The highly anticipated session scheduled for day two of the upcoming EBAday 2021, titled ‘Do we really need Central Bank Digital Currencies?’ is focused on answering this precise question.
In partnership with Finextra, the Euro Banking Association’s annual conference is set to dive into the thorny questions around how CBDC can promote financial stability, financial inclusion and cross-border payments, and the role they are anticipated to play for commercial banking.
While US regulators have been more sceptical of committing to a digital currency, the UK’s Bank of England and the ECB have progressed further along their timelines and are expected to announce their plans in the coming months.
This week the Swedish central bank Riksbank, announced its project in partnership with Handelsbanken to launch an e-krona pilot. Benny Johansson, head, Nordic payments, Handelsbanken said that the partnership will provide the opportunity to “evaluate what benefits the currency may provide, as well as giving us the chance to create value for the bank, our customers and society in general.”
Despite attempting to lower expectations, the BoE’s Jon Cunliffe – who is spearheading the CBDC project – recently commented that the release of a ‘Britcoin’ is now looking more probable than ever. In Europe, the ECB has shown its desire to address concerns around privacy that a digital currency tends to arouse, in addition to busting myths around the supposed consequence of ‘abolishing cash.’
In conversation with Finextra TV, Andrew Smith, chief technology officer and co-founder of RTGS.global, recently noted that both the issue and the opportunity around CBDC comes down to use-cases.
“There is a variety of use-cases we can talk about, but they can be lumped into wholesale or retail categories. Depending on the way you want to look at CBDC or which use-cases you want to follow, you end up with different challenges, risks, complications – some technical, some economic. CBDCs are often touted as being a replacement for other payment systems that we have today. They don’t really offer any additional value and there is no additional benefit to me as an end user.”
He added that we need to consider what kind of benefit a CBDC can actually bring to the marketplace. This is because if the only added benefit being discussed is focused on speed of transaction, instant payments, instant gratification – Smith believes that this does not warrant the investment in developing a CBDC.
“If you approach it as a way of de-risking the financial service sector itself, or the way that banks hold funds, then all of a sudden you can see a massive benefit of a CBDC that is 24×7, instant, always available, which then can become an enabler for banks to carry out other processes and functions that they must deliver to their customers.”
The EBAday session ‘Do we really need Central Bank Digital Currencies?’ will be moderated by Robert Bosch, partner at Bearing Point, and will be led by the following panellists:
- Sophia Bantanidis, head of strategy and policy, Citi Innovation Lab,
- Marion Laboure, macro-strategist, Deutsche Bank Research and lecturer in economics and finance, Economics Faculty, Harvard University,
- Naveen Mallela, global head of coin systems, ONYX, JP Morgan,
- Dirk Schrade, deputy head of department payments and settlement systems, Deutsche Bundesbank.
CBDCs and stablecoins will be a core topic discussed at the Euro Banking Association and Finextra’s EBAday 2021. Running in digital format on 28-30 June for its sixteenth year, the event will welcome a host of board directors, chief executive officers and payments and technology heads from Europe’s leading banks, as well as selected fintechs and registration is now open.
Part 2 – some pucks moving in the right direction to democratise Wall Street
I could be accused or being optimistic to the point of naivety but I draw hope from 5 things that are at least moving in the right direction of democratising Wall Street.
– price/fees competition. Funds that sell high cost active alpha have to justify their fees against low cost passive beta. They increasingly quote net of fees. Some are choosing to compete on both fees and performance to deliver what we call low cost alpha.
– wealthy people giving back. Some of that maybe more PR than real (ie a pledge has to be followed up with cash) but motivation matters less than the end result It is positive if some wealthy people who want to be seen to be doing the right thing are shamed into actually delivering. Others know that a hypercapitalist push to increasing inequality may actually damage their self interest.
– growing adoption of impact investing. This replaces the either profitable OR doing good paradigm with profitable AND doing good. The key benefit is getting off the treadmill of always raising more philanthropic capital.
– faster exposure of damaging business models. Thank you Internet! It is now so easy to write online and it only takes one person to expose the bad stuff and maybe somebody else with a lot of followers to give that a shout out. For example, many more people now understand that even if it is free it can harm your wealth.
– Follower model may disrupt fund management. The idea – like most disruption – is simple. You follow somebody’s trades and give them a share of the profits. This enables a new breed of fund managers to invest first then gather assets later ie the exact opposite of how it works today. The key to success is enabling both parties to make money even if the number of trades is very low.
Some subjects are too complex for our short attention spans, so we do 4 posts one week apart, each one short enough not to lose your attention but in aggregate doing justice to the complexity of the subject. Stay tuned by subscribing.
Daily Fintech’s original insight is made available to you for US$143 a year (which equates to $2.75 per week). $2.75 buys you a coffee (maybe), or the cost of a week’s subscription to the global Fintech blog – caffeine for the mind that could be worth $ millions.
London’s DNA Payments Group Enters £100M Deal with Alchemy Partners
London-based DNA Payments Group, the fast-growing “vertically integrated” payments firm, has entered a £100 million deal with Alchemy Partners (Alchemy).
With an operations based hub in Kent, DNA presently serves more than 45,000 merchants including established online and offline retailers to SMEs, offering them with 70,000+ terminals which make “over 20 million transactions worth over £600m a month.”
As mentioned in a release, DNA is one of just a few players in the United Kingdom and Europe with fully Cloud enabled omni-channel payment processing capabilities, and also “provides a variety of SaaS and PaaS solutions to major global acquirers and payment schemes.”
The investment by Alchemy “sees DNA well positioned to benefit from the strong market opportunity, with the UK beginning to see signs of a recovery from the Covid-19 pandemic,” the announcement noted.
Arif Babayev and Nurlan Zhagiparov, the founders of DNA, stated:
“Alchemy’s investment marks a historic day for DNA and is a huge endorsement of our company and our technology. We have been looking for the right partner with the right ethos, vision and experience and we are lucky to have found this partnership with Alchemy.”
The past year has been quite challenging for businesses, and at DNA they have been “fully dedicated to helping [their] customers manage through the pandemic,” the firm’s management noted while adding that during the last few months DNA has expanded its digital commerce solutions and payment methods, “providing merchants with Pay by Link, Checkout v3, ApplePay, Pay by Bank, PayPal, Open Banking and many other new capabilities.”
As noted in the update:
“This transaction will allow us to accelerate our growth, helping more merchants accept payments quickly and easily, both in-store and online. Our technology and vertical integration give us an unparalleled advantage in servicing our partners and customers, but also provide a great foundation for bolt-on acquisitions.”
This investment will allow us to further improve our product offering and continue with our business strategy of making key acquisitions to grow our presence “not only in the UK but also internationally,” the firm’s management added while pointing out that they have “more than doubled [their] estate size and turnover in the past 18 months.”
Toby Westcott, Partner at Alchemy Partners, remarked:
“We are delighted to be partnering with DNA. Alchemy is always looking for opportunities to partner with talented business founders and uncover attractive investments that others may not be able to access.”
Wescott also mentioned:
“We are focused on helping companies grow and develop, and having worked closely with both Arif and Nurlan during this extraordinary period caused by the Covid 19 pandemic, it was clear that DNA and Alchemy’s goals, missions and values were closely aligned. Merchants’ increasing need for omni-channel payments solutions combined with the strength of DNA’s product proposition creates a compelling investment opportunity and we are excited to join DNA on its journey to build a leading payments business in the UK and expand into Europe.”
DNA Payments was advised by Proskauer, Houlihan Lokey and EY and Alchemy was advised by Macfarlanes and PwC on this transaction.
Launched in 1997, Alchemy aims to target key opportunities across Europe to team up with and work with management teams, assisting them with creating value by addressing problems, helping “take difficult decisions and driving through change.”
Since introducing its services, Alchemy has finalized more than 190 transactions, investing £4 billion+ into firms and organizations based in 14 different countries.
Global Payments Fintech Fiserv Appoints Wafaa Mamilli as Tech Risk Committee Board Member
Fiserv, Inc. (NASDAQ: FISV), a global provider of payments and financial services technology solutions, revealed on Friday (June 11, 2021) that it has decided to appoint Wafaa Mamilli to its Board of Directors. Wafaa will reportedly be serving on the Technology Risk Committee of the Board.
Wafaa has served as Chief Information and Digital Officer of Zoetis Inc. and a member of the executive team since January of last year. While working at Zoetis, the global animal health firm, Wafaa was leading global tech, digital, analytics, and cybersecurity teams powering business innovation, growth, and customer experiences.
Wafaa has also been tasked with supporting the firm’s digital and data analytic strategies and solutions that promote better animal care and customer businesses.
She joined Zoetis from Eli Lilly and Company, where she spent over 20 years in various leadership roles such as Global Business Units CIO. Wafaa also worked as Eli Lilly’s very first Chief Information Security Officer. She was responsible for leading strategy and execution to secure digital products, devices, manufacturing systems, and information.
Denis O’Leary, Chairperson of the Board of Directors of Fiserv, stated:
“Wafaa brings the insights of a deep technology background to our board, which will inform our focus on innovation and the creation of superior value for clients and shareholders. Her expertise and perspective on cybersecurity and the use of digital and data are particularly relevant in navigating today’s rapidly evolving technology landscape.”
Wafaa received her Master’s degree in Computer Science from INSEA in Rabat, Morocco, and also a Master’s degree in Business Applications of Information and Technology from Université Rennes in Rennes, France.
She possesses a General Management Certificate from the London Business School and has also completed the Harvard Business School’s Advanced Management program.
As covered in March 2021, Fiserv had entered an agreement with Pittsburgh’s Fintech Pineapple Payments. The terms of the deal had not been shared publicly.
Established in 2016, Pineapple Payments offers payments processing services, proprietary tech along with omni-channel payment acceptance services for integrated software providers and SMBs. The Fintech company serves over 25,000 merchants.
Frank Bisignano, President and Chief Executive at Fiserv, noted earlier this year that with Pineapple Payments currently serving as a key distribution partner of Fiserv, they intend to accelerate the delivery of innovative capabilities to many different merchant clients.
Bisignano added that together, they will aim to offer omni-channel payments tech and related services to enable merchants to “maximize the potential” of digital payment processing. He added that they’re looking forward to welcoming Pineapple Payments to the Fiserv team and continuing to provide services that merchants and their clients require.
Crown Agents Bank appoints Fintech Head, Chief Commercial Officer as Part of Expansion
Crown Agents Bank, a UK-regulated provider of wholesale foreign exchange and cross-border payments services has appointed a new Head of Fintech and Chief Commercial Officer.
According to a statement from the company, David Mountain has joined the bank as Executive Vice President (EVP) and Head of Fintech – a new role for the firm. Joe Hurley has been selected by the bank as Chief Commercial Officer (CCO).
Crown says the new appointments come following a “transformational” 18-month period for the bank, with the launch of new digital financial services and 65% year on year growth in the business.
Mountain will be responsible for M&A and strategy, as well as the use of strategic technology. He previously launched Accucard, an online credit card business that was sold to Lloyds TSB, and is a board member of US-based Fintech ProducePay.
Hurley joins Crown Agents Bank to build the bank’s strategic client coverage and business development. He was previously Senior Vice President and member of the Management Committee at Discover Financial Services, working on M&As and investment in Fintech companies like Marqeta.
CEO of Crown Agents Bank, Bhairav Trivedi, commented on the new appointments:
“My vision for the bank very much involves being a first-mover on developing and offering our clients cutting edge technologies that give them an advantage over their competitors. David’s and Joe’s expertise in the finance sector and their impressive network, built up over years of being at the forefront of the fintech scene, place them in the perfect roles for driving forward Crown Agents Bank’s technology-first strategy. Particularly in emerging and frontier markets, digital services are a priority, and through David’s and Joe’s leadership, we will continue to achieve – and accelerate – our growth in delivering tech-driven, market-relevant solutions to these often-underserved regions.”
Crown also noted that Steven Marshall will move from Chief Commercial Officer to undertake a newly created strategic role of Chief Product and Network Officer.
Crown Agents Bank is authorized and regulated by the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA). Specializing in emerging markets, Crown provides FX, trade finance, payments, and deposits.
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