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Big tech vs Fintech vs Banks – in international payments
| 09-07-2019 | by Patrick Kunz |
Fintech & Banks
Traditionally the market for international payments was dominated by banks. Recent years and technological advancements has shown that banks are slow to adapt to new technology and market requirements. In some cases it still takes days to transfer money from Europe to Asia, while an email, FB message or picture can be send in seconds. Fintech has tried to fill the gap with innovative tech solutions that solve these problems. Often these companies are lean and mean and adapt to market changes much quicker than the big stable banks. They provide cloud solutions, link to every bank possible and make you more bank independent. Lately we have seen consolidation in the fintech market where players are merging, growing or being taken over by banks. Some banks have started their own fintech. But often fintech only solved a part of the problem and is build on the existing (bank) infrastructure. Banks are also working on innovation: instant payments, swift GPI and PSD2 api’s are helping the customer paying faster and easier. These initiatives are great but have taken years to be implemented.
Bigtech
Then there is a third group of players: big tech. These are the google, facebook and alixpress of our world. These are traditionally IT companies who have a big client base but these companies where not involved in payments (yet). Their edge is size, market access and fast adoption. What happens if they enter the market for payments? Are they likely to win? Look at Alipay, massively successful in China but growing immensely outside Asia to. Why ? because it is easy to use, innovative, low cost and probably most importantly connected with an existing service of the bigtech (alixpress – shopping). The company provides the full customer journey: shopping for product and paying the goods in the most easy way without moving away from the website. Not only via desktop but also via mobile. On the go they make it possible to pay by scanning a QR code, in a grocery store or in a cab. Who needs cash OR a debit card, you only need your mobile phone and an app! Why was this successful? Because the existing customer base was already there they just vertically integrated into the customer journey; easier for the customer and therefore extra revenue for Ali. But also more power for Ali.
Stablecoin Libra
Looking at Facebook and their Stablecoin Libra. Digital currency, unregulated, not based on the traditional banking/payment infrastructure. There are big and significant differences with Bitcoin but the idea is the same: sending and receiving money worldwide in an instant as digital currency. There should be no speculation on the Libra-Rate as the rate of exchange is based on a basket of currencies (EUR, USD, JPY etc). Similar to the old tech Special Drawing Rights from the IMF. So what makes libra different to bitcoin and the other coins? I am not going into the technical differences as that is beyond my scope and would bore you. The main difference is the easy of adoption. New to bitcoin and want to use it: you have to open a wallet, trading account and learn have to transfer the BTC to somebody and the receivers also needs a wallet; a barrier for most. Using Libra will be much easier as it is just an extension of the services of Facebook. Libra potentially has 2,4 billion users (the number of facebook accounts). This is a big competitive advantage. Compared with smart marketing (facebook knows that) and combining it with existing products there is a big potential. Sending money to your facebook friends in Australia or Japan? No problem: in-an-instant via Libra. Besides facebook it is also supported by other big players like Visa, Spotify, Paypall, Mastercard, Vodafone. Is there a future without Libra ? And how many facebook users are there without an bank account. There are 2,4 billion facebook users and 1,7 billion people without a bank account in this world. The reach is already huge so there is low barrier for adoption.
The Battle
Does this mean bigtech will be ‘winning’? In my opinion hard to say. That battle is being fought the coming years. Don’t forgot the power and influence of regulator and governments. Digital payments are unregulated and unknown and could influence the power of governments and the whole banking infrastructure of money regulation, central bank money creation and some even fear de-stabilization of the monetary system as a whole. Regulators could stop/limit the quick steps forward by bigtech.
The coming years will be exiting to see the technological advancements in the battle for payment revenue. The winner will be the consumer; easy of paying will increase further and more importantly the speed will increase. Paying how we want and within a blink of an eye, and this worldwide, will be the new standard within several years.
Patrick Kunz
Treasury, Finance & Risk Consultant/ Owner Pecunia Treasury & Finance BV
Why Richard decided to explore the World of Treasury
| 08-07-2019 | by treasuryXL | Kendra Keydeniers
The post-graduate Executive Treasury Management & Corporate Finance programme combines two finance disciplines: Treasury Management and Corporate Finance. These disciplines largely overlap and are inextricably connected.
After a successful completion of all required modules, the title of Registered Treasurer (RT) is conferred by the Registered Treasurer foundation.
The course will start on 1 September 2019. Why wait? Apply today!
Let’s talk with another RT graduate this week: Richard Blokland started the Executive Treasury Management & Corporate Finance programme in 2007 to become a certified Treasurer. He graduated in 2009.
Richard’s broad professional treasury experience touches several industries like Oil & Gas, Airlines, Real Estate and the Public Sector. His experience brought him to his latest function as a successful Corporate Treasurer at NewCold.
What was your main reason to start a career in Treasury?
I started within a Treasury Department for my first job and found out that Treasury would offer me the opportunity to combine business economics with mathematics which I was looking for. Besides this, each day within Treasury is different and I really appreciate this aspect.
Why did you start with the RT program?
This program would offer me the opportunity to get the best education in the field of Treasury.
What are key words that you would use to describe the program?
Divers, meeting the requirements for being a Treasurer and fun.
Which topics covered were most interesting?
Cash management (international), business analysis, derivatives and tax.
Can you describe what your research and thesis was about?
My research and thesis resulted in a framework for handling (US) cross border lease within your organisation, and have it embedded in the right way.
How did the education help you in your career?
It helped me a lot as the RT is a highly trained Treasury professional and also puts you in the same league as the RA or RC.
What surprising elements did the program hold that you did not expect?
The elements not typically Treasury but every Treasury professional should at least know about something, and the international aspect in terms of teachers.
Are you still in touch with your peers?
I am with some.
What other treasury education programs did you consider and why did you choose this one?
None as the RT program is all I need.
Can you describe a treasury topic you learned about that you could directly implement in your job?
For example Tax in terms of transfer pricing.
More stories please! Read the RT story of Mathieu here and/or read more info about the RT program here.
Why a personality assessment in the Treasurer Test?
| 05-07-2019 | by Kendra Keydeniers |
Our deeper dive into the Big 5 model continues with our next topic:
The personality of the candidate you consider for your job opening consists of a set of traits that determine his/her behaviour. As behaviour is essential for success in the new position, we decided a personality assessment would be a huge asset in the Treasurer Test.
Instruments for candidate screening
There are many instruments you can deploy to predict the success an applicant will have upon hire. Best known are cv screening, (structured) interviews, reference checks, diplomas and on-line or other assessments. Research shows that, depending on the position, skills tests are the best predictors of how good a candidate will do, followed by personality assessments. Combining various instruments increases certainty about the expected success. In the Treasurer Test we combine skill/knowledge testing with a Big5 personality assessment thus aiming high. There are other reasons for including Big5.
Personality Assessments
Many of the instruments mentioned to predict the success of an applicant are not stable. They will give different results with the same candidate if done for the second time and are subjective. Especially interviews and reference checks are proven unstable and interpreted differently. Most organisations did not invest in the training of interview skills of staff members: meetings are often improvised. Personality assessments are proven consistent. All involved in the recruitment process will have the same report, decisions will be better.
With on-line technology getting easier accessible and more cost effective, creating this assessment in 2019 is doable, though still not easy. Five years ago it would have been much harder and potential users would have a harder time to accept the concept.
Research of ‘the treasurer’ personality
No well-known research has been done into the personality and skills of treasurers. The population is not compared among each other and to general population. Neither research has been done into the success variables of treasury professionals. The dataset resulting from the Treasurer Test will, taking GDPR into consideration, be used to do quantitative research into the personality of “the treasurer” and other aspects.
Treasurer Test as matching tool
Let’s not forget that in order to reach the full potential of a new employee and related to this the Treasurer Test, the new working environment of the employee should be analysed in order to find out what personality would match best. The Treasurer Test serves as a matching tool, so two sides should be taken into consideration: the position and organisation on one hand, the candidate on the other.
Although user friendly, it cannot be denied that making the Treasurer Test is an investment in time and money. However, let’s think about the following question: can you quantify the investment lost if you hire the wrong candidate?
On behalf of Team Treasurer Test,
Community & Partner Manager at treasuryXL
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