On the second day of ICT Spring, finance and technology specialists met again in Kirchberg, located at the very heart of Luxembourg, to share their knowledge and discuss FinTech trends and best practices. The morning session focused mainly on innovation in payments, ranging from mobile to blockchain, with a long discussion around the latest PSD2 regulation.

Digital payments specialist Jonathan Prince (Co-Founder, Finologee), who acted as moderator, first welcomed Ning Wang (Co-Founder & Chief Business Officer, PingPong) on stage, for a speech entitled "A bridge from Asia to Europe". He started his presentation by telling the audience about his background and expertise earned notably working for PayPal and AliPay, and explained them what PingPong was all about. He then listed some of the pain points of cross-border e-commerce, especially between Asia and Europe: security, speed, transparency, currency conversion and local compliance. But according to him, the challenges also mean a lot of opportunities for young players to develop new solutions which could be more adapted to international commerce. PingPong arrived in Luxembourg one and a half year ago and relies mainly on partners, marketplaces, banks, import/export agencies and has a constant relationship with regulators. Its ambition and vision? To continue to accelerate and create new opportunities for international sellers.

The cooperation/competition with FinTechs in the payments industry was the main topic of a discussion between Laurent Nizri (Founder & General Manager of the Paris FinTech Forum) and Catherine Fournier (CEO, Natixis Payment). Mr. Nizri started by saying that every single day new startups in the payments industry are created: "many disappear, when others choose to work directly with banks". He then reminded the audience that the payment revolution actually started almost 10 years ago, in 2009, with the implementation of PSD1. Mrs. Fournier explained that Natixis first got into digital payments in 2015, through mobile. Lately, the French bank bought 3 FinTechs, all at a different stage. Currently in the first part of the journey, they all managed to double and triple their revenues. "These statups were acquired to be part of our business. We did not just buy technology," she added. It mostly allowed to create new ways to engage and work, but the next step might very well be the mutualization of platforms. "We are also working on branding, using the strength of the Natixis name", she concluded.

Jean Hilger (President, LUXHUB) also took the stage during the session, focusing on PSD2, comparing payments to the milk industry because of its complexity and large variety of products create to please the customer. He then got intro more details concerning APIs and their standard processes: "APIs have become products by themselves just like Google and Netflix. The need to become real-time, precise, have a reactive lifecycle, integrate cybersecurity mechanisms, etc. These are new levels of service complexity that we didn’t have before". According to the FinTech expert, banks used to complain about regulation but PSD2 might be the one that leads to a revolution and to the market of open banking. He added: "Banks could actually become technical service providers, managing APIs. They could therefore do it by themselves or delegate it to companies like LUXHUB". The startup's DNA is to connect banks to FinTechs, funds, etc, as times are more and more digital and integrated. "It starts with PSD2 and will go further into open banking," he concluded.

PSD2 was also the main topic in a round table discussion moderated by Jonathan Prince, with the participation of Patrice Fritsch (Executive Director, EY), Ghela Boskovich (Head of FinTech & RegTech Partnerships, Rainmaking Innovation), Jacques Pütz (CEO, LUXHUB) and Fred Giuliani (Co-Director of Informatics Development Department, BCEE Luxembourg). Mr. Fritsch started by reminding the audience about PSD1, which was created by the European Commission due to a lack of harmonization when it comes to payments: they needed to be processed in a similar way globally and reduce customer liability. With PSD2 transposed in early January, the biggest change is that new entrants become licensed and will access bank accounts to provide the services. According to Mrs. Boskovich, PSD2 is a game-changer as it opens up competition and allows the improvement of end-services. "It will also change Business Models because banks won't own the data anymore," she added. "It increases competition and creates a new value chain. And if PSD2 still limits open banking, it is going towards this direction, and a PSD3 can be expected," highlighted Fred Giuliani. And according to Jacques Pütz, GAFAs might also benefit from PSD2 and increase their presence in the payments industry. "They can provide clients will a greater user experience. It will put a lot of pressure on banks," he explained. In this respect, will the largest payments providers just offer services or also bank accounts? And will banks become IT companies? Ghela Boskovich concluded: "Banks will have to do a cultural shift, as their main asset is going to be data and permission control".

Waldlust, TSI Payment, Welendus, FINQware and EarthLab then participated to a Startups Insights session.

The return of electronic wallets was the topic of another panel discussion, under the moderation of Mr. Prince, and with Joschka Friedag (CEO & Co-Founder, Cringle), Damien Guermonprez (Chairman, LemonWay) and Ning Wang sharing their knowledge. Mr. Friedag started his speech by highlighting the fact that wallets are often assimilated to bank account, and that unlike in Asia, it is not necessary part of the user journey in Europe. According to Ning Wang, the concept of wallets has evolved and his now centered around data and access. "Cash is too expensive to be sustainable', added Damien Guermonprez. Mr. Friedag could only agree, stating that there will be less cash in the future, as our world gets more and more digital. "The only advantage is that cash is private, when digital payments are not. Regulators should come up with a solution in line with the basic right of anonimity" he explained. The experts then discussed the issues of privacy, cybersecurity but also the rise of cryptocurrencies. "Companies need to create modern wallets build especially for the modern lifestyle" concluded the CEO and co-founder of Cringle.

Before moderating a round table discussion on cryptocurrencies, Paul Brody (Principal & Global Innovation Leader, BlockChain Technology, EY) introduced the topic stating that "Blockchain has become enormous and that 2018 is the year of industrialization, where the technology will be used to run critical operations". According to the experts, it is already happening in finance, logistics, asset management and in many more industries. Yet, we were promised a revolution and might currently be a bit disappointed…

He then welcomed Jean-Louis Schiltz (Former cabinet minister, Schiltz & Schiltz), Andy Bryant (COO, Bitflyer), Marc P. Bernegger (Member of the Board, Crypto Finance Group) and Shahar Rabin (CEO, Capitalise.ai) to discuss the "attack of the cryptos". Mr. Schiltz first stated that regulation was useful: "aiming at regulating the Blockchain is a no brainer". Yet, it is still unclear how to regulate: it is clearly not about speed, but rather about clarity. According to Andy Bryant, one of the advantages of Luxembourg is that you can talk directly to the regulator and work things out together. Mr. Bernegger then talked about the huge impact of the tokenization, "the next step of the digitalization of the real world". Shahar Rabin underlined that the volatility was one of the biggest challenges when it comes to the development of cryptocurrencies. He added: "We need to connect cryptos to a commodity to create stability and then provide simple yet sophisticated platforms so that a larger majority of people can enter the space". The discussion ended with experts sharing their vision for the future. According to Jean-Louis Schiltz, in one year, we will see much more blockchain applications in the financial world and more questions will be raised regarding its use in funds and securities.


Alexandre Keilmann

Photos: Dominique Gaul

Publié le 18 mai 2018