Live from Money 20/20 Asia Part 2, Digital Currencies and Realtime Payments [Episode #7]

Podcast Intro (00:00:00) – Hello. Welcome to P.I.T. Exchange, a podcast by Currency Research. Join us as we discuss the latest in payments, innovation and technology with the industry’s most innovative thought leaders. Today’s payments are changing and moving around the world faster than ever before and P.I.T. Exchange gives you the knowledge and insights to keep up. Sit back and relax as we join currency research, exchanging ideas with today’s special guest.

Shaun Ferrari (00:00:32) – Hello, everybody. Welcome to the next edition of The P.I.T. Exchange by Currency Research, where we talk about the latest in payments, innovation and technology. We’d like to once again thank Money 20/20 and The Money Podcast for sharing the stage with us and letting Currency Research host our new podcast here. Jens, you’ve been here with me all week.

Jens Seidl (00:00:54) – I have been here. It’s day three. It’s been a busy week. It’s been good. And, really looking forward to this session now because we’ve got some great guests with us today.

Shaun Ferrari (00:01:02) – Absolutely. It’s been great. And, without further ado, we want to let everybody know who’s with us here at Live at Money 20/20. So we’ve got three wonderful guests with us today. Rufaida, maybe say hello and introduce yourself, and we’ll go around the table.

Rufaida Hamilton (00:01:18) – Well, good morning and welcome to Money 20/20. I’ve really had a fabulous week. Looking forward to this conversation. I, look after payments for South Africa at Standard Bank, which, if you don’t know, is the largest bank in Africa. So great to be here. Looking forward to this. Thank you.

Shaun Ferrari (00:01:36) – Awesome. Thanks. Irina.

Irina Chuckina (00:01:38) – Yes. Thank you for having me. Good morning. Yes, my name is Irina. I am a CMO at Volt, which is a UK headquartered open banking slash real time payments platform. And thank you. I’m really looking forward as well.

Shaun Ferrari (00:01:52) – Great, awesome. And Julia, welcome.

Julia Demidova (00:01:55) – Hello and welcome to Money 20/20. I’m Julia, and I am heading CBDC and digital currencies within FIS. So what it means, it’s central bank digital currencies, tokenized deposits, regulated stable coins and it’s been a fantastic few days here at Money 20/20 and I look forward to the conversation now. Thank you.

Shaun Ferrari (00:02:16) – Awesome. Thanks and welcome. And for those that are joining us and didn’t listen to the episode before this, we are on the event floor here at Money 20/20, in kind of a glass sound booth here. It’s a nice little environment they set up for us and it’s been a been a great week. So the big topic this week has been cross-border, cross-border payments. How that how that’s working, how that’s becoming more efficient. Different technologies that are being applied to that. and I know Irina, maybe just starting with you, I mean, Volt positioning themselves, right, as a disruptor in this space, for, for cross-border payments, real time payments, maybe tell us a little bit about what’s happening, what you’re seeing.

Irina Chuckina (00:02:53) – Well, I have to say that cross-border payments is almost the theme of the show. There’s definitely very strong representation of a lot of different payment leaders. Pains, payouts, well, effects. You really can pretty much capture, you know, all of the key trends and also all of the key movers and shakers in this space.

Irina Chuckina (00:03:13) – So, what is happening right now? I think there’s have there have been a few, a few directions, a few themes here. So I, I’d say that, interoperability continues to be there, the buzzwords and the, but it’s a really important principle that everyone the whole industry is sort of united, unified around, I sometimes it has it brings in an element of financial inclusion, in the emerging markets. It’s about, you know, making sure that we involve all of the people through alternative payments, wallets, in this region. It’s a very big theme if you think about Southeast Asia. this is this is not the region that relies on cards. It’s well, you’ve seen hopefully you’ve seen the rounds on the streets. Prompt pay is really one of the strongest global showcases for domestic. Well, RTP, the real time payment scheme. It’s has one of the highest penetrations in the world, really, in terms of the world day to day, lively adoption. So it’s definitely setting some really good example.

Irina Chuckina (00:04:16) – So can, the world continues to be a very fragmented place. There’s probably well, hundreds if not thousands of, solutions, domestic brands, different payment flavors. So how do we bring this all together, into that interoperable cross-border? I don’t want to use the word seamless, but at least, effective layer that connects all of the different payment cultures around the world. I think that is the vision that is the holy grail that we all trying to solve. Slightly different angles, slightly different focus, sort of, well, I guess on different technologies, but that’s the way forward. And maybe there’s room for CBDCs in there. Maybe there’s room for blockchain technology. So we’re still I think we’re trying to explore. But yeah that is the big question.

Shaun Ferrari (00:05:02) – Yeah. What about CBDCs, Julia? I mean, you’re playing in that space a lot at FIS.

Julia Demidova (00:05:06) – And and of course, you know, cross-border payments are also very important to us. and, you know, I just wanted to second everything Irina, have said, just now, I think, you know, cross-border payments, you know, quite significant. And I think, you know, we’ve seen a lot of conversation, here at Money 20/20 on cross-border payments. And everyone has their own way of, you know, enhancing the cross-border payments. Everyone has their own painpoints. You know, to solve. And I think we within FIS, we’re a largest fintech, globally. And we support our clients globally as well. From kind of, you know, banking, capital markets perspective. And of course, you know, for us, this topic is really big and we are looking to support, you know, our existing clients and, and new clients in their cross-border, initiatives. Right. And I think, you know, we’ve seen this, you know, from kind of, you know, B2B perspective, but also, of course, you know, there is an opportunity from B2C perspective as well, or C2B perspective as well, or C2C, you know, perspective too.

Julia Demidova (00:06:12) – So I think, you know, there are lots of different use cases within the cross-border payments. And everyone, out here is, you know, trying to solve, you know, different problems. But there is definitely a problem. I think, the cross-border payments today are relatively opaque. and we hear, you know, Don has the perfect method for reconciliation. and also cross-border payments are very expensive. I, we’ve done, you know, some research at least on the cost of the cross-border payments. And it was something like $27 per transaction. So it can be very, very expensive and I think, you know, it’s our job and, you know, I’m sure the fellow panelists, you know, will agree to this, the cross-border payments and, you know, our responsibility of the industry stakeholders and to help, you know, solve, you know, all the inefficiencies and, you know, the improvement of the cross-border payments. So from our perspective, we are working on the platform, and network that would, you know, facilitate cross-border payment

Julia Demidova (00:07:17) – and, you know, from kind of, you know, you know, B2B perspective, when, of course, you know, maybe in time this will evolve. and then, of course, you know, in terms of central bank digital currencies, we had a great panel discussion yesterday with, Bank for International Settlements and SORAMITSU and, you know, of course, you know, I was, you know, speaking there too. And it was very interesting because, Benedicte from BIS she, she, kind of, you know, talked about the project and BIS has been leading for the last couple of years, and project mBridge. and that’s been kind of, you know, a big project, you know, regionally, there, you know, several central banks and who are members of mBridge and of course, a lot of observers, central banks as well. And I think, you know, the kind of, you know, the participants and the central bank of you and, you know, China and, you know, the Bank of Thailand are participants of that, you know, kind of, you know, cross-border network.

Julia Demidova (00:08:18) – So I think, you know, those kind of, you know, projects are, you know, very significant. And also, it was, you know, mentioned that, you know, this is almost MVP. So I think, you know, we’re definitely going to see some sort of new, new generation, cross-border payment platforms emerging in the next couple of years. Some of them are have already emerged. But I think, you know, we’ll see definitely a lot more, you know, cross-border payment platforms, networks being led by, institutional players or, you know, central banks themselves, to achieve those efficiencies.

Jens Seidl (00:08:57) – Yeah and maybe just picking up on the aspect of, costs and emerging markets, because Rufaida, at our conference in Cape Town last year, you painted a real picture of what this means to people. And maybe you want to talk a little bit about that and explain how this can really make a difference to people’s lives, because I think you were really passionate about that last year, I remember.

Rufaida Hamilton (00:09:19) – Yeah. And I’m listening to my panelists and it’s great being the only banker in the room and over outnumbered and overpowered, but, obviously the I thought about the problems you are thinking about solving and, the three for me, like Jens said, sorry, the one is cost. And I speak about cost in two ways. The cost to the consumer. So that last mile and then the cost to the bank in manufacturing or cross-border payment, because ultimately that’s our job. So I know some people would like to think that the there’s a natural dissonance now between the concepts of a banker and payments because it’s preserved no longer held by the banks. But right now, the trust factor leaves the banks with, with that reserve for a while to go a cost. And, and, and I was particularly interested in some of the pay tech solutions around and quite a few competitors to Volt have come, you know obviously merchandising their ways to us. And it’s been interesting to understand because, it’s cost in pace obviously velocity that’s important.

Rufaida Hamilton (00:10:31) – and that costs to the last mile is where the beauty of simplicity of these new solutions help. So it doesn’t mean the end of the traditional correspondent banking model possibly. You know, we wait to see. But what we most interested in, in adopting new technologies, new next gen technology and platforms or solutions is, how seamlessly they can help us offer those services to clients because it is the opaqueness, it is the cost factor, and it is about, the experience of the individual who need to move money to somebody in Southeast Asia because their migrant worker had a stack yesterday that the 10 million Filipinos who live abroad out of the country and 180,000 of them in Thailand, and they need to move money back to back home. How do they do that effectively? Cost effectively? Firstly and secondly, you know, with some sort of certainty around when those funds are going to arrive. So real time, low cost, seamless. I know it’s hard to use that word. it is really a big consideration, but I don’t want to, move away from the topic without addressing the as a banker.

Rufaida Hamilton (00:11:54) – What I worry about a lot, which is risk and risk comes in the form of fraud. And obviously all the burdens that, come with moving funds, anti-money laundering, terror financing and all those considerations. And, you know, we really have come to a point where we need solutions that wrap around the core movement of value and deal with, those friction factors like non monitoring fraud and monitoring transactions for the various reasons. So, so trying to find the right solutions and, and address the right use cases because I, I one theme I’ve picked up, beyond the cross-border in maybe in the how in the last few days is especially in emerging economies, you want to have real use cases you solving. So it’s great to have a CBDC. It’s great to have an AI powered crypto blockchain enabled. All of that was buzzwords in one solution would be amazing. But if they’re not solving for use cases that really meet the needs of the, you know, particularly the underserved and the included, then I think it’s just a sexy idea as opposed to something that, and also had another very interesting concept.

Rufaida Hamilton (00:13:11) – In our first day of the keynote stepped banking in India, which is don’t create poor solutions for poor people because they know better. So they will find the best, most cost effective solution, but may not be able to necessarily dictate all of the other friction factors that come with it. So I’m interested to just understand, you know, that CBDC realm, whether that’s going to solve for it. I think real time cross-border and CBDCs eventually will coexist, provided in that real time cross-border space and in the CBD space, we can deal with fraud, which is becoming a massive reality domestic or cross-border in a real in, in the real time world. And then, secondly, deal with the other friction factors boring bankers like we need to think about, which is transaction monitoring and screening.

Irina Chuckina (00:14:02) – So when money moves in real time, well, fraud prevention has to be real time as well because that is that boundary is non-negotiable. Like we have to set boundaries. There are certain quite a lot of controls that come with money movement.

Irina Chuckina (00:14:16) – So as much as the vision I think is for those, you know, transparent, affordable instant payments, there are certain indeed parameters that we still need to they we must comply with. Right. So there is no way for us to, I think there are certain new technologies that can help us to solve those. Luckily now with AI and like really robust, sophisticated, it’s modern, risk and frauds or AML compliance tools were able to resolve some of that. But yeah, you’re right. It’s it’s not it’s no quite..

Rufaida Hamilton (00:14:46) – And yeah and a pet topic for me. And when I listen to you is what it is. I said it to Jens and I asked a few regulators I’ve met in the last few days, and our regulators rally back in South Africa. How instant is instant in your mind? Because I don’t think instant can be instant with all of the burdening on a transaction or movement or value. And, I actually had one regulatory regulator say to me, we will not like in Europe set a time limit because we know it’s unachievable given all the other pressures, regulators and just market forces up and closing on payment providers.

Shaun Ferrari (00:15:23) – It’s an interesting question. You know, in terms of, yeah, how instant is instant and what technologies help it be instant in terms of the fraud monitoring and those sorts of things I think of. Whether it’s AI screening or tokenization type practices where you could authenticate it a token and the token is already been cleared by the user or whatever information is going on the chain with it. Right. So there are ways to do it. I’m curious kind of on that, I guess. Fraud piece before we leave fraud out. I don’t know. Julia, do you have any thoughts on. On what?

Julia Demidova (00:15:52) – Sure. I had actually, you know, a couple of points, you know, and I second everything that, you know, analyze them, you know, just said, I think, you know, the kind of, you know, the question of trust. I think, you know, that’s the key, right? the, the new form of money needs to be trusted, right? You know, whether that’s, you know, your central bank, digital currency, whether that’s your, tokenized deposit or whether that’s your regulated stable coins, it needs to be trusted, right? Or even if it’s, you know, crypto, right? You know, there needs to be a trust.

Julia Demidova (00:16:21) – There needs to be a consumer protection. So and I think, you know, the industry stakeholders are working together. I don’t think, you know, we’re working against each other. I think there’s definitely a lot of collaboration, a lot of partnerships within the industry to achieve some sort of, you know, trust in, in these new forms of money and, you know, maybe even, you know, in the kind of, you know, technology that powers some of these and, you know, digital currencies. And I think, you know, there was a great, I mean, a question how instant care can it be, you know, how instant is instant, right. I think, you know, again, the technology is very sophisticated today. Right. And with, you know, FIS we today we’re working on, on the solution and we are trying to make it very scalable. And we are trying to make it instant and atomic and, and, you know, in some of the proof of concepts that we’ve been working on, we’ve been able to achieve 1 million transactions per second and millisecond latency.

Julia Demidova (00:17:17) – So I think technology is very, very sophisticated, but also various overlay services that are being developed, various applications that are being developed on top of the blockchain platforms, and on top of our platform, they are also becoming more sophisticated. And I think, you know, back to kind of, you know, question on the fraud and risk. Right. within a phase, we have, you know, 4 or 5 different fraud and risk tools and the fraud is becoming more sophisticated. and, of course, you know, we need to adapt to that, and we need to ensure that there is a new generation of risk and fraud tools. And I think, you know, in the future, the fraud will only become more sophisticated. So we definitely need to, you know, look at, you know, what other types of fraud, you know, we will be facing in the next couple of years, but also, I think, you know, in terms of, you know, some of the technology that is powering, some of these digital currencies, right? Even today, you know, we need to think about, you know, you know, what is the potential impact of quantum computing, for example? because, you know, quantum computing, in my view, is a significant threat to some of the blockchain initiatives that, are there today.

Julia Demidova (00:18:31) – So, a lot of, blockchain platform is probably today are doing a lot of research on how to wrap those tokens up, to make it, you know, you know, cyber secure and resilient system. So I think, you know, there is, a lot of work, you know, for us to do, not just, you know, on the, you know, fraud and risk and enhancing our solutions with, the various new tools like artificial intelligence or, large language models, but also, you know, looking at, you know, what other technologies, could, you know, be emerging in the next couple of years and how could we protect, these payment systems, these novel new payment systems that we are developing?

Jens Seidl (00:19:17) – Yeah. I guess the other thing is, with regards to fraud, we need to take a risk based approach. Right. And how fast can an instant payment be? If you’re buying some food at a food stall, you don’t need a lot of fraud checking, right? That should be almost instantaneous if you’re buying a car. And yeah, of course it can take a few minutes and nobody will mind. They’d rather get it right, right. And and take their time. So I think that’s also new models we need to build where you take different routes in your, your fraud management just based on the risk and, and identifying what that risk is to begin with. I think that’s the, the real tricky.

Irina Chuckina (00:19:53) – Of course, a lot of analytics and behavioral models, I think, you know, definitely will be, you know, implemented.

Rufaida Hamilton (00:19:59) – Yeah I like that. And Jens, you know you’re right because the value of AI and the new gen technology that we have the benefit of, and obviously it’s got massive, evils associated with it in the wrong hands is how we can use AI and AI. I’m, I’m the first to say I always say this to my teams, when someone asks me what is our payment strategy? Our strategy is to comply. So we are bank and very boring. Like, let’s think about it.

Rufaida Hamilton (00:20:26) – But, we will have to do AML screening. We will have to, you know, encumber transactions with that. Can’t get away from it. But there are ways and until we navigate that will be it if pre carefully because I think it’s very new terrain in the instant environment especially for domestic maybe cross-border is a little more evolved, but we will have to use AI to cleverly to deploy fraud to monitoring and capabilities. I can’t see that you can get away from the fact that we are never going to keep up with the fraudsters. Great, fine. We know that. But, the if we have a good sense of topologies and topologies to find different countries out expressing one I’ve experienced in the African context, which is chat bot quickly now. But and you solve for that using AI and being able to detect and prevent, I think, therein is unlocking the secret and I don’t think I’m there yet in, in terms of solutions, but I’m certainly, you know, keeping an eye out for the right technologies.

Rufaida Hamilton (00:21:32) – And you’ve got everybody trying to, to build that. so, so like, really important. I wanted to talk about some of the typologies and just, you know, maybe just to share because they operate in a domestic and cross-border sense. And it’s the typologies you almost don’t know how to defeat. as a provider of either the fraud capability or the banking payment service, which is I can pay you $50 every month. If I use your card, you know, then you’ve got to rely on very sophisticated transaction monitoring and oversight to detect. And then still, it requires a lot of forensic capability to unlock that. I’m also very interested in the CBDC side of it where deepfakes are now the reality in immensely developed economies because, I mean, I listen to the technology providers around how to avoid it. I had my headshot taken. I had the demonstration. I’m still worried that that that is something we can’t fight. So the technology is becoming our worst enemy in that fund.

Julia Demidova (00:22:39) – Of course. Maybe just a quick comment.

Julia Demidova (00:22:41) – and I think in terms of fraud and risk, to, to finalize that, you know, piece of conversation, I think, you know what, we will see a lot more and maybe that’s a little prediction from, from me. We will see kind of, you know, second layer, you know, fraud and risk, you know, kind of, you know, screening. So I think, you know, PSPs, you know, banks will, you know, you know, kind of handle all the AML, KYC, sanctions screening from their end. But then there will be probably a second, third layer of central screening, fraud monitoring, processes as well. And also from kind of CBDC perspective, what we have seen at FIS, we have seen, a lot more central banks thinking about kind of, you know, a centralized approach in terms of, you know, performing the risk and fraud. And I think, you know, that’s kind of also probably inevitable that everyone is going to be screened.

Julia Demidova (00:23:32) – Everyone is going to be part of the systems. Of course, central banks probably would not, you know, see any data. They would not, you know, have ability to kind of observe what’s going on. But it will be just kind of, you know, a second layer, for, for the banking industry and also for the SPS, just to comply with all the kind of, you know, policy and regulation, but it’s definitely getting more sophisticated, the fraud and risk and a lot of, you know, deepfakes as well. And we have seen, you know, a lot of, you know, kind of, you know, booths here at the Money 20/20, they collect a lot of data. They collect your private emails, they collect your, work emails and all the titles. I think, you know, we just need to manage on how that data is being used today and I think there is, of course, you know, GDPR, you know, rules. So I think, you know, those are just going to become more, you know, prominent and perhaps, they will become more important and probably will be enhanced in the next couple of years.

Shaun Ferrari (00:24:38) – Right. What about Irina? How about how are you thinking of the fraud layer and instant payments in real time payments out.

Irina Chuckina (00:24:45) – Well, in the in the context of the real time payments and open banking payments, which is, I guess, just another side of, one of the facets of the instant payments. I think one layer that I actually really think is really important is that that biometric authentication is pretty much almost always a part of that default experience. So unlike cards where, well, things are in the cloud, it’s tokenized. Yes, it’s quite secure, but sometimes you don’t in many merchants still don’t have 3DS or similar types of solutions. So if you have that additional biometric layer to kind of confirm, to give consent to the transaction, authorize it. I think that’s, first of all, that gives reassurance to the, the user, but also that drastically reduces fraud. We’re seeing much, much, much lower levels of fraud and chargebacks, by the way, in, open banking payments.

Irina Chuckina (00:25:36) – So I think this is one of the strong, one of the really strong sort of value propositions, the core benefits to the merchant, they can reduce, costs associated with both fraud and chargeback quite drastically, in addition to also saving money on the interchange fees. And just like the overall end to end sort of package, economically benefit is much more beneficiary and much more sustainable and long term. And then when it comes to sort of more sophisticated, interesting, types of different fraud totally counts. Sort of take over is different. While social engineering schemes, I think these of deep fakes, all of these things are scary and they become indeed more and more sophisticated. One of the personal story in in kind of an anecdote, literally two days ago, was trying to make one of my first crypto transactions. I get a call from Monzo was actually it was a person ID check and we validated. Monzo has a beautiful experience of knowing like, well, kind of confirming that you were actually being contacted by the bank, but the lady spent a good ten, 15 minutes talking to me about asking me about like, is anyone sort of asking me to make that crypto transaction? Are you being maybe, I don’t know, have a yeah.

Irina Chuckina (00:26:49) – Is there an imposter or some financial advisor, you know, in brackets that is giving you sort of, well, I don’t know, promises or unrealistic expectations because I think we’re seeing a lot of that, you know. Well, it’s not quite the Ponzi schemes, but it’s, you know, all sorts of groups or basically getting rich fast types of experiences that creep so, naturally just is, I don’t know, somehow crypto community has a lot of like, I there’s a guaranteed income. You can I’ve just earned whatever. $20 million, like, you know. There’s a lot of these people do want to believe in miracles in general. And I think that it’s sometimes interestingly, it’s not even associated with the level of financial education. Even the more kind of educated people sometimes fall the fall trap. And I guess coming back to my experience, I actually really appreciated that chat, that call with the Monzo lady, the specialist that was like trying to figure out, am I being tricked into something that I do? I really understand the risks and implications of that, you know, transaction.

Irina Chuckina (00:27:54) – Is it a substantial amount of my, you know, in my income or savings? Am I giving everything I have for something? It was like I was I am I actually am more or less sort of educated and aware of all of the risks. I think that’s important. That is a very important responsibility of the operators or banks. Well, payments schemes I guess everyone. So as an ecosystem, we have to make sure that we, have that level of consumer duty protection, and play an active role. So I think this is a great initiative. I continue to support and encourage similar types of things. So I think, yeah, risk is. Protecting and helping our users to protect the money we all involved. We can all contribute, and I think we need to think and be proactive about addressing knowledge.

Jens Seidl (00:28:47) – And I think you’re right. It’s a great opportunity to create customer loyalty, right? Yes. You just had a fantastic experience one.

Irina Chuckina (00:28:54) – Yes, one that cares about.

Jens Seidl (00:28:57) – Totally, so it’s not just a duty, but I think it’s a real opportunity to create a consumer loyalty and then tie your customers to your your business.

Rufaida (00:29:06) – I am going to take that learning back to our back. You know, I I’m happy to well you a financially council do you probably learned from that engagement idea you ever considered there is actually great. Yeah. I’m sorry Shaun, I wanted to ask. I’m so intrigued about you touched on privacy and open banking and, and that for me and the learnings from GDPR and PST3 is, is really all about that the, the privacy and who owns the data. And with the central banks playing a bigger role or whole of government sort of approaches to owning a digital identity and then owning a fraud capability or a KYC capability, it becomes a whole of government ownership of all your data. So I’m interested to understand the thinking around the room, around the where do you draw the boundaries? How do you manage data privacy? And I suppose the one component of it is because I don’t mind if someone knows my home address, you know, in government. Right. Probably good for me that someone does.

Rufaida Hamilton (00:30:12) – But I do mind if all of my economic activity and that sort of information is available off the back of my CBDC and, you know, identify all my CBDC activity. So I just wanted to get a feel for how that is working out in your, my head space and how you’re thinking about it.

Julia Demidova (00:30:36) – I’m sure maybe you know, a quick comment from me and then I’ll pass it over to you. Irina. I think in terms of the privacy, the way we have designed our digital regulated money platform is, with a very flexible privacy controls. so, I think, at FIS, we are very good at building technology. We are very good at innovation. Right. that’s what we do. We build the central infrastructure. We build a national mission critical infrastructure for commercial banks, banks, fintechs and central banks. And it’s our job to make it flexible. So, we don’t have the right time to go to the regulators or policymakers and to tell them, you know, what, what privacy levels or measures should be adopted.

Julia Demidova (00:31:27) – From our perspective, we believe that’s the mandate of the regulator policy, in that particular jurisdiction to identify what are the, kind of, you know, the privacy levels that are in a kind of a good for that particular market. Right. So whether central Bank wants to make it very private and make it very anonymous and that the system, we can support, those nations and central banks, and if central bank decides and that they want to make the ecosystem the payment ecosystem very, transparent again, you know, we would be happy, you know, to support them. Again, I think, you know, there is definitely a balance of things. and I think we will see. So sort of, you know, a balance between, having, you know, privacy, you know, you know, very private system and also having, you know, very transparent system. So I think, you know, there needs to be just a good balance, between those two.

Irina Chuckina (00:32:33) – And it’s really I mean, it’s a really difficult question. I agree, I think the regulators indeed are probably setting those guidelines and like a lot of the guidance come from, from them, really. But if you think about it, the most anonymous way really well is to have cash. Really this is cash is the most. Yeah. I don’t know, like private tools that you can use to manage your financial operations. The moment when you put anything into a bank account or start using cards, whatever it is, investment platforms, that data becomes digital. And when it becomes digital again, quantum computing can solve pretty much any, any. Well, I guess hack into any system will break into any password within seconds. Anything less than seconds. Really. So I think you there, you have to sort of absorb and be comfortable with the fact that, well, unfortunately, the information can be stored. And that’s why banks and governments really do need to make sure that then create those levels and layers. But there is also, I do believe that there is a lot of benefits in, well, consensually sort of agreeing to share your information because in exchange to data, the users can benefit from.

Irina Chuckina (00:33:53) – well, whether it’s personal finance management advice, by giving access to your data, you are able to create opportunities to find ways to optimize it, to optimize your finance, to find better. I don’t know, better products, more efficient ways. So to identify gaps within your transaction, I don’t know if flow or budgets and actually be able to find the opportunities to either make more money or save more money or like, I don’t know, maybe in, well, I don’t know, find products that would drastically optimize your the composition of your budget. If we’re talking about retail experience or if you’re a business, by giving access to your transaction details, you’re able to get better. You know, again like interest rates. So I’ll cut well, the whole factoring sort of business is built around the fact that, well, it’s kind of a construct or a contract or even rather that is beneficiary for all the parties. So if you’re thinking about, well, protection levels should be there. Absolutely. But that data gives the ability for all of us to make better decisions.

Irina Chuckina (00:34:56) – And I think there is I mean, this is maybe an idealistic view but yeah, basically, tell me about your point. If you want to protect your privacy, you use cash or. Well, I guess some crypto methods could technically also still be used, but I, I think now the world is starting to become much more aware of, you know, all of the KYC ownership principles, even with within the, the crypto world, things are becoming much less obscure than they used to be.

Jens Seidl (00:35:26) – Oh, well, I think that’s..

Julia Demidova (00:35:27) – Question on the, privacy of cash, because every single node has a serial number. So if someone really wanted to track the nodes. So if someone really wants to, they could right.

Shaun Ferrari (00:35:40) – Not so. No. So I ran cash distribution at the fed for many years. No, they can’t they, they know, like, where it’s initially paid out and where it comes back, but, all the steps in the middle are, are lost. Yeah. You, you there’s not that people like to think there’s that nuance going on, but it’s not, it’s not that much.

Shaun Ferrari (00:36:03) – So cash you do know, I mean the one piece of cash when you when it comes down to it, you in theory and from the authenticity standpoint is if I was to pay Jens something, he at least knows it’s coming from me, right? I’m there as a face to face transfer. There’s that, but is it tracked somewhere? No. the privacy topic is so interesting, I find, because people get really heated about it and really passionate about it, and then they go and buy their cup of coffee or their shirt with their visa card, and it’s like, okay, well, that that’s tracked all over the place, right. Or in the US, we still use cheques quite a bit bizarrely, but we do. And everyone’s bank account number is right on the cheque. Rhere was a time when you wrote your license number on the cheque, so it’s a very interesting, interesting topic. I do think on the technology side, there are some benefits when you start talking Web3 or what you can what you can authenticate on a, on a token or have kind of a privacy.

Shaun Ferrari (00:37:05) – You mentioned biometrics, but you could essentially have a all your information on a token. Right. And you release that token to somebody. You get authenticated as a transaction. You take the token back and your information is still yours, but the transaction has occurred. There’s ways that it can function. Now, can that be hacked? I’m sure it can, especially with quantum computing.

Julia Demidova (00:37:24) – So but of course there are new, tech possibilities here as well. Right. You know, you have the key piece, right? I mean, that’s a new emerging, you know, tech and, you know, that helps you to preserve the privacy. But at the same time, you know, it gives you some level of transparency and auditability. Right. So I think, you know, some new emerging technology, like XRP’s, it will definitely, you know, will have a greater role in the ecosystem. And I think in terms of like, you know, cash. back to the cash point, I still think, you know, it is traceable and you see a lot of great movies, right? You know, where, you know, there is some drug lords somewhere sitting and they,

Irina Chuckina (00:38:07) – Receive a lot of cash and then someone, you know, tracks from FDI that there’s some money. So maybe I watch too many movies.

Rufaida Hamilton (00:38:15) – Yeah. Like to see that. In their world where cash is king. Because obviously it’s very perceivable and tangible. I give you cash and I know it’s instant. And then I am able to say funds have been, achieved. So, I think that you said you were being idealistic about the data privacy considerations, and that it kind of all can work if there’s awareness and understanding and what your data is being used for. And I think you’re not being idealistic, but you, you definitely focusing on a certain market and digitally included and financially literate individuals who also have a very keen understanding. So education levels obviously very different in emerging economies where while I said, you know, the adage I learnt in the last few days is, don’t develop poor solutions for poor people because they’re very street smart. Yes, they street smart, but they may not understand what they consenting to.

Rufaida Hamilton (00:39:24) – So, when I think about and we’re going through massive evolution and all the emerging economies I’ve had exposure to, when I think about data privacy, I think there’s a lot of work to do there. and, and I’m interested in how we can do that better using technology. and to. Firstly, I mean, the first immediate step is digital inclusion, but then it’s the entire intangible to measure stuff, which is how do you know that someone’s reading the terms and conditions, which were very good fintechs and banks, about putting them there? And banks are under a little more obligation to make sure that they well understood and that the education and awareness is really clear. And then you’ve got to meet certain standards around that. But even then we live with the experiences like old school screen scraping. People were consenting. It’s a, you know, it’s just a GDPR and BSD three are just evolutions of the traditional screen scraping, consenting. But the awareness of what you’re actually consenting to, what you’re handing over.

Rufaida Hamilton (00:40:35) – And that’s the draconian example. You’re literally handing over the keys to the vault. So I get that one. But the less the more mild mannered, acceptance of terms and conditions, which is, you agree to consent to your data being used. It’s the what that’s being used and how. So think about an example like India, right? The poster child for digital ID and Aadhaar. And then digital ID enabled payments not built into CBDC. And they’ve come under a retrospective pressure to, you know, an inflection point that says how we protecting commercial activity and behaviour, that’s embedded in your data in your data lines. Right. So like I go on swipe or tap pay for my coffee straight after this. And I’m not thinking about that. I was saying to somebody the other day, oh, you know, myself ever going to accent series getting really good now and understanding what I say from three years ago. And that person said, well, that’s a bad thing. You’re handing over a lot of your IP to Siri.

Rufaida Hamilton (00:41:39) – I like I said, I think it’s okay for someone to know my address in government, but I don’t want them to know where I’m spending all of my money and all of my money is sitting.

Irina Chuckina (00:41:48) – So that brings the question of do we read terms and conditions? Every single app, every single service we have? Or when we were signing up for Money 20/20, we gave our consent to something or are we paying attention? I think this is the most one of the really biggest inefficiencies. I don’t know honestly how to solve it, but we are. You’re exactly right. We’re signing up to something every day, sometimes multiple times a day, via all of our apps and phones and, you know, digital tools and online systems. And unfortunately, all of those really lengthy details and the terms and conditions, I don’t think anyone reads that really. I don’t think there’s even 1% of the people. And I know there, again, like some funny stories about, you know, all sorts of, you know, really weird things that are being included intentionally in the terms and conditions just to track and spot how like, look at how many people.

Irina Chuckina (00:42:39) – But no. AWS as one of my favorite keys, AWS has a clause in the contract. I think until now they probably still have it. That zombie apocalypse. If in case zombie apocalypse happens, they are not responsible. And like literally these are, you know, dead corpse. But yeah, it’s it is in their contract on their website. You can ask people on different variants. And I think some of them have seen.

Julia Demidova (00:43:03) – I think, you know, as you know, we see cross-border payments evolving. I think, you know, the data privacy will be even more, you know, important. And again, you know, it’s kind of, you know, back to the point we were making earlier on the kind of, you know, regulation and policy. I think we will definitely need to see, new standards emerging. And I think, you know, we are on the right track for new kind of, you know, standards and regulation, globally. But I think, you know, as we see payments evolving as new technology being, adopted by users, I think we will see a new set of regulation probably evolving as.

Shaun Ferrari (00:43:42) – Well, I guess, I mean you’ve all at one point kind of mentioned, flexibility or I guess my question is in this world where there are so many different options now to make a payment, we mentioned them here, whether if even for the cross-border environment. Right. We’ve got real time networks that can be sewn together. We have CBDCs that can wholesale CBDCs, that can help move funds. we talked about now data and each region, each country, each regulatory regime has their own thoughts about what should be private, what should it be private. So on the trade off between flexibility, or standardization, because there’s two ways to make this work, right. Either everybody gets on the same standard, and goes through a hub and you’re all transacting like data with like regulations. It’s one way to do it or you build in flexibility for essentially 100 different countries with 100 different models and, and a whole bunch of different ways of doing transactions, I guess. Where do you think the balance is?

Shaun Ferrari (00:44:47) – But to even what has to be standardized or what can be built in reasonably flexibly through whether it’s open banking or, a front end mobile app type. I don’t know. I just see a trade off there.

Rufaida Hamilton (00:45:02) – Yeah, I like the question because an instinctive commercial response for me is standardization is almost an, you know, a swear word, except if it allows for. And I try to translate it when someone is you. Regulators do standardization with standards because I like standards. I like the uniformity it brings. I know that the consumer has consistency of experience. All of the exactly what you’re saying. But if standardization limits innovation, then I struggle. So I try to explain it like this. If there’s a vanilla, offering or platform or interoperable, option that everybody adheres to, whether it is a CBDC interoperability or digital identity interoperability. And they’re, provided there is a layer that is supported and endorsed in that framework that enables innovation. So the green space must be a proper green space when there’s standardization.

Irina Chuckina (00:46:06) – I really like that.

Julia Demidova (00:46:07) – So I agree with wonderful point. I think, you know, in some instances, you know, standards are very important. Like, you know, consumer protection. I think, you know, that’s the key. You know, the standard must be there. And I think, you know, standard needs to be global. I think, you know, for certain experiences like privacy, I think, you know, they will be, probably a lot of flexibility. I don’t think, you know, we will be able to achieve sort of, you know, consensus globally on what levels of privacy, you know, do we want in our new payment ecosystem? Right. but I think, you know, on certain aspects like protecting consumer, like providing, a good service to consumer, maybe, standards for, you know, transactions processing, maybe that should be also a standard. so I think, you know, there are a must go to standards and there are, you know, some flexibility in terms of, you know, some of these, you know, overlay services.

Irina Chuckina (00:47:03) – I guess standards also needs to be neutral, right? So I think one of the best examples of standardization is I think there was GSMa that has introduced the standard, like basically the way we’re currently using our phones around the world is because of that single standard that they fed that have done many years ago. can there be certain, like a similar thing in the world of payments? I yeah, well, it certainly would benefit everyone. Visa and Mastercard quite a few years ago also came up with a single standard. The DMV, like all of these things have benefited massively. All of the ISO systems are massively also really, really important for all. I guess all of the financial operations, there’s a whole range of them that are protecting and creating that sort of single, unified norm really. And I think it does encourage innovation. This is a really, really good example. So standards, are really, really critical, but they have to be we have to make sure that we also don’t sort of they’re not they should not encourage sort of the monopolies or the legacy systems to benefit from them more than perhaps the innovator is the disruptors.

Irina Chuckina (00:48:11) – So, I wish we had we found a way. I’m really looking forward to that time when maybe the central banks will come together and would actually unify or agree on the system, just like BIS is doing, by working with, well, I guess to say, well, by connecting the real time payments around the world. But bilateral is not always the most efficient way. Sometimes maybe the private companies are able to find a faster way, a more efficient way. I think the difference in the benefit of or the advantages of the fintechs have to the more traditional financial institutions is that they typically are a little bit more agile and they have so many incentives to find shortcuts. well, not every shortcut is good, but the short, the fastest way to a technology that can that can be scalable, that is efficient, you know, economically efficient. So I think I’m hoping and looking forward to having an, a solution that will unify and harmonize, the, the, the world of cross-border payments, which is seems to be I mean.

Julia Demidova (00:49:14) – But it’s very far to kind of, you know, find this unified approach and framework. Right. You know, we have seen with even, you know, mega regulation, right? you know, it exists kind of, you know, the framework in Europe, right? and we have e-money institutions, credit institutions who could be issuers of these regulated stable coins. But then, I’m based in London from the UK we have slightly different approach to viewing them, you know, stable coin, issuance. Right. And then other parts of the world also, you know. See kind of, you know, the issuance of stable coin, you know, just, you know, for the banks to be able to issue regulated stable coins. So I think, you know, there will be some divergence. I don’t think we will be able to achieve that unified approach across the globe. But as long as there is kind of, you know, a consumer protection. and I want to emphasize that’s probably the most important today.

Jens Seidl (00:50:10) – Yeah. I’m so sorry. We’d love to keep going, but we’ve been signaled to get kicked out of the booth. Our time is up. Shaun, you want to wrap this up?

Shaun Ferrari (00:50:17) – Yeah, it was up. No, thanks. All three of you for your thoughts. It’s been a great discussion. We really appreciate it. I think it shows that there’s a lot of discussion to be had, and we look forward to continuing that with all of you and at some of our Currency Research, upcoming events on on global payments and cross-border payments and digital currencies all around the world. So thanks all of you for joining us. Thanks for listening to the P.I.T. Exchange podcast coming from Money 20/20 live, and we look forward to talking to everybody on our next episode. So thanks for joining us. Thank you very much.

Julia / Rufaida / Irina (00:50:47) – Thank you.

Podcast Outro (00:48:32) – Thank you for listening to The P.I.T. Exchange, a podcast by Currency Research. Check out our upcoming events and publications at and join us for our next episode to hear what’s trending in payments, innovation and technology.

Welcome to part 2 of Asia Money 20/20 where we delve into the intricate world of payments innovation and technology. We recently had the pleasure of hosting a fascinating discussion with industry experts Rufaida Hamilton, Irina Chuckina, and Julia Demidova, who brought their unique perspectives to the table. Today, we are excited to share the insights and key takeaways from discussing the latest trends and challenges in cross-border payments and real-time payments

The Cross-Border Conundrum: Costs, Risks, and Opportunities
Cross-border payments are a lifeline for migrant workers and businesses operating on a global scale. However, the costs and risks associated with these transactions remain a significant hurdle. Rufaida, Head of Payments at Standard Bank, South Africa, shed light on the pressing need to serve these communities more effectively. She emphasized the importance of developing solutions that not only reduce costs but also tackle fraud and compliance issues in real-time payments.

Interoperability: The Key to Global Payment Cultures
The conversation took an interesting turn when Irina, Chief Marketing Officer, Volt, highlighted the significance of interoperability in connecting diverse payment cultures. The dream of transparent, affordable, and instant cross-border payments is within reach, but it comes with the challenge of adhering to regulatory requirements and preventing fraud in real-time transactions. It’s a delicate balance that requires innovative thinking and robust technology.

Trust in Digital Currencies: CBDCs and Blockchain

Julia, Head of CBDC & Digital Currencies Product and Strategy FIS, brought a fresh perspective on the trust factor in new forms of money, such as CBDCs, tokenized deposits, and regulated stablecoins. She underscored the necessity for advanced fraud and risk tools to keep pace with the evolving nature of fraud. Moreover, the potential impact of quantum computing on blockchain initiatives cannot be ignored, as it could redefine the security landscape.

AI and Advanced Technologies: The Future of Fraud Management
Our discussion also touched upon the need for a risk-based approach in fraud management. The potential for second-layer fraud and risk screening, along with the role of AI and advanced technologies, was a focal point. These tools are becoming increasingly crucial in addressing fraud and compliance challenges in real-time payments, ensuring that the industry can maintain consumer trust and meet regulatory standards.

Data Privacy and Fraud Prevention: Striking the Right Balance
Data privacy remains a hot topic in the payments and banking sector. Rufaida stressed the importance of flexible privacy controls and the adherence to regulatory standards across different markets. Irina pointed out the role of biometric authentication in reducing fraud and chargebacks in open banking payments. She also acknowledged the benefits of data sharing for personalized financial management, provided that consumer awareness and consent are prioritized.

Standardization vs. Flexibility: Finding Harmony in Payments
Julia and Irina shared their insights on the delicate balance between standardization and flexibility. While standardization is crucial for consistency and consumer protection, there must be room for innovation. Standards set by organizations like GSMA and the introduction of the EMV standard by Visa and Mastercard have been pivotal, but they must not stifle new players in the market.

The Role of Central Banks and the Quest for Unified Payments
Irina expressed hope for central banks to play a role in unifying and harmonizing cross-border payments. The agility and incentives of fintech companies to find efficient solutions are promising, but a streamlined approach is still needed. Rufaida echoed these sentiments, acknowledging the challenges in achieving a unified framework, especially with the varied regulations and approaches to stablecoin issuance.

Don’t Miss Out on the Ongoing Conversation!

As we wrap up this insightful journey, we invite you to continue the dialogue and participate in upcoming events, Global Payments Summit and Central Bank Payments Conference. Our speakers will discuss various aspects of digital currencies, and the evolution of real-time payments. The payments industry is complex, but it is ripe with opportunities. Standardization, innovation, and consumer protection are the pillars that will support the growth and evolution of this exciting field. We look forward to continuing this journey with you, exploring the innovations that will shape the future of payments.


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