differing to traditional loans, MCA allows businesses to pay the advance as a percentage of their card transactions, ensuring that payments are in sync with their cashflow. This flexibility is particularly beneficial for businesses with seasonal revenue streams, as it removes the stress of fixed monthly payments during low-income periods.
Prepare for the future now
The future of payments is increasingly digital, and businesses that provide customers with the best payment experiences will thrive. Businesses must invest in scalable payment solutions that can adapt to evolving technologies and consumer preferences. By adopting integrated payment solutions, SMBs can navigate the complexities of cash flows, rising operational costs, and evolving customer expectations. Moreover, by leveraging value-added services and staying ahead of technological trends, businesses can foster customer loyalty and drive sustainable growth.
Partnering with a knowledgeable payments provider that offers service and support that meet different business needs, dedicated relationship management, and industry insights can be a game-changer. It can give SMBs the agility and access to innovation they need to be profitable now and into the future. With expert support at every step, businesses can not only survive today but also seize the opportunities of tomorrow.
The global InsurTech sector experienced a notable resurgence in the first quarter of 2025. Funding levels surged to $1.31 billion…
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The global InsurTech sector experienced a notable resurgence in the first quarter of 2025. Funding levels surged to $1.31 billion – an impressive 90.2% increase compared to the previous quarter. This was driven by AI and P&C Sector Investments. It marks the strongest funding performance since Q3 of 2022. This signals renewed investor confidence and a maturing ecosystem poised for innovation.
P&C
A major catalyst behind this upswing is the significant capital flow into Property & Casualty (P&C) insurance technology providers. P&C-focused InsurTechs accounted for a staggering $1.13 billion of the total Q1 investment. This highlights a strategic shift among investors towards sectors with proven demand for digital transformation. The ability of these firms to deliver scalable, tech-enabled solutions for underwriting, claims processing, and risk assessment has made them highly attractive investment targets.
AI
Furthermore, artificial intelligence (AI) has emerged as a dominant theme in this funding cycle. Roughly 61.2% of the capital raised – totalling over $710 million – was allocated to AI-driven InsurTech companies. These firms are leveraging AI to disrupt traditional models by automating decision-making. This further enhances customer experience, detecting fraud, and enabling hyper-personalised policy offerings. The increasing reliance on AI reflects a broader trend across FinTech sectors, where data-driven technologies are reshaping business models and customer engagement.
What does the future hold for the InsurTech sector?
Meanwhile, despite this funding resurgence, early-stage startups in the InsurTech space saw a notable decline in capital inflows, hitting a five-year low. This suggests a market preference for more mature, proven business models with clearer paths to profitability. Investors appear to be adopting a more cautious, value-driven approach. Moreover, the focus is on companies with strong fundamentals and existing market traction rather than speculative early-stage ventures.
The Q1 2025 results not only point to a healthy rebound for the sector but also underline a directional pivot towards sustainable innovation. InsurTechs that can integrate AI and address the evolving needs of insurers and policyholders alike are positioned to lead the next wave of growth. As the industry continues to digitise, the emphasis on efficiency, personalisation and resilience will likely guide future investment patterns.
Wirex, a leading provider of Web3 banking solutions, has announced the expansion of its Wirex Business platform to BASE, a new layer-2…
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Wirex, a leading provider of Web3 banking solutions, has announced the expansion of its Wirex Business platform to BASE, a new layer-2 blockchain developed by Coinbase. This milestone marks a significant development in Wirex’s vision to provide seamless stablecoin-powered financial services to businesses across the globe.
BASE Blockchain
The recently launched Wirex Business platform is rapidly expanding, and this new integration with BASE will enable corporate clients to easily manage treasury functions, issue corporate cards, and handle expenses using stablecoins like USDC and EURC. This expansion allows businesses to integrate both fiat and stablecoin payments seamlessly within their existing operations, while leveraging the cutting-edge technology of the BASE blockchain.
Key Features of Wirex Business on BASE:
Corporate Bank Accounts: Wirex Business provides businesses with corporate bank accounts that can hold both fiat currencies and stablecoins. This feature allows companies to seamlessly manage and convert funds between fiat and digital currencies.
Corporate Visa Cards: Wirex Business clients will now be able to issue corporate Visa cards to employees and contractors. These cards can be used globally to make payments in over 80 million merchants, across more than 200 countries. Wirex Business integrates stablecoins like USDC and EURC into the payment infrastructure, allowing for easy spending without the need for conversions or delays.
Payroll Cards: In addition to corporate cards, Wirex Business enables the issuance of payroll cards, providing a fast and cost-efficient way for businesses to pay employees and contractors in stablecoins.
Stablecoin Payments: Stablecoins based on the BASE blockchain can now be seamlessly spent in 80 million+ merchants globally, offering companies an innovative way to pay for goods and services, all while maintaining transparency and speed.
Wirex Business continues to innovate and expand its reach within the corporate payments space. It offers a comprehensive suite of banking and payment solutions for Web3 companies and crypto businesses. The integration with BASE blockchain marks a new chapter in Wirex’s journey. Aligning its offerings with industry-leading blockchain technology to provide businesses with seamless, secure, and scalable payment solutions.
A deeper strategic alliance with blockchain
Expanding to BASE is just the first step in what will be a much deeper partnership between Wirex, BASE, and Circle throughout 2025. Behind the scenes, the teams are already working closely on broader strategic initiatives. These are aimed at transforming the way businesses interact with digital dollars onchain.
Ambitious crosschain vision
“Our expansion to BASE signifies a critical milestone in our commitment to making Web3 banking services accessible to businesses globally. By supporting BASE, we’re enabling corporate clients to operate with seamless, stablecoin-based financial services and empowering them to integrate the benefits of decentralized finance into their day-to-day operations
Pavel Matveev, Сo-founder of Wirex
This integration marks the beginning… Wirex Pay has ambitious crosschain plans, with expansion to several other major chains scheduled for later this year. This vision stems from Wirex’s belief in offering native experiences for users on BASE and other ecosystems. Rather than relying solely on swap or bridge mechanisms. Native support ensures better UX, security, and scalability for corporate clients managing stablecoin flows across multiple blockchains.
“Wirex Business offers an innovative self-custody model that is directly connected with card and banking rails. This self-custody approach ensures that businesses maintain full control of their assets and removes any counterparty risk. By using Wirex’s platform, businesses can harness the power of stablecoins, backed by the flexibility and security of Web3, to revolutionize the way they manage and move funds globally.”
Daniel Rowlands, General Manager of Wirex Pay
About Wirex Pay
Wirex Pay is a pioneering stablecoin payment platform that bridges the gap between blockchain innovation and real-world usability. It is built on Zero Knowledge (ZK) technology. Wirex Pay delivers unmatched privacy, scalability, and efficiency, redefining how stablecoins are utilised for global payments. At the core of Wirex Pay is its ability to issue non-custodial Visa cards. Empowering users to spend their stablecoins seamlessly at over 80 million merchants in 200+ countries wherever Visa is accepted. By combining the reliability of Visa’s global payment network with the innovation of blockchain, Wirex Pay ensures users can transact with confidence and convenience.
Dave Murphy, Head of Financial Services EMEA & APAC at Publicis Sapient, on why retail banking is at an important crossroads and must react
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Retail banking stands at a pivotal juncture. As digital-first generations reshape customer expectations and competitive pressure from FinTechs and neobanks intensifies, traditional banks face a critical choice: modernise now or risk obsolescence. Publicis Sapient’s latest Global Banking Benchmark Retail Banking Report underscores that “digital by default” is no longer an aspiration. It’s an immediate necessity.
Drawing on insights from 600 retail banking executives across 13 countries, the report highlights a convergence of transformative forces… The accelerated adoption of Gen AI, the decline of legacy IT infrastructure, and an urgent need to reimagine customer engagement for a younger, mobile-first demographic.
Digital or Die: A Defining Moment
Retail banking has been evolving for over two decades, but the stakes have never been higher. In Q1 2025, JPMorgan Chase reported a net income of $14.6 billion, up 9% year-over-year. This was driven by robust trading revenues and investment banking fees. Meanwhile, UK neobanks are making significant strides. Revolut achieved a net profit of $1.0 billion in 2024, marking its first billion-dollar annual profit, with revenues soaring 72% to $4.0 billion. Monzo also reported its first full year of profitability, posting a pre-tax profit of £15.4 million and doubling its revenue to £880 million.
Despite these advancements, 62% of retail banking executives admit their pace of transformation lags behind competitors. This isn’t a minor delay – it’s a strategic disadvantage in a market where 44% of new currents accounts are already being opened with digital banks and FinTechs.
Gen AI: Catalyst and Compulsion
Among all the changes underway, generative AI has emerged as the most powerful and potentially disruptive force. According to the benchmark study, data and AI are the top investment areas for digital transformation over the next three years. Executives are betting big on AI not only to improve customer engagement but also to modernise operations and accelerate core transformation. The impact of Gen AI in banking is tangible. It can:
Personalise customer journeys at scale
Accelerate software development lifecycles
Write code and automate data management
Deliver hyper-relevant product recommendations
Power AI agents with human-like customer service abilities
In short, Gen AI makes what was once prohibitively expensive and time-consuming not only possible but scalable.
The banking customer has changed
The report makes it clear: retail banks must stop building for yesterday’s customer. Gen Z, who will make up one-third of the workforce by 2030, already prefer mobile-first, always-on banking. They value immediacy, customisation, and authenticity. A staggering 83% of Gen Z consumers say they are frustrated with current bank processes.
Compounding this generational shift is the growing irrelevance of traditional customer segmentation. Today’s consumers defy linear categorisation. The same individual can be a small business owner, a parent, and a new homeowner. Yet banks often treat them as three separate customers because of product-centric data silos.
The core problem with legacy thinking
Legacy systems continue to be the biggest barrier to meaningful transformation. 70% of banking executives say their legacy infrastructure is hindering their ability to deliver the digital experiences customers expect. Many core systems are COBOL-based and nearing end-of-life. Yet banks are reluctant to modernise due to perceived risk and complexity.
The irony is clear: the risk of maintaining outdated systems now outweighs the risk of change. With Gen AI, banks finally have the tools to confront the 800-pound gorilla in the room – core modernisation.
Why Core Modernisation is the linchpin
Modernising the core is about more than infrastructure. It’s the key to unlocking the full value of AI, data, and digital transformation. A modern, cloud-native core enables:
Real-time access to first-party and third-party data
Agile delivery through microservices
Better governance and regulatory transparency
Faster go-to-market with new apps and services
Retail banks that modernise their core can stop building costly middleware just to access data. Instead, they gain a unified view of the customer and the agility to respond to banking market shifts in real time.
The virtuous cycle of AI and Core
What’s truly powerful is the feedback loop between Gen AI and a modernised core. Gen AI helps accelerate the core transformation by generating code, automating testing, and streamlining documentation. Once modernised, that core then enhances Gen AI’s capabilities with clean, structured data. This virtuous cycle creates exponential value, making digital transformation faster, cheaper, and more sustainable.
Retail banks are already allocating 35% of their customer experience digital transformation budgets to Gen AI. Furthermore, many are embedding AI across the entire software development lifecycle using tools like Sapient Slingshot to reduce human error, increase test coverage, and ship better code faster.
From Product-Centric to People-Centric banking
Ultimately, the report urges retail banks to shift from a product-centric to a people-centric mindset. That means designing experiences around life moments, not product categories. It means knowing that the mortgage customer is also a small business owner and a parent, and offering solutions that reflect that reality.
With modern core systems and Gen AI, banks can personalise outreach, tailor financial advice, and meet customers where they are. This holistic view is essential not only for growth but also for loyalty.
The era of deferral is over. Banks can no longer afford to delay core transformation. Gen AI has lowered the cost, reduced the complexity, and increased the speed of change. The only question left is whether banks are ready to lead or risk falling behind.
Publicis Sapient is working at the intersection of Gen AI and core modernisation every day… Helping banks link strategy to execution and deliver on the full promise of digital transformation. The future of retail banking isn’t coming – it’s already here. The time to act is now.
Sprout, the creator of a smarter mortgage payment platform to drive financial freedom, has been named the winner of of…
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Sprout, the creator of a smarter mortgage payment platform to drive financial freedom, has been named the winner of of Pitch360 at Level39 during UK FinTech Week.
Sprout’s Co-Founder, Asis Tewari, thanked the judges and organisers for running an inspiring session and offered praise for fellow finalists. “It was a privilege to pitch alongside such passionate and innovative founders. We learned a lot… Thank you also to London Business School and Jeff Skinner for helping validate our journey, and to Sir Andrew Likierman for giving us the confidence to kick off. And for introducing us to Professor Joao F. Cocco and his white paper on Portfolio Choice in the Presence of Housing.”
Sprout
Sprout empowers homeowners to build lasting wealth by making smarter mortgage decisions. With AI-driven insights, smart automation, and a user-friendly interface, it can simplify homeownership – aligning your mortgage with long-term financial goals and future flexibility.
Tewari was inspired to launch Sprout after a dinner with Anil Agarwal, billionaire industrialist and Chairman of Vedanta… “He told me: The only way to build real wealth is through investing in markets — and every generation needs to start as early as possible.”
Why Use Sprout?
Do you know the true return of your property? Sprout tracks the real costs and value of your property to give an accurate return.
Are your mortgage repayments really building wealth? Sprout makes it simple to allocate your payment wisely, giving you the ability to pay down your mortgage smarter.
Is your money working hard for you? Sprout gives you exclusive access to best-in-class funds.
Pitch360
Innovate Finance’s flagship pitching competition, Pitch360, is taking place across the UK in 2025. There are six regional pitch events across a 12-month campaign, featuring live events in the North, South West, Midlands, Scotland, Northern Ireland and Wales. Pitch360 shines a spotlight on the best FinTech talent and emerging technologies the UK has to offer. It’s aim is to showcase how FinTech innovation can help drive the growth agenda and transform financial services.
Find out about future events, and apply to pitch, here.
About Innovate Finance
Innovate Finance is the independent industry body for UK FinTech. It’s mission is to accelerate the UK’s leading role in the financial services sector. It does this by directly supporting the next generation of technology-led innovators to create a more inclusive, more democratic and more effective financial services sector that works better for everyone.
The Embedded Finance Market is estimated at $115.8 billion in 2024 and is projected to reach $251.5 billion by 2029, at a…
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The Embedded Finance Market is estimated at $115.8 billion in 2024 and is projected to reach $251.5 billion by 2029, at a CAGR of 16.8% from 2024 to 2029, according to a new report by MarketsandMarkets.
Embedded Finance disruption
The embedded finance market is experiencing a massive disruption because of the development of technologies such as API, AI, and Blockchain. This capability allows companies to incorporate financial services into their platforms, delivering consistent and unique solutions. Furthermore, demand for complex, value-added, readily available services that can be offered in real-time has prompted firms in almost all industries to embrace Embedded Finance.
This shift helps non-financial firms to provide banking, lending, insurance, and payment services, which fortifies customer relations and generates more revenues. This market is divided into segments based on different aspects, such as the type, business model, and industry. These segments collectively offer a comprehensive overview of the evolving Embedded Finance landscape and its potential business implications.
By 2029, the Embedded Finance market is expected to have a robust growth trajectory
Substantial growth in the embedded finance market is driven by the rising digitalisation of financial services and the emergence of customised solutions across diverse industries. The seamless integration of financial services into non-financial platforms is being facilitated by technologies such as APIs and artificial intelligence, which are playing a crucial role in this transformation. Sectors such as healthcare, eCommerce, and transportation are increasingly adopting embedded payments, lending, and insurance to improve customer experiences and streamline operations. This expansion is driven by both B2B and B2C models, as businesses collaborate with FinTech providers to integrate financial services into their ecosystems. Customer relationships are being strengthened and new revenue opportunities are being unlocked.
Based on industry, the healthcare sector is expected to have the highest growth rate
The growing need for hassle-free, patient-focused payment solutions has led to the incorporation of embedded finance solutions into healthcare platforms. Digital health technologies, such as telemedicine and wearable devices, are driving the integration of payment, lending, and insurance options in the healthcare sector. Regulatory support for innovation in FinTech and healthcare, along with the demand for affordable and precise billing systems, is speeding up adoption for Embedded Finance solutions. Moreover, collaborations between FinTech companies and healthcare providers are making way for tailored financial products, enhancing patient access to care while simplifying provider revenue cycles. These factors are driving the widespread adoption of Embedded Finance in the healthcare industry, supporting the growth rate of the market and underscoring its transformative potential in the healthcare sector.
FinTech innovation is thriving
FinTech innovation is giving way to a thriving market in North America. Companies are now directly incorporating financial services, such as payments, lending, and insurance, directly into their core offerings. Companies such as Stripe, PayPal, and Plaid, which provide comprehensive solutions to enable other businesses to integrate financial capabilities efficiently, are leading the Embedded Finance sector in the United States. Canada is witnessing growth in the market, with companies like Shopify integrating payment and financing options into their eCommerce platform, thus improving the customer experience. The US Embedded Finance market is more mature, whereas Canada is catching up and the market growth would be facilitated by its robust technology ecosystem and supportive regulation.
Husnain Bajwa, SVP Product – Risk Solutions at SEON, on KYC detection and verification to combat fraud in financial services
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Many fraudsters today are no longer just criminals – they’re technologists wielding powerful artificial intelligence (AI) as their primary weapon. As fraud techniques evolve, businesses are becoming increasingly vulnerable to sophisticated adversaries. With the rising wave of AI-powered fraud, traditional fraud prevention methods, which heavily emphasise Know-Your-Customer (KYC) processes, are struggling to keep pace.
Fraudsters have learned to exploit the inherent delays in standard KYC processes. They use AI to generate synthetic identities and automate infiltration techniques at an unprecedented scale. By the time most verification processes kick in, significant resources have already been spent, and potential damage has been incurred. To gain the upper hand, companies must move beyond isolated identity checks and adopt a more integrated approach. This combines pre-KYC detection with advanced KYC verification. A dual-layered defence system that’s both proactive and agile enough to adapt to the evolving threat landscape.
Introducing Pre-KYC fraud detection
Since KYC processes are essential for businesses to meet regulatory requirements and maintain compliance, the solution isn’t to abandon KYC but to transform it. Organisations must adopt a pre-KYC detection layer that detects fraud before it reaches verification processes.
What does this look like in practice? It starts by analysing a user’s digital footprint. This includes key data points, such as the age of an email address, phone number history, IP address patterns and social media activity. These indicators help assess the authenticity of a user’s identity. For example, a newly created email or an IP address associated with a known VPN service can be red flags, signalling possible fraudulent intentions and enabling businesses to proactively intervene before harm occurs.
Device intelligence further strengthens the initial stages of pre-KYC user verification. This technology detects discrepancies in device integrity, such as emulators, proxies or device spoofing techniques. These are common tactics fraudsters employ to conceal their true identities. Advanced device fingerprinting tools are critical in identifying when a device’s profile does not match its user’s provided details or shows unusual behaviour, adding an extra layer of security.
Adding to this framework, behavioural analytics play a pivotal role by monitoring how users interact with platforms. Analysing navigation patterns, session durations and behaviours during account setup can expose irregularities that suggest fraudulent activities. Indicators such as repetitive account creation attempts with varied data points or abnormally quick typing and navigation speeds often point to bot-driven fraud. This provides businesses with opportunities to intervene early in the user engagement process.
Combining Pre-KYC Technology with traditional methods
While pre-KYC tools can identify potential threats early, KYC verification remains essential for ensuring that the users who pass initial screening are legitimate. Once a user reaches this stage, robust identity verification methods must be in place to confirm the authenticity of the individual’s information.
Modern KYC processes must combine several features: document verification, biometric checks and address verification. The first, document verification, involves using optical character recognition (OCR) and machine learning to scan government-issued IDs and detect forgeries in real time. Additional security in this realm can be attained via facial comparisons – matching a user’s selfie with the photo on their ID – to ensure that the person behind the camera is the same as the one in the presented documentation.
Next, advanced liveness detection aids in combating both deepfake technology and image-based fraud – two fraud vectors on the rise. By requiring users to perform specific actions or gestures during verification processes, liveness detection ensures that fraudsters can’t simply upload a static image or video to impersonate someone. Lastly, address verification provides further protection, confirming a user’s address against authoritative databases or recent utility bills. These checks are crucial for businesses in regulated industries, where proof of residency is often a compliance requirement.
The growing threat of AI-powered fraud
Now that fraudsters can access AI tools, the fraud game has entirely changed. Bad actors can generate synthetic identities, manipulate biometric data and even create deepfake videos to pass KYC processes. Additionally, AI enables fraudsters to test security systems at scale, quickly iterating and adapting methods based on system responses.
In light of these new threats, businesses need dynamic solutions that can learn and evolve in real time. Ironically, the same technology serving sophisticated fraud can be our most potent defence. Using AI to enhance both pre-KYC and KYC processes delivers the capability to identify complex fraud patterns, adapting faster than human-driven systems ever could. These AI-powered tools don’t just detect fraud – they predict and prevent it by continuously learning from each attempted breach.
At the pre-KYC stage, machine learning (ML) algorithms can identify patterns and anomalies across vast amounts of user data, providing more accurate and faster risk assessments. As fraudsters evolve, these systems can recognise emerging fraud patterns, preventing bad actors from bypassing security.
Similarly, AI-driven verification methods can detect increasingly sophisticated forgeries and manipulations in the KYC phase. At the same time, adaptive authentication systems can increase or decrease the level of verification required based on the user’s risk profile. This flexibility strengthens security and enhances the user experience by reducing friction for legitimate users.
The stakes are set to climb
The battle against AI-empowered fraud isn’t just about preventing financial losses. It’s about maintaining customer trust in an increasingly sceptical digital marketplace. Every fraudulent transaction erodes confidence, and that’s a cost too high to bear in today’s competitive landscape.
Businesses that take a multi-layered approach, integrating pre-KYC and KYC processes in a unified fraud prevention strategy, can stake one step ahead of fraudsters. The key is ensuring that fraud prevention tools – data-rich, AI-driven and flexible – are as adaptive as the threats they are designed to stop. The future of fraud prevention isn’t about building higher walls; it’s about creating smarter, more adaptive and intelligent systems to anticipate and neutralise threats before they materialise.
Vikas Krishan, Chief Digital Business Officer & Head of EMEA at Altimetrik, on the disruptive power of AI in FinTech
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AI is already disrupting every area of the Financial Services Industry, and is being included in almost every strategic conversation around technology-enabled transformation. This transformation is exemplified by industry leaders like JP Morgan Chase. CEO Jamie Dimon has championed a £12 billion annual investment in data and technology, overseeing over 400 AI use cases. These include fraud detection, customer service improvements and operational efficiencies across the bank. The core platforms underpinning the industry risk buckling under the weight of modernisation. AI is gradually loosening the components of legacy institutions and presenting fresh opportunities. These are scalable, resilient and adaptable to the agile needs of Financial Services. Through this reimagining of core platforms, those who choose to act now can expect to leapfrog their competition. Meanwhile, those who fail to act now risk obscurity, lack of productivity and being disregarded by their consumer base.
The transition to new architectures
For decades, banks have relied on legacy systems to power their core operations. These often ageing platforms are becoming increasingly difficult and expensive to maintain. They have been built both in languages not commonly used and architected with a different business reality in mind. Many frequently lack the flexibility required to meet the demands of today’s digital-first customers. They also struggle to integrate with modern financial technologies. A significant challenge facing organisations is the accumulation of technical debt. There is a cost to additional work or rework caused by choosing quick or limited solutions over more robust, maintainable approaches. Over time, this can lead to significant issues that compound the challenges of legacy systems.
This lack of nimbleness is often the byproduct of a Frankenstein approach to architectural systems. Many financial institutions have traditionally built new features or attempted to fuse together two platforms. This is a delicate balancing act, requiring extensive planning and careful execution. If done with limited oversight, challenges can arise. These include operational disruptions, increased security risks and obvious incompatibility issues. The high risks and cost burdens associated with maintaining legacy platforms has led many banks to reconsider traditional merger approaches. Increasingly opting for modern, cloud-based microservices driven solutions that offer enhanced scalability, security and integration potential.
Meeting the challenge
As the industry establishes governance around this necessary transition, core platforms are being replaced by newer, more adaptable microservice-based architectures. Navigating this evolution requires leveraging an industry partner with a deep understanding of the complexities and risks involved. There are challenges moving from monolithic core systems to flexible, modern frameworks.
If we think back five years or so, many players in the market were already aware of this critical shift. Companies like Misys and Avaloq were acquired by private equity firms and given substantial investment to advance digital initiatives, developing solution suites. The reason for this was clear, everyone understood the market was changing. However, the challenge still remains in managing the migration of large, complex platforms. The key question has always been how to de-risk these migrations when moving to newer architectures. This is an issue across organisations, and it is something that we at Altimetrik actively work with clients in financial services to address.
Data first with AI
If we consider platforms such as core banking or payments systems, the data generated from these transactions should, in theory, hold value. However, gaining insights from legacy platforms is significantly more challenging and the cost of extracting and utilising that data is often prohibitive. It is here that a data-driven approach to AI must be agreed upon.
High-quality, accurate data lies at the core of every successful AI implementation. AI thrives on data; the more precise the data, the better the AI can learn and provide reliable insights. This fundamental truth highlights the importance of data integrity within the AI ecosystem. However, many financial institutions are struggling in this area, both in effectively using internal data and leveraging accurate, timely external data. As companies grow, their data environments become increasingly complex, adding to these challenges.
As financial services organisations expand, they often face the challenge of data silos, declining data quality and scattered, disconnected data repositories. This leads to a fragmented data ecosystem. It can limit AI’s potential to deliver meaningful insights and drive improvements. This transformation requires active leadership from the top. Successful digital transformation depends on executive-level commitment and understanding. Leaders like Charles Scharf of Wells Fargo demonstrates how CEO ownership of data and AI initiatives drives organisation-wide adoption and success. Their hands-on approach ensures these technologies aren’t just IT projects, but core business strategy enablers.
A Single Source of Truth with AI
To overcome this, financial institutions should establish a Single Source of Truth (SSOT) and in doing so move away from older, somewhat clumsy core platforms. An SSOT will provide a unified, consistent view of data across the organisation. This accelerates decision-making with greater confidence. As demonstrated by successful implementations across the industry. For exmple, Bank of America’s AI-powered virtual assistant Erica providing personalised financial advice to Wells Fargo’s modernised data infrastructure. This enables enhanced risk assessment and management. By centralising core data, an SSOT enables the identification of operational inefficiencies, better monitoring of customer behaviours and effective execution of strategies to foster growth.
The key question is how to successfully de-risk this transition from a fixed cost base to a more flexible, agile one. This transition is essential for becoming an outcomes-focused business with greater adaptability. So, how can technology help achieve this?
One approach involves what is often (unfortunately) referred to as a Strangler Pattern. Instead of a wholesale shift from one platform to another, this modulated approach guides clients on a journey that focuses on gradually moving specific functionalities. By decomposing the legacy system function by function, we rebuild each component within the new platform. This allows the old system to run in parallel until fully replaced. Thus shrinking the monolithic structure in a manageable, low-risk way. It is a method preferred by many large financial services players when they move to become digital businesses.
By working within a digital business methodology that prioritises outcomes over technology, we gain significant advantages. The beauty of this function is its flexibility. When implementing a new function, the management of a FS firm may discover it isn’t meeting expectations or fulfilling business needs. And yet these clients still have the security of the old platform to fall back on and can easily revert back to the original system and refine the new function before trying again. This way of working ensures a safety net. It can reduce risk and enable iterative improvements without causing major disruptions to business operations.
The full picture
The transformation of core platforms through AI presents both immense opportunity and significant challenges. Those institutions willing to embrace this change, adopting data-first approaches and modern architectures, are poised to redefine the industry landscape. The transition, whilst complex, can be managed through measured strategies allowing for gradual, low-risk modernisation. As we move forward, the success of financial institutions will increasingly hinge on their ability to harness AI’s potential. They will need to create unified data ecosystems and adapt to the evolving needs of the digital age. Financial services businesses must embrace AI and modernise their core platforms or risk becoming as obsolete as a floppy disk.
Ayre Group founder Calvin Ayre stresses the power of Blockchain in helping to overcome security and transparency challenges in financial data
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The financial services sector is built on trust. However, ongoing data breaches, security vulnerabilities, and inefficiencies have severely eroded confidence in the industry. In the past five years alone, 69% of financial institutions have experienced at least one data breach, exposing the sector’s ongoing Cybersecurity challenges.
Financial institutions handle vast amounts of sensitive customer data, including personal identification details, transaction histories, and confidential records. All of which are prime targets for sophisticated cyber criminals. Furthermore, in exploiting weaknesses in legacy systems, third-party integrations, and cloud infrastructures, attackers gain unauthorised access, manipulate data, and compromise financial integrity.
Leveraging Blockchain technology
Recently, studies have been testing and trialling data breach detection systems that leverage Blockchain technology. This includes utilising smart contracts, self-executing agreements with predefined rules, to generate alert notifiers. These studies underscore the potential of Blockchain to enhance the speed and accuracy of data breach detection. Improvements from the standard 200+ days can be made up to as little as 10 seconds.
However, external threats are only part of the problem. Internal risks such as human error, data mismanagement, and outdated compliance frameworks further exacerbate data integrity issues. Nearly a third (28%) of financial service organisations cite mistakes from manual processes as their biggest data reconciliation pain point. Another key issue is the continued reliance on legacy systems, which lack the automation, security, and scalability required to maintain accurate and tamper-proof records. This highlights the growing need to restore confidence in financial data.
These ongoing challenges have far-reaching consequences. Alarmingly, 40% of CFOs express doubts about the accuracy of their financial records. This raises serious concerns about governance, regulatory compliance, and financial stability. Insider fraud, unauthorised transactions, and data manipulation remain major risks; calling for institutions to implement immutable systems. One such solution is Blockchain technology. As a decentralised ledger that guarantees data integrity, Blockchain can play a crucial role in enhancing the reliability of data.
Many institutions hesitate to adopt new technologies due to high costs and operational disruption. A report by Duco and the Financial Technologies Forum revealed that 64% of financial institutions perceive the transformation of manual processes as too expensive or time-consuming. But Blockchain technology presents a new era of data resilience that. It can address these challenges head-on, enhancing security, and restoring trust in financial data.
Restoring resilience with the power of Blockchain
One of the most powerful features of Blockchain is its ability to create immutable records. Every transaction is securely logged, forming transparent and tamper-proof audit trails. By enabling real-time auditing and decentralised verification, Blockchain reduces the risks associated with human error, fraud, and outdated systems.
BSV Blockchain, with its focus on scalability and low-cost transactions, enhances these benefits by enabling high-volume data processing on-chain. It makes real-time auditing more efficient and cost-effective. Additionally, its data provenance capabilities allow institutions to track the origin, history, and any modifications of every data entry. Moreover, it offers complete accuracy, ensuring the creation of auditable and reliable records that help to eliminate discrepancies. This can also minimise information asymmetry across the financial ecosystem.
Accurate risk assessment is the cornerstone of financial services. Investors and institutions need reliable data to evaluate risk levels in specific markets and positions. Blockchain enhances this process by providing trustworthy data that can be verified and traced back to its source. It also reduces information asymmetry by ensuring wide accessibility to high-quality data. These features boost efficiency, making markets work more effectively and enabling money to flow to investments that are correctly priced according to their risk. Furthermore, because the data is always available and immutable, it allows for quick risk assessments. This helps individuals respond faster to market changes.
Blockchain also has the ability to revolutionise credit ratings, making assessments more transparent, automated, and fair. Further ensuring businesses and individuals gain more equitable access to financial services. Traditionally, credit assessments have been opaque, slow, and prone to biases. Blockchain enables automated credit scoring using real-time data and self-executing smart contracts. This approach can provide a more accurate and unbiased measure of creditworthiness.
For example, companies like Lendoit leverage blockchain-based platforms that use decentralised credit ratings to offer fairer access to financial services. This especially benefits individuals and businesses traditionally underserved by standard credit systems.
A new era of trust and efficiency in financial services
Financial institutions face an increase in sophisticated cyber threats and the challenge of managing vast data volumes. Adopting Blockchain-based solutions will be essential for long-term sustainability. With immutable records, real-time reconciliation, and automated auditing, the financial sector can reduce risks, lower operational costs, and rebuild trust among investors, regulators, and consumers. The adoption of Blockchain will be crucial in addressing the data integrity challenges highlighted earlier, helping to restore confidence in the industry.
By embracing Blockchain, financial institutions can future proof their operations. This can foster greater financial inclusion, and redefine trust in the financial ecosystem. Those who adopt these advancements will not only strengthen their competitive position but will also help shape a new era of transparency, security, and innovation in global financial markets.
For more Blockchain insights from Calvin Ayre visit Ayre Group
HBX Group eWallet incorporates advanced features such as integrated financing, access to invoices and complete traceability of transactions
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HBX Group, a leading independent B2B travel technology marketplace has launched the HBX Group eWallet. This innovative B2B payments platform is specifically designed for the travel industry. The product has been developed in collaboration with FinPay, an e-money institution regulated by the Bank of Spain. It will be initially available in Spain in April 2025, with plans to expand to OECD countries starting in June.
B2B eWallet
A B2B eWallet is a digital solution that allows companies to securely store and manage payments quickly, and efficiently. Operating similarly to a digital wallet for consumers, it is designed to facilitate instant, cross-border transactions between companies. HBX Group eWallet, developed specifically for the travel industry, goes a step further. It incorporates advanced features such as integrated financing, invoice access, and full transaction traceability. Its aim is to digitise and automate B2B payments, reduce transaction costs, and improve the operational scalability of the travel ecosystem.
“HBX Group eWallet represents a decisive step toward modernising B2B payments in the travel ecosystem,” says Daniel Nordholm, chief product and new business officer at HBX Group. “We want to set a new standard for efficiency and security in the sector. The partnership with FinPay allows us to achieve this with a solution tailored to the industry’s needs.”
“This collaboration with HBX Group leverages the full potential of financial technology applied to real-world business contexts,” says Juan Antonio Soriano, CEO of FinPay. “FinPay represents a breakthrough in the digitalisation of B2B payments and financing. And we are proud to be the technology partner making it possible.”
Registration on the platform implies acceptance of the terms and conditions of FinPay, the entity responsible for the payment and financing services integrated into the solution.
About HBX Group
HBX Group is a leading global independent B2B travel technology marketplace. It owns and operates Hotelbeds, Bedsonline, and Roiback. It offers a network of interconnected travel technology products and services to partners. These include online marketplaces, tour operators, travel advisors, airlines, loyalty programmes, destinations and travel suppliers.
The vision is to simplify the complex and fragmented travel industry through a combination of cloud-based technology solutions. This includes curated data and a broad portfolio of products designed to maximise revenue. HBX Group is present in 170 countries and employs more than 3,600 people worldwide. It is committed to making travel a force for good, creating a positive social and environmental impact.
Sofia Kyriakopoulou, Chief Data & Analytics Officer at SCOR on how GenAI is driving InsurTech innovation at leading reinsurer SCOR
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Sofia Kyriakopoulou, a Fintech Strategy AI Champion and Group Chief Data & Analytics Officer at SCOR, spoke at InsurTech Insights revealing how GenAI innovation at one of the world’s largest reinsurers is transcending the realm of proof of concepts to become fully productive…
SCOR is as a tier one reinsurer – adaptable and business oriented. We are nimble, deeply technical and very focused on where and when we can play. We have an ambition to grow with our clients and see AI as the differentiator to allow us to innovate, offer new services, and to increase insurability. At SCOR, AI is not the future ambition. It’s here and now in InsurTech.
Delivering business value at scale with AI
In my role as SCOR’s Group Chief Data Analytics Officer I don’t just oversee data and AI initiatives, I aim to ensure they deliver business value at scale. Doing an AI proof of concept is relatively easy. Getting this into the hands of the user, that’s hard. And that’s what we strive to do at SCOR today. I want to give to you a glimpse of our approach and to share with you how we’re building the insurer of the future.
Since GenAI came into our lives in May 2022 we have all been following the frenzy of its unprecedented rise. It has the potential to change the way we work. And there are very few places where this potential is more relevant than insurance. We have ample data that has never been touched by digitalisation… The submissions, the contracts, the statements of accounts and so on. All of us who have been in data science who have tried the traditional models, we have seen the pain. The annotations, the laborious testing validation. And finally, if we could get it to work, it would’ve been so hard to scale it throughout the lines of business from the markets. Then came GenAI. And by now, many of us have figured out what it can do and what we would like to achieve with it.
GenAI can summarise what treaties look like across their addendums in agreements. And it can do more… Take out pieces of information and fill in my template, fill up my IT system, fill up my database. In the end, it’s not about what the technology does, it’s about what we do with it. And at the core we are focusing the opportunities in two places. Number one, the processes where it could create massive efficiencies. Number two, the new data points that could augment our analytics. And once we combine that with deep industry expertise, we believe that’s when we can go beyond pure automation.
Data in the DNA
At SCOR data is in our DNA. We’re a very technical company full of high calibre individuals and we’re growing. We see AI as a differentiator to be able to do more with the most precious piece of capital that we have – our people. So, we are embedding APIs where we believe it matters most. First of all, with our workforce. AI-powered tools are a commodity, but they’re essential. We are equipping our personnel with secure access to third party tools – essential to increase their effectiveness and efficiency. That’s where the value starts to arise – the processes. Identifying those document intensive processes where adding AI could significantly expedite them. Getting the data points for analytics that could make our decisions faster and more efficient. And that’s where it becomes really interesting, as we contemplate the jewels of the crown that we could be building.
AI-Powered InsurTech Underwriting
We believe differentiation comes from AI-powered underwriting and claims solutions. Through SCOR’s digital solutions, we’re coupling our internal knowhow with AI models to create an advantage for us as we use them internally and for our clients. We want to make the AI-powered underwriting process real when an application or submission comes in and triggers the engine to go straight to process. A certain percentage of cases work like that. Currently, if an underwriting repairer is needed the human looks at that. If we don’t have sufficient evidence that will need to be attained for the process to be reviewed again. Then we can decide what’s wrong with it. There are issues we can overcome… Number one – always back and forth with delays. Number two is human judgment – humans are not very consistent. And number three – we’re missing all the insights that we could have brought in from the past evidence. So, could we do better? Yes, we could add AI on all those human steps and augment them. We could do that. But could we look at it differently?
Could we think of this not sequentially, but at once, synthesising all the necessary data points when they’re needed. Looking at it again, we take evidence, we apply AI, we are structuring essential elements out, we’re triggering the underwriting rule engine, and then we’re adding any further information we have available that could support the decision making. Finally, we’re recommending to the underwriter what they should do. And to signify that this is supporting the underwriter, it’s an underwriting system and the small automation that could happen upstream. This is exactly what we’re currently using internally to augment life and health to support our underwriters.
SCOR’s AI Assistant
Our AI-powered underwriting capability is something we can provide to our clients through SCOR’s digital solution; we call it the AI Assistant. And here’s what it does in practice. When applications come in, we select the chain of thought that we’ll apply. For example, we ask it to think like a medical underwriter. It then extracts the essential pieces from the medical reports, joint records and vital family history. And then it creates a digital twin – the standardised pieces of information that the underwriters believe are the essential data points.
We store them and then we go deeper. We are putting the human in the loop so that humans can validate the actual sources of information. And then we complete the decision making. For example, the AI Assistant could detect an impairment and suggest the next course of action. This signifies the direction of sale. That’s the gold standard that we want to strive for.
Scaling AI with InsurTech
We don’t stop at experimentation. Data scientists like me, we love the tip of the iceberg. That’s where it’s exciting, and you can push to get the proof of concept to work. But in fact, under the water lies the very hard work one has to do… The building up of a data foundation; putting all the essential data assets together at the level of data quality that we can trust; establishing the necessary governance and then developing the IT platform in an equally robust way so it can scale. The proof of concept is not just an experiment.
We must plug in the actual IT landscape, the InsurTech tools where the AI is going to be consumed. And then you can go deeper and link the processes with the humans… In order to positively disrupt the process and keep the human in the loop they must be part of the journey from day one. We must educate our teams, demystify what AI is and isn’t. We must listen to their reactions because they’re the ones we will rely on to elevate the model performance.
Meeting the gold standard with InsurTech
Effective change management is for me, the essential element to allow us to go end-to-end. With insurance, and reinsurance, I believe we have come a long way. From the underwriting manuals to the rule engines, to the first AI models, probably now to the first cracking of the notorious submissions… It has been such a journey transforming both technology and the way we work. The shift, however, is beyond technology. It’s about how we operate, how we innovate, and how we create value for us and for our clients. Today, thanks to our ability to be nimble and technical at SCOR, we are in a position to connect all of the new capabilities of this value chain into what is an end-to-end comprehensive risk view. And for me, that’s the gold standard for InsurTech and what we are striving for with this AI revolution.
Collaboration combines Plumery’s API-first digital platform with Darien Technology’s regional expertise to modernise customer experiences in South America and Spain
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Plumery, a customer-centric digital banking experience platform, has announced a strategic partnership with Darien Technology. The consulting and technology firm specialises in financial services across South America and Spain.
Digital Banking Transformation
The partnership is focused on empowering banks and other financial institutions to modernise their digital channels. This is done without the complexity or cost of full-scale core replacements. Plumery’s developer-friendly, API-driven architecture is being combined with Darien Technology’s on-the-ground expertise in technology consulting, software development and UX/UI design. Moreover, the two companies are offering a fast, flexible path to digital transformation tailored to the needs of regional financial institutions.
Ben Goldin, Founder and CEO of Plumery, said: “This partnership allows us to extend Plumery’s reach into markets that are undergoing rapid digital change but are often held back by rigid legacy systems. Our platform provides the foundation for financial institutions to deliver seamless digital banking journeys that are easy to launch, fully customisable, and designed to scale. Through a focus on speed, cost-efficiency, and customer experience, we’re giving institutions the autonomy to evolve continuously. Without being tied to expensive vendor lock-ins or slow, professional service-heavy delivery models.”
A collaboration driving modern banking
The collaboration introduces a modern digital banking stack that integrates seamlessly with existing core systems and FinTech ecosystems. It offers financial institutions the ability to deliver omnichannel digital experiences across web and mobile. From frictionless onboarding, KYC compliance to personalised engagement and full loan origination journeys. Furthermore, the combined proposition allows financial institutions to respond immediately to changing customer expectations.
Plumery’s event-driven platform architecture and cloud-native infrastructure allow for real-time responsiveness, while its open design ensures banks and other financial institutions maintain full control over the user experience. Darien Technology complements this functionality with regional delivery capabilities and deep expertise in guiding financial institutions through complex innovation journeys.
Luis Salazar, Digital Transformation Director & CDO, EMEA at Darien Technology, said: “We’re thrilled to partner with Plumery. Their flexible, cloud-native, event-driven architecture and developer-friendly approach to digital banking, coupled with their ability to support progressive modernisation without the need for large-scale core transformations aligns perfectly with our mission to help financial institutions innovate with speed and confidence. Together, we bring not only best-in-class technology, but also deep implementation experience and local market insight that ensures banks can turn strategy into reality with reduced risk and faster time to value.”
About Plumery
Headquartered in the Netherlands, Plumery’s mission is to empower financial institutions worldwide. Regardless of size, it crafts distinctive, contemporary, and customer-centric mobile and web experiences.
Plumery operates with a diverse team that embodies a unique combination of seasoned expertise and vibrant innovation. This blend has been cultivated through years of experience at start-ups, scale-ups, and established financial institutions. Most notably at globally leading financial technology companies, where they were instrumental in creating disruptive digital banking solutions and platforms that now serve 300+ banks globally.
Plumery’s Digital Success Fabric platform provides banks with the foundation for success beyond fast-time-to-market. It helps expedite the development of their digital front ends. Moreover, significantly cutting costs compared to in-house initiatives or solutions with high total cost of ownership (TCO).
About Darien Technology
Darien Technology is a digital transformation and technology consulting firm. It empowers organisations across South America and Europe to accelerate innovation, modernise legacy systems, and deliver best-in-class digital experiences.
The company has nearly a decade of experience delivering complex projects in financial services, government, and education. Darien is trusted by some of the region’s most forward-thinking institutions. Its capabilities span across end-to-end software development, systems integration, UX/UI design, cloud infrastructure, digital onboarding, document management, identity verification, and AI-driven data insights.
From modernising banking platforms and CRM systems to launching digital onboarding solutions and mobile banking apps, Darien Technology brings the right mix of strategic guidance and hands-on technical delivery. Specialised teams – covering digital consulting, software factories, and marketing automation – allow it to deliver scalable, customer-centric platforms. Furthermore, these improve operational efficiency and user engagement.
Headquartered in Panama with a growing presence in Spain, DarienT’s team of consultants, engineers, and designers understand the unique challenges of regional markets. They are committed to delivering solutions that are agile, secure, and future-ready.
In a major move for blockchain-powered finance, Kinexys by J.P. Morgan has launched GBP-denominated Blockchain Deposit Accounts at its London…
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In a major move for blockchain-powered finance, Kinexys by J.P. Morgan has launched GBP-denominated Blockchain Deposit Accounts at its London branch. This marks a significant expansion of its Kinexys Digital Payments platform into the UK market. The innovation introduces one of the first blockchain-native banking products of its kind in the region. It is designed to facilitate 24/7 real-time payments and cross-border transactions for institutional clients.
SwapAgent, a London Stock Exchange Group Post Trade Solutions business, and Trafigura, a global leader in commodities trading, are the inaugural clients on the platform. The deployment signals a meaningful step in the evolution of blockchain in mainstream banking infrastructure, particularly in foreign exchange (FX) settlement, liquidity management, and programmable finance.
The new offering allows corporate clients to settle GBP-denominated payments anytime, including weekends. And while accessing same-day FX settlements and real-time cross-border capabilities. This follows the platform’s earlier rollout of EUR-denominated blockchain accounts in Frankfurt and continues Kinexys’s push for global digital payment standardization.
SwapAgent will integrate Kinexys accounts into its digital post-trade pilot, with an eye toward broader adoption that could see blockchain accounts become a central part of its settlement architecture.
“As we expand SwapAgent’s settlement capabilities and enhance our digital presence, we’re eager to collaborate with Kinexys by J.P. Morgan”
Nathan Ondyak, CEO, SwapAgent
Trafigura Eyes Transformation in Cross-Border Treasury
Trafigura plans to leverage Kinexys accounts for real-time payments across New York, London, and Singapore, integrating programmable fund movement to streamline treasury operations across its global network.
“We are excited to advance our capabilities… [and] benefit from a transformative financial solution that will streamline our operations and enhance our competitive edge”
Chris McLaughlin, Global Head of Group Treasury, Trafigura
Kinexys: Momentum Behind the Numbers
Since inception, Kinexys has processed more than $1.5 trillion in transactions, with daily volumes exceeding $2 billion and 10x year-over-year growth. Its programmable payments feature, offering a self-serve “if-this-then-that” interface, provides users with automation options that traditional banking infrastructure has struggled to match.
This move cements J.P. Morgan’s blockchain unit as a first mover in institutional-grade digital payments infrastructure in the UK, positioning Kinexys as a major player in the convergence of blockchain, treasury, and cross-border payments.
Ozone API launches industry-first tool that enables US banks to calculate the cost of building and maintaining their own open banking APIs
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Ozone API, the global leader in open banking technology, has launched an industry-first tool. It forecasts an accurate estimated cost for US banks planning on building their own API infrastructure. It comes in response to the recent Section 1033 rulemaking under the Dodd-Frank Act. This means that American consumers will have the right to access and share their financial data.
API Build It Calculator
The “Build It Calculator” can estimate the cost to a US bank of building and maintaining its own API infrastructure. It does this by analysing data points including, but not limited to, the desired length of time for project completion, the financial institution’s hosting costs and the value of a bank’s deposits. This information is then fed into a formula built according to Ozone API’s extensive experience delivering open banking infrastructure globally.
Moreover, the final cost even includes the salaries of employees required to support the project. This is calculated in line with the proportion of their annual working hours that would be spent on the API build, implementation and maintenance.
Having already been tested and validated by banks in the US, the tool helps financial institutions understand the complexity and cost involved in building APIs. Furthermore, it also reveals the hidden costs of maintenance, which can often be as much as half the cost of initial implementation every single year.
Using the Build It Calculator, banks of all sizes can estimate both the up-front cost and maintenance costs of building their own open banking APIs in a single phone call with Ozone API. This brings significant clarity to initiatives that often reach eight-figure budgets.
Open Banking with APIs
“Open banking technology brings huge benefits to financial institutions as well as businesses and consumers, but building API architectures does require significant investment. We are making this tool available to help banks understand the scale of the undertaking and effectively prepare to comply with Section 1033. It’s crucial that banks are armed with accurate data to help them make the best decision, whether that is to build their own infrastructure or work with partners that can offer off-the-shelf or bespoke solutions.”
Eyal Sivan, General Manager, North America, Ozone API
The tool has been rolled out in the US already and is set to expand into new regions globally, including the UK, MENA, LATAM and APAC.
About Ozone API
Ozone API empowers banks and financial institutions around the world to deliver high performing, standards-compliant open APIs.
As open banking and open finance sweep the world, Ozone API helps banks and financial institutions to adapt and thrive in the new era of open data, by providing the technology to unlock the power of open finance globally.
The UK-based FinTech is the leading standards-based open API platform, supporting all global standards and providing the tools and expertise to help banks and financial institutions comply with regulation and create real commercial value.
With a founding team that led the development of the UK open banking standards, Ozone API continues to shape open finance globally helping regulators, banks and technology platforms to accelerate open finance. Learn more: https://ozoneapi.com/
Ripple, the leading provider of digital asset infrastructure for financial institutions, has announced it is acquiring Hidden Road for $1.25…
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Ripple, the leading provider of digital asset infrastructure for financial institutions, has announced it is acquiring Hidden Road for $1.25 billion. This represents one of the largest deals in the digital assets space. Additionally, with the acquisition, Ripple becomes the first crypto company to own and operate a global, multi-asset prime broker. Hidden Road is one of the fastest-growing prime brokers around the world. It offers institutions a one-stop-shop of advanced services. These include clearing, prime brokerage, and financing across foreign exchange (FX), digital assets, derivatives, swaps, and fixed income.
Ripple driving crypto industry growth
For the crypto industry to achieve the next phase of growth, it’s critical that core infrastructure is in place for institutional adoption. Prime brokers bring the necessary credibility and professional trading services expected in legacy finance to digital assets. Together, Ripple and Hidden Road are bringing the promise of digital assets to institutional customers at scale. They are bridging traditional finance and decentralised finance (DeFi).
Hidden Road has a strong business, clearing $3T annually across markets with more than 300 top institutional customers. Moreover, with the backing of Ripple’s significant balance sheet, Hidden Road will exponentially expand its capacity to service its pipeline. It will become the largest non-bank prime broker globally.
“We are at an inflection point for the next phase of digital asset adoption. The US market is effectively open for the first time due to the regulatory overhang of the former SEC coming to an end. And the market is maturing to address the needs of traditional finance,” said Brad Garlinghouse, CEO of Ripple. “With these tailwinds, we are continuing to pursue opportunities to massively transform the space. We are leveraging our unique position and strengths of XRP to accelerate our business and enhance our current solutions and technology.”
This acquisition also reinforces Ripple USD’s (RLUSD) position as an enterprise-grade USD-backed stablecoin with real utility. Hidden Road leverages it as collateral across its prime brokerage products. This will make RLUSD the first stablecoin to enable efficient cross-margining between the digital asset space and traditional markets.
Decentralised Finance (DeFi)
Hidden Road will, in turn, migrate its post-trade activity across XRPL. This will streamline operations and lower costs, demonstrating XRPL’s potential as the go-to blockchain for institutional decentralised finance (DeFi). Ripple also sees the potential to optimise costs and liquidity in its cross-border payments solution, Ripple Payments. And Ripple will provide critical custody services to Hidden Road’s customers who need bank-grade digital asset custody.
“With new resources, licenses, and added risk capital, this deal will unlock significant growth in Hidden Road’s business. Allowing us to increase capacity to our customer base, expand into new products, and service more markets and asset classes,” said Marc Asch, Founder and CEO of Hidden Road. ”Together with Ripple, we’re bringing the same level of trust and reliability that institutional clients are accustomed to in traditional markets. We are designed and optimised for a digital world.”
Digital Asset development
Thanks to its simple, secure, compliant digital asset infrastructure, Ripple is well-positioned to provide the core services that financial institutions need to tokenise, store, exchange and move digital assets. Furthermore, Ripple has over a decade of experience in the digital asset space and holds 60+ regulatory licenses and registrations in various jurisdictions.
Ripple participated in Hidden Road’s Series B and is a customer of its platform, experiencing firsthand the strength of the team, technology, risk management, and operational controls. The deal is expected to close in the coming months, subject to regulatory approvals.
AccessPay CEO Anish Kapoor examines the positive impact of DORA on the digital payments industry
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The EU’s Digital Operational Resilience Act (DORA) is a positive step for the payments industry and will help boost the resilience of an ecosystem that has changed radically over the last twenty years. Even so, the implications of this landmark regulation for payment service providers (PSPs) are complex and far-reaching. It will require investment in processes and infrastructure, which must also factor in the ongoing shift to real-time payments.
The technology backstory
Two decades ago, payment technology predominantly referred to back-end systems used by banks and PSPs to process electronic transactions. Online banking was still in its infancy, the smartphone hadn’t yet been launched, and traditional payment methods such as cash and cheques were much more prevalent.
Today, it is a very different story. The number of electronic payments made via cards and digital wallets, credit transfers and direct debits has exploded. Technology is front and centre in payment service delivery, as individuals and businesses use online portals and mobile apps to manage accounts and initiate payments. While the rise of real-time payments, such as the EU’s SEPA Instant Credit Transfer (SCT Inst), means an increasing proportion of bank transfers are settled instantly rather than over several working days, which also means that anti-fraud measures and other compliance checks have to take place in real-time given the heightened fraud risk.
So, if there is a technological failure at any point in this new world of payments, it can have immediate and considerable ramifications for individuals and businesses. The now-infamous CrowdStrike outage in July 2024 affected several sectors, including banking, with some PSPs unable to process payments. More recently, an hours-long glitch at Bank of Ireland in December 2024 caused delays in processing payroll transactions for some employers, while a two-day outage at Barclays in February 2025 left customers unable to make bank transfers and use their debit cards. To catch up, Barclays had to process payments over the weekend and extend call centre operating hours.
DORA’s goals
DORA aims to make the EU’s financial institutions (FIs) more resilient to information and communication technology (ICT) risks. It will minimise the potential for IT outages and require FIs to be back online as quickly as possible when they do occur. From a practical perspective, it will oblige them to create and implement ICT risk management frameworks. And meet new requirements for resilience testing, outage reporting, and information sharing.
Of course, the advent of DORA adds to the compliance burden for FIs, who will partly be spurred to comply to avoid fines for non-compliance and the associated negative press. Still, its rollout should be seen as positive for the industry. It should help to improve resilience across the ecosystem and boost customer confidence in the sector.
Improving infrastructure resilience with DORA
One angle that is less widely discussed when it comes to DORA is its implications for a PSP’s infrastructure. Whether developed in-house or outsourced, payment systems will need to have the capacity to accommodate peak loads following any outage. This will require PSPs to scale by multiples of their standard throughput.
For example, if a PSP’s average processing volume is 1,000 transactions per hour and its systems are down for three hours, it will need to have the capacity to process those 3,000 outstanding transactions once service resumes. And without impacting new transactions coming through the system. Additionally, if they are real-time payments, the delayed transactions must be settled as soon as possible. In this hypothetical example, such an outage would mean the system needs to handle 4,000 transactions in one hour, four times its usual capacity.
This requirement to recover quickly from IT outages will necessitate additional investment in infrastructure and automation. Especially given the move towards real-time settlement. In particular, it will likely drive interest in cloud-native technology, which can scale more readily on demand.
Third-party vendor relationships
DORA will also significantly impact how PSPs manage third-party IT vendor relationships. This development has been driven by the growing complexity of the financial ecosystem in the wake of digitisation and the rise of open banking. Research from McKinsey Digital highlights how the growth in the number of apps and vendors has increased the complexity and pressure on IT leaders.
Under DORA, FIs are expected to monitor third-party providers, update supplier contracts to cover IT resilience, and establish an oversight framework for critical third-party providers. Consequently, conducting due diligence on third-party providers, particularly new vendors, and their approach to resilience is essential. Generally, we are likely to witness a flight to quality, with the providers that invest in controls and resilience set to fare best in the long term.
Adjusting to DORA
The arrival of DORA is a positive development for the payments industry. The sector has changed significantly in recent decades and relies heavily on technology for service delivery. Likewise, its customers depend on the PSPs to deliver their services so that they can conduct their business uninterrupted. However, the changes required by DORA are extensive and will require PSPs to invest in their infrastructure, processes and third-party relationships. As they adjust to the requirements of DORA, PSPs should ensure that infrastructure is resilient and flexible enough to handle surges in transaction flows. And factor in the shift to real-time settlement, which will only add to the demands made of payment systems.
Arsalan Minhas, AVP Sales Engineering, EMEA & APAC, at Hyland, on how AI revolutionising financial services
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Artificial intelligence (AI) is revolutionising financial services, reshaping how institutions detect fraud, personalise customer experiences, and optimise investment strategies. From AI-powered chatbots assisting customers to machine learning models predicting market trends, the technology is driving unprecedented efficiency and insight.
Yet, alongside these advancements come new challenges. AI-driven scams are evolving in sophistication, algorithmic biases raise ethical concerns, and regulatory scrutiny is increasing. As financial institutions accelerate AI adoption, they’re walking the fine line between harnessing its benefits and mitigating its risks.
AI in fraud detection and prevention – strengthening security measures
One of the most critical areas where AI has transformed financial services is fraud detection and prevention.
Traditional fraud prevention methods relied on static rule-based systems, which were often ineffective at identifying evolving threats. Such systems aren’t necessarily equipped to keep up with the sheer pace of financial service operations today, which has led to a surge of interest in automated alternatives.
AI, particularly machine learning algorithms, offers a dynamic solution by analysing vast datasets in real time to identify anomalies and potential fraud. AI also enhances biometric authentication methods, such as voice and facial recognition. This can ensure secure access to accounts, reducing the reliance on passwords, which are vulnerable to breaches.
According to a recent McKinsey report, AI-driven fraud detection systems can reduce financial fraud losses by up to 50%. Making them a crucial asset for financial institutions. These unprecedented levels of speed and versatility has made AI a priority for even the biggest players.
Of course, fraud detection is not without its challenges. Criminals are also leveraging AI to create sophisticated scams, such as deepfake-based identity fraud. And the introduction of new technologies can challenge cybersecurity initiatives.
With that in mind, financial institutions must constantly update their AI models to stay ahead of emerging threats. Regulatory compliance adds another layer of complexity, as AI’s decision-making much align with consumer protection laws and data privacy regulations like GDPR and CCPA.
The future of Customer Experience
On the customer-facing side of things, Artificial Intelligence is transforming the customer experience through hyper-personalised financial services. Gone are the days of generic banking interactions. AI now enables financial institutions to tailor services based on individual customer behaviours, preferences and financial goals.
Leading UK banks like NatWest and Lloyds Bank have invested heavily in AI-powered virtual assistants. NatWest’s digital assistant, Cora, has handled millions of customer interactions, providing real-time financial insights, bill reminders, and even fraud detection alerts. Similarly, HSBC uses AI-driven tools to analyse spending patterns and offer personalised financial advice. The ability to assess transaction data allows banks to recommend budgeting strategies, suggest tailored loan offers, and predict future financial needs, making banking more intuitive and customer centric.
AI-driven robo-advisors, such as those offered by Nutmeg and Moneyfarm, have revolutionised investment management by providing algorithm-based financial planning. These platforms leverage AI to assess risk tolerance, market trends, and historical data to offer personalised investment strategies with lower fees than traditional financial advisors.
While such tools can be incredibly effective, they do raise concerns about data privacy and algorithmic bias. The more AI knows about an individual’s financial habits, the greater the risk of data misuse or bias in lending and investment recommendations.
Financial institutions must therefore ensure transparency and fairness in AI decision-making to build customer trust and meet regulatory regulations. The basis upon which customers share their personal data, and the protections that it is afforded, are a non-negotiable for any serious financial organisation.
Redefining market strategies in trading and investment
According to Deloitte, Artificial Intelligence is poised to be one of the most disruptive forces in investment management. High-frequency trading (HFT) firms now rely on AI algorithms to process vast amounts of market data within milliseconds. It also enables hedge funds and investment firms to predict market movements by analysing patterns from historical data, social media sentiment, and global economic indicators.
Leading firms like Man Group and XTX Markets have harnessed AI to enhance their trading strategies and portfolio management. Man Group, managing $175 billion in assets, utilises machine learning tools to develop its platform, ManGPT, to analyse trades and optimise investment decisions.
Similarly, XTX Markets, a London-based trading firm, employs advanced AI models to execute millions of trades daily, emphasising AI-driven strategies over sheer speed. Predictive analytics have become an indispensable tool in portfolio management, helping firms adjust their strategies based on real-time market fluctuations.
Naturally, these automated tools require to-the-second oversight from the business itself. The 2010 Flash Crash, in which the stock market plunged nearly 1,000 points within minutes, was exacerbated by algorithmic trading. AI-driven trading models can react unpredictably in volatile markets, amplifying risks if not properly regulated. Humanised AI – the combination of human and AI working in concert, rather than automated systems working in isolation – is crucial.
The future of AI in financial services
As Artificial Intelligence continues to evolve, its integration within financial services will only deepen. Institutions that successfully integrate AI into their operations will gain a significant competitive advantage. Benefiting from enhanced fraud detection, superior customer experiences, and data-driven investment strategies.
These businesses must also navigate the complexities of regulatory compliance, data privacy, and ethical AI deployment. The EU’s AI Act is one of many policies aiming to create the most robust governance structures for AI applications, and finance is no exception.
Striking the right balance between innovation and regulation will be crucial to ensuring AI remains a force for positive transformation rather than disruption. Financial institutions must prioritise transparency, human oversight, and ethical considerations in deployment to fully realise its potential while maintaining consumer trust.
The financial industry is on the brink of an AI-driven revolution. With careful implementation and responsible oversight, the technology has the power to make financial services more secure, efficient, and customer-friendly than ever before. Institutions that embrace this technology while addressing its challenges will shape the future of finance, redefining the way money is managed, invested, and protected in the years to come.
Scott Zoldi, Chief Analytics Officer at FICO, explains why there should be no AI alone in decision making processes
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Many AI models are black boxes and developed without proper consideration for interpretability, ethics, or safety of outputs. To establish trust, organisations should leverage Responsible AI. This defines standards of robust AI, explainable AI, ethical AI, and auditable AI. Under Responsible AI, developers define the conditions that lead to some transactions having less human oversight and others having more. But can we take people out of the decision-making loop entirely? To answer that question, let’s look at some developments in Responsible AI.
Trust in Developing AI Models
One best practice that organisations can adopt is maintaining a corporate AI model development standard. This dictates appropriate AI algorithms and processes to enable roles that keep people in the loop. This will often include the use of interpretable AI, allowing humans to review and understand what AI has learned for palatability, bias, ethical use and safety. Auditable AI will then codify the human-in-the-loop decisions and monitoring guidelines for operational use of the AI.
Responsible AI codifies all the essential human decisions that guide how AI will be built, used and progressed. This includes approving or declining the use of data, removing unethical relationships in data (i.e., illegal or unethical data proxies), and ensuring governance and regulation standards are met. Responsible AI leverages an immutable blockchain that dictates how to monitor the AI in operation. And the decision authority of human operators, which can include conditions where AI decisions are overruled, and operations move to a ‘humble AI model.’ AI Practitioners are keenly aware that even the highest performing AI models generate large number of false positives. So, every output needs to be treated with care and strategies defined to validate, counter, and support the AI.
A Responsible AI framework
There should be a well-defined process to overrule or reverse AI-driven decisions. If built in a Responsible AI framework, these decisions are codified into a crystal-clear set of operating AI blockchain frameworks well before the AI is in production. When there is a crisis you need clear preset guidance, not panicked decision making. This blockchain will define when humans can overrule the AI through alternate models, supporting data, or investigative processes. This AI operating framework is defined in coordination with the model developers, who understand the strengths and weaknesses of the AI. And when it may be operating in ways it wasn’t designed, ensuring there is no gap between development and operation. When auditable AI is employed, there are no nail-biting decisions in times of crisis. You can rely on a framework that pre-defines steps to make these human-driven decisions.
Companies that utilise Responsible AI frameworks enforce usage adherence by auditable AI, which is the operating manual and monitoring system. Embracing Responsible AI standards can help business units attain huge value. At the same time they can appropriately define the criteria where the businesses balance business risks and regulation. Domain experts/analysts will be given a defined span of control on how to use their domain knowledge and the auditable AI will monitor the system to alert and circumvent AI as appropriate.
Drawback prevention begins with transparency
To prevent major pull-back in AI today, we must go beyond aspirational and boastful claims to honest discussions of the risks of this technology. We must define how involved humans need to be. Companies need to empower their data science leadership to define what is high-risk AI, and how they are prepared or not to meet responsible/trustworthy AI. This comes back to governance and AI regulation. Companies must focus on developing a Responsible AI programme, and boost practices that may have atrophied during the GenAI hype cycle.
They should start with a review of how AI regulation is developing, and whether they have the tools to appropriately address and pressure-test their AI applications. If they’re not prepared, they need to understand the business impacts of potentially having AI pulled from their repository of tools. And get prepared by defining AI development/operational corporate standards.
Companies should then determine and classify business problems best suited for traditional AI vs. generative AI. Traditional AI can be constructed and constrained to meet regulation using the right algorithms to meet business objectives. Finally, companies will want to adopt a humble AI approach to have hot backups for their AI deployments. And to tier down to safer tech when auditable AI indicates AI decisioning is not trustworthy.
The vital role of the Data Scientist
Too many organisations are driving AI strategy through business owners or software engineers who often have limited to no knowledge of the specifics of AI algorithms’ mathematics and risks. Stringing together AI is easy. Building AI that is responsible and safe and properly operationalised with controls is a much harder exercise requiring standards, maturity and commitment to responsible AI. Data scientists can help businesses find the right paths to adopt the right types of AI for different business applications, regulatory compliances, and optimal consumer outcomes. In a nutshell: AI + human is the strongest solution. There should be no AI alone in decision-making.
InsurTech Insights Europe 2025: A Transformational Gathering for the Future of Insurance
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InsurTech Insights Europe 2025, held on March 19-20 at the InterContinental London – the O2, reaffirmed its status as the premier conference for insurance technology professionals across the continent. Drawing more than 6,000 attendees from over 80 countries, the event brought together C-level executives, startup founders, investors, and tech leaders. They explored the evolving future of insurance powered by innovation and digital transformation.
Key Themes
With seven stages and over 400 speakers, the conference agenda was packed with compelling keynotes, forward-looking panel discussions, fireside chats, and practical workshops.
The overarching theme of the 2025 edition was crystal clear: artificial intelligence (AI) is no longer a futuristic concept, it’s the driving force behind today’s insurance innovation. Topics like automation, generative AI, claims transformation, underwriting analytics, embedded insurance, cyber security, and ESG all reflected a dynamic industry poised for rapid acceleration.
A Focus on Leadership & Diversity
One of the standout sessions was the panel discussion titled “The ROI of Gender Diversity: Breaking the Glass Ceiling for Women in Leadership”, held on the Purple Stage. Featuring high-level voices from Solera, unlock VC, and AXA XL, the panel addressed the often-overlooked yet crucial importance of gender diversity in executive roles. The discussion didn’t stop at raising awareness; it presented measurable business outcomes tied to diverse leadership and called for action to foster inclusivity across all levels of the industry.
Complementing this session was “The Women in Insurance Power Group Meet-up”, a networking event held at the Sky Bar on the 18th floor. Attendees not only connected over lunch but were also invited into an exclusive WhatsApp group, encouraging long-term collaboration and support among female leaders and allies in the space.
The Innovators Hub and the ITI Marquee: Where the Future Was Born
A major addition to this year’s conference was the debut of the ITI Marquee. A vibrant, purpose-built zone dedicated to showcasing bold ideas and startup brilliance. This space housed the Innovators Hub, which included its own dedicated Innovator’s Stage. Here, early-stage ventures and InsurTech pioneers pitched their solutions to panels of VCs, corporate innovation leads, and fellow founders.
This setting offered more than exposure, It cultivated real-time connections between startups and investors, giving many smaller players their first shot at meaningful partnerships or funding opportunities. The diversity of ideas, from AI-powered claims processors to data-driven risk models for climate insurance, reflected the industry’s hunger for next-gen solutions.
Keynote InsurTech Highlights
One of the most talked-about moments of the event came from Daniel Schreiber, CEO and Co-Founder of Lemonade, whose opening keynote explored how AI can dramatically enhance customer experience in insurance. He challenged the audience to rethink not just how insurance is sold or serviced, but why it’s offered. And how technology can transform its social impact.
Another crowd favourite was the session on “The Path to Embedded Insurance”, which unpacked how insurance products are increasingly being bundled into digital ecosystems like ecommerce platforms, mobility apps, and smart home technologies. This wasn’t just a hype piece. Real-world case studies from European neobanks and auto insurers illustrated how embedded models are already driving customer growth and retention.
Among the compelling keynotes on the Main Stage, Sofia Kyriakopoulou, a Fintech Strategy AI Champion and Group Chief Data & Analytics Officer at SCOR, revealed how GenAI innovation at one of the world’s largest reinsurers is transcending the realm of proof of concepts to become fully productive.
InsurTech Deep Dives: AI, Data & Digital Claims
Sessions throughout the week made it clear that AI is at the forefront of virtually every area of insurance operations. Whether it was applied in predictive underwriting, fraud detection, or personalised customer engagement, companies are looking to AI not just for marginal gains but foundational transformation.
A standout workshop on AI in Claims Automation included live demos from startups using computer vision and NLP to automate damage assessment. Meanwhile, a session on Data-Driven Underwriting shared how insurers are replacing traditional risk proxies with real-time data streams, from wearables to smart meters.
Cybersecurity was another hot topic, with insurers discussing how to build resilient cyber products in the face of increasing digital threats and regulatory complexity.
Global Meets Local: The Power of Diversity
Although a European event at heart, the conference had a distinctly global flair. Speakers came from the U.S., Singapore, Brazil, South Africa, and the Middle East. They brought diverse perspectives on shared challenges such as climate change, digital regulation, and consumer trust.
Simultaneously, European startups shone on stage. Companies from the UK, Nordics, DACH, and Benelux presented innovative, often niche solutions for localised market challenges—from parametric crop insurance to real-time mobility coverage.
Trade Exhibition & Brand Visibility
The exhibition floor was a hive of activity, featuring booths from established players like Munich Re, Swiss Re, Guidewire, Duck Creek, and Cognizant, alongside vibrant startup showcases. Product demos, swag giveaways, and live challenges kept engagement high and made it easy for brands to stand out.
The conference proved to be a golden opportunity for brand elevation, allowing companies to position themselves as thought leaders or rising disruptors in front of an incredibly curated audience.
InsurTech Insights Europe: The Verdict
The closing remarks from Kristoffer Lundberg, CEO of InsurTech Insights, captured the spirit of the event:
“It’s a privilege for us to gather together the sharpest minds in the industry to discuss the role of AI in insurance. The direction and impact of these technologies will shape the space for decades to come.”
Indeed, InsurTech Insights Europe 2025 wasn’t just a conference, it was a strategic gathering. A melting pot of ideas and a launchpad for the next generation of insurance products and platforms. Attendees walked away not just with new business cards, but with fresh ideas, collaborative leads, and the motivation to drive innovation within their own organisations.
As the insurance industry continues to evolve amid mounting global challenges and rapidly advancing tech, this event served as a timely and energising reminder… The future is not something to wait for—it’s something to build, together.
Guy Marion, CMO at Chargebee, on how businesses can get ahead of the ‘click-to-cancel’ movement through customer-centricity
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The promise of predictable revenue now comes with heightened customer expectations. As regulators worldwide push for ‘click-to-cancel’ requirements for subscriptions, businesses face a critical choice. Do they wait for regulations to force changes, or transform cancellation friction into an opportunity for deeper customer trust? For revenue leaders, the question isn’t just about compliance – it’s about turning a potential disruption into a competitive advantage.
In the US, the Federal Trade Commission’s (FTC) new rule will require businesses to simplify cancellations and obtain consent for monthly renewals and the conversion of free trials to paid memberships. Similar measures are already in place in France, where self-serve cancellation buttons became mandatory in 2023. The UK’s 2024 Digital Markets, Competition and Consumers Act echoes this trend and serves as a prelude to anticipated further regulations.
As regulations evolve in 2025, subscription businesses that proactively embrace customer-friendly cancellation policies will have a competitive advantage in the market.
Customers value control with ‘click-to-cancel’
Research by Chargebee reveals that ‘click-to-cancel’ options are by far the preferred offboarding method for customers. Standing in stark contrast with complicated cancellation processes that can alienate customers and jeopardise return business. Customers are pushing back against the unclear terms of ‘negative option’ subscription models. These automatically renew memberships unless explicitly cancelled. Transitioning to transparent subscription models pre-empts regulatory penalties and serves to differentiate businesses as customer-centric.
Businesses need to adapt their strategies around cancellations by embedding the process into the product experience and prioritising it as an opportunity for dialogue with the customer. Feeling forced to maintain an unwanted subscription is not the ticket to brand loyalty or advocacy. When the cancel intent is clear it’s best to let customers leave.
Leaving is learning
Providing an easy exit doesn’t have to conclude the customer journey, but can instead provide an opportunity for future engagement. Subscription businesses should view every cancellation as a diagnostic tool for what went wrong. If a customer leaves, it’s usually because their perceived value of your product fell short of the cost. Maybe they’re right, and the product could be improved. In which case, you have valuable data to enhance your offering. Alternatively, perhaps they just weren’t presented with a clear enough value proposition, which if identified, gives you the chance to enlighten them.
If the customer sees value but has budget constraints, offering discretionary reductions empowers them to choose to continue their membership. Therefore, identifying why customers want to leave can provide the intelligence needed to drive long-term loyalty. Even turning once-hesitant customers into brand advocates.
For instance, a subscription fitness app might discover that seasonal habits influence customer retention, enabling it to adjust the timing of specific content to better align with trends. Proactive communication is key, as it helps reveal the ‘why’ behind churn. Offering exit surveys, personalised retention offers, or pausing memberships instead of outright cancellations maintains a dialogue with the customer, and may even persuade them to stay.
Making friends with machine learning
AI-powered analytics are transforming how businesses understand and prevent subscription cancellations. By analysing customer behaviour patterns, companies can now identify early warning signs of churn and address issues before customers reach for the cancel button. This proactive approach doesn’t just comply with click-to-cancel regulations – it helps businesses build stronger customer relationships through data-driven insights and timely interventions.
Leveraging the predictive power of AI-enabled platforms will be key to supporting customer retention. Businesses can identify patterns of usage across individuals and demographics, spotting trends and addressing them accordingly. This can be targeted interventions, such as discounts, or reiterating the value proposition in tutorials and new product features.
Evolve your payment system to reduce churn
When it comes to fighting cancellations with a good customer experience, billing and payment processes need special attention. Many customers cite billing frustrations, such as unexpected charges and convoluted payment methods, as reasons for ending their memberships. Investing in advanced subscription management tools that prioritise flexibility, transparency, and personalisation is helpful to mitigate cancellation intent before it crystallises.
Actionable insights businesses should implement:
Adaptable pricing strategies: Customisable plans that cater to different customer needs and budgets help increase value perception.
Automated revenue recovery: Automatically recovering failed payments – such as those inadvertently caused by expired payment methods – prevents revenue loss and removes potential friction with customers.
Grace period and reminder: Allowing a brief buffer for overdue payments, paired with well-timed reminders, helps retain customers who may otherwise churn.
Data-driven insights: Levelling up your analytics capabilities helps identify patterns of disengagement, enabling you to act before cancellation occurs.
Foundations for the Future
The adoption of ‘click-to-cancel’ rules reflect a broader trend toward customer empowerment. Businesses that resist this shift not only risk their brand image but also forgo the opportunity to deliver better customer experiences. Ultimately, it is only a matter of time before regulations tighten and going willingly is always preferable to being pushed. Staying a step ahead means organisations can plan and implement changes smoothly – and position themselves positively. Subscription businesses that heed the warnings now and build positive cancellation experiences will reap the rewards of strengthened customer retention, in 2025 and beyond.
MoneyLIVE Summit 2025: A stellar combination of thought leadership, cutting-edge technology showcases and unparalleled networking opportunities
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The MoneyLIVE Summit 2025, held on March 10th-11th at London’s Business Design Centre, once again positioned itself as one of the most significant events in the banking and financial services industry. With over 1,500 attendees, 200+ speakers, and an agenda packed with insights on digital transformation, AI-driven innovation, and payment advancements, the event delivered a comprehensive overview of the future of financial services.
As one of Europe’s most influential FinTech and banking conferences, MoneyLIVE Summit attracted executives from leading institutions, including HSBC, Revolut, Standard Chartered, Barclays, Google, and Mastercard, providing attendees with unparalleled networking opportunities and deep dives into the latest industry developments.
The 2025 edition of MoneyLIVE Summit focused on several key themes within the financial sector, including:
AI and Automation in Banking
The Future of Payments and Open Banking
Sustainability and ESG in Finance
The Evolution of Embedded Finance
Cybersecurity and Fraud Prevention
Modernising Legacy Systems
AI and Automation: The Next Frontier
One of the most anticipated discussions centredd on Artificial Intelligence (AI) and Automation in Financial Services. Keynote speakers such as Taylan Turan (CEO, Retail Banking, HSBC) and Francesca Carlesi (CEO, Revolut UK) highlighted how AI is revolutionising customer interactions, risk assessments, and fraud detection.
A standout panel featured representatives from Google Cloud, Lloyds Banking Group, and Monzo, discussing the ethical implications of AI-driven banking and how institutions can balance efficiency with regulatory compliance. The consensus? AI is no longer a futuristic concept but an operational necessity.
On the opening day we spoke with Tim Mason, Managing Director for Artificial Intelligence at Deutsche Bank, and Publicis Sapient VP Jan-Willem Weggemans, about the rise of Agentic AI. Look out for this feature in the May edition of FinTech Strategy Magazine. Publicis Sapient also hosted an AI Champions Meet Up.
The Future of Payments and Open Banking
With open banking continuing to disrupt traditional financial models, this year’s summit included multiple sessions on its evolution. Speakers from Visa, Mastercard and Stripe explored how real-time payments and digital wallets are reshaping the customer experience.
One of the most engaging sessions was on CBDCs (Central Bank Digital Currencies) and the impact of digital currencies on global trade. Representatives from the Bank of England and the European Central Bank provided valuable insights into regulatory developments and the long-term feasibility of CBDCs in mainstream banking.
Sustainability and ESG in Finance
The financial industry’s role in Environmental, Social, and Governance (ESG) initiatives was another critical theme. With growing investor interest in sustainable finance, executives from Barclays, NatWest, and BlackRock discussed how banks can integrate ESG principles into lending and investment strategies.
A major highlight was a fireside chat with Ana Botín, Executive Chairman of Santander Group, who emphasised the need for banks to take the lead in financing climate action while maintaining profitability. She stressed that FinTech innovation must align with sustainability goals to drive real change.
Notable Speakers & Thought Leadership
MoneyLIVE Summit 2025 featured an impressive lineup of speakers, including CEOs, policymakers, and FinTech pioneers. Notable names included:
Francesca Carlesi (CEO, Revolut UK) – Discussed the role of challenger banks in redefining customer expectations.
Taylan Turan (CEO, Retail Banking, HSBC) – Spoke about how traditional banks must adapt to stay competitive in an increasingly digital world.
Saif Malik (CEO, UK, Standard Chartered Bank) – Shared insights on the rise of embedded finance and its impact on global banking.
Anne Boden (Founder, Starling Bank) – Highlighted the impact of neobanks on legacy banking institutions.
Google Cloud & AWS Representatives – Covered AI’s growing role in fraud prevention and customer engagement.
Lee McNabb (Head of Payment Strategy, NatWest) – Shared views on modernising core payment architecture for the long term.
The diversity of perspectives provided attendees with a well-rounded understanding of the industry’s challenges and opportunities in the coming years.
MoneyLIVE Networking & Attendee Experience
Networking has always been a key highlight of MoneyLIVE Summit, and the 2025 edition did not disappoint. The event provided ample opportunities for professionals to connect, with dedicated networking zones, private meeting areas, and an exclusive VIP lounge for C-level executives.
The FinTech Startup Village was a must-visit area, showcasing some of the most innovative fintech startups in Europe. Several emerging companies, specializing in AI-driven financial advisory, blockchain-based payments, and RegTech solutions, presented their groundbreaking products.
A standout initiative was the Women in Finance Roundtable, which focused on fostering greater gender diversity in leadership roles within the financial industry. Featuring influential female leaders from Citi, JPMorgan, and Monzo, the discussion encouraged actionable steps towards inclusivity and representation. Publicis Sapient also hosted a networking session on Celebrating Women in Finance.
Exhibition & Innovation Showcase
The exhibition hall was bustling with activity, featuring booths from major players like IBM, Microsoft, Accenture, and Salesforce, as well as FinTech disruptors showcasing cutting-edge solutions. Attendees had the opportunity to experience hands-on product demos, including AI-powered chatbots, biometric authentication for secure banking, and blockchain-based smart contract platforms.
One of the most talked-about innovations was Quantum Computing in Financial Services, presented by IBM. Experts explored how quantum computing could enhance complex financial modelling, risk analysis, and fraud detection, potentially transforming the industry in the next decade.
Key Takeaways & Industry Impact
MoneyLIVE Summit reaffirmed its reputation as a forward-thinking, insightful event that brings together the brightest minds in finance and technology. Some of the key takeaways included:
AI is mainstream – Banks and fintech firms must embrace AI-driven solutions to enhance customer experience and operational efficiency.
Payments are evolving rapidly – With open banking, digital wallets, and real-time payments on the rise, banks need to innovate or risk being left behind.
Cybersecurity remains a top priority – With increased digital transactions, fraud prevention and regulatory compliance are more critical than ever.
Sustainability cannot be ignored – ESG-focused financial strategies are no longer optional but a necessity for long-term growth and investor confidence.
Embedded Finance is the future – Traditional banks and fintechs must collaborate to integrate financial services seamlessly into everyday life.
MoneyLIVE: The Verdict
MoneyLIVE Summit 2025 lived up to expectations, delivering a stellar combination of thought leadership, cutting-edge technology showcases and unparalleled networking opportunities. For professionals in banking, payments, fintech, or regulatory compliance, this event provided invaluable insights into the industry’s trajectory.
The only potential downside? With so many high-quality sessions running simultaneously, attendees had to make tough choices about which discussions to prioritise. However, the availability of on-demand session recordings meant that all the key insights attendees need were available.
With an impressive lineup of speakers, a strong focus on industry trends, and excellent networking opportunities, MoneyLIVE Summit remains a must-attend event for financial professionals looking to stay ahead in an ever-evolving landscape.
Join the world’s largest InsurTech community hosting 13,000 Executives, Entrepreneurs and Investors each year…
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Insurtech Insights is the world’s largest insurance technology community. It offers unprecedented connection to the most comprehensive and global gathering of InsurTech entrepreneurs, investors, and insurance industry incumbents.
Over the course of two days at its conferences, the industry gathers to showcase the forefront of innovations and form the partnerships of tomorrow. The unparalleled networking experience, with thousands of meetings, is a staple at any Insurtech Insights event.
“The biggest feat was the sell out crow of 4,000. Seeing so many from across Europe and the US was just brilliant!”
Nigel Walsh, Managing Director – Insurance, Google
Gain insights from over 400 expert speakers include representatives from Zurich, Allianz, Lemonade, Zego and many more…
“Such a great event with such a great level of attendance”
Steven Zuanella, Group Chief Digital & Innovation Officer, Generali
Insights
Improve your knowledge on challenging and strategic issues relevant to any organisation. Stay on top of future trends and seize new opportunities. Expand your toolset and effectively solve the challenges of today and tomorrow.
Inspiration
Challenge your way of thinking with new perspectives. Expand your professional horizon by meeting with and listening to leading insurance experts. Equip yourself with ideas and knowledge that adds value to you, your team, and your organisation.
InsurTech Networking
Expand your network by meeting with 6,000+ executives, entrepreneurs and investors from all over the world. Create new opportunities leading to a stronger and more global network. Meet with and attract the talent of tomorrow.
Fouzi Husaini, Chief Technology & AI Officer at Marqeta, answers our questions about Agentic AI and its applications for businesses
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Agentic AI is emerging as the leading AI trend of 2025. Industry figures are hailing Agentic AI as the broadly transformative next step in GenAI development. The year so far has seen multiple businesses release new tools for a wide array of applications.
The technology combines the next generation of AI tech like large language models (LLMs) with more traditional capabilities like machine learning, automation, and enterprise orchestration. The end result could lead to a more autonomous version of AI: Agents. These agents can set their own goals, analyse data sets, and act with less human oversight than previous tools.
We spoke to Fouzi Husaini, Chief Technology & AI Officer at Marqeta about what sets Agentic AI apart whether the technology really is a leap forward in terms of solving AI’s shortcomings, and how Agentic AI could solve business problems.
1. What makes AI “agentic”? How is the technology different from something like Chat-GPT?
“Agentic refers to the type of Artificial Intelligence that can act as agents and on its own. Agentic AI leverages enhanced reasoning capabilities to solve problems without prompts or constant human supervision. It can carry out complex, multi-step tasks autonomously.
“GenAI and by extension Large Language Models, the most famous example being ChatGPT, require human input to solve tasks. For instance, ChatGPT needs user prompts before it can generate content. Then, sers need to input subsequent commands to edit and refine this. Agentic AI has the capability to react and learn without human intervention as it processes data and solves problems. This enables it to adapt and learn much faster than GenAI.”
2. Chat-GPT and other LLMs frequently produce results filled with factual errors, misrepresentations, and “hallucinations”, making them pretty unsuited to working without human supervision – let alone orchestrating important financial deals. What makes Agentic AI any better or more trustworthy?
“All types of AI have the possibility to ‘hallucinate’ and produce factually incorrect information. That being said, Agentic AI is usually less likely to suffer from significant hallucinations in comparison to GenAI.
“Agentic AI’s focus is specifically engineered to operate within clearly defined parameters and follow explicit workflows, making it particularly well-suited for having guardrails in place to keep it on task and from making errors. Its learning capabilities also allow it to recognise and adapt to its mistakes, ensuring it is unlikely to hallucinate multiple times.”
“On the other hand, GenAI occasionally generates factually incorrect content due to the quality of data provided, and sometimes because of mistakes in pattern recognition.”
“In fintech, Agentic AI technology can make it possible to analyse consumer spending data and learn from it, allowing for highly tailored financial offers and services that are more accurate and help to create a personalised finance experience for consumers.”
3. How could agentic AI deployments affect the relationship between financial services companies and their customers? What about their employees?
“The integration of Agentic AI into financial services benefits multiple parties. First,
integrating Agentic AI into their offerings allows financial service companies to provide their customers with bespoke tools and features. For instance, AI can be used to develop ‘predictive cards’. These cards can anticipate a consumer’s spending requirements based on their past behaviour. This means AI can adjust credit limits and offer tailored rewards automatically, creating a personalised experience for each individual.
“The status quo’s days are numbered as consumers crave tailor-made financial experiences. Agentic AI can allow fintechs to provide personalised financial services that help consumers and businesses make their money work better for them. With Agentic AI technology, fintechs can analyse consumer spending data and learn from it. This allows for more tailored financial offers and services.
“As for employees, Agentic AI gives them the ability to focus on more creative and interesting tasks. Agentic AI can handle more routine roles such as data entry and monitoring for fraud, automating repetitive tasks and autonomous decision making based on data. This helps to reduce human error and enables employees to focus more time and energy on the creative and strategic aspects of their roles while allowing AI to focus on more administrative tasks.”
4. How would agentic AI make financial services safer?
“Agentic AI has the capability to make financial services more secure for financial institutions and consumers alike, by bringing consistency and tireless vigilance to critical financial processes. With its ability to analyse vast strings of information, it can rapidly identify anomalies in spending data that indicate potential instances of fraud and can use its enhanced reasoning and ability to act without human prompts to quickly react to suspicious activity.
“While a human operator will be susceptible to decision fatigue, an AI agent could always be vigilant and maintain the same high level of precision and alertness 24/7. This is vital for fields like fraud detection, where a single missed signal could lead to significant consequences.
“Furthermore, its capability to learn without human interaction means that it can improve its ability to detect fraud over time. This gives it the ability to learn how to identify new types of fraud, helping it to adapt as schemes become more sophisticated over time.”
5. What kind of trajectory do you see the technology having over the next year to eighteen months?
“In fintech, Agentic AI integration will likely begin in the operations space. These areas manage complex, but well-defined, processes and are perfect for intelligent automation. For instance, customer call centres where human agents usually follow set standard operating procedures (SOPs) that can be fed into an AI system, which makes automation easier and faster than before.
“In the more distant future, I believe we will see Agentic AI integrated into automated workflows that span entire value chains, including tasks such as risk assessment, customer onboarding and account management.”
Philipp Buschmann, co-founder and CEO of AAZZUR, looks at the changing face of Embedded Finance and the rise of the API economy
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The business world is changing. If you are paying attention, you will notice one of the most exciting transformations happening right now is Embedded Finance. We hear a lot about APIs (Application Programming Interfaces) and how they power our digital lives. However, what’s really grabbing attention is the rise of the API economy. Specifically, people are excited about how embedded finance is reshaping how businesses interact with their customers.
So, what’s all the fuss about, and why should you care? Let’s dive in.
What is Embedded Finance Anyway?
At its core, Embedded Finance means integrating financial services into non-financial platforms. It allows companies to offer banking-like services – think payments, lending, and insurance – directly within their apps or websites, without needing to be a bank themselves.
It’s like how Uber lets you pay for your ride without ever leaving the app. Uber isn’t a bank, but through embedded finance, it can offer seamless payment options, providing an effortless user experience. The user doesn’t need to think about the financial side of things; it just happens in the background. And that’s the magic of embedded finance – it’s smooth, simple, and frictionless.
APIs: The Backbone of Seamless Integration
APIs (Application Programming Interfaces) are the unsung heroes enabling the smooth interaction between different software systems. They allow platforms to communicate and share data effortlessly, acting as bridges between various services. For instance, when companies like Airbnb incorporate payment processing, they rely on APIs to connect with third-party providers like Stripe or PayPal. Without these connections, seamless financial interactions would not be impossible.
In the past, businesses that wanted to offer financial services had to build out much of the infrastructure themselves. However, with the rise of the API economy, this complexity has been drastically reduced. Companies can now integrate ready-made financial services quickly and focus on their core offerings.
However, while APIs handle much of the heavy lifting, they aren’t the whole solution. They still need to be connected to the devices or systems using them. This involves stitching them together through a middle layer that coordinates the various API functions, along with coding a front-end interface that users interact with.
In essence, APIs provide the building blocks, but there’s still a need for a tailored architecture to ensure everything operates smoothly – from the back-end infrastructure to the user-friendly front end. This layered approach ensures businesses can offer a seamless experience without getting bogged down by technical complexities.
Why the API Economy is Booming
The API economy is booming because it allows businesses to be more agile, innovative, and customer-centric. APIs give companies the flexibility to offer services they wouldn’t have been able to in the past. A clothing retailer can offer point-of-sale (POS) financing without becoming a bank, or a fitness app can offer health insurance with the click of a button.
Think about Klarna, a company that’s become a household name by offering “buy now, pay later” services. Klarna partners with thousands of retailers, allowing them to provide flexible payment options directly within their checkout process. The retailer doesn’t have to worry about the complexities of lending—it’s all handled by Klarna’s Embedded Finance platform through APIs.
This creates a win-win situation: customers get more flexible payment options, and retailers can drive conversions without any of the financial headaches.
How Embedded Finance is Connecting Customers to the World
Embedded Finance is all about breaking down barriers between industries and creating better, more holistic experiences for customers. And it’s not just about payments—it extends to lending, insurance, and even investments.
Take Revolut, the digital bank that started as a foreign exchange app but now offers everything from insurance to cryptocurrency trading. By using APIs to embed these financial services into their platform, Revolut has transformed into an all-in-one financial hub. Customers don’t need to visit different apps or websites for banking, insurance, or investments – they can do it all within Revolut.
The world of e-commerce has certainly embraced the world of embedded finance, Shopify, the e-commerce platform, has built it directly into its ecosystem. Through its Shopify Capital programme, the company offers its merchants quick access to business loans. This seamless integration is made possible by APIs, allowing Shopify to assess a merchant’s financial data and offer lending without the need for the merchant to seek out external financing. It’s fast, convenient, and keeps businesses within the Shopify ecosystem, further strengthening customer loyalty.
A New Level of Personalisation
This is more than just making payments easier – it’s about giving customers a more personalised, seamless experience. By tapping into financial data, businesses can offer products and services that really hit the mark for each individual.
Take travel apps like Skyscanner, for example. They’ve made things super convenient by embedding travel insurance right into the booking process, so, when you’re booking a flight, you can easily add travel insurance without even leaving the app. It’s all about creating a one-stop shop that gives you exactly what you need, right when you need it.
The Future
The API economy, particularly in the realm of Embedded Finance, is just getting started. Over the next few years, we can expect to see more industries leveraging this technology to enhance their offerings and create richer customer experiences. Everything from health tech to real estate is ripe for disruption.
However, it’s not just about jumping on the bandwagon. Companies need to be strategic about how they implement embedded finance. It’s not a one-size-fits-all solution, and it’s crucial to understand how these services align with your business goals and customer needs.
The rise of the API economy and embedded finance is opening up new doors for businesses and customers alike. By embedding financial services into non-financial platforms, companies are not only streamlining operations but also creating more value for their customers.
Embedded Finance is already making waves across industries, from retail to tech, and the businesses that are brave enough to embrace it are positioning themselves at the cutting edge of this transformation. For customers, it’s opening the door to a world that’s more connected, convenient, and tailored to their needs. It’s not about whether embedded finance will change the way we do business – it’s about how quickly it’s happening, and which companies are ready to step up and lead the charge.
So, whether you’re running an e-commerce business, developing a tech platform, or simply thinking about how to better serve your customers, it’s time to consider how embedded finance can connect your customers to the world in ways you never thought possible.
The UK-Australia Insurtech Pathway has been introduced as a joint effort to support insurance technology firms seeking expansion opportunities in…
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The UK-Australia Insurtech Pathway has been introduced as a joint effort to support insurance technology firms seeking expansion opportunities in both markets.
The programme was launched in Australia on 18 February 2025, while a launch event is scheduled in the UK on 20 March 2025.
It has been developed through a partnership between the UK’s Department for Business and Trade (DBT), Insurtech UK, and Insurtech Australia. The initiative is designed to help Insurtech companies navigate regulatory frameworks, establish business operations and connect with investors and industry stakeholders.
InsurTech Pathway
The pathway will offer structured support to selected firms looking to enter either market, addressing key challenges related to compliance, business development, and market integration.
The UK and Australia both have well-established insurance sectors that encourage innovation through regulatory structures and technology adoption.
The Insurtech Pathway aims to lower entry barriers for firms by providing targeted guidance and fostering industry collaboration.
The initiative builds on the UK-Australia Free Trade Agreement (FTA), which took effect on May 31, 2023. The agreement is intended to reduce trade restrictions and facilitate easier market entry for businesses, including through streamlined visa pathways, expanded access to government procurement, and lower investment barriers.
Facilitating cross-border market access
Louise Cantillon, Deputy Trade Commissioner for Australia and New Zealand, said the initiative reflects both regions’ commitment to strengthening trade ties in financial services and technology:
“By working together, we can unlock new opportunities for insurtech companies in both markets, driving innovation and supporting job creation.”
Insurtech UK CEO Melissa Collett said the initiative aligns with UK firms’ interest in the Australian market:
“Insurtechs consistently feedback to us on their appetite for the Australian market due to its strong insurance industry, wide-spread insurance uptake and anglophone ties.”
Simone Dossetor, CEO of Insurtech Australia, further highlighted the pathway’s benefits:
“The UK is the top-rated market for global expansion for our insurtech members and with Australia being the fourth largest market for Lloyd’s there are strong synergies between the two regions.”
The program will provide tailored support, including regulatory and compliance guidance, networking with insurers and investors, trade delegations, and engagement with key regulatory authorities to streamline market entry.
EY Insurance Leaders: Isabelle Santenac (Global), Jeff Gill (Americas), Anita Sun-Young Bong (Asia-Pacific) & Philip Vermeulen (EMEIA)
Published
7 March 2025
Estimated Read time
6Mins
EY Insurance Leaders Isabelle Santenac (Global), Jeff Gill (Americas), Anita Sun-Young Bong (Asia-Pacific) & Philip Vermeulen (EMEIA) present EY’s Global Insurance Outlook 2025 report. Learn how insurers can embrace InsurTech to accelerate value creation from gaps to gains
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Even as shifting global dynamics challenge insurers, EY’s 2025 Global Insurance Outlook Report shows there have never been more viable paths to innovation-led growth across the industry. Indeed, the huge gaps in protections against cyber and climate threats – with 99% of losses from cyberattacks and 60% from natural disasters uninsured – plus the massive shortfall in retirement savings present compelling value creation opportunities. Strategically orienting the enterprise around richer data and fully modernised technology is one critical step.
Uninsured Losses
99% of losses from cyber-attacks are uninsured
60% of losses from natural catastrophes are uninsured
But whether insurers prioritise new product development, M&A or geographic expansion in their growth strategies, a few key actions can unlock growth through innovation.
1. Design purposeful products
The biggest protection gaps – retirement savings and climate- are poised to get even bigger. The global retirement savings gap is set to grow from US$106 trillion in 2022 to US$483 trillion in 2025. Thanks to longer lifespans and aging populations worldwide, there is greater need for products that deliver income for older citizens. That’s how insurers can promote financial security across society.
The “silver tsunami” – the huge demographic wave of Baby Boomers reaching retirement age – will cause a spike in demand for financial estate planning services as well as life and health insurance augmented with wellness programs. In the US alone, those aged 65 and over will grow from 58 million in 2023 to 82 million in 2050. Leading insurers will need to position themselves for the coming transfer of assets by demonstrating clear value propositions.
Global Retirement Savings Gaps
$106t in 2022
$403t projected gap in 2050
Purpose can also provide the motivation to deliver climate solutions with more robust coverages and tailored prevention services for the huge populations – over 40% worldwide, according to Geneva Association – that live in high-risk areas. Strengthening climate protections necessitates rethinking traditional approaches to risk management, pricing and claims modelling. Purpose can also fuel positive collaborations and partnerships with governments and other stakeholders, an important step given the increasing likelihood of new government mandates.
US Citizens Aged 65+
58m in 2023
82m in 2025 (projected)
2. Personalise offerings to expand share of wallet
Usage-based products, modular add-on features and tailored pricing demonstrate to consumers that you are committed to serving their unique needs – a proven way to promote loyalty and engagement. Artificial intelligence (AI) tools can help in this area with tailored messaging, more accurate pricing and faster underwriting and binding processes.
On-demand coverage and real-time risk prevention are other ways that personalisation strategies can add value. AI and advanced analytics can also target the highest-potential customers for product bundles and other offerings that maximise customer value.
Technology Boost
10-25% increase in operating profits for insurers with successful data and analytics strategies
35% increase in employees’ underwriting capacity from generative AI (GenAI)-enabled automation
3. Seek innovation at scale
With a lean and highly automated operating environment, insurers can look to scale low-margin products to new segments via partners and ecosystems and other channels. The rapid expansion of embedded offerings demonstrates what’s possible.
Parametric insurance – policies that pay out when specific events occur – expands the type of attractive products insurers can deliver to new customers and is expected to grow to US$29.3 billion by 2031. Parametric solutions have gained traction in the agricultural industry and as protection against natural disasters, but can also be applied to business interruptions, supply chain disruptions and cyber-attacks.
Parametric Insurance Market Size
$11.7b in 2021
$29.3b in 2023
4. Use regulation as a prompt to innovate
The combination of more and more stringent rules in Europe and softening oversight in the US may create an unbalanced competitive playing field, with 61% of insurers cite evolving regulatory requirements as the top operational challenge for the year ahead. But firms that go beyond a minimalist, check-the-box approach may generate business value from their compliance programs.
Consider how the EU Financial Data Access (FiDA) legislation, slated to be enacted in 2025, paves the way for consent-based data sharing across pension, savings and nonlife insurance companies and products. That’s an invitation for firms seeking to expand their offerings. Similarly, the opportunity to participate in government pension schemes requires insurers to enhance their ability to share data securely and seamlessly. The Danish Compromise is reshaping the competitive landscape by creating new opportunities in bancassurance channels in Europe. Lastly, more detailed disclosure and reporting standards should prompt more automation and integration of data flows.
Regulation Prep
61% of insurers cite evolving regulatory requirements as the top operational challenge for the year ahead
5. Embrace a unified data strategy for the entire enterprise
Success in the digital age demands that every business have a unified data strategy – one that is comprehensive and led by the C-suite. Because better data underpins every aspect of the business and is crucial to innovation, the data and technology agenda must be driven by the CEO, rather than the IT team. Further, strategic planning and resource allocations – basically any and all senior management decisions – should be redesigned to reflect the richer data sets executives now have at their disposal.
A data strategy must reflect the need to harness the power of AI and other advanced technologies and define the necessary components of a flexible, future-ready data infrastructure. It will also need to establish appropriately robust governance models and controls environments for fully automated processes to ensure quality and build trust.
6. Commit to serving the underserved
What industry wouldn’t like to find tens of millions of new customers? For insurers, devising new solutions (e.g., micro coverages, starter policies) for just 1% of the estimated 4 billion underserved people worldwide could result in 40 million new customers, according to research from Forrester. Here again, it’s all about purpose – delivering protections to the people who need them most.
New products – more affordable, easier to buy and modify – hold the key. Parametric policies, microinsurance for smaller farmers and precise coverages for small businesses and gig workers are just a few of the ways to create value for underserved segments. Carriers in some emerging markets offer health and life insurance for as little as $0.20 per month. It will take bold strategic thinking and creative action to deliver what these customers want (and can afford), but the underserved (who contribute to the lion’s share of the worldwide protection gap) offer the biggest potential for insurers to sustain their solid bottom-line performance.
Serving the Underserved
40m projected new customers from engaging just 1% of the 4 billion uninsured, low-income people worldwide
Summary
Volatility and uncertainty – both within individual markets and across regions – define the global insurance industry to an extent not seen in decades. The run of economic prosperity and integration that benefitted the financial services sector for several decades seems gone forever. But insurers are uniquely qualified to create value during periods of instability. Those that target investments in AI-enabled tech and stronger data management capabilities to personalise communications and products will be able to create more value, create it faster and deliver it to more customers and communities than ever before.
Our maiden cover story follows the irresistible global rise of Revolut and the customer-focused growth agenda for the leading global…
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Our maiden cover story follows the irresistible global rise of Revolut and the customer-focused growth agenda for the leading global financial technology company.
Our cover story follows the irresistible global rise of Revolut. We hear from its Australia & NZ CEO Matt Baxby about the customer-focused growth agenda for the leading global financial technology company. “Traditional banks are great at putting their head in the clouds around strategy and what the vision for the future looks like. Where they really fail is translating that to what needs to happen in the next quarter to begin to realise that vision. And that’s where Revolut’s strengths lie, with a real orientation to action.”
ClearBank: A new era in Financial Services
We speak with ClearBank’s UK CEO, Emma Hagan, about how the digital bank is disrupting the market to deliver regulated banking infrastructure – at speed. “We are not encumbered by legacy platforms, systems or technology and don’t have to battle outdated processes. Everything was built new based on what our clients need from an infrastructure-type bank in the market.”
NatWest: Banking open for all
Head of Group Payment Strategy, Lee McNabb, explains how a customer-centric vision, allied with a culture of innovation, is positioning NatWest at the heart of UK plc’s Open Banking revolution: “The market we live in is largely digital, but we have to be where customers are and meet their needs where they want them to be met. That could be in physical locations, through our app, or that could be leveraging the data we have to give them better bespoke insights. The important thing is balance… At NatWest, we’ll keep pushing the envelope on payments for a clear view of the bigger picture with banking that’s open for everyone.”
EBRD: People, Purpose & Technology
We speak with the European Bank for Reconstruction & Development’s Managing Director for Information Technology, Subhash Chandra Jose. With the help of Hexaware’s innovation, his team are delivering a transformation programme to support the bank’s global investment efforts: “The sweet spot for EBRD is a triangular union of purpose, people, and technology all coming together. This gives me energy to do something innovative every day to positively impact my team and our work for the organisation across our countries of operation. Ultimately, if we don’t get the technology basics right, we can’t best utilise the funds we have to make a real difference across the bank’s global efforts.”
Innovation Group: Enabling the future of Insurance
“What we’ve achieved at Innovation Group is truly disruptive,” reflects Group Chief Technology Officer James Coggin. “Our acquisition by one of the world’s largest insurance companies validated the strategy we pursued with our Gateway platform. We put the platform at the heart of an ecosystem of insurers, service providers and their customers. It has proved to be a powerful approach.”
OSB Group: Building the bank of the future
Group Chief Transformation Officer Matt Baillie talks to Interface about maintaining the soul of a FinTech with the gravitas of a FTSE business during a full stack tech transformation at OSB Group. “We’ve found the balance between making sure we maintain regulatory compliance and keeping up with customer expectations while making the required propositional changes to keep pace with markets on our existing savings and lending platforms.”
Begbies Traynor Group: A strategic approach to digital transformation
We learn how Begbies Traynor Group is taking a strategic approach to digital transformation… Group CIO Andy Harper talks to Interface about building cultural consensus, innovation, addressing tech debt and scaling with AI: “My approach to IT leadership involves creating enough headroom to handle transformation while keeping the lights on.”
MoneyLIVE Summit is coming to London’s Business Design Centre March 10-11. Book your tickets now!
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Hosted in the FinTech capital of the world, MoneyLIVE Summit is the global payments and banking event bringing together industry leaders at the top of their game. This is where ground-breaking partnerships are forged, where innovation is accelerated and where the brightest ideas are born.
MoneyLIVE Summit sets the agenda for the future of banking and payments
For over 30 years, MoneyLIVE has brought together the movers and shakers of the banking and payments industry. Through impactful conferences, webinars, reports, roundtables and digital content.
Join 1500+ attendees and hear from 200 expert speakers across five stages. Revolut’s UK CEO Dr Francesca Carlesi, Lloyds Banking Group COO Ron van Kemenade, Standard Chartered UK CEO Saif Malik, ABN-AMRO’s CDO Jorissa Neutelings and Groupe Crédit Agricole Group COO Philippe Coue are among the baking leaders sharing insights across Payments Infrastructure, Digital ID, AI & Operations, CX, Digital currencies and Blockchain, Open Banking and much more.
“An unmissable event for those serious about banking and payments transformation.” Global Head of Strategy & Innovation, ING
Startup City
Welcome to Startup City, the innovation epicentre of MoneyLIVE Summit 2025. This designated hub is designed to accelerate start-up and scale-up growth, featuring a dynamic stage, exclusive networking zone, and high-impact deal booths.
If you’re on the hunt for funding, seeking scaleup opportunities, or looking to forge distribution partnerships, you’ve found your ultimate arena.
Brendan Thorpe, Customer Success Manager at Auriga, on how banks can gain valuable insights from ATM data
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Everyday customer interactions with ATMs or ASSTs to withdraw cash or check their account means these touchpoints emit hundreds of thousands of data points per day. This data holds the answers to how customers interact with those end points and how they are performing. However, currently this data is not being fully analysed or harnessed at all.
Data Analytics
This is surprising when you consider how better data analytics is widely understood to be crucial to enable banks to stay ahead of the competition. Indeed, one major study found that nearly half (48 percent) of banking executives globally agreed on this. However, many do little with it. The data which is harvested from the self-service banking network, including ATMs and ASSTs, is a critical way for banks to lower their operational costs. At the same time it can improve their offerings and increase their bottom line.
Real-time data collection and analysis is more than just critical for managing operational costs. It also plays a significant role in how banks realise their omnichannel ambitions to improve customer engagement and experience. For this to be successful, banks must leverage tools which provide actionable insights into performance across a number of channels including in-person services, ATMs, online and apps. The insights which are collected on these channels provide a complete and integrated picture of banking performance across all touchpoints.
Actionable Insights from Data
No matter how a customer interacts with the bank, every touchpoint provides large amounts of data which can be collected, sorted, and analysed for actionable insights. However, taking this information from raw data and transforming it into valuable insights is a challenge for many financial services organisations.
To do this, it involves strong data management and analytics processes and end-to-end mapping of all self-service banking channels, in-person and online. Real-time insights are also key to understanding how the network is performing and how customers are interacting with the endpoints. Importantly, this information must be easily accessed throughout the organisation. Doing this will enable the bank to identify if there are any inefficiencies or issues throughout the network which can be fixed swiftly, with minimal disruption to services.
Significantly, with real-time monitoring, banks can see any attacks on their services or endpoints from threat actors. The sensors are not only on the ATM. Those around the machines will be able to collect any interactions with the endpoints and in the surrounding area. For the most part, the sensors will pick up harmless interactions, but other times this may be an indicator that a threat actor was trying to take money out of the machine. As such, collecting, sorting, and analysing real-time data from the sensors can protect the bank and their customers and mitigate any harmful threats.
Furthermore, predictive analytics and continuous monitoring will enable banks to forecast the future performance of each touchpoint. Banks are able to apply specific parameters. Depending on their current business objectives they can better understand how each service channel is forecasted to perform in a specific situation.
How advanced analytics is transforming banking
As budgets tighten with rising costs, banks need to approach their ATM networks in a smarter way to optimise cash management and data forecasting. Real-time data tracking gives banks a greater understanding into customer behaviour. This is key to service performance improvements, including knowing in real time whether the ATM self-service interface is working or not. However, banks must get their data right, before they lean on the insights.
From real-time monitoring of customer interactions, financial services institutions can collect data based on the transaction flow, which can indicate if there is a better way for customers to complete their transaction. This will allow banks to see where network inefficiencies lie and then drive a culture of continuous improvement. The ATM is a vital touchpoint for a full omnichannel service, so banks leveraging data in the right way will ensure that the endpoint and the network are more user friendly.
Moreover, real-time tracking will also enable banks to predict when cash cartridges need to be replenished. As such, this will ensure there is enough cash in the machines for customers, and be able to better forecast how much cash the endpoint will need. This creates efficiencies around how banks deliver cash to the machines that need it. It reduces their Cash-In-Transit (CIT), security, interest and insurance costs.
Digital Transformation
To make sure that banks are making the most out of the data, they should leverage a dynamic, industry-specific banking business analytics platform. This should be available to all in the business and be able to seamlessly integrate into their current systems. The platform must collect and analyse the data in real-time from all key touchpoints in a bank’s network. Importantly, this data should be converted into usable insights for customer behaviour and performance metrics for the ATM. This will enable banks to adapt their offerings to changes in customer needs and market conditions. This will place banks on the front foot so they can focus investment in the up-and-coming areas.
The banking industry shows no signs of slowing down when it comes to digital transformation and development. The key here is to understand how all service channels, in-person and online, are performing to ensure customer demands are met. The way to do this is through leveraging real-time insights and data analytics. Financial services organisations must transform their approach to self-service banking strategies as data analytics is not only a driver of competitiveness, but also of long-term success.
Akbar Hussain, Co-founder and Chief Legal & Compliance Officer at TerraPay. on how money is travelling faster and further than ever
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In the last few years, we’ve seen capital become increasingly mobile, with ever greater sums of money travelling across national borders. This trend in international payments has largely been shaped by shifting consumer behaviours and needs, an unprecedented global health crisis, technological advancements and the rapid rise of eCommerce. However, just because more of us are doing it, that doesn’t mean international money transfers have become all that much easier or quicker.
International Payments
Sending a digital bank transfer from A to B is one thing. But when you’re sending cash across national borders the complexities are compounded. However, while cross-border money movement can be a challenge, there are opportunities on the other side of the coin. The big prize? A chance to reimagine how money flows.
In a frictionless world, international payments could, and should, be effortless. But cross-border payments are still bogged down by regulatory demands, technological gaps and transparency issues. Until fairly recently, the word ‘instant’ was not associated with cross-border money transfers.
If we get it right, and substantially ease the difficulties of sending money abroad, we can empower individuals and open up the global economy. Smoother cash flows mean markets can function more effectively, and geographic barriers to wealth and attainment can be broken down. First, it’s incumbent on us to dismantle the following barriers:
Financial Illiteracy
Traditionally, navigating international payments has felt like an exclusive club, accessible only to those fluent in its jargon. From formatting payments correctly to ensuring BIC and IBAN numbers are accurate, it’s easy to see why so many feel excluded.
But it doesn’t have to be that way. Streamlined systems can make it easier for people to send their money wherever they want. Moreover, you don’t need to be wealthy or well-heeled for your cash to be a frequent flier.
High Costs
Hitting “pay” on an international transfer can often feel like throwing it into a black hole and hoping for the best. With no tracking or transparency, the money disappears until it finally surfaces in the recipient’s account days later. Transaction fees are high, which can really add up if you’re transferring small payments at a time.
Compliance
As financial regulations tighten to combat fraud and crime, cross-border payments face more scrutiny than ever. Large transfers, in particular, often encounter unexplained delays as banks – yours, intermediary banks, or even the recipient’s – verify the legitimacy of the funds. Customers are rarely kept in the loop. Instead, they’re left waiting, powerless, for their money to clear. It’s an opaque, frustrating experience that feels anything but consumer friendly.
These challenges all pertain to traditional cross-border payments. But what if we thought about these transactions differently? Let’s reimagine cross-border payments in the same way we’ve revolutionised communication. If an SMS can reach anyone, anywhere in the world, instantly, affordably, and without interruptions, why can’t money work the same way?
Digital Wallets
In just over a decade, digital wallets have transformed the financial landscape, connecting millions of unbanked and underbanked individuals to the formal financial system. These tools have proven especially vital for small-value cross-border transfers, which are often critical for families, businesses, and communities. By 2026, global wallet users are projected to exceed 5.2 billion, driving transaction volumes past $12 trillion. These numbers highlight not only the scale of their impact but also the untapped potential for advancing cross-border payments.
The question isn’t whether digital wallets can play a role in cross-border transactions, because we know that they do. The question is how we can maximise their potential across geographies. What does a payment ecosystem look like when wallets are at the heart of it?
Two key factors are essential: building a more comprehensive ecosystem for digital wallets and ensuring greater interoperability between systems. These changes would simplify cross-border transactions for individuals and businesses alike. Creating a global financial environment where sending money is as intuitive as sending a text message.
A thriving digital wallet ecosystem – characterised by low fees, simple interfaces, transparency, and robust security – could redefine how people connect, collaborate, and seize opportunities across borders.
The Future for Payments
To achieve this, the financial industry must come together to dismantle systemic barriers. Interoperability, regulatory alignment, and infrastructure upgrades are essential to creating a unified global payment framework. Advocating for cross-border interoperability at the domestic level, for example, would pave the way for transactions that transcend silos and fit within a globally recognised standard. This would lower costs, reduce risks, and boost the efficiency of cross-border payments.
Digital wallet innovators have an opportunity to bridge the gap left by traditional banks. While established financial institutions bring legacy and scale, they’ve often been slow to innovate in ways that meet the needs of a fast-moving, increasingly interconnected world. For billions of people, the future of finance is already in the palm of their hand.
Luke Kyohere, Group Chief Product and Innovation Officer at Onafriq, on payments innovations to look out for this year
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The global payments landscape is undergoing a rapid transformation. New technologies coupled with the rising demand for seamless, secure, and efficient transactions has spurred on an exciting new era of innovation and growth. With 2025 fast approaching, here are important trends that will shape the future of payments:
1.The rise of real-time payments
Until recently, real-time payments have been used in Africa for cross-border mobile money payments, but less so for traditional payments. At OnAfriq, we are seeing companies like Mastercard investing in this area, as well as central banks in Africa putting focus on this.
2. Cashless payments will increase
In 2025, we will see the continued acceleration of cashless payments across Africa. B2B payments in particular will also increase. Digital payments began between individuals but are now becoming commonplace for larger corporate transactions.
3. Digital currency will hit mainstream
In the cryptocurrency space, we will see an increase in the use of stablecoins like United States Digital Currency (USDC) and Tether (USDT) which are linked to US dollars. These will come to replace traditional cryptocurrencies as their price point is more stable. This year, many countries will begin preparing for Central Bank Digital Currencies (CBDCs), government-backed digital currencies which use Blockchain. The increased uptake of digital currencies reflects the maturity of distributed ledger technology and improved API availability.
4. Increased government oversight
As adoption of digital currencies will increase, governments will also put more focus into monitoring these flows. In particular, this will centre on companies and banks rather than individuals. The goal of this will be to control and occasionally curb runaway foreign exchange (FX) rates.
5. Business leaders buy into AI technology
In 2025, we will see many business leaders buying into AI through respected providers relying on well-researched platforms and huge data sets. Most companies don’t have the budget to invest in their own research and development in AI. Therefore, many are now opting to ‘buy’ into the technology rather than ‘build’ it themselves. Moreover, many businesses are concerned about the risks associated with data ownership and accuracy so buying software is another way to avoid this risk.
6. Continued AI Adoption in Payments
In payments, the proliferation of AI will continue to improve user experience and increase security. To detect fraud, AI is used to track patterns and payment flows in real time. If unusual activity is detected, the technology can be used to flag or even block payments which may be fraudulent. When it comes to user experience, we will also see AI being used to improve the interface design of payment platforms. The technology will also increasingly be used for translation for international payments platforms.
7. Rise of Super Apps
To get more from their platforms, mobile network operators are building comprehensive service platforms. These integrate multiple payment experiences into a single app. This reflects the shift of many users moving from text-based services to mobile apps. Rather than offering a single service, super apps are packing many other services into a single app. For example, apps which may have previously been used primarily for lending, now have options for saving and paying bills.
8. Business strategy shift
Recent major technological changes will force business leaders to focus on much shorter prediction and reaction cycles. Because the rate of change has been unprecedented in the past year, this will force decision-makers to adapt quickly, be decisive and nimble. As the payments space evolves, businesses, banks, and governments must continually embrace innovation, collaboration, and prioritise customer needs. These efforts build a more inclusive, secure, and efficient payment system that supports local to global economic growth – enabling true financial inclusion across borders.
Aviva, one of the UK’s leading insurance, wealth and retirement businesses, has chosen AutoRek, a leader in automated reconciliations, as its…
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Aviva, one of the UK’s leading insurance, wealth and retirement businesses, has chosen AutoRek, a leader in automated reconciliations, as its reconciliation and CASS tool.
The collaboration will ensure greater efficiency and compliance through automation. Aviva will leverage AutoRek’s end-to-end platform to implement a fully audited, rules-driven reconciliation process, ensuring complete transparency for CASS auditors and internal stakeholders.
With AutoRek, Aviva will gain an improved automated solution for client money and regulatory reporting, reducing the manual effort and inherent risk associated with manual processing.
This new capability will enable Aviva to reduce operational inefficiencies, streamline compliance, and enhance overall financial control.
“Aviva is dedicated to investing in technology to further our growth strategy. Following an extensive tender process, we were highly impressed with the quality of the AutoRek tool. The implementation of the AutoRek solution will streamline our processes and allows us to confidently address future scalability and volume requirements.”
Chris Golland, Head of CASS & Middle Office, Aviva
“We’re thrilled to onboard Aviva as a client to the AutoRek platform, empowering them to achieve greater efficiency and accuracy in their operations. Together, we’re driving innovation and setting new benchmarks for financial excellence.”
Nick Botha, Payments Lead at AutoRek, on meeting customer expectations for faster, cheaper and more transparent cross-border payments
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As international trade and e-commerce continues to expand, cross-border payments have grown substantially. According to the latest report from EY, global cross-border payments are growing at around 9% annually. And they are expected to reach $290tn by 2030. As the digital economy continues to expand, the demand for more efficient, secure, and inclusive payment systems becomes crucial. The shift from traditional T+2 and T+1 settlement periods to real-time payments has already reshaped domestic transactions. Setting the stage for a similar revolution in cross-border payments.
Whilst there is plenty of opportunity for cross-border payments, sending and receiving payments can be a complex and challenging process. This is due to rising data volumes, fragmented systems, and different regulations across multiple territories. So, how can businesses best prepare for the evolving cross-border payments environment?
Breaking down the barriers for cross-border payments
It’s no secret that achieving real-time cross-border payments involves complexities beyond technology alone. Regulatory challenges are a significant hurdle. Multiple financial institutions across different countries have distinct rules around payments, fraud detection, and compliance. For example, the stringent regulations of the UK’s Financial Conduct Authority (FCA) contrasts with the relatively flexible approach of the US Federal Reserve. This diversity in regulations can lead to inefficiencies, increased costs, and compliance burdens. Harmonising these regulations will be crucial for creating a seamless global payment network.
In addition, cross-border payments often take several days to process through traditional banking systems. This can be due to time zones, inefficient processes and the involvement of multiple intermediaries, including correspondent banks, and local financial institutions. Each intermediary adds time and cost to the transaction, and the entire process can take between two to five days. For businesses, these delays can disrupt cash flow, complicate supply chain management, and create issues with paying vendors and employees promptly. Worryingly, the delay can prove hugely problematic for SME’s who often operate with tighter cash reserves and need more immediate access to funds.
Furthermore, businesses engaged in cross-border transactions must also navigate the complexities of fluctuating exchange rates. Currency exchange rates can change dramatically, influencing the cost and value of transactions. This could lead to financial losses if a payment is delayed or if a favourable exchange rate changes before the transaction is processed.
Unlocking potential by reducing complexity
To overcome cross-border challenges, G20 leaders endorsed a roadmap for enhancing payments globally in 2020. This initiative set out to address the four key challenges related to cost, speed, access, and transparency. Therefore, paving the way for a more efficient and inclusive financial ecosystem. For example, the G20 aims for 75% of cross-border payments to be credited with the beneficiary within an hour by 2027. The past couple of years have undoubtedly brought major milestones with respect to this roadmap. Most notably, SWIFT has been a central figure in traditional cross-border payments. It provides a standardised network for financial institutions to send and receive information about transactions.
The challenges faced by businesses with cross-border payments has unlocked new opportunities for financial institutions to develop innovative solutions. FinTechs are leveraging advanced technology, including blockchain, artificial intelligence (AI), and digital currencies, to make cross-border payments faster, cheaper, and more transparent. Blockchain and cryptocurrencies are often cited as potential game changers in cross-border payments due to their ability to eliminate the need for intermediaries, whilst enabling instant and transparent transactions. For example, Ripple, one of the leading blockchain-based payment networks, uses its RippleNet platform to facilitate payments between countries. This provides faster and more cost-effective payments.
Cross-border payments traditionally have been more complex than domestic transactions due to multiple intermediaries. Furthermore, it’s important to note ongoing international collaboration will be crucial to ensuring cross-border payments remain seamless, secure, and inclusive. This opportunity can be maximised through automatic reconciliation. By automating the processing of high volumes of date from cross-border payments, businesses can remove the distractions of mismatched information, fraud concerns and accounting hold-ups. It also manages inbound payments, outbound payments, and inter-currency transfers through a centralised framework. This enables businesses to gain complete visibility of the data.
Opportunities on the horizon for cross-border payments
The pace of change within the payments and wider fintech industry is showing no signs of slowing down. Customer expectations for faster, cheaper and more transparent payments are driving change across the sector. It’s certainly an exciting time for the industry, but financial institutions cannot afford to rest on their laurels. Further growth can be found on the horizon for those who are equipped with the right knowledge to be able to pursue cross-border payments effectively.
Ben Parker, CEO at eflow Global, on how consolidating information can help organisations achieve a comprehensive view of their regulatory compliance
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When it comes to compliance, financial institutions are constantly navigating a landscape that is not only highly complex, but also in a state of perpetual flux. Firms must ensure that they are meeting the current standards set by regulators. Furthermore, they must also stay ahead of the curve in a world where regulations are continuously evolving. It’s about keeping up with the rapid advancement of technology, particularly in areas like artificial intelligence. It reshapes both the methods of regulatory enforcement and the strategies employed by those who seek to circumvent the rules.
Accordingly, the importance of technology and data in compliance strategies is ever increasing. Traditional approaches, such as manual data entry and analysis, are increasingly inadequate in meeting the demands of modern regulations. Just look at the frequency and granularity of data reporting that is needed for the EMIR Refit regulations as a practical example.
However, as financial firms have recognised this shift and turned to technology as the solution, the transition has brought new problems of its own. Namely, the fragmentation of data across disparate, siloed systems. So, how do firms solve this issue?
The data fragmentation problem in compliance
The issue of data fragmentation has become a common occurrence in compliance. Firms are often deploying multiple technology solutions to manage their regulatory obligations. Across areas such as trade surveillance, eComms surveillance, best execution and transaction reporting. As a result, they often find themselves grappling with data silos caused by using multiple, disconnected systems.
While these tools are often very good at specific tasks, a lack of data integration between systems will harm a firm’s overarching compliance efforts. These platforms, if sourced from different vendors, may not be able to share data between one another. This ultimately undermines their effectiveness, negating the operational efficiency technology is supposed to add.
The use of multiple systems by firms can happen for a variety of reasons. For example, legacy technology that has been in place for a number of years, the need to comply with different regulations as the business has scaled and changes in regulatory strategy. Moreover, you also need to consider that reporting formats can differ between regions, as can protocols for monitoring market abuse. When you combine all of these variables, it means only one thing – identifying non-compliant activity is trickier for firms to achieve, as is demonstrating compliance to regulators.
This is a major problem as, perhaps more than ever before, different areas of compliance overlap. For example, being able to monitor suspicious messages shared through digital communications channels could help identify instances of market abuse. Or predict when it might take place. This relies on a firm being able to map its trade data over eComms surveillance data to create a complete picture of the activity. Without being able to do this, firms would have to spend huge amounts of time and resources manually cross-referencing data from separate systems. In turn this increases the risk of human error and the danger of breaching regulations.
Why a holistic system supports compliance
Rather than having to implement complex and costly integrations between in-house and third party apps, a holistic compliance platform can provide the seamless flow of data between various sources via straight-through processing. This creates a real-time overview of compliance processes and streamlines workflows, reducing human errors and enhancing efficiency.
With such technology in place, firms have a central digital hub from which to manage their holistic regulatory strategy. If chosen wisely, additional modules can be easily added and integrated to meet new regulatory requirements as they emerge. This allows firms to scale more effectively.
This ‘single source of truth’ also enables compliance professionals to have a broader understanding of trading activity taking place across their organisation. It also facilitates improved sharing of information between different departments, trading desks and regional offices. This ‘joined up’ approach is likely to become even more important. As the financial landscape becomes increasingly interconnected this will be incredibly challenging to achieve without a centralised digital platform.
New regulations such as EMIR Refit require significant extra reporting requirements. The sheer amount of data and the speed with which it needs to be processed means such automation and integration tools are crucial. Moreover, in such a digitally diverse landscape, a holistic system allows companies to assess the numerous data points needed to be compliant without any regulatory gaps.
A future non-negotiable
While many firms are currently grappling with multiple compliance systems and data silos, employing a centralised system will become a non-negotiable in the future of compliance. Not only are regulations constantly changing, but trading strategies are evolving even quicker. This means that instances of market abuse, driven by trends like growing interest in digital assets and AI-powered trading, are only likely to increase. If firms are hindered by disparate compliance systems, they leave themselves open to significant regulatory risk.
The underlying challenge for companies is to find ways to maintain compliance and keep on top of changing regulations while also ensuring these efforts do not place an unnecessary strain on resources. In the face of these challenges, a holistic compliance system offers the simple solution to striking this balance – it enhances the efficiency, accuracy, adaptability and overall effectiveness of regulatory processes. Crucially, it is clear that regulators have growing expectations of firms to take a proactive approach to this challenge.
A centralised regulatory system also sets firms up to integrate more advanced tools like AI. There are already highly sophisticated compliance tools that have integrated features like natural language processing to ‘translate’ messages and link suspicious communication to abusive trading. The more comprehensive and diverse the data, the better these models work at analysing trends and spotting abuse.
A holistic solution to a complex compliance challenge
While a firm’s intention may be to drive efficiency, the adoption of compliance technology without a coherent strategy can in fact create more issues. If compliance systems can’t communicate effectively with each other, errors creep into datasets and gaps in regulatory processes appear. This means firms risk breaching regulations and suffering greater market abuse, with both outcomes bringing financial and reputational damage.
The key lies in integrating these disparate data sources into a single, cohesive, holistic system. By consolidating information, businesses can achieve a comprehensive view of their regulatory compliance. Therefore, reducing the need for cumbersome IT infrastructure and ensuring they remain agile in the face of ongoing regulatory changes. Ultimately, a holistic system simplifies a regulatory and trading landscape that is increasingly varied and complex.
James Butland, VP – Payment Network at Mangopay, on meeting the needs of the gig economy with Embedded Finance payment solutions
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Specialised payment solutions supported by Embedded Finance have become essential for supporting the gig economy. They offer speed, accessibility, and security in financial transactions.
The global gig economy is forecast to reach a value of $1847 billion by 2032, reflecting its rapid expansion and impact on the workforce. This growth has unlocked flexibility and autonomy for workers. Furthermore, it has also introduced unique financial challenges, particularly in payment systems. With so many platforms available for freelancers, each one strives to offer the best experience. To succeed in the competitive world of the gig economy and handle changes in demand and pricing, platforms need to adapt fast.
Embedded Finance is a Transformative Force
Embedded Finance is emerging as a transformative force for gig workers. It simplifies payment processes and enhances financial management. Its impact is already evident in the streamlining of payments. Instead of waiting for traditional payroll cycles, gig workers can now access their earnings instantly. Empowering them with greater control over their finances. This approach not only alleviates cash flow challenges but also facilitates more effective ways of working for freelancers.
Moreover, Embedded Finance enables seamless partnerships with gig economy platforms. By integrating directly into these platforms, Embedded Finance solutions allow gig workers to manage all financial processes, from receiving payments to tracking earnings, without leaving the platform. For example, partnerships with wallet-based infrastructure providers enable secure, efficient fund dissemination. Meanwhile, laying the groundwork for additional revenue opportunities through wallet-facilitated transactions. This integration enhances both worker experience and platform capabilities, fostering a more cohesive gig economy ecosystem.
Flexible, Fast Payouts
The gig economy is global by nature, requiring financial solutions that can support businesses and workers across borders. Flexible FX infrastructure plays a crucial role in streamlining contractor management by ensuring seamless multi-currency payments, compliance, and administrative efficiency. This type of infrastructure empowers platforms to reduce operational costs and improve the overall user experience for both businesses and gig workers.
By leveraging modular and flexible FX solutions, employment and HR platforms can cater to specific use cases, such as managing international contractor payments. These solutions not only enable compliant and efficient transactions but also simplify processes. This allows businesses to focus on core operations while offering a seamless experience to their users. Such advancements highlight the potential of integrated financial technology to address complex cross-border payment needs effectively.
For gig workers, income can often be irregular, leading to cash flow uncertainties and financial stress. Specialised payment solutions, powered by Embedded Finance, address this by enabling instant payouts. By integrating low-fee processing and real-time transaction capabilities, these platforms bypass the delays of traditional payroll systems. This provides workers with immediate access to their earnings.
The ability to access income in real time is more than a convenience; it is a critical lifeline for workers managing daily expenses, emergencies, or reinvestment in their work. This advancement significantly enhances financial stability, helping to sustain the gig economy as a viable career path.
Digital Wallets
A substantial number of gig workers operate outside conventional banking systems, lacking access to savings accounts, credit, or other essential financial services. Digital wallets and cross-border payment capabilities, key elements of Embedded Finance, are integral to addressing this gap. These tools allow gig workers to securely store and manage their funds, receive payments in multiple currencies, and make transactions with ease.
Additionally, digital wallets serve as more than just repositories for funds. They can include features such as budgeting tools, savings trackers, and credit-building capabilities. These tools enable gig workers to manage their finances more effectively while opening up new opportunities for growth and security. For instance, workers can build credit profiles through wallet-based transaction histories, unlocking access to financial services that were previously out of reach.
Security and Growth
As the gig economy increasingly relies on digital platforms, the importance of secure and adaptable financial solutions cannot be overstated. AI insights and data-driven credit assessments are creating robust ecosystems tailored to the needs of gig workers.
AI powered advanced analytics are transforming the way gig workers manage their finances. These tools can identify financial trends and provide actionable insights tailored to the individual. For instance, they can recommend optimal saving strategies or suggest the best times to withdraw funds, enabling workers to make smarter financial decisions and reduce uncertainty in their income flow.
While data-driven credit assessments are breaking down traditional barriers to credit access for gig workers. With irregular income patterns, many gig workers struggle to secure loans or build credit through conventional means. Platforms are addressing this by using alternative data points—such as earnings history and payment behaviours—to create fair and accurate credit profiles. This innovation opens doors to financial opportunities that empower gig workers to achieve greater financial stability and growth.
By streamlining payments, integrating accessible financial tools, and leveraging cutting-edge innovations for security, these solutions address both immediate and long-term needs. Through continued innovation, the gig economy is poised to thrive as a flexible, inclusive, and dynamic component of the global financial system.
OnAfriq’s Amber Thetford, Chief Product Officer – Card issuing and processing, on how prepaid debit cards can enable companies to take advantage of of trade opportunities across the African continent
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As businesses seek to expand across African borders, cashless payment solutions offer a safer method of transferring money. Prepaid debit cards provide security while mitigating many infrastructure and regulatory challenges.
The African Continental Free Trade Area Agreement (AfCTA) is moving into the operational phase. It is becoming clearer that part of its success lies in ensuring entrepreneurs and small businesses can effectively trade and receive payments across borders.
African Trade
As the African Union has noted, the trade area will be the biggest since the World Trade Organization was formed in 1995. Africa’s population is currently 1.2 billion people. A figure expected to reach 2.5 billion by 2050.
South Africa took its first step in making AfCTA a reality when former Minister of Trade, Industry, and Competition, Ebrahim Patel, launched the implementation of the start of preferential trade this year. The South African Revenue Service also certified two consignments to Ghana and Kenya.
Yet, with trade expected to grow among members from 15%-18%, a safe way of moving money is required given the risk that cash presents. Some nine-tenths of transactions in sub-Saharan Africa are, based on World Bank information, in cash.
Card payments in the digital ecosystem
The large amounts of cash involved in trade are also cumbersome and difficult to physically transport between markets. Card payments, part of the digital ecosystem, can enable efficient, secure, and transparent transactions. These are essential for facilitating trade.
Card payments can eliminate the need for manual intervention and reconciliation when it comes to banking and bookkeeping. This, the World Bank states, makes them, on average, three times more cost-effective than conventional purchase order costs.
Mobile money payments have greatly improved Africa’s ability to make cross-border payments. However, they do not meet the full scope of needs of individuals or businesses. As the United Nations points out, there are regulatory bottlenecks. Furthermore, a lack of interconnectivity among mobile transactions in some countries means people cannot transfer money across borders. Moreover, limitations of infrastructure, accessibility, and interoperability make it difficult for their users to access the global digital economy. As a result, this type of cross-border payment can be limited.
Prepaid cards can solve trade problems
There are solutions to these trade dilemmas. Prepaid cards can enable businesses and individuals to transact with global institutions and marketplaces without the need to own a bank account. This option removes a pain point for a business that would otherwise need to accept local alternative payment methods or cash. Navigating challenges like high fees, currency shocks and a lack of access to traditional banks can be simplified through prepaid cards. This makes them a pivotal instrument that enhances Africa’s connection to the global economy.
For example, one of OnAfriq’s customers provides payroll solutions for seafarers and cruise ships, which frequently travel to different countries. Once the card is loaded, it is very convenient for sailors to use it as one would a normal debit card. They can swipe to pay for purchases or transmit money across borders. The beauty of this option is that whoever is loading the card with money, can be based anywhere in the world. Moreover, the same is also true of the person holding the card.
Prepaid cards can also be used to manage expenses because they can be provided to managers. For example, a bookstore could make independent decisions about business-related purchases. But only up to a certain amount. This has the added advantage of speeding up operations as there are no lengthy delays across the company when it comes to acquiring stock. Furthermore, it goes some way towards eliminating fraud as the card has a set limit.
Larger companies with staff who travel extensively can also provide gratuities for their employees. They can then cover incidental expenses without having to dip into their own pockets or bring back paperwork to be reimbursed.
AfCTA dream can become a reality
A platform that simplifies a user’s ability to transfer money to cards brings the AfCTA dream closer to reality. The versatile power of prepaid cards can be used to promote free trade between countries and unite Africa’s fragmented payment landscape.
Prepaid solutions can aid businesses seeking to operate in other African countries to thrive – making AfCTA’s aim a reality and boosting economic growth for all.
Jan-Willem Weggemans, Vice President, Commercial Payments Lead at Publicis Sapient on the outlook for payments modernisation
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The payments industry is transforming rapidly, driven by customer demand shifts, regulatory developments and technological advances. Payments players need a tailored innovation approach for each value opportunity, based on their strategic position and ambition and each driver of change.
Understanding the drivers of payments modernisation
Driven by technological advancements, shifting customer expectations and regulatory developments, banks and financial institutions must adapt their offerings. They must modernise their payments to remain competitive in this ever-evolving landscape as we start this new year.
Customers expect real-time, seamless and personalised payment experiences that are now standard expectations across financial services. Not only that, but users are demanding frictionless cross-border transactions, alongside advanced features like biometric authentication.
Massive advances in technological capabilities drive customer expectations. Cloud computing, data platforms, Artificial Intelligence (AI), and Application Programming Interfaces (APIs) enable faster, scalable, resilient, and more secure payment solutions. These enable opportunities to innovate customer propositions and experiences. Moreover, supporting the modernisation of processes and technologies can lower costs and improve resilience.
Regulatory developments are a key factor. From new (instant) payments schemes to ISO standards to KYC/AML requirements, there is an ongoing need to change/modernise the payments operating model. And possibly innovate client solutions.
For these reasons, legacy banks can struggle with the pace of change and inefficiencies. Including enabling FinTech disruptors to gain a competitive advantage. So, how can banks examine these learnings and implement better change?
Progressive modernisation and the impact of GenAI
Banks and financial institutions can take a tailored approach to payment innovation and modernisation. In all of these approaches, modernising an incumbent player with significant legacy challenges is generally a process of progressive modernisation. Big bang approaches and the building of neo banks to move a legacy bank forward have generally not delivered success.
Progressive modernisation enables a bank to move in a controlled way from the legacy to the modern state. This requires running the legacy and modern services in parallel. Meanwhile, the integration is enabled by decoupling the hardwired systems top and bottom (integration and data). Only then can you spin up the modern enterprise and core services and progressively direct more clients/transactions/products over the new stack.
Progressive modernisation is becoming more attractive and suitable for many clients. Furtherore, GenAI can materially alter the cost and duration of these programs, offering lower risk and a significantly improved business case. With new and innovative solutions that utilise GenAI at their core, the whole journey can be greatly accelerated. Including Legacy system discovery, Target state design, Backlog creation, and Building and Testing.
Three key approaches when facing the need to modernise Payments
Payments players are facing an ongoing modernisation need, driven by changing client behaviours, technology innovation and regulatory activism.
Broadly, we recognise three approaches to payment modernisation, including:
Fix the edge – either top of the stack or bottom, a small fix, without touching 90% of the existing tech.
Incremental uplift – installing a modern solution (but not fully end-to-end). For example, a new core system for a set of products/customers.
Move to native build – setting steps on the progressive modernisation journey, after investing in decoupling the hardwired legacy systems.
To select the right approach, we consider two key factors: the event and the players. The event looks at the size of the opportunity (or materiality of the threat) and the size/complexity of the change. The player looks at the performance of the existing operating model, whether payments are core, and whether the ambition is to be a leader in payments or to be part of the majority of players.
How a player’s participation strategy drives modernisation choices. A client offers white label card processing services, and in their market, they need to offer the most modern solution and lead with modern technology, AI, and embedded compliance/risk solutions. A major incumbent bank decided to invest primarily in customer value propositions, driving value from the broader client relationship. The bank opted for a processing-as-a-service model when it needed to modernise the processing platform.
Looking at the two extreme options, we see that fixing the edge works well for players where payments are not core, when they do not need to be the first mover, or when their existing operating model is performing well. From an event perspective, it fits when the opportunity is small and/or the change is minor in effort and complexity.
At the other end of the spectrum, moving on the journey to native build is most suited for players where payments are core. Where they want to be the first mover in the market, and where the existing operating model is facing major challenges. From an event perspective, it is more suited when the event supports a significant value opportunity (or threat to the business) and requires a significant change.
Making payments progress real
Many new payment options, including A2A payments and instant payments, offer incremental benefit cases for many players. These are not large enough to kick off the incremental modernisation journey. Thus, most players will opt for a “fix the edge” or “incremental” modernisation approach and wait for another event for a full modernisation.
Regarding regulation. The new ISO20022 standard is due to come into full force in November 2025. However, less than a third of messages were exchanged using the new standard in late 2024. An often cited reason for delays in implementing regulatory changes is the edge approach replanning required to keep up with the evolving set of rules regarding the ISO standards. The evolving set of rules is inevitable, as the regulator is responding to market experiences and feedback from trying to implement the initial rules set. Thus, in regulatory change with this level of impact, a cloud-native approach would be better, enabling a more nimble/agile response to continuous changes.
What is the next move?
Faced with the inevitable need to invest in payments, we suggest taking a portfolio approach and looking 2-3 years ahead when evaluating individual modernisation events. And your strengths/weaknesses and strategy. Modernisation is not just a technical upgrade but a strategic enabler that can drive efficiency, resilience, and innovation. You can ensure that each modernisation effort contributes to a cohesive, future-ready payments ecosystem by aligning your investments with long-term business goals. This approach will help you avoid costly short-term fixes. And build a scalable, agile infrastructure that supports evolving customer expectations, regulatory requirements, and competitive pressures.
Sejal Mehta, Karen Chiew, and Andrew Rodgers from Odgers Berndtson’s Global FinTech Centre of Excellence, look at five FinTech trends and how they will influence leadership hiring and assessment in 2025
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In 2024, the UK FinTech sector experienced a significant surge in hiring, reflecting the industry’s robust growth and investor confidence. From January to April 2024, FinTech job vacancies increased by 61% year-on-year, with technology roles, particularly in development and engineering, leading this expansion.
Alongside this growth, we’re seeing a gradual blurring of boundaries between traditional finance, decentralised finance (DeFi), and technology. Moreover, this convergence is most evident at the executive leadership level. Here, movement between these sectors is becoming increasingly common – propelled by regulatory shifts and evolving global politics.
In light of these trends, here’s a look at the types of leaders UK FinTech firms are likely to prioritise in 2025…
Bridge Builders between Digital and Traditional Finance
The UK is pressing ahead with development in digital payments, including blockchain applications and Central Bank Digital Currencies (CBDCs). This signals growth in investments in digital asset companies. This aligns with the broader global trend, notably the pro-crypto stance of the new Trump administration.
We’re already seeing an uptick in DeFi players asking for professionals from established finance and banking backgrounds who can bridge traditional and digital asset knowledge. In particular, we anticipate demand for leaders who are adept in risk management, compliance, and client services. Those who can demonstrate the ability to navigate the complexities of digital assets.
As digital currencies and CBDCs open new possibilities in financial products, demand is rising for leaders in product development. Those who can design, test, and implement digital payment solutions that appeal to both institutional and retail users. Leaders who are agile and can thrive in an environment of ambiguity will be especially valuable in serving the overlapping needs of these different customers.
Hyper-Personalised Financial Specialists driven by AI
FinTech is rapidly leveraging AI to pivot toward autonomous financial and predictive insights. In 2025, this will lead to the growth of hyper-personalised financial products and enhanced risk management.
To capitalise on the opportunities of this developing technology, FinTech companies will look for leaders with established capabilities in data analytics and AI. Particularly those who can drive data-informed strategies, emphasising efficiency and scalability.
Crucially, the growth of autonomous finance means FinTech firms will face significant demands on their data infrastructure and processing power. Furthermore, leadership expertise in cloud computing, AI architecture, and data scalability will be key as firms navigate these technical challenges.
Cybersecurity Leaders with Deep Specialisms
In 2025, cybersecurity leadership hiring in FinTech will emphasise specific skills beyond traditional cybersecurity. This is due to heightened regulatory scrutiny and evolving digital threats. With the rapid growth in digital payments, cryptoassets, and autonomous finance, we anticipate FinTech firms to prioritise leaders with expertise in digital identity verification to prevent unauthorised access and protect consumer data across platforms.
As transaction volumes rise, transaction security leaders who can oversee real-time monitoring, anomaly detection, and encryption protocols will become essential to safeguard against data breaches and financial losses. Likewise, fraud detection capabilities and leveraging AI and machine learning will be a key focus in cybersecurity leadership roles. These will proactively identify and mitigate fraud risks, especially with the increasing adoption of open finance and decentralised finance solutions.
Highly Adaptable Regulatory Leaders
Multiple regulatory developments affecting FinTech companies will come into effect in 2025. These include cryptoassets, cyber security, Buy Now Pay Later (BNPL) services, open finance, and enhanced safeguarding for payments and e-money firms. Moreover, these changes will introduce stricter compliance requirements, aiming to improve transparency, consumer protection, and resilience within the FinTech sector.
Additionally, we expect the recently published UK National Payments Vision, APP Fraud guidelines and Financial Promotions to drive payments and FinTech companies to seek leaders with expertise in compliance, cybersecurity, and risk management. As firms navigate stricter rules, demand will increase for executives who can build robust frameworks for regulatory compliance, safeguard digital assets, and ensure consumer protection. Leaders with experience in adapting to regulatory shifts, particularly in highly regulated sectors, will be essential to manage these new obligations efficiently.
This need for specialised knowledge will intensify competition for talent with both technical and strategic regulatory expertise. Making digital regulatory acumen a critical asset for leadership roles in FinTech.
Customer-Centric Innovators to Build Seamless Experiences
FinTech companies are prioritising leaders capable of harnessing Banking-as-a-Service (BaaS) to innovate in customer experience and streamline cross-sector collaborations. As BaaS becomes a cornerstone of FinTech innovation, firms will seek executives who are adept at using this model to create seamless, customer-centric solutions that simplify interactions and integrate financial services more deeply into everyday life.
This shift reflects a clear message from the industry: customer experience is no longer a single department’s responsibility; every leader is expected to bring a customer-first approach to the table.
Leaders who can foster strategic collaborations across sectors – such as retail, healthcare, and technology – will be valued, as these partnerships drive BaaS innovations that embed financial services within various digital ecosystems. Consequently, the demand for leaders with a balance of technical insight, strategic partnership skills, and a strong customer-focused ethos will shape hiring trends, with companies competing for leaders who can bridge the gap between FinTech capabilities and elevated, customer-centred experiences.
Shaping the Future: Agility and Insight in FinTech Leadership
As FinTech technologies and sectors continue to merge, FinTech leaders must demonstrate learning agility. Their ability to adapt past experience to new contexts will be crucial to their leadership effectiveness.
Equally important will be their curiosity in understanding the evolving landscape. And their interpersonal savvy in navigating relationships with diverse stakeholders – both of which will significantly influence their impact in the FinTech space.
The most effective way to identify leaders with these capabilities is through leadership team competency profiling. This approach offers data-driven insights into team composition and critical skill gaps, aligning leadership competencies with the specific strategic objectives of the FinTech firm. By tailoring this process to the firm’s current phase of growth, FinTech companies can ensure they have the right leaders to successfully navigate the challenges of a highly disruptive market.
ClearBank, the enabler of real-time clearing and embedded banking, recently announced its partnership with Airwallex. A leading global Digital Payments and…
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ClearBank, the enabler of real-time clearing and embedded banking, recently announced its partnership with Airwallex. A leading global Digital Payments and financial platform for modern businesses. Through this collaboration, Airwallex will leverage ClearBank’s agency banking solution to enhance its UK offering with virtual business accounts, GBP collections, and Confirmation of Payee (CoP) functionality.
Partnering for Digital Payments with ClearBank
ClearBank has enabled the global FinTech to issue virtual accounts and IBANs under its own brand identity. This reinforces Airwallex’s robust financial platform, while also allowing the company to maintain seamless customer branding. Moreover, through the partnership, Airwallex will have access to UK payment schemes. These include Faster Payments, BACS, and CHAPS. Accelerating Airwallex’s strategic goal of helping businesses simplify their global Digital Payments and financial operations, unlock new opportunities, and grow without limits.
“Our priority is to provide businesses with fast, flexible and seamless financial services. ClearBank’s agency banking solution aligns perfectly with our vision, allowing us to enhance our product offering in the UK while maintaining our brand identity. The team’s deep understanding of our business needs and their speed of execution have been invaluable throughout the partnership development and integration process.”
Vivien Cheung, Head of Financial Partnerships – EMEA, Airwallex
The partnership is founded on the companies’ shared ambition to utilise innovative technology to bring streamlined financial services to more customers in new markets. Furthermore, it highlights a growing demand for innovative financial solutions that combine the flexibility of FinTech with the security of traditional banking. ClearBank’s cloud-based approach allows for efficient integration, enabling Airwallex to deliver the features and functionality businesses need to make Digital ayments faster and more cost-effective.
“We’re proud to partner with Airwallex as the business enters its next phase of growth. Our unique combination of innovation and security was essential in supporting the premium customer experience that Airwallex is looking to provide. We look forward to deepening our relationship with Airwallex as we explore further opportunities for collaboration.”
John Salter, Chief Customer Officer, ClearBank
About Airwallex
Airwallex is a leading global financial platform for modern businesses, offering trusted solutions to manage everything from Digital Payments, treasury, and spend management to embedded finance. With our proprietary infrastructure, Airwallex takes the friction out of global payments and financial operations, empowering businesses of all sizes to unlock new opportunities and grow beyond borders. Proudly founded in Melbourne, Airwallex supports over 100,000 businesses globally and is trusted by brands such as Brex, Rippling, Navan, Qantas, SHEIN and many more. For more information, visit http://www.airwallex.com
About ClearBank
ClearBank is a purpose-built, technology-enabled clearing bank. Through its banking licence and intelligent, robust technology solutions, ClearBank enables its partners to offer real-time payment and innovative banking services to their customers. For more information, visit www.clear.bank
According to a new report published by WiseGuy Reports (WGR), The Insurtech Insurance Technology Market was valued at $ 31.05 billion in…
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According to a new report published by WiseGuy Reports (WGR), The Insurtech Insurance Technology Market was valued at $ 31.05 billion in 2024 and is estimated to reach $322.7 billion by 2032. It is set for growth at a CAGR of 33.99% from 2025 to 2032.
InsurTech revolution gathers pace
The insurtech insurance technology market is revolutionising the traditional insurance sector by integrating advanced technologies such as artificial intelligence (AI), machine learning (ML), blockchain, and data analytics. InsurTech solutions streamline operations, improve customer experiences, and enable data-driven decision-making. These technologies cater to various aspects of insurance, including underwriting, claims processing, and policy management.
The market has witnessed robust growth due to the rising demand for digital solutions and personalised insurance products. With startups and established insurers collaborating, the industry is becoming more agile and competitive, creating new opportunities for innovation in risk assessment and fraud prevention.
InsurTech’s key players
The InsurTech insurance technology market features a dynamic mix of startups and established players. Key companies include Lemonade, Metromile, and Hippo, known for their innovative approaches to insurance delivery. Traditional insurers such as AXA and Zurich are also investing in InsurTech partnerships to modernise their operations.
Companies like Policybazaar and Root Insurance are leveraging AI and big data to enhance customer engagement. Furthermore, tech giants like Amazon and Google are exploring the sector, further intensifying competition. Moreover, these players focus on integrating advanced technologies and developing user-centric platforms to stay ahead in a rapidly evolving market.
Stuart Cheetham, CEO at MPowered Mortgages, on how AI-powered technology allows mortgage lenders to fully underwrite loan applications in minutes
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AI technologies are about to have a huge impact on the mortgage market… In November last year the founders of Revolut announced plans to launch a “fully digital, instant” mortgage in Lithuania and Ireland in 2025. Details were sketchy but the company said that mortgages will be part of a “comprehensive credit offering” it intends to build.
Neobanking progress with AI
Digital only banks, like Revolut and Monzo, are renowned for using the power of technology and data science to create efficiencies and improve customer experience. The reason neobanks have been so successful is because they provide a modern, convenient and cost-effective alternative to traditional banking. This is done a transparent way, through fast onboarding, 24/7 app access and instant notifications. All with a user-friendly interface.
While many financial services sectors have embraced financial technology in the way Revolut and Monzo have for the retail banking sector, the mortgage sector has struggled to make a real breakthrough here. Why hasn’t the mortgage industry caught up one might ask? Mortgages are complex financial products, existing at the intersection of justifiably stringent regulation. They represent the single biggest financial commitment people make in their lifetimes. Financial advisors who source mortgages on behalf of borrowers are hindered at every stage by outdated systems and inadequate or commoditised product offerings.
Disrupting the Mortgage Market
The mortgage industry is one financial services sector that has been yearning to be shaken up by the FinTech industry for some time. While it’s encouraging to see a successful brand like Revolut enter this market, what is less known is that huge progress is being made already by smaller and less well known FinTech disruptors.
For example, the mortgage technology company MQube has developed a “new fast way” of delivering mortgage offers using the cutting edge of AI technology and data science. Today, it still typically takes several weeks to get a confirmed mortgage offer. This is one of the major reasons the homebuying process can be so time consuming and stressful for brokers and borrowers. The mortgage process is characterised by bureaucracy, paperwork, delays and often frustratingly opaque decision-making by lenders. This leads to stress and uncertainty for consumers, and their advisors. And at a time when they have plenty of other property-purchase related challenges to contend with.
Our proprietary research shows us, and this will come as no surprise, that the biggest pain point for borrowers and brokers about the mortgage process is that it is time consuming, paperwork heavy and stressful. Imagine a world where getting a mortgage is as quick and as easy as getting car insurance. This is MQube’s vision.
MQube – AI-powered Mortgages
MQube‘s AI-powered mortgage origination platform allows mortgage lenders to fully underwrite loan applications in minutes. MPowered Mortgages is MQube’s lending arm and competes for residential business alongside the big banks. It uses MQube’s AI-driven mortgage origination platform and is now able to offer a lending decision within one working day to 96% of completed applications.
The platform leverages state-of-the-art artificial intelligence and machine learning to assess around 20,000 data points in real-time. This enables lenders to process mortgage applications in minutes, transforming the industry standard of days or weeks. It automates the entire underwriting journey, from application to completion. This helps to provide a faster service, reduce costs, mitigate risks, and to make strategic adjustments quickly and effectively. By assessing documents and data in real-time during the application, it is able to build a clearer and deeper understanding of a consumers’ circumstances and specific needs. Applicants are never asked questions when MQube can independently source and verify that data, leading to a streamlined and paperless experience. Furthermore, this whole process reduces dependency on human intervention.
The benefits of AI
More and more lenders are seeing the benefits AI and financial technology can bring to their business. They are beginning to adopt such AI-driven financial systems which are scalable and serve to address systemic problems in this industry. The mortgage industry is still some way behind the neobanks, but what’s hugely exciting to see is the progress that has been made so far. Moreover, if FinTechs continue to innovate this sector and if lenders continue to embrace financial technology and use at scale, then getting a mortgage could genuinely become a quick, easy and stress free process. At this point, the mortgage industry could begin to see a shift in consumer perception and change in consumer behaviour. A new frontier for the mortgage industry is upon us.
Plumery, a digital banking experience platform for customer-centric banking, today announced it has launched Digital Lending. The fully end-to-end digital…
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Plumery, a digital banking experience platform for customer-centric banking, today announced it has launched Digital Lending. The fully end-to-end digital loan origination journey allows bank customers to go from application to disbursement in 180 seconds.
Digital Lending
Plumery Digital Lending offers market-leading speed with banks, digital lenders and other financial institutions who are able to launch their new lending products in as little as 18 weeks. Moreover, allowing firms to triple their loan portfolio and capacity while maintaining the same staffing levels.
Many financial institutions are still unable to offer a fully digital loan origination process to customers. This forces them to partially complete a process online before finalising with human intervention. Yet, firms need to move quickly to stay competitive in today’s fast-paced world and benefit from the highest interest rates in a decade.
Transforming the loan process
“By transforming the loan origination process into a fully digital experience, banks and other financial institutions can meet the demand for seamless and efficient customer journeys. Firms can configure every aspect of the process, safe in the knowledge they are on top of bank-grade security and infrastructure.”
Ben Goldin, Founder and CEO of Plumery
Digital Lending includes:
Digital application through web and mobile interfaces
Secure capture and storage of customer information
Streamlined, compliant onboarding experience
Automated application processing and data collection
Integration with external data sources for accurate scoring and vindication
AI/machine learning driven credit decisioning with customisable rules
Digital document generation and e-signatures
Loan disbursement and integration with core banking or loan management systems
With customer journeys built on the Plumery platform, firms can align with their unique workflows or adapt to changing regulatory requirements – and continue making rapid improvements from there. Plumery offers tools which both developers and business users can employ to make final adjustments, ensuring fast and affordable automation.
About Plumery
Headquartered in the Netherlands, Plumery’s mission is to empower financial institutions worldwide, regardless of size, to craft distinctive, contemporary, and customer-centric mobile and web experiences.
Plumery operates with a diverse team that embodies a unique combination of seasoned expertise and vibrant innovation. This blend has been cultivated through years of experience at start-ups, scale-ups, and established financial institutions, and most notably at globally leading financial technology companies, where they were instrumental in creating disruptive digital banking solutions and platforms that now serve 300+ banks globally.
Plumery’s Digital Success Fabric platform provides banks with the foundation for success beyond fast-time-to-market by expediting the development of their digital front ends while significantly cutting costs compared to in-house initiatives or solutions with high total cost of ownership (TCO).
Ben Hunter, Senior Director of Financial Services at Gigamon, on the impact of the Digital Operational Resilience Act (DORA) and what financial institutions can do to ensure lasting compliance
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The Digital Operational Resilience Act (DORA) came into force on January 17th. It’s high time for financial institutions to refine their compliance and Cybersecurity efforts. This regulation isn’t just another box-ticking exercise. It represents a shift in the financial services industry that touches everyone in the ecosystem. And every corner of the organisations within it. From IT teams to the board, every department must pull together under a cohesive cyber strategy to meet the challenge. It’s not simply about systems and software. DORA demands a cultural shift toward organisation-wide cyber resilience.
At this stage, the big changes should already be in place. However, the focus now must be on the finer details. The overlooked pieces that could potentially make or break compliance and prove extremely costly. Organisations must tweak processes and ensure every element of their plan works seamlessly and aligns with the broader goal of operational resilience. Here are three areas of focus to perfect preparedness and ensure DORA compliance is not just a box checked but a new standard embraced by the whole organisation.
Criticality of third-party Cybersecurity management
One of DORA’s requirements is reducing reliance on single ICT service providers. This is designed to safeguard financial institutions against concentrated risk. By now, all structural changes should already be in place, with organisations diversifying their ICT providers. Or improving internal capabilities to reduce their external dependencies. However, compliance doesn’t end with restructuring. The focus must now shift from restructuring to managing these relationships effectively. Organisations should be looking to perfect their third-party risk assessment, monitoring, and due diligence strategies. They must ensure their processes for vetting ICT service providers are not just in place but are meticulously detailed. Contracts need to leave no room for ambiguity, with explicit terms outlining providers’ security and risk management strategies. These agreements must be revisited and stress-tested to confirm they align with DORA’s standards.
Equally critical is ironing out the specifics of ongoing monitoring and oversight. Institutions should be finalising the structure and frequency of their performance reviews and audits. Ensuring these mechanisms are robust enough to identify and address any emerging vulnerabilities. Moreover, by focusing on the details now, organisations can build a resilient operational framework that doesn’t just meet DORA’s requirements but builds resilience into their core operations for years to come.
Global efficiency through multi-cloud environments
Adopting a multi-cloud strategy has become essential for financial institutions operating on a global scale. It mitigates concentrated risk by avoiding dependence on a single provider and allows organisations to address the unique regulatory and operational challenges of different regions. However, the complexity of multi-cloud environments brings its own challenges. Particularly in ensuring the visibility and control required under DORA. This is why it’s crucial for organisations and their third parties to refine the tools and processes that support this level of visibility and allow the security teams to continuously monitor their environments.
According to recent data, 50% of CISOs say their confidence in risk management hinges on having full visibility into all data in motion, including encrypted and lateral traffic across both on-premises and cloud environments. This underscores the importance of advanced monitoring capabilities to effectively manage the complexities of multi-cloud infrastructures. While DORA mandates comprehensive visibility, the benefits go beyond just meeting compliance requirements. Deep observability strengthens organisations’ ability to detect vulnerabilities in real-time, ensuring seamless operations across regions and providers, and service continuity. For multi-cloud strategies to be effective, they must be paired with the right network-level monitoring capabilities. It’s important to build resilience from the inside out.
Organisational alignment to demonstrate Cybersecurity compliance
Demonstrating compliance isn’t just about avoiding fines and ticking regulatory boxes. It’s about preserving trust and protecting the organisation’s reputation. Reputational damage and financial penalties hit the top of the organisation hardest. This makes board-level engagement essential to ensuring Cybersecurity efforts are prioritised and aligned with broader business objectives. Boards must recognise that Cybersecurity is not a siloed function; it’s a key aspect of business resilience.
While security leaders are responsible for designing and implementing security strategies, their ability to deliver is directly tied to the board’s involvement. Board members control the decisions that shape an organisation’s Cybersecurity posture, from budget allocation to strategic priorities. Without their active engagement, security leaders may lack the resources, influence, or organisational buy-in necessary to implement comprehensive security measures. This can lead to significant gaps in compliance efforts and overall resilience.
To demonstrate compliance effectively, organisations need a unified approach to gathering, standardising, and presenting evidence to regulatory authorities. This includes aligning on consistent formats for documenting key areas like risk assessments, incident management, security testing, and third-party oversight. By finalising internal policies and leveraging automation tools, institutions can ensure their compliance evidence is regulator-ready and accessible. Such coordination not only satisfies DORA’s demands but also signals a strong, unified commitment to operational resilience. One that must come from the top and ripple throughout the entire organisation.
With penalties for non-compliance reaching up to 2% of global annual turnover, financial institutions cannot afford to be anything less than fully aligned on their compliance strategies going forward. Furthermore, as the broader compliance frameworks are now finalised, the focus must shift to perfecting the finer details that will ensure long-term resilience and success.
About Gigamon
Gigamon offers a deep observability pipeline that efficiently delivers network-derived intelligence and insights to your cloud, security, and observability tools. This eliminates security blind spots, optimises network traffic and reduces tool costs. Therefore, enabling you to better secure and manage your hybrid cloud infrastructure.
Industry leaders join forces to host groundbreaking event during ETHDenver 2025 where Stablecoin innovation meets B2B finance
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PayPal, Deloitte,and Bitwave will co-host On-Chain B2B Payments Day. A transformative event dedicated to accelerating the global adoption of Blockchain powered B2B payments.
Exploring Blockchain technologies
On-Chain B2B Payments Daywill bring together hundreds of senior financial leaders, accountants, auditors, and enterprise executives on February 27 at ETHDenver. They will explore how stablecoins and Blockchain technologies are reshaping the future of payments for businesses.
“With the broader adoption of blockchain networks and digital assets, stablecoins play a critical role,” said Deloitte Tax LLP Partner, Global Tax Leader – Blockchain & Digital Assets, Rob Massey. “Business transactions take on a whole new dynamic when these ‘programmable’ funds interact with the software applications on a near real time basis. Furthermore, with that, we end up with unique tax, accounting and risk considerations.”
Redefining payments with Blockchain
The Blockchain event will be presented alongside ETHDenver – the annual conference for Ethereum developers and Blockchain advocates. On-Chain B2B Payments Day kicks off with a networking brunch and panel discussion featuring some of the leading voices in payment innovation. The event is sponsored by NetSuite alongside other key industry contributors.
“Stablecoins offer an unprecedented opportunity to transform payment operations for global business,” said Bitwave Co-Founder and COO, Amy Kalnoki. “At Bitwave, we expect to see on-chain payments become one of the fastest-growing areas of Blockchain adoption in 2025. Moreover, this event will provide financial leaders with insights into how on-chain technology will redefine cross-border payments, liquidity management, and real-time reporting.”
Why Attend On-Chain B2B Payments Day?
Gain Practical Insights: Learn from financial experts about accounting, tax, and regulatory frameworks for building a compliant and future-ready payment practice.
Discover Real-World Use Cases: Explore how stablecoins are transforming B2B payments, from accounts receivable (AR) to accounts payable (AP) and beyond.
Engage with Industry Leaders: Connect with top decision-makers from leading enterprises, institutions, and crypto-native organisations advancing on-chain payments between vendors and payers.
Bonus: Take the “Bitwave Vendor Payment Pledge” and join an exclusive network of business partners accepting stablecoin invoice payments.
Ben Goldin, Founder & CEO of Plumery, on how Digital Banking innovations are reshaping the financial landscape, creating a greener future and new opportunities for millions
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Digital banking is making waves in emerging markets, evolving beyond simple transactions to deliver rapid access to credit, broaden economic inclusion, and support sustainable solutions. As smartphone adoption rises and AI reshapes lending processes, digital banking is significantly expanding in underbanked regions, enhancing financial inclusion for people and businesses while minimising environmental impact.
According to McKinsey, several trends have accelerated this Neobanking evolution in emerging markets. The pandemic drove a shift from cash to contactless and digital payments. E-commerce grew significantly – global transaction volumes increased by 25% from 2019 to 2020 and are expected to continue growing at 12-15% annually. Governments introduced cashless payment systems like Wave in Côte d’Ivoire, UPI in India, and Pix in Brazil to enhance interoperability and improve aid distribution. Furthermore, investor interest surged, with payments-focused fintechs receiving nearly 40% of the $5.2 billion in tech startup capital in Africa in 2021.
Together, these factors have fuelled innovation in digital finance. This has helped meet rising demand and enabled AI-driven, mobile-first platforms to deliver fast access to capital, fostering financial empowerment in underserved communities.
Additionally, smartphone penetration is set to reach 88% in Sub-Saharan Africa by 2030. Setting the stage for even greater financial inclusion. Combined with a growing focus on sustainability, digital banking in these regions is positioned to offer services that are both inclusive and environmentally conscious. Here’s a look at how digital banking is breaking down barriers, expanding financial empowerment, and building a greener future across emerging markets.
The evolution from basic transactions to fully-fledged Digital Banking
Digital banking initially gained traction by providing essential services like balance checks, peer-to-peer (P2P) transfers, and bill payments. This bridged gaps left by limited banking infrastructure. However, with evolving needs, digital banks and fintech companies now offer advanced products such as digital lending. This is among the most transformative aspects of digital banking in emerging markets.
Traditional access to credit was often challenging due to strict requirements, physical infrastructure, and extensive documentation. Digital lending platforms eliminate these barriers, enabling users to apply for loans directly through mobile devices, often receiving decisions within minutes.
AI-driven credit assessment models leverage alternative data points like mobile usage, purchase history, and digital wallet activity. This allows customers to secure funds without a formal credit record. Quick access to capital can be a lifeline for small business owners. Allowing them to act on opportunities as they arise. Digital lending thus meets immediate financial needs and supports broader economic growth by empowering local businesses.
Banking on a sustainable tomorrow
As digital banking expands, the need for environmentally sustainable operations becomes critical. The infrastructure supporting digital banking requires significant energy, especially as usage grows. To address this, financial institutions in emerging markets are adopting cloud-based platforms and energy-efficient data centres, reducing resource consumption while scaling services.
Cloud-based solutions are not only more scalable but also more energy-efficient, enabling banks to expand their reach responsibly. Automated processes further enhance energy efficiency, allowing Neobanking providers to serve more customers while minimising their environmental impact. This focus on sustainability aligns with broader goals of economic development and environmental stewardship, especially in regions vulnerable to climate change. For instance, Nubank in Brazil has achieved significant milestones by focusing on digital-only services, reducing the need for physical branches and their associated environmental impact.
Bridging gaps and expanding reach
Financial inclusion remains at the heart of digital banking’s impact in emerging markets. Digital platforms provide an entry into the formal financial system for millions. This allows them to save, invest, and plan for their futures. For small businesses, mobile applications and digital wallets offer essential tools for growth, empowering them to compete and contribute to local economies.
Digital platforms are also helping bridge the documentation gap by offering digital identity verification. This allows individuals without formal identification to open accounts and access financial services. Moreover, this approach is critical in regions where many people lack traditional IDs, which has historically excluded them from banking. By incorporating digital identification and security measures, financial institutions extend their reach, supporting resilience and inclusion.
Pioneering financial access through Digital Banking innovation
Emerging technologies like Blockchain, AI, and Biometrics are another factor in redefining digital banking in emerging markets. Blockchain provides a secure and transparent transaction method, which is particularly valuable in regions with less stable financial systems. AI enables credit assessment using alternative data, while biometrics and electronic Know Your Customer (e-KYC) simplify account creation. This makes it easier for individuals in remote areas to access financial services without physical documentation.
These technologies not only broaden financial access but also ensure that digital banking systems are efficient, secure, and scalable. By integrating these advanced tools, banks and fintech companies can provide reliable services to underserved populations, raising the standard for accessibility and security. An example of this in action is Moniepoint, a Nigeria-based FinTech. It has secured significant funding to enhance digital payments and banking solutions across Africa. By applying advanced technologies it reaches many who still lack access to banking services.
The future: Empowerment, Inclusion, and Sustainability
The future of digital banking in emerging markets holds great potential. With rising smartphone and internet connectivity, even remote areas gain access to financial services, breaking down traditional barriers to inclusion. This evolution goes beyond technology, creating pathways for financial empowerment and economic resilience.
A new generation of digital banking solutions is enabling financial institutions to extend their reach into emerging markets with a comprehensive range of services. From account management to lending. Designed with flexibility in mind, these platforms support customisation, allowing banks to tailor services to local needs through open APIs and modular infrastructure. By embracing sustainable practices and sustainable technology, these solutions not only broaden financial access but also foster growth in underserved regions in an environmentally responsible manner.
Yuno and PayPal team up to simplify Digital Payments for merchants with flexible options to broaden market reach and unlock new revenue streams
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Yuno a leading payment orchestration platform, has announced a strategic collaboration with PayPal, a global leader in Digital Payments processing. This collaboration significantly enhances Yuno’s offering, giving merchants seamless access to PayPal’s vast active user network. This now surpasses 400 million worldwide.
Unlocking revenue streams with Digital Payments
Yuno-powered merchants can now effortlessly offer PayPal’s secure and flexible payment option, broadening their market reach and unlocking new revenue streams. Trusted by millions worldwide, PayPal allows users to make purchases, transfer funds, and pay bills in a fast, easy, and secure way, without the need to repeatedly enter card payment information, contributing to reducing digital footprint and providing the security users are looking for.
Including this partnership, Yuno now supports over 300 global payment methods via its intuitive, user-friendly interface, making it easy for merchants to scale quickly by offering the most popular and locally-relevant payment methods in each market. Yuno’s platform also provides access to other innovative features. These include one-click checkout, advanced fraud protection, and optimised payment routing. This boosts transaction success rates and prevents lost sales in the wake of outages at a payment provider.
Catherine Kaupert, Global Head of Partnerships of Yuno, commented: “We’re thrilled to team up with PayPal, a well-known and trusted name in Digital Payments processing globally. This integration further strengthens Yuno’s capabilities, allowing our merchants to tap into PayPal’s extensive network and drive growth with ease. Together, we are simplifying payments, making them more secure, and enabling businesses to scale without friction.”
Paola Fuentes, Head of Partnerships for Hispanic Latam at PayPal, added: “Our affiliation with Yuno integrates our entire product portfolio. Including PayPal Checkout and credit and debit card payment processing to provide cutting-edge payment solutions for both customers and businesses. By joining forces, we are expanding the benefits of both companies’ offerings, giving consumers the option to select the payment method that suits them best and take advantage of instalments. According to recent data from AMVO, this is one of the main incentives for Mexican consumers to make purchases through the digital channel”.
Last year, Yuno secured $25 million in a Series A round led by Andreessen Horowitz, Tiger Global, DST Global Partners, Kaszek Ventures, and Monashees, fuelling its expansion across Asia, Europe, the Middle East, and Africa.
About Yuno
Yuno has emerged as a dominant force in global payment orchestration. Its core mission is to empower global commerce by enabling businesses of all sizes to accept and disburse Digital Payments anywhere in the world. Furthermore, fostering financial inclusion.
Yuno enables businesses to access over 300 payment methods worldwide. As well as innovative features including one-click checkout, smart routing, and robust anti-fraud tools via a single unified, easy-to-use interface. Yuno serves a global customer base that includes McDonald’s, inDrive, Rappi and other renowned brands across more than 80 countries.
About PayPal
PayPal has been revolutionising commerce globally for more than 25 years. The company creates innovative experiences that make moving money, selling, and shopping simple, personalised, and secure. PayPal empowers consumers and businesses in approximately 200 markets to join and thrive in the global economy.
Simon Ellis, Head of Operations, EMEA at the global payment platform Airwallex, with his key FinTech predictions for 2025
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This past year has truly solidified FinTech’s role as an indispensable part of the financial landscape. From the sleek banking apps that have become a daily staple for millions to the invisible financial infrastructure powering seamless payments… FinTech is no longer just a buzzword – it’s the new norm. It’s not just about innovative startups anymore. It’s about how traditional financial institutions are embracing and integrating these technologies to stay relevant and meet the evolving needs of their customers. In essence, FinTech has become synonymous with modern banking, driving continuous innovation and transformation across the entire industry.
But what’s next? 2025 promises to be transformational in many ways. Businesses are accepting AI as the reality of our future. Consumers are becoming more accustomed to flexibility and choice. And now more than ever, both seek agile and seamless solutions for their financial needs.
Here are the trends we at Airwallex expect to see play out over the next twelve months:
Coopetition with traditional banks and FinTechs
Coopetition will become a firm reality in 2025. Many of the conventional fears associated with FinTechs will no longer be a salient presence. Increased collaboration between FinTechs and banks will facilitate further innovation on a mass scale. These giants will insert themselves into new industries and access a new generation of customers. The prerequisite for this is the correct compliance and controls but firms are committed to getting this right to ensure they maintain the right to operate.
A path to Hyper-Personalisation
Over the past year, we’ve witnessed the emergence of an increasingly educated payments buyer, mindful of what they need today and into the future as they scale. In 2025, we’ll see payment providers take more direction from their customers. Payment providers will need to be more flexible as merchant customer preferences shift.
For ambitious and progressive businesses, particularly those looking to operationalise in new markets at pace, convenience remains king. Navigating multiple vendors can quickly create friction. However, this is where FinTechs bundling their solutions comes into play. Having a single point of contact that provides a range of services – whether that’s foreign exchange (FX), multi-currency digital accounts, expense management or payouts – isn’t just about convenience. Moreover, it saves on crucial costs that can be reinvested back into the business to spur growth.
The days of taking a one-size-fits-all product approach will no longer suffice. Hyper-Personalisation will reign supreme as businesses fight for customer attention and brand loyalty.
The continued rise of Embedded Finance
In seeking to accommodate the growing need for flexibility, the year ahead will see Embedded Finance become more commonplace across a range of industries. Consumers have most likely all experienced the seamless process of making an embedded payment, whether it’s ordering through a food delivery app or paying for a ride. Usually, it’s through digital-first services, but 2025 will be the year that we see more traditional industries embrace embedded payments to keep pace with the broader innovation taking place in their sectors. This will also help businesses stand out in an ever-changing and overcrowded market. Embedded Finance will help end users maintain their dominance while also driving product stickiness.
AI is here to stay
To accelerate this transformation, 2025 will see FinTechs and banks persist in the use of AI to improve decision-making and customer engagement. AI is already being used to automate and expedite previously long and complex processes. For example, Generative AI (GenAI) will continue to help financial institutions enhance the speed and efficacy of know-your-customer (KYC) and customer onboarding processes. Furthermore, at the same time, it will detect unusual activity and fraud. We’ll also continue to see a focus on AI’s use to improve the ongoing customer experience with personalised insights and advice.
As a result, modern financial services will become more accessible to businesses of all sizes and across sectors. Allowing for easier and more cost-effective management of global operations.
Bharat Mistry, Director – Product Management at Trend Micro, on why attack surfaces are more difficult to mange than ever and the need for greater Cybersecurity controls to tackle the problem
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Some surprising news emerged in mid-December. A Freedom of Information request sent to the Financial Conduct Authority (FCA) revealed that the number of c
Cybersecurity attacks reported to the regulator by large financial institutions fell 53% from the previous year. Reported data breaches also fell, by 29%. While welcome news, there are some big caveats.
The fall in reports could signify attacks are getting more sophisticated and harder to spot. The reporting periods also didn’t quite align, meaning two-and-a-half months of possible regulatory reports weren’t included in 2024’s figures. In fact, we’re seeing attacks and breaches at financial services industry (FSI) firms surging. In line with these organisations ramping up investment in digital transformation and IT modernisation projects.
Threat actors are grasping the opportunity with both hands. To keep them at bay, IT and cybersecurity leaders in the sector may need to rethink their approach to cyber risk management.
Cybersecurity controls are urgently required
Digital transformation is on an inexorable path. Driven by customer demand for seamless cross-channel experiences, and the quest for more streamlined business processes and productivity gains. Cloud adoption, mobile and app-centric services, remote workforces, and expansive supply chains are the result. However, this rapid change comes at a price. Research warns that half (49%) of global FSI leaders believe their attack surface is spiralling out of control.
Put simply, the ‘attack surface’ is the total expanse of all the IT and OT systems in a business that could theoretically be hacked. It includes everything from on-premises desktops and servers to cloud containers and even employees. Vulnerabilities and misconfigurations across these systems and services are inevitable. And the more assets there are, the more chance there is that a determined threat actor will find a weakness. This allows them to compromise the corporate network or a critical cloud account.
Heeding the warning
The likelihood of them doing so is increasing all the time. Not just because the typical FSI attack surface is increasing, but also because cybercriminals and nation-state operatives are getting better at using AI to their advantage. The National Cyber Security Centre (NCSC) warned back in January 2024 that AI “will almost certainly increase the volume and heighten the impact of cyber-attacks over the next two years”. It’s right. Generative AI in particular lowers the bar for budding threat actors by enabling them to create highly effective social engineering campaigns. And perform reconnaissance at scale to find weaknesses in organisations’ attack surfaces. In some cases, these weaknesses may exist in AI tools brought in by workers themselves. One report claims over a third of firms are struggling with shadow AI.
Our adversaries are also aided by the sheer complexity and interconnectivity of modern digital environments. APIs, microservices and third-party integrations -including frequently buggy or downright malicious open source components – expand the attack surface yet further.
Why it’s time for change
Managing risk across these environments should be a priority for obvious financial and reputational reasons. Open Banking rules and the growth of FinTech have made it easier for dissatisfied customers to jump ship. Furthermore, providing more options for those looking for a new provider. A serious breach could be the catalyst for a mass exodus. It’s also expensive in other ways. FSI is the second-top sector overall in terms of the average cost of a data breach. This is estimated to be over $6m per incident, assuming no more than 113,000 records are compromised.
However, there’s increasingly a regulatory imperative for FSI firms to rethink their Cybersecurity strategy. Any operating in the EU now has to comply with a rigorous new set of requirements in the EU Digital Operational Resilience Act (DORA). From January 1, 2025, those in the UK deemed to be critical third parties (CTPs) will be required to put in place a number of “technology and cyber risk management and operational resilience measures”.
A new mindset
So what does this mean in practice? Modern technology environments are dynamic, with new assets appearing and disappearing. Furthermore, new vulnerabilities are emerging and fresh misconfigurations surfacing on a daily or even hourly basis. Managing risk across this vast, incredibly volatile and highly distributed environment requires a new approach. Traditional perimeter defences are no longer sufficient.
Instead, FSI firms need continuous monitoring of risk across their entire attack surface. From endpoints and networks to servers and cloud workloads. Ideally, such a platform will flag areas of concern and either suggest improvements or automatically remediate. It could be something as simple as changing an insecure password, or patching a critical vulnerability newly published by a key vendor. This is the way to build resilience for the long term.
But there’s more. Some threats will always sneak through corporate defences. That’s why it’s also vital to expand security operations capabilities with AI-driven analytics and cross-layer detection and response (XDR). The goal is to correlate threat data across multiple layers and automatically prioritise alerts for stretched analyst teams. Robust incident response processes are also key here, to ensure no time is wasted in containing the threat and minimising any damage caused.
More broadly, it’s about fostering a culture of cyber resilience. Continuous improvement, proactive defence, and a willingness to adapt are ingrained in the corporate mindset. More Cybersecurity regulations are promised by the government in 2025. The clock’s ticking.
Industry thought leaders from Marqeta, the global modern card issuing platform, offer a detailed outlook of the fintech industry for 2025, with predictions around personalisation, digitalisation and the evolving regulatory landscape
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Payments will turn fully personal, with tailored credit, rewards, and BNPL at scale in 2025
In my opinion, a major global payment trend of 2024 has been hyper-personalisation. A new generation of customers is driving a shift toward personalisation at scale, expecting their FinTech services to be unique and tailored to individual needs. Modern consumers want a future where financial services integrate seamlessly into their digital lives and keep pace with their evolving needs.
As a result, we are seeing trends, such as personalised credit offerings and rewards booming. In an industry with increasingly low consumer loyalty, brands and financial institutions must go beyond traditional interactions with FinTech. For example, the recent Marqeta State of Credit report found that of UK consumers who use more than one credit card, 43% confirmed that they would use a credit card more frequently if better rewards were offered. By moving to a dynamic, rather than set rewards structure, consumers can earn benefits tailored to their spending habits and preferences in real time.
Increasingly with innovations like Buy Now Pay Later (BNPL), consumers are guided to credit options specifically suited to them and their needs. In 2025, we will increasingly see personalised BNPL payment plan options being offered in real time. Often within existing payment apps and products we already use daily. We are also seeing B2B payments emerging as a strong trend. Ensuring gig workers, sellers and partners get paid efficiently while offering robust expense management and financing. I anticipate we’ll see more demand for innovative B2B payment solutions that enable seamless money management across 2025.
2025 will be a year of rapid innovation in financial services
In today’s digital-first world, traditional payment infrastructure is no longer enough to keep up with the demands of consumers. The front door of a bank is now an app, digital wallet usage is increasing. New, flexible services have a growing prevalence on the market. In 2025 and beyond, customers will continue to drive a shift toward modern services which keep up with the rate of digital and mobile innovation.
The ramifications of changing consumer trends could lead to the traditional roles of banks, such as ATMs and as physical branches, disappearing. To ensure continued customer loyalty, all financial service providers will be forced to innovate and offer consumers the embedded, seamless and instantaneous services that they desire.
Consequently, across 2025, we are likely to see new technology and solutions being offered to reduce unnecessary friction for consumers trying to pay and get paid. We are already seeing increased demand for Accelerated Wage Access (AWA). A Marqeta study shows that 74% of gig workers ages 18-34 would be interested in an employer who offered an option to get paid immediately. As businesses and workers grow tired of cash flow restrictions and having to wait for monthly pay slips in an otherwise instant, digital world. As new services evolve, competition in Fintech will be enhanced and the financial industry will be forced to grow and evolve.
Nicholas Holt, Head of Solutions and Delivery, Europe
Proactive compliance strategies will lay the foundation for fintech in 2025
With banking and FinTech partnerships under increasing regulatory scrutiny, the stakes around compliance have never been higher. In this environment, Fintechs can no longer afford a reactive approach to compliance. Instead, they should adopt proactive compliance strategies that go beyond simply seeking to avoid fines and that are embedded into the everyday makeup of their culture and product strategies, helping to build trust, ensure stability, and foster sustainable growth.
At Marqeta, we’re committed to embedding compliance into our company’s culture, helping to mitigate risks and create a foundation for long-term success for us and our customers. Proactive compliance strategies allow organisations to leverage advanced tools and position themselves to adapt to shifting regulatory demands while showcasing a genuine commitment to transparency.
Alex Mifsud, CEO of Embedded Finance platform Weavr, on the outlook for Banking-as-a-Service (BaaS)
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If any FinTech trend is painfully making its way through the archetypical Gartner hype cycle, it is Banking-as-a-Service or BaaS. At its core, BaaS is an API-driven platform enabling third-parties to develop financial products that make use of the banking and payments capabilities, and the regulatory permissions, of financial institutions that offer it.
This means non-regulated businesses can, in effect, make financial services available to customers without having a banking or financial licence themselves. The bank gets to monetise their licence efficiently, while FinTechs bring ingenuity, market insight and usually, superior digital experiences to customers. It sounds wonderful in concept, but the reality is far more complex. The recent collapse of Synapse, a prominent BaaS provider, as well as the sheer number of regulator interventions across many developed world economies, has highlighted critical vulnerabilities in the BaaS model.
The BaaS Model
While no one, including regulators, seems to be denying the opportunity to create customer value, it is increasingly evident that the BaaS model as it has developed over the past five years will not survive in its present form. There are several evolutionary directions that are being talked about for BaaS, even if not yet established. Here, I would like to present a specific variant. The European regulatory model not only makes this possible, but also presents a strong win-win opportunity for banks to collaborate with non-bank financial institutions like e-money institutions and payment institutions (I’ll use the acronym “EMI” to mean either of these). In this model, banks get access to the benefits of BaaS with minimal exposure to the now-better-understood risks. Moreover, EMIs get access to the powerful capabilities and economics that are the sole preserve of banks as deposit-taking institutions.
These collaborations – in effect, a multi-tier approach to BaaS – should offer safer exposure to Embedded Finance for banks. And richer capabilities available to embedders, and ultimately, end-customers.
Antipattern Matching
Recent announcements that Clearbank, a digitally-savvy clearing bank now promoting itself as an embedded finance platform, has hit profitability is a welcome tonic to investors despairing of the stream of bad news hitting BaaS players in the US and Europe. Even JP Morgan, one of the most respected global banks, has shown that size is no obstacle to ambitious, or even radical, innovation, as it also offers Embedded Finance. And at the other end of the size scale, Griffin announced earlier this year that, having secured a banking licence specifically to offer BaaS and embedded finance, it is now ready to start operating.
In the face of the mentioned challenges that EMI BaaS players have faced with regulators in Europe, some in the investment community have been proclaiming that, to do BaaS effectively, a financial institution needs to have a banking licence. An e-money or payment institution licence simply won’t cut it.
While such pattern matching and extrapolation is understandable, it is not necessarily correct, so let’s look at an alternative view: both EMIs and banks are viable financial institutions to support Embedded Finance, but each have strengths and weaknesses. Better still, by working together in a multi-tiered configuration, each type of financial institution can play to its strengths enabling the combination to deliver high capability, highly adaptive delivery models of Embedded Finance.
Banks doing Embedded Finance
While a banking licence does confer specific advantages – mainly, that deposit-taking provides one of the most attractive financing models for financial institutions to raise funds for lending – there are also disadvantages to being a bank compared to being an EMI. In the UK, for instance, banks need to hold more capital than EMIs, and perhaps more importantly, banks are supervised by both the Financial Conduct Authority (FCA) and the Prudential Regulatory Authority (PRA), the latter of which does not supervise EMIs.
Navigating innovative operating models like Embedded Finance with two regulators can create greater risk aversion and therefore slow down or even discourage the experimentation that is required to find the right risk-value formula that works. We know from recent experience that getting the balance right between great customer value and sustainable compliant operations can be a delicate balance.
The Benefits
One way to square the circle is for banks to provide wholesale financial services to EMIs which then serve end customers on their own licences in turn. While this doesn’t completely insulate the bank from censure in the event that the rules are broken – for instance, if money laundering occurs – it does place the biggest share of the burden of the customer on-boarding and monitoring compliance on the EMI. Given that EMIs were created initially to support money-related activities for a digital world, it may be easier for them by working with a single regulator to achieve the right balance. It also allows large banks with cumbersome on-boarding processes designed for large corporations to get access, via the EMI, to a community of small and medium sized business customers that, in aggregate, represent meaningful business volumes for the bank.
There is a strong win-win in this kind of bank-EMI collaboration, especially for banks which are used to dealing with other financial institutions as customers. EMIs, in turn, can source a range of wholesale financial services from multiple banks: foreign exchange from one, and lending capacity from one or more others.
A New Pattern: Multi-Tiered Banking with BaaS
The future of BaaS lies in collaboration. A multi-tiered banking model allows institutions to combine their strengths strategically. Such a model not only optimises the use of resources but also enhances the value proposition of BaaS by incorporating the strengths of various financial entities. EMIs, with their ability to offer commercial cards, credit lines, and foreign exchange services, reduce the risk for larger institutions and open doors for broader innovation.
Simon James, CEO of PayComplete, on why 2024 was a pivotal moment for cash and what the future holds
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After several years of doom and gloom and many proclaiming the death of cash, the last 12 months have well and truly put that idea to bed. Despite many expecting the COVID pandemic to be the last nail in the coffin, four years later, cash is still in widespread use. The future looks bright. Recent figures from the British Retail Consortium (BRC) underscore the story of 2024… Cash is no longer on the way out and is set to remain a critical part of the payment ecosystem and economy for the foreseeable future.
What happened with cash?
The resilience and ongoing importance of cash to payments, finance, and the economy is down to two factors. Firstly, it’s clear now that consumers care. Recent research from PayComplete’s ‘Why won’t cash just die?!’ report found 89% of consumers view the ability to pay in cash as important to customer satisfaction. More importantly, when it is removed as a payment option, only 26% of consumers comply. Meanwhile, an even larger group (36%) vote with their feet and walk away without making a purchase.
It’s not just customer experience that’s impacted by the absence of cash as a payment option. Brand perception also suffers. Research findings discovered nearly half (47%) of consumers believe organisations that don’t accept it are putting profits ahead of customer satisfaction. Moreover, when denied the opportunity to pay in cash, respondents felt a range of emotions, including inconvenience (54%), outright annoyance (52%) and, for those who walked out without making a purchase, anger (16%). Failure to offer this payment choice is a big risk for businesses. It can negatively impact customer satisfaction, brand reputation, and lead to outright anger from customers.
However, the value consumers place on cash goes beyond it being a way of completing a transaction. It is also seen as critical to supporting local communities. Interestingly, the research found 65% of consumers know card payments incur charges for businesses, resulting in nearly a quarter (22%) actively choosing to pay in cash instead. In fact, over half (57%) of consumers want to help businesses save money by paying in cash, which jumps to 71% for small businesses, tipping, and personal services. Paying with cash, therefore, is not simply a way of transacting with a company. For many shoppers, it’s a sign of support.
Regulators and lawmakers protect cash
However, consumers continuing to care is only part of the story. Furthermore, an important factor has been the steps regulators and governments have taken to protect access to cash. In the UK, 2024 was the year that the FCA’s Access to Cash came into force. This made it a legal requirement for banks and building societies across the UK to provide a minimum level of access to cash. Across the pond, similar measures have been taken by Connecticut, Massachusetts, Colorado and Tennessee as US states move to enshrine access to cash into law. With lawmakers realising its importance, and creating regulations to protect access to it, the long-term future of cash is now secure.
What does it all mean?
2024 has been a watershed year for cash and its future. No longer are there debates and discussions about a cashless society. Instead, it is here to stay, and, with that certainty, it makes it far easier for businesses to plan for their own future. Businesses waiting to see what would happen with cash before deciding if it was part of their future now have a conclusive answer and can plan accordingly. Moreover, those who have already taken steps to move towards a cashless future will need to reverse course or risk facing consumer wrath.
The rise of CashTech
The good news for businesses is that cash management and handling technology hasn’t stood still these past few years. There is a combination of smart hardware and software to finally unify management, processing, and handling. CashTech is a new set of solutions that make it quicker, easier, and more efficient than ever before for businesses to handle cash. Combining hardware and software, CashTech solutions enable enterprises to digitise their handling. Making it easy to assess business-critical areas like cash flow management and better support accounting and business management processes. By automating handling, businesses can also avoid the unnecessary costs of discrepancies and inefficiencies from manual processes.
In the coming years, when we look back on 2024, we will see it as the year the future for cash was confirmed. Talk of a cashless future and the death of hard currency was wide of the mark. While cash may not usurp debit and credit card payments, neither will they bring about its end. With the future now clear, it’s time for businesses to adopt CashTech in 2025 and turn inefficient processes into a game-changing competitive advantage.
About PayComplete
PayComplete is the global leader in cash management solutions, combining bleeding edge hardware solutions with game changing software, unifying cash management with other key payments and operational systems. Dedicated to innovating self-service experiences and operations for both consumers and employees, The PayComplete IoT platform is made up of an adaptable set of SaaS and machine software, intelligent devices, and professional, technical and merchant services. PayComplete Connect unifies the management of transactions, users, devices, and data across the enterprise, bringing digital precision to cash transactions and systems. PayComplete serves a broad range of industries, including retail, transportation, financial services, vending, cash centers, mints and more.Industry leaders, work with PayComplete to make their cash transaction-based businesses more innovative, agile, and efficient.
Glenn Fratangelo, Head of Fraud Product Marketing & Strategy at NICE Actimize, on financial services fraud prevention in 2025.
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2024 marked a turning point in financial crime management with the advent of Generative AI (GenAI). McKinsey estimates GenAI could add a staggering $200-340 billion in annual value to the global banking sector. A potential revenue boost of 2.8 to 4.7%. This underscores the transformative potential of GenAI. IT IS rapidly evolving from a futuristic concept to a powerful tool in the fight against financial crime. However, 2024 was just the prelude. 2025 promises to be the year GenAI truly comes into its own. Unlocking transformative capabilities in combating increasingly sophisticated threats.
This evolution is not merely desirable, it is essential. The Office of National Statistics (ONS) reported a concerning 19% year-over-year increase in UK consumer and retail fraud incidents in 2024, reaching approximately 3.6 million. This stark reality underscores the urgent need for financial institutions (FIs) and banks to bolster their defences against financial crime. In 2025, leveraging the power of GenAI is no longer a luxury, but a necessity for protecting customers and safeguarding the financial ecosystem.
The evolving GenAI-powered fraud landscape
Fraudsters have embraced GenAI as a potent weapon in their arsenal. This technology’s ability to create realistic fakes, automate attacks and mimic customers creates a significant threat to the financial landscape.
Deepfake technology has become a particularly insidious tool. By generating highly realistic voice and facial fakes, fraudsters can bypass remote verification processes with ease. This opens doors to unauthorised access to sensitive information, enabling account takeovers and other fraudulent activities.
In addition, the rise of synthetic identities further complicates the challenge. By blending real and fabricated data, fraudsters can create personas that seamlessly infiltrate legitimate customer profiles. These synthetic identities are extremely difficult to detect, as they appear indistinguishable from genuine customers. Making it challenging for institutions to differentiate between legitimate and fraudulent activities.
Phishing scams have also undergone a dramatic evolution, becoming more sophisticated and personalised. AI-driven techniques allow fraudsters to craft personalised, convincing emails that mimic legitimate communications, resulting in significant data breaches.
Harnessing GenAI
GenAI is being used by criminals – presenting a significant challenge in the realm of fraud. It requires advanced AI capabilities such as real-time behavior analytics that use machine learning to continuously analyse all entity interaction and transaction patterns. This can identify subtle deviations from a customer’s typical behaviour. It allows for initiative-taking and the flagging of suspicious activity before any damage occurs. Moreover, providing a significant advantage over traditional, rigid rule-based systems that often fail to detect nuanced threats.
Fraud simulation and stress testing using GenAI can also empower institutions to proactively assess the resilience of their systems. By simulating potential fraud scenarios, financial institutions can identify vulnerabilities and train detection models to recognise emerging tactics. Furthermore, this proactive preparation ensures that defences remain ahead of fraudsters’ evolving methods, creating a more robust and adaptable security infrastructure.
Low volume high value fraud, such as BEC or other large value account to account transfers usually lack the quantity of data needed to optimise models. GenAI can address this by creating synthetic data that mimics real-world scenarios. This approach significantly improves the accuracy and robustness of detection models, making them more effective against new and unforeseen threats.
GenAI has the potential to transform the investigation process by automating tasks such as generating alerts and case summaries, as well as SAR narratives. This automation not only minimises errors but also frees analysts from mundane tasks, allowing them to focus on higher-value activities. The result is a significantly accelerated financial crime investigation process, enabling institutions to respond to threats with greater speed and efficiency.
The battle against fraud in 2025 and beyond
The battle against financial fraud in 2025 and beyond is an undeniable arms race. Fraudsters, wielding generative AI as their weapon, will relentlessly seek to exploit vulnerabilities. To counter this evolving threat, financial institutions must embrace AI to outmanoeuvre fraudsters and proactively protect their customers.
The future of fraud and financial crime prevention hinges on our ability to innovate and adapt. Institutions that view GenAI not just as a challenge, but as an opportunity, will emerge as leaders in this fight. AI is a force multiplier for institutions striving to combat fraud and financial crime, empowering them with smarter, faster, and more adaptive defences, we can create a more secure and trustworthy financial ecosystem. The choice to innovate in the face of adversity will define the path forward and shape the future.
Martin Greenfield, CEO of Quod Orbis, on a troubling paradox within the cybersecurity landscape: despite substantial investments in security infrastructure, confidence levels and actual capabilities remain worryingly misaligned.
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Financial institutions face concrete regulatory pressure on Cybersecurity with the European Union’s Digital Operational Resilience Act (DORA) coming into force in February. This landmark regulation demands robust ICT risk management and comprehensive security monitoring. Currently, many organisations continue to rely on disparate tools and spreadsheets that may leave them vulnerable to sophisticated threats. These include AI-powered deep fakes and targeted spear phishing campaigns.
This challenge transcends the financial sector as organisations across all industries face mounting pressure to demonstrate both security effectiveness and regulatory compliance. Our research reveals a stark reality. Organisations typically maintain an average of 19 security solutions per team. However, a surprising 41% still cite insufficient technology as the primary obstacle to maintaining a robust security posture.
This misalignment points to a fundamental issue. Organisations must recognise effective cybersecurity isn’t achieved through quantity of tools, but through strategic selection of the right solutions. Furthermore, perhaps most concerning is the false sense of security prevalent among IT decision-makers. While 93% express confidence in their infrastructure visibility tools, an alarming 95% acknowledge difficulties in accessing specific digital assets over the past year. This creates dangerous blind spots leaving organisations exposed to both security breaches and compliance shortfalls.
Understanding the Cybersecurity challenge
Today’s enterprise infrastructure resembles a tapestry of critical assets, connections and endpoints. To put this complexity into perspective: IT teams now manage an average of 31 endpoints per person across their organisation. For a company of 1,000 employees, this translates to more than 30,000 devices requiring constant monitoring and protection. This challenge intensifies with the widespread adoption of cloud services, hybrid working arrangements and an ever-growing ecosystem of connected devices.
Scale amplifies these difficulties markedly. Our research reveals organisations with more than 1,250 employees demonstrate the lowest confidence in their existing tools (88%) and face the greatest challenges in accessing critical assets (97%). Moreover, these larger enterprises typically wrestle with an unwieldy combination of legacy systems, bespoke solutions and modern platforms. This results in notably lower visibility rates (79%) compared to their smaller counterparts.
Perhaps most revealing is the stark confidence gap between technical and compliance teams. While 94% of information security directors express confidence in their system visibility, merely 66% of compliance directors share this outlook. This disparity exposes a crucial misalignment between technical capabilities and compliance requirements. One that poses serious operational risks as regulatory frameworks increasingly demand continuous monitoring. Organisations clinging to manual compliance processes face an unstable burden. Teams are stretched thin handling routine tasks while regulations grow more complex. Embracing automated technologies to handle routine monitoring requirements will allow compliance teams to pivot from being reactive box-checkers to strategic risk managers.
Moving from reaction to prevention
The impulse to combat emerging threats by rapidly acquiring new security solutions has led many organisations to create sprawling, inefficient systems. These often compound the very problems they aim to solve.
This reactive approach has trapped organisations in a costly cycle of diminishing returns. Despite substantial technology investments, nearly 40% of firms report a troubling lack of actionable intelligence, while 37% struggle with budget limitations. This paradox is increasingly drawing board-level scrutiny. And rightfully so. After years of approving emergency technology purchases to plug cybersecurity gaps, boards are now questioning the value of new investments. Furthermore, tthis creates a dangerous stalemate: organisations need smarter, not just more, technology investment.
However, a more strategic approach is gaining traction through integrated system monitoring platforms. These comprehensive solutions unite previously disconnected tools under a single dashboard. This can offer real-time visibility across the entire cybersecurity landscape. This unified approach enables teams to identify and address vulnerabilities before they evolve into security incidents. A capability that resonates with the 82% of organisations who recognise enhanced visibility would substantially strengthen their cybersecurity posture.
It’s encouraging that 72% of IT teams have secured increased budgets over the past three years. However, the path forward requires more than mere financial investment. Organisations must shift from reactive spending to strategic deployment. Although this presents its own challenge: convincing board members that additional tooling represents an investment in comprehensive visibility rather than merely plugging security gaps.
The path forward
The transformation from fragmented security to comprehensive oversight demands more than technological upgrades. It requires a fundamental reimagining of how organisations approach cybersecurity monitoring and compliance.
The advantages of this strategic shift are compelling and quantifiable. Our analysis reveals security teams anticipate multiple efficiency gains: 38% expect automation to streamline document creation, 37% foresee improved board pack preparation, and 36% anticipate dedicating more time to strategic security assessments. Perhaps most significantly, 35% predict a reduction in human error alongside enhanced data accuracy. The efficiency gains are substantial. Teams could reclaim up to 60 hours annually per member on board reporting alone, time better invested in strategic security initiatives.
With regulatory frameworks growing increasingly sophisticated across sectors, including the forthcoming DORA regulation, maintaining current practices is no longer viable. The disparity between perceived and actual security capabilities poses a tangible risk that organisations must address proactively.
About Quod Orbis
Quod Orbis is the single source of truth across security, risk and compliance, providing an orchestration layer for the entire tech stack whether in the cloud, on-premise, legacy or bespoke. Founded in 2018, Quod Orbis became part of Dedagroup, one of the leading Italian IT players, in 2024.
A pioneer in Continuous Controls Monitoring (CCM), Quod Orbis provides complete and constant visibility into a company’s cybersecurity, compliance and risk posture. Quod Orbis’ ability to connect with every piece of technology within a business, unrivalled automation capabilities and continual support enables the company to serve a global client base across a wide variety of industries.
‘FlyEasy’ parametric cover is now available on Zurich Indonesia’s Travel Product: offering real-time lounge access for delayed flights
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Blink Parametric, in partnership with Zurich, has launched flight disruption assistance solution ‘FlyEasy’. Coverage is on the Zurich Indonesia direct channel via the Zurich Edge platform. Leveraging parametric technology, the proposition has been designed to instantly activate coverage benefits upon confirmation of a flight delay. This seamless, fully-digital approach provides ultimate convenience to customers, relieving them of traditional claims processes and allowing them to enjoy their travels with greater peace of mind.
The expansion is part of the agreement signed in January 2024. The award-winning flight delay solution can now be offered to Zurich’s customers across Asia Pacific via the Zurich Edge Platform.
Zurich Asia Pacific Network
This integration is the second rollout this year under the framework agreement to offer Blink Parametric solutions to Zurich Asia Pacific network partners and customers across Singapore, Hong Kong, Malaysia, Indonesia and Japan. The first was with Singapore-based OTA Klook in March.
Once a customer registers their flight details pre-travel, Blink Parametric monitors that flight in real-time. Also, in the event of a flight delay of two-hours, the customer will automatically be offered real-time assistance of complimentary access to a VIP airport lounge. The lounge pass will have extended validity with a shelf-life of six-months if not used on the day of disruption. The benefit will be applicable for single trip and annual multi-trip executive and premier international travel plan insurance customers. No claims filing or application processing is required.
Sukma Darman, Head of Digital, Zurich Indonesia commented, “One of Zurich Edge’s key objectives is to bring a fresh perspective on insurance to our partners and customers. We can then deliver personalised, customer-centric solutions using next-gen technology. Blink Parametric have helped us to achieve successful travel insurance integrations for the Asia Pacific region throughout this year. This includes delivery of innovative real-time assistance for our valued customers when they need us.”
Blink Parametric & FlyEasy
“This latest Zurich Indonesia integration coincides directly with our strategic move to further expand and support our business development and partner activities across the APAC region,” says Richard Pollard, Director of Strategic Accounts, Blink Parametric. “Furthermore, our work with the Zurich team this year has been significant, with two successful launches to date. It’s now possible for Zurich partners to tap into the Zurich Edge platform and deploy our real-time travel assistance solution under the FlyEasy brand with speed and efficiency. Exactly how it should be!”
Blink Parametric is recognised as one of the most innovative and successful providers of travel InsurTech solutions to insurers world-wide. It offers real-time assistance and service choices to travellers impacted by flight disruption events. Blink Parametric travel solutions are fully customisable and designed to deliver operational efficiency. Moreover, processing high frequency, low value travel insurance claims when the traveller needs immediate real-time claim resolution.
Benjamin Avraham, CEO and Founder at Okoora – the creators of Automated Business Currency Management, on Embedded Finance in global trade and the challenges of FX risk in global expansion
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Embedded Finance is rapidly emerging as a transformative force in cross-border payments, reshaping how businesses handle transactions across borders. By making payments more efficient and accessible, it is becoming a key tool for companies navigating the complexities of global trade. While the concept isn’t entirely new, its adoption has accelerated, with the sector projected to generate an estimated $230 billion in revenue by 2025.
Trends in Embedded Finance for Cross-Border Payments in 2025 and beyond
Embedded Finance is poised to reshape cross-border payments. It offers innovative solutions to address inefficiencies and create experiences with reduced friction for businesses and consumers alike.
A key trend is the integration of multi-currency wallets. These enable real-time currency conversion and support localised payment methods tailored to specific regions. This not only reduces transaction delays but also enhances accessibility for global users. At the same time, embedded risk management tools are gaining traction. These provide businesses with automated FX hedging options and predictive analytics to better manage currency volatility.
Super apps with embedded cross-border capabilities are becoming more prevalent. These offer all-in-one solutions for payments, investments, and FX management. These apps are especially impactful in promoting financial inclusion, allowing underserved markets to access cross-border payment systems with ease.
The Challenge of FX Risk in Global Expansion
For businesses aiming to expand globally and remain competitive, understanding and managing foreign exchange (FX) risk is paramount. Currency volatility, intricate markets, and hidden costs remain significant hurdles for companies operating internationally. Moreover, the solution lies in leveraging embedded currency risk management, which integrates FX tools directly into business workflows to streamline and mitigate these challenges.
Historically, small and medium-sized businesses (SMBs) have relied on traditional banks for cross-border payment services. However, slow, opaque, and cumbersome banking processes often fail to meet the modern demands for a frictionless experience. SMBs today require more than just service providers—they need trusted partners who truly understand their unique needs and can deliver tailored solutions. Embedded Finance levels the playing field by giving SMBs access to financial tools previously reserved for larger corporations, empowering them to compete effectively in global trade.
On a parallel track, larger players such as payment institutions, corporates, and banks are increasingly recognizing the potential of embedded finance to unlock new market opportunities and enhance the financial ecosystem. According to a recent report by Publicis Salient, embedded finance revenues are expected to grow by 40% annually in the coming years, underlining its critical role in the evolution of global financial services. This is encouraging organizations without in-house capabilities to actively seek partnerships with fintech providers to deliver integrated, relevant, and accessible financial services, while also creating new revenue streams.
Key features of Embedded Finance for Cross-Border Transactions
As businesses continue to navigate the complexities of cross-border transactions, Embedded Finance offers an array of powerful features that streamline processes, enhance efficiency, and mitigate risks. By integrating financial tools directly into business systems, companies can improve operations, reduce costs, and gain greater control over their international payments and currency management.
Below are the key features that make Embedded Finance a game-changer for businesses engaged in global trade:
Streamlining Payments
Frictionless Transactions: Embedded finance integrates payment processing directly into business systems, enabling businesses to send and receive funds across borders without needing separate third-party platforms.
Localised Payment Methods: It supports local payment systems, ensuring businesses can transact with customers and partners in their preferred currencies and payment formats.
FX Risk Management
Automated Hedging: Embedded tools can automatically hedge against currency fluctuations, reducing financial exposure and safeguarding profit margins.
Predictive Analytics: Advanced analytics help businesses anticipate and respond to currency market threats and opportunities.
Reducing Costs & Delays
Lower Fees: By bypassing traditional banking intermediaries, embedded finance platforms often reduce transaction costs.
Faster Settlements: Transactions are processed more quickly, enabling businesses to manage cash flow and working capital more efficiently.
Enhancing Transparency
Clearer Pricing: Embedded finance platforms provide real-time insights into exchange rates and transaction costs, ensuring businesses have full visibility into cross-border payment processes.
Regulatory Compliance: Built-in compliance tools streamline adherence to local regulations, reducing administrative burdens and risks of non-compliance.
Access to Financing
Embedded Credit & Loans: Businesses can access trade financing or working capital loans directly within platforms, supporting growth and smoothing cash flow challenges during cross-border trade.
Supply Chain Support: Financing solutions embedded in procurement platforms help businesses manage large international purchases with ease.
Simplifying Tax & Regulatory Compliance
Automated Tax Calculations: Embedded tools help businesses calculate duties, taxes, and other levies for cross-border transactions.
Built-in Compliance Checks: Solutions automatically ensure compliance with local and international regulations, saving time and reducing risks.
The road ahead for Embedded Finance
The evolution of embedded finance holds the potential to unlock new market opportunities and enhance the global financial ecosystem. Through strong collaboration among fintech companies, regulators, and technology providers, the industry can pave the way for embedded finance to deliver highly relevant financial services in an accessible manner to meet the needs of businesses globally.
About Okoora
Okoora is a leading fintech provider, offering businesses worldwide the financial infrastructure needed to scale their international operations. Recognized by CNBC and Statista as one of the world’s top 250 fintechs, the company’s automated platform, API, and embedded finance solutions empower businesses to collect and send payments, manage multi-currency accounts, and hedge FX risks. Okoora enables seamless operations in over 100 currencies and 180 countries.
Nick Merritt, Executive Director at Designit, on six developments shaping the future of banking in 2025
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Retail banks are entering 2025 with a heady mix of ambition and trepidation. A bewildering blend of technological wizardry and ever-shifting customer expectations has forced banks into a relentless cycle of adaptation. To stay ahead, six key areas are emerging as the lodestars guiding their strategies for the coming year.
Digital Transformation and Automation – Predicting Your Needs Before You Have Them
Imagine a world where banks predict your needs before you’ve even realised them. From AI-driven chatbots that never sleep to robo-advisors whispering bespoke investment tips into your ear, automation is rewriting the rulebook on customer interaction. But the magic isn’t confined to the shiny front-end; back-office systems are also getting a makeover. Robotic Process Automation (RPA) is busy in the engine room, banishing inefficiencies and sidestepping human error with quiet efficiency.
And then there’s the matter of personalisation—a concept that banks are finally treating as more than a marketing buzzword. Armed with advanced data analytics, banks are no longer just responding to customer needs—they’re predicting them. Pre-approved loans or a savings plan tailored to your Friday night wine habit? No problem.
Cybersecurity: Evolving as Fast as the Threats
With this digital power comes a greater need for vigilance. Cybercriminals are evolving just as quickly, turning cybersecurity into a battlefield. AI-driven fraud detection tools now scan for anomalies with hawk-like precision, while biometric authentication methods—fingerprints, faces, even voices—transform our bodies into passwords.
Cyber resilience has become essential, ensuring banks bounce back swiftly from attacks. Trust, in banking as in life, remains hard-won and easily lost.
Sustainability: ESG as a Competitive Advantage
Environmental, Social, and Governance (ESG) criteria have transitioned from being a footnote to taking centre stage. Customers are no longer content with bland promises of responsibility—they’re demanding action. Enter green loans with their tempting interest rates, ESG investment funds that let you save the planet while saving for retirement, and carbon-neutral pledges that make you feel virtuous about your overdraft.
It’s not just a moral imperative; it’s good business sense. In a world increasingly attuned to sustainability, ESG is a differentiator. Banks that can convincingly wear the green badge of honour are more likely to attract eco-savvy customers and forward-thinking investors alike.
Embedded Finance & Partnership Models
Embedded Finance might sound like jargon, but it’s quietly reshaping how we interact with money. Why go to a bank when the bank can come to you—disguised as a “Buy Now, Pay Later” button on your favourite shopping app or as a seamless payment option in your rideshare app? Banks are waking up to the fact that ecosystems, not high-street branches, are where the action is.
Partnerships with fintech firms are unlocking new avenues for growth. Whether it’s integrating loans into car dealership platforms or powering payments for subscription services, embedded finance is giving banks a chance to slip into customers’ lives in ways they barely notice—but deeply appreciate.
Cryptocurrencies: Cautiously Testing the Waters
And then there’s the crypto conundrum. Once the domain of tech evangelists and speculative investors, cryptocurrencies are elbowing their way into the mainstream. Bitcoin ETFs have made it easier for traditional investors to dip a toe into the crypto waters, while Ethereum and Ripple (XRP) are offering solutions that align with real-world banking needs.
Ripple’s laser focus on cross-border payments could revolutionise international money transfers, slashing costs and speeding up transactions. Ethereum’s smart contracts, meanwhile, promise to simplify complex processes like loan approvals. And Bitcoin, the poster child of the crypto world, is slowly gaining traction as a viable payment method.
Yet, it’s not all smooth sailing. Volatility, scalability issues, and a regulatory environment that can best be described as “uncertain” are significant hurdles. Still, with pro-crypto voices gaining ground, 2025 might just be the year retail banks cautiously dip their toes into the digital currency pool.
Personalisation: The Age of “Me”
Customers expect their banks to understand more than just account numbers; they want personalised interactions that anticipate their ambitions. Advanced analytics are turning this into reality, moving banking from transactional to relational.
Imagine a bank that adjusts your credit card rewards for your travel habits or nudges you toward your dream car before you even start shopping. Personalisation isn’t just a service upgrade—it’s a survival strategy.
Looking Ahead to 2025 and Beyond…
The opportunities for retail banks in 2025 are as immense as they are complex. Digital transformation is reinventing customer experiences, ESG is aligning institutions with the values of an increasingly conscientious public. Meanwhile, Embedded Finance is quietly rewriting the rules of engagement. Cryptocurrencies, for all their challenges, are becoming harder to ignore, while data-driven personalisation is making banking feel more like a partnership than a transaction.
For banks willing to embrace these shifts, the rewards are clear: deeper customer loyalty, stronger revenue streams, and a reputation for innovation. Standing still is no longer an option.
Ripple, a leading provider of digital asset infrastructure for financial institutions, has announced Ripple USD (RLUSD) will be available on…
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Ripple, a leading provider of digital asset infrastructure for financial institutions, has announced Ripple USD (RLUSD) will be available on global exchanges. RLUSD is an enterprise-grade, USD-denominated stablecoin. Created with trust, utility, and compliance at its core, it is backed by Ripple’s years of experience working with crypto and the existing financial system.
RLUSD will be initially available on Uphold, Bitso, MoonPay, Archax, and CoinMENA. Additional listings will be made on platforms such as Bullish, Bitstamp, Mercado Bitcoin, Independent Reserve, Zero Hash and others in the coming weeks. Each RLUSD token is fully backed by U.S. dollar deposits, government bonds, and cash equivalents. Designed to ensure its stability, reliability, and liquidity. To maintain the highest standards of transparency, Ripple will publish monthly, third-party attestations of RLUSD’s reserve assets, conducted by an independent auditing firm.
“Early on, Ripple made a deliberate choice to launch our stablecoin under the NYDFS limited purpose trust company charter. Widely regarded as the premier regulatory standard worldwide,” said Brad Garlinghouse, Ripple’s CEO. “As the U.S. moves toward clearer regulations, we expect to see greater adoption of stablecoins like RLUSD. They can offer real utility and are backed by years of trust and expertise in the industry.”
A Growing Ecosystem Supporting Global Adoption
Key RLUSD partners include leading global exchanges, market makers, and payment providers. They are set to drive adoption and usage across the Americas, Asia-Pacific, UK, and Middle East regions. RLUSD is ideal for financial use cases and allows institutions to:
Access liquidity for remittance and treasury operations.
Seamlessly integrate with decentralised finance (DeFi) protocols.
Reliably bridge between traditional fiat currencies and the crypto ecosystem. Ensuring a seamless and efficient transition when entering (on-ramping) or exiting (off-ramping) the crypto space.
Provide collateralisation for trading tokenised real-world assets such as commodities, securities, and treasuries onchain.
Early next year, Ripple Payments will use RLUSD to facilitate global payments on behalf of its enterprise customers. Ripple Payments has served $70 billion in payments volume and counting. Furthermore, it has near-global coverage with 90+ payout markets. Moreover, this represents over 90% coverage of the daily FX market. RLUSD is available on both the XRP Ledger and Ethereum blockchains, offering flexibility and scalability for a broad range of financial use cases.
RLUSD: Raising the standard for Stablecoins
Raghuram Rajan, former Governor of the Reserve Bank of India, and Kenneth Montgomery, former First Vice President and Chief Operating Officer of the Federal Reserve Bank of Boston, will join the RLUSD advisory board. They will provide strategic guidance on regulatory, financial, and operational aspects to support RLUSD’s stability and growth.
Rajan and Montgomery join the ranks of the existing advisory board including former Federal Deposit Insurance Corporation (FDIC) Chair Sheila Bair, Vice Chairman of Partners Capital and former CENTRE Consortium CEO David Puth, and Ripple co-founder and Executive Chairman Chris Larsen.
“Stablecoins could become the backbone of private payments by offering a secure, scalable, and efficient alternative to traditional systems. With its focus on compliance and reliability, RLUSD aims to establish new standards for trust and to play a pivotal role in shaping the future of payments. Joining the Advisory Board provides me an opportunity to counsel RLUSD as it embarks on its journey in the rapidly evolving financial landscape,” said Raghuram Rajan, former Governor of the Reserve Bank of India.
“I am excited to join Ripple’s advisory board at such a pivotal moment for digital finance,” said Kenneth Montgomery, former First VP and COO at the Federal Reserve Bank of Boston. “Stablecoins are rapidly emerging as a cornerstone of the payments landscape. They are delivering the speed, efficiency, and cost-effectiveness that traditional systems often struggle to achieve. I look forward to collaborating with the Ripple team to support the global growth and adoption of RLUSD. Unlocking new opportunities for financial inclusion and modernising the future of payments.”
Ripple: modernising the future of payments
RLUSD sets the standard for stablecoins, combining innovative functionality with the regulatory rigor and credibility of an NYDFS-issued New York limited purpose trust company. Furthermore, this highlights Ripple’s leadership in fostering trust and transparency in digital assets.
Ripple’s President Monica Long commented on X: “The release of RLUSD marks a new chapter – both for the XRP Ledger, as well as Ripple, for use in our $70B payments flows. Combining our 10+ years in the business; the rigour and compliance required with stablecoin issuance by a NYDFS chartered company; and an experienced Advisory Board – RLUSD is launching from day one with credibility, utility and a whole host of partners ready to support it!”
FICO’s use of Blockchain for AI model governance wins Tech of the Future: Blockchain and Tokenisation award
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Global analytics software leader FICO has won the Tech of the Future – Blockchain and Tokenisation award. The Banking Tech Awards in London recognised FICO for its innovative work using Blockchain technology for AI model governance. FICO’s use of blockchain to advance responsible AI is the first time blockchain has been used to track end-to-end provenance of a machine learning model. This approach can help meet responsible AI and regulatory requirements.
FICO’s AI Innovation and Development team has developed and patented an immutable blockchain ledger. It tracks end-to-end provenance of the development, operationalisation and monitoring of machine learning models. The technology enforces the use of a corporate-wide responsible AI model development standard by organisations. It demonstrates adherence to the standard with specific requirements, people, results, testing, approvals and revisions. In addition to the Banking Tech award, Global Finance recognised FICO’s blockchain for AI technology with The Innovators award last year.
Responsible AI
“The rapid growth of AI use has made Responsible AI an imperative,” commented Dr. Scott Zoldi, chief analytics officer at FICO. “FICO is focused on technologies that ensure AI is used in an ethical way, and governance is absolutely critical. We are proud to receive another award for our groundbreaking work in this area.”
FICO is well-known as a leader in AI for financial services. Its FICO® Falcon® Fraud Manager solution, launched in 1992, was the first fraud solution to use neural networks. Today it manages some four billion payment cards worldwide. FICO has built advanced analytics capabilities into FICO® Platform, an applied intelligence platform for building decision management solutions.
Adam Zoucha, MD EMEA at FloQast, on how businesses will modernise financial processes in 2025
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With 45% of accountancy firms and in-house finance teams facing talent shortages, 2025 is going to be a critical year for many. Financial transformation is going to be the watchword. The conditions companies are facing will push them to speed up the transformation of their operations, modernising their financial processes while strengthening their company culture and vision.
The year ahead will likely see a continuation of the current period of instability, posing serious challenges for accounting teams looking to grow their business. The impact of global geopolitics is hard to predict which, twinned with the UK economy’s persistently slow growth rate, means companies will need to innovate to succeed – embracing automation, AI, and cutting-edge compliance processes.
It’s not all about the macro trends, though. On an individual level, our research this year has shown that employees are feeling the strain, and business leaders will need to take that seriously in 2025. The talent shortage is a vicious cycle – the harder it is for companies to find and retain talent, the more pressure remaining team members end up having to shoulder. The right technology can play a crucial role in reducing that stress and breaking the cycle.
Alongside those real challenges, there are real opportunities. The accounting business is changing fast, and it’s a great time to be in the industry. As we draw 2024 to a close, here are five key things accounting firms can expect to see in the new year.
Financial Transformation moving up the agenda
We’ve already looked at some of the reasons why financial transformation is going to be critical in 2025, but that doesn’t mean every CFO and accountant in the business is rushing to deliver. Based on our research 60% of accountants and CFOs still do not consider it a top priority – mainly because most don’t truly know what it means for their business, so education is key.
In essence, companies should aim to align their finance functions more closely with their organisational goals, enabling accountants to bring their expertise and insight to the decision-making process. As the finance function’s strategic role grows, there will be an urgent need for agile, digital tools that enhance collaboration and efficiency. For CFOs, embracing this transformation is essential to navigate new complexities with precision and effectiveness.
Accountancy teams will embrace new tools for the future
The talent gap present in the industry is unlikely to change any time soon. It takes time to train people, and accounting has a bit of a PR problem – its status as a secure, skilled job is battling with perceptions of stress and burnout.
As a result, in 2025, leaders will increasingly look to keep accountants motivated, engaged, and fulfilled as the declining population of new candidates continues to heap pressure on accounting teams—a trend that’s unlikely to reverse anytime soon.
It’s essential that business leaders retain their finance professionals by fostering a fulfilling work environment. They can help by upskilling accountants and adopting technologies to reduce mundane and repetitive tasks. CFOs can play a key role by equipping their teams with future-focused skills, blending technology with strategic insight to drive real value within their organisations.
AI will power Tansformation in 2025
Transformation in 2025 won’t be limited to removing internal silos and improving staff retention, crucial though those things are. We’re also going to see AI helping accountants become key players in driving business success. The real value of AI will become apparent this year. For finance teams, it will act as a copilot, automating routine tasks and giving time back to accountants to become strategic assets for their organisations.
This shift will help the industry tackle talent shortages with agility, turning challenges into opportunities for growth. Embracing AI isn’t just about keeping pace; it’s about unlocking accountants’ full potential as key players in driving business success.
Compliance will become a value-generating asset rather than a tick-box exercise
Compliance and risk, when managed properly, can drive real value for organisations. In 2025, the nuanced relationship between compliance, reputation, and risk means it’s likely to move up the corporate agenda.
Technology can be a real driver here, and compliance strategies are fundamental to the larger accounting transformation journey. By taking a more holistic approach to compliance, rather than treating it as a mere check-box exercise, compliance can become a valuable asset. Currently, only 16% of organisations take this strategic view, revealing a significant opportunity for those willing to innovate and elevate their compliance efforts.
Overall, accounting businesses may be facing rough seas, but with the right tools and investments in place, they can unlock new value in 2025: transforming financial processes, improving employee satisfaction, and stepping further into their growing role as strategic advisors.
Bryan Daugherty, Global Public Policy Director at the BSV Association (BSVA) and Co-Founder at SmartLedger Solutions, on how blockchain technology provides the accountability and cybersecurity needed to prevent widespread IT catastrophes across sectors
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By Embracing Blockchain, We Can Create a Safer Digital Future
The rapid increase in cyberattacks poses a severe threat to businesses. These attacks are becoming more sophisticated and costly by the day. The average cost of a data breach in the UK is £3.58 million, and in the US now $9 million. It typically takes 200 days for organisations to detect a breach, followed by another 70 days to contain it. These delays expose significant vulnerabilities in traditional data management systems. They rely heavily on third parties, making them prime targets for cybercriminals.
Blockchain technology offers a transformative solution to these challenges by creating a secure, decentralised model that can effectively mitigate risks. It provides an opportunity for both individuals and organisations to take control of their data. Therefore, improving cybersecurity and ensuring operational resilience.
The Problem with Centralised Systems
Traditional cybersecurity systems are built on centralised models, where data is stored in one location or through third-party intermediaries. This structure makes them attractive targets for cybercriminals, creating a “honeypot” of information that can be breached. A concerning statistic is that, for over a decade, organisations have taken an average of 200 days to detect breaches. Despite claims from cybersecurity vendors that they provide “instant detection,” real-world results show significant gaps in protection, putting data at risk for extended periods.
Blockchain: Game-Changing Cybersecurity Features
Blockchain’s decentralised model provides a powerful alternative. By distributing data across a global network of nodes rather than a central location, blockchain makes it exponentially harder for cybercriminals to compromise large datasets. Even if one node is breached, the entire system remains intact. This eliminates the single point of failure that centralised systems suffer from.
Another key feature of blockchain is its immutability. Once data is recorded on a blockchain, it cannot be altered or erased, making tampering nearly impossible. Therefore, this ensures any unauthorised access is immediately detectable, enabling quicker response times and minimising damage.
Real-Time Threat Detection with CERTIHASH
Blockchain’s potential in cybersecurity is already being realised through solutions like CERTIHASH’s Sentinel Node. A blockchain-based tool that provides real-time threat detection. Built on the BSV blockchain, CERTIHASH can detect breaches within 10 seconds or less, offering a proactive approach to cybersecurity. This is a significant improvement over traditional systems, which often take months to identify breaches, leaving organisations vulnerable to prolonged data exposure.
By leveraging blockchain, cybersecurity shifts from being reactive to proactive. This gives organisations the tools they need to stay ahead of evolving threats and safeguard data more effectively.
Overcoming Misconceptions About Blockchain
Despite the clear advantages of blockchain, many organisations remain hesitant to adopt the technology, often due to misconceptions. Furthermore, some still associate blockchain with cryptocurrencies like Bitcoin, which have been linked to ransomware. This outdated view overlooks blockchain’s real potential as a secure, decentralised data management tool.
Blockchain is not just about crypto; it’s about creating a new standard for data integrity and security. Moreover, it offers decentralised, tamper-proof records that give users control over their own identity and data, reducing reliance on vulnerable third-party systems.
A Decentralised, Secure Future
As global reliance on centralised systems grows, so do the vulnerabilities they present. A single point of failure can lead to widespread outages, as seen in numerous cyberattacks and technical malfunctions. Blockchain, with its decentralised architecture, offers a robust alternative that enhances the security and resilience of critical systems. By distributing data across multiple nodes, blockchain ensures continuity even during attacks or outages.
Conclusion
Investing in blockchain cybersecurity is no longer optional. With cyber-attacks growing in scale and sophistication, organisations must adopt cutting-edge technologies to protect their data, operations, and customer trust. Blockchain’s decentralised and tamper-proof architecture offers the key to building a safer, more secure digital future. One where businesses and individuals alike can operate with confidence, free from the constant threat of cybercrime.
Paul O’Sullivan, Global Head of Banking and Lending at Aryza, on the rise of AI in banking
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The banking sector stands at the crossroads of technological innovation and operational transformation. AI is taking centre stage in reshaping how financial institutions operate. The banking sector is beginning to recognise AI’s potential. It can address challenges, enhance operational efficiency, and deliver more personalised customer experiences.
The Current State of AI in Banking
Research reveals that while a number of banking organisations have yet to fully integrate AI into their operations, key areas such as debt recovery are leading the charge. The slower pace of adoption can be attributed to the highly regulated environment of banking. Because transparency, compliance, and customer trust are non-negotiable. However, despite this cautious approach, banks that have implemented artificial intelligence are already seeing significant benefits, particularly in risk management.
AI’s Role in Risk Management
Effective risk management is a cornerstone of the banking sector. AI is proving to be a powerful tool in this area. By analysing vast amounts of data and providing predictive insights, AI enables banks to mitigate risks early. They can strengthen customer portfolio stability, and make data-driven lending decisions. These capabilities are essential in a landscape where financial risks can escalate rapidly.
Beyond the expected benefits, banks have also reported enhanced customer insights as an unexpected advantage. By leveraging AI to analyse customer behaviours and preferences, banks can tailor their products and services more effectively. Furthermore, they can improve customer satisfaction and experience, whilst fostering long-term loyalty.
Challenges to Adoption
Although organisations are experiencing a multitude of advantages, the integration of AI in banking is not without its hurdles. Legacy IT systems, stringent regulatory requirements, and concerns around data privacy pose significant challenges to widespread adoption. Banks must ensure AI-driven decision-making processes are effective. Moreover, they must also be fully transparent and compliant with industry regulations. Further highlighting the importance of a gradual, strategic approach to AI implementation.
Opportunities Ahead
The potential for AI in banking extends far beyond risk management. From streamlining operational workflows to enhancing customer personalisation and improving decision-making. AI is set to drive innovation across the sector. For example, AI-powered chatbots and virtual assistants transform customer service by providing instant, 24/7 support. They can handle complex interactions, enhancing customer satisfaction. At the same time, advanced analytics enable banks to analyse behaviour patterns, predict trends, and personalise product offerings. Furthermore. enhancing cross-selling opportunities and driving deeper customer engagement. These tools are becoming strategic enablers for innovation in the financial landscape.
A Call to Action
For banks to fully realise the benefits of AI, they must address the digital transformation gap, modernising outdated infrastructures and fostering a culture of innovation. This includes investing in technologies that align with their strategic goals, ensuring robust data security measures alongside maintaining compliance with evolving regulations.
As the banking sector continues its journey towards digital maturity, AI will play a pivotal role in defining its future. By overcoming current barriers and embracing AI-driven solutions, banks can not only enhance operational efficiency but also deliver the seamless, personalised experiences that customers now expect in an increasingly digital world.
About Aryza
At Aryza know that in today’s highly regulated world, there is huge value in quickly guiding your customers through the product that best fit their immediate needs, through a seamless journey that is tailored to their specific circumstances.
We created smart platforms, responsible and compliant products, and a unique system of companies and capabilities so that businesses can optimise their customers’ journey through the right product at the right time.
For our teams across the globe, the growth of Aryza is a good news story and a testament to our clear vision and goals as an international business.
And also front of mind as we build a global footprint is our impact on the environment. Aryza is committed to reducing its carbon impact through the choices it makes and we are pleased to say that we follow an active roadmap.
Misplaced confidence in visibility tools leaves organisations vulnerable amidst record high data breaches, according to latest research
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A new report from Quod Orbis highlights that 95% of businesses are at risk of a cybersecurity blindspot. A reported 93% of UK organisations have confidence in their system visibility. However, nearly all (95%) of them have struggled to access critical assets in the last year, according to the research.
Over a third (38%) actually rank lack of visibility as one of their biggest challenges, further highlighting the gap between respondents’ perceptions and the reality of their situation. This comes at a time when data breaches this year have already surpassed one billion stolen records.
Quod Orbis Cybersecurity Research
Martin Greenfield, Quod Orbis CEO, comments: “Businesses are suffering from a blind spot that’s leaving them exposed. Misplaced confidence in existing cybersecurity tools means these same organisations are susceptible to data breaches and non-compliance fallout. This results in potentially crippling financial and reputational consequences.”
Quod Orbis commissioned a research study with international research house, Censuswide, to poll 500 board executives and IT decision makers, across enterprises of 500+ employees in the UK.
Cybersecurity Tech Stacks
Cybersecurity tech stacks are growing exponentially in the face of rising threats. The average team manages 19 security solutions at any one time. However, 41% still report a lack of technology as being their biggest challenge when it comes to maintaining a robust cybersecurity posture.
As 72% of IT teams have had their IT budget increased in the past three years, Greenfield urges businesses to break free from the typical cycle of throwing money at a problem and hoping something sticks. “It’s not about the biggest investment, it’s about the right investment.”
A quarter (26%) of IT decision makers are yet to allocate budget to basic security tools like asset visibility technology. This is despite 40% reporting a lack of actionable data.
It’s clear though that businesses recognise the advantage of implementing the right technology. More than eight in 10 (82%) agree that greater visibility over digital assets will greatly improve business security. This is a huge leap from the 93% of respondents who believe their businesses already provide them with the necessary tools.
According to the data, most upcoming IT investments will be allocated to Continuous Controls Monitoring (32%), privileged and identity access management (30%) and zero trust (29%).
The Future
Greenfield concludes: “Digital infrastructure has reached a level of complexity that not only warrants, but demands, complete visibility. Now is not the time to gamble with your company’s security. Furthermore, organisations need to stop adding layers of unnecessary technology as a way of solving the immediate problem. Instead, they must take a step back and think holistically about how to resolve their issues.
“Tools like CCM, powered by automation, help teams see and understand their security and risk posture in real time. This offers peace of mind that all of their data is relevant and up to date. This level of insight provides early awareness of potential problems and empowers teams to take a proactive approach to security, instead of being forced back into the same reactive position they’ve been in for years.”
About Quod Orbis
Quod Orbis is the single source of truth across security, risk and compliance, providing an orchestration layer for the entire tech stack whether in the cloud, on-premise, legacy or bespoke. Founded in 2018, Quod Orbis became part of Dedagroup, one of the leading Italian IT players, in 2024.
A pioneer in Continuous Controls Monitoring (CCM), Quod Orbis provides complete and constant visibility into a company’s cybersecurity, compliance and risk posture. Quod Orbis’ ability to connect with every piece of technology within a business, unrivalled automation capabilities and continual support enables the company to serve a global client base across a wide variety of industries.
Innovative Systems, a leading provider of enterprise data, compliance, and integration solutions, has launched FinScan Marketplace
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The platform will serve as a one-stop shop for anti-money laundering (AML) compliance. It offers a streamlined approach to managing compliance risk and unified case management via a central hub for all related activities. FinScan Marketplace positions itself as a trusted partner for organisations navigating today’s complex, global regulatory landscape.
Removing the complexity of AML compliance
“Our goal with FinScan Marketplace is to remove the complexity of AML compliance. We bring everything organisations need into one unified platform,” said Deborah Overdeput, Chief Marketing Officer at Innovative Systems. “This launch reflects our commitment to delivering solutions that simplify processes. We empower compliance teams to work smarter, and ensure organisations remain vigilant. And fully aligned with evolving regulatory requirements in a rapidly changing landscape.”
FinScan Marketplace revolutionises how organisations manage their AML portfolio. It provides a single, easy-to-navigate interface. Customers can seamlessly access a comprehensive suite of tools. These include sanctions screening, KYC checks, adverse media screening, payment screening, and risk scoring, with additional features continually in development.
FinScan Marketplace
At the heart of FinScan Marketplace is its unified case management system. This integrates all critical AML processes into a cohesive workflow. From performing due diligence checks to monitoring transactions and investigating potential risks, customers can manage everything within a single platform. This integration saves time, reduces errors, and ensures compliance efforts remain seamless and effective.
FinScan Marketplace provides customers with a clear vision of the platform’s evolution. Its intuitive interface lets users view in-progress product developments, register interest in upcoming features. Furthermore, they can participate in design feedback sessions. This approach ensures future enhancements align closely with real-world compliance needs.
“We are not just delivering tools; we are creating partnerships with our customers by building solutions that adapt to their challenges,” Overdeput added. “Transparency and collaboration are key pillars of the FinScan Marketplace.”
Innovative Systems for AML
FinScan Marketplace reflects Innovative Systems’ dedication to becoming a trusted partner for a host of organisations. These include financial institutions, insurance companies, fintechs, casinos and gaming entities, charities and non-profits, government agencies, and other organisations it serves. By continuously delivering value, anticipating industry needs, and prioritising customers’ feedback in its development process, the company demonstrates its commitment to supporting effective and reliable AML compliance.
Innovative Systems delivers enterprise data, compliance, and integration solutions through the company’s leading FinScan®, Enlighten®, and PostLocate® brands. These solutions offer actionable insights and enable organizations to identify the hidden opportunities or risks in their data. We have pioneered best-in-class data quality, data management, and risk and compliance solutions in thousands of applications across more than 65 countries. Our cloud-based (SaaS), on-premise, and hybrid offerings deliver dramatic, measurable improvements in accuracy, cost, and time to production over alternatives. Learn more at innovativesystems.com
About FinScan
Trusted by hundreds of organisations worldwide, Innovative Systems, Inc.’s FinScan offers advanced Anti-Money Laundering (AML) compliance technology and consulting solutions. Built on decades of experience in data management and proprietary matching technologies, FinScan provides a data-first, risk-based approach to ensure unparalleled accuracy and efficiency in identifying and reducing risk, accelerating AML compliance workflows, and optimising team productivity. FinScan’s comprehensive, integrated platform includes Know Your Customer (KYC), unparalleled sanctions screening, risk scoring, data quality, and advisory services for implementing a holistic compliance program. FinScan offers flexible deployment including SaaS, on-premise, and hybrid options. FinScan’s SaaS clients are screening more than 300 billion names a year. Learn more at finscan.com
Alex Mosher, Chief Revenue Officer at Armis, on why businesses are prioritising their cybersecurity budgets, ensuring they have the resources needed to counteract emerging threats
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Cybersecurity is no longer optional. In 2025, we expect a significant uptick in overall spending. With threats becoming more sophisticated, organisations recognise the imperative to invest adequately in cybersecurity measures. This trend is driven by the growing awareness that the cost of a cyber-attack far outweighs the investment required to prevent it.
In 2025, there will be a marked shift toward comprehensive security solutions that offer integrated functionalities. Companies will increasingly seek platforms that provide threat detection, incident response, and compliance management within a single solution. This trend arises from the need to simplify security management and reduce complexity. Siloed solutions are ineffective, expensive and reduce the efficiency of security teams with finite resources. Furthermore, by consolidating various security functions into a unified platform, businesses can streamline their processes and enhance their overall security posture. Integrated solutions offer a holistic approach to cybersecurity, addressing multiple aspects of an organisation’s security needs. The move toward comprehensive solutions also reflects a broader understanding of the interconnectedness of cybersecurity elements. A unified solution that addresses multiple areas provides a more robust defence against potential breaches.
Emphasis on Automation and AI
Automation and artificial intelligence (AI) are revolutionising the cybersecurity landscape. Organisations increasingly prioritise spending on AI-driven security solutions to enhance threat detection and response capabilities. The focus will be on tools that streamline incident response, reduce manual workloads, and enable security teams to focus on more strategic initiatives. Moreover, the trend will also include spending on analytics tools that help organisations understand and mitigate risks based on the current threat landscape. Threat intelligence and analytics play a pivotal role in enhancing an organisation’s security posture.
AI technologies offer a proactive approach to cybersecurity, allowing organisations to identify and mitigate threats in real-time. By leveraging machine learning algorithms and data analytics, businesses can gain deeper insights into potential vulnerabilities and respond swiftly to emerging threats. The emphasis on automation and AI is driven by the need to enhance efficiency and effectiveness in cybersecurity operations. By automating routine tasks and employing AI for advanced threat detection, businesses can optimise their resources and achieve a more robust security posture.
Investment in Cloud Cybersecurity Solutions
The migration to cloud environments continues to accelerate, driving the need for robust cloud security solutions. Key investment areas will include cloud security posture management (CSPM) and cloud workload protection platforms (CWPP). The emphasis on cloud security reflects the growing reliance on cloud services for business operations. Moreover, organisations recognise that securing their cloud environments is paramount to safeguarding digital assets and ensuring regulatory compliance. Investments in cloud security solutions also align with the broader trend toward digital transformation. Businesses are leveraging the cloud to drive innovation and agility. This neessitates a strong security framework to protect their evolving digital ecosystems.
Enhanced Budgeting for Compliance and Regulatory Needs
Data protection and privacy regulations are becoming increasingly stringent worldwide. Also, this necessitates enhanced budgeting for compliance-related cybersecurity solutions. I expect organisations to allocate more resources to auditing tools, risk management platforms, and solutions that help them meet regulatory requirements such as GDPR, CCPA, and HIPAA.
The emphasis on compliance reflects a growing awareness of the legal and reputational risks associated with non-compliance. Investing in compliance-related solutions also aligns with the broader trend toward data-driven decision-making. Moreover, by implementing tools that ensure alignment with regulatory requirements, organisations can demonstrate their commitment to ethical data practices and build trust among stakeholders.
Growth in Cybersecurity Insurance Expenditures
Cyber insurance is becoming an essential component of an organisation’s risk management strategy. The growth in cybersecurity insurance expenditures reflects a broader awareness of the financial implications of cybersecurity threats. Investing in cyber insurance aligns with the emphasis on accountability in cybersecurity spending. By securing coverage for potential losses, businesses can demonstrate their commitment to protecting their assets and ensuring business continuity in the face of unforeseen events.
By understanding the key cyber spending patterns outlined here, businesses can make informed decisions. They can enhance their security posture to protect their valuable assets and ensure business continuity as we move into 2025.
Yuno enables organisations to transform online checkout experiences, allowing customers to pay securely without the need for passwords
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Yuno, a leading global payment orchestrator, announces that Mastercard’s Click to Pay at checkout is now available to all Yuno clients.
Click to Pay helps improve customer experience by ensuring purchases can be made securely and quickly with just a few clicks. It significantly decreases the instances of cart abandonment that plague the e-commerce industry. According to Mastercard research, nearly two-thirds of shoppers still struggle through manually entering their card details. Around 25% of carts are abandoned because checkout is too complex or slow. The average online shopping cart abandonment rate worldwide reached 70.19% in 2023, according to Statista. This resulted in an estimated $260 billion recoverable loss in e-commerce sales annually in the US and EU alone. Plus, fraud rates are seven times higher online than in stores. Criminals exploit exposed card numbers, creating headaches for cardholders and huge losses for merchants and card issuers.
Click to Pay with Yuno and Mastercard
Yuno’s single-click Click to Pay integration, which is enabled in 40 markets across the world, goes beyond just reducing cart abandonment. It also translates to increased sales and conversions for merchants with digital payments. Yuno offfers a secure and familiar digital checkout option trusted by millions of cardholders worldwide. It empowers businesses to boost customer confidence and improve the shopping experience. Yuno’s ability to offer Mastercard Click to Pay access to merchants is especially crucial for businesses expanding into new markets, where brand recognition can be a challenge. With Yuno, merchants can offer a globally recognised payment solution that eliminates friction at checkout almost anywhere in the world.
Yuno
Juan Pablo Ortega, Co-Founder and CEO at Yuno, commented: “At Yuno, we are constantly seeking out the best solutions to streamline payment processes and enhance security, while delivering speed. Making Mastercard’s Click to Pay at checkout feature easy to integrate for all of our customers supports our commitment to removing barriers to global commerce. We’re making sure our customers can focus on running their businesses without any unnecessary headaches.’’
Mastercard
Diego Szteinhendler, Senior Vice-President, Fintechs, Merchants and Digital Platforms, Mastercard Latin America and the Caribbean, added: “Digital consumers expect an intuitive, frictionless and secure experience. To support this demand, we’ve built a robust digital infrastructure with a suite of acceptance and payment services, including Click to Pay. Through partnerships like the one with Yuno these are becoming available to millions of consumers across Latin America and beyond.”
Yuno’s clients, including Viva Aerobus, Bacu, and Habibs, have already begun taking advantage of Mastercard Click to Pay at Checkout via Yuno. It is helping them deliver a secure and convenient user experience for their customers across the globe.
About Yuno
Yuno has emerged as a dominant force in global payment orchestration, with a core mission to empower global commerce by enabling businesses of all sizes to accept and disburse payments anywhere in the world, fostering financial inclusion. It enables businesses to access over 300 payment methods worldwide as well as innovative features including one-click checkout, smart routing, and robust anti-fraud tools via a single unified, easy-to-use interface. Yuno serves a global customer base that includes McDonald’s, inDrive, Rappi and other renowned brands across more than 80 countries.
Waheed Mahmood, Financial Services Lead at Rackspace Technology, on how cloud is elevating CX in the financial services industry
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The importance of customer experience (CX) in financial services is growing. In July 2023, the Financial Conduct Authority (FCA) published its Consumer Duty guidelines, designed to set clearer standards of protection for consumers of financial services. The Consumer Duty was created to ensure that financial institutions (FIs) act fairly, while preventing customers from making poor financial decisions.
Despite the guidelines being implemented over a year ago, some FIs are still struggling to meet customers’ needs and are not working hard enough to protect them. In October 2024, for example, the FCA fined TSB Bank Plc £10,910,500 for failing to ensure that customers in arrears were treated fairly between 2014 and 2020.
According to Forrester, there has also been a significant decline in EU bank customer experience (CX) quality in 2024. This matters, because as CX quality declines, so does customer loyalty. Financial service executives must step up their game if they want to stay competitive and earn this loyalty. FIs that leverage technology can increase customer satisfaction, reduce the cost to serve and boost conversion rates and profitability. As we look ahead, here are some ways FIs can harness technology to drive customer satisfaction in 2025 and beyond.
Driving CX through the Cloud
The Consumer Duty’s objective was to guide individuals toward sound financial decisions. To achieve this, FI’s must leverage data and analytical insights. However, legacy systems often hinder effective data sharing and analysis, limiting the ability to provide personalised guidance.
Private cloud technology empowers banks to modernise their legacy systems. This can increase agility with the delivery of new services and products, enabling them to create and deliver enhanced CX. This includes offering seamless digital experiences, from smart self-service options and instant transaction tracking to tailored financial guidance and decision-making. Banks can also use cloud analytics to spot user pain points and service disruptions early, directly improving both customer satisfaction and profitability.
The integration of cloud services with existing banking systems also enhances data flow and interoperability. Real-time analytics platforms, such as Azure Stream Analytics help process and analyse vast amounts of data. This can reveal valuable insights into customer behaviour and preferences. Banks can then offer personalised advice and services, boosting customer satisfaction and interaction.
To maximise these benefits, FI’s need to ensure these customer insights are shared across departments. Eliminating departmental silos can drive improvements in product development, marketing strategies, and customer service protocols. Success requires integrating design expertise and data capabilities – involving teams from every business function to build a data framework and platform. This integration will help convert customer insights into actionable improvements.
Double down on service innovation for CX
Before leveraging cloud technology, FIs must evaluate their current technology stack to identify weak points before embarking on digital transformation initiatives. Legacy systems, which many FIs still depend on put them at a disadvantage as customer demands and expectations grow. This outdated infrastructure is particularly vulnerable, leaving sensitive customer data exposed to risk.
By updating their technology stack, FIs can improve customer interactions while streamlining critical systems for transaction handling and personalisation. These work together to deliver an experience that aligns closely with individual customer needs.
FIs are also leveraging machine learning to gain insights into customer spending patterns, enabling them to offer personalised financial advice and recommendations. Additionally, GenAI is reshaping CX; AI-driven chatbots, for example, offer instance guidance and assistance, freeing up human staff to focus on more complex issues. However, to maximise the benefits of GenAI, FIs need robust infrastructure in place. GenAI models require high-quality, well-structured data for training and precise forecasting.
A cloud-based platform is particularly well-suited for FIs with specific demands around control, security and workload customisation. By adopting this approach, institutions can meet the high storage and encryption requirements of GenAI, thereby, enhancing both system performance and data security – key factors in scaling these technologies.
To respond to a continued decline in customer experience quality, financial service providers must make this a strategic priority. Delighting and engaging customers on a personal level has become vital and institutions that satisfy these expectations will be best equipped to attract new clients and build enduring loyalty.
Mastercard collaborates with Qover to offer embedded return service for hassle-free shopping in Belgium and Luxembourg
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Qover, a leading insurtech company committed to building a global safety net, and Mastercard are joining forces to improve the online shopping experience for Mastercard credit cardholders in Belgium and Luxembourg. Furthermore, with Qover’s platform, Mastercard now offers a return shipping cost protection service that refunds shipping fees when retailers don’t provide free returns. Available now on mastercard.be and mastercard.lu, this protection is unique in Belgium and Luxembourg.
Easy protection for Mastercard credit cardholders
This new protection arrives as nearly 9 out of 10 Belgians shopped online in early 2024, with clothing remaining the top category. Moreover, Mastercard’s return protection, available to all credit cardholders, provides reimbursements on shipping costs for returns. Also, it offers coverage up to €30 per return and a maximum of three claims or €90 per cardholder annually.
“Embedded protection is becoming a strategic tool for businesses to enhance customer value and build loyalty. We’re honoured by Mastercard’s trust and are excited to bring this innovative solution to their cardholders.”
Quentin Colmant, CEO and Co-founder of Qover
Technology driving customer-first experiences
Using its AI-driven platform, automations and advanced data extractions, Qover makes return protection easy and accessible. Also, users can quickly find coverage details or submit a claim in just a few clicks. “Customers receive instant updates on the status of their claim, keeping them informed every step of the way”, explains Parker Crockford, Chief Revenue Officer at Qover.
For Mastercard, this technology strengthens loyalty and sets its credit cards apart in a competitive market. The solution is designed for digital-first users who want simple, personalised services.
“We’re excited to unveil this new solution in collaboration with the rising star of European insurtech, Qover. This unique protection reinforces the value of Mastercard credit cards for online purchases and enhances the online shopping experience for our Belgian and Luxembourg cardholders.”
Henri Dewaerheijd, Country Manager, Mastercard Belgium and Luxembourg
This initiative is a key step for Qover in delivering hyper-personalised embedded solutions to meet diverse consumer needs. Qover aims to expand this tech-driven solution across Europe.
Mastercard integrates its Multi-Token Network (MTN) for tokenized deposits and tokenized assets with Kinexys Digital Payments (formerly JPM Coin)
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Mastercard’s blockhain Multi-Token Network (MTN) has connected to Kinexys Digital Payments as a payment settlement solution. This will enhance the availability of B2B cross-border payments to business applications on MTN.
Kinexys Digital Payments is a next-generation payment rail powering real-time value transfer. Also, it uses commercial bank money and is offered through Kinexys by J.P. Morgan, the firm’s Blockchain business unit.
Mastercard’s MTN brings together a set of API-enabled, blockchain-based tools and standards for innovative business models under one platform.
Kinexys by JP Morgan and Mastercard are respectively providing solutions designed to improve the efficiency of commercial transactions. Furthermore, these solutions aim to improve the cross-border payment experiences common for such transactions. They will achieve this by providing greater transparency and faster settlement as well as reducing time zone friction.
By integrating Mastercard MTN’s connectivity with Kinexys Digital Payments, mutual customers of MTN and Kinexys will be able to settle B2B transactions through a single API integration.
Kinexys – JP Morgan’s Blockchain business unit
“At Kinexys, we believe our solutions can play a transformative role in the ecosystem for digital global commerce and digital assets, where the value proposition of commercial transaction venues is enhanced by the availability of commercial bank payment rails that can natively integrate with any digital marketplace or platform. We look forward to supporting our clients engaging with the MTN ecosystem and collaborating further with Mastercard in the digital space.”
Naveen Mallela, Co-Head of Kinexys by JP Morgan
MTN – Mastercard’s Multi-Token Network
“For years, both Mastercard and Kinexys by JP Morgan have been committed to innovating for the future of digital asset and commercial infrastructure. By bringing together the power and connectivity of Mastercard’s MTN with Kinexys Digital Payments, we are unlocking greater speed and settlement capabilities for the entire value chain. Moreover, we are excited about this integration and the new use cases it will bring to life, leveraging the strengths and innovations of both organisations.”
Raj Dhamodharan, executive vice president, Blockchain and Digital Assets at Mastercard
Ozge Celik, Head of Product at Turkey’s largest FinTech Papara, on how personalisation is making everyday financial transactions more manageable and embedded into our lifestyles
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With unlimited choice from a global marketplace, customer expectations are continuing to reach new heights. Undeniably, we are seeing financial services – being led by the FinTech sector – undergoing a seismic shift towards personalisation and catering to this new form of demand. Users are no longer content with generic services. Furthermore, they want tailored, hyper personalised experiences that reflect their individual needs and preferences. This is particularly true for their banking experiences. Yet, many traditional banking institutions are struggling to keep up with these demands due to their legacy systems and traditional cookie-cutter approach. Whereas the FinTech industry, with its agile frameworks and state-of-the-art technologies, is demonstrating its capability to rapidly position solutions that cater to this demand.
The growing trend for personalisation
Personalisation in consumer services is not a novel concept, but its application within the financial sector is a relatively recent development. Despite its infancy, its impact on the industry is profound. Banking has always been a cornerstone of our daily lives, from withdrawing cash to transferring funds. As such, it is unsurprising that users increasingly view their financial services as an extension of their personal identity.
Over the past decade, we have seen the introduction of customisable physical bank cards, personalised digital tools on mobile banking apps and instant messaging services. Banks and fintechs are striving to meet users’ needs, reshaping the loyalty landscape that has traditionally favoured established banks. These institutions, with their often rigid and cumbersome systems, are being compelled to re-evaluate their user engagement strategies and the solutions they offer.
Leading the customisation charge
Startups and FinTechs are riding the crest of this wave of customisation. Traditional financial institutions frequently overestimate the costs associated with data collection and the development of meaningful personalised tools. FinTechs, on the other hand, harness their technological capabilities to sift through vast amounts of data, identifying individual preferences and behaviours. This insight enables them to better create personalised products and services that resonate with consumers on a deeper level. Offering such tailored experiences is not merely a competitive advantage; it is quickly becoming essential to attract and retain users.
The rise of the super app
The emergence of the super app epitomises this new paradigm. The inconvenience of managing multiple mobile banking apps is becoming a thing of the past as consumers increasingly favour a unified platform that addresses all their financial needs. This demand extends beyond financial services. The success of super apps like Alipay and WeChat Pay, which integrate services from ride-hailing to grocery shopping, illustrates how this model has become ingrained in everyday life. While the same level of adoption may not be universal due to various market factors, FinTechs are taking note and developing intuitive apps that combine financial and non-financial functions to deliver a seamless and efficient user experience.
FinTech’s personalisation extends to every facet of the financial journey. From customised budgeting tools and investment portfolios, to personalised insurance products and bespoke lending solutions, providers are redefining what it means to have a financial service that truly fits the individual.
The implications for personalisation in traditional banking
To stay relevant, banks must embrace digital transformation and consider partnerships with FinTechs or face the risk of further falling behind. Collaboration between established financial institutions and FinTech disruptors can yield the best of both worlds: the trust and scale of traditional banks combined with the innovation and agility of fintech.
As FinTechs continue to meet and exceed the hyper-personalised needs of consumers, they are establishing a new benchmark in the financial services industry. By making everyday financial transactions more manageable and integrated into our lifestyles, they are not merely responding to consumer demands but are also anticipating them. As this trend progresses, we can expect to witness further disruption, with fintechs at the helm, steering us towards a more personalised and accessible financial future for all.
About Papara
We are not a Bank; we are Papara, we are here for you.
We are a financial technology company that offers a new financial application experience. Keeping the user in mind against the traditional financial solutions, we strive to build the next generation financial super app. Our amazing community always suggest features and gives us constant feedback.
We integrate the most innovative technology to help our users control their money while being completely transparent.
In 2015,we started our services with the permission we received from the Banking Regulation and Supervision Agency to operate as an “Electronic Money Institution”.
Papara is the first non-bank to issue a Mastercard logo prepaid card in Turkey and currently a Mastercard, Visa, and Interbank Card Center member. In our seventh year of operation, we have acquired 21 million users and expanded our team to 1.000 happy people dedicated to creating the best financial experience.
Today, millions of our users choose Papara’s innovative products to make millions of transactions every month.
Jamil Jiva, EVP at Linedata, on compliance in asset management following the EU AI act
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AI’s value-add has shifted from speculative to tangible in recent years. For consumers, it’s brought convenience; for businesses, invaluable timesaving. In the asset management space however, its impact is transformative. It can help assess choice, trust, and risk in seconds. AI isn’t just improving efficiency, it’s fundamentally reshaping decision-making processes.
It’s clear artificial intelligence is achieving widespread adoption among asset managers. Linedata’s recent global survey showed that 36% of asset management companies have already integrated AI into their operations. A further 37% are preparing to introduce it.
However, adopting new and evolving technology can prove to be a long-term challenge. Asset managers have to adapt to regulation as it changes. For example, the newly enacted EU AI Act is designed to regulate high-risk uses. It seeks to ensure safety, transparency, and accountability. With new regulations arriving thick and fast, companies should avoid rushing their implementation or cutting corners. Compliance should be their first and last thought.
AI can bring immediate benefits in optimising efficiency, streamlining operations, and boosting decision-making capabilities. The newly enacted EU AI Act will push firms planning to take a more measured approach to deploying artificial intelligence. This will necessitate a long-term, compliance-driven approach.
The New Compliance Landscape
The EU AI Act marks a turning point for AI governance. For the financial sector, the act will put explainability at the fore of AI-augmented decisions. For asset management firms, which increasingly rely on AI to drive decisions related to market forecasts, risk modelling, and portfolio management, the act mandates a robust approach to accountability.
Asset management firms that use AI must now prioritise governance or risk severe penalties and long-term reputational damage. As firms adjust to the EU AI Act, they must recalibrate their AI strategies and implement future-proof frameworks that blend innovation with security and ethical standards.
Hybrid AI Systems: Creativity and Control
One promising approach to the new regulatory environment is hybrid AI. Hybrid systems marry proprietary data with third-party models. With a blended strategy firms retain full oversight over sensitive tasks – such as decision-making models . Meanwhile, outsourcing less critical functions like data analysis or back-office automation to third-party vendors.
However, hybrid systems bring their own challenges under the EU AI Act. The new regulation imposes strict requirements for transparency. This means firms must ensure that any external solutions they adopt meet the same high standards of risk management and documentation. This necessitates a more in-depth vetting process for third-party providers and ongoing oversight to guarantee compliance. Effective governance, therefore, hinges not just on internal processes but also on the integrity and transparency of external systems and partners.
Despite these complexities, hybrid AI presents an opportunity for asset managers to continue innovating without compromising on compliance. By carefully managing these systems, firms can position themselves to harness the full potential of artificial intelligence while mitigating the risks associated with regulatory breaches.
Building a Sustainable AI Strategy
While the EU AI Act certainly raises the bar for compliance, it also presents an opportunity for firms to create more sustainable, future-proof strategies. Much like how the GDPR transformed data governance, the AI Act could drive a more comprehensive approach to artificial intelligence oversight, encouraging firms to adopt stronger ethical frameworks while staying ahead of regulatory shifts.
For asset managers, investing in adaptable AI infrastructures is one way to navigate these regulatory demands. By focusing on systems that are both flexible and scalable, firms can ensure they remain compliant with evolving regulations without sacrificing the pace of innovation. In particular, areas like predictive analytics, ESG reporting, and portfolio management stand to benefit from such advancements, provided firms integrate transparency and accountability into their strategies.
Asset managers who view regulatory challenges as opportunities – rather than obstacles – will emerge as leaders, showcasing a commitment to ethical AI that can ultimately build trust with clients and regulators alike. While the EU AI Act may seem daunting at first, for those who embrace the changes, it offers a chance to redefine how artificial intelligence can shape the future of asset management.
Zachary Scott, Managing Director at Publicis Sapient on Buy Now Pay Later demand in the UK and the changing nature of CX in 2025 and beyond…
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In the dynamic world of consumer Embedded Finance, Buy Now, Pay Later (BNPL) services have become a game-changer. They offer shoppers greater flexibility and convenience. BNPL allows consumers to make immediate purchases while spreading payments over time, often without interest. Its popularity skyrocketed during the pandemic. Fuelled by the e-commerce surge, it continues to play a pivotal role in shopping habits. Recent surveys reveal that 39% of U.S. consumers plan to use BNPL within the next six months.
This growth isn’t confined to the U.S. It’s a global phenomenon. U.S. fintech giant Affirm recently launched its BNPL services in the UK, marking its first international expansion. Affirm selected the UK due to strong demand from merchants eager to incorporate flexible payment options into their offerings.
The BNPL boom reflects a broader trend in Embedded Finance, which integrates financial services seamlessly into non-financial interactions. BNPL, for instance, embeds financing directly into the retail experience. This allows consumers to access payment plans as part of their shopping journey. This integration simplifies the traditionally separate processes of purchasing and financing, creating a smoother, more user-friendly experience.
Optimising customer experience for Embedded Finance
The value case for Embedded Finance is based on this seamless customer experience and the opportunities it offers to enhance the services offered. Partner companies are able to provide financial services without having to maintain extensive and complex financial infrastructure, leveraging technology to facilitate these offerings instead.
Already, several opportunities are emerging that are poised to propel the growth of embedded finance into new sectors and applications. Banks and retailers should be prepared to seize opportunities from embedded insurance products, embedded wallets in non-financial apps, and new forms of embedded lending that go beyond the existing BNPL instalment model.
Consolidating Services
However, to succeed in this next phase, financial service providers and their partners will have to keep pace with and be ready to adapt to changing consumer preferences and requirements. Staying ahead of the curve takes more than just improving individual interactions. It involves curating a comprehensive journey that aligns with consumers’ expectations for simplicity, transparency, and flexibility. People are increasingly seeking a mobile-first platform that caters to both their financial and non-financial needs in a single, unified space. Driving further consolidation of customer journeys through Embedded Finance is likely to be a critical strategy for industry leaders in the next wave of adoption.
Advancements in open banking protocols and the rise of new FinTech ventures are setting the stage for more integrated financial and non-financial services, further blurring the boundaries between these two traditionally distinct customer journeys. Emerging trends in Generative AI and conversational banking will also contribute to the enhanced customer experience. These technologies are set to shape consumer expectations, with more and more people looking to access support and services through conversational experiences. Embedded Finance is no exception.
New Opportunities
For financial service providers, embracing these trends opens myriad possibilities. Leading the charge in Embedded Finance can contribute to customer acquisition, generate direct revenue from the new services offered, and enable cross-selling of other financial products.
For partners within the Embedded Finance ecosystem, the opportunities are equally substantial. As well as driving Net Promoter Score (NPS), they can unlock new referral or commission-based revenue streams.
It’s clear that the future of consumer finance is deeply linked to the progress of Embedded Finance. As more offerings beyond BNPL emerge, the boundary between financial services and non-financial experiences can become increasingly blurred. For providers and partners ready to embrace this change and leverage it to meet evolving customer needs, this represents a substantial opportunity.
FinTech Connect shapes the future of financial services with the UK’s only full FinTech ecosystem event at London’s Excel December 4-5
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Join us as FinTech Connect welcomes world leading Fintechs, Financial Institutions, Challenger Banks, Merchants, Scale-Ups and StartUps, Investors, Accelerators and Media to The ExceL, London.
FinTech Connect
Each year we welcome visionaries from the UK, Europe and beyond all looking to innovate within the market, expand their footprint and drive businesses forward. The event brings all this under one roof, over two insight-packed days, sparking ideas, forging partnerships and accelerating change.
Tackling the hottest topics and biggest challenges in the fintech market. Including: embedded finance, Web3, cross-border payments, investment, scaling, Gen AI, crypto, regulation, digital innovation and customer experience (CX).
Our mission is to connect the global thought leaders across the FinTech ecosystem in an event like no other. Set yourself up for a strong 2025 by signing up for the UK’s only full FinTech ecosystem event and join 2,000+ fintech leaders in London.
Insights from FinTech’s biggest names
We’ll be asking the big questions… What AI elements do financial institutions need to follow? Build, buy or partner? What opportunity works best in the modern ecosystem? How are banks advancing their digital transformations in 2024? Who owns the CX?
Gain insights on these topics and more from some of the biggest names in financial services. Speakers include Victoria Cleland, Executive Director – Payments, Bank of England; Rory Tanner, Head of UK Government Affairs at Revolut and Nick Kerrigan, Managing Director, Swift. Thought leaders will also be taking to the stage from HSBC, DZ Bank, Lloyds Banking Group, BT and a host of other leading institutions.
Keep up to date with the latest speakers, discussions and more. Download the full agenda here.
Seth Ruden, Director of Global Advisory at BioCatch, on how the UK’s financial institutions can be better prepared to deal with authorised push payment (APP) scams
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The focus on authorised push payment (APP) fraud scams – where scammers impersonate reputable individuals or institutions – has increasingly shifted to whether banks should reimburse customers for funds stolen by scammers. We can gain valuable insights from the approaches taken by financial institutions in the UK. They are leading the way with their cybersecurity efforts compared to their counterparts in other regions.
First, British banks established a standardised reporting system and typology. This is a fundamental first step that every financial institution should take to grasp the full scope of how financial fraud affects banking consumers. Banks may disclose the type of fraud, the amount of money stolen, and the bank measures used to prevent the scam from occurring. This centralised view brings the true scope of the totality of scams into focus.
Three ways the UK’s financial institutions are leading in the fight against fraud
Second, the UK has developed strategies to identify specific scams and reduce their losses. The regulator added a slew of new controls to banks, including confirmation of payee, scam and transaction-specific interventions, and money mule account controls for those receiving the illicit funds. Before regulation, not every financial institution had implemented these controls, providing an uneven playing field and allowing scams to flourish. Banks outside the UK should not wait for regulators to mandate controls like these. They should do it on their own accord to prove they realise the magnitude of the scam problem and the severity of its impact on bank customers.
Improved consumer financial scam controls should be a minimum requirement for financial institutions in 2024. These controls should cover: authorised push payment behavioural analysis, money mule behaviour around both account opening and account activity, and analysis of both inbound and outbound transactions. Furthermore, detecting and then closing money mule accounts – used by fraudsters as an intermediate stop between the victim’s account and the final destination for the stolen funds – is absolutely critical, as they serve as the backbone for every consumer-based financial scam.
The third? Getting involved. Banks need to integrate themselves and participate with industry and trade associations – such as the FS-ISACs and GASA (Global Anti Scam Alliance). These associations provide opportunities to network with peer institutions and others in the fraud value chain to share scam information and learn from each other.
Effective Fraud Prevention: A practical assessment of Key Strategies
Many banks today use precision anomaly detection and behavioural biometrics to notify them when a fraudulent transaction takes place. Financial institutions in the UK often issue actionable alerts to clients in real-time. Santander UK, for example, now asks customers if they have seen the item in person before approving a payment through Facebook Marketplace. For online account opening, there are good solutions for bot-detection to prevent automated bots from opening new accounts, behavioural biometrics to detect suspicious patterns of data entry, and solutions that can analyse the customer KYC data. A secondary benefit of strong account opening controls is the reduction of operational costs to close bogus accounts.
For detecting existing money mule accounts, traditionally it required tracking the circulation of funds, both the inbound and outbound transaction activity and looking for anomalies (e.g. high value in and then immediately transferred out). Now, user behaviour anomalies – such as changes in the user’s input/output device activity or navigation preferences – may indicate a change in account control before the suspicious transactions take place.
Protecting Customers: What the future holds for Financial institutions
Since the UK’s introduction to faster payments, the region has become a centre of research for the rest of the world. However, eliminating threats to UK customers and their money has remained difficult despite an increase in regulation. While Governments and international groups are starting to identify and take down some of these organisations there are still hundreds of thousands of scammers and coerced individuals involved in these intricate schemes. A key challenge for financial institutions is understanding how scammers get their customers to initiate authorised payment. However, these challenges can be combatted by understanding the psychology behind how scammers work which can be a prominent factor in tackling the problem. Financial institutions must ensure that, in a few years’ time, they can confidently answer ‘yes’ to the question: Did we do enough to help eliminate consumer financial scams?
Ozone API has provided Open Banking Limited (OBL) with an updated model bank as the model bank provider for OBL to reflect v4.0 of the Open Banking standards
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The global open banking leader, Ozone API, has launched an updated platform for Open Banking Limited (OBL) in line with the UK’s latest standards. It is the first major update since the introduction of VRPs.
Ozone API has successfully updated the model bank to support the rollout of the UK’s Open Banking Standards v4.0. This positions Ozone API as the first provider to deliver fully compliant APIs, facilitating the transition for financial institutions and third-party providers (TPPs) operating in the UK.
Open Banking Standards
The changes were announced by OBL in early July. OBLv4 introduces some mandatory updates for the UK’s CMA9 banks, with some required to be completed by as early as 31st December 2024. Additionally, ISO 20022 is set for implementation by 31st March 2025. Alongside the Bank of England’s publication of mandatory updates to payment regulations. These proposed changes have been driven by several significant factors, including the deprecation of key security standards such as FAPI 1 Implementers Draft 2.
While the UK open banking standard was initially mandated just for the CMA9 banks, it has become the de facto standard for the UK market. However, many UK banks remain on old versions of the standard.
The OBL model bank serves as a critical testing ground for banks and financial institutions, enabling them to experiment with and refine their API implementations in a controlled and secure environment. It will serve as a vital resource for banks, fintechs, and other TPPs by providing a safe space to develop and test their APIs in alignment with the new OBLv4 standards. It is designed to help institutions comply with the regulatory changes.
Ozone API
“We’re delighted to confirm that we’re the first provider to launch a platform that reflects v4.0 of the Open Banking Standards for Open Banking Limited. We’re excited to work with our partners to support fast and high-quality API changes, ahead of the first legislative deadlines coming into force later this year. Ensuring a smooth transition to the updated standards is critical for banking players who want to stay at the forefront of open banking industry changes into 2025 and beyond. We are extremely proud that our market-leading platform is ready to support our customers and partners as they transition to v4.0. I’m pleased that we’re able to support the entire UK financial ecosystem to start their OBLv4 journey by providing the OBL’s model bank. Our founding team were closely involved during their time working with the Open Banking Implementation Entity in the development of the UK Open Banking Standards, and we remain committed to enabling UK banks to make the most of open banking now and into the future.”
Huw Davies, CEO of Ozone API
Open Banking Limited
“Open Banking Limited is not only committed to maintaining the open banking standard, but also supporting the ecosystem by helping participants with their journey to version 4. This includes upgrading the model bank to v4 to provide as much support and coverage to participants as possible including the FCS, Standards and technical guidance.”
Henk Van Hulle, CEO, Open Banking Ltd
Ozone API has launched a comprehensive guide and a series of educational resources to accompany the new OBLv4 standards, aimed at helping banks and FIs navigate the changes smoothly and efficiently. The guide and resources provide actionable insights and best practices for institutions of all sizes.
Since the UK Government announced it would revisit the Data Protection and Digital Information Bill in July 2024, it is anticipated that the UK will see more regulatory changes related to open banking, smart data and the open data economy.
Other key findings include surge of info-stealers and botnets, an increase in evasive malware and a rise in network attacks across the Asia Pacific
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WatchGuard® Technologies, a global leader in unified Cybersecurity, today released the findings of its latest Internet Security Report. The quarterly analysis details the top malware, network, and endpoint security threats observed during the second quarter of 2024.
Among the report’s key findings was that 7 of the Top 10 malware threats by volume were new this quarter. Furthermore, this indicates threat actors are pivoting toward new techniques. The new top threats included Lumma Stealer. This advanced malware is designed to steal sensitive data from compromised systems. Also, a Mirai Botnet variant, which infects smart devices and enables threat actors to turn them into remotely controlled bots. And a LokiBot malware, which targets Windows and Android devices and aims to steal credential information.
Cybersecurity fears for Blockchain
WatchGuard’s Cybersecurity Threat Lab also observed new instances of threat actors employing “EtherHiding”. A method of embedding malicious PowerShell scripts in blockchains such as Binance Smart Contracts. In these instances, a fake error message linking to the malicious script appears on compromised websites, prompting victims to “update your browser”. Malicious code in blockchains poses a long-term threat. As blockchains are not meant to be changed, theoretically, a blockchain could become an immutable host of malicious content.
“The latest findings in the Q2 2024 Internet Security Report reflect how threat actors tend to fall into patterns of behaviour. Certain attack techniques become trendy and dominant in waves,” said Corey Nachreiner, CSO, WatchGuard Technologies. “Moreover, the report illustrates the importance of routinely updating and patching software and systems to address security gaps and ensure threat actors cannot exploit older vulnerabilities. Adopting a defence-in-depth approach, which can be executed effectively by a dedicated managed service provider, is a vital step toward combating these cybersecurity challenges successfully.”
Additional key findings from WatchGuard’s Report include:
Malware detections were down 24% overall. This drop was caused by a 35% decrease in signature-based detections. However, threat actors were simply shifting focus to more evasive malware. Moreover, in Q2 2024, the Threat Lab’s advanced behavioural engine that identifies ransomware, zero-day threats, and evolving malware threats, found a 168% increase in evasive malware detections quarter-over-quarter.
Network attacks increased 33% from Q1 2024. Across regions, the Asia Pacific accounted for 56% of all network attack detections, more than doubling since the previous quarter.
An NGINX vulnerability, originally detected in 2019, was the top network attack by volume in Q2 2024. It had not appeared in the Threat Lab’s Top 50 network attacks in previous quarters. The vulnerability accounted for 29% of total network attack detection volume, or approximately 724,000 detections across the US, EMEA, and APAC.
The Fuzzbunch hacking toolkit emerged as the second-highest endpoint malware threat detected by volume. The toolkit serves as an open-source framework that can be used to attack Windows operating systems. It was stolen during The Shadow Brokers’ attack of the Equation Group, an NSA contractor, in 2016.
Seventy-four percent of all browser-initiated endpoint malware attacks targeted Chromium-based browsers, which include Google Chrome, Microsoft Edge, and Brave.
A signature that detects malicious web content, trojan.html.hidden.1.gen, came in as the fourth most-widespread malware variant. The most common threat category caught by this signature involved phishing campaigns. These gather credentials from a user’s browser and deliver this information to an attacker-controlled server. Curiously, the Threat Lab observed a sample of this signature targeting students and faculty at Valdosta State University in Georgia.
UBS Digital Cash aims to increase efficiency, transparency and to enable the programmability of money movements for corporate and institutional clients
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Cross-border payments often lead to delayed settlements. As a result, this creates a fragmented view of liquidity positions for companies. The aim is to increase transparency and security with blockchain-based payments via UBS Digital Cash. Moreover, this should in turn facilitate timely payment processing. In addition, companies should be able to manage intraday-liquidity and adjust liquidity buffers on their accounts more easily in the future. This is thanks to greater visibility of their total cash positions.
USB Digital Cash with Blockchain
Andy Kollegger, Head UBS Institutional & Multinational Banking, says: ”UBS Digital Cash going forward aims to enable our clients to make cross-border payments in a much more efficient and transparent way. Furthermore, Blockchain-based payment solutions for cross-border payments are a strategic focus for UBS. With the successful UBS Digital Cash pilot, we have reached another important milestone.”
In the pilot, transactions with multinational clients and banks were successfully carried out. These included domestic transactions within Switzerland and cross-border payments in US dollars, Swiss francs, Euros and Chinese yuan. Additionally, the pilot also included the transfer of liquidity between various UBS companies. UBS plans to expand and develop its UBS Digital Cash offering in further steps.
The advantages of Blockchain-based payments solutions
Pilot participant Janko Hahn, Head Treasury Operations at Autoneum, says: “The UBS Digital Cash pilot showcased the key advantages of blockchain-based payment solutions. They make cross border transactions faster, on time and provide a seamless traceability, which is a huge benefit when operating in a global market.”
Xiaonan Zou, UBS Head Digital Assets, Group Treasury, adds: ”We see the interoperability between UBS Digital Cash and other digital cash initiatives as key for the financial industry. In addition to their role in correspondent banking, they also have the potential to streamline and simplify the settlement of tokenised assets in the capital market.”
How does UBS Digital Cash work?
For the payment process, UBS Digital Cash uses a private blockchain network to which only the permissioned clients have access. The settlement is performed via smart contracts, which, for example, automatically execute payments as soon as predefined conditions are met. Client transfers at UBS are recorded and processed in a digital system for recording transactions. They are independent of currency, practically in real time and around the clock. UBS Digital Cash complements UBS’s involvement in a wide range of market initiatives. These include the Swiss National Bank-led project Helvetia for real wholesale Swiss franc Central Bank Digital Currency (wCBDC), as well as the Agorá project, led by the Bank for International Settlements (BIS) together with seven central banks, to unlock central bank money and tokenised deposits from commercial banks in the cross-border payment context.
About UBS
UBS is a leading global asset manager and the leading universal bank in Switzerland. In addition, the company offers diversified wealth management solutions and focused investment banking functions. With the acquisition of Credit Suisse, UBS has assets under management of $5.7 trillion as of the fourth quarter of 2023. UBS supports its clients in achieving their financial goals through personalised advice, solutions and products. Headquartered in Zurich, Switzerland, the company operates in more than 50 markets around the globe. UBS Group AG shares are listed on the SIX Swiss Exchange and the New York Stock Exchange.
additiv, a global leader in fintech and digital transformation, has announced the launch of an InsurTech solution with AXA Switzerland
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AXA Switzerland has successfully launched its addProtect bancassurance offering, powered by additiv’s technology platform. Furthermore, this innovative InsurTech solution allows banks to directly protect their mortgage customers against key risks with a simple plug-and-play solution.
addProtect InsurTech solution from additiv
As a seamless plug-and-play solution, addProtect gives banks direct access to the platform without the need for additional integration with existing IT systems. Its user-friendly and intuitive design allows banks to effortlessly integrate the platform into their day-to-day business operations. With the death and payment protection insurance, bank advisors have easy-to-understand products at their disposal. These offer added value to customers beyond the existing offering. The addProtect platform is now available for banks, and an initial pilot will be launched in collaboration with PostFinance.
Samuel Peter, Head of Partnerships at AXA Switzerland, stated:
“With addProtect, AXA is responding to the growing need of customers and banks for appropriate insurance solutions where and when they are needed. The solution creates additional advisory potential and better protection for the customers of our partners’ banks. We look forward to making the solution available to other partners.”
Dieter Lützelschwab, General Manager Switzerland at additiv, added:
“When developing addProtect, we focused on the user experience for the customer and the bank advisor. In addition, our platform provides an easily configurable, modular insurance solution that covers the entire value chain from quotation to claims processing.”
About additiv
additiv empowers the world’s leading financial institutions and brands to create new business models and transform existing ones. additiv’s API-first cloud platform is one of the world’s most powerful solutions for wealth management, banking, credit, and insurance. The InsurTech technology, together with the global ecosystem of regulated financial services providers, opens up new opportunities for banks, insurance companies, asset managers, IFAs and consumer brands to quickly and flexibly offer their own and third-party financial solutions through existing or new customer channels.
Headquartered in Switzerland, with regional offices in Singapore, UAE, Germany, and the UK, and more than 250 employees, additiv serves over 400 financial institutions (banks, insurers, asset managers, pension providers, IFAs, etc.) and brands worldwide.
Bitget announces $100k seed funding through ‘Pitch n Slay’ roadshow competition
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Bitget has launched the ‘Pitch n Slay’ roadshow competition, aiming to provide financial support, professional guidance and exposure for female entrepreneurs. This will be delivered through collaborations with organisations such as World of Women, Women in Web3, Bitget Wallet, Foresight Ventures and Morph. The initiative is designed to help female leaders expand their projects.
Bitget Blockchain boost for female entrepreneurs
The final will be held during DevCon in Bangkok, Thailand on November 15. The shortlisted “Pitch n Slay” project contestants will present their optimised projects to investors and a jury panel. The jury members include Gracy Chen – CEO of Bitget; Taya A – CEO of World of Women; Min Xu – Partner at Foresight Ventures; along with other outstanding Web3 leaders. Three winners will have the opportunity to share $100k seed funding.
Blockchain4Her
Bitget is the third largest exchange for crypto derivatives with a user base, surpassing 20 million registered accounts globally. Furthermore, it is one of the largest platforms for cryptocurrency copy trading. Meanwhile, the daily trading volume on Bitget exceeds 10 billion USDT, reflecting its significant market presence.
“Bitget is committed to gender inclusivity with women making up more than 45% of our management team. We are also dedicated to creating an inclusive culture for the LGBT community. Through the Blockchain4Her program we hope to create more growth opportunities for women-led startups We’ll continue to expand this platform, creating pathways for growth and amplifying women-led startups in Web3.”
Gracy Chen, CEO, Bitget
About Bitget
With a background in traditional finance, Bitget’s founding team discovered blockchain technology in 2015. But it was viewed as “tulip mania” by the industry back then. In 2018, we became intrigued by cryptocurrency after studying the Bitcoin whitepaper and Ethereum ecosystem. We believed that cryptocurrency would play an important role in the future and even benefit the unbanked groups.
Born in a bear market, Bitget insists on putting users first, focusing on product innovation, and advocating long-term development with the spirit of earnestness. The company aims to inspire people to embrace crypto and improve the way they trade, one at a time.
New collaboration between Plumery and Payment Components
will enable financial institutions to adopt instant payments without overhauling existing core banking infrastructure
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Plumery, a digital banking experience platform for customer-centric banking, has announced a new partnership with Payment Components, a leader in payments and open banking solutions. By decoupling digital experience and payments processes from legacy systems, institutions can now innovate more flexibly and efficiently. They can streamline operations while maintaining their existing core banking frameworks.
Progress for Payments
By leveraging Plumery’s innovative approach and Payment Components’ expertise, this partnership allows clients to accelerate time-to-market and future-proof operations against regulatory shifts such as the Instant Payments Regulation (IPR). Financial institutions can offload the burden of implementing new digital channels and instruments, such as real-time payments, without altering their core systems.
The IPR aims to make instant payments fully accessible to consumers and businesses across the EU. Currently only a minority of service providers support instant payments. While such regulatory changes usually impact core banking infrastructure, the Plumery and Payment Components partnership ensures these systems remain unaffected.
“This partnership is crucial for institutions needing to rapidly modernise without overhauling their entire infrastructure. Together, we offer a powerful, flexible solution that enables our clients to embrace innovation while staying ahead of regulatory changes like the IPR. Adding Payments Components to our partner ecosystem solidifies our commitment to creating cutting edge solutions that embrace digitisation.”
Ben Goldin, Founder and CEO of Plumery
This global partnership offers a streamlined path to modernisation, enabling financial institutions to stay compliant, competitive and responsive to ongoing market shifts with solutions ready to support firms as they navigate the evolving financial landscape.
“Our collaboration with Plumery will empower financial institutions to seamlessly adopt modern payment technologies, addressing the complexities of regulatory changes, all while minimising disruptions to existing systems. We wanted to work with Plumery because both our company’s share a similar approach, work ethic and most importantly because of the compatibility of our products.”
Sotirios Nossis, Founder and CEO of Payment Components
Plumery
Headquartered in the Netherlands, Plumery’s mission is to empower financial institutions worldwide, regardless of size, to craft distinctive, contemporary, and customer-centric mobile and web experiences.
Plumery operates with a diverse team that embodies a unique combination of seasoned expertise and vibrant innovation. This blend has been cultivated through years of experience at start-ups, scale-ups, and established financial institutions, and most notably at globally leading financial technology companies, where they were instrumental in creating disruptive digital banking solutions and platforms that now serve 300+ banks globally.
Plumery’s Digital Success Fabric platform provides banks with the foundation for success beyond fast-time-to-market by expediting the development of their digital front ends while significantly cutting costs compared to in-house initiatives or solutions with high total cost of ownership (TCO).
Payment Components
At Payment Components, we’re reshaping the fintech landscape on a global scale. Today, our solutions are essential for more than 65 banks and financial institutions across 25 countries. We provide componentized solutions in a range of domains, including AI banking, open banking, account-to-account payments, and financial messaging technology. We achieve this through continuous innovation, building software components that help financial institutions become digital champions and deliver richer payment services to their clients. Our name reflects our belief: complicated processes in the financial industry will be replaced by AI-assisted dedicated components. We stand for simplicity, speed, and constant innovation
UnaFinancial study identifies cybersecurity as most influential factor driving FinTech growth
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A recent study from UnaFinancial has identified cybersecurity as the most influential factor driving the development of FinTech worldwide, with a 63% significance. The second most impactful factor is the average hourly wage rate, with a 13% significance.
The study showed that FinTech growth in Europe, America, and globally has the strongest correlation with the size of the cybersecurity market, with correlation coefficients of 0.8714, 0.9762, and 0.8607, respectively.
In Asia, however, FinTech growth was more closely tied to the size of the consumer electronics market (0.9403). Meanwhile in Africa, it correlated with consumer spending volumes (0.7427). Therefore, globally, cybersecurity emerges as the most significant driver of FinTech growth. More vital protection facilitates a more robust FinTech environment.
Economic Disparities with Cybersecurity: High Income vs Low Income Economies
Economic status also plays a crucial role in shaping FinTech dynamics. High-income countries display pronounced correlations with various factors. Notably, the size of the cybersecurity market (0.6923), consumer electronics market (0.5839), average wage rates (0.6237), and consumer spending volumes (0.6971) are all significantly linked to FinTech growth.
Conversely, low-income economies exhibit no substantial correlations with these factors, highlighting a disparity in FinTech development influenced by financial resources and technological infrastructure.
Middle-income countries show a more nuanced relationship, with FinTech volumes correlating with nominal GDP (0.5373), the cybersecurity market (0.5727), consumer electronics (0.5637), fintech hubs (0.5409), and consumer spending volumes (0.6136). This suggests that while multiple factors impact middle-income countries, cybersecurity remains a vital component.
Quantifiable Cybersecurity Impact on FinTech
Furthermore, another interesting finding was the measurable impact of various factors on FinTech transactions. For example, for every $1 million increase in the global cybersecurity market, FinTech transactions per adult are expected to rise by $31.6. Similarly, a $1 increase in the average hourly wage could boost FinTech transactions by $67.5. The establishment of just one more FinTech hub could increase global FinTech transactions per capita by $839.
Remarkably, as a country’s income grows, the correlation between FinTech growth and two factors—cybersecurity market size and average wage rates—becomes stronger. This means these factors may indeed influence the development of FinTech across a country.
A deeper non-linear analysis further validated the significance of these factors. It revealed that the cybersecurity market is the most influential driver of FinTech growth, with 63% of significance, followed by the average wage rate (13%). As we advance into an increasingly digital future, the investment in and enhancement of cybersecurity will remain a cornerstone of FinTech innovation and expansion.
UnaFinancial Study
The UnaFinancial study considered data from 2022 for 146 countries, which were grouped into four regions: Asia, Europe, Africa and America. The potential factors under consideration included gender ratio, nominal GDP per capita, Internet penetration, cybersecurity market volumes per capita, consumer electronics market volumes, number of FinTech hubs per 100,000 people, average hourly wages, consumer spending per capita, direct investment as a share of GDP, unemployment rates, trade volume relative to GDP, and share of urban population.
The study not only illuminates the integral role of cybersecurity but also provides a roadmap for understanding how various factors interplay to influence the global FinTech landscape. In this digital age, safeguarding financial transactions and technologies is as critical as ever. Moreover, ensuring that FinTech continues to flourish amidst evolving challenges and opportunities.
Money20/20, operates the world’s leading fintech events in Europe, Asia and USA and is “the place where money does business”….
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Money20/20, operates the world’s leading fintech events in Europe, Asia and USA and is “the place where money does business”. Money20/20 USA has unveiled seven startups poised to transform the financial sector. The selected startups are Brightwave, Casap, Eisen, Footprint, NALA, Ntropy, and Zumma. They were revealed during the Startup Media Session on October 29th in Las Vegas. The Startup Media Session was designed as part of the event’s goal to support startups at the intersection of finance and business.
“Money20/20 USA is focused on what drives the conversations most relevant to the FinTech industry. From economic and regulatory uncertainty to the future of payments and the impact AI will have on money moving forward. We are proud to highlight the work these startups are doing to move this industry forward.”
Scarlett Sieber, Chief Strategy and Growth Officer at Money20/20
Brightwave
Brightwave is the leading AI platform for financial services. It delivers accurate and insightful financial research enabling finance professionals to make better decisions faster. Its purpose-built AI systems synthesize insights across thousands of pages of primary sources. It can automate the most tedious parts of investing workflows and help users spot opportunities others have missed.
“Being named one of the Top 7 Startups at Money20/20 is a strong acknowledgment of the strides we’ve made in transforming how investment research is done. We’re also excited to announce our $15 million Series A funding at the world’s premier show for financial innovation. At Brightwave, we’re tackling one of the hardest problems in finance. We’re making sense of vast amounts of data to uncover deeper insights and relationships that others miss,” said Mike Conover, Founder and CEO at Brightwave.
Casap
Casap is an AI-powered disputes automation and fraud prevention platform. With built-in regulatory expertise and network integrations, Casap’s intelligent automation identifies fraudulent claims early. It delivers fast, frictionless dispute and chargeback resolution at a fraction of today’s cost.
“Money20/20 was the first conference I attended after starting Casap last year and it played a pivotal role in validating our vision. The connections, conversations, and insights I gained were invaluable. Exactly a year later, we’re back and launching out of stealth with live customers. We’re addressing some of the most pressing challenges in scaling payments. We’re starting with automating chargebacks and combating first-party fraud. We’re deeply grateful to Money20/20 for this opportunity to reach so many in the industry and help drive meaningful change in how payments are operated at scale,” said Saisi Peter, Co-founder of Casap.
Eisen
Eisen is the first escheatment automation solution that proactively manages the offboarding of dormant accounts, stale checks, wind-downs, and more. Financial institutions rely on Eisen to simplify the complex landscape of regulatory outreach, disbursement, and escheatment requirements. It ensures compliance while reducing operational risk.
“Money20/20 has been a cornerstone for Eisen since 2021, where the very idea for our company first sparked in the halls of the Venetian. It all started with conversations about the hardest challenges in FinTech. Each year, it’s helped us refine our vision and better serve our customers. For us, Money20/20 isn’t just about growth — it’s where Eisen began,” said Allen Osgood, CEO of Eisen.
Footprint
Footprint is a Series A identity company that has raised $20M from funds such as QED and Index Ventures. The company provides a single SDK that automates onboarding – KYC/KYB, fraud, security, and authentication – into an easy-to-integrate solution. Footprint works with leading companies across the Banking, Auto, and Real Estate sectors. Its technology portabalises identity, creating a centralised database of de-duplicated authentic identities.
“Money20/20 is at the vanguard of innovation. We’ve tried to be different at Footprint. Whether that be through our recent fraud indemnification program or our approach to labeling good actors. Some may think these are crazy ideas. But it is great to see Money20/20 continue to be where crazy can get a spotlight. That is how I would like to think true innovation happens,” said Eli Wachs, Co-founder and CEO of Footprint.
NALA
NALA is a global cross-border payments fintech company based in the US doing cross-border payments to emerging markets like Africa and Asia. It has two products, a consumer FinTech product enabling migrants to send money home and an infrastructure business called Rafiki, building payment rails for Africa. NALA recently became profitable and raised a $40m series A after achieving 10x revenue growth in 12 months.
“At NALA, we are on a mission to build payments for the next billion. Emerging markets are often overlooked but shouldn’t be underestimated as these regions have seen the fastest economic growth in the world. We have big ambitions for what we would like to achieve and have exciting plans in the pipeline in the coming years,“ said Benjamin Fernandes, Founder and CEO of NALA.
Ntropy
Ntropy is on a mission to organise the world’s financial data. 80% of the world’s financial data is unstructured and locked in transactions, documents, PDFs, and images. This means it is under-leveraged and cannot be used by models at scale. Ntropy was founded to solve this problem for any type of financial data, in any language, any geography, powering humans and more recently agents and agentic workflows in finance.
“Ntropy is processing hundreds of millions of transactions and documents weekly with over 98% accuracy, in under 100ms, 1000x faster, and cheaper than any other provider on the market. You can access Ntropy via our API-s directly, and more recently via NVIDIA NIM-s. This collaboration enables flexibility in deployment and allows our customers to scale immediately. This year’s Money20/20 has been about demonstrating the real value of GenAI and we have been very fortunate to have this exposure together with our partners at NVIDIA, Oracle, and AWS, who are accelerating Ntropy’s mission,” said Naré Vardanyan, Co-founder and CEO of Ntropy.
Zumma
Zumma is a financial copilot that automates and simplifies financial processes for Latin American businesses by leveraging existing tools they already use such as WhatsApp to save them time and money. The company is starting with automating expense management and expense invoicing processes, saving their customers more than $4,000 per employee per year in tax deductions.
“Being part of Money20/20’s Startup Media Session helps us spread the word about our product to the fintech community. The Money20/20 team has been key in our growth by connecting us to key players in the industry,” said Daniela Lascurain, COO and Co-founder of Zumma.
Launched by industry insiders in 2012, Money20/20 is the heartbeat of the global fintech ecosystem. Moreover, some of the most innovative, fast-moving ideas and companies have found their feet (and funding) on its show floor. From J.P. Morgan, Stripe, and Airwallex to HSBC, Deutsche Bank, and Checkout.com, Money20/20 is the place where money does business.
Scott Zoldi, Chief Analytics Officer at FICO considers whether the current AI bubble is set to burst, the potential repercussions of such an event, and how businesses can prepare
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Since artificial intelligence emerged more than fifty years ago, it has experienced cycles of peaks and troughs. Periods of hype, quickly followed by unmet expectations that lead to bleak periods of AI-winter as users and investment pull back. We are currently in the biggest period of hype yet. Does that mean we are setting ourselves up for the biggest, most catastrophic fall to date?
AI drawback
There is a significant chance of such a drawback occurring in the near future. So, the growing number of businesses relying on AI must take steps to prepare and mitigate the impact a drawback or complete collapse could have. Research from Lloyds recently found adoption has doubled in the last year, with 63% of firms now investing in AI, compared to 32% in 2023. In addition, the same study found 81% of financial institutions now view it as a business opportunity, up from 56% in 2023.
This hype has led organisations to explore AI use for the first time. Often with little understanding of the algorithms’ core limitations. According to Gartner, in 2023 less than 10% of organisations were capable of operationalising AI to enable meaningful execution. This could be leading to the ‘unmet expectations’ stage of the damaging hype/drawback cycle. The all-encompassing FOMO of repeating the narrative of the incredible value of AI does not align with organisations’ ability to scale, manage huge risks, or derive real sustained business value.
Regulatory pressures for AI
There has been a lack of trust in AI by consumers and businsses alike. It has resulted in new AI regulations specifying strong responsibility and transparency requirements for applications. The vast majority of organisations are unable to meet these in traditional AI, let alone newer GenAI applications. Large language models (LLMs) were prematurely released to the public. The resulting succession of fails fuelled substantial pressure on companies to pull back from using such solutions other than for internal applications. It has been reported that 60% of banking businesses are actively limiting AI usage. This shows that the drawback has already begun. Organisations that have gone all-in on GenAI – especially those early adopters – will be the ones to pull back the most, and the fastest.
In financial services, where AI use has matured over decades, analytic technologies exist today that can withstand regulatory scrutiny. Forward-looking companies are ensuring they are prepared. They are moving to interpretable AI and backup traditional analytics on hand while they explore newer technologies with appropriate caution. This is in line with proper business accountability, vs the ‘build fast, break it’, mentality of the hype spinners.
Customer trust with AI
Customer trust has been violated by repeated failures in AI, and a lack of businesses taking customer safety seriously. A pull-back will assuage inherent mistrust in companies’ use of artificial intelligence in customer facing applications and repeated harmful outcomes.
Businesses who want their AI usage to survive the impending winter need to establish corporate standards for building safe, transparent, trustworthy Responsible AI models that focus on the tenets of robust, interpretable, ethical and auditable AI. Concurrently, these practices will demonstrate that regulations are being adhered to – and that their customers can trust AI. Organisations will move from the constant broadcast of a dizzying array of possible applications, to a few well-structured, accountable and meaningful applications that provide value to consumers, built responsibly. Regulation will be the catalyst.
Preparing for the worst
Too many organisations are driving AI strategy through business owners or software engineers who often have limited to no knowledge of the specifics of algorithm mathematics and the very signifiicant risk in using the technology.
Stringing together AI is easy. Building AI that is responsible and safe is a much harder and exhausting exercise requiring model development and deployment corporate standards. Businesses need to start now to define standards for adopting the right types of AI for appropriate business applications, meet regulatory compliances, and achieve optimal consumer outcomes.
Companies need to show true data science leadership by developing a Responsible AI programme or boosting practices that have atrophied during the GenAI hype cycle which for many threw standards to the wind. They should start with a review of how regulation is developing, and whether they have the standards, data science staff and algorithm experience to appropriately address and pressure-test their applications and to establish trust in AI usage. If they’re not prepared, they need to understand the business impacts of potentially having artificial intelligence pulled from their repository of tools.
Next, these companies must determine where to use traditional AI and where they use GenAI, and ensure this is not driven by marketing narrative but meeting both regulation and real business objectives safely. Finally, companies will want to adopt a humble approach to back up their deployments, to tier down to safer tech when the model indicates its decisioning is not trustworthy.
Now is the time to go beyond aspirational and boastful claims, to have honest discussions around the risks of this technology, and to define what mature and immature AI look like. This will help prevent a major drawback.
Alexandra Mousavizadeh, CEO and Co-Founder of Evident, on how global banks are stepping up their AI comms in the face of growing investor scrutiny
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In the big banks’ Q2 earning calls this year, a critical milestone was reached. For the first time, half of the 50 major banks we track in the Evident AI Index fielded questions from equity analysts concerning risks and opportunities specific to artificial intelligence (AI).
External scrutiny of the banks’ AI progress is steadily increasing. This is in line with the huge sums institutions have pumped into originating, developing, rolling out and scaling AI use cases. Banking leaders we’ve spoken to aren’t expecting to register meaningful bottom line business impacts from AI investments for at least another 24-36 months. Meanwhile, investors need satisfying that progress is being made, and that ROI will be forthcoming,
Against this backdrop, the way in which banks communicate around AI is becoming increasingly important.
Just 12 months ago, many banks were making only sporadic, broad-brush or conceptual references to AI. However, our recent AI Leadership Report revealed every bank in the Evident AI Index now has a communications and marketing strategy. Furthermore, the majority are referencing AI across multiple communications channels. These include annual reports, press releases, company LinkedIn posts, and media interviews.
Banks need to ‘talk the walk’
It’s not just the volume of comms, but the substance that is increasing. More banks are now willing to reveal specifics around internal use cases already in production. Moreover, they are sharing the results of these efforts and tangible information about what they are doing to scale artificial intelligence.
Last year, only 6 of 50 Index banks identified AI as a strategic priority in investor relations materials, and clearly described specific use cases in production alongside their ROI. This year, this number increased 2.5x to 15 banks.
These substantive communications help to reassure and placate investors. Furthermore, if a bank is perceived to be at the leading edge of AI adoption, the easier it becomes to attract, retain and inspire the talent needed to make organisation-wide transformation a reality
The C-Suite needs to engage in the AI debate
To achieve cut through in the debate, banks are mobilising their C-level leaders to publicise their ongoing efforts. They are setting out their vision for becoming AI-first organisations.
Of the 50 banks, 45 now have at least one C-Suite executive that has engaged on the topic of AI in external media in the last year. Furthermore, 15 of the 50 banks have two spokespeople on AI, while six banks (CaixaBank, DBS, Goldman Sachs, Intesa Sanpaolo, JPMorgan Chase, and NatWest) are engaging with four or more spokespeople across the Executive team.
As the primary owner of the bank’s strategic vision, the CEO should arguably lead from the front when it comes to market communications around AI. Meanwhile, JPMorgan Chase leads the pack across a host of AI maturity metrics. The efforts of Jamie Dimon to set the agenda and relentlessly beat the drum should not be understated.
Over the past 12 months, Dimon has been quoted in the media on AI topics around 10x more than any other banking chief. He continuously reaffirming his institution’s dominant position in the eyes of investors. This is an intentional, coordinated AI communications strategy that other banks would be well advised to follow.
Communicating tangible AI gains is vital as operational realities bite
Every potentially game-changing new technology follows a well-established hype cycle. In the case of AI, we’re now seeing the inflated expectations of Generative AI – arguably the most significant technology innovation of the past decade – being tempered by the realities (and difficulties) of operationalisation.
A recent memo from leading venture capital firm Sequoia Capital highlighted the elephant in the room. Namely, that the gap between what’s being spent to build out AI (mostly by tech companies) and the actual revenue realised by that investment has risen to $600 billion this year, up from $200 billion in September 2023. Investors are starting to probe for detail on when and where the ROI is coming from and, like Big Tech, the world’s leading banks will find it impossible to duck the difficult questions.
A delicate balance must be struck. Overpromising on AI today and underdelivering further down the line could prove disastrous. And yet, banking leaders know that in the highly contested race for artificial intelligence supremacy, failing to communicate their plans and progress also carries reputational risk.
Of the 50 banks we track, 38 announced at least one AI use case in the last year. Meanwhile, only 21 reported any outcomes associated with those use cases. And of those, only two – JPMorgan Chase and DBS – went so far as to specify their total actual realised $ return on AI spend last year.
With investor scrutiny only likely to intensify in the year ahead, individuals at the top of every bank must set forth a clear vision. They must establish frameworks for measuring the effectiveness of their AI efforts and the ROI being realised. And, crucially, provide consistent and clear communication every step of the way.
Nicholas Holt, Head of Solutions and Delivery, Europe, Marqeta on how AI has the potential to revolutionise payments
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The financial services sector has witnessed a profound transformation over the past two decades. It has been propelled by technological advancements. From online banking to mobile-first platforms like Revolut and Monzo, the industry is continuously evolving. The integration of Artificial Intelligence (AI) into financial services is set to push the boundaries even further. Offering enhanced convenience and changing how we manage our money.
AI offers the ability to process and analyse vast amounts of data in real-time. It promises to make financial services intuitive, intelligent, and personalised to individual needs. And it can also help to make it more secure.
AI-Powered Personalisation
AI can interpret a consumer’s transaction history and spending patterns to create tailored financial recommendations. These include optimising payment methods, choosing better reward programmes, or suggesting savings opportunities. This degree of personalisation is far more sophisticated than the broad, one-size-fits-all approach currently offered by banks.
The technology can enable ‘predictive cards’ to leverage machine learning algorithms to set personalised credit limits and rewards based on an individual’s financial behaviour. By predicting future needs, AI-powered tools can offer a more holistic view of one’s finances. They can improve financial literacy and promote better financial decision-making.
Consumers are increasingly warming to the idea of AI in financial services. According to Marqeta’s 2023Consumer Pulse Report, 36% of consumers in the US and the UK expressed interest in using AI tools to help manage their finances. This figure rose to over 50% for consumers under 50, indicating a clear demand for personalised AI-driven solutions.
Unlocking Access to Credit
Access to credit is a significant factor in financial inclusion. AI has the potential to expand this access by transforming how creditworthiness is assessed. Traditionally, credit approval processes have relied heavily on limited data points, such as a person’s credit score and income. However, AI can analyse a broader range of data, from spending patterns to social media behaviour. This can provide a more nuanced assessment of an individual’s creditworthiness.
By using advanced machine learning models, AI can process this data at incredible speeds. This allows more people to be approved for credit faster and with greater accuracy. It can be particularly beneficial for individuals who may have struggled to secure credit through traditional methods, such as younger consumers or those without a lengthy credit history.
Generative AI (GenAI), which builds upon traditional AI by predicting and creating entirely new behaviours and patterns, also holds promise in this area. As the use of GenAI tools grows, we can expect more tailored financial products that respond to each consumer’s unique needs. Moreover, this could include personalised loan offerings or dynamic credit options that adapt in real-time to a person’s financial situation.
Fighting Fraud
While personalisation is one of AI’s most exciting applications, its ability to detect and prevent fraud is another crucial benefit. Fraud detection is a near constant battle across financial services, with millions of transactions processed every minute across the globe. Identifying suspicious activities quickly and accurately is essential for maintaining trust and security.
Machine learning algorithms are adept at spotting irregularities that might be missed by human analysts or even traditional software. Additionally, these systems can identify patterns that indicate potential fraud and alert financial institutions instantly, allowing them to take swift action.
Furthermore, as fraud techniques evolve, AI systems will continuously learn and adapt, staying one step ahead of cybercriminals. This capacity to evolve will make AI an invaluable asset in the fight against fraud.
AI and Embedded Finance
Embedded Finance, the process of integrating financial services into non-financial platforms, has already begun reshaping how consumers and businesses interact with money. AI is set to accelerate this trend, enhancing the capabilities of embedded financial tools with real-time data processing and hyper-personalisation.
For instance, businesses could use AI-powered embedded finance solutions to offer tailored payment options at checkout based on a customer’s purchasing behaviour. This could include personalised financing options, such as Buy Now, Pay Later (BNPL) services, or optimised rewards based on previous transactions. Companies like Marqeta are already exploring AI’s potential to elevate embedded finance, making these interactions seamless and highly personalised.
The Future of Finance
Financial services in 20 or just 10 years from now will likely be unrecognisable compared to today. AI will play a central role in shaping this evolution. Consumers and businesses can expect a future where financial products are deeply integrated into everyday life. However, not as separate, standalone services, but as seamless, invisible enablers of transactions and financial management.
GenAI will become increasingly sophisticated, offering predictive insights that can help consumers manage finances with greater precision. For businesses, AI-driven solutions will enable more efficient operations, cost reductions, and enhanced customer engagement through personalised offerings.
In this future, consumers will enjoy unparalleled convenience and flexibility. Payments, credit, and financial planning will be customised to fit the individual, with AI continuously learning and adapting to offer better recommendations and insights. This will lead to greater financial literacy, broader access to credit, and improved financial security. Additionally, financial service providers will gain much greater control over fraud and other security challenges.
Fred Fuller, Global Head of Banking at Endava, on how banks can effectively communicate AI advancements and demonstrate ROI to investors
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There is no single solution, AI or otherwise, that can prepare financial institutions for the modern world. To build a bank capable of successfully navigating the challenges of the future, a long-term digital transformation strategy is required. Especially relevant in the wake of recent IT outages,
At present, according to Endava’s Retail Banking Report 2024, 67% of banks are still heavily reliant on legacy systems. This leads to wasted budget and decreased efficiency. With limited resources available to modernise their tech stack, company leaders are often forced to choose which technology-type to prioritise. When doing this, 50% have chosen artificial intelligence (AI).
Is AI alone enough?
Can AI overhaul archaic processes or are there too many hurdles in the way? The first hurdle to successful digital transformation in financial services is overcoming the employees’ perception of the process. Time and time again, corporations have failed in the goal to integrate solutions that successfully feed into a long-term tech strategy. Often, this is due to wide-spread change fatigue. When exhausted by continuous efforts to change their day-to-day, workers become resistant to transformation. The best way to overcome change fatigue, and drive digital transformation in financial institutions, is through overhauling legacy systems. And adopting solutions that will stand the test of time.
Legacy Systems
Across the world, outdated legacy systems are holding financial institutions back and costing them billions. From 2022 to 2028, this expense is expected to grow at a rate of 7.8%. Not only do these archaic processes cost money, but they force banks to contend with a multitude of siloes. From departments to data. We live in a world where neobanks are growing in popularity. They are able to provide a frictionless customer experience using their modern tech stack. Traditional organisations must rid themselves of siloes to enable all areas of the business to leverage AI. In turn, this will provide them with strong data collection and support from departments who are agreed on next steps.
At present, three quarters of financial institutions feel they need to modernise their core. Without this change, they lack the secure, data-driven foundation necessary to utilise AI and see return on their technical investments.
The benefits of AI integration
Once a strong foundation has been laid, it becomes easier to see the practical benefits of integrating AI. For example, when data is no longer siloed by legacy systems, using chat bots to support customers with simple queries creates an efficient consumer experience. There are internal benefits too. AI can spot potentially suspicious activity, flagging it before it is too late. Or analysing data to ensure risk management and process automation. Despite its wide-reaching capabilities, AI alone is not the only option for financial institutions…
Routes to the future
Endava’s Retail Banking Report also showcased the variety of solutions that banks are using to improve their tech stack. 45% of respondents recognised data analytics, in and of themselves, as a top area for investment. Meanwhile 30% flagged IoT, and 14% the Metaverse.
There’s a reason for the emphasis on strong data. It not only supports the integration and use of AI-fuelled capabilities, but it is the driving force behind numerous functions of the bank itself. Of those surveyed, 37% aimed to use data to improve customer service. 34% to strengthen security, and 33% to personalise products and improve the customer experience.
As well as attracting and retaining consumers, business leaders can benefit from their access to strong data by attracting and retaining talent. With 39% of failed digital transformations viewing lack of employee buy-in as a factor, financial institutions are encouraged to educate workers on their technology integration plans, and ensure solutions are user-friendly. Fortunately, looking ahead, 20% of banks surveyed seek to use data to improve the workplace.
A bank’s priority – looking ahead
More than ever, banks are reliant on data to keep operations running smoothly. From providing customers with a personalised experience to improving the workplace in the competition for talent, there are a multitude of reasons to ensure the foundations of your tech stack are strong.
Doing so makes integration of new technology a smoother experience for all. To this end, it’s no shock that 50% of banks are keen to embrace AI, using it to benefit customers and speed up processes. However, with many hampered by the legacy technology and the ever-looming threat of change fatigue, integration of any technology should be carefully planned, customer focused and data led.
Lucian Daia, CTO at Zitec, on the rise of embedded finance driving customer loyalty across financial services
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The frenzy of Christmas and Halloween marketing is already in full swing, with date reveals of Christmas market returns to pumpkin patch locations. Retailers are gearing up to execute their strategies as the Golden Quarter approaches. This year, however, retailers have another string to their bow, another key message to snag a customer: ‘Buy Now, Pay Later’ (BNPL).
Business is booming in the BNPL game, with the market quadrupling in size since 2020. It is expected to hit a record level of £30bn in 2024. The payment option is fast becoming a staple in the digital wallets of millions for the major retail milestones of the year.
Halloween is the first major retail moment in the run-up to the festive season as Britain settles back into its winter routine. However, the rise of BNPL points to consumer behaviour that’s fast evolving and anything but predictable.
Retailers sink or swim based on the customer experience they deliver. From the rise of omnichannel strategies to speedy same-day deliveries, click and collect options, and attention-grabbing immersive experiences… There’s no shortage of initiatives to drum up customer loyalty. Now, payment solutions are part of the equation. Embedded Finance is front and centre of this change, integrating financial services (like loans, insurance, debit cards etc.) into businesses that don’t usually handle finance.
Application Programming Interfaces (APIs) offer a “Plug and Play” type functionality. Retailers can offer seamless payment solutions like BNPL or digital wallets directly on their systems. This integration keeps shoppers on the site and reduces the tiresome friction of third-party pop-up systems. Moreover, it offers features like zero-interest point-of-sale loans or app-based rewards. Of course, it allows them to check-out as easily and as quickly as possible too.
Bye-bye Velcro
Bye-bye Velcro, hello snazzy digital wallet that holds payment cards and bank account details all in one place. Digital wallets have become essential components of modern payments and offer a convenient and less risky way for shoppers to buy their items.
Gone are the days of searching for physical cards under stashes of files or keying in repetitive digits on a keyboard. Digital wallets also offer a reduced risk of fraud because of advanced encryption and tokenisation technologies. Beyond security, digital wallets provide retailers with valuable consumer insights.
For instance, if a customer buys a Halloween costume and decorations, retailers can use this data to target them with personalised offers. Such as a discount on themed candy bowls or matching spooky accessories. This level of personalisation is make or break for retailers today. Customers are setting a higher bar than ever for personalised content, offers and experiences that meet their needs and interests.
Speeding up cash flow with BNPL
Another innovation retailers need to have on their radar is instant payments. Unlike traditional systems that mean transactions can take hours or even days to complete, instant payments ensure funds are transferred within seconds.
For retailers, especially those operating on thin margins or managing high transaction volumes, the speed at which funds are made available can be make or break. The quick availability of cash means retailers can better manage their finances, buy new stock and address operational costs at pace.
Contrary to common belief, Brits don’t love queuing; in fact, they hate it. Faster payment options in-store have been pivotal in giving customers the speedy experience they demand so they can get on with their day. Quick transactions not only improve cash flow and reduce delays but enhance the customer experience. Making it ideal for those who’ve left their shopping too late, or forgotten an item on their list. As a result, customers walk away with the right impression.
Ditch the lines and pay with a tap
Retailers should be equipped with mobile point-of-sale (mPOS) systems that allow customers to make payments through their smartphones or other mobile devices, cutting down on wait times and speeding up the checkout process.
Retailers also stand to benefit from digital receipts, detailed sales reports, and real-time inventory management from having this system in place. This efficient processing not only improves cash flow but also provides valuable data for managing stock levels and customer preferences.
Beyond the Golden-Quarter
As retailers prepare for the Golden Quarter and beyond, understanding and leveraging FinTech payment innovations can seriously pay dividends. By adopting technologies such as embedded finance, digital wallets, instant payments, and mobile payments, retailers can improve their operational efficiency, enhance customer experiences, and position themselves for future growth in a digital-first world. Indeed, in recent years marked by economic shocks, huge tech advancements – especially with AI – and increasingly unpredictable consumer behaviour, it is crucial for retailers to stay ahead of payment options.
Providing consumers with flexibility, choices, and ultimately, ways to manage their outgoings and spread the cost will be key. Retailers will need to take a view on which innovations align best with the changing expectations of their customers and who they partner with to help them remain competitive.
Consumer Financial Protection Bureau (CFPB) responds to FinTech innovations in Neobanking to protect customers
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The top US watchdog agency for consumer financial protection has unveiled long-awaited rules, reports Reuters. These rules are intended to drive a shift toward open banking. And spur competition, allowing consumers to control and share their own data when shopping for services.
The new rules also aim to govern relations between the burgeoning world of financial technology companies that offer consumer apps for an expanding array of services. And the sometimes competing interests of traditional banks that can be hesitant to grant access to their customers’ accounts and data.
Financial Protection across Open Banking
US Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra has commented on the transition to the new rules. These allow mobile phone users to switch providers while keeping the same number. He said the coming change should help bring US payments systems more in line with advances in other developed countries. He also said the rule incorporates strong privacy protections and consumer choices. “A company that ingests (a) consumer’s data can use the data to provide the product or service the consumer asked for, but not for unrelated purposes the consumer doesn’t want.”
New banking rules from the CFPB
First proposed a year ago, the new regulations were 14 years in the making. They were originally called for in the 2010 Wall Street reforms enacted following the 2008 financial crisis.
According to the CFPB, as the rules take effect, consumers will be able to transfer their data between banks free of charge and without obstacles. They will also be able to borrow on better terms. For example, by allowing lenders to issue loans using data held by other financial institutions. And to make payments directly from their bank accounts rather than by card – using open banking.
Neobanking consumers will also be able to revoke access to their data immediately, according to the CFPB. Ahead of the announcement, CFPB officials said the agency had made some changes to the version originally proposed in response to concerns from industry and public comment. It is now sparing banks with less than $850 million in assets from having to provide data, for example.
Companies will have more time than originally proposed to come into compliance. Larger financial technology companies will have until 2026, while the smallest will have until 2030.
DBS Token Services, marks new milestone in financial services with blockchain
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DBS has announced the introduction of DBS Token Services. The new suite of banking services integrates tokenisation and smart contract-enabled capabilities with award-winning banking services. It aims to unlock new transaction banking capabilities and operating efficiencies for its institutional clients with blockchain.
DBS Token Services via Blockchain
DBS Token Services unlocks instant, 24/7 real-time settlement of payments. It integrates the bank’s Ethereum Virtual Machine-compatible permissioned blockchain. This is the core payment engine and multiple industry payment infrastructure for DBS. In addition, smart contracts enable programmability for institutions to govern the use of funds according to predefined conditions. Enhancing security and transparency. Using a permissioned blockchain provides DBS full control over these services. It enables the bank to harness the benefits of blockchain technology while adhering to compliance standards.
The project is the culmination of several years of industry collaborations and experimentation in digital money innovations. The suite of solutions includes Treasury Tokens, Conditional Payments, and Programmable Rewards. It exemplifies how established financial institutions can leverage blockchain technology and smart contracts to deliver new client experiences.
Lim Soon Chong, Group Head of Global Transaction Services, DBS Bank
“To capture the massive shift of human and corporate activity to on-demand digital services, companies and public sector entities are reimagining their operating models and customer engagement strategies. A new generation of ‘always-on’ banking services is essential to support this shift and transformation.
“By leveraging tokenisation and smart contract capabilities, DBS Token Services enables companies and public sector entities. They can optimise liquidity management, streamline operational workflows, strengthen business resilience, and unlock new opportunities for end-customer or end-user engagement. It marks a significant step forward in transaction banking. It demonstrates how established financial institutions can leverage blockchain technology to deliver new ground-breaking features and experiences.”
DBS: Shaping the future of finance with Blockchain
Since 2016, DBS has been a driving force in several industry initiatives led by the Monetary Authority of Singapore. It has been exploring the potential of blockchain technology in enhancing Singapore’s financial landscape. Key initiatives include Project Ubin, Project Orchidand Project Guardian.
DBS Token Services continues to explore broader applications of blockchain enabled solutions. These include the tokenisation of securities and digitalisation of trade finance. These innovations reflect DBS’ ongoing commitment to building a more robust and innovative banking landscape..
Amelia Lowe, Vice President of Operations at SquareTrade, on the potential for AI to revolutionise InsurTech
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We have all witnessed the growth of AI in the past year. It’s quickly becoming an innate part of how we work. In the UK alone, the number of AI registered companies has increased by over 600% in under a decade. While the size of the AI market is expected to grow to over £800 billion by 2035. AI holds the power to radically reshape the way we live, learn, and conduct business. It can unlock possibilities we once only imagined. In the past two years, we’ve witnessed this transformational potential come to life. It’s driving innovation and redefining industries at an unprecedented pace.
We stand on the brink of a new era. AI is poised to become an integral force that not only enhances our daily lives but also paves the way for a more effective way of doing business and connecting with customers. AI holds the key to supercharging the customer experience, by creating seamless, intelligent customer journeys. So how do we do it?
In today’s highly competitive world, great customer service is essential. Customers do not want to feel like just another number. They want their individual needs to be recognised and addressed with personalised responses.
At SquareTrade, we aim to engage with our customers in ways that feel authentic and personal, even when they are engaging with AI. Our objective is to deliver a level of personalised interaction that was once thought of as unattainable with automated systems. Furthermore, ensuring every customer feels appreciated and understood in each exchange.
Enhancing customer experiences with AI for seamless, intelligent journeys
At the core of any customer relationship is the confidence that issues will be resolved quickly and effectively. Your team, and the people behind your company, play a pivotal role in delivering that trust across all customer touchpoints.
When integrating AI into a business, it is essential to align the technology with the company’s core objectives. For us, the focus has been on driving innovation and streamlining processes while ensuring customer service remains uncompromised. Our goal is to ensure, no matter how AI is implemented, the customer experience feels personal and authentic. Even with automated systems, we want to provide a level of personalised interaction that was once unimaginable. We see AI as an extension of our team. In light of that we apply the same values and principles to those we apply to our team, which focus on trust, transparency and respect.
Have you met Sally?
We now live in a world where AI tools and customer experience must work in harmony. According to Statista, 73% of consumers believe AI can enhance customer experience, with 80% reporting positive interactions with AI so far. Clearly, AI has reached a point where customers can appreciate its benefits during their times of need. It can seamlessly recognise and addresses issues productively.
When businesses explore integrating AI solutions, it’s crucial to align them with their unique standards, customer service approach, and company culture. No two AI solutions are alike. For us, it was vital that any AI implementation seamlessly complemented our existing operations. A key example of how we’ve achieved this is through the introduction of Sally, our AI chatbot. Sally provides one of the quickest and most efficient ways for customers to engage with us when visiting our website. This enhances the user experience while staying true to our service values.
We are already witnessing the benefits of introducing Sally. She consistently achieves high success rates in resolving customer incidents autonomously. By deploying her in a strategic and targeted manner, we can reserve human interactions for more complex queries and claims.
AI Training for Operational Excellence
AI’s potential goes beyond customer interactions. It is increasingly being leveraged for training and education within organisations. In an industry like insurance, where no two claims are the same, InsurTech companies need training systems that prepare team members to adapt to a wide variety of scenarios.
Given that individuals learn in diverse ways and at varying speeds, the ability to create personalised learning experiences is immensely valuable. We see AI training tools as the equivalent of providing each employee with a personal tutor. Moreover, one that can adapt to their unique strengths, challenges, and learning styles.
And the learning doesn’t stop when the training does. AI-powered platforms can now continuously assess performance in real-time. If an employee is struggling in a particular area, the AI can automatically adjust the learning program to address those needs. This ensures ongoing growth and development tailored to each individual.
Fraud Detection
AI is poised to revolutionise fraud detection and prevention. It is becoming an invaluable asset to the teams that monitor for suspicious activity. In the insurance industry, AI can be deployed at multiple levels to enhance fraud detection. For example, through intelligent automation that swiftly analyses large datasets and flags potentially fraudulent claims for further investigation. This can save valuable time and resources.
AI can also enable the creation of predictive models that forecast fraud based on historical data and emerging trends. This helps insurance players to stay one step ahead of evolving threats. These models improve risk assessment accuracy by reducing false positives and allowing us to focus more effectively on genuine risks.
Looking ahead, the potential for AI in fraud detection is immense. AI is breaking new ground in areas where traditional rule-based systems fall short. Its ability to process vast amounts of data in real time, identify patterns and anomalies that would be nearly impossible to detect manually, makes it a game-changer in tackling complex problems.
Embracing AI Advancements
AI has the potential to revolutionise countless industries, but its impact is particularly profound in InsurTech. Given the critical role insurance plays in people’s lives, the opportunities for innovation and improvement are vast.
As an industry, it’s essential we recognise AI’s ability to transform customer experiences. As early adopters, we have witnessed its potential firsthand. We will continue to leverage these advancements to enhance personalised and automated processes. We can bridge language barriers, and create new methods of interaction.
However, our focus must always be on finding the right balance. Identifying where these solutions can deliver the greatest impact in serving customer needs quickly and effectively. Moreover, also ensuring that we retain the opportunity for human connection whenever it is needed. As well as ensuring compliance and security are a core part of how we think about implementing solutions to enhance business operations.
WaveBL Completes a new groundbreaking network connectivity Proof of Value (POV) with Swift, the participation of five global banks, and leading ocean carrier eBL Issuer MSC
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WaveBL, the leading blockchain based electronic Bill of Lading (eBL) platform, has completed a groundbreaking Proof of Value (POV). It worked with Swift and the participation of five global banks. Lloyds, Emirates NBD Bank, Federal Bank Limited, and other banks. Furthermore, MSC Mediterranean Shipping Company (MSC), a leading ocean carrier acted as an eBL issuer on WaveBL.
The POV successfully demonstrated the transfer of structured electronic document presentations (including eBLs) originated on the Platform. They were sent to and between Swift members, and back to the Platform, all as part of a Letter of Credit (LC) transaction. The process was executed utilising a series of Swift FIN messages and FileAct transfers from WaveBL to the different banks. The process maintained possession and title management of the electronic trade documents on WaveBL’s ledger of issuance.
Describing the Flow of the POV with WaveBL
The POV involved two eBLs – one straight and one negotiable – both issued by MSC on the WaveBL platform. The eBLs were first sent to an exporter on the WaveBL platform. Here, commercial documents like a packing list, invoice, and certificate of origin were added. These were then sent to the advising bank by the platform over the secure and resilient Swift network, using an MT message and a FileAct document transfer. In turn, the advising bank and the issuing bank exchanged the presentation between them while WaveBL’s ledger maintained the tracking of possession and title of the contained eBLs.
Ultimately, the issuing bank released the documents to the LC applicant, who is the importer, including the endorsement of the negotiable eBL from the issuing bank to the order of the importer on the Platform. All of which was instructed to the platform through a Swift MT message. This streamlined process allows for payments to be received within hours, rather than days. This is often the case with transactions that involve the physical transfer of documents. Similarly, with the eBLs surrendered back to MSC on the platform, the importer was able to collect the goods at the port of destination without delay.
Strengthening the supply chain-trade finance connectivity: The WaveBL Swift gateway
This groundbreaking POV underscores WaveBL’s dedication to making its network fully integrated with the financial system. This allows customers to seamlessly interact with Swift members and among participants themselves. For Swift members, electronic trade documents could soon be exchanged via WaveBL using their existing Swift infrastructure. And without requiring the installation or use of any specialised software or service.
WaveBL anticipates that the concept led through this POV will further its mission of creating seamless connectivity between the supply chain and financial markets. It will drive the shift towards 100% adoption of eBLs, as outlined in the FIT Alliance Declaration of September 2023. WaveBL is also looking forward to becoming the first electronic trade document provider to achieve full connectivity with the entire Swift community. This allows all banks a simple, standardised way to receive and send electronic bank presentations originated on the platform.
Innovative approach by leading banks
The participating banks have all previously demonstrated exceptional innovation by using WaveBL as their entry point to the eBL market. They gained experience by exchanging electronic trade document presentations in live commercial transactions. As part of the POV, WaveBL, Swift and the banks established a joint working group. This was aimed at analysing the methodologies and structure of the Swift MT messages and the electronic presentations proven during the POV. Moreover, their involvement highlights a commitment to advancing trade finance through digitisation and cutting-edge technologies for document exchange. WaveBL is eager to continue working with the joint working group as its expected integration with the Swift network unfolds.
Boaz Lessem, Chief of Legal Regulation and Partnerships, WaveBL:
“As the eBL market continues to grow, this POV solidifies our vision of seamless connectivity between WaveBL and Swift, providing a new, standardised solution for banks that prefer not to use the platform’s interface directly. By leveraging Swift’s trusted infrastructure, banks will now be able to exchange electronic trade documents with ease. Enabling greater flexibility and efficiency in trade finance. I believe this connectivity will lead the way to an increased value proposition for the electronic transformation to eBLs. I thank the Swift team for its ongoing leadership and support as part of this POV, driving forward this important initiative in trade finance digitisation.”
Gabe Hopkins, Chief Product Officer at Ripjar, on how GenAI can transform compliance
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Generative AI (GenAI) has proven to be a transformational technology for many global industries. Particularly those sectors looking to boost their operational efficiency and drive innovation. Furthermore, GenAI has a range of use cases, and many organisations are using it to create new, creative content on demand – such as imagery, music, text, and video. Others are using the new tools at their disposal to perform tasks and process data. This makes previously tedious activities much more manageable, saving considerable time, effort, and finances in the process.
However, compliance as a sector has traditionally shown hesitancy when it comes to implementing new technologies. Taking longer to implement new tools due to natural caution about perceived risks. As a result, many compliance teams will not be using any AI, let alone GenAI. This hesitancy means these teams are missing out on significant benefits. Especially at a time when other less risk-averse industries are experiencing the upside of implementing this technology across their systems.
To avoid falling behind other diverse industries and competitors, it’s time for compliance teams to seriously consider AI. They need to understand the ways the technology – specifically GenAI – can be utilised in safe and tested ways. And without introducing any unnecessary risk. Doing so will revolutionise their internal processes, save work hours and keep budgets down accordingly.
Understanding and overcoming GenAI barriers
GenAI is a new and rapidly developing technology. Therefore, it’s natural compliance teams may have reservations surrounding how it can be applied safely. Particularly, teams tend to worry about sharing data, which may then be used in its training and become embedded into future models. Moreover, it’s also unlikely most organisations would want to share data across the internet. Strict privacy and security measures would first need to be established.
When thinking about the options for running models securely or locally, teams are likely also worried about the costs of GenAI. Much of the public discussion of the topic has focussed on the immense budget required for preparing the foundation models.
Additionally, model governance teams within organisations will worry about the black box nature of AI models. This puts a focus on the possibility for models to embed biases towards specific groups, which can be difficult to identify.
However, the good news is that there are ways to use GenAI to overcome these concerns. This can be done by choosing the right models which provide the necessary security and privacy. Fine-tuning the models within a strong statistical framework can reduce biases.
In doing so, organisations must find the right resources. Data scientists, or qualified vendors, can support them in that work, which may also be challenging.
Overcoming the challenges of compliance with AI
Despite initial hesitancy, analysts and other compliance professionals are positioned to gain massively by implementing GenAI. For example, teams in regulated industries – like banks, fintechs and large organisations – are often met with massive workloads and resource limits. Depending on which industry, teams may be held responsible for identifying a range of risks. These include sanctioned individuals and entities, adapting to new regulatory obligations and managing huge amounts of data – or all three.
The process of reviewing huge quantities of potential matches can be incredibly repetitive and prone to error. If teams make mistakes and miss risks, the potential impact for firms can be significant. Both in terms of financial and reputational consequences.
In addition, false positives – where systems or teams incorrectly flag risks and false negatives – where we miss risks that should be flagged, may come from human error and inaccurate systems. They are hugely exacerbated by challenges such as name matching, risk identification, and quantification.
As a result, organisations within the industry quite often struggle to hire and retain staff. Moreover, this leads to a serious skills shortage amongst compliance professionals. Therefore, despite initial hesitancy, analysts and other compliance professionals stand to gain massively by implementing GenAI without needing to sacrifice accuracy.
Generative AI – welcome support for compliance teams
There are numerous useful ways to implemented GenAI and improve compliance processes. The most obvious is in Suspicious Activity Report (SAR) narrative commentary. Compliance analysts must write a summary of why a specific transaction or set of transactions is deemed suitable in a SAR. Long before the arrival of ChatGPT, forward thinking compliance teams were using technology based on its ancestor technology to semi-automate the writing of narratives. It is a task that newer models excel at, particularly with human oversight.
Producing summarised data can also be useful when tackling tasks such as Politically Exposed Persons (PEP) or Adverse Media screenings. This involves compliance teams performing reviews or research on a client to check for potential negative news and data sources. These screenings allow companies to spot potential risks. It can prevent them from becoming implicated in any negative relationships or reputational damage.
By correctly deploying summary technology, analysts can review match information far more effectively and efficiently. However, like with any technological operation, it is essential to consider which tool is right for which activity. AI is no different. Combining GenAI with other machine learning (ML) and AI techniques can provide a real step change. This means blending both generalised and deductive capabilities from GenAI with highly measurable and comprehensive results available in well-known ML models.
Profiling efficiency with AI
For example, traditional AI can be used to create profiles, differentiating large quantities of organisations and individuals separating out distinct identities. The new approach moves past the historical hit and miss where analysts execute manual searches limiting results by arbitrary numeric limits.
Once these profiles are available, GenAI can help analysts to be even more efficient. The results from the latest innovations already show GenAI-powered virtual analysts can achieve, or even surpass, human accuracy across a range of measures.
Concerns about accuracy will still likely impact the rate of GenAI adoption. However, it is clear that future compliance teams will significantly benefit from these breakthroughs. This will enable significant improvements in speed, effectiveness and the ability to respond to new risks or constraints.
Ripjar is a global company of talented technologists, data scientists and analysts designing products that will change the way criminal activities are detected and prevented. Our founders are experienced technologists & leaders from the heart of the UK security and intelligence community all previously working at the British Government Communications Headquarters (GCHQ). We understand how to build products that scale, work seamlessly with the user and enhance analysis through machine learning and artificial intelligence. We believe that through this augmented analysis we can protect global companies and governments from the ever-present threat of money laundering, fraud, cyber-crime and terrorism.
The AXA Group aims to protect over 20 million customers through inclusive insurance globally by 2026
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AXA Egypt and Post for Investment (PFI), the investment arm of Egypt Post, are establishing the first micro-insurance company in Egypt. This strategic collaboration is made possible by leveraging the new insurance law and aims to revolutionise the insurance landscape in the country.
Financial Inclusion
This initiative is fully aligned with AXA´s conviction that postal networks play a crucial role in global financial inclusion. Over a quarter of the world’s adult population accesses formal financial services through their post office. AXA notably signed a partnership with the Universal Postal Union (UPU) in May 2024. Moreover, this collaboration with UPU includes a research program. It will showcase successful postal insurance models and the establishment of the Postal Insurance Technical Assistance Facility (PITAF). This will promote financial inclusion and risk mitigation among underserved populations. Through this partnership, AXA is pushing the boundaries of insurance to better protect all. Solidifying its dedication to inclusive insurance practices worldwide.
The Egypt Post, who will be the main distribution channel of this JV, is a well-respected organisation. It has a strong nationwide presence, renowned for its last mile distribution capabilities and robust brand credibility. Additionally, with over 4000 branches, kiosks, and mobile trucks across all governorates, Egypt Post is an integral part of the country’s infrastructure. It caters to the population with unparalleled reach.
“We believe in the power of collaboration to create lasting change, and this joint venture is a testament to our commitment to inclusive insurance. Together, we are revolutionising the insurance landscape in Egypt to better protect and empower communities, setting new benchmarks for millions seeking reliable and accessible insurance protection.”
Garance Wattez-Richard
Micro-insurance from AXA
The product categories will include both retail and group offerings. Embedded and voluntary options will cater to diverse needs. The range of products will cover various areas. These include hospital cash, personal accident, term life, payment protection, credit life, livestock, and group protection, ensuring comprehensive coverage for the customers.
The ambitious goal is to reach 12 million customers within the first decade of operation. Therefore, underlining the commitment to making a significant impact on the lives of Egyptians through tailored insurance solutions.
This collaboration between AXA EssentiALL, AXA Egypt and PFI/Egypt Post marks a significant milestone in the local insurance industry. It paves the way for inclusive and impactful micro-insurance offerings that have the potential to transform the socio-economic landscape of Egypt. As the first of its kind, this micro-insurance company is poised to set new benchmarks. Furthermore, it can become a beacon of hope for millions of Egyptians seeking reliable and accessible insurance protection.
SemFi by HSBC will deliver innovative embedded finance solutions for businesses
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HSBC has launched its new jointly owned venture, SemFi by HSBC. It aims to deliver Seamless Embedded Finance solutions to business clients.
The new technology company is a joint venture between HSBC and B2B global trade network Tradeshift. Furthermore, SemFi will embed HSBC payment, trade and financing solutions across a range of e-commerce and marketplace venues, including Tradeshift’s own B2B network.
SemFi will deliver its solutions in the UK to begin with. Furthermore, it will enable SME suppliers on e-commerce venues to access digital invoice financing from HSBC. Via a seamless experience it also aims to offer SMEs greater flexibility and security in their spend management through the bank’s virtual card solutions.
SemFi by HSBC
“Businesses are increasingly looking for seamless financial solutions that are embedded within their e-commerce journeys. So they can access these when and where they need them.
“SemFi by HSBC aims to deliver such embedded capabilities to help businesses grow. It will seek to bring the best of both worlds to our business customers and e-commerce partners. A startup technology mindset coupled with the global scale and expertise, of an international bank.”
Vinay Mendonca, Chief Executive Officer
The new venture is led by senior leadership drawn from HSBC. This includes Vinay Mendonca as CEO and Shehan Silva as Chief Operating Officer (COO). Additionally, Jo Miyake, Interim CEO of Global Commercial Banking, joins the SemFi board.
HSBC has been steadily building its capabilities and presence in embedded finance. It is driven by business customers seeking connected financial journeys to e-commerce venues.
HSBC supports around 1.3 million businesses worldwide. Moreover, it is the world’s largest trade bank, facilitating over $800 billion of trade flows annually.
Tradeshift supports over $260 billion of annual gross merchandise value for a million business users on its platform.
SemFi is intended to be a technology company and will not operate as a banking entity. Clients will be onboarded by the bank and the bank’s balance sheet will be leveraged for financing.
Sejal Mehta and Andrew Rodgers from Odgers Berndtson’s Global FinTech Centre of Excellence and Randy Bean, a Senior Advisor to Odgers Berndtson and industry author, explore the dynamics shaping leadership in the UK fintech sector
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The UK FinTech sector is undergoing a significant transformation, marked by maturation, consolidation, and a more selective investment landscape. Funding is increasingly funnelled towards profit-generating scale-ups, and away from newer entrants.
At the same time, the sector is shaped by a multi-generational workforce with varied perspectives. Meanwhile rapid advancements in AI foster apprehension and excitement. These converging factors make FinTech one of the most dynamic and competitive spaces to work in today. This presents both challenges and opportunities for its leaders.
From our perspective as global FinTech executive search and leadership advisors at Odgers Berndtson these shifts are reshaping the demands placed on leadership. They are also influencing what it takes to lead effectively in this fast-changing sector. Here, we explore the leadership trends that are emerging as a result.
Ethical FinTech leadership
Venture capital funding is now more selective and private equity investors are increasingly targeting fintechs with solid exposure. This is creating a difficult environment for new start-ups. Those attracting funding are typically cash-positive scale-ups.
Amidst these challenges, more FinTech firms are opting to list on the NASDAQ rather than the London Stock Exchange, as the UK navigates more stringent regulation. The need for payments licences, extensive reporting, and compliance demands weigh heavily on FinTech leaders.
In this landscape, we’re seeing leaders with experience in regulated financial services bring a valuable skillset. The ability to operate within defined regulatory frameworks while generating growth. FinTech boards are looking for leaders with high authenticity and who can make ethical decisions. And while balancing ambition and growth with the realities of working in a highly regulated space.
Founder replacements
We are in the midst of the FinTech sector’s maturation. Start-ups are transitioning into scale-ups, requiring different leadership competencies. For many, this requires the founder to step down or step into a board role and appoint a CEO who can take the business through its next stage of growth.
This requires leaders who are commercially driven, capable of shaping market strategies, and adept at understanding customer needs and product-market fit. Navigating risk and regulation becomes crucial, while the founder’s creative, opportunity-led approach typically no longer dominates the new operational and strategic demands.
Boards and investors are looking for CEOs with a broader skillset and deep regulatory expertise. These leaders must also be able to attract and retain the type of talent that can sustain growth and innovation, while maintaining the ‘DNA’ that made the business so attractive in the first place.
A multi-generational workforce
Intergenerational divides are becoming more pronounced for all businesses and noticeably in sectors like FinTech. Here, younger generations with fresh perspectives are working alongside older, more experienced professionals – often from traditional financial services backgrounds.
This diversity in age, experience, and approach can be a powerful asset, but only if integrated effectively. Typically, Gen Z and Millennials prioritise flexibility, technological integration and experimentation. Meanwhile, Boomers bring valuable expertise in regulatory environments and operational effectiveness, but may be more accustomed to traditional structures and leadership styles.
Increasingly, we see FinTech leaders attempt to bridge these divides by emphasising open communication, promoting mentorship opportunities, and encouraging cross-generational collaboration. With less funding and more regulation, FinTech leaders recognise the need to identify and capitalise on the strengths of a multigenerational workforce if they are to succeed.
Leadership team dynamics
As FinTech companies scale, leadership is no longer just about the capabilities of individual leaders but about the dynamics of the entire executive team. Successful scale-ups understand the importance of assembling a leadership team that brings a diverse mix of skills, and generational perspectives to the table.
We are starting to see FinTech companies think about leadership team dynamics as they scale up. Boards are looking for a blend of strategic, operational and ethical considerations. As well as how well team members work together. Do they solve problems cohesively? Are there any unresolved tensions or conflict? Are they aligned and equipped to collectively deliver on the leadership mandate?
Many leadership teams are not optimising their potential due to misalignment of strengths. For example, we recently worked with a FinTech creating an executive team profile to identify the leadership competencies needed to deliver their mandate. This exercise enabled the team to reallocate executive responsibilities for strategic initiatives based on the required strengths, regardless of traditional job roles.
Polarising views on Gen AI
Leading organisations are experiencing a transformational moment due to accelerated interest in AI and Generative AI. 89.6% are increasing their investments in AI, while 64.2% of companies have indicated that AI will be the most transformational technology in a generation. In response, organisations are hiring for the data and AI leadership roles required to prepare their companies for an AI future.
However, this integration of Gen AI has sparked both excitement and nervousness, particularly around issues of data protection and privacy. Generational differences are especially noticeable. Younger professionals are often less concerned about data privacy, while older generations remain cautious about the security implications.
This divergence in attitudes can create tension within the organisation, as leaders grapple with how best to leverage Gen AI while ensuring compliance with stringent data protection regulations. For some FinTechs, AI is seen as a specialised area requiring dedicated focus. Meanwhile, others believe AI represents a fundamental shift in how business can be conducted and AI strategy should be woven into the fabric of every leader’s responsibilities.
This divide in attitudes reflects the broader challenges we see FinTech companies face in incorporating AI. Leaders must now navigate the balance between embracing innovation and safeguarding sensitive information. They must also ensure AI is not seen as a siloed function. It must be an integral part of their commercial and strategic vision. Given the fundamental changes in the sector, the emphasis on leadership capabilities is changing for both the individual and executive team.
Wirex Pay announces pioneering step forward for cryptocurrency payments with new app integrating traditional finance with blockchain
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Wirex Pay, a leading decentralised payment network incubated by Wirex, has announced early access to its innovative crypto payment app. Now live for select whitelisted users. This exclusive opportunity offers early adopters a chance to experience the next era of crypto payments. It can seamlessly integrate digital assets into everyday transactions – all directly from a non-custodial wallet.
With Wirex Pay, users can enjoy full financial autonomy, conducting secure, fast transactions in over 200 countries, whether shopping online or in-store. Designed to remove intermediaries, Wirex Pay ensures users maintain total control over their assets while making crypto payments easier than ever.
Key Features of Wirex Pay:
Seamless Crypto Payments: Effortlessly pay with digital assets in real-time
Full Control: Manage and spend crypto directly from non-custodial wallet
Security & Privacy: Enjoy full ownership of assets with no intermediaries
Pavel Matveev, Co-Founder of Wirex Pay, commented:
“Wirex Pay represents a significant step forward in the evolution of crypto payments. We’ve removed the barriers between crypto and everyday transactions, giving users the power to spend their assets freely and securely. We’re thrilled to offer this exclusive early access to our community and can’t wait for everyone to experience the future of payments.”
Wirex Pay offers a safe, decentralised payment solution, with built-in ID verification to ensure account protection while allowing users to control their digital assets fully. The platform bridges the gap between blockchain technology and real-world spending, empowering users to make instant, secure transactions worldwide.
About Wirex Pay
Wirex Pay is a pioneering modular payment chain, incubated by Wirex and powered by Polygon’s advanced Zero Knowledge (ZK) technology. This innovative platform seamlessly integrates traditional finance with blockchain, providing a decentralised, gasless, and on-chain payment infrastructure. Wirex Pay enables users to make instant, secure payments using a wide range of cryptocurrencies, all while maintaining full control over their assets.
As businesses increasingly turn to AI to drive efficiencies in customer service operations, James Towner, Chief Growth Officer at ArvatoConnect, explores how businesses can strike the right balance of using digital technologies that empower successful human interactions.
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Generative AI continues to transform how businesses engage with their customers. Buy-now-pay-later-giant Klarna is the latest to grab headlines for integrating an AI customer service chatbot that manages the equivalent workload of 700 employees. Klarna’s bosses have hailed AI as delivering superior experiences for their customers, saying its chatbot has a customer satisfaction score similar to human agents. However, studies find AI is no panacea for customer service success just yet.
AI vs the human touch
AI can undoubtedly play a major role in automating more routine queries. It provides a dynamic augmentation to the agent’s role by providing consistent, relevant information to the agent’s fingertips. But in many instances human interaction is an invaluable part of the customer experience.
In addition, customers have a variety of needs not least when it comes to those with vulnerabilities. The latest report from ArvatoConnect found how consumers that self-identify as being vulnerable said they prefer some level of human interaction when seeking help from a business. AI tools are unlikely to fully understand their unique needs.
A separate study by Smart Money People also highlights that nearly half of financial services customers (48%) are frustrated by a lack of access to human support. And an over-reliance on chatbots (24%) from firms. This epitomises the challenge facing customer services transformation projects in financial services and other categories. How can businesses get the right balance between AI and the human touch to optimise the customer experience? And what are the risks to getting the balance wrong?
Humanising the digital, digitising the human
Undoubtedly businesses can drive efficiencies in customer service operations with the help of technologies. These include AI, machine learning for analysing customer data, and robotic process automation (RPA) for handling repetitive tasks like extracting data from financial documents and using next generation chatbots. They allow human agents to focus on more complex issues, bringing empathy and creativity to their interactions.
Combining AI and human agents can then enable what we call ‘humanising the digital and digitising the human’. It represents a hybrid approach. For example, live speech AI analytics can provide helpful prompts or insights for agents, during conversations with customers, while freeing up their time.
Automating quality assurance and using generative AI to summarise customer interactions is helping to boost agents’ productivity while driving upskilling and training. Sentiment analysis and conversation analytics can also help agents to identify triggers for vulnerability. This can help them to provide the right level of support customers need and identify the next best action to take.
Developments of these customer service technologies will continue to drive transformation. Advanced tools can assess past and present customer data, suggest personalised next steps and guide agents through complex interactions. This helps ensure they deliver the right outcomes quickly and effectively to all customers.
Addressing the imbalance
Encouragingly, addressing the balance of AI and human agents is on the radar of businesses. Nearly a third (29%) of financial services businesses told us in a separate study that they planned to move the focus away from AI to human contact.
However, this compares to 51% in our study saying they planned to introduce more technology, such as AI and automation, to support the customer experience.
Understandably, many businesses see such technology as a route to saving money. But cost savings can still be reaped by empowering human agents with the right digital tools.
Companies can set clear goals for which processes need improvement, design solutions that meet those specific needs, and take a people-first approach. What this means, is using technology at the right times, in the right places – what we call ‘digital orchestration’ – and always knowing why it’s being used and what it’s expected to deliver.
Supporting vulnerable customers with AI
This is even more important when it comes to vulnerable customers, tailoring options like access to a human, to avoid the risk of alienating a large customer base
Nearly half (47%) of people in the UK identify as vulnerable, according to the Financial Conduct Authority. These individuals may face one or more of a wide range of unique challenges like mental or physical health issues, or have experienced difficult life events like bereavement.
Our study, which polled 250 individuals who self-identify as vulnerable, found that more than three-quarters (78%) of vulnerable consumers said that they prefer some level of human contact when seeking help, as many feel AI tools fail to fully understand their unique needs, leading to delays and frustration.
Nearly half (48%) of those who identify as vulnerable also admitted to avoiding businesses entirely when they do not provide adequate support tailored to their needs: largely in the form of inadequate human interaction.
However, 56% of those surveyed felt that AI and technology could meet their needs just as well as a human could. This reflects a growing acceptance of digital solutions, indicating that while many still prefer human contact, there is an openness among some vulnerable customers to engage with AI-driven assistance, as the impact of this advancing technology continues to permeate all in society.
Critically, in striking the right balance between humans and AI, businesses need to understand the preferences of their customers and how they want to interact with the organisation.
Looking ahead
Many business leaders will be turning to their IT and customer experience directors to see how they can replicate the apparent success of businesses like Klarna in adopting AI while reducing agent capacity. Yet any customer service transformation project must consider the risks of failing to balance AI and the human touch and what impact it might have on customers.
Businesses have the most to gain by using technology in a way that supports and enhances the human experience, for both the agents and the customer – creating personalised and genuine interactions that solve customer issues in the shortest amount of time.
Berkley Egenes, Chief Marketing & Growth Officer at Xsolla, on the legislation changing financial services
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The European Union’s Digital Market Act has sent tremors through digital payments. The legislation is designed to stop Big Tech’s monopoly over vital online services, from search engines to messaging apps. But beneath the surface, one of the most fascinating battlegrounds is how the Digital Markets Act will impact the lucrative world of digital payments. A space long dominated by a few influential players. This will affect how industries, including the video game industry, monetise these services.
Big tech’s digital tollbooth
For years, the platform owners have controlled much of the infrastructure around digital payments. Major platforms have tightly controlled access, charging app developers and merchants fees for every transaction processed. Furthermore, they take hefty cuts from each purchase through their ecosystem. The impact of the Digital Markets Act may vary across different platforms. Some companies will need to adjust their models to fit the legislation. Others may push back or delay changes through legal and regulatory channels.
The Digital Markets Act specifically targets a select group of ‘gatekeepers’, defined by their user base, revenue, and platform reach. Not every platform or company will be obligated to follow the Digital Markets Act’s rules. However, companies like Apple and Google, fall under the Digital Markets Act’s direct scope. The legislation now obliges these companies to open their platforms. This will allow smaller players and third-party services to operate without being strangled by eye-watering fees or exclusionary policies.
The impact on monetisation with Digital Payments
The big question is how this will impact the business models of the gatekeepers and the developers who rely on these platforms. For years, the mobile platforms have depended on hefty commission fees. Often as high as 30%, these monetise digital payments within their ecosystems. These fees have been a central sticking point for developers, particularly video game studios, which sometimes generate billions in revenue through in-app purchases and microtransactions.
Free-to-play mobile games specifically rely heavily on players making in-game purchases, from cosmetic skins to virtual currency. Under the current system, a significant chunk of that revenue is siphoned off by platform holders. They collect commissions on every transaction. This has forced game developers to either raise prices or accept slimmer margins while operating within the confines of strict payment policies.
The Digital Markets Act is disrupting this current model. Game developers have been fighting the ability to direct players to alternative payment methods. They may now have the freedom and access to offer alternative ways to market and monetise their game while still having the player experience on the mobile phone. As a result, for the first time, consumers may be able to choose alternative payment processors. This potentially reduces costs for players and developers alike.
For video game developers, particularly indie studios, the Digital Markets Act could represent a long-awaited relief from the large hold of app store economies. Developers can now distribute, market and sell their digital items and bundle packs through their online web shop or mobile SDK. By exploring these alternative options, developers will be retaining more of the profit per transaction. They could invest in better content or offer custom promotions to players – a win for both creators and consumers in the gaming industry across Europe.
Don’t ignore the challenges
The Digital Markets Act ushers in a brave new world of competition and choice for consumers, but it’s not all plain sailing. While the Digital Markets Act is designed to promote competition, the actual implementation of its provisions is still subject to regulatory developments and potential litigation. This means the full impact of the Digital Markets Act could take time to materialise. Moving towards a more open payment system demands a mountain of technical tweaks and a watchful eye from regulators. The real headache will be getting all these different payment systems to talk to each other while keeping security watertight.
Consumers also have to consider how they will adapt to these changes. While there are many benefits, changing habits takes work. The success of the Digital Markets Act will depend on effective communication, education, and transparency to ensure consumers are aware of the new options and their benefits.
A new era for Digital Payments?
While the Digital Markets Act promises greater choice and a more level playing field, the road ahead will be anything but smooth. While the Digital Markets Act’s potential to break down monopolistic practices is significant, its effects may not be felt immediately. Regulatory processes, litigation, and slow consumer adoption could mean the transition to a more open digital payments landscape occurs gradually over time. Gatekeepers have maintained a firm grip on payment infrastructure for years, charging high fees that have eaten into developers’ profits. But with the Digital Markets Act tearing down some of these walls, game studios may have the flexibility to finally bypass gatekeepers and offer cheaper in-game purchases, subscriptions, and services directly to consumers.
While the Digital Markets Act opens doors for smaller developers and alternative payment options, it also forces companies to rethink their monetisation strategies. This could potentially pass new costs onto consumers in other ways. What is clear is that the digital payments landscape is in flux. How the tech giants, game developers, and consumers adapt to this new reality will define the future of monetisation in the digital economy. The game is far from over, and the real winners have yet to be decided.
FinTech Strategy spoke with Ryan O’Holleran, Head of Sales, Enterprise, EMEA at Airwallex, to learn about the global payments and financial infrastructure provider
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Airwallex, a financial infrastructure provider, offers a range of services. Including multicurrency accounts, payment acceptance card issuing, foreign exchange (FX) payouts, treasury and expense management. In addition to supporting small and medium-sized businesses, the company also provides APIs and a software layer for direct access to enterprise businesses. As well as an enterprise platform product called Scale. Airwallex has found success working across various industries. It works with the likes of Bird (formerly MessageBird) to handle global accounts and backend treasury, and partners with Qantas to offer financial tools for their business partners.
The company also enables faster and more efficient payments through its patchwork network of financial partnerships and licenses. Airwallex has experienced significant growth even during economic downturns. As of August this year, Airwallex globally processed transactions worth more than $100 billion annually and saw a 73 percent year-on-year increase. It is now focused on embedded finance solutions and global expansion.
At Money20/20 Europe, FinTech Strategy spoke with Airwallex’s Head of Sales, Enterprise, EMEA, Ryan O’Holleran, to find out more…
Tell us about the genesis of Airwallex?
“Our co-founder, Jack Zhang, started a coffee company in Melbourne, Australia, which is still around today, with a few friends from university. And while they were building out this coffee shop, they were buying beans from abroad, along with supplies and packaging. They found how hard it was to actually pay for services, send funds abroad and deal with multiple currencies. So, they saw an opportunity to help streamline the financial infrastructure for small businesses. That’s when Jack and his co-founders put Airwallex together and built out an initial SME’s use case to allow multicurrency accounts and FX payouts. Since then, the business has really expanded…
Today, Airwallex provides a set of APIs – we’re really providing financial infrastructure to move money globally. On those APIs, we also have a layer of software that we can offer direct access to enterprise businesses. The third part of this, which is kind of the new product over the last three years, is our enterprise platform product called Scale. Scale allows you to embed those financial services into a product as well as a platform or marketplace. So, you kind of think about it as a direct treasury product, APIs and a platform product.”
Tell us about your role at Airwallex?
“I’m originally from San Francisco, grew up in the Bay area, started in tech, did a couple of startups, and I actually got into payments via Stripe. I joined Stripe back when there were about 200 employees in San Francisco. Spent some time in Chicago and then moved to the UK initially with Stripe. I was there for about five and a half years, as we went from 200 staff to 6,000. At that point, I wanted to get back to something a little bit different. To help more cross-functioning with product and help scale businesses. The opportunity with Airwallex came along where I saw the company addressing many things my customers at Stripe were asking for.
So, the FX piece, mass payouts, treasury, all complimented what Stripe is doing with acquiring. Since I joined the team three years ago, we’ve been scaling across EMEA. We now have offices in London, Amsterdam, Vilnius and just last year launched our office in Tel Aviv to cover Israel. And we have teams in the Americas and APAC where Airwallex was founded.”
What are some of the key challenges financial institutions are facing that you can help them with? What problems are companies asking you to solve? In doing so, what are the challenges for Airwallex?
“We work in different areas. This is where I think we have differentiated the business and also where I see the industry moving. If you look back over the last five, 10 years, there was this approach where you had Stripe and all the major players coming in and saying, we can do things and we can do it really well and you only need to use us, you don’t need to use a patchwork of providers. I think that is starting to shift. You see this with orchestration layers like Primer or Gravy, allowing people to be agnostic on PSPs. And then you’re seeing people think about redundancy. So, the heads of payments we’re talking to this week are looking at two or three providers because they need redundancy or want to use the best provider in each region. They don’t want to be siloed.
Airwallex can be used in a segmented approach. So, if you just need us for payouts, you can do that. If you just need us for FX, you can do that. If you just need us for acquiring, you can do that. Or we could do that globally and you can adjust as you see fit. So, the flexibility of Airwallex I think is one of our superpowers.”
Tell us about some of the successful partnerships Airwallex has been involved in…
“The interesting thing about Airwallex is that since we’re providing financial infrastructure, there’s a huge variety of customers we work with. One of the local ones is Bird (a cloud communications platform that connects enterprises to their global customers). Using our software product they are creating global accounts, handling backend treasury, payroll, suppliers and more. We’ve also worked with Qantas to build out an SMB solution embedding all of the Airwallex financial services and they call it Qantas Business Money.
Elsewhere, Brex in the US were looking for a provider to help with their payout rails. One of the things Airwallex has done is rebuilt the Swift network via local rails. So, we have a patchwork network of financial partnerships and licences where if you are located, let’s say in the US, but you want to pay somebody out in the UK, you get access to faster payment rails having never set foot in the UK or separate rails via Europe having never set foot in the EU. So, you get this mass payoff solution of local rails, which is faster, cheaper, and more efficient than using something like Swift.”
What trends are you seeing across the FinTech landscape? What opportunities do you see for Airwallex?
“I think where we’re seeing a lot of opportunities, in EMEA specifically, in B2B, vertical, SaaS, travel and marketplaces, is this embedded finance solution. It was kind of a buzzword a few years ago and now we’re actually starting to see it develop. I view it as actually embedding all of these financial services – whether it be a wallet, issued cards, or local multi-currency accounts – and being able to monetize that. So, we’re seeing this with a lot of our customers actually wanting to white label our products, embed that and bring payments on platform.”
And what’s next for Airwallex? What future launches and initiatives are you particularly excited about?
“The growth of Airwallex, specifically on a global scale, over the last few years is one thing I’m very proud of because it’s happened during one of the worst economic downturns we’ve experienced. FinTech was almost retracting in terms of budgets and investments. You’re starting to see the tide turn, but we were able to grow over 100 percent year on year, through some of the toughest times for business. And now we’re really starting to see that pick up because the businesses, who actually decided this is going to be a building year for us now, they’re going live, they’re accelerating, they’re growing.
And so we’re seeing the ROI of that investment. It’s a testament to the global financial infrastructure we’ve built. Meanwhile, Airwallex became cash flow positive in 2023. It now processes more than $100 billion in annualised transaction volume. The company now employs over 1,500 people worldwide working across 23 international offices.”
Why Money20/20? What is it about this particular event that makes it the perfect place to showcase what you do? How has the response been to Airwallex?
“The great thing about Money20/20, here in Europe, and in Asia and the US, is the good division between buyers and sellers. So, you have all these service providers like Airwallex, Amex, etc… And then you have the Heads of Payments from companies like Booking.com, Vinted and SumUp who are coming here with their teams to meet with providers. If you think about that from a sales perspective, those meetings are very hard to get outside of this environment. But over a week you get 15 different meetings each day that would normally take months to arrange. So, the ROI from this week is really powerful just from being able to have these conversations. Three years ago, we first came to suss out the event and as we’ve grown the response has grown. People are being proactive and keen to engage with us which is exciting to see.”
Finch Capital report shows UK FinTech sector dominant across Europe
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The latest annual State of European Fintech report by FinTech growth capital firm Finch Capital has been published. It shows the UK dominating Europe with 65% of deals in H1 2024. The UK is maintaining its dominance amid declining funding across the continent.
Highlights include:
Funding in UK FinTech increased 3% year-over-year to £2.3bn, highlighted by Monzo’s £500m deal.
UK sectors such as insurance set to gain from AI adoption, with 80% of actuaries using it for improved risk analysis.
FinTech sector beginning to see jobs market recover in Europe, up 10% YoY.
“The next wave of fintechs is shifting from unicorns to ‘half-a-corns,’ with £500m valuations becoming the new benchmark” Aman Ghei, Partner at Finch Capital
The UK has increased its dominant role in Europe’s FinTech sector. It now accounts for two thirds of the total volume of deals reached across the continent in the first half of this year. According to a new annual report analysing the sector, with investment and M&A anticipated to grow this year and into 2025.
The annual State of European Fintech 2024 report found the UK is strengthening its position at the forefront of the European FinTech sector, despite an overall decline in funding across the continent.
The report highlights the ongoing challenges faced by the sector. It notes that higher interest rates, a focus on cost efficiency and increased scrutiny on the sustainability of business models have driven the UK to account for around 65% of fintech deals in Europe.
Funding in the UK FinTech sector rose 3% YoY to £2.2bn compared with £1.9bn in H1 of last year. The largest deal done in Europe in H1 was UK’s Monzo, which raised £500m in equity.
The European FinTech Picture
Overall, the 9th edition of the annual report, authored and compiled by leading fintech growth capital firm Finch Capital, found that although it remains a challenging environment for European FinTechs, there are clear signs of brighter prospects ahead.
While the UK leads the way, the Netherlands showed resilience, with investment volumes holding steady. Meanwhile, Ireland, Germany, and France all saw major government-backed initiatives aimed at fostering growth through 2025. Signalling strong long-term commitment to the local technology ecosystems.
Despite a notable contraction in funding across Europe, some key sub-sectors helped by higher interest levels, such as challenger banks like Revolut and Monzo, are beginning to show profitable growth.
Higher Rates and Boosted Profits
The report revealed that total capital invested in European fintechs in the first half of 2024 fell by 25% YoY, from £3.2 billion in H1 2023 to £2.4 billion in H1 2024.
However, profitability in sub-sectors like banking is driving larger funding rounds. The top challenger banks are generating close to £600m in profit in 2024 compared to a £125m loss in 2023.
As these banks emerge as success stories, the UK has become a hub for profitable growth, while other European nations work to adapt, the report found.
Mid-Market Fintech M&A Thrives
The report also highlighted the increasing activity in the mid-market M&A space across Europe. Particularly in the UK, which is benefiting from consolidation in the sector.
Funding rounds for fintech unicorns have slowed, the findings show, with investors prioritising companies with solid financial fundamentals and avoiding overly ambitious valuations based on hyper growth and unproven profitability.
European exits under £500 million now account for 32% of global M&A activity, although the market remains 2-3x smaller than the US for larger deals, according to the report.
AI Creating Efficiency
The report also found that, as a leader in fintech innovation, the UK is expected to benefit significantly from the adoption of AI technologies in the coming years, particularly in the insurance sector.
According to research, 4 out of 5 actuaries are now using AI to improve risk analysis and pricing models and 65% of executives say they will invest more than $10 million in AI in the next 3 years, making the industry more efficient.
Commenting on the findings, Aman Ghei, Partner at Finch Capital, said:
“The challenges that fintech faced in 2023 were necessary for the sector to mature and become more sustainable. While funding may be down overall, and unicorn chasing has slowed, there is plenty of opportunity for companies that are capital efficient and have a clear path to profit. With AI transforming the industry and significant dry powder still available, the next 12-18 months will mark a turning point for fintech in Europe. The next wave of fintech success stories will likely be built on sound financials rather than rapid revenue growth alone.”
Hugo Farinha, Co-founder and CTO at Virtuoso QA on why AI is driving organisational change across financial services
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We’ve seen an enormous amount of discussion concerning all aspects of AI since the emergence of Chat GPT made it headline news. However, most articles and conversations focusing on its business impact seem to wilfully ignore the ‘elephant in the room’. Namely, the inevitable organisational change AI will usher in, especially for employees.
AI technology driving change
To ignore change is folly, and likely to have the exact opposite effect that businesses and AI technology vendors want. We can’t pretend workforces won’t be disrupted by such a seismic technological advance. Certain job roles will become obsolete. Business leaders can’t run the risk of creating a culture of fear and uncertainty among employees who are unlikely to be fooled.
It’s true AI could lead to leaner operations, particularly in insurance and finance companies, with fewer employees needed for routine tasks, but only half the story. Smart businesses will almost certainly reinvest cost savings into new growth areas that require specific human talent. Companies that maintain a strong human element in customer service and personalised offerings will differentiate themselves in a crowded market. The rise in AI-driven, agile companies will create faster market shifts and greater competition.
While AI has the potential for productivity and efficiency gains, and even to do the same with less if needed, I actually don’t predict major job culls in the next few years. AI is particularly good at data processing and data analytics, in insurance for example. So, when more data can be processed and analysed, human intervention can make better informed decisions as a result. In the short to medium term, data analysis and decision making will remain firmly in the human realm. But powered by AI.
The Future for Artificial Intelligence
Meanwhile, the technology is still evolving, and organisations need to build a model that layers over the top of AI – powered by it, rather than replaced by it. Despite the hype, we are still a long way from AI becoming an entity that can lead, implement and operate itself to a purposeful end. But it will increasingly power applications overlaid by strategic, human-led frameworks.
To achieve this, leaders must bring their teams with them on the journey. In the field of testing for example, developers have traditionally written code as part of their role. This is a very time consuming and laborious task. Historically skills gaps have led to delays in progress. But the ability to ‘outsource’ to AI has freed up the time of those developers to focus on the purpose of that code in relation to the product. And, ultimately, the customer. Similarly, leaders in all fields need a broader understanding of AI use cases such as these to make effective strategic decisions. For example, on hiring. Understanding when to bring in more people and when to bring in new technology to complement the skills of your existing team means understanding AI’s strategic implications, technical capabilities and limitations.
An Evolving Job Market
From the perspective of the employee, the job market will continuously evolve alongside AI advancements. It will require ongoing adaptation and learning to stay relevant. Skills such as empathy, communication, and negotiation will remain vital. These are differentiators and difficult for AI to replicate. Understanding AI tools and data analysis will be increasingly important, even for non-technical roles. The ability to adapt to new technologies and continuously learn will be essential. Moreover, as AI becomes more integrated, the need for professionals who understand the ethical implications and regulatory requirements will grow exponentially.
Driving growth and job creation in this new world will require a different mindset to the current received wisdom. From both employees and leaders. In addition to the advances and changes already discussed, AI also has the potential to level the playing field, enabling smaller or newer companies to compete more effectively with, and even seriously threaten, established players. With many traditional barriers to entry such as burdensome start-up costs removed, new business models are likely to emerge. In much the same way as they did in the early days of the internet. Investors will be on the lookout for the next ‘giant killer’.
This will create opportunities for those with the foresight to upskill, as well as for those looking to start their careers. Although those opportunities and the jobs of tomorrow may not yet be completely clear. What is clear, however, is that established businesses cannot afford to be complacent. Change is inevitable and empires can be toppled overnight by technology as disruptive as AI. By embracing it early, leaders in those businesses will have the opportunity to spot and fix the gaps and redundancies in their business models that the technology and its capabilities exposes before the market does so more painfully and publicly.
Our mission is to enable and lead the world’s quality-first revolution. QA tools haven’t kept up with the demands of the testing world. Virtuoso is here to deliver with AI-powered, low-code/no-code test automation to support the modern business.
“Virtuoso technology represents the foundation for software quality in the digital world, and we are proud to be a critical, guiding force in the era of AI.”
AXA UK has launched new online InsurTech tools to enable customers to notify claims digitally for both home and car insurance
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AXA customers can now benefit from a new and improved digital service when making an insurance claim. They can use InsurTech tools that allow them to notify losses online. The improved online service allows customers to notify AXA of their claim online anytime they choose. Not only will it be more convenient, but it will also make for a more efficient claims experience. This allows AXA to offer support and resolve claims in a timely manner.
AXA Online Insurance Tools
Car insurance customers can register claims for road traffic accidents, theft of vehicle, lost or stolen keys, misfuelling, storm or flood damage and malicious damage. Using this service gives customers the option of an end-to-end digital notification experience. It offers a broader choice in the ways they can interact with customer service teams.
Home insurance customers can also use the tools to register claims online for theft, escape of water, flood, storm, accidental damage and accidental loss. This is then picked up by the customer service team to take the claim forward.
Making an impact with customers
The improved service is already making an impact with customers. A recent home insurance claim was reviewed and a supplier was instructed within two hours of being registered online. Motor insurance customers have also been able to book in their vehicle for repairs within minutes of notifying AXA of a claim.
“We know that our customers’ expectations have evolved in recent years. They want the claims process to be quick, clear and simple. That’s why we’ve worked hard to ensure that these enhanced digital claims tools offer customers fast and seamless journeys. At a time when they need it most as well as offering increased flexibility and improving their overall experience.”
Suzy Tiffany, Retail Claims Director at AXA UK
AXA has focused on how it can improve customers’ experiences and interactions by providing digital capabilities where possible across its claims journeys. The claims submission service can also be accessed by brokers, enhancing the claims journey for them and their clients.
However, all the usual channels will still be available for brokers and customers to contact the claims teams. Even if they have notified a claim online, they can still pick up the phone and speak to someone if they prefer.
Philipp Buschmann, co-founder and CEO of AAZZUR on how the customer becomes the investor with Embedded Finance at the heart of the wealth management revolution
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Wealth management has traditionally been a game for the well-off. It often requires large sums of money just to get started. For decades, the idea of “investing” conjured up images of Wall Street brokers managing hefty portfolios for a small group of elite individuals. But, thanks to Embedded Finance, times are changing and the barriers to investing are coming down. The technology is reshaping how people handle their money. Here’s what it can do for you.
Tackling the investment problem
Historically, investing hasn’t been easy. Most brokers require a significant minimum deposit to open an account, often in the thousands. Fees and commissions on trades can add up quickly, and if you don’t have a large amount of capital, these costs can erode your profits. For many, these hurdles were enough to keep them from even thinking about investing. It simply didn’t feel like something for “ordinary” people with average incomes.
Even with the rise of online brokers, the stock market has remained intimidating to a lot of people, many of whom felt like they lacked the knowledge or resources to get involved.
On top of the classical challenges we must also discuss the upcoming wealth transfer. The next generation of users have no interest in sitting with wealth managers; at the same time they don’t have the knowhow to trade or invest.
Imagine being able to not only excite your customers but empower them as well. That’s what embedded finance solutions promise. As companies strive towards more inclusive messaging, adopting embedded finance tools has never been more valuable. One of the great perks is that it doesn’t require a complete overhaul of IT infrastructure, instead, it involves a seamless experience that even junior employees can understand and implement.
Embracing the solution with Embedded Finance
I’ve said it’s easy – but how easy? Embedded finance works by bridging the gap between traditional financial systems and the average consumer. By integrating financial services directly into everyday apps and platforms, it makes it possible for people to start investing without even realising they’re doing it. Monzo is an example of it in action. They used embedded finance solutions to enable customers to invest directly in the bank during its fundraising rounds. They raised millions by allowing users of the app to seamlessly invest and become shareholders, a great example of how “the customer becomes the investor”.
Think about how your business manages its money. You most likely use an app to track accounts and make payments. This is no different to customer budgeting, and it’s a window of opportunity for you to tap into. That app can offer you the ability to automatically invest any leftover money at the end of the month into a diversified portfolio. Customers don’t need to download a separate app or set up an account with a brokerage firm. Everything is integrated into the website they’re shopping on. This is the beauty of embedded finance – it makes financial services a natural part of your daily life.
For younger people just starting out on lower salaries and learning how to invest sensibly, there has never been a greater time to be innovative and branch out into financial services.
The second vector for investment is to centre it around a new social frame. Investment’s can be around supporting your ideals, for the environment, or for technologies sake. This means that there are apps/club/activities that can become another home for investment. The same way country clubs aren’t just for food, golf and banter. Embedded finance opens the door for classically aligned companies and charities to think about expanding their business model. I could imagine Greenpeace offering embedded investing. So, could the country club co-invest in art that is displayed (but also invested) in.
Equalising opportunity with Embedded Finance
Embedded finance allows financial services to be delivered in a more personalised, user-friendly way. Apps can now provide personalised investment recommendations based on a user’s spending habits, savings goals, and risk tolerance. And thanks to automation, these services are becoming more affordable and scalable. Instead of paying for an expensive financial advisor, users can rely on AI-driven tools to offer similar advice for a fraction of the cost, or even for free. Wealthfront does this by offering automated financial planning and investment management with AI-driven recommendations and tax optimisation strategies.
GoHenry is another example of a company taking the initiative and embracing its solutions. They allow customers to invest in the company using the Crowdcube platform. People can invest in as little as they want and become shareholders with ease. As a result, loyalty is enhanced and capital surges.
Another example is fractional investing. In the past, buying a single share of a company like Amazon or Tesla might have been out of reach for someone with limited funds. However, this no longer has to be the case as companies like Robinhood allow customers to invest in big stocks like Tesla for as little as £1, making it possible for anyone to grow their wealth without having to stretch themselves and get into debt.
What does the future hold?
As embedded finance continues to evolve, we can anticipate even more innovations in the world of micro-investing and wealth management. The lines between financial services and everyday life will continue to blur, making it easier than ever for people to manage their money, invest, and build wealth – all without needing a financial background or a large amount of capital.
Philipp Buschmann is co-Founder and CEO at AAZZUR, a one-stop-shop for smart embedded finance experience. Recognised as a rising star in the FinTech space, AAZZUR’s mission is to build profitable banking whilst at the same time empowering consumers to have access to better informed financial choices.
Philipp is a serial entrepreneur with extensive experience of working in Challenger Banking, Financial Services, IT and Energy across the world. He took one of his business’s public – Ignis Petroleum was publicly listed in the US and Germany.
Having started as a developer in Financial Services, Philipp has first-hand experience of the banking revolution from both a technology and financial perspective. His interest in behavioural economics helped inspire AAZZUR’s revolutionary work on customer centricity in banking.
Philipp holds an MBA from the London Business School. He is passionate about entrepreneurship and loves exchanging ideas, insights and discussing FinTech’s future. He has spoken at major Fintech events including Money 20/20, MoneyLive, Finovate, Fintech Matters, and the Future of Retail Banking.
Cullen Zandstra, CTO at FloQast on mitigating the risks of AI to deliver benefits to financial services
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There’s a lot of buzz around Generative AI (GenAI). What’s not always heard beneath the noise are the very real and serious risks of this fast-developing AI tech. Let alone ways to mitigate these emerging threats.
Currently, one quarter (26%) of accounting and bookkeeping practices in the UK have now adopted GenAI in some capacity. That figure is predicted to grow for many years to come.
With this in mind, and as we hit the crest of the GenAI hype cycle, it’s critically important that leaders focus closely on the potential risks of AI deployment. They need to proactively prepare to mitigate them, rather than picking up the pieces after an incident.
Navigating the risky transition to AI
The benefits of AI are well-proven. For finance teams, AI is a powerup that unlocks major performance and efficiency boosts. It significantly enhances their ability to generate actionable insights swiftly and accurately, facilitating faster decision-making. AI isn’t here to take over but to augment the employees’ capabilities. Ultimately improving leaders’ trust in the reliability of financial reporting.
One of the most exciting aspects of AI is its potential to enable organisations to do more with less. Which, in the context of an ongoing talent shortage in accounting, is what all finance leaders are seeking to do right now. By automating routine tasks, AI empowers accountants to focus on higher-level analysis and strategic initiative, whilst drawing on fewer resources. GenAI models can help to perform routine, but important tasks. These include producing reports for key stakeholders and ensuring critical information is effectively and quickly communicated. It enables timely and precise access to business information, helping leaders to make better decisions.
However, GenAI also represents a new source of risk that is not always well understood. We know that threat actors are using GenAI to produce exploits and malware. Simultaneously levelling up their capabilities and lowering the barrier of entry for lower-skilled hackers. The GenAI models that power chatbots are vulnerable to a growing range of threats. These include prompt injection attacks, which trick AI into handing over sensitive data or generating malicious outputs.
Unfortunately, it’s not just the bad guys who can do damage to (and with) AI models. With great productivity comes great responsibility. Even an ambitious, forward-thinking, and well-meaning finance team could innocently deploy the technology. They could inadvertently make mistakes that cause major damage to their organisation. Poorly managed AI tools can expose sensitive company and customer financial data, increasing the risk of data breaches.
De-risking AI implementation
There is no technical solution you can buy to eliminate doubt and achieve 100% trust in sources of data with one press of a button. Neither is there a prompt you can enter into a large language model (LLM).
The integrity, accuracy, and availability of financial data are of paramount importance during the close and other core accountancy processes. Hallucinations (another word for “mistakes”) cannot be tolerated. Tech can solve some of the challenges around data needed to eliminate hallucinations – but we’ll always need humans in the loop.
True human oversight is required to make sure AI systems are making the right decisions. We must balance effectiveness with an ethical approach. As a result, the judgment of skilled employees is irreplaceable and is likely to remain so for the foreseeable future. Unless there is a sudden, unpredicted quantum leap in the power of AI models. It’s crucial that AI complements our work, enhancing rather than compromising the trust in financial reporting.
A new era of collaboration
As finance teams enhance their operations with AI, they will need to reach across their organisations to forge new connections and collaborate closely with security teams. Traditionally viewed as number-crunchers, accountants are now poised to drive strategic value by integrating advanced technologies securely. The accelerating adoption of GenAI is an opportunity to forge links between departments which may not always have worked closely together in the past.
By fostering a collaborative environment between finance and security teams, businesses can develop robust AI solutions. They can boost efficiency and deliver strategic benefits while safeguarding against potential threats. This partnership is essential for creating a secure foundation for growth.
AI in accountancy: The road forward
The accounting profession stands on the threshold of an era of AI-driven growth. Professionals who embrace and understand this technology will find themselves indispensable.
However, as we incorporate AI into our workflows, it is crucial to ensure GenAI is implemented safely and does not introduce security risks. By establishing robust safeguards and adhering to best practices in AI deployment, we can protect sensitive financial information and uphold the integrity of our profession. Embracing AI responsibly ensures we harness its full potential while guarding against vulnerabilities, leading our organisations confidently into the future.
Founded in 2013, FloQast is the leading cloud-based accounting transformation platform created by accountants, for accountants. FloQast brings AI and automation innovation into everyday accounting workflows, empowering accountants to work better together and perform their tasks with greater efficiency and accuracy. Now controllers and accountants can spend more time delivering greater strategic value while enjoying a better work-life balance.
Will Rolph, Business Development Manager at Clear Junction, takes a closer look at the tech making digital remittances possible
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Digital remittances are one of the main forces driving financial inclusion. Over 200 million migrant workers send money home every year. FinTech as a force for good can create positive changes for individuals and businesses; remittances are a prime example. Their role in facilitating financial inclusion cannot be underestimated. By increasing people’s purchasing power, raising per capita incomes, and feeding into local and national economic growth.
By 2027 remittances could reach $1.2 trillion, with the potential to unleash profound transformations in their recipient societies. Many factors are driving this growth. These include increasing waves of migration, none are as influential as the proliferation of innovative technology making remittances easier to send and receive. And at much lower cost than traditional money transfer channels beset by high FX fees and sluggish settlement times.
For decades, remittances were dominated by a few players including Western Union and MoneyGram. They have enviable global reach and networks. However, recipients – especially those in rural and remote locations – were faced with a lack of physical offices on the ground where they could collect their remittances. It was common for recipients to have to travel long distances to get their money. The loss of time and convenience is obvious. These often arduous journeys also came with increased risk of theft or loss of funds along the way.
The lack of physical infrastructure soon became a problem that tech was perfectly placed to solve. It did so in a way that allowed mobile payments to leapfrog legacy infrastructure issues with ease.
What’s powering digital remittances?
The tech behind digital remittances is a complex ecosystem that has evolved significantly over time. Furthermore, the pace of innovation shows no sign of slowing down. There are several key technologies and methods involved in advanced remittance solutions.
Electronic Funds Transfer (EFT) is a method of transferring money from one bank account to another electronically. Remittance services often utilise EFT to move funds between the sender’s bank account and the recipient’s bank account or designated payout location.
Payment gateways are another crucial component. These online platforms facilitate the transfer of funds between parties. They securely process transactions, verify payment information, and transfer funds between the sender and the recipient.
Remittance providers often integrate with banks, payment gateways, and other financial institutions via APIs (application programming interfaces). This facilitates access to banking infrastructure and fund transfers. The APIs enable real-time transaction processing, status updates, and seamless connectivity between the remittance platform and other financial services.
Security is paramount when it comes to remittance transactions. Remittance platforms employ encryption tech to secure data transmission and storage. This protects sensitive financial information and prevents fraud. Secure Socket Layer (SSL) encryption, Transport Layer Security (TLS), and multi-factor authentication are commonly used to safeguard transactions and user data.
These technological advances have all played their part in helping remittances to proliferate. People who were out of reach can now access a wide array of sophisticated financial services all from their phone thanks to the neobanking revolution.
Three tech trends taking digital remittances to the next level:
Super Apps
The main innovation that has sent remittances skyrocketing is the phenomenal adoption of smartphones, which has paved the way for the rise of money transfer super apps.
The importance of the smartphone in the global remittance market cannot be understated. By necessity, apps need to be user-friendly and easy to navigate to succeed. Apps play a crucial role in improving the remittance process. They offer the speed, cost efficiency, and security that users have come to expect. Furthermore, remittance apps often provide features that allow users to track their transfers in real-time and manage their transaction history easily. This helps in budgeting and financial planning, especially for those who send remittances regularly.
Most importantly, 4G or 5G networks mean such apps can reach users in remote or underserved areas where access to broadband internet infrastructure or traditional banking services is limited or non-existent. This accessibility is in turn driving inclusivity and promoting financial participation and empowerment among a broader segment of the population.
Eastern Europe serves as a good example of where this technology is particularly life changing. Across the continent, banking penetration rates range between 44% in Albania to 92% in Croatia. So, a key challenge and focus for banks, governments, and tech solution providers is driving greater financial inclusion, and improving remittance flows are key to this.
Blockchain
Just as cryptocurrencies use blockchain technology to track assets, some remittance providers are now leveraging the same technology to streamline the transfer process and enhance security.
Blockchain technology enables secure, transparent, and immutable record-keeping of transactions. This reduces the risk of fraud, enhancing trust between parties. Cryptocurrencies like Bitcoin and stablecoins are sometimes used for remittance purposes, leveraging blockchain technology for fast and low-cost digital cross-border transfers.
It’s easy to see the attraction of blockchain technology for remittance providers. Moreover, it is a fully encrypted, decentralised, and immutable ledger, and as such cannot be altered in any way. Also, because blockchain technology is decentralised, no intermediary bank or financial institution can get involved. For these reasons, blockchain could become crucial to the remittance industry in the coming years.
Artificial Intelligence & Machine Learning
There are few industries not being impacted by AI and ML technologies. Both are increasingly being employed in remittance services to detect fraudulent activities, improve compliance with regulatory requirements, and enhance user experience. Furthermore, these technologies analyse transaction patterns, identify anomalies, and provide insights to prevent fraudulent transactions and ensure regulatory compliance.
Why all of this digital transformation matters
Remittances play a vital role in both individual livelihoods and broader economic development efforts. This makes them an essential aspect of global economic relations and poverty alleviation strategies. Additionally, we can see the tangible, life-changing differences that payment technology evolution can achieve. Moreover, through increased household purchasing power, accessing formal and cheaper financial services, and indirectly through increased revenues for remittance service providers and the businesses people buy from.
Clear Junction is a global payments solutions provider that was established in 2016. The company was founded by a veteran team of financial professionals with many years of experience in cross-border payments and banking. Over the years, we have worked tirelessly to build and develop our own proprietary technology to facilitate an end-to-end regulated payments solution. We are licensed and regulated by the Financial Conduct Authority and have offices in multiple locations across the UK and Europe, including London, Poland and Latvia.
Russ Rawlings, RVP, Enterprise, UK&I at Databricks, on the future of AI in FinTech
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Strict regulation, along with time and cost restraints, means financial services must take a measured approach to technological advancements. However, with the emergence of GenAI, particularly large language models (LLMs), organisations have an opportunity to maximise the value of their data to streamline internal operations and enhance efficiencies.
Embracing GenAI has never been more important for organisations looking to stay ahead of the curve. 40-60% of the global workforce will be impacted by the growth of AI. Moreover, global adoption of GenAI could add the equivalent of $2.6tn to $4.4tn in value annually to global industries. The banking sector stands to gain between $200-340 billion.
But whilst the financial services industry can gain incredible benefits from GenAI, adoption is not without its challenges. Financial organisations must prioritise responsible data management. They must also navigate strict privacy regulations and carefully curate the information they use to train their models. But, for companies that persevere through these obstacles, the benefits will be substantial.
Building customised LLMs for financial services
Consumer chatbots have brought GenAI to the mainstream. Meanwhile, the true potential of this transformative technology lies in its ability to be tailored to the unique needs of any organisation, in any industry. Including the financial sector.
Risk assessment, fraud prevention, and delivering personalised customer experiences are some of the use cases of custom open source models. Created using a company’s proprietary data, these models ensure relevant and accurate results. And are more cost-effective due to their smaller datasets. For instance, banks can use a customised model to seamlessly analyse customer behaviour and flag up any suspicious or fraudulent activities. Or, a model can leverage sophisticated algorithms to assess an individual’s eligibility for a loan.
Another huge benefit of these tailored systems is trust and security. Deploying a custom open-source model eliminates the need to share sensitive information with third parties. This is crucial for organisations operating within such a highly regulated industry. This approach also democratises the training of custom models. Furthermore, it allows organisations to harness the power of GenAI whilst retaining control and compliance.
Using data intelligence to boost AI’s impact
To truly harness the power of GenAI, organisations must cultivate a deep understanding of data across the entire workforce. Every employee, regardless of how technical they are, must grasp the importance of proper data storage. Also how data can be used to improve decision-making.
Organisations can use a data intelligence platform to help implement this. Built on a lakehouse architecture, a data intelligence platform provides an open, unified foundation for all data and governance. It operates as a secure end-to-end solution tailored to the specific needs of the financial services industry. By adopting such a platform, businesses can eliminate their reliance on third party solutions for data analysis. They can create a streamlined approach to data governance and accelerate data-driven outcomes. Users across all levels of the business can navigate their organisation’s data, using GenAI to uncover important insights.
The future of AI in the financial sector
The path to success lies in embracing GenAI as a canvas for crafting bespoke solutions. Whilst no two financial institutions are exactly the same, the industry’s tools must strike a delicate balance between supporting specific use cases and addressing broader requirements, Customised, open source LLMs and data intelligence platforms hold the key, sparking transformative change across the sector. These tailored solutions will empower financial businesses to integrate cutting-edge innovations and ensure security, governance and customer satisfaction. Organisations that embrace this change will not only gain a competitive edge, but also pave the way for larger transformations, re-shaping the financial landscape and setting new standards for the industry.
Databricks is the data and AI company with origins in academia and the open source community. Databricks was founded in 2013 by the original creators of Apache Spark™, Delta Lake and MLflow. As the world’s first and only lakehouse platform in the cloud, Databricks combines the best of data warehouses and data lakes to offer an open and unified platform for data and AI.
PayPal Ventures, the global venture capital arm of PayPal, announced additional investment in Chaos Labs. This investment underscores PayPal Ventures’ confidence…
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PayPal Ventures, the global venture capital arm of PayPal, announced additional investment in Chaos Labs. This investment underscores PayPal Ventures’ confidence in Chaos Labs’ potential and their blockchain products.
Chaos Labs: Edge
Chaos Labs’ recent launch of Edge, a new decentralised oracle protocol, has garnered significant attention within the industry. Edge has already secured a remarkable $30 billion over the last 2 months. It has been adopted by leading exchanges such as Jupiter, the top perpetuals exchange on Solana. And also by GMX, the leading exchange on Arbitrum.
Edge offers a comprehensive, low-latency oracle solution. It combines accurate price data with actionable market intelligence. Its advanced architecture ensures the security and efficiency of DeFi applications. Furthermore, providing insights into market dynamics and security risks. Edge monitors the market for specific risk signals, performs the offchain data parsing and computation, and outputs one actionable data point.
Omer Goldberg, CEO and Founder of Chaos Labs on the PayPal Ventures investment
Omer Goldberg, CEO and Founder of Chaos Labs, said, “We’re excited to receive the strong confidence and additional support from the PayPal Ventures team. Edge by Chaos is the culmination of our entire company’s work and expertise. Edge Price, Risk, and Proofs deliver meaningful and unmatched contextualised risk and price data for assets including stablecoins and other real-world-assets. In addition to the crypto assets and venues that provide access to them.”
Last month, Chaos Labs announced a $55 million Series A funding round led by Haun Ventures, including prominent new investors such as F-Prime Capital, Slow Ventures, and Spartan Capital, and existing investors including PayPal Ventures. Chaos Labs has experienced significant growth, tripling its customer base and securing billions in trading volume, loans, and incentives.
PayPal committed to Blockchain
PayPal Ventures’ investment aligns with PayPal’s ongoing commitment to the blockchain ecosystem. In May 2024, PayPal launched its stablecoin, PYUSD, on the Solana blockchain.
Amman Bhasin, Partner at PayPal Ventures, said, “Our continued investment in Chaos Labs reflects our belief in their vision to create a safer crypto ecosystem. And move more financial services on chain. Chaos Labs has emerged as a leading risk authority in the sector and we are thrilled to witness their evolution as they launch innovative products like Edge to mitigate oracle vulnerabilities.”
About Chaos Labs
Chaos Labs leads the blockchain risk management industry with innovative solutions for the evolving onchain financial landscape. It enables protocols to verify stability across all market conditions, merging offchain observability with onchain risk parameter adjustments. Backed by leading venture capital firms, Chaos Labs continues to set new standards for security and responsiveness in onchain finance. Founded in 2021, Chaos Labs is headquartered in New York City.
About PayPal Ventures
PayPal Ventures is the global corporate venture arm of PayPal. We invest for financial return in companies at the forefront of innovation in fintech, commerce enablement, digital infrastructure, and crypto/blockchain technologies. Through the expertise, experience, and vast network of PayPal Ventures – and the companies we invest in – we are helping to bring transformative solutions to market faster. For more information, please visit: www.paypal.vc
Adam Edwards, Product and Growth Director at Satago on how embedded finance is helping drive digitisation for the B2B financial space
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Small and Medium Enterprises (SMEs) are at the heart of the UK economy. They contribute significantly to local employment and revenue across a wide array of sectors. However, the current economic landscape and consistently high inflation are inhibiting them from reaching their full potential.
Three key challenges which prevent SMEs from investing in growth are tight cash flow, poor access to capital and the late payments crisis. With over £32 billion in late payments plaguing them, SMEs need longer-term, meaningful policy action from the government, alongside better Working Capital solutions.
Investing in Embedded Finance
With a growing SME market needing better support than ever from lenders, banks are rapidly investing in IT adoption. Particularly, Embedded Finance tools, to better serve this sector. Indeed, analysts have forecast a staggering 148% growth in the Embedded Finance market. It is predicted to reach a revenue of $228 billion by 2028.
Banks have been quick to offer flexibility to consumers in the business-to-consumer (B2C) Embedded Finance space. Offering lots of options for flexible finance in response to high demand. However, the business-to-business (B2B) market has in many ways been slower.
There are certainly challenges here – but the opportunities are huge for the lenders that get this right to go on and serve the SME space. So, what can the B2B space learn from how Embedded Finance has succeeded in the B2C sector? And what are some of the benefits and new challenges that this investment could pose?
The role of Embedded Finance in supporting SMEs and founders
Embedded Finance emerges as an innovative approach to bolster SME support. It integrates financial services directly into non-financial platforms. This integration empowers SMEs to seamlessly access critical financial services. These include instant credit, streamlined payments processing, and optimised cash flow management. This enhances operational efficiency and financial resilience.
When we look at B2C financial services, we can see traditional banks working hard to catch up with challenger banks. These competitors have presented consumers with entirely new means to access digital banking, improve their visibility on financial information, and manage their funds and savings with secure API access.
This has forced traditional banks to digitise quickly in the B2C space to remain competitive and keep up with customer expectations. Embedded tools have become a key part of this. While the B2B financial services industry hasn’t traditionally faced the same level of market pressure to innovate – this is now starting to change. We will start to see the impact in a couple of ways.
I predict we will begin to see rapid growth in the number of partnerships between FinTech companies and B2B lenders. Where banks such as Barclays have already been partnering with the likes of Amazon on the consumer side for a long time to offer flexible payment capabilities, we will see a lot more similar partnerships starting to take place in the B2B space, to support the growing SME market. As a result, I anticipate a rise in the number of online marketplaces dedicated to the B2B lending space. We will also see increasingly niche market areas – such as agriculture and dedicated equipment manufacturers, for example.
The opportunities and challenges with Embedded Finance
There are several opportunities to be capitalised on via Embedded Finance in the B2B space. Lenders that have been held back by legacy systems in the past will now be able to offer a more flexible suite of digital finance options to customers, especially SMEs. SMEs, which may be run by a single founder or a small group of stakeholders, are likely to be used to an agile structure. They can take big decisions quickly and will be keen to be able to flexibly access financial tools. Through integration with expert providers, lenders can also benefit from new origination channels and access new pools of customers for bank accounts, financial consultancy and more.
For the fintech partners and integrators, including those providing white-labelled products to banks, there’s a chance to take advantage of the trust customers have in their banking providers. And the lenders’ brand reputations can increase their own revenue and future opportunities for sale.
Meanwhile, SMEs are set to reap the benefits of being able to offer better user and payment experiences to their own customers further up chain. They too, will benefit from better cash flow management, improved financial visibility and increased flexibility via different working capital tools. Just like consumers are able to – all of which will be facilitated by better digital tools.
However, it is worth acknowledging that as the B2B space grows, heightened concerns around fraud risk associated with financial transactions are also likely to emerge. Going forwards, we’ll see more analytics and artificial intelligence built into Embedded Finance. This will feed into underwriting models and support fraud checks. With more complex transactions and shared financial data via Embedded Finance partnerships, the risks of non-compliance could become more perilous. Therefore, there are certainly challenges ahead.
A competition for innovation in the B2B space
For SMEs to thrive, sustained and reliable access to cash flow is essential. Collaborative efforts between the government and the financial services industry are critical. Establishing robust regulatory frameworks and fostering innovation in Working Capital solutions will be vital.
The Embedded Finance market in over the next year and beyond can expect to see significant emphasis on B2B players, such as banks and corporate lenders. They are looking to catch up with the consumer market and serve SME customers with the most secure – and flexible – lending options.
Consumers have realised the benefits of seamless, digital financial services for themselves. We’ll now see demand growing as SMEs expect the same innovation and experience when it comes to their B2B financing. Lenders and banks that want to satisfy this growing pool of customers hungry for flexibility and sustainable lending support, will need to be willing to evolve and digitise, or risk missing out on the competition.
Satago is a leading fintech that enables lenders and corporates to streamline operations, boost revenue, and enhance their business customer experiences. This is achieved through cloud-native Working Capital and Cash Flow solutions, powered by real-time data, Open Banking, and API technology.
Luke Gall, Product & Engineering Director at Access PaySuite, part of the Access Group, on the open banking opportunity for FinTechs
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In the rapidly evolving landscape of financial services, Open Banking is no longer a futuristic concept but a present-day reality. Recent findings reveal that the adoption of Open Banking payments has surged, with 32% of financial services businesses and an impressive 58% of fintechs now offering this innovative payment method to their customers.
This uptake signifies a noteworthy shift for fintechs. Open Banking payments have overtaken Direct Debits (54%) and card payments made over the phone (4%) in terms of availability. The sector continues to expand at a remarkable pace. There are over 26,000 startups currently in operation globally. Understanding and leveraging Open Banking has become an increasingly crucial consideration for organisations to stay ahead in a competitive market.
The rise of Open Banking
Open Banking allows third-party financial service providers to access banking data and initiate digital payments on behalf of customers, provided they have explicit consent. This model not only enhances convenience for users, but also fosters greater competition and innovation within the financial sector. The growing adoption rates reflect a broader acceptance of this technology. It is driven by the potential to streamline payments, enhance user experiences, and offer personalised financial services.
In the UK, FinTech adoption is particularly robust – 84% of individuals use FinTech services daily. The push towards Open Banking is both a response to consumer demand and a strategic move for FinTechs to differentiate themselves. The rise in Open Banking adoption is a signal that financial services must adapt swiftly. For FinTechs, staying ahead involves more than just adopting new technology. It’s about leveraging tech to redefine and enhance service offerings.
Why FinTechs must embrace Open Banking
Today’s consumers demand seamless and efficient financial transactions in order to complete their purchases. Open Banking meets these expectations by enabling quicker and more secure payments. FinTechs can provide this to their customers by integrating Open Banking into their services. This significantly enhances customer satisfaction and fosters loyalty.
The rapid adoption of Open Banking by FinTechs highlights its growing importance. Those that hesitate or overlook this trend risk falling behind. Early adopters of Open Banking have the opportunity to leverage its capabilities to introduce distinctive features. These include instant account verification, real-time payments, and enhanced financial insights. It’s a crowded marketplace for FinTechs, but these advancements can deliver a competitive edge.
By granting access to banking data, Open Banking creates the possibility for FinTechs to work with other financial service providers in a collaborative environment. Around 82% of FinTech startups say this helps them to innovate more quickly and effectively. The ability to partner with others in the industry can encourage the development of novel solutions and services. These can be pecifically tailored to evolving consumer needs.
The role of third-party payment providers
Third-party payment providers play a crucial role in helping FinTechs adopt Open Banking. They do this by offering the infrastructure and expertise needed to integrate with banks and other financial institutions. These providers facilitate secure access to customer data through APIs. This enables FinTechs to deliver innovative services like personalised financial management and account aggregation. And all without the need to build costly systems from scratch.
By leveraging the established networks and compliance frameworks of third-party providers, FinTechs can more easily meet regulatory requirements. Such as those outlined in the Revised Payment Services Directive (PSD2). This allows them to scale faster and focus on enhancing the customer experience. By prioritising simplicity and convenience, FinTechs can not only improve user satisfaction but also ensure their Open Banking offerings meet the high expectations of today’s consumers.
However, FinTechs must recognise not all customers are familiar with the nuances of Open Banking. To ensure a smooth transition and maximise the benefits of this technology, financial service providers, including FinTechs, should invest in educating their customers about its advantages and functionality. This will empower users to confidently engage with Open Banking and fully leverage its potential.
At the same time, safeguarding sensitive financial data is critical to building and maintaining this trust. Robust security measures, such as strong encryption protocols like Advanced Encryption Standard (AES) and Data Encryption Standard (DES), are essential to protect data during transmission and storage. Regular security audits help identify and address vulnerabilities. Meanwhile, transparent privacy policies demonstrate a commitment to data protection.
The future of Open Banking
The trajectory of Open Banking is set to continue its upward trend, as more financial institutions and FinTechs embrace its potential. For FinTechs, this is an opportunity to lead the charge in transforming financial services. By understanding and addressing the key factors associated with adoption, FinTechs can not only stay relevant, but also drive the future of financial technology.
Embracing Open Banking is not just about keeping up with industry trends… It’s also about positioning yourself at the forefront of a financial revolution. The ability to offer innovative, secure, and user-centric services will define the next wave of FinTech success. In this dynamic environment, staying ahead of the curve requires foresight, adaptability, and a commitment to leveraging technological advancements. FinTechs that navigate these considerations effectively will not only thrive but also shape the future of financial services.
Why Access PaySuite? Getting paid should be simple – and that’s where we come in! Backed by The Access Group a top 5 UK software company, Access PaySuite is led by a team of payments experts with over 20 years’ of experience in the industry. Access PaySuite is a reliable, resilient solution that helps your business thrive with every payment.
FinTech Strategy spoke with Zak Lambert, Product Lead for Plaid in Europe, to find out more about the world-leading data network and payments platform
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Plaid offers the world’s largest open finance platform. Plaid specialises in bank connectivity and provides a single API for customers to integrate with banks around the world. They have had innovative success stories working with companies like Western Union and MoneyBox. Plaid see opportunities around current trends such as account-to-account payments, variable recurring payments, and cash flow underwriting for businesses and consumers.
At Money20/20 Europe, FinTech Strategy spoke with Plaid’s Product Lead for Europe, Zak Lambert, to learn more…
Tell us about Plaid…
“I work in product management for Plaid in Europe. We’re the world’s largest open finance platform operating across 20 markets in Europe and North America. Back in 2019 when we first launched in Europe our bread and butter was bank connectivity. Integrating with over 10,000 banks through a single API. We still provide that connectivity in one API for our customers. Millions of users go through that journey every day for a number of different use cases.
“I was part of the team that started Plaid in New York and opened the office there. I did a variety of things from helping customers integrate, building new products, working with sales teams, and anything else that would help us grow, About a year after that, I moved over to London to be the first person on the ground there. Fast forward five years and I’m delighted to be the head of product in Europe. I’ve been with the company for about five and a half years. Overall, it’s just been an exciting journey from a hundred people to more than a thousand now.”
Talk about some of the successful integrations Plaid is involved in…
“We recently announced that we’re working with Western Union across Europe to fund transfers, whether that’s someone depositing in the UK and Germany, Italy or Spain. Plaid is powering account to account payments for Western Union across their various use cases. Particularly when you look at the growing trend around account-to-account payments and pay by bank, we’re thrilled to be working with brands of that caliber. Since launch we’ve seen hockey stick growth for their customer adoption of pay by bank. This shows trust and reliability of the open banking ecosystem which we’re excited to be a part of. We are also delighted to be supporting MoneyBox, one of the largest fintechs in the UK. They handle millions of transactions to fund and create ISAs. Moneybox have launched VRP (Variable Recurring Payments) through Plaid in order to optimise their customer flows and have more reliability in customer recurring payments. With our new flow, users can go through the journey once, set up their consent, and then money can move in the background. It’s like a card on file with a bank account. We see this as a significant trend in the coming years in the UK specifically, and then across Europe as that product set develops.”
What trends are you seeing across the FinTech landscape? What opportunities do you see for Plaid?
The UK has always been an early adopter of open banking but we’re now seeing a surge in demand from mainland Europe. We are currently live in 18 markets in Europe and continue to focus on our reliability and depth in each market to ensure we can meet that demand.
This year, we’ve learned more about how our customers want to use VRP (Variable Recurring Payments). In June, we launched Moneybox’s VRP proposition to enable them to relaunch their Payday Boost offering which was previously restricted by direct debit limitations. Every week we’re having more and more conversations on VRP use cases.
We’re also excited about how open banking and fintech more broadly can help make financial access more inclusive. For example, open banking can help the underserved get more access to credit by using real-time data to inform underwriting decisions. At Plaid, we’ve built specific products to do this such as the Financial Insights Report that companies such as Capital on Tap are already using to inform their decisioning programmes.
And what’s next for Plaid? What future launches and initiatives are you particularly excited about?
“There are three areas I would highlight… First, pay by bank globally for Plaid. You look at Western Union, they’re probably not the first company to adopt something, but the second they adopt something it probably is about to hit mainstream. That’s significant volume. They’re one of the world’s oldest companies. They’ve been fantastic to work with. So, as that trust and familiarity start coming into play, people that aren’t Western Union come and say, okay, we’ve seen this experience. It was really good. We want it now. We’re working with our teams across the globe to bring that to life for North America and Europe in the simplest way possible. It’s really exciting.
“Second, we have the significant opportunity to bring lending into the 21st century. Particularly because of the third thing, which is the Plaid network. We’ve touched hundreds of millions of consumers. We’ve spent a long time building products to make payments easy and to make underwriting easy. And now we’re in the third phase… We have all of these users, this large network, so how can we make this even simpler for people? And just giving smoother experiences when the user is actually in the workflow. So, boosting conversion, delivering network style experiences in the same way that other network businesses do.”
Why Money20/20? What is it about this particular event that makes it the perfect place to showcase what you do? How has the response been to Plaid?
“This is my sixth straight Money20/20 and it gets busier every year! It’s great to learn more about the ecosystem at large. You can see developing trends each year, and it’s always a little bit different. You build relationships at Money20/20 that stay with you for the rest of your life. And it’s a perfect opportunity to meet people in the flesh that you might normally only see on screen. You can get a pretty direct read on what they’re working on and it’s exciting to be here making new connections.”
Henry Balani, Global Head of Industry & Regulatory Affairs at Encompass Corporation, on meeting the demand for improved risk management, operational efficiency, and customer service with pKYC
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The traditional banking and finance industry is evolving. Processes are experiencing a digital transformation as a result of perpetual Know Your Customer (pKYC). The pKYC approach enables modern banks to continuously update and verify customer information in real time. Banks are moving away from the reliance on periodic reviews. This change is driven by technological advancements. And the increasing demand for dynamic and responsive regulatory compliance mechanisms.
Perpetual KYC
Conventional KYC processes commonly involve periodic reviews of customer information at fixed intervals. These reviews are typically conducted every one, three, or five years. While these reviews are thorough and comprehensive, they are also static. This can result in outdated information, potentially overlooking changes in customer risk profiles or new compliance requirements.
On the other hand, perpetual KYC is dynamic and event driven. Through its continuous and automated approach, pKYC enables financial institutions to address risks and compliance needs in real-time. These risks can be determined by continuously monitoring customer activities. Furthermore, automatically updating profiles in response to specific triggers, including changes in personal information, significant transactions, or alterations in beneficial ownership.
Gaining a competitive advantage with pKYC
By leveraging pKYC, banks, and other regulated financial institutions can take advantage of a range of benefits. These are crucial in the modern digital era to gain a competitive edge. Through continuous monitoring, pKYC enables financial institutions to identify and address potential risks promptly. This real-time approach helps mitigate risks associated with financial crimes. Moreover, it ensures compliance with the latest regulatory standards.
pKYC will lead to operational efficiency and cost reduction. By automating many of the manual processes involved in KYC, pKYC significantly reduces the time and resources needed for compliance. This allows financial institutions to focus their efforts on high-risk cases, rather than conducting blanket reviews for all customers, resulting in substantial cost savings.
This process also enables many banks to improve their customer service and management. It also enhances the customer’s experience. With pKYC, customers are not subjected to frequent, intrusive reviews if their profiles remain stable. This results in a smoother and more positive customer experience, potentially increasing overall customer satisfaction and loyalty. Additionally, automated systems minimise human error and ensure consistency in applying KYC policies. This enhances overall regulatory compliance and reduces the risk of non-compliance penalties.
Perpetual KYC implementation: Challenges and considerations
Implementing a pKYC operating model is not straightforward. It requires the right blend of infrastructure and operating process. Every firm’s pKYC journey and ecosystem will be unique and cut across people, processes and technologies.
Data is central to the success of pKYC as reviews based on event changes (aka event driven triggers) will not be effective if client information is outdated, missing or incorrect. Without consistent access to relevant and accurate client information, pKYC is impossible. Corporate Digital Identity (CDI) is fast emerging as a foundation for ensuring valid customer information is collected for successful pKYC operations.
Being able to leverage this data requires an ecosystem of technology, which may be developed in house, utilising third-party RegTech providers, or a combination of both. This technology should drive how data is stored, structured and accessed so that pKYC triggers can be comprehensively managed. Customer lifecycle management systems (CLMs) are particularly relevant to pKYC as they connect all components along the workflow processes.
Importantly, overarching executive sponsorship is needed to ensure a successful outcome in transformation initiatives. Recognising the structural and cross departmental challenge, influential sponsors will align the multiple stakeholders involved in driving this change and will champion a firm’s pKYC strategy and approach to regulators and other key stakeholders.
Ultimately, pKYC must be future-proof and scalable, ready to adapt in line with business strategy and regulation to keep firms competitive.
The future of pKYC
The adoption of pKYC is growing, driven by regulatory pressures and the increasing complexity of financial crimes. Financial institutions are recognising the benefits of a proactive, real-time approach to compliance and risk management. The move towards pKYC is seen as a necessary evolution to stay ahead in a highly regulated and competitive financial environment.
As the technological landscape continues to evolve, integrating advanced technologies such as blockchain and further developments in AI and ML will likely enhance pKYC systems’ capabilities. Ensuring higher levels of compliance and risk mitigation, these technologies are able to provide more robust and secure mechanisms for customer verification and monitoring.
Blockchain technology can be utilised to further improve the initial customer authentication and validation process. As a result, we can expect improvements and advancements in the quality of customer data collected during initial customer onboarding processes. Financial institutions can then leverage AI-enhanced tools that can identify and collect the necessary attributes during document processing stages. This ensures that pKYC will utilise relevant, accurate, and up-to-date data. Perpetual KYC represents a significant departure from traditional, periodic KYC, as it offers a wide range of benefits in real-time risk management, operational efficiency, and customer experience. Although the implementation of pKYC poses certain challenges, it also provides numerous advantages, making it an increasingly attractive solution for financial institutions aiming to enhance their compliance and risk management frameworks and maintain a competitive edge in a rapidly evolving regulator landscape.
Tetyana Golovata, Head of Regulatory Compliance at IFX Payments, on builidng compliance into business culture
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Regulation plays a critical role in shaping the fintech landscape. From Consumer Duty and FCA annual risk reporting to APP fraud, the tectonic plates of the sector are shifting. Whether you consider these regulations as benefiting or hindering the industry, businesses are struggling to keep up.
According to research by fraud prevention fintech Alloy, 93% of respondents said they found it challenging to meet compliance requirements. In a new study by Davies a third of financial leaders (36%) said their firms had been penalised for compliance breaches in the year to June. The FCA brings in its operational resilience rules in March 2025. So, it is more important than ever to ensure your company makes the grade on compliance.
Learning lessons from history
Traditionally, FX has struggled with the challenge of reporting in an ever-developing sector. As regulatory raise the bar on compliance, responsible providers must help the industry navigate the changes and upcoming deadlines.
Fintechs and payments companies are entering uncharted waters. They face pressure to beat rivals by offering more innovative products. Regulators have struggled to keep up in the past. Gaps in legislation have allowed some opportunists to slip between the net, as seen in the collapse of FTX. Because of this, implementation and standardisation of the rules is necessary. This ensures innovation remains seen as a force for good, and to help identify and stamp out illegal activity.
Culture vs Business
Culture has become a prominent factor in regulatory news. We have seen cases of large fines and public censure relating to cultural issues. FCA COO Emily Shepperd observed in a speech to the finance industry, “Culture is what you do when no one is looking”.
Top-level commitment is crucial when it comes to organisational culture. Conduct and culture are closely intertwined. Culture is not merely a tick-box exercise. It is not defined by perks like snack bars or Friday pizzas. Rather, it should be demonstrated in every aspect of the organisation, including processes, people, counterparties, and third parties.
In recent years, regulatory focus has shifted from ethics to culture. Recognising its crucial role in building market reputation and ensuring compliance with rules and regulations. Furthermore, boosting client confidence, and retaining employees. The evolving regulatory landscape has significantly impacted e-money and payments firms. Moreover, regulations are strengthening each year. Each regulation carries elements of culture, as seen in:
Consumer duty: How do we treat our customers?
Operational resilience: How can we recover and prevent disruptions to our customers?
APP fraud: How do we protect our customers?
Culture Drivers
Key drivers of culture include implementing policies on remuneration, conflicts of interest, and whistleblowing. However, for it to become embedded it must touch employees at every level.
This is showcased by senior stakeholders and heads of departments facilitating close relationships with colleagues across a company’s Sales, Operations, Tech and Product teams to build a collaborative environment.
Finance firms must recognise the trust bestowed on them by their customers and ensure the protection of their investments and data is paramount. Consumer Duty may have been a wake-up call for some companies, but progressive regulation must always be embraced and their requirements seen as a baseline rather than a hurdle.
Similarly, the strengthening of operational resilience rules and the upcoming APP fraud regulation in October are to be welcomed, increasing transparency for customers.
Compliance vs Business
Following regulatory laws is often viewed as a financial and resource drain, but without proper compliance, companies are vulnerable to situations where vast amounts of money can be lost quickly.
A case in point is the proposed reimbursal requirement for APP fraud, which will mean payment firms could face having to pay compensation of up to £415,000 per case.
Complying not only safeguards the client and their money, but also the business itself. About nine in ten (88%) financial services firms have reported an increased compliance cost over the past five years, according to research from SteelEye. Embedding compliance earlier in business cultures can be beneficial in the long run, cutting the time and money needed to adapt to new regulations and preventing the stress of having to make wholesale changes rapidly.
Building a cross-business compliance culture
Compliance is a key principle at IFX Payments, and we strive to be a champion in this area. In response to these challenges, the business restructured, establishing dedicated risk and regulatory departments, along with an internal audit function.
Regulatory compliance aims to support innovation by developing and using new tools, standards, and approaches to foster innovation and ensure product safety, efficacy, and quality. It has helped the firm to navigate the regulatory landscape while driving growth and maintaining high standards.
This organisational shift allowed each business line to own its own risk, with department partaking in tailored workshops designed to identify existing, new, and potential risk exposure. Shared responsibility for compliance is the only way to create a culture which values it. We see this as a great way for organisations to drive innovation while sticking to the rules.
Pat Bermingham, CEO of B2B digital payment specialist Adflex, asks what impact will Artificial Intelligence really have on B2B payments?
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Visit any social media newsfeed and countless posts will tell you AI means “nothing will ever be the same again”. Or even that “you’re doing AI wrong”. The volume of hyperbolic opinions being pushed makes it almost impossible for businesses to decipher between hype and reality.
This is an issue the European Union’s ‘AI Act’ (the Act), which came into force on 1 August 2024, aims to address. The Act is the world’s first regulation on artificial intelligence. It sets out how to govern the deployment and use of AI systems. The Act recognises the transformative potential AI can have for financial services, while also acknowledging its limitations and risks.
Within the debate about AI in financial services, B2B payments are an area where AI has huge potential to accelerate digital innovation. Let’s go beyond the hype to provide a true perspective on what AI really means for B2B payments specifically.
Understanding what AI is, and what it isn’t
AI is a system or systems that can perform tasks that normally require human intelligence. It incorporates machine learning (ML). ML has been used by developers for years to give computers the ability to learn without being explicitly programmed. In other words, the system can look at data and analyse it to refine functions and outcomes.
A newer part of this is ‘deep learning’, which leverages multi-layered neural networks. This simulates the complex decision-making power of our brains. The deep learning benefits outlined later in this article are based on Large Language Models (LLMs). LLMs are pre-trained on representative data (such as payment/transaction/tender data). Deep learning AI does not just look at and learn patterns of behaviour from the data. It is becoming capable of making informed decisions based on this data.
Before we explore what this means for B2B payments, let’s make one caveat clear: human supervision is still needed to ensure the smooth running of operations. AI is a supporting tool, not a single answer to every question. The technology is still maturing. You cannot hand over the keys to your B2B payments process quite yet. Manual processes will retain their place in B2B payments. AI tools will help you learn, adapt and improve more quickly and at scale.
The AI Act – what you need to know
The Act attempts to categorise different AI systems based on potential impact and risk. The two key risk categories include:
Unacceptable risk – AI systems deemed a threat to people, which will be banned. This includes systems involved in cognitive behavioural manipulation, social scoring, and real-time biometric identification.
High risk – AI systems that negatively affect safety or fundamental rights. High-risk AI systems will undergo rigorous assessment and must adhere to stringent regulatory standards before being put on the market. These high risk systems will be divided into two further categories:
AI systems that are used in products falling under the EU’s product safety legislation, including toys, aviation, cars, medical devices and lifts.
AI systems falling into specific areas that will have to be registered in an EU database.
The most widely used form of AI currently, ‘generative AI’ (think ChatGPT, Copilot and Gemini), won’t be classified as high-risk. However, it will have to comply with transparency requirements and EU copyright law.
High-impact general-purpose AI models that might pose systemic risk, such as GPT-4o, will have to undergo thorough evaluations. Any serious incidents would have to be reported to the European Commission.
The Act aims to become fully applicable by May 2026. Following consultations, amendments and the creation of ‘oversight agencies’ in each EU member state. Though, as early as November 2024, the EU will start banning ‘unacceptable risk’ AI systems. And by February 2025 the ‘codes of practice’ will be applied.
So, with the Act in mind, how can AI be used in a risk-free manner to optimise B2B payments?
Today’s B2B payment platforms are not one-size-fits-all solutions; instead, they provide a toolkit for businesses to customise their payment interactions.
AI-based LLMs and ML can be used by payment providers to rapidly understand and interpret the extensive data they have access to (such as invoices or receipts). By doing this, we gain insights into trends, buyer behaviour, risk analysis and anomaly detection. Without AI, this is a manual, time consuming task.
One tangible benefit of this data analysis for businesses comes from combining payment data with knowledge of a wide range of vendors’ skills, products and/or services. AI could then, for example, identify when an existing supplier is able to supply something currently being sourced elsewhere. By using one supplier for both products/services, the business saves through economies of scale.
Another benefit of data analysis comes from payment technology experts. Ours have been training one service to extract data from a purchase order or invoice, to flow level 3 data, which is tax evident in some territories. This automatically provides the buyer with more details of the transaction, including relevant tax information, invoice number, cost centre, and a breakdown of the products or service supplied. This makes it easy and straightforward to manage tax reporting and remittance, purchase control and reconciliation.
AI-driven data analysis isn’t just a time and money-saver, however. It also adds new value by enabling providers to use the data to create hyper-personalised payment experiences for each buyer or supplier. For example, AI and ML tools could look out for buying and selling opportunities, and perform a ‘matchmaking supplier enablement service’ that recommends the best payment methods – and the best rates – for different accounts or transactions. The more personalised a payment experience is, the happier the buyer and more likely they are to (re)purchase.
Efficient data flows mean stronger cash flows
Another practical application of AI is to help optimise cash management for buyers. This is done by using the data to determine who is strategically important and when to pay them. It could even recommend grouping certain invoices together for the same supplier, consolidating them into one payment per supplier, reducing interchange fees and driving down the cost of card acceptance.
AI can also perform predictive analysis for cash flow management, rapidly analysing historical payment data to predict cash flow trends, allowing businesses to anticipate and address potential challenges proactively. This is particularly valuable in the current economic climate where cashflow is utterly vital.
By extracting value-added, tax evident data from a purchase order or invoice, AI can rapidly analyse invoices and receipts to enable efficient, accurate automation of the VAT reclaims process. Imagine: the time comes for your finance team to reclaim VAT on recent invoices and receipts, but they don’t have to manually go through every receipt or invoices and categorise them into a reclaim pile or not reclaimable. It sounds like a dream but it will be the reality for business everywhere: AI does the heavy lifting and humans verify it, saving significant time and resources.
The third significant benefit of AI is automated invoice reconciliation. By identifying key information from an invoice and recognising regular payees, AI can streamline and automate the review process. This has the potential to significantly speed up transactions and enable more efficient payment orchestration.
Binding together all supporting paperwork, such as shipping, customs, routes, and JIT (just-in-time) requirements can also be done by AI, and it’s likely to be less prone to human error.
This provides an amazing opportunity to make B2B payments faster, reduce costs and increase efficiency. Businesses know this: 44% of mid-sized firms anticipate cost savings and enhanced cash flow as a direct result of implementing further automation within the next three years. According to American Express, 48% of mid-sized firms expect to see payment processes accelerate, with more reliable payments and a broader range of payment options emerging.
When. Not if.
There are significant opportunities to leverage AI in B2B payment processes, making it do the heavy lifting. It is, however, essential to view these opportunities with a balanced understanding of the limitations of AI.
While all the opportunities for AI in B2B payments outlined here are based on relatively low-risk AI systems, human oversight of these systems is still essential. However, with all the freed-up time and resource achieved through the implementation of AI, this issue can be avoided.
AI in B2B payments is not an if, but a when. The question is, when will you make the jump, hand in hand with technology, rather than fearing it or passing full control over to it.
In order to grow, it is essential for users to see the tangible benefits. For example, by enhancing efficiencies in account payable (AP), businesses can reallocate time and resource previously spent in AP to other areas. Early adopters are starting to test the water but only time will tell how much of an impact AI will make.
Most businesses will likely wait for the early adopters to fail, learn and progress. If something goes wrong in B2B payments, it can have a huge impact on individuals, businesses and economises. Only when the risk is clearly defined and manageable will AI truly become the gamechanger in B2B payments that all the hype claims.
“Adflexhas been at the heart of the B2B fintech revolution from the beginning. We are known for fostering innovation and helping companies harness the power of digital payments. Our technology and expertise bring together buyers and suppliers to make transactions fast, cost-effective and straightforward to manage. We take the pain out of the supply chain by delivering seamless and secure payment integration that adds value to both buyers and merchants.”
Mayank Sharma, Senior Product Marketing Manager, FinScan on managing the changing face of risk in financial services
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Today, companies are expected to have a holistic view of financial crime risk. They must consider the entire ecosystem of their counterparty relationships including suppliers, vendors, employees, and customers. Failure to do so can result in organisations breaching regulatory requirements, leading to fines and reputational damage. Assessing complex ownership structures, expanding overseas operations, and managing increasing amounts of data places strain on limited resources and capabilities.
Many businesses grapple with multiple systems housing different data and information. Without an integrated view or calculation of risk or the ability to dynamically obtain data to update risk ratings, compliance and onboarding teams are operating ineffectively. What obstacles do businesses face in reaching a comprehensive view of their risk exposure? And how can technological advances help companies take a more proactive approach to financial crime risk management?
The changing face of risk
The last decade has seen a notable shift in how companies are expected to understand and manage risk. Traditionally, the focus was on performing due diligence on new customers during onboarding and at discrete intervals over the customer lifecycle. Today, companies are expected to adopt a more comprehensive perspective and take into account their entire network of counterparty relationships. This includes assessing extended relationships, encompassing customers, beneficial owners, customer’s customers, suppliers, employees, and other stakeholders. This includes distributors and other counterparties.
It also entails understanding the nature of the geographies reached, the products and services used, and from whom they send and receive funds. For example, a community bank might have domestic customers with clear backgrounds but are exposed to indirect sanctions and money laundering risks through the customers’ supplier or vendor relationships based on sanctioned geographies or beneficial owners.
Organisations must monitor sanctions and suspicious activity risk for direct and indirect client relationships. Failure to do so can result in large financial penalties. As seen in the high-profile examples of companies receiving fines for having customer or vendor relationships in sanctioned jurisdictions, and from overall weaknesses in their AML controls. However, the larger issue, from a risk perspective, especially in the context of geo-political changes and complex ownership structures, is even beyond AML and sanctions that bleeds over to reputational risk, i.e., who you are doing business with.
Companies need to develop their financial crimes analysis and risk assessment processes across all risk monitoring systems. They need to make sure they identify all the parties down to the level necessary to determine the compliance risk of doing business. Such an analysis “future proofs” the organisation from undue reputational damage. It also keeps them proactively compliant with sanctions and AML failures.
Process and technology challenges
From a technological standpoint, AML and sanctions risk from customers, vendors, employees, and supply chains are typically distributed across multiple processes. These include onboarding, due diligence, screening, and monitoring, which use different systems that are not integrated. This makes it difficult to get a holistic overview of the risk exposure.
Furthermore, many models are not sufficiently robust and fail to consider the relevant elements at the appropriate times. Most due diligence is performed at the point of onboarding. This presents a snapshot in time but does not accommodate dynamic updates such as alerts to situational changes, potentially impacting a customer’s risk score. There may be periodic Know Your Customer (KYC) updates or event-driven triggers, which influence the risk rating. However, these are typically retrospective, driven by customer interactions, and prioritised by the current rating. As such, low-risk customers who start displaying high-risk activity, which is not part of the trigger events, would not even be subject to an updated review based on that activity. Rather, they would only be reviewed at the next scheduled update for that batch of low-risk customers. This could be some years after they were first onboarded or last reviewed.
Consequently, risk ratings may misclassify customers, pushing up operating costs. A study from McKinsey & Co found that banks changing approaches to reviewing low-risk customers based on trigger events, rather than a schedule, reduced KYC operating costs by 20 percent.
Adopting an integrated and dynamic approach
As the understanding and expectations surrounding risk change, so does the technology supporting risk scoring. Integrated risk scoring dynamically calculates a score from all critical source systems used by compliance and business functions. These include external sources such as news outlets and social media. This provides a robust approach more valuable for financial institutions as it uncovers scenarios not driven by interactions with the customer. This also has an impact, perhaps a more significant one, on a customer risk rating. Adverse media or changes in beneficial ownership, for example, will not necessarily be items brought to the financial institution by the customer. But these can impact the nature of the ongoing customer relationship.
Artificial intelligence (AI) and machine learning (ML) are also likely to play an increasingly important role. As regulators become more open to innovative approaches and technologies, AI and ML will be used to enable real-time checks, such as integrated adverse media or identification checks. However, caution must be exercised regarding explainability, and the decision-making process must be understandable to human operators. Organisations must maintain clear documentation of how AI models work and the criteria they use for risk scoring. They must also monitor for and mitigate any biases in the AI models. They must enusre deployment doesn’t lead to unfair treatment of any ethnic or racial groups. Ultimately, new technology should realise a net reduction in residual risk.
Facilitating a proactive approach to risk
Companies are faced with an increasingly complex risk landscape. Today, they are expected to have a detailed understanding of their business relationships and assess the risks these relationships present. With geopolitical turmoil increasing, a wave of new sanctions, and the resulting implications for AML checks, companies need to ensure they have robust profiling processes and systems. To enable this, businesses should look for integrated solutions that bring together the various indicators and allow for dynamic updates of risk profiles.
FinScan offers advanced Anti-Money Laundering (AML) compliance technology and consulting solutions. Built on decades of experience in data management and proprietary matching technologies, FinScan provides a data-first, risk-based approach to ensure unparalleled accuracy and efficiency in identifying and reducing risk, accelerating AML compliance workflows, and optimising team productivity.
Michael Donnelly, Head of Client Success at BlueFlame AI, on how to prepare your firm to attract and retain the next generation of AI talent
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In the fast-paced world of financial services, a new generation is stepping in with high expectations for generative artificial intelligence (AI) in the workplace. Recently, BlueFlame AI conducted a specialised training session for one of our private equity clients, aimed at their newly hired summer intern class. The experience was eye-opening for us. Furthermore, it also provided a great lesson in the growing importance of AI in the industry and the expectations today’s young professionals have as they enter the workforce
AI & LLMs
The comprehensive training session covered vital areas such as AI and Large Language Models (LLMs), a review of the most popular use cases the industry has adopted, and hands-on practical training in prompt engineering. Moreover, our goal was to show this next generation the skills they’ll need to leverage these tools effectively. New roles could revolutionise alternative investment management processes like due diligence, market analysis, and portfolio management.
We also used this as an opportunity to survey the group about their experience of and expectations for AI use in the workplace – and it yielded some striking insights. A significant 50% of the interns reported using ChatGPT daily, with 83% utilising it at least weekly. Furthermore, these numbers suggest young professionals expect these tools to be available to them in their professional lives. In the same way they are available in their personal lives and set to become as commonplace as traditional software in the workplace. The interns’ expectations regarding AI’s impact on their work efficiency are even more telling. An overwhelming 94% believe these tools will enhance their productivity, indicating strong faith in the technology’s potential to streamline tasks and boost performance.
These high expectations have key implications for employers. A significant 89% of interns expect their employers to provide enterprise-grade AI/LLM access. This statistic is a wake-up call for companies that have yet to invest in AI technologies, highlighting the need to stay competitive not just in terms of products and services but also in workplace technology provision.
Talent Acquisition & Retention
Perhaps most important is AI’s potential impact on talent acquisition and retention. One-third (33%) of interns surveyed indicated they would reconsider their choice of employer if they didn’t offer access to enterprise-grade AI/LLM tools. A response that could throw a serious wrench into any Financial Services firm’s hiring plans.
The message is clear for businesses looking to stay ahead of the curve when it comes to supporting their employees. Investing in AI technologies and training is no longer optional. Firms must be ready to meet the expectations of the incoming workforce. They need to provide them with the best technology to maintain a competitive edge in an increasingly AI-driven business landscape. Companies that embrace AI and provide their employees with the tools and training to harness its power will likely see significant productivity, innovation, and talent retention advantages.
AI Revolution
Private and public investment firms stand to benefit greatly from this AI revolution. As this new generation brings its enthusiasm and expectations for technology tools into the workplace, firms that are prepared to meet these expectations will be better positioned to tap into fresh perspectives, drive innovation and reap significant efficiency and productivity gains. And if firms can take a proactive approach to training and commit to developing a forward-thinking, AI-enabled workforce, they will be able to enhance their teams’ capabilities and shape the future of work in the financial sector.
Generative AI and the workplace expectations it has created mark a new paradigm in the market. The next generation of professionals is not just ready for AI – they’re demanding it. Firms that recognize and act on this trend will be well-positioned to lead the pack when it comes to innovation, efficiency and talent acquisition.
Founded in 2023 BlueFlame AI is the only AI-native, purpose built, LLM-agnostic solution for Alternative Investment Managers.
Neobanks are transforming the financial sector as digital-only institutions that offer a comprehensive range of banking services through mobile apps…
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Neobanks are transforming the financial sector as digital-only institutions that offer a comprehensive range of banking services through mobile apps and online platforms. These services encompass current and savings accounts, payments, loans, and investments — all managed seamlessly through digital channels.
With cutting-edge financial technology, neobanks provide faster, more affordable, and more convenient solutions for both customers and businesses. The surge in mobile phone use, cloud computing, and artificial intelligence has fuelled rapid growth.
The neobanking market is even expanding rapidly, with a projected market volume of $10.44 trillion by 2028, according to Statista. This represents a 13.15 percent growth rate from 2024 to 2028.
Innovative Business Models
To offer a broader range of services and better customer experiences, neobanks leverage application programming interfaces (APIs). This model involves integrating various financial applications and services using APIs. It will allow them to manage Know Your Customer (KYC) verifications, do instant refunds, and arrange collections efficiently.
Then, the significant source for neobanks is interchange fees. This model involves charging transaction fees for every transaction and earning a portion of the fees from payment networks like Visa.
Furthermore, credit card business models use credit as a foundation, generating revenue from transaction fees and interest on carried balances to drive growth and profitability. This model starts with credit card services and later offers a bank account.
Other models allow neobanks to offer high-yield savings accounts and certificates of deposits (CDs). Revenue will come from earning interest on the assets and charging fees for services related to these accounts, such as maintenance fees.
Technology Integration
Neobanks have redefined the banking landscape through a digital-first approach, prioritising customer experience, and leveraging technology to deliver innovative financial services. This combination sets them apart from traditional banks and allows them to offer unique and competitive financial services.
A core characteristic of neobanks is their digital-only operations. By eliminating physical branches, they significantly reduce overhead costs. These savings translate into lower fees for customers and increased competitiveness.
Furthermore, neobanks harness the power of cloud computing, data analytics, and artificial intelligence to deliver personalised financial solutions. These technologies enable them to gain valuable insights into customer behaviour, allowing for tailored product offerings and improved operational efficiency.
Neobanks have also pioneered innovative revenue streams. Unlike traditional banks heavily reliant on interest income, they generate revenue through various channels, including interchange fees and partnerships.
Finally, many neobanks embrace open banking principles. This collaborative approach allows third-party developers to create new financial products and services that complement the neobank’s offerings. By collaborating with third-party developers, neobanks create additional value and broaden their reach.
The Global Neobanking Innovators
Advapay expected the total number of neobanks users to increase to 3.6 billion worldwide by 2024. Moreover, they spread relatively evenly across the main regions. For example, neobanks in North America, LATAM, APAC, and the UK each now accumulate a total price tag of 50 billion dollars or more per region.
Revolut, a UK-based neobank, stands as a leading example of digital banking innovation. Expanding its services to over 30 countries, Revolut offers multi-currency accounts, currency exchange, stock trading, and insurance.
The neobank employs various innovative business models including API integration, transaction fees, credit card services, high-yield savings, and certificates of deposit. Revolut’s software as a service (SaaS) approach enhances flexibility, scalability, and rapid product development.
Beyond Revolut, Nubank from Latin America showcases innovation through robust security features, diverse financial products, and blockchain-based loyalty programs. Meanwhile, WeBank in China excels in digital lending, mobile payments, and alternative credit scoring.
Future Prospects
The neobanking industry is rapidly evolving, with 278 neobanks operating globally as of March 2023. This intense competition forces neobanks to continuously innovate to differentiate themselves.
As a result, traditional banks face increased pressure to adapt to these new market dynamics. Neobanks have the potential to drive financial inclusion, foster creativity, prioritise customer needs, and expand globally.
Looking ahead, neobanks can expect a surge in competitors. This will force incumbent banks to either adapt their strategies to defend their market share or become digital attackers themselves to stay competitive in the evolving market.
With competition growing and attention spans shrinking, innovative product launches aren’t something neobanks should do once. Instead, creating agile solutions that are in tune with current consumer needs must be an essential part of their growth strategy.
Technological innovation is disrupting traditional business models, and customers now expect faster, more convenient service. Personalisation is crucial, with customers…
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Technological innovation is disrupting traditional business models, and customers now expect faster, more convenient service. Personalisation is crucial, with customers wanting insurance tailored to their specific needs. Enter InsurTech.
Digital transformation is a must for insurance companies. Early adopters reap benefits, while others risk falling behind. We explore five key benefits of digital transformation in insurance, highlighting strong reasons for companies to embrace the InsurTech revolution.
Digital transformation helps businesses improve workflows and empowers employees to work more efficiently and effectively. Adopting a digital culture can significantly cut down on time spent on tasks, eliminate manual processes, and introduce new features. Even basic automation of important steps can lead to substantial savings on overhead costs.
Research by the Harvard Business Review shows that over 89 percent of large companies worldwide are already implementing digital transformation initiatives, with projections of a 31 percent increase in revenue and a 25 percent reduction in costs.
An example of how digital transformation fosters innovation is the collaboration between Fingent and the California law firm Sapra & Navarra. Together, they developed Ambit, an artificial intelligence (AI) tool that streamlines workers’ compensation claims management. By using AI, Ambit speeds up the claims process and reduces associated costs.
Benefit 2: Enhanced Customer Experience
Improving customer experience and engagement is a key benefit of digital transformation. Data analysis helps insurers understand their customers better. This allows them to develop personalised products and improve customer service.
An example is XYZ Insurance. The company created a digital sales app for agents, launched an online e-commerce platform, and built a self-service app for customers on smartphones. This digital ecosystem streamlines the entire insurance process, from getting quotes and completing applications to uploading documents and making payments.
Benefit 3: Data-Driven Insights
For underwriting, digital transformation means unlocking new ways to analyse data and make decisions. AI is a key player in this change. AI can analyse massive amounts of data using algorithms and predictive analytics. This helps uncover patterns and connections that human underwriters might miss. These insights benefit both insurance companies and policyholders.
AI helps assess risk more accurately. By pinpointing potential problems with greater precision, AI allows underwriters to set appropriate premiums. This reduces the risk of setting premiums too low or too high, leading to a healthier insurance portfolio for the company.
Benefit 4: Increased Agility
Predictive analytics is a powerful tool at the core of digital transformation. It uses complex algorithms and machine learning to analyse massive datasets. This helps insurers uncover valuable patterns and trends to make better decisions in various areas of their business.
One key benefit is risk mitigation. Analysing historical data and current trends lets insurers better assess risk profiles and price policies more accurately. Additionally, predictive modelling helps them simulate future scenarios, such as a major weather event’s impact on their business. This foresight enables proactive adjustments and risk-reduction strategies.
Benefit 5: Improved Compliance
Regulatory technology (RegTech) helps insurance companies navigate compliance challenges. It provides smarter ways to analyse information. This allows them to see potential risks across a much larger dataset than ever before.
Insurers used to check a small sample of policies to find problems with sales or pricing. This took a lot of resources and only covered a tiny fraction of customers. RegTech, combined with advanced data analysis, can streamline this process. By looking at all their policies, insurers can identify potential issues more efficiently.
Conclusion
The traditional insurance industry faces pressure to keep pace with a rapidly changing digital world. Rising customer demands and innovative competitors threaten their position, but digital transformation offers a powerful set of tools to overcome these challenges and unlock new growth.
Digital technologies can streamline internal processes, making them more efficient and cost-effective. This translates to a smoother experience for customers with faster processing times and simpler interactions. Additionally, digital tools let insurers analyse data more effectively and improve risk management and regulatory compliance.
By investing in innovation, insurers can develop new products and services that meet evolving customer needs. This proactive approach strengthens their market position and lays the foundation for long-term, sustainable growth.
Nada Ali Redha, Founder of PLIM Finance, on flexibility, consolidation, and the evolution of digital payments
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Embedded finance, the integration of financial services into non-financial platforms, is no longer a niche trend. It has become a defining characteristic of modern commerce. Consumers are increasingly drawn to the convenience and flexibility it offers, leading businesses across industries to adopt embedded finance solutions. The rise of these platforms, combined with shifting consumer expectations, presents both opportunities and challenges for traditional banks and fintech players.
Customer-centricity with Embedded Finance
At the heart of this transformation is a desire for simplicity. Consumers are opting for solutions that allow them to bypass the inconvenient processes associated with traditional banking. They are avoiding excessive paperwork, account opening delays, or hidden charges. Instead, they are drawn to platforms that offer seamless integration of services. Enabling them to make purchases, manage their finances, and access credit without ever leaving the ecosystem of their preferred brands.
E-commerce giants like Amazon have been quick to recognise this trend, embedding financial services directly into their platforms. This allows them to offer a one-stop solution that caters to all their customers’ needs, from browsing products to making payments or accessing credit options. The appeal is clear: customers stay within the same digital environment, enjoying a frictionless experience that saves them time and effort. This development, however, raises the stakes for standalone payment providers like PayPal and Klarna, as they are increasingly excluded from these in-house ecosystems.
Shifting financial services
For legacy banking providers, this shift presents a major challenge. Traditionally, these institutions have relied on their extensive networks, trusted brands, and regulatory backing to maintain a dominant position in the financial landscape. But as businesses integrate financial services directly into their offerings, banks are no longer the first point of contact for many consumers. A growing number of businesses are bypassing traditional banks altogether, embedding payment and lending options at the point of purchase or within their own apps. This trend highlights a fundamental shift in how consumers interact with financial services, often without even realising it.
In response, payment providers and fintechs must find innovative ways to remain competitive. One potential strategy is for these companies to develop their own marketplaces. By creating an ecosystem of services that includes not only payments, providers can capture more customer loyalty and engagement. This would enable fintechs and payment solution companies to offer a holistic, embedded finance solution. Rather than relying on external platforms or partnerships.
PLIM Finance
A case study for this would be PLIM Finance’s marketplace, which offers a highly customised experience. PLIM connects consumers with their desired services in a way that prioritises personalisation and convenience. As a platform built with user-centric design at its core, it allows consumers to search for treatments based on location, type, and specific clinics, giving them the ability to make informed decisions effortlessly. This is achieved through a search engine that filters results to suit each individual’s exact needs. Enhancing the user experience by eliminating irrelevant options for a streamlined experience. PLIM’s marketplace also encourages partners to create detailed profiles, showcasing their services, reviews, and credentials, which enhances visibility and attracts new clients. By fostering a direct connection between consumers and clinics, PLIM’s marketplace stands out in the embedded finance space. Ensuring a seamless, personalised customer experience that is simple and easy-to-use.
Strategic partnerships
Another potential strategy is deeper collaboration with external partners. By integrating their services into a wide range of businesses, payment providers can continue to capture market share. Without needing to create their own consumer-facing platforms. Strategic partnerships can expand the reach of these payment solutions, allowing them to tap into user bases they might otherwise miss. For example, smaller or mid-sized businesses may benefit from embedding a well-established payment solution into their website or app rather than developing their own in-house system.
However, not every provider will be able to meet the demands of this rapidly changing landscape on their own. As the embedded finance space continues to mature, industry consolidation becomes a very real possibility. Larger players may acquire smaller fintech companies. Integrating their innovative solutions into existing platforms can offer a more comprehensive suite of services. This would mirror the broader trend in the tech sector, where big players often absorb disruptive startups to maintain their competitive edge. Consolidation offers both challenges and opportunities. While smaller companies risk losing their independence, they also gain access to the resources and customer base of their new parent companies.
Evolving financial landscape
This evolving landscape is also occurring at a time of significant economic uncertainty. Financial stress often pushes consumers to reevaluate their spending and financial habits, with many looking for greater control over their cash flows. This is where embedded finance stands out. The flexibility it offers allows consumers to manage their money more efficiently, whether through payment deferrals, buy-now-pay-later (BNPL) options, or quick access to credit. These features are particularly valuable when budgets are tight or income is uncertain.
Moreover, embedded finance solutions empower consumers by giving them more control over how they manage their transactions. For example, BNPL options give individuals the freedom to split payments over time, making larger purchases easier to manage without the immediate financial burden. This level of control resonates with modern consumers, who increasingly seek transparent, flexible financial solutions that can be tailored to their personal circumstances.
For businesses, this presents an opportunity to strengthen customer loyalty by offering embedded finance services that align with consumer needs. By removing barriers to purchasing, businesses can enhance the customer experience, which, in turn, can drive increased sales and long-term engagement. As a result, companies that adopt embedded finance solutions can gain a competitive edge, particularly in sectors like e-commerce, where convenience is king.
Conclusion
In conclusion, embedded finance represents a fundamental shift in how consumers interact with financial services. As more businesses adopt these solutions, traditional banking institutions and standalone payment providers will need to adapt or risk being left behind. Whether through developing their own marketplaces, forging deeper collaborations, or pursuing mergers and acquisitions, the financial services landscape is poised for continued transformation. Embedded finance, with its focus on flexibility and convenience, is likely to become an integral part of the future of commerce—benefiting both consumers and businesses alike.
Digital banking offers increased convenience and accessibility. However, this growth also exposes banks to heightened cybersecurity risks. Protecting data and…
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Digital banking offers increased convenience and accessibility. However, this growth also exposes banks to heightened cybersecurity risks. Protecting data and information is crucial to maintaining customer trust and preventing financial loss.
Cybercrime poses a significant threat to the digital banking industry. According to Cybercrime Magazine, cybercrime costs will increase by 15% over the next five years and reach $10.5 trillion by 2025. These attacks target sensitive information and funds, causing substantial damage to banks.
To mitigate these risks, banks must implement robust cybersecurity measures to safeguard digital systems and data.
1. Strong Authentication
The Payment Services Directive (PSD2) mandates strong customer authentication (SCA) to reduce fraud and enhance online payment security. This directive imposes specific requirements on market participants to meet new obligations. The European Banking Authority (EBA) developed regulatory technical standards (RTS) based on the Commission’s authority under PSD2.
The RTS aims to protect consumers and create a level playing field within the evolving financial technology market. To achieve this, the RTS establishes security measures for payment service providers — including banks and other financial institutions — when processing payments or offering payment-related services.
2. Encryption
Unencrypted data is a common cyber threat. Hackers can easily access this data type and give severe consequences for banks. According to Statista, the average cost of a data breach worldwide is $4.45 million dollars. However, data breaches not only cause substantial financial loss for recovery and ransom payments but also damage a bank’s reputation.
To prevent these issues, all digital banking data must be encrypted. This safeguards information and makes it difficult for cybercriminals to access even if stolen. Encryption transforms data into a coded format that requires a specific key to decipher. Only individuals with the correct key can view the original data.
Encryption involves using an algorithm and a key to convert plain data into encrypted data. The original data can only be recovered by decrypting the ciphertext with the correct key.
3. Regular Cybersecurity Audit
A security audit is a thorough examination of an organisation’s IT infrastructure. This process verifies the effectiveness of security policies and procedures. Security audits assess how well an institution’s cybersecurity program operates. This includes reviewing policies, testing controls, and checking compliance with industry standards and regulations.
Banks and financial institutions face increasingly complex cyber threats. Regular security audits help identify vulnerabilities in systems. By discovering weaknesses, banks can strengthen defences with firewalls, antivirus, and antimalware software. A cybersecurity audit should be conducted by an independent expert to ensure objectivity.
4. Employee Training
The World Economic Forum reports that 95% of cyberattacks involve human error. This means hackers often exploit employee mistakes. They use tactics like phishing to deceive employees into revealing sensitive information. This can lead to data breaches and financial loss. For example, employees might click on malicious links, disclose confidential data, or leave devices unattended.
Therefore, bank employees must have training to recognize that cyberattacks are a constant threat. Moreover, the consequences of a breach can be severe for employees, customers, and the bank’s reputation. Cybercriminals operate in a lucrative industry, for that reason, it is imperative to equip employees with the knowledge to safeguard against these threats.
5. Incident Response Planning
An incident response plan is a formal document approved by bank leadership to guide the organisation before, during, and after a potential or confirmed security incident. The plan aims to reduce the impact of security events, limiting operational, financial, and reputational damage.
A successful incident response plan should be established before a security attack occurs and assigned to specific team members. IBM research shows companies with well-developed and tested response plans save an average of $2.66 million compared to those without such protocols.
To create an effective incident response plan, banks can reference established frameworks. For specific incident handling steps, The National Institute of Standards and Technology’s SP-800-61 and SANS’s Incident Handlers Handbook provide detailed blueprints. Aligning the incident response plan with these resources ensures a focused and effective approach to managing cybersecurity incidents.
Importance of Cybersecurity Measures
The increasing reliance on digital platforms exposes individuals and organisations to growing cybersecurity risks. Malicious actors exploit security weaknesses to steal personal information and compromise digital assets. Forbes reported a staggering increase in cyberattacks in 2023, impacting over 343 million people, with data breaches soaring by 72 percent from 2021 to 2023. These striking figures highlight the urgent need for state-of-the-art cybersecurity in digital banking.
The 2008 global financial crisis exposed vulnerabilities in the traditional financial system. In response, blockchain technology emerged, offering a solution. …
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The 2008 global financial crisis exposed vulnerabilities in the traditional financial system. In response, blockchain technology emerged, offering a solution.
With its ability to address these weaknesses, blockchain holds significant potential to transform the banking industry. This article will explore how blockchain can be used in banking and the benefits it offers for a more secure and efficient financial industry.
Introduction to Blockchain in Banking
Blockchain technology is changing the way data is stored and shared. It’s a digital record spread across a network of computers. This system uses cryptography for security, allowing authorised participants to update the records without needing a central authority.
Once information is added to the blockchain, it’s impossible to alter or erase. To add new entries, network participants verify transactions using complex algorithms.
Traditionally, banks and payment systems rely on intermediaries to facilitate transactions. However, blockchain’s distributed network allows for direct consensus and verification between participants, streamlining the entire process.
Blockchain Case Study: Payment Processing
Central and commercial banks around the world are exploring blockchain for payment processing. This interest extends to cross-border payments, traditionally dominated by companies like SWIFT and Western Union.
Several successful blockchain implementations in banking serve as case studies. In 2015, Commonwealth Bank of Australia (CBA) teamed up with Ripple, a fintech company specialising in blockchain solutions for international payments. Their goal was to build a system using blockchain to speed up settlement processes between CBA’s different branches.
Westpac, another major Australian bank, followed suit in 2016 by partnering with Ripple to create a cost-effective system for cross-border payments using blockchain.
Blockchain Case Study: Trade Finance
Trade finance, handling all aspects of domestic and international commerce, relies heavily on banks to facilitate transactions. Traditionally, this involves managing risk, providing credit, and allowing both exporters and importers to participate. However, the system often suffers from slow and outdated paper-based documentation.
Recognising this need for improvement, leading institutions like Standard Chartered and HSBC have joined groups exploring blockchain technology for trade finance. One example is Voltron, a platform designed by R3 and CryptoBLK to digitise letters of credit.
Pilot projects across 14 countries with over 50 companies and banks participating yielded notable results, reducing letter of credit processing time from five days to less than 24 hours. Building on this success, Voltron rebranded as Contour in 2020, launching a digital trade finance network with R3 and other banks as supporters.
Blockchain Case Study: KYC
Know Your Customer (KYC) processes are a slow hurdle in banking as they can take weeks to complete. The system also suffers from wasted effort, as each bank asks new clients for the same information.
This inefficiency creates high costs for banks. Compliance burdens are heavy, and penalties for not following the rules are significant. The constant changes in regulations make it difficult for banks to stay compliant.
Chris Huls of Rabobank proposed a solution—storing KYC information on a blockchain. This secure and transparent technology acts as a shared platform for customer data. Once a bank completes KYC, a summary can be uploaded to the blockchain. Authorised institutions can then access this information, eliminating repetitive checks.
Benefits Realised
Blockchain technology offers a new way to store and manage data. Unlike traditional databases, blockchain spreads data across a network of computers and creates a public record that’s difficult to tamper with.
Any attempt to change a record in one place would be caught by other computers in the network. This system eliminates the possibility of any single entity manipulating information.
Furthermore, blockchain promotes transparency. Transactions are visible to anyone who wants to see them, with tools allowing real-time tracking. This can lead to faster processing times for consumers, potentially reducing transaction completion to minutes, regardless of location or time.
Inter-bank transfers can also benefit from blockchain’s efficiency and security. Large sums involved in these transactions come with risk and cost during the current multi-day settlement process.
Lessons Learned and Future Outlook
These case studies demonstrate the technology’s ability to streamline transactions, reduce friction, and enhance security. The technology also promotes transparency and immutability of data.
However, a major challenge remains—ensuring customer data privacy. Public blockchains, with their inherent openness, create obstacles. Permissioned blockchains with strong encryption offer some solutions, but cybersecurity concerns still exist. Building trust and widespread adoption requires addressing these data privacy issues.
Regulatory uncertainty presents another hurdle. Currently, there’s no central authority overseeing and regulating blockchain protocols. The need for some form of governance is apparent, but careful consideration will need to be given to the distribution of power within such a system.
Financial institutions are increasingly turning to artificial intelligence (AI) to gain a competitive edge. AI tools streamline operations, improve customer…
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Financial institutions are increasingly turning to artificial intelligence (AI) to gain a competitive edge. AI tools streamline operations, improve customer support, and automate processes, making banks more efficient and customer-focused.
Research by McKinsey shows that over 20 percent of an organisation’s digital budget goes towards AI. The study links significant investments in AI to a 10-20 percent increase in sales. AI will play a central role in boosting efficiency, customer service, and overall banking productivity.
Introduction to AI in Personalised Banking
Delivering personalised experiences is crucial for customer satisfaction and retention. AI helps banks achieve this by collecting and analysing customer data. This data is then used to create recommendations, product offerings, and even financial advice tailored to each customer’s needs.
AI tools can optimise workflows through a technique called prescriptive personalisation, using past data to predict future behaviour. Real-time personalisation takes this further, incorporating current information alongside historical data.
This allows banks to deliver highly customised virtual assistants and real-time recommendations powered by natural language processing (NLP) models. These AI-powered assistants not only build trust and user engagement but also simplify interactions with the bank.
Tool 1: Predictive Analytics
Predictive analytics, powered by AI tools, unlock a new level of customer personalisation in banking. These tools analyse data to uncover hidden patterns and trends that traditional methods might miss. This knowledge reveals sales opportunities, possibilities for cross-selling, and ways to improve efficiency.
Predictive analytics use past data to forecast customer behaviour and market trends. This foresight allows banks to tailor marketing strategies and sales approaches to meet changing customer needs and capitalise on emerging opportunities.
Tool 2: Chatbots and Virtual Assistants
One key advantage of chatbots is their constant availability. This is especially helpful for customers who need assistance outside of regular operating hours.
AI chatbots learn from every interaction, improving their ability to understand and meet individual customer needs. By integrating chatbots into banking apps, banks can provide personalised banking experiences and recommend financial products and services that fit a customer’s specific situation.
Erica, a virtual assistant developed by Bank of America, handles tasks like managing credit card debt and updating security information. With over 50 million requests handled in 2019 alone, Erica demonstrates the potential of chatbots as efficient assistants for customers.
Tool 3: Recommendation Engines
Banks use AI tools to analyse vast amounts of customer data, including purchases, browsing habits, and background information. This deep understanding helps banks recommend products that truly fit each customer’s needs.
These personalised recommendations extend beyond credit card suggestions. AI can identify potential investments or loans that align with a customer’s financial goals. By providing customers with relevant information, banks allow them to make informed financial decisions.
Tool 4: Sentiment Analysis with AI
AI sentiment analysis translates written text into valuable insights. AI uses NLP to understand emotions and opinions in written communication. By examining things like customer feedback, emails, and social media conversations, banks gain a much clearer picture of customer sentiment.
Tool 5: Voice Recognition
AI-powered voice assistants offer a convenient way to handle everyday banking tasks. From checking balances to paying bills, all a customer needs are simple voice commands.
These assistants use NLP to understand customer requests and respond accurately. Voice authentication adds another layer of security by verifying customer identity during transactions.
Tool 6: Process Automation
Robotic Process Automation (RPA) automates repetitive tasks, boosting operational efficiency. It tackles up to 80 percent of routine work and frees up workers for more valuable tasks requiring human judgement.
RPA bots can handle tasks like issuing and scheduling invoices, reviewing payments, securing billing, and streamlining collections – all at once. NLP empowers these bots to extract information from documents, simplifying application processing and decision-making.
Tool 7: Facial Recognition with AI
Facial recognition helps banks verify customer identities during tasks like opening accounts, accessing information, and making transactions. Compared to traditional passwords, facial recognition offers stronger security and greater convenience. It eliminates the need for remembering complex passwords or worrying about stolen credentials, making banking interactions smoother and less error-prone. This technology also helps prevent fraud by identifying attempts to impersonate real customers.
Capital One AI Case Study
Capital One demonstrates how AI can personalise banking. Their AI assistant uses NLP to understand customer questions and provide immediate answers. Capital One also incorporates AI into fraud detection. Machine learning and predictive analytics help pinpoint suspicious credit card activity to strengthen security measures.
Conclusion
AI tools offer a significant opportunity for banks to improve customer experiences and achieve long-term success. By personalising banking services with AI, banks can better meet individual customer needs. This leads to higher satisfaction and loyalty, which enhances the bank/customer relationship.
AI has the potential for an even greater impact. As banks integrate more advanced AI capabilities, they can create even more engaging and personalised interactions. This focus on ‘hyper-personalisation’ could be the next big step for financial institutions to set them apart in a competitive market.
Neobanking is different from traditional banking which is operated through physical intermediaries. By implementing an interface and various advanced features,…
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Neobanking is different from traditional banking which is operated through physical intermediaries.
By implementing an interface and various advanced features, this type of bank can change people’s views on managing finances by keeping up with rapid technological advances.
In the US, many people have been underserved by traditional banks, facing high fees and a lack of branches. To help, some companies offered prepaid debit cards with checks for bill payments, but these were limited.
The 2010s fintech revolution introduced mobile-first banking through neobank apps. These apps allowed quick account signups with no minimum balance or overdraft fees and offered small, interest-free loans to keep people away from payday lenders.
This model attracted millions of customers, with neobanks profiting from higher interchange fees. However, they also faced challenges such as higher fraud and disputes, impacting their profitability.
In this article, we will discuss the five main benefits of neobanks: convenience, lower fees, a better user experience, faster transactions, and innovative financial products. These advantages will explain why customers are switching to this type of bank.
Convenience
One of the main advantages of neobanks is their ease of access. Customers do not need to visit the bank physically and can carry out all banking transactions anytime and anywhere.
This convenience extends to all processes, from opening an account to transferring money to the destination account. These tasks can be completed in minutes via a mobile phone.
Lower Fees
Apart from accessibility advantages, neobanking offers a competitive fee structure with relatively lower admin fees than traditional banks. This is because traditional banks incur overhead costs to maintain physical branches, while neobanks do not.
As a result, neobanks can pass on savings to customers through lower service rates. Additionally, neobanks save on costs by not requiring workers to operate physical branches.
Enhanced User Experience
Neobanks prioritise user experience by designing intuitive interfaces—making banking straightforward and accessible. They also offer personalised financial insights for each customer.
Neobanking’s mobile applications simplify financial management with budget tools and real-time transaction notifications. These features empower consumers to make informed financial decisions and maintain better control over their finances.
Faster Transactions
Neobanking offers convenience and lower costs while speeding up transactions with advanced technology. This allows users to manage their finances in real time.
For example, customers can quickly transfer money between local and international banks, thanks to the efficient systems deployed.
Innovative Financial Products
Not only are neobanks useful for fast transactions, but they also provide innovative financial products. One such innovation is automatic investment, which allows users to allocate and manage portfolios via a mobile app.
Additionally, neobanks offer unsecured loan products with a quick and transparent application process. This approach not only provides efficiency but also aligns with consumer behaviour in interacting with financial services.
Conclusion
The advantages of neobanking go beyond convenience and cost savings; they also include a consumer-oriented banking approach. By leveraging powerful digital innovations, neobanks offer an accessible and customisable banking platform.
This approach enhances the consumer experience with more innovative financial products and alternative solutions. Neobanking also implements financial transparency policies, allowing consumers to explore and benefit from various banking options.
In the future, neobanks may have a significant opportunity to attract high-value customers who manage large deposits. A mobile app could integrate all their accounts from different banks into one, simplifying deposit management. Additionally, neobanks could use AI to deliver personalised customer service and a premium experience.
Fuelled by the Covid-19 pandemic and a projected market size of $166.4 billion by 2030, InsurTech companies are revolutionising the…
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Fuelled by the Covid-19 pandemic and a projected market size of $166.4 billion by 2030, InsurTech companies are revolutionising the insurance industry.
These firms offer digital alternatives in a typically slow-to-change industry. Furthermore, their innovative solutions have empowered traditional insurers to accelerate digitalisation and streamline processes.
These are the leading firms that have helped this traditional field both adapt and start rapidly catching up to efficiency trends associated with more dynamic industries.
Introduction to InsurTech Innovation
The insurance industry is undergoing a transformative shift fuelled by InsurTech.
Innovating technologies for insurers is about finding novel solutions to longstanding challenges and harnessing emerging trends to shape the future of the industry.
Insurance leaders are almost unanimous in recognising that innovation as not just important, but critical to future success. Moreover, insurers who fail to embrace InsurTech advances, and the wave of digital insurance products and opportunities they represent, risk falling behind in an increasingly competitive and dynamic industry.
Oscar Health
Oscar Health built itself from the ground up with a tech-first approach focused on member service. This unique strategy aims to make healthcare more accessible and affordable for all Americans.
Oscar’s commitment to exceptional service is reflected in its sky-high Net Promoter Score (NPS) of 50 and a near-perfect 97% member satisfaction rate for virtual care. With a presence in over 577 counties across 20 states, Oscar Health’s impact on the InsuTech industry is undeniable.
NEXT Insurance
A leader in small business insurance, NEXT Insurance offers easy-to-understand, digital coverage designed specifically for the self-employed. Also, their recently launched Copilot tool empowers agents to serve micro-businesses efficiently. Copilot streamlines the process for both sides. Business owners can get quotes and bind coverage online instantly, while agents gain a simplified workflow to boost revenue.
Vouch
Since 2018, Vouch has emerged as a prominent force in the InsurTech space by transforming the way business insurance serves high-growth companies. Vouch recently launched AI Insurance, a groundbreaking product specifically designed to mitigate risks for AI startups in this rapidly developing field.
Hippo
Hippo stands out for its proactive approach to homeowners insurance. Partnering with homeowners to implement smart home devices and personalised safety recommendations, Hippo prioritises preventing hazards before they occur. This commitment has secured their position as a top InsurTech firm, protecting over 200,000 homes across most US states.
Bestow
Bestow prioritises simplifying insurance and boosting financial security for everyone. It believes the process shouldn’t be daunting, so they leverage cutting-edge technology and data throughout the entire value chain to streamline everything. Furthermore, its commitment to innovation is evident in the recent launch of permanent life insurance and the addition of AI features to its underwriting workbench.
QuanTemplate
Founded in 2011, QuanTemplate uses machine learning and big data to empower businesses through digital transformation. Its core offering, a data integration, automation, and analytics platform, equips insurance professionals with the tools to unlock valuable insights and gain a deeper understanding of market dynamics.
Dinghy
Dinghy caters to the changing insurance needs of freelancers and businesses with its innovative pay-as-you-go model and focus on online and mobile accessibility.
This focus on accessibility is further enhanced through its partnership with ARAG, providing ‘Freelance Assist’. This is a unique package combining Dinghy’s flexible insurance with ARAG’s online legal resources tailored for freelance professionals.
CoVi Analytics
CoVi Analytics tackles both regulatory compliance and operational efficiency for insurers. Its AI-powered CORE platform automates complex reporting for evolving regulations, while the app suite featuring Policy 2.0 simplifies risk incident capture and boosts operational efficiency.
ManyPets
ManyPets, formerly known as Bought By Many, has emerged as a leading pet insurance provider by taking a unique approach to customer needs.
Born from a focus on analysing social media commentary, ManyPets uses customer feedback to shape its insurance policies. This customer-centric approach extends to its technology focus, making ManyPets the first pet insurance company to offer form-free online claims.
Shift Technology
Shift Technology provides a suite of AI-powered Software-as-a-Service (SaaS) solutions specifically designed to address the insurance industry’s needs. Its focus lies in fraud detection, empowering insurers with robust protection against financial losses, reputational damage, and cyber threats.
Key Factors for InsurTech Success
Several key factors have fuelled the recent surge in InsurTech innovation. Digitisation plays a crucial role by speeding up information processing, leading to cost reductions, efficiency gains, and the development of new, customer-centric products.
Additionally, personalisation is another key factor, enabling insurers to tailor services to individual needs and preferences. They consider factors like age, location, and lifestyle before providing quotes. Finally, advanced analytics capabilities provide valuable insights into consumer behaviour, allowing insurers to better target customers, while also offering real-time risk assessment data.
The automotive industry is transforming vehicles into mobile banking centres with the introduction of embedded finance. This allows drivers to…
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The automotive industry is transforming vehicles into mobile banking centres with the introduction of embedded finance. This allows drivers to seamlessly pay for fuel, tolls, parking, and electric car charges without leaving their cars.
Embedded banking or embedded finance is a technology that is used on many websites for easy transactions. It integrates financial services like payments, accounts, or lending into non-financial products or services. That technology can also be brought into your car.
It turns banking into a part of driving, creating an efficient experience for drivers. With this new system, drivers can easily manage all of these payments automatically making for seamless transactions.
Benefits of Using Embedded Banking
Built-in banking does more than just make payments easier. It can also help drivers choose the right car based on how they drive. For example, if someone often drives long distances, the system might suggest a fuel-efficient car. If another driver drives mostly around town, a smaller car might be recommended. This intelligent system can make buying a new car easier and more personal.
Insurance companies can also benefit from this technology. They can see how people drive and adjust their premiums accordingly. For example, a cheaper insurance premium may be given to a driver with a clean driving record. On the other hand, a driver who has a history of speeding or traffic accidents may get a more expensive premium. This makes insurance fairer and more personalised to each driver.
Car companies that are the first to add built-in banking will have a big advantage. Buyers will want to buy cars with this new and convenient feature, giving these companies an edge. In addition, this technology allows car companies and banks to increase revenue. They could offer special deals or services to drivers who make frequent use of the in-car payment system.
Enhanced Financing Options
Embedded finance simplifies vehicle financing by integrating financial services into the car-buying process. Furthermore, customers can apply for and manage loans directly through their vehicle’s interface, with loan options personalised to their financial profile and driving habits. This innovation improves user experience by making payments, financing, and insurance easier and more secure.
Embedded banking turns cars into mobile banking hubs, leveraging data from modern vehicles to customise financial products. Moreover, insurance premiums can adjust based on driving behaviour, financing can match vehicle usage, and payments for charging or tolls can be automated, enhancing efficiency and customer satisfaction.
Seamless Transactions
Embedded finance simplifies transactions by allowing drivers to pay for services like fuel, tolls, and parking directly through their vehicle’s system. This integration eliminates the need for physical payment methods, making the driving experience smoother and more convenient.
In the automotive industry, embedded finance also transforms how customers handle car purchases and financing. By integrating banking, lending, and insurance services into the vehicle’s interface, automotive companies can offer a more seamless and convenient experience. Using APIs from specialised providers, this approach opens new revenue streams and enhances overall customer satisfaction.
Increased Sales
Automotive companies that adopt embedded finance technologies can experience a significant boost in sales and revenue. By offering integrated financial services, car manufacturers can attract customers looking for modern, convenient solutions.
According to McKinsey, embedded finance can boost sales by increasing conversions, average purchase amounts, and customer loyalty. Research by RBC Capital Markets shows that buy now, pay later (BNPL) options can raise checkout conversion rates by 20-30 percent and lead to higher spending per transaction.
A major global retailer has found that customers using their embedded lending services spend 20 percent more. However, the solution must be easy to use; otherwise, abandonment rates can be high.
The Collaboration of Industries for Embedded Banking
This new technology also encourages teamwork between different industries. For it to work well, car companies, technology companies, and banks need to work closely together. They need to create strong security measures to protect users from potential online threats. This collaboration is important to ensure that the system is secure and reliable.
By connecting cars and financial services, embedded banking will accelerate innovation. It will help create a future where driving and banking are connected. This will lead to a more efficient and customer-friendly world.
New Technology Leaders
Mercedes-Benz is already leading the way with this technology through its partnership with Mastercard. In Germany, Mercedes-Benz customers can start the fueling process from their car and pay with their fingerprints. This is the first time in-car payments have been used at gas stations.
When a driver arrives at a connected service station, the Mercedes Me Fuel & Pay service starts automatically. The driver selects the gas pump, and the system calculates the cost. Payment is made with a fingerprint. After refuelling, the invoice appears on the screen and is emailed to the driver, allowing them to leave without visiting the checkout.
Future Prospects
This new technology will help both the automotive and banking industries. It makes life easier for drivers and promises to change the way we drive by enabling easy payments on the go.
Once all car companies start using built-in banking, the current system of driving will change forever. This technology will turn cars into more than just vehicles to get from one place to another; they will become smart, connected hubs that make life easier for drivers. The future of driving begins with the implementation of embedded finance.
WatchGuard’s Threat Lab cybersecurity research team forecast headline-stealing hacks involving LLMs, AI-based voice chatbots and VR/MR headsets. They also assess…
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WatchGuard’s Threat Lab cybersecurity research team forecast headline-stealing hacks involving LLMs, AI-based voice chatbots and VR/MR headsets. They also assess the impact of the war on talent, AI spear phishing and QR codes.
Watchguard leading on Cybersecurity
WatchGuard Technologies, a global leader in unified cybersecurity, offers an annual batch of predictions covering the most prominent attacks and information security trends that the WatchGuard Threat Lab research team believes will emerge each year. This year, these include malicious prompt engineering tricks targeting large language models (LLMs), managed service providers (MSPs) doubling down on unified security platforms with heavy automation, ‘Vishers’ scaling their malicious operations with AI-based voice chatbots, hacks on modern VR/MR headsets, and more…
“Every new technology trend opens up new attack vectors for cybercriminals,” said Corey Nachreiner, chief security officer at WatchGuard Technologies. “In 2024, the emerging threats targeting companies and individuals will be even more intense, complicated, and difficult to manage. Therefore, with an ongoing cybersecurity skills shortage, the need for MSPs, unified security, and automated platforms to bolster cybersecurity and protect organisations from the ever-evolving threat landscape have never been greater.”
Cybersecurity predictions
The following is a summary of the WatchGuard Threat Lab team’s top cybersecurity predictions for 2024:
Prompt Engineering Tricks Large Language Models (LLMs)
Companies and individuals are experimenting with LLMs to increase operational efficiency. However, threat actors are learning how to exploit LLMs for their own malicious purposes as well. During 2024, the WatchGuard Threat Lab predicts that a smart prompt engineer ‒ whether a criminal attacker or researcher ‒ will crack the code and manipulate an LLM into leaking private data.
MSPs Double Down on Security Services Via Automated Platforms
There are approximately 3.4 million open cybersecurity jobs, and fierce competition for available talent. More SMEs will turn to trusted managed service and security service providers, known as MSPs and MSSPs, to protect them in 2024. To accommodate growing demand and scarce staffing resources, MSPs and MSSPs will double down on unified cybersecurity platforms with heavy automation using artificial AI and Machine Learning.
AI Spear Phishing Tool Sales Boom on the Dark Web
Cybercriminals can already buy tools on the underground that send spam email, automatically craft convincing texts, and scrape the Internet and social media for a particular target’s information and connections. However, a lot of these tools are still manual and require attackers to target one user or group at a time. Well-formatted procedural tasks like these are perfect for automation via AI and machine learning. This makes it likely that AI-powered tools to combat cybersecurity will emerge as best sellers on the dark web in 2024.
AI-Based Vishing Takes Off in 2024
Voice over Internet Protocol (VoIP) and automation technology make it easy to mass dial thousands of numbers. Once a potential victim has been baited onto a call, it still takes a human scammer to reel them in. This system limits the scale of vishing operations. But in 2024 this could change. The combination of convincing deepfake audio and LLMs capable of carrying on conversations with unsuspecting victims will greatly increase the scale and volume of vishing calls. What’s more, they may not even require a human threat actor’s participation.
VR/MR Headsets Allow the Recreation of User Environments
Virtual and mixed reality (VR/MR) headsets are finally beginning to gain mass appeal. However, wherever new and useful technologies emerge, criminal and malicious hackers follow. In 2024, cybersecurity researchers forecast that either a researcher or malicious hacker will find a technique to gather some of the sensor data from VR/MR headsets to recreate the environment users are playing in.
Rampant QR Code Usage Results in a Headline Hack
Quick response (QR) codes provide a convenient way to follow a link with a device such as a mobile phone. They have been around for decades, but mainstream usage has exploded in recent years. Furthermore, Threat Lab cybersecurity analysts expect to see a major, headline-stealing hack in 2024 caused by an employee following a QR code to a malicious destination.
The growth of international trade and global mobility has fueled the demand for efficient cross-border payments solutions. Legacy systems are…
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The growth of international trade and global mobility has fueled the demand for efficient cross-border payments solutions. Legacy systems are often slow and expensive, with multiple middlemen and complicated procedures.
With its decentralised and secure nature, blockchain technology offers a compelling alternative. Furthermore, as the cross-border payment market is expected to reach $290 trillion by 2030, blockchain and digital payments are emerging as strong contenders to streamline international transactions.
Introduction to Blockchain in Cross-Border Payments
While blockchains are not designed exclusively for payments, they offer a powerful foundation for streamlining cross-border transactions. Unlike traditional banking systems restricted by national borders, blockchains are global by nature. Also, in a blockchain payment system, payers and payees use a shared network with common data formats. This enables direct transactions to and from anywhere.
Traditional card and banking networks are controlled by individual institutions. Blockchains distribute this authority. Anyone with an internet connection can participate in these permissionless networks. Moreover, this removes the control of centralised systems, making them more accessible for both merchants and customers.
Benefit 1: Speed
Traditional reliance on central authorities can slow down transaction processing. For example, depositing a check on a Friday might not show up in the recipient’s account until Monday because of limited bank hours.
Blockchain technology operates 24/7 and enables much faster settlement times. On some blockchain networks, transactions can be finalised in minutes. This efficiency is especially beneficial for cross-border payments.
Benefit 2: Cost Savings
A report by Jupiter Research shows that by 2030, banks could save over $27 billion in cross-border settlements. This efficiency comes from blockchain eliminating the need for intermediaries. Also, consumers often pay banks or notaries for verification, but blockchain removes this dependency and its fees.
Benefit 3: Security
Traditional and centralised databases use a single point of access, making them vulnerable to cyberattacks. Blockchain technology offers a stronger alternative. It distributes encrypted data across a network of interconnected computers.
This system, called a distributed ledger, makes tampering very difficult. Any change would need to be reflected across the entire network at once. Additionally, blockchain allows controlled access. Only authorised participants can see or modify specific data. This granular control significantly reduces the risk of unauthorised access and fraud.
Benefit 4: Transparency
A key strength of blockchain technology is its transparency. This comes from a fully traceable and tamper-proof transaction record. Therefore, every transaction on the blockchain is permanent and unchangeable.
Once verified by the network, it cannot be altered or deleted. This permanence applies even to attempts to modify a transaction. Moreover, hanging it would require altering every single block after it in the chain, a nearly impossible task.
Benefit 5: Improved Liquidity Management
Liquidity describes how easily you can buy or sell something without affecting the price. For digital currencies, more liquidity means steadier prices with less fluctuation.
Blockchain technology has the potential to change how companies handle liquidity. By offering real-time information on a company’s financial health and available cash, blockchain helps treasurers. They get a complete picture of the company’s cash across all entities, departments, bank accounts, and locations, accessible at any time.
Transparency from blockchain technology empowers treasurers to make more accurate cash flow forecasts. It also helps them allocate cash resources more efficiently, for example, in supply chain finance and refinancing activities.
Benefit 6: Reduced Error Rates
Unlike traditional systems where human errors can occur, blockchain uses a network of computers for verification. Thousands of computers on this network work together to confirm each transaction, making errors much less likely.
Even if one computer makes a mistake, it only affects its copy and is rejected by the rest of the network. This strong verification process creates a highly accurate record of information.
Benefit 7: Better Compliance
Financial regulations create a complex compliance challenge for institutions. Blockchain technology offers a solution with its secure, transparent, and permanent record of transactions. It simplifies compliance processes for regulators, who can monitor and audit transactions more easily.
Blockchain can also streamline customer onboarding and anti-money laundering (AML) efforts. Secure identity management using blockchain streamlines these procedures and guarantees accurate records.
Conclusion
Blockchain technology promises a future of secure, efficient, and streamlined cross-border payments. With its shared record of transactions, it significantly reduces fraud and data breaches. By removing middlemen, blockchain also allows for faster, cheaper transactions with greater transparency throughout.
Banks are adopting artificial intelligence (AI) technology to provide more personalised experiences. A study by the AI Development Company projects…
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Banks are adopting artificial intelligence (AI) technology to provide more personalised experiences. A study by the AI Development Company projects that 75 percent of financial institutions will invest $31 billion in integrating AI into their existing systems by 2025. The trend is driven by customer demand for faster and more convenient banking options.
AI excels at analysing enormous amounts of data. This lets banks find patterns and trends to personalise customer service and boost efficiency. For example, AI-powered chatbots offer 24/7 help with basic questions, freeing up customer service staff for trickier issues. AI can also analyse customer behaviour to predict their needs and suggest relevant services or support, from personalised investment options to flagging suspicious account activity.
Benefit 1: Increased Efficiency
Long wait times and impersonal interactions often leave customers frustrated with traditional bank customer service. Fortunately, AI streamlines the experience by providing quick and accurate answers. It eliminates the need to navigate complex phone menus.
AI personalises interactions and saves customers from endless button-pressing and long hold times. AI in customer service can also analyse vast amounts of customer data. The data helps banks anticipate customer needs and recommend tailored solutions, preventing problems before they arise. This results in higher customer satisfaction and a smoother banking experience.
Benefit 2: Personalisation
AI can analyse vast amounts of customer data, including purchases and browsing habits, to create detailed customer profiles. These profiles help banks recommend relevant products and services that fit individual needs.
For instance, a customer who often pays bills online might be recommended a new budgeting tool. Similarly, someone who regularly saves for travel could receive information about travel insurance or currency exchange. These personalised suggestions can come through various channels, like the bank’s website, email alerts, or chatbots.
Benefit 3: Cost Savings
Cost savings are a major advantage of AI-powered customer service in banking. One key way AI achieves this is through automation. Chatbots powered by AI can handle many routine customer inquiries, freeing up human agents for complex issues. This reduces labour costs while also improving response times.
AI also helps with better staffing management. It can analyse past data to predict how many calls are coming in. Banks can then ensure they have the right number of agents available, avoiding overstaffing or understaffing that can significantly impact costs.
Benefit 4: 24/7 Support
Traditionally, reaching a support agent often meant waiting on hold during peak hours. However, AI in customer service is transforming the industry by offering immediate assistance through chatbots. These virtual assistants provide instant support the moment a customer reaches out.
Unlike human agents with limited working hours, chatbots are available 24/7. This ensures customers get help whenever they need it, regardless of location or time zone. This is especially valuable in the globalised world, where customers might need support outside of regular business hours.
A great example of this success is Photobucket, a media hosting service. After implementing a chatbot, they offered 24/7 support to international customers. This results in a three percent increase in customer satisfaction scores along with a 17 percent improvement in resolving issues on the first try.
Benefit 5: Multilingual Support
AI-powered chatbots offer multilingual support, breaking down language barriers and creating a positive banking experience. These chatbots can figure out a customer’s preferred language at the start of a conversation. This ensures clear communication, no matter what language the customer speaks.
Conclusion
A study by Global Market Insights predicts the conversational AI market will reach $57.2 billion by 2032. This technology is making big strides in banking, particularly by automating routine tasks and inquiries. By taking care of these repetitive tasks, AI frees up human agents to focus on more complex customer issues. This improves efficiency and helps banks manage their operating costs. A streamlined customer service experience builds trust and loyalty, which can lead to business growth for financial institutions.
A revolutionary trend has emerged and revolutionised the banking sector. Neobanking has changed market demand and become a consumer favourite….
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A revolutionary trend has emerged and revolutionised the banking sector. Neobanking has changed market demand and become a consumer favourite.
Neobanks, or digital banks, offer banking services without physical presence. Unlike traditional banks, which require customers to access services on-site, neobanks can process all services online.
These solutions address the challenges of extensive physical infrastructure and aim to offer more user-centric services. Neobanking offers 24/7 operational access, lower fees, higher interest rates, enhanced customer service, innovative features, and more.
Current Trends in Neobanking
One of the many advantages is seamless digital wallet experiences. Customers can use international payments with competitive exchange rates and lower fees than traditional banks. Another advantage of neobank services is instant loans. This feature makes credit more accessible, including to those traditionally underserved.
Cryptocurrencies and blockchain adoption are growing in neobanking. Digital banks integrate blockchain for secure transactions and smart contracts. Cryptocurrencies like Bitcoin and Ethereum enable global transactions without intermediaries. As regulators adapt, neobanking harnesses blockchain’s potential for decentralised finance (DeFi) and offers access to lending, staking, and yield farming.
Technological Advancements
Neobanks apply the latest technological developments to enhance their services, utilising advancements like Artificial Intelligence (AI) to create personalised systems. Through machine learning, neobanks leverage algorithms for credit scoring, risk assessment, and fraud detection, improving their decision-making processes.
These technologies also strengthen customer service through chatbots, enhance risk assessment and credit scoring, and provide personalised financial advice. Furthermore, AI-driven insights enable neobanks to offer more relevant products and services, boosting customer satisfaction and loyalty.
Market Dynamics
The neobanking market is expected to grow at a CAGR of 35.8 percent during 2023-2030 due to increasing financial digitalisation, as predicted by UnivDatos. The neobanking market is expected to grow at a CAGR of 35.8 percent during 2023-2030 due to increasing financial digitalisation, as predicted by UnivDatos.
The growth can be attributed to the convenience neo-banks offer, such as 24/7 access to services through mobile apps, allowing customers to manage their finances anytime, anywhere. Neobanks have lower operating costs, due to the lack of physical branches, also contribute to their appeal.
Furthermore, supportive government regulations and investor confidence are crucial to this growth. Governments have introduced regulatory sandboxes to foster fintech innovation, encouraging entrepreneurs and investors to enter the market. The success of companies like Stripe, Chime, and Revolut highlights the potential of neobanks to meet the demand for efficient and cost-effective financial solutions.
The market is characterised by dynamic and rapidly evolving trends driven by technological advancements. For instance, some neobanks are exploring blockchain technology for secure transactions and offering cryptocurrency services. This technology caters to the growing interest in digital assets.
Future Directions
The future of neobanking is poised for transformative growth. Neobanks will increasingly target international markets, adapting services to local regulations and consumer preferences. Moreover, this expansion is set to broaden financial inclusion and capture diverse customer bases.
Machine learning algorithms optimise product recommendations and credit assessments. This technology will also grow the adoption of advanced security measures such as biometric authentication, multi-factor authentication (MFA), and real-time fraud detection systems.
Partnerships and ecosystem expansion will become key to sustained neobanking. Collaborations with fintechs, e-commerce platforms, and traditional banks will broaden offerings. Additionally, this ecosystem integration will offer customers access to various financial and non-financial services.
Conclusion
Neobanking is a disruptive force in the financial industry. It enhances financial management by providing a seamless system. Customers can quickly meet their various needs within reach, from transactions in diverse payments to cryptocurrencies and blockchain. These banks utilise the latest technology to provide data-driven services and products to ensure customer satisfaction.
The market is rapidly evolving, driven by technological advancements and changing consumer preferences. Therefore, as neobanks continue to innovate and adapt, they make financial services more inclusive and accessible.
McKinsey & Co. is seeing an increase in the number of clients seeking artificial intelligence-linked projects, reports Bloomberg. Faster adoption…
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McKinsey & Co. is seeing an increase in the number of clients seeking artificial intelligence-linked projects, reports Bloomberg. Faster adoption of the technology is helping the consulting titan and its peers boost revenue, across industries like Insurtech, following a period of tumult.
About 40 per cent of the New York-based firm’s client projects involve the technology. The number of AI-related customers in the past 12 months is approaching 500, Rodney Zemmel, senior partner and head of the firm’s digital business, said in an interview.
“We believe the long- or the medium-term economic implications are very real,” Zemmel said. He was a final candidate in the recent global managing partner leadership elections at the firm. According to people familiar with the matter, who asked not to be identified discussing confidential information.
Though there’s some degree of hype around AI, “we’re seeing the organisations that are doing that are getting value from it,” Zemmel said. “It’ll be a little longer, and maybe, a little harder than people think, but we’ve got no doubt that the value is there,” he added.
AI adoption across Insurtech
Among those deploying automation rapidly are the traditional and regulated industries such as banking and insurance, Zemmel said. In a June report, Citigroup Inc. said AI is poised to upend consumer finance and make workers more productive. Additionally, with a high potential for 54 per cent of jobs across banking to be automated. Citi also said that the technology could add $170 billion to the industry’s coffers by 2028.
JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon has called AI “critical” to his company’s future success. He also noted the technology can be used to help the firm develop new products, drive customer engagement, improve productivity and enhance risk management.
The surge in automation has come as a relief for the broader consulting industry. It has been battling a slowdown in demand for its traditional services. McKinsey, Ernst & Young and PricewaterhouseCoopers have been cutting jobs to weather the slump. Furthermore, Accenture Plc shares tumbled in March after the company warned it’s seen financial-services customers, including Insurtech, rein in spending on its software.
AI’s rise is also diverting some budgets toward specialist consultancies. Although AI-focused units like McKinsey’s QuantumBlack are growing rapidly, according to Zemmel.
McKinsey – QuantumBlack
McKinsey, which has advised everyone from the U.S.’ Pentagon to China’s Ping An Insurance Group Co., currently has about 2,000 people working across QuantumBlack. It has 7,000 staff in total in tech-related fields, according to Zemmel’s estimates. McKinsey’s headcount stood at about 45,000 globally as of 2023 and revenues were at a record $16 billion.
Zemmel said that the firm is still evaluating how the use of AI will impact its own headcount over the longer run. McKinsey had earlier warned about 3,000 of its consultants that their performance was unsatisfactory and will need to improve.
“We’re certainly planning on being agile about it,” Zemmel said. “One thing that’s clear is everybody in our organization’s going to need to know how to use AI and incorporate in their day-to-day work if they’re going to remain relevant to their clients.”
Alloy, the identity risk management company trusted by over 600 leading banks, credit unions and fintech companies, has released its…
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Alloy, the identity risk management company trusted by over 600 leading banks, credit unions and fintech companies, has released its 2024 State of Embedded Finance Report.
The Report examines the year’s top trends in embedded finance risk management and compliance. Alloy surveyed more than 50 professionals at financial institutions operating bank sponsorship programs in the United States to learn how their businesses are responding to compliance challenges.
The Report is being published at a time when sponsor banks in the US are facing increased regulatory scrutiny. A reported 25.6% of the FDIC’s formal enforcement actions have been directed at sponsor banks since the beginning of 2024.
Alloy’s report found that while embedded finance programs drive significant revenue (over 50%) for sponsor banks, a majority (80%) of respondents reported that meeting embedded finance compliance requirements as a sponsor bank is challenging in the current environment.
“Running a sponsor bank program is inherently complex because you have banks who are highly regulated working with companies that are often new, fast-growing, and creating entirely new ways for consumers to interact with money,” said Tommy Nicholas, CEO and co-founder of Alloy.
“Despite the challenge, we’re already seeing sponsor banks respond to regulatory developments by investing in better controls, training, and adding to their compliance tech stack.”
State of Embedded Finance Report 2024
Here are five of the key findings from Alloy’s State of Embedded Finance Report:
1. Over half of sponsor banks’ deposits and revenue come from embedded finance partnerships.
Partnerships between banks and fintechs are a cost-efficient approach to catalyze growth through increased deposits, seamless UI, and accelerated innovation.
2. As regulatory scrutiny grows, embedded finance partnerships are becoming harder to maintain.
The embedded finance boom resulted in many banks testing the waters of bank sponsorship programs. As the complexity of managing these programs grows, we may see sponsor banks with less sophisticated embedded finance programs and tech stacks leave the space entirely.
3. Respondents cite reputational damage as the top consequence of compliance violations.
Reputational damage often results in increased regulatory scrutiny, including more frequent examinations and document requests. This heightened oversight can strain resources and pose ongoing operational challenges.
4. 90% of financial institutions face challenges when meeting compliance requirements as a sponsor bank.
Lack of control and audibility over fintech partners’ policy controls were cited as top challenges to meeting compliance requirements. Managing compliance across multiple jurisdictions and adapting to evolving regulatory changes were also top concerns.
5. 94% of respondents say they plan to invest in new compliance technology to help them manage their embedded finance partnerships.
As attention surrounding compliance missteps has grown over the past few years, there are new tech solutions available to help bridge the gap between sponsor banks and fintechs.
Download the Report
Respondents included 51 decision-makers from financial institutions operating bank sponsorship programs in the United States.
Surveys were conducted by The Harris Poll, a leading survey platform for over 60 years.
For further insights you can download the full report here
As digital payments continue their rapid ascent, understanding the accompanying cybersecurity challenges has never been more critical. Furthernore, with Statista…
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As digital payments continue their rapid ascent, understanding the accompanying cybersecurity challenges has never been more critical. Furthernore, with Statista forecasting a robust 9.52 percent annual growth rate for digital payments from 2024 to 2028, the urgency to address these security concerns intensifies.
While this growth brings unparalleled convenience, it also introduces new security vulnerabilities that must be addressed. Cybersecurity is fundamental in safeguarding confidential data against hacking, fraud, and data breaches. Implementing effective cybersecurity measures can also maintain trust between businesses and clients while preventing financial loss. To optimise cybersecurity, identifying the current threats to digital payment systems is a must for businesses and consumers.
Current Cybersecurity Threats
Digital banks face various threats that continually evolve as technology advances. By addressing these challenges head-on, banks can protect their users and continue the growth of digital payment.
Many types of cyber threats can disrupt digital payment systems:
Phishing attacks: These attacks use deceptive emails, phone calls, or texts to trick victims into revealing personal information, such as login credentials and financial details. The scam can lead to other types of cyber threats.
Malware: Malicious software that infiltrates systems to steal data, monitor activities, or lock accounts. Various forms of malwares have different functions, such as Trojans, Worms, and Spyware.
Man-in-the-Middle (MitM) Attacks: intercept communications between the user and the bank allowing attackers to steal sensitive information or funds.
Data breaches: Unauthorised access to digital bank databases exposes vast amounts of sensitive information, including personal and financial data.
Ransomware: It is an attack that employs malware to infiltrate computer systems to steal data, monitor activities, or lock accounts. The attackers then demand payment and keep disrupting the devices/websites until they are paid.
Credential stuffing: Attackers use stolen usernames and password combinations from other breaches to gain unauthorised access to accounts.
DDoS and DoS attacks: Distributed Denial-of-Service (DDoS) attacks overwhelm the bank’s servers, making online services unavailable to customers. Unlike the Denial-of-Service (DoS) attack where a single source is used to flood the target, DDoS use multiple sources of compromised devices (botnets).
Insider threats: Employees or contractors with access to sensitive information may intentionally or unintentionally cause data breaches or other security incidents.
Social engineering: Manipulating individuals into divulging confidential information through psychological manipulation.
Zero-Day Exploits: Attacks that exploit previously unknown vulnerabilities in software or hardware before patches are available.
Cybersecurity Measures
Encrypting data is essential to convert the personal information into a secure format. This encrypted data can only be accessed with the correct key or description. This ensures that the data remains secure and unreadable after interception.
Multi-Factor Authentication (MFA) adds a layer of security by requiring some form of verification before granting access to the platform. Tokenisation replaces critical payment data with a unique or random token that cannot be hacked once intercepted.
Biometric verification, such as fingerprint and facial recognition, provides additional security by utilising unique physical characteristics. These include the shape of the face and the outline of a fingerprint, both of which are difficult to replicate.
Financial institutions have also innovated to improve cybersecurity by implementing artificial intelligence (AI). For example, JPMorgan Chase has implemented an AI-driven fraud detection system. This application is used for monitoring transaction activity in real-time. It can also detect potential threats or fraudulent transactions using the data analytics tool.
Regulatory Requirements
Financial companies are obligated to meet regulatory compliance. It is important to build customers’ trust and avoid legal or financial penalties. For global financial institutions, regulatory issues might be more complex as each country has its version of rules. As cyber threats evolve, regulators continuously update and enforce these requirements to address new challenges in digital payment systems.
For instance, UK regulations have set strict rules to ensure the security of digital payments. These include data protection measures, and companies that do not prioritise cybersecurity will face substantial fines. Similar regulations have been implemented across European Union (EU) Member States, compelling financial institutions to enhance cybersecurity to create a safe digital payments environment for consumers.
FinTech Strategy met with Stiven Muccioli, Founder & CEO at BKN301, to discuss digital payment services connecting North Africa, the…
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FinTech Strategy met with Stiven Muccioli, Founder & CEO at BKN301, to discuss digital payment services connecting North Africa, the Middle East, and Europe.
BKN301 Group is a London based fintech provider that offers Banking-as-a-Service, connecting North Africa, the Middle East, and Europe. The company aims to address the financial inclusion gap in these regions. It provides digital payment and banking platforms to unbanked populations. BKN301 has successfully partnered with fintechs in Egypt and Qatar, serving millions of customers and providing access to financial services. They are also focused on expanding their market in Europe. The company aims to become a leader in the industry and bridge the gap between Europe and the Middle East.
At Money20/20 Europe, FinTech Strategy spoke with BKN301 Founder & CEO Stiven Muccioli to find out more…
Tell us about the genesis of BKN301…
“I launched the company in 2021 with the vision to create the biggest tech provider for a digital banking service connecting North Africa, the Middle East, and Europe. We are looking at the demographic sheet of the world… In Europe, we are overserved by the banking system and it’s quite tough to create new projects in the FinTech space. It’s hard to scale past Europe, into the Middle East and North Africa. Ours is an operation in its early stages. There is a huge penetration with mobile devices in the Middle East and North Africa, but at the same time there are a huge amount of people unbanked.
So, we have created the platform to allow digital banks to start fast and with low cost. Basically, we are the ‘backbone’ for the new digital banking era in the Middle East and North Africa. We also work with many companies across Europe. However, we are very focused on the connection between the Middle East, North Africa and Europe. Also, we are focused on the remittances business and cross-border payments because many working abroad in Europe don’t have access to the banking system in Europe. And there are many digital banks in Europe trying to fulfil this gap for new customers.”
Tell us about your career journey…
“I began 15 years ago in the startup business and founded two other companies. The first one, Tippest, was a copycat of Groupon in Italy. This was founded with a group of friends in 2011 and we were able to scale successfully, leading to its sale in 2015. Following that, I moved to the US where I spent some time as an angel investor. In 2016 I came back to Italy to start a new company. It was a corporate venture operation inside of the Iccrea Bank, one of the biggest banking groups in Italy. We created a company named Ventis. It delivered the first super application that merged e-commerce and the digital bank.
We created a platform capable of delivering an e-commerce service, and at the same time digital banking services, payment cards, accounts and more. We managed this part of the business for the Group and reached good numbers. In 2020, we sold the company and today it is the third biggest payment player in Italy.”
Tell us about some of the successful partnerships BKN301 has been involved in…
“We have seen great successes with key partners such as Damen. Damen is a e-payment company in Egypt serving 18 million customers. Thanks to our technology, they are able today to provide a digital payment application to millions of Egyptians. They are now connected and have access to a range of financial services to save money and receive remittances from Europe and across the Gulf. A very successful story in terms financial inclusion.
It’s the same in Qatar where we serve a partner that provides service to labourers and construction workers – there are around 700,000 such workers in Qatar. A good example of financial inclusion because we provide the platform for a low-cost digital banking platform connecting unbanked people to Europe.”
What are some of the key challenges financial institutions are facing that you can help them with? What problems are companies asking you to solve?
“At BKN301, we’re focused on our technology and building an ecosystem based on APIs so we’re able to provide those APIs to digital banks – with us, they save time and money. So, the integration cost is far less than a traditional integration cost. They’re able to work multi-market because we are in different markets and they won’t have any legacy agreement with big corporates. We provide APIs so they can develop and use them for core banking and processing.”
What trends are you seeing across the FinTech landscape? What opportunities do you see for BKN301?
“Every year there is a new wave of news, but we don’t know how long each trend will it last… A couple of years back blockchain was at the core and everyone want to add a feature, sometimes without any reason. Now it’s the same with AI. To build a concrete platform on AI or on blockchain, you need many years, and a lot of investment, to be focused. I don’t believe companies that come out after six months saying they are now AI based. It’s impossible to build a real platform based on AI that quickly. We need to define the real companies. So, which one has the mature technology. It’s a good wave and I think there is a huge need. For example, anti-money laundering controls driven by AI could be a game changer.”
And what’s next for BKN301? What future launches and initiatives are you particularly excited about?
“This year we want to get more established in the market in Europe, so we will be focused on expansion. The goal for us is to become the door, the access bridge, between Europe and the Middle East. We aim to become a backbone for the new financial ecosystem across the region.”
Why Money20/20? What is it about this particular event that makes it the perfect place to showcase what you do?
“Every year there is a new wave of news… A couple of years ago blockchain was at the core and everyone wanted to add some feature on blockchain, sometimes without any reason. And now it’s the same with AI. To build a concrete platform on AI, or on blockchain, you need to be focused for years and have a lot of investment – it can’t be done in six months. So, as with blockchain, we need to define the companies making real progress with established technology based on AI, the same as we did with blockchain. It’s a good wave that can meet a huge need, for example with anti-money laundering controls, and Money20/20 is a great place to learn more about where the industry is at today.”
The insurance sector is witnessing a growing adoption of digital insurance solutions. Machine learning (ML), artificial intelligence (AI), and embedded…
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The insurance sector is witnessing a growing adoption of digital insurance solutions. Machine learning (ML), artificial intelligence (AI), and embedded insurance are at the forefront of this wave across InsurTech.
According toAcumen Research and Consulting, the InsurTech market is expected to reach $166.4 billion by 2030. This projection is reinforced by a high compound annual growth rate (CAGR) of 39.1 percent anticipated between 2022 and 2030. This growth is attributed to a surge of insurance technology innovations.
Introduction to InsurTech
InsurTech, short for “insurance technology,” combines traditional insurance practices with cutting-edge advancements in AI and blockchain. It plays a key role in transforming the insurance industry by making it more efficient, transparent, and accessible. Furthermore, automation, improved risk assessment, and tailored coverage options ensure the digital insurance industry meets evolving consumer demands.
Digital Transformation
InsurTech is a driving force behind the digital transformation of the insurance industry. This transformation isn’t just about software upgrades or automation. It’s a strategic shift that revamps core operations and how insurers deliver value to customers.
Today’s consumers demand personalisation, speed, and convenience in everything, including insurance. They expect instant access to policy details and quick claims resolution—areas where traditional systems struggle. InsurTech empowers insurers to meet these changing demands by enabling customised interactions and faster service.
Customer Experience
InsurTech companies are transforming customer interactions with insurance. Convenience, speed, and personalisation are now priorities.
This change is driven by a focus on improved customer experience. Digital platforms and mobile apps from InsurTech firms make buying policies, managing them, and filing claims easier. Self-service tools and chatbots provide instant support and assistance, reducing the need for traditional customer service channels.
Efficiency gains with InsurTech
A crucial element of InsurTech’s contribution to the insurance industry lies in claims management. InsurTech streamlines insurance claims by automating tasks with AI and ML. This means faster claim assessments, processing, and payouts for policyholders.
InsurTech also boosts efficiency for insurers by automating tasks, which can lead to lower operating costs. These lower costs could potentially translate to reduced premiums for consumers. Consequently, digital insurance becomes more accessible and cost-effective.
Case Studies
Several insurance companies are demonstrating success through innovative InsurTech solutions.Chapter, for instance, uses online tools to connect users with advisors and advocates. These experts help people navigate the complexities of enrollment. They ensure people understand their options, deadlines, and how to choose the right plan for their needs.
Health plan selection is another area where InsurTech is making a difference.GoHealth utilises a sophisticated platform powered by ML algorithms to match consumers with plans tailored to their unique needs. Licensed agents and dedicated telecare teams offer support throughout the selection process and beyond.
Future Prospects
InsurTech presents a future brimming with possibilities for the insurance industry. However, as more processes become digital, security concerns come into focus. Future Processing’s InsurTech survey revealed that81 percent of respondents believe insurers need stronger cybersecurity policies.
This underlines the need to revisit cybersecurity practices as digital transformation progresses. Looking forward, developments in AI and tools like ChatGPT, along with data privacy concerns, suggest quality will be the foundation of InsurTech’s future. By focusing on high-quality data and strong security, insurers can gain deeper customer insights and significantly improve the customer experience.
Embedded finance is transforming e-commerce for the better. It enables online businesses to offer payment processing, lending, insurance, and other…
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Embedded finance is transforming e-commerce for the better. It enables online businesses to offer payment processing, lending, insurance, and other financial services within their own platforms as a non-finance platform. The convenience and efficient shopping experience offered is changing the way people shop and how e-commerce businesses operate.
The companies that implemented embedded finance have seen significant growth in conversion rates of up to 12 percent, the average order value of up to 30 percent, and as much as a 7 percent incremental revenue. Brain & Company’s 2022 report also projected the embedded finance market value to grow to $7 trillion by 2030, indicating an increasing demand for this service.
Embedded Finance benefits
Embedded finance offers integrated payment solutions for e-commerce businesses. Customers can access financing options at the point of sale without switching to other platforms. This seamless experience makes it easier for buyers to complete their purchases, ensuring revenues for the businesses.
This integration provides better access for financial products, especially digital banking. Commonly, digital bank accounts are easier to set up than their traditional counterparts. It allows non-banking populations can easily make their purchase in e-commerce platforms.
Embedded finance opens new sales and revenue stream opportunities for e-commerce businesses. They provide sellers with working capital loans based on sales data, enabling them to earn additional revenue through interest and fees. The integration also increases customer retention as they are less likely to switch to competitors. This leverage offers long-term success in a competitive market.
Personalisation is another embedded finance’s strong suit. E-commerce businesses can use the customer’s data from their platforms to offer financial products tailored to their needs, creating a better customer experience.
Accenture found that 63 percent of consumers are more likely to buy a financial product from non-financial platforms that they trust. This report emphasises the importance of personalised embedded finance in generating more financial product sales.
Case Study: Amazon
One of the e-commerce platforms that successfully uses embedded finance isAmazon. In 2007, it launched Amazon Pay, allowing users to make purchases on external sites using their Amazon account details. This move not only expanded Amazon’s revenue opportunities but also strengthened customer loyalty.
Over the years, Amazon has continued evolving its embedded finance offerings, including one-click payments, buy now pay later, and lending services. Their latest venture involves a cash advance program in partnership with fintech company Parafin, which provides select sellers easy access to capital without interest or collaterals.
Case Study: Shopify
Shopify also creates a good embedded finance ecosystem with its various financial products. The Canadian e-commerce platform launched Shopify Payments in 2013 to simplify payment. This was followed by Shopify Capital in 2016, a lending product now available in four countries. The latest addition is Shopify Balance, a financial product offering a bank account and a debit card for managing financial activities.
Shopify earns most of its revenue from “merchant solutions” rather than just e-commerce software. This segment, which includes financial and fulfilment services, is growing much faster than its SaaS offerings — 29 percent compared to 8 percent as of Q4 2022, according to the company’s financial report.
Future Outlook for Embedded Finance
The future of embedded finance seems promising, with experts projecting an increase in demand and market share. As customers expect better integrated financial solutions, many companies will continue to adopt this system.
Embedded finance will also continue evolving with new technological advancements like artificial intelligence (AI) and machine learning (ML). Both AI and ML are projected to play a significant role in increasing efficiency, security, and sales for embedded finance in the future.
To maximise the benefits of embedded finance, financial institutions and e-commerce businesses should collaborate to anticipate possible hurdles. Regulatory and compliance challenges are one of the complex issues that may hamper its development.
E-commerce platforms should also ensure their new sophisticated solutions are scalable. As new financial technology is adopted, the platforms should be capable of managing increasing transaction volumes without sacrificing performance or security.
With the growing popularity of digital payments, cybercriminals have found a lucrative target. Cybersecurity data breaches rose sharply by 72%…
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With the growing popularity of digital payments, cybercriminals have found a lucrative target. Cybersecurity data breaches rose sharply by 72% in 2023 compared to the previous record-breaking year. This shows the need for financial technology companies to implement strong banking security.
While digital payments offer benefits, businesses must protect themselves and their customers from cyber threats. Understanding the common cyber threats and implementing effective countermeasures are key to long-term success.
The Importance of Cybersecurity for Digital Transactions
With the increasing reliance on online platforms for financial activities, the risk of cyberattacks has grown exponentially. These attacks can lead to significant financial losses, damage to reputation, and erosion of customer trust. From identity theft to data breaches, the consequences of compromised security can be severe.
To prevent such consequences, cybersecurity measures are required for every financial institution. By applying cybersecurity best practices such as encryption, strong authentication, and regular security audits, organisations can protect customer data, prevent fraud, and maintain operational resilience.
Threat Landscape
Cybercriminals employ various tactics to exploit vulnerabilities in digital systems. Phishing attacks, a common method, deceive users into divulging sensitive information through fraudulent emails or websites. Another prevalent threat is ransomware, where cybercriminals encrypt a victim’s data and demand payment for decryption.
Additionally, unauthorised access to accounts through stolen credentials can lead to financial loss. These cyber threats highlight the need for a security framework to protect digital transactions against malicious activities.
Best Practice 1: Encryption
Cybercriminals can easily exploit vulnerable systems, leading to substantial financial losses and reputational damage. A data breach can cost millions of dollars to rectify, including expenses for recovery and ransom payments. A recent IBM report indicates that the average global cost of a data breach exceeds $4.45 million.
Encryption safeguards sensitive information by transforming it into an unreadable format, accessible only to authorised parties possessing the correct decryption key. This cryptographic process employs complex algorithms and keys to safeguard data integrity and confidentiality.
Best Practice 2: Multi-Factor Authentication
Cybercriminals can easily steal passwords and pins through brute-force attacks, systematically testing numerous combinations until successful. Multi-factor authentication (MFA) offers a robust defence against this threat.
Requiring users to provide multiple forms of identification strengthens account security. This authentication combines different types of verification. This includes information only the user knows, like passwords, items the user possesses, such as security tokens, and unique physical traits, like fingerprints.
By requiring multiple verification steps, banks and financial institutions create a formidable barrier against unauthorised access to sensitive information and funds. Additionally, multi-factor authentication enhances user account management by requiring unique authentication factors for each individual.
Best Practice 3: Employee Training
Organisations with regular cybersecurity training experience a 40% reduction in security incidents compared to those without, according to This emphasis on employee education is justified as human error remains a primary target for cybercriminals.
Hackers frequently exploit employee vulnerabilities through tactics like phishing, social engineering, and other deceptive methods. By training employees to recognize these threats, financial institutions can mitigate the risk of data breaches and financial losses.
Such incidents can result in substantial financial losses and damage to an institution’s reputation. Consequently, comprehensive cybersecurity training is essential for all bank employees to mitigate these risks.
Best Practice 4: Regular Security Audits
A security audit is an evaluation of an organisation’s digital infrastructure, designed to identify vulnerabilities that could compromise digital transactions. This process involves examining security policies, testing safeguards, and ensuring compliance with industry regulations.
Given the escalating complexity of cyber threats, financial institutions must prioritise regular security audits. Banks can uncover weaknesses before malicious actors exploit them by scrutinising systems and processes.
Regular security audits empower organisations to proactively strengthen defences by implementing essential safeguards such as firewalls, antivirus software, and antimalware solutions. To ensure impartiality and objectivity, it is essential to engage an independent expert to conduct these assessments.
Best Practice 5: Incident Response Planning
As the frequency and sophistication of cyber threats continue to rise, the need for robust defences becomes increasingly critical. Safeguarding digital transactions requires a proactive approach, including a well-defined incident response plan.
An incident response plan is a crucial component of any organisation’s cybersecurity strategy. This formal document outlines strategies for preventing, detecting, and responding to security breaches that could compromise financial data. By establishing clear protocols and assigning specific responsibilities, banks can minimise the impact of cyberattacks and protect both their reputation and customers’ assets.
To be effective, an incident response plan must be established in advance and assigned to specific teams. By following established frameworks, such as those provided by the National Institute of Standards and Technology (NIST) and SANS, organisations can develop comprehensive plans. These resources offer detailed guidance on handling various types of security incidents to ensure a coordinated and efficient response.
Conclusion
Protecting digital transactions requires a multi-faceted approach. Implementing cybersecurity measures is essential for protecting sensitive financial data and maintaining customer trust.
Encryption and multi-factor authentication are foundational elements of a strong security posture. Encryption safeguards data by rendering it unreadable to unauthorised individuals, while multi-factor authentication adds an extra layer of protection by requiring multiple forms of verification. These are just two examples of critical best practices financial institutions should adopt.
Financial institutions must prioritise cybersecurity to maintain customer trust and protect their bottom line. By investing in advanced security measures and staying vigilant against emerging threats, organisations can effectively mitigate risks and ensure the integrity of digital transactions.
The growing complexity of financial markets presents new challenges for asset and wealth managers. Therefore, to navigate this evolving environment,…
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The growing complexity of financial markets presents new challenges for asset and wealth managers. Therefore, to navigate this evolving environment, many are embracing artificial intelligence (AI) for assistance with investment decisions. AI acts as a powerful tool, improving efficiency and effectiveness across various aspects of asset management.
From analysing market trends to building diversified portfolios, AI’s strength lies in processing massive amounts of data. Furthermore, it uncovers hidden patterns empowering managers to make data-driven investment choices across financial services.
Introduction to AI in Asset Management
Asset management involves managing investment portfolios for individuals, institutions, and businesses. This includes stocks, bonds, real estate, and other financial assets. The main goal is to grow value over time while minimising risk and meeting client goals.
AI is transforming asset management with its data processing and analytics capabilities. Additionally, AI algorithms can quickly analyse massive amounts of financial data, market trends, and economic indicators. This helps uncover hidden patterns and connections that human analysts might miss. A data-driven approach empowers asset managers to make better investment decisions and develop more accurate market forecasts.
Portfolio Management
AI is transforming asset management by offering powerful tools for better decision-making. Moreover, machine learning (ML), AI analyses vast amounts of historical market data to identify patterns and predict future trends, providing valuable insights for building portfolios.
Natural language processing (NLP) lets computers understand human language. NLP can unlock information from unstructured sources like news articles, social media, and analyst reports. The algorithms then analyse sentiment and extract key information that feeds into portfolio decisions.
AI optimisation algorithms help construct optimal portfolios. These algorithms consider risk tolerance, return goals, and investment limitations. By using these tools, portfolio managers can create portfolios designed to maximise returns while minimising risk.
Risk Management
AI is changing how investment decisions are made. The AI algorithms can analyse massive amounts of historical market data and complex risk models.
The analysis provides a deeper understanding of individual asset risk and the overall portfolio’s exposure. With this knowledge, investment managers can proactively identify potential risks and develop strategies to lessen them.
AI offers real-time risk monitoring. An AI-powered system continuously tracks portfolio performance, alerting managers to any significant changes in risk. This allows for swift adjustments as market conditions evolve.
Automated Trading
Traditional automated trading tools execute trades based on pre-programmed instructions from human traders. These tools function within the parameters set by the user and can’t analyse markets on their own.
AI offers truly independent systems with tools that can analyse markets using technical and fundamental analysis with minimal human input.
AI uses sentiment analysis, ML, and complex algorithms to process vast amounts of information and identify trends. This data-driven approach removes the emotional bias that can affect human traders.
Case Studies
The asset management industry is seeing a rise in firms using AI to improve performance. A recent example isDeutsche Bank’s collaboration with NVIDIA. This multi-year project aims to integrate AI across their financial services. This includes virtual assistants for easier communication and AI-powered fraud detection. The bank expects faster risk assessments and improved portfolio optimisation.
Morgan Stanley is also making strides in AI adoption. Partnering with OpenAI, their financial advisors now have access to a massive research library at high speed. Advisors can explore client portfolio strategies and find relevant information in seconds, leading to better-informed advice.
Future Prospects
APwC report predicts artificial intelligence will significantly boost global GDP, contributing up to $15.7 trillion in 2030. This advancement could reshape asset management in the coming years, leading to entirely new business models and investment strategies.
One future possibility involves fully automated investment platforms powered by AI. These platforms would manage investment portfolios with minimal human involvement and use real-time data analysis to create personalised investment plans.
Moreover, AI could pave the way for more dynamic investment strategies that respond to market changes. By constantly analysing market conditions, AI can automatically adjust investment portfolios to optimise returns and minimise risks. This could lead to more resilient and adaptable investment systems that are better equipped to navigate various market environments.
Standard Chartered has joined a suite of other institutional investors in the Digital Transformation platform United Fintech United Fintech is…
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Standard Chartered has joined a suite of other institutional investors in the Digital Transformation platform United Fintech
United Fintech is a London headquartered neutral Digital Transformation platform. It acquires and forms partnerships with fintech companies in the capital markets space. It is creating a fintech one-stop-shop to innovate with businesses. This is driven by collaboration with other cutting edge technology providers for the benefit of banks, hedge funds and asset managers.
Digital Transformation
The investment supports Standard Chartered’s ambitions to contribute to the advancement of digital transformation. Furthermore, these solutions work across capital markets, wholesale banking and wealth management, and the broader financial services arena.
As part of the investment Standard Chartered has been granted Board observer rights and subject to fulfilment of certain pre-conditions, will be offered a rotational Board seat. Additionally, this will enable it to share existing expertise and contribute to decisions around the platform’s strategic direction.
Stabdard Chartered
“We have been impressed by the growth in United Fintech’s portfolio of innovative, engineering-led technology companies. Standard Chartered share their vision for how technology can transform and disrupt market structure and infrastructure,” said Geoff Kot, Global Head, CIB Business Platforms & Partnerships at Standard Chartered. “We look forward to partnering with them as we continue on our journey of digital transformation.”
United Fintech
“The investment underscores Standard Chartered’s commitment to accelerate digital transformation. Also, it highlights their forward-thinking approach to collaborative innovation,” said Christian Frahm, CEO and Founder of United Fintech. “We are an Asia-focused multinational bank with an expansive footprint in Asia, Africa, Middle East, Europe and Americas. We are thrilled to have them complete our circle of global investors, joining Citi and BNP Paribas. They initially invested in February 2024, as well as Danske Bank, who followed in May.”
About United Fintech
Founded in 2020, United Fintech is an industry-neutral Digital Transformation Platform. Here, global financial institutions and cutting-edge technology providers come together to unleash their full potential and enable the future of finance.
“The financial services sector is a large part of any nation’s economy. Moreover, this sector to continue to thrive, we want to match the knowledge and expertise of our financial service providers with data-driven innovation to create an efficient symbiosis between customers, banks, and technology.”
From AI to multi-factor authentication, here are 7 cybersecurity solutions keeping financial institutions’ critical data secure.
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Data belonging to 20.4 million UK citizens was affected by cyberattacks made against financial institutions at the end of 2023. This represents a 143% increase from the 8.4 million individuals affected in the previous year. The demand for robust cybersecurity is ever-increasing in financial institutions.
Financial Institutions encompass a wide range of businesses dealing with financial and monetary transactions, including banks, insurance companies, and brokerage firms. These institutions are pivotal for a functioning capitalist society, simplifying transactions, enabling individuals and entities to seek investment or lend money, and assisting in managing assets.
The increasingly digitalised nature of the economy, including the rise of online-only financial institutions like challenger banks, has accelerated the development of financial technologies and their adoption in the market. As a result, Software as a Service (SaaS) for finance, such as digital banking, electronic payment, online investment, and other online-based services, makes financial services more accessible to the consumer. But, with the ease of access technologies provided, new challenges have also emerged, especially regarding cybersecurity.
Financial institutions are enticing targets for cybercriminals. Therefore, cybersecurity has become integral to banking security in protecting data from malicious attacks.
Here are seven top cybersecurity solutions to secure data from online threats.
1. AI-Powered Threat Detection
The ability for AI models to perform pattern recognition on large amounts of unstructured data is opening up an exciting new frontier in threat detection for cybersecurity teams. AI tools can potentially flag subtle differences, anomalies, and patterns that could point to a zero-day threat or the presence of a bad actor in the system.
Some industry experts believe that AI-powered threat detection will be pivotal in helping cybersecurity teams respond to rapidly evolving cyberattack strategies that are increasingly difficult to combat — somewhat ironically, this uptick in the frequency and sophistication of attacks is at least partially due to the availability of AI tools, which hackers are also putting to use.
AI’s adaptive learning and advanced recognition capabilities enable automated responses to threats and can predict future risks by analysing past patterns. This helps reduce false positives and saves security teams time on assessments.
2. Multi-Factor Authentication
Multi-factor authentication has quickly become the standard in security and identity protection as more and more people bank, shop, and administer their lives entirely online. Put simple, it’s a multistep account login in which more information besides username and password must be provided.
Typically referred to as “something you have, something you know”, multi-factor login procedures drastically reduce account hacking, allowing security teams to detect suspicious activity that occurs in the logging processes.
3. DDoS Mitigation
Distributed Denial of Service (DDoS) is a coordinated cyberattack that overwhelmingly sends a request to the server simultaneously, which makes the server slow down or even go offline. DDoS mitigation is important for banking service security to prevent the interruption of vital services.
Cynersecurity teams can perform DDoS mitigation by implementing a load balancer, restricting requests from certain places, and blocking communication from outdated or unused ports, protocols, and applications.
4. Compliance
Compliance is vital to both ensure the security of systems and organisations against cyber attack, but also to prevent legal penalties and repercussions if an organisation is found to be in breach of existing regulations. These regulations ensure that an organisation’s cybersecurity set up is in line with the security and data protection laws in the countries where it operates, with the end goal of mitigating risk to the consumer — or just people in general whose data is collected and kept by the company.
There can be serious legal and financial risks associated with non-compliance — tied to both finance and cybersecurity. For example, in 2021, Natwest was fined over £264 million by the FCA for its extended failure to identify and prevent money laundering. Since the FCA was established, there has not been a year when its total fines issued have been less than £1 million. In the UK, other financial and cybersecurity compliance regulations are DPA 2018, UK GDPR, NIS regulations, and the Computer Misuse Act 1990.
5. Database Activity Monitoring
Database Activity Monitoring refers to any set of tools that monitors and analyses database activity. The goal of this monitoring is to flag and report deceptive, illegal, or undesired behaviour taking place within a system. Ideally, these tools run and operate without any serious impact on user experience.
Because most databases don’t monitor or flag suspicious activity by default, unless you have a tool that handles activity monitoring, making third party solutions a necessity in many cases. According to monitoring software solutions vendor Cyral, most systems also don’t collect enough data to enable “a full forensic investigation of historical breach events.” Also, databases that do often log and store this information inside the database itself. Any attacker that gains access to the database can then, supposedly, have write access to the full collection of tables (as is often the case), meaning they can easily delete any activity rows associated with their presence and theft of data.
6. SQL Injection Prevention
SQL injection is a code injection technique attackers use to steal, spoof, and manipulate data. An effective SQL injection attack can result in attackers gaining unapproved access to sensitive data like including credit card information, PINs, or other private information. In banking security, a failure to prevent SQL injection can result in attackers altering balances, voiding transactions, and even transferring money to their bank accounts.
Cyberattackers inject malicious SQL code into the backend of a target system when they discover defenceless user inputs in a web application or web page. The hackers can then use this opening to locate the IDs of other users within the database, impersonating these users — usually those with data privileges such as the database administrator — to run malicious code within the system.
7. Regular Risk Assessment and Training
Perhaps most importantly, the best defence against the rising tide of cybercrime is a cybersecurity conscious culture. Financial institutions should conduct regular risk assessments manually to identify potential vulnerabilities and threats to their systems and networks.
They should regularly evaluate and revise systems and networks based on analytics and assessments to prioritise cybersecurity initiatives and protect vital assets. Security teams shouls also conduct periodic security awareness training, which can strengthen cyber-readiness among finance personnel. This is particularly important given the rise in generated AI-driven phishing campaigns and other technologically democratised forms of cyber crime.
Case Study – Cybercriminals in UK Businesses
An investment article from IFA magazine reported 300,000 cybersecurity breaches in finance institutions across the UK in 2022 alone, making them the second-highest number of data breaches from all industries after the IT sector. Reports estimate losses in the region of £27 billion per year, with small businesses in the UK affected the most by cyberattacks, usually phishing.
The UK authority encourages its citizens to be more aware of the possibility of cyberattacks, especially phishing and fake charity emails, as online threats are growing exponentially. Ledi Sallilari from the SEO consulting firm Reboot also suggested that more complex passwords can help prevent account breaches.
The rapid expansion of internet usage brings new challenges for cybersecurity. Proper knowledge and awareness about cyber criminals should become mandatory for all Internet users to protect their online data.
Financial institutions, responsible for managing customer funds, need to implement strong cybersecurity measures. With more secure backend systems, they can protect assets and maintain customer trust in an increasingly digital world.
The financial technology sector is witnessing a surge in the adoption of blockchain technology, particularly for its transformative capabilities in customer verification.
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Traditional methods of identity authentication often face limitations in security and reliability, exposing user data to potential breaches. Blockchain, however, offers a compelling solution. This article explores how blockchain technology is changing the way industries approach customer verification.
Blockchain and Identity Verification and Management
Customer verification is critical in ensuring the security of accounts and transactions. Traditional identity management systems relied on trusted authorities to issue and manage credentials. This centralised nature makes them lack transparency and vulnerable to data breaches.
Blockchain presents a transformative solution for this issue. This distributed ledger technology offers a secure and transparent way to store and manage data. Each piece of information is cryptographically linked within a chain of blocks. Each block in the chain contains a unique cryptographic hash, acting as a digital fingerprint. And, lastly, each block’s hash incorporates the hash of the preceding block.
This makes it virtually impossible to tamper with the data once recorded. Any attempt to alter information in a previous block would change its hash, triggering a cascade of changes throughout the chain and exposing the tampering. This inherent security significantly reduces the risk of identity theft and fraud compared to traditional methods.
Another core strength of blockchain technology lies in its inherent transparency. Blockchain technology permanently records every transaction and instance of data entry on a shared ledger, accessible to all participants in the network. This fosters trust by promoting accountability and facilitating immediate verification for activities like dispute resolution.
How Blockchain Improves Efficiency
Customer onboarding for financial institutions hinges on verifying a customer’s identity. Traditionally, this involves multiple document submissions across various institutions. Blockchain technology streamlines this process.
One approach involves storing encrypted personal information (PII) like passports or driver’s licences on the blockchain. Customers would then grant permission to specific institutions to verify their identity. This eliminates the need to repeatedly submit documents for each new financial relationship.
It also creates a more reliable data source for institutions since everyone would be referencing the same information. Additionally, customer control over access simplifies compliance with privacy regulations.
Case Studies
One example of how financial institutions are leveraging blockchain technology for customer verification is Tradle, a Know-Your-Customer (KYC) platform built on blockchain. This platform utilises bots to scan relevant customer information, such as financial data and employment history, providing banks with verifiable background checks to streamline loan approvals.
The gathered information is then secured on the blockchain for both internal bank transfers and external data sharing, ensuring its immutability and trustworthiness. This approach offers financial institutions a secure and efficient way to conduct KYC checks, potentially reducing processing times and fraud risks.
Future Outlook
The future of digital identity management appears to be closely linked with the potential of blockchain technology. A report by Market Research Future predicts a surging market, reaching a valuation of $17.81 billion by 2030, driven by government initiatives that promote blockchain development worldwide.
Blockchain’s core strengths—security and transparency—offer a compelling alternative to traditional identity management systems. Ongoing advancements in blockchain technology and a growing focus on digital identity security point towards a promising future.
Data analysis is critical for predicting risks and returns. The ever-growing size of data has overwhelmed human capacity. This is where artificial intelligence (AI) comes in.
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AI is transforming the financial sector by automating routine tasks and efficiently analysing large and complex data sets. It can analyse vast amounts of data with unprecedented speed. The instant but comprehensive insights that this capability provides lead to significantly improved accuracy.
Introduction to AI in Financial Forecasting
Financial forecasting can be challenging for smaller businesses. They often rely on assumptions and human judgement. This can result in inaccuracy, especially when unexpected events occur.
AI can analyse massive amounts of data to find hidden patterns that drive revenue. It automates routine tasks and enables a more detailed analysis than humans can achieve on their own.
Predictive Analytics
By automating data processing and interpretation, AI empowers financial teams to make informed decisions based on a strong analytical foundation. It goes beyond basic analysis by employing advanced algorithms and machine learning (ML) to extract valuable insights from data.
This not only improves the accuracy of forecasts but also unlocks a deeper understanding of market complexities that were previously out of reach.
Risk Assessment
AI algorithms use advanced data processing to spot patterns, unusual activities, and connections that traditional methods might miss.
By training ML models on past data, AI can learn to identify patterns associated with fraud. These models then analyse new transactions, compare features, and flag potential problems in real-time.
Real-time Data Analysis
Slow reporting and analysis have hindered companies’ ability to adapt. AI-powered systems overcome these issues by enabling real-time analysis and decision-making.
AI’s ability to process massive amounts of real-time market data helps financial experts identify opportunities and adapt to market shifts quickly. This translates to increased resilience and competitiveness for businesses.
Case Studies
Financial institutions are increasingly using AI to improve their forecasting and data analysis for managing operational risk. This trend is likely to continue as IndustryARC expects the AI market to reach US$400.9 billion by 2027, growing at a compound annual growth rate (CAGR) of 37.2% during the forecast period of 2022–2027.
Deutsche Bank‘s collaboration with NVIDIA on “Financial Transformers” shows the potential of AI for early risk detection. These models can identify warning signs in financial transactions and speed up data retrieval, helping banks address potential problems quickly and ensure data quality.
AI also plays a key role in anti-money laundering (AML) efforts. By analysing transaction patterns, customer behaviour, and risk indicators, AI can identify suspicious activities for investigation. This not only improves detection rates but also streamlines the process. Google Cloud’s AML AI is a prime example; it helped HSBC find many more real risks while significantly reducing false positives, saving them time and resources.
Future Prospects
AI in finance is expected to significantly reshape financial forecasting. Analysts and executives will see widespread AI adoption for tasks like data analysis, pattern recognition, and automation. This trend is driven by the projected growth of global AI in the finance market. A report by Research and Markets predicts it will reach $26.67 billion by 2026, growing at a rate of 23.1% each year.
For investment firms, AI can make highly accurate forecasts and execute complex trading strategies, optimising investment decisions and returns. Banks will also benefit from AI’s capabilities. AI-powered data analysis can give banks a deeper understanding of their customers, enabling personalised financial services. Chatbots and robo-advisors used for customer service and financial planning will continue to evolve, becoming more advanced and even more human-like in their interactions.
Cost-effectiveness and digital-first strategies are positioning neobanks as genuine challengers to established financial institutions.
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The financial services industry is experiencing a seismic organisational shift. Increasingly, growth is moving away from traditional brick and mortar banking and towards digital-first banking experiences. Neobanks, financial institutions that operate entirely online and forego physical branches, are at the forefront of this shift.
Catering to a tech-savvy generation, these institutions prioritise convenience and user-friendliness. They focus on providing innovative features, often powered by the latest technological advancements.
How Neobanks work
Neobanks are financial technology companies that provide banking services entirely through mobile apps and websites.
They prioritise a user-friendly experience with features like real-time transaction alerts, budgeting and investment tools, and faster account opening. Neobanks may also offer access to a wider range of trading markets, including cryptocurrencies and stock exchanges.
Their cost-effective model is a key driver of their growth. Consumers benefit from lower or nonexistent monthly fees on core banking services and potentially faster loan approvals with lower interest rates, all managed through user-friendly mobile apps. These factors are fueling the significant growth of neobanks within the financial market.
Current State of Neobanks
Over the past decade, neobanks have carved a significant niche in the financial services industry. Their growth shows no signs of slowing down.
Statista predicts a user base of 376.9 million globally by 2027. This represents a remarkable twenty-fold increase from the 18.95 million users reported in 2017. While the full impact on traditional banking remains to be seen, these trends highlight a shift in the financial services sector.
Successful neobanks typically offer low or no fees on essential banking services like account maintenance, deposits, and withdrawals. They often stand out with faster loan approvals and funding compared to traditional banks, along with competitive interest rates. Additionally, these digital banking features are conveniently accessible through user-friendly mobile apps.
Future Trends
The outlook for neobanking is promising, driven largely by its core strengths – a fully digital experience and streamlined services. Neobanks empower customers to manage their finances entirely online and eliminate the need for physical branches.
While traditional banks have embraced digitalisation to an extent, neobanks offer a more comprehensive online-only solution that attracts a growing customer base.
Several factors are fueling this growth. The massive adoption of smartphones has created a mobile-first generation comfortable with managing finances through apps. Moreover, collaborations between traditional banks and fintech companies are blurring the lines between the two sectors, potentially leading to a more dynamic and competitive banking environment.
Opportunities for Growth
Neobanks are poised to disrupt the financial services industry with their innovative technology and focus on customer-centricity. These new financial institutions offer an attractive alternative to traditional banks. However, success in this competitive environment requires a smart strategy.
For neobanks to gain traction, it’s important for them to maintain strong customer acquisition and retention plans. Offering appealing account opening incentives and rewarding loyalty programs can encourage customers to switch or make neobanks their main financial partner.
Ultimately, neobanks that prioritise security, transparency, and excellent customer service while providing innovative digital banking features are best positioned for long-term success in the neobanking industry.
Challenges Ahead
Despite their emergence, neobanks face several challenges that could hinder their future growth. Cybersecurity remains a top concern, as the financial sector is a prime target for cyberattacks due to the sensitive information it handles. Data breaches can have severe consequences for both neobanks and their customers.
Building brand recognition is also a hurdle for new neobanks. Many consumers are unfamiliar with these digital banking options, therefore it’s hard for new players to establish themselves in a crowded market.
Additionally, relying too heavily on third-party partnerships can introduce risks. Conflicts of interest and less control over the customer experience can arise. This lack of control further hinders brand recognition efforts.
Conclusion
Neobanks are no longer a futuristic concept, but a defining feature of the present financial landscape. This is evident in two key trends. First, mobile apps are becoming increasingly sophisticated. Second, traditional banks are witnessing a global decline in branch networks as they shift focus to online services.
Looking forward, the future of neobanks appears promising. Grand View Research predicts a compound annual growth rate (CAGR) of 47.7 percent for the neobanking industry between 2021 and 2028.
However, a key obstacle to wider adoption lies in the varying levels of technological comfort among different age groups. While younger demographics readily embrace mobile applications, older generations may require more time to adapt.
A closer look at how artificial intelligence, machine learning, blockchain, IoT, and more technologies are transforming the InsurTech space.
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Customer expectations are changing fast. Great digital experiences set the standard, no matter the industry. This means insurance companies are no longer competing only with each other, but with every positive digital experience customers encounter daily.
Technology is changing how the InsurTech space serves its customers
Technologies like artificial intelligence (AI), the Internet of Things (IoT), and cloud computing revolutionise insurance. Outdated systems are being replaced with modern solutions, which offer greater efficiency, security, and data-driven insights.
This digital transformation enables a new generation of insurance services. For example, automated claims processing uses AI to speed up workflows and payouts. Additionally, AI helps detect fraud to protect both insurers and policyholders.
Insurance technology is also improving the customer experience. From personalised plans to user-friendly interfaces, digitalisation is making insurance more accessible and convenient.
AI and Machine Learning
People want more personalised experiences with insurance products and services. InsurTech advances, powered by AI and machine learning (ML), can help insurers meet this demand.
ML algorithms analyse massive amounts of customer data, including behaviour and habits. This allows insurers to tailor insurance products and services to individual needs and create unique customer journeys.
Beyond personalisation, AI has the potential to streamline core insurance processes. AI can speed up claim processing and streamline underwriting. Faster data access and reduced human error lead to more accurate and efficient reporting.
A report by McKinsey suggests that AI could significantly change the insurance industry. It could shift the focus from reacting to problems to preventing them. This proactive approach would benefit everyone involved—brokers, consumers, and insurers.
Blockchain Technology
Blockchain technology offers a powerful solution for data security. It stores vital insurance information, such as claims and payments, in secure blocks on a shared ledger. Any attempt to alter this data would change the entire chain and make tampering easily detectable.
A study by Boston Consulting Group shows 60 percent of insurance companies are actively investing in blockchain. Additionally, 80 percent of C-suite executives in these companies believe blockchain has the potential to significantly improve efficiency.
IoT and Telematics
Many consumers are now willing to share personal data for lower insurance costs. This willingness unlocks the potential of the IoT in the insurance industry.
IoT automates data collection from various sources, like smart home devices, car sensors, and wearables. This data becomes a key source of real-world information for insurance technology. By analysing it, insurers can improve risk assessment accuracy and refine pricing based on individual behaviour.
Telematics devices take personalised insurance a step further, particularly in car insurance. These devices, equipped with GPS and motion sensors, track driving habits in real time. They collect data on speed, location, time of day, and other factors linked to accident claims. This comprehensive data allows insurers to create even more tailored insurance policies.
Case Studies
Several insurance companies are already using InsurTech advances to streamline processes and improve risk assessment.
For example, FRISS uses AI software to quickly detect suspicious claims. Their system analyses data to find possible fraud networks and hidden patterns. With this, FRISS cuts claims handling time by 66 percent and saves insurers money.
Chubb Insurance is another example that shows the value of combining IoT devices with data analysis tools. By constantly monitoring environmental factors with sensors, Chubb can predict potential property damage. This proactive approach lets them offer personalised premiums based on risk profiles, ultimately helping policyholders avoid expensive incidents.
Future Prospects
Grand View Research projects the global InsurTech market size to expand at a compound annual growth rate (CAGR) of 52.7 percent from 2023 to 2030. This rapid transformation will be driven by advancements in various technologies, each presenting both opportunities and challenges.
As more insurance processes become digitalised, concerns around cybersecurity naturally rise. A Future Processing survey underscores this concern, revealing that 81 percent of respondents believe insurers need stronger cybersecurity policies.
The quality of data and security practices will be the cornerstones of successful InsurTech implementation. AI relies heavily on data, while strong security protects sensitive customer information. By prioritising these aspects, insurers can unlock deeper customer understanding and improve the customer experience.
Drawn by increased flexibility and convenience, retailers are embracing embedded finance solutions in the hope of opening up new revenue streams.
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Embedded finance is gaining significant traction among retailers. The term refers to the integration of financial services into non-financial applications and platforms. For example, an app that offers cashback on large purchases, or pay later features with zero interest. This new crop of digital tools is enabling retailers to strengthen customer relationships.
Retailers can create a more convenient shopping experience by providing features like flexible payment options and personalised financial advice directly within their platforms. This approach not only builds customer loyalty but also opens doors to new revenue streams from integrated financial services.
Enhancing Customer Shopping Experience
Embedded finance can keep customers engaged in the retail environment and enhance the customer shopping experience. By embedding payment options directly into their platforms, retailers can offer a faster and more convenient payment process. Customers do not need to leave the retail environment to complete a transaction.
One of the most significant benefits of embedded finance is the ability to offer point-of-sale financing. Customers can apply for funding at the time of purchase, rather than having to apply for credit separately.
Referred to as BNPL (buy now and pay later), this feature makes purchasing decisions easier and more flexible. This flexibility is driving customer loyalty. A study by Vodeno found that 40% of respondents would only choose brands offering BNPL and similar financial technology features like cashback. This number jumps to 50% for young adults.
Increasing Sales
Research by Natwest and BCG shows promising results for businesses that adopt embedded finance. Retailers saw conversion rates jump by 12%, average order value increase by 30%, and revenue rise by 7%.
Embedded finance can be a strategic tool for maximising revenue. Instead of just processing transactions, retailers can offer additional financial services for a fee. For example, a procurement platform could charge for automated reconciliation. This will save businesses time and generate new income.
Successful Implementation and Future Innovations
Several retail companies have successfully implemented embedded finance. These include Amazon with its Amazon Pay. The feature allows customers to use their payment information stored on various platforms. Another example is Walmart‘s mobile app. This platform provides customers with a variety of financial services, from paying for their groceries to managing their Walmart MoneyCard.
John Lewis has also integrated its financial services, offering customers credit cards, insurance, and personal loans directly through their retail platform. There’s also Tesco Bank, which provides a range of financial products, including savings accounts, loans, credit cards, and insurance products.
According to KBV research, the global embedded finance market is expected to reach $384.8 billion by 2029, reflecting a compound annual growth rate (CAGR) of 30%. Parallel to the growth, retailers will continue to innovate, offering more integrated financial services. These can include more sophisticated loyalty programmes, personalised financial advice, new payment options, and enhanced data analytics to better understand and serve customers.
Retailers must embrace these innovations to remain competitive and meet the ever-increasing expectations of modern shoppers. By integrating financial services into non-financial products or services, retailers not only create added value for customers but also increase customer loyalty. In addition, embedded finance also presents opportunities for retailers to increase profits.
Digital payments enable access to financial services by underserved members of society at a time when the digital divide is widening.
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The United Nations emphasises financial inclusion as a driver for economic development, including it as component eight of the Sustainable Development Goals for 2030. The World Bank defines financial inclusion as crucial economic development and social progress that ensures equal access to financial products and services.
In recent years, accessibility to financial services has improved rapidly as financial technology has advanced. The 2022 World Bank report revealed that 71 percent of people in developing countries had access to a bank account in 2021, a 42 percent jump from a decade earlier.
The key driver of this development in financial inclusion is the growth of digital payments, which surged during the COVID-19 pandemic, according to the CFA Institute.
Role of digital payments
Digital payment technologies, such as digital wallets, online mobile banking apps, and contactless transactions, contribute to the growth of financial inclusion. Compared to traditional methods, digital payments offer multiple benefits.
Reduced costs are one reason digital payments have become a significant cause of economic growth. They allow lower barriers to entry for underserved people.
With more people having digital financial accounts, the underprivileged can receive wages, government benefits, or remittances more easily.
Digital transactions provide a safer alternative to physical cash transactions. The digital records for each transaction help people manage their finances and increase transparency in businesses. They also help mitigate the risks of theft or fraudulent activities.
Accessibility
Digital payment solutions significantly improve accessibility to financial services. They eliminate geographical barriers for people living in remote areas as long as there is internet access.
Online platforms make it easier for people to conduct transactions, pay bills, and access credit and insurance services from anywhere. They also allow instant payments that happen in seconds without the need for third parties.
The accessibility of digital payments extends to people with disabilities. Mobile banking apps often include features such as voice commands, screen readers, and accessible interfaces that cater to them.
Case Studies
Many digital payment initiatives have successfully promoted financial inclusion in marginalised communities.
One of them is India’s Jan Dhan-Asdhar-Mobile (JAM) Trinity initiative, which was launched in 2014. The Pradhan Mantri Jan Dhan Yojana programme aims to provide universal access to banking facilities with at least one basic banking account for every household. This programme promotes financial inclusion in rural areas by offering zero-balance accounts with debit cards.
Meanwhile, the Aadhar programme introduces a biometric digital identity for Indian residents, simplifying access to financial services. Lastly, the Mobile Network programme focuses on growing mobile network infrastructure to facilitate digital payments.
Challenges and Solutions
Still, the challenges of achieving financial inclusion through digital payments persist. In 2022, 1.4 billion adults remained unbanked. Meanwhile, increased accessibility also comes with the consequence of more people becoming prone to potentially unscrupulous lending practices, especially since the underprivileged often lack sufficient financial knowledge to avoid such schemes.
Thus, financial education is crucial so that more people can effectively protect their wealth. The government should initiate financial literacy programmes for the people. The programmes could also be conducted through online platforms to reach more communities.
In addition, increasing security technology is also important to overcome the risk of fraudulent activities. AI technology might solve this problem, as it can efficiently detect suspicious patterns and mitigate fraud schemes.
Future Outlook
Digital payments’ future role in driving financial inclusion will become more prominent as mobile and internet penetration increases. Governments should prioritise investment in telecommunications and internet infrastructure to reach their optimal potential.
AI-powered solutions are expected to continue to develop and offer many ways to accelerate digital finance adoption. With the advancement of technology, security and customer experience will also improve.
AI, real-time monitoring, and machine learning are helping fintech firms stay ahead of growing cyber threats.
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The financial sector faces a growing threat—cybercrime.
Cybersecurity Ventures predicts a significant rise in cybercrime costs, with the total impact of hacks, breaches, and data theft potentially reaching as high as $10.5 trillion a year by 2025. As attacks become more common and more severe, mitigating these risks and preventing fraud is paramount for financial institutions and financial technology companies alike.
Luckily, ongoing advancements in technology offer fintech organisations a powerful arsenal of weapons to combat cybercrimes. Adaptive fraud prevention systems use artificial intelligence (AI) to detect and prevent fraudulent activity in real-time. These intelligent systems continuously learn from new data, allowing them to identify evolving patterns and improve cybersecurity.
Introduction to cyber fraud protection
Cybersecurity is crucial in the financial services industry, where sensitive financial data and transactions are a prime target for cybercriminals. Moreover, cyber attacks can inflict significant financial losses, not just through direct theft but also via hefty regulatory fines, legal costs, and reputational damage.
Financial institutions have a responsibility to safeguard customer trust by implementing robust cyber fraud protection measures. This includes advanced technologies like network security, intrusion detection systems, and malware protection.
By securing financial transactions and customer data, these measures not only deter cyberattacks but also mitigate their impact, fostering customer confidence in the bank’s security posture.
Common types of Cyber fraud
The financial sector occupies a bull’s-eye for cybercriminals, ranking second only to healthcare in global cybercrime costs according to theIBM Cost of a Data Breach Report 2023. Financial institutions face an average loss of $5.9 million per cyber incident, highlighting the critical need for robust cyber fraud protection measures.
These attacks come in various forms. One of the most common isphishing scams. These are attempts to trick people into surrendering sensitive information. Meanwhile, ransomware attacks aim to disrupt operations or extort money by encrypting critical data. Distributed Denial-of-Service (DDoS) attacks overwhelm systems with traffic, making essential services unavailable to legitimate customers.
Advanced cybersecurity technologies
The fight against cyber fraud necessitates sophisticated tools, and advanced technologies like AI and machine learning (ML) are playing an increasingly crucial role.
AI fraud detection uses ML algorithms to identify fraudulent activities within vast datasets. These algorithms are trained to recognise patterns and anomalies that deviate from typical user behaviour and transaction patterns. Once the patterns are identified, attackers can be purged from the system before they have a chance to steal anything of value. Cybersecurity systems powered by ML can drastically reduce the amount of time bad actors spend inside a system.
ML algorithms excel at identifying patterns and trends that might signal potential fraud. Also, by analysing big data, these algorithms can adapt quickly to evolving fraud tactics.
They can detect and alert security teams within seconds of suspicious behaviour, such as unusual purchases or login attempts from unfamiliar locations. Thanks to continuous data analysis, businesses can gain an immediate advantage, allowing them to swiftly identify and respond to suspicious activity, ultimately minimising potential losses.
Case studies
The financial sector is actively exploring the potential of AI to combat cyber fraud. Mastercard’s Decision Intelligence technology exemplifies this trend. By analysing historical spending habits, this AI solution creates a personalised baseline for each cardholder’s behaviour.
This approach is a significant improvement over traditional, one-size-fits-all methods, which often lead to false declines. AI’s contextual analysis of transactions allows it to bypass common triggers for false positives, ultimately enhancing fraud detection accuracy.
Future prospects
The future of cyber fraud protection hinges on the continued evolution of technology. One promising area lies in adaptive technologies, such as behavioural biometrics. Additionally, these systems move beyond static passwords or fingerprints, creating a unique user profile based on a person’s interaction patterns.
These patterns are ‘behavioural fingerprints’ that include typing style, mouse movements, and even how an individual holds their phone. Over time, the system learns user habits, building a digital identity that can detect deviations indicative of unauthorised access.
This approach is particularly effective because it’s nearly impossible for hackers to replicate one’s unique behavioural traits, even if they steal the password. This adds a crucial layer of security that traditional methods cannot provide.
Customer service significantly influences the overall customer experience and brand reputation. Artificial intelligence (AI) has taken customer service to new…
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Customer service significantly influences the overall customer experience and brand reputation. Artificial intelligence (AI) has taken customer service to new heights, including in the insurance industry.
Financial technology development has offered a better customer experience with enhanced accessibility and convenience. Mobile banks and digital wallets make it possible to contact the customer service team through online platforms. With the help of AI, FinTech companies escalate their services by offering more personalised, prompt, and efficient service.
AI Chatbots and Virtual Assistants
Conversational AI, which focuses on creating human-like interactions like chatbots and virtual assistants, improves customer service efficiency.
Chatbots are automated programmes that promptly address customer service queries. They can assist customers with inquiries and provide support for product information, account balances, or transaction details. AI-powered chatbots can give an immediate response and handle multiple customers at the same time.
Meanwhile, virtual assistants are voice-activated apps that can comprehend and carry out tasks based on users’ commands. These assistants offer personalised support by understanding the customers’ needs. For instance, they can deliver investment guidance tailored to customers’ risk tolerance and financial objectives.
These AI solutions can also assist human assistants by handling routine tasks, allowing them to focus on more complex work. Thus, the employment of AI assistants can reduce operational costs and effectively allocate resources to more important tasks.
Personalised interactions with AI
This approach can provide more personalised interactions by using algorithms and predictive tools to understand and respond to each customer’s preferences. AI algorithms can analyse large datasets of customers’ past interactions, browsing behaviour, and demographic information.
Meanwhile, predictive analytics tools can be used to anticipate customer needs and offer relevant financial products or services. These recommendations are constantly updated based on real-time client interactions and feedback.
24/7 Support
AI-powered customer service has the benefit of around-the-clock availability. It can operate continuously without being bound by office working hours like human-based customer service. Faster response times and enhanced availability help FinTech companies improve overall customer satisfaction.
Case Studies
Paypal, a digital wallet company, is one of the FinTech companies that has successfully used AI to improve its customer service. After implementing chatbots, PayPal experienced a 20 percent decrease in customer support costs and a 25 percent increase in user engagement. These chatbots can handle routine inquiries, resolve issues, and make personalised product recommendations.
Another example is Citi, a US retail bank that developed an AI-powered Customer Analytic Record (CAR). This programme can consolidate customer data, including financial records, used products, and interactions across online banking. The data is linked to automated decision-making AI software for analysis. The system can then recommend personalised offers to customers via text and mobile banking.
Future prospects
According to David Griffiths, Citigroup’s chief technology officer, AI has the potential to revolutionise the banking industry and improve profitability. With the continuous development of AI technology, the fintech industry can further improve its customer service.
Ronit Ghose, another executive at Citigroup, predicts that in the future, every client will have an AI-powered device in their pocket. This innovation will improve their financial lives with enhanced AI in customer service.
However, there are still concerns about AI’s scalability limitations in handling vast amounts of tasks. In addition, AI’s access to customers’ data makes security an important area to ensure its credibility. FinTech companies should ensure digital compliance to earn customers’ trust.
Integrating blockchain into financial systems promotes trust among stakeholders, from investors to regulators. This potential stems from blockchain’s transparency, immutability, and security.
The technology offers investors clarity and security. It provides a transparent view of transaction histories and asset ownership, which reduces the risk of fraud and increases investor confidence.
For regulators, blockchain serves as a tool to improve monitoring and enforcement of compliance with regulations. Moreover, the immutable nature of blockchain records ensures accurate and permanent logging of financial transactions. Additionally, aiding in audit trails and regulatory oversight, particularly in areas like anti-money laundering and know your customer (KYC) rules.
Securing transactions with immutable ledgers
Blockchain’s immutable ledger ensures that once data is recorded, it cannot be easily altered or tampered with. Each piece of information, like transaction details, is stored in blocks and protected by unique hash values.
Hash values are alphanumeric strings generated for each block, linking it securely to the previous block. This chaining ensures that any attempt to change data in one block would invalidate the entire chain. Therefore, making tampering detectable and preventing unauthorised alterations.
The security of blockchain is reinforced by its decentralised nature. Copies of the blockchain are stored across multiple computers in a network, and consensus among these nodes ensures the integrity and originality of the data.
This robust system not only enhances security but also supports applications like smart contracts. These automate and enforce agreements based on set conditions.
Blockchain for real-time auditing
Blockchain technology enables real-time auditing, thanks to its decentralised and transparent nature. This ensures auditors can verify the authenticity and integrity of financial data without relying on centralised authorities or intermediaries.
This capability not only improves audit efficiency but also strengthens trust and confidence in financial reporting. Furthermore, auditors can track transactions from their inception through to completion in real-time, reducing the risk of errors. By eliminating the need for manual reconciliation and audit trails, blockchain reduces the time and resources traditionally required for auditing processes.
Meeting regulatory demands with blockchain
The technology helps businesses meet complex regulatory requirements more effectively. As data entries are permanent and secure once recorded, blockchain ensures information cannot be altered or deleted. It provides a reliable way to consolidate and verify data needed for regulatory reporting.
For regulators, blockchain simplifies oversight by offering a shared platform where transaction details are transparent and accessible in real-time. Moreover, this decentralised approach eliminates the need for extensive manual checks and balances, making it easier to monitor and enforce compliance across various stakeholders.
The ability to streamline regulatory reporting is particularly evident in industries like reinsurance. Here, blockchain facilitates faster and more accurate reporting among insured parties, insurers, brokers, and regulators.
Case Studies
Several financial institutions have demonstrated improved transparency through their adoption of blockchain technology. For example, J.P. Morgan offers a prominent use case, which launched its Quorum blockchain platform in 2016.
Quorum, based on Ethereum, has been used for various applications like debt issuance and financial transaction settlements. Moreover, this platform enhances transparency by providing a secure and decentralised way to record and verify transactions, reducing the risk of errors and fraud in financial operations.
Similarly, the African Development Bank Group (AfDB) partnered with BanQu to develop the Supply Chain Finance Blockchain. Additionally, this platform aims to streamline supply chain finance for SMEs in Africa, making transactions more transparent and efficient. Also, by leveraging this tech, AfDB improves visibility across the supply chain, ensuring funds are allocated and tracked accurately, thereby enhancing transparency in financial operations.
FinTech Strategy met with Merusha Naidu, Global Head of Partnerships at Paymentology, to discover more about the global issue processor.
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Banks, digital banks and fintechs, around the world, trust Paymentology to issue and process all forms of cards and transactions, at scale. Paymentology offers a cloud-based platform, rich data, a global footprint and proven track record powering industry leaders and game-changers.
A global issuer processor with on the ground teams in 50+ countries across 14 time zones, Paymentology’s founders saw that the payments industry was stagnant and limited, in both capability and ambition.
In March 2021, Tutuka and Paymentology merged, resulting in a ‘payments and card processing powerhouse’. The merger combined the ultra-advanced, multi-cloud platform of Paymentology with the global reach and experience of Tutuka to revolutionise cloud-based processing globally.
Tutuka was traditionally a financial services company, that provided payment processing technologies, software and services, and application programming interfaces (APIs) for e-commerce and digital transacting across countries in Africa, Latin America, Southeast Asia, and the Middle East, while Paymentology processed for legacy banks in Europe and the UK. The merger enabled banks and fintechs to integrate into a single API, go live and issue cards almost anywhere in the world.
At Money20/20 Europe, FinTech Strategy spoke with Global Head of Partnerships, Merusha Naidu, to find out more…
Tell us about the genesis of Paymentology?
“Paymentology is a global neo processor. We work with banks and fintechs to help them issue their own cards, whether prepaid, debit or credit, virtual or physical. The beauty of the platform is that it’s fully cloud native. So, we’re scalable. We’re focused on speed to market so when you are working with a fintech, or a digital bank, it’s all about two things. How do you innovate? And then how do you go live quickly? Those are two areas of the business that we really focus on. Not only is our tech state of the art, with everything built in the cloud, all of our infrastructure is also in the cloud, including things like our connection to schemes.
We were the very first issuer processor to connect to Visa Cloud Connect, via cloud endpoints in Europe. Being first in embracing modern practices, we ensure our processes are next-generation, thanks to our fully cloud-native and digital infrastructure.
What makes us different? We operate across UK, Europe, the Middle East, Africa, Latin America and Asia Pacific; we are truly global, operating across all five regions. One of the things that makes that possible is our tech. A customer can integrate with us once and then launch across five regions if they wanted to, or multi-market rollouts. We offer a huge ability to scale using integration. Our customers are able to replicate that digital first experience across every single jurisdiction. So, whether it’s Kenya and Dubai and then Saudi Arabia and Portugal, they can have the same experience across the world.”
Tell us about your role at Paymentology?
“I’ve been with Paymentology for 14 years. Prior to taking up my current role as Global Head of Partnerships, I was the Regional Head of Asia Pacific. So, when you look at partnerships, I was asked a question recently at a talk: ‘What would my message be to issuers across the industry?’ My message is that you can’t do it alone. If you want to create truly scalable, innovative solutions, you’ve got to work with partners and collaborate with the best in class. We know we are best in class when it comes to issuer processing, but we also create ecosystem partners that close the gap when it comes to creating really valuable payment ecosystems.
Whether it’s top core banking providers, leading cloud services, or premier card manufacturers, these are the partners we collaborate with. This allows us to confidently assure our customers that we work with the best, to deliver the best, across the entire value chain.”
Tell us about some of the successful partnerships Paymentology has been involved in…
“We were the first company to deliver flip card technology for our client Mox. Paymentology embedded its global processing capability into the platform, to enable Mox to launch its ground-breaking feature to ‘flip’ between debit and credit spending on the all-in-one Mox card. This allows you to have one physical card, one virtual card number, but in the background, we link it to two different accounts.
It gives the customer real flexibility around how they can spend, because if it’s everyday purchases, they can use their debit account or their prepaid account. If they have larger purchases, they can switch in the app and use their credit facility. So, it really gives customers flexibility and choice – two things at the heart of what we do.
What trends are you seeing across the FinTech landscape? What opportunities do you see for Paymentology?
“Cross-border payments for us is key. Meanwhile, everyone talks about being digital first. For us, tokenisation has helped and we have a superior partner, MeaWallet, to help us deliver this. Elsewhere, crypto has been seen as a sore point but it’s coming back and people again want that flexibility. So, having a way for customers to spend their crypto, converting crypto to free apps and making sure that data is at the heart of all that. It’s about learning about our customers, understanding what our customers want and using our data to make informed decisions, or giving our customers data so that they can make the decisions.”
And what’s next for Paymentology? What future launches and initiatives are you particularly excited about?
“We’re excited about being able to deliver flexibility, control, agility. Because the Paymentology platform is so agile, in the future you will be able to plug in even more different components into the offering. So, a customer can add in rewards and loyalty points. For example, airlines have a platinum MasterCard product, so it opens them up to all of the MasterCard loyalty rewards, airport lounges, all of those benefits. It’s all about being innovative and keeping up with that innovation and growing with customers.”
Why Money20/20? What is it about this particular event that makes it the perfect place to showcase what you do? How has the response been to Paymentology?
“Paymentology is headquartered in the UK so it’s important for us to make sure we’re representing business across Europe. This is the centre of the world for banking innovation. People look to this event to really learn about what’s happening in the industry globally and discover what trends are going to come up. What should we be doing? How can we innovate together and learn from each other? That’s one of the things I really love about Money20/20; the talks in all of the panels are so interesting and I always leave knowing more. Being in the payments industry, and especially being an issuer processor, it’s important for us to learn from the industry and understand where we need to move so that we can stay at the forefront of developments.”
Sage, the leader in accounting, financial, HR, and payroll technology for small and mid-sized businesses (SMBs), has announced an expansion…
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Sage, the leader in accounting, financial, HR, and payroll technology for small and mid-sized businesses (SMBs), has announced an expansion of its partnership with a leading neobank. What’s more, Stripe offers a financial infrastructure platform for businesses, to help improve cashflow management and payment processing for SMBs. The partnership is key to helping businesses to move money easier and faster
Sage partners with neobank Stripe
Stripe is trusted by millions of businesses around the world, ranging from startups to enterprises. The partnership with Stripe provides Sage customers with more options to pay and get paid quickly. Additionally, leveraging Stripe’s financial infrastructure, Sage will offer its customers a trusted solution to help ease cashflow and simplify financial processes. From streamlined checkout and payment processing, to Tap to Pay contactless payments, and auto-reconciling bank transfers.
Also, in partnership with Stripe, Sage intends to expand its payments ecosystem. Therefore, ensuring that a growing number of its customers have access to services that will help them to manage their cashflow.
“This partnership signifies a shared vision between Sage and Stripe. To transform how SMBs pay and get paid, helping our customers to simplify cashflow management,” said Walid Abu-Hadba, Chief Product Officer, Sage. “Furthermore, we are committed to harnessing the power of technology to drive innovation, enhance efficiency, and pave the way for growth.”
Addressing cashflow problems
Supporting customers globally, Stripe’s integration into Sage is currently available in the UK through Sage Accounting, Sage 50 and Sage 200. Also, Stripe is fully integrated into Sage Network, enabling customers to easily plug into the broader Sage ecosystem. Moreover, they can choose additional applications and features such as Sage Connect, automating AR and AP processes to help manage their cashflow and payments.
The expansion of the partnership will see customers benefits including:
Streamlined checkout and payment processing: SMBs with cash trapped in outstanding invoices can make it easier for customers to review their accounts. They can pay with Sage Connect’s customer account portal and Stripe Checkout.
Multiple payment methods: Accept payments from customers through different methods including digital wallets, cards and bank transfers. Additionally, Stripe uses machine learning to surface the most relevant payment methods for customers depending on their location.
Unified payments experience: Collect payments online and in person through Tap-to-Pay, for seamless, in-person, contactless payments No terminal hardware required.
A safe and secure payment experience: Leveraging Stripe’s advanced security protocols and compliance with global financial regulations. Customers can be assured transactions are protected against fraud and data breaches. Providing peace of mind for both businesses and their clients.
Auto-reconciling bank transfers: Saving time with automatic reconciliation. Finally, bank transfers enable customers to pay invoices via bank transfer, streamlining the payment and reconciliation process.
“Sage understands the importance of innovating for its customers. We’re thrilled to be part of its journey,” said Eileen O’Mara, Chief Revenue Officer at Stripe. “Stripe is building a suite of software-defined financial services. Ultimately, we can enable leading platforms like Sage to provide integrated features that make their customers’ lives easier.”
Lastly, this partnership adds to the broad range of payments and banking partners within Sage’s ecosystem.
The financial services industry is witnessing a shift towards digital-first solutions. Advancements in technology and infrastructure have fuelled the rise…
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The financial services industry is witnessing a shift towards digital-first solutions. Advancements in technology and infrastructure have fuelled the rise of neobanking. It offers convenient, cashless transactions through digital banking features.
From just 12 neobanks operating globally in 2015, the number has skyrocketed to 300 as of 2023.Juniper Research expects neobank users to reach 850 million by 2030.
Introduction to Neobanking
Neobanks are digital-only banks. They rely on mobile apps and web interfaces to deliver their services. Customers access and manage their accounts, conduct transactions, and receive support from their devices. This approach allows neobanks to offer lower fees and greater convenience compared to traditional banks. There are ten key features differentiating successful neobanks.
Feature 1: User-Friendly Interface
Neobanks prioritise user-friendly and intuitive interfaces within their core platform—the mobile app. The app lets customers conduct all essential banking functions directly from their smartphones.
Neobanks eliminate traditionally time-consuming processes. Account openings are conducted entirely digitally. They also offer near-instant identity verification, funding, and activation of debit cards and accounts.
Feature 2: Personalised Services
Neobanks leverage artificial intelligence (AI) and machine learning (ML). This data-driven approach helps them understand their customers better. They analyse spending habits and financial behaviours to provide personalised financial advice. This empowers customers to make informed decisions about their money.
Neobanks also use customer data to create targeted marketing campaigns. These campaigns align with individual interests and financial goals. Neobanks’ real-time, personalised approach enhances customer satisfaction and strengthens customer retention and loyalty.
Feature 3: Robust Security Measures
Security is essential for neobanks, as they handle sensitive customer data and countless transactions. Neobanks embrace advanced technologies like AI-powered fraud detection and blockchain encryption. Multi-factor authentication (MFA), encryption protocols, and biometric identification form the first line of defence against cyberattacks.
By prioritising robust security, neobanks can offer the innovative digital banking features customers expect from financial technology. This also ensures they stay ahead of constantly evolving threats and vulnerabilities in the digital banking sector.
Feature 4: Innovative Products
Traditionally, launching new banking features took years. Now, with ML models analysing large amounts of customer data, neobank teams can develop and launch new digital banking features in just weeks. Moreover, this allows them to stay ahead of market trends and meet customer demands quickly.
Feature 5: Seamless integration with other services
According to PYMNTS, consumers are increasingly interested in super apps, with nearly 70 percent wanting a one-stop platform for managing digital finances. This demand pushes banks to embrace open banking.
Neobanks can collaborate more effectively by sharing their APIs with financial technology companies, digital payment providers, and other platforms. Open APIs grant access to a wider customer base, fostering partnerships between banks and e-commerce firms. This integration allows them to meet consumer demand for a more comprehensive digital banking experience.
Feature 6: Low Fees
One key advantage of neobanks over traditional institutions is their cost structure. Without the burden of physical branches, neobanks benefit from lower overhead expenses. This translates to a competitive edge in terms of fees and rates.
Neobanks can charge zero fees for services that typically incur charges at traditional banks. Additionally, they can also provide more attractive interest rates on savings accounts. These factors can be appealing to cost-conscious consumers.
Feature 7: 24/7 Customer Service
The use of AI and chatbots helps neobanks deliver 24/7 customer support. Customers do not have to wait on hold or schedule branch appointments. Instead, they can receive prompt answers to inquiries or resolve issues at any time.
Feature 8: Hassle-Free Account Onboarding
Neobanks are known for their swift account opening experiences. This is achieved through leveraging advanced technology. Intuitive mobile apps and web platforms let customers open accounts remotely within minutes. Also, technologies like AI-powered identity verification and digital document submission expedite the onboarding process.
Feature 9: Automated Saving Feature
One of the unique features offered by many neobanks is automated savings functionality. This functionality allows customers to set up automatic transfers from their checking accounts to their savings accounts. Additionally, these transfers can be triggered by various events, such as on payday or when a certain balance is reached in the checking account.
Feature 10: Cryptocurrency Services Integration
To expand their offerings and cater to a growing interest in digital assets, some neobanks are integrating cryptocurrency services into their platforms. Also, customers can manage their cryptocurrency holdings directly within their neobanking app and simplify the process of buying, selling, and sending these digital assets.
Case Studies
A successful example of neobanks is Revolut. The bank that allows users to buy, sell, and transfer cryptocurrency directly within their app. Revolut also removes any hidden fees associated with traditional cryptocurrency exchanges.
Conclusion
Neobanks’ core strength lies in its focus on flexibility and user convenience. Furthermore, designed specifically for the digital age, they prioritise a seamless user experience. Their focus on mobile-first design and intuitive interfaces makes banking easier and more convenient. This approach allows neobanks to offer a wider range of digital banking features compared to traditional banks’ online platforms.
An efficient and timely claims process is important in the insurance sector. Many companies use insurance technology or InsurTech innovations…
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An efficient and timely claims process is important in the insurance sector. Many companies use insurance technology or InsurTech innovations to streamline this complex process.
The traditional insurance claim process is commonly stressful, lengthy, and vulnerable to fraud. However, by embracing digital innovations, such as AI, big data analysis, and machine learning, insurance companies can simplify this process and give a more positive customer experience.
Role of InsurTech
InsurTech solutions streamline claims processes by using user-friendly mobile apps or websites. Customers do not need to make cumbersome phone calls, paperwork, or office visits. Instead, claims can be initiated and managed seamlessly through the digital platforms.
InsurTech accelerates the claims process, reduces turnaround time, and minimises customers’ stress. It also provides an opportunity for immediate insurance claim submission, such as after a car accident.
Automation
Digital insurance employs advanced technology like AI and automation, unlocking many benefits for customers’ claim processes. Reporting automation tools play an important role in claims processing by simplifying and accelerating the process.
An automated system can be applied for data entry and extraction. AI algorithms can scan and extract document details from police or medical reports and automatically fill out digital claim forms.
Meanwhile, automated chatbots allow customers to access around-the-clock services. Policyholders can ask questions, report claims, and get information more conveniently using this feature rather than relying on office time-bound human employees.
Fraud Detection
InsurTech enhances fraud detection in claims processing by using predictive analytics tools. Fraud detection is important for insurance providers to avoid false claims or exaggerated losses that can lead to significant financial losses.
AI machine learning tools can detect suspicious patterns from a vast amount of data, allowing insurers to identify potential fraud. This helps insurance companies reduce losses from fraud and mitigate potential risks.
InsurTech Case Studies
PwC reveals that 57 percent of insurance companies have invested in AI and machine learning technologies to enhance operational efficiencies.
Lemonade, a digital insurance company for renters and insurance, has successfully used AI to underwrite policies and claims. The company achieved a faster and more transparent claim process for customers. The digital automated process also reduces the processing time and keeps costs down.
Meanwhile, Metromile, an InsurTech company that provides pay-per-mile car insurance, offers AI-assisted automated claims named AVA. AVA can give guidance through damage photo collection and verify coverage. This system can also connect customers to repair shops and offer the option of reserving a vehicle if they have rental coverage.
Future Prospects
InsurTech’s potential impact on claims processing is expected to make a significant shift in the future. AI will be more integrated into the financial industry and will reshape the claim processes.
According to McKinsey’s prediction, claims processing will be largely automated by 2030, with advanced algorithms handling initial routing. IoT sensors and emerging technologies like drones will replace traditional methods for reporting claims. Policyholders will also use video streaming for damage assessments that AI can immediately assess to detect fraudulent activities.
Automated customer chatbots will manage most interactions, while human involvement will only be for complex claims and risk management. Integrated IoT and data aggregation will allow insurers to file accurate claims rapidly during major disasters.
Small businesses are the backbone of the global economy. The World Trade Organisation reports that small and medium-sized enterprises (SMEs)…
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Small businesses are the backbone of the global economy. The World Trade Organisation reports that small and medium-sized enterprises (SMEs) make up over 90 percent of all businesses, employ 60 to 70 percent of the workforce, and contribute 55 percent of GDP in developed economies. Despite their significance, they may face barriers to accessing financial services. Embedded finance services offer small businesses innovative solutions to traditional financial hurdles.
Embedded finance combines financial services with non-financial experiences. Technology companies partner with banking institutions to offer these services directly within their platforms. This means customers can access financial tools, like making payments or managing accounts, without leaving the platform.
Analysts atGlobal Market Insights predict the embedded finance market will reach a compound annual growth rate (CAGR) of over 29 percent between 2023 and 2032. A key driver of this growth is the increasing demand for faster and easier transactions.
Embedded finance allows businesses to offer sophisticated payment and banking services directly to their customers and suppliers. This removes many of the frictions associated with business-to-business (B2B) payments, especially as these transactions are typically made in real-time.
By embedding financial services into their offerings, businesses can increase customer loyalty, increase revenue opportunities, and become more competitive in the market. This integration allows customers to access various financial services without hassle, creating a seamless customer experience.
It also offers small businesses innovative solutions to traditional financial hurdles, such as cross-border commerce and evolving security and privacy requirements. Embedded finance also helps businesses provide services such as loans, insurance, debit cards, and investments through their platforms.
Access to credit
Getting credit remains a major challenge for many small and medium-sized businesses. A Goldman Sachs report found that 70% of small businesses struggle to access funding for daily operations, inventory management, and growth. According to the same report, this lack of financing hinders 76% of SMBs.
Embedded finance offers a potential solution. Businesses can integrate financing options, like credit cards, directly into their services. This provides much-needed financial flexibility for their small business customers. Improved cash flow for small businesses strengthens the partnership between both parties. The larger company becomes a key player in the small business’s growth journey.
Improved cash flow with Embedded Finance
Cash flow is a significant challenge for small businesses as many operate on thin margins. Embedded finance can help small businesses overcome that by integrating payment processes and real-time financial data into business operations.
For example, point-of-sale (POS) systems with embedded payment options allow businesses to receive funds instantly. Meanwhile, automated invoicing and payment reminders can reduce the time and effort required to chase down payment payments.
Enhanced Customer Experience
By integrating payment solutions directly into their platforms, businesses can offer features like one-click payments, installments, and digital wallets. This streamlines the checkout process and boosts customer satisfaction.
Loyalty programmes also become more attractive with embedded finance. Businesses can reward returning customers with discounts, cashback, or exclusive offers, strengthening brand loyalty and driving repeat business.
For example, Deliveroo’s ‘Deliver Money’ feature streamlines food delivery by enabling real-time payments. This eliminates the need for cash and waiting for change, speeding up transactions and creating a smooth checkout experience. Faster access to earnings empowers small businesses to fulfil orders quicker and potentially offer special promotions.
The digital banking industry faces cybersecurity challenges. A Statista report shows a 10 percent jump in global malware attacks in…
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The digital banking industry faces cybersecurity challenges. A Statista report shows a 10 percent jump in global malware attacks in 2023, reaching 6.06 billion incidents.
Cybercriminals are growing more skilled, leading to more frequent data breaches that expose vulnerabilities in banking security. Moreover, effective risk management and strong network protocols are essential to securing digital banking operations.
Introduction to Cybersecurity in digital banking
As online transactions become the norm, strong cybersecurity measures become more crucial. Banks keep sensitive financial data and handle high-value transactions, making them prime cyberattack targets.
Effective cybersecurity is a multi-layered approach. Also, it combines advanced technology, strict policies, and constant monitoring to fight cyber threats. These security measures shield not only a bank’s finances but also customer personal information.
For that reason, cybersecurity is the foundation of trust and reliability in finance. Without strong security protocols, the balance between innovation and managing risk is disrupted, potentially shaking customer confidence in digital banking.
Early Cybersecurity practices
The rise of the internet gave birth to a new genre of malicious activity. Cybercriminals emerged to target this new frontier. They launched worms, malware, and phishing attacks.
In response to these escalating threats, the 1990s saw the introduction of firewalls and antivirus software. Additionally, these early security measures acted as barriers between networks to protect systems from unauthorised access.
Cybercriminals constantly develop new viruses and threats. Likewise, antivirus companies continuously create new software patches and signature updates to stay ahead. Despite that, the possibility of new threats slipping through these defences remains a challenge.
Technological advancements
Fraud is a major challenge for financial institutions. Artificial intelligence (AI) has emerged as a powerful weapon in the fight against this threat.
This technology excels at detecting various types of fraud. AI algorithms can detect suspicious activity in real time, helping prevent fraud before it happens.
AI solutions go beyond simple detection. By creating detailed profiles of each customer and tracking their activities, AI can predict potential risks and prevent fraud proactively.
Current Best Practices
A strong foundation is critical to banking security. This includes constantly checking for weaknesses through risk assessments. Digital banks must update their security protocols regularly to keep pace with changing risks. Collaborations with other financial institutions and government agencies help banks stay informed about the latest threats and how to respond.
Data classification is also essential. Banks need strict controls on who can access sensitive information. Employee security training must be regular to make them aware of threats.
Case Studies
The digital bank Starling Bank partnered with cybersecurity firm HackerOne in 2019. This partnership created a streamlined system for anyone to report weaknesses found in its apps and website.
The initiative initially focused on specific areas and common vulnerabilities. This collaboration revealed valuable insights into weaknesses often missed during standard testing. The project’s findings allowed Starling to develop automated detection tools that proactively prevent security issues.
Future Trends
A report byStatista predicts the global cybersecurity market will hit $271.90 billion in 2029, highlighting the growing need for strong defences in digital banking. While still new, quantum computing presents a future hurdle. Its ability to crack current encryption methods means new, quantum-resistant cryptography needs to be developed for banking security.
However, machine learning and AI are expected to be adopted more widely in cybersecurity. Beyond just reacting to threats, financial institutions will also increasingly focus on proactive threat hunting. This means identifying and stopping potential vulnerabilities before they can be exploited.
The banking industry is slowly adopting artificial intelligence (AI) technology. It offers many benefits for financial institutions, from upgrading customer…
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The banking industry is slowly adopting artificial intelligence (AI) technology. It offers many benefits for financial institutions, from upgrading customer experience to automating menial tasks. However, many are still cautious about using AI in certain areas, such as regulatory compliance management.
Given the continuously evolving legal requirements, good regulatory compliance management is crucial for banks. AI solutions can help effectively manage compliance by automating repetitive tasks, detecting suspicious activity, and providing real-time insights.
Automated compliance monitoring with AI
Artificial intelligence allows banks to perform continuous tasks around the clock with automated compliance monitoring. The previously labour-intensive work can be done more efficiently to ensure the bank follows all regulatory obligations.
The bank’s compliance teams usually handle monitoring processes, but AI automation can reduce costs. The compliance team can also focus on more important tasks rather than repetitive work.
The increased efficiency also means reduced compliance risk and non-compliance damage like fines.
Risk management
Financial institutions face regulatory compliance risks in various areas, which can lead to legal sanctions, financial loss, or a bad reputation. Advanced AI solutions can aid in risk management by identifying and mitigating risks more effectively.
AI-powered solutions can develop more accurate risk models and provide real-time responses. Many banks use this technology to help streamline compliance while improving the security of sensitive financial data. Furthermore, AI can detect compliance gaps and ensure adherence to laws and regulations.
Data analysis
AI can quickly analyse large volumes of data, a novel capability in the industry. A data analysis system can be designed to keep track of the latest regulatory changes and ensure the bank remains compliant.
Machine learning models can identify suspicious patterns and detect anomalies to report any breach of regulation. They can also analyse historical data and predict compliance risks. These allow banks to mitigate risks and address compliance issues before they escalate.
Case studies
Several banks have successfully used AI for regulatory compliance solutions.HSBC, for instance, uses AI-powered Know Your Customer (KYC) verification. This system can analyse customer data quickly, identify potential risks, and alert compliance officers for investigation.This bank also used Google Cloud’s Anti Money Laundering (AML) AI to combat and detect fraudulent activities in real-time. With these, HSBC has reduced the verification time by 80 percent and experienced a significant reduction in false positives.
Meanwhile,Danske Bank has also earned benefits from using fraud detection AI. The bank witnessed a 60 percent reduction in false positives and a notable decrease in fraudulent activities.
Future outlook for AI in regulatory in compliance
AI solutions are predicted to fundamentally change financial institution compliance management in the next five years, according to McKinsey. In the future, implementation for regulatory compliance in banks will be more widespread. Over 80 percent of C-level executives who participated in an Accenture survey planned to commit 10 percent of their AI budget by 2024 to address regulatory compliance.
AI offers many benefits, and as accessibility to this financial technology increases, more financial institutions will be inclined to adopt it, according to theFinancial Stability Review.
Technology will evolve, giving better automation capabilities, more extensive data analysis, and enhanced interpretation. This could further reduce the manual effort required in the banking industry.
As adoption increases, ensuring the AI systems used are ethical and unbiased is necessary. Thus, banks need to provide transparency for AI in banking and adherence to guidelines.
Blockchain payments are becoming more popular. In 2023, the adoption of blockchain payments like cryptocurrencies reached a new height of…
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Blockchain payments are becoming more popular. In 2023, the adoption of blockchain payments like cryptocurrencies reached a new height of 420 million users globally, per a Triple-A report. This number is an 800 percent increase compared to the previous year.
Blockchain is a decentralised digital ledger that records and verifies transactions through a network of computers. Unlike traditional payment methods, blockchain payments occur directly between parties. Each transaction is stored in a ‘block’ linked to previous blocks, forming a chronological chain.
The technology provides enhanced security and speed for cross-border payments. International payments used to be a complex process due to the different currencies and banking systems involved. However, the technology can simplify transaction processes significantly.
Speed and efficiency
Blockchain payments revolutionised traditional cross-border payments by enabling faster and more efficient transfers.
The decentralised network used in blockchain eliminates the need for a central authority. It simplifies the verification for transactions and avoids process delays. The technology also allows direct peer-to-peer transactions with no extra parties.
Thus, settlement speeds are much faster than in traditional banking systems. Unlike traditional ones, blockchain payments can be made within minutes instead of lengthy periods of days.
Cost reduction
Blockchain cross-border transactions come with significantly lower transaction fees than traditional systems. This is mainly due to the absence of intermediaries.
It also allows users to get lower currency fees than traditional modes. Moreover, cryptocurrency options offer no currency fees at all.
Security enhancements with blockchain
The security systems used by traditional banks involve third parties, which often means heightened vulnerability. The additional parties might experience operational issues that can affect the banks. Each third-party involvement adds possible risks to the main payment system. Blockchain payments remove the need for additional parties and enhance security with better transparency.
They use a decentralised network where multiple network participants verify and record each transaction. This makes it nearly impossible for system manipulation incidents to happen.
The technology also allows the use of smart contracts. These are digital contracts stored in a blockchain that automatically enforce themselves when specific conditions are met. These AI-powered contracts reduce reliance on transaction intermediaries and avoid potential fraud or errors. This contrasts with traditional systems, which require third parties to safeguard information
Case studies
Some financial institutions have already used blockchain for cross-border payments. Ripple is a prime example of blockchain technology’s effect on cross-border transactions. Its native cryptocurrency, XRP, plays an important role in this. Cryptocurrency can aid faster and cheaper international transactions. Moreover, its worldwide network of financial institutions allows a near-instantaneous settlement.
In the trade finance sector, cross-border payments play an important role. Platforms like Marco Polo have included blockchain payment options in their services.This simplifies and better secures trade financing transactions.
E-commerce platforms also included these payment options, like Bitcoin, to increase global sales. One of the online platforms that accept Bitcoin payments is CheapAir, an online travel agency. Another one is NewEgg, an e-commerce platform for computer parts and consumer electronics.
Future prospects for blockchain payment systems
Blockchain technology is still evolving and more companies will likely adopt blockchain payment systems. The rising need for faster and more secure global payments is expected to drive the broader adoption of blockchain payments.
Among thefuture trends that involve blockchain payments for cross-border transactions is the rise of central bank digital currencies (CBDCs). CDBCs are a digital version of national currency that is more efficient for cross-border transactions.
More blockchain-based platforms will emerge and further streamline international trade finance processes. These platforms will facilitate end-to-end trade finance, including documentation, tracking, and payment.
The security for blockchain transactions will continue to develop, as zero-knowledge proofs and advanced encryption are increasingly used.
Partnerships with traditional financial institutions and global payment networks will expand. This can further enhance the accessibility and adoption of blockchain payments.
Episode Six (E6), a global provider of payment processing and digital ledger infrastructure, has announced that its cloud-based solution offering…
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Episode Six (E6), a global provider of payment processing and digital ledger infrastructure, has announced that its cloud-based solution offering payments-as-a-service, is now available on the Amazon Web Services (AWS) Marketplace.
Episode Six on AWS Marketplace
AWS Marketplace is a curated digital catalog, Customers can use it to find, buy, deploy, and manage third-party software, data, and services to build solutions and run their businesses. By listing the E6 solution on the AWS Marketplace, E6 is extending its technology offerings to a vast network of over 330,000 active AWS Marketplace customers. Furthermore, it provides them with a seamless way to find, purchase, and deploy its configurable card issuance and virtual accounts platform.
E6, who have created and operate a globally distributed issuer processor and digital ledger infrastructure, will now be available in AWS Marketplace. E6 operates across 14 AWS availability zones including regions such as the United States, Europe, Singapore, Australia, Japan and Indonesia.
AWS customers will be able to simplify how they engage third-party cloud-based technologies to modernise their payment technology, and build digital-first products while using existing AWS committed spend.
Cloud-native platform
E6’s cloud-native platform, TRITIUM®, provides a real-time ledger that can work with an organisation’s existing infrastructure. This empowers AWS clients to build and launch any modern card product, without constraints of legacy technology.
Said Brian Muse-McKenney, Chief Revenue Officer at Episode Six said: “One of the biggest challenges our industry is facing right now is providing critical payment systems with high availability to prevent downtime, while simultaneously having the flexibility and power to quickly deploy feature-rich products. Our cloud-based solution offers AWS customers the assurance that there’s availability, scalability and extensibility, allowing us to enhance our clients’ services, without impacting their core banking systems.”
In addition, AWS customers can now access advanced payment solutions more conveniently, through the AWS Marketplace. This will provide banks, technology companies and brands with greater cost efficiency, helping them stay competitive in their respective markets.
Modernising digital payments
John Mitchell, CEO & Co-Founder at Episode Six, said: “At E6, we’re committed to working with customers to modernise their payment services. This listing is an important development in our partnership as it allows AWS customers the ability to find and deploy the E6 cloud solution seamlessly. The AWS Marketplace is another new channel we’re proud to open to offer customers access to our technology, and to allow them to leverage their AWS committed cloud spend more easily.”
As an AWS ISV Accelerate Partner, E6 is actively co-selling with AWS, and driving accelerated sales cycles as part of connecting with the AWS Sales organisation to support leading FSIs and tech companies that are modernising their payments on AWS.
Neobanks, the digital-first financial institutions operating without physical branches, have emerged as a potent force in the financial services industry….
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Neobanks, the digital-first financial institutions operating without physical branches, have emerged as a potent force in the financial services industry. Leveraging cutting-edge banking technology and a laser focus on customer experience, they are challenging traditional banks’ dominance.
Neobanks operate entirely online, offering a suite of financial services—from current accounts and debit cards to money transfers and budgeting tools—all seamlessly integrated through user-friendly mobile apps. Their core value proposition lies in:
Convenience: With their 24/7 access to banking services, they eliminate the need for physical branch visits.
Lower Fees: Decreased overhead charges for maintaining accounts and conducting transactions.
Seamless User Experience: Intuitive mobile apps prioritise user experience with streamlined account management and personalised financial tools.
Financial Inclusion: Neobanks can foster financial inclusion by offering services to those with limited access to traditional banking.
Neobanking benefits
Compared to traditional banks, neobanks excel in user experience and fees. Neobanks offers quick and paperless online applications and a mobile-first approach, allowing customers to access services quickly anytime, anywhere. Their services incur lower fees, with transparent pricing structures.
Consumers, particularly the tech-savvy generation, are increasingly drawn to neobanks due to the accessibility and convenience they bring to the table. The ability to manage finances anytime, anywhere resonates with nowadays on-the-go lifestyles. They are also cost-efficient, offering lower charges that result in direct savings for consumers.
Neobanking in numbers
In 2020, the global neobank market was valued at US$ 18.6 billion, according to a report by Mordor Intelligence. It is expected to record US$ 333.4 billion in 2026. This figure represents a CAGR of 50.6 percent. With a user penetration of 3.89 percent in 2024, the average transaction value per user is US$21,110 in 2024, according to Statista. In 2028, it is predicted that there will be 386.30 million neobank users worldwide.
Some of the biggest neobanking names include Chime. Serving 14.5 million users in 2022, around nine million relied on Chime as their primary bank., as reported by Forbes. In 2024, the number of users grew to 22 million, more than that of SoFi, Dave, MoneyLion, Varo Bank, and Current combined, also as reported by Forbes.
The aforementioned names are not small players either. Varo, for example, managed over 7 million accounts in 2023. Likewise, SoFi recorded 8.1 million users using its services in the first quarter of 2024, a 2.5 million, or 44 percent, increase from 2023’s last quarter.
The rise of neobanks has forced traditional banks to re-evaluate their strategies. Many banks have undergone a digital transformation, investing in mobile banking platforms and improving user experience to compete with neobanks’ digital agility. Traditional banks are also securing partnerships and acquiring neobanks to absorb expertise and expand service offerings.
Future Outlook
The future of financial services may see a more collaborative landscape between neobanks and traditional banks. Neobanks may find value in partnering with established institutions for broader reach and access to a wider range of financial products. Conversely, traditional banks may leverage neobanks’ technological expertise and customer focus to enhance their offerings.
Fueled by the Covid-19 pandemic and a projected market size of $166.4 billion by 2030, InsurTech companies are revolutionising the insurance industry.
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These firms offer digital alternatives in a typically slow-to-change industry. However, their innovative solutions have empowered traditional insurers to accelerate digitalisation and streamline processes.
These are the leading firms that have helped this traditional field adapt. Furthermore, it is rapidly catching up to efficiency trends associated with more famously dynamic industries.
Introduction to InsurTech innovation
The insurance industry is undergoing a transformative shift fuelled by InsurTech.
Innovating technologies for insurers is about finding novel solutions to longstanding challenges and harnessing emerging trends to shape the future of the industry.
Insurance leaders are almost unanimous in recognising that innovation as not just important, but critical to future success. Insurers who fail to embrace InsurTech advances and the wave of digital insurance products and opportunities they represent risk falling behind.
Moreover, in an increasingly competitive and dynamic industry, falling behind would be a disaster for any business.
1. Oscar Health
Oscar Health built itself from the ground up with a tech-first approach focused on member service. This unique strategy aims to make healthcare more accessible and affordable for all Americans.
Oscar’s commitment to exceptional service is reflected in its sky-high Net Promoter Score of 50 and a near-perfect 97% member satisfaction rate for virtual care. Also, with a presence in over 577 counties across 20 states, Oscar Health’s impact on the industry is undeniable.
2. NEXT Insurance
A leader in small business insurance, NEXT Insurance offers easy-to-understand, digital coverage designed specifically for the self-employed. Their recently launched Copilot tool empowers agents to serve micro-businesses efficiently. Copilot streamlines the process for both sides: business owners can get quotes and bind coverage online instantly, while agents gain a simplified workflow to boost revenue.
3. Vouch
Since 2018, Vouch has emerged as a prominent force in the InsurTech space by transforming the way business insurance serves high-growth companies. Additionally, Vouch recently launched AI Insurance, a groundbreaking product specifically designed to mitigate risks for AI startups in this rapidly developing field.
4. Hippo
Hippo stands out for its proactive approach to homeowners insurance. Partnering with homeowners to implement smart home devices and personalised safety recommendations, Hippo prioritises preventing hazards before they occur. Furthermore, this commitment has secured their position as a top InsurTech firm, protecting over 200,000 homes across most US states.
5. Bestow
Bestow prioritises simplifying insurance and boosting financial security for everyone. They believe the process shouldn’t be daunting, so they leverage cutting-edge technology and data throughout the entire value chain to streamline everything. Their commitment to innovation is evident in their recent launch of permanent life insurance and the addition of AI features to their underwriting workbench.
6. QuanTemplate
Founded in 2011, QuanTemplate uses machine learning and big data to empower businesses through digital transformation. Their core offering, a data integration, automation, and analytics platform, equips insurance professionals with the tools to unlock valuable insights and gain a deeper understanding of market dynamics.
7. Dinghy
Dinghy caters to the changing insurance needs of freelancers and businesses with its innovative pay-as-you-go model and focus on online and mobile accessibility.
This focus on accessibility is further enhanced through their partnership with ARAG, providing “Freelance Assist.” This is a unique package combining Dinghy’s flexible insurance with ARAG’s online legal resources tailored for freelance professionals.
8. CoVi Analytics
CoVi Analytics tackles both regulatory compliance and operational efficiency for insurers. Their AI-powered CORE platform automates complex reporting for evolving regulations, while the app suite featuring Policy 2.0 simplifies risk incident capture and boosts operational efficiency.
9. ManyPets
ManyPets, formerly known as Bought By Many, has emerged as a leading pet insurance provider by taking a unique approach to customer needs.
Born from a focus on analysing social media commentary, ManyPets uses customer feedback to shape its insurance policies. This customer-centric approach extends to its technology focus, making ManyPets the first pet insurance company to offer form-free online claims.
10. Shift Technology
Shift Technology provides a suite of AI-powered Software-as-a-Service (SaaS) solutions specifically designed to address the insurance industry’s needs. Their focus lies in fraud detection, empowering insurers with robust protection against financial losses, reputational damage, and cyber threats.
Key factors for InsurTech success
Several key factors have fuelled the recent surge in InsurTech innovation. Digitisation plays a crucial role by speeding up information processing, leading to cost reductions, efficiency gains, and the development of new, customer-centric products.
Personalisation is another key factor, enabling insurers to tailor services to individual needs and preferences by considering factors like age, location, and lifestyle before providing quotes. Finally, advanced analytics capabilities provide valuable insights into consumer behaviour, allowing insurers to better target customers, while also offering real-time risk assessment data.
As digital convenience continues to shape consumer expectations, embedded finance is a key factor in transforming how consumers manage their finances.
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Embedded finance is the integration of financial services into non-financial platforms. It allows businesses to offer financial products and services within their existing apps and websites. Integrating well improves customer experience and opens up new business opportunities.
Embedded finance evolves incredibly fast as a segment within Fintech – a sector guiding how our digital future will work. Financial services are rarely so exposed to the real-time digital user experience of consumers as they are with things like embedded banking.
The emerging embedded finance trends for 2024 are driven by changes in consumer needs, a maturing sector, and advances in tech and regulation.
Understanding these trends as they unfold is critical for analysts, executives, and any industry actor.
1. Integration with E-commerce Platforms
Possibly the most notable embedded finance trend for 2024 is its increasing integration with e-commerce platforms.
Consumers now expect more than just a variety of payment methods at checkout. They want features like one-click buy buttons, pre-approved financing options, and loyalty programs with instant rewards. By embedding these financial services directly into their platforms, e-commerce businesses can provide a smoother, more personalised shopping experience. This can also drive higher sales and customer retention.
Complacency here is a risk. What was cutting-edge for the past few years will quickly look dated as e-commerce integrations improve. That presents a real danger at the point of transactions because digital consumers do not hang around long if the experience is better elsewhere.
2. Rise of Buy Now, Pay Later (BNPL) Services
Buy Now, Pay Later (BNPL) services revolutionised the experience of financial services for younger consumers when they developed a few years ago. In 2024 this embedded finance trend will keep growing.
We have seen the rise of brands like Clearpay and Klarna to household-name status. Their progression to embedded banking options on checkout pages across a slew of major websites and apps was a watershed moment.
BNPL providers allow customers to make purchases and pay for them in instalments, often with little to no interest. It has seen rapid growth, especially with younger consumers.
This embedded finance trend is commonplace and established. There is room to bring even more flexibility to transaction payments. As BNPL’s success is driven by the most tech-savvy age cohorts, expanding its reach in new and innovative ways is both a necessary and profitable enterprise.
Integrating BNPL options directly into the checkout process made it easier for customers to make purchases. This year, more BNPL options will emerge. Providers will partner with a wider range of businesses as they keep adapting to consumer spending habits.
3. Expansion into new sectors
Embedded finance is no longer limited to e-commerce and retail, where it first made its name by making the inaccessible accessible (through BNPL), improving customer experience with embedded banking, and cultivating loyalty programs by packaging financial services into consumers’ purchasing journeys.
Those opportunities in online and offline retail were relatively low-hanging fruit, but major sectors are ripe for harvesting in 2024. Embedded finance trends are appearing in enormous sectors where the opportunities are enormous.These include:
Healthcare: Patients can access financing options for medical procedures or subscriptions to wellness programs directly at point of care.
Automotive: Car dealerships and ride-hailing platforms can offer car loans, insurance products, and instant financing for rentals and maintenance services within their apps.
Travel and Hospitality: Travel booking platforms and airlines can provide travellers with instant financing for flights and hotels, travel insurance, and currency exchange within their booking processes.
4. FinTech partnerships flourish
The success of the embedded finance ecosystem depends on collaboration. Unsurprisingly, this means Fintech partnerships are an embedded finance trend, but 2024 predictive indicators suggest that the sector is now mature enough for these partnerships to become more complex. This is opens up new fields of opportunity,
Traditional financial institutions are recognising that maturity and are responding by increasingly partnering with Fintech companies.
Fintechs bring agility and tech, while banks offer regulatory compliance, a broad customer base, and the benefits of trust and reputation.
These partnerships are the indicator of a maturing sector that is now able to integrate with the traditional industry it originally spun off from. These Fintechs bring in the innovations and practices that matured outside traditional financial services, and a primary benefit of that will be giving access to embedded finance trends, embedded banking solutions, and a customer experience suited to the modern digital consumer.
5. Cybersecurity centre stage
Cyber threats have been a major issue for years and mass fraud campaigns that attempted to hijack checkouts were a big feature of the spike in fraud that hit at the start of the Covid-19 lockdowns.
Cybersecurity will always be necessary, but the 2024 predictions for embedded finance will have been noted by criminal groups, too.
These major embedded finance trends also mean the attack surface for cyber threats is expanded in this transitory phase. Criminals will inevitably target traditional institutions now partnering with fintechs and embracing embedded banking – the opportunity to find a vulnerability to exploit during the period of transition is too good for them to pass up. The same is true across industries, all of which present opportunities for fraud, theft, and ransomware attacks.
Protecting sensitive data from hacking will be as crucial as protecting the embedded financial services themselves. This is the case for finance providers, Fintechs, and the big firms in industries like insurance or healthcare that have sensitive patient and consumer data to protect.
Advanced security measures like strong authentication protocols, data encryption, and continuous monitoring for suspicious activities will be necessary. Collaborating with cybersecurity experts and conducting regular security audits will be crucial for building and maintaining trust with consumers and businesses.
The cost for implementing increased measure may be high but the risks come with consequences – monetary, reputational, or regulatory – will be severe,
6. Evolving regulatory landscape
The regulatory environment for embedded finance changes all the time. Predicting what will happen is as important as adapting to the new reality when it actually happens.
As the industry grows, regulators are coming to grips with a fast-changing environment, but 2024 predictions suggest a slew of new guidelines to ensure consumer protection, data privacy, and fair competition is coming the industry’s way.
Embedded finance providers need to stay informed about these changes and adapt \ to remain compliant. Collaboration between industry players and regulators will be key to creating a sustainable and healthy embedded finance ecosystem. So will planning for where legislation and regulation is likely to come and ensuring strategies manage the risk appropriately – maximising opportunities without compromising long-term prospects.
7. Open Banking fuels data-driven solutions
Open banking regulations are paving the way for a data-driven approach to financial services.
Embedded finance providers can use open banking APIs (Application Programming Interfaces) to access consumer financial data with their consent. Open banking APIs have been on the market for a while, but their analysis and use look like they are becoming more sophisticated.
This will lead to the creation of more personalised financial products and services, such as tailored insurance quotes, automated savings plans, and pre-approved credit options. It also means more financial services will reach more consumers and businesses that occupy the vast market gaps in financing that traditional services have failed to adequately serve.
As open banking adoption increases, embedded finance solutions leveraging the analyses they provide will also become more sophisticated: the better the data they get from open banking APIs, the more data-driven and far-reaching they can become.
The risk of misreading data has kept open banking from surging ahead, but ultimately the consequences of what it enables will be huge and transformative for economies and populations. Any progression brings huge opportunity.
2024 predictions make a febrile atmosphere
Among these 2024 predictions is a common theme – once-transformative embedded finance solutions could transform into vulnerabilities through the year, but only because of the massive opportunities that are opening up as embedded banking proliferates and financial services adapt.
The sector’s future is filled with possibilities, but dangers still lurk and they are very real. And so are the threats of missing out. 2024 will reward those who focus on continually improving the reach of financial services through things like embedded banking – it will also punish those slow off the mark. This is a dynamic sector poised for significant growth and innovation.
FinTech Strategy spoke with Craig Ramsay, MD for Business Development at Episode Six, to learn about its approach to partnering to create payment products customers will love
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Episode Six (E6) have a deep understanding of the industry pain points and a vision of the enormous opportunity in the paytech arena. The three co-founders of E6 came together in 2015 to build and launch TRITIUM® – a platform that helps banks and fintechs leave legacy behind and build payments products their customers love.
From there, they attracted several visionary allies within key payments industry players to support E6, as they built a global team to bring their vision to market. They currently have employees in 35+ countries and support clients across five continents.
During Money20/20 Europe we spoke with Chris Ramsay, MD for Business Development at Episode Six, to learn more…
Tell us about the genesis of Episode Six?
“We are a mature business not a startup. We’ve been going nine years. Furthermore, we’re series C and have raised over £97 million across three rounds. The last round was in March 2023. We’re actually a secure reliable FinTech. We work with the likes of HSBC and can meet that reliability change for banks who might be wondering whether a solution provider will still be around in two years. E6 has 180 employees globally. We operate in Asia, the US and we’re growing fast in Europe.
Additionally, we see huge growth in this space and we’re really excited – it’s one of the reasons I joined from HSBC nine months ago. At E6, we love to solve customer problems, and a customer problem has payment as a component. We want to make that customer journey a better experience in a safe and secure way. Banks want to do that. Companies want to do that. People just need the technology to be able to do it well. And we think we’re able to support that now and in the future.”
Tell us about your role at Episode Six?
“I joined from HSBC where I was the innovation head on the corporate side for the bank speaking to a lot of the verticals. And every time I spoke to hospitality, healthcare, or telcos, they were asking about how can you actually do intake as a bank… And the bank’s response is that they would love to do that, but they’re not fintechs. I got a bit frustrated by trying to always push for change. Yet there is a different way. And that way is for banks to actually think about E6 as a partner. We provide technology. We’re a technology company. We have a ledger that allows you to actually take lots of different products to sit alongside your core business, and then we can do the issuing and processing.
What are some of the key challenges financial institutions are facing that you can help them with? What problems are they asking you to solve? In doing so, what are the challenges for Episode Six?
“We are now deploying into the Middle East and recently launched within Saudi Arabia. Our technology can pretty much be used in every country. And what’s interesting, I’m a banker and I know that everybody likes to make things complicated. The payments process does not have to be complicated. You can simplify it. People who are buying into our services start from addressing their customer problems. They’re keen to solve them and don’t want, or need, to understand all the ins and outs of payments. They just want to be able to get things done. And that’s where again, we try and focus a lot of our effort. So, it’s the people aspect of our company we’re proud of because we are bringing cross industry knowledge combined with technology to actually have a bit of fun.
Tell us about some of the successful partnerships Episode Six has been involved in…
Japan Airlines
“Japan Airlines is one of the companies that we power. You download the Japanese Airlines app when you’re booking your flights. And if you’re a regular customer you get points like you do with BA. And they also have a multicurrency wallet within their app that’s linked to a card. That card is powered by a bank and has 15 currencies on it, along with the loyalty points. So, the card can be used outside of Japan as a normal debit card and handles the currency conversion. We have Revolut in Europe and they have an inbuilt multicurrency app in Japan airlines and link to loyalty points.
So, for the Japanese Airlines customer, they don’t have to worry about being embarrassed about not having the right currency abroad and plan how they will actually be able to spend their money. Our platform also enables FX rates to be changed. For example, Platinum Japanese Airlines customers get better FX rates. All of this creates a great customer experience, but it’s the flexible technology that’s making things happen.”
A-Tono
“We have also just launched with A-Tono in Italy. Italians love real Cash, but even so digital payments grew 12% last year compared to 2022, totalling €444bn, up from €397bn. It represents a huge opportunity for payment solutions providers and retailers. A-Tono wants to deliver prepaid card offerings across many verticals: transit, gift cards, post offices and more. They needed the right technology to be able to make these offerings. You take a card and load money onto it – we power that for A-Tono. We’ve actually migrated all of their existing customers onto our platform. They want to stand out as the innovator in digital payments in Italy where Italians don’t have many choices.
By integrating E6’s powerful enterprise-grade payment processing and ledger technology, A-Tono can now offer its clients, which span a number of sectors in Italy, access to the latest global payment capabilities. Switching to E6 has broadened the services A-Tono is able to offer clients when it comes to payments processing and solutions, giving them more flexibility, choice and revenue streams.
Together, E6 and A-Tono will offer clients easy access to the most innovative payment solutions, integrated seamlessly into their existing infrastructure to provide secure, scalable and best in class customer-centric experiences.
Whatever the size of the company, whatever the region, we want to be involved in solving customer problems.”
What trends are you seeing across the FinTech landscape? What opportunities do you see for Episode Six?
“Everybody says cheques are going to go, they’ve been saying that for years but it’s actually happening. Not in the US, but digital payments are on the rise and it’s not just card payments. You’ve got wallet payments and the likes of PayPal, people don’t want physical cash. I don’t think the large retail brands have found a real solution. When you see what’s on offer at events like Money20/20 there are lots of people who can actually solve problems and it’s the collaboration I get excited about. What I’ve seen change over the last three or four years is that the Visas, the Mastercards and the big banks are looking to find small organisations like us to figure out how to solve their problems.”
And what’s next for Episode Six? What future launches and initiatives are you particularly excited about?
“The great thing is that we can go fast. We’re able to take a customer opportunity today and be delivering it and in market by the end of the year. That growth is consolidating our position that we are a technology company that can be trusted. We’re here to stay, but it’s the people that are employed by E6 that are really going to be the difference about why we are chosen versus some of our competitors. It’s not just about technology, it’s about trust and it’s about partnership because everybody wants their money to be transferred safely. And we can be trusted because we’re already trusted by the big banks.
Why Money20/20? What is it about this particular event that makes it the perfect place to showcase what you do? How has the response been to Episode Six?
“Networking is really important for us as a small company. I wander around the stands here and there are lots of people who can actually solve problems and it’s the collaboration I get quite excited about. What I’ve seen change over the last three or four years is that the big banks are looking to find small organisations like us to figure out how to solve their payments problems. And that’s different to when I was working for a bank only a few years ago. You just have to be here at Money20/20… What I’m seeing, since we returned after Covid, is how many people from different parts of the world are coming here to actually talk to each other in person. If you’re not here at Money20/20, then it’s actually hard to be relevant in this industry.”
The FinTech sector has changed how we manage our money. From mobile banking apps to robo-advisors, FinTech offers a new…
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The FinTech sector has changed how we manage our money. From mobile banking apps to robo-advisors, FinTech offers a new level of convenience and efficiency. But with this convenience come challenges and cybersecurity responsibilities: safeguarding the vast amount of sensitive financial data entrusted to these platforms.
Cybersecurity is no longer an afterthought for FinTech companies; it’s an essential foundation for their success. Breaches exposing financial information can have devastating consequences, not just for the companies involved but for their users as well.
Understanding these cyber threats is crucial for FinTech companies aiming to safeguard their operations and customer data. Here are the top 10 cybersecurity risks FinTech firms must be aware of in 2024.
1.Phishing Attacks
Phishing attacks trick people into divulging personal information. Cybercriminals often pose as legitimate companies through emails, texts, or phone calls. They llure victims into clicking malicious links or revealing passwords.
Phishing attacks significantly threaten financial companies because they target the human element rather than technological weaknesses. Hackers impersonate trusted sources like banks or colleagues to trick employees into revealing sensitive information or clicking malicious links. It can lead to data breaches, financial losses, and account takeovers.
2. Ransomware
Ransomware attacks involve cybercriminals holding sensitive data hostage and demanding a ransom from the victim. FinTech companies are particularly vulnerable to ransomware attacks because they rely on digital systems and customer financial data.
These attacks can impair operations, damage reputations, and lead to significant financial losses. They can be devastating, as there is no guarantee that paying the ransom will result in the safe return of the data.
3. Insider Cybersecurity Threats
FinTech companies may face a unique cybersecurity threat from their employees, known as insider threats. These insiders can be malicious, accidentally negligent, or even tricked into compromising sensitive data. Malicious insiders might steal financial information or sabotage systems for personal gain. Negligent insiders could leave data exposed or fall victim to phishing scams, unintentionally giving away access.
4. DDoS Attacks
Distributed Denial of Service (DDoS) attacks overwhelm online systems with traffic, making them inaccessible to legitimate users. FinTech firms are attractive targets for these attacks because they offer multiple entry points (banking systems, online accounts) and prioritise constant service availability.
DDoS attacks can severely hurt a FinTech company’s reputation and finances by causing downtime, raising security concerns among customers, and potentially leading to data breaches during the distraction.
5. Malware
FinTech companies are prime targets for malware attacks, accounting for 19 percent of all attacks and suffering nearly US$18.3 billion in losses in 2017. While the number of traditional banking malware strains is decreasing, it doesn’t represent a decline in overall threat. Instead, attackers are developing more sophisticated malware that uses techniques like obfuscation and slow, staged attacks to bypass antivirus detection.
6. Data Breaches
FinTech companies are under fire due to data breaches exposing sensitive financial information. Hackers exploit security flaws to steal user data, leading to financial losses, identity theft, and damaged trust. To combat this, strong encryption methods like end-to-end encryption and tokenisation can scramble data, making it useless to attackers.
7. Mobile Security Risks
Despite offering convenient access to financial services, mobile apps are a double-edged sword for FinTech companies. These apps are vulnerable due to their popularity, making strong security practices essential. Regular security updates, secure coding from the start, and robust data encryption during transmission are crucial to patching weaknesses.
8. Third-Party Cybersecurity Risks
The reliance on third-party vendors for services and integrations creates a security blind spot for FinTech firms. To address this, thorough vetting through due diligence and vendor risk assessments is crucial before forming partnerships.
9. API Vulnerabilities
FinTech companies rely heavily on Application Programming Interfaces (APIs) to enhance customer interfaces and share information across systems. While APIs are essential for data exchange, they also open doors for cyberattacks.
To fortify their defences, FinTech companies need to focus on secure API design with solid authentication methods (like OAuth or API keys), constant monitoring, and regular security assessments to identify and fix weaknesses before they become exploited.
The use of artificial intelligence (AI) and machine learning (ML) has increased in FinTech for decision-making processes. While beneficial, these systems also present risks if they make inaccurate decisions based on incorrect data. Rigorous testing and monitoring of AI and ML systems are necessary to minimise these risks.
Steps to mitigate threats
The cybersecurity threats facing FinTech in 2024 are varied and complex. FinTech firms must prioritise cybersecurity to protect customer data and maintain trust. By researching technology usage, training employees on cybersecurity, regularly monitoring suspicious activity, and building advanced security systems, FinTech companies can improve their defences against these evolving threats.
Neobanking, the fusion of technology and financial services, is reshaping the banking landscape. As we look towards the future, neobanks may bring transformative changes that will impact financial institutions worldwide.
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Neobanking emerged around 2017 as a new model in banking, offering fully online services without physical offices and branches. It has rapidly evolved, attracting a growing customer base with its convenience and accessibility. As we enter a new banking era, several predictions will shape the future of neobanking.
There are several key trends and predictions for the future of neobanking, such as the growth of AI-powered services, the increasing focus on cybersecurity, the expansion of neobanking services, and more. These insights are essential for financial leaders facing the evolving financial technology landscape.
1. AI-powered Services
Artificial intelligence (AI) is set to transform neobanking. Financial institutions are increasingly using AI to enhance their services. AI-driven features, such as personalised financial advice, automated customer support, and advanced fraud detection, will become standard offerings. These technologies will enable neobanks to provide more accurate risk assessments and deeper insights, allowing human operators to focus on strategic improvements.
2. Integration with Existing Tech
Integrating emerging technologies such as blockchain, Internet of Things (IoT), and 5G also opens new possibilities for neobanks. These technologies can enhance transaction security, provide real-time data insights, and enable more efficient banking operations, further driving the evolution of neobanking.
3. Expansion of Neobanking Services
Neobanks should diversify their service offerings to meet the evolving needs of their customers. Beyond traditional banking services, we can expect innovations in areas such as personal finance management, investment advisory, and integrated payment solutions. These expanded services will position neobanks as comprehensive financial hubs that fulfil various financial needs.
4. Focus on Cybersecurity in Neobanking
As neobanks operate entirely online, cybersecurity becomes increasingly important. Protecting customer data from cyber threats is critical to maintaining trust. They should anticipate a significant investment in advanced cybersecurity measures, including encryption, multi-factor authentication, and continuous monitoring. They must ensure strong security protocols to prevent data breaches and protect their reputation.
5. Strategic Partnerships
To remain competitive, neobanks will likely form strategic partnerships with traditional banks. These collaborations are a win-win: neobanks gain access to established infrastructure and a broader customer base, while traditional banks benefit from cutting-edge technology. Ultimately, such partnerships will enhance customer experiences by combining the strengths of both banking models.
6. Regulatory Adaptation
The shift in the landscape requires regulatory frameworks to adapt. Governments and regulatory bodies will be crucial in ensuring fair competition and consumer protection in this evolving environment. We can expect new regulations that address the unique challenges posed by digital banking, promoting innovation while safeguarding financial stability.
7. Enhanced Customer Experience
The future of neobanks hinges on their ability to deliver a seamless digital experience and bridge the gap in customer service. Building trust and replicating the human touch, strengths often associated with traditional banks, will be crucial in converting users into primary customers. The shift in focus will be vital for driving long-term profitability.
8. Banking-as-a-Service (Baas)
Beyond their core offerings, neobanks may disrupt the financial landscape further through Banking-as-a-Service (BaaS). Using their expertise and technology, they can empower other businesses to offer embedded financial services, creating a win-win situation for both parties.
9. Green Banking Initiatives
Sustainability will become a priority for neobanks. We expect to see an increase in green banking initiatives, such as offering eco-friendly financial products and investing in sustainable projects. They can leverage their digital platforms to promote environmentally responsible banking practices.
10. Global Expansion
Neobanks will expand their reach globally, entering new markets and catering to an international customer base. The expansion will be driven by the increasing demand for digital banking services and the universal appeal of innovative financial solutions.
A neobanking future
The future of neobanking is bright, with a dynamic and evolving landscape supported by AI, advanced security, and broader financial product offerings. As the model matures, the most successful players will likely be those who can adapt to changing economic conditions, solidifying their position as the industry leader.
Blockchain has transformed transaction security. Blockchain platforms use the technology to create a shared digital ledger that records every transaction. This ledger is distributed across a network of computers, making it almost impossible to alter or tamper with the data.
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Blockchain also makes financial transactions more efficient. Traditional financial systems often involve multiple intermediaries, such as banks and payment processors. Blockchain removes the need for intermediaries, speeding up the transaction process and decreasing costs.
Still, blockchain’s high level of security is its most essential feature. It helps prevent fraud and unauthorised access, ensuring that users can trust the safety of their financial transactions. This article explores the top ten blockchain platforms that facilitate secure transactions.
Bitcoin (BTC)
Known for its decentralised architecture and security through the proof-of-work consensus mechanism, Bitcoin stands as the pioneering blockchain platform. It offers users a secure method for peer-to-peer transactions, and the BTC token is a reliable store of value globally.
Ethereum (ETH)
Ethereum revolutionised blockchain technology by introducing smart contracts, enabling the creation of decentralised applications (dApps) and various financial services. It has a vibrant developer community and ongoing upgrades, including the transition to Ethereum 2.0 aimed at improving scalability and reducing energy consumption.
Ethereum is ideal for developers and users interested in decentralised applications and smart contracts.
Ripple (XRP)
Ripple specialises in facilitating rapid and cost-effective cross-border payments and remittances, appealing to financial institutions seeking efficiency. It ensures fast transaction speeds and low costs, positioning itself as a competitive option in the global payment landscape.
Ripple is a practical choice for financial institutions needing fast and affordable cross-border transactions.
Stellar (XLM)
Stellar shares similarities with Ripple, focusing on fast and low-cost cross-border transactions but also targeting individual users alongside financial institutions. It aims to simplify the process of international money transfers while maintaining strong security.
Stellar serves as a viable option for users and institutions seeking accessible and cost-effective solutions for cross-border payments, emphasising simplicity and security.
Hyperledger Fabric
Hyperledger Fabric caters specifically to enterprise needs, offering a permissioned blockchain platform that prioritises security and privacy. Its modular architecture enables tailored solutions for businesses requiring controlled access to data and secure financial transactions.
Implementing and managing Hyperledger Fabric demands substantial technical expertise, limiting its accessibility for non-enterprise users. Enterprises seeking secure and customisable blockchain solutions should consider Hyperledger Fabric for its features and enterprise-grade security.
Cardano (ADA)
Cardano distinguishes itself with a research-driven approach to blockchain technology, emphasising security, scalability, and sustainability. It supports smart contracts and aims to offer a platform that is both secure and capable of accommodating a wide range of decentralised applications.
Cardano’s ecosystem and developer community are still growing, impacting its pace of innovation. However, Cardano remains appealing to users and developers seeking a scientifically rigorous blockchain platform with a focus on security and scalability.
Tezos (XTZ)
Tezos introduces a self-amending blockchain capable of upgrading without hard forks, ensuring long-term stability and continuity. It supports smart contracts and decentralised applications, offering flexibility and security.
While Tezos’ innovative governance model may seem complex to newer users, it offers a compelling option for those interested in a self-amending blockchain with robust security features and a focus on long-term sustainability.
Binance Smart Chain (BSC)
Binance Smart Chain, developed by Binance, emphasises high performance and low transaction costs, making it particularly suitable for decentralised finance (DeFi) applications. It supports a broad range of financial transactions with efficient throughput.
BSC is a preferred option for DeFi developers and users seeking a platform with fast transaction processing and minimal fees, though caution is advised regarding centralization risks.
Polkadot (DOT)
Polkadot excels in interoperability, connecting multiple blockchains to enhance scalability and security across decentralised networks. It offers a scalable platform for developers to build interoperable applications spanning various blockchains.
Similar to Cardano, Polkadot’s ecosystem is still evolving, with ongoing development efforts to broaden its functionalities.
Polkadot appeals to developers interested in building interoperable and scalable decentralised applications across multiple chains.
Solana (SOL)
Solana distinguishes itself with high throughput and low transaction costs, capable of processing thousands of transactions per second. It aims to support scalable decentralised applications, particularly within the DeFi space.
Solana has maintained its appeal among developers and users looking for high-performance blockchain solutions. It continues to be a preferred option for its efficient transaction processing capabilities.
InsurTech is an emerging sector of huge importance. It transforms an old and crucial industry by creating insurance technology that brings major tech advances to enable widespread change.
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The top InsurTech companies aim to revolutionise the industry with a rapidly evolving and advancing series of insurance technologies. All of these seek to make insurance more accessible and customer-centric. This improves insurance products and creates opportunities for new ones.
By adopting a mobile-first approach, InsurTech reduces the need for face-to-face interactions. This means lower operational costs, allowing InsurTech startups to offer more competitive pricing models.
The InsurTech landscape owes its growth to startups. These early-stage companies disrupt the insurance sector by bringing new tools to the game. These include AI, which can handle traditionally resource-exhausting and time-consuming tasks, such as determining the right policies to offer customers.
According to a report by Spherical Insights, the InsurTech market was valued at $3.85 billion in 2021. Based on a CAGR of 52 percent, Spherical forecasts that it will grow to $166.7 billion by 2030. This growth is mainly fuelled by Insurtech startups. Read on to discover the top Insurtech companies to watch in 2024, as they make strides forward into a period of accelerating growth.
According to a report by Spherical Insights, the InsurTech market was valued at $3.85 billion in 2021. Based on a CAGR of 52 percent, Spherical forecasts that it will grow to $166.7 billion by 2030. This growth is mainly fuelled by Insurtech startups.
Read on to discover the top Insurtech companies to watch in 2024, as they make strides forward into a period of accelerating growth.
1. Lemonade
Lemonade brands itself as “an insurance company built for the 21st century.” With Maya, its cutting-edge AI tool, Lemonade can “craft the perfect insurance” coverage in as little as 90 seconds. The AI also contributes to the seamlessness of the insurance claims process, with customers needing to wait only three minutes after claim submission to get paid.
In November 2023, Lemonade was serving2 million active customers. It ticked the first million mark in 2020. Throughout the period, the premium per customer increased by 70 percent.
InQ1 2024, the average premium per customer was $379, an eight percent increase year on year. The in-force premium was $749. The figure represents a 22 percent increase year-on-year and corresponds to total revenue growth of 25 percent.
2. NEXT Insurance
Next Insurance caters to small businesses, offering products such as workers’ compensation and equipment insurance. The company provides coverage for diverse professions, from contractors to entertainers.
Next has developed an AI tool called Copilot, not to be confused with Microsoft’s AI with the same name. The tool allows insurance agents to increase operational efficiency and profitability by streamlining the quoting and binding process. It also helps reduce underwriting delays.
Established in 2016, Next was serving500,000 active customers in 2023, an increase from 420,000 in 2022. It has received $1.1 billion in funding from big-name investors such as Munich Re, Allstate, and Allianz X. Per November 2023, the company has a market valuation of $2.5 billion.
3. Oscar
The Oscar Health team provides digital-based health insurance. The company offers services for individuals and families. Through its app, customers can access remote health care anywhere, anytime. Established in 2012, Oscar has over1.4 million customers across 20 states of the US.
4. Metromile
Metromile revolutionises automobile insurance with its premium-per-mile scheme. Premium rates are based on driving habits, which is claimed to allow customers to save around 47 percent, or $947 per year, compared to traditional car insurance.
Metromile wasacquired by Lemonade in 2022 for $145 million worth of LMND shares. In return, Lemonade took control of “over $155 million in cash, over $110 million in car premiums, an insurance entity with 49 state licenses, and precision data from 500 million car trips.”
5. Asurion
Asurion specialises in technology care. This InsurTech company provides electronic equipment coverage, catering to owners of smartphones, laptops, TVs, and smart home appliances. By using its services, customers gain access to quick repairs of only 45 minutes for their electronics through local repair experts and tech repair stores across the US.
6. Zego
Zego offers smart and flexible insurance coverage for self-employed drivers and fleets. A wide selection of insurance products is available to meet the needs of private taxi companies, haulage truck drivers, and courier vans. Zego became theUK’s first InsurTech unicorn in 2021 after raising $150 million, bringing its valuation to $1.1 billion.
7. Hippo Insurance
Hippo Insurance combines home insurance with smart home devices. The company provides customers with smart home monitoring systems to detect potential issues. These include leak sensors, motion detectors, and smart smoke alarms. In 2024, Hippo provides coverage for 200 US households.
8. Pie Insurance
Pie Insurance caters to small businesses. This InsurTech startup uses advanced analytics tools to determine the best premiums, considering comprehensive possible risks. The company aims to make insurance affordable and accessible to small businesses in the US.
9. Clearcover
Clearcover uses AI technology to speed the claims process up to just seven minutes. The startup has raised a total of$515 million over nine financing rounds. Its latest funding round was in April 2024, when it raised $55 million in a second Series E. The investment round was led by Omers Venture, with several undisclosed investors participating.
10. Shift Technology
Shift Technology is a claims fraud detection platform that uses AI to detect fake claims in real time. This InsurTech platform also detects underwriting risks and improper payments. Its financial crime detection feature ensures compliance with AML and KYC regulations. Shift’s technology speeds up the decision-making process, allowing insurance companies to operate with greater efficiency. With a market capitalisation of $2.89 million per June 2024, the company has raised $316 million since its inception in 2014, raising $219 million in its latest Series D.
These top InsurTech companies are disrupting the market with advanced technologies such as AI tools. With their capabilities to streamline user experience, lower costs, and improve decision-making processes, these InsurTech startups will continue to challenge legacy insurance companies.
FinTech Strategy hears from Till Wirth, EVP of Product at Wise Platform, to find out more about its mission to make international payments fast, low-cost, convenient and transparent
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At Money20/20 Europe in Amsterdam, Till Wirth, EVP of Product at Wise Platform, took part in an impactful session titled “From Personal Payments to Enterprise: The Changing World of Cross-Border.” Wirth’s panel talk focused on the transformative trends in cross-border payments and their implications for both personal and enterprise financial transactions.
“Wise is a global technology company building the best way to move money around the world. Wise Platform is Wise – but for banks, large businesses and other major enterprises.
We allow our partners to embed the best way to send, receive and manage money internationally into their existing infrastructure, creating value for their business and customers.
Over the past decade, Wise (formerly known as Transferwise) has built a global payments infrastructure that has revolutionised how money moves around the world. Now, thanks to Wise Platform, other companies can gain access to our industry-leading, reliable service seamlessly.
We save partners time and money by allowing them to deploy new products and services to customers seamlessly, helping them to speed up innovation and serve, retain, and grow their customer base.”
FinTech Strategy spoke with Wirth to learn more…
Tell us about the genesis of Wise… Why is this an exciting time for the company?
“For us at Wise, it’s all about continuing towards our mission of making international payments fast, low-cost, convenient and transparent for our customers and partners.
It’s an exciting time for us as we’ve moved over £118bn on behalf of our 12.8 million active customers in the last financial year and helped them save more £1.8bn in fees. Over 62% of Wise’s transfers are completed instantly (in 20 seconds or less). Wise Platform, our global payments infrastructure for banks and enterprises is growing quickly, too, which allows us to bring the benefits of Wise to more people around the world.”
Tell us about your role…
“I lead the Wise Platform Product team building the global payments infrastructure for banks, financial institutions and enterprises around the world. For example, my team built the product behind the collaboration we announced with Swift last year.”
What are some of the key challenges financial institutions are facing that you can help them with? What problems are they asking you to solve?
“Consumers now expect their cross-border payments to be instant, convenient and transparent. And they are moving to providers they can trust to provide these services. As a result, we’re seeing banks focusing on retaining and winning back their customers through improving their cross-border payments experience. This is exactly what Wise Platform is helping them to do.
We work with more than 85 partners globally, including Bank Mandiri, Indonesia’s largest bank by assets, Shinhan Bank, one of South Korea’s oldest and largest national banks, and GMO in Japan to provide them with the capabilities, technology and network to enable fast, secure and cost-effective international payments for their customers. Quickly, directly from their own apps, without any major technical overhaul.”
Tell us about a recent success story…
“In June this year, Wise Platform hit a major milestone when our integration with Nubank, the world’s largest digital banking platform with over 100 million customers, went live.
Thanks to our partnership, Nubank’s premium Ultraviolet customers can now access multi-currency accounts and debit cards powered by Wise directly from their Nubank app. Customers benefit from a convenient user experience that we’ve tested and iterated over the years for our own customers to seamlessly manage their finances internationally.”
Why do you think the evolution of collaboration between banks and fintechs is set to continue?
“One of the reasons is that while banks have scale, they can gain agility in non core focus areas by working with fintechs and deliver significant customer benefits quickly.
Most banks have been built to focus on domestic banking, meaning their global cross-border payments are often not a priority. However, fintechs are better able to specialise and focus on one specific customer pain point. This means they can innovate much more quickly.”
Why Money20/20? What is it about this particular event that makes it the perfect place to showcase what you do? What’s the response been like for Wise?
“It’s a great event that brings the industry together and enables us to discuss the progress we’re collectively making. This year in particular, it was great to be on a panel to discuss how the cross-border payments landscape is evolving and the latest trends we’re seeing. We look forward to the upcoming event in the US later this year.”
With more financial transactions shifting to digital platforms, having proper cybersecurity measures becomes a priority.
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Moreover, data is at the heart of every fintech company, which makes them attractive targets for hackers and malicious actors.
Financial technologyhas created new opportunities for customers and businesses in the finance industry. Individuals can now borrow, transfer, save, and invest from the convenience of their homes. Also, the growth of the industry is massive, with fintech revenues projected to grow sixfold from $245 billion to $1.5 trillion by 2030.
However, following that growth are security risks associated with it. Accounting services firm BPM predicts that cybersecurity attacks aimed at fintech companies will only continue to grow in 2024 and beyond. Furthermore, these attacks can end in monetary losses, reputational damage, and brand erosion.
To prevent such cases,fintech security leaders globally have implemented cybersecurity measures.
1. Stripe
Founded in 2010 by Patrick and John Collison, Stripe specialises in payment processing software and application programming interfaces (APIs).
Based in South San Francisco, California, the company offers top-tier encryption and secure transmission protocols. The protocols, which adhere to the PCI DSS standards, are in place to ensure the security of credit and debit card data.
Launched in 2018, Stripe’s innovative tool Radar detects and blocks fraudulent transactions. After its 2.0 update in 2018, the company claimed it helped reduce fraud rates byan additional 25% for its users.
With other services like Stripe Terminal, Stripe Tax, and Stripe Capital, Stripe has become a trusted name in online payment processing. It powers payments for major companies like Amazon, Google, and Shopify, all of which demand high-security standards.
2. Square
Owned by Block, Inc., Square was launched in 2009 by CEO Jack Dorsey and co-founder Jim McKelvey. Square offers an all-in-one financial services platform, including customer booking, e-commerce, payroll, shifts, loan financing, and banking.
In 2021, Square received FDIC approval from the Utah Department of Financial Institutions. Additionally, with end-to-end encryption, regular vulnerability assessments, and secure data storage, Square reached Level 1 PCI DSS certification. This is the highest level for payment processor certification.
3. PayPal
Launched in 2000 from the merger of Confinity and X.com, PayPal is a leader in secure online transactions.
Acquired by eBay in 2002, PayPal became the leading global payment application after eBay discontinued its Billpoint service. It has arguably outpaced competitors like Citibank C2IT, Yahoo! PayDirect, and BidPay from Western Union.
PayPal uses advanced encryption technologies and multi-factor authentication to protect user data. With its continuous monitoring and fraud prevention mechanisms, the company is compliant with industry standards.
According to the company, its fraud detection tools are informed by data from 1 billion monthly transactions. It claims that the toolgets smarter with each transaction.
4. Ant Financial (Alipay)
Ant Financial’s Alipay, is the second-largest international payment processor after Visa.
Founded in 2014 by Jack Ma as an affiliate of Alibaba, Ant Financial offers a range of products. Available services include electronic payment processing, banking, and mobile payments through brands like Yu’ebao, Huabei, and Xianghubou.
Ant Financial combines advanced cybersecurity measures such as AI-driven fraud detection, biometric authentication, and data encryption. Alipay itself also holds the internationally recognized ISO/IEC 27001 cybersecurity certification.
Used by more than 1.2 billion users, Ant Financial is protected by its AI-powered risk engine AlphaRisk. With the tool, Alipay’s fraud loss rate has been kept under0.64 in 10 million, way lower than the industry average.
5. Plaid
Established in 2013 by Zack Perret and William Hockey, Plaid is an embedded financial platform. It facilitates secure online payments and transactions by connecting users’ bank accounts to finance applications.
Plaid ensures authorised access to bank data through secure bank portals, which eliminates the need for user credentials. In October 2020, Plaid introduced “Plaid-Link,” a service that enables real-time payments for loans, insurance, and wages. It securely connects 12,000 US financial institutions, plus many more in Canada, the UK, and Europe.
6. Chime
Founded in 2012 by Chris Britt and Ryan King, Chime partners with regional banks to offer fee-free mobile banking services. Chime uses encryption, access protocols, continuous monitoring, and proactive fraud prevention to keep its payment processes secure.
In April 2020, Chime launched the fee-free overdraft product “SpotMe.” It successfully processed $375 million in Economic Stimulus Payments one week from the scheduled government disbursement.
7. Adyen
Adyen, listed on Euronext Amsterdam, is a Dutch FinTech company founded in 2006 by Arnout Schuijff and Pieter van der Does. Primarily catering to businesses, Adyen offers e-commerce, mobile, and POS payment solutions. The company successfully achieved 1.3 billion euros in revenue in 2022.
Adyen’s cybersecurity measures include encryption, tokenization, secure data storage, and regular security assessments, all backed by Level 1 PCI DSS certification.
8. Sift
Founded in 2011, Sift is one of the cybersecurity companiesproviding AI-powered fraud platform. It uses machine learning combined with data network scoring 1 trillion events per year to offer security solutions.
The company notices that online fraud is a growing problem, especially for retailers and financial institutions. Therefore, Sift’s algorithm distilled over hundreds of millions of user actions to create fraud pattern recognition tool.
Sift has received several accolades, including being named a leader in 2023 Forrester Wave for Digital Fraud Management and G2’s Momentum Leader in Spring 2024.
9. Darktrace
Cybersecurity company Darktrace, established in 2013, uses AI to respond to cyber threats in real time. Since its inception, the tools it created has been deployed over 9,000 times.
With its Enterprise Immune System technology, Darktrace is able to handle Industrial Operational Technology, email, SaaS, cloud, network, and endpoint safety. More than 9,400 organisations, including major financial institutions, rely on its advanced solutions.
The company was included in The Cyber Award’s AI Product of the Year in 2020 and Fast Company’s top 10 most innovative AI companies for 2022.
10. Netskope
Cloud-based cybersecurity company Netskope was founded in 2012 to help organisations apply zero trust principles. The company’s solutions protect data across cloud services and apps, which makes it pivotal for fintech institutions relying on such technologies.
The California-based firm helps financial services companies meet compliance requirements such as FINRA, PCI-DSS, GLBA, and GDPR. Not only that, it provides necessary protection, such as SWG, CASB, ZTNA, DLP, Cloud Firewall and SD-WAN.
In 2024, Netskope is recognized as a leader in the Gartner Magic Quadrant for Cloud Access Security Brokers (CASBs).
What makes these a success
These top cybersecurity firms in fintech have set high standards in cybersecurity. Their efforts have significantly contributed to a safer digital landscape for fintech.
They have also demonstrated collaboration with fellow financial or cybersecurity experts. Collaboration means having access to specialised knowledge that may not be available in-house. This includes latest threat intelligence, security tools, and tailored audits.
Additionally, it is imperative that companies adhere to industry standards and regulations. Compliance is the first step in building trust with users and stakeholders alike.
Despite the convenience it offers, adoption still faces challenges. This article discusses the main opportunities it brings and the challenges it faces.
Opportunities
The advent of embedded finance has brought about new opportunities; they are, among others, as follows:
Supporting growth of financial technology
Embedded finance is a significant booster for the growth of the financial technology sector. Traditional finance has struggled to reach traditionally unbanked communities. By making finances integrated into non-financial apps, these communities can now access financial services.
Promoting peer-to-peer transactions
While the integration of financial services into non-financial apps is important, one of embedded finance’s most important functions is facilitating seamless peer-to-peer transactions.
Increasing payment channels
Embedded finance allows companies and services to accept payment from more channels, allowing them to expand their reach.
Focus on customer experience
Embedded finance has an emphasised focus on customer experience. By integrating multiple financial services into one platform, customers can now access them with ease.
Challenges
As embedded financial services are still in their early stages of development, they face several challenges.
Complexity in integrating multiple services
Integrating multiple services entails some technical complexity.
Regulatory challenges
A platform integrating multiple financial services into one platform might have to navigate diverse regulatory challenges that bind to each service, not to mention the challenges that come from the partnerships with the service providers.
Risk management
By integrating multiple services into one platform users are at an increased risk of having their accounts and data compromised.
Notable Embedded Finance Platforms
Multiple successful embedded finance platforms have emerged in various countries. For example, there is Alipay in China, GoJek in Indonesia, Plaid in the U.S., and Adyen in the Netherlands.
These platforms all owe their success to the same factors. These are user trust, widespread adoption, security, innovation, and an extensive network of partners.
User trust stems from data security. Embedded finance platforms employ tools such as encryption and secure API designs and ensure security compliance to secure user data. Then, they also have extensive networks of partners, ensuring the comprehensiveness of their service offerings.
Due to the convenience they offer, embedded finance enjoys public support. It provides opportunities for companies and services to reach more users. That said, embedded financial services also face challenges such as cybersecurity.
Financial service sectors are undergoing significant transformation driven by the adoption of AI.
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From established institutions to innovative FinTech startups, financial organisations are embracing AI technology to improve their offerings and operations.
A report by Statista projects global investment in AI for financial services to reach a staggering $26.5 billion by 2025, highlighting the growing importance of AI in finance. Additionally, given the significant impact of AI technology, this article will explore the top 10 AI applications transforming the financial services sector.
Introduction to AI in Financial Services
The financial sector is grappling with a growing tide of data and intricate market dynamics. Furthermore, AI technology has emerged as a powerful tool to navigate this complexity. ML models, for instance, can analyse vast amounts of transaction data in real-time, identify unusual patterns, and flag potential fraudulent activities.
Moreover, AI’s impact extends to automating manual tasks that burden financial institutions. AI tools can efficiently process large datasets, generate reports, and handle administrative duties. Also, this shift towards automation allows financial institutions to focus their resources on higher-value and strategic endeavours.
1. Signifyd
Signifyd offers a comprehensive Commerce Protection Platform designed to empower businesses with a holistic approach to fraud and abuse prevention.
By using machine learning (ML) models, Signifyd’s Fraud Protection ensures exceptional accuracy in eliminating fraudulent transactions while automating order approvals. Additionally, this is further bolstered by Abuse Prevention, a feature that addresses customer abuse behaviours and simultaneously rewards legitimate customers.
2. KAI
Kasisto offers a conversational AI platform, KAI, designed to enhance customer experiences within the financial sector. KAI tackles two key challenges for banks: reducing call centre volume and empowering customers. Equally important, it achieves this by providing self-service options and solutions through AI-powered chatbots.
If a customer inquiry extends beyond the chatbot’s capabilities, KAI seamlessly transfers the conversation to a human customer service representative, ensuring a smooth handover and comprehensive resolution.
3. Entera
Entera, an AI application designed for residential real estate investors, streamlines the entire investment lifecycle. Combining SaaS tools and expert services, Entera empowers investors to buy, sell, and manage single-family homes. Furthermore, the platform grants access to a comprehensive database of on-market and off-market properties, simplifies transaction processes, and facilitates market trend discovery.
4. Range
Aimed at simplifying wealth management, Range offers a unique blend of AI technology and human expertise. This unique approach integrates investment management, tax planning, and estate planning services, all accessible through a user-friendly interface. Tailored to meet individual goals through a unified view of all financial activities, Range also offers clients the guidance of certified financial planners when needed.
5. Zest AI
Zest AI uses ML and artificial intelligence to address challenges in credit risk assessment for financial institutions. Their platform analyses vast datasets to identify patterns missed by traditional models, addressing longstanding challenges faced by financial institutions. Also, this AI technology aims to reduce lending bias, improve risk prediction, and expand access to credit for borrowers.
6. Upstart
Upstart is a fintech company using AI technology to improve credit accessibility. Their AI-powered lending platform assists financial institutions in making informed lending decisions by analysing a broader spectrum of data beyond traditional credit scores. This approach aims to expand credit inclusion, allowing borrowers with limited credit history to qualify for loans.
7. Proofpoint
Proofpoint offers a suite of cybersecurity solutions designed to shield organisations from sophisticated cyberattacks and compliance concerns. This AI application addresses people, data, and brand protection, encompassing areas like email security, data loss prevention, and threat intelligence. Recognizing people as the most susceptible targets, Proofpoint prioritises a human-centric approach to ensure the very foundation of an organisation’s security posture is fortified.
8. Brighterion
Brighterion tackles complex decision-making across industries like finance and healthcare with its unique model-based AI technology This model-based system utilises Smart Agents, enabling it to personalise, adapt, and continuously learn.
After analysing and observing data, the platform creates virtual profiles that update in real-time. This allows for a holistic one-on-one analysis, granting organisations a comprehensive 360-degree view of each entity’s behaviour.
9. Kavout
Kavout stands out in the industry by harnessing the power of ML and quantitative analysis. This approach allows them to process vast amounts of unstructured data and identify real-time patterns within the financial markets.
One of Kavout’s core solutions is the K Score, an AI-powered stock ranking system. Furthermore, by analysing this massive data pool, the K Score condenses the information into a single numerical ranking for each stock.
10. Trumid
In the fixed-income trading space, Trumid is a company using advanced analytics and AI to optimise the credit trading experience. Their suite of data-driven tools and proprietary Fair Value Model Price offers real-time pricing intelligence for over 20,000 USD-denominated corporate bonds. In addition, this engine analyses and adapts to market fluctuations, equipping traders with valuable insights to guide data-driven trading decisions.
Digital payments are now the preferred payment method for much of the world, and they continue to evolve.
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They were first introduced through the creation of credit or debit cards. These physical cards allowed consumers to spend money without needing cash.
Advances in mobile technology led to online banking apps, mobile wallets, and contactless payments. These methods are even more convenient and are transformative for commerce, online and in physical outlets.
Throughout 2024, there are ten key trends expected to rise as digital payments evolve:
1. Rise of cryptocurrencies in everyday transactions
Cryptocurrencies, or crypto, are digital currencies maintained by a decentralised blockchain system rather than any government or institution. Owning a crypto means possessing assets that are not tangible, hence it is more popular as an investment currently.
Many platforms are gradually integrating crypto into their financial ecosystem. For example, PayPal — the online payment giant — allows users to buy, hold, and sell crypto.
Despite its volatility issues, crypto is predicted to keep growing. It offers fast transactions, easier cross-border payment, and lower transaction fees than traditional methods.
2. Biometric Authentication
The security concerns surrounding digital payments are unchanged, but the method for securing them is improving all the time. This has led to widespread growth in biometric authentication. Biometric authentication allows for more security and convenience than traditional passwords and PINs, which can be forgotten or stolen. It makes impersonation far more difficult.
Biometrics requires users to input unique physical characteristics like fingerprints or facial features (via a camera). Approved in an instant, consumers can make payments easily by verifying with the tap of a finger or by staying still for the camera.
3. Growth of Peer-to-Peer Payments
Peer-to-peer payment apps allow users to send money directly to another user using a mobile device. The convenience of this payment mode made it popular.
Among the most used apps are Zelle, Venmo, and Paypal. Zelle, for instance, gained$307 billion in transactions in 2020, 58% growth on the previous year, and part of a wider trend in digital payments growth during the Covid-19 lockdowns.
This method offers instant transactions advantageous for time-sensitive transactions like splitting bills or sending emergency funds. It also commonly has a low-cost or free transaction compared to traditional banking options.
4. AI fraud detection with digital payments
AI technology has greatly impacted many sectors, including digital payments. Fraud detection with AI is a solution that uses algorithms to analyse large transaction data. This AI tool can recognise suspicious patterns and identify discrepancies that indicate fraudulent activity.
Companies likeVisa introduced AI fraud detection this year. The AI-powered security tools are included in the Visa Protect suite. The fraud detection tool, including digital wallets, can be used for immediate payments.
5. Real-time payments (RTP)
Real-time payments make immediate transactions between accounts significantly better than traditional banking systems, which might take days. This is a preferred option for both consumers and businesses.
Businesses can improve cash flow with faster payments, and consumers can access funds immediately. Currently, the RTP frameworks continue to be adopted by worldwide financial institutions. It is expected to be the standard for various transactions, including payroll and cross-border payments.
6. Voice-activated transactions
Voice-activated payment is an innovative method for users to do transactions simply using speaking commands. A payment system such as this can be more convenient for users than the common typing password method.
This form of authentication is possible through voice recognition tools used in mobile apps. Additionally, voice-activated payments offer a high level of security and a smoother consumer experience. As more companies adopt this trend, it is expected to become even more popular in 2024.
7. QR code payments
QR code payments uses a unique QR code that smartphones can scan to authorise transactions. It is usually connected to consumers’ mobile banking apps or mobile wallets as the source of payment.
This contactless payment offers a seamless payment experience that is highly desirable for users. Businesses also benefit from the simplicity of the method by making transactions faster and seamless.
8. Cross-border payments
Cross-border payments are expected to grow consistently as the world moves on from the restrictions of the COVID-19 pandemic. Also, more businesses are engaging in cross-border payments, and 80 percent expect a transaction volume increase in the next 12 to 24 months.
International payments often suffer from high fees and lengthy transaction times. However, companies are expected to improve their capabilities as cross-border payments increase.
9. Buy Now Pay Later (BNPL)
Buy Now Pay Later (BNPL) services are a more accessible of borrowing for payment than traditional methods like credit cards.
They allow consumers to make purchases and spread the cost over time. This method enables minimal or zero percent financing and no initial credit check.
Many e-commerce platforms have integrated these payment system as they become more popular.
10. IoT devices integration for digital payments
Integrating Internet of Things (IoT) devices with mobile payments helps make the consumer experience more convenient. This innovation allows wearables and smart home appliances to make contactless payments.
Furthermore, IoT devices can also generate data that can be analysed to create a more personalised experience.
Blockchain technology has come a long way since its emergence in the mid-2000s. Initially associated only with cryptocurrencies, it is now known as a tool that revolutionises the finance industry.
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In 2024, blockchain has seen transformative growth. According to a Coinbase report, on-chain projects announced by Fortune 100 companies have increased 39 percent from last year. Furthermore, 56 percent of Fortune 500 executives say their companies were working on on-chain projects.
Major actors in financial services are now embracing blockchain technology. From HSBC, IBM, and Nasdaq to JP Morgan, big names are now driving blockchain innovations. Here, this article explores ten blockchain trends expected to dominate the second half of this year.
1. Decentralised finance (DeFi)
A financial disruptor, DeFi enables peer-to-peer financial services without intermediaries such as banks. DeFi services such as Uniswap, Aave, or SushiSwap offer products and services like lending, trading, and asset management, often at competitive rates.
Under a Decentralised Autonomous Organisation (DAO), governance is placed in the hands of token holders. This results in a more inclusive decision-making process.
2. Smart contracts
Smart contracts are computer programmes that automatically execute agreements when predefined conditions are met.
One example of the financial institutions that have experimented with this is BNP Paribas. In 2020, it announced a collaboration with fintech company Digital Asset to design real-time and settlement applications using DAML smart contracts. It has also been involved in pilot projects for trade finance using blockchain.
Other than finance applications, smart contracts are also used in government services, legal industries, and notaries.
3. Cross-border payments
Most cross-border transactions are complicated and costly. Often, they also involve multiple intermediaries and currency conversions.
Blockchain offers a more efficient and cost-effective solution by allowing funds to be transferred directly between individuals and institutions. Blockchain-enabled payments take only a few seconds compared to traditional payments, which may take 3-5 business days.
Companies like Faster Payments Service, Ripple, IBM World Wire, and Strike have already demonstrated successful blockchain-based cross-border payments.
4. Digital identity verification with blockchain
Last year, 3,205 data compromise cases affected 353 million victims in the US. Nearlyall were data breaches, affecting 349 million victims.
Blockchain-based digital identity verification offers a solution to this problem. Personal identity verification protocols like Civic and decentralised identity networks like Sovrin allow users to control their personal information in a way that prevents identity theft and phishing.
Additionally, these platforms simplify and speed up the data verification process, allowing service providers to reduce the time, cost, and resources spent on manual verification.
5. Asset management
Blockchain’s technological capability can reduce the risk of losses when facilitating asset management. Tokenised securities, for instance, allow users to trade digital tokens representing ownership of assets such as stocks, investment funds, and bonds.
An example of this is Paxos Gold (PAXG), an asset-backed digital token with a total market capitalisation of $327 million.
Blockchain also allows for real-time tracking of asset ownership, transactions, and changes throughout the asset lifecycle management.
6. Fraud prevention with blockchain
With blockchain, organisations can permanently track and verify transactions, which makes it a powerful tool against fraud.
Cryptography and encryption techniques help ensure the authenticity and integrity of information, making it difficult to counterfeit. Institutions like Barclays Bank, JP Morgan, and HSBC have already integrated blockchain technology into their payment infrastructures.
7. Supply chain finance
Blockchain-based supply chain finance models are becoming increasingly popular. This is because it allows supply chain partners to share information more easily.
An immutable digital ledger can track all information, from assets to product quality, saving time and money for all parties involved. IBM Food Trust uses this feature in the food supply chain sector. With a permanent, tamper-proof record of every transaction, from farm to table, the technology helps ensure the authenticity and safety of food products.
The Provenance network also uses blockchain to allow consumers to verify the origins and authenticity of products. This system makes sure that product histories are permanently recorded and easily accessible.
8. Blockchain-based trading
This year saw an increasing ownership of digital assets. The global user base for digital currenciesreached 562 million people, a significant increase from 420 million in 2023. Within virtual worlds and the metaverse, trading volumes have only been increasing since the bullish run in 2023.
Blockchains can also be used to trade various assets, such as luxury goods, real estate, and intellectual property rights.
9. Internet of Things (IoT)
Blockchain can connect IoT devices to ensure safety in interactions between devices and networks. This feature opens up new opportunities for financial services such as micropayments and decentralised insurance.
Hyperledger Fabric, for example, acts as a distributed transaction ledger for various IoT transactions, helping keep track of millions of connected devices.
Another ledger, IOTA, is specifically designed for the Internet of Things (IoT). It secures sales and trading data streams to facilitate micropayments between IoT devices without transaction fees.
10. Insurance
Smart contracts built on blockchain technology can protect health records and detect fraudulent claims. Aside from that, its ability to automate claims processes can minimise human interference.
Etherisc is a company that claims to be a pioneer in parametric blockchain insurance, having used the technology since 2016. It is a decentralised insurance protocol built on blockchain technology that has developed solutions like flight delay insurance and crop insurance.
Another example is Insurwave, a blockchain-based platform developed by EY and Guardtime in collaboration with insurers and shipping companies.
FinTech Strategy met with Gurdeep Singh Kohli, one of SC Ventures’ founding partners, to find out more about its focus on investment, innovation, and venture building
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SC Ventures is a business unit of Standard Chartered Bank that focuses on investment, innovation, and venture building. Unlike other corporate venture capital unts (CVC), SC Ventures not only invests in fintechs but also builds its own independent ventures. The unit has three main objectives… To rewire the DNA of banking, to invest in fintechs that have a strategic fit with the bank, and to drive a culture of innovation across the bank’s employees.
SC Ventures has launched several successful ventures in areas such as Digital Assets, Online Economy & Lifestyle, Sustainability & Inclusion and SMEs & World Trade. The unit embraces challenges in terms of governance, talent, and scaling the ventures. In terms of future trends, SC Ventures is interested in exploring the application of AI and the potential of the metaverse in commerce and education.
During Money 20/20 Europe we met with Gurdeep Singh Kohli, one of SC Ventures’ founding members, to find out more…
Tell us about the genesis of SC Ventures?
“SC Ventures is the investment, innovation and venture building arm of Standard Chartered Bank. Our purpose, the vision statement, is to rewire the DNA in banking. A need that we are increasingly hearing from our clients. Importantly, SC Ventures is not like any other CVC unit you may come across in the corporates, or even banks. Most of them just have a CVC unit, which is an investment unit into fintechs. But what we have is also a venture building arm; it’s what differentiates SC ventures from many other CVCs.
Venture building is where we build our own businesses and these are set up as independent ventures. Going forward, many of them will actually have their own stand here at Money 20/20 as independent ventures. We are also a bit different from an investment perspective. Sc Ventures only invests in fintechs… We work with so many CVCs set up with a pure financial objective. However, SC Ventures only invests in a fintech that has proven itself with the bank or with one of our other ventures.
So, there needs to be a strategic fit first before we make an investment. Another of our objectives is to drive the culture of innovation across the 85,000 people we have at the bank. And as a part of that, we run an intrapreneurship programme where the bank can throw challenges for employees in the bank to participate and come up with ideas. We take them through training and then we put those ideas into production. We have been delivering against these three objectives – venture building, Fintech investment and intrapreneurship – since the inception of SC Ventures six years ago.”
Talk about your role at SC Ventures?
“I’m one of the founding members of SC Ventures with CEO Alex Manson right from day zero. Alex and I drafted the blueprint for SC Ventures which got endorsed in 2017. We set up in 2018 and I have played multiple roles over these last six years. Today, I’m an Operating Member and lead for Europe and the Americas. During the last six years I’ve set up the venture building practice where we started incubating a few ventures. The few have become quite a few! I’ve also played a part in developing our strategy and I’m now responsible for the intrapreneurship program. I also serve on the board of the ventures we launch and as an Operating Member, overseeing the performance of these ventures.”
What are some of the key challenges financial institutions are facing that you can help them with? What problems are they asking you to solve? In doing so, what are the challenges for SC Ventures?
“Our portfolio is spread across four high conviction themes: Digital Assets, Online Economy & Lifestyle, Sustainability & Inclusion and SMEs & World Trade. Venture building in itself is a challenge. It requires a venture building mindset to achieve progress in stages.
We created an alternate governance model to allow the decision making for venture building to be faster and more nimble. Meanwhile, we maintain institutional grade security from a risk, compliance and security mindset and are actually among the best in the market. This is something smaller fintech companies do not have. Another challenge we face is talent. It is very important to have these ventures led by people who also understand banking, not just tech. A combination of people from within and outside the bank is required to be successful. Obviously, the ability to scale is another key challenge as we look at the sales cycle for developing many of these capabilities.”
Tell us about some of SC’s successful ventures…
“Online Economy & Lifestyle has seen some of our biggest success stories with the digital bank Mox, which operates in Hong Kong. We have also built a Banking-as-a-Service (BaaS) business called Audax which is live and now opening up to new clients. And we are looking at some of the onboarding solutions in the UAE with a venture called Appro.
Within SMEs & World Trade, we took a different approach. We did not lead with financing, we led with commerce. Because the problem statement from the client was ‘help us grow and then you can give us financing’. Traditionally, the banks have led with financing, but the SMEs have told us they can manage financing and want us to help them grow so that financing follows. We’ve responded by building a B2B commerce platform for SMEs called Solv. It’s been very successful from a scale perspective in India; and we are entering other markets. We also have ventures like Olea and TASConnect, for supply chain management, and Olea which helps distribute trade assets to institutional investors. So, that’s the bridge which Olea is creating.
For Sustainability & Inclusion, SC Ventures is partnering with ENGIE Factory on a startup to bolster funding for conservation projects. The venture will leverage emerging technology to identify, evaluate and drive capital into critical conservation efforts worldwide.
Across Digital Assets, our biggest ventures are Zodia Custody and Zodia Markets, creating institutional grade capability for custodying cryptocurrencies and digital assets and for institutional trading.”
What trends are you seeing across the FinTech landscape? What opportunities do you see for SC Ventures?
“The financial world moves on and the recent focus on crypto and payments has shifted to how AI can impact the future for financial services.
There is an element of what can we do in the field of metaverse. And there is an element of the application of metaverse for commerce and the application of it for learning. Another key theme is not AI in terms of tech but AI in terms of application which we are interested in. What we are doing now is creating a centre of excellence in SC Ventures for the bank. It will find out the use cases of AI within banking. We are already seeing examples of applying use cases of AI in compliance. So, we are working on a capability which can make the compliance or regulatory change management much easier by applying AI.
In my opinion, AI is at the stage where blockchain was a few years ago… You kept on hearing the word blockchain. But my simple brain said, ‘Blockchain is the tech, but tell me the application.’ I think AI is at that stage where people are leading with AI, but then AI will be replaced by the word, which is the application of it. And that is very natural for the evolution to happen. But I think everybody’s going to benefit.”
And what’s next for SC Ventures? What future launches and initiatives are you particularly excited about?
“We have also created an Innovation Bridge (currently known as the FinTech Bridge) which connects fintechs to the banks. I’m leading on this unique proposition which doesn’t exist anywhere else right now in the market. Initially this bridge was only for Standard Chartered, which is the bank calling out to the fintechs to find solutions to their problems. Now, we are opening up this bridge for other banks to pose challenges. So far, we have 4,000 fintechs registered on the bridge.”
Why Money20/20? What is it about this particular event that makes it the perfect place to showcase what you do? How has the response been to SC Ventures?
“It’s the first time I’ve attended Money 20/20, we’ve had some fascinating impromptu conversations that will lead to great opportunities. All the big names are here and it’s clearly a popular event from a thematic perspective – payments is a big theme this year. I have a very high regard for the quality of what’s on offer and the way the event has been organised. It’s a great customer experience, the way it’s all been structured, at scale, is actually one of the best I’ve ever seen.
The response has been fantastic… We’re now beginning to combine Standard Chartered’s access to the clients and also SC Ventures. We are working as one unit to transform the bank and the banking industry at the same time. It’s a unique combination that is getting people engaged and starting great conversations for future collaborations.”
FinTech Strategy and Interface joined Publicis Sapient at Money20/20 in Amsterdam for the launch of its third annual Global Banking Benchmark Survey and spoke with Head of Financial Services Dave Murphy about its findings
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The third annual Global Banking Benchmark Study from Publicis Sapient draws on insights from 1000+ senior executives in financial services across global markets. The study focuses on the goals, obstacles, and drivers of digital transformation in banking.
Global Banking Benchmark Study
The study was launched during Money20/20 Europe in Amsterdam last month. Eoghan Sheehy, Associate MD, and Grace Ge, Senior Principal, highlighted the banking industry is focused on improving existing processes rather than introducing new ones. Data Analytics and AI are identified as key priorities for digital transformation. Additionally, there is a focus on internal use cases and efficiency.
Eoghan and Grace also discussed the challenges faced by the banking industry. These include regulation, competition from companies like Amazon, and the need to attract talent. They emphasised the importance for financial institutions of modernising core infrastructure. Also, building cloud infrastructure to support ongoing digital transformation. Moreover, the study notes the prevalence of the development of custom-made tools and internal use cases for AI implementation. Furthermore, Eoghan and Grace provided examples of repeatable use cases and discussed the success factors for Data Analytics and AI.
Four key takeaways from Publicis Sapient
Four key tracks came out of the study…
Modernising the core will always be important. But modernising the core for its own sake and also building the cloud infrastructure that supports it or allows for it to be modern. A decent chunk of the survey responders are still very focused on this. Executives are stating they want to make sure their people can make the best use of the beautiful core they’ve now built.
GenAI is an area of thoughtful experimentation for the Neobanks. We’re talking about scaled microservices here. Instances where, across Neobanks, you’ll have the same machine learning model and the same GenAI text generator facilitating retail and SMEs. That’s pretty sophisticated and something everyone has to contend with.
Data Analytics transformation is a key priority using GenAI to do so along with bringing new talent into the game.
Payments has been a big theme at Money20/20… We’re seeing lots of activity around ancillary individual product areas.
“The study focuses on how to think about solving problems end-to-end. Banks are dealing with legacy issues and taking a customer first view into solving the challenges. The practical application of AI across the banks is a significant theme as they look to automate decision-making and deliver better credit risk models. AI is finally delivering a set of use cases that truly can impact the way banks operate and build their own technology.” Dave Murphy, Head of Financial Services, EMEA & APAC
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Neobanking trends are part of a major financial innovation that has rapidly developed in recent years: a fully digitised rendering of the banking transaction landscape.
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The constant evolution of neobanking is exciting for both consumers and businesses. It promises a continuous wave of innovative financial products and services.
Introduction to Neobanking Trends
Neobanking refers to financial institutions that operate completely online. A neobank works digitally and has no physical branch offices. The entire transaction process — from registration to the final transfer — is completed within an app or online platform.
At first, neobanks were considered a threat to the banking industry. The term ‘challenger banks’ was used broadly to suggest they were there to subvert the status quo.
In reality, it is hard for traditional businesses and institutions to innovate. Meanwhile, neobanks created laboratories for banking innovations. The basic services provided through neobanking do not greatly differ from those offered by normal banks. They include: the ability to create savings and deposit accounts; money transfer and payment services; and financial planning services.
Digital banking is widespread, but digital banking experience vary enormously. Neobanking allows customers to link their online accounts to conventional bank accounts. That way, customers can enjoy the best features from both types of banks – like the neobank’s capacity for custom analysis of personal habits and planning with data from their other accounts.
Neobanking Trends in 2024
Neobanking is about providing a fully digital and maximally convenient customer experience of banking. Its greatest innovations all do that and 2024 predictions for neobanking trends all push further into that field of convenience:
1.Enhanced Mobile Banking Features
Mobile banking features are increasing in 2024 and will continue to do so – growing in number as more features launch, and growing in presence as successful features proliferate.
Neobanking services are very practical, allowing consumers to make transactions using only their mobile phones, anytime, anywhere. It is digital banking as an incubator of financial technology.
New neobanking features also offer a more personalised digital banking experience. Consumers can choose the colour of their digital debit card, choose the material and design of a physical card (if they want one), and create and add custom spending categories, which they can sort transactions into manually and set up to file them automatically according to their preferences.
Customers can also add their images to their savings accounts, which is a feature that does not necessarily have a financial service tied to it, but deepens the consumer relationship with the neobank. That helps with customer retention and business continuity and is a marked departure from traditional banking, which struggles to make those personal ties with their customers.
If you build the service around the customer, it makes sense to give them more than just the service. Especially in a mobile-first world where they will have hundreds of interactions with the neobank in just a day.
2.AI Integration
Artificial Intelligence has a growing role in neobanking as it does acrossl financial services and industries generally,
AI and machine learning technology will be integrated into neobanking personalisation features to provide more customised banking insights for customers. AI models can also analyse consumer spending patterns, allowing for the production of more personalised and efficient budgeting tools – all in the platform.
Ultimately, this helps power offerings of embedded financial services and opportunities for new revenue streams and happier customers.
3.Expansion into New Markets
Neobanking found its feet in markets where it was able to grow and mature into the exportable product it is today – especially in the UK.
The UK’s status as a finance hub and a large developed economy with high levels of digital maturity and global integration made it an ideal base for neobanking. It is not the only one, though, and there have been innovations all over the world, from Nigeria to the Netherlands and Indonesia, with neobanks finding ways to meet consumers where they are digitally native.
Neobanks are starting to leave their original territories and enter new markets. This means a more diverse customer base for these neobanks, and a more diverse range of neobanking services, serving a great range of niches, for consumers to choose from.
They are mostly entering via partnerships and collaborating with local regulators – both indicators of the sector’s maturity.
4.Crypto Integration
Cryptocurrencies are not a fad, and will be an integral part of neobanking trends in 2024.
Financial technology that supports crypto payment methods and investment portfolios will open up a new field to the benefits of neobanking. This is a consumer choice decision, but bringing cryptocurrencies into a new arena holds unknown possibilities in its own right.
This aligns with the digital banking principle that offers more diverse financial choices. This development does not mean that real money will be gone, just that consumers will have more financial portfolio and payment options. It also brings crypto to new consumers.
5.Environmental Sustainability
Neobanks lead the trend towards more environmentally sustainable banking practices.
Their ability to reach their customers so intimately means they get great traction with sustainable messaging in-app, and can activate customers with environmental and social initiatives – like donating a round-up from a transaction – by embedding those features in the existing consumer journey.
This shift is driven in part by consumer preferences. Younger generations prefer brands that focus on social responsibility and sustainability is now recognised as a major factor in purchasing decisions for many age groups.
Younger consumers want the businesses they use to align with their own values. For the environmentally-conscious crowd, digital banking is an important platform on which to cultivate trust.
6.Enhanced Biometric Security
Cybersecurity is ever-present and biometric authentication makes neobanks very secure.
Biometric security measures have made digital banking much more secure. Logging into an account by simply typing a password is already considered outdated.
Multi-layered security protocols for authentication are now proactive fraud prevention measures: so they include using fingerprint scanning, facial recognition, or recording videos to authenticate a user. The use of fingerprints and facial recognition tech lends itself to the seamless customer experience and customers easily authenticate every time they open their apps, however often they do it.
7.Increased Cooperation and Competition
Increasing competition with conventional banks is now offering more chances to collaborate.
Competition drives innovations, and as traditional institutions fought to keep pace they were able to see what they could do and where they just could not match the agility of neobanks.
Partnerships between neobanks and traditional financial institutions is itself becoming a trend, as they combine to offer the best of the new with the best of the old. That, in turn, will create many opportunities for consumers to win out.
The new frontier of a changed world with neobanking
The banking world has changed. So has how we manage our finances. User personalisation, the integration of AI, and biometrics have all become commonplace thanks to neobanking. However, these innovations have had a huge impact.
Financial technology changes our lives every day, and neobanking trends will . These feature enhancements are not just neobanking trends – they represent significant changes in digital banking and the ongoing relationship between bank and consumer.
InsurTech, short for insurance technology, is transforming insurance accessibility and efficiency.
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Global adoption benefits all stakeholders – from brokers to policyholders, underwriters, and customers.
Gallagher, one of the world’s largest insurance brokers, puts the amount invested into InsurTech globally at $55 billion. Global InsurTech funding dipped below $1 billion in Q1 2024, but early-stage funding grew 26.5 percent quarter on quarter, despite a widespread funding slowdown.
This suggests insurers are starting to favour more sustainable investment strategies and are planning for the long term – banking on visions that will bring rewards some years down the line.
Gallagher, one of the world’s largest insurance brokers, puts the amount invested into InsurTech globally at $55 billion. Global InsurTech funding dipped below $1 billion in Q1 2024, but early-stage funding grew 26.5 percent quarter on quarter, despite a widespread funding slowdown.
This suggests insurers are starting to favour more sustainable investment strategies and are planning for the long term – banking on visions that will bring rewards some years down the line.
There are some common themes – more than 85 percent of insurers want to grow customer experience initiatives and the industry is shifting towards customer-centric strategies. This is a reflection of consumer demand, but importantly it signals that insurers are approaching innovations with confidence in widespread and long-term viability as a core part of business strategy.
These are the top innovations drawing their attention:
AI in underwriting
Traditionally, underwriting is full of time-consuming manual work. When left to AI, it can process data such as claim history, social media content, and market conditions to produce more accurate decisions.
Goldman Sachs’ 2024 Global Insurance Survey found 29 percent of insurers use AI, with 51 percent planning to implement AI technologies. Insurers see AI as having a broad range of uses: 73 percent think it will reduce operational costs and 39 percent are considering using AI for underwriting insurance risk.
Lemonade and Allianz, for example, use AI algorithms to assess risks and approve policies.
Blockchain technology forms a distributed database system. This means offers a secure and transparent way to verify documents and transactions. Each transaction is recorded in blocks connected in an unalterable chain that guarantees data integrity. The data is what it is, and that certainty underpins verification.
This technology can improve trust between insurers and insured parties by providing transparency in the claims process. Etherisc, a blockchain-based insurance platform, and AXA’s Fizzy are among companies using this technology to automate flight delay claims.
Telematics in auto insurance
Telematics combines telecommunications, computer science, and electrical engineering to monitor and collect data on driving behaviours. It enables insurance based on how an individual actually drives.
Insurance thought leaders forecast the insurance telematics market will grow from $5 billion in 2023 to $11 billion by 2028. A strong sign of early growth in what could be a transformational change in insurance.
In auto insurance, telematics devices or apps installed in vehicles gather real-time data on how a person drives. This benefits both insurers and policyholders by encouraging safer driving, and it reduces the frequency and severity of claims. In the US, Allstate’s Drivewise and Progressive’s Snapshot are examples of telematic programs that offer discounts based on safe driving habits.
Digital platforms and IoT in health insurance
While digital platforms simplify processes in health insurance, the Internet of Things (IoT) enables remote patient monitoring through wearable devices and smart gadgets.
These devices collect real-time health data, which insurers can use to assess risks more accurately. As a result, offered health plans are often more personalised. IoT also improves preventive care by alerting users to potential health issues early on. This feature can help reduce the overall cost of healthcare and insurance claims.
IoT use in health insurance is a growing trend, with more insurers integrating IoT tech into their services.
Greentech for InsurTech
Interest in sustainable InsurTech investments remains strong, particularly in EMEA and Asia. ESG is a primary consideration for a third of EMEA insurers and 13 percent of Asia insurers.
Mercer and Oliver Wyman’s 2024 Global Insurance Survey found 70 percent of insurers already incorporating sustainability into their investment decisions plan to increase the money they put into sustainable investments over the next 12 months.
AXA Climate, for example, focuses on providing climate risk solutions with sustainable insurance products it says help businesses transition to a low-carbon economy.
Community-based Models
Peer-to-peer (P2P) insurance allows individuals to pool resources to share risk. Claims are paid from the pooled funds, and any remaining funds can be returned to the group or rolled over to the next period.
P2P insurance is more collaborative and cost-effective compared to traditional insurance models. Friendsurance, for instance, is a P2P platform for minor claims that lets unused funds be refunded by the end of the year.
AR for property inspection
Augmented Reality (AR) can be used for remote property inspections. Insurers can guide policyholders through the inspection process using AR to capture images and videos.
Hippo Insurance and Liberty Mutuals are among the companies that guide homeowners through self-inspections for the underwriting process. This InsurTech approach reduces the need for in-person visits, which may end up speeding admin and keeping customers happy.
The future for InsurTech
There are many bullish viewpoints on InsurTech in the public domain, and the big players are already leading the way. They clear a path for the rest of the market to build on these successes and learn from the challenges they can push through.
Key technologies such as cloud, connectivity, and AI will continue to expand their influence on the industry. The behaviour of the market in early 2024 suggests that the combination of advancing tech and early forays by big insurers has created a field ripe for innovations to take hold.
Throughout history, finance and banking have seamlessly adapted to integrate with evolving consumer lifestyles. Embedded Finance exemplifies this ongoing integration,…
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Throughout history, finance and banking have seamlessly adapted to integrate with evolving consumer lifestyles. Embedded Finance exemplifies this ongoing integration, strategically placing financial services directly within customer interactions at the moments they’re needed.
Industry experts have pinpointed embedded finance trends as a major development area, not only for financial institutions but also for non-financial companies seeking to participate in this burgeoning market. The embedded finance market is projected to experience explosive growth, surging from $63.2 billion in 2023 to a staggering $291.3 billion by 2033.
To capitalise on this opportunity and gain a competitive edge, businesses need to stay informed about the latest 2024 predictions and emerging trends within embedded banking. This is a space that evolves rapidly; and so must they.
Embedded Finance primer
Embedded finance refers to integrating financial services, such as checking accounts, loans, insurance, and investment tools, directly into the platforms of non-financial companies. This integration often occurs through partnerships between technology providers, traditional financial institutions, and the non-financial company itself.
While the concept of integrating financial products into non-financial transactions isn’t entirely new, embedded finance has gained significant momentum in recent years.
The term itself rose to prominence in the mid-to-late 2010s, coinciding with a confluence of trends in the fintech and retail app space. Additionally, the widespread adoption of application programming interfaces (APIs) and Software-as-a-Service (SaaS) models has facilitated the integration of financial services into non-financial platforms.
Trend 1: Integration with E-commerce Platforms
One of the key embedded finance trends in 2024 centres around its integration with e-commerce platforms. As online marketplaces become the future of retail, embedded banking offers a strategic weapon to fuel growth in this space.
Embedded finance lets marketplaces offer personalised financing at checkout, such as flexible payments or credit options. This can boost sales and customer satisfaction by giving them more buying power.
But the real game-changer might be loyalty programs. While traditional stores use loyalty programs, online marketplaces haven’t fully tapped this potential. By seamlessly combining finance and rewards, marketplaces can create a powerful tool to keep customers coming back for more.
Trend 2: Rise of Buy Now, Pay Later services
Another prominent embedded finance trend is the rise of Buy Now, Pay Later (BNPL) services. These services have become a familiar sight for online shoppers, appearing at checkout precisely when consumers are considering their budget.
BNPL solutions offer an alternative to traditional upfront payments by splitting the purchase amount into smaller instalments, typically spread over weeks or months, often with no interest charges.
Trend 3: Expansion into new sectors
The expansion of embedded finance beyond traditional sectors presents exciting possibilities. In the automotive industry, for example, connected and autonomous vehicles hold immense potential for integrating financial services.
This innovation has the potential to significantly enhance the user experience by offering on-the-go payments, streamlined vehicle financing, and convenient insurance options directly within the car itself.
Moreover, embedded banking can transform cars into mobile banking hubs, blurring the lines between financial services and automotive operations. This convergence creates opportunities for entirely new business models and revenue streams for both automotive manufacturers and financial institutions.
Trend 4: Partnerships with FinTech firms
The rise of embedded finance necessitates a strategic shift towards collaboration. This trend is particularly evident in partnerships between traditional financial institutions and fintech firms.
This strategic teamwork allows each party to leverage its strengths. Fintech companies bring innovative solutions and a focus on user experience, while established institutions provide robust financial infrastructure and regulatory expertise.
Trend 5: Prioritising Cybersecurity for Embedded Finance
As embedded banking continues to gain traction, ensuring the security of these transactions becomes paramount. This trend reflects the growing recognition that data security is not just a technical hurdle, but a strategic imperative. Financial institutions, fintech companies, and non-financial participants will all need to prioritise collaboration and information sharing to address emerging threats and vulnerabilities within the complex embedded banking ecosystem.
Trend 6: Regulatory Changes
Financial models like BNPL underscores the ongoing debate surrounding regulatory frameworks. While BNPL offers convenience, it has sparked discussions on the need for enhanced safeguards to protect consumer interests and promote responsible lending practices. Some call for stricter rules to prevent debt spirals and clear terms. However, fintechs find existing regulations hard to adapt to their evolving products.
Trend 7: Improved Analytics for Embedded Finance
Data is the lifeblood of informed decision-making, and B2B marketplaces, portals, and apps are no exception. By integrating financial services within the user experience, these platforms gain access to a rich data stream related to transactions, users, and the sales cycle.
Embedded finance solutions can further improve user experience by streamlining the consumer feedback process. This facilitates a deeper understanding of user pain points, paving the way for experience improvements. Ultimately, these data-driven insights inform future development efforts, ensuring a platform that caters effectively to user needs.
Outlook on embedded finance
Embedding financial services can create new revenue streams for businesses. For non-financial institutions, integrating financial services unlocks new revenue streams through partnerships with financial providers. This collaboration fosters the creation of additional services and strengthens relationships with both businesses and consumers.
It is not just new revenue streams that are at stake. Embedded finance trends are reaching a point where 2024 predictions suggest an environment ready to reward businesses with greater customer loyalty, growing existing revenue, and a sustainable flow of data to compound the business benefits of consumer behaviour with a better understanding of it.
Digital payments have evolved significantly over the years, starting with the introduction of credit cards and ATMs in the 1960s and 1970s. Bank of America launched the first credit card, later known as Visa, in 1958.
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Then ATMs revolutionised access to cash in the late 1960s. The 1980s and 1990s saw the rise of personal computers and the internet, setting the stage for online banking and electronic payment systems. PayPal, founded in 1998, pioneered major digital payment platforms, enabling electronic money transfers.
In the 2000s, smartphones led to the development of mobile payment systems. Apple Pay debuted in 2014, allowing contactless payments via smartphones, followed by Google Wallet and Samsung Pay.
The 2010s marked the emergence of cryptocurrencies, starting with Bitcoin in 2009, the first decentralised digital currency. Blockchain technology gained attention for its potential to transform payments with heightened security and transparency.
The COVID-19 pandemic in the 2020s accelerated digital payment adoption as people sought contactless and online options. Innovations like QR code payments, Buy Now, Pay Later services, and P2P payment apps gained popularity.
Today, digital payments are widely embraced, including mobile wallets, P2P apps, and online banking, as consumers and businesses prefer digital transactions over cash. Technologies like NFC, biometrics, and AI enhance payment security and convenience, while embedded finance integrates payment services into non-financial platforms.
Cryptocurrencies gained acceptance, and blockchain explores streamlined cross-border payments and security enhancements. Governments also developed frameworks to ensure digital transaction security and privacy, combat fraud, and protect consumer data.
Future Innovations in Digital Payments
Digital payments promote financial inclusion by providing digital banking access to unbanked populations. Looking ahead, the future holds promise with the rise of Central Bank Digital Currencies, fintech advancements, and ongoing payment technology evolution focused on user experience and security enhancements.
1. Contactless Digital Payments
In the future, contactless payments are expected to grow significantly as more people and businesses adopt this convenient technology. The ease and speed of tapping a card or phone to pay, especially highlighted during the COVID-19 pandemic, will likely continue to drive its popularity.
2. Integration with AI
Integrating Artificial Intelligence (AI) into digital payment systems will also enhance security and offer more personalised experiences for users. AI can detect fraudulent activities quickly and recommend payment options based on individual preferences and behaviors.
3. Growth of Cryptocurrencies
Cryptocurrencies are also predicted to become more common in everyday transactions. As digital currencies, driven by the likes of Bitcoin and Ethereum, gain acceptance, more people will use them for regular purchases, not just investments. This mainstream adoption could reshape how we think about money and transactions.
4. Digital-only Banks
We may also see the rise of digital-only banks, which operate entirely online without physical branches. These banks will offer streamlined services, often at lower costs, making banking more accessible.
5. Real-time Digital Payments
Real-time digital payments will become the norm, allowing instant money transfers, which will simplify transactions for businesses and consumers alike. For businesses, real-time payments mean quicker access to funds, improved cash flow management, and faster settlement of transactions. This efficiency is particularly beneficial in sectors requiring rapid financial transactions, such as retail, e-commerce, and services.
6. Biometric Authentication
Biometric authentication, such as fingerprint or facial recognition, will further enhance security. This technology will make payments faster and more secure by verifying a person’s identity through unique physical traits.
7. Internet of Things (IoT)
Lastly, the Internet of Things (IoT) is revolutionising various aspects of daily life, extending its impact to how financial transactions are conducted. As more everyday devices become connected to the internet, they gain the capability to facilitate payments seamlessly. Devices like smartwatches, home appliances, and even cars could potentially handle transactions directly. Customers could experience even greater convenience and efficiency in their purchasing processes.
Overall, the future of digital payments looks promising, with innovations that will make financial transactions more seamless, secure, and integrated into our daily lives.
Digital transformation has introduced new challenges in financial cybersecurity.
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The banking industry has shifted towards online transactions, leaving behind the days of brick-and-mortar branch visits for check cashing or deposits. As more and more sensitive data is transferred through internet banking technology, ensuring its security becomes paramount.
According to a 2023 survey by the Financial Services Information Sharing and Analysis Centre, 89% of financial institutions are increasing their cybersecurity budgets in 2024. This investment underscores the need for advanced internet banking security measures despite the existence of various security protocols.
In this article, we’ll explore the latest trends in internet banking security, examine real-world cases of cyberattacks, and provide valuable insights into securing your financial institution’s technological infrastructure.
Introduction to Internet Banking Security
As online banking becomes increasingly prevalent, financial institutions must prioritise cybersecurity – implementing specific measures to safeguard their systems and networks from cyberattacks.
Cybersecurity challenges in internet banking are multifaceted. Hackers employ a variety of techniques, including hacking attempts, data breaches, identity theft, malware, and viruses, to gain unauthorised access to sensitive customer data and financial assets.
A successful cyberattack can not only compromise sensitive information but also disrupt critical bank operations, causing significant inconvenience for customers and potentially leading to financial losses.
Common Cybersecurity threats
A 2021 report by IBM highlights the high cost of data breaches in the financial sector, placing it second only to healthcare. This vulnerability stems from the immense value of economic data, which can be exploited for fraud and other cyberattacks.
Beyond data breaches, financial institutions must also be vigilant against ransomware infections, phishing scams, and account takeover attempts. These threats carry the potential for data loss, operational disruption, and significant financial consequences.
In phishing attacks, cybercriminals impersonate bank representatives via emails, calls, or SMS messages. Their objective is to deceive customers into divulging sensitive information such as login credentials or credit card details.
Meanwhile, malware attacks take various forms, including worms, viruses, spyware, ransomware, and Trojans. These malicious programs can infiltrate devices, servers, or networks. If a customer’s infected device connects to the bank’s network, it poses a significant threat to overall financial cybersecurity.
Impact on consumers and banks
Cybersecurity breaches create huge consequences for both consumers and financial institutions. Consumers directly impacted by a breach may find their personal information exposed on the black market, thereby increasing their risk of identity theft.
The impact on banks, however, extends far beyond immediate financial losses from stolen funds. Beyond the initial financial blow, banks face the additional challenge of a potential erosion of customer trust. When customers fear their money is at risk, their confidence in the bank’s ability to protect them diminishes.
Mitigation Strategies
The first line of defense in ensuring robust financial cybersecurity lies within a well-trained workforce. Equipping employees with cybersecurity best practices empowers them to identify potential threats like phishing attempts or suspicious software. Regular training ensures awareness remains high and employees are prepared to act appropriately.
Organisations should also implement comprehensive cybersecurity policies and procedures. These policies should clearly outline acceptable online behaviour, data handling practices, and incident response protocols. Regularly reviewing and updating these policies ensures they remain relevant against evolving cyber threats.
Case Studies
One such case involved a social engineering attack on Experian’s South African office. A cybercriminal impersonated a representative from one of Experian’s clients and tricked an employee into releasing sensitive internal data.
Although Experian downplayed the information’s sensitivity, the South African Banking Risk Information Center reported that the breach affected a staggering 24 million customers and nearly 800,000 businesses. The compromised data eventually surfaced on a dark web forum in 2021. Fortunately, with law enforcement assistance, the data was promptly removed before widespread exploitation occurred.
The second case involves a data breach at Flagstar Bank, a major US financial institution. In 2022, the bank suffered a significant breach exposing the social security numbers of nearly 1.5 million customers. While Flagstar initiated incident response protocols and stated no evidence of data exploitation, they still advised customers to closely monitor their credit and promptly report any suspicious activity.
Future Cybersecurity Trends
The cybersecurity landscape for banks is constantly shifting, demanding ongoing vigilance and adaptation. Advanced persistent threats (APTs) remain a major concern, as these actors employ sophisticated techniques to infiltrate networks and steal sensitive data.
Furthermore, the growing number of Internet of Things (IoT) devices introduces new vulnerabilities, potentially leading to large-scale breaches and botnet attacks. Emerging technologies like AI and quantum computing pose further challenges.
While these technologies hold promise for enhancing security, they could also be exploited by malicious actors to launch more potent cyberattacks. Therefore, staying ahead of the evolving threat landscape will be a key focus for the future of cybersecurity in banking.
A blockchain is a shared database spread across a network of computers. The technology is most famous for its use in cryptocurrencies like Bitcoin, where it keeps a secure and decentralised record of transactions.
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Unlike traditional databases, blockchain data is distributed across many machines, and all copies must match to be valid. For example, the Bitcoin blockchain gathers transaction data into a 4MB file called a block. Once full, the data is encrypted to create a unique hash, which links to the next block, forming a chain.
Blockchain decentralisation means data isn’t stored in one place but across many computers or devices in a network. This ensures data redundancy and accuracy. If someone tries to alter a record on one computer, other nodes in the network detect the change by comparing block hashes, preventing unauthorised modifications.
Once data, like cryptocurrency transactions, is recorded, it’s irreversible due to secure proof of work. Blockchains can also securely store various information types, such as legal contracts or inventory records, by representing them as tokens through hashing.
However, blockchain isn’t just for cryptocurrencies. The technology has now expanded to include real-world applications, from the financial sector to real estate.
Blockchain in financial services
In the financial sector, blockchain makes sending funds faster and cheaper, particularly for international transactions.
Traditional bank transfers can take days and involve various intermediaries, each adding fees. In contrast, the technology allows transactions to be completed in minutes, reducing time and costs.
Supply Chain Management
In supply chain management, blockchain provides a way to track products—from their origin to their final destination. This transparency helps companies quickly identify when and where problems occur. For example, this could allow them to pinpoint the source of contamination in a batch of food products By having single source of truth for every step in the supply chain, companies can ensure the authenticity and quality of their products, improving consumer trust and safety.
Blockchain in healthcare
In healthcare, blockchain can be used to store patient records securely, allowing them to be easily shared between doctors and hospitals while maintaining privacy. This ensures patient information is accurate and up-to-date, which is crucial for effective medical treatment. Additionally, blockchain can help streamline administrative processes and reduce errors in medical records.
Other applications for Blockchain
Blockchain also has the potential to revolutionise voting systems by making them more secure and transparent. Each vote can be recorded in a way that is nearly impossible to alter, ensuring the integrity of the election process. This technology can help reduce fraud and increase voter confidence, as every vote is accurately counted and verified.
The real estate industry can benefit from this tech by simplifying and securing property transactions. Blockchain can reduce the need for intermediaries like brokers and lawyers, making the buying and selling process faster and more transparent. This can also help prevent fraud and ensure that property records are accurate and tamper-proof.
Digital identity management is another area where blockchain can play a significant role. By creating secure digital identities, blockchain can help individuals prove who they are online without sharing excessive personal information. This can improve security and privacy for online interactions, reducing the risk of identity theft and fraud. Blockchain-based digital identities can be used for a variety of purposes, from logging into websites to accessing government services.
Blockchain technology offers numerous benefits across different industries, and its applications continue to grow, demonstrating its potential to transform various aspects of life.
Traditional evaluation processes for credit scoring and analysis for risk management are being elevated with AI.
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This innovation is driving financial inclusion for people around the globe who don’t have traditional access to financial institutions. Equipped with the correct algorithm and capability to assess big data sets accurately, AI is the ideal assistant.
Using a machine learning model, AI in credit scoring will continue to develop and upgrade itself the more we use it. New advanced algorithms can be expected. AI will be able to process bigger sets of data and produce more accurate results. This means a bigger scope of potential borrowers can be accessed, while making the lenders’ work lighter.
As has been seen, this function of AI is used in real-time by several US-based finance companies, such as Ocrolus that provides financial documents review services. They’re using AI to achieve 99% accuracy in their results.
The next step to further AI’s advances is by putting more effort in training it, making it a sharper tool.
How AI is becoming essential to credit scoring
Credit scoring is one of the main ways to assess potential borrowers and help decide whether they’re eligible for mortgages, business loans, or even credit cards. It also helps determine the terms they are offered, and the amount they can borrow.
AI is essential in this area because much of credit scoring is dependent on providing financial evidence as a guarantee, usually in the form of employment payslips or assets. New potential borrowers are less likely to have assets and are in an economy where self-employed, contract, and gig work is increasingly the norm.
Then there are those who are ‘unbanked’, who don’t have any savings – that includes 1.5 billion people.
New technology means data sourcing can become broader and more inclusive. This creates new borrower categories to consider, making it possible for financial institutions to reach more borrowers who previously could not be assessed.
AI Boosts Accuracy and Efficiency
Credit scoring must be done thoroughly, and that is a process that takes time and effort when done manually.
Once the process is established, it can follow protocol and move much faster. AI’s power makes it much easier to go from identifying a new model for credit scoring to being able to roll it out reliably at scale
Machine learning means all data AI analyses feeds into the processing system. AI is trained by analysing a bulk of data consisting of transaction history, debt history, and payment history. All of which are the main points of traditional data scoring.
But, instead of only training to do this repeatedly and accurately, AI will detect previously unseen patterns. This will help predict future behaviours of potential borrowers, such as their probability of repaying on time, from groups that do not have good access to credit.
AI in risk management and assessment
When it comes to risk management, the more accurate the analysis, the better. With AI evaluating larger sets of data with more data sources, the results can be more personalised.
The model also helps the system to monitor the activities in real time using advanced and adjusted tools. Therefore, the outcome itself will always be the most up to date and precise. In a more advanced scenario, the tools can even predict based on previous patterns, giving them a function to prevent.
Real-life, real-time examples
Aside from risk assessment and data analysis, AI also contributes to many other factors. It can be used for fraud detection based on patterns that it recognises. It can also create personalised offers based on an individual’s data analysis.
The usage of this type of AI and the tools it creates is already being applied. Enova, a US-based financial technology company, uses AI to complete its credit assessment. With more advanced updates every year, we can expect even more companies in different industries utilising AI.
Future trends that must be nurtured
The biggest challenge moving forward is how much effort we want to put in to evolve the AI we have now, as the complexity grows and bigger effort is needed. Evidently, AI banking solutions help bring huge impacts, so attention is now shifted to updating them furtther.
The assistance AI brings to overall credit scoring and risk management in general will easily outweigh the complexity of its introduction. The more patterns and data AI consumes, the more accurate the results and powerful its feedback loop. Credit scoring is possibly the most impactful application of AI in financial services for the future of consumers.
Despite the recent advancements in technology, the global financial system remains susceptible.
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Financial crime has evolved to be more sophisticated, and malicious actors continuously exploit vulnerabilities to commit fraud and theft.
Nasdaq and Verafin’s2024 Global Financial Crime Report said that around $3.1 trillion of illicit money flowed through the global financial system last year. The funds went into crimes such as terrorist financing, human trafficking, and drug trafficking.
The same report also revealed that $485.6 billion were lost to scams and schemes. Around $6.7 billion was lost to business email compromise, while $3.8 billion was lost to romance scams and similar schemes. No less than $77.7 billion in fraud was stolen from elderly victims.
Blockchain technology has the potential to improve fraud prevention measures. According to blockchain analysis firm Chainalysis, only 0.15 percent of cryptocurrency transactions are used for illicit purposes.
How can blockchain prevent fraud?
Blockchain is an immutable digital ledger. When used accordingly, it can heighten the security of various transactions with its decentralised framework.
Each transaction on a blockchain is accessible to all participants within the network. This results in real-time auditability and verification, which can prevent data manipulation and fraud.
Since the recorded data is distributed across many computers, it becomes more resistant to manipulation. Any transaction data recorded there cannot be altered or deleted. The process creates a permanent audit trail, which makes it difficult for fraudsters to cover their tracks.
There are several blockchain-powered mechanisms that can help prevent fraud in transactions. One example is identity verification using cryptographic techniques. All recorded identity information is digitally encrypted and stored in the network. Like consensus mechanisms, digital identity verification works through multi-factor authentication, making it difficult for criminals to misuse identity data.
Another example is smart contracts. These are computer programmes that execute agreements automatically between two parties. It can automate financial transaction processes, minimising human intervention and exploitable errors.
Case studies
Several financial institutions have successfully implemented the blockchain technology to combat fraud. Last year,Nasdaq executed the first-ever share trade using blockchain with its proprietary Linq platform. Nasdaq enabled the startup Chain to sell shares to an unnamed technology investor.
Linq provides a historical record of securities issuance and transfers, enhancing governance, transfer of ownership, and auditability. With blockchain, Linq reduces risks associated with delayed settlements and administrative burdens.
Barclays Bank, on the other hand, has been exploringblockchain’s potential applications over the past years. To enhance the safety of transactions, the bank uses blockchain in its payments infrastructure and smart contracts in its post-trade processes. Additionally, Barclays is an investor in ‘Utility Settlement Coin’ (USC), a blockchain project aiming to reduce risks in trading processes.
JP Morgan also leverages blockchain technology to mitigate fraud in its transfer system. The company usesConfirm, a global account information validation application on the blockchain, to allow partner banking institutions to request confirmation of beneficiary account information. Partners receive near-real-time responses from other participating banks.
Aside from reducing processing and verification time, the method heightens the safety of transactions. Payments can be sent through J.P. Morgan’s global clearing solution only after they are validated by Confirm.
Challenges and opportunities ahead
Despite the promising potential, blockchain technology faces several challenges in its fraud prevention application.
Blockchain is still relatively new and has not been widely adopted across the financial industry. Therefore, it lacks clear regulatory frameworks to operate, which results in uncertainty that hinders its adoption. Furthermore, current blockchain platforms often face scalability issues that limit their ability to handle large volumes of transactions.
Before blockchain is available for large-scale applications, financial institutions and developers must address these concerns.
Still, the future of blockchain in reducing financial fraud appears to be promising. In 2022,KPMG’s Banking Industry Survey revealed that 92 percent of senior executives said their banks offered or were planning to offer blockchain processes to their customers.
With increasing advancements, blockchain’s integration into the financial sector is likely to increase.
Because digital banking involves sensitive personal and financial information, it has unique cybersecurity needs to protect against hackers and fraud.
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Cybersecurity is a vital component of digital banking. Customers need to trust systems to manage their money online through apps or websites, without visiting a physical bank. This offers convenience, allowing users to check balances, transfer money, pay bills, and even apply for loans from their computers or smartphones.
Because digital banking involves sensitive personal and financial information, it has unique cybersecurity needs to protect against hackers and fraud. One key security measure is encryption, which scrambles data so that only authorised users can read it.
Another important measure is two-factor authentication, which requires users to provide two forms of identification, such as a password and a code sent to their phone, to access their accounts. These measures help ensure that digital banking remains safe and secure for users.
Cybersecurity Risks and Preventative Measures
One of the biggest concerns in the banking industry today is the security of mobile banking apps. As more people use these apps for financial transactions, weak security measures can make them vulnerable to hacks.
Additionally, banks face threats from third-party organisations, as hackers often target less secure shared banking systems. Third-party networks cab also be hijacked to gain unauthorised access. The growing field of cryptocurrency also presents new cyber threats… The unstable nature of cryptocurrency and limited understanding of securing these digital assets make them attractive targets for cybercriminals.
To protect against cyber attacks, banks are implementing various preventative measures. Conducting thorough security audits helps find system weaknesses. Setting up strong firewalls while updating antivirus and anti-malware software creates a solid defence against cyber threats. Multi-factor authentication (MFA) and biometrics add extra security layers, making it harder for unauthorised users to access accounts.
Automatic logout features end user sessions after inactivity. Meanwhile, banks are educating customers about secure practices like avoiding public Wi-Fi for banking and regularly updating passwords. These combined efforts enhance the overall cybersecurity of the banking sector.
The Importance of Regulatory Compliance
Regulatory compliance is crucial in digital banking cybersecurity for several reasons. First, it ensures the protection of customer data. Regulatory standards include guidelines that help banks protect sensitive information. This reduces the risk of data breaches and identity theft. Compliance also builds and maintains customer trust. When customers know that a bank follows security standards, they feel more confident about the safety of their financial information.
Following regulations helps banks avoid legal problems, including fines and sanctions, which can be costly and harm their reputation. Regulations provide a framework for consistent security practices across the industry. This ensures all banks meet a basic level of security to prevent gaps that hackers might exploit. Additionally, compliance requires banks to conduct regular risk assessments and audits, helping to identify weaknesses and strengthen their cybersecurity measures.
Regulatory compliance also ensures that banks are prepared to maintain operations and protect customer data, even during cyber attacks or other disruptions. This includes having disaster recovery and business continuity plans in place.
Lastly, compliance can drive innovation by encouraging banks to adopt new technologies and practices that enhance security. This proactive approach helps banks stay ahead of emerging threats and continuously improve their cybersecurity measures.
Case Study: Revolut
Revolut is known for its strong cybersecurity measures. The bank uses advanced encryption to ensure that data shared between users and the bank is secure, protecting personal details, transaction histories, and account balances from being intercepted by hackers.
Additionally, Revolut requires users to enable two-factor authentication (2FA), adding an extra layer of security by requiring a second form of verification, such as a code sent to their phone. The bank also employs biometric verification, such as fingerprint or facial recognition, to further secure user accounts.
Revolut also uses machine learning to detect and prevent fraudulent activities in real-time, ensuring that suspicious transactions are quickly identified and blocked.
Case Study: Chime
Chime is another digital bank that prioritises cybersecurity. Chime protects user data through encryption, ensuring that communication channels are secure. The bank also offers two-factor authentication to enhance account security, requiring users to verify their identity with a second form of verification.
Chime provides real-time transaction alerts, notifying users of any account activity immediately. This allows users to quickly identify and respond to any suspicious transactions. Additionally, Chime employs measures such as automatic logout after periods of inactivity to prevent unauthorised access. These security features help Chime maintain a secure banking environment for its users.
Looking ahead, cybersecurity trends in digital banking are likely to focus on several key areas to stay ahead of emerging threats. One trend could involve increased adoption of artificial intelligence (AI) and machine learning to enhance threat detection and response capabilities. AI can analyse vast amounts of data in real-time to identify unusual patterns or behaviors that may indicate potential security breaches.
Staying ahead of cybersecurity threats requires a combination of technological innovation, proactive defense strategies, and ongoing education. Digital banks that prioritise cybersecurity and adapt to these future trends will be better equipped to protect their customers’ data and maintain trust in an increasingly digital banking landscape.
The rise of digital wallets has transformed the way consumers pay. Today, digital payment solutions offer a seamless and convenient way to complete transactions with a simple tap on the phone.
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Due to the convenience they provide, digital wallets and payments have become increasingly popular. In the UK, digital wallets are projected to account for US$256 billion of e-commerce transactions by 2027, according to the 2024 Global Payments Report by Worldpay.
Mobile digital wallets have become essential tools for managing everyday transactions
With countless providers available today, this article explores some of the leading platforms:
1. Apple Pay
Apple Pay is the most recognisable name in contactless mobile payments. This dominance is likely due to its seamless integration with iPhones, the leading smartphone platform.
Apple’s digital wallets solution leverages Near Field Communication (NFC) technology for contactless payments. Apple Pay ensures security with features like device-specific numbers, unique transaction codes, and biometric authentication (Touch ID or Face ID).
2. Google Pay
Evolving from Google Wallet and Android Pay, Google Pay emerged in 2018 as a comprehensive digital wallet solution.
With Google Pay, users can make secure transactions on websites, within apps, and in stores using cards saved to their Google accounts. In-store payments with Google Pay don’t require an internet connection, adding to its user-friendliness.
3. PayPal
For international online shopping, PayPal shines due to its established global presence. It allows users to access funds and link bank accounts worldwide, simplifying cross-border transactions.
Beyond its functionality, PayPal uses robust encryption technology to safeguard financial information during transactions while also enabling effortless international transactions across a vast network of over 200 countries and 25 currencies.
4. Samsung Pay
Offered to Samsung Galaxy users, Samsung Pay offers a convenient, globally available contactless payment option in stores that accept tap-and-pay transactions. Beyond credit and debit cards, Samsung Pay simplifies gift card management by allowing users to store and redeem them directly within the app.
5. Zelle
Zelle is a US-based peer-to-peer (P2P) payment platform developed by Early Warning Services, a consortium owned by major US banks. It simplifies money transfers using just the recipient’s email or US mobile number. Zelle uses advanced encryption technology and leverages the secure infrastructure of participating banks for an extra layer of protection.
6. Venmo
In the US, Venmo has become a popular choice for casual money transfers among friends and family. Founded in 2009, Venmo allows users to divide shared costs for things like restaurant bills or movie tickets, eliminating the need for cash exchanges during group outings.
7. Alipay
Alipay e-Wallet connects businesses globally with a suite of solutions. Merchants gain access to popular payment methods, flexible integration, and efficient cross-border settlements. Other than being China’s most popular payment platform, Alipay also surpassed PayPal as the world’s largest mobile payment platform in 2013, with partnerships exceeding 250 overseas financial institutions.
8. WeChat Pay
WeChat Pay is another major Chinese player alongside Alipay, offering similar core functionalities like transactions and credit card storage. Its unique strength lies in its seamless integration with WeChat, China’s dominant social media platform.
WeChat Pay offers a digital version of the Chinese New Year red envelopes. The “WeChat Red Packets” service exemplifies how the app caters to users’ cultural practices and integrates itself into their daily routines.
9. Amazon Pay
Launched in 2007, Amazon Pay is a global online payment processing service developed by Amazon. This e-wallet has partnered with fintech companies like ZestMoney to offer no-cost Equal Monthly Installment (EMI) payment options. That way, consumers can pay for their purchases easily on Amazon and partner platforms.
For merchants, Amazon Pay offers a simple way to integrate a secure payment function onto their website and accept various payment methods, including SEPA for the EU and SWIFT globally.
10. Cash App
Cash App stands out for its unique features not found on other platforms or in traditional wallets. Beyond standard money transfers and storage, users can purchase Bitcoin and other cryptocurrencies and invest in stocks. The app also supports instant international transfers.
Finance is going through a period of sustained growth while it digitalises and starts to offer more convenience to consumers.
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Embedded Finance, integrates financial and banking services into apps and services outside finance. It is at the forefront of this change.
Embedded Finance is a term that might sound foreign to many people but every digitally connected consumer would have experienced some aspect of it. It is designed to be practical and accessible. You “embed finance” to take or experience some financial action somewhere you would actually want to. Paying for an item or service through the vendor’s app, is a classic example.
User experiences on apps and websites are crucial to business growth. Overcoming issues that interrupt, for instance, a buying experience, can have a direct and major effect on business growth. So can the insertion and creation of business opportunities for financial services.
Increased revenue streams
Bringing embedded banking or other embedded finance benefits into non-financial contexts reduces the points where a consumer might abandon a transaction. It also creates new opportunities for additional transactions and the use or purchase of additional (embedded) financial services.
If they don’t have to leave the app or website, they are more likely to make a purchase; and if you can offer and convert the sale of a financial service tied to a purchase that they made, at the point where they made it – you have both increased and added new revenue from embedded finance solutions.
This creates new opportunities and brings financial services to a wider audience that are not especially familiar with them or with banking technology as a whole.
The more customers can use a service by finding it conveniently embedded outside that finance app, the more touchpoints there are to build both revenue and that customer relationship.
Enhance customer loyalty
Bank or financial services can cultivate greater customer loyalty by embedding finance options in the non-financial contexts that they would most likely want them.
Customers positively associate that convenience with the financial or banking service provider, and with the non-financial context itself. It is easy to incentivise the use of embedded finance options and the purchase of embedded financial services with discounts that latch onto the customer journey the consumer is already on.
A classic example of this (and the above) is buying a plane ticket, and having the option to add insurance, a hotel, or car rental, at a discounted rate, while completing a single transaction in a single, non-financial setting.
Tying those purchases together into loyalty rewards programmes is a simple and effective way to grow customer loyalty. This is also well evidenced by airlines rewarding air miles for packaging flight purchases with hotel, rental, insurance, and other partners.
Improved Customer Experience
The positive associations that go towards growing customer loyalty start with their experience of the non-finance app or site. Customer experience (CX) cultivates those positive associations and emotional ties that will keep them customers for a long time.
Embedded financial services that solve problems for customers and make their lives easier will always improve their experience. Packaging that in an experience that is enjoyable, through design elements, haptic feedback, sounds, or just customisation is all part of it.
Most of all, you can improve CX by offering a wide variety of embedded finance options. If customers feel an app or platform can be used for every transaction, and they like it there and trust it – they will stay there when faced with the option to move elsewhere.
Personalised offerings, built-in protections to assure their security, and expanding their access to financial tools will all help.
Access to Valuable Data via Embedded Finance
Through analysis of financial data, businesses can monitor actual performance precisely and adapt how to handle different situations.
Successful embedded finance benefits help the bottom line, but they also always deliver valuable data on how to serve the customer better and what firms can do next to support business growth.
Embedded finance allows for the capture of valuable data on customer behaviour and on behaviour towards embedded financial services in the non-financial contexts they get embedded in. This data capture gives unprecedented insights that will in turn lead to improved financial services and new opportunities for revenue generation.
Competitive Advantage
Embedded Finance presents clear opportunities for businesses to find and establish competitive advantages. The nature of embedded financial services also means that they can find advantages through initial deployments and long into the future.
Embedded finance benefits are so significant for business growth that they will become part of cross-industry business strategy for years to come. It offers quick wins for early adopters, and those who just deploy the best tech. It also brings growth to firms deploying embedded banking for the first time, as their customer base reacts to the deployment.
From that point forward, businesses can press that advantage home. They can use that advantage in consumer preferences to find better ways of serving them with the embedded applications they deploy.
Agile businesses can maintain those competitive advantages over sustained periods of time because of the availability of data to interpret.
How embedded finance transforms business growth
Embedded finance enables businesses to innovate quickly, adapting to market trends and customer demands more effectively.
The sooner platforms with embedded finance options are deployed, the sooner businesses can refine them. Familiarising consumers with their brand’s growing forays into consumer convenience supports growth.
Embedded Finance is one of the most beneficial inventions in banking that combines technology and finance fields. As people rely more on technology, they need a more practical and efficient platform to help them. They are part of the fabric of the digital future.
The financial services landscape is undergoing a seismic shift, driven by the rise of top neobanks establishing themselves as household names in markets around the world.
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These digital-first institutions started by shaking the foundations of traditional banking with their innovative approaches, streamlined services, and focus on user experience.
They have led the way for the future of financial services, acting as laboratories for customer-centric solutions. Furthermore, neobanks bring the convenience of a fast-moving digital world to the inflexible realities of banking, like security and regulation.
What is a Neobank?
Neobanks, also known as digital challenger banks, operate entirely online. They offer a full suite of financial services through user-friendly mobile apps. Unlike traditional banks burdened by legacy infrastructure, neobanks leverage cutting-edge technology to provide a frictionless and efficient banking experience. Their emergence caters to the evolving needs of today’s tech-savvy populations, demanding transparency, affordability, and real-time access to their finances.
Often designing their original solutions for a customer base unique to a country, read on to discover the top ten neobanks transforming what customers can do with digital banking.
1. Nubank (Brazil, Mexico, Colombia)
Nubank stands at the forefront of the neobanking revolution. This Brazilian giant was founded in 2013, it boasts over 70 million customers and reputations for battling financial complexity. Their innovative approach includes a transparent fee structure, instant credit card issuance, and a focus on financial education. Nubank’s success lies in its laser focus on the underbanked population of Latin America, offering them a gateway to the formal financial system.
2. Revolut (Global)
Revolut, a global neobank with a presence across multiple continents, is renowned for its cutting-edge technology and commitment to banking innovation. They have redefined international money transfers with their fee-free services and real-time exchange rates. Revolut’s success story is fueled by its diverse product portfolio, encompassing budgeting tools, cryptocurrency trading, and integrated investments. This one-stop-shop approach caters to the modern, globally-connected individual.
3. Chime (USA)
Focuses on the undeserved American market, offering free checking accounts, early access to direct deposits, safety net for overdraft fees. Chime’s success hinges on its mission to provide financial inclusivity and empower individuals often overlooked by traditional banks.
4. N26 (Europe & USA)
Known for its user-friendly mobile app and global reach, N26 offers fee-free accounts, budgeting tools, and instant money transfers. Their multilingual platform and emphasis on international accessibility resonate with a mobile and globalised customer base.
5. Starling Bank (UK)
This award-winning neobank prioritises customer service with its 24/7 in-app chat support and focuses on financial well-being. Starling Bank’s success is driven by its commitment to transparency and building trust with its customer base.
6. Varo (USA)
Caters specifically to the underbanked population in the United States, offering second-chance banking solutions and access to credit builder tools. Varo’s mission to provide financial opportunities for those traditionally excluded from mainstream banking contributes significantly to financial inclusion.
7. Monzo (UK)
Pioneered features like fee-free foreign ATM withdrawals and real-time spending notifications, making them a favourite amongst young adults. While Monzo recently faced some regulatory hurdles, their focus on user experience and innovative features continues to shape the digital banking landscape.
8. Brex (USA)
Specialises in serving high-growth startups with a suite of financial products specifically tailored to their needs. Brex provides corporate credit cards, expense management tools, and integration with popular accounting software, streamlining financial operations for young businesses.
9. SoFi (USA)
Offers a comprehensive suite of financial products, including student loan refinancing, personal loans, investing options, and mobile banking services. SoFi’s success lies in its ability to cater to a broad range of financial needs under one digital roof.
10. Klarna (Global)
Revolutionised the “Buy Now, Pay Later” (BNPL) market by offering interest-free instalment payments at online stores. Klarna’s focus on seamless integration with e-commerce and its flexible payments options have transformed the online shopping experience for millions.
What neobanks mean for finance
The rise of neobanks represents a significant shift in the financial services landscape. Furthermore, these agile players are challenging the status quo with their innovative approaches, streamlines services, and commitment to user experience. Also, by leveraging technology, data, and a focus on financial inclusion, neobanks are not only attracting new customer segments but also pushing traditional banks to adapt and innovate.
As neobanking continues to evolve, we can expect further disruption and a transformed financial services industry that is more accessible, efficient, and user-centric. We can also expect partnerships with neobanks from traditional financial institutions as they look to replicate some of the banking innovation the top neobanks created.
Artificial intelligence is fundamentally changing how businesses operate, and the banking and finance sector is no exception.
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Furthermore, the integration of AIinto banking apps and services has driven a shift towards a more customer-centric and technologically advanced industry.
AI-powered systems improve efficiency and decision-making within banks – but they also offer significant cost reductions. A 2023 McKinsey report on banking highlighted the potential for AI to increase productivity by 5% and generate global cost savings of up to $300 billion.
Introduction to AI in Banking
Automation in banking has evolved rapidly… Starting from basic work and Robotic Process Automation (RPA), to deploying AI in data analysis and eventually to sophisticated applications that impact core areas like risk management and fraud prevention.
AI’s deployment in advanced data analytics helps combat fraud and improve compliance. Meanwhile, AI models can streamline anti-money laundering measures, completing tasks in seconds that previously took hours or days.
AI’s data processing speed allows banks to uncover valuable insights that fuel AI development in chatbots, payment advisors, and fraud detection. This translates to a better customer experience for a wider audience, potentially boosting revenue, lowering costs, and improving bank profitability.
Understanding Customer Behaviour
Successful applications in functions that represent relatively “easy wins” have helped shift the focus to customers.
AI unlocked a new level of customer understanding. By analysing everything from spending habits to online behaviour, AI usesd machine learning to predict customer behaviour and tailor services accordingly.
This deep insight helps banks with AI strategies to be proactive. For instance, AI can identify patterns that indicate a customer may soon switch banks. Armed with this knowledge, banks retain customers by offering personalised incentives or targeted offers.
AI analysis of customer data to gain insights into spending habits, savings patterns, and investment preferences. Banks can use these insights to tailor marketing campaigns, enhance customer service interactions, and create new products and services that directly address the evolving needs of their customers.
A rising demand for more personalised customer experiences has dovetailed with the development of generative AI. The latter’s ability to learn, create, predict – and then communicate, promises a further revolution in banking technology and strategies. It also offers a method of automating delivery of better customer experiences at scale.
Personalised Product Recommendations
By implementing AI models, banks can now offer products and services that are tailored to each customer’s unique financial situation and future needs. This shift towards personalised product recommendations fosters deeper customer relationships and loyalty.
Personalised product recommendations ensure customers are only approached with offers that are likely to interest them, optimising the cross-selling and up-selling of financial products. This targeted approach not only increases the success rate of product offers but also reduces the inefficiency of blanket marketing campaigns.
Better Customer Service
AI-driven chatbots are revolutionising customer interactions in the banking sector. These virtual assistants provide personalised, round-the-clock experiences. Powered by natural language processing (NLP), chatbots understand and respond to customer queries in a manner akin to human communication.
This AI strategy allows customers to receive immediate assistance with any banking matter, eliminating the need for long queues or frustrating phone calls. Customers can get instant assistance with various banking matters – from checking account balances and transferring funds to even applying for loans – all through a simple conversation.
Case Studies
Facial and voice recognition are becoming increasingly sophisticated thanks to AI’s ability to analyse vast amounts of data and refine authentication processes. These advancements not only enhance security but also contribute to personalised customer experiences.
A recent example is NatWest, the first major U.K. bank to leverage AI-powered biometrics for remote account opening. Developed with HooYu, the system uses real-time biometric matching to verify a customer’s selfie against official identification documents.
Another example comes from JPMorgan Chase, where researchers use AI and deep learning techniques to develop an early warning system for malware, trojans, and phishing campaigns. This system can identify threats before they occur, providing crucial time for the bank’s cybersecurity team to take preventative measures. These approaches show how AI strategies are shaping the future of banking tech.
Future Outlook
AI has the potential to revolutionise how financial institutions operate and interact with customers.
There is a major security challenge that comes with it. Banks have to prioritise cybersecurity measures to keep sensitive data protected from unauthorised access or accidental disclosures. There are also serious privacy concerns over the use of customer data.
Financial institutions have their own unique vocabulary and styles of communication. While this may seem a disadvantage, these emerged for ease of communication and specificity – and that means AI will be able to both learn and use the same methods finance workers are versed in. AI will likely become a companion tool for individuals within the industry, just as it will be for customers of it. Each will empower and improve the other.
The financial services industry has always been racing to implement the newest technologies. Back in the 1960s, various financial institutions…
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The financial services industry has always been racing to implement the newest technologies. Back in the 1960s, various financial institutions competed to introduce ATMs. In the 2020s, it’s AI’s turn to deliver the utmost value to fintech customers.
Modern finance infrastructure relies on AI-based fintech trends and solutions. Applications such as Venmo, Paypal, Wise, Apple Wallet, and other apps are the primary examples. With them, users can purchase insurance, apply for loans, or buy cryptocurrency without leaving their homes.
With the growing demand for fintech services, the rise of AI is rapidly reshaping the future of fintech itself. According to NVIDIA’s State of AI in Financial Services: 2024 Trends Survey Report, 43 per cent of global financial services professionals already use generative AI in their organization. Forty-six per cent of them are already using large language models (LLMs), too.
Catching up with AI trends is mandatory in maintaining a competitive edge. The NVIDIA report reveals that 97 percent of surveyed companies plan to quickly invest in more AI tools. By next year, projections suggest that the globalAI in finance technology market will rise to $26.6B.
Here are ten of the top AI trends expected to influence the fintech industry:
1. Customer Insights
Many AI tools enable analysts to crack customer behaviour and preferences. From the data, fintech companies can craft even more personalised experiences.
Customer insights can be inferred from various sources. For example,HSBC’s AI tool analyses a customer’s transaction history, coupled with their social media activity, to provide investment advice and product offerings. The approach has been said to improve customer satisfaction and retention rates.
Another digital banking company, Revolut, uses machine learning algorithms to perform similar tasks. It provides AI-based budgeting and investment advice, as well as financial planning strategies.
2. Robo-advising
More financial institutions are exploring chatbots and virtual assistants with the ability to provide recommendations. According to research by Polaris, the Robo-advisor market is anticipated to grow from $7.39B in 2023 to $9.5B in 2024.
NVIDIA’s report also reveals that 34 per cent of financial services professionals sought AI’s help to enhance the experience of their customers. For instance, Bank of America’s virtual assistant, Erica, is equipped with AI insights to provide customers with real-time assistance.
3. Customer Onboarding with AI
It is commonly known that customer onboarding processes, especially in financial services, are often time-consuming. Many companies are looking to counter this by using AI tools that can automate compliance checks and document processing.
For example, the Oxford startup Onfido uses its proprietary AI, Atlas, to automate identity verification during customer onboarding. Atlas’s method include cross-referencing documents like passports and driver’s licenses with facial biometrics.
4. Robotic Process Automation (RPA)
Robotic Process Automation, as the name suggest, is a way to automate repetitive tasks. In various companies across the world, this technology has been transforming back-office operations.
By increasing effectivity, RPA allows companies to focus on value-added activities. JPMorgan Chase, for example, is able to cut the time to analyse legal documents through its COIN (Contract Intelligence) platform. The bank claims that COIN allows it to reallocate its resources to more strategic business endeavours.
5. Investment Management
More often than not, companies that use artificial intelligence systems to manage their investment benefit from better portfolio diversification. Independent investors who have converted to AI-driven services, too, seek ways to maximise the returns on their investment.
Its platform formulates personalised investment plans based on risk tolerance and financial goals. With Wealthfront, investors also gain access to continuous portfolio optimization and tax-efficient investing.
6. Credit Scoring with AI
Traditionally, scoring models only process limited data. This can often lead to biases, especially for outdated models. In comparison, AI-based credit scoring that analyze broader data sources can assess creditworthiness in a more accurate manner.
This means improved access for underserved populations, on top of reducing default rates for lenders. California-based Zest AI, for instance, offers an AI-powered credit scoring platform that uses a tool called FairBoost to give a more holistic view of a borrower’s creditworthiness.
Regulatory technology, whichdemand jumped last year, is a resource-intensive area for financial institutions. Therefore, AI automation has been a huge help in streamlining its processes.
In the field, artificial intelligence helps to guarantee financial institutions adhere to regulatory standards more efficiently and effectively. For example, De Nederlandsche Bank uses AI data analytics to detect networks of related entities. The process assesses the exposure of financial institutions to networks of suspicious transactions.
8. Payment Processing with AI
A lot of fintech companies are looking into AI to perfect their payment processes in terms of speed and security. The integration results in increased customer satisfaction, both for B2B and B2C companies.
The multinational finance company Stripe, Inc., for example, use AI tools to empower its digital payments processing. Now, customers can manage recurring billing effortlessly thanks to its advanced AI agents.
Stripe has also collaborated with Microsoft’s Azure OpenAI team to integrate GPT-3 for its support services.
9. Blockchain and Cryoto-related Services
AI improves the security and efficiency of blockchain and cryptocurrency transactions drastically. Some tools can perform difficult tasks such as predicting price movements, and optimise trading strategies.
A standout example is the American blockchain firm Chainalysis. For some time, the company has been helping prevent fraud and other illicit activities in the crypto space.
10. AML Compliance
Created to prevent financial crimes, Anti-Money Laundering (AML) regulations can benefit from the use of artificial intelligence. When integrated into the system, AI tools can efficiently detect malicious activities, which results in expedited AML processes.
For example, the financial crime detection company AyasdiAI creates AI application Sensa to help institutions with anti-money laundering (AML) compliance. AyasdiAI’s platform identifies suspicious activity patterns that traditional methods might miss. Its method reduces false positives in AML compliance efforts and increases overall accuracy.
AI in Fintech’s future
The trends outlined in this article represent the future of the fintech industry.
AI’s role in fintech will only continue to grow with more companies investing in its development. Soon, artificial intelligence will take on more sophisticated tasks that add to the value of fintech products and services.
With fully online banking services, neobanks have become a strong contender to legacy banking institutions.
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Big neobanks such as Chime, SoFi, and N26 are now well-established players among the financial services industry.
The growth of neobanking is massive, driven by demand for digitalisation in the industry. For instance, Monzo has over 8 million customers in the UK, while Revolut boasts more than 35 million users across Europe and the US. Nubank, based in Brazil, has over 70 million customers, making it one of the largest neobanks globally.
The market size of neobanks is projected to reach $836.11 billion in 2028 at a compoundannual growth rate (CAGR) of 47.5 percent. Experts believe that the growth is supported by open banking initiatives, embedded finance, and diversification of offerings.
As neobanks continues to grow, traditional banks have responded by launching new subsidiaries. HSBC, for example, launched its retail bank division First Direct, while Scotia Bank released the online-only direct bank Tangerine.
The competition between both revolves around offering the best customer experiences. Let’s explore the differences in their offerings.
Service offerings
While traditional banks offer common financial products, neobanks often focus on niche markets. For example, traditional banking takes care of customers’ loans, mortgages, and investment. Meanwhile, neobanks tackle the need for budgeting tools, cross-border transfers, foreign currency exchanges, and other traditionally overlooked services.
In terms of accessibility, the extensive reach of traditional banks allows for both digital and physical services. ATMs and branch offices are available in physical locations for easy access.
However, some of their digital services may not be on par with neobank’s seamless services. Traditional banks like Bank of America, for example, have numerous branches and ATMs, but their mobile app ratings often fall short compared to neobanks like Chime or Varo.
Designed for digital natives, neobanks’ user experiences are fully online. While the lack of physical branches may be a drawback for those requiring complex assistance, their platforms are rich in features that make for a user-friendly experience.
Another significant difference lies in the cost and operational fee. Most traditional banks enforce higher fees and interest, partly driven by the costs associated with maintaining infrastructure. They also require customers to deposit minimum balances to open an account.
Neobanking revolution
Neobanks are typically less fussy about fees and requirements. As part of their promotion strategies, they often offer no-fee accounts with no minimum balance. The absence of physical branches also allows them to reduce costs and lower interest rates, which is attractive for SMEs and gig economy workers.
Under the pressure of the competition, more traditional banks are experimenting with digital technologies. However, their innovation pace can be slower due to inherited systems and regulatory issues.
JPMorgan Chase, for instance, has been investing in its digital platform, Chase Mobile, but the process is slower compared to the agile development cycles of neobanks like Starling Bank.
Compared to that, neobanks have more freedom in formulating their offerings. These banks often dabble in integrating technologies such as artificial intelligence, machine learning, and blockchain networks into their services. Neobanks like Oxygen and Upgrade provide personalised financial advice and credit-building tools with their AI tools.
Conclusion
While it seems like neobanks are winning in some aspects, many are lagging when it comes to profitability. Older, more established institutions have the edge in winning the hearts of customers at large. Neobanks like Monzo have struggled to turn a profit, whereas traditional banks continue to generate stable revenues.
According to American business intelligence company Morning Consult, 66 percent of users remainreliant on traditional banks, while only 47 percent trust neobanks. For neobanks to gain a competitive edge, they will need to capture a larger share of the market.
Still, the future is promising for both neobanks and traditional banks. As the demographic shifts, so do customer preferences towards different kinds of banking services. Staying competitive means reading into evolving market demands, such as the need for green and ethical financial products, and answering them.
Going forward, it will be important for banks to leverage emerging technologies such as LLMs and AI. Those who successfully adapt to these technological advancements will be able to offer products and services that the market needs.
InsurTech has rapidly evolved over the past decade, transforming insurance by bringing technological innovations to a very traditional industry.
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Initially, InsurTech emerged with startups using digital platforms and data analytics to streamline insurance processes, enhance customer experience, and offer more personalised insurance products.
These companies introduced digital distribution channels, like mobile apps and online platforms. This made it easier for customers to purchase and manage insurance policies. Furthermore, as InsurTech grew, AI and machine learning began playing pivotal roles in underwriting, claims processing, and risk assessment, improving accuracy and efficiency. Firms even started experimenting with blockchain tech to support transparent and secure transactions.
Today, InsurTech continues to evolve, with a focus on data-driven insights, IoT integration for real-time risk monitoring, and partnerships with traditional insurers to drive innovation across the industry.
1. AI in underwriting and claims Machine Learning
As we move into the new decade, Insurtech is advancing rapidly, driven by innovations that are reshaping the insurance landscape. Artificial Intelligence is key to shaping this landscape.
AI offers sophisticated data analysis to improve how risks are assessed and insurance products are priced. It can perform these tasks at scale and find new indicators to improve pricing and risk judgements through analysis of datasets and within its own actions at scale.
Applying AI models to insurers’ vast troves of data transforms the insights and action they can derive from them.
2. Machine Learning for Insurtech
The turbo-engine of AI, Machine Learning gives insurers the ability to find AI solutions with computing power.
ML performs calculations at scale specifically to identify patterns and trends, which can then be absorbed by its learning models.
This and AI in general, improves accuracy but also allows insurers to respond more effectively to market changes, benefiting both insurers and policyholders alike.
3. Blockchain for transparency
Blockchain technology is another transformative force, introducing the cutting-edge transparency and security it offers into digital insurance transactions.
By using smart contracts, blockchain tech automates claims processing, reducing admin, and speeding up settlement times – benefiting both the insurer and the beneficiary. This shift minimizes paperwork and enhances trust within the insurance ecosystem, marking a significant departure from traditional practices and the customer relationship environment.
4. Telematics and IoT
The integration of Internet of Things (IoT) devices is revolutionising insurance by providing real-time data on insured assets.
This data fuels personalised policies and enables dynamic risk assessments based on up-to-date information. For instance, wearable devices and sensors can track health metrics or monitor vehicle usage, allowing insurers to tailor premiums and services to individual behaviors and needs.
5. Big Data
Big Data analytics plays a crucial role by analyzing vast amounts of customer data to uncover insights that enable personalised insurance offerings.
This data-driven approach improves risk assessment and customer experiences by anticipating their needs and preferences. Insurers can proactively offer relevant products and services, fostering stronger customer relationships and loyalty.
6. Chatbots
Digital tools like chatbots are transforming customer interactions in Insurtech. These AI-driven solutions provide instant support, streamline policy management, and offer great user experiences.
Customers can easily file claims, get answers to questions, and manage their policies through intuitive mobile apps, enhancing convenience and satisfaction. Great chatbots, for instance, can also satisfy customer queries while reducing the burden on members of the customer service team – meaning they can do an even better job when customers have to go to them.
7. Virtual Assistants
The use of virtual assistants is growing alongside the increased availability of technology to support online chat functions.
Chatroom digital infrastructure is becoming commonplace. Additionally, this allows agents and teams of agents to manage client discussions within a website or application chatbox. This is far more efficient than dealing with customers on calls, as it lends itself to guided discussions with prompts, encourages concise responses, and can now support authentication measures and simple record-keeping.
Agents can also manage multiple chats at the same time, while customers can go about their daily tasks while keeping the chat open.
8. UBI and on-demand insurance
Usage-based Insurance (UBI) and on-demand insurance are gaining popularity for their flexibility and affordability.
UBI uses telematics and IoT data to offer personalised premiums based on actual usage patterns, like driving behaviour. On-demand insurance lets customers buy coverage for specific events or activities, catering to modern preferences for flexibility and customisation of services.
9. RPA
Robotic Process Automation (RPA) is finding traction in insurance. RPA automates repetitive tasks in company operations, reducing costs, and improving efficiency.
Moreover, by handling data entry, claims processing, and other routine functions, RPA frees up human resources to focus on more strategic decisions and customer-focused work. The nature of the automation also guarantees that the action will conform to standards
10. AR/VR
Augmented Reality (AR) and Virtual Reality (VR) are emerging technologies with many applications in insurance.
These range from virtual property inspections to immersive agent training. Tech like this helps improve risk assessment accuracy, streamline claims processing, and improve customer engagement through interactive experiences.
What Insurtech trends means for insurance
Insurtech is supporting a shift towards more efficient, responsive, and customer-centric insurance services. By embracing these technologies, insurers are able to improve industry fundamentals like operational efficiency, risk reduction, and customer experience while engaging with the most vibrant parts of the emerging tech landscape.
These changes mean insurance will both participate in the technological revolution but also find such large efficiency gains that it grows into a dynamism that was not possible before.
Insurance Technology, known as InsurTech, represents a groundbreaking advancement in the fintech sector.
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Historically perceived as resistant to change, the insurance industry has been criticised for its cumbersome and time-consuming processes. However, the emergence of InsurTech marks a pivotal transformation within the industry.
At its core, insurance offers peace of mind — protection against life’s uncertainties like floods and accidents. In exchange, policyholders pay premiums regularly.
In recent years, InsurTech has experienced significant growth and gained popularity among financial customers. The global insurtech market soared to $5.45 billion in 2022 and is expected to expand by 52.7% from 2023 to 2030.
Its popularity is justified by its benefits that can provide a better customer experience. It offers digital solutions to streamline processes such as filing claims and managing policies.
Streamlining insurance access and policy management
InsurTech offers great benefits for customers. It allows them to access products directly through digital platforms and choose a relatively affordable insurance package online.
The digital platforms used in InsurTech also simplify policy management for customers. These platforms consolidate multiple policies into one accessible location, allowing customers to view, update, and renew policies effortlessly.
Furthermore, integration with fintech components through e-commerce platforms can give customers additional benefits like bundled discounts or simplified payment options.
The automated renewal reminders help customers make timely renewals and avoid the risk of coverage gaps. The platform also makes it possible for real-time access to policy documents, which is very convenient in urgent situations like accidents.
Leveraging AI in InsurTech
InsurTech also uses AI and data analysis technology to understand customer needs and offer more personalised policies. Insurance companies in the past struggled to accurately assess customers’ risks and preferences due to their reliance on historical data and basic demographics.
However, AI algorithms offer a more efficient way to do the task. With AI, insurers can do the assessment efficiently and offer customised policies with appropriate coverage and pricing. This is possible due to AI’s capability to analyse extensive data from diverse sources like social media, IoT devices, and public records.
The AI tech can detect anomalous patterns that indicate fraudulent activities. As fraudulent claims are a big concern for insurance providers, this feature can help detect and prevent scams.
InsurTech also simplifies and speeds up the claims process by assisting customers and streamlining it. Customers can now submit claims digitally instead of the time-consuming manual process.
Advanced optical character recognition (OCR) and natural language processing (NLP) technologies used by InsurTech can help extract relevant data from claim documents automatically. Meanwhile, AI algorithms can analyse claim data to assess its validity.
For further customer service, the use of chatbots and virtual assistance has more benefits than traditional customer service support. The automated customer service can be available at any time and is capable of providing support outside business hours. Customers can get instant responses as these virtual assistants can handle multiple queries without delays.
Future trends
AI technology is a pervasive trend across the fintech landscape and predicted to grow even bigger in the future. More products that people use daily will integrate AI tech into their systems.
One of the main uses of AI in InsurTech is the customer service bots. While current AI-powered chatbots can handle complex queries, automated customer service features still have limitations.
Nevertheless, there will be a greater focus on enhancing customer engagement through interactive tools in the future. The improved AI tool is expected to understand natural language, interpret intent, and provide updated relevant information or escalate issues to human assistants when necessary.
The improved use of AI is not only limited to customer service but also other areas such as marketing, personalisation and fraud detection. For instance, AI tech can help insurers to target customers more efficiently by identifying behavioural patterns.
The rising concern on environmental and social issues makes it possible for more sustainable and socially aware digital insurance products in the future. For example, products that incentivise sustainable behaviours or provide coverage for climate-related risks. With this, the customers will feel an added sense of satisfaction with their purchase.
Increasing digitalisation is making financial services cybersecurity a crucial issue for banking technology.
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Here are the most trends that affect it the most:
A growing reliance on bankingtechnology as the industry digitalises has naturally brought both cybersecurity and financial services security into the limelight.
Digitalization will always come with cyber risks, and financial services will always come with security concerns. Banking is among the industries most vulnerable to cyber threats. A lack of financial services security is a gap cybercriminals can exploit, especially as banking goes through a digital transformation.
Introduction to Cybersecurity Trends
Financial companies face much more challenging cyber threats in 2024. Cyber risks boomed as the world shifted online during the Covid-19 pandemic. This trend is getting amplified by the implementation of AI in financial services, as well as the proliferation of AI-enabled cyber-criminality broadly.
This period of innovation is creating a greater array of possible vulnerabilities for criminal groups to exploit – a much bigger attack surface.
This extends to much bolder targets – the International Monetary Fund (IMF) said in March it was hit by a cyber attack. This is happening worldwide and continues the trend established last year, with Indonesia’s State Cyber Agency (BSSN) recording 350 million cyberattacks occurred in 2023. That includes a ransomware attack on its National Data Centre (PDN).
In previous years, the banking technology security system was linear. In an era with hundreds of interconnected devices, banks have a much more complex challenge to keep their networks secure. Cyber risks are intense and varied, including data breaches, Botnets, and DDoS attacks.
These attacks will hit consumer financial services, through temporary outages, the theft of personal data, and impacting company performance assessments.
Trend 1: AI in Cybersecurity
Artificial intelligence (AI) technology has already created huge changes in business behaviour. It has also encouraged a shift from reactive to proactive approaches in detecting cyber-attack patterns.
As businesses are forced to respond to the widespread arrival of this revolutionary technology.
A simple example of threat increases due to AI is the use of generative AI to increase phishing attacks. It is easier to generate a lot more spam than it was before.
A better piece of news is that AI also brings more precision to recognizing cyber-attack patterns. Machine-learning can study cyber threats in depth and both identify them and identify vulnerabilities in financial services security, This ultimately helps fast and effective responses to evolving cyber threats.
Trend 2: Zero Trust Architecture
The “Zero Trust” security model will continue to evolve. This is where every user and devices is considered untrustworthy by default, until proven otherwise.
That means that testing and validation processes will apply for every user or device login. This approach helps mitigate the risk of internal and external threats.
Basically, every user and device has to continually verify that they are legitimate.
Trend 3: Cloud Security:
An increase in cloud adoption through 2024 will also mean a corresponding growth in cloud security solutions.
More integrated cloud security solutions are a natural part of protecting the cloud environment. They are also an important facet of banking technology security strategy, and will continue to be.
Trend 4: Blockchain-based Security
Adopting blockchain technology as a security solution will help ensure data integrity and transparency.
Blockchain effectively shuts off the tap for interference in the creation of the data records that underpin a given process. The lock security system will ensure optimal protection from unauthorised changes.
Trend 5: Increasing Mobile Security
Mobile devices are now an important player in digital financial transactions. That’s whyfinancial services security is also focused on enhancing stronger mobile security.
Banking technology platforms are designed with strong encryption protocols. These will ensure data sent between devices is protected from unauthorised access. That includes bringing multi-factor authentication features, biometrics, and passcodes.
Trend 6: Biometric Authentication
As above, verifying the individual at the point of digital contact is a storing guaerantee of authenticity.
Authentication methods liike facial recognition and fingerprint scanning offer stronger security. This includes multi-modal biometric authentication that is also used to prevent forgery. There are banking apps that require occasional video recordings to authenticate by appearance and voice recognition to approve large transactions.
Trend 7: Changes in Privacy and Data Protection Regulations
Privacy rule changes will continue to evolve following as data protection requirements get stricter.
Banking companies will also follow global regulations that focus on consumer data privacy. Their clients will also have higher expectations of data security.
Trend 8: IoT Cybersecurity
The IoT (Internet of Things) ecosystem requires better security standards and device management in general.
Because IoT functions through the connection of physical infrastructure with the digital realm, penetrations of that infrastructure – especially through physical devices, require tough security measures.
Reducing the risks associated with unsecured IoT devices will be such a widespread trend that financial services security can rely on a huge body of evidence and best practice to control what attack surface is presented,
Trend 9: 5G Network Cybersecurity
The launch of 5G networks worldwide bring with them the network security expectations that any major shift in networking will create.
That requires an emphasis on network security. Faster network speeds with lower latency creates new challenges that need to be solved. For financial services security, protecting IoT devices connected to the 5G network, ensuring infrastructure support, and mitigating the risk of vulnerabilities appearing where network breaks happen during authentication procedures are all areas of concern.
Trend 10: Cyber Insurance
The cyber insurance market will see significant growth in the future.
Because cybersecurity threats evolve so quickly, assessing how to insure for will require totally new approaches across Insurtech, client-side decisions, and consumer protection.
This falls neatly into concert with the need for financial protection from cyber threats. Insurance will adjust to banking technology risks and the changing compliance environment that maintaining financial service security will now require.
Conclusion
Cybersecurity trends encourage banks to improve their security architecture. Old methods used to secure banking technology systems will most likely be ineffective as the demands on banking technology to evolve are inescapable.
Financial companies will need better financial services security capabilities – but they will be able to get them. The industry will respond with more sophisticated security solutions to the increasing threat from cyberspace.
Embedded finance is revolutionising the financial landscape by seamlessly integrating financial services into non-financial contexts.
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What that means is empowering a moment in time with the ability to financially optimise how you handle it. Imagine buying a coffee and having the option to split the payment into instalments within the cafe’s app. Or booking a flight and receiving personalised travel insurance recommendations. All of this, based on your spending habits, preferences, and the flight you just booked.
In both scenarios, you never leave the one place you planned to visit – the cafe and the airline.
This is the power of embedded finance – it helps consumers by making financial services more accessible, convenient, and personalised. It brings financial options to the point of consumer decision making.
Seamless Transactions
Embedded finance means bringing the behaviour tied to transactions directly into platforms consumers already use.
Whether it’s paying for groceries, booking a ride, or splitting a restaurant bill with friends, embedded finance allows for instant and secure transactions within the familiar environment of the non-financial app. This also works the other way around – some financial apps allow for those decisions to all take place in their own app.
This saves time and effort – it just creates a more streamlined user experience and empowers consumers in the moment of their purchasing decision.
Enhanced Access to Credit
Embedded finance is opening doors for consumers who previously struggled with access to traditional credit options.
Buy Now, Pay Later (BNPL) services are the most prominent example of embedded finance. These offer buyers the flexibility to break purchases up into instalments tied to their personal circumstances. This helps with budgeting and allows young consumers to build a credit history, as traditional methods of doing so are less accessible. The rise of self-employment and the gig economy has meant consistent monthly payments are hard to predict for many consumers.
Embedded finance can facilitate real-time credit assessments based on a consumer’s spending behaviour within a given platform, enabling them to access microloans or other financial products they might not have otherwise qualified for.
Personalised Financial Services
The use of data analytics within embedded finance to personalise financial products and services for each consumer is having an impact beyond transactions.
By analysing a user’s spending habits, income streams, and financial goals within a platform, embedded finance providers can offer targeted recommendations. These can focus on saving accounts, investment opportunities, or even insurance products.
This level of personalisation empowers consumers to make informed financial decisions based on their unique circumstances.
Embedded Finance Case Studies
The impact of embedded finance is already being felt across various sectors:
Sector
Use Case
Benefit for Consumers
Retail
A retail app that allows customers to pay for their purchases and simultaneously apply for a store credit card with a pre-approved limit based on their past purchases.
Streamlines the checkout process and provides access to personalised credit options.
Travel
Travel booking platforms can leverage embedded finance to offer travellers real-time currency exchange. Travel insurance can be tailored to their itinerary with instant microloans for unexpected expenses.
Creates a more holistic and convenient travel experience.
Healthcare
Embedded finance can be integrated into healthcare platforms to facilitate co-pay payments. Offer personalised health insurance plans based on a user’s medical history. Provide financing options for medical procedures.
Empowers patients to manage their healthcare finances more effectively.
Future Trends
The future of embedded finance is full of possibility and it marks an era that is just beginning. We can expect to see:
Deeper integration: Financial services will become even more seamlessly integrated into everyday platforms, creating a truly frictionless financial experience.
AI-powered personalisation: Artificial intelligence will play a more prominent role in personalising financial products and services, offering hyper-targeted recommendations based on real-time data analysis.
Open banking: Open banking APis will further empower embedded finance by allowing secure access to a consumer’s financial data across different institutions, leading to a more holistic view of their financial health
Embedded finance is a game-changer for consumers. Seamless transactions, enhanced access to credit, and personalised financial services, are giving consumers the ability to take real-time control of their finances and make informed decisions.
As this technology continues to evolve, we can expect an even more convenient, personalised, and inclusive financial landscape. This consumer empowerment means more, new opportunities for financial services.
Blockchain gained popularity in the early 2010s due to people’s interest in cryptocurrency.
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In simple terms, blockchain refers to a digital database containing information that can be simultaneously used and shared within a special network. A blockchainis a distributed ledger with growing lists of records (blocks) that are securely linked together via cryptographic hashes. The blocks that are connected to each other form a chain of transactions that cannot be changed or altered. Each block contains transaction data and a cryptographic hash is used to validate and secure it.
Blockchain was officially introduced in 2009 with the release of its first application, the Bitcoin cryptocurrency, but its roots reach back several decades. Indeed, many of the technologies that form the basis for blockchain today were in the works long before the emergence of Bitcoin.
The technology has many potential uses in various sectors beyond finance, including logistics, health, agriculture, and entertainment.
Blockchain was officially introduced in 2009 with the release of its first application, the Bitcoin cryptocurrency, but its roots reach back several decades. Indeed, many of the technologies that form the basis for blockchain today were in the works long before the emergence of Bitcoin.
The technology has many potential uses in various sectors beyond finance, including logistics, health, agriculture, and entertainment.
1. Increased Adoption of DeFi
DeFi, or Decentralised Finance, is a blockchain-based financial service that operates without a central authority.
In recent years, there have been fluctuations in DeFi total value locked (TVL), which hit more than $100 million in November 2021. Currently, in 2024, there will be approximately $55.95 billion of TVL in DeFi.
The increased adoption of DeFi makes it the leading trend to monitor in 2024.
2. Expansion of Blockchain in Supply Chain
In supply chain management (SCM), blockchain is used to ensure security, transparency, and efficiency. It is used to record, encrypt, and lock transaction data in blocks with cryptography, hashing to connect each block, decentralised systems, and product tracking from end to end.
In this way, it brings security, transparency and automation to the supply chain, helping companies to increase operational efficiency and providing certainty to all parties involved in the SCM process.
3. Blockchain for ESG Reporting
Blockchain is more than just cryptocurrency. It can give access to create, oversee, and report environmental, social, and governance (ESG) projects. The technology automates reporting, maintains records, and provides more detailed environmental impact reports. Customers, managers, and investors now have more insight into a company’s workings because of blockchain.
4. Cross-chain Interoperability
Cross-chain technology, or interoperability on blockchain, is a key new innovation. This technology introduces a mechanism that offers direct interaction across different crypto networks.
Through interoperability, various decentralised systems and applications can work together, and interact directly through a protocol. Interoperability is important because it offers a more sophisticated form of the entire blockchain ecosystem.
5. Blockchain in Digital Identity
Apart from other blockchain technologies, digital identity management and verification is one of the most promising applications for blockchain technology. Additionally, it allows us to control our own digital identity worry-free, and provides secure management and storage.
6. Tokenisation of Assets
Tokens are digital units (crypto) issued on top of the blockchain. Furthermore, the values of tokens are based on their specific function and can be exchanged for assets, such as gold, property, and shares. In blockchain technology, you can turn your assets into digital tokens and distribute them easily within the network.
7. Regulatory Advancements
Since rising in 2013, blockchain technology has been constantly evolving and developing. The technology is transforming regulatory compliance. The focus is still the same—transparency, security, and efficiency—to offer a more satisfying and efficient service to all users across the globe.
To keep up with all of the emerging tech trends read the latest issue of Interface Magazine here
Digital payments are reshaping how consumers spend, enabling seamless online transactions. This eliminates the need for physical cash or in-person exchanges.
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The payer and payee only need to bring a digital device, such as a smartphone with a digital wallet/mobile banking app or credit/debit card. People can easily do transactions if their device is linked to a bank account with sufficient funds.
The popularity of digital payments has skyrocketed since the COVID-19 pandemic. In 2023, the transaction value through digital wallets was estimated at $3.1 billion, 50% of the market share. Meanwhile, cash transactions declined by 8.1%.
The immense popularity of digital payments also changed consumers’ spending habits. Before the rise of digital payments, cash was the most common option for the majority. Although cash remains an option, the amount that can be withdrawn from the bank is limited. This limitation has led to greater control over spending for many individuals.
Meanwhile, according to an online survey of 2,000 people by Forbes in 2024, 52% said they are more likely to impulse purchase with card payments. The convenience of digital payments often leads to impulsive purchases. Whether using a card or tapping a phone for contactless payment, these methods remove friction at the point of sale.
Research by EEG also found that digital transactions give a unique psychological pleasure response to their users, making purchases easier and more spontaneous.
The cost of convenience
The convenience offered by digital payments shapes the new habit of how people spend money. Digital payments, especially contactless ones, tend to prompt people to spend more.
Contactless payment cloaks money’s value, and this reduces the pain that comes from spending cash. According to a study by ZenithOptimedia, shoppers who use contactless payment had less accurate recollection of spending than those using cash or traditional cards. This leads to contactless users spending 48% more than people using other methods.
Mobile Wallets
Meanwhile, mobile payment apps or mobile wallets also had a significant impact on consumer spending.Research shows that consumers’ risk of overspending increases while money management time decreases when using mobile wallets.
The mobile wallet strategy of using a brand loyalty program also significantly contributes to overspending. Consumers will gain reward points, discounts, or special offers by spending a certain amount through the mobile wallet program.
This will encourage consumers to repeat purchases and spend more to gain bigger rewards. Consumers will also feel less guilty about spending money as they subconsciously perceive these transactions as more beneficial and convenient.
Since digital payments are mostly done online, providers can gather a huge amount of consumer data. This data can be used to analyse consumers spending patterns and predict their consumer behaviour.
The mobile apps or card providers can send personalised promotions and enhance their customers’ experience. This targeted marketing strategy will also further push spending as people will likely be more interested in what they are offered.
Future trends
As technology advances, digital payments and consumer behaviour will continue to evolve. One potential future trend is the rise of cryptocurrencies.
While many people see crypto as an investment, more platforms are now integrating crypto payments as an option for payments. However, it is still rare to see offline stores accept crypto payments.
In the future, consumers will become more aware of the security issues associated with cryptocurrencies due to their lack of regulation. They will increasingly seek out options that provide stronger security measures.
When it comes to digital payments, the use of Artificial Intelligence (AI) and the Internet of Things (IoT) are expected to be more prevalent in the future. AI can help providers to create personalised experiences by analysing consumer spending habits more efficiently and accurately.
IoT devices like smart fridges can autonomously initiate payments for consumables or services. This could lead to overspending if not managed properly, prompting more consumers to seek financial management solutions through apps or services.
As these technologies become increasingly integrated into our daily lives, the need for robust and reliable financial tools will be more critical than ever, shifting how we manage our finances in a hyper-connected world.
Satya Mishra, Director, Product Management at Amazon Business, discusses how CPOs have become an important voice at the table to drive digital transformation and efficient collaboration.
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Harnessing efficiency is at the heart of any digital transformation journey.
Digitalisation should revolve around driving efficiency and achieving cost savings. Otherwise, why do it?
Amazon is no stranger to simplifying shopping for its customers. It is why Amazon has become a global leader in e-commerce. But, business-to-business customers can have different needs than traditional consumers, which is what led to the birth of Amazon Business in 2015. Amazon Business simplifies procurement processes, and one of the key ways it does this is by integrating with third-party systems to drive efficiencies and quickly discover insights.
Satya Mishra, Director, Product Management at Amazon Business, tells us all about how the organisation is helping procurement leaders to integrate their systems to lead to time and money savings.
Many people shop on Amazon. What is Amazon Business, and how is it related to procurement?
Satya Mishra: “More than six million customers around the world tap Amazon Business to access business-only pricing and selection, purchasing system integrations, a curated site experience, Business Prime, single or multi-user business accounts, and dedicated customer support, among other benefits.
“I lead Amazon Business’ integrations tech team, which builds integrations with third-party e-procurement, expense management, e-sourcing and idP systems. We also build APIs for our customers that either they or the third-party system integrators can use to create solutions that meet customers’ procurement needs. Integrations can allow business buyers to create connected buying journeys, which we call smart business buying journeys.
“If a customer does not have existing procurement systems they’d like to integrate, they can take advantage of other native tools, like a Business Analytics dashboard, in the Amazon Business store, so they can monitor their business spend. They can also discover and use some third-party integrated apps in the new Amazon Business App Center.”
Why would a customer choose to integrate their systems? Are CPOs leading the way?
Satya Mishra: “By integrating systems, customers can save time and money, drive compliance, spend visibility, and gain clearer insights. I talk to CPOs frequently to learn about their pain points. I often hear from these leaders that it can be tough for procurement teams to manage or create purchasing policies. This is especially if they have a high volume of purchases coming in from employees across their whole organisation, with a small group of employees, or even one employee, manually reviewing and reconciling. Integrations can automate these processes and help create a more intuitive buying experience across systems.
“Procurement is a strategic business function. It’s data-driven and measurable. CPOs manage the business buying, and the business buying can directly impact an organisation’s bottom line. If procurement tools don’t automatically connect to a source of supply, business buying decisions can become more complex. Properly integrated technology systems can help solve these issues for procurement leaders.”
Satya Mishra, Director, Product Management at Amazon Business
Beyond process complexity, what other challenges are procurement leaders facing?
Satya Mishra: “In the Amazon Business 2024 State of Procurement Report, other top challenges respondents reported were having access to a wide range of sellers and products that meet their needs, and ensuring compliance with spend policies.
“The report also found that 52% of procurement decision-makers are responsible for making purchases for multiple locations. Of that group, 57% make purchases for multiple countries.
“During my conversations with CPOs, I hear them say that having access to millions of products across many categories through Amazon Business has allowed them to streamline their supplier quantity and reduced time spent going to physical stores or trying to find products they’re looking for from a range of online websites. They’ve also shared that the ability to ship purchases from Amazon Business to multiple addresses has been very helpful in reducing complexity for both spot-buy and planned or recurring purchases. Organisations may need to buy specific products, like copy paper or snacks, in a recurring way. They may need to buy something else, like desks, only once, and in bulk, at that. Amazon Business’ ordering capabilities are agile and can lessen the purchasing complexity.”
How should procurement leaders choose which integrations will help them the most?
Satya Mishra: “At Amazon Business, we work backwards from customer problems to find solutions. I recommend CPOs think about what existing systems their employees may already use, the organisation’s buying needs, and their buyers’ typical purchasing behaviors. The buying experience should be intuitive and delightful.
“Amazon Business integrates with more than 300 systems, like Coupa, SAP Ariba, Okta, Fairmarkit, and Intuit Quickbooks, to name just a handful. With e-procurement integrations like Punchout and Integrated Search, customers start their buying journey in their e-procurement system. With Punch-in, they start on the Amazon Business website, then punch into their e-procurement system. With SSO, customers can use their existing employee credentials. Our collection of APIs can help customers customise their procure-to-pay and source-to-settle operations. This includes automating receipts in expense management systems and track progress toward spending goals.
“My team recently launched an App Center where customers can discover third-party apps spanning Accounting Management, Rewards & Recognition, Expense Management, Integrated Shopping and Inventory Management categories. We’ll continue to add more apps over time to help simplify the integrated app discovery process for customers.
“Some customers choose to stack their integrations, while others stick with one integration that serves their needs. There are many possibilities, and you don’t just have to choose one integration. You can start with Punchout and e-invoicing, for example, and then also integrate with Integrated Search, so your buyers can search the Amazon Business catalog within the e-procurement system your organisation uses.”
Are integrations tech projects?
Satya Mishra: “No, integrations should not be viewed as tech projects to be decided by only an IT team. Integrations open doors to greater data connectivity and business efficiencies across organisations. Instead of having disjointed data streams, you can connect those systems and centralise data, increasing spend visibility. You may be able to spot patterns and identify cost savings that may have gotten lost otherwise.
“It’s not uncommon for me to hear that CPOs, CFOs and CIOs are collaborating on business decisions that will save them all time and meet shared goals, and integrations are in their mix of recommendations.
“One of my team’s key goals has been to simplify integrations and bring in more self-service solutions. In terms of set-up, some integrations like SSO can be self-serviced by the customer. Amazon Business can help customers with the set-up process for integrations as well.”
How has procurement transformed in recent years?
Satya Mishra: “Procurement is no longer viewed as a back-office function. CPOs more commonly have a seat at the table for strategic cross-functional decisions with CFOs and CIOs.
“95% of Amazon Business 2024 State of Procurement Report respondents say the purchases they make mostly fall into managed spend. Managed spending is often planned for months or years ahead of time. This can create a great opportunity to recruit other stakeholders across departments versus outsourcing purchasing responsibilities. Equipping domain experts to support routine purchasing activities allows procurement to uplevel its focus and take on higher priorities across the organisation, while still maintaining oversight of overarching buying patterns. It’s also worth noting that by connecting to e-procurement and expense management systems, integrations provide easy and secure access to products on Amazon Business and help facilitate managed spend.”
What does the future of procurement look like?
Satya Mishra: “Bright! By embracing digital transformation and artificial intelligence to form more agile and strategic operations, CPOs can influence the ways their organisations innovate and adapt to change.”
Anthony Payne, Chief Marketing Officer of HICX, tells us how working collaboratively with suppliers on sustainable procurement practices could act as an organisation’s competitive advantage.
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Sustainability isn’t just a ‘nice to have’ anymore – businesses don’t have much of a choice in the world of 2024.
With ESG regulations now locked in place, organisations must comply or risk significant penalties. In order to achieve sustainability objectives more effectively and efficiently, collaborating with suppliers represents a real opportunity to get there faster.
When businesses work with suppliers to reach sustainability goals, they need access to the most accurate supplier data possible. However, obtaining this data isn’t necessarily straightforward. Ultimately, suppliers own it and need to provide it.
This means it is in a business’s interest to form and maintain a great working relationship with suppliers.
Anthony Payne, Chief Marketing Officer of HICX, the supplier experience platform, discusses the benefits of being supplier-centric and how giving brands a better experience adds value to organisations.
What is the link between businesses collaborating with suppliers, and suppliers being able to give them helpful sustainability information?
Anthony Payne: “There is a direct link. A good supplier experience makes it easier to communicate with suppliers because it allows for collaboration, whereas the opposite can harm communication efforts. For example, when businesses need ESG information, many will survey a broad group of suppliers even though the questions don’t apply to everyone. This is easier for the business. But it means every supplier who receives the survey must investigate whether it applies to them. The experience is more likely to frustrate suppliers than to help them offer the best information.
“Rather, we can help suppliers to help us by communicating better. The way forward is to segment suppliers into groups and send them only relevant requests. This creates a more positive experience in which suppliers are better able to provide helpful information.”
What about their motivation to help sustainability efforts – does this also rely on supplier experience?
Anthony Payne: “Yes, because if the culture of the business-supplier relationship is one in which each party looks out for themselves, then suppliers won’t be terribly motivated to offer the most helpful ESG information. It’s just human nature. Whereas if a business creates an environment in which suppliers can collaborate with them, then they’re more likely to become a customer-of-choice. This is a status worth having. A recent HICX survey showed that while 49% of suppliers would go the extra mile for their biggest customer, as many as 73% would make the effort if this was a customer-of-choice.
“Ultimately, if businesses give their suppliers a good experience, then more suppliers should be willing to provide helpful ESG information – even if it means spending a bit more effort.”
What are some of your most effective strategies and best practices to building a future-proof ESG framework?
Anthony Payne: “Businesses can futureproof their ESG frameworks by viewing suppliers as value-adding partners. This principle suggests three ways to engage suppliers…
“First, have a corporate mindset in which every employee views every supplier as a valued partner. If COVID-19 taught us anything it’s how much we rely on suppliers. When the pandemic hit, non-strategic suppliers such as providers of IT equipment and protective personal equipment suddenly became as central to operations as those who supplied the main ingredients. If we take the view that ‘all suppliers matter’, then it becomes easier to treat them all as partners in the same eco-system and we can work together towards common goals.
“Then, through this lens, we can market to suppliers. In customer marketing, a business would require a certain action from customers – such as getting them to buy a product, read a newsletter or attend an event – and so would motivate this behaviour. Similarly, in procurement, we can appeal to suppliers in a way that encourages them to participate in ESG activities, for instance, by providing helpful carbon emission information.
“One way to encourage the desired behaviour with suppliers is to segment them into the appropriate categories and send them only necessary messages. This is what a marketer would do with customers. By viewing suppliers as partners and introducing supplier marketing and segmentation, you can improve suppliers’ experience and get the most from them.”
What are the biggest barriers that organisations face to delivering more sustainable practices within their organisations?
Anthony Payne: “Once supplier data has been captured, however, the challenge continues because it must be maintained as a golden source of truth. Not having accurate supplier data is a major barrier to delivering sustainable practices because it means that businesses cannot see who all their suppliers are and what they’re doing.
“Thankfully, with robust onboarding and data management in place, businesses can keep their supplier data up-to-date and accurate so that it can inform good sustainability decisions.”
What is the best way for procurement teams to assess and prioritise the suppliers they work with? How do you juggle environmental impact vs value to company?
Anthony Payne: “The best way to assess and prioritise suppliers is to have visibility. Businesses need to know who all their suppliers are and what they’re doing, at any given time. Only once leaders are informed, can they make the best environmental decisions.
“It’s imperative to manage environmental impact with suppliers, regardless of how much value they bring a company. Apart from the moral obligation to protect the environment, businesses also have their reputations to consider. An environmental infringement that gets exposed – no matter how deep in the supply chain it might occur – is very likely to cause reputational damage, which can have a knock-on effect on sales and share price.
“In addition to brand reputation, businesses can also face expensive fines, if their suppliers are found to fall short of environmental regulations.”
What are the challenges and opportunities when it comes to supplier diversity?
Anthony Payne: “The challenge is to source the right suppliers in the first instance and then be able to report on their activity. We know that finding diverse suppliers in the UK can be difficult. While the US market is more mature, supplier diversity is growing here. Considering this, many suppliers that could qualify as “diverse” are not yet certified. Additionally, when diverse suppliers are indeed certified, there is no guarantee that their skillsets will match your needs.
“Thankfully there are ways in which businesses can proactively grow their networks of diverse suppliers. For starters, leaders can equip people within the organisation who work with suppliers, to find diverse suppliers by educating them and putting policies in place. Further, there are practical steps one can follow – such as defining the criteria for what qualifies a supplier as diverse in various territories and then finding the right businesses by searching online directories, desktop research and asking for recommendations.
“Once suppliers that are considered to be diverse are indeed found, they bring much value. Apart from being able to make a positive sustainability impact, the expectations of regulators, shareholders and consumers can be met. The by-product of this is a positive reputation which has economic benefits.
“The opposite logic also applies, and failing to capture supplier diversity value becomes a missed opportunity. For instance, when third-party expectations to support supplier diversity are missed, this can damage brand reputation which hurts sales figures and share price. Also, the unique offerings that diverse suppliers can offer will be missed, and with it the chance to make an impact. Therefore, it’s sensible to make the most of the diverse suppliers that you worked so hard to find.”
Do you have any tips for readers who want to make the most of the diverse suppliers they have sourced?
Anthony Payne: “Yes, you can start by knowing that it’s possible to make the most of the diverse suppliers you find. You can do this by following a stepped approach.
“Start by onboarding new suppliers who are considered ‘diverse’ with processes that reliably capture their information. This way, your diversity programmes can be well-informed. It’s hugely valuable to be able to tell, at the touch of a button, where a particular supplier might be based. Also, what qualifies them as ‘diverse’? And while they might hold diversity status today, how can we be sure it still applies tomorrow?
“With all the right information collected at the start of each relationship, then it’s a good idea to instill processes that drive everyone who works with suppliers to spend more with those who are considered as diverse. As more diverse suppliers join the organisation, then you need to keep their data accurate. Do this by digitally transforming the procurement landscape to make master data a priority. With robust processes, it’s possible to maximise your relationships with all suppliers.”
How optimistic are you about the future of ESG within procurement?
Anthony Payne: “I am very optimistic about the future of ESG within procurement, because, we’re seeing the supplier experience movement grow in the UK and the US. For instance, we’re seeing new job roles come out in this area as the principle is popularised. And we know that having good Supplier Experience Management programmes in place sets up business to procure in the most ESG-friendly way possible.
“And so, with Supplier Experience Management becoming increasingly popular, we believe that the future for sustainability is bright.”
Publicic Sapient CEO Nigel Vaz reflects on the leadership strategies required for successful digital business transformations
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The hardest part of being a business leader and CEO – especially leading through change – are the choices we make every day to move toward that will drive our future success. Often, this will mean letting go of things that made us successful in the past. We must make room for new skills, relationships, ways of working, and opportunities.
The average CEO has 30 years of business experience and makes decisions based on that accumulated experience. But think how much the world has changed in the space of five years, let alone 30. The same thinking and approach are not going to stand the test of time. The modern CEO needs to find and maintain the ability to turn preconceived ideas on their head. As a leader, I’ve always felt it’s important that I adopt the behaviours I advise for our clients. Leaders must be willing to learn, adapt and act with speed.
The Modern CEO
The modern CEO has a complicated, bordering on paradoxical, relationship with change. We dislike uncertainty and volatility, and yet we have an intense distaste for stasis. We would rather avoid geopolitical instability and macroeconomic challenges. However, changes to customer needs, shifting industry landscapes and rapid technological innovation bring opportunities to transform our companies. We must identify paths to value creation and growth, and build better, more efficient businesses. And, the reality is for today’s CEOs, you don’t get to pick one or the other. You have to be ready to lead your organisation in the context of both simultaneously. Leading through either type of change is not for the faint of heart.
In my role as CEO of Publicis Sapient – a digital business transformation company that partners with organisations globally to help them create and sustain competitive advantage – my relationship with change is amplified. I am responsible for driving growth and ensuring our business capabilities are optimised for the digital age. At the same time I’m leading a business that empowers our clients to embrace change by putting digital at the core of how they think, organise and operate. On the Executive Committee of our parent company, Publicis Groupe, I am also weighing in on how to lead on the digital business transformation of the Groupe. This has been accelerated this past year with the pace of AI.
Change Management
The nexus of these different aspects of my CEO role is not uncommon to many of the CEO clients we work with. Like myself, they are leading their organisations and people through a period of tremendous change. Furthermore, they are tasked with making decisions daily on choices that will impact the direction and outcomes for their company.
One of the most critical choices they will make is determining the purpose of their organisation. When there is so much change and challenge surrounding you, the easy path is to react and say, ‘How do I overcome each of these challenges?’ But first you have to be clear on who you are as an organisation and the impact you want to have. Without that sense of direction, you can very easily fall into the mistake of making disconnected, reactive decisions.
Welcome to the latest issue of CEOstrategy where we highlight the challenges and opportunities that come with ‘the’ leadership role
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Our cover story focuses on the work of Nigel Vaz, the CEO of Publicis Sapient – a digital business transformation company that partners with organisations globally to help them create and sustain competitive advantage – and his approach to change management.
Welcome to the latest issue of CEOstrategy!
Tasked with accelerating business growth, while building the synergies across an organisation that can drive innovation to meet diverse customer needs and keep revenues on track, the modern CEO must be mentor, marshall and motivator on the journey to success.
“I lead Publicis Sapient with a set of principles to keep me on track, and which I offer to fellow CEOs as a guide,” says CEO Nigel Vaz. “Embrace change, and view challenges as opportunities for growth and innovation; Foster a culture of continuous learning within yourself and your organisation; Advance the organisational capabilities that will enable your company to deliver on your brand promise; Adopt a data-driven approach to decision-making, utilising analytics and advanced technologies and Stay rooted in purpose to realise your competitive advantage.”
EMCS: Leading a small fish making a big impact
“If you look after your people and you have the right people in place, the customer experience takes care of itself,” explains EMCS Industries CEO Trevor Tasker. “A lot of entrepreneurs say the same, but you don’t always see it in action. If I have to micromanage somebody, I’ve made a hiring mistake. When I’ve found the right person, all I have to do is support them and trust them. If I can’t trust them, I can’t lead them. And being trusted makes my employees so much better at their jobs. It makes choosing the customers you deal with very important as well…”
Moneypenny: People at the heart
We are consistently listed in the best places to work rankings and have created a happy and fun working environment,” says Moneypenny CEO Joanna Swash. “We strive to be authentic, and that starts at the top. If the leadership team walks the walk and talks the talk, then trust is built. Trust fosters a culture where employees are motivated, engaged and empowered with a culture of transparency and honesty…”
Bupa: Choice, care and compassion driving digital transformation
“In a fast-changing world, it’s essential that we harness the power of technology to keep improving health outcomes for our customers,” says Global & UK CEO Carlos Jaureguizar of the digital transformation journey helping Bupa become the world’s most customer-centric healthcare company. “We give our people the tools to give customers the best care, streamline the customer experience and drive innovation.”
Also in this issue, we hear from Rachel Youngman, Deputy CEO at the Institute of Physics, on how organisations can leverage ESG targets to meet the Net Zero challenge; we get the lowdown on a fintech success story from RTGS.global CEO Jarrad Hubble; discover the importance of Strategic Thinking with Institute for Management Development Professor Michael Watkins and count down ten reasons why integrity is key to business success with Serenity In Leadership CEO Thom Dennis.
Global cloud services point-of-sale provider, GK Software, was founded over 30 years ago in Germany. For most of its existence,…
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Global cloud services point-of-sale provider, GK Software, was founded over 30 years ago in Germany. For most of its existence, its focus was on expanding across Europe. However, in 2015, GK broke into the US when its partnership with SAP helped it drive into that vital market. The business has been thriving stateside ever since. Its core business is a point-of-sale software platform – CLOUD4RETAIL – which features the OmniPOS solution. Today, GK is ranked highly in global POS installations and has been among the top three for the last five years.
GK is an organisation committed to continuous improvement and customer engagement. It is evolving, getting into newer technologies like AI in a big way. It’s leveraging its expertise to improve insights into what its retail customers and their shoppers need. This includes everything from price optimisation to loyalty to self-service technologies.
Its ability to provide these services, through its expertise, is what attracted Virginia ABC to GK Software. Virginia ABC was a previous user of SAP’s point-of-sale (POS) solution, but as the authority evolved, it required an updated POS.
GK Software meets Virginia ABC
Enter: GK Software. “As a result of our relationship with SAP and with Paul Williams at Virginia ABC, we were shortlisted in their new point-of-sale solution selection,” explains Max Francescangeli, Regional Sales Director at GK Software.
“With Virginia ABC, we went through quite an extensive selection process. It’s a government agency, so the rules are very strict,” says Francescangeli. “But we were able to prove that we could use our expertise to address and solve all of their problems in spite of the unique environment they operate in. They needed a flexible solution that would interact well with their legacy platforms during implementation. We were certainly able to provide that. So, we were eventually awarded the business and the project has been extremely successful.”
The approach GK takes with its customers during these projects highlights just how much out-of-the-box capability its solution has. GK’s team spent a lot of time with Virginia ABC. The organisation examined its business requirements and using a consultative approach to show how its software could be configured. This was so it could meet the end-state business requirements and take advantage of best-of-breed capabilities that exist within GK’s platform.
“Rather than going there and trying to do a lot of customisation, we wanted to help them take advantage of the software as it exists,” Francescangeli adds. There were also other areas where GK was able to provide a lot of value and expertise to Virginia ABC. These include payment processing and its partner ecosystem. Virginia ABC was previously using a payment provider with limited capabilities, but GK was able to step in and expand the technology set. “We gave them more hardware choices, expanding what they could do with their in-store devices.”
Virginia ABC also needed more advanced reporting and analytics within its environment. So, GK introduced a solution called Advanced Central Electronic Journal and Reporting. Francescangeli continues: “It saved them a tremendous amount of effort, and gave them a lot of flexibility. We implemented that very quickly and they gained business value from it immediately.”
An evolving partnership
GK Software and Virginia ABC worked on initial deployment for the first 12 months of the project, and GK has continued to supply its services ever since. Each year after the first, Virginia ABC has expressed interest in something else GK offers. As a result, the relationship has remained close and Virginia ABC continues to expand the partnership.
“Paul and his team have been champions of ours and we’re champions of theirs as well,” Francescangeli states. “Due to the relationship we have with Virginia ABC, we have been able to secure business from other retailers in the same space because they have confidence that we know how to handle the market.”
“GK checks a lot of boxes retailers are looking for,” Bill Miller, North American VP of Sales at GK adds. “We’re in this inflection point where we offer modern technology that also has a lot of functionality out of the box, and that’s what people want. That’s what Virginia ABC wanted, and that’s what we supplied.”
N-SIDE VPs Amaury Jeandrain and Charlotte Tannier discuss their organisation’s partnership with Sanofi and look ahead to a brighter future.
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Transparency. Good partnerships need it to survive.
For N-SIDE and Sanofi, it has been a key ingredient to what has made the partnership successful for the past eight years.
Since late 2015, N-SIDE has established and built on a strategic partnership with France-based pharmaceutical company Sanofi, aimed at optimising the firm’s clinical trial supply chain. The partnership helped digitalise Sanofi’s clinical supply chain while driving greater performance and waste reduction.
Harnessing efficiency
N-SIDE is a global leader in increasing the efficiency of life sciences and energy industries by providing software and services that optimise the use of natural resources, facilitating the transition to a more sustainable world. Founded in 2000, N-SIDE has built deep industry knowledge and technical expertise to help global pharmaceutical and energy companies anticipate, adapt, and optimise their decisions. In the life sciences industry, N-SIDE reduces waste in clinical trials, leading to more efficient, faster, and more sustainable clinical trials.
Amaury Jeandrain, Vice President Strategy of Life Sciences at N-SIDE, has witnessed first-hand the development of the partnership since he joined the company in January 2016. “Very quickly, the value of risk management and waste reduction was perceived internally and this partnership ended up growing to become one of our largest. Today, Sanofi is the company at the forefront of a lot of the innovation co-created with N-SIDE.”
Amaury Jeandrain, Vice President Strategy of Life Sciences at N-SIDE
Pharmaceutical companies of varying sizes use N-SIDE solutions to avoid supply chain bottlenecks in their clinical trials, decrease risks and waste, control costs, reduce time-to-market and speed up the launch of new trials. N-SIDE’s focus is on four key pillars to bring high levels of efficiency into Sanofi’s clinical supply chain: best-in-class supply chain, people, analytics and innovation.
Charlotte Tannier, Vice President of Life Sciences Services at N-SIDE, adds that the key differentiator is the transparency between her organisation and Sanofi. “We trust each other and know that we can be fully open with them,” she explains. “We like to build new things together and co-develop innovative solutions.”
Charlotte Tannier, Vice President of Life Sciences Services at N-SIDE
Teaming with Sanofi
Having defined a clear route to success through the Sanofi partnership, Amaury is keen to point out that the relationship has acted as something of a catalyst for future business collaborations with other companies. “There are a lot of good practices that were initiated with Sanofi that now became a standard in our industry,” he discusses.
Looking ahead, the future of the partnership looks bright and is showing no signs of slowing down. Charlotte explains that the next step is all about “integration.” “For the moment, we have multiple teams and departments that are using the N-SIDE solutions, and many other software are used as well within the organisation. The focus in the short term will be to enable a unified IT landscape and environment,” she reveals. “The objective will be to be fully integrated and to increase the impact of the data they own. Because we believe, with Sanofi, that the way forward is through data. We are also planning to help Sanofi leverage more of the data that we’re generating together to increase its impact.”
As technology continues to evolve and organisations become even more digitally mature, partnerships built on transparency and trust will be in demand. N-SIDE and Sanofi already have that head start.
In this innovative partnership, the whole is greater than the sum of its parts as the two companies focus on taming tail-spend with an on-demand platform with embedded change management.
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Businesses have been leaving money on the table for years. For most organisations, (indirect) tail spend flies under the radar because of the large number of lower-value transactions, a fragmented supply base, and a poor user experience. This results in process inefficiencies and lost savings opportunities that can be eight to 13 percent higher than with more competitive sourcing.
Simfoni and Kearney set out to solve this problem, joining forces on solutioning tail spend management. The partnership pairs Kearney’s rich heritage and expertise in procurement transformation and change management with Simfoni’s composable analytics and spend automation technology. The result is a comprehensive global delivery model that significantly improves tail spend management, which until now has been a major problem for large and smaller organisations alike.
“We started our journey over three years ago,” says Stefan Dent, co-founder of Simfoni. “It takes some time to form a bond. You get to know one another working together on client engagements and then you realise that the relationship is really working, so you double down on the commitment.”
Simfoni helps businesses “see spend differently” leveraging data analytics to gain a deep understanding of user needs across everyday ‘tail spend’. Founded in 2015, Simfoni is a leading provider of tail spend, spend analytics, and e-sourcing solutions for large and midsize businesses around the globe. Simfoni’s platform uses machine learning and AI to accelerate and automate tail spend management, saving time and money. Its solution quickly ingests and organises complex data to uncover opportunities to optimise tail to higher value spend. Simfoni emphasises rapid value delivery through on-demand spend automation solutions that are operational in weeks rather than months.
Remko de Bruijn, senior partner at Kearney
The Kearney–Simfoni partnership delivers a unique and powerful proposition, combining Simfoni’s digital tail spend solution with Kearney’s know-how and ability to launch a transformation and unlock the promised value, says Remko de Bruijn, a senior partner at Kearney. “There are many digital procurement solutions around, but frankly, many of them aren’t delivering the promised value, typically because of challenges with user adoption and change,” he says. “Kearney continuously assesses solutions in the market, with one of our other partners, ProcureTech, and together, we concluded that Simfoni is leading in tail spend. This is how we found each other.”
Kearney is a leading global strategy consulting firm founded in 1926, with more than 5,700 people working in more than 40 countries. The company works with more than three-quarters of the Fortune Global 500 as well as with the most influential governmental and nonprofit organisations. Kearney is a partner-owned firm with a distinctive, collegial culture that transcends organizational and geographic boundaries—and it shows. Regardless of location or rank, the firm’s consultants are down-to-earth and approachable, with a shared passion for doing innovative client work that realises tangible benefits for their clients, in both the short and long term.
“We see Simfoni as a powerful solution to realise savings in indirect tail spend. It’s about not only data and spend automation, but also the customer experience,” De Bruijn says. “This is crucial when dealing with everyday spend as most users are non-procurement professionals.”
Kearney aids businesses in implementing Simfoni’s solution quickly, mitigating risks associated with unmanaged spend and vendors. “The attractive thing about Simfoni is that the solution manages tail spend—optimising both spend and vendors—with the savings funding the digitisation. It’s a tail spend solution that delivers a comprehensive service,” De Bruijn says. “Simfoni will even pay the tail suppliers with Simfoni becoming the ‘One Vendor’ for the tail, which creates additional benefits in accounts payables and working capital.”
Simfoni and Kearney both operate globally, which is important since their customers often operate in multiple regions around the world. “It’s a very interesting and powerful proposition,” De Bruijn says.
Stefan Dent, co-founder of Simfoni
Simfoni designed its tail spend platform from the ground up. The company founders came from the procurement domain, having worked in a variety of procurement leadership roles and at other procurement technology providers. “Let’s face it, existing solutions never solved tail spend, which accounts for around 80 percent of your vendors and transactions and around 20 percent of spend value,” Dent says. “Until now, the only options were BPOs, where you effectively outsource your tail to be managed by humans in a lower-cost country, or you use self-service bidding platforms. These solutions deliver some value, but it’s like putting a plaster on a wound. You never properly cure the problem.”
Simfoni’s platform is unique in that it is first and foremost a software-as-a-service (SaaS) solution with integrated buying services and digital procurement content components that connect with a client’s existing systems, or Simfoni can operate autonomously. Dent says that’s not even the best part. “The user experience is the most important element because, as Remko pointed out, most tail spend users are not procurement professionals,” he says. “Our users are in R&D, IT, plant operations, or marketing. They want an intuitive, easy-to-use solution to source and buy goods and services to support the everyday needs of their business. This is where traditional eProcurement systems fail.”
Dent says Kearney is an ideal partner being a trusted advisor to many of the world’s largest organisations. Kearney’s expert knowledge of procurement and transformation are a vital part of the offering. “Kearney’s input and expertise is crucial as Kearney helps our clients scope their tail spend program and update their procurement operating model while Simfoni frees up resources, allowing the client to focus on higher-value activities,” he explains. “At the end of the day, technology alone doesn’t solve tail spend. It’s about change. Kearney helps our clients make that digital shift. That’s why our partnership is so powerful because together we provide a comprehensive change and a digital solution as a package. The opportunity for our clients to finally control and optimise tail-spend is huge.”
Linda Chuan, Chief Procurement Officer at Box, discusses the value of delivering effective and long-lasting change management in procurement.
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Being at the forefront of change requires a specific type of person – it’s not for everyone.
But for those that are equipped to deal with the volatile and at times, disruptive, nature of change, that’s where the rewards can be uncovered.
Knowing this all too well is Linda Chuan. She is a seasoned sourcing and procurement operational excellence executive with a public accounting background and a strong ability to execute from vision and strategy. Her innovative experiences with organisations large and small have culminated in a unique, but practical end-to-end view and understanding of business processes. Chuan’s approach to problem-solving is holistic, mixed with a blend of discipline, creativity, agility and resilience. She has demonstrated successes in her execution and delivery with real results time and again, while also leading successful transformational digitisation strategies.
Procurement’s transformation
The industry she serves has undergone quite an evolution in recent times. Having transformed from a back-office function into a dynamic, exciting, enterprise division at the forefront of change. Procurement and its professionals have been on quite the journey in recent times. As such, Chuan explains that the space is, in fact, so unrecognisable that even its definition has changed. “Procurement started out as purchasing for primarily manufacturing companies decades ago,” she discusses. “Then it evolved from purchasing to procurement where the practice and the profession required more skills around understanding contract verbiage and how the commercial terms would impact the business. There was a little bit more skillset required, legal terms, understanding contracts, all the way to what we know today as strategic sourcing.”
Fast forward to 2020’s Covid pandemic and procurement was forced to shift again amid significant disturbance to supply chains. As a result, procurement was swiftly elevated to the c-suite and became front of mind for most CEOs globally as businesses looked to tighten their belts while urgently finding alternative methods of supply.
“Following Covid, I think we, as procurement professionals, are now mandated to be even more than strategic sourcing and add value to the company,” affirms Chuan. “We’re asked to look ahead and think about the macroeconomics as well as the microeconomics and how it could impact the company and get that translation to direct company impact earlier. This is all while being able to help either prevent large risks or promote opportunities within the company so they can then maximise what’s happening out there in the marketplace versus where everyone was reacting to what has already happened and trying to be prepared for what was coming.”
Tech disruption
Disruption has meant procurement was propelled to become even more strategic and forward-facing following a recent surge of black swan events as technology takes a firmer grip on the space. “The whole profession has evolved, especially over the last 10 or 15 years, where we’re becoming increasingly more strategic and important to a company.”
The company Chuan serves is a cloud content management company that empowers enterprises to revolutionise how they work by securely connecting their people, information and applications. Founded in 2005, Box powers more than 115,000 businesses globally, including AstraZeneca, JLL, Morgan Stanley, and Nationwide. Headquartered in Redwood City, CA, Box has offices across the United States, Europe and Asia. Chuan joined Box over four and half years ago and was recruited to help with establishing the firm’s procurement function and building it from the ground up.
“Any engagement or relationship with a third-party provider, whether it’s buying widgets, purchasing services or even SaaS across the entire company is under my scope,” she explains. “Box has grown globally to reach new regions such as Japan and Poland to UK and Australia. We’ve continued to grow even throughout the pandemic. It’s my third role to establish and build out a sourcing and procurement organisation from the ground up. I find that to be so rewarding and every company’s a little different. What might’ve worked in my previous roles may not work at Box. I love having to tailor and think about which processes and what systems could work that would fit each company’s specific and unique culture, executive level preferences as well as the employees. It’s very exciting.”
Blank canvas
For Chuan, her passion is to make things as easy as possible for the end user. She likes to think about a procurement organisation as a service firm. “We’re like a small entrepreneur company within an enterprise,” she tells us. “Our customers are our internal employees. As the company and the employee base grows, the customer base increases too. To me, it’s really imperative that we think about the user experience because every company has policies to check off, but who really ensures that we are compliant to those policies? A lot of other larger companies find it’s easier to make the policy a mandate where employees must follow, but I find that with high-tech companies, it’s more of a case of “influencing” rather than “mandating” in that kind of environment.
“In order to establish more of a centralised process where all of the employees would have to come through this one system and one intake, it has to be so user-friendly or else people are not going to want to come to you. If you make it easy for them and design the process in such a way that the policy is already incorporated, then employees will want to utilise the process. It should feel like they’re just going through the process, but they’re walking through the actual compliance policy and ensuring that we’re doing all the right things to protect the company, but they shouldn’t have to feel the burden of it.”
The Box Advantage
According to Chuan, unless she can show her people a new process or system that’s guaranteed to be more efficient, she understands there will be a degree of reluctance to accept change initially. “I’m already thinking about the whole change management programme at the beginning of when I need to select a solution, especially if there was an RFP involved, rather than waiting until we’ve selected a solution and are in the implementation phase. To me, that’s too late,” she explains. “Change management happens when a project has been approved for you to go find a solution or when the project has been initiated by your senior executives through an investment committee meeting or via a software review committee. That’s where change management actually starts.”
Chuan is passionate about harnessing a positive company culture. She stresses within Box operating with a mentality of collaboration, transparency and inclusiveness holds the key to success. Chuan explains that one of her best strategies is to imagine herself as an owner of a company as it leads to better decision-making. “It’s about always trying to think about doing the right things by the right people,” she discusses.
Secret sauce
“The culture is so special and it’s truly about walking the talk versus just talking the talk. It’s about making that culture real and living every single day like our two founders, Aaron Levie and Dylan Smith. The culture itself makes it easy to collaborate and build that relationship and that trust with my fellow employees, knowing that the procurement sourcing organisation is there to help protect them and make the company better. Doing it together is so much easier than trying to push through by yourself, and I call it with every deal that ‘it takes a small village’. We have a really, really good relationship with our legal department and with our vendor trust department. I am enjoying a level of engagement and utilisation of my function more than any other company I’ve been blessed to be a part of. The culture at Box is our secret sauce.”
Given the speed at which the procurement function is shifting, being proactive to the latest trends in transformation could be the key between success and failure. Indeed, one of the most highly anticipated innovations of the past few years ChatGPT has captured the imagination of procurement professionals globally. The race to explore the technology and examine how the natural language processing tool could be introduced into processes is already underway. However, its arrival brings with it fresh fears that AI is here to replace humans.
Future-facing
According to Chuan, that couldn’t be further from the truth. “I don’t see it as taking jobs away, I see it as improving our job and work life,” she explains. “Most people don’t want to do those mundane, low-level data entry, tactical tasks anyway. But if you don’t have people or the right system checking that the data going in is of good quality, then you can’t count on the reporting and the analytics on the backend. But the problem is that people don’t want to do it. Wouldn’t it be perfect to have a replacement with AI, robotics and machine learning that could do all of the things that people don’t really want to do anyway?”
Looking ahead
Having said that, Chuan is clear that there must always be some form of human influence and oversight over AI. One of procurement’s biggest challenges in 2024 and beyond is making new tech work for each respective organisation. Chuan believes procurement, and indeed the world, isn’t to be ruled by technology, but instead used as a tool. “There has to be some kind of monitoring and human judgment to QC/QA the results,” she says.
“I don’t think we’re at the point where machines can replace judgemental thinking. I think we need to have an eye on ensuring we’re doing the right thing ethically by people and making sure that we’re using technology responsibly. Let’s say we do all of that, the increase in the level of job productivity that AI could bring to many people should outweigh people’s fears. I don’t think we should be fearing it. I think we should be looking at it from an analytical and strategic view and get excited about the prospect of having all the time to be more innovative and forward-thinking. To me, that’s where the fun and rewarding work is.”
Hear more about Linda Chuan’s passion for delivering change management in procurement in our CPOstrategy Podcast.
This issue’s Big Question explores whether procurement would be better prepared should a similar situation occur.
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COVID-19 affected everyone in different ways.
It caused death, illness, chaos and disruption the world over. It shut down airports, overwhelmed the NHS and left our streets empty. With March 2024 marking four years since the UK announced its first national lockdown, how ready would procurement and our supply chains be in the event of a similar scale this time around?
To go forward, unfortunately, we must look at the chain of events last time around.
Having been declared a global pandemic on 12th March 2020 and with cases of coronavirus accelerating to uncontrollable levels, many businesses’ supply chains collapsed. When the pandemic hit, businesses were left footing the bill for billions of pounds worth of unsold goods, causing inventory-to-sales ratios to rise high.
As a result of lockdowns, organisations were left with no choice but to cut their activity or shut down entirely for a brief period as guidance continued to change at little to no notice. As such, production was halted in factories across the world causing mass layoffs and redundancies across the majority of industries, particularly in manufacturing and logistics, resulting in a reduction in shipping which affected delivery times globally.
Consumer demands also shifted significantly. The demand for personal protective equipment (PPE) as well as the likes of toilet paper and pasta rose dramatically. There was an increase in office furniture amid a surge in demand in remote working. This, alongside the likes of government help such as furlough, helped enable a surge in demand for e-commerce as consumers bought online in record numbers. The shift in demand for goods led to a reduction in experiences such as attending events, eating at restaurants or going out to pubs.
In order to meet this increase in demand, factories pumped out goods quicker than ports could handle them. US ports were full of exports from Asia with too small of a workforce to unload them and too few truck drivers to transport the goods. While ports were full, compounding the issue was a labour shortage, especially truck drivers. And talent remains a concern to this day to procurement and supply chain.
But COVID-19 is only one of procurement’s fires. There’s been the Suez Canal disaster, wars in Ukraine and Israel and inflation concerns to contend with too.
So if the worst were to happen and another ‘black swan’ event was to take place, what lessons has procurement learned?
As a result of the generative AI boom, Jack Macfarlane, Founder and CEO, DeepStream, believes that the industry is in a much stronger position to overcome a future pandemic. “It proved that procurement needed to brush up on its ability to adjust to black swan events swiftly by investing in the right technology and training for the industry to respond to sudden challenges and changes,” explains Macfarlane. “With the growing use of generative AI, the industry is now in a much stronger position to contend with a future pandemic. Generative AI can scrape vast datasets regarding global trends, using the data to predict shortages, price fluctuations and supplier risks before they happen.
“Regardless of the industry you’re in, procurement leaders should always focus on ensuring the right policies are in place to prevent declining quality control in a future black swan event.”
Omer Abdullah, Co-Founder and Chief Commercial Officer at The Smart Cube, agrees that procurement finds itself in a more secure place than that of four years ago. “Procurement is undoubtedly readier than it was prior to the COVID-19 pandemic. CPOs and their teams have learned where potential value drivers are, and they also understand supplier relationships and supply chain intricacies more intimately,” he reveals. “Procurement has also moved further along the digital spectrum. Organisations have tools at their disposal to operate effectively, and on a dispersed basis, should a similar event take place. Additionally, there are now far more risk management solutions in place versus before the pandemic – allowing practitioners to identify problems, and potentially risky situations, before they arise. Add to this more diversified supply chains and established alternative sources for essential categories, and the function is far more prepared than pre-2020.”
However, Abdullah went on to explain that while “no one would be absolutely ready for another unexpected pandemic”, he insists the industry did learn lessons from COVID-19. “It must be noted that there’s still a recency effect at play – procurement professionals tangibly remember the pandemic’s impact,” he explains. “As time progresses, though, this may change but for now, the industry knows how to operate if a comparable scenario were to unfold soon.”
Bindiya Vakil, CEO and founder of Resilinc, believes the pandemic has showcased how better prepared companies are for the next global disruption. “Fortunately, the COVID-19 pandemic taught businesses some valuable lessons. Not nearly as many companies are flying blind in the face of disruption,” explains Vakil. “Many organisations learned that having visibility into their entire supplier network is the foundation for mitigating disruptions. Mapping their supply chain down to the part-site level and then using AI-powered technology to monitor it 24/7 for potential threats gives procurement leaders an early-warning system with actionable insights to make mitigation plans within hours.”
While Vel Dhinagaravel, CEO and President Beroe Inc, reveals that COVID-19 “took the mask off” procurement and exposed the true character of teams. “Some were much more partnership-oriented and some a lot less. Some of these memories endure and will either help or handicap their responses to future disruptive events,” Dhinagaravel reveals. “During 2020-2022 as different countries and regions were in varied states of lockdown there were tremendous constraints on supply chains. As a result, procurement got an opportunity to be part of discussions around product mix optimisation and product pricing which previously had been largely off limits to them.”
He adds that while the future is uncertain, he believes the function is in a healthier position to thrive should the worst happen again. “Post-pandemic, these relationships have endured, and we have also seen these teams consciously building agility and resilience into their operating models and supply chain,” he discusses. “They’ve been using data and analytics as key levers to get visibility of their supply chain and suppliers – identifying points of failure, assessing scenarios, and proactively running simulations to develop diversification strategies. While these actions don’t give procurement a crystal ball to predict the next disruptive event, it puts them in a much better position to be able to handle another pandemic or major supply chain shock.”
And Betsy Pancik, Senior Vice President at Proxima, says that the pandemic was procurement’s “time to shine” with business leaders recognising the importance of a robust procurement function to keep business running smoothly. “COVID-19 caused major supply shortages, which drove price surges and quality issues – many procurement teams had to quickly mobilise capability and capacity to support immediate business needs,” she explains.
“Some companies learned this the hard way by not having the right processes and teams in place, which led to insufficient inventory, spend increases, and strained supplier relationships. Many companies realised the need for alternative suppliers to prevent these issues in the future and started proactively seeking additional sources of supply. Others realised the need for emergency buying procedures, systems, and processes that enable quick action, automated buying, supply chain visibility, and investment in talent – all of which will help businesses respond in a more organised and robust way if a similar situation were to happen again.”
In truth, procurement teams learned a lot from the events of March 2020. Procurement and supply chains can’t be complacent. The function can’t afford to let the mistakes of the past define its future. Supply chains must have alternative methods of supply and Chief Procurement Officers must be agile and ready to respond. Procurement can’t drop the ball and must stay ready.
Edmund Zagorin, Founder of Arkestro, discusses his company’s rise as a predictive procurement orchestration platform.
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“What if there was a better way to compare quotes from suppliers?”
This question led Edmund Zagorin down a road of discovery which culminated in turning an idea into a start-up.
While working as a procurement consultant, Zagorin observed how much time his sourcing teams spent building Excel pivot tables. The problem? Category experts needed to identify potential errors in supplier submissions at the item level before an award scenario could be properly evaluated. Together with childhood friend Ben Leiken, who had risen to become an engineering and product leader at SurveyMonkey, the idea was to find a way to automatically pre-populate text in a sourcing project with little to no manual data entry required from procurement users of suppliers. Leiken had seen firsthand the impact that so-called “smart defaults” could have on survey completion. And Zagorin knew that in procurement, more completions would mean more supplier offers, which could yield better commercial outcomes for the procurement team. Arkestro, then Bid Ops, was born.
Studies show that when procurement is able to predict a plausible range of commercial outcomes ahead of a supplier offer, there is enormous leverage created when the buying entity names the price. Summarising the past decade of research, Lewicki et al.’s 2007 “Essentials of Negotiation” states that “…whoever, the buyer or the seller, made the first offer… determined the final selling price, with higher final prices when a seller made the first offer than when a buyer made the first offer.”
For this reason, Arkestro customers began delivering material higher cost savings outcomes than traditional RFPs and RFQs, a fact that caught the attention of Ariba co-founder Rob DeSantis. Together, Zagorin and DeSantis brought together an experienced management team, led by IBM and Ariba alum Neil Lustig as CEO. Lustig’s experience as CEO of Vendavo, a predictive pricing company used by sell-side teams to achieve better negotiated outcomes, made him ideal to scale Arkestro into a global juggernaut.
Edmund Zagorin, Founder, Arkestro
Today, Arkestro is the leading predictive procurement orchestration platform that enhances the impact of procurement’s influence, especially for large manufacturing enterprises across any procurement activity and spend category that involves collecting a quote from a supplier. Arkestro turns the traditional procurement process on its head: instead of the supplier creating a quote or proposal and then a procurement analyst using competitive offers and benchmark data to decision the desirability of that offer or action an approval, Arkestro customers use a predictive model to benchmark a potential quote before contacting suppliers, putting procurement in a position of leverage to either ask for their desired outcome using an AI-generated Suggested Offer or generate an Instant Counter-Offer to any quote.
Arkestro then helps customers persistently monitor the changes in quoted price for this item across all procurement activities, tracking trends and changes and helping teams proactively uncover the optimal procurement configuration for each item and basket with respect to timing, geography, quantity, lead time and other attributes.
By embedding game theory, behavioural science and machine learning models directly into the procurement process, Arkestro enables customers to dramatically accelerate cost reduction projects, often with existing preferred suppliers and attain their best available cost outcome for every unique item more frequently and at greater scale across their spend. This predictive procurement approach is especially helpful for technical procurement categories such as highly engineered components, materials and capital equipment, as well as categories like metals, chemicals, food ingredients, MRO, packaging, logistics and even IT.
Enterprises who are on a journey to create sustainable and antifragile data quality for their procurement function are turning to Arkestro as the predictive approach eliminates the two manual steps that tend to introduce errors into item-level identifiers: the step where the supplier creates a quote, and the step where procurement analysts have to validate, correct, give feedback and approve it. By using a predictive model to generate and validate supplier offers, Arkestro offers a continuous improvement path for enterprises whose digital procurement journey includes cleansing item-level data to create a true item-based “data foundation.”
Transformation journey
And since its founding in 2017, Arkestro has been on quite the transformation journey. The company has expanded rapidly and scaled its product – as well as for spend categories and industries served – globally. In a little over half a decade, Zagorin, Leiken and their team have created a true enterprise grade AI infrastructure platform that can be embedded into the likes of spend management giants SAP Ariba or Coupa or used as a standalone database and application.
Despite significant success in a relatively short space of time, Zagorin is keen to stress that his initial vision was to solve a problem that he was also experiencing in the market. “Our growth has corresponded to a great degree with a widening of the aperture of where we feel predictive technologies can make an impact for procurement teams,” he discusses. “I think one of the other things just from a paradigm standpoint is that procurement processes involve a lot of manually created data. There’s a lot of data entry on the supplier side, procurement side and on the stakeholder side throughout the process. Every keystroke in every process introduces the possibility of human error.”
Predictive procurement is a new approach that suggests the data before a human user enters it. What Arkestro has introduced is the idea of predictive and working with customers to apply that at different stages of the procurement process through AI. “One of the things that’s also been interesting, and you’ve seen this in other areas of AI, is that you can cross a threshold where at some point in the model it gets good enough that it really provides exponentially more value as it’s being used,” he says. “As opposed to software, which traditional software degrades over time, it gets stale and the interface feels clunky. As new interfaces come out, AI has almost the opposite dynamic where it actually gets better. It’s smarter by itself just by people using it. That’s also been pretty exciting to see.”
Procurement’s evolution
Indeed, the procurement space is in a state of flux. Amid significant transformation driving the function forward, it has never been such an exciting time to be involved in the industry. The rise of AI and machine learning is having a seismic impact with there also being hopes that new technology could reduce the need to bridge talent gaps.
“If you asked five years ago what’s holding procurement back from digitally transforming the operation and living out your full potential, I think a lot of procurement professionals would’ve said how hard it was to hire,” Zagorin explains. “People were saying: ‘Oh we have data quality issues where it’s really hard to actually know what we’ve spent, what our spend per supplier looks like for our core geographies, let alone what we paid for each individual item. We went out and bought a bunch of digital platforms and we’re struggling to gain adoption which is related to the data quality issues.’ This is what I heard from executives when I was working in procurement. Because traditionally, if you have a process and it’s not being consistently used, then it’s not going to accurately represent the most important attributes or business logic of the data that’s moving through it.”
Despite the positive introduction of tech innovation, procurement has also had its challenges. Supply disruption as a byproduct of COVID-19, wars in Ukraine and in Israel as well as inflation concerns, it is fair to say the function has never been more talked about in the C-suite.
“Boom, there’s the next wave of Covid, or suddenly there’s a war somewhere in the world,” he shares. “It has felt like there’s always something and it really creates context switching for procurement teams which is stressful, plus being bad for productivity. This is especially the case for digital transformation projects in procurement, and it’s also demotivating because it makes people feel like they’re not making progress. This then means that the length of the project elongates and you have this kind of stuck-in-the-mud feeling that it’s hard to get quick wins and generate momentum. That’s what customers are thinking about as they are looking in the market to find a true partner not just for their digital journey, but for their AI journey.”
Given the speed of procurement’s evolution, there are voices that believe the function requires a rebrand. Gone are the days of procurement being regarded as a back-office function hidden away out of sight, today it stands as an exciting, dynamic force at the forefront of innovation. “I live in California where job titles are a little bit looser generally,” explains Zagorin.
“If we look at procurement needing a rebrand, the big challenge that I see with procurement is that the structure of a lot of these categories doesn’t necessarily correspond with either the activities associated with them or with the relationships with the suppliers within those categories. What we have in procurement with ‘category management’ is we’re frequently asking procurement professionals to be a jack of all trades and master of none within their categories. Perpetual ‘crisis-mode’ is not a recipe for letting up-and-coming procurement professionals develop the category knowledge and domain expertise that are traditionally necessary.”
Procurement’s bright future
Looking ahead, Zagorin believes there has never been a better time to be working in procurement. “The profession has a lot to offer, and it really is this huge engine of value creation at most big companies,” he explains. “Arkestro serves enterprise manufacturing companies typically with multiple plant locations which buy at both the corporate and the plant level creating a lot of item-level data quality issues. What we’re seeing is the ability for companies to get live on Arkestro in a matter of days and often deliver a payback period for their entire solution costs in a matter of weeks.
“If you look at deployments of enterprise technology five years ago, that’s a stark difference in terms of what procurement’s promising versus what it’s delivering and the time-to-value. We have a new generation of startups, from intake to tail spend to what Arkestro does, more on the strategic side and or on technical procurement categories and direct materials, often starting with a bill of materials and handling all the back-and-forth with the suppliers up to allocation, awarding and the purchase order. You have this cohort of startups that’s just getting bigger and more people are using us to run large physical manufacturing operations. There’s not a lot of direct competition in the space of these growth-stage startups.
“I think what’s going to happen is more and more companies are going to say if it makes business sense and we think there’s tangible value in doing it, then let’s find a way to test and learn. Let’s find a way to try it out to implement it in one geography or for one business unit or category and just see how it works. Five years ago, it was always easy to say we’re too busy or we have other stuff going on. What’s changing today is if you’re not testing and learning constantly from new technology, you’re going to miss out because the stuff that’s happening right now is world-changing.
“Generative AI and novel technical approaches to on-demand superintelligence are going to be as impactful to many enterprises as the development of the internet, not to mention human society at large. The people who are playing around with it and staying curious and running experiments are going to create a lot more value. They’re going to have a lot more fun, and they’re going to build great teams and organisations that lay the groundwork for the next generation of procurement professionals.”
Changing requirements, shifting demographics, and new technologies are conspiring to create a procurement talent shortage.
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Two of the biggest challenges facing procurement leaders are recruitment and retention. Staffing issues were identified as one of the biggest risks facing procurement in the next two years by Amazon Business’ 2024 State of Procurement Report, as the procurement function “broadens in scope while facing staffing shortages”.
It seems as though the more critical procurement becomes to the modern enterprise, the more the cracks in the talent pool begin to show. With increased technological adoption and a growing emphasis on strategic operations (compared to a traditional transaction-focused approach) in the procurement function, solving the talent shortage is more critical than ever.
As we’re still in early 2024, we’ve put together the top five factors driving the talent shortage, as well as how procurement leaders can address them in order to capitalise on the opportunities in the industry and meet the strategic objectives of the business as a whole.
1. Digital transformation
Ironically, the very trend that’s driving the rise in procurement’s fortunes is also one of the biggest factors fueling its talent shortage. As digital transformation reshapes the procurement function from top to bottom, it also means that the skills necessary to succeed in procurement roles are changing. Even a few decades ago, a procurement job was a mixture of relationship management and sending invoices. Now, there’s AI to grapple with, big data analytics, and an expectation that the department will be a key strategic driver of efficiency, sustainability, and supply chain resilience. The skill sets that make a successful procurement team today aren’t the same as they were even a few years ago.
How to fix It: Education and development should be at the forefront of anyone’s mind looking to build a successful procurement function. Upskilling and growing the team’s knowledge base is almost always more cost effective than hiring externally, but you should also know when to look beyond the department to fill a talent shortage, even if that just means sniffing around the IT department for anyone not nailed down.
2. Competition (internal and external)
If (almost) every procurement team is short on staff (well, 86% of them, according to Amazon Business), then it’s no surprise that competition for top talent is fierce. Salaries are rising, and the fact the talent shortage is affecting departments other than procurement means that procurement is in competition, not only with other procurement teams, but with other departments in its company for talent and the money to pay that talent.
How to fix It: Smaller firms without the resources to compete might consider outsourcing their procurement functions, engaging third parties like a business might engage a legal team or a management consultancy.
3. Messaging and awareness
Or lack thereof… Seriously, procurement may be the exciting new frontier of digital transformation and strategic optimisation, but traditionally the department has largely existed as an afterthought—a place where purchase orders go to be rubber stamped. The nature of the role may be changing, but perceptions are harder to shift. If the preconceived notion is that procurement is a stodgy, backwards profession, then it’s unlikely to attract the best and brightest graduates, let alone funnel MBAs into a procurement-specific pipeline early on in their education.
How to fix it: Take a leaf out of the broader supply chain discipline’s book and go on a two-pronged charm and educational offensive. By working with educational institutions and recruiting heavily from adjacent industries with transferable skills (increasingly easy to do given the increasingly digital-first nature of the discipline), new talent can be enticed into the procurement space and developed from there by existing veterans.
4. Demographic shifts
Tied into Number 5, the natural changing of the guard is a large part of what’s ushering in a more discerning labour force. It’s also seeing Boomers and Gen X either exit the workforce into retirement or be promoted up into senior management, where the skills that made them an asset to the company on a day-to-day basis are less important to their roles.
Also, as Millennials age up towards middle management there aren’t as many members of Gen Z entering the workforce to replace them. It’s the same further up the chain as the populous Baby Boomers are replaced with the relatively sparse Gen X.
How to fix it: One way to encourage a smoother transition from one generation to the next—especially in an industry where relationship management plays such a huge role—is to encourage mentorship and development aimed at transferring skills and key knowledge from senior staff to lower (even entry level) positions.
5. The Great Resignation
Sparked by the COVID-19 pandemic, as well as a general rise in pro-labour sentiment across the economy at large, the last few years have seen a spectacular rise in employees quitting the roles that couldn’t be bothered (or afford) to pay them enough or treat them fairly. The consequences for mismanaging teams are much higher in a world where the stigma over changing roles regularly for better pay, hours, and working conditions has more or less evaporated.
How to fix it: It should be obvious, but people keep quitting their jobs, so the message must not be getting through. The age of pizza parties and casual Fridays are over. Employees expect more from their employers, whether in terms of wages, benefits like healthcare, work-life balance, and other meaningful contributions to quality of life. In addition to benefits on paper, fostering positive cultures, creating opportunities for development and salary advancement are all a big part of not only attracting new talent but keeping it as well.
Our cover story this month focuses on the work of Arianne Gallagher-Welcher. As the Executive Director for the USDA Digital…
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Our cover story this month focuses on the work of Arianne Gallagher-Welcher. As the Executive Director for the USDA Digital Service, in the Office of the OCIO, her team’s mission is to drive a tech transformation at the USDA. The goal is to better serve the American people across all of its 50 states.
Welcome to the latest issue of Interface magazine!
Welcome to a new year of possibility where technology meets business at the interface of change…
“We knew that in order for us to deliver what we needed for our stakeholders, we needed to be flexible – and that has trickled down from our senior leaders.” Arianne Gallagher-Welcher, Executive Director for the USDA Digital Service reveals the strategic plan’s first goal. Above all, the aim is to deliver customer-centric IT so farmers, producers, and families can find dealing with USDA as easy as using an ATM.
BCX: Delivering insights & intelligence across the Data & AI value chain
We also sat down with Stefan Steffen,Executive Leader for Data Insights & Intelligence at BCX. He revealed how BCX is leveraging AI to strategically transform businesses and drive their growth. “Our commitment to leveraging data and AI to drive innovation harnesses the power of technology to unlock new opportunities, drive efficiency, and enhance competitiveness for our clients.”
Momentum Multiply: A culture-driven digital transformation for wellness
Multiply Inspire & Engage is a new offering from leading South African insurance provider Momentum Health Solutions. Furthermore, it is the first digital wellness rewards program in South Africa to balance mental health and physical health in pursuing holistic wellness. CIO, Ndibulele Mqoboli, discusses re-platforming, cloud migrations, and building a culture of ownership, responsibility, and continuous improvement.
Clark County: Creating collaboration for the benefit of residents
Navigating the world of local government can be a minefield of red tape, both for citizens and those working within it. Al Pitts, Deputy CIO of Clark County, talks to us about the organisation’s IT transformation. He explains why collaboration is key to support residents. “We have found our new Clark County – ‘Together for Better’ – is a great way to collaborate on new solutions.”
Also in this issue, we hear from Alibaba’s European GM Jijay Shen on why digitalisation can be a driving force for SMEs. We learn how businesses can get cybersecurity right with KnowBe4 and analyse the rise of ‘The Mobility Society’.
Could generative AI be the answer to procurement’s problems: fewer workers, more work, and a rising bar for digital literacy.
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It’s news to no one that the nature of the procurement industry has changed.
Spurred by the COVID-19 pandemic, an industry-wide surge in digital transformation, and the rising immediacy of the climate crisis, procurement has never been more important, or more complicated. However, as the industry’s demands grow and evolve, many procurement teams find themselves in need of skilled individuals that simply aren’t there.
A recent study conducted by Gartner found that just one in six procurement teams believe they have “adequate talent” to meet their future needs. That means just 15% of CPOs were confident in their future talent pools and ability to recruit skilled individuals, even if they believed their current staffing was sufficient to meet demand today.
Concerns over “having sufficient talent to meet transformative goals based around technology, as well as the ability to serve as a strategic advisor to the business,” were the primary cause of skill shortage stress, according to Fareen Mehrzai, a Senior Director Analyst in Gartner’s Supply Chain Practice. Essentially, the changing nature of procurement means not only that today’s procurement teams are unprepared for the discipline’s continued transformation from back office buyer to “orchestrators of value” in the executive team, but face an increasingly sparse hiring market as the requirements for a new procurement recruit become increasingly complex to satisfy.
Generative AI: Making digital accessible
Generative AI exploded into the public consciousness in 2023 with the launch of image generation tools like Midjourney and DALL.E, as well as chat-bots like Chat-GPT, powered by large language models. Investment has been immediate and almost unthinkably massive. In late 2023, it was estimated that generative AI startups were attracting 40% of all new investment in SIlicon Valley, and Bloomberg Intelligence estimates that the market for generative AI, valued at $40 billion in 2022, will be worth as much as $1.3 trillion in the next decade.
Now, whether or not generative AI has the society-spanning, epoch-disrupting economic and social impact people are predicting (personally, I remain unconvinced, and anyone who disagrees can either fight me in the metaverse or try to run me over with a self-driving car) actually manifests, there’s no denying generative AI’s potential as a useful tool if adopted correctly.
Especially in an underskilled, rapidly digitalising procurement sector.
How can generative AI help procurement?
While Generative AI will never write a (good) movie script or create a piece of art that anyone with any taste would find genuinely moving, there are some things it does very well. Namely, it is very good at not only taking in and processing huge (and I mean huuuuge) amounts of chaotic, poorly structured information and answering questions about it, but most importantly, it can understand prompts and give results in simple, conversational language. There are still limitations and kinks to work out, however.
Generative AI still deals with hallucinations. However, the ability to input huge amounts of data and analyse that data in a conversational format could alleviate a lot of the technological literacy related teething problems that appear to be at the heart of the procurement skills shortage.
An EY report notes that, in the Supply Chain and Procurement space, generative AI has massive potential to: “Classify and categorise information based on visual, numerical or textual data; quickly analyse and modify strategies, plans and resource allocations based on real-time data; automatically generate content in various forms that enables faster response times; summarise large volumes of data, extracting key insights and trends; and assist in retrieving relevant information quickly and providing instant responses by voice or text.”
The future of Gen AI
Generative AI can be a source of simplicity for procurement teams at a time when new technologies often add complexity and necessitate upskilling or new hires. EY notes that a biotech company using a generative AI’s chat function has had positive results when using it as a way to inform its demand forecasting. “For example, the company can run what-if scenarios on getting specific chemicals for its products and what might happen if certain global shocks occur that disrupt daily operations. Today’s GenAI tools can even suggest several courses of action if things go awry,” write authors Glenn Steinberg and Matthew Burton.
Adopted correctly, generative AI could not only empower procurement teams to handle the pain points of today, but also tackling the looming threat of the skills shortage in an industry facing a relentless demand for skills that may not be in adequate supply for years to come.
Public sector purchasing stands to gain the most from data-driven procurement, and so far has done the least.
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Data-driven analytics have the potential to empower CPOs with greater understanding of their ecosystems, value chains, and internal operations. Big data can shine a light on places where there’s room to create efficiencies, contain costs, and mitigate risk.
In the June 2023 issue of Government Procurement, Steve Isaac notes that analytics can create significant benefits in areas like negotiation, vendor segmentation and yearly planning. He goes on to note, however, that “advanced analytics and data science haven’t exactly broken into the public procurement zeitgeist. It isn’t the subject of keynotes at the annual conferences and meetings … It isn’t a qualification line on most procurement job listings. For most agencies—even large ones—introducing advanced data science is not a priority.”
It’s not altogether shocking that, while the private sector is investing heavily in the potential benefits of data analytics and other digital procurement tools—with the global procurement software industry predicted to exhibit a CAGR of over 10% between now and 2032—public sector procurement lags behind. Isaac notes that it’s a “chicken and egg” issue with the case for a robust data science function hinging on the benefits of that investment being understood, which requires them to be felt, which can’t happen until investment, but… and so on.
However, there’s a case to be made that this delay in data science investment by public sector procurement agencies is one of the critical stumbling blocks also preventing public sector procurement from adopting artificial intelligence, machine learning, and other cutting-edge technology with the potential to solve a lot of the recurring public sector pain points.
Raimundo Martinez, Global Digital Solutions Manager of Procurement and Supply Chain at bp, noted in a recent interview with the MIT Technology Review that “everybody talks about AI, ML, and all these tools, but to be honest with you, I think your journey really starts a little bit earlier. I think when we go out and think about this advanced technology, which obviously, have their place, I think in the beginning, what you really need to focus on is your foundational [layer], and that is your data.” Martinez stresses the importance of building a strong data foundation that allows CPOs to take advantage of emerging technologies in their supply chains.
It’s not as though public procurement departments are short on data either. Isaac argues that, “if data is a precious resource, governments are gold mines.” Governments collect huge amounts of information all the time. The widespread adoption of digital ERP systems, eProcurement, supply chain management software and vendor performance sites is now doing a great job of mining that data.
As noted in a report by researchers from the Government Transparency Institute, a European think tank, “The digitalisation of national public procurement systems across the world has opened enormous opportunities to measure and analyse procurement data. The use of data analytics on public procurement data allows governments to strategically monitor procurement markets and trends, to improve the procurement and contracting process through data-driven policy making, and to assess the potential trade-offs of distinct procurement strategies or reforms.”
From compliance to being an efficiency driver, there are more benefits to sustainable procurement practices than environmental ones.
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The main obstacle cited by procurement leaders (as well as those outside the procurement and supply chain functions) to adopting sustainable procurement practices is cost.
According to Edie’s “The Business Guide to Sustainable and Circular Procurement” report released in November 2023, “Costs and Finances” was considered one of the biggest barriers to “Improving Sustainable Procurement For Your Operation”. In a survey of procurement leaders, 76% considered cost to be one of the biggest issues, compared to the distant second and third options: “Lack of Data” (54%) and “Lack of Understanding on Sustainability (38%).
However, in addition to the fact that the benefits of collective climate action dramatically outweigh its short term costs (existential threats are like that), there are sound arguments to be made for sustainable procurement practices from a business point of view as well.
The sustainability benefits incurred by reducing environmental impact in the supply chain can, according to the Edie report, be a catalyst that helps respond to a plethora of issues and considerations.”
Closing the loop to create a more circular supply chain can be driven from within the procurement function, and can do a lot to protect the S2P process from pricing volatility and supply chain disruption—something increasingly on the mind of industry leaders, as indicated by Dun & Bradstreet’s Q1 2024 Global Business Optimism Insights report, which highlighted “a downturn in global supply chain continuity due to geopolitical tensions, trade disputes, and climate-related disruptions in maritime trade causing both higher delivery costs and delayed delivery times.”
There is also the fact that meaningful adoption of sustainable practice in the S2P value chain can have a meaningful financial benefit to brands as a whole. Sustainability is an issue on which consumers vote with their wallets. According to the World Economic Forum, “sustainable procurement practices can help deliver a 15-30% increase in measurable brand equity and value”. Consumers, suppliers, and partners all value sustainable practice as a meaningful demonstration of company quality, and—especially in terms of public opinion—consumers are becoming savvier when it comes to differentiating meaningful change from empty rhetoric.
There’s more economic benefit than brand value adjustment that comes along with reexamining procurement practices from a sustainability perspective. The same report by the WEF noted that “embedding sustainability into procurement practices can actually help reduce departmental costs for procurement by 9-16%.” Evaluating processes for the sake of exploring green options often exposes existing inefficiencies, siloes and poor planning that can then be rectified rather than being left unexamined.
While business leaders continue to shy away from perceived profit loss as a result of pursuing more sustainable practice in their procurement functions, when handled correctly, it can be a source of more than just emissions wins.
As procurement becomes more important, digitally-driven, and strategic, so has the role of the Chief Procurement Officer.
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15 years ago, the Chief Technology Officer role rarely appeared on a roll call of the C-suite outside Silicon Valley. If you weren’t a tech company, you had a “head of IT” or even just an “IT guy”. Now, “every company is a technology company”, and every boardroom has a CTO. (And a Chief Information Officer, and a Chief Security Officer, and probable a Chief Digital Transformation Officer, and so on).
As technology has changed the way that we do business at a near-molecular level, so too has it changed the roles of the leaders overseeing it. No longer can you have someone in your C-suite who is technologically illiterate, just like you can no longer be a tech genius without at least a little flair for business. As the role has become more integral, it has become more strategic, and the demands placed upon executives and employees have changed.
That’s all ancient history, but history repeats itself. The same thing is happening to procurement right now.
In the last several years, the procurement function has started to show genuine signs of transformation from what David Ingram, CPO for Unilever, calls a “insular, contract-and-process-heavy organisation to a wider, more insightful function that is connected to what is happening in the broader market.”
Hervé Le Faou, CPO at Heineken, goes further, stating that “Fundamentally, the CPO is evolving into a ‘chief value officer,’ a partner and co-leader to the CEO who is able to generate value through business partnering, digital and technology, and sustainability, which are new sources of profitable growth in a shift toward a future-proof business model.”
A white paper from AI procurement company Zycus points out that the role of CPO has grown to include new duties, and preexisting duties have become more important in an increasingly fast-moving, easily-disrupted business landscape. “Today, CPOs are responsible for compliance. They play an active role in merger & acquisitions and participate in strategic initiatives. This is in addition to handling supply risk management, environmental responsibility, as well as the traditional job of ensuring cost-efficiency,” the report’s authors note. “Hence, it comes as no surprise that some companies have started inducting CPOs into the board of directors. In many others, the employee- hierarchies are undergoing a change, with procurement function reporting directly into the C-level executives or the board. The CPOs of today enjoy greater autonomy and improved control over budgets than before.”
As a result, the role of CPO has transformed from a tactical, functional one to something broader, more strategic, and typically more autonomous.
Risk management has risen (almost) to the top of CPOs’ priority list for 2024. Here’s how they’re tackling it.
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If ever the world truly reached a state of “new normal”, that state is one of constant disruption.
Even by the time the COVID-19 pandemic threw the world’s supply chains into a state of utter turmoil in March of 2020, procurement teams were already dealing with a heightened state of disruption. The US-China trade war that defined most of 2019 had barely simmered down before most of Australia was on fire and a US drone strike killed Qasem Soleimani which made an escalating war with Iran look like a very real possibility. Lockdowns, protests, earthquakes, war in Ukraine, spiking oil prices, genocide in Palestine, and both the accidental and purposeful disruption of shipping through the Gulf are just a smattering of the disruptions to which procurement professionals are becoming accustomed.
“After the last few tumultuous years, procurement teams are still facing steep challenges in getting ahead of supplier and supply chain risks,” writes Greg Holt, Product Marketing Director at Interos. “Unfortunately, there are no signs that the heightened frequency of disruptions we’ve seen over the last few years will abate in 2024.”
It’s clear that the procurement teams that learn to manage risk on a daily basis will be the ones that fare best in a world increasingly defined by geopolitical instability and a collapsing climate.
Procurement risk management strategies
Risk management is not a one-time process, nor a single overhaul of policy; managing risk requires constant oversight and frequent reevaluation to ensure you avoid disruption today and are ready for problems that will arise tomorrow.
Streamline your data, break your silos
Procurement departments are often repositories of some of the best risk management data in the whole organisation, gathering large amounts of information on suppliers and other external factors. Procurement departments that take a more purposeful approach to their risk data can quickly establish themselves as repositories of “data, assessments, monitoring and alerts,” becoming “trusted partners who can maintain the risk intelligence needed to support the business with insights, trends and a common view of the risks posed across the extended supplier ecosystem.”
Automate away human error
While there is no shortage of questions when it comes to applying automation to complex tasks (not to mention new pain points and sources of risk), correctly implementing automation can create immediate benefits when used to take repetitive, resource intensive tasks out of human hands. Repetitive, menial tasks are common in procurement systems, and are the most prone to human error. Automation tools can reduce errors and free up time for procurement workers.
Use digital transformation to diversify your supplier ecosystem
There’s a limit to the amount of decision making and supplier diversification achieved by human means. There’s simply too much decision making to be juggled. However, with the help of AI, procurement departments can diversify and adjust their supplier ecosystem much more effectively and to a greater degree. For example, the South Korean government has adopted AI-powered decision making to nearshore a significant portion of its procurement spend. Now, 75.6% of the government’s total procurement spend is now awarded to SMEs through the evolution of its AI platform.
Interest and investment in generative AI has been massive, but does the technology actually have the capacity to meaningfully change the procurement industry?
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Since the arrival of large language model-powered chatbots, like OpenAI’s ChatGPT, the corporate landscape has been frantically striving to invest in and adopt generative AI.
Executives floated (I mean salivated over) the possibility that generative AI could replace a staggering number of roles throughout virtually every sector from law to content creation and entertainment. Well, just look how well that turned out. The legal backlash has, in many cases, been severe and, just over six months into the generative AI hype cycle, cracks are beginning to show.
But what about the applications? Surely all these issues and all this money is going into generative AI technology for a reason, right? Surely we all learned our lesson from the Metaverse, the crypto bubble, NFTs, and streaming and… I guess we didn’t, did we?
Well, actually, there are a few, but they won’t look like the Wild West of content generation we’ve seen so far.
In the retail sector, for example, 98% of companies plan on investing in generative AI in the next 18 months, according to a new survey conducted by NVIDIA (a company with an admittedly vested interest in selling shiny new GPUs). Early examples of adoption in the sector have included personalised shopping advisors and adaptive advertising, with retailers initially testing off-the-shelf models like GPT-4 from OpenAI.
However, many retailers are recognising that the strength (and weakness) of generative AI is that you only get out what you put in. That’s why the technology is, ultimately, useless as a way to replace creative roles like writers and artists. However, as a brand communicator meticulously trained on a specific set of data with carefully updated parameters, it could be invaluable. NVIDIA’s report notes that “many are now realising the value in developing custom models trained on their proprietary data to achieve brand-appropriate tone and personalised results in a scalable, cost-effective way.”
Generative AI trained on a company’s internal and customer-facing databases, web presence, and curated information resources could conversationally recommend, educate, and explain critical information to employees, customers, and business partners effectively and consistently. In an industry where communication relies on clarity and an understanding of large quantities of information, like procurement, the applications suddenly start to look a lot more appealing.
Chatbots and negotiation bots trained to converse with suppliers, programmed with company approved negotiation tactics and the latest pricing information, could automate a great deal of complexity out of the Source to Pay process.
I think the looming issue is the impact of generative AI adoption on a company’s Scope 3 emissions, as 2024 will unquestionably be defined by greater scrutiny on these sources of pollution. However, it seems that however many issues the more widely known aspects of generative AI have, the technology itself could still have a role within the procurement function of the near future.
Does it justify all the investment, hype, and endless industry media thinkpieces? I guess only time will tell.
An overabundance of digital solutions and a dearth of trust in procurement data presents a unique challenge for CPOs.
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The digitalisation of the procurement sector is well underway, with the global procurement software market set to grow by $11 billion over the next decade, with demand for cloud-based procurement solutions and automated and efficient procurement processes driving this revenue growth.
Procurement efficiency drive
However, a proliferation of digital tools across the procurement landscape points to the growing danger of inefficiency and lack of clarity when it comes to CPOs’ digital transformation strategies. A report by procurement software vendor Productiv found that “procurement and IT are being inundated with software access, vendor intake and renewal requests,” leading to a 32% uptick in the number of SaaS apps procurement departments are running, and a steadily growing workload for purchasing departments as they manage, on average, 700 vendors across various indirect procurement categories.
“This patchwork of tools across various steps of the vendor management lifecycle has created technology, team and data silos,” notes Aashish Chandarana, Chief Information Officer, Productiv. “Instead of increasing efficiency, these tech stacks start adding up to a lot of manual work to bring everything together.” The result is less time and less data to support generating meaningful insights to drive the necessary efficiencies that procurement needs to start producing for the business.
Frequently, it also seems, procurement spends so much time managing sprawling, disconnected tech stacks, that it doesn’t have the time to ensure its data is trustworthy either. A SpendHQ report found last year that “79% of non-procurement executives express limited confidence, or none at all, in utilising procurement’s data for making strategic decisions.” CPOs might recognise the critical nature of accurate data in driving decisions, but so far it seems as though the industry is struggling to ensure the accuracy and reliability of procurement data throughout the wider organisation.
Big Data potential
The potential of big data, effectively harnessed, is tremendous in the procurement process—potentially creating true visibility in otherwise murky or completely opaque value chains, highlighting opportunities for cost containment and efficiency, and helping flag risk factors that could preempt disruption.
Organisations looking to maximise the potential applications of data within their organisations need to be simultaneously mindful of the need for a decluttered tech stack and verifiable, trustworthy data if they are to avoid the pitfalls currently affecting the sector.
Costas Xyloyiannis, CEO of HICX, discusses why it’s time for leaders to take a fresh view of the data problem, and plan to reduce emissions.
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The start of the year is a good time for business leaders to consider their progress against net zero commitments. It also nudges us nearer to carbon-cutting milestones, the nearest of which is in 2030. By this time, businesses across the globe need to have halved their carbon emissions. So, if they haven’t already, now is the time to step up delivery.
But first, there’s a barrier to overcome. Behind every credible net zero win, is credible carbon data. The problem is it’s in very low supply. Good data relies on good emissions information from suppliers, and securing it is notoriously difficult.
As 2024 gets off to a start, it’s time for leaders to take a fresh view of the data problem, and plan to notably reduce emissions. To enable net zero success, we can assess supplier relations in three areas: the power play, digital processes, and a principle that works tremendously well in marketing.
Suppliers are in the power seat
Gone are the days when suppliers view their role as subservient. If the Covid-19 pandemic showed business leaders anything it’s just how much they depend on suppliers – and not just a strategically relevant few. In 2020, we saw non-strategic suppliers, such as PPE and IT providers, become crucial to operations overnight. Since then, businesses have continued to need a broader range of their supplier networks. When further supply chain disruptions brought continued uncertainty, that dependence deepened. Today, as businesses require increasing amounts of carbon information, the fact that we need suppliers is cemented.
Despite this, how big businesses work with their suppliers is often outdated and counter-productive to their goal of gathering good information.
Digital processes are in the Stone Age
Bringing supplier relations into the 2020s will take some serious shifts. First, it’s time to assess the digital processes for managing suppliers, which frankly are not up to the task. A hybrid setup of old and new technology, often poorly integrated, stops procurement teams and their suppliers from communicating well. It causes other friction too, like logging in and out of multiple tools just to perform simple tasks, a headache for both parties.
Additionally, the various tools are data traps. Every time a supplier uses a tool, it collects and stores their data. Siloed in this way, supplier data can quickly become duplicated and outdated, because it’s difficult to maintain. Unreliable master data is no good at fuelling automated workflows, and so procurement teams get stuck with manual processes.
These clunky manual processes together with the frustrating communication methods are not a recipe for successful relations. Given that businesses lean so heavily upon suppliers to receive data for carbon reporting, it’s fair to say that the approach to supplier relationships must change.
Friction is building
When starting a business relationship, most suppliers don’t sign up for this level of friction. What they expect is to put in their first purchase order, deliver their first product, send their first invoice, and repeat. In a perfect world, they will simply transact and renew.
In practice, however, the relationship is not so simple. Businesses need more from suppliers than just transacting – for one, they need a significant amount of information for compliance and innovation reasons and of course on carbon activity. So, businesses send their suppliers an abundance of information requests.
Suppliers, then, who simply want to transact, must field these requests. Further bugbears such as manual processes, disparate ProcureTech setups and poor communication practices, make it difficult to respond. A recent Supplier Experience survey found that over a third of suppliers are expected to login to 10 or more systems, nearly half struggle to resolve queries with their biggest customers, and 61% find it challenging to do their best work. Yet, while suppliers don’t find the situation productive, it continues. Why? Because businesses need their carbon information.
Suppliers want a partnership
An important consideration is that suppliers have agency. When they have limited stock or an idea, they can choose who gets it. When it comes to making the effort to dig up vital carbon information they have a choice. This isn’t to say that suppliers purposefully hold information back. This would be unlikely because they too want the relationship to work. But when they are swamped trying to fulfil their original mandates whilst figuring out complex tech and deciphering information requests, the little time and energy they do have to provide information might well go to a customer-of-choice.
It’s no different in the consumer world, where shoppers decide which brands to buy from. Businesses can’t force consumers to buy from them, so marketing teams get involved and work their magic. They encourage people to spend their hard-earned, limited money on products which they may or may not need, by showing them value, often in the form of an emotional appeal.
Similarly, businesses can’t force suppliers to spend their limited time giving carbon information. But they can sweeten the experience. There’s an opportunity, therefore, for Procurement teams who manage suppliers to change things up. Rather than bombarding suppliers with information requests that they will struggle to fulfil, they can borrow the principle of ‘encouragement’ from Marketing. Procurement can show value to suppliers, according to what’s important to them, with the view to receive value in return.
So, as we start a new year, business leaders can take a fresh perspective on how suppliers are engaged. By understanding the dependence on suppliers, this relationship can be improved. Ultimately, by viewing suppliers as partners, simplifying digital processes and “marketing” to them, business leaders can lay the groundwork for net zero.
Luke Abbott, Co-Founder and CEO at Equipoise, discusses the art of accelerating sustainable procurement with artificial intelligence.
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In today’s rapidly evolving business landscape, sustainability is not just a buzzword; it’s a necessity. As organisations strive to reduce their environmental footprint and drive social improvements in their supply chains, sustainable procurement emerges as a pivotal strategy. With the advent of artificial intelligence (AI), the potential to revolutionise sustainable procurement practices has never been more promising.
Understanding sustainable procurement
Sustainable procurement is the integration of environmental, social, and economic considerations into procurement decisions, to reduce adverse impacts upon society, the economy, and the environment1. As businesses grapple with the repercussions of climate change, dwindling resources, and increasing stakeholder demands, sustainable procurement offers a pathway to not only mitigate risks but also seize new opportunities.
The AI advantage in sustainable procurement
AI, with its ability to process vast amounts of data, automate tasks, and identify intricate patterns, is poised to be a game-changer for sustainable procurement. By leveraging AI, organisations can:
Enhance sustainability data collection
Scope 3 is the hottest topic in sustainable procurement and many organisations are grappling with the question of how to measure the greenhouse gas emissions of their suppliers. Understanding this, especially beyond the first tier, requires extensive data collection. If you were to focus on your top 100 suppliers and ask your tier n-1 suppliers to do the same, when you get to tier 3 (which is probably nowhere near the end of the supply chain) you need to engage a staggering one million companies. At this point, manual data collection and analysis is out of the question for time-strapped organisations. AI tools, such as Avarni2, streamline this process, ensuring comprehensive and accurate data acquisition.
Predictive analytics for sustainability risk management
Managing sustainability risks in today’s intricate global supply chains presents challenges such as monitoring vast supplier networks, handling overwhelming sustainability data and rapidly adapting to sanctions, media reports and regulations, all while maintaining a pristine reputation. AI offers a solution by providing real-time monitoring of supply chains, predictive analysis of potential disruptions, seamless data integration for a comprehensive view, automated reporting for enhanced transparency, and scenario analysis for strategic planning. AI tools, like Versed AI3, continuously monitor vast amounts of supply chain data, ensuring real-time tracking of sustainability factors. This real-time monitoring allows companies to identify potential risks before they escalate, enabling procurement teams to proactively address disruptions and uphold sustainability standards.
Automation
According to Deloitte’s 2023 Global Chief Procurement Officer Survey4, over 70% of CPOs have seen an increase in procurement-related risks, and only a quarter feel equipped to predict supply disruptions timely. Furthermore, internal challenges like talent loss and organisational complexities add to the burden. By automating routine tasks, AI not only alleviates these pressures but also empowers procurement professionals to focus on high-value initiatives, such as supplier education on sustainability priorities. Generative AI tools like ChatGPT can expedite market research, strategy formulation, and contracting processes, allowing teams to be more agile and responsive in this volatile environment.
AI in action
Unilever’s Sustainable Living Plan5 has been at the forefront of leveraging AI to drive innovation in sustainable procurement. In 2023, Unilever highlighted how they have been using AI and digital technologies, from the launch of their first digital tool to the recent formulation of the world’s first green carbon detergent6.
“We’re using AI to help identify alternative ingredients that can strengthen the resilience of our supply chain, making our formulations more sustainable and cost-efficient, and simplifying them by reducing the number of ingredients without impacting a product’s quality or effectiveness.” – Alberto Prado, Unilever R&D’s Head of Digital & Partnerships.
Through a data-driven approach, Unilever has been making smarter, faster, and sharper decisions to optimise its portfolio of brands and products. Their commitment to sustainability is further emphasised by their ambitious goals, which include climate action to achieve net zero, reducing plastic usage, regenerating agriculture, and raising living standards within their value chain7.
Limitations and due diligence
While AI offers transformative potential, it’s crucial to recognise its limitations. The accuracy of AI predictions and recommendations hinges on the quality of data fed into the system. In the realm of sustainable procurement, this means ensuring that the data sources are reliable and comprehensive. Regular audits, cross-referencing with trusted databases, and continuous training of AI models are essential to maintain the integrity of AI-driven insights.
The 2023 Gartner Hype Cycle for artificial intelligence8 underscores the significance of addressing the limitations and risks of fallible AI systems. It emphasises the need for AI strategies to consider which innovations offer the most credible cases for investment, ensuring that AI’s transformative benefits are realised while mitigating potential pitfalls.
The future of AI in sustainable procurement
As we gaze into the future, the synergy between AI and sustainable procurement is poised to grow stronger. With advancements in machine learning algorithms, natural language processing, and predictive analytics, AI’s potential to drive sustainability will only amplify. The Gartner report highlights the rise of generative AI, which is reshaping business processes and redefining the value of human resources. Such innovations, including generative AI and decision intelligence, are expected to offer significant competitive advantages and address challenges associated with integrating AI models into business processes.
However, a conservative outlook suggests that while AI will be a significant enabler, the onus remains on organisations to embed sustainability into their ethos and operations.
In conclusion, as the business landscape becomes increasingly complex, the fusion of AI and sustainable procurement offers a beacon of hope. By harnessing the power of AI, organisations can not only navigate the challenges of today but also pave the way for a sustainable and prosperous future.
From cost-containment to carbon emissions, here are the 10 things that should be top of mind for every chief procurement officer in 2024.
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In the year to come, procurement will continue to transition from a back office function to a boardroom value-driver. Chief Procurement Officers and other leaders will need to increasingly reevaluate their relationships to the rest of the business as procurement not only becomes an increasingly vital source of business wins, but also a central piece of the puzzle when it comes to emissions reduction and resilience throughout the supply chain.
From generative AI to the skills shortage, there’s a lot that CPOs could be focusing on in the year ahead. We’re kicking off the new year with our list of the top ten things CPOs should be prioritising in 2024.
1. Drive significant value for the business
That’s why the first priority of all CPOs in 2024 is to apply technology, new operational organisation, hiring practices, sustainable strategy, cost containment, and every other trick and technique in order to create value for the business. Increasingly, CPOs are transitioning from logistical and cost-cutting functionaries to “orchestrators of value” and that will only become more apparent as the year (and decade) wears on.
2. Drive digital transformation
As mentioned before, procurement is a process that’s reinventing itself before our very eyes, embracing new digital technologies and ways of working that increase efficiency and drive value for the business. CPOs are increasingly important integrators of technology into the business, and should all be prioritising ways to implement technology over the coming year. However, it’s important to beware that technology for technology’s sake is even more dangerous than sticking it out with a legacy system…
3. Reduce environmental impact
Knowing may be half the battle, but once CPOs have an understanding of the environmental impact their S2P process has, they must prioritise finding ways to mitigate that impact. From a stricter regulatory landscape to a more perceptive and angry public, a meaningful environmental sustainability strategy is no longer “nice to have” or even necessary: it’s long overdue.
4. Understand your Scope 3 emissions
More than 60% of procurement leaders in the US, UK, and Europe surveyed in a recent report say that their Scope 3 emissions reporting process is more of a “take your best-guess” approach than a process of gathering concrete, reliable information.
The S2P process is one of, if not the, biggest source of greenhouse gas emissions for every company on earth, and understanding the consequences of working with one supplier or another (and then accurately reporting that information) is a huge part of the journey to net zero. CPOs who fail to prioritise transparency in their S2P process will find themselves actively hindering their organisations’ environmental ambitions at a time when procurement has the potential to be the biggest driver of positive environmental impact in many organisations.
5. Cultivate your supplier ecosystem
As much as technology is playing a bigger and bigger role in the procurement process, no CPO should discount the importance of building genuine, strategic relationships within their supplier ecosystem. Obviously, some industries are doing better than others, but in many areas (like the fashion industry, where “Those in charge of contracting suppliers for fashion brands say they are investing in longer-term strategic partnerships,” but their suppliers “tell a different story”) there’s still need for improvement.
6. Don’t buy into the hype (too soon)
In 2021, it was self-driving cars. In 2022 it was the metaverse. And last year saw the world get absolutely bent out of shape over the promise of generative artificial intelligence. However, much like NFTs and blockchain (another thing everyone was spending a lot of money trying to figure out how to make money from for a while), the promised trillions of dollars of economic impact from these technologies has yet to translate into meaningful business applications. Even the hyperloop was abandoned this year.
Procurement is an area with a huge amount of potential for digital transformation, and adopting the right technologies for the right reasons is what’s going to separate industry-defining success stories from all those dudes who went blind at the Bored Ape Yacht Club convention.
7. Mitigate risk to the supply chain
In the wake of the COVID-19 pandemic, the global source to pay (S2P) process has transitioned from a “just in time” approach to a “just in case” one. As climate change disrupts agriculture and manufacturing across the global south, and events like the Yemeni blockade of the Suez canal in order to hinder Israel’s occupation of Palestine hinder the movement of goods between regions, CPOs should prioritise diverse buying strategies that mitigate risk to their S2P processes.
8. Be a source of cost-containment
Inflation was a defining characteristic of the economy in 2023, as corporate price gouging (amid other factors) caused cost-of-living to spike. In a world of rising prices, and supply chain unpredictability, controlling costs will fall increasingly to CPOs in 2024. Cost reduction targets have been hit less consistently across the industry in the last few years, thanks largely to inflation and the pandemic’s disruption of global supply chains. Going into the year ahead, CPOs who can find a way to successfully meet their cost containment targets will find themselves with a serious leg up over their competition.
9. Don’t lose existing talent
The world is in the midst of a growing resurgence in the power of labour, as class consciousness and anti-capitalist sentiment rise. The old propaganda about loyalty to companies that would replace that employee in a heartbeat doesn’t work anymore, and workers are increasingly understanding (and demanding) their true worth, and it sent shockwaves through the service, autoworker, and entertainment industries in the US last year alone.
With the tech sector still leading the world in brutal mass Q4 firing and rehiring strategies, and labour movements within massive logistics firms like Amazon growing stronger by the day, 2024 promises to be defined by more strikes and other examples of direct action, not less. CPOs in the middle of a talent shortage should prioritise giving their employees reasons to stay beyond gym memberships and company pizza parties.
10. Hire top talent
The nature of procurement is changing. As the discipline becomes increasingly digitalised, not to mention plays a more strategic role within the modern enterprise as a whole, the skills that make for a good procurement professional aren’t the same skills that were on job listings ten, or even five, years ago.
In 2024, CPOs should constantly reevaluate the skills necessary not only to do the job now, but to tackle the procurement challenges of the next few years when hiring.
In our new feature, Shaz Khan takes us through a day in his life leading operations as CEO at Vroozi.
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The procurement industry is on the cusp of a golden age. The quality and breadth of software that we will have at our disposal will be able to solve pain points in ways we have never seen before. As CEO of Vroozi, every day is spent with the mission of trying to spearhead these innovations in sourcing and procurement tech forward. However, in order to keep a proper work-life balance and not burn the candle at both ends, I have to ensure that my days are organised in such a way that I can maximise productivity while leaving enough room to let my mind and body recharge.
My mornings typically look the same. I wake up every day at 6am and I spend the hour either checking emails or getting on phone calls with partners and clients who are located in different time zones. My wife and I love a great cup of coffee and she brews a mean French press every morning which I happily imbibe as we prep to take our youngest child to school.
After morning drop off, I always do some type of workout from 8am to 9am, a quick morning hike, weight training, or some type of cross-fit routine. Physical activity is important to me and I like to get my blood pumping first thing in the morning. I am based in Los Angeles and I love to take advantage of the favourable climate and conduct my daily morning leadership meetings when possible. We have built a great team and culture at Vroozi and I always want to start the day with complete alignment on our company objectives.
For the rest of the morning, I am involved in a mix of meetings with management, status calls with different departments, and direct sales calls. I try to schedule most of my meetings during these hours so that by 1pm, I can focus on my own work without distraction. I fit lunch somewhere within these time slots depending on when I find an opening, but it ranges from day to day. From 1pm to 4pm, I get to do the work I need to do to review items of importance — from various documents, contracts, or simply just game planning and overall strategy.
As a CEO, there are three major areas I am laser focused on. The first area involves evangelising the overall vision of the company, both internally and to the outside market. It is important to set a solid vision and mission statement for your team but also provide clear guidance to the market on your differentiators, value proposition, and capabilities in the simplest of terms. My second responsibility is Chief Recruitment Officer. I want to ensure that I am actively recruiting and building the best team. Of course, a big part of that involves hiring talent from outside the company, but I strongly believe in promoting from within — ensuring there is a proper promotional path for high performers within the company.
The third responsibility has two components: Innovation and Sales. I subscribe to the notion that tech CEOs should spend 50% of their energy innovating on the product and the other 50% driving sales and distribution for the product lines. CEOs need to educate themselves on the products and services that they’re selling and how to sell it. You cannot offload that responsibility to other people. You should immerse yourself in all aspects of the product and influence the roadmap of that product. That’s why it’s critical to be able to support sales efforts directly or indirectly.
After 4pm, I check in with the management team to see if there are any urgent action items or issues that need to be unblocked. I like to spend a portion of my day with core management to ensure we understand organisation goals and that we’re doing what is needed to achieve them. If we see some slips in the process, we’ll address the things we need to do to fill in those cracks. We are a tech company and much of our focus revolves around the pace and quality of innovation with our software platform. Are we responding to customer needs quickly? How quickly are we approving new features on a product roadmap that we feel is meaningful to the company mission? How quickly are we demonstrating value not only to our existing customers but to prospects in our sales cycle? Are we retaining customers and growing with them?
Shaz Khan, CEO, Vroozi
When selling software, customer retention and expansion is critical. We strive to maintain the same level of enthusiasm, service level, innovation and attention for both our long-standing customers and new customers in a consistent manner. The same way you expect a retail chain at a mall to look and feel relatively the same whether you are in Texas or California, we want our services to be consistent and world-class regardless of region and market.
As top management, you should not be the final verdict in every required key decision. You should be able to empower leadership with a framework for decision making and risk management and trust that business is moving in a continuous state of motion. You have brought leaders in for that very purpose—to lead departments, mitigate risk, and execute strategy. However, problem solving is absolutely a necessary part and art for any C-Suite executive. My approach is very action-based. If there is a problem in a department that I see is not getting addressed to the company’s satisfaction, I will actively pull up a chair and sit down with that department to ensure we don’t leave until we outline an approach to solve the issue at hand.
Leaders need to entrust the team that they have gathered around them to solve day to day problems and challenges. But CEOs also need to be active so that problems in the business can be addressed and remediated quickly.
I also draw a line in the sand where I will never go searching for problems to solve. There’s a trust that you build with your executive team to get that work done. Regardless if I’m handling the problem or one of my direct managers is handling it, I believe that if any item will take you less than 10 minutes to complete, get it done immediately. This is how you are able to streamline business operations without letting issues pile up month after month unaddressed.
Once I deal with any important matters at hand with upper management, I’ll take a break and wind down with dinner with the family or coaching my daughter’s league basketball teams. My last shift of the day is around 9pm where I will check in with our international team and partners and customers. I take any calls required from those overseas teams when it comes to product development or sales opportunities.
After 10pm, I make sure to shut down and prepare for the next day. It’s important to set boundaries when you’re off the clock. I don’t subscribe to the philosophy that you have to work all hours of the day to prove your worth. Being CEO will already require plenty of sacrifice and commitment within the title. You have to always be on and there is no real concept of a weekend or a holiday. But that does not mean that we must burn out. I always try to find time to disconnect and decompress, whether with music, art, or physical activities.
The procure-to-pay industry will see some dramatic and fantastic changes in the next couple of years and Vroozi is positioned to not only adapt to these changes but to lead these changes with our AI-based technologies. There will be an increasing proliferation of technologies within the procuretech ecosystem that will augment company resource pools with smart AI-enabled assistants. These advanced tools will streamline purchasing and payment transactions, and foster improved collaboration between buyers and suppliers, ultimately enhancing supply chain operations.
In the next three years, procure-to-pay will emerge as a vital organisational function, not only driving improved operating margins and enhancing productivity through intelligent document processing but also acting as a key catalyst for innovative supply chain developments between suppliers and buyers. This will involve capabilities that will span predictive analytics on pricing trends, supply chain scenario planning, and digital payment alternatives with AI assistants who will recommend the best course of action to take—both within the software technology map, but also with additional solutions beyond it to further strengthen your business case or outcome.
With these changes on the horizon, I anticipate shifts in my day-to-day. Before COVID, I was on the road for half the year, as I firmly believe you have to be physically present whenever possible rather than relying on management via Zoom or other video conference tools. As we continue to expand in 2024, I expect to dedicate more time to travel, engaging directly with customers, partners, and participating in key events.
As I prepare to hit the road this year, my typical day will often look different. However, regardless of my location, my routine will maintain a structured focus on developing the best possible product and getting that product in the hands of as many customers as possible.
CPOstrategy explores this issue’s Big Question and uncovers if now is the greatest time to be in procurement.
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Procurement has a unique opportunity.
Amid unprecedented digital transformation and innovation, it finds itself in a state of flux and momentum. For professionals who like change, procurement is the place for them. The years of procurement standing still are long gone, its position in the c-suite is only becoming increasingly secure and prominent.
As Covid outlined, businesses need flexible and agile supply chains that are equipped to deal with local or global disruption based on macroeconomic factors. This could be an aforementioned pandemic, wars like the ones we’ve seen in Ukraine and Israel in recent years or other external issues such as the Suez Canal disruption or inflation concerns. Procurement’s time is now.
At DPW Amsterdam 2023, the notion that procurement exists in today’s world as an exciting function that spearheads the c-suite. In comedian and host of DPW, Andrew Moskos’, opening welcome, he noted procurement’s transformation and shouted. “Procurement used to be boring but now we’re all rockstars. We run the company, we’re in the c-suite, we run ESG, sustainability, risk and 80% of the spend of a company goes through us.” His message was met with loud applause from a capacity crowd at former stock exchange building Beurs van Berlage.
Michael van Keulen, CPO, Coupa
According to Michael van Keulen, Chief Procurement Officer at Coupa, it’s the feeling of ‘no two days are the same’ which keeps him energised and feeling refreshed about meeting new challenges in the space. “I wear so many different hats every single day,” he explains. “I always say sometimes I’m an accountant, others I’m an environmentalist. Sometimes I’m the treasurer or a finance person, but I’m also sometimes a psychiatrist. Sometimes I’m a doctor, a nurse, a lawyer, a judge, an environmentalist and yes even a wizard.
“I never know what my day looks like. I can plan it, but something may happen where everything goes out the window. Procurement will always be going through some type of disruption. It’s about how you drive the competitive edge and how you drive value despite that. Procurement is the best gig in the world. It’s great that more people have started to see that now too.”
Right now, generative AI is the latest craze causing quite the buzz in procurement. Indeed, its noise is loud with its true influence yet to be determined. But it’s worth remembering generative AI didn’t start with ChatGPT in 2022. Chatbots actually go back to the 1960s. Among the first functioning examples was the ELIZA chatbot which was created in 1961 by British scientist Joseph Weizenbaum. It was the first talking computer program that could communicate with a human through natural language. But, given the introduction of a far more advanced model – ChatGPT – gen AI isn’t just making waves in procurement but across industries globally too.
Daniel Barnes, Community Manager, Gatekeeper
For Daniel Barnes, Community Manager at Gatekeeper, the stakes are high. As a self-confessed change agent, he believes procurement stands at a make-or-break moment. “You’ve got people who are stuck in the past that are archaic with what they’re doing. Then there’s those who are really pushing the profession forward,” he explains. “I see it as a moment in time where procurement kind of goes one in two ways. It’s extinct in terms of how it used to be. There’s solutions which have automated workflows and are doing the work that traditional procurement people used to do. We can pull people along, but there has to be a willingness to change or it’s not going to happen. That’s why I think it’s great to see people that are showing that willingness. They may not have the answers, but they want to learn.”
Alan Holland, CEO, Keelvar
According to Alan Holland, CEO of Keelvar, he is bullish and optimistic about procurement’s future, stressing that decision-making for the function is easier than ever before. Holland affirms tomorrow is “very bright” as procurement enters an era with intelligent software agents that can automate workflows and make the human workday more efficient. “There’s a whole new range of possibilities where creative and thoughtful planning will provide a competitive advantage for organisations. Procurement can be far more influential in how successful their companies can be. It’s a game-changer.”
Scott Mars, Global V
Scott Mars, Global Vice President of Sales at Pactum, affirms procurement’s in its golden age given the number of vendors operating within the procuretech ecosystem has hit soaring heights. He tells us, “I was speaking with a CPO recently and he said 10 years ago you could name the procure to pay and ERP vendors on one hand, now there’s hundreds of them and all these periphery vendors for AI and spend. The most visionary procurement leaders aren’t just looking at these all-encompassing solutions, they’re bolting on niche solutions into their ecosystems to make their teams more efficient. I think we’ll start to see a consolidation in the coming years of all these little companies into a few larger players to do really an end-to-end type solution. I expect someone to come up with a solution to close the loop in procurement.”
Stefan Dent, Co-Founder, Simfoni
While procurement, like many industries, is still plagued by talent shortages, there is hope that AI could hold the answer. But while its influence is crucial in one hand, is there a risk that the industry could go too far the other way and become over reliant on technology? Stefan Dent, Co-Founder at Simfoni, believes soon Chief Procurement Officers will soon be thinking differently about their workforce. “This is arguably the best time for people to join procurement, as you’ve got this great opportunity to embrace digital and make it happen. Young people can question ‘Well, why can’t it be done by a machine?’ They’re coming in with that mindset, as opposed to fighting being replaced. I think for graduates coming into procurement, they’ve got the opportunity to play with digital which is a wonderful thing.”
Matthias Gutzmann, Founder, DPW Amsterdam
Today, procurement, and its professionals, find itself amid meteoric change. Indeed, its future could be anything. Matthias Gutzmann, Founder of DPW Amsterdam, believes it is time for procurement to create a buzz about the profession. “It’s the best time to be in procurement,” he explains. “It’s the most exciting era to be in procurement and supply chain. We need to get loud about it and celebrate that fact.”
For our first cover story of 2024 we meet with Lloyds Banking Group’s CIO for Consumer Relationships & Mass Affluent,…
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For our first cover story of 2024 we meet with Lloyds Banking Group’s CIO for Consumer Relationships & Mass Affluent, Martyn Atkinson, to learn how an ambitious growth agenda, combined with a people-centred culture, is driving change for customers and colleagues across the Group.
Welcome to the latest issue of Interface magazine!
Welcome to a new year of possibility where technology meets business at the interface of change…
Lloyds Banking Group: A technology & business strategy
“We’ve made significant strides in transforming our business for the future,” explains Martyn Atkinson, CIO for Consumer Relationships & Mass Affluent at Lloyds Banking Group. “I’m really proud of what the team have achieved. There’s loads more to go after. It’s a really exciting time as we become a modern, progressive, tech-enabled business. We’ve aimed to maintain pace and an agile mindset. We want to get products and services out to our customers and colleagues. We’ll test and learn to see if what we’re doing is actually making a meaningful difference.”
AFRICOM: Organisational resilience through cybersecurity
We also speak with U.S. Africa Command’s (AFRICOM) CISO Ryan Larsen on developing the right culture to build cyber awareness. He is committed to driving secure and continued success for the Department of Defence. “I often think of every day working in cyberspace a lot like counterinsurgency warfare and my time in Afghanistan. You had to be on top of your game every minute of every day. The adversary only needs to get lucky one time to find you with that IED.”
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ALIC: Creating synergy to scale at speed with Lolli
Since 2009 the Australian Lending & Investment Centre (ALIC) has been matching Australians with loans that help build their wealth. It has delivered over $8.3bn in loans to more than 22,000 leading Australian investors and businesses. Managing Director Damian Brander talks ethical lending and the challenges of a shifting financial landscape. ALIC has also built Lolli – a broker enhancement platform built by brokers, for brokers.
Sime Darby Motors: Driving digital, cultural, and business transformation together
Sime Darby Berhad is one of the oldest and most successful multinational companies in Malaysia. It has a twin focus on the Industrial and Motors sectors. The company employs more than 24,000 people, operating across 17 countries and territories. Sime Darby Motors’ Chief Digital & Information Officer Tuan Jean Tee shares how he makes sure digital, cultural, and process transformation go hand in hand throughout one of APAC’s largest automotive multinationals.
Also in this issue, we hear from Microsoft on the art of sustainable supply chain transformation, Tecnotree map the key trends set to impact the telecoms industry in 2024 and our panel of experts chart the big Fintech predictions for the year ahead.
Data is the key to unlocking new opportunities and managing risk, but capitalising on the opportunities of data in procurement is not without challenges.
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Over the past few years, the procurement sector has been thrust into the limelight, as CPOs are increasingly being identified as drivers of value creation, cost containment, and risk management.
In addition to business and process innovations, a lot of the changes in the role of procurement are due to a wave of digital transformation sweeping the industry. If digital transformation is the engine driving this elevation of the procurement function, then data is the fuel powering it.
Effectively capturing, organising, and utilising data to generate meaningful insights can produce significant benefits for the procurement process. However, costly investment into data analytics, flawed adoption strategies, and oceans of bad data can turn all the potential for wins into a whole new source of risk for the business. This week, we’ve gathered our top 3 challenges CPOs face when incorporating big data into their operations.
1. Bad data
No, I don’t mean Lore from Star Trek: TNG. Bad Data is a fundamental and pervasive risk to procurement professionals looking to empower their analytics. It’s also a far more widespread problem than many executives would like to believe. Last year, a report by SpendHQ found that 75% of procurement professionals doubted the accuracy of their procurement data, leading to almost 80% of executives outside the procurement function lacking confidence when it comes to making decisions based on that data.
In order for it to make any meaningful contribution to reducing costs, mitigating risk, promoting sustainability and driving meaningful change within the business as a whole, the data used by procurement has to be accurate. Pierre Laprée, chief product officer of SpendHQ, noted in the report that “procurement teams must do more to build and maintain influence within their organisations, including removing the dependency on spreadsheets to become more efficient.”
2. Choosing the right technology
Collecting, managing, and drawing insights from your procurement data is a matter of using the right digital tools. However, choosing the right digital tools—especially with CPOs often facing pressure from stakeholders to transform their operations digitally—can be a complicated prospect with potentially severe negative consequences ranging from sub-par outcomes and wasted budgets to catastrophic data breaches.
A report by Productiv found recently that, while “procurement and IT are being inundated with software access, vendor intake and renewal requests,” the number of applications and subscription services being managed by the average business has risen by more than 30% in the past two years. Combined with growing workloads, skill shortages, and an unclear vision for handling these growing technology stacks, Productiv’s report notes that “this patchwork of tools across various steps of the vendor management lifecycle has created technology, team and data silos. Instead of increasing efficiency, these tech stacks start adding up to a lot of manual work to bring everything together.”
3. Creating spend data visibility
Dark purchasing refers to the phenomenon of procurement expenses incurred outside a business’ defined procurement process. It’s uncontrolled spending that procurement can’t see, but that still gets added to their numbers at the end of the quarter.
Big data and procurement is often thought of in terms of its ability to help understand the world outside the business’ walls—logistics, pricing, supplier behaviour throughout the market in response to market changes—but effectively deploying data analytics to understand why dark purchasing is happening, when, and by whom is a vital step in figuring out how to reduce its impact on the company.
Unfortunately, this presents a serious challenge, as many procurement departments lack a cohesive data organisational strategy; data is often scattered throughout multiple silos in the organisation, hidden from procurement in much the same way that unapproved purchasing hides until quarterly expense reports. Overcoming this challenge and creating a holistic, accurate view of company spend—both within the procurement function and outside it—is one of the greatest opportunities and challenges presented by the infusion of big data into procurement.
B2B procurement is headed for a new, more dynamic, digitalised era defined by a more strategic approach to traditional processes and new challenges.
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The procurement industry isn’t a back-office function anymore. Much like the transition of IT departments from obscurity to the C-suite over the past 10-15 years, procurement is making its way into the limelight.
“We are entering a new era of smart business buying where senior leaders are understanding the impact procurement can have on efficiency and overall company success,” said Alexandre Gagnon, vice president of Amazon Business Worldwide, at a recent Amazon Business event attended by more than 1,000 procurement leaders across the public and private sectors.
“The procurement function is now cross-disciplinary, spanning both functional and strategic purviews as buyers are planning to invest more in technology and optimisation while future-proofing their companies and organisations,” added Gagnon.
Procurement’s transition
The 2024 State of Procurement Report released by Amazon Business in conjunction with the event points to an array of indicators that the nature of procurement is fundamentally changing. From the traditional procurement workloads concerned with day-to-day purchasing, to a more recently emerged responsibility of future-proofing the business against disruption (by another pandemic, for example), procurement’s goals are “ever-growing”.
In order to keep up, the discipline is “transforming at lightning speed,” claims Gagnon in the introduction to the report.
Data gathered from over 3,000 procurement professionals supports this inclusion. Key findings include the fact that 95% of decision-makers say their organisation currently has to outsource at least a portion of their procurement to third parties, the fact that 95% of decision-makers say their procurement function has “room for optimisation”, and 53% of respondents who say their procurement budgets will be higher in 2024 than they were this year.
Tech-driven procurement
Technology investment is expected to be high on the agenda, as procurement leaders attempt to bring increased visibility and resilience to their departments. A remarkable 98% of decision makers said they were planning to invest in analytics and insights tools, automation, and AI for their procurement operations, with the (anonymous) VP of purchasing at a major global bank in the US saying that “Making investments in the right tools and technology [is critical] because you rely on data as a procurement organisation. There is … spend data, contractual data, invoices, and more. Without the right tools in place, you can only do so much [with your data].”
Reflecting on the changing role of procurement in the modern enterprise, Gagnon added that “Ultimately, procurement not only keeps operations running, but plays an integral role in achieving key organisational goals, and with smart business buying, companies have procurement solutions to serve as a growth lever for organisations.”
The assistant will use natural language processes and AI to perform “thousands of procurement tasks”.
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The latest in a small flurry of generative AI-powered virtual procurement assistants is hitting the market. Earlier this month, Relish, a B2B app developer based in Ohio, announced the release of its new procurement assistant—a virtual assistant product powered by generative artificial intelligence and designed to intuitively interact with users while performing “thousands of procurement tasks”.
“What we’re offering is a solution that truly frees users from the menial to engage in the meaningful,” said Ryan Walicki, Relish CEO, in a statement to the press. He added that the Relish Procurement Assistant would revolutionise the way businesses handle their procurement systems and processes, claiming: “By leveraging large language models, this single interface spans all procurement systems and platforms and can be custom fit to any enterprise solution ensuring workflows are never interrupted.”
The rise of generative AI
Relish isn’t the first company to utilise a combination of generative AI and large language models, like ChatGPT, to create a more naturalistic interface between users and complex systems for managing data. In November, Californian tech firm Ivalua released an Intelligent Virtual Assistant powered by generative AI as part of its platform, making similar claims that the technology would eliminate busy work, freeing up employees for more strategic activities.
Relish works in a similar way, plugging into an existing procurement management platform, and using artificial intelligence and natural language processing to “intuitively interact” with users in a conversational way, giving them detailed insight into their workflows.
According to Relish, the technology can perform numerous tasks, including supplier management, sourcing, contract management, supply chain, and purchasing.
Where Relish differs from other offerings on the market is in its alleged ability to “[adapt] to any platform and workflow preference.”
According to Jeremy Reeves, Relish Senior Vice President of Product: “The adaptability helps users get the most out of their procurement enterprise software, maximising their return on the investment… It brings a new dimension to how users will go from being taskmasters to being conductors of their enterprise systems.”
Sapio Research found that just 48% of organisations are confident they are accurately reporting Scope 3 emissions through their P2P process.
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More than half of the 850 procurement leaders in the US, UK, and Europe surveyed earlier this year could not claim to be “very confident” in their organisation’s ability to accurately report Scope 3 emissions, according to a new study conducted by Sapio Research and commissioned by Ivalua.
While 48% of leaders were confident in the accuracy of their companies’ reported emissions figures, nearly two-thirds (62%) of leaders surveyed admitted that “reporting on Scope 3 emissions feels like a ‘best-guess’ measurement.”
A significant majority of the organisations were confident that they are on track to meet net zero targets. However, the report also found that many don’t have plans in place for:
Adopting renewable energy (78%).
Reducing carbon emissions (68%).
Adopting circular economy principles (72%).
Reducing air pollution (67%).
Reducing water pollution (63%).
Procurement’s role
It has long been recognised that procurement has a vital role to play in the reduction of environmental impact in organisations’ supply chains, with as much as 90% of a company’s emissions falling within the Scope 3 band.
“Organisations are aware they must urgently address sustainability and understand the cost consequences of not doing so. But this lack of confidence paints a negative picture,” comments Jarrod McAdoo, Director of Sustainable Procurement at Ivalua.
“A lack of perceived progress could fuel accusations and fears of greenwashing, so it’s important to remember that obtaining Scope 3 data is part of the natural maturation process. Many sustainability programs are in their infancy, and organisations need to start somewhere. Estimated data can help determine climate impact and contribute to building realistic, actionable net-zero plans. Over time, organisations will need to make significant progress on obtaining primary Scope 3 data and putting plans in place, or risk financial penalties as well as ruining reputations in the long run.”
Regulatory and public scrutiny continues to mount against both public and private sector polluters. A report released in December highlighted the devastating annual emissions by militaries around the world, finding armed forces to not only be one of the world’s largest fossil fuel consumers (5.5% of all global emissions), but that the US military alone has a larger environmental impact than some developed countries. The scale of military contribution to the climate crisis, in addition to the lack of transparency when it comes to disclosing those figures, is a major issue that is also echoed in the private sector of the civilian world.
Are some companies ‘unintentionally greenwashing?’
In the private sector, both activism and legislation continues to move (too slowly, but it’s a start) against corporations responsible for the climate crisis and pollution. In the UK, the High Court in London ruled that Nigerians affected by oil spills the corporation promised to clean up can bring legal action against the British multinational. The state of California is itself suing America’s largest oil companies for their role in exacerbating and covering up the effects of climate emissions for decades.
More recently, corporations that rank among the world’s largest polluters have been accused of adopting environmentally friendly rhetoric in order to make themselves appear more committed to environmental sustainability than they, in actual fact, are. The practice, known as “greenwashing”, has been criticised by politicians, activists, and members of the scientific community.
McAdoo notes that the inability to accurately report Scope 3 emissions—taking a “best-guess” approach—could be a contributor to organisations looking to avoid unintentionally greenwashing their emissions data by misrepresenting themselves.
“Nearly two-thirds of U.S. organisations agree that an inability to measure supplier emissions accurately makes it hard to turn words into action,” McAdoo continued. “There is a clear need to adopt a smarter approach to procurement. Organisations need granular visibility into their supply chains to ensure they can measure the environmental impact of suppliers but also collaborate with suppliers to develop improvement plans. Only with this transparency can organisations showcase meaningful sustainability progress and avoid accusations of greenwashing.”
Coupa Software and Acquis Consulting Group has released an eBook offering tips on how to navigate the challenges of the procurement landscape.
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A new eBook from Coupa Software and Acquis Consulting Group providing guidance on how to navigate the challenges of the procurement landscape has been released.
The eBook offers real-life success stories from the likes of Dent Wizard, Sun River Healthcare and Eyecare Partners while uncovering essential strategies for enhancing efficiency and driving growth.
Additionally, the eBook provides expert guidance on mastering procurement and compliance in today’s economic landscape as today’s leaders are forced to re-examine their internal processes, particularly when it comes to business spend management.
As a result of rising inflation, as well as the cost of capital and labour, it has meant businesses need to identify new ways to improve margins, drive sustainable growth and scale productivity. However, many existing solutions at mid-market companies are already stretched to the limit.
This led to Dent Wizard, Sun River Healthcare and Eyecare Partners coming to the same conclusion – digital transformation can take painful and antiquated processes and make them stress-free and efficient.
The new eBook is considered a must-read for leaders seeking to overcome the complexities of today’s procurement space amid a challenging economic climate.
To find out more about how Dent Wizard, Sun River Healthcare and Eyecare Partners recommend organisations can transform their business spend management, download Coupa and Acquis’s free eBook here.
AI and Machine Learning-powered analytics could help security teams flag and prevent fraud in their procurement functions.
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Procurement fraud is costly and hard to prevent, but with the right tools, organisations could see red flags earlier and respond in time rather than too late.
According to the Association of Certified Fraud Examiners (CFE), organisations lose 5% of their annual revenue to fraud, with the median loss per case totalling $117,000, and the average being $1.7 million.
Supply chains and procurement functions are especially vulnerable to fraud—often comprising long and winding networks, intricate webs of relationships, vast inventory assets, and multiple transactions along the S2P journey. The procurement and supply chain functions of retailers and manufacturers are especially vulnerable.
Frequently, procurement fraud is the result of a malicious individual within the organisation, although vendors and partners can also be responsible. Bid rigging, intellectual property infringement, inventory theft, and product counterfeiting are all examples of occupational fraud within the procurement process.
To address these challenges, companies must implement proactive measures. The CFE report noted that nearly half of fraud cases occurred due to a lack of internal controls, or an overriding of insufficient existing controls. It also found that anti-fraud controls were effective, resulting in lower losses and quicker fraud detection.
Fraud is prone to thrive in the procurement process, and can have devastating consequences, but the fight against the threat isn’t hopeless, and new technologies are proving especially effective in stamping out the issue.
In addition to traditional anti-fraud measures like strengthening internal controls, performing due diligence, and conducting regular quality checks, organisations can fight fraud in their procurement and supply chain functions by harnessing the power of AI and Big Data.
Fighting fraud with Big Data
AI analytics of Big Data sets can do more than improve efficiencies and predict trends in the movements of goods; these types of analytics excel at pattern recognition and, once correctly trained, can identify subtle changes in activity within the procurement function and supply chain that could point to fraud.
According to Isabelle Adam, an analyst at the Government Transparency Institute in Budapest, and Mihály Fazekas, founder of the Institute and assistant professor in the School of Public Policy at Central European University, “With the increasing use of electronic and online administrative tools — such as e-procurement platforms — making administrative records readily and extensively available in structured databases, public procurement has become a data-rich area.”
This wealth of data, if improperly handled, can become a place for fraud to hide, but if big data analytics are applied, they argue, it “can serve as a tool for auditors to identify and prevent fraud and corruption.”
The top seven trends driving procurement’s transition from the back-office to the boardroom in 2024.
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The year ahead has the potential to be a watershed moment for the procurement industry, as infusions of leading edge technology and process innovation conspire to enable procurement’s shift from spend management to strategic leadership. Increasingly, leadership is recognising the potential of procurement to guard against risk, drive sustainable practice, and be a key enabler in helping the business identify and capitalise on new opportunities.
Procurement is undeniably on a journey from being a back-office cost-cutting function to a key driver of strategic wins for the business. In 2024, procurement teams should continue to capitalise and build upon existing wins as they continue their optimisation journey. For those lagging behind, the time to begin their transformation from functionary to value orchestrator is now.
2. More space strategic, value-add work
A vast majority of decision makers surveyed by Amazon Business last year revealed that they needed to outsource elements of their procurement function to a third party. It’s a known fact that the current procurement industry struggles with a lack of the necessary human resources, skills, and systems to keep pace with mission critical operational demands. With those demands only expected to get more complex in 2024, procurement teams need to find ways to spend less time on low value manual work and refocus their efforts on high-level, strategic activities. Adopting low-code platforms, AI, process automation, and other technology could be a way to execute on this necessary transformation.
3. More investment (and hype) surrounding AI, automation, and analytics
2023 was the year when generative AI exploded into the spotlight, attracting massive amounts of hype, interest, and investment. However, just a few weeks into 2024, you can see excitement starting to cool, as organisations struggle to find effective applications that justify the price of admission.
In 2024, we can expect to see massive AI utilisation in data analytics, in process automation, and other elements of the S2P process, but generative AI adoption in ways that produce meaningful benefits are likely more than 12 months away.
4. Low code, higher automation in S2P platforms
Managing the source to pay process is increasingly complex, and time consuming to orchestrate. In 2024, with pain points like this increasing complexity (due to climate instability, compliance regulations, etc.) and talent shortage, the adoption of more low-code platforms will increase the ability of procurement teams to automate significant elements of their operations.
5. Scope 3 comes under greater scrutiny
A recent report found that around two thirds of procurement professionals in the US, UK, and Europe feel that their Scope 3 emissions reporting is more “best-guess” than hard fact. With regulatory scrutiny—not to mention public opinion—growing less and less lenient with regard to greenwashing and climate inaction, procurement teams need to make 2024 the year they take meaningful action to create transparency beyond Scope 1 and 2 emissions.
This obviously represents a significant challenge. Scope 1 and Scope 2 emissions are relatively straightforward compared to the sprawling, often opaque morass of Scope 3. Inaction is not an option, however, if organisations are to meaningfully pursue their net zero by 2030 targets.
6. Mission-critical Big Data
Collecting, managing, and effectively drawing insights from big data is and will remain one of the defining challenges for the modern enterprise. A proliferation of data from IoT devices, cloud-based platforms, and a general increase in the amount of technology being integrated into the procurement process (not to mention an increase in awareness of how important it is to gather as much data as possible) is leaving some industry players overwhelmed.
Vast silos of data with no meaningful way to draw insights from the unstructured mass create more problems than they solve. 2024, then, should be the year that procurement not just recognises the importance of data, but the absolute criticality of putting systems in place to manage it effectively.
7. AI achieves greater autonomy in planning tasks
Even as the shockwaves of the COVID-19 pandemic recede from the global supply chain, macroeconomic forces still conspire to place increased pressure on supply chains and procurement teams. Forward planning is more important than ever and procurement professionals are finding themselves increasingly struggling to meet the demands of “a more complex, multi-tiered, more nuanced world.”
Using artificial intelligence to more effectively run scenario analysis could have a transformative effect on the S2P process, allowing low-touch planning driven by AI to eliminate manual work, analyse data at scale, identify and flag anomalies, and even start making suggestions to humans as to how to proceed. There is still some doubt over AI’s ability to handle tasks consistently with minimal human oversight, but the tide of public opinion is starting to change.
New data from Emergen Research suggests the procurement technology market will be worth approximately $17.9 billion in 2032.
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Increased adoption of cloud services, artificial intelligence (AI) and process automation are driving strong growth in the global procurement software market.
According to a report released this week by Canadian market research firm Emergen Research, the global procurement software market is expected to register a rapid revenue CAGR of 10.4% over the decade following the 2022 financial year—from a global valuation of $6.67 billion at the start of the forecast period to $17.90 billion in 2032.
The report’s authors found that “increasing use for cloud-based procurement solutions and rising need for automated and efficient procurement processes are key factors driving market revenue growth.”
The talent challenge
In the face of a talent shortage—exacerbated by growing demand and increasingly supply chain complexity—the report expects to see cloud-based procurement systems attain widespread adoption.
“Cloud-based procurement systems have many benefits such as easy deployment, flexibility, scalability, and lower infrastructure costs. This software allows for real-time access to procurement data, leading to better informed and timely decisions,” note report authors. “In addition, this software also makes it possible for companies to access procurement software at any time and from any location, which makes it easier to manage procurement procedures globally.”
Is automation the solution?
Artificial intelligence and machine learning will also support procurement teams in overcoming the pain points presented by the skill shortage, stricter regulations, and supply chain instability. The report suggests that the technologies—if correctly adopted—could be instrumental in “helping companies to automate increasingly complex procurement processes while enhancing decision-making.”
However, high up-front costs may present an insurmountable barrier to entry for some organisations, and a deterrent for others, the report notes. These costs include software licensing fees, implementation costs, training expenses, and any required hardware upgrades. Emergen researchers also note that concerns over data privacy and cyber security could slow adoption of cloud-based solutions.
Kathleen Anne Harmeston discusses some of the key items sitting on the 2024 agenda amid seismic digital transformation.
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Procurement, in my opinion, has experienced one of the largest direct knock-on effects of unprecedented inflation and geopolitical issues over the last two years (including supply-chain issues caused by Brexit, the US-China Trade War, and European instability of the Russia-Ukraine War).
Procurement’s challenges
We are seeing this impact in the form of cost increases across nearly all industries and challenges in securing and maintaining reliable, dynamic, and cost-effective supply partners.
Boardrooms are struggling to understand why they should invest further funds to bolster the CPO remit, including investment to help them technologically revolutionise the business and the function. Possibly this is due to a lack of visibility on how procurement can be a high performing business partner, which offers a proactive, seamless, automated and value-adding service supporting profitability and ESG efforts. CPOs are now tasked to sell the benefits of investing in procurement over and above the safety blanket of ‘cost reduction’ as the signature sell.
The above obstacles will also be underpinned by the phenomenal opportunity of integrating AI into the procurement function alongside many other digitisation opportunities. Those companies who welcome technological innovation of their P2P systems and supplier management processes are likely to have better competitive advantage and risk management as a consequence.
The general consensus I have gained from speaking with my peers are:-
Profitability (of course).
Agility and digital readiness within the P2P and business management systems.
Delivering ESG for the firm and not just giving “lip service” to the exercise.
Risk management within the elaborate complex web of supply chain networks.
Driving Innovation through the supply chain.
2023 saw the same old issues in limited control over and transparency in third-party spend. This was due to supply instability, semi manual processes, rising costs and value leakage from off-contract spend. With this in mind, boardrooms are more likely than ever to push back on the CPOs call for further investment. But this creates a circular argument of investment needed in the function, combined with business’ commitment to approved supplier compliance to meet the board challenges in 2024.
Moving to 2024
Digital readiness has become imperative as team members continue to work in hybrid or remote ways, but also because inefficient manual processes and limited digital visibility and automation of spend management causes significant lost opportunity and risk. Recent studies from KPMG and SAP show that 37% of procurement processes are still semi auto and manual and 77% of Executives complain they cannot access a good spend data real time. These studies have been further supported by research from Ivalua which states:
53% of procurement and supplier management processes have yet to be digitised.
22% of procurement teams estimate that they are wasting their time each year dealing with paper-based or manual processes.
50% of procurement leaders think the rate of digitisation within procurement is too slow.
47% say existing procurement systems are not flexible enough to keep up with constant change and market uncertainty.
Inefficient procurement processes often result in disorganised data management and reporting -ultimately leading to executive frustration. These issues further invite problems such as duplication of payments or delays in payment.
What are the technological innovations for 2024?
The shape and structure of the procurement division in the future will change quite dramatically with the ever-increasing integration of AI. When the second wave of more sophisticated generative AI software arrives – which improves its reliability of output, data leakage, and data security – AI and machine learning may well plug the gap of manual human input for certain portions of the procurement division. With AI (or any kind of automatic digitization for that matter) we will soon embrace the automation and celebrate the headcount savings in procurement, and instead ask for investment in greater strategic skills and the next level of development for our procurement staff.
AI truly has the potential to transform procurement. From specifically supply chain management, to helping with demand forecasting and inventory management to logistics optimisation, new product development cycle time improvement, and supplier engagement. AI will also help with managing our spend via creating predictive reports for cost reduction opportunities.
Specifics for CPOs look for in 2024
Advanced AP Invoice Automation Platforms
Advanced accounts payable invoice automation platforms process invoices in any format with good speed and accuracy. It means going touchless eliminates the pain of managing paper invoices. By reducing the cost per invoice, shortening cycle times, and increasing spend control, these cloud-based electronic invoicing systems offer built-in matching and automatically identify errors, duplicates, and overpayments. They ensure payments are only made for ordered and received goods. Many APIA platforms can be tailored to specific organisational needs. This is with features like cognitive OCR invoice capture, smart coding, and invoice approvals to further streamline the process. These platforms can integrate with existing financial or ERP systems for seamless digital payments. While their advanced features like duplicate invoices and fraud checks, along with integrated exception handling, demonstrate the future of invoice processing in the P2P cycle.
Mobile P2P solutions
Mobile platforms are becoming more useful and available in the P2P process by shifting to cloud and software-as-a-service (SaaS) solutions. The convenience of mobile apps allows users to manage procurement activities on the go. This is also while offering real-time access to crucial data and processes. This mobility not only increases efficiency but also enables quicker decision-making. CPOs can also integrate their P2P systems with other cloud-based applications, such as ERP, CRM, and BI, to create a seamless and holistic view of your procurement performance.
Data analytics and visualisation
Data analytics tools are the applications that enable you to analyse your P2P data in an actionable way. These tools will help you improve your decision making, performance measurement, and reporting. For example, you can use dashboards, charts, and graphs to visualize your spend patterns, savings achievements, and compliance levels. You can also use predictive analytics, machine learning, and natural language processing to generate forecasts for your P2P strategies. Visualisation software has also made huge strides in being able to share new product development ideas. This is also while helping progress the supplier collaboration and management agenda.
Integration of blockchain for greater transparency and security
Blockchain technology is rapidly transforming the P2P sector with its unparalleled transparency and enhanced security features. By integrating blockchain, businesses are able to establish immutable records for every transaction. This will significantly boosting both transparency and security within their procurement processes. This technology is particularly effective in fraud prevention and compliance adherence and supply chain tracking. It ensures that each transaction is reliably recorded and easily verifiable, underscoring its growing importance in the P2P landscape.
Supplier collaboration
Supplier collaboration is the practice of building long-term and mutually beneficial relationships with your key suppliers, based on trust, transparency, and value creation. It can help you improve your supplier performance, reduce risks, and drive innovation. For example, you can use supplier portals, e-procurement platforms, and digital contracts to communicate with your suppliers more effectively. You can also use supplier scorecards, feedback mechanisms, and incentives to monitor and reward your suppliers for their performance.
Sustainability and social responsibility
Global supply chains are complex and can be multi-tiered. This presents a serious challenge for CPOs with limited visibility into the supply chains for sustainability and social responsibility. AI-powered reporting will enable teams to keep track of supplier and product information. This is via using global data sources from different countries, regions and languages. The key is to raise the issues and gain the sponsorship to address the risks proactively. Mapping systems and technology can help but only if this policy is embedded within the business. There is movement from tier one contract management of supply chains to managing the supplier networks.
User experience and engagement
User experience and engagement with your P2P system, such as ease of use, functionality, design, and feedback is important for the function. Alongside engagement, it can help you increase your user adoption, satisfaction, and loyalty. For example, you can use mobile apps, chatbots, voice assistants, and gamification to make your P2P system more accessible, intuitive, responsive, and fun.
Concluding remarks
The P2P landscape in 2024 will be shaped by technological advancements and a shift in business priorities. From the integration of AI and blockchain to the emphasis on sustainability and mobile solutions, these trends are redefining how companies approach procurement and supplier relationships. Despite executive reluctance to engage in further investment, during periods of inflation and market stagnancy, digitisation must be embraced with the option to either pivot or perish. Adoption of new systems and processes requires training and capacity planning within procurement departments. This is so that the business-as-usual services can continue without a downturn in service levels. Businesses that adapt to these changes will enhance their operational efficiency and position themselves strategically for future growth and success.
Fairmarkit has revealed a partnership with ServiceNow and unveiled an automated quoting integration in a bid to scale efficiency.
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Fairmarkit has announced a new partnership and integration with ServiceNow to boost productivity for customers.
The company, which is a leading autonomous sourcing solution set on transforming the procurement of goods and services, has unveiled an automated quoting integration with the ServiceNow platform to drive efficiency.
Scaling efficiency
It is anticipated that the move will help enterprise procurement increase spend under management, source goods and services efficiently as well as operationalise DEI and ESG initiatives through an automated quoting process.
With Fairmarkit’s automation, AI and GenAI capabilities embedded within ServiceNow’s Source-to-Pay Operations solution, end users can automatically create, send and award quotations from within the ServiceNow interface which streamlines processes and decreases turnaround time for competitive quoting.
Buyers maintain the same level of user experience and functionality they expect from Fairmarkit sourcing including reduced cycle time, greater visibility into spend, higher savings and improved compliance and diversity maintenance from within the ServiceNow interface.
Initiated via a ServiceNow sourcing request, requests for quotes (RFQs) are automatically sent to suppliers and bids are collected and presented to the user for an award decision within ServiceNow. Once an award is made, a purchase requisition is created and the customer’s desired ServiceNow workflow is continued.
Revolutionising the way forward
Kevin Frechette, CEO of Fairmarkit, commented: “Fairmarkit’s integration with ServiceNow furthers our commitment to revolutionising the way all organisations buy and sell. We are fired up to work collaboratively with joint customers to ensure the most user friendly and efficient purchasing process possible.”
Kirsten Loegering, VP, Product Management – Finance & Supply Chain Workflows at ServiceNow, added: “From enterprise end users to seasoned procurement professionals, automated quoting with Fairmarkit will simplify the intake-to-award process, while also increasing opportunities for costs savings and efficiency gains. Establishing this partnership with the market leading sourcing solution opens the door for enterprises to bring more spend under management, enables end users to competitively quote with little effort, and paves the way for more value and less manual work.”
This month’s exclusive cover story features a fascinating discussion with Dhaval Desai, Principal Group Engineering Manager at Microsoft, regarding a massive and sustainable supply chain transformation at the tech giant…
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This month’s exclusive cover story features a fascinating discussion with Dhaval Desai, Principal Group Engineering Manager at Microsoft, regarding a massive and sustainable supply chain transformation at the tech giant…
In the past four years, Microsoft has gained more than 80,000 productivity hours and avoided hundreds of millions in costs. Did you miss that? That’s probably because these massive improvements took place behind the scenes as the technology giant moved to turn SC management into a major force driving efficiencies, enabling growth, and bringing the company closer to its sustainability goals.
Expect changes and outcomes to continue as Dhaval Desai continues to apply the learnings from the Devices Supply Chain transformation – think Xbox, Surface, VR and PC accessories and cross-industry experiences and another to the fast-growing Cloud supply chain where demand for Azure is surging. As the Principal Group Software Engineering Manager, Desai is part of the Supply Chain Engineering organisation, the global team of architects, managers, and engineers in the US, Europe, and India tasked with developing a platform and capabilities to power supply chains across Microsoft. It’s an exciting time. Desai’s staff has already quadrupled since he joined Microsoft in 2021, and it’s still growing. Within the company, he’s on the cutting edge of technology innovation testing generative AI solutions. “We are actively learning how to improve it and move forward,” he tells us.
We also have some inspiring and informative content from supply chain leaders and experts at Schneider Electric, Smart Cube, Protokol, Red Helix and Astrocast. Plus, expert predictions for 2024 from leading supply chain leaders, as well as a round-up of the best events this year has to offer!
The ability to scale available space up or down on demand could provide procurement teams with an invaluable degree of flexibility.
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From retailers to manufacturers, enterprises that handle large amounts of product and raw materials have always needed places to put it. As a result, the vast majority of industrial real estate is devoted to warehousing, with 11.1 billion of the 14.8 billion square feet of industrial real estate in the US classified as warehouse space.
Warehouse square footage is essential, not only to logistics, but to the procurement department. You can’t buy things if there’s nowhere to put them. Procurement teams working to support the needs of the business as a whole are therefore bound by the limitations of the physical space the business maintains for storage.
Changing demands
A procurement function’s ability to respond to changing demands—either from within the company or when performing direct procurement in anticipation of demand from without—is limited by the physical warehousing space maintained by the enterprise. However, more space isn’t always the solution, as real estate is costly to buy, develop, maintain, secure, and so on. Small and even medium sized enterprises may not have the capital or resources to maintain their own warehouse space, and—in an era of e-commerce-first business models—may have more distributed business models than can be supported if warehousing space is internally owned.
The answer to giving procurement teams the flexibility they need to store, move, and acquire necessary stock for the business could lie in On-Demand Warehousing.
On-demand warehousing
The model “allows eCommerce businesses to access warehousing solutions as and when needed, without making a long-term commitment, through a pay-as-you-go system,” write Dr Banu Ekren, Dr Ismail Abushaikha and Dr Hendrik Reefke in a recent report. By using a platform to purchase space within a larger warehouse on a short term basis, businesses gain the flexibility to grow (or shrink) their procurement of inventory in line with the demands of their business, without the need for long-term rental agreements or costly real estate purchases that the business “might” grow into down the line.
On-Demand Warehousing platforms can also reduce environmental impact by consolidating inventory from multiple buildings into singular facilities—reducing the need for heat, electricity, etc.
From shared responsibility to “blackmail”, an array of relationships exist under the umbrella of “partners” in the source-to-pay value chain.
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Whether in earnest or just in cynical pursuit of a hot new buzzword, it seems like no one in the procurement and supply chain sectors actually buys things anymore. Instead, goods are sourced from a strategic partner—implying a simple transaction has been replaced by a closer, more meaningful and, supposedly, beneficial relationship.
For example, in the fashion industry—traditionally one of the most transactional industries for buyer-supplier relationships—McKinsey’s 2023 CPO survey found that even between fast fashion brands and their suppliers, relationships are becoming more strategic, long-term, and mutually beneficial.
The number of transactional relationships reported by CPOs in the fashion industry reportedly fell by more than 50% between 2019 and 2023, from 22% to just 10%. That number is predicted by McKinsey’s analysts to drop to just 3% by 2028, as more than half of relationships in the industry evolve into “long-term strategic partnerships with volume commitments”.
The future of strategic partnerships?
According to McKinsey, the future of strategic partnerships between procurement teams and their supplier ecosystems looks bright in the fashion industry. This should be good news across other fields like medical supplies, consumer goods, food, and industrial manufacturing—as fashion is perhaps the industry with the most historically hostile relationship between buyer brands and the suppliers who manufacture their clothes, often for no guarantee of purchase, at rates so low they often result in untenable labour conditions. If some of the most predatory supply chains on the planet can grow into thoughtful, considerate strategic partners, then it surely bodes well for the rest of the world.
Or it would, if any of that were particularly true.
I’m not saying McKinsey or the CPOs that took their survey were lying. I’m sure they truly do believe their transactional relationships are evolving into strategic partnerships. But, as Maliha Shoab pointed out in a piece for Vogue Business this week, while “Those in charge of contracting suppliers for fashion brands say they are investing in longer-term strategic partnerships,” their suppliers “tell a different story.”
The reality is that research conducted by Fashion Revolution found that just 12% of brands publish a responsible purchasing code of conduct (virtually the same as last year and the year before that), and data gathered by Sanchita Saxena—visiting scholar at the NYU Stern Center for Business and Human Rights and senior advisor at human rights-focused consultancy Article One—points to truly collaborative and strategic partnerships between procurement teams and their suppliers being much rarer than procurement executives would seem to believe.
Reimagine supplier relationships
Some suppliers Saxena spoke to even characterised their relationships with fashion buyers as “blackmail”, revealing to Vogue Business that one supplier in particular recalled: “The company was threatening [us] saying, if we don’t agree on a reasonable discount, maybe next season [our] business volume might be affected. We were also told that if we don’t give the discount then there might be cancellations coming, and that kind of pressure… I wanted to give them a $20-25,000 discount, but eventually with the pressure I have to probably agree on almost double that amount… we didn’t want to offend them by any means.”
Other relationships were more mutually beneficial, and it does seem as though there is some action behind the partnership rhetoric in some areas of the fashion industry.
The point is, however, that procurement professionals’ imagined relationships with suppliers may be a whole lot more strategic than they actually are. There is a fundamental power imbalance between supplier and buyer in many industries, where small organisations farther up the value chain struggle to dictate terms to large corporations looking to cut costs more than build meaningful long term relationships.
The five most important challenges for procurement teams to meet in 2024 and beyond, according to Amazon Business.
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It’s no secret that procurement is undergoing the same backroom-to-boardroom transformation (dare I say “glow up”) that the IT department went through over the last decade. If every business in 2023 is a technology business, then by the end of the decade, it doesn’t feel unreasonable to claim every business will be a procurement business.
However, with prestige and importance comes pressure. The modern procurement function already faces challenges, from supply chain disruptions and rising prices to the existential need to reduce emissions, which will only grow more complex as the discipline moves close to the forefront of the modern enterprise. It’s no wonder that, while Amazon Business’ “2024 State of Procurement” report found that the majority of procurement budgets (54%) were set to rise next year, an overwhelming number of respondents confirmed that their procurement functions are in need of optimisation.
With 2024 still in its first month, we’ve broken down the five highest priorities for procurement leaders to focus on over the next 12 months, as well as heading into 2025.
1. Retaining and developing existing talent
Lastly, even more important than attracting new talent, the number one priority for procurement teams in 2024 will be retaining the talent they already have, and developing those procurement professionals to marry knowledge of the business and industry with an understanding of new trends, techniques, and technologies.
2. Attracting top talent
A report released by Gartner in December found that more than 85% of procurement directors and executives believe that their teams contain “adequate talent” to meet the future needs of their organisations’ procurement function. The demands placed on procurement professionals are changing, as the adoption of new technologies make the profession more data-driven and strategically focused on business value creation than ever. An evolving profession means attracting new talent will be a vital priority for procurement leaders in the coming years.
3. Reducing purchasing costs
Cost was king before the pandemic and, while procurement teams may have more than just their bottom line in mind, it’s still one of the most important differentiators for the function. Not only is procurement a key driver of efficiency within the modern enterprise, but costs are rising across the industry, with Amazon Business reporting that “Costs and Budgets” were the leading risk factor facing procurement over the next two years.
4. Refining procurement practices across organisations
Even as a newly celebrated discipline with a greater role to play in the modern organisation, a key indicator of a successful procurement strategy is that, most of the time, other departments don’t know it’s there. A successful procurement function empowers other parts of the business to make purchases with autonomy, supporting them in making decisions that are compliant, efficient, and cost effective. Developing the procurement practices that create good procurement habits across an organisation—not just in the procurement department—will be a key priority for procurement teams going forward in 2024.
5. Building more resilient, agile supply chains
If the 2020 COVID-19 pandemic taught us anything it’s that disruption is not a matter of “if” but “when”. Global supply chains—driven almost exclusively by cost-cutting parameters for decades—were decimated by the pandemic, and in the wake of lockdowns it has emerged as hard-won wisdom that the procurement departments of the future need to look at more than cost when building a supply chain. In the Amazon Business report, 81% of respondents revealed that they have internal or external mandates to purchase from different types of certified sellers.
Blockchain promises added transparency and security for the procurement process, but are the benefits worth the price of admission?
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Blockchain—the decentralised ledger technology that powers cryptocurrencies and NFTs—could be an immensely disruptive force in the procurement and supply chain management sectors. We’re going to take a look at how blockchain might impact procurement, and whether it represents a meaningful innovation or if the costs outweigh the benefits.
Blockchain: the hype
Using a combination of different technologies, including distributed digital ledgers, encryption, asset tokenization, and immutable record management, blockchain creates an unbroken and tamper-proof (in theory) chain of information.
For example, storing the entire service history of a vehicle, the transaction history of a house, or the provenance of a piece of art on a blockchain theoretically renders it trustworthy and incorruptible. A potential buyer could review the timestamped information included on the blockchain and be confident in its accuracy. In principle, blockchain could reduce or remove the need for intermediaries in highly regulated and complex transactions—like real estate, for example.
“Have you bought a house lately? Imagine if you could have transacted with the seller directly, even though you had never met, confident that the deal would be recorded in a way that neither of you could change or rescind later,” write Gartner analysts David Furlonger and Christophe Uzureau, suggesting that “You wouldn’t have to reconcile rafts of personal information with a real-estate agent, mortgage broker, insurance agent, property inspector and title company” if you were making a transaction using the blockchain.
Furlonger and Uzureau suggest that record keeping and verification is just the beginning and, once developed and combined with other technologies (characterised by lots of hyper and limited real world applications) like artificial intelligence (AI), the Internet of Things, and the Metaverse, the real potential of the technology will be unleashed, creating “whole new social and economic constructs in the peer-to-peer age of Web3.”
Blockchain: the reality
In actuality, Blockchain outside of applications for cryptocurrency isn’t actually… very interesting? It’s certainly not new. Blockchain technology not used to underpin a cryptocurrency is just a distributed append-only data structure. Often there are some users that are allowed to make additions to the structure. In the real estate example used Furlonger and Uzureau, that might include the homeowner, a surveyor conducting an appraisal of the property, the utility company providing electricity and water to the house, and professionals hired to perform maintenance on the property. A private blockchain could collect and verify the history of a property like rings on a tree, and provide an authoritative account that is, in theory, free from tampering. The thing is, that sort of verification is called a consensus protocol, and they’ve been around since before the 1960s—as have append-only data structures.
The reality is that the new, shiny applications for blockchain aren’t actually very useful. Supposedly, Blockchain technology offers up a way to verify information (or conduct a transaction) without relying on an intermediary, or blindly trusting a third party. “Trust-less” is the phrase that gets thrown around a lot. However, the result is often that you’re just trusting the technology underpinning the blockchain over a human or a public institution.
Building trust
As Bruce Schneier pointed out in an article for WIRED, “When that trust turns out to be misplaced, there is no recourse. If your bitcoin exchange gets hacked, you lose all of your money. Your bitcoin wallet gets hacked, you lose all of your money. If you forget your login credentials, you lose all of your money. If there’s a bug in the code of your smart contract, you lose all of your money. And if someone successfully hacks the blockchain security, you lose all of your money.”
One glaring example was the 2019 case of cryptocurrency exchange CEO Gerald Cotten, who died while being the only person with the password necessary to access US$145 million worth of other people’s Bitcoin. Far from being trustless, it would seem the people who lost access to their money were placing their trust in a single individual who died, leaving them no physical or legal recourse to get their money back.
There’s also the very valid criticism of blockchain-based technology that it’s an environmental disaster. NFTs caught most of the heat for this over the past few years, but all blockchain-based technology needs to be stored somewhere in a constantly active server. As noted by the NASDAQ in a report from earlier this year, “The energy consumption of blockchain technology results in significant greenhouse gas emissions, which contribute to climate change.”
So, blockchain is bad?
Not necessarily. I, personally, will stake what reputation I have on the fact NFTs and cryptocurrencies are misguided and valueless gimmicks at best and insidious, cynical techno-cults (that burn fossil fuels more enthusiastically than the UV lights at the Bored Ape convention burned out crypto bros’ retinas) at worst.
However, remember the boring version of blockchain technology? The append-only data sets we talked about before may not be new or especially sexy, but they’re an element of blockchain technology that could be incredibly useful for the procurement sector.
Blockchains in procurement
The procurement sector has traditionally struggled with opacity. Sourcing goods—especially from overseas markets—through networks of distributors and middlemen can muddy the waters and conceal vital steps in the source-to-pay process. The origin of goods, labour practices, contact with modern slavery or deforestation, can all be concealed in a murky supply chain.
Tracing the progress of an item from its raw materials through to a finished product is “often a challenge for today’s supply chains due to outdated paper processes and disjointed data systems that slow down communication. The lack of data compatibility exposes supply chains to problems like visibility gaps, inaccurate supply and demand predictions, manual errors, counterfeiting, and compliance violations,” notes an AWS report. However, with blockchain, procurement and supply chain management organisations can “document production updates to a single shared ledger, which provides complete data visibility and a single source of truth. Because transactions are always time-stamped and up to date, companies can query a product’s status and location at any point in time. This helps to combat issues like counterfeit goods, compliance violations, delays, and waste.”
Global network
If the documentation of, say, a shipment of EV batteries, can trace a direct line from a lithium mine in Australia to a factory in China through a global network of suppliers, all the way to their arrival at a factory in Ohio, the procurement department sourcing those batteries can scrutinise every piece of the value chain much more effectively for quality control, potential counterfeiting, and ESG compliance.
It’s not as flashy as Dogecoin, but it’s actually useful, especially as corporations make efforts to divest major polluters or other parties with poor ESG practices from their supply chains in an effort to reduce Scope 3 emissions and stop propping up reprehensible practices like modern slavery and deforestation.
Next generation AI tools can offer unparalleled visibility into the sustainability of organisations’ supply chains.
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There are increasing pressures on procurement departments to be a driving force in their organisations’ sustainable goals.
The process of buying, shipping, and generally moving physical products about is one of the larger sources of carbon emissions for the modern enterprise.
For consumer companies, supply chain operations typically account for more than 80% of greenhouse gas emissions, creating “far greater social and environmental costs than its own operations”, according to a study by McKinsey. The environmental impact of a company’s operations, and their extent into Tier 2 and Tier 3 emissions, is also becoming a more prominent part of the conversation, making the decision of who to partner with and for what more pertinent to an enterprise’s sustainability goals than ever before—especially as T2 and T3 emissions become the target of new ESG regulation.
The path to sustainable practice is increased visibility into procurement practices, supply chain impact, and the supply chains of ecosystem partners. Increasingly, procurement teams are artificial intelligence (AI) for these insights.
Responsibly sourced startups
The demand for AI-powered sustainability in the procurement sector is already driving investment in promising new tools. The Copenhagen-based startup Responsibly was founded in 2021, and in October 2023 managed to leverage its work on AI-driven sustainable procurement tools into a $2.4 million funding round, aiming to further develop its project of “democratising access to sustainable procurement”.
The company combines an AI model with large data sets to allow users to analyse their suppliers and potentially take action to restructure their procurement practices. The data analysed relates to suppliers’ carbon emissions and links to deforestation, but also their gender pay gap, human rights records, and more. The company has already accumulated several high profile clients, including the CERN research facility.
Data-driven, sustainable decision making
The success (and sustainability) of a supply chain is, first and foremost, an issue of visibility. Decision-making to reduce carbon emissions, cut costs, and improve resilience is almost universally a matter of understanding the factors affecting what has traditionally been a very murky, complex, impenetrable system. Using AI to maintain visibility into upstream manufacturing, purchasing, and logistics channels is critical in a world where supply chains are more complex, and the critical eyes of regulators and other organisations within a company’s ecosystem are more prone to scrutiny, than ever before.
For any organisation looking to operate more sustainably—especially in a climate of net zero commitments and increased regulatory scrutiny—the next generation of AI models, powered by advanced analytics, intelligent algorithms, natural language processing, and real-time processing of huge data sets, represents a way to understand the source to pay process on a more granular level than was previously possible, and a path to making the necessary decisions for a more sustainable supply chain.
In a press release on Tuesday (January 9th), Sphera, which is a leading global provider of ESG performance and risk management software, revealed it has purchased the supply chain sustainability software firm.
Supply chain network
Founded in 2012 and headquartered in Santa Cruz, California, SupplyShift has built a supply chain network of over 100,000 suppliers, where buyers and suppliers engage and share information quickly in order to manage risk and facilitate supplier regulatory compliance.
The solution provides supply chain transparency and supplier mapping at any tier as well as data analytics, supplier scoring and traceability.
SupplyShift has customers and business partners globally, and the company’s portal is used by a variety of customers across industries, from worldwide retailers to Fortune 500 brands.
Growth journey
Paul Marushka, CEO and president, Sphera, said: “SupplyShift has seen tremendous growth with its software solution that allows for direct communication with suppliers and customers and enables the seamless collection of their Scope 3 emissions data, which helps suppliers improve their supply chain ESG performance.
“As more regulations are passed that demand transparency, the SupplyShift solution will become indispensable in meeting global regulatory requirements and stakeholder expectations. Bringing SupplyShift’s portal into the Sphera family will expand our current offerings and enable us to provide unparalleled Scope 3 and ESG tracking and reporting capabilities. We are pleased to welcome SupplyShift’s customers, colleagues and solution to Sphera and look forward to helping our combined customer base accurately track and report their Scope 3 emissions and be compliant.”
Alex Gershenson, SupplyShift’s CEO and founder, added: “SupplyShift was founded on the idea of leveraging software to drive sustainability initiatives, and for 11 years we have been empowering companies to understand their supply chain ESG risk and performance.
“We are excited to join the Sphera family and take data availability to a new level through the combination of Sphera’s industry-leading ESG data and SupplyShift’s Scope 3 data collection abilities. Through SpheraCloud, Sphera’s SaaS platform, and its LCA solutions, we can help even more customers track their Scope 3 emissions and manage their supply chain sustainability.”
Procurement teams are under mounting pressure to minimise disruption and contribute value to the business. Here’s how Generative AI could help.
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Across all industries, the unprecedented disruption caused by the COVID-19 pandemic, along with the “growing need for procurement to enable growth, mitigate inflation/risk, and drive significant levels of value” has, according to Deloitte’s 2023 Global CPO Survey, afforded businesses’ procurement function “a seat at the table.” However, with the recognition of procurement’s importance comes responsibility and, increasingly, pressure.
The procurement function of a modern enterprise is one of the final remaining frontiers where truly value additive transformations can occur. Cutting costs, identifying new efficiencies, and pursuing more sustainable practice throughout the supply chain are non-negotiable KPIs for all procurement teams.
Artificial intelligence (AI) and machine learning (ML) have long been a part of successful procurement and logistics strategies—automating manual and menial tasks, freeing up professionals to focus on more strategic objectives. The recent advent of generative AI, underpinned by natural language processing (NLP), pattern recognition, cognitive analytics, and large language models (LLMs), however, has the potential to support procurement professionals in new, more impactful ways than ever.
Here are our top X ways that generative AI can help procurement professionals deliver on the demand for smarter buying, more ethical sourcing, and the holy grail of an unshakably resilient supply chain.
1. Predicting Disruption
If the last three years have taught us anything, it’s that the supply chain is a fragile thing. Organisations struck by the pandemic that failed to adapt and recover as fast as their competitors are, at the very least, facing a harsher world today than they were in 2019, with many having been absorbed by more resilient, faster-moving competitors. Even with the pandemic behind us, its effects are still being felt, and disruptions are a fact of life.
In case of a disruption, procurement teams need to be able to identify and respond quickly—something only 25% of firms are able to do, according to Deloittle’s 2023 procurement industry survey.
AI tools bring a heightened ability to identify patterns and analyse large data sets to the procurement department, dramatically increasing procurement professionals’ ability to identify disruptions (both within the organisation and in the market as a whole) before they happen and adapt accordingly.
2. Textual Data Analysis
Artificial intelligence has been used to sift through large data sets for years, but Generative AI may allow the scope of those data sets to expand by orders of magnitude. The ability for ML-powered LLMs to analyse large amounts of unstructured textual data, such as news articles, social media posts, contracts, and customer feedback could create a wealth of new insight and recommendation generation opportunities to benefit businesses’ procurement functions.
Procurement professionals will have an additional angle from which to evaluate vendors, examine their compliance status, gather market intelligence, and assess risk. Unstructured text remains one of the great untapped data resources, and LLMs have the ability to convert that raw data into actionable insights for the procurement function.
3. Intelligent Recommendations
In addition to internal purchasing recommendations based on compliance, generative AI could also be used to create highly personalised, granular criteria for business buyers. An AI-powered buying tool could, for example, scrape hundreds of thousands of item listings, eliminating results based on millions of data points, to create proposed shopping carts for particular applications weighted by any number of criteria determined both by company policy and the buyer’s own preferences.
4. Automated Compliance
Generative AI’s ability to analyse large, unstructured data sets and draw complex, human-like conclusions from them that are then translated into insights and decision recommendations could be transformative for handling compliance in procurement.
A generative AI model could be used to monitor company-wide activity for anomalous or non-compliant purchasing behaviour—alerting the procurement department if an issue arises. In addition to creating more freedom for buyers outside the procurement function, and freeing up time within procurement that would otherwise be spent reviewing company spend for compliance, a Generative AI could be used to make intelligent spending recommendations in order to increase compliance with minimum spend contracts, for example.
Keith Hartley, CEO of LevaData, discusses why procurement’s golden age is now amid the rise of transformative tech solutions.
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“This is the golden age to be in procurement.”
Keith Hartley, CEO of LevaData, doesn’t hold back.
Similar to his passion for surfing, he is constantly on the lookout for the next challenge to tackle. The company he leads is an integrated, AI-powered supply management software platform that is transforming direct material sourcing by helping companies reduce costs, mitigate risk, and accelerate new product development.
Given the trajectory of the procurement function’s journey over the past 10 years, few could doubt the change the space has seen. Indeed, procurement was once a back-office function siloed out of sight, but today it stands front and centre in business operations as a key cog in the machine. Hartley recognises that while it is an exciting time, procurement is still a laggard and restrained. “I would say we’re woefully behind in procurement,” he admits.
“The function’s teams are typically not ones to raise their hand and demand the tools they need to do their job. If you’re a salesperson and you work in a Customer Relationship Management system, it’s a given you need a system to do your job, and if you’re in finance, it’s a given you need an ERP system. When you turn to procurement, there’s not widespread acknowledgement that you need a tool like LevaData to do your job.”
LevaData powers the smartest supply chains in the world by constantly analysing business objectives against real-time market activity and community intelligence. The company is trusted to deliver improved margins, control risks, generate new product velocity, and achieve multi-tier supplier engagement with purpose-built tools for quick collaboration and decisive actions. LevaData creates a competitive advantage with transformational and predictive insights. “What we are replacing are spreadsheets and emails, but some major companies are still 100% reliant on them,” discusses Hartley. “It’s an antiquated way of doing business. Macroeconomic shocks aren’t new, and obviously Covid was a significant one. With these shocks in the global supply chain, you must understand the impact on your specific business.”
Hartley speaks to how at the end of the day, companies still need to make a profit. “It’s about finding alternative sources of supply and buying the parts at the right price. These are challenges that don’t go away; in fact, they were heightened during Covid and have continued with ongoing geopolitical tensions. The reality is there are always macroeconomic shocks that cause supply to be constrained and prices and lead times to be variable. This has a direct impact on how organisations deliver results and drive revenue growth. Covid really heightened the need for companies to get this workflow in order, and that’s what LevaData has been addressing. The procurement people have been thrust into the light. If they don’t have the tools they need, then they’re stuck. The job is incredibly complex, and procurement needs all the help it can get in today’s world.”
The arrival of generative AI
As generative AI continues to emerge in conversations in procurement and beyond, its rise has caused much excitement within organisational structures. Indeed, OpenAI’s ChatGPT’s launch in late 2022 has only amplified this conversation, with many eager to harness the benefit of efficiency and cost savings as quickly as possible. But just because it’s new, does it make it right?
“It’s early days. It’s mostly hype so far in terms of how it’s being adopted and brought forward, but I’ve never seen a faster accelerated hype cycle than gen AI [has] right now,” explains Hartley. “LevaData is a leader in AI and is using it in two areas of our product. We’re still in the early infancy of AI and what it can do. We use AI to help us contextualise all the different data sources. We take over 154 data sources and blend them. This is data that doesn’t make sense together. Most data-heavy people tap out at about 12 or 14 data sources because the mathematics gets so complex. The complexity has kept the indirect procurement providers away from this space.
“The second part where we use AI is where we identify parts based on savings potential. There’s a lot of potential for the generative piece incorporating an even larger number of data sources. This is huge. AI is going to change a lot and will take some time, but I’ve never seen such a rapid hype around AI before.”
Procurement’s golden age
Looking ahead, Hartley is full of optimism and enthusiasm for procurement’s future and believes we are entering the “golden age.” “The best part is that we’re just at the very start,” he explains. “If you’ve been in indirect procurement for the past 50 years, you’ve been wowed by Coupa, JAGGAER and Ariba, as they have sold the world on the benefits of source-to-contract and procure-to-pay workflows. That works well for indirect procurement, when you are buying pencils, chairs and laptops in volume. But the more complex workflow of sourcing direct materials, the very materials that you turn into products to sell in the market, has largely gone unnoticed. Fortunately, companies have realised the direct sourcing opportunity, and started investing in AI-powered tools like LevaData.
“Legacy spreadsheets and email should no longer be the de facto standard for direct material sourcing. With the convergence of AI, big data, and analytics platforms, procurement professionals can be the heroes they and their company deserve. The next decade is going to be a wild ride in procurement.”
At DPW Amsterdam 2023, we chat with procurement leaders to find out why the conference is regarded as one of the most influential tech events in procurement today…
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Koray Köse, Chief Industry Officer, Everstream Analytics
“When you go to events that are this disruptive that are actually giving you an environment like a concert where people have a very positive vibe, that’s when the best experiences are shared and people open up. If you listen, you now understand what the real challenges are. If you’re at a conference that is very formal, then you get a very different feeling. It is the casualness of DPW that helps the authenticity of every company and its challenges.
“It’s a unique environment where you get very authentic, bold, blunt, but truthful statements of perception of actuals, desires, future vision, and also conversations about how can we as a community do things differently? How can we as potential future partners do things differently? And how can tech concatenate value and how can we actually now do that in a partnership with companies that we don’t even consider clients at this point? They’re not clients, but they share exactly what they want and those are benefits.
“I think it’s almost like an incubator environment because a lot of ideas are formed here. Lots of connections are made and a lot of deals for vendors are done too. You look at the floor and there are about 120 vendors all here for the same reason, it’s amazing. To get that concentrated over 48 hours, a lot of people will walk away and need to process what happened and the conversations they had. Then we look forward to next year.”
Koray Köse, Chief Industry Officer, Everstream Analytics
Ashwin Kumar, Vice President, GEP
“DPW has given me some insight into what kind of options there are. Sometimes I go through the booths and I see two solutions and question how they’re different. At first, I think they’re doing the same thing. And then once they start explaining, you find out the nuance. Now I understand this may not be applicable for this client of mine that I’m working with maybe this is for a company that’s growing at 30%, not for someone who is already there and growing at 2% or 3%.
“I think that way DPW has helped me understand how do you stitch different things together and then take it to a client and say, ‘this is the ecosystem you need at this point in time. It could change in six months, or three months, we don’t know. Go with it for now and you don’t have to worry about being married to that solution for too long.’”
Ashwin Kumar, Vice President, GEP
Kathryn Thompson, Partner, Deloitte
“I think DPW shows us the art of the possible in digital procurement. It shows us if you were unconstrained and you could do anything, what would you choose and build? You don’t have that in some of the other tech conferences that are a bit tied into an infrastructure they need to build. I love this what if idea we have here. I think it’s fabulous we have this confluence of organisations that need these tools, all the different startups and solutions to bounce ideas off and work out the future. DPW has real energy and passion like no other. You must get your message across in three minutes or it’s gone, that passion is brilliant because there’s nothing similar.”
Kathryn Thompson, Partner, Deloitte
Scott Mars, Global Vice President of Sales, Pactum
“This to me, especially for Europe, is the premier procurement technology event. All the main vendors, our competition as well as our peers are here. There’s many CPOs in attendance alongside procurement and digital transformation leaders so for us as a vendor, it really is a great audience. We love having the ability to network with our peers or other vendors, potential partners and these procurement leaders and visionaries so it’s definitely a great opportunity to do that. It is certainly one of the best procurement events I’ve ever been to. They do a great job here at DPW.”
Scott Mars, Global Vice President of Sales, Pactum
Karin Hagen-Gierer, Chief Procurement Officer, Scoutbee
“Whenever I go to conferences, I get to see the latest technology exhibited. I can have conversations with many people in a very short period of time. Number two, for me as a CPO, I come here as well to meet my peers and have good conversations. Amsterdam is always a good place to come and maybe combine business with pleasure.”
Karin Hagen-Gierer, Chief Procurement Officer, Scoutbee
Gregor Stühler, CEO, Scoutbee
“Procurement people are incredibly busy and getting a hold of them is quite difficult. Having them all in one spot is super helpful. One key challenge for procurement software providers is that the buying centre is not the same. If you sell sales software or whatsoever, it’s usually the same buying centre. You approach the Chief Revenue Officer or something like that. In procurement, it’s not always the CPO that decides on the tech. But DPW is filtering out and attracting the talent that is making those tech decisions and it’s extremely valuable for the startups and for the tech companies as well.”
Gregor Stühler, CEO, Scoutbee
Alan Holland, CEO, Keelvar
“This event has actually been a catalyst for some of the transformation we’re seeing in procurement. Matthias and his team have grown together best-of-breed vendors and they realised early on that change is afoot and legacy systems are going to become part of the history of the space. He embraced these vendors which are coming up with exciting new developments and provided us with a venue to put our best foot forward and present ourselves to other large enterprises with an appetite for understanding what innovation was required. We’re very grateful to Matthias, we’ve worked with him from day one and we think he’s done fantastic work here.”
Alan Holland, CEO, Keelvar
Prerna Dhawan, Digital Lead, Procurement, The Smart Cube
“I think DPW raises the profile of procurement. DPW has elevated the function because procurement is no longer seen as the industry that thinks of digital at the end. It’s not a laggard anymore. I attended the first DPW event pre-Covid and thought it was brilliant then but it’s got bigger and better since. We talk about this in procurement, you get innovation from your suppliers but if you think about innovation when it comes to technology you have to be open to talk to vendors and that doesn’t happen in other conferences the way it does here. I think DPW has created that platform for learning from each other to happen.”
Prerna Dhawan, Digital Lead, Procurement, The Smart Cube
CPOstrategy explores this issue’s big question and uncovers what the impact of gen AI is in procurement.
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The true possibilities of what can be achieved via AI is still being unearthed.
Indeed, the influence of new technology will only grow from here and new digital tools are being introduced all the time.
When it comes to generative AI, there is perhaps a misunderstanding that it is a new innovation. But the history of gen AI actually dates back to the 1960s. Among the first functioning examples was the ELIZA chatbot which was created in 1961 by British scientist Joseph Weizenbaum. It was the first talking computer program that could communicate with a human through natural language. It worked by recognising keywords in a user’s statement and then answering back through simple phrases or questions, in likeness to a conversation a human would have with a therapist. While ELIZA was seen as a parody and largely non-intelligent, its introduction has paved the way for later advancements in Natural Language Processing (NLP) and the future of generative AI.
Fast forward to today and the gen AI conversation and wider tech landscape looks very different. In late 2022, OpenAI launched ChatGPT – technology which has shaken the procurement function and beyond. ChatGPT interacts in a conversational way with its dialogue format making it possible for users to answer follow-up questions, admit mistakes, challenge incorrect answers and reject unsuitable requests. As such, the chatbot has created quite a buzz which has been felt across the globe.
Generative AI’s misconception
Speaking to us exclusively at DPW Amsterdam, Gregor Stühler, CEO at Scoutbee, believes there are some misconceptions around ChatGPT and the nature of how accurate the data it provides actually is. As is the case with any new technology, these things take time. “It’s always the same. It happened with electric cars, nobody thought that would solve the battery issue,” he discusses. “I think we are right at the peak of the hype cycle when it comes to those things and people have figured out what they can use it for. With wave one of gen AI, it is fine to have hallucinations of the model and if something is spat out that is not supported by the input.
Gregor Stühler, CEO at Scoutbee
“But by the second use case, hallucinations are not okay anymore because it’s working with accurate data and should not come up with some imaginary creative answers. It should be always supported by the data that is put in. This is very important that people understand that if you train the model and if you have the right setting, those hallucinations will go away and you can actually have a setting where the output of the model is 100% accurate.”
Data security
Michael van Keulen, Chief Procurement Officer at Coupa, agrees with Stühler and despite obvious benefits such as time and cost, he stresses caution should be used particularly when it comes to valuable tasks. “If you look at ChatGPT, it’s fine if you’re looking for recommendations for something low-risk. I need something for my wife’s birthday next week, you input three things that she loves and ask it to help. It’s great,” he tells us. “But it comes from data sources on the web that aren’t always governed, controlled or trustworthy. It’s whatever is out there. What about the algorithms that come with ChatGPT? I don’t know what’s influencing the search criteria. On Google, if you pay you are at the top of the search bar. But I don’t know what ChatGPT is governed by.”
Michael van Keulen, Chief Procurement Officer at Coupa
Managing data leakage
Danny Thompson, Chief Product Officer at apexanalytix, explains that one of the biggest challenges with generative AI is being aware of a leakage of sensitive information combined with a contamination of important data. “We have a database of golden records for 90 million suppliers who are doing business with Fortune 500 companies and that is the best information we’ve been able to accumulate about the suppliers and their relationships as a supplier to large companies,” he tells us.
Danny Thompson, Chief Product Officer at apexanalytix
“We want to make sure we’re not loading sensitive information into a generative AI function that might allow just random people to access that data. Ultimately the customers in the space that we’re operating in are serious companies moving around large amounts of money and facing real risks that they have to manage. It’s really important that the data that they have is either highly accurate or at least they understand the degree to which it’s accurate. This means if you’re using the solution that you don’t understand the level of trust you can have in it, then you shouldn’t be using it yet.”
Can generative AI bridge the talent shortage?
Amid talent shortages in procurement, there are some sections of the procurement space questioning to whether AI and machine learning can plug the gap and reduce the necessity of recruitment. Naturally, this raises the debate of whether robots will replace humans. Stefan Dent, Co-Founder and Chief Strategy Officer at Simfoni, adds that while AI and machines won’t replace humans, it will mean people will need to find new forms of work and take on higher-value roles.
Stefan Dent, Co-Founder and Chief Strategy Officer at Simfoni
“The shape and structure of the modern procurement function will change quite dramatically and people will need to upskill,” he discusses. “A lot of the work will be taken over by the machine eventually either 20%, 50%, and then a hundred percent. But the human needs to have that in mind and then plan for that next three to five years. The procurement function of the future will be smaller, and they should purposely be doing that, to then look at solutions to find a way to enable it to happen naturally.
Future proof procurement
“For someone who’s joining procurement now, you’ve got this great opportunity to embrace digital. Young people can question ‘Well, why can’t it be done by a machine?’ They’re coming in with that mindset as opposed to fighting being replaced by a machine. I think for graduates coming into procurement, they’ve got the opportunity to play with digital and actually change the status quo.”
As we look to the future, gen AI and new forms of technology will continue to change the world and the way we work. In the short term, work is expected to continue to upgrade the user experience and workflows through gen AI in order to build greater trust for the end user. As transformation continues to happen, businesses and wider society must embrace new types of AI to thrive and stay ahead of the latest trends. The potential that gen AI tools possess is expected transform the workplace of tomorrow while delivering value-add such as time and cost savings on a day-to-day basis.
Given the speed of evolution and development, it is yet unimaginable exactly what form the digital landscape will take in years to come. However, that horizon brings with it fresh opportunity and excitement revolving around a whole new world of technology at our fingertips. The future is digital.
RPA promises increased efficiency, lower costs, and an end to staffing issues, but can procurement teams implement successfully?
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Though it’s less frequently associated with automation than its more robot-friendly cousin logistics, procurement is a discipline that’s undergoing a radical transformation.
“Your new procurement employee will work 24/7, never call in sick, rarely make mistakes,won’t complain, and never ask for a raise. Of course, this is not your typical worker, but a procurement software robot—or bot.”
Although it reads like the opening paragraph of an abandoned Nanowrimo project started by someone who’d just finished I, Robot, I assure you this report released in 2020 by consultancy KPMG is an entirely serious endeavour. Although the global clamour to replace employees with robots may have died down a little now that a few million professionals have been dragged kicking and screaming back to the office, the benefits that automating elements of the procurement function could deliver are hard to deny.
RPA is big business and isn’t going anywhere. In 2022, the global robotic process automation market was estimated at $2.3 billion. It’s expected to grow at a CAGR of 39.9% between this year and the end of the decade.
From multinational corporations to the US Department of Homeland Security, robotic process automation (RPA) is emerging as a popular way to manage complexity within a large supply chain, automate repetitive tasks, and enhance the capabilities of a procurement department. The US DHS’ procurement department, for example, spent just under $24 billion across about 60,000 transactions in 2022, and is increasingly handing the responsibility for contractor responsibility determinations, as well as automating tasks for the Customs and Border Protection—allegedly cutting jobs that took an hour down to just a few minutes.
As KPMG’s report stresses, “leveraging procurement bots is the next logical step as organisations look to benefit from advancements in digital capabilities.”
RPA adoption in procurement—the Benefits
Added visibility
Improved efficiency
Reduced costs
Large amounts of traditional procurement processes involve repetitive tasks like requisitioning, purchase order management, checking compliance, andanalysing spend, supplier onboarding, and more can be automated using an RPA bot. This is not only because RPA is getting smarter, but also because businesses’ procurement functions tend to be more consolidated within a single platform that is more closely integrated with the business in a modern enterprise. In a sufficiently digitalised system, there’s little to stop RPA from creating efficiencies by eliminating menial tasks.
Likewise, by integrating RPA into a company’s enterprise resource management (ERP) platform, it gains access to vast amounts of data that can then be tracked, analysed, and used to draw insights faster than a human could hope to tackle the same task. Most modern supply chains comprise several different pieces of specialised software, and making each one talk to one another smoothly can create serious pain points for procurement teams, but RPA can do a great deal to smoothe over the cracks.
RPA Risks and How to Overcome them
Data exposure
Lack of oversight
Misguided direction and overspend
As mentioned above, RPA works best when fully integrated into as much of your system as possible, with access to as much data as you can feed it—especially with modern RPA using AI to make more and more intelligent decisions based on raw and unstructured data sets. Obviously, this creates a potentially huge, glowing weak point in your company’s cyber security framework. Because RPA bots replace human workers, they need access to the privileged information that humans have, and those bots are just as—if not more—vulnerable to attack.
RPA bots can automate a great deal of tasks, but it’s easy to lose track of the fact that they’re just bots and, without proper oversight and direction, they could create inefficiencies, security flaws, and breach compliance—all costly problems, especially if the typically costly technology fails to address the original inefficiencies or issues it was bought to resolve.
Automating procurement processes could undeniably lead to increased efficiency, lower costs, and a more resilient procurement function, but only if implemented with intentionality, and given proper oversight once up and running.
Wary of overdependence on overseas suppliers, the South Korean government is investing heavily in increasing the resilience of its public procurement process.
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The South Korean government announced last month plans to establish a commission to oversee and coordinate plans to make the country’s procurement process more resilient. This announcement comes on the back of concerns over the vulnerability of South Korea’s “critical industrial” supply chains.
A state-backed fund expected to exceed 5 trillion won ($3.79 billion) is being set up to “secure stockpiles of critical supplies and support investment in relevant businesses and facilities”, with a long-term goal of divesting Korean industries from overdependence on procuring materials from single country suppliers.
Specifically, urea (like ammonium phosphate used in fertiliser manufacturing) and graphite (used in the production of batteries for electric vehicles) are both considered critical materials for Korean industrial activities, and supplies of both originate almost exclusively from China.
An Editorial published in the Korea Times noted that a recent export restriction of urea product shipments from China has caused a spree of panic buying. “What matters is that China accounts for 95 percent of Korea’s ammonium phosphate imports. Desperate to cope with a growing sense of crisis especially among farmers and relevant industries, the [Korean] government came up with a package of measures designed to secure key materials on a stable basis.”
The government will procure a reserve of 12,000 tonnes of urea in order to create a 130 day buffer to safeguard against future disruptions.
The way ahead
At a meeting of the new commission on Monday, Korean Finance Minister Choo Kyung-ho commented that “Recently, supply chain risk factors for items directly related to core industries and people’s livelihoods—such as urea, diammonium phosphate and graphite—are increasing,” suggesting that devising a national procurement strategy less reliant on Chinese exports would be essential, given the fraught economic and political histories between the countries.
Moving forward, the commission said it would designate materials and items for intensive monitoring, selected from among 200 options identified as being of critical importance and potentially vulnerable to supply chain disruption by a government study conducted in 2021. Magnesium, tungsten, neodymium and lithium hydroxide were included in the previous listing. In addition to urea products, the Korean government is expected to increase its stocks of graphite, 90% of which comes from China.
Protect your procurement function in the year ahead by avoiding the biggest risks on the industry’s radar.
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The last few years have seen unparalleled disruption to the source-to-pay process, from resource shortages and pricing hikes, to new regulatory restrictions and changes in consumer tastes. In the Amazon Business 2024 State of Procurement report released in November, researchers point out that “Many of the top risks … have the potential to disrupt procurement operations with little warning, underscoring the need for preparedness.”
1. Rising Costs and Inflation
The past year has been defined by runaway inflation in the US and beyond, and while it has translated into record corporate profits (researchers estimate now that corporate profits are responsible for around 60% of inflation, following a Kansas City study in 2021) it has been biting from the supplier side as well, with the price of everything from materials to labour rising over the last 18 months. Procurement teams should analyse their budgets and plan accordingly, in order to ensure they can secure the goods and services the business needs without compromising cost containment.
2. Supply Chain Volatility
War, genocide, unrest, and other sources of market volatility can smash a supply chain overnight. The procurement process works best when things are reliable, consistent, and predictable. The very best procurement teams know that this is a fantasy, and that geopolitical, economic, and environmental changes can all contribute to risk that needs to be met with agility and resilience.
3. (Failed) Technology Disruption
From self-driving cars to the metaverse, the last few years are littered with more examples of technological megatrends that failed to disrupt anything or really even materialise than a Phoenix, Arizona parking lot is littered with Waymo crash test dummies. Failing to adopt new and disruptive technology is a risk to your business, but overspending on hype is a much easier trap in which to stumble.
4. Cybersecurity
Data remains one of the most precious resources on the planet, and with the rise of generative AI sparking fresh debate over intellectual property and privacy, organisations will need to be more mindful of their data than ever before. This isn’t unique to procurement, but it remains a function of the business that has a lot of contact with the outside world, especially third party organisations soliciting contracts. Procurement staff should receive regular cyber security training and departments should conduct regular risk assessments in order to avoid presenting an easy target.
5. Increased Regulatory Pressure
Despite the lacklustre Cop28, record profits for the oil and gas industries, and all signs pointing towards a failure to prevent an era of “global boiling”, regulations got a little bit stricter for corporations in the last few years. Compliance will become an increasingly challenging target for corporations to hit as the decade continues. Procurement teams—as functions with some of the biggest sway over scope 3 emissions—will play a large role in keeping their organisations on the right side of the regulations, and could even be a big part of meaningful sustainability-focused change.
6. The Skill Shortage
As procurement becomes a bigger driver of innovation and profit margins for organisations, the gaps between existing skills and future requirements are showing wider and wider. Five out of six procurement leaders don’t believe they have the talent on tap to meet the challenges of the near future, and the increasingly digital-first, strategic nature of the role threatens to place demands on existing functions that they never expected to face.
Procurement leaders who recruit, develop, and retain skilled professionals will have a profound leg up over the competition in 2024 and beyond.
Procurement has the potential—and the responsibility—to go beyond switching out plastic straws for paper in the quest for Net Zero.
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Across the public sector—and increasingly in the private sphere as well—organisations are committing to the necessity of a net zero future. While emissions reduction efforts often begin with scope 1 and scope 2 emissions, analysis of holistic environmental impacts in supply chains often expose scope 3 emissions as being the source of as much as 90% of an organisation’s greenhouse gas emissions.
With the majority of an organisation’s carbon impact originating outside the organisation itself, it increasingly falls to the procurement function to make intelligent, sustainability-motivated decisions in order to draw down indirect emissions and foster a culture of sustainability within their supplier ecosystem.
However, while investment in increasingly sustainable source-to-pay processes is rising, many procurement teams describe the pursuit of net zero as a serious challenge. In Europe, companies earmarked an average of 27% of their total investment budget into improving sustainability this year, a 16% rise in sustainability investment.
Nevertheless, more than 43% of companies surveyed in a recent report had not set a net zero goal, and, within the 32% of organisations with a net zero target of 2030, many procurement professionals reported that “limited data, complex supply chains, and limited control over supplier emissions” presented serious obstacles.
The report notes that, while “procurement organisations firmly have net zero on their agenda,”, other factors like the need to keep costs low are impeding their efforts. Another report by the World Economic Forum—this time focusing on public institutions as drivers of sustainable procurement—also acknowledges the trepidation with which public and private sector organisations view the possible costs of pushing for net zero.
However, the WEF notes that “Pursuing net-zero goals in public procurement will boost the green economy,” estimating that “the private investment and new jobs triggered by greener public procurement, in aggregate, will boost global GDP by around $6 trillion through 2050 – a significant proportion of the green economy’s total GDP of $70 trillion.”
While the short term might represent an increase in costs, the long term benefits for organisations that manage to drive a successful net zero green transition, both in their own organisations, and supply chains, will be substantial. Adopting procurement practices that require green certifications from suppliers (even subsidising green activities within their ecosystems by paying higher prices for suppliers who can demonstrate their green credentials) can drive meaningful reductions in the scope 3 emissions for organisations throughout both the public and private sectors.
Incorporating SEO techniques into your procurement strategy can empower and optimise your organisation’s source-to-pay process.
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In the wake of the COVID-19 pandemic, digital transformation has emerged as a more critical strategic goal for procurement executives than ever.
Now, resilience, agility, and visibility have become vital qualities of the modern procurement function alongside the drive to lower costs and increase speed. Integrating a digital-first approach into more stages of the procurement process can, according to a Gartner study, lead to a 20% increase in revenue and a 50% reduction in process costs.
However, digital transformation needs to be considered and intentional—haphazardly adopting new tools and processes for the sake of something new and shiny will cost more than it saves, and cause more problems than are solved.
One highly effective form of digital transformation that’s often applied outside of the procurement process is search engine optimisation (SEO). Applied to the procurement function of a business, SEO techniques can help buyers reach either a wider pool of suppliers, or a more specific set of suppliers more tailored to their needs—or both, as necessity dictates.
SEO has a lot of potential to help automate routine procurement operations, allowing for procurement staff to focus on more strategic objectives and partner relationship management. Supplier discovery, as well as other elements of sourcing, can be automated with an SEO integration, and the correctly optimised online presence can be used to attract suppliers.
Four steps to SEO optimisation in procurement
Know your terms. By identifying the key phrases and terms associated with your business and objectives, you can start to define an SEO strategy.
Embed your terms. Take your chosen SEO terms and ensure they are a part of your brand identity across existing websites, social platforms, etc.
Create content. White papers, blog posts, and media placements all increase your visibility and presence within the procurement sector.
Assess, Adjust, Optimise. Constantly measure your engagement, work to understand your suppliers and partners, and iterate improvements of your strategy in response to results and the changing context of the marketplace.
By implementing an SEO strategy, procurement teams move beyond the confines of their immediate ecosystem, casting a wider net that can lead to increased competition between suppliers, lower costs, and access to new goods or resources that may have significant knock-on benefits for the business at large.
As AI continues to emerge in a big way, Vicky Kavan, Vin Kumar and Nicolas Walden explores what the AI opportunity is in procurement?
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Procurement is a hard function to impress. Other parts of the business can afford to get carried away now and then, but not procurement. Everything in procurement comes down to finding value and then making sure you don’t overpay for it.
Artificial intelligence (AI) might seem like just the kind of emerging new technology that procurement would shy away from. But, as many procurement leaders already understand, this would be a big mistake. In our work with the world’s largest companies, we see two kinds of major emerging AI opportunities you won’t want to miss. The first group – how we execute our procurement using, for example, new autonomous sourcing systems – can save millions today. While the second – the advent of AI-driven automation and enhancements across almost every industry and areas of spend – will help save you even more tomorrow.
Savings today
In terms of the impact of AI, procurement executives predict that supply market intelligence (50% of respondents), contract management (43%) and bid optimization (37%) will be some of the greatest opportunity areas for AI technology.
Despite this, and even as most AI and generative AI systems remain pilot projects, autonomous sourcing systems are already transforming how procurement functions operate at large multinationals. Many procurement executives have told us that they find these systems, which can automate execution in either tactical or strategic areas and provide enhanced decision support, extremely valuable:
Clients tell us these systems are helping them reduce cycle times dramatically – from months to weeks or weeks to days – and cut costs by 10% or more. Supplier discovery? Shorter. E-sourcing? Shorter. Contract development? Shorter. While it is in the early days, time savings of 30% or more can be possible.
When MTN Group, an African multinational telecommunications giant, installed its Procurement Cockpit platform, the system paid for itself in four weeks because the AI-enabled software quickly identified new opportunities, consolidated pricing insights from around the sprawling corporation and accelerated negotiation preparation.
These systems are now making themselves useful across a range of sectors. Procurement executives at a major U.S. retailer, major European telecom and major European energy company all told us that these systems have saved time and money. Use cases include replacing the need to write detailed requirements, sourcing questions and even contracts through the use of modified templates through to tactical price negotiations.
Strategic drive
From strategy to insights, sourcing and negotiating – to contract drafting and supply risk management – AI-enhanced systems will make procurement faster and simpler. Although feature sets and value propositions vary from vendor to vendor, promising autonomous sourcing systems fundamentally change how technology engages with stakeholders using chatbot-style interfaces to summarise requirements as an output of discussions; search and identify providers of products based on a variety of market, process and business considerations; prepare request for proposals and contracts; and maintain a higher degree of compliance with regulations. Some of these systems can even execute simple one-round negotiations. At the moment, Globality, Fairmarkit and Pactum (for negotiations) are three of the biggest names in this space.
Savings tomorrow
Eventually, we expect that AI-enhanced functionality is likely to yield major cost savings in almost every spend area, business function and industry sector.
Contact centres or marketing services, for example, could already send out automated posts and even voice responses that mimic the voice of your choice. A travel agency might be able to supplement human customer service with a robot concierge, making it possible to achieve a much greater level of service than ever before. Such changes won’t happen immediately – implementing them is not a quick win – but AI enhancements will be a huge source of value and service improvements down the line.
Category managers, be advised: the general consensus among purchasing executives we polled recently is that fleet, digital tech, advertising and general equipment are the categories that will benefit most from AI-enabled technology.
Of course, as with most powerful tools, AI-powered services also create new sets of potentially considerable risks. For example, you will need to make sure that your contracts are clear about what your vendor can do with your data – can it be aggregated in a large language training model? If that model leads the company to develop a more advanced service, do you want to be compensated for your contribution? Are you covered for potential liabilities if you transfer customer data to your AI vendor and your customer’s information is somehow revealed? If you work with an AI vendor and create intellectual property on its platform, who owns that new product? There are many new angles and issues that you will need to consider.
Looking ahead
Over the next five to 10 years, AI is likely to transform many aspects of business, including procurement. Based on The Hackett Group’s analysis of 44 Level 2 processes across the source-to-pay, end-to-end process – for a company performing at the median of our database – there is a potential to reduce staff by up to 46% over the next five to seven years.
Clients have told us they see digital technology (including AI) as the most transformative trend facing procurement in the next few years (71%) – more important than data (51%) or environmental, social and governance, and sustainability (47%). For procurement professionals, how the work is done and where they will find value are both likely to change dramatically. Given the speed with which we expect these opportunities and their attendant risks to develop, now is a good time to start thinking about the opportunities AI can create for your team.
Just how much of the procurement process can be automated, and who does it help?
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It’s hard to argue that 2023 will be remembered as the year that generative AI exploded into the public consciousness. Image and text generation in the form of ChatGPT and Midjourney ignited excitement, controversy, contempt, and a fervour to adopt in equal measure. The generative AI industry is predicted to be worth more than $660 billion per year by the end of the decade.
But while there’s no denying that generative AI will be a part of the economic landscape of 2024 and beyond, it’s not yet clear what that will look like. More importantly, it’s no guarantee that generative AI will, uh, generate any ways for the technology to make back the hundreds of billions already spent to develop it.
It wouldn’t be the first major trend to be backed to the hilt by big tech firms, only to dissolve into nothingness like that racoon who drops his cotton candy in a puddle. In stark contrast to 2022, this year’s tech roundups and trend predictions have put a conspicuous lack of emphasis on the metaverse. Now, to be clear, the fact that Yahoo Finance calculated that “Mark Zuckerberg’s $46.5 billion loss on the metaverse is so huge it would be a Fortune 100 company” is great news for those of us who didn’t want to spend our thirties attending meetings in a glowing virtual mallscape surrounded by cutesy, animated versions of our bosses and coworkers. Huge relief. It’s also quite funny. More relevantly to the topic of generative AI is the cautionary tale that, unless big, expensive technological developments can be monetised, they will disappear.
So, how do we monetise generative AI?
How to make generative AI useful
Technology is most valuable when it solves problems, and saves time and money, or at least improves people’s quality of life—when there’s a measurable benefit of some kind, sometimes to humanity, and usually to shareholders. That’s the stuff that sticks around.
While its applications and capabilities—especially when it comes to creative tasks or just the ability to make something actually original—are limited, generative AI may actually be a good fit for the procurement sector, potentially solving a major issue the industry is currently experiencing.
Generative AI and the Procurement Skill Shortage
The procurement sector is short on talent—with five out of six procurement leaders claiming they will lack skills, staff, and other vital human resources in the near future. This is the case for several reasons, but primarily: an ageing workforce is starting to retire faster than new hires can skill up; also, the requirements of the job are becoming more technology centric as procurement digitally transforms, leaving departments underskilled even if they’re no understaffed; and lastly, the amount of work for procurement functions is increasing overall, as it becomes more of a driver of business efficiency and innovation.
If generative AI could be used to reduce procurement teams’ workload by automating certain aspects of the job, it could be a key piece of the puzzle when it comes to solving the skill shortage.
Retail giant Walmart has been successfully running pilot projects using its AI-powered Pactum solution to automate supplier negotiations. According to Deloitte, not only did Walmart find it “helpful for landing a good bargain, three out of four suppliers prefer negotiating with AI over a human. This strongly indicates that the ecosystem is ready to embrace this disruption.” While I’m not sure if this example is an endorsement of AI or an indictment of Walmart’s procurement team, the ability for generative AI to take over routine communication, negotiation, and other interactions in the source-to-pay process could free up huge amounts of time to focus on more strategic activities.
Gen AI’s future
It’s not hard to imagine that both buyers and suppliers could input their desired results and parameters into a generative AI negotiator and outsource the relationship management entirely. Out of curiosity, this morning I set up ChatGPT in two windows and had it conduct an RFP, tender negotiation, and sale agreement for the sale of an order of self-sealing stem bolts between O’Brien Enterprises and Quarks. It was a very civil, if slightly roundabout affair, and everyone seemed to come away happy—hacky business journalists especially.
Goofy demonstrations aside, there’s real potential for significant elements of routine communication and relationship management in the procurement process to be automated, or at least assisted by generative AI. If correctly combined with data analytics on contextual information ranging from weather patterns, commodities pricing, and supplier behavioural history, a generative AI could offer useful insights to procurement professionals while its generally low threshold for usability allows less tech-savvy procurement professionals to harness more powerful digital tools.
How Big Data can increase resilience, mitigate disruption, and help procurement teams spot danger before it’s too late.
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In the procurement sector, successfully managing risks while achieving your other strategic objectives is what sets a successful procurement function apart from those that can expect to experience disruption. Today, however, procurement teams face greater risk than ever before as supply chains become more complex, ESG goals become more ambitious, and the parameters for compliance get narrower.
Technology—powered by artificial intelligence and big data analytics—is radically digitalising the procurement process. While this has the potential to increase efficiency, revenue, and accelerate the procure-to-pay process, it has also driven complexity. Luckily, digital transformation also holds the key to managing this complexity. Digital tools, powered by artificial intelligence and machine learning, can tackle larger and more complex amounts of information than ever before. These analytical tools and their more powerful capabilities in turn have seen viable data sets balloon to include vast quantities of structured and unstructured data from throughout the supply chain, gathered together under the umbrella of Big Data.
Data source
Big Data, in gathering together vast amounts of information about every aspect of the source-to-pay process, in addition to broader contextual information ranging from economic instability to weather patterns, can help procurement professionals build up a more comprehensive, nuanced understanding of their procurement process than ever before. The level of visibility is unprecedented, even in a sector where supply chains are more complex than they’ve ever been.
Complex supply chains are more prone to disruption. More moving parts and longer distances to travel mean higher likelihoods of things going wrong. Michael Higgins, founder and CEO of Clutch, wrote recently that “risk is inherent at every step of the supply chain, from moving raw materials to manufacturers and between manufacturers and the distributor,” adding that “The added value of big data analytics is predicting potential disruptions, giving procurement managers time to make intelligent decisions.”
Procurement transformation
Advanced analytical tools can be used to track the weather, potential disruptions to agricultural or construction operations, political unrest like demonstrations or riots, and changing legislature that may affect everything from compliance to price. Because Big Data analytics are increasingly capable of collecting and analysing all of these factors and more, procurement professionals have the capacity to counteract sources of risk that traditionally would have seemed as inevitable as an act of divine wrath.
The risks to a supply chain are really representative of risks to your suppliers and their networks. Big Data analytics is also granting insight into the workings of—allowing a huge number of variables tied to each supplier to be tracked and used to make decisions. The result is a more agile and reactive procurement process that can analyse and respond to data analytics in real time, as opposed to trying to make best guesses based on past results and limited human judgement.
Procurement is truly transforming from the back office to the boardroom—becoming more strategic, digitally empowered, and complex than ever before—and Big Data analytics are increasingly a vital part of the function within the modern source-to-pay process.
Jamie Ganderton, Vice President at Proxima, examines the future of sustainable procurement going into 2024.
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As we step into a new year and inch closer to the global sustainability targets set for 2030, the spotlight on sustainable procurement will only continue to intensify. The aftermath of COP28 has placed an even greater emphasis on the role that large corporations play in global decarbonisation. This, coupled with incoming rules and legislation across Europe and the United Kingdom, such as the European Corporate Sustainability Reporting Directive (CSRD), has underscored the critical need for agile and proactive approaches to corporate sustainability action.
The Scope 3 Benchmark, a tool developed to enable organisations to collaborate to advance progress on sustainability targets, has shown that Scope 3 still remains a challenge and 2024 will be a pivotal year in addressing some of the fundamentals as we move within just two short contract cycles away from 2030. Looking ahead, the focus will sharpen on bridging the gap between sustainability objectives and procurement strategies, with an emphasis remaining on translating lofty sustainability goals into actionable procurement strategies. As we navigate 2024, collaborative advancements, data-driven insights, and the proactive evolution of procurement practices will be critical drivers, propelling sustainable procurement into a new role of implementing purposeful action.
Embedding sustainability targets into procurement strategies
Whilst it seems like an obvious starting point, many procurement teams have not yet fully embraced the need to translate sustainability requirements into procurement strategy. Even for those that have, challenges remain to translate sustainability language into effective procurement strategy. There is a tendency for organisations to panic and jump straight into supplier engagement, without first planning who they are going to engage and what are they going to need from them.
The goal for many in 2024 should be to plan out how the next six years are going to look and begin progress as soon as possible, because we know that change takes time and never happens as quickly as we intend. Sustainable procurement transformation is going to require focus and investment to get right. The core focus areas should be measuring emissions to drive action, developing the functional enablers to support the change, and developing the strategic levers for decarbonisation.
Leveraging emissions measurement to drive action
The primary starting point is to understand your emissions, in detail. Embrace carbon emissions measurement and start reporting them, ideally across all categories of Scope 3, but at least the core supplier-related areas. Following the GHG Protocol’s spend-based methodology is an adequate starting point, provided the outputs you develop allow you to drive insights into your emissions “hotspots” and start evolving greater accuracy as data quality and supplier maturity improves. Procurement teams can then begin to develop the strategic decarbonisation levers they will need for their categories.
Making procurement functional enablers
Building a sustainable procurement function requires the right support pillars, but evidence coming from the Scope 3 Benchmark suggests that some key foundations are missing. Firstly, there is a lack of directly invested resources, and there are also limited numbers of support team members. The volume of interaction with suppliers on Scope 3 is high, therefore you need someone to set the strategy and have an effective team to enact it. Even medium-sized businesses will have a reasonable number of material emitting suppliers who need engagement and management, which creates an increased workload for supplier management teams.
Additionally, many organisations have limited Scope 3 learning and development capability plans to support team members in developing their carbon literacy and bridging the skills gap.
At some point procurement needs to be bold and make carbon a key consideration throughout decision making, from up-front category planning, through to RFx and sourcing processes, negotiations and contracting, and post-contact supplier management. If there is no consideration given to carbon with equality to the classic cost, quality and service evaluation, then we will never make different decisions. There will never be a commercial incentive to suppliers to support decarbonisation efforts and we will inevitably fail. In 2024, we will begin to see more forward-looking CPOs begin to build carbon pricing into their decision-making, paving the way for processes to change.
Developing policy to help suppliers face reality
Traditional procurement policies are usually written once and then set in stone without the need to revisit them any time soon. Over the coming years, the old Procurement Policy is a tool that has the power to make a huge impact and one that needs its own evolution. This policy development will enable a blanket application of sustainability to be adopted without procurement intervention in every sourcing decision. Between now and 2030, we need to strengthen the requirements annually to allow suppliers to gradually get used to the changes and ratchet up the pressure over time. At some point in the future, there will be a decision not to trade with some companies if they have not met minimum standards. This tough line should motivate those to change or risk losing business.
Once procurement teams get to grips with what is driving carbon emissions in the supply chain, they then needs to develop the right approaches to motivate, encourage, and sometimes force suppliers to act. Some suppliers will be on board with the need to decarbonise and happily support the process, whereas others will need significant levels of ‘encouragement’. Some categories will be relatively straightforward to plot a pathway to decarbonisation, whereas others have more complex challenges and require more strategic levers. Category teams will need to build a comprehensive picture of their suppliers and in many cases begin the co-development of solutions to tomorrow’s problems. Research and innovation, product reengineering, and demand management can all play a significant role in reducing emissions, but release of value may be some time in the future, which places a greater emphasis on 2024 being the year to truly put weight behind the efforts.
A green future
As we look to 2024, a lot needs to change if we are going to meet the looming global sustainability targets. Many procurement teams are still grappling with integrating sustainability into their strategies. The next few years mark a critical juncture and demand meticulous planning and swift action. Transforming procurement practices to align with sustainability goals requires measured steps, starting emissions measurement and building a strategic decarbonisation plan from there. Whilst there is a lot to be done, with the right strategies in place, procurement teams are poised to play a pivotal role in accelerating organisations’ progress towards net-zero.
Walmart turns to Indian suppliers to meet procurement needs, aiming to buy $10 billion worth of goods per year by 2027.
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US retail giant Walmart is shifting its procurement strategy in response to a sea change in fast moving consumer goods (FMCG) manufacturing from the Global South.
Broadly speaking, Walmart’s strategy is to accelerate its procurement of goods from “categories where India has expertise.” These include food, consumables, health and wellness, general merchandise, apparel, homewares and toys. Additionally, Walmart spokespeople have noted that India—which is home to the third largest pool of scientists and technicians in the world—“has some of the brightest minds in innovation, and we want to explore potential solutions to challenges in our value chain with these innovators and startups.”
Andrea Albright, Executive Vice President of Sourcing at Walmart commented: “India is well-positioned to support increased demand for products by Walmart customers, and we are excited about our partnership with Hero Ecotech. This collaboration furthers our work to strengthen resiliency in our global supply while contributing to economic growth worldwide.”
Accelerated growth
India’s manufacturing sector is booming. Led by the automotive, electronics, and textiles sectors, Indian manufacturing is projected to reach $1 trillion in the next three years, according to a report by Colliers. A surge of investment—both domestic and international—is driving this growth, with the state of Gujarat receiving the lion’s share of the growth as the region is “becoming India’s manufacturing powerhouse.”
In order to support the development of its procurement network among Indian suppliers, Walmart has also announced plans for an invite-only event to be held in New Delhi this February, where “Indian export-ready suppliers are invited to apply to pitch their products to our buyers for Walmart U.S. stores and Sam’s Clubs,” and “Innovative Indian companies are invited to pitch solutions addressing sourcing challenges across apparel, general merchandise, fresh and packaged food, health and wellness, and consumables. Pitches may lead to pilot projects within Walmart’s value chain.”
Our final cover story for 2023 explores how Deputy CIO May Cheng is accelerating a digital customer and product-centric approach…
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Our final cover story for 2023 explores how Deputy CIO May Cheng is accelerating a digital customer and product-centric approach to IT management for the International Trade Administration (ITA).
Welcome to the latest issueof Interface magazine!
Interface showcases leaders at the forefront of innovation with digital technologies transforming myriad industries.
We connect once more with the tech trailblazers at the International Trade Administration. Deputy CIO May Cheng and her team areaccelerating adoption of ITA’s customer and product-centric approach to IT management. In addition, their focus is on Agile, DevSecOps, Value Proposition, and Human Centred Design. “In 2023, we launched 13 products, three MVPs and saw enhancements operationalised. Moreover, the digital model has enabled a partnership between business and IT. The result is clearer lines of shared responsibility, transparency in resources, and a continuous learning culture across the agency.”
Businessman touching data analytics process system with KPI financial charts, dashboard of stock and marketing on virtual interface. With American flag in background.
Royal Papworth Hospital NHS Trust: Digitally transforming patient care
The Royal Papworth Hospital NHS Foundation Trustis centred on bringing tomorrow’s treatments to today’s patients with a clear mission to provide excellent, specialist care to patients suffering from heart and lung disease. We hear from Andrew Raynes who took up his role as CIO in 2017. He is overseeing a digital transformation program bringing value to staff and patients. “Using the global language of interoperability… we’ll see greater efficiency in terms of use of technology and sweating our assets. Furthermore, exploiting the benefits to support seamless care by allowing standards to do the heavy lifting.”
Toronto Community Housing: Supporting tenants with tech
Toronto Community Housing houses tenants in 106 of Toronto’s 158 neighbourhoods. It ensures over 43,000 low and moderate-income families are supported in their continuously managed homes. Luisa Andrews, VP Information Technology Services tells us it’s the best role she’s had in her career. “It’s the most challenging, and where I’ve seen the most progress in a short amount of time. I’m proud of my team and what we’ve accomplished in five years. We, and our partners, have enabled the corporation, through technology, to do what it needs to do for our tenants.”
Marshfield Clinic Health System:
Marshfield Clinic Health System provides care at over 50 locations across the US state of Wisconsin. Chief Data & Analytics Officer Mitchell Kwiatkowski explains its tech mantra to us: “We’re trying to toe that line while examining new technologies as they come out. We’re aiming to understand what they are, how they can help, and implementing things that are mature enough and show promise. I don’t think healthcare is necessarily risk-averse; it’s a highly regulated area that doesn’t always have deep pockets for investment. However, it’s people’s health at stake, so we have to be careful…”
Also in this issue, we get the lowdown on the tech trends for 2024 from Hitachi Vantara innovation guru Bjorn Andersson. We also hear from the WatchGuard Threat Lab research team with their cybersecurity predictions for the year ahead.
A consortium of volunteers from California have slowly restructured their state schools’ digital procurement process. Next year, it plans to go national.
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Procuring digital goods and services for public schools in the US has reportedly been a fraught process for decades. A fractured landscape between underfunded public institutions and a private tech sector has struggled to even accurately assess students and regulators’ needs, let alone finding the right edtech (education technology) to meet those needs.
This is all made harder by an increase in the amount of technology being integrated into schools—whether that’s good, bad, or maybe both, it’s undeniably expensive. The global education technology market was valued at $123.40 billion in 2022 by Grand View Research. It’s expected to expand at a rate of 13.6% between now and the end of the decade.
The power of education for procurement
Edtech is also a wide umbrella, with examples ranging from apps, overhead projectors, and chromebooks for students to thousands of screens, digital signage, and “content management platforms” like those found in Christopher Columbus High, an all-boys prep in Miami which the South Korean tech giant Samsung has transformed into a “connected campus”. In the US, procurement functions working for individual school districts are often forced to work with smaller budgets, fractured regulatory landscapes, and to compete with private schools with larger budgets that drive overall prices in the sector up.
The Education Technology Joint Powers Authority (Ed Tech JPA) was formed “out of frustration” with the existing system, or lack thereof, in 2019. The volunteer group, made up of procurement specialists and school purchasing professionals, has spent the past four years streamlining procurement for digital products and services, leveraging the buying power of multiple schools to negotiate prices, buy in bulk and save money.
From a grouping of school districts located in Irvine, San Juan, San Ramon Valley, Fullerton, Clovis, El Dorado County and Capistrano Unified districts, the consortium has grown to include 163 member districts that educate around 2.3 million students. The organisation has been awarded 23 procurement contracts to date, and is growing rapidly in education.
At the California IT in Education (CITE) conference, held in Sacramento during November, JPA President Brianne Ford, predicted that next year would see the program expand beyond California and make group bargaining procurement for edtech a national feature of the US school system.
CPOstrategy’s cover story this month features a fascinating discussion with Rick Sisk, Director of Procurement at Gen4 Dental
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CPOstrategy’s cover story this month features a fascinating discussion with Rick Sisk, Director of Procurement at Gen4 Dental, who explains how he’s revolutionising procurement for the dental industry, and why doctor-led care is so important…
Gen4Dental: Changing the procurement landscape for dentistry
Gen4 Dental is an organisation that strives to be a true partner to dental practices. It is a truly dentist-first DSO, promoting excellence at every level and working to improve by at least one percent every day. Through mergers and acquisitions, the organisation is also growing at an incredible rate, and this expansion and ambition requires a sturdy procurement department to support it. Enter: Rick Sisk, Director of Procurement at Gen4.
Prior to Sisk joining Gen4 Dental, the procurement landscape certainly wasn’t what it is today. The organisation has grown so quickly in its short lifetime; Sisk says that Gen4 has expanded so rapidly in a way that had the potential to cause problems. “When I came in, there was no real purchasing platform. I called my industry friends and said ‘hey, I need help’. We needed to start at ground zero. I had all these ideas and I was told that procurement was mine to shape. I was really excited about that…”
RBI Procurement: Success through technology, innovation and community building
We speak to Edzard Janssen and several of his team members at Raiffeisen Bank International (RBI) to see how the procurement function is enhancing value creation, mitigating risk and dealing with increasing regulatory requirements…
Now, more than ever, procurement leaders are having to harness innovation as they seek to prosper in highly uncertain times. Successful procurement teams are fostering emerging technologies and strategically aligned operating models and processes as they strive to unlock value across their enterprises. The procurement function at the Austria-based Raiffeisen Bank International AG (RBI) is such an entity, dedicated to delivering value through a future-orientated approach, at scale.
Edzard Janssen, Head of Group Procurement, Outsourcing & Real Estate Management at RBI, joined the Austrian bank in 2011, where he was tasked with building a state-of-the-art value-creating function. The latest strategy of RBI Procurement focuses on four strategic areas as guidance for all initiatives: value-centric procurement, state-of-the-art capabilities, mastering the data journey and safeguarding the bank.
1. Value-centric procurement: Focusing on value, not on price, and what truly brings value to the bank.
2. State-of-the-art capabilities: The procurement systems, the total procurement infrastructure landscape and the capabilities of staff.
3. Mastering the data journey: Harvesting and utilising the huge pools of data across the bank.
4. Safeguarding the bank: Covering regulatory compliance, IT and cybersecurity as well as operational and business risk.
Value-centric procurement
The ability to deliver value-centric procurement is of course directly related to strategic sourcing and Janssen and his team have made great strides in recent years, establishing an innovative category management approach at the bank. “There are two parts that cover the source-to-pay process,” Janssen tells us from his Vienna office.
“One is the sourcing part of the process mainly fueled by the capabilities of our people and strategy formulation – the right way of approaching the market is pretty much driven by the quality of the people running the process. And then you have the second part of the process: procure-to-pay. So, doing the call-offs and executing the contracts. All that is powered by the quality of systems and efficiency of processes.”
We speak to Kiran Menghnani, Director, Tipico Services Ltd (part of the iGaming and Sports Betting brand Tipico Group) to see how he and his team have transformed procurement at the company…
Kiran Menghnani, Director Tipico Services Ltd – part of the online iGaming and Sports Betting brand Tipico Group – almost stumbled into procurement by accident. As the Malta Head-Officed enterprise Tipico Group started to experience rapid growth midway through the 2010s, combined with complicated regulatory developments, the maturity of the Group realised the tangible need for a dedicated procurement function.
And in 2016, Gibraltar-based Kiran, who had already been with the company since 2011 building internal processes and structures, was asked to look into creating a future-ready procurement hub that could deliver a more strategic and agile business-facing function.
Tipico had a somewhat disjointed procurement approach to purchasing, prior to its transformation, a situation that resulted in a lack of transparency and an antiquated siloed approach. It was clear to Kiran whilst settling into his new assignment, that as the company continued to grow at pace, that this casual approach to procurement needed to change.
“We were still a young but rapidly growing company. We needed to work fast to get the tasks done while finding our way when dealing with our suppliers. Now the responsibility was on me to better understand the pain points being faced. And so I went about asking the basic questions challenging any purchasing requests. Has the contract been reviewed internally? Is there any data processing by the supplier? Has the price been benched with the market? How can I access past/existing contracts?”
“I soon started to realise that I wasn’t getting the answers to comfort me as Director, and that this humble piece of paper called a contract needed more attention, so I needed to protect both myself and the company as regulatory requirements had evolved. And that’s how this journey really started: someone questioning as to what we were doing and accepting that there were obvious gaps and opportunities.”
Richmond’s Department of Procurement Services (DPS): Leadership, relationships and the power of technology
We speak to Rene Almaraz, Director, Department of Procurement Services, City of Richmond, Virginia to see how public procurement is transforming at the city…
The values of the City of Richmond’s Department of Procurement Services (DPS) are set out on the opening page of its first ever annual report: teamwork, integrity, innovation, customer focus and leadership. The report is the work of the department’s relatively new director, Rene Almaraz, and his staff, and highlights the team’s achievements – in fiscal year 2023 – and priorities for the future, and also the guiding principles that influence how and why decisions are made.
Almaraz says: “Our goal is to build an organisation that’s more nimble, that provides faster and higher quality service, and supports the customer to the highest degree possible, which includes explaining to them why and when they should follow a specific process. This, in turn leads to how we can get it done better the next time.”
It will be two years in January since Almaraz took on the role, with clear goals for creating a more agile department that delivers for internal customers and the people of Richmond…
This brings us to two of the points on the DPS list of values: teamwork and leadership. This means within the department itself, but also with external partners, suppliers and customers. The DPS team has grown by around 40% to 28 staff since Almaraz took the reins, as he explains. “We’ve needed to grow. Before I got here, coming out of the pandemic, there wasn’t a lot of stability in terms of headcount. It’s now stabilised and we’ve built a good team here, a really focused team. Plus, I’ve received a lot of support from my leadership and my peer departments to continue improving.”
The team has grown, but can be considered relatively small when you consider the scope of work they’re responsible for, which is why collaboration is so important for Almaraz and, above all else, trust and communication within the team. He explains: “I’m a huge believer in trust – my staff has to trust me, that I’m doing the right thing. I need to know when to communicate and what to communicate, but they’ve got to trust me and then I must trust them.”
This mutual trust allows everyone to feel inspired and to grow, he says, and develop the skills needed to conduct complex procurement projects. Part of this means asking for help when it’s needed and, crucially, learning from mistakes. Almaraz adds: “Be honest with me: if you need some support, let me know. This is a project I’m giving you so you can grow and so I can grow. We’re going to lead and put this department on the map, through our expertise and professionalism. That’s our objective here.”
Ask Procurement—a generative AI procurement solution—is being developed for the market by IBM using Dun & Bradstreet’s “huge data cloud”.
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In order to develop more effective and market ready digital solutions for supply chain and procurement professionals, IBM is partnering with Dun & Bradstreet, a data-dealer with access to vast quantities of raw information gathered from a wide variety of sources, as well as cutting edge analytical tools. Together, the companies will work on expanding the capabilities of IBM’s watsonx to expand their use of generative artificial intelligence (AI).
Through the collaboration IBM and Dun & Bradstreet intend to develop multiple offerings for clients to incorporate into their AI workflows, leveraging IBM’s AI and data platform, and fueled by Dun & Bradstreets’.
Ask Procurement
The leading solution in development, according to an IBM press release, is Ask Procurement, a generative AI-powered procurement solution that will “help empower procurement professionals to unlock new data and insights with a 360-degree view into all aspects of a company’s business relationships to help increase savings, reduce time, and mitigate the potential for risk.”
Ask Procurement is expected to use Dun & Bradstreet’s platform, but feature watsonx supported models and other generative AI capabilities “fueled by Dun & Bradstreet’s vast Data Cloud.” The solution is expected to be available to procurement teams in the second half of 2024, integrated with Dun & Bradstreet solutions or an enterprises’ existing ERP or procurement solution.
“At Dun & Bradstreet, being a trusted data partner and a responsible AI partner to organisations are synonymous,” said Ginny Gomez, President, North America, Dun & Bradstreet. “As two trusted brands that bring nearly 300 years of combined experience to the businesses we serve, Dun & Bradstreet and IBM are ideally suited to help companies responsibly navigate the rapidly evolving generative AI space because we know their business environments and processes well. And with hundreds of thousands of organisations globally relying on us every day, we believe there is no better company than Dun & Bradstreet to lead the industry and our clients into the future.”
The HS2 rail project promises over 300 work packages, ranging from £1 million to £500 million for 2024.
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The 2024 procurement pipeline for the HS2 rail project promises a £1 billion “boost” for British businesses, as the project administrators reveal details for a slew of contracts available over the coming year and a half.
The contract opportunities, collectively worth over £1 billion, give a heads up to potential suppliers looking to boost their order books and grow their business in the year ahead. So far, UK businesses have secured over £17 billion worth of work on HS2 and 2024 promises even more opportunities to get involved.
“Forward planning is absolutely crucial for businesses, so we’ve worked closely with our stations and civils contractors to develop a simple procurement pipeline setting out what we’ll need and when,” commented Robin Lapish, HS2’s supply chain lead.
HS2 – London with Manchester
HS2—a 140 mile high speed rail network project originally slated to connect London with Manchester—was first announced under the UK’s Labour government in 2009. In the 13 years since its announcement, the project has experienced delays, cost overruns, and controversies. Construction began in September of 2020.
According to the UK’s Institute for Government, while the project was initially estimated as “delivering £2.40 of benefit for each pound of public money spent, the government had revised the BCR down to 1.8 in 2013,” and “Lord Berkeley estimated that HS2 would only deliver £0.66 for each public pound spent, predicting both higher costs – at £22bn more than the 2019 Chairman’s stocktake – significantly reduced benefit from both passenger demand and train frequency, and less ambitious predictions of economic growth.”
As of February 2023, HS2’s total cost to date was calculated at £24.7 billion, and its BCR was calculated as having dropped to .80 following a reduction in rail use after the pandemic—prompting Prime Minister Rishi Sunak to announce the cancellation of the Birmingham to Manchester leg of the line.
This presumably goes all the way back to when every company was a sharp rocks and oxen firm. For the modern enterprise, identifying how the technology du jour empowers successful organisations in your industry and harnessing it for your own ends is just as vital to success today as it was for the Egyptians in 3,500 B.C. to figure out as quickly as possible where the Sumerians were getting all those cool, new, super shiny and sharp new rocks.
Nowhere is this more true than in the procurement sector. A place where harnessing Big Data can drive new efficiencies, improve resilience and agility in the face of disruption. This is done all while helping procurement teams understand their business in real-time.
However, this doesn’t mean that Big Data analytics adoption has been simple, easy, or without risk. The disruption caused by the COVID-19 pandemic highlighted most of a company’s value chain is dependent on external third parties. There’s only so much you can get done without engaging with organisations up or down your value stream.
Procurement teams can typically find themselves managing expenses accounting for about 50% of a business’ revenue — sometimes overseeing spend in the billions of dollars. Procurement’s ability to maintain and navigate increasingly complex networks of relationships can be hugely enhanced by the power of analytics. However, adopting the wrong analytics platform, feeding it the wrong information, and drawing the wrong conclusions can be disastrous.
By gathering data from both internal and external sources, then analysing it with the appropriate tools, procurement teams have the capacity to create powerful insights in less time than ever before.
Combining environmental information (weather patterns, crop cycles, raw materials pricings, political unrest, etc.) with rich data generated within a company’s operations, mean that procurement teams using Big Data analytics have a significant leg up when it comes to predicting trends, finding favourable prices for buying, and sourcing inventory from a diverse network of suppliers so as not to place undue stress on their partner network. Reduced costs don’t hurt matters, either.
A closer look at some of the best tools to help your procurement function capture the potential benefits of a world powered by big data.
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Procurement is becoming an increasingly data-driven field. Correctly gathered, organised, and analysed, Big Data sets can help a procurement department do everything from increase efficiency and reduce costs, to make more ESG-conscious decisions or shore up their supply chain against unexpected disruption. However, managing huge amounts of structured, unstructured, internal, and external data can present a significant challenge for procurement staff. This is especially true when procurement professionals haven’t needed to also be data analysts until recently. This means there might be understandable skill gaps in your team.
Luckily, there exists a wealth of digital tools designed to capture, analyse, and generate insights from massive amounts of data. This is all specifically catered towards enhancing and elevating your procurement function. Here’s a closer look at five digital tools to help maximise the potential of Big Data in your procurement function.
1. GEP Smart
With AI-powered spend analysis, as well as strategic sourcing, purchase order processing, and invoice management, GEP Smart is one of the more broadly capable and robust procurement tools on the market. The platform is capable of absorbing, collating, and converting large data sets into everything from compliance procedures to supplier management strategies.
2. Kissflow
For smaller organisations still in the process of growing their procurement teams, Kissflow can help bridge the gap between a legacy or underdeveloped procurement function and where it needs to be with less emphasis on learning complex new digital tools. Kissflow is all about being simple, accessible, and customisable. The platform handles basic procurement functions natively, but integrates with a huge variety of other tools and programs.
3. Coupa
Focused largely on spend management, Coupa unified, streamlines, and empowers the source-to-pay process. The firm uses Big Data analytics to manage working capital and forecast budgets, giving procurement professionals more visibility over finances.
4. Tamr Procurement Analytics
Tamr Procurement Analytics specifically targets the problem of siloed data within the supply chain, helping procurement professionals quickly unify their data sets and start using artificial intelligence to generate insights at speed. The AI and machine learning decision engine underpinning Tamr’s platform enriches user data while also curating it against a rigorous set of standards to ensure quality.
5. TARGIT Decision Suite
TARGIT is a business intelligence and analytics tool that can gather observations from throughout the supply chain. This allows them to be more easily converted into actionable insights. The platform embeds directly into internal and external-facing portals, allowing a procurement team to share dashboards with the entire supply chain network. By creating a holistic impression of the entire supply chain, TARGIT improves the results of its predictive analytics, increasing efficiency and resilience.
At DPW Amsterdam, Kathryn Thompson and Fraser Woodhouse, Partner and Director at Deloitte, discuss the rise of generative AI and the impact on procurement.
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Procurement is changing.
That’s something that isn’t lost on Kathryn Thompson, a Partner at Deloitte.
As part of her role, she leads the Sourcing and Procurement Market Offering within Deloitte’s Consulting division in Europe, Middle East and Africa. Originally from Australia, Thompson has worked in procurement since 1996 and has observed quite the evolution over the past two and a half decades.
Procurement’s transition
Over the years, procurement has shifted from a traditional back-office function to an entity operating at the fore of a company’s strategy. Having been involved in the industry for more than 25 years, Thompson has had a front-row seat to procurement’s digital transformation. While she affirms that AI has changed procurement, she isn’t convinced that generative AI is changing the space – yet.
Kathryn Thompson speaking at DPW Amsterdam 2023
“We see lots of AI tools pulling from different data sources to apply intelligence to different decisions,” she explains. “But the generative part, beyond contract summaries or pulling together draft RFPs, remains to be seen at scale. One of my more sophisticated clients has run 300+ Proof of Concepts in AI across their business, including and beyond procurement, and admits they are yet to scale or drive meaningful ROI from any POC. At the moment, the generative AI side for us, isn’t getting past proof of concept or the pilot stage yet.”
Fraser Woodhouse is a Director at Deloitte and has been with the firm since February 2019. He believes that procurement and sales teams will use gen AI for RFPs over the next six months. “I think they’ll do it without telling anyone,” he explains. “It will eventually get to a point where I think that sort of crutch will become a necessity. When it’s built into the enterprise platforms, people will forget how to write contracts because the AI does it automatically. People will even use it to write their emails.”
The AI dilemma
AI on its own is pointless – it simply doesn’t operate the way you need it to. That’s why the importance of making tech work in a way that creates efficiency has never been more important. For Woodhouse, he insists it’s about putting a human at the right place in the process. “One of the solutions I saw was a gen AI assistant helping write an RFP built in, but then the supplier has a gen AI assistant helping do the response to the RFP as well,” he tells us. “Very quickly you’ve got two AIs negotiating with each other, and that doesn’t work unless a human is curating stuff at that point in the middle.”
Given the ease of AI usage, there is a discussion as to whether tech implementation could go too far the other way. Could humans lose the ability to perform simple tasks they previously wouldn’t have thought twice about? But Woodhouse is quick to dispel that myth and believes that despite the growing reliance on technology, people won’t be rendered useless. “People didn’t forget how to communicate when spellcheck came around, they could communicate better,” he explains. “If you are a supplier and are responding to an RFP and you’re pressing their generative AI button to build the response and five of the other suppliers are doing the same thing, who’s going to stand out? The ones who wrote it themselves or at least edited it and had meaningful input.”
“You can use AI for the transactional, easy stuff but there must be a value underpinning it,” adds Thompson. “The winners are going to be the ones that are human about things.”
Fraser Woodhouse and Kathryn Thompson speaking to CPOstrategy at DPW Amsterdam 2023
Procurement’s place
With such significant innovation happening, it is seen as a transformative time to be in procurement. As automation speeds up, the necessity to upskill new graduates coming into the workforce and encourage them to learn higher-value work earlier in their career journeys is becoming increasingly important.
“Covid and the following work from home attitude has a lot to answer for,” explains Thompson. “Pre-Covid, you would rarely work from home. Consultants, suppliers, delivery partners always went to the client’s site. That’s where innovation, creativity, results that are more than the sum of their parts happen. That’s not replicable by generative AI. We need to get everyone back out there and doing things. Rather than replacing jobs, we’re replacing tasks. The tasks that we’re replacing are the likes of data analysis, synthesising, and summarising. Hopefully, it means we’re doing real-life negotiations, brainstorming and innovation instead which are the things that people love to do. Fingers crossed, it just means the bar goes up.”
Automotive supplier Continental has chosen to work with JAGGAER to implement its global purchasing strategy while driving digitalisation.
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Spend management firm JAGGAER has announced it is working with automotive supplier Continental to push its digitalisation agenda.
In a press release published on Monday (December 11), it was revealed the manufacturer will use JAGGAER’s spend management tools to implement its global purchasing strategy. The JAGGAER ONE suite will counteract previously isolated solutions and harmonise the areas of purchase-to-pay, source-to-contract and business partner management.
A multi-stage rollout is set for launch, beginning in Germany and the United States before being slowly expanded globally.
The release detailed that one of the most important factors for Continental choosing JAGGAER was due to the extensive and highly standardised range of functions of JAGGAER ONE, which already covers many existing requirements. In addition, this not only ensures a quick time-to-value, but also ensures a low implementation risk. Continental confirmed it found JAGGAER’s multi-ERP capability “particularly impressive”, with a total of 30 ERP systems needing to be connected.
Following the project’s launch earlier this year, the implementation of JAGGAER solutions within Continental will take place in several stages. Initially, the company will focus on the procurement of non-production materials and raw materials. It will start with the optimisation of the source-to-source contract process. In the next project phase, Continental will focus on the procure-to-pay process to ensure security of supply for employees globally. This is done via predefined catalogues and to optimise follow-up processes.
As well as the global rollout and digitalisation, there are also plans to expand the use of software to direct purchasing.
Efforts to address climate and social issues in the procurement process don’t have to be siloed, argues a new report from Business Fights Poverty.
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With more than 90% of a company’s environmental impact originating within its supply chain, not its internal operations, corporations are under greater pressure than ever to divest and draw down their Scope 3 emissions.
At the same time, other Environmental Social and Governance (ESG) issues concerning gender disparity, minority representation, and workers’ rights are also more clearly in the spotlight than ever before alongside climate change.
However, a report published on 5th December by social impact-focused network organisation Business Fights Poverty, argues that while there is “an urgent need for transformative action on environmental and social issues such as climate change, biodiversity loss, poverty and inequality,” there exists a tendency in the corporate sector to tackle these “complex and fast-moving challenges by simplifying them and breaking them down into separate, smaller issues”.
The result is often that solving issues of climate, social, and ecological justice becomes a zero-sum game, with one issue neglected at the expense of others, because of a siloed approach manifesting itself beneath the ESG umbrella. The report argues that, not only is this approach antithetical to the ideals of ESG initiatives, but “an integrated and systemic approach that recognises the interconnectivity of the challenges across environmental and social issues” is more effective at tackling these issues.
The report, titled Supply Chain Decarbonisation with a Gender Lens: Practical Guidance for Global Businesses, notes that vulnerable groups, especially women, are especially vulnerable to the effects of climate change. It goes on to provide guidance for corporate procurement strategists and leaders, describing how to ensure that “women are both unharmed by decarbonisation strategies, and that their participation in any benefits generated in the process is secured.”
Four Gender-Sensitive Routes to Procurement Process Decarbonisation
Supplier incentives: Recognise and co-brand with suppliers who are emerging as leaders on decarbonisation and/or gender.
Procurement policies and choices: Source from and encourage women-led businesses that are providing low carbon solutions
Product and services design: Switch to renewable energy and upskill women to participate in the switch.
Business model innovation: Promote a circular economy that includes women, for example decent work for waste and recycling pickers.
The need for decarbonisation in the procurement process is pivotal. As of Q4 2023, nearly 40% of Fortune 500 companies have now set Net Zero targets. It’s not good enough, and the actual meaning of Net Zero is being eroded and worked around by corporations looking for ways to continue harming the environment and damaging the global social fabric while making record profits. But it’s a start.
“Whilst a growing number of companies are investing resources to better understand, account for, manage and reduce their supply chain emissions, little attention is being devoted to the role of, and impacts of interventions on, the people working in those supply chains,” urges the report. “The decarbonisation strategies of large multinational companies with complex global supply chains have impacts on workers around the world, both positive and negative.”
Only one in six procurement teams have “adequate talent” to meet their future needs, as industry demands grow and evolve.
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Fewer than a fifth of procurement directors and executives believe that their teams contain “adequate talent” to meet the future needs of their organisations’ procurement functions.
In a recent survey of 111 procurement leaders, analyst firm Gartner found that, while procurement leaders remained fairly confident in their current talent pools, when asked about their ability to meet future demand, confidence plummeted.
“Procurement leaders are generally confident in the current state of their talent and the ability to meet their near-term objectives,” commented Fareen Mehrzai, Senior Director Analyst in Gartner’s Supply Chain Practice. “However, our data shows that chief procurement officers (CPOs) are worried about the future and having sufficient talent to meet transformative goals based around technology, as well as the ability to serve as a strategic advisor to the business.”
The threat of an industry-wide talent shortage has been looming for several years, and isn’t constrained to the procurement and supply chain sectors.
In the UK, half of all employers expect to face talent and skills shortages when recruiting procurement and supply chain professionals—something 20% of firms believe will be exacerbated by Brexit. In Europe, firms say they already lack “highly qualified procurement personnel”, with 78% of procurement leaders surveyed as part of a recent Accenture report “increasingly confronted with skills shortages in their procurement departments.”
A Different Beast: Procurement Professionals’ Key Competencies “Shifting”
One of the key reasons that procurement leaders lack confidence in their industry’s talent pipeline to meet future demands is reportedly the shifting nature of the modern procurement function.
“Procurement leaders are aware that the competencies required to drive transformation are different from traditional procurement skills, and that there are significant gaps between their current and future needs for the most important competencies,” Mehrzai said. Only 4% of surveyed leaders said that no gap existed between their current capabilities and their need for technology and data skills, with 68% of leaders saying technology and data skills had become more important to the operation of their procurement function in the past year.
Increasingly, procurement is a data-driven, technology-focused sector, but it appears the development and recruitment of available talent lacks behind the sector’s need to not only drive transformation within the business but also serve as a strategic advisor to its key decision makers. As generative AI and data analytics are adopted in greater concentrations across the sector, the demand for professionals who are primarily equipped with technology and data-centric skillsets — at the potential expense of a traditional procurement background — will only increase.
At DPW Amsterdam 2023, Prerna Dhawan, Chief Solutions Officer at The Smart Cube (a WNS company), tells us about the importance of remaining focused on fixing the problem and not leveraging technology for technologies sake.
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“You don’t need AI or even gen AI for the sake of it.”
In today’s world, everyone is obsessed with what’s new and fresh. Like in most other functions, in procurement, the latest craze is generative AI, with ChatGPT being one prominent example. Despite new technology’s clear benefits, such as cost and time savings, it’s important to keep the problem you’re trying to solve and the business impact you’re looking to make front of mind.
Prerna Dhawan is the Chief Solutions Officer at The Smart Cube. Like many of her peers, Dhawan recognises the potential that new technology brings but also shares concerns. “Like everyone else, we’ve been on that bandwagon as well,” she tells us. “For us, there have been two key learning so far. We have already done one live deployment of gen AI. We went live with our gen AI model earlier this year, which enables users to skip the stage of manually searching for content on Amplifi PRO, our on-demand procurement intelligence platform. You just ask the question and our platform leverages a custom NLQ framework and gen AI to provide a natural language response. Using a combination of our own AI models and gen AI provides a more dependable, accurate response as pure Gen AI isn’t fully functional for all types of analysis and can’t be trusted completely.”
Navigating AI adoption
Indeed, there has been criticism from some sections about ChatGPT providing hallucinations and making key data up. For multi-million pound organisations responsible for high levels of spend, this isn’t good enough. A second learning Dhawan is keen to get across is that she believes that gen AI is being dominated by hype. She explains that with any “new shiny object”, it should be treated with caution.
“I’ve tried to explain this a little bit, but everyone is excited about new things. A recent example is another use case where we were experimenting with our digital assistant,” she explains. “There was a point where we used a 100% gen AI approach, and we were still getting issues and hallucinations where the queries weren’t being answered correctly. The team said we needed to make it work and I explained that, ultimately, a client needs to solve the problem, they’re less hung up on how this is done. Sometimes people get lost with the technology and the approach. You have to ask yourself, are you solving the problem? If the answer is to just input a human and you don’t need AI, then do that.”
Prerna Dhawan, Chief Solutions Officer at The Smart Cube, sits down with CPOstrategy at DPW Amsterdam 2023
The journey
Armed with more than 16 years of experience in developing client solutions, managing strategic relationships, defining product strategies and driving profitable growth, Dhawan has worked with procurement, supply chain and corporate strategy teams across many global 2000 companies. Throughout her career, she has helped them embed intelligence and analytics as enablers of competitive differentiation and business transformation, along with The Smart Cube’s co-founders Gautam Singh and Omer Abdullah.
The Smart Cube is a WNS company and is considered a trusted partner for high-performing intelligence that answers critical business questions. The Smart Cube works with clients to figure out how to implement answers faster through customer research, advanced analytics and best-of-breed technology. The firm transforms its data into insights – enabling smart decision-making to improve business performance at the top and bottom line. Together with WNS, expert resources are combined with leading digital technologies, merging human intelligence and AI with innovation.
Digitally-enabled future
While AI’s challenges should be acknowledged, Dhawan is in no uncertain terms about the importance of stepping out of comfort zones and meeting fear head-on. Change can be a divisive topic with human nature being to cling on to what’s familiar. However, this can result in becoming reactive and failing to keep up with competitors.
Prerna Dhawan, Chief Solutions Officer, The Smart Cube
“As leaders, if we want to change the game of procurement and redefine the value we create for a business, we have to be more open to embracing new things,” she explains. “If you learn what the capabilities of new technology are and where you can actually use it, everything has strengths and weaknesses. Ask yourself – do you want to be an early adopter or do you want to be a laggard in your industry? All of this has the potential to give you that competitive advantage. It’s about being open, experimenting at pace, but also not being blinded by the magic and assuming everything will just work. There will be changes needed to your processes and people’s mindsets.”
Procurement’s future
With the future of procurement set to continue to be digitally-enabled and full of innovation, Dhawan believes the function now has its seat at the table and is ready to thrive.
“If I look at my journey from when I started in procurement, clients were asking questions like ‘Who are the suppliers in the market? How do I get the best price?’ Procurement is now getting involved at the new product development stage and is even advising the business on what ingredients to use while taking a more total value approach,” she discusses. “When you’re thinking about the product, do you want to put in palm oil or sunflower oil based on sustainability considerations, and how can you justify additional costs of a sustainable supply chain? Procurement isn’t just supporting the bottom line but also influencing the broader business goals of sustainability, innovation and resilience. It’s a great time to be here.”
Conrad Smith, Founder and CEO at Graphite Systems, discusses the similarities between Formula One and procurement amid significant digital transformation.
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“Our business, like the F1 driver, knows to go fast.”
You’d be forgiven for thinking that procurement and Formula One are worlds apart at first glance. However, to Conrad Smith, Founder and CEO at Graphite Systems, they are actually a lot closer than initially meets the eye. A petrolhead by his own admission, Smith shared the stage with Haas Team Principal Guenther Steiner at DPW Amsterdam 2023. As a purchaser with almost 30 years of experience, Smith has overseen quite a transformation during his procurement career. He says that with everything going digital, you would assume that purchasing would accelerate. But it is, in fact, the opposite.
The pace of purchasing
“Over these 30 years, you would think purchasing would be getting faster,” he tells us. “Business is speeding up, but purchasing is slowing down – that’s stunning. When you think about it, where else in the world is slowing down when everything’s going faster and faster? Even though we’re investing in Coupa and Ariba and all of these expensive purchasing tools, it’s still slowing down. Our business stakeolders know business is speeding up, and so their tolerance is going away. In the nineties, when you onboarded a supplier, you just needed commercial data, name, address, tax, and banking.”
Conrad Smith (left) with DPW founders Matthias Gutzmann and Herman Knevel
Having been founded in February 2019, Graphite Systems is the premier supplier life cycle and risk management solution. The emergence of risk and due diligence has become a primary function within procurement. Vendor due diligence during the procurement process ensures users can identify and mitigate the risks present with a vendor they want to do business with during the contracting process. For Smith, he believes that this transformation has been 15 years in the making.
“I think that it was typical that a purchasing leader would point to other stakeholders and say it’s legal that’s holding this up, privacy or security. They’re the ones stopping the process from happening,” he explains. “And quite frankly, I’ll admit, those were my early thoughts. This is like a hot potato – I don’t want to be owning it. I look stupid because of the slowness I described. Think how stupid the business thinks we are when they come and say, I’m working on a project, I need this consultant here on Monday. And our best response is that it’ll take weeks or months to onboard the supplier”
“Weeks matter, and we need to go through all this risk and due diligence. It’s really important to do the risk and due diligence, but we can’t do that at the expense of the speed of business. While business is quicker, in every measure that you look at, purchasing is going slower. It’s dumb, and the business knows that, and it means we lose credibility. It needs to happen, but we need to be very intelligent about it and not just do things the same ways we’ve always done them.”
Conrad Smith with Haas Team Principal Guenther Steiner at DPW
Procurement’s changing
Smith explains that one of the reasons he can relate to the F1 analogy is that while cars are going faster than ever, the drivers are far safer today. “Every year, we see massive accidents take place,” he tells us. “I think last year, a car that was flipping head over heels tumbling and hit the fence before slamming into the ground but the driver was okay,” he explains. “There’s this principle that is very important in almost any situation where somebody says, you can have this or you can have that. It’s a false choice.
“You have to pick speed, or you have to pick safety. If you go in with a requirement that says it has to be fast and it has to be safe, that’s the F1 example. You have to go into purchasing and say it’s a non-negotiable. It has to be fast and safe. How can we rethink the design so it can go fast and be safe? That’s really my passion, and it’s possible. It doesn’t mean it’s easy, but it’s possible. Frankly, in the case of this purchasing problem, it’s way easier than it should be. But we’re still stuck on passing paper back and forth instead of just saying, there’s my profile. Everything you need is in my Graphite profile – just like everything you need to know about me [as a professional] is in my LinkedIn.”
The future of creation, management, and sharing of data and documents between buyers and suppliers absolutely needs to evolve from emails, spreadsheets, and PDFs into a modern social network architecture. This transformation of information sharing has already proved its speed and efficiency in most other aspects of our lives. It’s time to quit wasting time and money on supplier onboarding and embrace modern technology in this critical procurement process.
Anthony Payne, chief marketing officer of HICX, tells us why we won’t reach net zero unless we fix data collection.
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As we approach COP28, large manufacturing brands are in the net zero spotlight. It’s been a year since the UN Expert Group released Integrity Matters, a report clarifying the exact metrics brands must meet if they wish to claim net zero success. Those planning to do so, account for around half of the world’s largest listed companies, according to the latest Stocktake, a number which has doubled in the last two and a half years. Despite this momentum, however, brands are slow to implement.
Now, with the conference marking another year closer to the 2050 Paris Agreement and other deadlines, it’s time to step up delivery. What this means is that the strategies behind net zero pledges need a boost.
As a supplier experience evangelist and a marketer, I view this challenge through a different lens. The way in which we engage suppliers to get their data needs significant improvement. And the way forward is to market to suppliers.
A growing conundrum
Most of today’s major brands have expensive procurement technology with which to engage suppliers, technology that has often evolved to be complex, clunky, and hard to use. As a result, supplier adoption of these tools is low, and therefore supplier engagement in projects to cut carbon and provide quality information is low. Brands have the challenge therefore of getting suppliers to adopt their expensive tech and engage in net zero efforts.
Additionally, we’re seeing that what each party expects from the brand-supplier relationship, is misaligned.
Anthony Payne, chief marketing officer of HICX
Suppliers, at the start of the relationship, are highly incentivised to work with a brand and they want to get to three things: the first purchase order, delivery of that first service or product, and payment. From that point, they just want to continue transacting and renewing business. This is their “steady state.”
A brand’s steady state, on the other hand, is more complex. In addition to transactional work, brands need a continuous flow of information around compliance, quality, performance, tax, carbon footprint and an awful lot more. Nowadays, brands also want to be efficient and automated. This brings new technology, whether it’s extensions to established technology or new specialist tools. Of course, with new tools come new processes.
Suppliers, as we’ve discussed, primarily want to receive orders, deliver on them and be paid. But now, they are also expected to respond to requests for a whole set of information, on a continuous basis. They’re also facing a lot of change in the form of ever-complex technology landscapes and evolving processes – and this isn’t just for one brand, it’s for all their customers and it’s leading to suppliers suffering from what we sometimes call, ‘initiative fatigue.’
The need for brands to collect data is here to stay and it’s time to deal with the thorny issue of how we can get suppliers to adopt the necessary tools and engage in net zero requests.
We need suppliers
Further to this conundrum, brands face something of a basic and rather obvious truth; they need suppliers. For example, brands need suppliers to provide carbon information, ideally using the tech setups that already exist, and they need them to engage in this activity over and above “business as usual”.
Why then, don’t more brands make their suppliers’ lives easier? We’re missing a trick. Let’s flip the way in which we work with suppliers – rather than bombarding suppliers with information requests, let’s encourage them to do what we need.
We can learn from marketing
Let’s turn our attention to another department, one that has had to apply the principle of encouragement rather than force. Marketing cannot force potential customers to buy or adopt a product or service, instead, it engages customers, encouraging them to adopt or buy. This is usually by appealing to a need or emotion.
What’s obvious in the customer-facing world is customers have a choice. For example, as much as I would love to be able to require an audience to buy what we’re selling, to come to our events and read our content, I obviously can’t insist.
This is now, more than ever, the same with suppliers. Like potential customer, suppliers have a choice. The fact that brands need suppliers in order to collect net zero data, gives suppliers more agency. Suppliers now get to exercise choice through their behaviour, and it’s this choice that is absolutely central.
Now don’t get me wrong. It’s not that suppliers want to veto what brands need from them, it’s more that they’re facing too much noise in the form of new technology, information requests and the resulting processes. They’re overwhelmed.
If you want suppliers to engage in your net zero efforts, think differently. Simply piling on more pressure won’t get the best of them. Rather, let’s think more about persuasion and encouragement, and how to show them value. The marketing process involves engaging customers, building strong relationships with them and offering them value, with the purpose of capturing value in return. You’ll see three-quarters of this process is about how we appeal to customers, not the other way around.
If we apply this concept to suppliers, we get a useful way of thinking about the relationship. Why don’t we engage suppliers more, build stronger supplier relationships and create value for them? If marketing is anything to go by, the result will be that we capture value from suppliers – like getting them to complete compliance questionnaires, do forecasts, take part in quality programs and log into (and actually use) those expensive systems.
Rather than trying, in vain, to force suppliers to engage in net zero activity, let’s market to them.
Now, as net zero delivery dates creep closer, brands can empower themselves to step up by stepping into the shoes of suppliers and appealing to them. As we explore new ways of working with suppliers, who knows what solutions could be inspired?
By Anthony Payne, chief marketing officer of HICX, the supplier experience platform
Costas Xyloyiannis, CEO at HICX, discusses why the time is now for supplier experience in supply chain and procurement and its rise to the top of conversations in the space.
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“I feel like the focus is shifting.”
Gone are the days of supplier experience being hidden away in the background. Today, it sits as an increasingly important target area within the procurement and supply chain space. But it hasn’t always been this way.
For Costas Xyloyiannis, CEO at HICX, he is pleased to see supplier experience’s conversation grow. “I’ve been in this space for 23 years and even if we go back three or four years ago, no one was talking about it,” he tells us. “It’s great to see a movement beginning to happen.”
Speaking with CPOstrategy at HICX Supplier Experience Live in Amsterdam, a day before DPW Amsterdam kicked off, he revealed how satisfying it was to see its evolution take place. And clearly there’s a market for it. Scores of people filled the Tobacco Theatre in Amsterdam all eager to listen to the many discussions and speakers attending the half-day event. “It is very satisfying because you see people’s minds changing in the same way that it did for the customer and employee experience,” he explains. “What you have to think about is that almost every company is also a supplier so it’s in your interest to focus on the supplier experience side. In another context, you’re also a supplier and people should understand that we’re all in it together. If you don’t think about solving it, then you’re going to have that pain yourself.”
Driving Supplier Experience
Indeed, it’s an issue that needs solving. Xyloyiannis explains that not understanding the necessity of supplier experience is a common misconception because it affects everyone in different ways. “Sales and marketing are the ones likely to understand what it means to be a supplier but they’re detached from the problem,” he says. “They are probably going into a portal and filling things in many times, it’s just not procurement doing it so that’s why they can’t make the connection. What we all need to realise is that focusing on supplier experience is in all of our interest. Ultimately, you have to think it’s just the right way of solving a problem because I create efficiency for myself and I’m also a supplier.”
HICX Supplier Experience Live in Amsterdam in October 2023
Xyloyiannis goes on to explain that if the focus is on supplier experience, an opportunity has been presented to create net efficiency – which is a massive win for all. “This benefits everyone because it’s not a zero-sum game,” he says. “If you think about business cases of other solutions, it’s we’re going to fire people and cut headcount. If I take the US government example of 150 million a year to DNB, this would’ve been a saving they would make without impacting any other functions internally. No heads would have to be cut; nothing would have to be outsourced. In a way, it’s free money for everyone when you can create net efficiency.”
Moving forward
Today’s Chief Procurement Officer has a lot on their plate. Amid navigating continuous innovation and transformation, ESG’s ever-increasing influence and battling inflation concerns all on the back of an already disruptive few years, procurement finds itself at an interesting moment. But looking ahead to 2024, supplier experience has its seat at the table and will only become a hotter topic in the years to come, according to Xyloyiannis.
“A lot of leading companies are putting huge amounts of focus on it,” he tells us. “Henkel posted on LinkedIn last year that they were driving their whole strategy around supplier experience. Then you’ve got Heineken and Unilever who are getting more involved in the space too. I think it is very much at the forefront, particularly in companies which produce goods and services. Supply chain has become very global and there’s a benefit to outsourcing and all these things, but it does make it very fragile. That’s why now it’s become important to focus on supplier experience because we have such a high dependency on one another.”
In this article, Veridion’s CEO unveils the exciting world of AI in Supplier Discovery, shares the company’s journey into data enrichment, and concludes with some behind the scenes of how the company is enhancing its Search API with natural language capabilities, paving the way to data-driven future in procurement and beyond.
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In today’s world, global supply chains are facing persistent volatility and disruptions, leaving procurement companies extremely exposed to the fluctuations of markets and the associated risks from vendors. This unstable environment highlights the necessity of innovative approaches in procurement management, particularly the adoption of AI-powered intelligent data.
Deloitte’s 2023 Global Chief Procurement Survey reports that 89% of companies worldwide have been negatively impacted by inflation-related cost risks in the last year, with 79% also facing substantial supply shortages. These figures underscore the critical need for innovative strategies and technologies to address these challenges in procurement.
Embracing AI for supplier discovery: A game-changer in procurement
Perspectives from Veridion’s CEO, Florin Tufan
As procurement firms aims to master the complexities of the evolving supply chain landscape, artificial intelligence (AI) emerges as a transformative solution that promises significant benefits, especially in enhancing supplier discovery.
Veridion, a company at the forefront of data enrichment and innovation, is leveraging AI to streamline data-driven growth across many areas within industries. Florin Tufan, Veridion’s CEO, offers candid perspectives on the opportunities and challenges presented by AI in procurement, with a special focus on its capacity to refine the supplier discovery procedure.
Tufan talks about how leveraging AI for supplier discovery is transforming procurement from a process constrained by limited information and relationships to one that is dynamic, informed, and resilient. AI-enabled data allows companies to comprehensively understand the supplier landscape, enabling them to analyse and evaluate a vast array of suppliers quickly and efficiently.
“We come from a world where it wasn’t possible to learn everything about the entire universe. If you had three suppliers for one highly important thing, you’d much rather spend a lot of time strengthening that relationship and putting better protection in place. There was no easy way to ask about others and question whether you were working with the right ones while finding out if you had enough resiliency. No, you want to work with the best ones so that you’re covered and get on with the work no matter what.”
However, Tufan also highlighted that while AI has the potential to significantly cut down the time companies spend searching for new suppliers, it’s not a magic wand that instantly fixes all procurement issues. There are still things to be fixed in the supplier discovery process.
CPOstrategy speaking with Veridion CEO Florin Tufan at DPW Amsterdam
Veridion’s approach: Addressing the need for a more proactive and comprehensive approach in supplier risk management
Tufan’s insights suggest a pressing need for a more proactive and comprehensive approach in supplier risk management.
Tufan pointed out a critical shortfall in the procurement strategies of many large companies—they lacked sufficient redundancy in their supply chains. When the pandemic struck, these companies scrambled to identify and connect with the best possible suppliers in various regions. However, the process was fraught with inefficiencies. “The discovery phase alone took weeks, and that was before even determining if those suppliers were a suitable match. By the time companies could establish redundancy, it could be two years later, and that’s simply too late,” Tufan explained.
He observed that the focus in procurement has traditionally been on what is known about the top suppliers based on past interactions, often neglecting the broader, more holistic view of a supplier’s status and potential risks. “There are numerous instances where companies face downturns or disruptions due to economic or political factors, and their clients often find out too late,” Tufan noted.
Who is Veridion? The company’s journey to data enrichment in procurement
Veridion, a Romania-based company, operates in the segment of source-of-truth business data, providing comprehensive and up-to-date insights on private companies. The company’s solutions are addressing particularly procurement, insurance, and market intelligence data challenges and are powered by AI and machine learning capabilities. This technology enables Veridion to extract maximum value from data, enabling efficiency and innovation for their customers.
One of Veridion’s earliest projects in procurement, which significantly contributed to its exploration of data enrichment solutions, involved collaborating with semiconductor companies seeking to diversify from China and US manufacturers planning to onshore to South America. This experience gave CEO Florin Tufan and his team deep insights into the complex challenges of global supply chain relocation. Tufan described this journey as both humbling and enlightening, particularly in understanding the significant impact of supply chain shifts on everyday products.
The company’s approach to addressing these challenges has been methodical and innovative. By leveraging AI and machine learning, they have developed more efficient ways to harness data, enabling businesses to make informed decisions in rapidly changing environments. This approach is not just about providing data but enriching it to offer meaningful, actionable insights.
Veridion has become a key player in transforming how companies approach procurement and supply chain management. By focusing on data enrichment and leveraging advanced technologies, they have positioned themselves at the forefront of this critical industry, offering solutions that are as dynamic as the markets they serve.
This “incredible journey”, as described by Tufan, exceeds the goal of business expansion. It’s about comprehending and effectively responding to the complex challenging of global with real-time, accurate data.
Looking forward: Veridion’s CEO perspectives on latest technology innovations
“I’m 99% percent excited! At the core, we’re an AI company.”
Florin Tufan’s vision for the latest cutting-edge technologies and innovations such as generative AI is one of optimism and excitement. He sees it not just as a technological leap, but as a tool that will become integral to daily life and business operations, enhancing efficiency and connectivity across the globe.
When asked what big news is coming soon, Florin announced an upcoming enhancement to their Search API, set to launch this year. This significant update introduces semantic search capabilities, leveraging natural language processing to enable more intuitive, human-like search experiences. With this advancement, users will be able to conduct searches that closely align with their specific needs and queries.
Veridion’s Search API is modernising multiple procurement processes from supplier search to enrichment, setting a new standard of excellence with first-class vendor data. By incorporating advanced AI capabilities, this intelligent search engine has made significant strides in deduplication, cleansing, and enriching master data, addressing a critical challenge many companies face. Organisations often struggle to understand the full potential of their existing supplier networks for sourcing opportunities. Veridion’s data-centric approach ensures that companies can now leverage their current supplier base more effectively or find new ones, uncovering hidden opportunities and driving efficiency in procurement strategies.
It looks like Veridion is reshaping the procurement landscape, turning complexity into clarity and offering an unparalleled user experience. The company is marking a paradigm shift towards a more efficient, data-driven future in procurement and beyond.
Maarten van der Borden, Customer Transformation Director at Celonis, discusses the influence digital tools such as generative AI is having on procurement’s workforce.
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“When something new arrives on the scene, people have a tendency to immediately think of the worst-case scenario.”
Maarten van der Borden is a Customer Transformation Director at Celonis. As AI gets increasingly complex and advanced, there are concerns from some sections of the workforce that robots will take human jobs in procurement. Indeed, one of the biggest draws of automation is the cost savings and efficiency it brings, with AI able to complete some tasks almost instantly. But van der Borden challenges that notion and believes technology should be used as an enabler.
AI’s impact on jobs
“AI will, in my opinion, not replace anyone anytime soon,” he reveals. “What it will do is make life easier and change the way we operate. In the late 90’s, we couldn’t envision what having a mobile phone would be like. When those were first introduced, we thought how annoying it would be that you would always be reachable. Now we can’t imagine living without a phone.
“I don’t envision the elimination of procurement positions due to AI. Rather, a significant shift may occur in the transactional aspects of process analytics. Currently, individuals proficient in creating complex Excel macros or adept at extracting and transforming data into actionable insights are highly valued. These roles are likely to undergo changes, but this should be seen as an opportunity for enhancement, not a threat. It’s crucial to recognise this. My belief is that AI won’t be replacing jobs, particularly in procurement where human involvement is key. The role of technology should be to empower and improve processes in procurement, not to replace the human element.”
Maarten van der Borden, Customer Transformation Director at Celonis
The journey
Over the years, Van der Borden has distinguished himself through a series of impactful transformations and strategic developments, primarily at the nexus of IT, business operations, and finance. His journey has been marked by the successful management of large-scale programs, where his ability to engage cross-functional teams and collaborate with stakeholders at all organisational levels has consistently led to the achievement of key goals. Notably, he has a history of taking on complex and challenging projects, steering them from concept to completion under stringent conditions. This track record has established him as an influential change agent, known for transforming underperforming organizations into models of high performance and efficiency.
Having began his career in the Dutch Military, he experienced a similar journey to many procurement practitioners. Van der Borden fell into the space by a “happy accident” and never left.
He shares, “I didn’t know much about procurement initially, but I quickly grew to love it.” His journey led him to DS Smith, a major packaging organisation, where he successfully spearheaded a comprehensive global procurement transformation. Subsequently, he transitioned to head the finance transformation within the same company. In this role, he sought a tool that could effectively navigate the unique challenges of procurement compared to finance.
“I needed something that would show me how our financial processes really ran. It meant finding the most impactful inefficiencies and developing an action plan to deal with them.”
Celonis today
This search brought him to Celonis’ process mining capability, a product that resonated with him so profoundly that he decided to join the company. “Right now, I am a Customer Transformation Director at Celonis, which means I help our customers organise themselves around this solution because I firmly believe implementing a tech solution by itself doesn’t do anything. We will always need the human element to make the change and create value, based on the insights tech provides. I’m very happy to be here.”
Today, Celonis is the global leader in process mining, providing companies with a modern way to run their business processes entirely on data and intelligence. The firm pioneered the process mining category more than a decade ago when it first developed the ability to automatically X-ray processes, find inefficiencies and implement immediate, targeted, and automated action to resolve them.
Gen AI drive
Procurement is in a transformative moment. At DPW Amsterdam, generative AI was the buzzword on attendees’ lips everywhere you looked. For van der Borden he acknowledges how rapidly the space is changing as a result of an increased influence of digital tools.
“To me, the first big thing to realise when we talk about gen AI is the democratisation of data and process analytics,” explains van der Borden. “I think what’s really important is that procurement realm to me is a prime example of where gen AI can have a huge impact. I think what gen AI will do is open up the capabilities of analytics to a much wider audience than today. People who may previously have trusted some Excel sheets or PowerPoint slides presented to them to make decisions can now freely explore, or even converse with their own data and make informed decisions themselves. You start to build a community of data analysts rather than just having consumption of data analytics. That to me is the big game changer that gen AI is actually providing procurement with.”
Procurement’s perception
CPOstrategy sits down with Maarten van der Borden, Customer Transformation Director at Celonis, at DPW Amsterdam 2023
By its own common admission, procurement used to be boring. A function hidden out of sight and kept far away from the c-suite. Now, it’s front and centre, firing on all cylinders. Indeed, the Covid pandemic helped drive it towards the top of the agenda, in addition to other enablers such as transformation and ESG. For van der Borden, he believes procurement is beginning to shake off that old skin and be seen as more of a strategic function.
“We’ve received a bad reputation in the past because the impact has not always been clear,” he tells us. “Some analysis that people do on procurement as a strategic function is to ask what’s the real impact? Yeah, you manage the supply and demand but as long as I have my blue ball point where and when I need it, you’re doing a good job. If things start to fall over then procurement used to get the blame. What I’m really happy to see is that more and more CEOs are seeing procurement as a strategic function, not only driving value in the financial domain but also more and more as the primary contributors to a more sustainable future and the guardians of our corporate brands.
An evolution
“There’s been a noticeable evolution in procurement, particularly in the merging of processes like source-to-pay, procure-to-pay, and purchase-to-pay. Our definitions in these areas haven’t always been crystal clear. However, when you delve into purchase-to-pay, it’s apparent that this is where the transactional activities occur. Due its very transactional nature, this phase is measurable and reveals the outcomes of our upstream actions in sourcing. I’ve observed that these areas, despite often being managed by separate divisions or functions, are intrinsically linked. The transactional aspects are commonly seen in shared services, while the sourcing aspects represent traditional procurement.
“Bridging these two areas, in my view, is a significant shift. This is where technology truly demonstrates its value. By integrating and examining the transactional processes to understand their shortcomings, we can trace back to the root causes, often found in sourcing. This integration is fascinating to me. It allows us to assess the real impact of our efforts.”
DPW has announced it is expanding into North America following the success of its Amsterdam offering.
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DPW has announced it is expanding into North America following the success of its Amsterdam event.
Founders Matthias Gutzmann and Herman Knevel revealed the news via LinkedIn to confirm a move that will see significant growth into new territories.
Gutzmann exclusively told CPOstrategy: “Marking a pivotal moment for DPW, our expansion to the US isn’t just about growing our footprint, it’s about building on our ongoing momentum over the last few years and bringing the enthusiasm and expertise of DPW.
“We aim to bridge procurement organisations with innovative startup founders and change makers, fostering the growth of a digital procurement and supply chain ecosystem in North America.”
Accompanied by a photo of the duo outside Google offices in Silicon Valley, California, he posted on Monday (27th November): “I am currently in #SilliconValley together with Herman Knevel, gearing up for an exciting week filled with meetings with tech giants, founders, visionary partners and future collaborators.
“Having previously led the expansion of Procurement Leaders | A World 50 Group Community into North America, I must say I feel extra energised to bring my experience and strong relationships within the North American market for the benefit of DPW.
“Stay tuned for more updates as we embark on this exciting phase of growth and innovation!”
Founders Matthias Gutzmann and Herman Knevel
Since launching DPW in Amsterdam in 2019, the conference has grown from strength to strength and is now widely regarded as the biggest and most influential tech event in procurement and supply chain on the planet. The conference welcomed over 1,250 procurement professionals with more than 2,500 virtual attendees watching along at home in its 2023 edition in October.
Last year’s event was held at the former stock exchange building, the Beurs van Berlage, with the theme called “Make Tech Work” which focused on turning digital aspirations into a reality. DPW Amsterdam has already been announced for October 9 and 10, 2024, next year.
Further details about DPW North America will be revealed in due course.
At DPW Amsterdam 2023, Sigbjørn Nome, CEO and Co-Founder at Ignite, discusses the importance of a people-first mindset in procurement.
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“It’s super important to get the right people in procurement.”
Sigbjørn Nome, CEO and Co-Founder at Ignite, is passionate about talent. The company is now armed with 60 employees and has become an organisation of choice for many graduates in Norway. According to Nome, building a positive environment that empowers staff holds the key to long-term success and growth in procurement.
“We’ve managed to get a good reputation in Norway and recruit top talent,” he tells us. “In the beginning, we used the best students and offered internships to help us build the first version of the product. Then we built a good relationship with the universities in Norway and we’ve also recruited lots of senior hires too. There’s a great combination of talent within Ignite.”
Ignite is an advanced yet simple spend management solution that gives customers the power of correct and holistic data, transparency, and actionable analytics to empower data-driven decision-making. This way, customers not only save money and avoid risk but also make smarter choices and drive value across their organisation. Ignite provides a one-stop shop to consolidate, clean, and enrich data, get advanced procurement analytics, conduct supplier assessments, as well as holistically managing suppliers and contracts and quickly and automatically estimating their Scope 3 CO2 footprint.
With a background in consulting, Nome worked on a variety of procurement transformation projects and has witnessed significant potential in the space. Having decided to form Ignite in 2016, the organisation began as a consulting firm but it was later decided to be delivered as a software-as-a-service (SaaS) company. “As a consulting business, you are cashflow positive and you earn money from the get-go. While for a SaaS business, you need to invest a lot in product and productive development,” he tells us. “It is quite a challenging change. As a business owner, you also need to sell and be more out there to get customers. There’s been a lot of challenges and one of those has been building the team which I’m really proud of.”
Procurement’s evolving function
Procurement is changing. Traditional procurement revolved around delivery, cost and quality. Now, given the nature of environmental challenges as well as the necessity of data analytics, people with diverse skill sets are needed more than ever before. Nome believes it’s about changing the mindset of procurement. “You’ve got to shift that mentality because the function is so different today,” he explains. “In the future, it’s going to be a more collaborative function because procurement teams cannot win alone.”
With that future in mind, Nome recognises the space is a different beast today than it was a decade ago. Change dominates the industry and the players that embrace transformation will be the ones who win. “You need to use procurement as a lever to get change done,” he tells us. “It’s not enough anymore to look at your business only, your responsibility also extends to your suppliers. It’s about where you spend your money and your negotiation power because customers will look at that. I would say the regulation demands will offer a broader perspective, not only looking at your business but also how you spend your money.”
At DPW Amsterdam 2023, Alan Holland, CEO of Keelvar, tells us about the acceleration of digital transformation in procurement and what it means for the next generation of the workforce.
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Keelvar’s mission is simple – to help procurement teams globally to scale sourcing excellence.
Keelvar is powered by unique artificial intelligence, designed by category experts, to deliver significant savings and operational improvements for global enterprises such as the likes of Siemens, Coca-Cola, Samsung, Novartis and more. The company was founded in Europe’s largest AI research lab by a team of computer scientists and engineers specialising in AI, optimisation and game theory applied to strategic sourcing. Keelvar has raised $42 million to date in funding to accelerate product development and global growth.
The company is led by Alan Holland who has served as CEO since the company’s foundation in September 2012. Indeed, in his first year, he led the organisation to win the Cork Company of the Year in the small company category, and the firm has more recently been awarded a Gartner Cool vendor.
Having previously served as a lecturer in artificial intelligence in University College Cork’s Computer Science Department, Holland specialised in Optimisation, Game Theory and Algorithmic Mechanism Design. Such experience has helped give Keelvar an edge in terms of innovating with offerings that exceed competitors’ technical capabilities. This enables Keelvar to define an entirely new category of the solution, putting Keelvar in an ideal position to lead this new category that Keelvar has called autonomous sourcing.
CPOstrategy sitting down with Alan Holland, CEO at Keelvar, at DPW Amsterdam 2023
Evolution at scale
Procurement is in a state of flux. The industry is experiencing unprecedented amounts of innovation and change in a way which has ripped up the playbook of what went before it. However, Holland believes it is only in the past half decade or so where transformation has really started to take place. “If we look at the last 10 years, the first five of those procurement was very slow to change,” he discusses. “What we saw were technology landscapes dominated by a small number of large suites vendors who had acquired many companies, but most enterprises were satisfied in buying all the modules they would need to run their procurement function from one vendor. Rarely was it the case that the various modules did what their customers needed. Some of them might have worked in some ways, but others just didn’t serve the need at all.
“In the second five years of our being, things started to change. We did start to notice an increasing acceptance that best-of-breed was the way forward and that enterprises needed to accept that if they were to get the buy-in from their stakeholders, then they needed to work with a combination of best-of-breed vendors and piece together their specific technologies landscape rather than just buying it in bulk from one. I would say it was gradual at first and then suddenly, but it’s only been suddenly in the last couple of years. The pandemic likely accelerated some of that change.”
Trust first
Holland explains that in recent years, large multinationals are placing an increasingly important level of trust in smaller, best-of-breed vendors such as Keelvar to allow them to run their sourcing events and meet niche demands. He believes that in the past it simply wouldn’t have happened and strives to prove that faith right. “I suppose that’s a process where enterprises are gradually increasing their trust in what are smaller vendors, but these smaller vendors are becoming bigger because we’re serving hundreds of large enterprises,” he explains. “We’re gaining in strength and momentum and the barriers to adopting best-of-breed at scale are lowering and the market willingness to jump those barriers is increasing. That momentum is just gathering more and more force.”
Alan Holland, CEO at Keelvar
Using tech as an enabler for talent
Procurement’s talent shortage and the ways to bridge has been a hot topic for years. Whoever you speak to within the industry, everyone will have a different viewpoint. Some say procurement needs a rebrand, others say it’s a lack of education while others think technology could hold the key. For Holland, he believes it’s about making tech work and freeing up people in procurement’s time to focus on more value-add work that will help solve strategic goals.
“What is attracting graduates to procurement now is working with intelligent systems that are powered by AI and that allow them to be strategic and not working on routine or tactical tasks because machines are taking over the data-intensive areas of processing these workflows,” he tells us. “Our second product, which we launched about three years ago is autonomous sourcing. These are sourcing bots that are intelligent software agents that you can now design, build, and operate your own sourcing bots. If you’re somebody who understands best practices in sourcing, you can now build automated workflows so that instead of having to run sourcing events one by one and get through 15 or 20 a year, now you could design bots that are running hundreds of these events per annum.”
Procurement’s bright future
While not only opening up people’s day, using technology as an enabler to make life easier also acts as a way of encouraging the next generation into the industry. “What you’re doing is freeing up many other people’s time to spend on relationship management or innovation discovery and talking to the market, finding out what new suppliers you should be dealing with, visiting suppliers to check things are in order,” he says. “And that is the type of work that people enjoy doing. Machines are taking more of the data-intensive work off their tables, and machines are not good at work related to establishing trust. Machines have no empathy, but people do. The soft skills in procurement are becoming ever more important because the machines are taking over the harder skills. That is leading to a transformation in the type of work that procurement is doing.
“It’s also leading to a transformation in the interest levels that graduates emerging from universities have for this sphere. When it used to be that they were first introduced to a legacy system and told that this is what they needed to use to do their job. Young workers are coming with higher expectations about software and rightfully so, and enterprises are reacting to the need to satisfy the technology requirements of younger recruits now, which is a very good thing. It’s accelerating that digital transformation that we are seeing.”
The next step
Looking ahead, Holland is full of positivity for the future and believes decision-making in procurement is easier than it’s ever been. He believes tomorrow is “very bright” as procurement enters an era with intelligent software agents which can automate workflows and make the human workday more efficient. “There’s a whole new range of possibilities where creative and thoughtful planning will provide a competitive advantage for organisations and procurement can be far more influential in how successful their companies can be. It’s a game-changer.”
At DPW Amsterdam 2023, Brandon Card, Co-Founder and CEO at Terzo, discusses the rise of his organisation amid the COVID-19 pandemic and how it used the disruption to its advantage.
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Terzo means third in Italian.
With the two founders having Italian heritage, they chose to describe what they set out to build – a platform that brings third parties together.
Terzo uses powerful AI technology to extract, analyse, and visualise its customer’s contract data. Terzo’s AI data extraction capabilities also reach beyond contracts and can solve an organisation’s document problems, from invoices to POs and more. Its platform was designed on the foundation of contract intelligence, providing business teams the necessary data to improve productivity, optimise spend, reduce costs, and manage risk and governance across their entire supplier ecosystem. Terzo is the first solution to provide critical data and terms to both legal and business teams to make decisions together.
Terzo’s journey
Brandon Card is the Co-Founder and CEO at Terzo. His company’s journey’s start was an interesting one, having been founded days before the onset of the COVID-19 pandemic and the lockdowns that then ensued. But, reflecting on the disruptive nature of the situation, Card believes it actually helped get Terzo up and running quicker. “It just accelerated our timeline because we wanted to build fast,” he reveals. “When we put the team together, we had this concept that we wanted to get the product out as fast as possible. We knew that with Covid happening there was going to be a huge shift in how people were working. People were going to need to buy new solutions faster and it’s going to be harder to control spending. We knew procurement was going to have a host of challenges across the supply chain with this interruption with Covid. Our team on the engineering side believed we need to build faster.”
This led to Terzo’s team on the engineering side of the house to work diligently throughout the rest of 2020 and into 2021 on building code and new releases with the vision of getting the Terzo product into the industry quicker. “We thought we might be able to help procurement given the challenges they have now with all of these new needs that the business is going to bring,” he says. “We probably built the product about 50% faster just because there were no distractions so there’s pros and cons when everything happens in life. Our team really worked well together and they buckled down and they took that time to focus on Terzo. It’s something I’m very proud of this team for doing that.”
Brandon Card speaks with CPOstrategy at DPW Amsterdam 2023
Developing relationships
A big part of what Terzo does revolves around strengthening relationships by uniting teams to unlock insights so organisations can make smarter decisions and maximise value from suppliers, customers and partners. Card believes this mantra holds the key to long-term success in procurement.
“It’s critical for us because when we think about whether we’re doing spend analytics or contract intelligence, it’s all about understanding the relationship with these different entities you’re working with,” discusses Card. “We’re not there yet but my big vision in the future is to build an enterprise relationship intelligence platform to understand every single business that you’re working with, whether it’s a customer, a supplier or a partner. The truth with these big organisations, a lot of their suppliers are also partners or customers. These relationships are very complex and they’re very critical to innovation.
“If you’re doing anything in the cloud right now, if you’re doing anything with AI or even autonomous driving, you need partners to get this done. You can’t build it in-house. And years ago, people would build in-house. When we were young growing up in the nineties, everyone had to build their own data centres and build their own software. We’re in a world now where you can go and turn things on online in a few minutes, and that’s where we want to be so you can push product out faster, competitive advantage, and I think these relationships are critical to procurement having a competitive advantage and driving value for the whole business.”
Procurement’s place
In today’s world, procurement is in the driving seat. The function isn’t siloed anymore, stuck in a back-office room and out of the way of everyone else. Despite such significant innovation, there is sometimes a perception that procurement is still boring. For Card, he believes one of procurement’s biggest challenges is changing that age-hold mentality of procurement within a c-suite.
“It’s about educating the CEO or the Chief Financial Officer (CFO) of large organisations just how critical procurement is. A lot of them just don’t understand,” he tells us. “That’s the challenge we have, and that’s something we want to change. In the future, the CFO is going to treat the head of sales the same they treat the CPO. Right now, the chief revenue officer gets special treatment in every organisation. If you run sales, you’re treated differently because you bring in revenue. If you’re procurement, you’re lucky if you’re at the table. But I do see that changing.”
While Card believes this shift is already beginning to happen with younger CFOs, change such as this doesn’t happen overnight. “By doing this, you’re going to have a really balanced organisation and reduce risk while optimising their costs,” he discusses. “Ultimately, they’re going to be more efficient, and the teams are going to be working a lot better together. There’s going to be a better culture when leadership buys in because then procurement feels valued. They work harder, and that vibe carries throughout the organisation. That’s something that we want to help push for procurement but we know it’s going to take time.”
At DPW Amsterdam 2023, Danny Thompson, Chief Product Officer at apexanalytix, tells us about the art of developing trust amid significant innovation in procurement.
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Trust.
Apexanalytix needs to build quite a bit of it. As a company which protects $9 trillion in spend and prevents or recovers more than $9 billion in overpayments annually, its client portals actively support over eight and a half million suppliers.
Indeed, apex has revolutionised recovery audit with advanced analytics and the introduction of first strike overpayment and fraud prevention software. Today, apex is a leading global force in supplier management innovation with apexportal and smartvm, now the most widely used supplier onboarding, compliant master data management, and comprehensive third-party risk management solution in global procure to pay. With over 250 clients in the Fortune 1000 and Global 2000, apex is dedicated to providing companies and their suppliers with the ultimate supplier management experience. A big part of that experience is based on building trusted supplier-buyer relationships.
Danny Thompson is the Chief Product Officer at apexanalytix and has been with the organisation since July 2015. Now in his third role with the company in eight years, Thompson reflects on his journey with the organisation with positivity. “I came in as a product manager working on our portal product,” he tells us. “And after a short time, because I was a former customer, at Pfizer and International Paper Company, and was an internal voice of the customer, they ended up having me drive messaging with marketing. Recently, we hired a great new leader of marketing who has taken that over fully so I’m dedicated full time to product again. So it’s been a great experience for me.”
Gen AI surge
One of the hottest topics on the CPO agenda in recent months has been ChatGPT. Wherever you go within the industry, you’ll likely find a conversation being had about the technology’s possibilities, as well as perhaps its limitations or challenges – and Thompson is equally keen to explore.
Danny Thompson speaks with CPOstrategy at DPW Amsterdam 2023
“There is certainly a lot of attention being paid to gen AI in the industry, and within our company as well,” says Thompson. “I think it’s because of the shock value of ChatGPT hitting the world and people are really stunned by its ability to interpret natural language and come back with really good information in response to questions that are being lobbed at it. There’s a lot of excitement around what it could do as well as what other generative AI solutions can do to help solve procurement, supplier risk and supplier information problems. We are making progress, and have introduced some generative AI functions, but Generative AI presents some challenges right off the bat that we are working hard to solve as quickly as we can.”
One of these issues is the hallucination problem that is being questioned within the space. This is where AI tools like ChatGPT lack factual support for some of the information provided. “There’s a statement at the bottom of the page which states you can’t rely on results being factual,” Thompson affirms. “When it comes to supplier information and risk management, that’s a problem.”
Managing risk
And it is such an important sticking point that Thompson stresses when it comes to supplier risk information, it is about being careful that the usage of generative AI, in its current state, is used for guidance rather than fact-finding. “Another challenge is around leakage of sensitive information combined with contamination of sensitive or important information,” reveals Thompson. “We have a database of golden records for 90 million suppliers who are doing business with Fortune 1000 and Global 2000 companies. That is the best information we’ve been able to accumulate about suppliers and their relationships as a supplier to large companies. Some of that data is publicly available and some of it is more sensitive. We want to make sure we’re not loading that sensitive information into a generative AI function that might allow random people to access that information. We’ve got to be careful about that leakage of data.”
The opposite is true, as well. Thompson reveals that his team asked the generative AI-tailored questions which they assumed would be pulled from their own database. The findings were less than ideal. “The responses had been contaminated with public information which was full of inaccurate data,” he tells us. “We’re figuring out how to draw those boundaries, as well—to protect sensitive data while also preventing contamination.”
Trust first
This showcases the importance of trust once again to an organisation like apex. The companies it serves are moving significant sums of money around and the potential risks are sizeable. For Thompson, there can be no greater responsibility when using AI tools. “The data must be either highly accurate or at least they understand the degree to which it’s not,” he says. “If you don’t understand that level of trust you can have in it, then you shouldn’t be using it yet.”
With an unprecedented amount of technological innovation at procurement’s fingertips, the industry is evolving at a rapid pace. It’s placed at a unique moment with digital transformation being swept up throughout the space. While this brings obvious advantages such as time and cost savings, it also means increased cybersecurity threats. “There are more threats coming in as a result of AI,” says Thompson.
“One of the biggest challenges our clients us our solutions to solve for is fraudsters trying to take over a supplier’s account and intercept their payments by submitting fraudulent account change requests. One of the typical ways companies catch these is very often the request is coming through very poorly formatted emails with bad grammar. But what we’re seeing is the bad guys have started using generative AI to create really convincing bank account change requests so there are increased threats to be aware of. But this increase in the availability of information is also make easier the whole process of knowing your supplier and knowing the risks associated with them. And Generative AI is going to allow you to quickly get help to understand how to mitigate a given risk much faster and easier than it’s ever been before.”
A passionate advocate for diversity, inclusion and equity of opportunity, Executive GM Ana Marinkovic leadsa team of 1,600+ small business experts. They lend over $1.2bn a month to Australian small businesses. National Australia Bank (NAB) plays a major role in propelling entrepreneurship across the country. Delivering better outcomes for small business owners sits at the very heart of NAB’s strategy. “Our scale and connectivity help us to tackle some of the biggest challenges facing our business and the communities we operate in,” says Ana.
TUI: Making travel plans mobile
The mobile side of TUI has never been more vital. TUI’s mobile apps were officially launched in 2013 and began as something of a proof of concept. For the entire international industry, moving from web to mobile devices was a huge shift. The initial set of apps were very skeletal and only integrated for UK and Nordic customers.
One of this year’s goals is to accelerate the native journey to make all the customer journeys native. This will further improving the customer experience. After a recent UI refresh, the app look and feel is fresh and sleek, and has plenty of exciting features for customers to enjoy. “Just in the last couple of months we’ve introduced an integration with OpenAI for a travel planner that helps you choose excursions,” Donia adds. “Seeing it grow over the years is so exciting.”
TARA Energy Services: tech fuelling growth
“Continuous improvement is woven into the fabric of the culture at TARA Energy Services,” says its proud Director of IT, Paul Parzen. “Every day, we face new challenges, both operationally in the field and strategically in the boardroom. We must make sure the organisation’s IT strategy for data management, core infrastructure, network architecture, and security is ready to meet them.”
Link Group: Shaking up UK’s pension market via digitalisation
“Some people might say, ‘wow, a pension. That sounds a little boring.’ But at the end of the day, what we do is help people retire in the best way possible and that’s a pretty good place to be.”
Those are the words of Dee McGrath, CEO of Link Group’s Retirement Solutions since May 2019. The company is a global, digitally-enabled business connecting millions of people with their pension assets – safely, securely and responsibly.
Evara Health: Technology delivering care for all
Evara Health’s mission statement is to help people become healthy and live healthy lives, and that means all people. A lot of health organisations don’t serve everybody and their treatments aren’t available under many types of insurance. However, Evara Heath doesn’t turn anybody away. It supports the underserved and the uninsured, and patients are treated regardless of whether they can afford it. Around 25% of patients have no insurance at all, and over half are covered by Medicaid, which isn’t accepted by everyone.
At DPW Amsterdam 2023, Daniel Barnes, Community Manager at Gatekeeper, discusses the evolution of the procurement function and the influence tools such as generative AI are having in the space.
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“It might sound harsh, but people just won’t have a job if they don’t change.”
For Daniel Barnes, Community Manager at Gatekeeper, his thoughts are clear. Technology is here and it’ll only get more advanced.
Barnes has been the Community Manager at Gatekeeper since June 2022. The company he works for is a next-generation Vendor & Contract Lifecycle Management (VCLM) platform that was born in the cloud and works on any device. Gatekeeper has a strong focus on collaboration, clear actionable data, obligation and compliance tracking, email alerts and most of all ease of use. The firm has a ‘zero training’ mantra driving a fanatical focus on usability that results in an application internal stakeholders and suppliers can use effortlessly.
The Gatekeeper Platform provides a suite of vendor management, contract management, kanban workflow, collaboration and reporting features. Customers can extend the functionality of Gatekeeper with additional modules to meet their required use cases, as well as integrating with over 220 third-party solutions.
Technology potential
Since joining the company, a key consideration for both Barnes and Gatekeeper has been the influence of generative AI. However, Barnes explains that while the potential of the technology is exciting, they are being strategic about how to leverage AI.
“We’re probably taking it a little bit more of a slower approach,” he tells us. “We have a contract summary function at the moment which means for any contract we summarise it so that anyone in the business can get a really quick understanding of that contract. We’re also exploring whether we’re going to bring in a Gatekeeper bot that allows us to get insights analysis in a very conversational manner. One thing we really believe is that contract and vendors aren’t just for procurement or legal. Everyone in the business has to contribute to make these successful. A lot of the issues, data and information behind these are legally complex. Procurement language is difficult when you’re talking about RFPs or you’re talking about risk. Someone in the business doesn’t care about that, they just want to get whatever they have brought, they want the service, they want it performed, they want it on time and they want a good relationship. We’re trying to figure out how to use AI like that.”
CPOstrategy speaking with Daniel Barnes at DPW Amsterdam 2023
The rise of Gen AI
Generative AI isn’t exactly new. In fact, it actually dates back to the 1960s. Among the first functioning examples was the ELIZA chatbot which was created in 1961 by British scientist Joseph Weizenbaum. It was the first talking computer program that could communicate with a human through natural language. But, given the introduction of a far more advanced model – ChatGPT – gen AI is the name on not only procurement’s lips but the wider world too. Barnes questions what you need to make AI successful at implementation.
“You get data and most procurement and legal teams have an issue with data because they don’t have it in one place,” he explains. “We fundamentally believe in this three-pillar approach. It’s to restore visibility and to have all your vendors and their contracts in one place. From there, you take control of that by digitalising all of your processes. Once they’re digital, you can track and automate them from various data points that you have in your vendor and contract records. That allows you to safeguard compliance, whether that’s regulatory, legislative or by contractual obligations. They’re all different forms of compliance that you need to track. Most teams are really struggling just with those. When we talk about gen AI, the reality is most teams are still so far away from even being able to realise those benefits. Today, gen AI looks powerful once you have the pillars in place and I’m really excited about its future.”
Procurement’s evolution
Indeed, procurement stands at a unique moment. With some in the space used to operating a certain way through legacy systems and others embracing a digital transformation and the technological innovation that brings with it, Barnes recognises that people who are reluctant to change could be left behind. “I think there has to be a willingness to change,” he tells us. “I’ve been talking about change in procurement since 2019, and I would say 80% of people who are engaged are hesitant and don’t want to change. That’s a really big concern. But my biggest worry is they don’t want to know in the first place. One of my fears is you’ve got so many solutions that genuinely can eliminate work in procurement teams. I’m worried for those people who don’t want to change because what are they doing when their work’s automated?”
The future
Barnes, who also hosts the World of Procurement podcast and YouTube channel, believes there is a current cultural divide in procurement and the industry is at a make-or-break moment. He affirms procurement will go “one of two ways”.
“You’ve got people who are stuck in the past that are archaic with what they’re doing. Then there’s those who are really pushing the profession forward,” he explains. “I see it as a moment in time where procurement kind of goes one in two ways. It’s extinct in terms of how it used to be. There’s solutions that I’ve seen which have automated workflows and are doing the work that traditional procurement people used to do. We can pull people along, but there has to be an initial willingness to change too or it’s not going to happen. That’s why I think it’s great to see people that are showing that willingness. They may not have the answers, but they want to learn.”
Last month, CPOstrategy travelled to DPW Amsterdam. Here are five takeaways from the biggest and most influential tech event in procurement.
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1. Digital transformation isn’t just about tech
David Rogers, author of The Digital Transformation Roadmap, delivered an important keynote that highlighted that digital transformation doesn’t just mean technology. He told the audience, “The hard part about transforming organisations isn’t about tech. It’s about making the technology work for your customers and for your business.”
He expressed the importance of delivering value in your organisation while also describing the art of rethinking business to define what growth opportunities there are by thinking differently about customers, competition, data, innovation and value. Rogers provided guidance to the audience and unveiled a five-step digital transformation roadmap. These are: define a shared vision, pick the problems that matter most, validate new ventures, manage growth at scale and grow tech, talent and culture. Rogers explained to the attendees gathered before him, “ChatGPT is not your strategy. Fall in love with the problem and not the solution.”
2. Building connections
DPW welcomed more than 1,250 procurement professionals over the two days while also hosting more than 120 procuretech solutions. New digital cards which were worn as lanyards around an attendees’ neck allowed for instant connections to be made and eradicated faffing about for contact details or losing important business cards. The buzz and hum of chatter in the air across the conference was audible. A walk around the two expo halls, both kitted out with dozens of tech solutions each offering something different to engage with ensured plenty of choice of destination. Many booths provided gifts which added a personal touch, such as Gatekeeper’s dragon or Omnea’s socks.
While the virtual only events in years gone by during the Covid period served a purpose, nothing could beat the sense of community and valuable face-to-face meetings that attendees were provided with.
3. Gen AI is a game-changer
If you were a fly on the wall in most conversations, a common theme would appear more often than not – generative AI. Indeed, the technology dominated thoughts at DPW Amsterdam 2023 which has only been accelerated given the ever-increasing influence of OpenAI’s ChatGPT which only launched a year ago. But gen AI isn’t only about chatbots, AI adoption was prevalent across the floor with each procuretech ecosystem showcasing its own spin on new technology as well as fresh and innovative ways of offering services.
Generative AI is firmly on the tips of people’s tongues. While its possibilities appear limitless, its rise to prominence has led and will continue to cause debate about how far its capabilities can reach in its current form. Expect that to continue.
4. People are still the secret sauce
As exciting as new technology is, without good people your operations are doomed to fail. While there have been concerns from some sections of the space that robots are here to replace humans, DPW Amsterdam’s conversation revolved around making tech work for us and about using technology as a tool to make day-to-day life easier.
Ultimately, even chatbots require a human at the other end to make the correct inputs otherwise all the end user receives is data without direction. While discussions were had as to whether AI can help plug talent gaps, all it means is that boring, outdated data-entry tasks will be taken over by machines and allow the next generation of the workforce to focus on greater value-add work that will lead to increased efficiency for themselves and the company they work for.
5. Now is the greatest time to be in procurement
In comedian and host of DPW Amsterdam Andrew Moskos’ opening speech he reflected on procurement’s evolution and transformation. “Procurement used to be boring but now we’re all rockstars. We run the company, we’re in the c-suite, we run ESG, sustainability, risk, and 80% of the spend of a company goes through us.” It was quite the welcome – and set the tone for the subsequent two days.
With an unprecedented amount of innovation at a practitioner’s fingertips in today’s ever-evolving and transformative world, the future is what procurement makes it. Gone are the days of procurement being some boring back-office function hidden out of sight, the industry has had a sudden injection of life via digitalisation.
Matthias Gutzmann, Founder of DPW, exclusively told us: “It’s the best time to be in procurement. It’s the most exciting era to be in procurement and supply chain so it’s an amazing time that we need to celebrate and get loud about it.”
Michael van Keulen, CPO at Coupa, discusses the emergence of gen AI and whether procurement is in a golden era amid technology transformation.
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Generative AI, or gen AI for short, is one of the hottest topics in procurement today.
Indeed, the introduction of ChatGPT has only accelerated its prominence into wider consumption. Gen AI allows its users to quickly generate new content based on inputs. These models could include text, images, sounds, animation, 3D models or other types of data. One of its biggest draws is the ability to understand different learning approaches and allows organisations to move quickly to leverage large quantities of data.
But despite obvious benefits such as time and cost, Michael van Keulen, Chief Procurement Officer at Coupa, stresses caution should be used particularly when it comes to valuable tasks. “If you look at ChatGPT, it’s fine if you’re looking for recommendations for something low-risk. I need something for my wife’s birthday next week, you input three things that she loves and ask it to help. It’s great,” he tells us. “But it comes from data sources on the web that aren’t always governed, controlled or trustworthy. It’s whatever is out there. What about the algorithms that come with ChatGPT? I don’t know what’s influencing the search criteria. On Google, if you pay you are at the top of the search bar. But I don’t know what ChatGPT is governed by.”
Van Keulen is a passionate and seasoned procurement evangelist with a comprehensive track record of driving value through business transformation at global companies. Since March 2020, van Keulen has been the Chief Procurement Officer at Coupa, a leader in cloud-based business spend management software, where he is responsible for driving best-in-class procurement practices across the company, supporting business development and being a source for peers looking to elevate and transform procurement. Van Keulen is especially passionate about building teams, driving value, organisational transformation, CSR, and diversity and inclusion.
CPOstrategy speaks with Michael van Keulen, CPO at Coupa, at DPW Amsterdam
The rise of AI
In the case of Coupa, the firm has been conducting its community.ai platform for the past decade which has been at the heart of the company’s strategy. Community.ai analyses real-time spend data, applies AI to compare company’s metrics against others and offers ways for organisations to be more efficient, profitable and sustainable. Van Keulen believes that the biggest difference between what Coupa offers and what gen AI provides is the trust factor.
“At Coupa, we measure information based on real spend, data and suppliers that are doing real business together – the internet isn’t doing that,” he discusses. “We’ve got nearly $5 trillion of spend under management from real transactions and real suppliers. That number continues to grow as customers and suppliers join the Coupa community. Pretty much all of our customers have trusted us with access to their sensitive data which we anonymize and then share back with the entire Community. As a member of the community I know I can trust it because it comes from a source that is reliable, sanitised, relevant and well-governed. As well, we have certain standards and algorithms that we built-in all based on outcomes that our customers are looking to receive.”
Van Keulen believes there is a misconception in procurement that ready-made data sets are out there that are capable of meeting customer requirements. “The truth is most tech companies out there today don’t have access to customer data because their customers won’t let that happen,” he explains. “But at Coupa, our customers have already given us access to their data. This means we now have a real, reliable, accessible, governed and structured data set that has been anonymized. When we then apply AI, you actually get prescriptions that are meaningful and relevant to procurement. I think the misconception is that this type of data set is easily found, but it’s not, we’ve been building this for over 10 years. There’s no other company out there that has the same level of spend data as Coupa.
“It’s the same as Google Maps. The only way that Google Maps works is because everybody uses it. It allows me to get from A to B to C to D, back to A in the quickest time and with the least amount of disruption. The only way that that works is because we’re all using it. And I look at AI no differently in spend as I do with AI in my private life.”
Michael van Keulen, CPO at Coupa
Bridging the talent gap via AI
The need for fresh talent in procurement has never been so important. Procurement, like many industries, is lacking a defined path to welcome the next generation of talent, a feeling which has only been amplified on the back of COVID-19. This means the need to find ways to meet that shortage head-on, whether that’s through education, an industry rebrand or via AI. In van Keulen’s mind, he believes developing the correct tech landscape could hold the key.
“I’ve actually said this for a while,” he explains. “For too long, we brought in super smart people and then we would let them work in some antiquated old-school ERP, in Excel and run RFPs in emails. Nobody wants that, especially the current workforce because they’re used to and have been raised with Amazon, they all have TikTok accounts and are used to all these other e-commerce websites which have very seamless systems. If they come into the workforce and I let them work in some outdated ERP environment with email as the means of communication, that talent is either going to leave procurement because they think it’s boring or they’re just going to leave the overall organisation and work somewhere else. We don’t want that to happen, so you need to have the right tech landscape in place.”
Once the strategy is formed, van Keulen explains that is where the fun of procurement begins. “Then procurement’s the coolest function in the world and we will close the talent gap,” he says. “The talent is out there, they’re just not coming to procurement. They’ll go to finance, marketing, legal or IT instead. If you execute procurement properly, it’s the best because you’re right at the heart of everything. But you need the right people, operating model and operationalisation of your procurement process as well as the right technology. You need all of those elements or it’s never going to work.”
The greatest time in procurement?
Given the disruptive nature of global challenges and its ripple effect on procurement and the supply chain over the past few years, organisations are increasingly waking up to the importance of developing greater strategic relationships with suppliers. COVID-19, inflation issues, natural disasters and wars have meant today’s CPOs have been forced to firefight and think more strategically than ever before. Van Keulen recognises the turbulent nature of recent years and believes major transformation is already underway in procurement. “Historically most executives in any company would pay very little attention to their supply chain,” he reveals. “Due to recent events, companies are realising that they need to be closer to their suppliers. Perhaps in the past, the CEO would only spend a small fraction of their time with suppliers but those metrics are changing rapidly.”
As the ground lies in procurement, some sections of the industry now believe it is the industry’s greatest era given the level of possibilities. Widely considered a back-office function tucked in a corner and working in a silo, procurement is a totally different beast in today’s world. For van Keulen, he likes the variety.
“I wear so many different hats every single day,” he explains. “I always say sometimes I’m an accountant, others I’m an environmentalist. Sometimes I’m the treasurer or a finance person, but I’m also sometimes a psychiatrist. Sometimes I’m a doctor, a nurse, a lawyer, a judge, an environmentalist and yes even a wizard. I never know what my day looks like. I can plan it, but something may happen where everything goes out the window. Procurement will always be going through some type of disruption and it’s about how you drive the competitive edge and how you drive value despite that. Procurement really is the best gig in the world and it’s great that more people have started to see that now too.”
Giorgio Sarno, Senior Data Scientist at Stratio, on how AI and ML can unlock data from both internal combustion and electric vehicles to reduce their carbon footprint and hasten the transition to zero-emission transport.
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A single bus journey pollutes 82% less than the same journey by car.
For this reason, a small decision like taking public transport instead of driving is a big step towards lowering emissions. If we then consider the significant reduction in greenhouse gas emissions that transport operators can achieve by implementing eco-driving solutions or by transitioning to electric vehicles, choosing the bus over personal vehicles becomes an even more sustainable choice. Transport operators are already moving in the right direction in terms of minimising the environmental impact of their services, and they’re doing so by leveraging vehicle data.
The bus is essentially a black box, where vehicle technical data is locked and remains largely inaccessible to transport operators. However, by automating the collection and analysis of this data, fleet managers can rely on artificial intelligence (AI) and machine learning (ML) algorithms to implement a predictive maintenance approach. This means that vehicle sensor data can be turned into actionable insights to help reduce the carbon footprint of internal combustion engine (ICE) buses, hasten the transition to zero-emission transport, and minimise breakdowns and downtime, resulting in a more reliable public transport service.
Car vs Bus
With cars representing 72% of EU road transport emissions, it’s key to make public transport the preferred form of travel. However, in order to create a push towards shared mobility and leverage the environmental benefits of public transport, operators and public transport agencies need to ensure it can live up to the promise of reliability, getting passengers where they need to be, when they need to be there. To guarantee reliability, it is necessary to turn our attention back to the most crucial component of public transport: the vehicle.
AI predictive maintenance is like a digital stethoscope for buses, enabling operators to tune in to the state of health of their vehicles’ critical systems and components. By collecting the data from built-in vehicle sensors and analysing the patterns that indicate the condition of components, maintenance managers can leverage real-time, actionable insights to inform their decisions. AI can identify tricky faults that humans could overlook – tracing leaks in the compressed air system or the wear and tear of brake pads, for example.
With such a system in place, bus operators can depend on real-time monitoring to assess whether their vehicles’ brake pads need to be replaced, meaning that parts can be ordered in bulk and that maintenance can be scheduled during off-peak periods to avoid service disruptions. Maintenance and repairs can be scheduled automatically and more accurately, contributing to better fleet utilisation and cost savings. More importantly, by preventing equipment failure, vehicle breakdowns can be pre-empted to reduce downtime and protect both revenue and customer experience.
The data on equipment behaviour, failure modes, and degradation patterns can also inform asset management strategies, including engineering decisions related to repair, replacement, or refurbishment of components and systems. By extending the useful life of assets and maximising their performance, operators can minimise waste generation, reduce the need for new equipment production, and lower the environmental impact associated with resource extraction, manufacturing, and disposal.
Moreover, early identification of sub-optimal operating conditions enables engineers to fine-tune equipment settings, adjust operational parameters or identify faulty components, reducing energy consumption and resource waste. By optimising resource utilisation, operators can function at higher energy efficiency, reduce carbon emissions, and enhance the overall sustainability of their operations.
Curbing ICE emissions
Predictive maintenance solutions can also be used to inform eco-driving strategies to further reduce the carbon footprint of ICE bus road usage. By analysing driver patterns, optimal RPM and idling time, operators can implement strategies to lower fuel consumption and put in place a range of continuous improvement processes. Arriva Czech Republic has recorded a saving of 942 litres of diesel per vehicle per year using this approach. This equates to 2.6 tons of carbon dioxide emissions avoided per vehicle, per year.
Speeding the transition to EVs
For transport operators, new EV technology poses challenges as well as opportunities. It comes with new breakdown patterns and failure modes and requires a new knowledge-set to minimise life cycle costs and optimise battery maintenance and route management. Additionally, the greater up front, maintenance and infrastructure costs of the transition mean that operators must have a detailed strategy in place to minimise the impact of the shift on their bottom line.
Just as with their ICE counterparts, by combining the granular collection of vehicle data and large-scale data processing with autonomous AI systems, public transport operators can gain valuable insights from the new EV data they have access to, creating a continuous feedback loop that constantly increases the ways in which data can be leveraged. The performance, faults, and range of EVs can be analysed and used to inform the planning of smooth, efficient, and profitable operations.
Predictive battery analytics for example can provide an accurate, comprehensive view of the battery health evolution of an EV bus, allowing for effective route planning and charging requirements, as well as usage optimisation metrics to extend the lifespan of the vehicles. This is crucial given the high proportion of the overall cost of an electric bus that the battery represents. By leveraging State of Charge (SoC) and Depth of Discharge (DoD) data, fleet managers can understand if the operation profile can be changed to maximise battery life, reducing the total cost of ownership of electric buses. This type of analysis is fundamental for an operationally successful and profitable EV fleet deployment.
The future of AI and ML for public transport
By onboarding next-gen AI and ML predictive maintenance technology, the future of sustainable, affordable, and highly efficient public transport is promising. The actionable insights on potential component failures, fuel consumption and operational efficiency offer full control over the health of both ICE and electric buses. This can be harnessed to enhance reliability, encourage passengers to move away from private car usage, curb emissions and wastage through inefficient driving and maintenance strategies, and pave the way for a smoother and faster transition to EV usage.
AI is constantly learning, picking up data about different categories of vehicle and enabling fine tuning for improved operations. It is a system that will keep on growing with huge benefits and impact, contributing to the goals of sustainable and reliable public transport. With some operators already implementing predictive maintenance, the approach will become more ubiquitous in 2023 and beyond, representing the new frontier when it comes to smoother, more efficient and environmentally friendly operations.
Matthias Gutzmann, Founder of DPW Amsterdam, discusses the conference’s rise to prominence, reflects on challenges and reveals future plans.
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“Our challenge is always around asking ourselves how can we make DPW Amsterdam better every year?”
It’s fair to say Matthias Gutzmann, Founder and CEO of DPW Amsterdam, doesn’t believe in standing still and resting on his laurels.
Since launching DPW in 2019, the conference has grown from strength to strength and is now widely regarded as the biggest and most influential tech event in procurement and supply chain on the planet. And despite welcoming over 1,250 procurement professionals with more than 2,500 virtual attendees watching along at home in its 2023 edition in October, Gutzmann is eyeing continuous improvement.
In 2018, Gutzmann was researching procurement conferences to showcase his then-employer, Vizibl, a startup. He was frustrated by the options. The existing conferences were prohibitively expensive for a limited startup budget, lacked investors, and failed to attract an audience of startup businesses, which is critical for the development of digital capabilities and to drive innovation. Identifying this gap in the market, Gutzmann left his job in New York, moved into his parents’ house in Germany, and invested his entire personal savings to launch DPW Amsterdam.
“As soon as one conference finishes, we’re already thinking about the next one,” he explains. “We all sit down and think about how we can improve the experience and what new technologies we can bring in next time. It really is a 12-month process to bring it all together.”
Bringing DPW to life
Held at the former stock exchange building, the Beurs van Berlage in Amsterdam, this year’s theme was “Make Tech Work” which focused on turning digital aspirations into a reality. There was a deep dive into discussions surrounding AI and machine learning in procurement, digital transformation strategies, sustainable procurement, supplier collaboration, risk management as well as innovation and disruption. The two-day event was centred on ensuring the vision of digital procurement happens now and how organisations can be challenged to deliver results instantly instead of only concepts and theories.
Despite significant success, Gutzmann maintains that there are some difficult aspects to get right in order to make the magic happen on the day. DPW Amsterdam builds client booths themselves instead of allowing sponsors to bring them themselves. “That’s a massive undertaking to get this done because we need all the design elements from the sponsors,” he says. “It’s that quality standard but we know it comes with more work instead of just allowing people to bring their own stuff. We have Simone Heeremans, Head of Production, who is amazing and oversees logistics such as catering to the suppliers.
“There is also the sales part of the conference which is selling the tickets and sponsorships. We have created this pull for the conference that we didn’t need to build a proper sales team around it. That said, there’s always a stress factor to get the numbers we want every year and grow it. So far, so good.”
The uniqueness of the conference, the problem it solves, and the timing of the launch in 2019 were the basis for today’s success and fast growth.
WHAT MAKES DPW AMSTERDAM SO UNIQUE?
Matthias Gutzmann:
1. THE AUDIENCE
Traditional procurement conferences only attract procurement professionals. But, DPW Amsterdam recognised the need for breaking this silo and for more collaboration in order to harness the potential of new digital technology, targeting an audience of procurement professionals, business leaders, suppliers, startups, data scientists, investors, and young talents No other procurement conference brings this variety of people together.
2. WORLD’S BIGGEST STAGE FOR PROCUREMENT STARTUPS
DPW Amsterdam is built to bring startups into the procurement ecosystem. In 2023, we displayed over 50 startups, giving delegates a unique insight into procurement innovation.
3. ATTENDEE EXPERIENCE I always thought procurement events felt boring – and I felt lost in a sea of guys wearing suits and ties. So, at DPW, our goal is to make procurement cool and sexy. Not an easy feat, I know. Our dress code at DPW Amsterdam is strictly “startup casual.” You’ll see t-shirts, hoodies, and sneakers from attendees, exhibitors, sponsors, and speakers alike. This dress code embodies our entrepreneurial spirit. But it also breaks down barriers– and levels the playing field between big-shot enterprise CPOs and 20-something startup founders.
Better than ever
A large focus for Gutzmann and his team has been tweaking the formula of the virtual experience. Due to the impact of COVID-19, DPW was forced to cancel its 2020 conference before offering a virtual-only event in 2021. The experience, although different, was praised for its ‘TV feel’ and still created a buzz for those watching at home. However, with day-to-day life returning to a new normal, DPW Amsterdam reverted to an in-person conference in 2022 but offered a hybrid solution for those keen to watch the action from afar. “There wasn’t really anything special about it,” he discusses. “If you run an eight-hour live stream from only one stage, you aren’t likely to keep people watching. That’s why this year we asked ourselves: what can we do to increase the virtual experience? So we did just that.”
This year, Gutzmann and his team set about creating a pop-up broadcast studio to generate a television feel with live coverage from podcaster and host of Let’s Talk Supply Chain Sarah Barnes-Humphrey, as well as a reporter conducting interviews on the expo floor. “Now we’ve got cameras moving around which helps bring the whole conference to life,” explains Gutzmann. “We’ve really ramped it up this year and turned it into a large production.”
Up until this point, DPW has run solely in Amsterdam which Gutzmann believes has acted as his organisation’s competitive advantage. It is this approach that has enabled DPW to allow it to reach the level it is today. Hosted at the Beurs van Berlage, Gutzmann is full of admiration for the historic building which was built in 1896. According to Gutzmann, he believes it is what sets DPW Amsterdam apart from other conferences operating in the space.
“We love it here, it’s unique and I feel it’s a key part of the experience,” he says. “But we’re becoming bigger and we might need to build something completely from scratch. Every year, we think about how we can do things differently. I don’t know if bigger is necessarily better, it’s also about the quality of the solutions we bring in. My goal is to map out the entire end-to-end tech ecosystem and bring in that diversity of solutions.”
Bright future
Procurement, like many industries, is suffering from a talent shortage. The need to find ways to plug that gap, whether that’s through education, industry rebrand or AI, has never been so crucial. With an eye on the future, Gutzmann believes in procurement’s workforce of tomorrow and gave out around 100 free student passes this year. “When we talk to CPOs everyone’s talking about talent shortages so we understand the need to bring in that next generation and show them that procurement could be the way forward for them,” he says. “I think in the context of digital, who better to do digital than the next generation? They are more tech savvy so we need them and it’s a great opportunity for both sides because they can meet CPOs and it’s also becoming a place for recruitment too. We are doubling down on young talent 100% and it’s a win-win.”
Gutzmann is candid about the future of DPW Amsterdam and is always open to feedback while striving for continuous improvement. He believes in the value of innovation and shaking things up in order to best meet attendee’s needs. “I always think we can always bring in new speakers, but this year’s agenda was incredibly strong,” he discusses. “It’s really about listening to the people. Ultimately how can we be more relevant around the solutions as well here? How can we better matchmake people? I was wondering about how we can work pre-event with some of the corporate attendees that are coming to the conference around mapping out their challenges to then have more meaningful matchmaking at the event because it’s an innovation showcase here as well. There’s more value to be had but we know that also comes with more work. There’s always more we can think about.”
With an unprecedented amount of technology at procurement’s fingertips today, Gutzmann is in no uncertain terms about what the next chapter of the space holds. “It’s the best time to be in procurement,” he explains. “It’s the most exciting era to be in procurement and supply chain. We need to get loud about it and celebrate that fact.”
Our exclusive cover story this month centres around Versuni, home to some of the world’s most renowned home appliance brands
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Versuni: Procurement excellence to drive growth
Our exclusive cover story this month centres around Versuni, home to some of the world’s most renowned home appliance brands. Versuni is a company with a rich history, dating back to 1891, albeit under a different name. Philips Domestic Appliances was renamed Versuni after the Netherlands-based giant sold the business to China-based global leading Private Equity company Hillhouse Capital in September 2021. And so began a process of disentanglement as Versuni embarked on its journey to becoming a successful and independent entity with a simple yet clear purpose of turning houses into homes.
“We refer to ourselves as a 130-year-old company with a scale-up mentality,” explains Hugo Sparidans, Chief Procurement Officer, Versuni. “We combine the legacy we have with Philips with all the goodies here in this new, agile environment where things can happen much faster and with a different mindset fully focused on growth.”
Versuni is now operating under private equity ownership following its separation from Philips two years ago. “My boss called me and said, ‘So, we’re going to spin off Domestic Appliances. Do you have the interest to lead the transition for Procurement within that spin-off, and then potentially after?’ That was an interesting question for me,” Sparidans explains. “I’d had a great career within Philips working for a successful business, but I was now facing the idea of leaving that behind for a trip into the unknown.”
Mars Pet Nutrition LATAM is changing the sustainability game within the pet food sector. Gabriel Guzman, VP Procurement LATAM, and Ana Milena Zambrano, Climate & Sustainable Sourcing Head LATAM, explain how…
Gabriel Guzman, VP Procurement LATAM, and Ana Milena Zambrano, Climate & Sustainable Sourcing Head LATAM, are leading a major ongoing evolution within Mars Pet Nutrition LATAM. Guzman has worked in some of the world’s largest organisations over 25 years, spearheading many high-profile projects during this time. Zambrano’s career spans 15 years across consumer goods and supply chains, with sustainability as a core lifelong passion.
A focus on sustainability and the environment is nothing new for Mars – it’s part of the culture. It’s a business with firm ESG pillars and a clear concept of what sustainability means to the organisation. “We believe the world we want tomorrow starts with how we do business today,” says Guzman. “It is the vision at the heart of our Sustainable in a Generation Plan – one where the planet is healthy, people and their pets are thriving, and society is inclusive.”
We sit down with Trevor Tasker, CEO of EMCS, for the second time to discuss partnership, leadership, and the state of the industry
EMCS Industries is one of the best-kept secrets in its sector. An innovator from day one, EMCS Industries invented the world’s first electrolytic marine growth protection system (MGPS). This set the basic standard for the field, to the extent that everybody else now uses the same or similar technology based on the EMCS Canadian engineered and manufactured antifouling system. Trevor Tasker is the CEO of the company, and he’s not only passionate about what EMCS does, but his rich background in leadership puts him in excellent stead as head of an industry-leading company.
Tasker’s first job at the age of 16 was as a self-employed wedding DJ. Since then, he has honed his entrepreneurial spirit on an international scale in industries such as financial, large scale digital signage, steel manufacturing, and others. He has experience in both building his own businesses, and being an employee, giving him a good foundation of what it means to both lead and be led.
“It allows you to get a good mix of what you like, what you don’t like, how you’d like to be treated, and how that shapes the way you treat others as you move through your career,” says Tasker. He’s worked across a variety of industries but the common denominator has been that he’s always either been in a leadership position within a company or running his own company. He’s conducted business all over the world and collected the tools he’s needed to be the best leader he can.
Joaquin Rivamonte, Director of Procurement at AlphaSense, talks about how he’s bringing scalability to the organisation, and the benefits of procurement working hand-in-hand with the wider business
Joaquin Rivamonte has enjoyed a rich and varied career, one which taught him numerous lessons in preparation for his role with market intelligence platform, AlphaSense. He cut his teeth in the financial service sector; he was the Director of Procurement for some medium-sized investment banking companies in San Francisco, helping support Silicon Valley before the businesses he worked for were bought by bigger banks. One was acquired by JP Morgan Chase, where Rivamonte became VP of Procurement. He was then asked to move to New York, just as Silicon Valley was experiencing the dotcom boom.
Office photos at AlphaSense, 24 Union Square East in New York City.
Rivamonte’s background in building procurement departments from the ground up continued, and eventually, Microsoft took him on. He moved to Seattle to be part of the Microsoft team in 2005, and this was the beginning of his education in how very large procurement departments work. “I did have experience in large groups of people reporting to me already,” Rivamonte says, “but at Microsoft, I had $2-3bn dollars of category responsibility under me.
“I was responsible for putting together the consulting category, which was almost $1bn, and the outsourcing category of about $1.2bn, plus the web development category and a lot of different IT contracts.”
CPOstrategy explores five barriers companies are faced with in terms of sustainable procurement.
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A robust sustainability strategy isn’t only a ‘nice to have’ any longer, it is quickly becoming one of the top items on the agenda in procurement.
Many organisations are implementing sustainability programmes with a view of helping them to cut costs, make their companies more competitive and secure a greener future for all.
But, adopting a greener way of working isn’t necessarily straightforward. Here are five barriers companies are faced with in terms of sustainability in procurement.
1. Acceptance from senior employees
Change isn’t always welcomed. Executives, particularly those that have been served the industry for a significant time period, aren’t always receptive or quick to embrace new strategies. Without buy-in from senior executives, positive change is trickier to achieve. However, by informing employees of the considerable advantages by making a shift, it could lead to an easier experience with less pushback.
2. Limited time and resources
Time, funding, and other resources are vital in ensuring the best results from sustainability. On a busy schedule, it can be challenging to implement a sustainable procurement policy but it is important to retain the knowledge that it won’t be achieved overnight.
3. Lack of support from suppliers
In a similar way to senior employees, getting suppliers on side can also be a hurdle. As suppliers are separate from your company, they potentially have less resources available or a different mindset. Suppliers may not recognise the importance of sustainability in the same way which could lead to a misalignment of priorities.
4. Higher costs
The prospect of a higher cost is one of the biggest concerns companies have when thinking about sustainable procurement. After switching to a sustainable procurement strategy, costs do tend to rise but by not switching sooner, it could lead to organisations paying even more in the future. For companies without a sustainable strategy, they will have to question whether they can afford to watch competitors implement green strategies and the impact this will have on what their customers demand.
5. Accessing the right technology
Technology can be an influential tool to help drive an organisation’s sustainability goals. Sometimes, a different set of digital tools to what is already existing within a company is necessary to make more of a concerted environmentally friendly effort. However, this comes with the caveat of new tools being time-consuming and requiring training to improve skills and knowledge. But once up to speed, using technology will mean greater efficiency to scale sustainability strategies.
CPOstrategy examines why replacing legacy systems could hold the key in procurement to achieve long-term success.
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As technology evolves, modernising legacy systems in procurement becomes essential.
Change management is never straightforward or linear. Indeed, legacy systems are familiar to an organisation and the workforce might be reluctant to embrace a new way of working, or at least at the very beginning.
But how much damage is clinging to outdated processes doing to an organisation?
Replacing legacy systems
“For many organisations, legacy systems are seen as holding back the business initiatives and business processes that rely on them,” according to Stefan Van Der Zijden, VP Analyst at Gartner. “When a tipping point is reached, application leaders must look to application modernisation to help remove the obstacles.”
People often like their routines and a preferred methodology of how something is completed. This can lead to pushback from the workforce about the purpose of ‘fixing something if it isn’t broken.’ And the point of change for the sake of change is a valid one, up until an alternative which is going to demonstrate tangible benefits. The truth is that most legacy systems don’t allow for growth with older technology often not able to interact with newer systems and processes. In ‘7 options to modernise legacy systems’, Gartner pointed out six main drivers of application modernisation with three from a business sense and three from an IT perspective.
These are business fit, value and agility as well as cost, complexity and risk. If a legacy application isn’t meeting new requirements needed by a digital business, it needs to be modernised to fit properly and should be enhanced to offer greater value to the business. Without agility, a digital business will struggle to keep pace with the latest trends or craze and put the organisation at risk of falling behind competitors. Whereas from an IT side, if the total cost of ownership is too high or if the technology is too difficult to use, then modernising could be vital.
Overcoming resistance to change
Ultimately, change management is an essential component of any Chief Procurement Officer’s role. It can range from a small swap, such as a change of supplier, to wide-scale amendments such as altering the way goods and services are acquired or implementing a procurement or software transformation. According to data from group purchasing firm Una, 70% of change management efforts fail. In order to combat this, there are three key steps to overcoming resistance to change. These are engagement, managing resistance and not neglecting training.
Market disruptions, evolving customer demands and the necessity for a digital landscape has forced businesses’ hands. They are now faced with the task of completing legacy modernisation as a matter of urgency to deliver innovative products and services quickly and efficiently. Failure to do so could lead to being reactive instead of proactive – a risk that in today’s fast paced and ever-changing world that should be taken with caution.
Erik Oberländer (DE), Manager, Procurement Advisory, PwC, discusses how to combat inflation and maximise savings through game theory.
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Material scarcity, rising inflation, exploding energy prices, and an unstable geopolitical situation pose procurement challenges like never before.
The right negotiation strategy is not only essential for companies to achieve cost savings but is also absolutely vital for survival.
In the current market situation, securing material availability often takes top priority. In this case, negotiations with suppliers must be based on partnership and close cooperation. On the other hand, if contract volumes have been awarded in competition between multiple suppliers with a high degree of shiftability, the use of game theory should be considered.
But what does the game-theoretical negotiation approach look like? In a classic bilateral negotiation, the focus is on convincing the other party with the right strategy and tactics, a convincing storyline, and compelling arguments for one’s own position. In contrast, the game-theoretical approach involves developing a bidding mechanism that maximises the competitive dynamics between suppliers. The design of the bidding mechanisms is based on insights from numerous scientific theories.
In fact, since the 1990s, several Nobel Prizes in Economics have awarded in the field of game theory. This scientific approach opens up new perspectives in complex negotiations and makes it possible to forecast how people tend to behave. In strategic procurement, many companies use game theory in bids and negotiations. After realising unimaginable savings results, procurement teams are electrified and absolutely convinced of the effectiveness of game theory.
Game theory in procurement
The two most relevant and commonly used bidding mechanisms in procurement auctions are the Dutch (ascending bid increments) and English auction (descending bid increments). In combination with other elements, such as qualification and ranking rounds, they can maximise competitive pressure through credible market transparency.
However, when developing any game-theory-optimised bidding mechanism, many questions should be asked. For example: How should the lots be formed to create the greatest possible competitive pressure? What decision will a supplier make if it is assumed that they want to maximise their own benefit – and how do you optimise the bidding design to take this into account? With what bidding design can you put the best suppliers under pressure?
These criteria are met:
Game theory is fascinating – with demonstrable successes that cannot be achieved through classic negotiations, with the consistency and “purity” of its systematics, and with the surprising realisation that some game-theoretical approaches have been intuitively and unconsciously used to increase strategic competition and minimise risk aversion.
Many procurement teams believe this approach only applies to certain categories of goods. This is a misconception. Generally, only three criteria will be met. We call them the 3Cs:
•Comparability: All relevant decision parameters will be taken into account and is monetised through a bonus-malus evaluation. The offers of participating suppliers are comparable, and award decision is based on total cost of ownership.
•Commitment: The award decision is completely open. All participating suppliers are released by the department, and all cross-functions can win the contract on their own. In addition, it is clearly communicated that there will be no renegotiations or vetoes in further procurement committees.
•Competition: There must be more than one supplier interested in the scope of the award. Only this way can a competitive situation be created that is maximised with the help of a tailored award design. The right incentives for suppliers must be identified, and the appropriate signals set.
Possibly, not all of these criteria are met at the beginning of the project, but they can be developed together in cross-functional teams (consisting of colleagues from procurement, engineering, quality, logistics, and sales).
How the award is carried out:
Once the 3Cs are met, suppliers must be prepared for the award event. In transparent communication, the mechanism and rules are explained, and any uncertainties are clarified. No supplier should be unsettled, because only if the supplier has fully understood the mechanism, can he behave optimally, and the award mechanism can achieve its full effect.
The award day is then carried out with suppliers on-site or virtually via eAuction tools. Especially for larger award volumes, it is advantageous to have suppliers on-site, as signals are also sent to suppliers between rounds. In addition, you can literally feel the tension level and adjust the bid steps accordingly.
Virtual implementation facilitates the scaling of the approach with multiple providers. Smaller award volumes are carried out quickly and without great coordination effort. The selection of the appropriate tool provider is crucial. Not all tools can map more complex award mechanisms and adapts to specific individual starting situations.
Here are the first steps:
It must always be considered that game theory is a complex science and cannot be simply applied. The preparation time for the design of award strategies is often underestimated and set too low. To become a good game theorist, it is not enough to attend a weekend course or read a book. In fact, the unprofessional application of game theory can do more harm than good. Therefore, it is strongly recommended to be accompanied by a coach during the first use – only with this expertise are amazing negotiation results possible.
It is not always easy to delegate final decision-making authority to a mechanism, but it is worth it. Successful awards can ignite the fire in procurement teams. It is important to generate maximum enthusiasm, support cross-functional cooperation, and institutionalise negotiating skills in procurement teams.
By Erik Oberländer (DE), Manager, Procurement Advisory, PwC
CPOstrategy compiles five ways that ChatGPT can transform procurement amid the rise of generative AI in the space.
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ChatGPT is seen by many as a catalyst for the next wave of technology transformation.
The technology, which was developed by OpenAI, has quickly become the buzzword of the year and one of the hottest topics on the c-suite agenda.
And its promise extends to procurement – an industry that relies heavily on the need for achieving efficiency, transparency and cost savings. Having already made its mark on a variety of industries already, procurement hopes that by embracing ChatGPT it will allow teams to make greater strategic decision-making to drive long-term value.
Here are five ways ChatGPT can transform procurement.
1. Rapid research
Through ChatGPT, time-consuming and cumbersome tasks such as research can now be completed almost instantly. Generative AI tools such as ChatGPT can analyse significant amounts of data and provide insights on market fluctuations while also searching for new suppliers, products and capabilities to secure better deals.
2. Automated procurement processes
ChatGPT can be used to discover patterns and identify trends which will allow procurement teams to make data-driven forecasts. Through leveraging predictive analytics, organisations can anticipate demand, optimise inventory levels and manage their supply chain more effectively.
3. Easier communication with suppliers
Tools such as ChatGPT can improve supplier performance tracking through automating data collection and analysis. Its focus on cooperation and transparency throughout the procurement process allows for stronger supplier relationships and more innovative thinking.
4. Enhanced risk management
A major benefit of generative AI in procurement is improved risk management and the ability to foresee potential dangers. Through identifying potential hazards such as financial instability among suppliers or non-compliance with procurement processes, ChatGPT can help businesses manage and reduce risks.
5. Cost savings and increased efficiency
ChatGPT can help organisations to save costs by automating operations, increasing stakeholder participation and allowing real-time data analysis. By reducing the amount of time and effort for tasks like evaluating bids and selecting a vendor, ChatGPT could shake up the procurement process immeasurably.
At DPW Amsterdam, Gregor Stühler, CEO and Co-founder of Scoutbee, and Karin Hagen-Gierer, CPO and Strategic Advisor at Scoutbee, discusses the rise of chatbots and their influence in procurement.
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Scoutbee was created with the idea of improving supply chain resilience through AI and big data to transform the way organisations use supplier data to discover and connect with suppliers.
The company, which was founded in 2015, offers an AI-powered Scoutbee Intelligence Platform (SIP) which uses graph technology and predictive and prescriptive analytics to deliver holistic supplier visibility that helps procurement make confident supplier decisions, drive cross-functional efficiency and optimise existing technology investments.
Scoutbee’s AI-driven data foundation connects teams to any data point, internal, external, third-party and more, as well as any data combination necessary to orchestrate a resilient, competitive and sustainable supply base.
Gregor Stühler is the CEO and Co-founder at Scoutbee. He believes that waiting to invest in AI tools and underlying data training will be companies’ greatest sustainable disadvantage of the next decade. “AI is not an off-the-shelf product, so you can’t buy AI unless it’s a pre-trained AI on a specific use case but then it’s not a competitive edge,” he tells us.
“A competitive edge only emerges when you have a clear use case and training on top of that. The companies that start using those AI solutions sooner with their data have much better training in place. As a result, they’ll always be ahead of the game quite significantly. Companies that use off-the-shelf AI products will do well, but the ones that actually take it meaningfully and start trading on their own use case and their own data will be the ones that will be accelerating.”
Gregor Stühler, CEO and Co-founder and Karin Hagen-Gierer, CPO and Strategic Advisor, at Scoutbee
AI – Changing the game?
Karin Hagen-Gierer is CPO and Strategic Advisor at Scoutbee. She explains that there are a multitude of ways in which tools such as generative AI are having an impact on procurement to change the game.
“AI is great to help with mundane and boring tasks,” she discusses. “It can help us with vendor requests that come in and can be appropriately channelled. It can help your colleagues to navigate procurement. When they have questions, they can interact with a chat solution and be guided in a much better way to find what they want much quicker. I think if we look at how it can enhance our teams’ effectiveness, it is really in market analytics, supplier searches, supplier evaluations, and ChatGPT that could help us broaden the spectrum. If you then look to more tailored solutions like Scoutbee then it’s a very different ball game that procurement professionals have at their fingertips. I’m noticing a drive on both efficiency and effectiveness in this space.”
Despite AI’s draws, Stühler is well aware of the challenges and hesitations around digital technology. As far as he is concerned, there are two waves of generative AI to be aware of. “Wave one is about having a prompt and how tools such as ChatGPT can help with that,” he says. “For example, what are 10 RFI questions for aluminium cans?
“Wave two is where I merge and synthesise all of my data into our large language model and it has reasoning to drive decision-making and scenario planning. You do have to be careful though because you have to give the system all your critical data but you don’t want to input this into an open model. This means the use case has to be that you deploy a large language model in your own infrastructure, and own your own graphic card that will never actually leave your organisation.
Gregor Stühler, CEO and Co-founder at Scoutbee
“This is the biggest concern that we’re seeing because ChatGPT has brought a lot of progress but also a lot of questions. Now, when people hear that we want them to merge their data into a large language model that’s completely private, we’re met with some resistance when we explain to them that their large language model is running on their very own graphics card that we don’t have access to. That tends to give them more comfort to put their data into it,” he continues.
Stühler adds that he believes there are some misconceptions around ChatGPT and the nature of how accurate the data it provides actually is. As is the case with any new technology, these things take time. “It’s always the same. It happened with electric cars, nobody thought that would solve the battery issue,” he discusses. “I think we are right at the peak of the hype cycle when it comes to those things and people have figured out what they can use it for. With wave one of generative AI, it is fine to have hallucinations of the model and if something is spat out that is not supported by the input.
“But by the second use case, hallucinations are not okay anymore because it’s working with accurate data and should not come up with some imaginary creative answers. It should be always supported by the data that is put in. This is very important that people understand that if you train the model and if you have the right setting, those hallucinations will go away and you can actually have a setting where the output of the model is 100% accurate,” he further emphasises.
Procurement’s potential
According to Karin Hagen-Gierer, there is an incredible opportunity to create value in procurement today. Following unprecedented global challenges over the past few years, CPOs have never been in the boardroom so often – something she’s keen to stress.
“The value of procurement through crisis has been proven,” she says. “We tend to say, it’s not a core business, but very often if things don’t go right, it becomes core very quickly and you are in the CEO’s office more than you might like. It’s the breadth of the role that allows to drive value: You impact the P/L impact, topline, and the ESG agenda to name a few. But then there is a need to future-proof your team’s skill set around how you can drive more impact from being more effective in the respective tool sets you’re using, the questions you’re able to solve solutions for. Additionally, you have to work on improving your efficiencies. Teams are not getting bigger, so you need to be enabled in a very different way to really drive all this value.”
Karin Hagen-Gierer, CPO and Strategic Advisor at Scoutbee
Stühler reflects on the past and admires the transformation procurement has undergone in the past decade since he joined the industry. “I came to procurement in 2012 and even then I remember this function being solely responsible for paying invoices and calling trucks to arrive sooner – at first glance,” he says. “Combined with the crises that now happened over the last couple of years, post-Covid has proven procurement’s value – and the impact organisations such as Scoutbee can make.
“I think two key things will happen in the future. Firstly, the tech landscape is exploding so quickly that there must be a consolidation that will happen. Secondly, when it comes to generative AI I think those pragmatic use cases will become the new normal. ChatGPT will be like Google today to get insights. Generative AI and large language models will get increasingly powerful over time and will help if you feed it the right data and connect it to different data streams that you have internally. It can become this true copilot and help you with complex scenario planning and make you aware of weak spots in your supply base while helping you to strategically take the right steps. The future is exciting,” he concludes.
Stefan Dent, co-founder at Simfoni, and Richard Martin, CEO at Thinking Machine, discuss the power of data in procurement and the future of AI.
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“See spend differently”.
Simfoni is revolutionising how businesses spend their money – via data. In today’s ever-changing world, everything is underpinned by data at Simfoni.
Founded in 2015, Simfoni is a leading provider of spend analytics, Tail Spend and eSourcing solutions to global businesses. Simfoni’s platform utilises machine learning and AI to accelerate and automate key parts of the procurement process which saves time and money while creating a pathway for supply chain sustainability. Its solution quickly distils and organises complex spend data to help discover opportunities and savings. It also gets up and running in days with an on-demand spend automation solution.
Indeed, Simfoni aims to take the hassle out of procurement through its automated, fluid platform that offers a unique pay-as-you-save pricing model which reduces barriers to technology adoption. Through fused revolutionary technology with AI-enabled content and deep expertise to automate, streamline and simplify procurement. Simfoni’s composable platform provides a selection of advanced automation modules that help customers sky-rocket savings and achieve sustainability objectives.
Stefan Dent, co-founder, Simfoni
Stefan Dent co-founded Simfoni and now serves as Chief Strategy Officer. He tells us his organisation was created ‘with a purpose to be different’. “A lot of customers have been working on full suite solutions for some time, which was seen as a sort of panacea for all ills that would solve everything,” says Dent. “It solved some areas such as direct spend, but these are large, mega expensive solutions that aren’t particularly agile. Ultimately, we came up with our own solution which is purposely different. We launched as a composable, agile solution that works with existing systems to boos ROI on tech spend. We apply next-gen technology to procurement that democratizes access to digital procurement tools – opening-up digital solutions to organizations of any size and across any sector. It means we can open our solution up to the masses and not just for large organisations.”
Relationship with Thinking Machine
Simfoni is powered by analytics. Its analytics solution informs spend, as well as watching how change is measured and performance is tracked over time. Now eight years old, Simfoni has fostered alliances with several younger companies offering specialist tools which have been embedded within the Simfoni platform. One such company is Thinking Machine, led by CEO and Founder Richard Martin.
Thinking Machine was founded in 2019 by Martin after he discovered the industry needed to find a better use of data to address ‘complex spend’ such as in Telecoms where you have multiple vendors, manual and frequent billing, changing tariffs and users. Martin explains that he witnessed all types of companies going through the same problems instead of only large companies. “Thinking Machine was developed as a way to give customers a single source of revenue across all services, pricing and demand but in a way that can be done at the very lowest level,” says Martin. “We would take all that complexity and be able to roll it up into actionable evidence that could be reconciled against their top-level financial numbers. It gives procurement directors the tools they need to actually be in the driver’s seat when it comes to their procurement operations.”
Developing key, strategic relationships with partners that can be depended on is an essential component to the success of any long-term business relationship. Simfoni relies on Thinking Machine to help manage its load and enable customers to go deep with Thinking Machine to extract even more value from their data. “We offer our clients the opportunity to go deep within certain domains,” discusses Dent. “We can then bring in Thinking Machine to help extract even more value from the data on complex spend.
Stefan Dent and Richard Martin speaking to CPOstrategy at DPW Amsterdam
“Thinking Machine’s application will ingest a large quantum of complex data. Their tools work like magic and allows data to be put into a readable format so they can make sense of the actual spend and quickly identify optimisation opportunities. This is part of our philosophy to work with niche technology partners because we shouldn’t do everything, so we need to put our resources where it counts. Resources like Thinking Machine work well by plugging into us, which means we offer incremental value to our clients without them going to market separately.
“It can also be very hard for a young company to work with large corporates because they’re untried or untrusted. This means for a company like Thinking Machine to connect with Simfoni is a win-win for everyone.”
Procurement’s bright future
Given the space procurement finds itself in today, the future is set to continue to be transformative. For Martin, he believes the introduction and influence of generative AI tools will help meet challenges in procurement head-on. “For the first time you see how it’s actually possible to be a unicorn with a 10-person team,” he explains. “The scales of efficiency are just out of this world. In terms of the procuretech industry, I think we’ve had a problem for a while now because there’s been all these best-of-breed solutions that are doing bits and pieces but is very difficult to stitch together into one cohesive platform that customers can make use of without having to know how to use 50 different tools.
“I think Gen AI offers a path to helping to smooth over some of those challenges and figuring out how to bring these things together. I think enterprises are going to start finding a lot more value in having all these best-of-breed solutions, such as Thinking Machine and Simfoni, while being able to use AI as a way to put this together into more of a single common layer that they can access. It is a very exciting time.”
For much of the past decade, Dent explains that he has believed that machines will take over mundane and outdated ways of working. Now, with the influence of tools such as Open AI’s ChatGPT, that digital future has only been accelerated and change the workforce of tomorrow. “Most CPOs of today are saying they need more headcount but I think they will soon be thinking very differently,” he discusses. “We predicted some time ago that Procurement departments will get smaller in headcount, maybe by even up to 50%. The procurement function of the future will be a lot smaller, leaner, and meaner. Procurement teams will be more intelligent and strategic, in terms of both the people employed, and the digital tools used to manage spend.”
While Dent believes AI and machines won’t replace every human in procurement, it will mean forward-thinking teams need to embrace new technology with humans taking on higher-value roles. “The shape and structure of the modern procurement function will change quite dramatically, and people will need to upskill,” he discusses. “A lot of the work will be taken over by the machine eventually either 20%, 50%, and then a hundred percent. But the human needs to have that in mind and then plan for that next three to five years. The procurement function of the future will be smaller, and they should purposely be doing that, to then look at solutions to find a way to enable it to happen naturally.
“This is arguably the best time for people to join procurement, as you’ve got this great opportunity to embrace digital and make it happen. Young people can question ‘Well, why can’t it be done by a machine?’ They’re coming in with that mindset, as opposed to fighting being replaced by a machine. I think for graduates coming into procurement, they’ve got the opportunity to play with digital and change the status quo which is a wonderful thing.”
Procurement is one of the leading industries when it comes to embracing new solutions and ways of working. The space is waking up to the massive value that can be created through autonomous negotiations. And making a name for itself in the procuretech ecosystem is Pactum.
Pactum is an AI-based system that helps global companies to automatically offer personalised, commercial negotiations on a significant scale. The system adds value and saves time for both the Pactum client and their negotiation partner by aligning values to determine win-win agreements via easy-to-use chat interface that implements best-practice negotiation strategies.
Scott Mars has been the Global Vice President of Sales at Pactum AI since December 2022. He explains that his organisation is always striving to grow and expand its service offering. “At Pactum AI, we’re defining the space,” explains Mars. “We’re a creator for autonomous negotiations, we work with some of the world’s largest organisations and we’re really looking to expand the pie. The name Pactum originates from the Latin definition of an informal agreement between two parties. We can do up to 10,000 negotiations at once and unlock hundreds of millions of dollars of savings for our clients. We’re typically looking at tail-end suppliers and tail-end spending that no one’s touching. In many cases, that represents 80% of the negotiations.”
Exponential savings
Mars highlights a recent example of incredible savings achieved through Pactum AI’s solutions in a short space of time. Recently, Pactum worked with a travel and leisure firm in the UK to introduce its autonomous procurement solution. “We conducted a very brief implementation over two weeks, which led to a much larger enterprise rollout,” he discusses. “The CPO was actually on holiday while we implemented the autonomous procurement solution with his team. This involved optimizing payment terms with some of his long-tail suppliers.
“When he got back from holiday, there were 50 DocuSigns sitting in his emails, all related to extending payment terms. Many of them were remarkable successes, resulting in an average extension of negotiated payment days by more than 30 days and a 3% average gain from negotiated discounts and discount periods. This means we secured an average discount of 3% on each invoice when paid within the agreed-upon discount term. Our unwavering commitment to enhancing overall value not only positively impacts our clients but also extends to their suppliers, creating a win-win scenario for all involved.”
With AI having such a transformative effect on procurement, achieving efficiency and cost-effectiveness is more streamlined than ever through digital tools. But being alert to new threats, particularly in a space that is so open to innovation, does bring data security concerns. Mars recognises the challenge of cybersecurity and affirms Pactum ensures the safety and confidentiality of sensitive procurement data remains secure in chatbot interactions.
Digital future
“Everything is hosted in a private cloud, so each customer has a private instance. It means all of our data is secure from a generative AI perspective,” he tells us. “Large language models (LLMs) are great, they’re creative but they have their problems which means we’re only using safe LLMs. All of our negotiation design is kept in-house, and we use rule-based explainable AI which means all the data is secure per each customer. We have the largest repository of behavioural science, so those learnings are shared across our customer base, but all the customer data and all their negotiations are private to each customer.”
Looking ahead, Mars is excited about procurement’s digital future and explains Pactum AI’s vision is to transform global commerce. “At the moment, we’re only doing buying, but we are looking to move into the sales side as well,” he discusses. “Large companies have a huge footprint. For example, the Fortune 500 is 66% of the US economy. The plan is for us to move into selling which will give us the scale to transform global commerce. It’s definitely a grand vision, but we do feel that we’ll move from buying into selling and transform global commerce.”
For procurement generally, Mars is adamant that the space is in its “golden age” with the magnitude of vendors within the procuretech ecosystem hitting unprecedented numbers. “I was speaking with a CPO recently and he said 10 years ago you could name the procure to pay and ERP vendors on one hand, now there’s hundreds of them and all these periphery vendors for AI and spend,” he reveals. “The most visionary procurement leaders aren’t just looking at these all-encompassing solutions, they’re bolting on niche solutions into their ecosystems to make their teams more efficient. I think we’ll start to see a consolidation in the coming years of all these little companies into a few larger players to do really an end-to-end type solution. I expect someone to come up with a solution to close the loop in procurement.”
Shaz Khan, CEO of Vroozi, discusses why AI is the great equaliser for companies to optimise procurement.
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In today’s ever-evolving business landscape, companies are facing a multitude of challenges when it comes to managing and controlling their spending. From global supply chain disruptions, outdated technology solutions, labor shortages and much more, these challenges have an immense impact on a company’s financial health and overall efficiency. Additionally, procurement teams are regularly tasked with new responsibilities beyond spend management and purchasing, such as managing supplier risk, building, and implementing CSG and ESG initiatives, studying economic trends to determine price elasticity, finding new sources of supply, and cleaning up disparate and dirty data. Yet most companies simply do not have the human capital or bandwidth to execute these areas with quality and control.
When it comes to bridging the gap between the obligations that procurement teams are tasked with and efficiently executing on these tasks, AI may be the great equaliser to help solve these problems. While AI has turned into somewhat of a buzzword in today’s market, there’s no doubt that the technology has powerful capabilities to truly transform procurement in the foreseeable future. For those changes to take place, it is important for procurement professionals to continue to articulate the problems they are facing on a daily basis, as this will force the industry to evolve and adopt the proper solutions for better business outcomes.
Shaz Khan, CEO and co-founder, Vroozi
The problems: Unchecked spending, outdated tech, and lack of governance
Irresponsible spending can wreak havoc on a company’s financial well-being. With non-managed indirect and direct spend categories, companies experience up to a 40% increase in costs, consequently eroding their gross margins and increasing operating expenses. This usually stems from lack of visibility into non-payroll spend categories, combined with old and antiquated technology solutions within enterprise infrastructure that makes it difficult to extract data, analyse spending patterns, and generate meaningful reports on total addressable spend (sound familiar?). Poor data quality and the need for data cleansing can impede effective spending management, leading to faulty decision-making that hinders procurement efforts.
Unchecked spending can also foster a culture of mistrust and overall decreased morale among employees. When employees perceive that their hard work and dedication are being undermined by wasteful spending practices, workers begin to feel disengaged — which leads to reduced productivity. When spending is not carefully managed, there is a risk that critical projects or departments may not receive the resources they need to thrive. This not only causes anxiety about the organisation’s financial health, but it also can lead to concerns about resource allocation and fairness. Therefore, it creates broader mistrust in organisational leadership.
One of the biggest culprits in inefficient spending management comes from a lack of visibility into supplier contracts, which stifles a company’s ability to identify cost-saving opportunities. Hidden fees, price escalations, and unexpected cost structures can be buried in supplier contracts. A lack of visibility can result in unexpected cost overruns, impacting the organisation’s budget and profitability. Departments may also struggle to fully understand the terms and conditions within these contracts, including performance expectations, delivery schedules, and penalty clauses. This lack of clarity can increase the risk of contract breaches, quality issues, or delivery delays.
The long-term benefits of incorporating AI into procurement
With more at stake within procurement departments than ever before, AI serves as a turbocharged catalyst for procurement teams to optimise their processes. Procurement leaders are increasingly delegated additional responsibilities and AI offers an invaluable assistant that can process, predict, and deliver information and outcomes without exhausting human resources. For example, predictive and smart reordering can keep items that require ongoing restocking on a regular purchasing cycle. AI can also help identify alternative sources or suppliers for this item that may offer additional cost-savings and attractive incentives. As this technology becomes increasingly more capable, it’ll save procurement departments hours of time — freeing up employee bandwidth to then focus on optimising supplier relationships and other strategic tasks.
Earlier, we discussed how unchecked spending leads to mistrust and disengagement within an organisation. AI can help re-establish morale and an engaged staff by gamifying the procurement process. For example, a company can create a scenario where employees and teams are rewarded with soft benefits for complying to procurement policies, reducing maverick spend, improving supplier relationships, or negotiating a new deal with a strategic supplier. These soft benefit rewards can be programmed into the system to track and signal when teams are hitting these goals. Gamification, particularly when entire teams are rewarded together, can foster camaraderie and a dynamic culture built around the thrill of victory, aligning employees with the company’s procurement strategies.
Ensuring a smooth transition to AI-driven procurement processes
When beginning the transition towards an AI-infused process, it requires an honest assessment of existing processes, data quality, and technology infrastructure to identify pain points and areas where AI can provide the most value. Integration will require some level of customization to meet the specific needs of your business, such as custom algorithms, workflows, or user interfaces. This is an ongoing process. Optimisation requires the continuous gathering of feedback from users and stakeholders to identify which areas are working well and which features need improving. Be prepared to adapt as you go along. AI is a rapidly evolving field, and we are in the very early stages of realising the true potential of this technology.
As the AI revolution takes place in procurement, employees need to be introduced to new technologies to understand the strengths and more importantly the limitations. However, when thinking of the big picture, Procurement teams must be prepared to upskill their talent pool and recruit new talent to maximise AI’s potential including investing in certifications in data science, cloud platforms, supply chain management, and data analytics. To reap the benefits of automation, data-driven insights, and enhanced decision-making, leadership requires teams that have skills to use and interpret AI tools effectively — particularly when it comes to data management. AI solutions rely heavily on data and procurement teams must know how to effectively manage this data, including data cleansing, integration, and analysis to ensure that the algorithms receive high-quality input data and large language models for accurate results and the promise of real predictive analytics.
The promise of a brighter future
This is also why collaboration between departments is essential. For AI technology to be implemented effectively, it requires synchronisation and cross-functional collaboration between IT, data science, corporate procurement, finance, and other departments. Companies that cultivate these collaborative ecosystems within their departments gain a strategic edge in terms of stability and future growth.
It’s important to note that while AI is a productivity and enablement tool, it is not a replacement for human intellect, willpower, and execution. Therefore, it’s essential to seek knowledge and expertise from insights from companies, networking groups, and individuals with practical experience in AI and GenAI capabilities. Remember, it’s important that you do not let AI drive your business, but rather let your business needs drive AI adoption. Define the specific problem that you aim to solve and determine if AI is the right tool to boost these areas.
Ultimately, the incorporation of AI into procurement processes holds the promise of a brighter, more efficient future for businesses. Procurement departments face many challenges but if they address these pain points with a strategic approach that involves the adoption of modern technology solutions while upskilling their workforce, businesses can expect to soon see enhanced visibility into their spending and gain a strategic edge in a competitive market. One thing is certain, AI will transform the procurement professional and function into a data analytics and supplier relationship mastermind.
ORO Labs has announced it has raised $34 million in Series B funding led by Felicis with participation from existing investors.
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ORO Labs has announced it has raised $34 million in Series B funding led by Felicis with participation from existing investors including Norwest Venture Partners, B Capital, and XYZ Venture Capital.
The move will see increased support for ORO Labs, which is a global SaaS provider and creator of the world’s foremost smart workflow orchestration platform for procurement, as it scales international and platform growth.
This latest round closes at the one-year milestone of ORO’s launch and the company’s November 2022 $25 million Series A, bringing total investment raised to $60 million.
ORO orchestrates company spend and supplier management across siloed systems and data to improve procurement workflows, increases visibility and makes it easier for business users.
ORO Labs co-founders Sudhir Bhojwani and Lalitha Rajagopalan
Humanising the procurement experience
The innovative platform helps companies quickly create intake workflows, build an integrated and orchestrated procurement tech stack, and dramatically simplify user engagement with purchasing throughout the organisation.
“We’re on a mission to humanise the overall procurement experience, simplifying and guiding end-to-end supplier engagement for efficiency and compliance,” said Sudhir Bhojwani, CEO and co-founder at ORO Labs. “Our Series B financing is further validation, not only of our success in executing, but also the opportunities as we continue to develop and scale ORO for international expansion and a host of new use cases – bringing incredibly easy start-to-finish procurement to even more organisations for agile operations and happy employees.”
“Our 2023 CFO survey identified procurement as the top pain point for CFOs and the number one spending priority,” said Victoria Treyger, general partner at Felicis Ventures. “ORO’s platform approach to orchestrating and simplifying workflows is driving adoption with global Fortune 1000 companies across a range of industries from financial services to pharma. Sudhir, Lalitha, and Yuan share a rare combination of deep procurement knowledge with the passion and insight to transform the category.”
ORO Labs co-founder Lalitha Rajagopalan noted, “I’m personally thrilled to have a woman investor joining the ORO board. Victoria brings keen go-to-market insight and a genuine love for procurement that will help us continue to scale our business, as well as a diverse perspective that aligns with important supplier inclusivity imperatives for our enterprise customers.”
Tackling the future
In use by leading global Fortune 200 enterprises, ORO provides organisations with a next-generation platform that streamlines procurement and reduces supplier cycle time using workflow automation. From intake to spend control, and contract management to supplier relationships, ORO’s smart procurement workflows empower organizations to optimize efficiency and drive success.
“Coordinating a global procurement organisation effectively and holistically with all stakeholders involved is a constant challenge for any enterprise,” noted Matthias Dohrn, President of Global Procurement for BASF. “ORO allows us to better do our part as procurement and orchestrate and scale thousands of value-generating procurement and business measures across the globe, understanding KPIs from a global perspective to streamline our processes, better engage employees and to generate EBIT. The low-hanging fruits are gone, and to manage thousands of improvement ideas, you need a tool to deliver – this for us is ORO.”
The news comes after ORO Labs was announced as the growth stage track winner of DPW‘s DEMO 2023 competition at DPW Amsterdam last month.
At DPW Amsterdam, Ashwin Kumar, vice president at GEP, discusses procurement transformation and what tomorrow’s challenge could look like.
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Transformation. Procurement has witnessed quite a bit in recent years.
Given the widespread adoption and acceleration of AI and data-driven processes over the past decade, change has been a necessity rather than a nice to have.
Evolution of AI transformation
Ashwin Kumar is not unfamiliar with change. Having worked at GEP since May 2008, he has had a front-row seat to the transformation and change procurement has overseen. Now Vice President, he tells us about the evolution of the procurement function and how the landscape is shifting to meet future market demands.
“I think the way we see the industry evolve over time is because we started with web 1.0, simple ERPs that were fragmented with no easy way to connect systems,” he tells us. “Data was all behind firewalls and it was very expensive to manage or mine data. Then we had a big technology breakthrough in cloud systems where the people who were managing the storage said they had a solution. You can just simply push data out of the cloud and what we saw was a lot of that control that the CIOs had on data architecture and the software systems and solutions was being given to different functions.
“A lot of that enrichment of data happened because of the cloud platform that enabled it. Back in 2010, we made the decision to move away from a SaaS platform because even then we believed the future was cloud and that’s where data is going to be which could mean a gold mine. Our CEO made a very conscious decision to basically stop a really good product that was working and move to the cloud platform.”
Ashwin Kumar, Vice President, GEP
The GEP difference
Today, a global leader in AI-driven procurement and supply chain transformation, GEP helps enterprises take the lead and, using the power of data and digital technology, to stay ahead in the connected global economy. More than 1,000 engineers have spent the last 7 months to design and launch GEP’s new AI-native, low-code platform for sustainable procurement and supply chains, GEP QUANTUM. This new platform, launched last week, powers GEP SMART, the industry’s leading source-to-pay procurement application, GEP NEXXE, its next gen supply chain solution, and GEP GREEN, enabling companies to track, measure and achieve their ESG goals.
With the transformative power of AI, GEP enables businesses to operate with greater efficiency and effectiveness, gain competitive advantage, boost profitability and maximise both business and shareholder value. GEP helps global enterprises across industries and verticals build high-performing, resilient and sustainable supply chains.
Investing in dedicated spend analytics and solutions has become an essential part of the procurement process. Data is king and ultimately the more companies know and can predict, the better off they’ll be. However, some companies are still lagging behind when it comes to adopting digital tools created for better visibility and transparency. Kumar questions the reason for this and points to the possibility that there could be a perception that digital tools were hype or a fad – but affirms spend visibility is the real deal.
“If you look at spend data, if I’m the business stakeholder, you’re coming and showing me things that happened six months before,” he tells us. “One of the things we actively tell customers is to understand that there is a difference between spend and cost. Spend is basically the last AP data that you get, which means it’s not even current.”
Procurement’s greatest time?
Given the disruptive nature of the past few years, procurement has had to stand up and be counted. For Kumar, he reflects on global challenges such as Covid, a war in Ukraine and inflation and its knock-on effect on procurement and the supply chain. He maintains that it’s a “difficult time” to be in the industry at the moment given the hurdles procurement and the wider world has faced head-on recently.
“We started off with Covid where we went and told suppliers, sorry, I don’t have money to spend so I’m going to stop spending,” he tells us. “Two months later, you tell them there’s a supply shock and since I’m your preferred customer, can you do something for me? Make sure my products are getting to me on time. Then six months later, there was a war in Ukraine where you were testing suppliers to see which side they were on and questioning whether or not to do business with them. After that, there were inflation concerns so things are constantly changing and you’re pivoting from one problem to another.
“It now means you need to have a platform ecosystem with multiple solution options so that there isn’t a single point of failure and avoid the need for a “transformation” every two years. Given the pace at which things are changing in the macro environment, those single points of failure are quickly going from lack of supply to resilience to risk to people to visibility. It could be something else tomorrow, it could be ESG tomorrow, we simply don’t know. I could have a really good risk assessment tool, but that might not be my focus six months from now – it could be something else. So resilience in the form of digital ecosystem housing different point solutions is paramount.”
Vizibl has revealed the launch of a new sustainability target programme to help large organisations get supplier engagement for sustainability initiatives ready to launch within four weeks.
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Vizibl has announced the launch of its Science-Based Targets Initiative (SBTi) Framework aimed at helping large organisations get supplier engagement for sustainability programmes ready to launch within four weeks.
The new configuration will allow companies to get started with their supplier raw spend data, which Vizibl first intakes.
The move will also see data cleansed, normalised and enriched, mapped and loaded onto Vizibl’s sustainability launchpad for emissions.
Organisations can also use the launchpad to quickly visualise emissions hotspots or which suppliers have committed to a SBTi.
Companies can quickly select cohorts of suppliers to add to supplier engagement programmes and start taking action after four weeks.
The new configuration will also allow all the supplier engagement action that’s been taken to decarbonise their supplier base, in one central location using the Vizibl platform, to mitigate against the rising tide of risk from upcoming and existing ESG regulations.
The process
This process follows SBTi’s supplier engagement guidance steps and leads the organisation through the process.
It will also mean automating key steps of the framework that would otherwise be administratively intensive spreadsheets.
The programme ready to launch is aligned to a UN-backed global sustainability standard for supplier engagement in the SBTi.
It supports Vizibl customer’s evidence of the collaborative actions associated with upcoming mandatory ESG regulations around scope 3 reduction.
It is also underpinned by a library of supporting content specifically to guide the organisation further to achieving science-based targets.
Once the programme is ready to launch, the Vizibl team is ready to walk the organisation through the launch process.
The team also supports the ongoing programme rollout and maintenance, continuously monitoring progress to ensure the programme meets agreed objectives.
“With mounting ESG regulatory pressure on businesses, ensuring our customers have the tools they need to quickly and accurately assess and improve sustainability performance across their supply base is key to Vizibl,” commented Richard Hogg, CEO at Vizibl.
“Ensuring that our customers can build a body of evidence that shows the efforts they’re taking, both at speed and at scale, to engage their suppliers to decarbonise their supply chains, is critical to meeting net-zero targets.”
Koray Köse, Chief Industry Officer at Everstream Analytics, speaks to us exclusively at DPW Amsterdam and discusses the importance of leading from the front in the supply chain
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Everstream Analytics sets the global supply chain standard.
Through the application of AI and predictive analytics to its vast proprietary dataset, Everstream delivers the predictive insights and risk analytics businesses need for a smarter, more autonomous and sustainable supply chain. Everstream’s proven solution integrates with procurement, logistics and business continuity platforms generating the complete information, sharper analysis, and accurate predictions required to turn the supply chain into a business asset.
Koray Köse is a supply chain expert, futurist and multi-lingual thought leader, CPO, researcher, and published author. He specialises in working with CSCOs, CPOs, CIOs and other c-level executives while possessing more than 20 years of success in developing global supply chain and sourcing strategies, re-engineering and transforming business processes, and maximising financial resources. Köse is experienced in designing new business frameworks, risk and governance processes and deploying full-scale ERP and procure-to-pay systems to drive efficiencies through digital transformation. He is an expert in industries such as automotive, pharma, life sciences, IT, electronics and FMCG and has served as Chief Industry Officer at Everstream Analytics since June 2023.
Koray Köse, Chief Industry Officer, Everstream Analytics
World’s first Slave-Free Alliance
Recently, Everstream became the world’s first Slave-Free Alliance (SFA) validated modern slavery and forced labour technology provider. Everstream’s collaboration combines the firm’s multi-tier supplier discovery and AI-powered risk monitoring and analytics with SFA’s proprietary forced labour intelligence to expose unknown risks and protect global supply chains from modern slavery and exploitation.
“We’ve had issues in supply chain before, like conflict minerals for instance was a big topic,” Köse tells us. “Legislation came that was rather weak, where companies can say we can’t confirm nor deny that we have conflict minerals in our products. Modern slavery takes it to a whole different level. In essence, you may get import issues the moment that you might be suspicious, or the government import controls may say, ‘this comes from a specific region that has general exposure’. You basically have a disruption in your supply chain.
“If you forget about the business side, your business is actually promoting ethics that your own company in its statement and the way you live don’t align with and you didn’t know about it. So unknowingly you have actually incremented the issue that you are tackling on your own and within your environment. For us it was important to live up to the promise and look for an NGO that is impactful, has a mindset that is all about partnership and not blaming or shaming, it’s about changing the environment.”
Breaking down barriers
Around 50 million people worldwide are living in modern slavery. It remains a serious problem in nearly every region, with over 40% occurring in upper-middle to high-income countries. Due to the opacity and complexity of today’s global supply networks, companies are increasingly vulnerable to the risk of forced labour. According to a study cited by Slave-Free Alliance, 77% of companies expect to find modern slavery somewhere in their supply chain. Through this alliance, Everstream will actively contribute to enhancing capabilities and eradicating modern slavery and forced labour from global supply chains.
“We started that partnership to transfer our knowledge and also get insights from their end and understand what the upcoming issues were in the arenas of modern-day slavery that we should keep an eye on and how to help our clients to be informed and avoid getting exposed,” says Köse. “That’s where I started to talk with Hope for Justice and have collaborated with them during my time at Gartner as well. Then legislation is pushing the matter to the forefront of supply chain issues.
“Now, there is also financial impact and disruption and there’s the ability to do good and live up to the promise of your own vision and the way you want to conduct your business. Then I wanted to put our product to test and make sure that it lives up to the promise and if it doesn’t then we fix it. We went through a validation process and we got 90% plus accuracy in the feedback, which is important as it’s another confidence boost that we’re doing the right thing and we should continue on that path. We are the first world’s first validated modern-day slavery solution to tackle the issue – we’re very proud of that.”
The value of due diligence
In today’s fast-paced world, due diligence has become more important than ever. Companies must ensure they are generating the best value for money and that the product that they’re purchasing actually meets their needs. Köse believes companies almost have no choice in 2023.
“It’s an element that is not only preserving value, but it also creates it too,” he explains. “In the past it was more like a checkbox exercise that you conducted because everyone thought it was the right thing to do. Meanwhile, you had spillovers that you didn’t know about. It’s almost like what I don’t know, I don’t care. Since transparency requirements have been augmented significantly and the realisation of transparency as a value driver has dropped through Covid almost instantaneously in the c-level boardroom, compliance has become a value driver.
“It’s not just a checkbox exercise where you say that you are compliant. It is an affirmation of your product quality, brand and innovation that speaks to the customers and the choice they make. If you are concatenating beliefs and values to your product in that moment, you just have created a customer and that customer will be retained throughout the lifetime that you actually care about what they care about.”
Zip has been named as the most innovative fintech solution after being recognised with an award.
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Procuretech firm Zip has announced its platform was chosen as the Most Innovative Fintech Solution by the 2023 Tech Ascension Awards.
The awards evaluate the top innovations in fintech, judging applicants based on technology innovation, market research and competitive differentiators.
Class-leading vendors recognised by the awards deliver technology that solves critical industry challenges and produces valuable business outcomes for customers.
Zip, which delivers an industry-leading intake solution, provides enhanced spend visibility, integrations into a company’s tech stack and new AI capabilities to accelerate workflows and identify savings.
The company’s platform modernises procurement workflows with a single front-door for employee purchases.
Setting the standard
“Our intake-to-pay solution is a revolutionary approach to procurement, and we’re thrilled to be recognised,” said Rujul Zaparde, co-founder of Zip.
“Zip not only improves efficiency across every business function but contributes to a new, highly improved employee experience by solving first for employee adoption of spend controls.
“We’re on a mission to continue setting the gold standard for procurement. Zip is the only platform that seamlessly streamlines procurement processes from intake all the way through to payments.”
The Tech Ascension Awards applicants are judged based on technology innovation, market research, hard performance stats and competitive differentiators.
The awards acknowledge leaders in enterprise and consumer technology. Two panels of enterprise and consumer industry experts judged submissions based on factual company descriptions. They were also measured on relevant statistics and data points as well as distinctiveness in the marketplace.
“As AI, cloud and interoperability serve as the new driving forces, we’re honoured to recognise these leaders in innovation,” said David Campbell, CEO, Tech Ascension Awards.
“We look forward to continuing to recognise companies that hold the power to transform the financial landscape for the better, driving advancements that improve accessibility, security and simplified experiences for users.”
Georg Rösch, Vice President Direct Procurement Strategy at JAGGAER, discusses his organisation’s approach amid significant transformation and evolution
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Procurement is at a sliding doors moment – its direction of travel could go one way or another.
The influx of new technology makes procurement a dynamic and interesting industry in 2023. Following global challenges felt around the globe, procurement practitioners have had to step up in the face of adversity. To the industry’s credit, procurement has so far come through it but now it’s about embracing the world of today and finding ways to deal with pressing issues such as ESG and the knock-on effects of a war in Ukraine while also navigating inflation concerns. Of course, all this is on the back of COVID-19, of which the aftermath is still felt in some quarters.
In a recent CPOstrategy Podcast, Georg Rösch, Vice President Direct Procurement Strategy at JAGGAER, tells us all about how spend management giant JAGGAER is helping procurement teams overcome the challenging backdrop and discusses digitalisation strategies within the space.
Georg Rösch, Vice President Direct Procurement Strategy at JAGGAER
The road in which procurement professionals end up where they do is always an interesting one. Can you tell us why procurement was the path you chose which led to your journey to JAGGAER?
Georg Rosch (GR): “I would say I stumbled into the procurement space. Growing up, I was always a technology person and had a very early interest in computers. When everyone was playing video games, I was playing around with software and started coding. Eventually, one thing led to another, and I found myself in a small procurement startup in Vienna in development. This is really where I found out that this is interesting stuff. 20 years later, it’s crazy to think I’m still doing it because I didn’t even know this field existed and I think that is felt industry wide. But I still love it and getting to combine procurement with technology is something I’m really interested in.”
In your view, how would you explain JAGGAER and sum up what differentiates it from other players in the space?
GR: “JAGGAER has been around for more than 25 years and came together through a lot of mergers and acquisitions. I came through from a branch that was local to Austria and the company has become one of the largest procurement software vendors out there. What I really like about JAGGAER is our vision of autonomous commerce. First of all, it sounds weird for a procurement software vendor not to have the word procurement in the tagline. But that’s done on purpose, because when you think about what a procurement software firm really does, it’s about communication and collaboration between buyers and sellers.
“For a while, JAGGAER was really good at the indirect procurement side which revolved around the whole P2P process. That’s really where a lot of our business came from. But this has evolved over the past 20 years into more of the source-to-contract process that’s being added which is proving so important. It’s not just the execution, but also the strategy of how you build everything and how you find the right sources. As part of autonomous commerce, we created four pillars. It’s networked, intelligent, comprehensive and extensible which spells NICE so it’s very easy to remember.”
Can you expand on the NICE strategy that JAGGAER has developed? What is its true meaning?
GR: “Networked basically means you collaborate with your suppliers, buyers, sellers, partners – everyone. It’s like the modern-day town square where the commerce happens – it’s the foundation of everything. Then it needs to be intelligent which means the question isn’t just about what data you have, but how do you intelligently use the data to drive the processes? Next, you have comprehensive. That encompasses all the functions you have starting from analytics, category management, supplier management, sourcing contracts, ePRO, supply chain management and quality management. It’s all of these beautiful things and how they work together.
“Finally, extensibility means a lot of different things. It means being open to communicating with other systems. With our platform, you can bring in a lot of external data – ESG and sustainability, risk, enriched supplier data, and more – from our partners into our solution. This allows you to make smarter decisions across the procurement cycle. Another aspect is that not every company is the same. Extensibility also means, ‘how can I tailor the solution to my needs?’ This completes the picture that we are working towards here at JAGGAER.”
The procurement space itself has undergone major transformation over the past decade and suddenly, it is so much more than just a back-office function out the way of everyone else. What has been the catalyst for its transformation in your opinion?
GR: “Procurement is really at a make-or-break moment. Supply chain and procurement have been really in the spotlight in the last couple of years. It’s been a case of ‘oh my, there aren’t any shipments coming anymore’ or ‘people are not buying the stuff that they bought before because our whole way of life changed.’ So, we were working from home, and we were not going out to restaurants or buying new clothes because we were all in our tracksuits all day. Society shifted. This meant procurement and supply chain management was really important because they needed to navigate all of this.
“This is why expectations and visibility of these functions rose during that time. But now we’re at a critical point. Can those functions deliver the value that they should? And can they continue this momentum? This is why I’m saying we’re at the make-or-break moment and there are a lot of companies that really made this transition and change to where procurement is an advisor to the business which is so critically important. Think about everything that’s not going away such as ESG with the environmental element, human rights and the governance of those different processes. Procurement is playing such a critical role of managing all these different agendas within our board level topics today.”
How is JAGGAER driving value to companies in a way that perhaps it didn’t before?
GR: “At JAGGAER in procurement, you want to cater to the most mature companies but many of your potential customers are not the most mature firms. It’s a challenge and that’s the balance that you need to strike. You have to be ahead of the curve and in front of the market, so we take this very seriously. We have a dedicated team that’s only working on what we call innovation to uncover questions like how do we use these new technologies? How can we bring this into the solution? How do we drive value for our customers with these things? We did this by coming up with what we call a maturity matrix, where you can see which step of the maturity scale you are on right now.
“It’s five steps in total but no one is at step five yet. The current technology that exists today is at step four, but the space is constantly changing. As a customer, they can measure where they are and say, ‘I might be a two at that process, but I’m a three at that’ and work out what needs attention. They can ask themselves the question, should I even do this? Does this make sense for me as an organisation? We really try to work with those maturity models because it helps us whenever we work with a customer to assess where they are and tell them this is where you can go, and this is what you can achieve by doing that.
“It helps us have the right conversations with our customers which was part of the vision of autonomous commerce. We have autonomous commerce as our North Star and know where we and the industry are aiming for, so it’s imperative our customers know the way too.”
How important is it that any technology introduced actually serves a purpose instead of being introduced for technologies sake?
GR: “People love technology, I love technology. But in business, we shouldn’t use a tool just because we like it. Tools should drive value. I won’t use something just because it sounds fancy. I’ll take whatever solution can truly solve the problem. At JAGGAER, when we evaluate solutions, we always consider what really helps us as an organisation and what drives value. At the end of the day, we are here to make our customers successful. And how is that success measured? Each customer might have different KPIs, but in the end, it’s driving valuation and value for the company. Value can look different for your organisation, whether it’s higher customer or shareholder value. We have to be very pragmatic about the means of how we help because what works for one company potentially doesn’t work for another.”
What does the future of procurement look like to you? How exciting/challenging does the road ahead look for the space?
GR: “I believe it’s continuing the path that we’re on right now which is bringing more data and market intelligence into the whole procurement process. Procurement overall has to move away from gut feeling decision-making. Success stems from bringing all the information that’s needed for procurement into a solution for data-driven decision making. What I’m seeing right now is more strategic information regarding important topics such as environmental impact and human rights. All of this should make a difference and influence the decision making in procurement. This is how procurement drives the sustainability agenda of the company and reliability across the supply chain. This is really where I see procurement going. It’s about taking in all this information, being the advisor to the business, and making the right decisions to drive the company strategy. The future is exciting.”
CPOstrategy explores this issue’s big question and questions whether procurement is in need of a rebrand in order to get to the next level
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Does procurement need a rebrand?
Procurement’s transformation in recent years has been exponential.
As an industry which has embraced technology at scale, there is a greater clarity in spend, expanded category coverage and increased return to shareholders. But is there enough awareness about procurement and is it doing itself a disservice? Procurement professionals aren’t often known for being great marketers. But in today’s fast-paced world, being sure an audience can understand something quickly is essential. Without strong brand potential, procurement is risking not living up to its full potential.
For example, procurement’s brand is often left to customers to work out. To many, people think that procurement is solely about purchasing or negotiating contracts. However, they are often unaware just how innovative and exciting procurement can be. From some sections, procurement is still sometimes thought of as some back-office function tucked away out of sight. But now, particularly in the face of massive challenges over the past few years, procurement has become so much more.
Solving talent shortages
In a recent CPOstrategy Podcast, Shaz Khan, CEO of Vroozi, discussed how rebranding procurement could help solve its talent shortages. He believes the space must be more strategic than just finding themselves there one day. He told us how corporate procurement is currently in a “golden age” and that by making job roles more relatable it could encourage fresh perspectives to enter the industry on purpose instead of by accident. “When you say you work in procurement, try explaining that to your family or friends because it takes a while! In reality, we as human beings in our day-to-day lives are sourcing every single minute of every day,” he explained.
“We are sourcing where our dry cleaning is, we’re negotiating at the farmer’s market for carrots. When we look at corporate procurement, we need to ask ourselves, do we need to be rebranding this function? We need to get more individuals not just falling into procurement by accident and make it more measured and predictive.”
What’s holding procurement back?
Executives “falling” into procurement has long been a common joke shared among those in the industry. But in what other line of work does such a high proportion of the workforce accidentally stumble upon their chosen industry and end up staying? It is both a compliment and an achilles heel to procurement but ultimately that method leads to periods of talent shortages which is what the industry is experiencing today. Procurement’s talent problem is not just down to one thing, given how COVID-19 impacted the industry and people’s decision to opt for a career change in the post-pandemic world. In order to address the problem, it all starts with education.
“I certainly didn’t know that this was a profession when I was at university and I don’t think I’m alone in that,” explains Pauline Potter, Director of Procurement at Evri.
“It all seems crazy to me because I genuinely think this is such a fantastic career path that people can take. It’s hugely variable with loads of paths you can go down and you can apply a similar skillset to all kinds of businesses. I think the first thing procurement can do to address the talent shortage is raise the profile when recruiting.
Nicolas Walden, Associate Principal at The Hackett Group, agrees in the importance of rebranding procurement but also believes that a lack of education could be holding procurement back. “I was talking to a CPO recently and he was saying when he looks across Europe, there’s only a small number of universities that actually offer degree level qualifications in procurement or supply chain,” he says. “I know from colleagues in the United States that there’s many more universities there that offer this level of education. This can create the entry point of a pipeline of talent for the future. This means they’ve got the skills, mindset and the training in what we need in terms of modern procurement.”
Recruitment in procurement
Khan highlights the opportunity procurement has to redefine how it presents itself to the workforce of tomorrow. It is his belief that getting rid of the misconceptions surrounding procurement could hold the key. “Higher education and the lack of programmes going forward after graduating is a real problem,” he adds. “Corporate procurement can be an incredible entry level area because it centres around data. You’re leveraging cutting edge toolsets and are making an impact on the company – your job isn’t boring. It’s not pushing paper back and forth or getting on phone calls with suppliers to talk about delivery schedules.”
And procurement roles don’t just have to apply to ‘procurement people’. Global procurement executiveFadi El Mouallem affirms that people could add their valuable transferable skills from other industries and be successful within the space. “I like to attract talent from different industries, not just procurement or finance,” he discusses. “I’ve had the likes of project managers, salespeople and engineers come into procurement and they all made a career out of it.
Success is making them feel that they belong, so they can grow into this space and make an impact. If they choose to leave procurement later, then that’s fine.”
Procurement, like many industries, has been through a tough time. But as a sector very much at the forefront of technology innovation the future looks equally exciting and bright. By rebranding procurement, being open to people from all walks of life and empowering the talent of tomorrow to emphasise that this could be the place for them to thrive, it could bring positive change that will stand the test of time.
CPOstrategy visits HICX’s first Supplier Experience Live as organisations gear up to remove friction and become a customer of choice.
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Supplier experience has never been such a hot topic.
After decades in the darkness, the importance of supplier experience is finally on the agenda.
Truthfully, success can’t be achieved alone. Without happy, committed and strategic supplier relationships, a business will stagnate. And now, organisations are waking up to the potential a robust supplier base could unlock.
The rise of Supplier Experience
Earlier this month, HICX launched its first-ever Supplier Experience Live the day before DPW Amsterdam. Hosted at the Tobacco Theatre in Amsterdam, it was recognised as an official DPW Amsterdam side event. The event’s vision was to help organisations use supplier experience to remove friction and become a customer-of-choice.
The half-day event began with a welcome from Ragnar Lorentzen, Chief Commercial Officer at HICX, who opened the door to the world of supplier experience and the market developments that have led the way. Lorentzen handed over to the first keynote speech from Dr. Elouise Epstein who explained that the ERP system was dead. Epstein suggested that the solution could be how well you exchange data with third parties.
Following Epstein was a panel discussion that featured Ruth Bromley, Director of Procurement Enablement at Heineken, Adam Hubbard, Senior Manager of Supply Chain, Governance and Performance at EDF which was moderated by Tommy Benston, VP of Global Client Management at HICX. The conversation advised of ways to gain a competitive advantage in procurement and supply chain through supplier experience management. Bromley highlighted three key learnings: speed, standardisation and simplicity, believing in a “single source of truth”.
Dr. Elouise Epstein
Driving supplier adoption
Later, Anthony Payne, CMO at HICX, discussed how to drive supplier adoption and engagement through supplier marketing. Payne explained the value of segmentation which is the process of dividing the market into subsets of customers who share similar characteristics. Payne equipped the audience with six recommendations to take forward and advised them to use caution with the language they use with suppliers. Following the coffee break was Duncan Jones, former Vice President and Principal Analyst at Forrester Research, who unpacked the reality of how to decide on the correct types of solutions in the new best-of-breed era amidst a transition away from the traditional database-centric approach.
The afternoon continued with a panel discussion involving Marc Bengio, Senior Director and Head of Technology Enterprise Procurement at Johnson & Johnson, Lance Younger, CEO at ProcureTech and Jacy Bassett, VP of Professional Services, to explore the topic “Demystifying the technology landscape: How do you architect for Supplier Experience?” Each speaker gave their viewpoint on how to arm the procurement function of tomorrow to meet the challenge of an ever-changing digital world. The conversation offered guidance and counsel amid an explosion of transformative solutions in the space.
Costas Xyloyiannis, CEO at HICX
Bright future
Finally, Costas Xyloyiannis, CEO at HICX, took to the stage to announce the launch of IUBN which he explained was a streamlined way to identify legal entities in a bid to create net efficiency within the supply chain. One system, one time, everywhere.
Speaking exclusively to CPOstrategy at the event, Xyloyiannis told us, “It’s pretty significant running an event like this. I’ve been in the space 23 years, and finally, I feel like the focus is shifting. Two or three years ago no one was talking about supplier experience so it’s great to see a movement starting to happen. It is very satisfying because you see people’s minds changing in the same way that it did for the customer and employee experience.
“What you have to think about is that almost every company is also a supplier so it’s in your interest to focus on the supplier experience side. In another context, you’re also a supplier and people should understand that we’re all in it together. If you don’t think about solving it, then you’re going to have that pain yourself.”
Supplier experience is just getting started. Reimagine the possible.
Global research and advisory giants Deloitte and DPW has announced a partnership to bring procurement innovation to organisations.
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Deloitte and DPW has announced a partnership to bring procurement innovation to organisations.
Under the terms of this strategic alliance, DPW LABS, the consulting arm of DPW, and Deloitte will work together to refine the boundaries of innovation in procurement.
From problem and strategy definition to proof of concept and deployment, through the DPW LABS innovation capabilities and digital ecosystem and Deloitte’s global transformation capabilities, the move allows for impact to be delivered at scale.
Deloitte is a global provider of audit and assurance, consulting, financial advisory, risk advisory, tax and related services.
The firm, which is a member of the Big Four in professional services, currently has about 330,000 employees in more than 150 countries and territories.
Founded in 2019, DPW stands as a global leader in procurement innovation. DPW LABS empowers organisations to identify and seize collaborative innovation opportunities with DPW’s line-up of pioneering startups, scale-ups, and tech innovation experts.
Herman Knevel, co-founder and co-CEO at DPW, said: “We are excited about this strategic partnership with Deloitte.
“This partnership will enable us to join forces and make tech work, expand and complement our impact at global scale.”
Michiel Junge, partner of sourcing and procurement at Deloitte, added: “We are united in our mission to make procurement awesome.
“The partnership with DPW will enable our clients to tap into DPW’s capabilities and ecosystem and define their procurement future.”
The move comes after DPW welcomed over 1,250 procurement professionals to Amsterdam for its annual conference.
DPW Amsterdam has quickly made its name as a hub of innovation and collaboration. It is one of the biggest and most influential tech events in procurement and supply chain.
CPOstrategy travels to the Netherlands to soak in the atmosphere of one of the world’s biggest and most influential tech events in procurement and supply chain – DPW Amsterdam 2023
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“You are the reason why DPW exists.
“It’s been my mission from day one to break procurement out of its silo and create what I call the end-to-end ecosystem and that is you.”
Digital Procurement World (DPW) Founder Matthias Gutzmann’s first address to the crowd gathered before the main stage had a clear tone of appreciation.
The rise of DPW Amsterdam
Today, DPW Amsterdam is one of the world’s biggest and most influential tech events in procurement and supply chain. Its exponential rise in a relatively short space of time is undeniable. Its story began with a frustrated Gutzmann having discovered a lack of procurement conferences to showcase his previous employer. This led to Gutzmann finding a gap in the market and set about solving the issue himself. He left his job in New York, moved into his parent’s house and invested all his savings to launch DPW. Months later, DPW’s launch conference in September 2019 welcomed 400 industry leaders while being praised from across procurement. Under the watch of Gutzmann and co-CEO Herman Knevel, DPW’s influence and pull has only grown since.
This year’s event was located at the historic former stock exchange building, the Beurs van Berlage. Built in 1896, the building breathes character and history. Its architecture and rich past, alongside its central Amsterdam location, showcases its sense of place and being.
Innovation
DPW Amsterdam has quickly made its name as a hub of innovation and collaboration. This year, more than 1,250 procurement professionals gathered to connect, learn and innovate, while over 2,500 virtual attendees watched along at home. The buzz and hum of chatter was audible, the sense of excitement evident. And the attendees were certainly in for a treat. This year’s theme was “Make Tech Work” which focused on turning digital aspirations into a reality. There was a deep dive into discussions surrounding AI and machine learning in procurement, digital transformation strategies, sustainable procurement, supplier collaboration, risk management as well as innovation and disruption. It was all centred on ensuring the vision of digital procurement happens now and how organisations can be challenged to deliver results now instead of only concepts and theories.
Speakers across the two days included renowned experts and visionaries including the likes of Dr. Elouise Epstein, Partner at Kearney, Yossi Sheffi, Director of Massachusetts Institute of Technology and author David Rogers, among dozens more. Sarah Barnes-Humphrey led superb virtual coverage of the event and allowed those unable to make it to still feel a part of such an important conference in the procurement calendar. There were book signings from Sheffi and Atif Rafiq, eye-catching tech innovations showcased on stage and even an appearance from F1 legend and Haas Formula One team principal Guenther Steiner.
Digital future
To sum up, in comedian and host of DPW Amsterdam Andrew Moskos’ opening speech he reflected on procurement’s evolution and transformation. “Procurement used to be boring but now we’re all rockstars. We run the company, we’re in the c-suite, we run ESG, sustainability, risk, and 80% of the spend of a company goes through us.”
Change is here and procurement holds the cards. Let’s Make Tech Work.
CPOstrategy examines 10 of the best ways to use artificial intelligence (AI) in procurement
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Artificial intelligence (AI) is one of the biggest buzzwords in procurement. Everyone wants to get their hands on it and introduce it into their strategies.
Particularly in procurement, AI is often talked about being the answer to all challenges. It can be used to overcome complex problems and deliver efficiency while also being introduced within software applications such as spend analysis, contract management and strategic sourcing.
In this article, we will list 10 of the best ways to use AI in procurement.
1. Machine learning spend classification
AI algorithms can help categorise, clean and classify data automatically. Machine learning spend classification helps detect patterns and uses them for prediction while allowing for better decision-making. Examples of spend classification techniques include supervised learning, unsupervised learning in vendor management and classification reinforcement learning.
2. Natural Language Processing (NLP)
National Language Processing (NLP) is the branch of artificial intelligence focused on understanding, interpreting and manipulating human language. It can be used to gain valuable data and information to streamline time-consuming processes. Information contained in legal documents can be interpreted through AI for the procurement of relevant data. It allows procurement professionals to get ahead and use an AI assist engine to receive alerts to proactively monitor progress. It also allows for compliance over the life of multiple agreements with the same or several vendors.
3. Robotic Process Automation (RPA)
Robotic Process Automation (RPA) mimics human actions to eradicate repetitive tasks. While not strictly AI in the traditional sense, RPA does provide procurement with opportunities to improve process efficiency and is part of the wider family of AI. It can assist with the likes of contract management, input identification as well as purchase request and order submission, among more benefits.
4. Anomaly detection
With AI being able to process vast amounts of data quickly, it is able to stay up to date on the latest developments and changes in the procurement space at speed. Automated notifications on things such as anomalies, new opportunities and recommended activities allows for immediate action to be taken and provide suggestions on what should be done instantly. Rapid detection will ensure risks are mitigated and resolved before they become problems.
5. Purchasing
AI can be utilised to automatically review and approve purchase orders. Chatbots can be used to check the status of acquisitions or automatically approve virtual card payments. AI can analyse data and assess the reliability and quality of suppliers based on predefined criteria. This helps the purchasing team select the best suppliers quickly and accurately.
6. Contract management
Contract management can benefit through using AI to create, store, review, index, retrieve, analyse, negotiate and approve agreements. A big benefit delivered by contract management solutions that use AI is standardised metadata reporting which eliminates the need for category managers and legal counsels to manually read contracts to gain insights into the commercial part of their supplier relationships.
7. Supplier risk management
Supplier risk management is an important part of the procurement process and is around understanding what happens if a supplier fails to meet its obligations. To combat this, AI can be used to monitor and work out potential risk position through Big Data. Millions of different data sources are screened in order to provide alerts on potential risks within the supply chain.
8. Accounts payable automation
AI can automate most manual tasks in accounting such as data entry and invoice routing. Using AI for this substantially reduces procure-to-pay cycles, minimises the need for humans to get involved and integrates multiple workflows into a seamless process.
9. Strategic sourcing
Using AI in strategic sourcing is a key tool in a procurement practitioner’s arsenal. AI can be used to manage and automate sourcing events while also leveraging machine learning for the recognition of bid sheets, as well as specialised category-specific e-sourcing bots such as raw materials and maintenance.
10. Automated compliance
AI can also be used as a valuable tool for compliance officers to help work out potential risks, monitor employee behaviour, generate reports, provide recommendations as well as educating employees about the importance of compliance. For organisations without a source-to-pay system, compliance is a useful alternative and allows procurement teams to seamlessly compare payment terms, identify duplications as well as determine non-compliance.
This month’s cover story features Fiona Adams, Director of Client Value Realization at ProcurementIQ, to hear how the market leader in providing sourcing intelligence is changing the very face of procurement…
And below are just some of this month’s exclusives…
ProcurementIQ: Smart sourcing through people power
We speak to Fiona Adams, Director of Client Value Realization at ProcurementIQ, to hear how the market leader in providing sourcing intelligence is changing the very face of procurement…
The industry leader in emboldening procurement practitioners in making intelligent purchases is ProcurementIQ. ProcurementIQ provides its clients with pricing data, supplier intelligence and contract strategies right at their fingertips. Its users are working smarter and more swiftly with trustworthy market intelligence on more than 1,000 categories globally.
Fiona Adams joined ProcurementIQ in August this year as its Director of Client Value Realization. Out of all the companies vying for her attention, it was ProcurementIQ’s focus on ‘people power’ that attracted her, coupled with her positive experience utilising the platform during her time as a consultant.
Although ProcurementIQ remains on the cutting edge of technology, it is a platform driven by the expertise and passion of its people and this appealed greatly to Adams. “I want to expand my own reach and I’m excited to be problem-solving for corporate America across industries, clients and procurement organizations and teams (internal & external). I know ProcurementIQ can make a difference combined with my approach and experience. Because that passion and that drive, powered by knowledge, is where the real magic happens,” she tells us.
ASM Global: Putting people first in change management
Ama F. Erbynn, Vice President of Strategic Sourcing and Procurement at ASM Global, discusses her mission for driving a people-centric approach to change management in procurement…
Ripping up the carpet and starting again when entering a new organisation isn’t a sure-fire way for success.
Effective change management takes time and careful planning. It requires evaluating current processes and questioning why things are done in a certain way. Indeed, not everything needs to be changed, especially not for the sake of it, and employees used to operating in a familiar workflow or silo will naturally be fearful of disruptions to their methods. However, if done in the correct way and with a people-centric mindset, delivering change that drives significant value could hold the key to unleashing transformation.
Ama F. Erbynn, Vice President of Strategic Sourcing and Procurement at ASM Global, aligns herself with that mantra. Her mentality of being agile and responsive to change has proven to be an advantage during a turbulent past few years. For Erbynn, she thrives on leading transformations and leveraging new tools to deliver even better results. “I love change because it allows you to think outside the box,” she discusses. “I have a son and before COVID I used to hear him say, ‘I don’t want to go to school.’ He stayed home for a year and now he begs to go to school, so we adapt and it makes us stronger. COVID was a unique situation but there’s always been adversity and disruptions within supply chain and procurement, so I try and see the silver lining in things.”
SpendHQ: Realising the possible in spend management software
Pierre Laprée, Chief Product Officer at SpendHQ, discusses how customers can benefit from leveraging spend management technology to bring tangible value in procurement today…
Turning vision and strategy into highly effective action. This mantra is behind everything SpendHQ does to empower procurement teams.
The organisation is a leading best-in-class provider of enterprise Spend Intelligence (SI) and Procurement Performance Management (PPM) solutions. These products fill an important gap that has left strategic procurement out of the solution landscape. Through these solutions, customers get actionable spend insights that drive new initiatives, goals, and clear measurements of procurement’s overall value. SpendHQ exists to ultimately help procurement generate and demonstrate better financial and non-financial outcomes.
Spearheading this strategic vision is Pierre Laprée, long-time procurement veteran and SpendHQ’s Chief Product Officer since July 2022. However, despite his deep understanding of procurement teams’ needs, he wasn’t always a procurement professional. Like many in the space, his path into the industry was a complete surprise.
But that’s not all… Earlier this month, we travelled to the Netherlands to cover the first HICX Supplier Experience Live, as well as DPW Amsterdam 2023. Featured inside is our exclusive overview from each event, alongside this edition’s big question – does procurement need a rebrand? Plus, we feature a fascinating interview with Georg Rosch, Vice President Direct Procurement Strategy at JAGGAER, who discusses his organisation’s approach amid significant transformation and evolution.
Nigel Greatorex, Global Industry Manager at ABB, on how digital technologies can support decarbonisation and net zero goals
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Nigel Greatorex is the Global Industry Manager for Carbon Capture and Storage (CCS) at ABB Energy Industries. He explains how digital technologies can play a critical role in the transition to a low carbon world by enabling global emissions reductions. Furthermore, he highlights the role of CCS and how challenges can be overcome through digitalisation.
Meeting our global decarbonisation goals is arguably the most pressing challenge facing humanity. Moreover, solving this requires concerted global action. However, there is no silver bullet to the global warming crisis. The solution requires a mix of investment, legislation and, importantly, innovative digital technologies.
Decarbonisation digital technologies
It’s widely recognised decarbonisation is essential to achieving net zero emissions by 2050. Decarbonisation technology is becoming an increasingly important, rapidly growing market. It is especially relevant for heavy industries – such as chemicals, cement and steel. These account for 70 percent of industrial CO2 emissions; equal to approximately six billion tons annually.
CCS digital technologies are increasingly seen as key to helping industries decarbonise their operations. Reaching our net zero targets requires industry uptake of CCS to grow 120-fold by 2050, according to analysis from McKinsey & Company. Indeed, if successful, it could be responsible for reducing CO2 emissions from the industrial sector by 45 percent.
A Digital Twin solution
ABB and Pace CCS joined forces to deliver a digital twin solution. It reduces the cost of integrating CCS into new and existing industrial operations. Simulating the design stage and test scenarios to deliver proof of concept gives customers peace of mind. Indeed, system designs need to be fit for purpose. Also, it demonstrates the smooth transition into CCS operations. Additionally, the digital twin models the full value chain of a CCS system.
Cybersecurity leader Shinesa Cambric on Microsoft’s innovation journey to identify, detect, protect, and respond to emerging threats against identity and access
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This month’s cover story highlights a cybersecurity program protecting billions of users.
Welcome to the latest issueof Interface magazine!
Interface showcases leaders at the forefront of innovation with digital technologies transforming myriad industries.
Shinesa Cambric is on a mission to drive innovation for cybersecurity at Microsoft. Moreover, by embracing diversity and opening all channels towards collaboration her team tackles anti-abuse and delivers fraud-defence. Continuous Improvement doesn’t just play into her role, it defines it…
“In the fraud and abuse space, attackers are constantly trying to identify ways to look like a legitimate user,” warns Shinesa. “And this means my team, and our partners, have to continuously adapt. We identify new patterns and behaviours to detect fraudsters. At the same time, we must do it in such a way we don’t impact our truly ‘good’ and legitimate users. Microsoft is a global consumer business and any time you add friction or an unpleasant experience for a consumer, you risk losing them, their business and potentially their trust. My team’s work sits on the very edge of the account sign up and sign in process. We are essentially the first touch within the customer funnel for Microsoft – a multi-billion dollar company.”
ABB: Digital Technolgies contributing towards Net Zero
Nigel Greatorex, Global Industry Manager for Carbon Capture and Storage (CCS) at ABB Energy Industries, explains how digital technologies can play a critical role in the transition to a low carbon world. He highlights the role of CCS in enabling global emissions reductions and how challenges can be overcome through digitalisation…
“It is widely recognised decarbonisation is essential to achieving net zero emissions by 2050. Therefore, it’s not surprising that emerging decarbonisation technology is becoming an increasingly important, and rapidly growing market.”
CSI: How can your IT estate improve its sustainability?
Andy Dunn, Chief Revenue Officer at IT solutions specialist CSI, reveals how digital technologies can contribute to ESG obligations: “Sustainability is a now seen as a strategic business imperative, so much so that 74% of companies consider Environmental, Social and Governance (ESG) factors to be very important to the value of their company. Additionally, we know almost three in four organisations have set a net zero goal. With an average target date of 2044, 50% of organisations are seeking more energy efficient products and services.”
https://www.youtube.com/watch?v=tsDaZiSO1ho
“Optimising energy use and consolidating servers and storage infrastructure form a strong basis for shaping a more environmentally friendly and efficient IT estate. It no longer needs to be the Achilles Heel of an ESG policy. “
Mia Platform: Sustainable Cloud Computing
Davide Bianchi, Senior Technical Lead at Mia Platform, explores the silver lining of sustainable cloud computing. He reveals how it can help us reduce our digital carbon thumbprint with collaboration, efficient use of applications, containerisation of apps, microservices and green partnerships.
“We’re already on an important technological path toward ubiquitous cloud computing. Correspondingly, this brings incredible long-term benefits too. These include greater scalability, improved data storage, and quicker application deployment, to name a few.”
Also in this issue, we hear from Doug Laney, Innovation Fellow at West Monroe and author of Infonomics and Data Juice. Also, we learn how companies can measure, manage and monetise to realise the potential of their data. And, Deputy CIO Melvin Brown discusses the people-centric approach to IT supporting America’s civil service at The Office of Personnel Management (OPM).
HICX CEO Costas Xyloyiannis on why we should turn the spotlight toward the experience suppliers receive as they serve big manufacturing brands.
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What’s clear from Deloitte’s Global Chief Procurement Officer Survey 2023 is that environmental and social governance (ESG) is now firmly on the corporate agenda. This year, it leapt right up the priority list, from seventh place to second.
Elevating ESG, however, is tough to deliver. In practice, it is hugely dependent upon good supplier data, which is notoriously hard to achieve and maintain. Exploring why turns the spotlight to its source: suppliers. So, do suppliers themselves cause brands to struggle with data?
Supplier experience expert HICX’s CEO, Costas Xyloyiannis, says they do – but only reactively. Where we really should turn the spotlight, he believes, is toward the experience suppliers receive as they serve big manufacturing brands.
Letting data live across teams will harm it
The way in which big brands work with suppliers creates too many entry points for their data. Each digital tool which employees use to engage suppliers is an opening. And by default, suppliers deposit their data in whichever tool they’re expected to use.
For example, when working with a major brand, suppliers are expected to use different tools for placing orders, sending compliance surveys, assessing performance, and doing many other tasks. Furthermore, most employees across the business work with suppliers in some way. Each time the parties work together in one of these tools, it stores the supplier’s data. And when we step back and look at all the data across the brand, as a whole, it is very compromised.
When the master dataset is created this way, it gets peppered with duplicated, incomplete, and outdated entries. Regrettably, in this format, it misguides decisions – including those which shape ESG activity.
The best team to own supplier data is overrun
Brands can reverse this weakness by addressing the data problem. But someone needs to do it. Despite so many teams contributing to and using supplier data, there is no one perfect owner for the job.
There is a function, however, which is closest. Procurement. As it already runs the relationship with suppliers, Chief Procurement Officers (CPOs) can probe adjacent issues – such as data.
A consideration though, is that Procurement teams already have mandates, which they are stretched to deliver. Eating into the function’s bandwidth is the necessity to tackle inflation, demand surges, driver shortages, and other Covid-19-related issues. Also waiting for the function’s attention is digital transformation, an area in which it seriously lags.
Put data at the heart of current strategies
Looking at Deloitte’s latest survey results, there is an opportunity for CPOs to work smart. There is a clear path for CPOs to fit the brand’s data goal at the heart of their two top strategies, “increasing supplier collaboration” and “investing in digital transformation.” Supporting this approach is in the interest – and arguably the responsibility – of all C-suite executives.
How then can fellow executives get involved? First, we can help Procurement’s collaboration strategy by reforming how every employee sees suppliers. Too often, suppliers are just a means to save costs. And while saving costs is important, it’s not everything. Untypically, cost savings slipped off the podium in this year’s survey, into fourth place. This shift in focus – away from squeezing suppliers and towards collaborating with them – will bode well for brands that want to perform in ESG. But only if everyone in the organisation can adopt the mindset.
If they do, brands can offer suppliers a better experience which will encourage them to contribute to improving data. It is human nature to want to give back. Further, we learnt in a recent HICX survey that suppliers are 20% more likely to “go the extra mile” for brands they rate as customers of choice. Therefore, it’s likely that suppliers will want to participate.
But a willingness to hike data quality is not enough. In addition to company mindsets, brands must tackle a second obstacle: digital processes.
Redefine what it means to digitise
Next, we can help Procurement to revamp the tools through which everyone engages suppliers. We know that too many entry points pull down data quality. The opportunity, then, is to guide the way in which Procurement digitises so that the brand and function can gain control. Thinking about processes in this way is real digital transformation.
Today’s situation makes maintaining reliable data very hard. Any attempt to cleanse data is undermined by the inflow of new data from multiple sources. It’s like trying to clean the ocean. The rate at which new pollution enters the ocean outstrips most efforts to remove it. And in both cases, it makes sense to control the inflow.
In a digital environment, this means fitting a solid data foundation. A data foundation, in practice, is a central repository with one front door that is monitored and through which all new data must come in. Master data can be sent to other tools. The rule however is that they can only borrow the data, and never alter it. Good data resides in this foundational repository, where it is looked after.
A word of caution though: be aware of quick fixes. A deeper look at the “multiple entry points” situation reveals a deeper integration challenge. Established tools, such as source-to-pay suites through which Procurement and Finance work with suppliers, don’t always mix well with newer tools on the market. One remedy is to use established suites fitted with newer features. But this fails to address the data quality goal. It reminds me of the famous quote by Henry Ford: If I had asked people what they wanted, they would have said faster horses. Using old suites fitted with new features is like using a faster horse. It’s a stopgap. Rather, let’s stop good data’s tendency to evade ESG leaders when they need it most. Let’s tackle underlying issues once and for all.
Building for the future
Truly digitising, of course, gives suppliers a better experience too, which drives the collaboration goal—and sets in motion a virtuous cycle.
Now, suppliers who once fed the ESG data problem can contribute to its solution. Leaders who help their CPOs to collaborate with suppliers and digitally transform, for the greater enterprise, can steer supplier behaviour and keep good data. And this, as we know, is the fuel to ESG success.
Doug Laney is Innovation Fellow at West Monroe and a leading Data & Analytics strategist. We caught up with the author of Infonomics and Data Juice to talk tech and how companies can measure, manage and monetise to realise the potential of their data
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Our cover story explores the rise of data and information as an asset.
Welcome to the latest issueof Interface magazine!
Interface showcases leadersaiming to take advantage of data, particularly in a new world of AI technologies where it is the fuel…
How to monetise, manage and measure data as an asset
Our cover star is pretty big in the world of analytics… We meet the guy who defined Big Data. Doug Laney is Innovation Fellow at West Monroe and a leading Data & Analytics strategist. We caught up with the author of Infonomics and Data Juice to talk tech and learn how companies can measure, manage and monetise to realise the potential of their information. In his first book Laney advised companies to stop being fixated on hindsight-oriented analytics. “It doesn’t actually move the needle on the business. In the stories I’ve compiled over the last decade, 98% have more to do with organisations using data to diagnose, predict, prescribe or automate something. It’s not about asking questions about what happened in the past.”
Canvas Worldwide: A data-driven media business
Continuing this month’s data theme, we also spoke with Alisa Ben, SVP, Head of Analytics at full-service media agency Canvas Worldwide. Data has transformed the organisation, and what its clients do. “We look holistically at the client’s business and sometimes the tools we have might be right for them, sometimes not. It’s more about helping our clients achieve their business outcomes.”
TUI Musement: from digital transformation to digital pioneer
At travel giant TUI, handling data effectively is paramount when communicating consistently and meaningfully with up to 25 million customers annually. David Garcia, CIO for TUI Musement, talks about the tech evolution driving the travel giant’s provision of experiences, transfers and tours. It’s a big part of its operational shift from local to global. “As a CIO, I’ve always been interested in how the tech innovations we drive can support the business and add value.”
Hiscox: making cybersecurity more accessible
Liz Banbury, CISO at Hiscox and president of (ISC)² London Chapter, talks to us about how cybersecurity can become a more accessible, realistic career path for almost anybody. “When I was at school, topics like computer science didn’t even exist,” Banbury explains. “In one of my first jobs, over in Hong Kong, we were still using a typewriter! A lot has changed. My key point here is that there’s a lot of cybersecurity professionals who are really good at their job. They are inspiring, and have come from all walks of life. Crucially, they don’t have a maths, computer science, or technological background at all. But they still make great cybersecurity professionals.
Portland Community College: Risk vs Speed in Cybersecurity
Reet Kaur, former Chief Information Security Officer at Portland Community College, discusses the organisation’s transition to the cloud amid a digital transformation journey. “I don’t want to work with people who just say yes all the time. I want my ideas challenged to help forge the excellence in the security programmes I help build.”
DBHDS: Cybersecurity in healthcare
The Virginia Department of Behavioral Health and Developmental Services (DBHDS) exists to create ‘a life of possibilities for all Virginians’ and transform behavioural health. Its focus is on supporting people across the entire commonwealth. It helps them get the support they need in order to take wellness and recovery into their own hands. In an area like healthcare, sensitive information is all over the place, meaning cybersecurity is a priority – and this is where Glendon Schmitz, CISO at DBHDS, comes in. “The security team exists to help the wider organisation achieve its objectives with data. We’re there to protect the business, not the other way around.”
Also in this issue, we schedule the can’t miss tech events and get the lowdown on IoT security from the Mobile Ecosystem Forum.
Pauline Potter, Director of Procurement at Evri, discusses her firm’s drive to delivering sustainability and offering best-in-class solutions.
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Today, Evri stands as the UK’s biggest dedicated parcel delivery firm and is armed with more than 18,000 couriers.
It has over 8,500 local one-stop ParcelShops and lockers and a growing network of best-in-class hubs and depots. Founded in 1974, Evri has undergone significant transformation over the years, most recently a successful rebrand with Hermes UK in March 2022. And overseeing the company’s procurement function is Pauline Potter. A Cornell University graduate in the US, Potter trained as an engineer before moving into consulting at KPMG and Efficio.
Indeed, setting the standard in procurement isn’t easy. It takes hard work, dedication and a drive to consistently deliver and meet customer demands, particularly in today’s world. However, to companies like Evri, they take challenges in their stride.
In our recent CPOstrategy Podcast, Pauline Potter, Director of Procurement at Evri, discusses her firm’s driving sustainability while at the same time delivering best-in-class solutions while maintaining its position as the UK’s biggest dedicated parcel delivery company.
Melvin Brown, Deputy CIO at the Office of Personnel Management, explains the organisation’s ‘sprint to the cloud’ and its determination to modernise at every level.
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Our cover story highlights the Office of Personnel Management’s ‘sprint to the cloud’ with technology.
Welcome to the latest issueof Interface magazine!
Interface hears from leaders who champion a people-first approach driving successful technology transformations.
Culture Modernisation at the Office of Personnel Management
The Office of Personnel Management (OPM) is a government entity which manages America’s civil service. This month’s cover story explores how an organisation that prioritises people is taking a human approach to IT. Deputy CIO Melvin Brown oversees a portfolio of $500m in programs and a growing workforce of around 300 federal employees and contractors. OPM is undergoing a major cloud transformation… “We want to be cloud-first and cloud-smart as we move forward,” he explains. “So, we created a two-year sprint to the cloud plan where we take all our major applications and move them to the cloud in order to take advantage of all the benefits that brings, from both a security and a utility perspective.”
International Trade Administration: A strategic vision for technology
The International Trade Administration (ITA) strengthens the competitiveness of U.S. industry, promotes trade and investment, and ensures fair trade through the enforcement of trade laws and agreements. We hear from its CIO Gerald Caron who is passionate about involving all stakeholders in ITA’s transformation… “We’re introducing different ways of thinking to drive innovation at the International Trade Administration (ITA). What is the art of the possible? We’re looking to explore possibilities with technology across our business units and build simple foundations for the development of more complex approaches.”
Irwin Mitchell: Technology with a human touch
Also espousing the importance of a people-centric approach, Graham Thomson, Chief Information Security Officer at Irwin Mitchell, discusses his firm’s transformative legal solutions. “We’re far more than just a law firm,” he says. “I think what sets us apart is that we’re very people focused and an organisation that genuinely cares about not only our customers but our people too. People are your biggest asset, and you have to look after them.”
State of Vermont: Using AI for good
We spoke with Shawn Nailor, Secretary and CIO at State of Vermont, about IT modernisation, tackling cybersecurity state-wide, and how AI is being used for the good of Vermonters. “We’ve got to be practitioners in order to give good guidance on how to use advanced technology and where… We want to establish a practice by which we can lead by example and show good applications or AI tools to advance services and the delivery of products.”
Also in this issue, we round up the must attend tech events; get game-changing AI, Metaverse and ‘moonshot’ insights from Lenovo, and learn why people are at the heart of the decision-making process at energy company newcleo.
Dominic Fitch, Head of Creative Change at leadership development specialist Impact International, outlines five forward-looking skills for the next generation of leaders.
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There is no denying that the world of business is evolving at an incredibly fast pace. With the constant launch of new tools and innovative tech, workers are required to embrace a wide range of modern equipment on a regular basis.
As employees continue to up their game, it is only natural that the next generation of leaders will need a set of updated skills too.
Dominic Fitch, Head of Creative Change at leadership development specialist Impact International
Here, with some insights from Dominic Fitch, Head of Creative Change at leadership development specialist Impact International, we take a look at some crucial future requirements that business owners and managers will have to nail to guide their team in an efficient, successful fashion.
1. Technological inclination
In the same way that youngsters jump at the latest technology at the first opportunity, it is important for future leaders to emulate that same drive and curiosity.
The world is becoming increasingly digitalised, and the business sector is no exception. This is why company owners and managers should have a basic understanding of today’s technologies, exploring how modern equipment can actively aid their business. From cloud computing to artificial intelligence and UX development, there are many different tools that can increase your organisation’s chance of success.
Of course, nobody expects you to be an expert in computing coding or programming. But getting precious digital and tech skills under your belt can provide you with more than one ace up your sleeve.
2. Empathy and emotional intelligence
Just like an experienced, Michelin-star chef, future leaders have to juggle and balance several different aspects to create a perfect menu. Yes, technology will play an essential role in developing and driving your company forward. But software and robots have not yet mastered emotional intelligence, which means they cannot help on the more human side of things.
A business owner or manager should always strive to harness their relationship with colleagues and team members. Empathising, sympathising, supporting, and understanding the necessities of your employees is crucial, as this can inspire confidence and a sense of belonging in your people. If workers feel appreciated and cared for, there is a good chance they will go the extra mile to spur the growth of your business.
Hence, taking an interest in your team’s well-being and nurturing a shared feeling of unity is a fundamental attribute to possess.
3. Openness to diversity
One of the most prominent advantages of modern technology is that it’s abating boundaries and favouring connections with people worldwide. Hence, as time goes by, it is becoming more and more important to collaborate with colleagues from all over the globe. This means that, on a daily basis, you are working with teams from different cultures and who may even speak another language.
Engaging with people from all walks of life and with diverse backgrounds can open the doors to endless opportunities. Not only will you benefit from a vast range of experience, knowledge, and expertise, but you will also learn precious lessons on how to enter and succeed in global markets. Therefore, as the world becomes increasingly connected, future managers need to embrace diversity and make the most of its invaluable benefits.
4. Clarity and communication
Clarity and effective communication are timeless features of strong leadership. Managers need to build bridges between their team members and outline the company’s missions in a concise, transparent manner. In this respect, leadership development training is an excellent place to start when it comes to learning how to deliver messages and strategies that are straight to the point.
Future leaders have to be able to identify the right channels to carry this out in a smooth, effective way. With the many digital platforms at our disposal, it is important to choose one that can keep people on the same page at all times. What’s more, as innovations and possibilities arise, future managers need to communicate the essence of the question at hand in a digestible fashion.
Simplifying a complex situation or task is a crucial skill, and it is one that can aid both your team’s productivity and your business’ efficiency.
5. Foresight and adaptability
As technology evolves, artificial intelligence progresses, and the business sector continues to mutate, future leaders need to be flexible. Business owners and managers have to be ready to adapt and make sure they are not fazed by what the future holds. They should monitor trends and look at how to welcome change with a positive attitude.
How can you prepare for upcoming possibilities? One effective way is to run through various scenarios and start outlining all possible outcomes. What’s more, engaging with new circumstances and journeying out of your comfort zone can be an important learning curve. In fact, it will teach you how to deal with unfamiliar situations. If an unexpected opportunity comes about, you will have both the skills and confidence to respond to them with confidence.
To keep in step with the times, business leaders of the future will need to polish their set of skills. From emotional intelligence and adaptability to clear communication and openness to diversity, there are many aspects that will strengthen your leadership. By showing an interest for new software and technological developments, you can make sure your company is expanding its reach and exploring new, successful paths.
In EY’s January 2023 European CEO Outlook Survey, it was discovered European CEOs expect short-term challenges but have reason for optimism.
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Today’s CEO faces unprecedented challenges like never before and is tasked with navigating choppy waters.
Amid global uncertainty caused by a potential recession and on the back of war in Ukraine and disruption caused by COVID-19, it can feel overwhelming for even the most experienced leaders.
A positive horizon?
Despite this, consulting giants EY has discovered reason for optimism in its January 2023 CEO Outlook Pulse survey which includes 390 responses from CEOs across Europe. While the survey found 98% of respondents are indeed expecting a global recession, the majority of European CEOs (52%) anticipate it to be temporary and not a persistent one. These figures are a greater percentage than CEOs worldwide (48%) who point to more long-term optimism for the global economy among European CEOs.
According to the survey, 47% of European respondents believe this recession will be different from previous slowdowns. The recent crisis is more driven by myriad geopolitical challenges and an ongoing fallout from the COVID-19 pandemic compared with previous recessions primarily as a result of financial and credit market factors. Many CEOs are aware of this difference and acknowledge the necessity for new and sustainable approaches that build resilience in uncertain times.
In EY’s last survey in October 2022, ongoing pandemic-related concerns such as supply chain issues were the most important topics. However, since then supply chain pressures have eased to some extent with data from S&P Global Purchasing Managers’ Index (PMI) showing improvement. Only 32% of European CEOs now cite supply chains as the key issue which is down from 41% in October. Given inflationary pressures and the upward movement in interest rates, European CEOs are increasingly focusing on the policies and steps they believe European governments should take to help businesses mitigate the downturn.
About 35% of European respondents, in comparison to 32% globally, consider uncertain monetary policy and increasing cost of capital as the biggest challenge to growth. With inflation beginning to decline in November 2022 after 17 months of upward trajectory, CEOs are closely following central bank activity for potential course changes.
A strategy change
In response to the current recession, EU policymakers are considering more dovish economic recovery proposals instead of top-down austerity rules seen during the sovereign debt crises a decade ago. This includes rethinking debt rules to help countries navigate this downturn. Alongside this, EU governments now face pressure on how to handle the discontent of people protesting against the rising cost of living crisis and questions still remain on how extensively they will intervene. In particular, governments are reluctant to pursue austerity measures as a result of protests from the crisis 10 years ago. Meanwhile, for CEOs, financing will continue to be a challenge as a result of increased capital costs that are set to persist which disrupted growth plans.
European CEOs have learned from previous financial crises and recognise that it is essential to think of new and sustainable strategies to capitalise on the opportunities.
What is the way forward?
According to EY, there are five directives which are worth exploring over the next few years.
Investing in operations European CEOs identify investing internally to boost operations as extremely important. Risk isn’t only about extraordinary events; day-to-day operational failures can also lead to losses, regulatory action and reductions in share prices. Operations such as finance, accounting and supply chain have emerged as the top priority area of investment for European CEOs (41%).
Recognising disruption and accelerating digital transformation
Amid ongoing global pressure to embrace new technologies and a digital transformation, COVID-19 further accelerated a trend toward digitalisation. Around 38% of European CEOs (in line with 37% globally) are looking to invest in digital transformation, data and technology to emerge stronger from this downturn.
Developing a strong environmental, social and governance (ESG) strategy
Businesses need to ensure ESG processes are moved to the centre of business strategy. Sustainability, including net zero and other environmental issues, as well as societal priorities, is one of the key areas that European CEOs identify as a need for more investment.
Nurturing talent
Despite the recession, the labour market remains tight in Europe. European CEOs are weighing cost management options, with 37% considering a move to contract employment and 38% planning on reducing learning and development investments. About one third are also considering a restructuring of their workforce compared with global and Americas CEOs (36% and 42%) considering the same approach.
Portfolio transformation
Looking ahead, portfolio rebalancing is expected to be a key theme as CEOs will be compelled to make bold decisions regarding their business portfolio. During a recession, companies must critically assess what their core businesses are, what their focus should be and where they can create value by spinning out or selling non-core assets. Some 93% of European CEOs consider prioritising restructuring opportunities as an important initiative in the next six months.
Mike Randall, CEO at Simply Asset Finance, discusses how to build a people-first strategy that enables growth.
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As the UK economy continues to balance on the edge of a recession, employee retention is quickly being pushed to the top of CEOs’ lists. Over the past couple of years, the job market has shifted dramatically with previously unheard terms such as ‘the great resignation’, ‘quiet quitting’ and ‘hybrid working’ becoming commonplace. People are rightly prioritising their working situation and job satisfaction levels, questioning whether they believe in the organisations they are committing so much time to.
Consequently, there has been a power dynamic shift in favour of the workforce. Reportedly in the third quarter of 2022 businesses witnessed over 365,000 job-to-job resignations across the UK. In similar fashion, the phenomenon of ‘quiet quitting’ – doing the bare minimum required of a job – has become a growing concern but its rise is prompted by a growing number of employees feeling disengaged in their roles.
Against this backdrop of a highly turbulent job market, and increasingly difficult macro-economic pressures, it’s vital for CEOs to prioritise a people-first strategy to ensure healthy growth for their business in 2023. Data from Deloitte has even revealed that experts believe how engaged a workforce feels can directly correlate to overall business output, with 93% of HR and business leaders in agreement that building a sense of belonging is crucial for organisational performance.
Mike Randall, CEO at Simply Asset Finance
However, creating the right environment and recruiting, maintaining and nurturing the right talent to ensure a people first approach can be daunting. With this in mind, here are four learnings CEOs might want to consider when approaching this challenge:
1. Define your beliefs
Before CEOs and founders can hope to attract the right talent, it is critical to first distil and translate the business vision into something that can be understood by employees. Put simply, this means defining the business’ beliefs.
Some business leaders may already refer to this as an ‘employer brand’, and it can be key to not only securing better talent, but also saving a business money in the long-term. Data from LinkedIn for example, recently found that a strong employer brand can help to reduce employee turnover by as much as 28% and cost-per-hire by 50%. Defining these beliefs – or the tenets a business does and doesn’t stand for – is therefore the perfect exercise to put a vision onto paper, and clearly communicate it to its prospective talent.
2. Build a solid culture
Once these beliefs have been defined, they must be reflected, and built into a strong culture. A business’ beliefs should permeate through the whole organisation – from customer communications, to how staff are treated, to how leaders run the business. Culture should essentially be a representation of a business’ beliefs being put into practice.
Building a strong culture in a business, however, is not solely about these beliefs but also extends into how employees are equipped with the tools they need to succeed. Companies that invest in learning and development for example, have been found to benefit from a 24% higher profit margin than those that don’t, according to the Association of Talent Development. Training and development should therefore be seen as a worthwhile and necessary investment that can solidify your culture and ensure profitability, not just an unavoidable cost.
3. Invest in retention
With research from Oxford Economics estimating the average turnover per employee earning £25,000 a year to be £30,000 plus, there is an evident cost to businesses that fail to invest in retention. Tackling this will mean regularly taking the time to truly understand what makes employees tick – and more specifically, understanding their motivations, attitudes, behaviours, strengths and weaknesses.
As the past few years have evidenced, individuals are no longer deciding where they work solely based on salary, but are also thinking about employer values, flexibility, and benefits. To avoid employee churn, businesses should regularly take time to understand what drives their employees and implement retention strategies to address these drivers. Gathering and analysing employee data will play an important role here over the coming years, and should be built into a long-term strategy to optimise employee satisfaction.
4. Build for the future
A common challenge encountered by modern businesses and startups wanting to take a people first approach, can be their ability to stay committed to it. As a business grows in size and becomes successful, it can be all too easy to let external factors dictate its purpose and for it to lose sight of what it initially stood for. The reality is that when this happens, a business is in its most vulnerable state – as its beliefs become increasingly distant, and worse, employees no longer understand what it stands for.
When creating a people-first strategy its therefore important to think long-term. If there are external factors that will potentially put this strategy at risk in future, it’s crucial to identify them, and put in practical steps to mitigate them where possible. The pandemic, for example, is a prime example of an external factor that interrupted the status quo of many businesses – disrupting employees, customers and operations in general. While they can be unpredictable in nature, having a plan to get through these times can help to get you back on track and reassure talent that a solution is in place.
In this economic climate, defining beliefs, building a solid culture, and retention plan should be at the core of every business’ strategy. It’s only when these things are in place that a business can hope to attract and retain talented people that exude the same passion and values built into the heart of a business. As while a business’ growth may be defined by its leaders, it is delivered by its people who are putting that vision into practice.
Diane Lightfoot, CEO of Business Disability Forum, on changing the narrative around diversity and inclusion in the workplace
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Disability is still often parked in the “too difficult” box when it comes to Diversity, Equity and Inclusion. Employers are often afraid of doing or saying the wrong thing and as a result, do or say nothing.
As a CEO, the stakes feel (and often are) higher. That high profile platform can feel daunting at the best of times; when tackling an unfamiliar topic, it can feel positively overwhelming.
Talking about Disability
What we do and say as senior leaders has a huge impact. Indeed, it is critical in driving change. In 2020, we published our global research report, ‘Towards a Disability-Smart world: Global disability inclusion strategy’ . Conducted with our Partner, Shell, the research found that 91 per cent of respondents across multi-national businesses agreed that identifying a senior global disability champion is essential. Talking about disability and diversity – normalising the conversation so it becomes business as usual, has a massive role to play in creating a culture of “psychological safety” in organisations; one in which employees feel safe to share a difference and to ask for the support they need.
As senior leaders, it is easy to forget our privilege and that the environment we inhabit, and how we think the culture feels, may look very different to others. I often quote a research study by our partner Accenture which showed a marked gap (of around 20% across the board) between senior executives’ perception of how “safe” their employees would feel to raise a sensitive topic (including talking about a disability) and how safe they actually felt.
Changing the narrative
So, what can CEOs do to change the narrative? At Business Disability Forum (BDF), we see time and time again that CEOs or senior leaders who have a personal knowledge of and interest in disability issues – perhaps because of their own experience or that of a close family member – are champions in driving change. Senior leaders are less likely to publicly identify as being disabled – the Valuable 500 campaign often quotes the stat that 1 in 7 C suite leaders have a disability, but 4 out of 5 are hiding it. Yet if you as a senior leader are willing to talk about a disability or long-term condition it is hugely powerful in enabling others to do the same.
Storytelling and sharing personal stories can have a huge impact – for good or for bad! The good: A high profile CEO we work with talks openly about his disabled adult children and the moral imperative that he believes that large businesses have in breaking down barriers and opening up opportunities to people who face greater barriers to employment. The bad: I vividly recall being in a meeting with an organisation (not a BDF member!) to plan a possible disability awareness campaign. At the end of the meeting, the CEO then told an anecdote about having had an operation in the past year and being back at work the next day – unlike one of their counterparts who had taken two weeks off to recover. What message does that send? I’ll warrant that those who overheard that story were less likely, not more, to talk about a disability as a result.
Being a disability ally
But you don’t need to have your own lived experience to be an ally. For many businesses, the pandemic brought many senior leaders “up close and personal” with their disabled employees for the first time. In a survey we carried out to find how out how BDF Members and Partners were responding to Covid19, we found that in 83 per cent of organisations the general response to Covid-19 – including arranging internal communications, home working, and ensuring staff have the adjustments they need – was being led by the Chief Operating Officer or Chief Executive.
Whilst the figure for responsibility for ensuring staff with disabilities and long-term conditions specifically can move to home working was much lower – 31 per cent said this was the direct responsibility of the COO or CEO as compared to 69 per cent for HR – this is still encouraging in giving senior leaders much greater insight into the issues facing their disabled employees. Too often we “don’t know what we don’t know” – but once we do, we can call it out.
I was very heartened by a discussion with one of our members who was planning an office relocation in which the senior champion leading the project told me that he had vetoed one possible option because it had cobbled paving directly outside – inaccessible to wheelchair users and difficult for anyone with a mobility or visual impairment.
Role Modelling
Leadership is also critical in modelling adjustments and different ways of working. As a CEO, you probably have the freedom to quietly get on with making the adjustments you need, whether that is working from home one day a week (and it’s worth remembering that pre-COVID-19 home working was the most frequently requested workplace adjustment), different/flexible working times or buying some ergonomic equipment. You don’t need to go through a process or to ask HR – but if you share a different way of working with the wider team again it can be hugely powerful in making it ok for others to ask for the support they need. And again, people are often afraid to ask for even simple adjustments that could transform the quality of their working life.
Our Great Big Workplace Adjustments Survey 2019 found that 28 per cent of those with adjustments and 34 per cent of those without adjustments (but who would have benefited from them) said they did not make requests because they were worried their employer might treat them differently. Again, actions speak louder than words. If the boss doesn’t take a lunch break, the rest of their team is unlikely to.
I hope that one positive legacy of COVID-19 will be a kinder and more human style of leadership. During the pandemic, we were forced to be more human in the way we worked; viewed in our home setting without the “trappings of office” or our workplace “armour” in terms of a formal dress code. The intimacy of letting people into our homes (albeit via our video camera) was a powerful thing. The blurring of lines between work and home has its downsides but has positives too as we started to see the “whole people” in our teams; ironically, since the pandemic began, many of us have got to know our colleagues better than we did before.
Culture Change
Of course, culture needs to be backed up by practical action. Make sure you equip people managers throughout your business with the tools and knowledge they need to have a conversation about disability, to identify any barriers people may be facing and to know where and how to get practical support. Our free Disability Essentials resources is a good place to start.
As Peter Drucker famously said: “Culture eats strategy for breakfast.” Like it or not, what you do as a CEO not only matters but has a disproportionate impact. Why not use that for the good?
Welcome to the launch issue of CEOstrategy where we highlight the challenges and opportunities that come with ‘the’ leadership role
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Our first cover story explores how Vodafone is leveraging strong leadership to drive the collaborations enabling businesses to champion change management and better use technology.
Welcome to the launch issue of CEOstrategy!
Tasked with accelerating business growth, while building the synergies across an organisation that can drive innovation to meet diverse customer needs and keep revenues on track, the modern CEO must be mentor, marshall and motivator on the journey to success.
“Leadership is purpose, it’s why do you do the things you do…”
Our cover story throws the spotlight on Vodafone US CEO David Joosten; also Director for Americas & Partners Markets at Vodafone Business, he talks to CEOstrategy about leading from the front and setting the standards to deliver growth while keeping employees and customers happy.
“People follow leaders that are honest about themselves. If you can reflect on what you’ve done well, but also where you need to improve it can inspire others to do the same.”
EMCS Industries Ltd: How a CEO can navigate change management
“Why hire talent and then tell them what do? You have so much to learn from the great people you hire. Micromanaging is not management, and it’s certainly not leadership. Let your people thrive!”
Read our interview with EMCS Industries Ltd CEO Trevor Tasker for more thought-provoking insights on leadership from the shifting tides of the marine industry in this maiden issue.
How to be an authentic leader
“At the most basic human level, everyone knows what it’s like to feel heard by another person, and how that changes our behaviour. It can help anger and sadness subside and enable us to start seeing things differently. So, when employees are being listened to by their leaders, it can only help how an organisation operates.”
Dr Andrew White, director of the Advanced Management and Leadership Programme at the University of Oxford’s Saïd Business School and host of the Leadership 2050 podcast series, explores transformative approaches to leadership for the modern CEO.
How can CEOs drive forward culture change around diversity and inclusion?
Diane Lightfoot, CEO of Business Disability Forum, explores the changing the narrative around diversity and inclusion in the workplace.
“Disability is still often parked in the “too difficult” box when it comes to Diversity, Equity and Inclusion. Employers are often afraid of doing or saying the wrong thing and as a result, do or say nothing. As a CEO, the stakes feel (and often are) higher. That high profile platform can feel daunting at the best of times; when tackling an unfamiliar topic, it can feel positively overwhelming. But what we do and say as senior leaders has a huge impact. Indeed, it is critical in driving change.”
https://www.youtube.com/watch?v=g-TRCm1dv6o
Also in this launch issue, we get the lowdown on agile ways of working from Kubair Shirazee, CEO of Agile transformation specialists Agilitea. Elsewhere, we speak with Nirav Patel, CEO of the consultancy firm, Bristlecone – a subsidiary of Mahindra Group and a leading provider of AI powered application transformation services for the connected supply chain – who discusses the challenges facing CPOs and supply chain leaders in our uncertain times. And we analyse the latest insights for CEOs from McKinsey and Gartner.
Standard Bank CIO Bessy Mahopo on the challenges of operating in a fractured market and how the company overcomes them
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This month’s cover story highlights how technology is helping Standard Bank overcome the challenges of a fractured market to both drive business growth and improve services for customers.
Welcome to the latest issueof Interface magazine!
“Time may change me, but I can’t trace time…” sang David Bowie. Changes can be challenging to manage with the path to positive disruption not always a smooth change management journey.
Interface dives deep for insights on understanding, planning, implementing and communicating change across industries.
Standard Bank CIO (CIB – Transactional Banking) Bessy Mahopo explains how one of South Africa’s largest banks is using its own digital transformation successes as a template to support the country’s ongoing technological evolution by overhauling IT from the inside out. “I believe that once we start moving the curve to fifth and sixth generation technology, we’re going to become even more of a value-producer.”
The art of change management with SAP
Maria Villar, Head of Enterprise Data Strategy and Transformation at SAP, talks about the importance of driving change in the technology space and helping businesses thrive with data from the perspective of one of the world’s leading enterprise resource planning software vendors. “My job is about finding out what a good data strategy looks like and continuing to spend time with customers to look ahead…”
Talent transformation journeys with TUI
We caught up with Cerstin Lang, Director for HR Group IT at TUI. She reveals how it’s global For:ward program is driving digital transformation as the travel giant works with training partner Udacity to upskill IT talent. “Our IT goals are focused on developing a structure that supports new ways of working with the right balance to innovate and grow in the future.”
How TransUnion is enabling consumer trust
Alejandro Reskala, CIO Canada, LATAM, Caribbean at TransUnion, about technology transformation at a leading consumer credit reporting agency, its dedication to people, and how it makes trust possible. “TransUnion has always blazed a trail to use technology and data to generate insights that help support financial inclusion.”
Also in this issue, we ask what the birth of ChatGPT means for businesses leveraging tech and learn from Rivery why organisations need to rethink their data strategy with robust operational analytics.
Mark Weil, CEO at TMF Group, discusses the rise of staff attrition in the industry
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At the start of 2023 many companies are still struggling to find employees. The job market favours the applicant far more than before Covid-19 across many sectors. Higher interest rates and lower economic growth so far haven’t reduced the pressure on labour availability.
High staff turnover isn’t just a matter of the cost it creates. The disruption from running with a lot of open roles and with less experienced staff can disrupt client service, increase error rates and lead to more serious compliance and reputation damage.
Mark Weil, CEO at TMF Group
Examining the data
A lot of commentary on the situation has been based on surveys of employees’ intentions rather than their actual decisions. By managing our clients’ financial, legal and employee administration we have access to large volumes of data. This provides insight on the overall recruitment and resignation levels across workforces, from several hundred thousand employees, covering a broad range of sectors and job levels in more than 90 countries.
As a starting point, the data tells us that there was indeed a significant global increase in staff resignation during and after the pandemic. Across the 90 countries, average company staff attrition rose from around 15% annually in mid-2020 to 25% at the end of 2021. That’s a dramatic 67% increase in just 18 months.
Global annualised employee attrition trend
Digging deeper reveals a much more nuanced picture by company and country. In 2021, staff attrition averaged around 20% across the 90 countries but was below 10% in a small number, with Argentina the lowest at 6%. Of those above 20%, India, the UK and Poland topped the list with a rate of 26%. Both India and Poland are now major destinations for companies establishing regional service centres – locations that are supposed to be low cost, stable hubs that support many other countries. So rising staff turnover there will be particularly painful.
2021 average employee attrition by country
When examining the data at company level, annual attrition levels vary even more widely, from a low of around 5% to a high of 40%. Some of that will be a result of challenges in specific industries and companies. Some will arise from the underlying attrition in the labour market of the countries they operate in. To disentangle how much is company versus country, we compare in the chart below the attrition a firm is seeing with the average attrition it should be seeing given the mix of countries where it operates. The wide spread in the data shows that that country averages matter far less than individual company factors. For example, looking at companies whose country mix should give them expected attrition of around 15-20%, we see many at 30%-40% and others at just 5%-10% attrition.
Company actual 2021 attrition versus average for the countries where they operate
Staff attrition is a problem at any time, but becomes a significant threat to a business if it gets too high. How high is a matter of judgement and depends on the particular company. In professional services, for example, when staff attrition is above 20% it starts to impact client service and above 30% it can pose a risk to regulatory and reputational integrity.
The rise in global staff attrition, coupled with big spikes by country and company means that multinational firms will have an increased number of locations where attrition is high and potentially well beyond manageable levels. From 2020 to 2021 the number of employees in company locations experiencing more than 20% attrition nearly doubled, from around 15% to 27%. Looking at where the levels were highest, employees in countries experiencing more than 35% attrition rose from 1% to 7%. That means there’s an increasing number of hotspots, where extremely high staff attrition means companies need to intervene quickly to avoid staff resignations spiralling due to increased workload.
Factoring in country complexity
An important additional factor is the complexity of a particular country to operate in. Many countries have onerous business rules which are enforced vigorously. High staff turnover in complex countries is particularly dangerous because of the added risk of compliance breaches.
We can look at country complexity using TMF Group’s Global Business Complexity Index. It ranks countries annually based on 292 criteria, covering the fiscal, legal and employment environments for doing business in each location.
Jolyon Bennett, CEO of Juice, discusses how sustainability has moved to the forefront of his organisation’s operations
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A green approach is quickly transitioning away something that is ‘nice to have’ to an essential component of a company’s strategy.
To Jolyon Bennett, who heads up UK tech accessories manufacturer Juice, being environmentally friendly is non-negotiable. Bennett has transformed the mobile phone accessories sector, having consistently introduced a series of quality, vibrant and consumer-focused products to market, ranging from portable power banks through to super-fast chargers.
He takes us under the bonnet of his firm’s sustainability drive.
You have recently removed all single-use plastic from your entire product range – why?
Jolyon Bennett (JB): “Why wouldn’t you? Single-use plastic is one of the biggest polluters in manufacturing – it uses 3% of the entire planet’s oil consumption. This year, it’s forecast that there will be 50kg of plastic waste for every single one of the eight billion human beings on planet earth – that’s a lot! Consumers, manufacturers and brand owners like myself all need to get on board with the fact that we’re going to need to use and re-use plastic packaging to make different things.
“Why have we done it? Because it’s totally the right thing to do. We need to stop making so much plastic and we need start reusing what we’ve already got. We need to stop cutting down trees in order to make paper and cardboard – let the trees grow and re-use what we’ve got. It just makes sense on a planetary level to stop consuming quite so much and start being just a bit more content with what we’ve got. Why do we need to make ‘new new new’ all the time?”
What have you used instead of virgin plastic?
JB: “We’re reusing, reusing, reusing. Did you know that recycled plastic – depending on its quality and density – can be recycled and re-used between seven and 200 times. Isn’t that unbelievable? It’s such an amazing material. Plastic is a vibe, and we should be re-using it. Juice is using post-consumer waste such as Evian bottles to make speakers, old milk cartons to make power banks and so much more!”
Why do you love plastic?
JB: “I just think we’ve got a lot of it so why not reuse it? I admire the material because it’s so durable – it’s an incredible scientific breakthrough to be able to make something that’s not only waterproof and heatproof but lasts for up to 3,000 years. There are so many different elements that make plastic a great material. I would prefer it if we didn’t have any, but that’s not going to solve the current (and ever-growing) problem of plastic waste finding its way into our oceans, and burying it isn’t the answer either. The problem is with us humans is that we just shy away from the truth – l don’t want to shy away, I want to face these problems head on and meet the challenge.”
Has Juice taken a financial hit to make this happen?
JB: “As an example, we sell around three million cables a year (based on last year’s figures) and each piece of packaging that we are making using post-consumer waste costs us between $0.15 and $0.25 more, so as a minimum, our increased cost for doing this is almost half a million dollars. But I still think it’s the right thing to do. Money is made up – the world could end and money would no longer matter, so let’s stop making decisions based purely on money and let’s start making decisions based on the right thing to do.”
How do you rate the overall quality of the ‘Eco’ products compared to the ones they have superseded?
JB: “There is absolutely no difference whatsoever, so I rate them just as highly.”
Do customers really want these eco products or is this more for your own conscience?
JB: “I don’t suffer from guilt so in that respect I don’t feel driven by my conscience to do this – doing the right thing has its own gravity and its own way of whisking you forward. Generally, I believe that people and businesses that do the right things will prosper. I’m a firm believer in the philosophy of ‘do the right thing and good things will happen’ so it’s a strategic choice to do something that has a positive impact because positive things attract positive things. While not every consumer or every retailer is especially interested in our sustainability drive, I do think this is shifting slightly. Maybe I do have a conscience, but the reality is that it’s the right thing to do, and the right thing gets rewarded in the end.”
Are retailers keen to stock them?
JB: “We haven’t given them a choice! We changed all of our products because we wanted to and we are adamant that even though the materials we are using are different, our products still perform just as well, if not better.”
Should other tech brands follow suit?
JB: “Of course they should, and we would happily help them do so. We’re willing to introduce other tech brands to our suppliers and guide them through the same process we’ve taken, sharing our knowledge – including the hurdles we’ve overcome – because it’s the right thing to do. I don’t understand why any brand would want to continue producing virgin plastic when they don’t have to, it just doesn’t make any sense to me.”
What advice would you give to other brands wanting to embark on this process of removing single-use plastic from their products?
JB: “Do it. Stop messing about – get on with it and do it. Although it may cost you a bit more in the short term, we’ve proven that consumers do generally buy more of your products if you are making the right decisions towards the environment, so you will reap this extra cost back whilst also doing the right thing.”
What is next for Juice?
JB: “I want Juice to be a brand that limits its impact. We’re currently doing this with our manufacturing and through our supply chain and the way that we conduct ourselves in general. I want to start releasing products that have a positive impact on humans as well as the planet – I’m a firm believer that everyone can win. There will always be a demand for technology, so I don’t believe that we should be fighting against it, however, I would very much like to see people taking their technology off grid.
“My dream is to be able to take every mobile phone on planet earth off grid and start generating our own personal electricity. I want to create products that link to your activity – imagine if you could run 5k and the kinetic activity could generate enough energy to a charge a device such as a phone or a laptop while you do it? I’m interested in organic solutions to current chemical problems such as organic battery cells using salt water and algae as a storage method of electricity – so much so that we’re currently in discussions with a photosynthesis harvesting electronics brand about using photosynthesis as a charging capability!
“I want to get more connected with nature and I think you can have it all – I think we can still enjoy modern technology as well as the beautiful world around us. If we can utilise our intelligence in the right way, we can all live in a perfectly harmonious symbiotic relationship with amazing technology products and a sustainable environment for all wildlife.”
Procurement is in a state of flux. Against a backdrop of economic uncertainty, the procurement landscape is volatile and requires…
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Procurement is in a state of flux.
Against a backdrop of economic uncertainty, the procurement landscape is volatile and requires agility to navigate turbulent waters. But, despite significant disruption could there still be opportunity?
Simon Whatson, Vice President of Efficio Consulting, is optimistic about the future of digital procurement and despite a challenging few years he is confident of a successful bounce back. He gives us the lowdown on the direction of travel for digital procurement in 2023.
As an executive with considerable experience in the space, we’d love to learn more about your background and how you ended up in procurement. Why was this the specialism for you and how did you get involved to begin with?
Simon Whatson (SW): “I think the one-word answer of how I came into procurement was accidental. I studied maths at university, with a year in France, before I began looking for different roles to apply for.
“Eventually, I was offered a position with a big plumbing and heating merchant with global operations. I worked in that supply chain team for two and a half years. Although it was called supply chain, a lot of the work was procurement, which involved negotiating with suppliers. It was after that stint there, that I discovered consulting and joined a boutique procurement consultancy. Now I am onto my third consultancy and I’m very happy here!
“In terms of why I’ve stayed, one of the success factors in procurement is being able to work cross-functionally. Procurement doesn’t own any of the spending that it is responsible for helping to optimise. It must work with other functions and the spend owners. I quite like the people side of that, building relationships, almost selling internally to bring teams together. That really appeals to me and is a key reason why I’ve been very happy in procurement.”
As we move into exploring procurement today in 2023. The space is filled with challenges and complexities. You only need to look at the last few years. Covid, war in Ukraine, inflation – how would you describe the world’s recent challenges and their effect on the industry and what do you feel CPOs and leaders can do to combat these issues?
SW: “I would flip it around and say that these are not so much challenges but rather opportunities for procurement. When I started my career 18 years ago, procurement was often fighting to get a voice and there were complaints that procurement was not represented at the top table, but the war in Ukraine, inflation, COVID and ESG, these are things which are now on the C-suite agenda and procurement is ideally positioned to help companies face those challenges. If you think about COVID and the war in Ukraine, procurement is in a privileged position to help with this.
“I see some procurement functions that prefer to do what they know, which focuses on the process and transactional side. However, there are also many forward-thinking CPOs and procurement professionals out there, that have really seized this opportunity of being on the C-suite agenda and drive the thinking and the solutions to some of these big challenges we’re seeing.”
Although new technology in procurement has been around for well over a decade, digitalisation has become so much more of an important topic. How would you sum up where procurement and supply chain are in terms of digital transformation today?
SW: “It’s a bit laggard, but digital transformation is difficult, and we have to recognise there are some real trailblazers. There are some firms doing some fantastic things in digital to produce better outcomes. If you contrast your experience when you’re buying something in your private life, it’s much easier than 20 years ago. You can get access to a wealth of pre-sourced things, whether it’s food, a holiday, a car, or a book. You can see reviews of what other people think of these things.
“But when you go into your workplace as a business user and you want to buy something, it doesn’t quite work like that yet. You often have to fill in a form, send it off and wait for them to come back to you. They might come back a little bit later than you were hoping and might tell you that they don’t have that part on the supply frameworks. I think people sometimes get confused about how it can be so easy to buy something as large as a car or a holiday on their sofa at home, but when they want to buy something at work, it seems to be quite cumbersome. Digital can help a lot with that, but it is incumbent on organisations and procurement functions to figure out how to recreate that customer experience that we’ve become accustomed to in our private lives.”
With a new generation of leaders growing up with technology, some might say that it could be a key driver in helping to speed the adoption in procurement along. Is this something you would agree with or what would you point to as a key driver?
SW: “I do think that it will act as one of the catalysts for further digital transformation in organisations, because if procurement doesn’t manage to recreate that customer experience that the new generation expects, then they won’t use procurement going forward and will look to bypass it.
“The analogy that I’ve used previously in this case is one of travel agents. I remember as a child, my parents were able to take us on holiday and I remember the whole process. We would walk into town to the travel agent, and look at some of the brochures of options. They often then had to phone the various airlines or resorts on our behalf. They might not be able to get through, so we’d have to come back the next day. I remember as a child being quite excited by the whole process but actually, thinking back, it was quite cumbersome. You compare that to now, with being able to review online, and you can get instant answers to your questions. It’s not a coincidence that travel agents don’t really exist anymore.”
How much of a challenge is it to not get caught leveraging technology for technologies sake? How important is it to stay true to your approach and be strategic?
SW: “We conducted a study of many procurement leaders and CPOs a few years ago, and one of the things that we found was that about 50% of procurement leaders admitted to having bought technology just on the basis of a fear of missing out, without any real understanding of the benefits that technology was going to bring. That was a real shock and a revealing find because technology is not cheap, and its implementation is quite disruptive. If you’re purchasing a system because everybody else is using it, then there could be some pretty costly mistakes. It is really important to make sure that when buying technology, it is because the benefits are fully understood.
“My advice to companies when looking to digitalise is own your data, visualise that data, and manage your knowledge. If you can focus on getting those things right in that order, and make your technology decisions to support that goal, then that’s a much better way of thinking about it rather than just jumping in and buying a piece of technology.”
It’s clear that the procurement space is an exciting, but challenging, place to be. What do you think will play a key role in the next 12 months to push the digital conversation further to take procurement to the next level?
SW: “Looking forward, one thing that procurement needs to do and continue to do is attract the best people. Ultimately, people are what makes an organisation, and it is what makes a function successful. I think procurement has often not looked for the right skills in the people that it employs. Traditionally, it’s looked for people with procurement experience and while they are valuable and required, we also need leadership potential. People who think a bit more outside the box and aren’t so process driven. A lot of what procurement has done in previous years has been process driven, so if you’re just limiting your search of people to those that have had procurement experience, you’re inevitably going to end up with a lot of people who are process driven.
“I think being bolder and recruiting people from different backgrounds with different skill sets is the way to go. If procurement can ‘own’ the ESG space, that will help with the younger generation see procurement make a difference. I think that’s one thing that will be key to success going forward.”
Check out the latest issue of CPOstrategy Magazine here.
Paul Farrow, Vice President of Hilton Hotels’ Supply Management, sits down with us to discuss how his organisation’s procurement function has evolved amid disruption on a global scale
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The hospitality industry has endured a rough ride over the past few years.
Following the COVID-19 pandemic which stopped the world in its tracks and now with millions facing a cost-of-living crisis, it’s been a period of unprecedented disruption for those involved in the space and beyond.
But it’s a challenge met head-on by Paul Farrow, Vice President of Supply Management at Hilton Hotels, and his team who have been forced to respond as the world continues to shift before their eyes.
Farrow gives us a closer look into the inner workings of his firm’s procurement function and how he has led the charge during his time with Hilton Hotels.
Could we start with you introducing yourself and talking a little about your role at Hilton Hotels?
Paul Farrow (PF): “I’m the Vice President of Hilton’s Supply Management, or HSM as we call it. I’ve been with Hilton Hotels for 12 and a half years, and my role is to head the supply chain function for our hotels across Europe, the Middle East and Africa.
“Over the past few years, Hilton has grown rapidly and has now got 7,000 hotels in over 125 countries globally. What is really exciting is Hilton Supply Management doesn’t just supply Hilton Hotels and the Hilton Engine because we also now supply our franchisees and competitive flags. While we have 7,000 hotels globally, Hilton Supply Management actually supplies close to 13,000 hotels. That’s an interesting business development for us, and a profit earner too.”
You’re greatly experienced, I bet you’ve seen supply chain management and procurement change a lot in recent years?
PF: “The past two to three years have been tremendously challenging on so many industries but I’d argue that hospitality got hit more than most as a result of the Covid pandemic. Here at Hilton, supply management was really important just to keep the business operational throughout that tough time, but I’m delighted to say we’re fully recovered now.
“Looking back, it was undoubtedly difficult, and you only have to look at the media to see that we’re now going through a period of truly unprecedented inflation. On top of the normal day job, it’s certainly been a very busy time.”
Hospitality must have been under an awful lot of pressure during the pandemic…
PF: “Most of our teams as a business and all functions have worked together far more collaboratively than ever before through the use of technology and things like Microsoft Teams and Zoom. Trying to work remotely as effectively as possible changed the way we all had to think and the way we had to do. Now we’re back in the workplace and in our offices, we’re actually looking to take advantage of that new approach.”
Inflation, rising costs, energy shortages, as well as drives towards a circular economy means it’s quite a challenging time for CSCOs and CPOs right now, isn’t it?
PF: “Those headwinds have caused and created challenges of the like that we’ve not seen before. The war in Ukraine and Russia has meant significant supply chain disruption and supply shortages of some key ingredients and raw materials. China is a significant source of materials and they’re still having real challenges to get their production to keep up with demand.
“All the local and short-term challenges are around energy and fuel pricing, so throughout the supply chain that’s been a major factor to what we’ve had to deal with. On top of that is the labour shortages. We rely heavily throughout the supply chain and within our business to utilise labour from around the world. In my region, particularly from say Eastern Europe as well as other businesses all fighting for a smaller labour pool than we had before. We are fighting with the likes of the supermarkets, Amazon’s, not just other hotel companies to capture the labour pool we need both in our properties but also within our supply chain supplies themselves.
Hilton operates a rather unique procurement function, doesn’t it?
PF: “We trade off the Hilton name because our brand strength is something that we are able to utilise and we’re very proud of, but we’ve also got additional leverage by having that group procurement model.
“We’ve got essentially two clients. We’ve got our managed estate which is when an owner chooses to partner with Hilton, they’re signing a management agreement because they want the benefit and value of the Hilton engine. That could be revenue management, how we manage onboarding clients and customers through advertising, as well as the other support we give in terms of finance, HR, marketing and sales as well as procurement.”
HSM is a profit centre and revenue driver through its group procurement model but how does this work?
PF: “Our secret sauce is our culture. It’s our people and that filters across all of our team members and indeed all of our functions. The key strategic pillars are the same for health and supply management around culture, maximising performance and so on as they are across the overall global business.
“Across our 7,000 plus hotels, the majority are actually franchised hotels because that’s the legacy of what still is the model in the US. When I joined Hilton 12 and a half years ago, the reverse is true where nearly all of our hotels in Europe, Middle East and Africa, and indeed in Asia Pacific, were and are managed. In the Europe, Middle East and Africa regions right now we’re building up close to a 50/50 split between managed, leased and franchised.”
What has pleased you most about the roll-out of the HSM?
PF: “It’s certainly not been easy because we’ve got 70 countries that sit within our region here in EMEA and Hilton’s penetration in those individual countries is very different. We may have 100 hotels in one of those markets and only one or two in specific countries. Our scale and our ability to get logistics solutions is different by market.
“Getting everyone on board to what we want to achieve to our guests and to our owners means we have to pull different levers. We have very effective brand standards. If you’re signing up to Hilton, you’re signing up to delivering against those brand standards that we believe are right for our organisation.”
What kind of feedback have you had from your clients?
PF: “Integrity is in our DNA, and we work very closely with our suppliers who we value as partners. These are long-term relationships, and we work hand in hand because we have to see that they’re successful so that we can be successful – it’s really important to what we do and we constantly look for feedback.
“With our internal and our external customers, we’ll have quarterly business reviews and so we’ll get that feedback through surveys where we are asking them to tell us what we do well and what we could do better. Our partners are now asking what additional value can you do to bring support to our organisation through ESG? So that’s what’s on the table now when it wasn’t before. But it’s not just that – it’s about the security of supply competitiveness, competitiveness of pricing, and a whole bunch of other very important things as well.”
Looking to the future, what’s on the agenda for the next few years?
PF: “We’re out there meeting and greeting people in person and there’s always new opportunities that make things exciting in what we do and how we work. Innovation’s very high on our agenda and we’re very proud of what we do in food and beverage. In non-food categories, it’s about how we support our owners and our hotel general managers to find that competitive edge and do the next big thing ahead of our competitors.”
Anything else important to know?
PF: “One thing we’ve been able to take full advantage of is how we’ve been able to grow our business by bolting on new customers. I think it’s fantastic that our competitors choose to use Hilton Supply Management because they benchmarked what our capabilities are and how competitive we are.
“Another key part of the agenda is environmental, social and governance (ESG) sustainability. Responsible sourcing and everything that sits within that is front and centre of what we do. Within that you’ve got human rights, animal welfare, single use plastics as well as general responsible sourcing like managing food waste. The list is very long, but they’re all very important.”
Check out the latest issue of CPOstrategy Magazine here.
Here are 10 of the most important leadership skills that CEOs need to demonstrate in 2023.
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In today’s world, a CEO needs to be lots of things to different people. The importance of having the leadership skill to being able to lead through unprecedented disruption was highlighted by the COVID-19 pandemic and helped to define what makes a good CEO.
Here are 10 of the most important leadership skills that CEOs need to demonstrate in 2023.
1. Clear communication
Communicating effectively with employees is one of the most vital skills any leader can have. By adopting a transparent mindset, it leaves little room for miscommunication or misunderstandings. But rather than just being eloquent, CEOs should deliver meaningful content too. A CEO needs to be able to communicate the essence of the business strategy and the methodology for achieving it.
2. Strong talent management strategy
People are the most important component of all businesses. CEOs who are able to recruit and retain key employees have a greater chance of increasing productivity and efficiency. After recruiting good people, the key to retaining them is by harnessing a positive work environment that empowers employees to succeed.
3. Decision-making
As a leader, thinking strategically to make effective decisions is vital to the success of an organisation. Making decisions is a key part of leadership as well as having the conviction to stand by decisions or agility to adapt when those decisions don’t have the required outcome. While all decisions might not be favourable, making unpopular but necessary calls are important characteristics of a good leader.
4. Negotiation
Negotiation is a fundamental part of being a CEO. In a top leadership position, almost every business conversation will be a negotiation. Good negotiations are important to an organisation because they will ultimately result in better relationships, both with staff inside the company and externally. An effective leader will also help find the best long-term solution by finding the right balance and offering value where both parties feel like they ‘win’.
5. Creativity and innovation
Being quick-thinking and ready to explore new options are great skills of a CEO. Creative leadership can lead to finding innovative solutions in the face of challenging and changing situations. It means in the midst of disruption, of which it has been increasingly prevalent, leaders can still find answers for their teams. Creative CEOs are those who take risks and empower employees to drop outdated and overused practices to innovate and try new things that could lead to greater efficiency.
6. Agility
Without agility over the past few years, businesses would have failed. CEOs were forced to embrace remote working following the advent of the COVID-19 pandemic whether they liked it or not. Now, faced against a potential recession, these macroeconomic events are unavoidable and have to be managed carefully. Effective leaders will have their fingers on the pulse and ready to respond to changes.
7. Strategic forecasting
Creating a clear path forward is essential to achieving uninterrupted success. The ability to look into the future and identify trends and issues to then react to is vital. Good CEOs are able to plan strategically and make informed decisions to set goals and plan for the future easily.
8. Delegation
CEOs can’t do everything. A leader tends to be pulled in a number of different ways every day and it is impossible to be on top of everything. This means the importance of bringing in a team of people who are trusted and skilled in their respective areas of expertise. Successful CEOs are expert delegators because they recognise the value of teamwork and elevating those around them.
9. Approachability
An approachable CEO who welcomes conversation and is an active listener will help employees feel at ease raising issues or concerns. This approach will help build strong relationships with staff and customers and encourage a healthy culture which is beneficial to employee retention. Leaders with strong, trusting and authentic relationships with their teams know that investing time in building these bonds which makes them more effective as a leader and creates a foundation for success.
10. Growth mindset
If a CEO arms themselves with a growth mindset it allows them to meet challenges head-on and evolve. This shines a light on improving through effort, learning and persistence. As others may back down in the face of adversity and upheaval, successful CEOs will strive to move forward with confidence. Those with a growth mindset are unlikely to be swayed as they have the tools needed to reframe challenges as opportunities to grow.
In McKinsey’s latest report ‘Actions the best CEOs are taking in 2023’, we examine three of the biggest trends on the c-level agenda
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Anyone can sail a ship when things are going well. But it takes a strong, robust and characterful CEO to steer a business through choppy waters and out the other side.
In McKinsey’s latest report ‘Actions the best CEOs are taking in 2023’, the research and advisory firm uncovered which trends are set to have the biggest impact on how CEOs lead their business throughout the year.
McKinsey’s CEO Excellence Survey surveyed 200 of the best corporate CEOs of the past 15 years. This was completed by whittling down a list of all the current and former CEOs of the 1,000 largest public companies during that timeframe. The list was subsequently filtered based on tenure, including only those who had completed at least six years in the role. From there, the CEOs were continuously shortlisted until the best 200 were determined.
Each CEO was asked to identify the top three trends that are set to determine how leaders tackle the future. Here is an insight into those findings.
1. Actions to deal with digital disruption
CEOs are targeting digital trends in three key ways: developing advanced analytics, enhancing cybersecurity and automating work. OpenAI’s launch of ChatGPT has accelerated the demand of companies looking to embrace advanced analytics for a competitive advantage. Improving cybersecurity is another key action for CEOs with the importance of guarding against external threats paramount amid strengthening and more mature cyberattacks. Lastly, automating work is another key priority to scale efficiency and eliminate boring and manual tasks which free up people’s time.
2. Actions to deal with the risk of high inflation and economic downturn
One CEO who is worried about economic uncertainty told McKinsey: “Act early to lower costs and protect the balance sheet so that you are stronger and leaner when the economy begins to turn more favourably.” McKinsey found that companies that outperformed the 2008 financial crisis cut operating costs by 1% before the downturn while the others expanded costs by the same percentage. The best performers reduced their debt by $1 for every $1 of book capital before the downturn. This can be done by reducing operating expenses, redesigning products and services as well as reassessing strategic and economic assumptions.
3. Actions to deal with the escalation of geopolitical risk
According to McKinsey, there are three actions to help manage the escalation of global and national crises. CEOs are targeting building robust compliance capabilities, creating resilience in supplier networks and investing in monitoring and response capabilities. These actions come following the challenges presented by COVID-19, the war in Ukraine and now inflation concerns. Many firms are choosing to build their trade compliance organisations and improve how they screen different customers and companies. While a defensive approach is the way forward for many, some companies see the turbulent times as an opportunity.
How Minted is leveraging digital technology to make investment in precious metals, accessible, affordable and simple
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Shahid Munir, co-founder of Minted, discusses how his firm is competing with larger banks for a spot at the top table of investment in fintech.
Few industries have boomed like the fintech space over the past few years. With a plethora of new technology at consumer fingertips like never before, banks are being properly challenged by upcoming startups offering an alternative solution. Among these is Minted, aiming to make the buying, selling, transferring and delivery of physical precious metals simple through flexible monthly plans and one-time purchases. The company was founded in 2018 by three close friends – Shahid Munir, Hamzah Almasyabi and Haroon Siddiq – with a shared passion for entrepreneurship, technology and the opportunities the financial industry presented. Their combined drive led to the creation of Minted.
Shahir Munir, Co-Founder, Minted
The rise of Minted
Munir, co-founder of Minted, admits the journey has been a “rollercoaster” since the trio decided to launch their venture. “It’s certainly been exciting,” he explains. “It’s been a great learning curve and was a case of taking an industry where so many people were so used to doing it one way and offering something new. This has been challenging because we have a great product, but no one understood it. We’ve had to go out and educate people first in what has been a journey of growth, but it’s a constant journey.”
A decade ago, financial technology was considered by many as ring-fenced by bigger banks. But Munir stresses he has tried to change that narrative and offer competition which provides tremendous value. “Previously, a bank was the only way you could provide financial products,” he says. “Technology has allowed more innovative and creative solutions to launch and test the bigger banks and what they became bad at which was the customer experience. Now you see bigger banks adopt a lot of the technology and some of the practices used by challenger banks which can only be a good thing. Being in London has also helped because it is one of the leading hubs for fintechs and really supports the financial technology industry.”
Armed with different skillsets, the three co-founders complement each other with a diverse range of experience. With Almasyabi bringing an operations background and Siddiq bringing business strategy, Munir completes the line-up with finance and technology know-how. “I think it’s what sets us apart and makes us different,” he says. “Our backgrounds mean we’re not tunnel visioned and can see clearly when things aren’t working. We have a great thinktank within the business which helps us come up with ideas.”
Making precious metals accessible, affordable and simple
“I recall seeing a meme about how the price of a Freddo chocolate had changed over the years, no longer being its trademark 10p, it was now 200% more expensive and also smaller in size. This led me down rabbit-hole of trying to understand why most items go up in price as years pass and rarely come back down again. I became fascinated with how the government increases the money supply and the concept of inflation – my money buys me less in the future than it does today.
“I met with the other two founders that same night and the thoughts extended from my mind into an intense conversation about quantitative easing, Brexit, cost of living – snacks were being consumed faster than the rate of government borrowing. Where could we park our money, what was better than money? That was when the penny-dropped (pardon the pun). Hamzah proclaimed: ‘What about gold, guys?’”
Digital disruption
Through Minted, customers will have full legal ownership over their gold and can also request to have their gold delivered to a verified address. The gold and silver are stored in a grade 10 vault in the UK with the highest level of security possible. The products are fully insured by Lloyds of London at the current value while in vaulted storage as well as when being transported.
As a digital disrupter, one of the biggest challenges Minted continues to face is a lack of understanding. Customer assurance is an important priority, and the organisation has established several initiatives to gain trust. Minted is registered and regulated by the Financial Conduct Authority (FCA) which means the firm operates to the highest financial standards and guidelines as determined by the FCA. “I feel like we need to go that extra mile,” stresses Munir. “What I think we underestimated at first was the extent to which people needed to ask questions until we launched a live chat facility on the website. This function helps build our knowledge base and allows us to hold the customer’s hand throughout the process. We’ve also found success when we’ve attended face to face exhibition events and had one-on-one interactions. It’s been brilliant to see first-hand the customer perception and look at what we can do better to meet their needs.”
Munir says he has noticed a trend of people starting with a “flutter” to test the water and check out the process. “I think it’s important that people build their confidence and recognise the value in what we offer,” he explains. “Once this is done, we often see those same customers make larger transactions. We know our difference can be a challenge for some people to accept which is why education is such an important topic to us. We have to keep doing explainer videos, use social media and hold community sessions to be there for customers.”
Scaling up
Minted recently launched its own app which offers customers an even easier way to manage their gold and silver, as well as introducing a tool to partner with businesses called Minted Connect. Munir believes the move has helped showcase an advanced, modern way for people to own physical items. “I love the app as it just makes things so much easier for customers via the platform,” he explains. “It’s been fantastic, a one-stop solution that helps stores the precious metals for free and allows them to be delivered at any time. In a world where everything is so digitally enabled it is nice to offer something physical – people don’t even buy cars anymore. Hopefully via customer feedback we can make improvements to the app that will help us develop new features.”
Munir believes gold is increasingly being seen as an alternative for savings and affirms global pressures like the threat of inflation amid economic uncertainty has helped people to realise the full potential of Minted’s offering. “In the past if you wanted to save money, you simply open a saver account and start adding money but with gold it was often a little trickier,” he says. “But with Minted we’ve simplified the process and tried to make it as automated as possible. Gold is a great alternative which has stood the test of time.”
Looking ahead, Minted is showing no signs of slowing down and is expanding into different territories. Munir remains positive for the next few years and what comes next for his organisation. “We’re working towards expanding the team because I feel like we’re at the stage now where each of our departments needs its own team of people to run each department,” he explains. “We’re scaling up and branching into new markets such as Turkey, and focusing in on developing the business to business side too.”
“Disruption should drive digitalisation and cloud uptake rather than hindering it.”
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Sal Laher, Chief Digital & Information Officer at global enterprise software provider IFS, reveals how a single strategy for cloud and digitalisation helps businesses maximise the rewards of growth.
Digitalisation equals transformation
Digitalisation and the business transformation projects that enable it are again on the radar for many businesses, particularly given the current macro-economics and potential recession being predicted. According to recent data from Research and Markets, The Global Digital Transformation Market size is expected to reach $1,302.9bn by 2027, rising at a compound annual growth rate (CAGR) of 20.8% in the period 2021-2027.
This renewed focus on digitalisation is aligned to businesses accelerating cloud migration, including readily available SaaS solutions. The Flexera 2021 State of the Cloud Report finds 92% of enterprises have a multi-cloud strategy and 80% have a hybrid cloud strategy.
Sal Laher, Chief Digital & Information Officer, IFS
Both trends will go hand in hand as digitalisation and cloud migration continue to drive business efficiencies, process change and consumer service demands. Most organisations are aware of the potential rewards both business models can bring. This is because it is not the first time they are being talked about– this major transformational shift has already been in place for a decade. But some, wary of the disruptive impact of recent global events are holding back from implementing them. However, it is the wrong approach.
Disruption should drive digitalisation and cloud uptake rather than hindering it. Even in isolation, either moving to the cloud, or undertaking digitalisation, will enable faster decision-making, supported by greater compute power and more agile processes, generating faster output and enhancing customer service. Yet, to drive competitive edge, organisations need to combine cloud migration with business transformation and look to maximise those benefits. To do this, they must develop a single strategy covering both elements and move forward with a common approach.
Migrating to the cloud for business transformation
By digitalising, organisations have an opportunity to benefit from faster time to insight, enhanced business and customer connectivity, and operational efficiencies. It allows them to more easily collect and analyse data that they can later turn into actionable, revenue-generating insights.
Over time, they can go further and start to tap into the benefits of artificial intelligence, machine learning, big data analytics, and the Internet of Things (IoT). But it is the additional compute power and scalability of the cloud that helps them to maximise these benefits and fulfil the potential of digital technologies.
Cloud migration also includes adopting evergreen application (business process) solutions in the cloud with the many SaaS solutions that are available today. That’s why it is important that they adopt a single plan to migrate to the cloud and drive business transformation all in one. This tandem approach also avoids unnecessary customisation, making a business much more agile to change based on actionable data insights.
Adopting a single plan will, in itself, drive up efficiencies and drive down costs. But critically, the two must be linked to ensure that businesses maximise the benefits of the migration process.
It is cloud, after all, that helps businesses adapt to the new digital world, enabling them, for instance, to leverage out of the box business applications, digital analytics tools and low code platforms that deliver informed decision-making and reduce costs. But cloud doesn’t just maximise the benefits for businesses, it also accelerates them. Cloud has become the fulcrum of digital transformation, mainly due to its ability to enable innovation at scale and allow businesses that have digitalised to rapidly launch enterprise-ready products.
Without cloud, businesses will struggle to drive through timely updates to systems and processes. The costs of stakeholder management may ramp up. Moreover, moving to the cloud without doing it within the step-by-step structure of digital transformation risks mistakes being made, increasing the likelihood of data loss and security breaches through misconfigurations.
Optimising the benefits of digital transformation in the cloud
We have seen how important it is to adopt a single strategy for cloud migration and digitalisation and to execute them in tandem. But organisations also need to maximise the benefits of the combined approach. So how can they best do this?
First, they need to avoid procrastination and delay. The benefits of digitalisation and cloud migration working together are compelling – and senior leaders need to seize the initiative and kickstart the transformation. To get the ball rolling, they need to conduct a benchmarking exercise to better understand where their business stands in terms of its capabilities or gaps. This will help to decide where efforts and resources should be focused.
They then need to align their business processes with IT. That’s key as modern business models increasingly emphasise the digitalisation of processes.
Cloud computing and network security concept, 3d rendering,conceptual image.
They should begin by determining their goals and the systems, technologies, and processes currently in use to achieve them. Next, they need to brainstorm and document core business objectives before developing a cloud and digitalisation migration roadmap to guide their implementation. Measuring performance will also be crucial to optimising results. In choosing which metrics to analyse, organisations should concentrate on those that will most positively impact their bottom line or user experience.
Ensuring employees buy into the process of cloud-based digitalisation will also be key. Organisations should use cloud-based digitalisation as an opportunity to strengthen business processes and help employees switch to new ways of working which maximise the potential of the new technology.
Digital readiness
Given all this, it is vital businesses don’t delay on their journey to digital and the cloud. Unfortunately, CIOs often struggle to know where to start with a cloud and digital migration strategy.
Before they begin, they often look to put a complete strategy in place up front. The truth is that it is not necessary. Instead, they need to get going and prioritise what’s most important. Pick one area, settle on a use case, digitalise, and move it to the cloud, demonstrate results – and then repeat incrementally. That will enable the business to showcase value and create momentum. Over time also, this single coordinated approach, will allow it to tap into a wide range of cloud and digitalisation related benefits – and ultimately to maximise the rewards.
Ian Povey, CIO – Head of Payments Services & Technology, on the strategic transformation taking place at NatWest benefitting both the bank and its customers
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This month’s cover story reveals how innovation is at the core of change for payments processes at NatWest.
Welcome to the latest issueof Interface magazine!
Charles Darwin famously said: “It is not the strongest of the species that survives, nor the most intelligent; it is the one most adaptable to change.” Technology is helping us to evolve. And that evolution is being driven by innovation.
“It may be a cliché, but a transformation journey really has no end… If you fixate on a constant end state without ‘checking in’ you can, and likely will, fail in your objectives.” A wise outlook from a CIO with three decades of change management experience across banking’s payments panorama.
Ian Povey, CIO – Head of Payments Services & Technology, discusses the strategic transformation taking place at NatWest and how that journey of change and innovation is benefitting both the bank and its customers as it evolves to become a relationship bank for a digital world. “Our environment is always changing – we must be on the back of the ‘Change Dragon’ and steering/influencing as a leader and always learning from our teams for new ideas.”
Customer-Centric transformation at FedEx
We also check in with logistics leader FedEx… Custom Critical CIO Cheryl Bevelle-Orange reveals a “technology-forward yet flexible company” embracing innovation and “paving the way for customers to get more relevant information faster about their packages while delivering with excellence”.
https://www.youtube.com/watch?v=galaZZlrEn0
Continuous Improvement in IT at Mazars
Mazars CIO David Marcelino explains his approach to innovation and leading on a successful IT transformation program at one of the world’s largest audit and advisory firms aiming to improve the digital experience for all its stakeholders. “Change Management, adoption, training and awareness are at the core of every single business technology project we deliver.”
Tech innovation at speed with the US Air Force
We also caught up with George Forbes, Director of Digital Operations Directorate at the United States Air Force, who outlines the importance of innovation within the federal government.
Digital Transformation in healthcare at Avellino
Nancy Selph, Global Head of IT at Avellino Lab, discusses how technology is creating new opportunities to improve health outcomes and the importance of leadership in the industry.
Also in this issue, we round up the key tech events and conferences across the globe; we learn how Minted are making it easy for everyone to invest in gold; and we feature the latest on cloud digitalisation from IFS.
We look into the supply chain production process of Easter Eggs and the journey to their final destinations in supermarkets
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Chocolate is arguably the world’s most popular sweet treat. Depending on who you ask, of course.
After, perhaps Christmas, it is the most common time for people to indulge in chocolate if they don’t do so anyway throughout the year.
And synonymous with Easter are the eggs themselves which are loved by children and adults alike all over the world.
The journey to Easter Eggs
The supply chain process is split into eight stages of production: cultivating, harvesting, splitting, fermentation, drying, winnowing, roasting and grinding. Following production, the supply chain process is extended further with logistics which is the final step to providing customers with their favourite seasonal sweet treat.
The journey actually begins with cocoa tree plantations being established which is done by scattering young cocoa trees amongst new shade trees or by planting the cocoa trees between established trees. These are planted in humid tropical climates, with temperatures between 21 and 23 degrees Celsius. This is consistent rainfall periods and a short dry season because these conditions provide good quality cocoa.
Each tree produces 20-30 cocoa pods a year which grows straight from the tree’s trunk and main branches. With this tree also yielding fruit, the crop is carefully pruned, and as a result, it is easier to harvest the cocoa pods. The next step is the labour-intensive task of harvesting the crop.
The harvest is a whole community affair on small West African farms. Large knives are then used to detach the pods from the trees and placed in large baskets on workers’ heads. The pods are then manually split open to remove the beans so they are ready for the two-step curing process. Each pod consists of between 20-40 purple cocoa beans.
The curing process consists of fermenting and drying the beans to develop the chocolate flavour. There are several fermentation methods but the most traditional is the heap method. This requires placing mounds of wet cocoa beans in between layers of banana leaves on the ground for between five to six days. Following this, the drying stage begins. This involves the wet bunch of beans being spread out in the sun or using a more advanced method of special dying equipment.
From plant to factory
Often, a lot of large chocolate brands then buy the cocoa through intermediaries. The beans are then packed into sacks ready to be exported to the brands processing facilities in other locations globally.
After arrival, the beans are cleaned and quality inspected before the winnowing stage takes place. The dried beans are cracked to separate the shell from the nib which is where the small chunks are used to produce chocolate. Afterwards, the roasting phase begins in which the nibs are baked at high temperatures reaching 120 degrees Celsius in special ovens. This is where the colour and flavour is acquired.
Subsequently, the next stage is grinding which creates the basis of all chocolate products. The roasted nibs are grounded in stone mills until a thick liquid chocolate consistency is achieved.
Chocolate to egg
The final step is creating the chocolate egg masterpiece by using highly efficient computer-operated technology which has been used since the mid-20th century. The molten chocolate is placed in heated egg molds which are rotated so there is an even thickness. Following this, the eggs are left to cool and then removed from the molds. Once cooled, the eggs are wrapped in coloured foil and packaged into individual boxes before being sent out for retail. The transportation and exportation throughout the various supply chain stages is vital being a seasonal product. This means they are heavily relied upon for their timings to deliver to large supermarkets and independent stores.
What does today’s CEO need to do to accelerate an organisation’s digital transformation journey?
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Digital transformation journeys are no one-size-suits-all. There is no singular way to welcome a new wave of technology into operations.
Since the turn of the century, digitalisation has had an increasingly influential impact on the way CEOs make decisions. Today’s world is full of disruption and potential risk. And with technology growing in complexity it can be challenging to lead such a revolution against a backdrop of economic uncertainty.
Embracing digital
According to KPMG 2022 CEO Outlook, which draws on the perspectives of 1,325 global CEOs across 11 markets, 72% of CEOs agree they have an aggressive digital investment strategy intended to secure first-mover or fast-follower status.
Advancing digitalisation and connectivity across the business is tied (along with attracting and retaining talent) as the top operational priority to achieve growth over the next three years. This digital transformation focus could be driven as a result of increasingly flexible working conditions and greater focus on cybersecurity threats.
However, the prospect of recession is threatening to halt digital transformation in the short-term. KPMG research found that four out of five CEOs note their businesses are pausing or reducing their digital transformation strategies to prepare for the anticipated recession.
This is reinforced further when 70% say they need to be quicker to shift investment to digital opportunities and divest in those areas where they face digital obsolescence.
When a company’s digital transformation ambition is mismatched to its readiness, it is the CEO’s responsibility to close the gap. According to Deloitte, in order to do this successfully, the CEO must assess the current level of organisational readiness for change.
This covers four key pillars that are mixed together to work out an organisation’s overall readiness: leadership, culture, structure and capabilities.
How CEOs can close the gap
Leadership: CEOs need to ensure their c-suite and other key executives are motivated and equipped to execute the vision. CEOs interviewed by Deloitte in a recent study emphasised the importance of the leadership team supporting the transformation vision and having a positive attitude and willingness to transform.
Culture: A large potential barrier to readiness in the organisation is down to culture. Low cultural readiness takes the form of bureaucratic, reactive and risk-averse ways of working that are at against the collaborative, proactive learning mindset needed for ambitious transformation.
Structure: If a company hopes to operate differently, it could mean the need for organising in an alternative way. CEOs will often need to lead the reorganisation of teams, assignment of new roles, revision of incentives, strategies to collapse organisational hierarchies or layers to increase agility.
Capabilities: CEOs need to equip their organisation with four key capabilities to harness digital for a superior capacity for change. These are nimbleness, scalability, stability and optionality which are often enabled or supercharged by digital technologies which are critical factors for competing in an increasingly disrupted world.
For now, one of the CEOs most important roles when steering the ship through disruption is to be ahead of the latest trends and tackle change head-on. By embracing a new digital future that will provide the company with long-lasting benefits, it will help create a brighter and future-proofed firm for years to come even after the CEO is gone.
Gartner surveyed 400 senior business leaders about the challenges faced and their priorities for 2022-23. We analysed the results
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Priorities change in a business; they evolve all the time to match the societal landscape around them. Following a major worldwide disruption like the COVID-19 pandemic, it’s no surprise that the focus for CEOs has shifted to match the way our outlooks and challenges have changed.
Gartner surveyed 400 senior business leaders about their 2022-23 priorities and found that – for the first time – environmental sustainability has made its way into the top 10. Additionally, workforce issues are a bigger priority than ever before.
Mark Raskino, VP Analyst at Gartner, said of the results: “In 2022, the Gartner CEO and Senior Business Executive Survey showed that, catalysed by multiple macro trends and economic factors, business leaders are reprioritizing some key areas of enterprise purpose and management focus.”
The last time there was such a dramatic change in the priorities of CEOs was in 2009-10, during the recovery from the last major recession. Here, we’ll dig into the key challenges for CEOs in 2023…
Growth
While growth remains the primary challenge, with 51% of respondents stating that it’s in their top three priorities, it’s actually down 8% from 2021-22. Gartner has surmised that the reason for this is that, due to ongoing supply chain disruptions, business leaders are less focused on driving up demand if they don’t necessarily know whether they can supply. Many organisations are working hard to revamp and improve their supply chains, but uncertainty remains and nobody wants to make promises that they can’t keep.
Technology
Technology has also dropped slightly as a top three priority, though it remains the second biggest focus at 34%. While the survey respondents are 5% less concerned about tech-related issues than in 2021-22, it’s still hugely important – especially as the world recovers from the pandemic.
Many businesses have taken the pandemic as a sign that they need better digitalisation, as a lack of that made the transition to home working difficult for some. Additionally, cybercrime is a major concern, especially when ensuring employees have the hardware and software they need to work safely from multiple locations.
Workforce
A focus on the workforce is up 32% from 2021-22, putting it at 31% in third place. This is the second consecutive year that workforce has become more of a priority, and there are multiple reasons for this.
Attracting and retaining employees is a challenge because older generations are retiring and there aren’t always enough replacements for specific roles. Plus, the younger generations joining the workforce are more likely to align themselves with businesses they truly believe in, meaning they are more picky, so organisations have to be the best they can and transparent with it.
Additionally, diversity, equality, and inclusion are bigger focuses than ever, and these have been boosted by the spotlight being shone on such topics during the pandemic. All in all, almost half (49%) of CEOs agreed with the statement that ‘it is very difficult for us to find and hire the kind of people we need in our business’.
Corporate
At 29%, corporate has dipped only a little since 2021-22 – just 5% – and remains a top priority. Corporate includes company structure and culture changes, and this is a focus right now due to the challenges of employee retention, as well as the drive towards digitalisation. Corporate change is required to improve business efficiency and performance, hence its position on this list.
Financial
The financial side of business has decreased in importance to CEOs for 2022-2023, dropping by 27% since 2021-22. However, it’s still in the top three for 20% of respondents. CFOs are making a major push towards finance transformation through technology to boost efficiency in their departments. Despite the ongoing challenge of building digital competencies in finance, 82% of CFOs have reported that their investments in digital are accelerating and exceeding investments in many other areas.
Products & Services
Products and services remain in the top three spot for 15% of respondents, up 43% from 2021. As the world recovers from the pandemic, the products and services a business produces are in the limelight. Competition is more fierce than it’s ever been, so innovation is key to remain in the best position.
Customer
The customer as a priority is up 26% from 2021-22, at 15% – and it’s no surprise. Linking into products and services, and the challenge of hiring the latest generation of workers, costumers have very high standards and hard work is required to impress them and retain loyalty.
In a Gartner survey about customer service trends, 74% of respondents stated that improving operational excellence to create a seamless customer journey is either ‘important’ or ‘very important’, and the survey found that business growth is best achieved through positive customer experience outcomes.
Environmental sustainability
Nine per cent of respondents to the Gartner survey stated that environmental sustainability is a top three priority – up a huge 292% from 2021-22. This is the first time it’s broken into the top 10, which is telling. Businesses are increasingly under pressure to do more when it comes to their own environmental impact. Many leading nations are aiming to be carbon neutral within the next few decades and being more sustainable undeniably leads to growth.
Cost
Also at 9% is cost, which is actually down 24%. Despite it being less of a concern than in 2021-22, cost remains a major focus. Supply chain shortages and the government support offered to help people through lockdowns have driven inflation, and Russia’s invasion of Ukraine has made that worse. As a result, we’re seeing the prices of products from the region shoot up, and those cost increases inevitably become the problem of business leaders.
Sales
While it’s number 10 (6%) on Gartner’s list of priority areas, sales is a 77% bigger priority in 2022-2023 than it was in 2021-22. Sales falls into a similar category to cost; with rising inflation comes an inability for customers to spend as freely as they once may have, making the landscape more competitive. Having said that, as we touched on with growth, sales aren’t necessarily being driven to the same degree due to supply chain disruptions.
Sara Malconian, Chief Procurement Officer at Harvard University & Jim Bureau, CEO of JAGGAER explain how ESG & the Circular Economy is changing the evolution of procurement.
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We speak to Sara Malconian, Chief Procurement Officer at Harvard University and Jim Bureau, CEO of JAGGAER to see how ESG and the Circular Economy is changing the evolution of procurement…
Sara, how have you seen your role evolve as a procurement leader over the years as ESG and supplier diversity come into focus?
Procurement leaders have gone from ‘cost cutters’ to ‘problem solvers’ within their organisations. Our core mandates used to be to drive cost savings and efficiency. We were hyper-focused on getting the most out of the organisation’s spend and supplier relationships. Those priorities haven’t gone away, especially in today’s inflationary environment, but the expectations of the procurement function are significantly higher and broader today.
Procurement functions saved their companies during COVID and the confluence of disruptions that followed. We showed we are a strategic linchpin. We are now looked upon to drive value and impact and strategically guide our organisations to achieve broader goals, including diversity and environmental, social, governance (ESG). Internal stakeholders realised the benefits of procurement and sought help with advancing their department’s agendas or solving their challenges. We listen to their needs, allocate the right resources, and ultimately enable them and the overall organisation to be successful.
I’ve been in procurement for over 20 years, and I can honestly say you’d be hard-pressed to find a more rewarding and exciting career. Procurement professionals have a real opportunity to make a tangible difference within their organisations, communities, and the world through the way we source products and services.
What is Harvard doing to have a positive impact on society? Can you share some examples, Sara?
Across the Harvard community, students, alumni, faculty, and staff are advancing scholarship and teaching on the world’s most significant challenges, and everyone wants to do their part to address inequities. Supplier diversity and inclusion have been a priority for Harvard for years, but we wanted to make even more of an impact and really invest in the growth and development of diverse businesses, especially as the pandemic highlighted inequities and disparities within our communities.
In 2021, we formed the Office for Economic Inclusion & Diversity (OEID), which is dedicated to reaching out to diverse suppliers, giving them opportunities, and providing them with tools, training, and resources to be successful. The office also encourages the use of underrepresented business enterprises (UBEs) in the purchasing of all goods, services, and construction at Harvard and standardises procurement practices with these businesses across the university.
We’re proud of the work this office is doing. We’re actively training suppliers on Harvard’s policies and how they can work with us. We’re creating a central location for them to access bid and RFP opportunities. UBEs can also apply to be mentored by Harvard Business School students.
We’ve created a dashboard to track and analyse spend with diverse suppliers across all of Harvard’s schools and measure progress over time. Everything we’re doing is aimed at increasing spend with our existing diverse suppliers, as well as the number of diverse suppliers that work with Harvard, and helping these suppliers grow their businesses.
Jim, why is prioritizing ESG and supplier diversity important and what steps can companies take today to progress in their journey?
Beyond being the right thing to do, investors, boards, regulators, customers, and employees now expect organisations to prioritise ESG and diversity initiatives and walk the talk. There’s also a clear business impact. Supplier diversity drives competitive bidding processes that lead to cost savings. Working with partners who are sustainable and have different ideas and perspectives fuels innovation and creates a competitive advantage. Sourcing from a sustainable and diverse supplier pool also reduces risk by broadening organisations’ access to multiple resources for various materials, products, and services.
One of the most critical steps companies can take to progress on their ESG journey is to make it clear to suppliers that environmentalism is a priority for their organisation. They will attract suppliers with higher levels of ESG maturity and provide suppliers who are earlier on in their ESG journey with sustainability toolkits and training to help educate them on eco-friendly best practices and sustainability innovations.
This step avoids having to overhaul their supply chain to account for ESG. Strategically managing suppliers by leveraging third-party data, scorecards, and supplier audits are crucial for understanding the ESG risks that suppliers pose and minimizing disruptions by working with them to correct these issues.
Successful supplier diversity programs start with a top-down culture shift. If a company’s culture isn’t diverse, inclusive, and supportive for all its stakeholders, they won’t be able to drive supplier diversity in a meaningful way. Supplier diversity strategy should map back to company goals and include an executive-level champion to sponsor the program internally and help bring in the resources they need.
Outside of leveraging technology to identify diverse suppliers and build a program, businesses can talk with people who have been in their shoes. They can collaborate with like-minded companies at industry events, engage in relevant LinkedIn groups, and connect with organisations such as the National Minority Supplier Development Council.
Once diverse suppliers are on board, organisations can create a supplier diversity policy that clearly outlines how many diverse suppliers need to be invited to bid for each event to ensure teams are executing on the strategy. Leading supplier diversity programs go beyond simply spending with diverse suppliers to providing mentorship and training them on how to respond to RFPs correctly, as well as creating environments where it’s easier for them to engage.
Jim, what role does technology play in helping organisations achieve ESG and supplier diversity goals?
Technology is a key enabler of ESG and supplier diversity initiatives. One of the biggest obstacles to supplier diversity and ESG is a lack of reliable supplier data. Suppliers don’t always keep their information up to date in self-service portals. The data procurement teams have isn’t always enriched to the level they need, with insights on diversity status, certifications, and proof of ESG compliance.
Researching and assessing suppliers is tedious and time-consuming, which leads many organisations to skip the verification step. Without this information, organisations don’t have a true picture of the inclusivity and sustainability of their supplier network, which makes it impossible to identify the right partners to source from to meet their ESG and supplier diversity goals and make an impact.
Technology addresses this challenge by automatically collecting, enriching, validating, and integrating the supplier data needed to obtain this level of supply base visibility and make decisions that drive ESG and diversity. AI-powered tools are available to match buyers with specific diverse suppliers who also have the capabilities to help drive ESG objectives and meet broader procurement criteria.
Software that segments the supply base and helps visualise spending with small and diverse suppliers across a variety of classifications is critical for setting benchmarks and measuring progress and ROI.
Jim and Sara, how do you expect the ESG and diversity conversation to shift and where should procurement leaders focus for the future?
Sara: I expect we’ll see the conversation shift to emphasise measurement. It’s not enough anymore to say you’re committed to ESG – you need to prove it and show demonstrable progress and ROI. Maintaining the momentum on ESG initiatives is hard. Technology is key for setting benchmarks and goals, ensuring accountability for hitting key milestones, and measuring progress and return in a credible way.
Jim: In a declining economic environment, choices inevitably need to be made. I expect the conversation around ESG will center around where companies can focus to maintain progress on ESG initiatives as financial and economic pressures come to the forefront. While some companies may need to scale back in some areas to preserve cash and resources to navigate a downturn, I’d advise them to be careful about slowing ESG down too much as it will be much harder to catch up to current levels after the economy bounces back.
I’d argue that when ESG is done right it can be a strategic lever for navigating a down economy, saving organizations money and resources, driving innovation, and helping them achieve broader business objectives and resilience.
Here are five of the biggest procurement events happening during 2023 that chief procurement officers won’t want to miss.
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Procurement Futures
London, UK | 1-2 February 2023
Held at the QEII Centre in central London, Procurement Futures is a new conference, launching in 2023. It promises delegates the chance to find out how to make supply chains more resilient, with thought-provoking and presentations and discussions designed to inform and inspire.
There is a flexible programme of content that can be tailored to attendees’ preferences, with networking opportunities throughout and a huge variety of sessions to attend and take part in.
This CIPS event has three streams of content: Insights, Ignite and Interact. Insights will showcase presentations and panel discussions from leaders, Ignite will consist of hands-on workshops to help delegates optimise their procurement strategies and Interact will be smaller groups taking part in interactive roundtables and debates.
Speakers across the two days will include Ross Grierson, Director of Procurement, Primark; Patrick Dunne, Director of Group Property, FM & Procurement (CPO), Sainsburys Plc; Rebecca Simpson, Procurement and Supply Chain Director, Balfour Beatty; and Nick Jenkinson, Chief Procurement Officer, Santander. In addition, delegates are ablew to book a one-to-one career workshop, where they’ll get advice on professional development from coaches covering a variety of specialisms.
Tickets are £795 for CIPS member, £995 for a non-member and £2240 for a supplier/solution provider, and there is a discount of 30% for tickets purchased before 30 November 2022.
The third World Digital Procurement Summit is aimed at procurement directors, VPs, managers and other industry specialists. The two-day event will focus on accelerating procurement processes, adopting emerging technologies, finding the right talent, overcoming the barriers to progress and embarking on a journey of transformation. It’s a hybrid event, bringing together procurement experts from various industries, which will maximise knowledge exchange opportunities. The event organisers list five key learning points for delegates:
Exploring the latest advances in data and cognitive technologies to gain greater insights and improve procurement processes
Overhauling the procurement ecosystem with new technologies and strategies to drive business value
Sharing the best practices of monitoring and managing a range of risks to hedge against future disruptions
Developing capabilities and skillset required for the digital transformation of procurement
Defining ESG metrics of the procurement strategy to ensure business continuity
Speakers will include Paul Harlington, Group Procurement Director at TUI Group and Patrick Foelck, Head of Strategy and Transformation Procurement at Roche.
Click here to check out a video from a previous event. Tickets cost €1495.
Returning for its 8th annual event, Women in Procurement & Supply Chain will deliver two days dedicated to leadership and the future of procurement. The event will feature a series of exclusive panel discussions and keynote addresses examining career development, overcoming imposter syndrome, working with confidence, developing an unbeatable talent pool, mentoring, diversity and inclusivity.
It will also address risk mitigation, digital disruption, ESG, sustainability, economic development, ethical sourcing, category management, cultural diversity, strategic sourcing, supplier relationships, procurement with purpose, and supply chain resilience. There are two pre-conference masterclass options on 6 March – that can be booked separately – covering either contract law or leadership skills.
Some of the reasons to attend include:
Discover the path to taking your procurement career to a new level while elevating your organisation with dedicated days on leadership and the future of procurement
Learn best practice strategies to facedown supply chain vulnerabilities and reduce risk exposure
Get ahead of the game with insights into the future of procurement and the impact of globalisation on modern supply chains
Put yourself at the cutting edge of ESG and procurement with the latest updates and trends in procurement with purpose
Speakers for the main two-day conference include Michelle Richard, Director of Procurement, Thales; Karina Davies, Chief Procurement Officer, icare NSW; and Kylie McKinlay, Procurement Partner – Property and Business, Australian Broadcasting Corporation.
Tickets start at $3,495 with discounts available until 25 November 2022.
The Americas Procurement Congress will feature the region’s most progressive CPOs sharing their expertise
With a focus on what makes CPOs tick, the Americas Procurement Congress will feature the region’s most progressive CPOs sharing their expertise in keynote presentations and working groups.
Giving delegates the tools to stay on the cutting edge of procurement developments, there are also sessions aimed at those with responsibilities over governance, procurement capabilities and quantifying data. Unsurprisingly, sustainability will also be a key theme in 2023, and attendees will hear from a diverse range of sustainability leaders about how to transition from traditional metrics to a purpose-driven function.
The agenda for Americas Procurement Congress 2023 will include:
Sustainability of the future
How to transition from traditional metrics to a purpose-driven function
Harnessing the power of digital transformation
Utilizing data as a driver of sustainable value, supply continuity and transparency Agile procurement
New approaches and skills that facilitate speed and agility
Frictionless procurement
Removing friction from the procurement process to support high-velocity sourcing
Beyond Just in Time
Designing future-fit supply networks for an age of chaos and conflict
Gartner Supply Chain Symposium/Xpo 2022 addressed the most significant challenges that chief supply chain officers and supply chain leaders face as they mitigate risk and navigate uncertainty in an increasingly dynamic and challenging environment.
At the conference, the top 5 sessions that CSCOs and supply chain leaders met on included:
Signature Series: The Future of Supply Chain
What the Pivot to Sustainable Profit Means for Procurement Leaders
The Art of the New Age One Page Dashboard: Why Your Current Perfor-mance Measures May Be Doing More Harm Than Good
Manage Supplier Risk With Technology
Procurement Role Redesign: Stop Fitting Square Pegs Into Round Holes
Here are five of the best procurement schools in Europe.
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As procurement becomes an increasingly vital and strategic function within many organisations, people are beginning to realise the full potential of turning it into a career for themselves.
This has subsequently led to many universities noticing the demand in the industry and offering courses which equip students with the relevant qualifications and skills needed to succeed in the supply chain space.
With this in mind, here are five of the best procurement schools in Europe.
1. CIPS
Course: Various Where: Across England
Run by Oxford College of Procurement and Supply, there are 10 Chartered Institute of Procurement and Supply centres in England offering several different qualification levels to choose from. The courses are recognised throughout the world as harnessing leading edge thinking and professionalism across the procurement and supply chain management space.
CIPS offers courses such as level three, four, five and six in procurement and supply with each qualification created to reflect current, emerging and best practice in procurement and supply chain management. Classes focus on exploring legacy purchasing and supply methods as well as techniques and theory to the application in a business environment.
CIPS doesn’t just offer in-person studying as courses are designed to suit individual lifestyles with virtual classrooms, part-time and weekend options to choose from.
2. Politecnico di Milano
Course: MSc in Supply Chain and Procurement Management Where: Milan, Italy
Renowned as being one of the best scientific and technological universities in the world, Politecnico di Milano offers an extensive portfolio of programmes in a variety of different spaces. Its supply chain master’s degree is a 12-month course aimed at equipping students with vital knowledge and skills needed to succeed in the industry.
The course also includes a number of practical activities in the programme such as lessons with international lectures, workshops on soft skills, company presentations, projects with companies, company visits and an international study tour in Rotterdam.
According to Politecnico di Milano, 86% of students were employed three months after graduation while 55% were also working abroad during the same period.
The course was ranked third in the TOP 2021 Eduniversal Best Masters Ranking (Global) and eighth in the QS Supply Chain Management Masters Rankings for 2023.
3. SKEMA Business School
Course: MSc (and MS) Supply Chain Management and Purchasing Where: Lille and Paris, France
Skema offers two supply chain management (SCM) and procurement masters: The premium international MSc Global Supply Chain Management in Lille taught in English, and the MS in SCM and Purchasing in Paris and Lille mainly taught in French. France’s highly-rated supply chain and procurement program has been designed with a progressive shift from theory to practice. The degree covers the entirety of supply chain activities from planning, purchasing, receiving, production, storage to delivery through nine compulsory and six elective courses.
The global MSc has a new cooperation with the leading prestigious business school, MIT in the US, plus another cooperation with Politechnico from Milano. The MSc master’s degree provides soft skills in supply chain and purchasing management as well as going into future trends in digitalisation, AI, sustainability, ethics, globalisation, risk management and agility. The course’s primary goal is to find future leaders who are seeking to make a positive impact on the world of supply chain management and procurement. The MSc is a full time program, complemented by paid internships in the area of the student’s choice, while the MS alternates weeks of classes with professionals at the forefront of their fields.
4. Audencia Business School
Course: MSc in Supply Chain and Purchasing Management Where: Nantes, France
Created in 2009, Audencia Business School’s programme will cover topics such as procurement, global sourcing and supply chain strategies. Other topics to feature includes green logistics, Big Data, digital transformation, negotiation and commercial law. The course will provide expertise from industry insiders as business executives visit and share professional insights during the programme.
The school works closely with the corporate world and is recognised for its responsible management practices. Audencia is triple-accredited, highly ranked and internationally oriented and according to its website, 79% of course graduates are employed before graduation. The course is available as a one-year or two-year master’s programme.
In autumn 2024, the course is set to be renamed to the MSc in Responsible Procurement and Supply Chain Management.
5. Cranfield School of Management
Course: MSc in Procurement and Supply Chain Management Where: Cranfield, United Kingdom
Cranfield School of Management provides students with specialist knowledge and skills in procurement needed to progress their careers
Cranfield’s Procurement and Supply Chain Management course has been co-designed with senior industry executives. This purchasing postgraduate course provides students with specialist knowledge and skills in procurement needed to progress their careers. Possessing one of the largest facilities in Europe, the course places considerable emphasis on how to overcome real-world challenges.
Students will gain an in-depth understanding of supply chain strategy and sustainability, procurement strategy, supplier selection and evaluation, negotiation and contact management. They will also be taught how to use data, models and software to solve problems and inform decisions, inventory and operations management and how to design effective supply chain operations.
Students will have the opportunity to attend a study tour and experience a different supply chain perspective elsewhere in Europe.
The course was ranked 11th in the world on the QS Supply Chain Management Masters Rankings for 2023.
Expert analysis of the tech trends set to make waves this year
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Digital transformation is a continuing journey of change with no set final destination. This makes predicting tomorrow a challenge when no one has a crystal ball to hand.
After a difficult few years for most businesses following a disruptive pandemic and now battling a cost-of-living crisis, many enterprises are increasingly leveraging new types of technology to gain an edge in a disruptive world.
With this in mind, here are what experts predict for the next 12 months…
1. Process Mining
Sam Attias, Director of Product Marketing at Celonis, expects to see a rise in the adoption of process mining as it evolves to incorporate automation capabilities. He says process mining has traditionally been “a data science done in isolation” which helps companies identify hidden inefficiencies by extracting data and visually representing it.
“It is now evolving to become more prescriptive than descriptive and will empower businesses to simulate new methods and processes in order to estimate success and error rates, as well as recommend actions before issues actually occur,” says Attias. “It will fix inefficiencies in real-time through automation and execution management.”
2. The evolution of social robots
Gabriel Aguiar Noury, Robotics Product Manager at Canonical, anticipates social robots to return this year. After companies such as Sony introduced robots like Poiq, Aguiar Noury believes it “sets the stage” for a new wave of social robots.
“Powered by natural language generation models like GPT-3, robots can create new dialogue systems,” he says. “This will improve the robot’s interactivity with humans, allowing robots to answer any question.
“Social robots will also build narratives and rich personalities, making interaction with users more meaningful. GPT-3 also powers Dall-E, an image generator. Combined, these types of technologies will enable robots not only to tell but show dynamic stories.”
3. The rebirth of new data-powered business applications
Christian Kleinerman, Senior Vice President of Product at Snowflake, says there is the beginning of a “renaissance” in software development. He believes developers will bring their applications to central combined sources of data instead of the “traditional approach” of copying data into applications.
“Every single application category, whether it’s horizontal or specific to an industry vertical, will be reinvented by the emergence of new data-powered applications,” affirms Kleinerman. “This rise of data-powered applications will represent massive opportunities for all different types of developers, whether they’re working on a brand-new idea for an application and a business based on that app, or they’re looking for how to expand their existing software operations.”
4. Application development will become a two-way conversation
Adrien Treuille, Head of Streamlit at Snowflake, believes application development will become a two-way conversation between producers and consumers. It is his belief that the advent of easy-to-use low-code or no-code platforms are already “simplifying the building” and sharing of interactive applications for tech-savvy and business users.
“Based on that foundation, the next emerging shift will be a blurring of the lines between two previously distinct roles — the application producer and the consumer of that software.”
He adds that application development will become a collaborative workflow where consumers can weigh in on the work producers are doing in real-time. “Taking this one step further, we’re heading towards a future where app development platforms have mechanisms to gather app requirements from consumers before the producer has even started creating that software.”
5. The Metaverse
Paul Hardy, EMEA Innovation Officer at ServiceNow, says he expects business leaders to adopt technologies such as the metaverse in 2023. The aim of this is to help cultivate and maintain employee engagement as businesses continue working in hybrid environments, in an increasingly challenging macro environment.
“Given the current economic climate, adoption of the metaverse may be slow, but in the future, a network of 3D virtual worlds will be used to foster meaningful social connections, creating new experiences for employees and reinforcing positive culture within organisations,” he says. “Hybrid work has made employee engagement more challenging, as it can be difficult to communicate when employees are not together in the same room.
“Leaders have begun to see the benefit of hosting traditional training and development sessions using VR and AI-enhanced coaching. In the next few years, we will see more workplaces go a step beyond this, for example, offering employees the chance to earn recognition in the form of tokens they can spend in the real or virtual world, gamifying the experience.”
6. The year of ESG?
Cathy Mauzaize, Vice President, EMEA South, at ServiceNow, believes 2023 could be the year that environmental, social and corporate governance (ESG) is vital to every company’s strategy.
“Failure to engage appropriate investment in ESG strategies could plunge any organisation into a crisis,” she says. “Legislation must be respected and so must the expectations of employees, investors and your ecosystem of partners and customers.
“ESG is not just a tick box, one and done, it’s a new way of business that will see us through 2023 and beyond.”
7. Macro Trends and Redeploying Budgets for Efficiency
Ulrik Nehammer, President, EMEA at ServiceNow, says organisations are facing an incredibly complex and volatile macro environment. Nehammer explains as the world is gripped by soaring inflation, intelligent digital investments can be a huge deflationary force.
“Business leaders are already shifting investment focus to technologies that will deliver outcomes faster,” he says. “Going into 2023, technology will become increasingly central to business success – in fact, 95% of CEOs are already pursuing a digital-first strategy according to IDC’s CEO survey, as digital companies deliver revenue growth far faster than non-digital ones.”
8. Organisations will have adopted a NaaS strategy
David Hughes, Aruba’s Chief Product and Technology Officer, believes that by the end of 2023, 20% of organisations will have adopted a network-as-a-service (NaaS) strategy.
“With tightening economic conditions, IT requires flexibility in how network infrastructure is acquired, deployed, and operated to enable network teams to deliver business outcomes rather than just managing devices,” he says. “Migration to a NaaS framework enables IT to accelerate network modernisation yet stay within budget, IT resource, and schedule constraints.
“In addition, adopting a NaaS strategy will help organisations meet sustainability objectives since leading NaaS suppliers have adopted carbon-neutral and recycling manufacturing strategies.”
9. Think like a seasonal business
According to Patrick Bossman, Product Manager at MariaDB corporation, he anticipates 2023 to be the year that the ability to “scale out on command” is going to be at the fore of companies’ thoughts.
“Organisations will need the infrastructure in place to grow on command and scale back once demand lowers,” he says. “The winners in 2023 will be those who understand that all business is seasonal, and all companies need to be ready for fluctuating demand.”
10. Digital platforms need to adapt to avoid falling victim to subscription fatigue
Demed L’Her, Chief Technology Officer at DigitalRoute, suggests what the subscription market is going to look like in 2023 and how businesses can avoid falling victim to ‘subscription fatigue’. L’Her says there has been a significant drop in demand since the pandemic.
“Insider’s latest research shows that as of August, nearly a third (30%) of people reported cancelling an online subscription service in the past six months,” he reveals. “This is largely due to the rising cost of living experienced globally that is leaving households with reduced budgets for luxuries like digital subscriptions. Despite this, the subscription market is far from dead, with most people retaining some despite tightened budgets.
“However, considering the ongoing economic challenges, businesses need to consider adapting if they are to be retained by customers in the long term. The key to this is ensuring that the product adds value to the life of the customer.”
11. Waking up to browser security
Jonathan Lee, Senior Product Manager at Menlo Security, points to the web browser being the biggest attack surface and suggests the industry is “waking up” to the fact of where people spend the most time.
“Vendors are now looking at ways to add security controls directly inside the browser,” explains Lee. “Traditionally, this was done either as a separate endpoint agent or at the network edge, using a firewall or secure web gateway. The big players, Google and Microsoft, are also in on the act, providing built-in controls inside Chrome and Edge to secure at a browser level rather than the network edge.
“But browser attacks are increasing, with attackers exploiting new and old vulnerabilities, and developing new attack methods like HTML Smuggling. Remote browser isolation is becoming one of the key principles of Zero Trust security where no device or user – not even the browser – can be trusted.”
12. The year of quantum-readiness
Tim Callan, Chief Experience Officer at Sectigo, predicts that 2023 will be the year of quantum-readiness. He believes that as a result of the standardisation of new quantum-safe algorithms expected to be in place by 2024, this year will be a year of action for government bodies, technology vendors, and enterprise IT leaders to prepare for the deployment.
“In 2022, the US National Institute of Standards and Technologies (NIST) selected a set of post-quantum algorithms for the industry to standardise on as we move toward our quantum-safe future,” says Callan.
“In 2023, standards bodies like the IETF and many others must work to incorporate these algorithms into their own guidelines to enable secure functional interoperability across broad sets of software, hardware, and digital services. Providers of these hardware, software, and service products must follow the relevant guidelines as they are developed and begin preparing their technology, manufacturing, delivery, and service models to accommodate updated standards and the new algorithms.”
13. AI: fewer keywords, greater understanding
AI expert Dr Pieter Buteneers, Director of AI and Machine Learning at Sinch, expects artificial intelligence to continue to transition away from keywords and move towards an increased level of understanding.
“Language-agnostic AI, already existent within certain AI and chatbot platforms, will understand hundreds of languages — and even interchange them within a single search or conversation — because it’s not learning language like you or I would,” he says. “This advanced AI instead focuses on meaning, and attaches code to words accordingly, so language is more of a finishing touch than the crux of a conversation or search query.
“Language-agnostic AI will power stronger search results — both from external (the internet) and internal (a company database) sources — and less robotic chatbot conversations, enabling companies to lean on automation to reduce resources and strain on staff and truly trust their AI.”
14. Rise in digital twin technology in the enterprise
John Hill, CEO and Founder of Silico, recognises the growing influence digital twin technology is having in the market. Hill predicts that in the next 20 years, there will be a digital twin of every complex enterprise in the world and anticipates the next generation of decision-makers will routinely use forward-looking simulations and scenario analytics to plan and optimise their business outcomes.
“Digital twin technology is one of the fastest-growing facets of industry 4.0 and while we’re still at the dawn of digital twin technology,” he explains. “Digital twins will have huge implications for unlocking our ability to plan and manage the complex organisations so crucial for our continued economic progress and underpin the next generation of Intelligent Enterprise Automation.”
15. Broader tech security
With an exponential amount of data at companies’ fingertips, Tricentis CEO, Kevin Thompson says the need for investment in secure solutions is paramount.
“The general public has become more aware of the access companies have to their personal data, leading to the impending end of third-party cookies, and other similar restrictions on data sharing,” he explains. “However, security issues still persist. The persisting influx of new data across channels and servers introduces greater risk of infiltration by bad actors, especially for enterprise software organisations that have applications in need of consistent testing and updates. The potential for damage increases as iterations are being made with the expanding attack surface.
“Now, the reality is a matter of when, not if, your organisation will be the target of an attack. To combat this rising security concern, organisations will need to integrate security within the development process from the very beginning. Integrating security and compliance testing at the upfront will greatly reduce risk and prevent disruptions.”
16. Increased cyber resilience
Michael Adams, CISO at Zoom, expects an increased focus on cyber resilience over the next 12 months. “While protecting organisations against cyber threats will always be a core focus area for security programs, we can expect an increased focus on cyber resilience, which expands beyond protection to include recovery and continuity in the event of a cyber incident,” explains Adams.
“It’s not only investing resources in protecting against cyber threats; it’s investing in the people, processes, and technology to mitigate impact and continue operations in the event of a cyber incident.”
17. Ransomware threats
As data leaks become increasingly common place in the industry, companies face a very real threat of ransomware. Michal Salat, Threat Intelligence Director at Avast, believes the time is now for businesses to protect themselves or face recovery fees costing millions of dollars.
“Ransomware attacks themselves are already an individual’s and businesses’ nightmare. This year, we saw cybergangs threatening to publicly publish their targets’ data if a ransom isn’t paid, and we expect this trend to only grow in 2023,” says Salat. “This puts people’s personal memories at risk and poses a double risk for businesses. Both the loss of sensitive files, plus a data breach, can have severe consequences for their business and reputation.”
18. Intensified supply chain attacks
Dirk Schrader, VP of security research at Netwrix, believes supply chain attacks are set to increase in the coming year. “Modern organisations rely on complex supply chains, including small and medium businesses (SMBs) and managed service providers (MSPs),” he says.
“Adversaries will increasingly target these suppliers rather than the larger enterprises knowing that they provide a path into multiple partners and customers. To address this threat, organisations of all sizes, while conducting a risk assessment, need to take into account the vulnerabilities of all third-party software or firmware.”
19. A greater need to manage volatility
Paul Milloy, Business Consultant at Intradiem, stresses the importance of managing volatility in an ever-moving market. Milloy believes bosses can utilise data through automation to foresee potential problems before they become issues.
“No one likes surprises. Whilst Ben Franklin suggested nothing can be said to be certain, except death and taxes, businesses will want to automate as many of their processes as possible to help manage volatility in 2023,” he explains. “Data breeds intelligence, and intelligence breeds insight. Managers can use the data available from workforce automation tools to help them manage peaks and troughs better to avoid unexpected resource bottlenecks.”
20. A human AI co-pilot will still be needed
Artem Kroupenev, VP of Strategy at Augury, predicts that within the next few years, every profession will be enhanced with hybrid intelligence, and have an AI co-pilot which will operate alongside human workers to deliver more accurate and nuanced work at a much faster pace.
“These co-pilots are already being deployed with clear use cases in mind to support specific roles and operational needs, like AI-driven solutions that enable reliability engineers to ensure production uptime, safety and sustainability through predictive maintenance,” he says. “However, in 2023, we will see these co-pilots become more accurate, more trusted and more ingrained across the enterprise.
“Executives will better understand the value of AI co-pilots to make critical business decisions, and as a key competitive differentiator, and will drive faster implementation across their operations. The AI co-pilot technology will be more widespread next year, and trust and acceptance will increase as people see the benefits unfold.”
21. Building the right workplace culture
Harnessing a positive workplace culture is no easy task but in 2023 with remote and hybrid working now the norm, it brings with it new challenges. Tony McCandless, Chief Technology Officer at SS&C Blue Prism, is well aware of the role organisational culture can play in any digital transformation journey.
“Workers are the heart of an organisation, so without their buy in, no digital transformation initiative stands a chance of success,” explains McCandless. “Workers drive home business objectives, and when it comes to digital transformation, they are the ones using, implementing, and sometimes building automations. Curiosity, innovation, and the willingness to take risks are essential ingredients to transformative digitalisation.
“Businesses are increasingly recognising that their workers play an instrumental role in determining whether digitalisation initiatives are successful. Fostering the right work environment will be a key focus point for the year ahead – not only to cultivate buy-in but also to improve talent retention and acquisition, as labor supply issues are predicted to continue into 2023 and beyond.”
22. Cloud cover to soften recession concerns
Amid a cost-of-living crisis and concerns over any potential recession as a result, Daniel Thomasson, VP of Engineering and R&D at Keysight Technologies, says more companies will shift data intensive tasks to the cloud to reduce infrastructure and operational costs.
“Moving applications to the cloud will also help organisations deliver greater data-driven customer experiences,” he affirms. “For example, advanced simulation and test data management capabilities such as real-time feature extraction and encryption will enable use of a secure cloud-based data mesh that will accelerate and deepen customer insights through new algorithms operating on a richer data set. In the year ahead, expect the cloud to be a surprising boom for companies as they navigate economic uncertainty.”
23. IoT devices to scale globally
Dr Raullen Chai, CEO and Co-Founder of IoTeX, recognises a growing trend in the usage of IoT devices worldwide and believes connectivity will increase significantly.
“For decades, Big Tech has monopolised user data, but with the advent of Web3, we will see more and more businesses and smart device makers beginning to integrate blockchain for device connectivity as it enables people to also monetise their data in many different ways, including in marketing data pools, medical research pools and more,” he explains. “We will see a growth in decentralised applications that allow users to earn a modest additional revenue from everyday activities, such as walking, sleeping, riding a bike or taking the bus instead of driving, or driving safely in exchange for rewards.
“Living healthy lifestyles will also become more popular via decentralised applications for smart devices, especially smart watches and other health wearables.”
The digital landscape is changing day by day. Ideas like the metaverse that once seemed a futuristic fantasy are now…
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The digital landscape is changing day by day. Ideas like the metaverse that once seemed a futuristic fantasy are now coming to fruition and embedding themselves into our daily lives. The thinking might be there, but is our technology really ready to go meta? Domains and hosting provider, Fasthosts, spoke to the experts to find out…
How the metaverse works
The metaverse is best defined as a virtual 3D universe which combines many virtual places. It allows users to meet, collaborate, play games and interact in virtual environments. It’s usually viewed and accessed from the outside as a mixture of virtual reality (VR), (think of someone in their front room wearing a headset and frantically waving nunchucks around) and augmented reality (AR), but it’s so much more than this…
These technologies are just the external entry points to the metaverse and provide the visuals which allow users to explore and interact with the environment within the metaverse.
This is the ‘front-end’ if you like, which is also reinforced by artificial intelligence and 3D reconstruction. These additional technologies help to provide realistic objects in environments, computer-controlled actions and also avatars for games and other metaverse projects.
So, what stands in the way of this fantastical 3D universe? Here are the six key challenges:
Technology
The most important piece of technology, on which the metaverse is based, is the blockchain. The blockchain is essentially a chain of blocks that contain specific information. They’re a combination of computers linked to each other instead of a central server which means that the whole network is decentralised. This provides the infrastructure for the development of metaverse projects, storage of data and also allows them the capability to be compatible with Web3. Web3 is an upgraded version of the internet which will allow integration of virtual and augmented reality into people’s everyday lives.
Sounds like a lot, right? And it involves a great deal of tech that is alien to the vast majority of us. So, is technology a barrier to widespread metaverse adoption?
Jonothan Hunt, Senior Creative Technologist at Wunderman Thompson, says the tech just isn’t there. Yet.
“Technology’s readiness for the mass adoption of the metaverse depends on how you define the metaverse, but if we’re talking about the future vision that the big tech players are sharing, then not yet. The infrastructure that powers the internet and our devices isn’t ready for such experiences. The best we have right now in terms of shared/simulated spaces are generally very expensive and powered entirely in the cloud, such as big computers like the Nvidia Omniverse, cloud streaming, or games. These rely heavily on instancing and localised grouping. Consumer hardware, especially XR, is still not ready for casual daily use and still not really democratised.
“The technology for this will look like an evolution of the systems above, meaning more distributed infrastructure, better access and updated hardware. Web3 also presents a challenge in and of itself, and questions remain over to what extent big tech will adopt it going forward.”
Storage
Blockchain is the ‘back-end’, where the magic happens, if you will. It’s this that will be the key to the development and growth of the metaverse. There are a lot of elements that make up the blockchain and reinforce its benefits and uses such as storage capabilities, data security and smart contracts.
Due to its decentralised nature, the blockchain has far more storage capacity than the centralised storage systems we have in place today. With data on the metaverse being stored in exabytes, the blockchain works by making use of unutilised hard disk space across the network, which avoids users within the metaverse running out of storage space worldwide.
In terms that might be a bit more relatable, an exabyte is a billion gigabytes. That’s a huge amount of storage, and that doesn’t just exist in the cloud – it’s got to go somewhere – and physical storage servers mean land is taken up, and energy is used. Hunt says: “How long’s a piece of string? The whole of the metaverse will one day be housed in servers and data centres, but the amount or size needed to house all of this storage will beentirely dependent on just how mass adopted the metaverse becomes. Big corporations in the space are starting to build huge data centres – such as Meta purchasing a $1.1 billion campus in Toledo, Spain to house their new Meta lab and data centre – but the storage space is not the only concern. These energy-guzzlers need to stay cool! And what about people and brands who need reliable web hosting for events, gaming or even just meeting up with pals across the world, all that information – albeit virtual – still needs a place to go.
“The current rising cost of electricity worldwide could cause problems for the growth of data centres, and the housing of the metaverse as a whole. However, without knowing the true size of its adoption, it is extremely difficult to truly determine the needed usage. Could we one day see an entire island devoted to data centre storage? Purely for the purposes of holding the metaverse? It seems a little ‘1984’, but who knows?”
Identity
Although the blockchain provides instantaneous verification of transactions with identity through digital wallets, our physical form will be represented by avatars that visually reflect who we are, and how we want to be seen.
The founder of Saxo Bank and the chairman of the Concordium Foundation, Lars Seier Christensen, argues, “I think that if you use an underlying blockchain-based solution where ID is required at the entry point, it is actually very simple and automatically available for relevant purposes. It is also very secure and transparent, in that it would link any transactions or interactions where ID is required to a trackable record on the blockchain.”
Once identity is established, it is true that it could potentially become easier to assess creditworthiness of parties for purchasing and borrowing in the metaverse due to the digital identity and storage of each individual’s data and transactions on the blockchain. However, although it sounds exciting, there must be considerations into how it could impact privacy, and how this amount of data will be recorded on the blockchain.
Security
There are also huge security benefits to this set up. The decentralised blockchain helps to eradicate third-party involvement and data breaches, such as theft and file manipulation, thanks to its powerful data processing and use of validation nodes. Both of these are responsible for verifying and recording transactions on the blockchain. This will be reassuring to many, given the widespread concerns around data privacy and user protection in the metaverse.
To access the blockchain all we will need is an internet connection and a device, such as a laptop or smartphone, this is what makes it so great as it will be so readily available. However, to support the blockchain, we’re relying on a whole different set of technologies. Akash Kayar, CEO of web3-focused software development company Leeway Hertz, had this to say on the readiness of the current technology available: “The metaverse is not yet completely mature in terms of development. Tech experts are researching strategies and
testing the various technologies to develop ideas that provide the world with more feasible and intriguing metaverse projects.
“Projects like Decentraland, Axie Infinity, and Sandbox are popular contemporary live metaverse projects. People behind these projects made perfect use of notable metaverse technologies, from blockchain and cryptos to NFTs.
“As envisioned by top tech futurists, many new technologies will empower the metaverse in the future, which will support the development of a range of prolific use cases that will improve the ability of the metaverse towards offering real-life functionalities. In a nutshell, the metaverse is expected to bring extreme opportunities for enterprises and common users. Hence, it will shape the digital future.”
Currency & Payments
Whilst it’s only considered legal tender in two countries, cryptocurrency is currently a reality and there is a strong likelihood that it will eventually be mass adopted. However, the metaverse is arguably not yet at the same maturity level, meaning cryptocurrency may have to wait before it can finally fully take off.
Golden Bitcoin symbol and finance graph screen. Horizontal composition with copy space. Focused image.
There is no doubt that cryptocurrency and the metaverse will go hand-in-hand as the former will become the tender of the latter with many of the current metaverse platforms each wielding its native currency. For example Decentraland uses $MANA for payments and purchases. However, with the volatility of crypto currencies and the recent collapse of trading platform FTX indicating security lapses, we may not yet be ready for the switch to decentralised payments.
Energy
Some of the world’s largest data centres can each contain many tens of thousands of IT devices which require more than 100 megawatts of power capacity – this is enough to power around 80,000 U.S. households (U.S. DOE 2020) and is equivalent to $1.35bn running cost per data centre with the cost of a megawatt hour averaging $150.
According to Nitin Parekh of Hitachi Energy, the amount of power which takes to process Bitcoin is higher than you might expect: “Bitcoin consumes around 110 Terawatt Hours per year. This is around 0.5% of global electricity generation. This estimate considers combined computational power used to mine bitcoin and process transactions.” With this estimate, we can calculate that the annual energy cost of Bitcoin is around $16.5bn.
However, some bigger corporations are slowly moving towards renewable energy to power their projects in this space, with Google signing close to $2bn worth of wind and solar investments in order to power its data centres in the future and become greener. Amazon has also followed in their footsteps and have become the world’s largest corporate purchaser of renewable energy.
They may have plenty of time yet to get their green processes in place, with Mark Zuckerberg recently predicting it will take nearly a decade for the metaverse to be created: “I don’t think it’s really going to be huge until the second half of this decade at the earliest.”
About Fasthosts
Fasthosts has been a leading technology provider since 1999, offering secure UK data centres, 24/7 support and a highly successful reseller channel. Fasthosts provides everything web professionals need to power and manage their online space, including domains, web hosting, business-class email, dedicated servers, and a next-generation cloud platform. For more information, head to www.fasthosts.co.uk
Todd Salmon, Executive Advisor for Strategic Services at GuidePoint Security, on the cybersecurity challenge of keeping up with the pace of the ever-changing digital world
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This month’s cover story explores how GuidePoint Security, an elite team of highly trained and certified experts, cut through cybersecurity chaos and confusion to put control back in customers’ hands.
Welcome to the latest issueof Interface magazine!
Interface welcomes in 2023 with a need-to-know list of what we can expect from technology this year and how it can allow enterprises to gain a competitive edge in a disruptive and increasingly digital world. Faced with everything from process mining and AI to quantum-readiness and the metaverse we cut through the hype to bring you the facts.
GuidePoint Security: digital transformation in cybersecurity
“Cybersecurity is in such a reactive mode because of the sheer volume of risks and vulnerabilities an organisation faces,” says Todd Salmon, Executive Advisor for Strategic Services at GuidePoint Security. “We see a lot of copycats and repeat attacks happen, but at the end of the day it’s all about creating solutions to help combat those problems.”
GuidePoint’s elite team of highly trained and certified experts, cut through cybersecurity chaos and confusion to put control back in customers’ hands. Helping them make the smartest, most informed cyber risk decisions, and choose and integrate the best-fit solutions to build the most effective cybersecurity program, Salmon discusses the challenge of keeping up with the pace of the ever-changing digital world.
bp: a strategic reinvention
“We are investing in digital to drive process efficiency and improve insights; but also to develop our people with the skills we need for now, and the future at bp. This means we are playing to win while caring for our people through investing in their personal development,” says Head of Strategic Transformation Nick Hales.
“After setting the right foundations through various remediation and compliance initiatives, we embarked on our digital transformation journey,” adds Strategy & Transformation Manager Emmanouela Vlachantoni. “There was a clear opportunity to standardise and streamline our controls environment to reduce complexity and increase insight.”
Fairfax County: winning the IT war with cybersecurity
Meanwhile, across the pond, we learn how Fairfax County in the State of Virginia is reaping the rewards of a cybersecurity program enabling government services and keeping citizens safe. “My role is to educate our leadership to ensure they understand the business value of cybersecurity as it relates to government services. Being accountable for the security of their systems and data is a key factor in developing a successful cyber program,” explains CISO Michael Dent.
Also in this issue, we round up the key tech events and conferences across the globe and, with the help of the experts at Fasthosts, take a deep dive into the metaverse… Can virtual reality become our reality? Read on to find out.
Nick Hales, Head of Strategic Transformation and Emmanouela Vlachantoni, Strategy & Transformation Senior Manager, on the journey to reinvent business processes that are reimagining bp
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This month’s cover story reveals how bp’s Strategic Transformation leaders are on a journey to reinvent business processes that are reimagining the energy giant.
Welcome to the latest issueof Interface magazine!
Our final issue of Interface for 2022 covers some of this year’s hot tech topics: digital transformation, cybersecurity, data & analytics, customer-centricity and more…
“We are investing in digital to drive process efficiency and improve insights; but also to develop our people with the skills we need for now, and the future. This means we are playing to win while caring for our people through investing in their personal development,” says Nick Hales.
“After setting the right foundations through various remediation and compliance initiatives, we embarked on our digital transformation journey,” adds Emmanouela Vlachantoni. “There was a clear opportunity to standardise and streamline our controls environment to reduce complexity and increase insight.”
Fairfax County: winning the IT war with cybersecurity
Meanwhile, across the pond, we learn how Fairfax County in the State of Virginia is reaping the rewards of a cybersecurity program enabling government services and keeping citizens safe. “My role is to educate our leadership to ensure they understand the business value of cybersecurity as it relates to government services. Being accountable for the security of their systems and data is a key factor in developing a successful cyber program,” explains CISO Michael Dent.
Piedmont Healthcare: data & analytics at the heart of growth
The power of data cannot be under-estimated… At Piedmont Healthcare Mark Jackson, Executive Director of Business Intelligence is building a data strategy driving speed to insight at scale. “Tool selection has played an important role in our ability to scale the BI program and deliver rapid insights in a dynamic environment.”
Also in this issue, CalArts CTO Allan Chen explains how an IT strategy based on coordination and collaboration is supporting six schools; Information Tech VP Fausto Sosa de la Fuente reveals the people-centric transformative IT process at construction industry giant CEMEX; and we take a look at the latest insights from McKinsey highlighting the lessons CEOs can learn from successful digital transformations.
John MClure, CISO at Sinclair Group – a diversified media company and America’s leading provider of local sports and news – talks about the evolution of cybersecurity and the cultural shift placing it at the forefront of business change
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This month’s cover story explores how Sinclair Broadcast Group is embracing the evolution of cybersecurity and placing the role of the CISO at the forefront of business transformation.
Welcome to the latest issueof Interface magazine!
Communication, secure and at speed, is a vital component of the transformation journey for both the modern enterprise and its relationship with stakeholders, be they customers or partners. Putting the right building blocks in place to deliver successful change management is at the heart of the inspiring stories in the latest issue of Interface.
Our cover star John McClure progressed from a career in the military and work as a consultant in the intelligence industry to fight a new kind of foe… As CISO for Sinclair Broadcast Group, a diversified media company and America’s leading provider of local sports and news, he talks about the evolution of cybersecurity, the battle to meet the rising velocity and sophistication of cyber-attacks and the cultural shift of the role of CISO placing it at the forefront of business change.
“Sinclair is unique in terms of its different business units and how it operates. It’s my job as CISO leading our cyber team not to be an obstacle for the business; we’re here to help it move faster to keep up with market forces, and to move safely. We’re here to engineer solutions that work for the enterprise but also help us maintain a positive security posture.”
State of Florida: digital government services
We also hear from CIO Jamie Grant who is leading the State of Florida’s Digital Service (FL[DS]) on its charge to transform and modernise the way government is accessed and consumed. He is building a team of talented, goal-oriented and customer-obsessed individuals to drive a digital transformation with innovation at its heart. “Leadership is really about developing the team and investing in the people. And it turns out that when you get their backs, they appreciate it and then you can achieve anything.”
ResultsCX: putting people first
Jamie Vernon, SVP for IT & Infrastructure at AI-powered customer experience solution specialist ResultsCX, discusses what drives customer care in the 21st century, and the part technology has to play.
“We are the custodians of our customers’ customers,” says Vernon. “In this increasingly tenuous relationship with their customers, they trust us. My leadership takes that responsibility very seriously, and charges each of us with doing everything we can to provide a perfect call, or email, or chat, every time, thousands of times a minute, around the clock and around the calendar.”
Jamie Vernon, SVP for IT & Infrastructure at AI-powered customer experience solution specialist ResultsCX, discusses what drives customer care in the 21st century, and the part technology has to play.
“We are the custodians of our customers’ customers,” says Vernon. “In this increasingly tenuous relationship with their customers, they trust us. My leadership takes that responsibility very seriously, and charges each of us with doing everything we can to provide a perfect call, or email, or chat, every time, thousands of times a minute, around the clock and around the calendar.”
Also this month, Sarita Singh, Regional Head & Managing Director for Stripe in Southeast Asia, talks about how the fast-growing payments platform is driving financial inclusion across Asia and supporting SMEs with end-to-end services putting users first, and we get expert advice for the modern CEO from the University of Oxford’s Saïd Business School.
Our cover story this month reveals how Dr Roman Salasznyk, Senior Vice President at Booz Allen Hamilton, and his team are driving innovation at the IT services specialist to deliver digital solutions supporting federal agencies in their quest to drive mission-critical programs
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This month’s cover story charts how IT services specialist Booz Allen Hamilton is delivering digital solutions to support federal agencies in their quest to deliver mission-critical programs.
Welcome to the latest issue of Interface magazine!
Technology is changing lives; from banking to transport and manufacturing to healthcare, the scaling of digital transformation journeys across global industry sectors is enabling and enhancing our lives… Harnessing the power of tech, to manage everything from the evolution of our supply chains to our response to medical emergencies like COVID-19, is changing the game.
Our cover story this month reveals how IT services specialist Booz Allen Hamilton is delivering leading edge solutions to support federal agencies in their quest to deliver mission-critical programs.
“We’ve made a concerted effort to invest and provide leading-edge capabilities to support some of our client’s most pressing public health challenges across the federal government space,” says Salasznyk. “Technology must add value, solve a business problem, and deliver measurable improvements in efficiency and effectiveness.” That efficiency is driven by over 29,000 experts around the world driving digital journeys, developing analytics insights, engineering, and cybersecurity solutions while working shoulder-to-shoulder with clients to choose the right tech to realise their vision and transform.
Nuffield Health: digital transformation for a healthier tomorrow
Nuffield Health is the UK’s largest healthcare charity (independent of the NHS) operating 37 hospitals and 114 Fitness & Wellbeing Centres. IT leaders Jacqs Harper and David Ankers describe the organisation’s incredible digital transformation and how its people-first attitude runs deep. Nuffield’s beneficiary-centric approach means “driving experiences” to be optimal and best-in-class is paramount. “What was really compelling when I joined Nuffield was how much of a difference this business can make to the nation in terms of improving its health,” says Ankers. “And equally, how we as a team can make the lives of practitioners so much easier. There’s a huge amount of value IT can add.”
Also in this issue, we hear from Celonis on why process mining can help companies stop wasting money on tech they don’t need, and we present the latest analysis from consultancy giant McKinsey’s Technology Council highlighting the development, future uses and industry effects of advanced technologies across 14 key trends.
CPOstrategy’s cover star this month is procurement transformation expert, and CEO and Co-Founder of Tropic, David Campbell…
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Right now, procurement excellence is blooming. Experts determined to create change are coming to the fore and aligning procurement with SaaS to bring an end to the do-it-yourself way of working that decimates technology budgets. Tropic is one such game-changer, providing the tools to navigate software procurement’s complexities for competitive advantage.
The CEO and Co-Founder of Tropic is David Campbell, a born entrepreneur. He grew up on a cattle ranch in California and has always had at least one side-hustle on the go. Even as a child, he was running some form of money-making venture at any one time – but he didn’t necessarily consider that entrepreneurial pursuits were his calling until later.
CEO and Co-Founder of Tropic, David Campbell
Campbell studied English at UC Berkeley, and on graduating assumed he’d go into the arts. He’s a lifelong musician and writer, and he moved to a cabin in the woods to write the ‘next great American novel’. This venture, while it didn’t have the exact results he had hoped for, planted the seed in his mind that perhaps entrepreneurialism was for him because he loved setting his own hours and vision, creating a strategy, and executing that…
Elsewhere, we have exclusive interviews with supply chain and procurement leaders at the City of Edmonton and QSC, as well as the results of our first Sustainable Procurement Champions Index. We also have some exciting news from DPW too, ahead of its conference later this month.
Our cover story this month explores how Wei Li, Vice President & GM for AI & Analytics at Intel, and his team are powering Artificial Intelligence to enable the digital journey from data to insights
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This month’s cover story explores Intel’s AI technologies powering the digital journey from data to insights…
Welcome to the latest issue of Interface magazine!
In this issue of Interface, we speak with a diverse group of tech leaders blazing a trail that others can follow to navigate the journey towards transformation.
We met with this month’s cover star Wei Li at the AI Summit during London Tech Week where Intel’s AI & Analytics leader delivered a compelling keynote speech and explained how the tech leader is powering Artificial Intelligence to enable the digital journey from data to insights.
“AI Everywhere means that anybody should be able to apply and use AI,” says Li, explaining the pledge Intel has made to further democratise the use of technologies such as AI. “We provide not only the hardware for AI, but also AI software and solutions for everyone to accelerate their data to insights journey. Software is the bridge between hardware and the millions of developers and billions of users.”
London Tech Week
During London Tech Week Chris Philp MP, the Parliamentary Under Secretary of State at the Department for Digital, Culture, Media and Sport (DCMS), discussed the launch of the UK’s Digital Strategy with an expert panel. We take a look at what this means for Britain’s approach to expanding the reach of its digital economy to drive growth, boost productivity and create more better-paid jobs.
ENGIE: collaboration through data
We speak with ENGIE’s Group Chief Analytics Officer Thierry Grima, who outlines the extraordinary data transformation the global utility giant is going through, and how the ground-breaking data connection of 170,000 global team members is benefiting the business. “As a business, we need to unlock the value of data because it’s no longer a competitive advantage. It’s just a necessity.”
Elsewhere, Jim Brady from Fairview Health Services reveals how his dual role as CISO and VP Information Security & Infrastructure/Operations is uniting security and operational technology to break down silos and drive a transformation with people power at its heart. “I love people, helping them and interacting with them in a positive way. There are several hundred people on my team, but I still spend time with them one-on-one and in small groups, even now that we’re largely working remotely.”
Also in this issue, S. M. Jaleel’s CIO Teoman Buyan explains how the right company culture can drive a positive technology transformation and Sal Laher, Chief Digital & Information Officer at global enterprise software provider IFS, talks about the importance of developing a more environmentally friendly approach to technology that weaves sustainability into the software fabric.
This month’s cover story explores the customer-centric digital transformation journey of leading insurer AXA being led by UK & Ireland CIO Darrell Ryman
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Our cover story this month explores how leading insurer AXA‘s customer-centric digital transformation journey is refining the art of the possible to unite business with technology.
Welcome to the latest issue of Interface magazine!
The opportunity to leverage data & analytics to transform organisations seeking to sharpen their digital focus and better connect with internal and external stakeholders is at the forefront of a revolution in connectivity driving both operational efficiency and growth. In this issue we bring you some inspiring stories that reflect the impact today’s innovations are having on shaping the business journeys of tomorrow…
This month’s cover story explores the customer-centric digital transformation journey being led by AXA’s UK & Ireland CIO Darrell Ryman. “It’s both a challenge and an opportunity for the insurance industry,” he reflects. “Many of the legacy systems firms use are now outdated and based on the nine-to-five business operating model – they’re not designed for the modern digital experience.” Ryman’s IT team is driving that transformation pivot by focusing on three key pillars: developing a digital backbone, becoming a digital business and creating a digital ecosystem.
https://www.youtube.com/watch?v=i6wxgQ2gAmI
XGS
Today’s on demand transactions require custom logistics solutions. We discover how flooring supply chain specialist Xpress Global Systems (XGS) is combining existing data with employee experience to deliver technology solutions that form the core of the company’s humanised approach to digital transformation.
EY
Also in this issue, Ken Priyadarshi CT AI leader of EY Technology, explains how the leading professional services network is developing Digital Twins to deliver big-data and low-latency scenario planning models for financial services: “It’s time for the digital twin to become a mainstream tool for the C-suite and go beyond the traditional manufacturing or operational use-cases.”
Data management driving efficiency and growth
Elsewhere, we learn how specialist insurance broker Howden is achieving success in Asia by establishing a structured, data-driven, engagement and distribution strategy; and reveal the way America’s leading critical infrastructure damage prevention firm, Stake Center Locating, is future-proofing by transferring its expertise from legacy systems to the cloud.
Martin Riley, Bridewell Consulting’s Director of Managed Services, explains why a cyber security strategy can future proof your business and provide the platform for a successful digital transformation
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Regardless of sector, digital transformation has become a business necessity for organisations in 2021. Described as the most important trend in business today, 65% of the globe’s GDP is expected to be digitalised by the end of 2022. And with promised benefits including improved operational efficiency, agility and employee productivity, it’s no surprise that businesses are going digital.
However, while there’s no denying the importance of digital transformation, different levels of organisational maturity can lead to different approaches and this is particularly apparent when it comes to security. Many organisations often take a reactive approach, whereby business and technology transformation are the priority and security is only considered afterwards. However, the risks from putting security on the backburner can be numerous, including higher costs and extended timelines to retrofit crucial security fixes.
Martin Riley
More mature companies have a different approach – one that puts security transformation first, ahead of digital transformation, to ensure the best possible future-proofed outcome. Their success is now providing a valuable proven blueprint for other firms to follow. So, to reap the benefits of this approach where should you start?
Shift your mindset
Before embarking on any transformation, it’s imperative to get your strategy right. Move away from thinking purely about digital transformation and cyber security as separate strategies and instead develop a cyber security transformation strategy. This will ensure that you can reduce risk and improve your cyber resilience, even as your attack surface grows.
It may be that security transformation becomes the driver of your digital transformation. For example, if you have identified vulnerabilities within your legacy IT infrastructure that necessitates a need to move critical data to the cloud.
Take critical national infrastructure as an example… The convergence of IT and Operational Technology (OT) as well as increased legislative requirements, such as the Network and Information Systems (NIS) Regulation, is driving a clear need for cyber security transformation. Organisations need to adapt to gain a holistic view of cyber security across physical OT and cloud systems before transformation can take place.
Understand your risks
Digitalising your business ultimately introduces new risks. For example, new digital channels can broaden your attack service, while poorly configured cloud-based infrastructure can pose easy targets for cyber attackers. There’s also risks from the internet of Things (IoT) which increases sensitive data proliferation (and by association, vulnerabilities), as well as authentication and access risks posed by remote working and connected supply chains. Before embarking on a transformation plan, you need to understand the security implications of any changes.
Assume zero-trust
In order to ensure that security is front of mind in your transformation you need to adopt a philosophy of a zero trust, where no individual or device is trusted. This involves verification by authenticating and authorising based on all available data points, utilising just-in-time and just-enough-access to limit user access and using analytics to drive threat detection. Not only does this help businesses to be prepared for cyber threats, but also articulates the value of security transformation to other departments.
Embed security from the outset
It can be tempting to simply keep investing in a growing number of security technology tools as and when your transformation takes place. However, all too often there is little integration, overlap and there are gaps in the coverage these tools offer. And while a well-configured set of security tools can provide coverage, many drive threat alerts that are false positives or benign positives, leading to fatigue and alert blindness. Instead, ensuring security is a critical part of the initial design of your transformation strategy.
Use security intelligence to your advantage
Move away from a focus on prevention to response and make security intrinsic throughout the business by implementing proactive measures such as Managed Detection and Response (MDR). By combining human analysis, artificial intelligence and automation to rapidly detect, analyse, investigate and actively respond to threats, MDR can encourage alignment of security transformation with digital transformation.
Cyber Technology Security Protection Monitoring
An adaptive and customisable security model, MDR can be deployed rapidly and cost-effectively as a fully outsourced service or via a hybrid SOC. It helps develop a reference security architecture that enables you to safeguard on-premise and legacy systems, cloud-based infrastructure applications and SaaS solutions, whilst also protecting and responding to new security and user identity threats as well as reducing cyber risk and the dwell time of breaches.
Engage third party support
Finally, don’t neglect to seek help from outside your organisation. By engaging a security architect early on in your project lifecycle, you can benefit from robust and detailed analysis and expertise to ensure the correct decisions are made, tracked and traced from beginning to end. They can also help you understand the interdependencies across your IT estate, identify risks and suggest best practice, as well as legal and regulatory obligations to ensure you continue to be able to withstand a range of cyber attacks throughout your transformation.
Reaping the rewards of cyber security transformation
Every business is on a digital transformation journey, regardless of size or objectives. However, as organisations transform, so do technology and cyber threats. Those that fail to adopt a more proactive and efficient system for mitigating risks and handling, responding, detecting and learning from cyber security attacks will find themselves falling behind and the security function unable to keep up.
Ultimately, cyber and digital security should be thought of as inseparable – and those that can plan and integrate both into their transformation projects from the very beginning will be in the strongest position to succeed and future-proof their business.
By implementing a robust cyber security transformation process and proactive security measures, such as MDR that can support secure digital transformation, you can reap the benefits of a stronger, structured system for managing, isolating and reducing threats and continue to pivot, transition and serve in the new digital economy without leaving security on the side-lines.
Bridewell Consulting
Bridewell Consulting is a specialist cyber security and data privacy consultancy. NCSC Certified and CREST accredited, it provides reliable, high-quality security and risk consulting services; helping its customers protect not just their data, but their reputation, customer trust and bottom line. Providing four core service areas: cyber security, data privacy, penetration testing/red team assessments and managed security services, Bridewell’s expert team of professionals possess specialist industry experience and proven capabilities. They can deliver effective cyber security and data privacy services across financial services, pharmaceutical, manufacturing, technology, retail, media, government, aviation and 24×7 critical services. As a vendor agnostic business, Bridewell is able to effectively and honestly engage with business executives and provide advice, guidance and services in a way that is most appropriate for each organisation, ensuring that proposed solutions are aligned with its clients’ strategy, business objectives and the wider IT architecture.
Learn more about emerging trends across the tech panorama in the latest issue of Interface
Going above and beyond to ensure emissions and offsetting the carbon we unavoidably emit as part of daily operations…
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Climate change rarely ceases to be out of the news. Whether it’s unusual weather, a rise in sea levels, or a different angle – the common theme is an increasing danger to humans and wildlife.
Thankfully, a strategy is now in place to reverse the effects of climate change and restore harmony to the planet. Back in June 2019, the UK government became the first country to sign their ‘Net Zero’ target into law – marking it as the first major economy to legislate for net zero emissions. Since then, other governments have followed suit, introducing their own laws and policy changes to help reduce the amount of carbon we emit.
These changes have had a huge impact on the way businesses work, inspiring many to introduce new ways of reducing their carbon footprint. Here, we look at those businesses that are going above and beyond to ensure their emissions are kept as low as possible or are offsetting the carbon they unavoidably emit as part of their daily operations.
Automotive – BMW
Regularly named as the world’s most sustainable car manufacturer, BMW has gained a reputation for its creativity and innovation in terms of reducing carbon emissions. The company’s long list of green credentials speaks for itself – for example, from 2009 to 2019 BMW has been able to reduce its delivery fleet emissions by over 40%. The company has also invested heavily in electric technology, turning to more renewable fuels to reduce carbon emissions even further. As it stands, BMW is currently on track to ensure that a quarter of all the vehicles it sells will be electrified by 2021, with a third in 2025 and half of all vehicles by the year 2030.
Aviation – EasyJet
Airlines are a significant contributor to carbon emissions globally. In fact, it’s estimated that the flights we catch account for some 12% of all transport emissions annually. Yet there are airlines that are making significant efforts to try and reduce this figure – one of which is EasyJet. In a recent report, EasyJet ranked top of the list of airlines trying to cut carbon emissions and tackle climate change and has since become the first airline to operate net zero flights across its whole network.
This has been possible through carbon offsetting initiatives which help to offset the emissions the airline uses during flights. It’s estimated that the company will spend around £25million each year carbon offsetting, lowering their impact on the environment and positioning themselves as market leaders in reducing CO2.
Fast food restaurants – McDonald’s
As one of the most iconic restaurants in the world, McDonald’s are firmly under the microscope when it comes to taking sustainable measures. Luckily, the company is making considerable efforts to reduce its impact on the environment wherever possible. With around 36,000 restaurants located in over 100 countries worldwide, McDonald’s has now began switching to energy efficient appliances to help cut energy waste by around 25%. It also aims to source all its packaging from recycled materials by 2025.
Off-grid energy – Flogas
As one of UK’s leading off-grid energy suppliers who help companies offset carbon emissions, Flogas has quickly become a market leader in the fight against climate change. In its ‘2040 Vision’ manifesto, the company has laid out plans on how it intends to the support the government’s carbon emissions targets by supplying its customers with 100% renewable energy solutions by 2040. As well as aiding its customers, the company has also undertaken several landmark steps in its own carbon reduction strategy such as promising to offset all Level 1 and Level 2 CO2 emissions for 2019 and became one of the first 0ff-grid gas suppliers to add Bio LNG powered delivery vehicles to its fleet. Since then, Flogas has also launched its Carbon Offsetting Initiative for both its commercial and consumer customers.
Manufacturing – Siemens
Manufacturing often requires energy intensive processes that create high levels of carbon emissions. However, this didn’t stop electronics manufacturer, Siemens, from becoming the first global company to commit to carbon neutrality by 2030 through using renewable energy at its factories. It’s also set out sustainability goals within its ‘Serve the Environment’ programme which details how it intends to create zero waste. As it stands, zero per cent of its waste has been sent to landfill from its factory in Newcastle and the business currently boasts a 92% recycle rate overall.
Software – Google
With a reputation for creating innovative software, it comes as no surprise that Google is one of the IT giants leading the way in terms of sustainability. As well as reducing its carbon footprint through company-wide efficiency improvements, Google also uses on-site solar power as a renewable fuel supply. The company then uses carbon offsetting to bring its remaining footprint to zero and goes to great lengths to ensure that the projects it supports help provide long-term global benefits.
Thomas Bradley is a copywriter for Flogas, with over seven years’ communications and copywriting experience. He has extensive experience within the energy, construction, financial services sector, and auto industries.
Interface Magazine talks to Vladimir Arshinov, IT Director at steel producer SIJ Group regarding the company’s massive digital transformation
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Going into 2017, SIJ Group (Slovenian Steel Group) – Slovenia’s biggest steel producer and one of the largest manufacturers of stainless and special steels in Europe had typical IT structure with semi-independent IT departments on each plant. And like many modern enterprises, SIJ was at work drafting a strategy to transform its operations, systems and processes into a more unified structure in a bid to improve productivity, safety and the all-important bottom line.
Vladimir Arshinov is SIJ’s IT
Director and his initial focus in 2017 was trained on the digital
transformation of SIJ’s IT department to a more transparent organization with a
clear workflow. Previously, IT was a department of innovation with each individual
plant having its own independent function, none of which connected with each
other, often across varying geographies. “This meant that lots of efforts were wasted
solving the same issues with different solutions,” Arshinov reveals.
At the end of 2017, SIJ
established a Project Management Office. PMBOK was selected as a master
methodology and the Head of PMO received PMP certification and developed
internal regulation documents, rules and methodology. After finalizing the
initial establishment phase, hiring project managers and the organization of
the operational work, SIJ came to the conclusion that to raise the scope and
complexity of the projects program, they needed a tool. The MS Project
Management Server was duly selected and implemented allowing SIJ to simplify
observation of the progress of projects and control, while ultimately reducing
duration. Project team meetings were almost eliminated, and the distribution,
control and execution of project tasks, were assigned to the project team
members who managed and controlled projects including budget consumption. Each
project member would then be measured for effectiveness.
Turning the IT department
into a leaner function was a massive first step for SIJ as it needed a firm
foundation upon which all future innovation could sit. And so, the next step in
SIJ’s internal IT transformation was aimed at the most sensitive and critical
area: software development. As with many metallurgical companies SIJ had a bulk
of different IT systems, which were supplied or developed in the past and had
to be either permanently supported, or, due to the business requirements,
changed. One concern with the legacy system was the reliance on locally based
productive software developer engineers developing new solutions and then,
after, supporting them, resulting in a massive drop in development speed, as
development and the subsequent support increased. This situation was causing
overloading, burnout and frustration, triggering a desire to change something;
sometimes resulting in employer change. However, SIJ IT considers people as its
major asset and were determined to break the vicious circle of “one system
– one person – forever”.
“What we did from an organizational point of view was to unify all geographically distributed developers from 4 different companies into the several virtual groups in each department,” Arshinov explains. “Each group has a Team Leader role, who assigns tasks to the group members and controls the execution of each individual task.”
Development
at SIJ is now organised according to an agile approach using scrum boards and
Microsoft Project Server to control all the time sheets of the people involved
in the projects, plus their schedules and budgets. SIJ uses
Microsoft Azure DevOps Server for unified storage of inter-company source code
and Change Request Scrum board monitoring and control. Process and technical
solutions now allow SIJ to involve external software development partners into
the development process while controlling their activities, deliverables and
costs. Developers can now use the Azure DevOps Server
with the scrum board and are now able to register change requests in their
system by themselves, where they see the progress of all individual change
requests coming through the process with the integration of the IT Director
informing the exchange and updating the status of the task development.
In October 2019 SIJ revamped
and migrated its Corporate Business Intelligence system to a new MicroStategy
platform. The project took six months and provided SIJ with an extensive
corporate Business Intelligence system with more than 180 different dashboards
covering production, finance, sales, procurement, HR, Legal and investment
functional areas. The overwhelming majority of the data now uploads
automatically and the business intelligence tool has
created a unified reporting system across the group utilizing the same source
of data in order to integrate it. “There was huge involvement of the business
customers with Oracle BI and this year, we moved to this new platform,”
Arshinov explains. “The front end of the system was changed (from Oracle BI) to
MicroStrategy for usability and a unified interface. Now, SIJ has a system that
looks the same no matter the device it’s accessed from. This project allows us
to organize and develop the team that tests the trial usage and develops the
processes of the PMO (Project Management Office) inside the IT function.”
The BI System contains the
entire spectrum of corporate data and allows SIJ to move quickly and
transparently when taking a management decision, while reducing the number of
mistakes, misunderstandings and time-consuming meetings.
The next system to be unified across the group was the Salesforce CRM system, which is now fully integrated. Then, an Oracle supplier portal followed, which opened the possibility of organizing tenders, thus massively simplifying the purchasing process. Oracle Innovation Management is another successful implementation, which, although a relatively small project, has had a big influence on the business transformation and innovation through increased flexibility. “It is also used to motivate people to suggest improvements and new innovative ideas,” he says.
So,
what have been the major successes, according to Arshinov, following the
ongoing digital transformation at SIJ? “The main difference between now and
then was that each individual company was living alone, and I see now that the
IT function in this case is unifying the people and allowing them to speak in a
single language. It doesn’t matter if it’s a steel center or a big plant,” he
explains. Costs have been dramatically reduced too, outsourcing being a prime
example. In 2016, SIJ was spending more than 70%
annual budget for operational external services.
For 2020, that part of budget reduced to 40%. Meanwhile, the capital investments part of the
budget has grown from 4% in 2016 to 56% in 2020.
The
implementation of a Supply Chain Planning system (from Quintiq) incorporating
the Oracle Business Suite, has improved the delivery, safety and performance of
SIJ’s plants. “We improved Delivery Performance OTIFF (on time and in full) of
a stainless steel plant by 12.8% in six months,” he enthuses. “And we shortened
the production cycle by 15,4% from ordering to shipping, which is a brilliant
result within six months of going live.”
In
SIJ Matal Ravne has replaced the melt shop technology system and entire plant
manufacturing execution system to replace the obsolete legacy system – which
had zero planning functionality – with PSI Metals. “First of all, we’re increasing the level of understanding
and the knowledge of the internal IT team, while dramatically decreasing
project cost by involving internal specialists into the supplier team. That
allows us to save several hundred thousand Euros of project budget and it’s a
win-win situation for the supplier as well. First of all, the supplier is
receiving our team, which knows the production and the limitations and has
extensive inside knowledge. At the end of the day, the commercial value, in
this case, is the cheaper price. Cheaper than anybody else is able to receive.”
Another
and no less important project for Sij Metal Ravne is the joint development work
with Comtrade Laboratory Information Management System (LIMS). Laboratories in
metallurgy companies are complicated and highly demanding environments with
unique processes required for quality control of all products and this solution
covers and improves core laboratory processes and will be highly integrated
with the PSI manufacturing execution system from one side and Oracle ERP on the
other.
Through this massive digital transformation, SIJ has also managed to increase quality control through sophisticated AI, which has massively impacted its operations. The acquisition of scrap metal, a major influence on SIJ’s bottom line, can now be influenced through advanced detection systems that can detect impurities, thus representing huge savings when it comes to procurement. “The conservative saving is €1.4m,” he says.
The
digital transformation at SIJ is touching every aspect of the company’s growth and
is certainly an ongoing journey rather than a destination. “We are not an IT
company, that’s understood,” Arshinov says. “But we are supporting services
inside the business, and of course our main concern will always be supporting
the production of steel. But we’re not there yet.”
Leveraging Radius Networks location technology for curbside pickup, in-store order delivery, and payments.
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Technology has and always will be used to solve problems. At the very basic level, technology is developed and used to make things simpler. Just look at our day to day lives and the way that technology has, for the most part, made our experiences simpler and this has changed the way we as consumers engage with retailers and restaurateurs. We now expect and outright demand that the businesses we enter and purchase food and items from offer the same level of seamlessness that we experience in our own homes. The interesting thing however, is that this isn’t necessarily a new challenge for restaurants and retail stores; these businesses have been looking to enable the most seamless and effective customer service since the very beginning. The only real thing that’s changed is the tools that they have at their disposal.
“At the end of the day, I think this goes for business philosophy in general, you really need to understand the problems that your customers have, and then solve them,” explains Marc Wallace, CEO and Cofounder of Radius Networks, a location technology service provider. “In our case, customers are businesses, such as restaurants, grocery stores, retailers or casinos; so we are targeting very specific problems. In most cases, those problems are taking wasted time out of the equation.”
Picture the traditional, and maybe even stereotypical, restaurant environment, where a food order is ready to go to the table and the service staff has to locate and identify the corresponding table to that order. In some instances, more than most, they may even walk throughout the entire restaurant before arriving at the right table with the right customer. Through wireless-enabled location technology, Radius Networks has transformed the customer experience by allowing businesses to track customers, improve profit margins and ultimately increase customer retention.
Customers have, and will always, vote with their feet, and in order to retain those customers, businesses need to be able to remove the pain points. As Wallace noted, wasted time is one of the single biggest pain points in customer service. Radius Networks offers location-based curbside pickup, in-store and table service solutions, as well as mobile payment technology to remove not only the one pain point, but multiple pain points. “We’re addressing other key problems, such as payments. When you dine-in at a restaurant and are in a hurry to leave, trying to get your server’s attention to pay for your bill can be frustrating for the customer. It leaves a bad taste in their mouth at the end of their dining experience,” says Wallace.
“We’ve developed solutions for making payments remotely without contacting the server. The server is notified when the bill is paid, and they can focus their attention on real problems that other customers have instead of shuttling credit cards back and forth.”
At the time of writing, the world has been gripped by the COVID-19 pandemic, a truly unprecedented event that has completely devastated lives and economies all over the world. It has also completely ripped up the rulebook when it comes to food and retail, with lockdown restrictions forcing businesses to either close down entirely, or pivot to delivery services. Radius Networks’ FlyBuy curbside pickup solution was actually launched over 12 months ago, but it has fast become a key technology offering that is solving an unforeseen problem. By automating the curbside delivery service for customers, FlyBuy provides a turnkey, end-to-end solution that uses the customer’s location for a faster, easier order pickup experience. “There was already a pre-existing return on investment (ROI) with FlyBuy because we were reducing the wait times for customers when ordering for pickup, which results in more frequent visits” says Wallace. “Throughout this pandemic, curbside delivery has become the only channel that people can do, so the importance of it has risen dramatically. It was once within a business’s top ten things it needed to consider, and has now risen to the very top of their to-do list.”
Radius Networks is currently offering a free version of both its FlyBuy curbside and buy-online-pick-up-in-store (BOPIS) software for restaurants, retailers, and non-profits during the COVID-19 crisis.
By its very definition, location tracking technology appears to be very intrusive. It is tracking locations and using that data to inform decision making, after all, and naturally that can cause a little fear and a hesitation. Wallace acknowledges these concerns and understands them wholeheartedly. “We had a decision to make early on in the company whether we were going to harvest data and use it for marketing purposes or whether we were going to be a privacy-centric company and focus on providing a solution,” he says. “We chose to be a privacy-centric company, mostly because all of us as individuals wanted that for ourselves.”
“When it comes to us as a location company, are very transparent with our customers and our businesses, so that they can be transparent with their consumer customers about what we’re doing with their location data, what we’re using it for, and how long we’re keeping it.”
This transparency is built into the very DNA of the company. FlyBuy will only ever use the location data to alert restaurant/retail staff that a customer is on the way and onsite to pick up their order, and only after the customer has opted-in to sharing that information. After a period of time has passed, they will then delete that data entirely. Its policy dictates that it does not, and will never, share that data with any third party, giving customers peace of mind that their data is safe and used only as agreed when they opt-in. Wallace believes that, while the reluctance and fear is understandable, consumers have access to services’ policies and can ‘do some homework’ in order to allay them. “I think, given the amount of options we are given today, customers can no longer just assume every location company is tracking or doing something devious with their information. They need to be aware when they approve location usage and when they don’t,” he says. “If they can be sure that sharing their location brings value to them, whether it be to have a car service come to their exact location, or their groceries meet them at their car immediately upon arriving in the pickup zone, they will happily share their location. Once they have established a level of trust in the people that are requesting location permissions, and see the benefits it brings to their lives, there is no problem.”
Radius Networks was founded in 2011, and for the best part of a decade, it has grown from strength to strength as a business, working with the likes of McDonald’s, Five Guys, and Coca-Cola, as well as being recognized in the INC 500, the Deloitte Fast 500, and the CIO Magazine’s Most Promising Digital Experience Solution Provider. But none of these successes would have been made possible, without a solid and sound foundation within the business. “I’ve been told by people ‘wow you guys got really lucky.’ Luck had absolutely nothing to do with it. Our mission is to solve problems for businesses, and right now businesses need our help more than ever. There were a lot of really difficult times over the years where we worked hard and earned the right to stay in the game, and we are once-again earning it right now,” says Wallace.
“Take FlyBuy as an example. I’ve been asked as to whether I thought this piece of technology that we developed over the last few years would ever be as important as it is right now. Yes. Yes I did, and so did everyone else on our team, and that’s key to our success as a company. Every single person at Radius Networks is engaged and believes in what we do.”
In these times of crisis, the spotlight has shifted significantly onto those business fundamentals and Wallace is extremely proud of the business he has built and the people within it. “The business principles that we’ve been practicing over the last few years have paid off. We are a strong company with sound fundamentals and sound financials. We haven’t over extended ourselves, either from an investment perspective or from an expenses perspective and that’s paying off for us now,” he says.
“It is tough in the current environment to point to positives, because you almost feel ashamed to do so. I think we’ve done a lot as a company to help others; we’ve given our product away for free to hundreds of small businesses, thousands of locations, with no obligation, and it’s a testament to the work we have done to get to this point. A lot of companies are doing a lot of good work to help each other right now and they can do so because they are built on solid foundations.”
Those foundations start from the very top. Wallace is a key advocate in communication. Much like Radius Networks communicates in an open and transparent way with its customers, the same rules apply from within. He admits that the pandemic has, ironically, made that communication better in some aspects, but it has always been a key part of what makes Radius Networks tick. “We’re talking to our customers all the time. My team is the best team in the world. They’re working in overdrive right now, communicating at such a high level, and listening to customer needs, because their needs have changed dramatically,” he says.
“As the CEO, I try to have frequent hands-on-deck tag-ups with everybody to give them an update and try to be as transparent as possible about the status of the business and what’s happening. I do this so they can feel comfortable that they have a job today, and they’ll have a job tomorrow. We work together to come up with our team goals, and stay aligned and upfront about everything that may come up along the way.”
Listening to the customer is key. That much is no secret. But when it comes to technology, listening to customers is absolutely essential when ensuring that what you’re offering is what the customers need and what they want. Wallace’s role as the CEO is not to sit at the top of the business and leave it to everyone else. He is very much active and engaged at every level to ensure that everything Radius Networks is doing is driven by the customer. Wallace is proud of the culture within his business and often finds himself sitting on a call with a major customer and beaming at how well his team listens and understands the customer’s needs and how Radius can successfully address them. “I’m so proud that we, as a team, have a culture that takes so much pride in their work,” he says. “Our people have always been solid employees, pre pandemic, but they have become absolute rockstars today.”
The world as we know it has changed forever and we cannot begin to predict what this new world will look like post pandemic. One thing is for certain, communication, and the way in which businesses engage with their customers, will never be the same again. Radius Networks has enjoyed success after success over the past ten years, and as we all experience great uncertainty, the goal for Wallace is to continue providing valuable location technology for many years to come. The key to succeeding, regardless of such uncertainty, remains the same for Wallace and his team. “Persistence,” he says. “It’s about persisting through the bad times, just like the good times, and trusting your business fundamentals and experience. Being transparent with employees and having a good team around you is key.”
Supermarkets share staff and warehouses to combat stockpiling
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Relaxation of regulations allows supermarkets to share staff and warehouses to combat stockpiling, but data access holds the key to preventing future shortages.
Britain’s supermarkets are no longer in a state of competition, but one of co-operation. The government has announced a relaxation of trading laws and competition regulations, in an attempt to allow supermarkets to collaborate and share resources to ensure that the public has access to essential food and goods amidst the impact of the Coronavirus outbreak in the UK.
Since Friday, supermarkets have been allowed to share distribution depots, delivery transportation, retail workers, and even data access, to give Britain’s grocers the most ammunition possible to combat shortages during a time of wildly unpredictable consumer demand. The government is also temporarily lifting the plastic bag tax for online deliveries, in an effort to prevent cross-contamination from delivery crates.
This unprecedented move, which sees typically competitive and battling retailers share access to data and resources, represents the value that technology and data holds in today’s retail landscape. A recent study by retail tech company Ubamarket showed that over half (52%) of UK shoppers are happy to offer their data to retailers provided they can save money – this suggests that if supermarkets are able to use tech solutions to connect with customers, for example through mobile apps, it will provide them with unparalleled access to data on consumer behaviour. This in turn will ultimately allow tech-equipped supermarkets to run their stores more efficiently and better negotiate unpredictable periods such as the one currently faced.
Will Broome, Founder and CEO of Ubamarket, comments on the relaxation of regulation between supermarkets and offers insight into how retail tech can help retailers to effectively negotiate future crises:
“The competition regulations in place in our retail landscape are vital, as they push companies to innovate and offer the very best service to customers. However, despite the havoc that is being caused by the outbreak of the Coronavirus, I for one am very interested to see how supermarkets and grocers across the country will be able to come together, collaborate and share their market insights and resources for the greater good, now that these regulations have been relaxed.
One of the key challenges facing retailers at this moment in time is to mitigate the drastic increase in consumer demand for certain goods and contend with disruption in their supply chains, and it is clear that many supermarkets are struggling to distribute essential goods whilst ensuring that their remaining stock is not unnecessarily depleted.
The implementation of retail technology is one way that Britain’s retailers could safeguard themselves against future cases of fluctuating demand and irregular consumer behaviour. With the help of retail-tech, supermarkets and stores can access far more in-depth and accurate consumer data, helping them to assess their behaviour, manage stock more efficiently and effectively, whilst being able to effectively communicate directly to the consumer base. By effectively using retail technology, retailers will be able to better prepare and deal with unpredictable consumer behaviour and spikes in demand, preventing such a drastic loss of stock which we see today.”
When Malta-based construction and property enterprise Vassallo Group embarked on a company-wide digital transformation, it looked to CIO Carlo Aquilina…
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When Malta-based construction and property enterprise Vassallo Group embarked on a company-wide digital transformation, it looked to CIO Carlo Aquilina to build the entire infrastructure, operations and innovations at the group…
Walk through the streets of the
beautiful island of Malta and you will not be able to escape the work of the
Vassallo Group. Property, hospitality, education and healthcare, the Maltese
construction and property company completely reshaped Malta following the
devastation caused by the Second World War. Indeed, Vassallo Group embarked on
a mission to ‘rebuild the nation’ to its former glory and beyond.
Building on its strengths, the Group carries a legacy that is over 70 years old, and over the years has diversified its operations that have brought about expansion and investment. Today, Vassallo Group, stands at the forefront of several different sectors in the local market that include property and construction, furniture and interiors, elderly and disability care, catering, hospitality, architecture and education. The Vassallo Group is a large, complex enterprise and represents a unique challenge to its IT function, which provides technological solutions and support to all of the companies and their users.
Vassallo Group talks to Interface Magazine
Carlo Aquilina was approached to take on the
role of CIO at Vassallo in 2015, having spent a while building up an IT team at
a manufacturing enterprise. “When I started in manufacturing, IT needed lots of
work. We started from scratch. We built up the whole IT department and the
whole team. When Vassallo approached me, they offered me that challenge again
as they really lacked IT. It was a real challenge, but I built my team and we
started on what needed to be done.”
Vassallo Group previously had a shareholding in
an IT company and this sister company was providing IT, but the level of
support was not sufficient for their local clients, thus Aquilina was asked to
build the IT function that would serve the 1,900-plus employees and its
extensive client base. “When I joined, I was tasked with the project: to start
from scratch. I gave the board of directors a number of options. Should we go
on premise, should we go with another hosting company, should we go hybrid,
should we go cloud? The main ambition was very simple and I was given six
months to come up with a solution where we gave our clients, our clients,
meaning our users basically, a brand new environment with zero downtime. It was
all firefighting in that first year.”
Vassallo went 100% cloud with Microsoft Azure, which Aquilina believed to be the best short-term, and long-term solution. “We’re a Maltese company. We’re not an IT focused company. IT is here to provide service to the business. Our business is not IT. We’re not a gaming company. All of our products are Microsoft, and so it was an obvious choice to move to Azure.” Vassallo agreed to go 100% to the cloud, having drawn a blank against the large capital expenditure associated with on-premise. “With cloud, you don’t invest in anything and everything is top of the range. Of course, it also helps to be paying operational costs and not capital costs. That was the way forward and then they (the board) embraced it. There was a number of partners who approached us to do this, to help us with this migration. I chose CyberSift, which was a start-up, actually.” An advantage to working with a start-up is that they’re not encumbered by a large kind backend and can move audaciously and quickly and this was certainly an appeal to Aquilina and his team. “I knew one of the technicians; a brilliant engineer and that helped. Plus, the price we were given was also from a start-up perspective.”
Vassallo Group. A Maltese institution
CyberSift viewed the chance to work with
Vassallo with similar relish and the then start-up provided a specific engineer
to be onsite with the IT team at Vassallo for the full duration of the
migration. “Whatever I was asking, I was getting,” Aquilina explains. “‘Okay,
we’ll do it for you, but you’ll have to promote us, after.’ Now I’m promoting
them. So, we had engineers working for us and I didn’t need to grow my team. In
fact, we’re a very small team.”
The key thing Aquilina and his team built in
that crucial first year was ‘trust’. “I had the trust of the board of directors
because every time they asked me something, I satisfied their request. So,
there was trust. At the end of the day, it’s a family-owned company. Trust is
very important.”
Aquilina and his team were given six months to
deliver the project and took 2-3 three months to design and implement the
infrastructure. The following three months, they contacted suppliers, before
moving the software. “If it’s on premise or on cloud, there was remote access.
It was teamwork, everyone pulling the same rope. Whenever one of the suppliers
told us, ‘Listen, we’re not available this week. Let’s do it next week. We’ll
slot in someone else. We’ll set meetings. We’ll explain what we are doing.’ All
they needed to know is that we were moving from server A to server B. They did
it for us because it was their software, their app, their solution.”
With any large-scale technological transformation there are challenges although Vassallo seemed to evade many of the pitfalls through great organisation. “I don’t think we had actually the biggest challenges because it was all planned out. We used to meet every day with the engineer who used to work for us and my team. It was a case of ‘What happened yesterday, what happened today, what is going to happen tomorrow and why? Are we on track? Yes. If not, why? What can we do?’ We worked late at night so that we could achieve it. It was all based on trust and teamwork. It was a case of open-heart surgery because the business wanted to work. The business kept on working even though we were doing open-heart surgery. We had that support from everyone. Everyone understood that this needed to be done. We had support from everyone, from all the partners, from Microsoft, everyone.”
Even though digital transformation involves technical infrastructure, software, servers and cloud, people are still integral to a successful outcome. “Yes, they are extremely important,” Aquilina explains. “There are the users, the customers and the IT team. We are a very small team and that really helped, because a huge team would require lots more organisation and more hand holding. It was me who was both sponsoring and managing the project. I had the lead engineer who was doing the actual work, remotely. They had an assistant administrator who was assisting. People are so important.”
Vassallo Group holds an annual internal awards
and in 2016, the IT department was awarded ‘Best Customer Focused Department’
even though it had been, in Aquilina’s terms, firefighting. We were there
constantly, anytime, any day of the week. The team and I were presented with
this trophy, which proved my theory that the company had move to something much
more stable.”
Now Vassallo Group is reaping the benefits of
this transformation. “IT-wise, we are working on a business intelligence
project. Now we have the infrastructure ready and a solid base or foundation, I
want to give something back to the business. We implemented an ERP solution,
which Finance, Logistics and Operations are using. I don’t want the directors
to go into board meetings with huge amount of papers. I want them to go in with
just a laptop. The data is live. We’ve already done that for one of the
companies and it’s working. You can connect to the TV to project live data.
That is business intelligence. We’re working on the other companies too. Now
that they know what they can get, everybody’s bombarding us with requests. Of
course, we’re taking our time and that is ongoing.”
From BI, Aquilina wants to harness the power of
AI in board meetings. “I want to give them the facility to project live data,
but I also want to give them the facility to change the data accordingly. They
will see the results with AI.” Recruitment could be a big beneficiary of these
initiatives too. “What if we employ 100 people? AI will work out the costs,
work out the benefits of employing that many people. Then you can take an
educated decision. ‘Should we employ 100 or 200? Let’s put in 200 more
employees. What’s the cost?’ AI will work out the costs as well as the
benefits. That’s all in progress. However, these are very sensitive tools that
we need to use and if the tool gives you the wrong information, then you will
make the wrong decision. I explained this to the board and they gave me the
time needed to do it properly. We have to be very meticulous. They understood
and told me, ‘Whenever you’re comfortable, we can start using.’ The CIO has to
have 100% trust from the board of directors, because if there’s no trust, they
keep on asking, ‘But why and how?’ That is the way forward.”
Providing technological infrastructure, new
software and cyber security for such a large company means that Aquilina’s
hands are certainly full. “We support about 1,900 employees and 500 users. I
can afford to have a relatively small team because we have a solid base, and a
solid infrastructure. I have a wonderful team. I recruited everyone from
outside the business. I didn’t find anyone here, so they all respect me. We’re
all friends at the end of the day, although I am their manager. We talk about
anything and I help when needed. So, there’s trust from them and the senior
management, which I believe is extremely important. It’s a wonderful place to
work.”
In early 2019, the Voluntary Health Insurance Scheme (VHIS) was introduced in Hong Kong by the Food and Health Bureau…
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In
early 2019, the Voluntary Health Insurance Scheme (VHIS) was introduced in Hong
Kong by the Food and Health Bureau to regulate indemnity hospital insurance
plans offered to individuals, with voluntary participation by insurance
companies and consumers. The VHIS was designed as a means of encouraging and
supporting customers to purchase private healthcare services and for Koh Yi
Mien, Managing Director Health and Employee Benefits at AXA Hong Kong, this
scheme represents a broader transformation of healthcare and insurance
services. “Currently, the demand on healthcare in Hong Kong in the public
sector is incredibly high with very long waiting times and waiting lists,” she
explains. “As a result, people just aren’t getting timely access to treatment.
The private sector in Hong Kong, which is world-class, has capacity. So, if we
can rebalance and shift some of the elective work from public to private, it
will free up more people to use the public service in a timely fashion.”
Yi
Mien also points to a global drive for greater transparency, accountability,
use of data and technology as well as promoting customer choice as key drivers
of change in the insurance space. “It’s no longer a case of simply providing
reimbursement to people when they need treatment,” she says. “It’s about being
the patient’s partner throughout their whole life so that when they need
healthcare, whenever and wherever they are, we are there to help and support
them in their times of need.”
The
modern-day insurance customer is very different from the customer of the past.
We live in times of greater access to information through the advent of social
media and the increasing influence of the Internet and this has resulted in
insurance customers being more knowledgeable about their conditions and asking
more questions of their doctors than ever before. As a result, the balance
between the customer and the healthcare provider is becoming more equitable.
“Customers and patients, as a result, are becoming more demanding,” says Yi
Mien. “Gone are the traditional ideas that doctor knows best. It’s not uncommon
for patients to see their doctor with a list of demands, while expecting to be
serviced.”
Running
parallel to becoming more knowledgeable and demanding is the use of smartphones
and how it has created a culture of service in an instant. When customers
purchase etiquettes or use banking services, they expect the ability to be able
to access and complete these transactions and services via their smartphone
devices. Fewer and fewer people are accessing physical bank branches and the
healthcare insurance sector, despite being still very traditional, is feeling
the effects of this instant demand. “Healthcare is a very traditional sector
sure, but asking patients or customers to book weeks in advance and telling
them they don’t really have any choice is becoming increasingly unacceptable
and so healthcare becomes a commodity,” says Mie Koh. “They, like any other
customer, vote with their feet and want 24/7 access to quality healthcare
without waiting directly from us as the insurer.”
The
informed customer and patient have also transformed the relationship between
customer and doctor. It is no longer a bilateral relationship and the entire
healthcare ecosystem works to provide services from prevention right through to
treatment. The result? Insurers like AXA work with customers before they are
sick and encourage them to maintain their health, but they also work with
clients during their illness and even afterwards AXA will continue to treat them
in their rehabilitation. “During their healthcare journey, customers want some
handholding in order to navigate the very complex healthcare system, to make
sure they get the right healthcare provider, doctor and hospitals that are best
for them in their time of need,” says Yi Mien. “This can only happen if we are
using digital so that it becomes more real time.”
AXA
has been embracing technology for a number of years to be able to serve and
effectively work with its customers. It achieves this by starting with the
definition of a product, because the product sets the rules. Yi Mien highlights
that the rules would often be how AXA would spell out the terms and conditions,
the provisions, but these rules also set the customer expectations. Throughout
late 2018 and 2019, AXA has invested in digital to enable its customers to buy
online, service online, claim online and check-up online. The company also
launched a servicing app called Emma, a ‘digital companion’ that enables even
faster service. Yi Mien describes this app as a true “health companion”. She is
also keen to highlight that the technology is only part of the story. AXA has
built a vast medical network with some of the leading hospitals and doctors and
customers simply having to log into their companion app to be able to access
this network at the touch of a button. “All they need to show is their digital
card, their e-card, and with the QR code, the provider just scans it. All of
the data is downloaded and all they need to do is sign, get their treatment,
and then when they discharge, just sign that they have received the treatment
and off they go,” she says. “The hospital will bill AXA directly so there’s no
out of pocket. The data is also transmitted to AXA which means that we have
more comprehensive and more reliable data.”
Comprehensive
and reliable data is crucial to the technology journey of AXA, but it is also
integral to the customer journey. With a customer’s entire electronic medical
records stored effectively and securely, as Yi Mien notes, why would they go
anywhere else? The data that an insurer handles is often complex in nature, but
this data is processed through artificial intelligence, with AI being used to
process claims more effectively and interpret the information to allow AXA to create
rules and algorithms to better serve its customers. AXA also utilises AI
through its companion app Emma. “Emma is our chatbot,” explains Yi Mien. “Emma
has been built up based on a multitude of Q&As that our customer services
team have recorded and collected over many months and years. As we continue to
build, and more people use Emma, then the quality of the responses she has in
her arsenal will improve.” In the first two months of operations, Emma recorded
an accuracy level of 50%. Yi Mien firmly believes that as more people engage
with Emma and as a result, the chatbot will evolve and become more of a
real-time navigator that can direct customers across the whole ecosystem.
In
the global discussion around AI, the topic of transparency is often a key point
of debate. With governments around the world shining a spotlight on exactly
what data is collected and how it is used, AXA ensures that it maintains an
open and transparent dialogue with its customers. As customers engage with Emma
and the companion app, they can at any time request their transcripts. Should
they choose to speak with a human adviser, all calls are recorded and again
they can access those recordings should they wish. Not only is this an example
of AXA complying with global governing laws, it also highlights that the
customer is at the very heart of every decision it makes and it maintains this
as it continues to implement new technologies. “If you look at banking as an
example, we all are so used to accessing our bank accounts at any time, be it
through our phones or online,” says Yi Mien. “If we want to speak to someone,
we can. If we want to go into a branch, we can. I believe this is the way to go
with insurance as well. We make it easy for our customers to contact us. We are
doing everything we can to allow that.”
“Healthcare
is quite personal, so we are doing what we can to allow customers to speak to
people, should they not wish to use our chatbot. These are very personal
journeys and digital is still in its early days, so we really have to provide
different avenues and channels for our customers to contact us.”
As
Yi Mien notes, AXA designs its customer journey by starting at the product and
going through all the way to treatment. The company makes every decision with
the customer’s perspective in mind. As a doctor by trade, Yi Mien sees that all
new products are designed by doctors because they understand how the patients
move throughout the whole healthcare ecosystem. When AXA designs new products,
it does not operate within a vacuum. It has a customer insight group, where
around 1,000 customers operate as a real-time focus group in which AXA can test
its products with. “When I think about future products, we will test with this
group of people and get feedback to see whether we are aligned with the current
customer need. So, it’s not just technology per se, but actually meets a
customer’s needs,” she says. “One other area to make sure that we are doing the
right thing, because technology also costs money, is to make sure that we are
very robust in what we do. AXA is unique in that we sell life insurance, health
insurance, employee benefits, and we also have P&C. So, being a multi-line
insurer, we have the opportunity of having one approach and cross-selling
across the business lines, which is a fantastic opportunity. We can only do
that through technology.”
Over
the course of her career, Yi Mien has been a champion of the transformative
effect of technology in becoming a greater enabler for healthcare and
healthcare insurance providers around the world. One area in particular that is
close to her heart is the mental health space. In Hong Kong, the waiting time
to see a psychologist is close to two years and if patients were to seek
private care, it is an expensive solution. “Look at a country like Hong Kong,
or Australia, they are so vast that there just aren’t enough practitioners to
cover the breadth of the geography. Digital is the solution,” she says.
“Digital enables people to seek, support and care at the time that is most convenient
for them.”
“In
the past two to three years, there has been a proliferation of digital tools.
Recent studies have shown that digital tools are as good as, if not better,
than in-person therapy because customers prefer to talk to a robot rather than
face-to-face because they feel that the robot is not judging them.”
Another
example that Yi Mien highlights is in the UK, where a VR program has been
developed by programmers that is therapy through gameification. The treatment
is consistent every time and because of its mobile platform, it is accessible.
“We can provide it where you work,” she says. “That’s just one example as to
how we can destigmatise mental health through technology.”
AXA
operates within a broad healthcare ecosystem, an ecosystem made up of partners,
providers and doctors and Yi Mien stresses that in the future of insurance, it
will be impossible for insurers to control the ecosystem. “I don’t foresee a
future where that happens,” she says. “Partnerships are incredibly important.
Things are moving so fast there’s no way we can catch up alone. We need to have
partners, collaborators, who are working together to ensure we are at the top
of our game and at the forefront of innovation.”
“Over the course of our lives, so many different
things can happen and so people will need better care and support. By having a
collection of data that represents our customer’s needs we are able to push or
suggest services that better meet those needs. In order for us to do that, we
need to have players collaborate in the ecosystem. It’s imperative.”
As
AXA continues this digital growth journey, the next few years will be defined
by improving the agility of the digital companion in order to improve the
interaction with customers. AXA will also be looking at developing a digital
marketplace in which customers can go shopping within an AXA owned digital
platform. For Yi Mien, though, the future is clear for AXA and in order to be
successful, she feels it’s down to one thing. “AXA has a clear digital strategy
for sure, where it will transform its digital system and build new IT
infrastructure to transform the customer experience,” she says. “But the
technology is only one part of the story.”
“Unless
we can transform the customer experience to deliver a service they truly value,
then technology doesn’t do anything. It’s important to recognise that
technology is enabling us to transform healthcare, to make it easier, faster,
and cheaper for people to receive care. That means in the long-term, sustainable
healthcare and health services, which fits into sustainable insurance.”
