FinTech Faceoff: A Transatlantic Debate on the Future of Finance.
Welcome. To the FinTech face-off, my name is Jennifer grizzle and I lead global marketing, for services, enterprise business. Here at LinkedIn the. Future of Finance is already here but, clarity, remains elusive, the. Flare up and flame up of FinTech unicorns. The. Race of incumbents. To innovate, while, challengers. Scale. The. The. Shadow of big tech Demuth's, and the, portent, of chinese platforms. In. Many, debates they discuss these topics however. Many. Events, are too formulaic, and they don't get at the heart of the matter thus. We conceived, an event, with a difference, the, FinTech face-off, a collaboration. Between Capgemini. Linkedin, and xi FS in this. Transatlantic, tussle, we, have teams both in America and Europe who, are gonna flex their FinTech muscle they'll. Compete, discussing. The future finance. And new, viewers, have a role too, so. Grab your seats share, your views and crown. The winner. Moderating. Live from, New York is, CBS. News business. Analyst, Jill, Schlesinger, over. To you Jill thanks. So much so my, role here, today is to be a really good traffic. Cop and we, have a Bobby over in London for, the European, side her name is Sarah Kochanski. So the two of us are going to moderate this live, event want, to thank everybody at LinkedIn, Capgemini. And 11 FS for helping to pull this off an amazing. Effort so. The first job here. Is to actually. Introduce you to our team. Team. America's, code, captains. Shanker, krishnan, partner. Capgemini. Sam, mall managing. Partner, 11. FS, and. Our. Team America, debaters. Starting. With beau, Hartmann. The, CIO, at, Goldman, Sachs Bank, and the CTO, of Marcus. Clara. SH I see. Co-founder. Here, say, Dan. Egan, director. Behavioral. Finance and, investing, at betterment. Jane. Barrett, CEO, and co-founder gold. Bean and author, of personal. Finance, and investing. Courses, on LinkedIn, learning. Geoff. Macmillan is the chief analytics, and data officer, at Morgan, Stanley. Kathryn. Petraglia is the president, and co-founder of, cabbage. And Zac. Gibson, is the chief, innovation, officer, at USAA. Now. We also have a robust. Social, team, both. Here in the Americas, as well, as for Europe, if you, want to join the conversation. Use the hashtag, WFT. R18, your. Social. Team captained. By first, Jim. Maru, co-publisher. The, financial. Brand. Theodore. Allow director. Of marketing, and innovation at, AARP. Sebastian. Mooney a directorship. We Halldor, & Co, April. Rudin founder, and CEO the. Rudin group, Bradley. Lemur managing. Director, head, of FinTech strategy. At Explorer. Advisory. And capital, Anna our. Era FinTech, correspondent, at Reuters, Ron. Shevlin, director, of research cornerstone. Advisors, penny. Crossman editor at large source. Media, and Dan. Latimer senior vice president, of banking, at Selland. And now, over to Sarah, Kochanski. Who will introduce the, European, team. Thank. You so much Jill so, I'd like to start by introducing our, co-captains. Over here in Europe first, up we have alias, Ghanim head of FinTech at Capgemini, second. We have Simon Taylor who is a co-founder at, 11 FS we. Also have an excellent debating, team with us here today we have Claire Cameron who is transfer motion controller, transformation. Director at Lloyds Banking. Jamie. Campbell. Awareness a bud. Souris. Ramamurthy, who's the chairman at csw, Bank. Nektarios. Slowly us who's the CEO at startup, bootcamp FinTech. Richard. Davies in charge of SME banking at TSP and, Simon. Vance Kalina an engineer, at Monza, we. Also have an amazing social team over here in Europe they're. Headed up by Spiros McGarrett's, who's a VC an advisor at lagares advisory, andreas. Straub managing, partner at fair advice & Partners AG, Simon. Cocking the editor in chief at crypto coin news gala. Boscovich head of FinTech and reg tech partnerships, at startup bootcamp, Sofia. Canon broadcaster. And socio-political commentator. And Maria, Dean vice, consul financial. Services at the British Consulate General New York and now, we're gonna go back to Jill who's gonna give us some more insight in how today, is going to work some, housekeeping, rules and more details on the all-important, voting element of today's event. Thank. You so much so we've all been to conferences and, I, know you've sat in these and you thought to yourself it's, just the same stuff, over and over again well, this is going to break the mold we're. Gonna cover some topics that have been in the conversation, but not in, this format, we're hoping, to break new ground with, a lively, engaging. And illuminating. Debate and I. Want, to be sure that everybody understands, that much of this debate was based on a fantastic. Report which you can get the, Capgemini, LinkedIn world FinTech report for 2018, you should check that out using, that we've divided the event into two main sections the, first hour will be financial.
Services, Customer, trust and journey the, second, our collaboration. Models between fintechs, and traditional. Financial services, firms, now, each of these two main topics has to has five specific questions. So, it's gonna move along very, quickly in case someone. Goes too long not that that whatever happened, with any of the fabulous. Panelists, on either side of the Atlantic but just in case we're. Gonna have a timer we're also going to have a buzzer if they go too long it's kind of like a high-stakes. Chess, match. Meets a frenetic gameshow, our, modified, format, for, a debate will be as follows for each question, both teams will start by laying out their opening positions, each, team, will then have the opportunity to, go first. The Americas, will kick off the odd numbers, the European, team will open the even numbers at the, conclusion, of the opening, positions, from both teams each, team will then have a rebuttal, period then. One of the team captains will sum, up the round and you, then, have to do a little bit of work it's time for you to vote and the way that you vote is you go to Twitter and you will follow the instructions at the bottom of your screen they'll be specific. Specific, should, hashtags, to use Sarah. And I will each announce, the results, of the rounds, at the end of the subsequent, round are, you, ready, because it is going to be a very. Bumpy, ride let's. Go, okay. Here we go the first section, customer, trust and journey, and, what. We know now is that expectations. For convenience. And personalization, or driving firms to quickly, adjust to meet customer, needs the, companies that deliver personalized. Relevant. And seamless, solutions, will be among the winners our, first. Question. What. Are the most overhyped, and. Underwhelming. Emerging, technologies, in financial. Services today, which. Technology. Actually has the, most realistic, chance, of redefining. The, banking, experience we. Are going to turn to Katherine for, the opening position, for the Americas. Thank. You the, Social Security Administration was. Founded in 1935. As a, social, insurance insurance. Program to pay retired workers, in 1946. The administration, added the words not to be used for identification to the card because even 80 years ago they knew better than that absent. Any other way to identify consumers. For, everything from financial transactions. To health care services, to employment, the social security number quickly became the only way to confirm, a consumers, identity, this, scheme as we all know is seriously, flawed a quick. Google search for kyc, solutions, yields page after pages of ads and. For, all kinds of services claiming, to solve any company's, identity, verification was by. The way if anyone from pega systems, is listening, I think, you're spending a little too much money on Adwords mm-hmm. Take, a quick walk through anything tech conference, and you'll, see booth after booth of identity verification startups.
Identity. Management solutions, are the most overhyped and underwhelming. Emerging technologies, today how. Many of you were disappointed I didn't go with Bitcoin on this. All. The new companies alike seek to fix our broken national, system of identity verification they, can't do it but it's not their fault increased. Regulation, about identity management after 9/11, was very well intentioned and the regulation, continues, to flow from FinCEN, as we attempt to curtail money laundering and terrorism. Financing, we all want this not, just for AML kyc purposes, but for everything every, day reveals yet another story of a hacked system, company, or, election, our. National, security depends on solving this problem and some of our best and brightest technology, minds have their heart set in solving it but. Until our governments, adopt a national identity management, strategy once centered around something other than an easily, guessed purchased, or stolen nine digit ID the. Problem simply can't be solved, many, countries around the world have tackled this issue with technology, including, densely populated countries. Like Indonesia in, India, Social. Security numbers were never intended to be used broad to broadly verify, identity, and it's clear that our continued, use of them puts our identities, and our democracies, at risk the, only solution that will work is a willing coalition, of public and private organizations that, work together on this issue until, then, every. Tech company the claims to have the Identity Management crisis, solved is just, biding their time until the next breach thank, you. All. Right, fantastic. Katherine. Thank you so much and now, we will, have the opening. Position, for the European, team Suresh. Lay. It out for us. Okay. So the. Overtype technology, is, obvious. Blockchain. In its fifth or sixth year. It's, like a hammer looking for a nail and, it's found a whole bunch of nails that are holding. Some art things together so I would. Look at from, a banking perspective, blockchain. As this is extremely, overhyped is unlikely to it's. It's likely, to come back in a different way but as it is it's it's it's meant, for a decentralized, banking system not, for a centralized. Bank. A regulated banking system, in. Terms of underwhelming. Technologies. Ice. You know I start to lean more towards Katherine but. More towards what I think is. A preventative. Compliance. Regime in banking because, end of the day the, biggest. What. We caught Block in a bank the thing. That slows everything down is compliance, and in. A digital world, if. The number of transactions, we're going to do goes through an order of magnitude of one or two or three and three zeros, the, what's slowing us down is going to completely gridlock, banking, and you cannot do whatever you need to do whether it's simple, payments so. It's. It's it's how you do preventative compliance, how do you have you re engineered, banking is not talked about as much as the.
Front-facing Consumer. Facing or blockchain, type you know the hyped word so I would, say parented at compliance and one of the key things that you need for preventative compliance, is the digital identity which Katherine talked about because, a lot, I would say more than half of the problems comes from trying. To build a profile against, or trying to build a unique profile, against, a human being or an entity and you don't, have a public, good like you. Have an India or in some other countries, where a digital, identity is a public, good whereas. In in, the u.s. it's. What. Is a reasonable, effort. Of a banker to find out what your identity is and which can be completely. Disagreed, with by regulator so you have absolute, opacity, on how you actually manage. Identity. Verification, in. One of the most developed countries, there, are other countries that have figured this out like Mexico, where you're going to soon have digital identity I believe but. I think that is very underwhelming. But it's actually, one. Of the inputs into compliance is digital, identity and that today. To me is very underwhelming, and I think that needs to be looked at so. Both. All right well now this is quite interesting because we have two, different views, of this Kathryn lays out the identity. Management systems, as underwhelming. Suresh. The blockchain of course we knew someone was going to add and bring that up I also, note, with great laughter his, idea around the compliance, issues since I am married to a compliance, professional, and I was sort of hoping that would be like for the rest of my life but maybe not, now. We've got first up for the US team we're going to have our rebuttal, from. Jeff. Jeff, take it away thanks Jill so I would say I would. Say the most overhyped, technologies. AI and, the one who has most promises, AI and, I, say that because we, use this as such an amorphous blob, of technology, and candidly. Most people have no idea what they're actually talking about we're talking about artificial intelligence and there, are aspects, about artificial intelligence anomaly. Detection. Identification. Of opportunities. Next best action that, are really powerful and can drive your business forward and, then you sort of drift into this sort of sentient. Being space and we are so far away away. From those things we've done a lot of testing ourselves and you. Know our jobs are safe for a while particularly in the high-end world and and. What, we have found is that, we have to stop making this conversation. About who is smarter, myself. Or the Machine and start talking about how we make ourselves better. At, what we do using the technology. That's. Available lots. Of players in this space or sort of chasing after bots and I met with a firm the other day who shall remain nameless who, basically, said listen I can create a bot for you in ten minutes if you give me a bunch of questions answers you, can create a really bad bot in, ten minutes. With a lot of technology, today it takes months and even years to actually do it the right way the, second thing I'll say the. Second most powerful thing you have your organization, is actually not a piece of technology its. Leadership, and its culture, and we, spend so much time talking, about the next new cool. Widget that's sort of coming down the line that's gonna take us to the next century, and the reality, is the reason you will fail has.
Nothing, To do with the fact that there is not a vendor solution to marketplace that can solve your problem the, reason you will fail is because you could not align your business object, and, your organizational. Structure, to embrace these new technologies. In a way that, actually grow your business, and move, the needle forward thanks. Joe. Okay. We're, now going to go to the. European, rebuttal. And Claire. Will, lay out that, argument. It's. It's interesting we are talking since, the beginning about technology, when we define, the customer, experience for. Me it's really the customer, that is defining this experience, and we have not talked about it for the last you know five minutes or six minutes, customer. Are setting the bar. This. Is why you, know FinTech, set the bar you, know in terms of offering new solutions, this. Is what we aspire to offer. The same type of experience it's, really about the customer. Then. I would totally agree with some of the comments that were made around, you, know the alignment, execution, of the technology, but I think the second part we didn't really discuss is you, know the underlying data because, for, me you know digital, digital, identity. Is just a way and a mean to, access, to banking services and, blockchain, is just a container that will store very, securely, distributed, data and. To some extent you know chat but is just our air is just a manipulation, of this data really, data is the, underlying not. Technology but the underlying assets that is we will make change, and redefine, the banking experience on the future the ability, of organization, to have highly, personalized, experience, that. They deliver to the customer is a trend, we are seeing clearly, in the industry, so. For me you know it's not about digital, identity, it's not about blockchain it's, not about a is not about Redbirds bad customer, and data. Captain. Who will provide. A nice tidy. Summation for, you Sam. Give. Us a summation of round one. So. Actually at first I got to say this because my wife keeps texting me I know my socks don't match alright and it's futile ice fault he did the laundry I swear, to God the kid has no attention span and it's driving me crazy all over in, a minute, what's. The most overhyped. Technology. Frickin, everything seriously. If there's an industry, that can overhype we're. It right, we push we, a I like crazy blockchain like crazy we talking about big data we, over, hype everything. What about the most underwhelming. Everything. Okay. Honestly. Thank you Elon Musk for launching a car into space that was pretty cool I like that but. I like, what Bill Gates says he's smarter than me yeah. I think everybody knows this quote we always over always, overestimate.
The Change that will occur in the next two years and underestimate the change that. Will occur in the next 10 don't let yourself be lulled into inactive, I, got. That in crowded, okay. Now it is your turn to, do something yourselves. As you watch this wonderful, debate go on to Twitter and. Start. Your voting, process, you, will see there are two different hashtags. One, for the Americas, one, for the European, team and you, will now be able to vote we, will announce the, winner of this first round in our next round and for, that next round I am going, to Sarah, who will start, in with, round, two. Thank. You so much Jill what an exciting start we've already hit blockchain, a I am compliance, and we're only twenty minutes in so. We're going to continue that trend and move on to a subject dear to many of those in the FinTech industries, hearts data, and specifically. How firms can extract maximum, value from it so, our second question is how, a company's leveraging, data to understand, customer needs improve. Trust and drive, engagement and, loyalty a reminder. That our panelists, can use examples from other industries, if they like on this one we go straight over to Jamie he's going to give us the opening position for the EU. Well. Before we get started talking about data in, the EU we really have to mention GDP, are we mentioned, earlier around how, customers. And companies are helping, you, know customers, trust. The companies, that they use and GDP, are is one of those initiatives, which has been led by the u EU and pioneered, across the world you know as a real standpoint, about putting trust and power, back in the customers hands so I think that's one that we definitely, need to get out of the way first. In, terms, of how companies are helping. Customer. Customers, achieve more with their data really, when we're talking about financial services we're talking about unlocking, hidden meaning, in transactional. Data. Companies. Such as Bud, we're helping, small.
Businesses, Go. Through the go through the onboarding. Processes, of applying for small business loans we're, partnering, with a company like I Walker to. Pre-fill, forms, and make sure that companies can go through those processes, as quickly as possible because let's face it if you're a small business you don't to spend all your time filling, out forms. Equally. On the consumer, side going. Deeper into how your, how, your spending. Is what, it's saying about your life so, really joining, the dots between your, spending. And what that means for you so if you're spending money and on. An, airport, or in a traveling. Capacity, you. Know really providing, the information back to customers, on on. On, exchange. Rates really. Being proactive with how data is being used in connecting people to those to. Those high pieces, of information. All. Those notes that you're right you know they're really really, got your head instantly, thank. You so much gents right. Thank. You very much and now we're gonna go back to Clara who's gonna give us the u.s. is opening position. So. Everyone's, talking about data but, it's really not about data it's about insights, and what you do with the data and insights, it's. Interesting to talk about how, data can be used to, drive engagement and try when you need to have engagement and Trust in the first place, to be able to get the data from consumers. In the first place so. Let's talk about digital, direct, and digital, advised digital. Direct highly. Transactional. We, know it's a race to the bottom there's a lot of data so the volume of data is there, but. The quality, of data some of the most rich, interactions. Happen. With, advisers and, this is true both for commercial clients as well as high net-worth individuals. That, firms, most, valuable, clients, generally. Have some, sort of advisor because those clients, demand, concierge. Services. And with, digital with, data with, automation, we can help scale those concierge, services, down the chain which, is why we see everyone. From established, firms to, Schwab and Vanguard to, even fin tech firms like betterment, now actually, having human advisers in that hybrid model so. We, know the big unlock is really the advisors what's, happening, right now is a black box frankly, and so, how are firms solving, this almost, every firm that we talk to it here say they, are even either considering, or have already deployed, some, sort of CRM, system multi. Millions of dollars to deploy. Many. Years to, get settled, so they put it out there and then what happens nothing. Because. Advisors, like any of us don't like to do manual data entry so, they stand up these fancy CRM, systems and advisers, don't after. They have a great, meeting.
With A prospect or client the, first thing that they do isn't to run back to their computer and enter all of their notes in a CRM it's just not realistic, and so, these CRM systems, stand, pretty empty and there ends up being this, huge divide between, what's happening at corporate, and what's happening with digital direct all of this data high volume, disconnected. With what's happening in the field that, therein, lies our biggest opportunity. Both in Europe as well as in the US compliance. Can, actually be our friend when it comes to data books. And records requirement. Where. We have to capture and supervise, everything, that happens from calls to, text messages to social media to email that is actually, it. The burden to capture but it's actually, an advantage when you're thinking about collecting, data in structured ways. Thank. You. Thank. You so much Clara so really. Interesting opening, positions there we managed to hit gdpr that's four out of four we. Were talking about compliance, more broadly again you know how it can help with these with these data questions, and indeed, the democratization, of services, so, reminder, to our audience that if you like what you heard you can head over to Twitter to vote on who you think had the best position, there and whilst you're doing that we're gonna go over to Suresh she's going to deliver the rebuttal, for the European team. So. Data. Banking. Is bad data it doesn't have good data that's at least my learning, so far. Because. End of the day banking. Is in. The business of Commerce enabling, consumers and, businesses which means they're, doing something else to, do a commercial. Transaction and, our role in banking is to enable that or. Even understand, what they need at the right time and provide the ability to do a value transfer or provided, a loan or liquidity, meet, a liquidity gap so, what we found is as. Banking. Is evolving, the, data from. The past, historical. Data is very bad because may there was memory constrained, bad machine you know smaller machines, and you don't have the contextual, data that you need to. Do what. This. End is a I we can't even get there you have to get to machine learning to get to machine learning we don't even have good data to learn in a very organized, structured, way so, what you hear about AI is people, can a kind of collecting forms and things and you know the front and you can do some some, amount of social, media engagement and, mobile app engagement so, what we found is you're, gonna have an, order of magnitude of data per transaction that you didn't have five six years ago so that's. Gonna allow you to do some things incrementally. But, not in a dramatically, improved, fashion, it's gonna drive, some amount of engagement, we're. Gonna see some changes in bill pay maybe, it's going to anticipate your amount of bill you're gonna pay and maybe even offer a loan it's going to do. The same thing in terms of wealth management but it's not gonna be what. You see in the some of the ads or think that some computer. Voice talks to you and tells you you know you should be buying this stock selling, stocke that's not gonna happen it's still gonna be human led human. Being led so, from. My perspective yes, there is going to be a data, assistant. Engagement. Models draught, banking. And. There are certain areas where banking, can collect really good data - really good machine learning that would, lead to more, let's, say faster, tools. For helping customers to make decisions faster, through endpoint. Devices which could be a Google. Home Alexa, could even be a you. Know a smartphone so, I believe in a dancer. Thanks. Suresh okay, so it's over to Dan for the us's rebuttal. That's. A very, sunny, outlook Suresh, Wow. So. It's, not going to get better and it's too hard so. I think one thing that we touched on that is very important, is that you need high quality data and the. Way that you do that is you invest in systems to generate high, quality data one. Of the things that we do a lot of is many, iterative, small experiments. So, you, don't need big data you need the right size data to answer the questions so that you can change the product that the customer sees, how, they experience, it we've, been able to do this in a number of ways to help clients make better decisions, like maybe, they shouldn't sell that stock or maybe they shouldn't change their allocation, that.
Involves Also owning enough. Of the data through the entire pipeline so, that you're not relying on third parties, who can't do what you need them to do betterment. Has a feature called tax impact preview that before. A client goes through with the transaction we are actually able to estimate the tax impact and tell them whether, or not we think it's a good idea for them to go through with that based on the taxes that are going to incur so, I think that the. Customer experience and how your systems the the infrastructure, that you invest in so that the product changes the service changes over time because, of the personal, experience, that each client has is incredibly. Important and the, investment, that you need to do this is the big difference it's not a matter of generating, data it's, a matter of taking that data and iteratively changing, the product that the customer experiences. I'm, gonna end on one sort of strange question is. The UK still part of the EU. There's some smack, down there Sarah. Too. Early. Well. Well the the corrector the empty answer is that yes it is for now. We're. Gonna turn it over to Elias, he's gonna give us a quick summary on his thoughts from that first round. So, technically yes, UK. As part of the you as we speak so, I think what, are the messages first gdpr is big, time changing, the way we engage. Concierge. Having the right data available. Having, more smart data be, able to get the right information I, love the example of saying well salespeople, don't run to the CRM so we need to help them get there but for me also the most important, part what my colleague was trying to say also spiced t2 in Europe. What we are doing here, is also now enabling. Everybody, to have access to the data and by having a salute to the data now we can get smarter. Decisions, I think the example that Suresh gave about Alexa, now I will be able to engage with Alexa, not only for basic stuff but maybe for more complex stuff based. On my behavioral, base of my family based of my family, Alexa. Could get me differently. Thank. You guys thank you everyone in fact and now we're gonna go back to Jill who's gonna let us know which team won round one and summarize. How you can vote on the round you've just seen over, to you Jill okay, thank you so much Sarah okay round one the winner is. America's. Okay. Now, remember. If you would like to vote in this, round that we've just completed round, 2 is really quite, vibrant I must say just, go to Twitter and follow the hashtags, down at the bottom of your screen you could vote for either the Americas, or for. The European, teams and don't, forget to weigh in and comment. Hashtag. WFT. R18, and now. It, is on to, round 3, okay. So we. Know that driving, insights, through data is key, for this personalized. Experience, we've just talked about. Big data small data incremental, data whichever way you want to do it but, here's the question all the companies have the data they, have technology, how, are they going to get there, here. Is your question number, three how, can banks meet rising, expectations. While. Saddled, with legacy, systems our api's. And open banking the final, answer or simply, a stopgap. Solution. For. The Americas, the opening, position, will be delivered, by Bo. So. First off I want to say Simon, haven't seen you a while that's a beautiful jumper, thank you for wearing it my friend, so. The, the. Question has a lot to unpack the. First part about it is can, you, know these legacy companies overcome, the, debts that they have and we talked about technical, debt which we'll get to well. It's more important there are three major debts instead of these legacy firms, that, they have to overcome first, one is product and process that second, one is organizational, debt and third one's technical, debt which, will tag at the very end of this the, first part is there's, a lot of products and processes that the firm's really have a hard time going after it's, difficult to retire a product, it's very hard to change a process inside of an ingrained organization, the, second one is organizational.
Debt Organ. Organization. 'old ette is challenging, that's a cultural, move you have to move hearts and minds and when you have large organizations, they, create something that I'd like to refer to as the immune system and the immune system is there to protect it for free compliance, reasons regulatory. Reasons or, just the fact that we've always done it that way and, to. Tackle that one companies. Put a lot of effort into it but it's very hard to move the massive needle without, moving those two pieces actually moving. The third debt is very challenging technical. Debt but we like to focus on it because of all the overhyped things that my colleagues talked about earlier and it's, also the big-ticket, item in the budgets CEOs, and CFOs look, at that line item and then they say hey what if I cut 1/3 of that out look, at all the things I would save through automation but if you don't tackle those first two Automation. Can only make it so far. Before. I get to the API, and open banking question because everyone likes to jump to the solution, but. Talk about how we tackled it and Marcus Marcus, by Goldman Sachs, those three debts that I talked about actually, were very, very impactful, to my thinking before I joined marcus by goldman sachs i lived, my career, in major companies, that, were partially. Good at tackling those things or failed. Completely, at tackling those things and this, the ideas, that i generated, in those times of running those platforms is that, yes, i can put a new automation system in or yes i could always put a CRM system in, but, at the end of the day if I don't move those things then. I'm just really pretty much putting a veneer over, other areas technology. And these large organizations are gangly insists that stretch out everywhere the, last part that I'd liked is to say on the API is an open banking really quickly is there a good frameworks, and they're, just frameworks, there's something that's going to come out after that and we as technologists, just have to be one step ahead and making, sure that we're doing.
Okay. Thank you and now over. The pond to, the, opening, position, for Europe Suresh. Europe. So. I don't end, of agree with him but I have a different, take on this having, gone through a transformation, there. Are four things I love which I've learned in, the last five years on this one is. Banking. As it is a legacy banks, or transaction, system so you have like some. In some even in a small bank when we bought when we had like 20 plus transaction, systems and I'm assuming a large bank has thousands. Of unique. Transaction systems, so, banking. Is a process business running, on a, siloed, transaction, system and organization, structure is kind. Of built around these transaction, systems you have a head of cards head of debit head of this head of that whereas. Really. Accords. Are token for accessing money from a number in a database so, we, had to rethink banking, as a process, and if you really do that it banking, comes down to less than 50 processes, end to end with, including, embedding, compliance, in it right so that is the first thing you have to do is to, do an organizational, transformation you, got to figure out what, your processes look like without which you don't know which way to redo, the org right, the. Next thing we looked at was there. Is a lot of cost centers, that are built around and. What, we call third-party. Vendor transaction, systems that, really prevent, you from offering, solutions that, that. That really would. Meet the consumer needs but the cost structure of multiple, transaction, systems don't, enable you to do that it could be bill pay it could be card issuance so we redid all of that so we moved a lot of cost centers to profit centers and one, of the things that we the. Issues in banking is settlement, and reconciliation, is not, talked about much but it's a single biggest headache in banking because you could spend a thousand dollars chasing, a dollar in in, a discrepancy so. We had to figure out how to do real-time settlement. And reconciliation, across all kinds, of products so you have to redefine how you do these these flows, in banking so once you get to that then you get to the third thing nothing, moves in banking without real-time compliance, so the existing, legacy compliance, regime is first. Transaction, random, sampling, of a, few transactions, to test and so other than watchlist, testing that, doesn't scale well because, you have, sure, all the big banks are building full of a false, positive watchers, people whose only job is to look at false positives, and you know remove them or to put them into a case management so, we went to a real-time data. Analytics, of every transaction that allows you to actually scale up with lower costs if, you do all this you get to a different place you get to a where the bank is poorly, addressable, today, to. A tokenize bank account becomes, a smart account so, the bank account itself is going to evolve from a simple, static ledger base account. All. Right, well, so, this, is kind of fascinating because, it looks like we're addressing, the problem from two very specific stand, points, I think. That when you think about those three different debts the, four different ways to rethink your banking you've got a lot to contend with if you. Think one of these two guys made, a better, argument head, on over to Twitter where you can vote just look at the hashtags, on your screen, and you can start, voting now or. You. May want to wait till after the rebuttal period so. Now let's, go to our, beautiful. Rebuttal. List Zac. For, the Americas. You're lovely. I've. Been called many things but. Beautiful, is not one of, but. I haven't called a father and so first. And foremost I'm a dad but I'm a child of the 80s and so. I'm a child of the 80s and, I'm a parent, of, 2018. And so, imagine a conversation, I would have with my daughter who's six and if, I looked at her and I said honey I'm sorry, I can't, parent.
You Because. I'm a child of the 80s I don't, I don't know how to be a parent, because, it's 2018. But. I love her and so, what I've had to do it I've had to reboot my own internal, operating system to, be a parent of 2018. Not, a child of the 80s who's tried to be a parrot of 1980, and so. How are banks any different, well. I love my daughter but. If you ask your bank does your bank love you does. Your bank care for you did, your bank want to see you achieve your goals the. Answer in many cases no but. The answer should be yes and if, the answer is yes then. The bank needs to figure out how and having. An excuse, that, legacy systems, and operations. And processes can. Enable, the bank to serve you is not, acceptable, the, answer has to be start, somewhere. Start. Somewhere make, it easy for your customers to do business with you make. Sure that their data is safe and secure help. Them pay down debt help, them send their child to college those. Are things you could do today before you touch your core operating systems, so. I would encourage you bankers. And you, Europeans. Think, like a parent. Love. Your customers. We're. Printing up t-shirts, does your bank heart you any moment now okay. We are going to go over to Europe delivering. The rebuttal, for the European, team is Simon. Should. I wait for the buzzer know how to start my. Bank loves you genuinely. We love, our customers. I'm. Simon I'm an engineer I work at monsley we built a bank from scratch in three years so I feel a bit disingenuous. Talking, about legacy because we haven't got any but. I have worked for big banks before I've worked with banks where you'd work, for twelve months to get one tiny little change they, didn't even really affect the customers, when. You say legacy I like to like divide the world into like not just like legacy means there's stuff that you don't really understand that's old I'd like I'd like to defy the define, the world by like before, Google and after, Google see, a few years ago Google basically took the technology that powers their data centers they took micro, services and kubernetes, and a programming. Language called golang and they basically open sourced all that and they put all that out in the world and if. You look around the top tech companies, now pretty, much like all of the big ones are using the same tech stack they're using micro services they're using container, management systems like kubernetes and they're using, languages.
Like Golang, to. Basically build. Software. The way you can release, things at the speed of thought you know you can write some code like I literally release a feature to our staging environment while I was waiting for this thing to start. Yep, like that is the product like it's not good enough anymore to say like are we managing down a legacy we're managing down our technical debt no if you if you're a company that he's been born after. This sort of like step change in the way IT is, done then you're never going to catch up when. We were building ones like from scratch we started three years ago we talked to a lot of people about like what even is a core banking system and no one could really tell us like is it a a series, of credits and debits that sum to zero or does it include the card processing or do you have to have an end-of-day batch like, what. Are we even talking about and in the end we decided that we will just have one system like one giant system, it doesn't have an API it is an API it, uses HTTP. All the way from the customers all the way through our core back-end systems is just one giant API so there's no legacy systems to manage. So. I don't really know what the answer is all right like our API, is the final solution or a stopgap I don't know I think, that they, you, know api's, are going to change banking they're going to change the world forever they're going to make customers, data available to customers in a way that they they want to use, that data, whether. Or not we move to a post API world where we use smart contracts like that, might be the future but for now API is a such, a big thing like don't try to look past them just embrace them you. Know and build a new bank build a new core banking system so they have we built the whole bank in three years. Wow. It's, pretty tough man, okay. Shanker. You've got your work cut out for you give, us a quick summary of, this. Third round, absolutely. Glad to do that great conversation. Around the room today I think, sometimes banks like smoking kills need to have something which says legacy, kills because legacy. Comes in the way of smart ideas legacy comes in the way of good ideas there, is oftentimes a lot of business, rules that the business, folks or want to take to the market but legacy stifles. So the good news for us is that I mean soonish is a good example of having created an API that works for payments we see mule soft RPG and folks like that build billion dollar businesses, backs on API so, I think API, is a good short-term solution, what I see happening is that there's going to be a lot of api's, public/private, and third party that API management is going to be the next signs so, legacy, is a problem, API helps us for now long, ways to go banks, need to change move, into new systems and be, the api's themselves, like Simon was saying that, would be mine. Thank. You very much okay. So, we now have our, winner, for, round two going, to for two it is America's.
Once, Again for, round two. Don't. Get so high. On your horse come on there's a long way to go here remember. That you can vote by going on to Twitter just look at those hashtags at the bottom of your screen and, you. Will be able to vote live at, any time, and. It's time to move, on to, our fourth question and, for that we go over to Sarah, who will take over now. Thank. You Jill well that was exciting and, indeed emotional, I would say come, on guys we've got some work cut out for us here let's, see if we can we, can win the next round here which is on a subject matter that has sparked debate across, the financial services sector and indeed, far beyond we're, talking blockchain, is. It the cure to all firms inefficiency, woes or is it an overhyped, technology, that's never gonna take off we're. Gonna start off with Simon, who's gonna give us his opening, position on the question which, is what does blockchain, hold for, future and financial, services thanks. A lot Sarah oh man. I like clearing up Harry and defending blockchain in, front of a bunch of cynical people as a it's a it's, tough gig but I'm gonna give it a go. So. The, killer use case for blockchain, exists, its cryptocurrency, there's, like, hundreds, of billions of dollars of value locked up in in the public block chains the, two biggest being the etherium and Bitcoin block chains but. The use case that really, excites me more, than the sort of self issuing crypto currencies, is the. Idea that commercial, banks and central banks could actually issue, crypto. Currencies I'm, not suggesting the Bank of England doesn't I see oh by the way before, we get. Down there but, three. Years ago we started ones oh and two years ago I worked on the project to get us connected, to the, faster payment scheme and the. Way that actually worked was we had to you. Know actually physically. Plug fiber-optic. Cables you know the other end of which was at the clearing system into, our, data center which was really hard because we're in the cloud but we managed it and then, we had to write esoteric, software to speak like really, really, old-school. Protocols. To actually talk to the central, infrastructure and I, I kept thinking the whole time like this would be so much easier if. There, was just the, trust in cryptography, if there was just, a smart contract out there where, we could take, you know the amount of value we were attempting to send from one bank to another like, as a central, bank issue crypto currency and send it to a smart contract with instructions, as to who the final recipient was right. It would have saved it's like a year of hard, work so as an, engineer like, for me the technology, it seems novel, and it seems very very powerful, and I'm not really I don't, really think it's um I think. Once you've actually played around with it it's it, it, is credible it's not just pure, hype. Blockchain. Has been around for ten years now and a lot of engineers think it's um it's it's a it's a it's good technology it just it's going to require. Like. Multiple, parties to be on both sides of every trade right. So. The like to get access to like. When you get access to faster, payments in the UK that's just a clearing system basically, you're just sending messages, about you know who's gonna receive the money and who's sending the money but the actual settlement system. That actually happens at the central bank so that happens at the Bank of England and the, old lady of Threadneedle Street doesn't, work on the weekends right like so you, you, basically, you only settle three or four times a day and that puts counterparty, risk out there as well. If. The central banks were actually you know brave enough to embrace blockchain. And issue their commercial, banks with some, personalized national, currency, issue them with actual currency. Thank. You very much Simon so now it's over to Jane for the u.s. is opening position. Thanks. Simon for, that very. Well-rounded. Argument, I think. Anyone. Who's been in the FinTech space a while or frankly any technology. Space you, know to beware the profits and you know who I'm talking about right every, conference you go to they, have the solution, for how everything, is gonna change I've. Been in technology since the 90s and every, year is the year of something, it's, year of search it's your social it's your mobile it's your of e-commerce and everything, is going to change but technology. Is additive, and one. Of the big issues with blockchain, is a.
There. Was a lot of profits, and a lot of money without. Really a whole lot of use cases coming, quickly thereafter and, be. Some, of the these profits we're talking a lot of theory right. Show, me show me the money show me where it actually goes so, in, wealth, specifically. I am an investment advisor in the wealth sector, there, really hasn't been a, killer. Application. Beyond. Crypto, like, we have a database innovation, and that's what blockchain is there's. Been a couple of exceptions in terms of innovation in wealth I think t0 have done something really interesting in terms of the. Backend of trading, blockchain. Exchange, which is launching next month should be a very interesting, innovation. But, beyond that I think we can all admit that, the innovations, been pretty, limp so. I'm gonna issue a challenge, to. The. Province, who may or may not come after me if, you, were to decoupled. Crypto, from blockchain, all we. Have is a database innovation, challenge. One challenge to. What. Is the, blockchain application. That the humans, of the world can get like, seriously, distributed, ledger can we have some better words please, that like some actual, human beings can say this, will make an impact on my life it's solving a problem that is not currently being solved, however badly it showed, me some exponential, impact a, lot, of luck chain application, that, can actually make a genuine impact on my life thank. You. Great. Thank, you very much Jane so Shirley, put a full house by now we've got cryptocurrency, and I CEOs ticked off we've, also got one blockchain, evangelist, and several, challengers issued, so. Let's see where we can get to when we get back the rebuttals but before we get there a reminder to vote for who you think won on the opening positions, there now. We're going to go over to nektarios for the e usual, battle. First. Of all we've done jumpers, we've done socks can we please do sneakers. I'm. Not even sure who I'm rebutting here but. Ultimately, who, cares why are we having this conversation. There's. Where, we run accelerators, right so we see I don't know hundreds of startups every year about 25, to 33 percent according.
To A third of all applications that we get as somewhat, blockchain, related, and most. Of them shouldn't be and most of them are really really terrible propositions, but people, get excited by the tech and they built something ago maybe, you should use conventional, technology, at, the same time we have all this industry fora that generates, so much noise and we'd like to talk about noise because the reason we're doing this today is to get away from the noise right so, why are we perpetuating. The noise if I were to bring in a bottle of a Heinz, product, and would clock churn only that block generally would be like 58 varieties, but nobody ultimately, cares the. Other side to this is not that people don't care but. It's the, impatience. With it this is new this, is new. Territory this is completely new in the way we interact it's new technology it's, different, applications, that we're still exploring but, people are so impatient. And. It takes longer for somebody to be promoted, within a bank that you actually see something like this happening to, fruition but, people getting, very. Frustrated, people are talking about oh it's not going to work there's no need for it reality is we have the opportunity, to use something that is fundamentally, new even. If it's a new way of using databases. That. We can actually use quite effectively. If we do it right and we give ourselves the time to, explore, at the moment we're an exploration stage right, why. Are people being so negative about the exploration why, are people so desperate, to figure out the details what we're talking about tech rather. Than talking about solutions that we're looking to find for problems and then find the right technology. To apply to this so. It is frustrating at the same time it does. Something that nobody really addresses with has the potential to change the relationship, and the ownership we have on data so. We're moving from a space so we have the potential to move a space where somebody, owns our data to us being able to control the data through this technology and this is a very interesting angle, right but it's not part of the debate the, debate is all about show us the money well, maybe not yet but give us some time right the. Debate is all about war there's all these kind of icos, what. Are they doing reality, is yeah there's definitely companies. Who managed to raise millions in medicine money you shouldn't be that shouldn't, be able to do that but. Give itself some time to breathe give it time give it time to actually, consolidate. Itself and establish. Yourself that otherwise we'll end up having. The faster horse rather than having the car. Thank. You NIC tereus so, now we're, gonna head back to Dan for the us's rebuttal. So. My. Background, is behavioral. Economics, right, so, I don't. Know anything about cryptography, or. Regulatory. Systems or, distributed, Ledger's i explicitly. Am not allowed near our databases because that would be horribly dangerous. So. My view is mostly to, answer the question about why people are negative, about it to think about humanity. Blockchain. Is basically short humanity. It. Is like saying I don't believe in trust I don't. Believe in society. I don't. Believe in actually, at some level the environment, do you know how incredibly. Inefficient these systems are in terms of the electricity, that they consume to do something that is again could, you could you verify that the money is there and that we can move it and that we could keep track of that, so. To answer the question about why it's so negative. Blockchain. Is basically this entire, expose. Of technical. Complicated. Solution. That. Doesn't serve anybody, who really wants it it, is amazing how, vapid. The use cases are outside.
Of Cryptocurrencies. Where. We can get people selling arms and drugs, and moving currencies around third-world, dictatorships. So. I can, see I think it's Simon laughing they're not. In my words. But. In the words of Matt Levine who is a financial columnist at Bloomberg I. Have. A half-baked, 3/4 joking theory of cryptocurrency which is that it is a magical, incarnation, of a sort of Internet male grievance people, mostly men sit around on reddit complaining that they are underappreciated, geniuses, and it is unfair that they have not been rewarded, with wealth they, expect that the modern world should reward computer, literacy and, then they grew up to realize that the modern world much like the old wort rewards mostly people who have creativity, and emotional intelligence and then, Bitcoin came along and the, paranoid computer literate people who spent a lot of time on the internet were the early adopters and became the world's first economica system that allocates wealth, basically, for hanging around on reddit. Thank. You very much Dan so. Over here we have Simon Taylor who's going to give us what he thinks of the salient points, on that. Subject, matter I. Am. NOT going to give you any salient, points whatsoever, I am gonna rant back at Dan and and, I think primarily. The term vapid, was what stuck out to me right then if, you've heard of modern slavery it's one of the most unfortunate of things in humanity, at the moment people are manufacturing, goods and services and not being paid for it well the problem, with modern slavery is it's very hard to prove what's happening and where goods came from large, retailers, don't know where their goods come from even though throughout the process there is a certification and, there is a completely, well-known, set of paper trails that happen throughout that and even though each of those people has a mobile device there, is absolutely no single database that has, all of world trade, because, what country do you put that in where do you centralize, it what old technology, do you centralize, around so for a vapid use case how, about preventing, modern slavery, how about preventing.
All Kinds, of Horrors like that that we see around the world I think we. Can do amazing things and, I think blockchain is just getting started. Thank. You very much all that was possibly, one of the most passionate debates, I've ever heard about blockchain, I'm, now gonna throw it back to Jan who's Jan, I'm not I apologize I'm, going to throw it back to Jill who is giving it to give us the results for the bracing on the previous round, well. Round, three the winner is. Europe. So. Now we have rounds, 1 & 2 going to the America is round 3 going, to Europe, if. You would like to vote head, over to Twitter use the hashtags at the bottom of your screen weigh. In on this it's very fun, and, now. I guess, that we've sort of gotten a lot of stretching. Done we've gotten, art our juices. Flowing, and that means. It's, time for the. Last question of this first section, and. It. Is Smackdown time if you didn't think the blockchain was gonna do it here we go here is question. 5. Americas. Or Europe. Which, has, been more successful. In building trust and. Delivering. Customer, experience. The, opening position, for the u.s. BOE you. Are up. So. I was I was, very lucky I spent, four and a half years of Barclaycard, based out of London England and I was deeply, immersed, inside, of the, UK. And European banking. System years, before that I was with Capital One I helped launch a business in France and help shut that prisons down as well so I had the experience of not, doing digital banking very very well and then, most, of my career has been inside, the United States in the banking organizations, I'll, have to tell you the best, banking. Systems. That I could see in the United in the world right now are in Europe and I know that so some of my colleagues in the United States might feel a little taken back about that but, the Europeans, specifically. In the UK have definitely taken the lead in that domain, about, opening up PSD one, and two most. Definitely, opened up the doors for faster payments the, open banking standards have been driven out of there the FinTech revolution, I argue, started, in Europe, but, before the Europeans and get too excited about that I would, tell you that the, one thing about the US that you can always tell is that we are sleeping giant, and when we wake up we're, more than happy to borrow all the great ideas from around the globe to, actually kick off and create innovation, in and of itself we're. Actually seeing, that with when I came to Marcus, Vigo MICEX like I said earlier a lot, of the things that impacted, my past career created, the things that we're building today so Marcus we, started with building the from, our consumers, in the middle and building out we had 10,000, interviews. And in those interviews, we, use the overlay of what, are the things that you find most important to, you being, transparent, being clear, putting, automation, that was simple and easy instead of using tens. Of 20 versions, of your data taking. Five simple elements and making a very quick decision and all. Of those are actually leading, to a better place of customer experience and engagement, also. With our partnerships, with the fintechs we're very happy to engage with fintechs and make them part of our ecosystem to. Improve the experience, overall and so, in from my standpoint, why I believe the UK and the Europeans definitely, have us out, of the gate I think, over the long term I think the Americans, will actually come in and will actually be implementing, the next version, of innovation, for the consumer, and for the banking systems overall. Well. Sit ok, for the opening, position, in Europe. Let's. Go to Simon. Who will take over from here. For. Words treat. The, customer. Fairly. That's. It it's that simple the, UK regulators. When. We were thinking about starting one so we're really super, clear like all regulation, basically, boils down to don't break the law but treat the customers, fairly and this was like been, the ethos of I think of the financial services market in the in the UK for the last few years now ever since probably 2009.
And. You, can see that coming everything, like through gdpr. Through, PSD, to through, giving customers access to their data it's, all about treating the customer, fairly, but, beyond that I think there's something else like if you want to build a trust with your customer, you have to never, betray, them you have to never reorder. Their purchases, so that you make the most amount of, overdrafts. Or you, have, to not, send them letters saying, that you're going to you, know charge. Them for an unauthorized overdraft. Fee after you've already charged them the an orthros overdraft, fee you have to not, charge them $30. For, a 1 pound being overdrawn, you have to basically, it's. So counter, to have the way banks have been run for so long the way banks here used. To be run so, I think I. Think. Like, at Monday we basically decided to be really really transparent about everything. From the early days and, the. Feedback, from our customers has been incredible, like people just love us they. Are obsessed with munzo the color of the cards with the like, the you know it's, like apparently it's a dating line now it's like if you've got mons oh and, like, all that comes back to basically treating the customers fairly, and being transparent and so. Yeah, that's. It basically treat the customer fairly. Ok. For, words treat, that customer. Fairly, be transparent. And. Will. That us, sleeping. Giant, catch. Up you may, want to vote on that right now if you do head over to Twitter hashtags. At the bottom and. Feel. Free to weigh in on this argument, hashtag. WFT. Are 18. Now. For, our rebuttal, here, in the u.s. miss. Clara, tell. Us what we need to know two. Words, two. Words free. Market, the customer, will go where, they're treated fairly venmo. PayPal. Where did all these companies start the, US will, win in the long term because, FinTech. Is, driven by tech and tech is we. Lead tech in in the US and the, fact that we have this scale means that as you heard from my partner Bo earlier that, all the best ideas that we see in Europe and Asia Latin, America, around the world we, will fold into, the. Behemoth that is that, a Silicon Valley in tech in, everything America. Brilliant. To top the Nook as good okay, let's, see we've got a European. Rebuttal. I believe. That that would be Simon, who's up. Different. Simon this time and, I get two and a half minutes to speak yay sound shout out about your socks they're amazing, and I'm sure they were ethnically, sourced, so I'm sure they came from some sort of blockchain all. Right so, the. Interesting, about free market and a big market, is it's a big country with very different cultures and, Americas, are a very big place but especially North. America, you have the west coast and the East Coast you have policy on one side and tech on the other side and you have a, five. Levels of federal. Regulation. Each state, needs to get regulated, getting, anything done cost, a lot of money and is extremely, hard now there are good initiatives, like labs CFTC. And similar, initiatives and the OCC that are coming out that will mean the u.s. will improve but, I think if Europe has an advantage and especially the UK it's policy, the ability, to have, three, of the world's top ten universities within, an hour's drive of London, you've got all of the policy making decisions right there in London and you've got the tech center, of Europe right there in London you've got Berlin just down the road and many of the great tech centers in the Nordics we have a burgeoning. Ability. To grow a new set of businesses and I think the question was always will, Europe, developed the unicorns, will it develop, the DECA corns will it develop the really big companies, and it was definitely behind the US where you had a capital that had been investing, for some time in pure. Tech place so we saw stripe and we saw Square and we've seen those companies do well in a very large home market, but, now we're seeing the companies in the UK that have been around for a few years especially the Challenger banks not neo banks, not, an app on top of somebody else's banking license but an entirely, new bank start, to reach scale Starling Mons over Adam Oak north these.
Organizations. Are starting to really grow and this is what excites me about you is really. A lot of the policy, around, general, data protection regulation, that Jamie mentioned around, PSD, to in open banking is about creating, a market, in which fintechs, can play and can succeed for consumers, and it's in fact not doing that interior draconian, way it's about treating customers fairly and, I think principles, based, regulation. Is actually, a lot easier to deal with it's. It's, nice to call the USA a free market but the reality, is when you've got 50 different state regulators, it's, very expensive, market. Alright, that's mean. Well. Said, ok. We're. Going to have a summation, of this, final. Round in our first section, and just remember. Right. After this, we will have a break so just, remember that ok, Sam, would, you like to summarize this. Wonderful. Smackdown. I. Think. We all just came across as pompous asses. We. Didn'