‘Artificial intelligence is almost a humanities discipline. It's really an attempt to understand human intelligence and human cognition.’ Sebastian Thrun, Computer Scientist
Another edition of Money 20/20 has come and gone, and while the event has grown, changed locations (remember Copenhagen in 2017?), and embraced a more casual vibe (myself included!), some things never change. The topics continue to inspire, the presentations and stages maintain their glamorous touch, and the fun never stops.
Without a doubt, this year's edition was dominated by AI. Whether the discussions revolved around generative AI or just AI, attendees were amazed by the technology's potential for automation, productivity, and even humour (e.g. the ‘hallucinations or babbling’ made by the event’s AI robot named aiana). Bigtech companies like Nvidia and Amazon sponsored stages dedicated to AI, and even former French president François Hollande joined to discuss the business impacts of automation.
Source: Money 20/20
But amidst all the AI buzz, fintech still held its ground, with discussions spanning blockchain, tokenisation, the future of money, digital wallets, and digital identity. It was a dynamic blend of innovation and insight that left everyone buzzing with ideas and inspiration!
In the realm of financial services, AI has firmly entrenched itself on the bankers’ agenda. 45% of banks are already investing in generative AI, with 81% having established dedicated GenAI teams, Anu Widyalankara, Director at EY reported.
Source: Anu Widyalankara, EY
This is because AI finds multifaceted applications across banking operations, including hyper-personalised content, task automation to boost operational efficiency, and support for risk and compliance tasks such as sanctions screening and AML monitoring. Additionally, HR departments benefit from policy development and training initiatives enabled by AI tools, while in investment, AI facilitates sentiment analysis, market tracking, and the creation of hedging services. Nevertheless, to be successful in the AI race, Anu emphasised the importance of prioritising human-centric approaches in AI development rather than solely focusing on processes. She underscored the essential roles of an AI visionary, an AI solution architect, and an AI ethicist in ensuring the responsible development and deployment of AI tools (thus, new job profiles created).
The importance of ethical considerations in AI development was also mentioned by Clara Durodié, CEO of Cognitive Finance Group. Clara suggested using a simple yet profound mantra when building AI: 'Would you be comfortable with your children or family using the tool you are building?' and proposed a holistic approach that includes hiring professionals from diverse fields such as psychology and philosophy. She addressed the pervasive issue of bias in AI, particularly gender bias and ingrained biases in language. Overall, it is critical to allocate more time and resources to address security, ethics, and governance concerns in AI development.
As next-generation digital assistants like Microsoft’s Copilot reshape the banking customer experience, representatives from Microsoft and NVIDIA delved into the latest AI tools developed for financial services, highlighting their transformative impact and value generation.
EMEA Financial Services Business Lead at Microsoft, Patrice Amman showcased examples of operational efficiency enhancements, such as more intelligent searching and chatbot interactions, underscoring Copilot’s role in facilitating human-AI collaboration. Copilot is not akin to autopilot, as human oversight is still very important. Speakers suggested several strategies for optimising AI models, including conducting stakeholder surveys, integrating proprietary and complementary data, and addressing compliance issues like transparency, accountability, and bias. Kevin Levitt, Director of Financial Services at NVIDIA, emphasised the importance of delivering meaningful use cases for scaling AI tools effectively.
Source Money 20/20
There is a critical need for investment in developing explainable, ethical, and transparent AI solutions. In conclusion, while AI itself may not be cause for concern, it’s essential to consider the ethical implications of its use by humans.
The artificial intelligence boom will heighten banks' reliance on major US tech firms, European banking executives at Money 20/20 warned. Bahadir Yilmaz, ING's Chief Analytics Officer overseeing the bank's AI initiatives, anticipates an increasing reliance on bigtech companies for infrastructure and machinery ‘because the computational power required for these technologies can be immense, and it's not practical for a bank to develop this tech independently’. Bahadir stressed that European banks must ensure they can switch between different tech providers to avoid ‘vendor lock-in’.
‘AI demands massive computing power, and the most practical way to access this is through bigtech’, said Joanne Hannaford, Head of Technology Strategy at Deutsche Bank's corporate bank. Joanne noted that banks must notify regulators when transferring data to the cloud, a process that could become more complex with increased cloud computing use. She added that banks also need to convey to regulators the risks of not using cloud computing’s capabilities, highlighting the potential opportunity costs involved.
For banks, real asset tokenisation represents the initial step towards DeFi, a journey that began in 2017 with a focus on real estate. Today, the market has evolved to include Ethereum transactions, with banks venturing into tokenising existing securities and transitioning from physical goods. Tokenisation extends beyond mere digitisation; it entails exploring real-world asset applications on-chain, including bonds and equity, to streamline manual processes and introduce programmability. Challenges persist, including regulatory hurdles, compliance integration, and education, particularly concerning tokenised deposits.
CBDCs, a subset of the tokenisation discourse, face differing adoption challenges. While wholesale CBDCs offer predictable use cases, the retail variant poses uncertainties in customer reactions.
Digital cash is a natural evolution rather than a replacement for physical cash, Evelien Witlox, Digital Euro Director at the ECB said. She highlighted the main benefits of using a digital euro, including ensuring payment capability regardless of location and maintaining trust in public money. Overall, the digital euro supports economic sovereignty by eliminating the need for non-European payment providers, plus it promotes financial digital inclusion since the digital euro is public money. To maintain financial stability, Evelien emphasised the need to set a specific limit on the amount of digital euro that can be held by each consumer. The major use cases for the digital euro include P2P payments (e.g., paying a neighbour), in-store payments, and ecommerce payments.
When asked what percentage of payments are expected to use the digital euro, Evelien didn't have a precise number but mentioned that the ECB aims to make this payment method attractive for merchants to adopt. To reassure digital euro sceptics, Evelien mentioned that European authorities do not want to track their citizens via the digital euro, as it has embedded security (and encryption) features and does not include programmability.
Overall, the ECB has made progress on the rulebook, privacy implementation, and procurement of solutions needed to develop the digital euro.
The regulatory clarity brought by MiCA in Europe reignited interest in blockchain, highlighted Monica Long, President of Ripple. Now, businesses are approaching blockchain through a mix of private and public partnerships, such as SocGen in France launching a stablecoin on a public blockchain.
Monica acknowledged that scandals surrounding FTX and Binance had damaged businesses like Ripple, causing a lingering negative impact. However, ‘these scandals were cases of fraud, distinct from the technology itself, and that there are applications demonstrating the benefits of blockchain’. Despite MiCA providing clarity in Europe, the US remains somewhat behind in the crypto space. Nonetheless, Ripple’s president is hopeful for progress, especially with potential stablecoin legislation on the horizon. Ripple has announced plans to launch a USD stablecoin in response to users' need for stable currencies and reliable transaction methods. Access to USD involves storage, liquidity operations, end-to-end infrastructure, banking relationships, and distribution channels, all of which Ripple can provide. Furthermore, the stablecoin will not render XRP obsolete. There is also potential for an XRP ETF, driven by demand, a large user base, and active developers on-chain.
When asked about the future of blockchain, Kaushik Sthankiya, Global Head of Banking & Payments at Kraken, expressed hope that crypto will be widely adopted within five years. Cassie Craddock, Managing Director of UK & Europe at Ripple, emphasised the importance of interoperability and the ability to move value between blockchains. Ioana Surpateanu, Chief Strategy Officer/NED at Domin Network/CryptoUK, noted that people pay for experiences, predicting a migration from Web 2 to Web 3 and highlighting the importance of the transition of money/value from the virtual to the real world.
Sasha Dobrolioubov, Head of Partnerships & BD at Persona, and Daniel Flowe, Head of Digital Identity at LSEG, shared insights on mainstreaming reusable IDs globally. They distinguished between portable and reusable identity, noting that portable identity is like self-sovereign identity and doesn’t rely on a centralised authority. Reusable identity, on the other hand, allows a single digital identity to access various online services, simplifying authentication while enhancing security and privacy.
The discussion on portable identity focused on three pillars: who issues the identity (public or private entity), who verifies the credentials, and the ecosystem participants. These led to differences on how identity is perceived globally, such as the more unified framework of EIDAS 2.0 in the EU versus the state-by-state adoption in the US.
In a separate panel on digital wallets, speakers advocated for the need for public-private partnerships and the importance of standardisation to develop interoperable and cross-border digital identity frameworks. They advocated for user control over data, suggesting that digital wallets can return control of identity and credentials to users. The term ‘finternet’ was coined to describe giving users their assets in a tokenized form within their wallets.
We all agree that one of the most notable payment methods used is instant payments. However, faster payments also mean faster fraud, and Soups Ranjan, CEO of Sardine explained why. Traditional approaches to fighting fraud act after a transaction is authorised. With faster payments, payment processors need real-time transaction fraud screening that occurs even before the transaction is authorised. These systems must perform large computations in real time, which traditional systems aren’t built for. Multiple scams in this area include business email compromise, phishing, and sending fake travel alerts.
Additionally, traditional fraud-fighting methods have focused mostly on transaction data. With the rise in faster payment scams, payment processors also need to contextualise ‘how’ the payment is made.
Lastly, traditional approaches don’t screen the counterparty. For example, when we make an in-person payment over Zelle or CashApp, we know the person's identity. At a distance, however, we need to ensure that the payment method matches the identity of the person we think we’re paying.
To combat faster fraud, Soups recommends understanding the entire customer journey to identify risk points. Behavioural biometrics, which deep fakes can't mimic, can help, and data sharing is essential. Sardine created a data-sharing consortium called Sonar to bring banks and fintechs together to create a ‘blocklist’ of counterparty payment methods that should not be trusted.
This edition of Money 20/20 was packed with insightful content, fresh meetings, and diverse perspectives on the payments industry, leaving attendees with much to ponder. Questions like, ‘Will AI steal our jobs or perfect them?’ and ‘Will the next popular faculties for youngsters be philosophy and psychology instead of IT?’ sparked thought-provoking discussions. We also explored how the digital euro and CBDCs will function and whether we need them with stablecoins already available. The potential for banks to embrace blockchain and tokenisation, the fight against fraud leveraging GenAI, and the future of digital ID wallets were all hot topics.
The only way to get answers to these questions is to attend the next Money 20/20 edition and stay in the know while connecting with fellow payment enthusiasts at the greatest money show on earth.
Thank you, Money 20/20, for an amazing edition, and congrats to the whole team for pulling off such a complex event. To conclude, I leave you with a picture representing Money 20/20 in 10 years and another depicting Money 20/20 taking place on Mars - courtesy of DALL-E. Will Money 20/20 look this way in 2034?
About Mirela Ciobanu
Mirela Ciobanu is Lead Editor at The Paypers, specialising in the Banking and Fintech domain. With a keen eye for industry trends, she is constantly on the lookout for the latest developments in digital assets, regtech, payment innovation, and fraud prevention. Mirela is particularly passionate about crypto, blockchain, DeFi, and fincrime investigations, and is a strong advocate for online data privacy and protection. As a skilled writer, Mirela strives to deliver accurate and informative insights to her readers, always in pursuit of the most compelling version of the truth. Connect with Mirela on LinkedIn or reach out via email at mirelac@thepaypers.com.
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