Money20/20 Europe explores blockchain, payments and personalisation on day two
Money20/20 Europe continued its “human by machine” agenda on Wednesday, with leading figures from the financial services sector gathering at RAI Amsterdam for day two of the conference.
Blockchain, payments and personalisation in focus at Money20/20 Europe
Having previously dedicated the majority of its opening day’s focus to hot topics including tokenisation, globalisation and AI, day two saw an agenda packed with discussions highlighting the latest breakthroughs in blockchain, payments and personalisation.
Data and personalisation
Setting the scene, Aarti Samani, founder and CEO of Shreem Growth Partners, took to the Exchange Stage early Wednesday morning to welcome and chair the opening panel covering N=1 personalisation.
Thought to have first emerged from the terminology of tailored medical treatments, N=1 personalisation challenges just how far service segmentation can really go. For banking, and for its commercial use cases specifically, embracing this concept means delivering a service to the client right where they want to be met, with the outcome tailored to the recipient’s needs exclusively.
The panel discussion moderated by Samani featured PrivatBank Ukraine deputy chairman, Mariusz Karol Kaczmarek; Charith Mendis, head of banking at Amazon Web Services; and Mettle CEO Michelle Prance.
Together, the panellists sought to “go beyond hypotheticals” in their joint analysis of industry efforts to personalise financial services on a client-by-client basis, generating a holistic understanding in touch with how current practices intersect with modern technologies.
Sharing her thoughts on the panel with FinTech Futures, Prance explained that the ascent of N=1 personalisation is largely due to the “ubiquity of data”, the more accessible cost of storing client information, and consequently, the “speed at which we’re now able to deploy data science techniques”.
However, Prance heeds caution, adding: “Just because we can reach out and talk to customers and offer them things doesn’t mean we should. Customers have given us their data. They’ve given us their money. They trust us. We need to respect that. So just because we can, doesn’t mean we always should.”
Emphasising that banking should be “more about the service and less about the product”, Prance challenges the notion that an “infinite amount of data” is always a bank’s sharpest tool.
“All that extra data that I know about you doesn’t give me information about the choices you’re going to make in the future,” she explained.
“It can help, but sometimes the data that we already have around the demographics of where you live, how many children you have, what your family situation’s like, those things are probably an equally good indicator about whether or not a service is appropriate for you.”
Blockchain interoperability
In a shared presentation between Swift and French banking group BNP Paribas, which took place on the Mastercard-powered Horizon Stage on Wednesday, the pair revealed the latest advancements to come from their partnership exploring tokenisation.
Having previously collaborated on the transfer of tokenised assets last year, the duo’s most recent undertakings are now focusing on blockchain interoperability and also the traditional and legacy banking systems with which blockchains dependently interact.
Discussing the presentation with FinTech Futures, Julien Clausse, head of BNP Paribas CIB’s integrated Asset Foundry Digital Assets platform, stressed its emphasis on multi-system interoperability.
“Today, there is not one network, but actually loads of networks out there that are still not consolidated yet,” Clausse explained. “So we have to manage interoperability between these networks, but not only between blockchains, but also with traditional networks.”
In this way, Wednesday’s presentation addressed the “transition phase” of all these systems with the advantages of tokenisation, he said, adding that such an effort “can take years and will likely take years” to complete.
“So how we can connect all these networks, blockchains, new networks, legacy networks, existing networks, or even our own systems internally? That’s one of the areas we are exploring, including the experimentation we did with Swift.”
“Try to distinguish two things: digitalisation and tokenisation,” Clausse urged. “So digitalisation is about typically writing smart contracts, writing instruments as a software programme, which brings in a lot of efficiencies because suddenly your financial instrument is programmed and can be better processed in your own systems.
“And then tokenisation is the ability to write that programme onto a blockchain securely in a trusted way, so it can be distributed within that network. And those are the two steps that we believe are very, very important to understand.”
Regulated liability exploration
The day also featured a panel session addressing the need for and development of a Regulated Liability Network (RLN) in the UK.
The session was chaired by Jana Mackintosh, MD of payments, innovation and resilience for UK Finance, who was joined by Adam Bealey, head of UK and Ireland at Swift; Visa’s head of money movement solutions, Edward Chandler; and Lee McNabb, group head of payment strategy research and partnerships for NatWest.
According to Money20/20’s own definition of the technology, an RLN “is a financial market infrastructure operating a shared ledger with central bank money”.
The topic’s arrival at Money20/20 Europe this year closely aligns with an announcement made by UK Finance in April that its RLN project – of which Visa and NatWest are active participants – is set to transition from the discovery phase to the experimentation phase.
In a hopeful turn for the payment rails of the future, McNabb disclosed to FinTech Futures at the conference that the project’s experimentation phase is “looking to prove the concept of regulated money on a shared ledger”.
“So effectively using the technology that’s still evolving, like distributed ledger technology (DLT), but using it in a way that just makes existing money cleverer, more secure, and in theory, instantaneous,” he explained.
“We’ve moved from the discovery phase, which effectively questioned whether we thought this concept could potentially have legs, to where we should focus from a use case perspective.”
Detailing the use cases present in the project’s sight lines, McNabb listed peer-to-peer payments, the end-to-end mortgage journey, and wholesale transactions as among some of the “core use cases” set to be addressed.
“So we’ll actually build the technical proof of concept, we will do the legal groundwork and understanding because that’s, to be fair, a big challenge, and then we’ll do the whole commercial and business case around it.”
Explaining this approach further, McNabb said that “there’s no point in doing an experiment, if actually, whilst it might work technologically, it’s frivolous from an investment perspective because the commerciality just doesn’t stack up”.
