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Fintech Review 2023: Predictions and Outlook for Germany, Austria, and Switzerland



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This blog post first appeared first on old medium publication (https://medium.com/startuprad-io), and was moved to this blog with the relaunch of our website in summer 2024.

Executive Summary


As we step into the holiday season, we at Startuprad.io are excited to bring you exclusive insights from our recent Fintech Review 2023 for Germany, Austria, and Switzerland. Our latest episode featured prominent voices in the Fintech industry, offering valuable perspectives on the current landscape and the outlook for 2024.


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Fintech Review


Ever since Joe ventured into podcasting, Fintech has ignited tremendous interest. In 2014, he initiated the annual Fintech reviews, initially in German. For several years, Startuprad.io has proudly presented this review as the crowning piece of each year. Lately, there’s been a request to shift the publication from December 25th to an earlier date, ensuring you can tune in during your Christmas travels. We’re thrilled to accommodate this request, especially for our German investors eager to delve into the thriving Fintech scenes of Hamburg, Berlin, and Munich, along with the broader spectrum of German startups.


The Video Podcast is set to go live on Friday, December 22nd, 2023

The podcast is available early to the members of our YouTube channel.




The Audio Podcast is set to go live on Friday, December 22nd, 2023


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The Guests 2023


Here are some of the highlights from the episode:

- Kimmo Soramäki, (https://www.linkedin.com/in/soramaki/) CEO of FNA.FI, shares positive news for the upcoming year and discusses the optimization of liquidity for banks and businesses, as well as the challenges posed by the rise in digital payment fraud.


- Paolo Sironi (https://www.linkedin.com/in/thepsironi/), an esteemed author and thought leader, delves into the rise of generative AI and its impact on the banking relationship, emphasizing the importance of digitalization, personalization, and simplification in communication for understanding the value proposition.


- Luca Frignani (https://www.linkedin.com/in/luca-andre-frignani/), CEO of Exaloan, provides valuable insights into the challenges and successes in the Fintech lending space in 2023, while also predicting a convergence of Fintech lending, tokenization, and the digital asset ecosystem in 2024.


- Ivan Maryasin (https://www.linkedin.com/in/ivanmaryasin/), CEO of Monite, reflects on the shift of startups towards becoming real businesses and the impact of high interest rates on incumbents and startups.


We invite you to tune in to the episode for an in-depth discussion on Fintech, banking, InsurTech, embedded finance, and CBDC, offering you a comprehensive understanding of the industry’s current state and future potential.


Fintech Reviews From the Past:

Here are some of the past episodes:



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The Host

This interview was conducted by Jörn “Joe” Menninger, startup scout, founder, and host of Startuprad.io. Reach out to him:


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Automated Transcript


Jörn “Joe” Menninger [00:00:20]:Hey, guys. Hello, and welcome everybody to a tradition of Startup Rad. Io. We are here today for you and bringing you the Fintech Review 2023. That is an annual tradition in all the podcast I have hosted ever since 2014 Where we usually get together in, live recording that was also streamed or we talked To fintech entrepreneurs, thought leaders, and other influential people in the fintech space and heard From them, what was important to them in the past year? Right now, it turned out that the schedules of All the people are quite full, so we had to do the recordings piece by piece, and we don’t get, like, a full on discussion, unfortunately. Nonetheless, it’s very interesting. We do have together here Paolo, Luca, Ivan, and Kimo. And each and every one of them will talk a little bit different about their perspective of Fintech, banking, InsurTech, embedded finance and CBDC in 2023, and maybe a little bit about the outlook 2024.


Jörn “Joe” Menninger [00:01:45]:But enough said for me, I would like to welcome Paolo.


Paolo Sironi — Author and Thought Leader [00:01:50]:I’m always happy to be here, and the Fintech review is my Most important appointment of the year. Luca?


Luca Frignani — CEO Exaloan [00:01:59]:Hey, Jan. Or as I already said last time. It’s a pleasure to be back. Ivan?


Ivan Maryasin — CEO Monite [00:02:06]:Hey, Joel. Great to be speaking. Been great. 2023 has been an exciting year, and we’re really looking forward to 2024 to do more great things.


Jörn “Joe” Menninger [00:02:14]:And last but not least, Kimo.


Kimmo Soramäki — CEO FAN.FI [00:02:17]:I’m doing very well. Happy Christmas. Merry Christmas, everyone. Really glad to be here today.


Jörn “Joe” Menninger [00:02:23]:And before you ask, the order I welcome to people has only to do by when they could make time in the busy schedule for our recording. Paolo, you are with The IBM Institute For Business Value, the global thought leader on Fintech, banking, and capital markets. Wim Bin, your perspective of 2023 and maybe a little bit your outlook 2024. And for everybody Who likes Paolo? He is the most frequent guest we have on our podcast, and he’s a steady guest since I do believe at least 5 years in our fintech review, you’ll find down here in the show notes many of the books he’s Talking about and he has published as well as his research paper. Sorry, Paolo. Here’s the stage to you.


Paolo Sironi — Author and Thought Leader [00:03:15]:2023 was a year plenty of news and advancements in technology. So it’s difficult to pick up 2 or 3 of the most important. But If I may, I want to focus on, a couple of elements. 1 is generative AI, and the other one is, the rise of embedded finance. Let’s start from generative AI. It’s, on, everybody’s mouth. Everybody’s talking about that. Everybody wants to do it.


Paolo Sironi — Author and Thought Leader [00:03:41]:Effectively, something is happening. And we’ve been talking a lot through the years about the capability of, building a conversational bank, but we knew that the technology was somehow limited in the capability of creating the connection with the consumers and the final users. Now this is changing. It doesn’t mean that we are there yet fully, but effectively we made a huge quantum leap in that direction. I think that, We can all see the history of banking investments in technology, which means opportunities for the startup this way. There were there are 3 periods in the last, 10, 15 years, and I would call them a period of digitalization a period of personalization with data and a period of communication with AI. So the 1st period is, Everyone’s interest and necessity to digitalize banking by Launching a digital app or a digital access. So, typically, that means, taking what’s existed or existed at the time, Lift and shift in a sense.


Paolo Sironi — Author and Thought Leader [00:04:50]:So that’s what Mediate Bank’s data on cloud technology and basically power with more capability, digital connectivity with a world of consumers that could be potentially growing, on the digital app compared to What has been happening in the past with the the, the website. So that is when we saw effectively a lot of investments into, architectures that can operate on cloud, so cloud technology, the hybrid cloud concept because a lot of information is basically rad. On prem anyway, like transactions for core banking, and the cloud becomes more and more relevant, at the point of contact with the client that’s powering up the the mobile app. So there’s the 1st period. We call it the digitalization of right. But then, banks realized that just being on cloud and having a digital app was not enough. If we look at the, net promoter scores of many banks, They fare, very poorly compared to other industries. That means it is not enough to be on digital, to create An entertaining and engaging enough experience so that, pleases the consumers, and pleases the consumers means the best consumers to effectively interact and consume on digital.


Paolo Sironi — Author and Thought Leader [00:06:05]:And that’s when banks understood that they had to personalize the digital experience. So so that’s when the artificial intelligence in terms of Machine learning and deep learning started becoming relevant in banking investments because all banks, the same with the startups that start on mobile Needed to consume existing data that are part of our core banking systems and new data, which are typically outside core banking systems In order to make that digital proposition more relevant in front of the consumer. So that is basically the last, let’s say, 5, 7 years of personalization as a mantra, leveraging data, leveraging traditional artificial intelligence techniques In order to personalize what has been put on digital for the client’s consumption. But here and again and as I have, You know, well, well explained in all my literature, especially the last one, banks in Fintech on platinum economies, that may not be enough because Mobile technology, which is, this one, is a technology of the demand. That means that the people may go on Amazon, Because they want to buy one of my books, and then my Amazon, my for something, guys. But, people typically don’t go on Google to look for the next investment Unity is more complex for the majority of people. They need to get into conversation, which makes a lot of important revenues of banking, an offer driven, marketplace. Basically, products are pushed to clients.


Paolo Sironi — Author and Thought Leader [00:07:34]:So the question is, when you move on cloud, when you move on digital and you don’t have an intermediary like human being, Things happen, and there are problems. So how do you put a push oriented, marketplace onto a demand oriented technology? That’s the question. That’s how you crack the code. And this is where, basically, we saw advances, starting at the beginning of this year with generative AI because Now we know that communication is the dominant element that will shape the banking relationship. Communication typically is human. Now technology is getting more and more human like, if I can say that, which sort of elevates the previous investments of banks and start up From the digitalization of right through the personalization with machine learning and deep learning into the generative AI era. Of course, this is not Free of concerns, generative AI is not a deterministic framework and algorithm. It’s a probabilistic one, so it’s important to Find ways to control it.


Paolo Sironi — Author and Thought Leader [00:08:34]:It is important to eliminate bias and hallucination. That’s not easy, though it is feasible. We need to be humble in the way, we want to use this Technology. At the end, the those companies will be able to apply radical transparency and good risk management that will be able to use this, And you advance in AI in order to, as I said, elevate their investments and power up their digital connectivity with clients a bit more. And if I can then for add, why does this matter? It matters because, something is authorizing. There is embedded finance. I launched a paper this year, a research that is based on 12,000 consumer survey worldwide, and the 1,000, banking executives survey head of open banking, banking, transactional banking strategy to understand where banks are in terms of opening up their architecture so to allow There are, products and solutions to be consumed by the final clients not only on the digital apps they power, but also In the apps and super apps of third parties that operate beyond their borders. And, of course, the further away you are, the more important it This is simplification, the communication element for people to understand the value proposition.


Paolo Sironi — Author and Thought Leader [00:10:03]:Not only I also had the chance of talking with 22 executives of banking and nonbanking institutions. They’re made up of what I call the voice of the maker. So trying to really understand massively and also in-depth what is happening In terms of embedding financial services somewhere else, you can think about pineapple later as an opportunity, but there’s more than better in the back Rad. As well as the investment management perspective. Now what I discovered is that effectively, financial services shift That I remember asking, at Fintech Conferences before the pandemic, if people had a bank account with, In in your bank. And and I typically saw something like 60% of people raising their hand. That I think in Fintech at least, There’s a lot of interest and and comfort in doing that. But then I asked a second question that was, how many of you, consider that To be the primary relationship, so the account where they put your salary or, basically, you have your main savings.


Paolo Sironi — Author and Thought Leader [00:11:06]:And and, usually, Everybody used to to lower the hand. It only happened once that a guy kept the the hand up, and he was the founder of a new bank. So that was promotional as well. But now you see that changed them. When we asked the 12,000 consumers worldwide, if they consider their, new bank account, like the primary count 16% of consumers worldwide said that they do so. And in Brazil, the number is 29%. So The extraordinary rise of new bank in, in Brazil that is basically, you know, fast The jump starting given the growth of, the neobanks and the digital proposition in some of the Asian countries. And this is also happening here In in Germany, we reviewed the how Germans wants to consume, like, pay for their consumption, looking at Dining out or, doing the grocery or go shopping online.


Paolo Sironi — Author and Thought Leader [00:12:05]:Yes. German is still is a cash country, but we saw the rise of the digital wallets less than in the rest of the world, but it’s rising here as well. And more interestingly, what I discovered is that, I asked these 12,000 consumers and 1,000 executives the same questions. I asked the consumer, for example, what do they want from their bank? List of priorities. And I asked the bankers what they think the consumers want From their bank. In New York, there’s quite a gap. So, basically, both of them identify that Security as the number 1, and that’s that’s a given. Right? So in a sense, banking is to be trusted.


Paolo Sironi — Author and Thought Leader [00:12:48]:There has to be secured. But if you look at what comes right afterwards, the bankers said that consumers want instant payment and buy an operator, And they don’t care about good customer experiences and rewards. Rewards is the last the least important for Vencos. But you know what consumers said? Consumer said they want in the order good customer experience, more digital wallets, and rewards. And that’s pretty interesting because, I guess this is, a difficulty of banks to understand how these become relevant in the digital world, and what is the monetization around that which is essential for consumers to be engaged them. Not only good customer experience now can be better addressed with generative AI. For example, we worked I worked with one of the largest payment companies in the world that that used the to Understand that the set of a conversation with clients and complaints for customer service is not just to automate them. So now it takes them, something like 15 minutes.


Paolo Sironi — Author and Thought Leader [00:13:49]:I’ll start to understand everything that is happening before it took him 3 weeks to summarize all type of conversation they have with clients. Example of automation. But, also, this becomes an opportunity as the granularity is much higher for the customer service to be more relevant. So it’s an elevation of the capability of people To talk to people, right, in more meaningful ways. But what matters to me here the most is digital wallets and rewards. Rewards are, basically a loyalty scheme, and loyalty is important. But it can also be expensive. You hook in clients with a reward, not necessarily Clients can use that award efficiently, so they they wait on the balance sheet of the institution for a while.


Paolo Sironi — Author and Thought Leader [00:14:28]:But now what about to think about using digital wallets To connect consumers, retailers with the merchants, the SMEs, which are also part of your banking relationship as, as a client. Now you need a new medium for doing that. I’m also happy that I was invited by HSBC to launch this embedded finance paper on the main stage of Global Connections in Singapore in September. Because, what SHBC did, They invited, 1 100 of their top corporate clients, to talk with the bank. And one of the core element was how can a bank see the clients not And more like clients and more partners in the Better Finance space. Now what we’re also learning is that one of the difficulty of banks is that they typically are buyers of technology. They They have time of selling technology. Now the Fintech are sellers of technology, not necessarily buyers of technology, and that is where, I guess, the problem is, but also the opportunity To connect the dots and to facilitate through Fintech innovation, the embeddedness of financial services in seamless ways for that to be consumed by, other industries.


Paolo Sironi — Author and Thought Leader [00:15:37]:And and I do believe that 2023 was the year when that was realized that 24% of the banks we surveyed said That embedded finance is core to their business strategy. It was not like that before


Jörn “Joe” Menninger [00:15:49]:the pandemic, and it cannot be growing. And Luca, of course, he may be known as the cofounder of Exelon, a Rad at risk management platform that helps institutional investors to build crowd crowd lending loan portfolios across different platforms globally. Of course, he does have a pretty Different perspective on the fintech year 2023 and maybe a little bit on the outlook. Luca, here you go.


Luca Frignani — CEO Exaloan [00:16:26]:Yeah. I think, I might be talking my position here. So I think 2023 has been a bit of a roller coaster For, the Fintech lending space and digital lending space. And it’s been fascinating to watch Some of the trends, I think everybody or most of the Fintech originators that we saw in the market, they have been have been successful, really big Fundraising rounds, with institutional firepower coming in and the space professionalizing more and more. But, I mean, Some of the players we’ve also seen are struggling, so it’s getting tougher to fundraise from institutional investors. And it was pretty interesting to see over the course of the year just This, you know, diverging trend, and, yeah, I mean, we’ve been on on the good side of it, fortunately. But, then also going forward, I think it’s Pretty interesting that, you know, it’s not only the segment of Fintech lending and digital lending that is gaining more traction, more, Awareness from institutional investors. But what I find interesting is that you really see ecosystems starting to converge.


Luca Frignani — CEO Exaloan [00:17:34]:And I’m saying that because, you know, there is more and more appetite also from what we see in the digital asset space to actually connect To source, you know, real world assets. And, my guess, if I, would have to make a prediction for 2024, Is that, you know, Fintech lending or digital lending and, you know, tokenization, And and the digital asset ecosystem are going to start, to be more intertwined going forward, in the sense that it’s, And my guess not only going to be, you know, traditional rappers or traditional investment vehicles like funds or securitized notes and and the like, But, we will probably see a lot of more tokenization going forward as an alternative wrapper to, you know, lending or loan portfolios. Well, so far, a recent transaction was announced, for instance, from Fazanara Capital. They have, they have, created, I believe, you know, a a tokenized tokenized tranche or tokenized, loan portfolio. And, if I’m not Much mistaken. Very recently, we saw Taylor, for instance, also coming in with a tokenized part of their SME loan portfolio. And, my guess is that we will be seeing more of that going forward. No.


Luca Frignani — CEO Exaloan [00:18:57]:I think it was really, so far, you know, this This new element of, investment vehicles that are starting to get digitized. I mean, in a way, you can see, you know, you have you have the digital front end of SME lending and the processes, and then on the other end, you know, you’re starting to see more or less the the liability side to be digitized with a different approach. But, overall, you know, I think the trend is is recurring that, you know, in Fintech lending, Especially with rising interest rates, that, I mean, that might come down over the next year as hinted by some central banks. But, I mean, the overall state of the economy As well as, you know, possibility, about a recession and, some wobbles, and then, you know, the emergence or, you know, the the, let’s say from the investor side, a bit of, An increased mindfulness about possible rising defaults that’s probably going to going to shape, the risk management and digital lending also going forward. And it has already been a key focus point in some of the discussions that we’ve had also with institutional investors and then and and Fintech lenders. So I think that’s really going to be key. And, just, you know, having the right tools in place To be able to control the risk in loan portfolios on a granular level or to screen the loan portfolios better, I think that’s really going to be key for investors going forward in order to, you know, to have a bridge or to have a way for institutional capital to continue flowing into that sector. And then maybe yeah.


Luca Frignani — CEO Exaloan [00:20:40]:Sorry if I may jump in. And then, obviously, there was also 1 comment, that I found Quite interesting that, obviously, you know, with rising interest rates, you know, there is this thing called demand elasticity of credit. So, obviously, you know, the higher the rates charged to borrowers, the more impact this has, the more negative impact this can have on, obviously, you know, credit demand. And so we’ve seen, for instance, also, one recent post from, October, that they also saw that, You know, due to the rising interest rates, it’s not actually only, you know, a better prospect for investors in that sense, you know, of, You know, of of higher spreads that can be earned. But then, again, you know, it’s also a table of how do you balance as a Fintech originator, how do you balance, the demand side of things. Right? Because if you need to pass on higher interest rates to borrowers, then it’s getting tougher to attract, you know, To to attract actually supply or interest from from borrowers. And so finding the right balance between between these two sides, I think that’s That’s crucial. That’s key.


Jörn “Joe” Menninger [00:21:48]:And, of course, there is Ivan. Ivan is the cofounder of an embedded Finance startup called Monite that we also had in our interview based in Berlin. Of course, he also does have a Quite different perspective on what was this year all about. So I give the stage to Ivan.


Ivan Maryasin — CEO Monite [00:22:14]:Yeah. Absolutely. I think for 2023 for us has been, sort of just just like for everyone in the startup markets, Observing a shift from being all this, like, cool innovative startup companies that sort of, like, do some cool stuff and then figure out how to make it work as a business and breakeven, That’s true. To actually, like, you know, a really, really crazy level of diligence how to make it a business already now, how to watch unit economics closely. And Not only this happened for us and other players in the market, but also for our potential customers. And in our market, the behavior largely shifted from trying to build after actually being almost a default buy, in embedded accounts payable and receivable that we do at Monites. So so that’s been a big one. And then another big trend we observed is that actually, you know, the the journey of startups seems to be very, very affected by, public markets and by what’s happening with, capital availability to a shocking stand.


Ivan Maryasin — CEO Monite [00:23:12]:Right? So it’s been also a shaky year for many companies. A lot of companies, didn’t survive the year. A lot of companies struggled. And so I think it’s been a tough year. And so for for all of those who are still in the game, I think That’s an achievement by itself. Raising any money this year was an achievement. Keeping good people around was an achievement. So it’s been a tough year that also brought a lot of, great opportunities around.


Ivan Maryasin — CEO Monite [00:23:36]:And I think, at least to me being in the startup industry for, you know, over 10 years, this is the 1st year where I can say that Startups are really shifting to become closer to real businesses. So that’s that’s my short recap of 23, but overall positive and really looking forward into 2024. Yeah. For 2024, look. My my outlook is actually positive. I think, we’ll continue seeing, you know, hard hard conditions to raise capital. We’ll continue seeing, that businesses, that startups need to become businesses in many ways. Right? Show good unit economics.


Ivan Maryasin — CEO Monite [00:24:10]:That multiples will be lower, than in 2021. Right? And all this stuff, so the this this shift that I talked about in 23 will continue. And then I have a couple of, interesting predictions when it comes to what I expect to happen in 2024. One of them is a large talent migration. I think, at least I would predict that, there will be a wave of people migrating. Some of that will be from late stage companies that are now a little bit stuck. It’s Hard to raise money, post series b or even 4 series b. So a lot of people who are in an exciting joke growth trajectory will find themselves Instagnation will look for more opportunities, and this wave will split into 2 main buckets, in my view.


Ivan Maryasin — CEO Monite [00:24:53]:Right? So the 1st bucket will become founders, And that’s where we see a lot of pre seed activity happening already now with, like, x, y’s, x revolute, x, this and that type of people, going to market, investors willing to fund it, investors willing to take risks, but also different conditions supply in terms of business model and economics. And then the 2nd part of these guys actually, with with what I’m seeing, could join some early stage companies like Monite like, seeds or series a. But, also, I expect a portion of them to go into corporates and into incumbents. And so I think we’ll see a lot of talent migration, from some types of companies to other types of companies. And, also, we’ll see companies going bust. Probably, there will be a lot of them going bust, Which means that there will be more and more talent available in the market. A lot of great people will become available, and more technology will be created, but also there will be great opportunity to for For businesses that are doing well, to hire some new additional, great talent. So that’s that’s that’s my first prediction, basically.


Ivan Maryasin — CEO Monite [00:25:56]:A large migration we see in the startup world or a fairly large. And then the 2nd prediction kind of going from the first one, I think what we’re starting to see, and this this might sound very controversial, but what we are starting to see is that incumbents are actually getting a lot cleverer. In fact, some of the banks we’re talking to at Monite, like, they hired great people. They actually have really good teams in place, and the tide is shifting. These guys are not as behind as they used to be. Some of them become even leaders in some parts of, for example, embedded finance. And they are very, very much, in a great position now with interest rates being high, especially banks, Right. And other incumbents as well.


Ivan Maryasin — CEO Monite [00:26:36]:Their business is actually doing really well. They’re able and willing to attract top talent. They’re changing in many ways How we think about product strategy and vision. And I think when when we talked about all these incumbents like a few years back, everybody was like, yeah. These guys are, like, forever behind. So I think this forever is starting to turn for now or maybe even kind of starting to turn into another direction where Some of these incumbents might actually catch up very quickly because they have money to throw at it. And if they get the right people on board for which the timing is actually really good right now, then they’re in a great position to, you know, build something good, to buy some good companies, to really spin off the right propositions to clients. And in the end, they are actually in a very comfortable position, compared to a lot of challengers out there, fortunately or unfortunately.


Ivan Maryasin — CEO Monite [00:27:25]:So my second prediction is that We’ll see incumbents becoming stronger, not weaker. There will be exceptions, of course. Right? Not every incumbent will will make it, But I think we’ll see a couple of really successful examples in 24. And then my 3rd prediction is is a little bit more, in the area of Fintech. I think The whole embedded finance, theme has been challenged very, very hard, in the last year or 2, with a lot of index going down, a lot of embedded finance players supplying index also not feeling great. And so what I think is gonna happen is that A lot of embedded finance that survives will actually go up market and start serving enterprise customers with real use cases. And then the second point here is The real use cases really matter. We used to live in a world with a lot of visionary selling, with a lot of, like, signed contracts, with a lot of vanity value being created or, like, sort of visionary value being created, but without economic proof.


Ivan Maryasin — CEO Monite [00:28:22]:I think these times are gone now. And in 24, I expect to see even strict due diligence on why embedded something makes sense specifically in these place. So that that’s that’s my outlook, for Fintech and while it sounds banal, I think we have never seen such a level of, like, diligence and deep dive by investors, by experts, by customers As we see now, and signed revenue or signed contracts or people like regularly not going live, which used to be the norm in embedded finance for a few years, I think we’ll stop being the norm, and we’ll see the evolution of proper business cases. And we’ll also see, again, some players, probably either needing to shift The model, or feeling really bad just because, the market will be very tough in terms of raising financing when the revenue doesn’t get real Fast enough. And this is, of course, one of the challenges for Monet as well that we look forward to solving in 2024.


Jörn “Joe” Menninger [00:29:23]:Last but not least, Kimmo, our specialist for central bank digital currency and adviser to central banks, is here with us from London. He, of course, has also quite different perspective On what was going on in the Fintech and finance world in 2023. Kiemwon, please go ahead.


Kimmo Soramäki — CEO FAN.FI [00:29:45]:Think the clear 2 main topics this year have been, liquidity and, fraud. And there are sort of specific reasons, I think, for both. So if I start maybe with liquidity, of course, the interest rate’s going up, so that makes money more expensive, and that makes liquidity more expensive, and that makes optimizing liquidity More important for for pretty much everyone, like, from, large banks, global banks to smaller banks, to corporates, to, The small Fintech, enterprises, like, like ourselves, liquidity is a very important topic. And, so, Joe, you know that we work mostly around payments, and that’s why I’ve been also here on the Central Bank Digital Currency Broadcast. And And, we’ve been pretty much over the last 2 decades already, been working with large value payment systems, like, CHAPS in the UK, where banks make payments with each other to make them more liquidity efficient. And, I think the ones that we were simulating together with the Bank of England maybe a decade ago Go help the the UK bank save 4,000,000,000 in in, liquidity in in that system from down from 20, 44,000,000,000 down from 20, so quite a large percentage as well. And so what we’ve been doing in the last couple of years is bring that type of technology for the banks as well So that the banks can compress, their liquidity holding, so how much money they are holding or buffers they are holding for for being able to make all the payments that their customers ask them to do or or that they want to make by themselves for the proprietary activities that they’re doing. So I think that’s been really, really, something that’s kicked off this year, because because the environment has changed from a Long time of 0 interest rates into really having positive interest rates, and everyone is experiencing that hit, how the, liquidity is actually getting costly.


Kimmo Soramäki — CEO FAN.FI [00:31:53]:In some other countries, we’re also thinking about mechanisms for corporates To optimize their liquidity. This is not maybe on an intraday basis, but on a longer term basis. Sort of looking at mechanisms how we could, when there is information about all the invoices that companies have sent each other To say that, hey. What if this company would pay earlier to that company so that that company could pay earlier to that company so that that company could pay earlier to the next company? And in order in in in that way, in a way, optimize the, the, the whole economy, and Then create buffers, excess capital that the companies now would be holding so that they could be making investments, or Not having to, cut down their operations or stuff, because they hit liquidity problems, which I think sort of is a It’s a rather big idea, and I’ve been advocating it, pretty much the whole year in different parts of the world. And, and we’re getting quite a bit of traction in A number of countries who are who are sort of thinking that that could help protect the downside when the economy is not doing well, but then also create a Quite quite a competitive advantage when when things are going well because everyone in the economy just gets paid earlier and needs Less operating capital to do so. And the the the 2nd piece, around fraud. I think that’s, so if the, if the liquidity is usually a Question, when we have larger amounts of larger payments between banks or large corporates, the fraud is something that really touches, I think, everyone. Probably Everyone has received emails, trying to get their bank details or, make them payments to someone or Scams, that, that try to get to your monies.


Kimmo Soramäki — CEO FAN.FI [00:33:46]:And I think in the past that pretty much after COVID, A lot of countries started to to, bring a lot of new consumers into the realm of digital payments. This, sort of financial inclusion and digitization of of the economies has meant that We have now in large parts of the world, faster payment systems, so it’s very easy to move money from, one person to another. It’s instantaneous. But at the same time, we have brought in hundreds of millions of people, that used to use Cash and now have to learn how to use digital payments. So they are very, sort of like, profitable targets for international gangs, to target and try to scam them out of their money. So So I think this is happening a lot in Southeast Asia, in the Middle East, but also I think, In in Europe, well, I think it comes just in very many forms. So what we are sort of working mostly is around what we call consumer fraud. So consumers getting scammed.


Kimmo Soramäki — CEO FAN.FI [00:34:54]:They’re making payments to, to fraudsters they don’t want to make payments to. And then these fraudsters are Our, onward muling the money is very quickly in the instant payment system. Trying to conceal the, the source of the money and then take it out in cash or or crypto or or move it somewhere out out out from the system. So there’s a sort of window of opportunity need to help them actually stop those payments, and then return the monies to the victim. Yeah. So, so what what happens is that the, the fraudsters, when they get their money quickly, through the faster payment systems or instant payment systems from the, from the victims, they start to move it around through mule accounts within the system Many times, so in 20 minutes, it can already have moved several accounts forward. And, of course, that Credit is very difficult for the for the, to recover that money money to the victim. And, as a consequence, I think Lot of people are losing trust into digital payments, the same way that I don’t answer phone calls anymore because most of them are scam or spam, or I’m I’m very distrust distrustful on any SMSes that I receive, because they probably lead to links that I should not be clicking.


Kimmo Soramäki — CEO FAN.FI [00:36:16]:And we don’t want that same thing happen to, to payment systems because they’re too critical for the functioning of the economy. And especially in countries that have digitized very quickly, there’s real risk that large amounts of people start to consider them just Trustful and stop using them and return back to using cash, which, of course, is much less efficient for the sort of, like, economy than than being able to Make purchases online and pay online.


Paolo Sironi — Author and Thought Leader [00:36:45]:It’s a pleasure to be here, and, I wish happy new year to everyone. 2024 will be An amazing year for innovation.


Luca Frignani — CEO Exaloan [00:36:54]:Awesome. Thanks, Yaron. The same to you. Merry Christmas and a happy new year.


Ivan Maryasin — CEO Monite [00:37:00]:Merry Christmas, and happy coming new year.


Kimmo Soramäki — CEO FAN.FI [00:37:03]:Merry Christmas, everyone, from my behalf as well. And, More exciting, and positive news for the for the next year.


Jörn “Joe” Menninger [00:37:15]:It has been a great pleasure to have you all here in

the Fintech Review 2023. Hope to see you soon again. Everybody out there, merry

Christmas. Happy New Year.


Narrator [00:37:33]:That’s all, folks. Find more news, streams, events, at interviewsatwww.startuprad.i0. Remember, Sherry is caring.




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