DigFin VOX

Benedicte Nolens is head of the Hong Kong Innovation Hub at the Bank of International Settlements. Her team has just released technical details for the workings of retail and wholesale central-bank digital currencies: digital cash. The project is called “Aurum”, Latin for gold.

Nolens, a former Goldman Sachs compliance head and fintech regulator at the Securities and Futures Commission, is at the forefront of CBDC research in Asia.

She speaks with DigFin‘s Jame DiBiasio about CBDC design choices, why many central banks are going to adopt them, and the particular experience in Hong Kong that can help shape the underlying structure of the future of money, both here and worldwide.

• Timecodes:
• 0:00 – Benedicte Nolens, BIS Innovation Hub HK
• 1:22 – Why she’s excited about releasing Project Aurum
• 2:08 – Do ordinary people need a CBDC?
• 4:07 – The differences between intermediated CBDCs and stablecoins
• 6:48 – The roles of central banks and of commercial banks
• 8:33 – HK’s example of commercial-bank issued notes as inspiration
• 10:03 – Counterparty risk and private stablecoins
• 11:04 – Aurum as a potential model for global adoption
• 13:32 – The tech: how distributed or permissioned is Aurum?
• 15:41 – Crossborder use cases and interoperability among CBDCs
• 18:28 – Private fintech initiatives, what drives change and adoption
• 23:24 – what’s next: pilots, use cases, privacy, financial inclusion

How quickly will robo-advisory take off in Asia?

\Kelvin Lei is co-founder of Magnum Research, the Hong Kong company behind Aqumon, a robo-advisor business that caters both to wealth managers and has a direct consumer platform.

Aqumon is also notable for working for banks both in mainland China and externally.

Lei discusses with Jame DiBiasio why robo and wealthtech is growing fast in Hong Kong, the opportunities for Hong Kong-mainland integrated business (“the Greater Bay Area”) and the next drivers of the industry.

• Timecodes
• 0:00 – Kelvin Lei, Aqumon
• 1:08 – State of robo advisory in Asia
• 3:16 – SaaS portfolio construction versus product selection
• 5:07 – Serving retail and private banks
• 7:38 – Robo’s value proposition for private banks
• 9:59 – Wealth management’s future
• 11:05 – HK/SG versus mainland Chinese clients
• 16:40 – What to expect from Greater Bay Area
• 18:13 – Accessing engineering talent in Shenzhen
• 21:07 – Assets under management, profitability
• 22:26 – Fund raising from VCs
• 23:22 – Project with Two Sigma
• 25:15 – The direction of technology’s travel
• 26:28 – Gamification in wealth management
• 27:20 – The future of wealthtech in Hong Kong

Jesse Chenard is founder of MonetaGo, a Singapore-based fintech specializing in digitizing trade and detecting fraud.

Chenard discusses his career with Jame DiBiasio, beginning with his entrepreneurial history in video advertizing and his eventual move into fintech.

He talks about the startup’s various pivots, including starting as a blockchain solution but evolving more to a cloud-based software provider for financial services.

Chenard also touches on the business’s early days in India, its partnership with SWIFT, and its new onboarding with global banks.

• Timecodes:
• 0:00 – Jesse Chenard, MonetaGo
• 0:59 – Early tech career, inventing video ad tech, mentoring startups, dabbling in crypto
• 4:06 – Exploring trade finance, early setbacks for crypto business, landing in India
• 8:26 – Relations with RBI, developing fraud-detection, partnering with SWIFT in India
• 11:38– Pitching banks, expanding their trade finance books
• 12:59 – Expanding cross-border, fragmented trade registries, pricing models, APIs
• 14:29 – First fintech API partner with SWIFT global, problems scaling with blockchain, moving to Google secure computing, remaining elements of DLT
• 18:00 – Use cases for blockchain in supply-chain finance
• 20:28 – Is there a future for DLT consortiums?
• 22:10 – Ethereum and other public blockchains
• 23:44 – Next for MonetaGo, new data uses, assembling bank networks
• 26:39 – Fund raising in 2022
• 29:22 – Banks using data to detect trade-finance fraud, future of the industry
• 33:42 – What’s next

Ned Phillips, co-founder and CEO of Singapore-based Bambu, discusses the state of robo-advisory business in Asia.

Based in Singapore, Bambu is one of several leading B2B wealthtechs, designing A.I.-led investment solutions for financial institutions to serve to their consumers.

Phillips speaks with DigFin‘s Jame DiBiasio about growth in the business, its impact on banks’ traditional role as distributors of investment products, and how it is changing the way asset management companies see their role. 

He concludes with why robo needs to stay boring even if that means short-term underperformance for the industry.

• Timecodes:
• 0:00 – Ned Phillips, Bambu
• 1:10 – State of wealthtech, AUM still small but gaining momentum
• 4:38 – Why banks are worried about robo’s business model, pace of business, customer experience
• 7:31 – Digitizing wealth management, fees versus customer retention
• 8:51 – What are the long-term advantages of banks and asset managers, how do they remain relevant
• 11:30 – Asset managers acquiring robo-advisors, and going direct to consumers
• 13:54 – Retirement-focused products stay boring, and use of data to understand customers
• 16:38 – Embedded finance, data sharing, and robo, products and incentives to reward long-term investing
• 18:50 – Changing long-term investing behavior, what are the appropriate goals and how to reward meeting them
• 20:55 – Robo-advisors versus mobile brokers, the dangers of gamification, and why robo businesses may disappoint
• 24:33 – The endurance of Asia’s bank-distribution model for funds

Coenraad Jonker is CEO of Tyme Bank, a neo-bank that originated in South Africa and is now serving customers in the Philippines.

Coen speaks with Jame DiBiasio about how challenger banks can be profitable while pursuing goals around financial inclusion, as well as the business, data and tech models required to succeed.

Tyme has a hybrid model involving in-store kiosks that gives it a twist in the market. He outlines the factors that made Tyme decide to enter the Philippines and why it is also now looking to get a license in Pakistan, and concludes by thinking about what digital banking may look like in the coming years.

• Timecodes:
• 0:00 – Coen Jonker, Tyme Bank
• 1:24 – Coen’s transition from traditional banking to digital banking
• 2:14 – How challenger banks can make money: cost base, tech, user experience
• 4:07 – Balancing a digital bank within a regulated environment, banks versus fintechs
• 5:46 – Funding sources, deposits, transactions
• 7:58 – What differentiates Tyme as a neo-bank
• 10:36 – Tyme’s physical kiosks
• 12:46 – Making a neo-bank a customer’s primary account
• 14:11 – The opportunity in the Philippines…
• 15:58 – …versus other emerging markets in Asia
• 17:36 – Competing with other digital banks in the Philippines
• 19:51 – Managing relations with a powerful distribution partner
• 20:45 – The strategy behind entering Pakistan
• 22:37 – Open banking, data in and data out, data use cases
• 25:48 – Scaling digital banking across countries
• 28:21 – 5G, IoT and the digital bank of the future

Custody for digital assets remains a hurdle for licensed financial institutions. Swen Werner and Irfan Ahmad of State Street Digital speak with Jame DiBiasio about the challenges of a traditional custodian building a new way of doing business in the world of digital assets.

The premise of peer-to-peer crypto is for users to "be your own bank". But institutions have compliance, risk, and licensing requirements that require a third-party custodian.

There are also issues around how to reimagine custody for assets that are currently either stored in hot wallets, exposed to risk, or offline in cold wallets and inert.

Building solutions for traditional investors is also complicated by the fast-moving nature of crypto markets. But as traditional players in securities and asset services such as State Street to advance the nature of custody for digital assets, they are also bringing those innovations back to the world of traditional securities.

Timecodes:

0:00 - Swen Werner and Irfan Ahmad of State Street Digital

1:00 - Challenges of custody in digital assets, building a platform for institutions

4:07 - Making P2P tech work for regulated institutions, processes versus code, new concepts of workflows

7:44 - Regulation and what is permitted in different jurisdictions, how regulators perceive ownership

10:31 - With custody solutions, how big will inflows be from traditional investors?

11:52 - What kind of digital assets will be in demand, and for what purposes - building for new transaction models

14:06 - Security and overcoming the division between hot and cold wallets

15:43 - Multiparty computation, how it works, risk management in traditional custody versus relying on onchain security

19:02 - How traditional institutions keep pace with change in digital assets

21:38 - Agreeing to definitions and taxonomy in digital assets

24:41 - What standards does State Street Digital hope to set?

27:48 - Convergence between crypto and traditional markets, bringing digital-asset infrastructure to the traditional securities world.

How close are financial institutions to operating on blockchain rails – and why do they want to be there? Nicole Olson and Patrick Campos speak with Jame DiBiasio about foundational changes.

Nicole is with State Street Digital, the new division at the global custodian bank, working on product design and innovation. She discusses how State Street is approaching blockchain to serve asset managers and asset owners, and how the technology is sweeping through the industry.

Joining her is Patrick from Securrency, a blockchain-related technology company that works with banks such as State Street to help build the tools so they can integrate traditional operations with blockchain models, from DeFi automation to compliance.

Timecodes:

0:00 - Nicole Olsen and Patrick Campos

1:06 - The big questions in DLT and tokenization for buy sides

4:11 - Crypto innovations adapted for institutional DLT

6:36 - Are banks playing offense or defense?

9:07 - Building hybrid apps that can interface with blockchains without being native

12:57 - Financial institutions are still stuck on mainframes so how can they ever do blockchain?

16:00 - Public versus private chains, ecosystems and interoperability

18:29 - How to create interoperability, standards, and "SWIFT on steroids"

21:52 - Turning the role of intermediaries inside out, helping clients know the asset rather than reconcile positions

23:16 - How ready are buy sides, do fund management CEOs really understand digital assets?

26:03 - Next milestones, from private markets to a digital dollar

Alex Manson is a leader at SC Ventures, the fintech venture arm of Standard Chartered Bank.

He speaks with Jame DiBiasio about SCV's structure, which is partly corporate venture, partly venture capital fund, and partly an incubator of the bank's own "intrapreneurs". SCV now has about 30 portfolio companies, from trade finance to digital assets.

Alex discusses how SCV defines success, its impact on the parent bank, its investments in licensed digital banking businesses, and what's next.

Timecodes:

0:00 - Alex Manson, SC Ventures

1:31 - Lessons from investing in fintech companies

4:00 - SC Ventures' impact on Standard Chartered Bank

6:07 - Working with fintechs, whether third party or via SCV, from onboarding to projects

9:13 - SCV's model versus classic venture capital

12:23 - How agile are fintechs spun out of the bank, are they independent enough?

15:34 - The business logic of how SCV builds portfolios of fintech companies

19:27 - Portfolio companies versus platforms, and the role of Mox and Trust virtual banks in the SCV stable

23:41 - Challenges for virtual banks versus tech companies - market fit, scale

29:35 - External financing and exits

31:00 - What's next!

Scott Treloar is founder of Noviscient, a fintech that is creating digital solutions for asset managers.

Treloar, who has a background in asset management, discusses why it's been difficult for the industry to go digital, and what Novsicient is bringing to the space.

He describes how technology makes it easier to allow emerging managers – often the ones with the best performance compared to large, more marketing-oriented businesses – to provide their strategies to big institutional investors.

Timecodes:

0:00 - Scott Treloar, Noviscient

1:13 - Asset management companies are struggling with going digital

2:52 - Turning information flows into digital info - how Noviscient does it, adding value to AM clients, helping AMs with operational efficiency

6:14 - How fintechs can help asset managers move beyond legacy processes

9:54 - Versus traditional outsourcing of middle office functions to banks

11:30 - New tech stacks, open source, modular plug-n-play

13:32 - Who are Noviscient's clients?

16:05 - The needs of scale and giving large investors access to small and emerging managers

21:40 - Using cloud and AI

24:10 - Sequential decision analytics, big data versus structured data

26:37 - Catalyzing deep change in the asset-management industry

Miles Wen is CEO of Hong Kong startup Fano Labs, a developer of deep networks and other AI tools to understand voices - to translate what people say, as well as add insights around the context of those conversations. It's a service that financial institutions are using today for monitoring wealth managers, among other things.

Wen speaks with Jame DiBiasio about the state of AI today, how banks are integrating (or struggling to integrate) AI solutions, regtech's growth prospects, and Fano Labs' going IPO.

Timecodes:

0:00 - Miles Wen and Fano Labs' work with AI

3:05 - Generating insights from people speaking multiple languages

5:44 - Real world uses for AI and regtech, including how firms sell investment products

10:48 - How special is Fano Labs' work and how different is its business model?

15:53 - Evolution of AI and deep learning models

18:29 - Working with banks in fintech/AI

19:25 - Fano's bank clients and creating new use cases

23:46 - How good are banks at integrating AI solutions?

28:04 - Regulators pushing for regtech solutions

30:05 - Fano Labs' IPO plans