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Fintech Leaders 2023We reveal this year’s changemakersImproving customer
experienceAre microservices the answer?FCA Consumer DutyWhat does your firm need
to know?Fighting fraud through the private sectorBy UK Ambassador, World
Association of DetectivesWhat next for crypto?Views from industry expertsRisk
Americas 2023Join us for our flagship in-person eventINSIDE THIS
ISSUEwww.cefpro.com/magazineFRAUDCRYPTOCONSUMER DUTYFINTECHCLIMATE RISKCeFPro®
magazine for non-financial risk professionalsTechnology EditionTALKING TECHThe
digital transformations shaking up financial services



www.cefpro.com/magazine2CONTENTSTechnology Edition - Feb/Mar
20233FOREWORDAdvanced innovation: Opportunity or challenge?Ty Lambert, Cadence
BankThe views and opinions expressed in this publication are those of the
thought leader as an individual, and are not attributed to CeFPro or any
particular organization.CeFPro® magazine for non-financial risk
professionalsWritten by the industry, for the industry4THE BIG
CONVERSATIONImproving customer experience: how microservices are shaking up
traditional bankingAnish Shah, BNY Mellon, Curt Queyrouze, Coastal Community
Bank & Mayank Mishra, former Citi6Q&AReviewing the expansion of model risk and
evolution of definition of a modelChris Smigielski, Arvest Bank8FINTECH LEADERS
EXECUTIVE SUMMARYCybersecurity, data, and customer experience: fintech’s routes
to success 10INFOGRAPHIC2023 Fintech Leaders 12INDUSTRY INSIGHTTop risk factors
for European firmsAlex Carrier, CeFPro16RISK FOCUSLeveraging the private sector
to fight fraudRoger Bescoby, Conflict International & World Association of
Detectives18Q&AManaging the transition from voluntary to mandatory climate
change disclosuresChristel Saab, Inter-American Development Bank20EVENT PREVIEW
Vendor & Third Party Risk series22CEFPRO CONNECT By the industry, for the
industry14RISK FOCUSThe FCA's Consumer Duty: What firms need to knowCatherine
Levy, former HSBC23TALKING HEADSWhere do you see the future of
cryptocurrency?21EVENT PREVIEW Risk Americas 2023

www.cefpro.com/magazine3MAGAZINE ADVISORY BOARDDominique BenzHead of Business
ControlsMizuho Mike GuglielmoManaging DirectorDarling Consulting Group Alpa
InamdarTransformation LeaderAIG Michael JacobsLead Quantitative Analytics and
Modeling ExpertPNCFOREWORDOUR MAGAZINE TEAM...We welcome contributions. If you
or your organization are interested in featuring in our next issue, please
contact infront@cefpro.comADVERTISING & BUSINESS DEVELOPMENTIf you are
interested in sponsorship and advertising opportunities, please
contact:sales@cefpro.comPUBLISHERAlice Kellyalice.kelly@cefpro.comEDITORIAL
ASSISTANT AND OUTREACH MANAGEREllie Dowsettellie.dowsett@cefpro.comMANAGING
EDITORKate O’Reillykate.oreilly@cefpro.comHEAD OF DESIGNNatasha
Marinowww.cefpro.comAngela Johnson de WetCloud Enabled Business Transformation –
Head of FunctionLloyds Banking Group Ty LambertSenior Executive Vice President &
Chief Risk OfficerCadence BankSabeena LiconteChief of ComplianceICBC Oskar
RoggMD, Head of Treasury, AmericasCredit Agricole CIBSean TitleyDirector of
Enterprise and Operational RiskMetro BankPhilip WhiteSenior Vice President –
Head of Transformation Strategy & Reporting – Market, Liquidity and
Non-Financial RiskDanske BankKen WolckenhauerVP, Vendor ManagementNordea Bank,
New York BranchWelcome to the first edition of iNFRont for 2023, which looks set
to be another year of advanced innovation in the financial services industry. As
opportunities to leverage technological efficiencies continue to be explored,
such as operational integration into cloud infrastructures and digital banking
for improved customer experience, an equally important counterbalance is
required to protect stakeholders. The saying ‘opportunity makes a thief’ springs
to mind when considering the modern era of conducting business. As we create
opportunities to operate more efficiently and more conveniently, we also invite
ever-present bad actors who seek financial gain through vulnerabilities in
processes, systems, and human behavior.We shed light on these risks in this
issue of iNFRont as we examine the evolution of the cyber threat landscape and
the use of technology to monitor and mitigate fraud and financial crimes.
Advanced technology utilizing artificial intelligence and machine learning is
becoming more and more common in the industry’s pursuit to combat financial
crimes, and with the use of these tools comes the need for explainability. We
must recognize the need for directness when providing transparency, and a level
of fairness and explainability is required when implementing advanced
technologies.In addition to industry change through innovation, regulatory
change is also alive and well in 2023, not least the Securities and Exchange
Commission’s (SEC) recent proposal to require certain climate-related
disclosures for publicly traded companies. Banks have increased their focus on
ESG initiatives over the last several years (even longer for many non-US banks)
and while the SEC’s proposal is designed to offer a level of standardization,
there are inherent challenges with any such implementation that must be
overcome. We hope you enjoy this issue of iNFRont and we welcome contributions
for future issues.ADVANCED INNOVATION: OPPORTUNITY OR CHALLENGE?Ty Lambert
Senior Executive Vice President & Chief Risk OfficerCadence Bank

www.cefpro.com/magazine4IMPROVING CUSTOMER EXPERIENCE: HOW MICROSERVICES ARE
SHAKING UP TRADITIONAL BANKINGCustomer experience continues to advance within
financial services as consumer demands and expectations reach new technological
heights. Since the onset of the pandemic and the move to a remote environment,
consumers are increasingly being exposed to digital services. As complex
financial institutions navigate the evolution of customer expectations, more are
adopting a collaborative approach when working with fintech and microservices.
With organizations striving to advance their product offerings by tailoring
unique opportunities to consumers, they are increasingly seeking to leverage the
agile nature of fintech to drive customer experience. At CeFPro’s Customer
Experience & Digital Banking congress (November 2022, New York City), industry
experts gathered to discuss the broad customer experience journey and the road
to digital banking. One particular discussion focused on fintech and
microservices and how to integrate for a seamless consumer experience. Here, we
summarize our in-depth interview with three industry thought leaders…Why is
banking as a microservice or embedded finance important in today’s context?
Anish: The concept has been around for a while, but consumers are now requesting
a more integrated experience. Technology is enabling us to do that but in a more
modular manner. Instead of outsourcing the whole piece, we can review and decide
where in the value chain we want to be based on our strengths, reviewing
partnership opportunities that allow us to scale up faster. This is not a new
idea but it’s becoming more viable now, offering opportunities to level the
playing field for smaller scale institutions. Historically, launching a new
offering, channel, or service model would require a large initial investment.
Leveraging microservices has increased accessibility, allowing organizations to
use them to test the waters; if the project is then successful, firms can
continue to leverage those partnerships at scale, or in-source the capability.
Curt: As a smaller institution, we can move faster, but the key to leveraging
microservices and low-code solutions is to create integrated teams. There are
pieces to this that are like Lego bricks; teams should be empowered to piece
things together. Firms have the opportunity to build a workflow and add
components like decision engines and APIs to bring this into scope more quickly.
It’s not just about leadership; it’s about equipping teams with the tools to
stay agile. Separating from levels of the control structure and developing teams
that can work together to execute solutions is unique for a microservice and
unique for banking. It does bring a range of risks relating to compliance and
data security, but these are all challenges that, once overcome, can help us
deliver another level of service to customers. Mayank: The beauty of
microservices is that they make collaboration so much more real – you can pick
and choose certain topics, models, or domains. Microservices have the potential
to support collaboration and bring energy into the system, allowing banks to
really see transformation and growth. The challenge is that there are
limitations in the skills available for microservices in the market today. To
set the context requires a deep understanding of the technology and we do not
currently have those skillsets at scale. In addition, microservices are great in
terms of speed but it can be hard to test in isolation whether they may conflict
when aligned with the customer journey. What are your thoughts on the metaverse
and the potential opportunities it offers?Curt: Engagement is the main
potential. However, banks are often not good at engagement. I’ve been thinking
about the banking ecosystem for many years, and I still haven’t figured out how
to do this well. Take financial education, for instance. A lot of fintechs are
working to try and improve financial health. Some of the messaging, like going
into schools to teach financial education, just isn’t penetrating. So, we looked
into gamification and exploring virtual worlds where students start with coins
and win rewards based on engagement and learning of money practices. We have the
opportunity to engage businesses and consumers, and to bring value through risk
reduction, fraud reduction, value-added services, and increased engagement. But
we have to keep evolving. We can’t just repeat the same presentation and expect
the same engagement levels. It’s akin to playing a game where you’ve completed
all the levels – if you have to wait for the developers to release new levels,
you’ll lose interest in the game.

www.cefpro.com/magazine5THE BIG CONVERSATIONAnish ShahMD, Head of Product &
DigitalBNY MellonMayank MishraManaging Director, Platform and Data
Solutionsformer CitiCurt QueyrouzePresidentCoastal Community Bank The challenge,
therefore, is not just around getting consumers in but keeping them. Underneath
that, it’s about a shared data ecosystem with security and protocols that
haven’t been built before. It’s both exciting and challenging! How is the
regulatory community responding to microservices? Are there any challenges
around that?Mayank: Business managers today have to deal with three dimensions,
starting with satisfying the regulatory edicts. The more geographies in which a
firm operates, the more regulators it comes into contact with and the higher the
levels of exposure to compliance. Second is the lens of competition and customer
expectation, and third is managing legacy platforms – we are running out of
capacity as we look towards new business models. These three areas feature in
everything we do. I see microservices as an important ingredient for all three
dimensions – reducing the cost of change around regulations and innovating
quickly either at core or extending the legacy. Anish: The role of the product
manager will expand to understand some of the gray areas and no-fly zones that
banks will impose. The sooner you can establish those boundaries, the sooner you
can put microservices or business services through initial checks to triage what
will work and what may not. If we are required to provide certain types of data
that we have a hard line on, it’s helpful to know that upfront, rather than
getting through business and commercial reviews and then learning where the line
is. Curt: The biggest issue for us is how to enter a new space and ensure we
keep compliance and relationships high. We’re taking the approach that we will
go above and beyond regulation, moving to the Banking as a Service model,
building a data ecosystem and protection standards that are currently
unregulated. The question is, who does the data belong to? The answer is the
consumer, of course, but some partners believe the data is theirs. If they want
the opportunity to play in this new world, then consumer ownership of data is
what they will have to accept and comply with. Fortunately, there are tools that
enable you to build protocols and have anonymization at your fingertips, making
this much easier to do than on traditional platforms. How can banks leverage
microservices to improve the customer experience?Anish: Firms should look at the
value chain at the most basic level and review where they want to own the
experience and capability. It will be essential to reinvest and maintain
competitive advantage, so these are long-term decisions. For the parts of the
value chain where there are plug-in components, this represents a great
opportunity for financial services firms to partner with microservices to
continually benefit from their investment. We are always analyzing the build vs.
buy debate and making choices that are right for us and the consumer. Curt: Our
fintech partners have raised hundreds of millions of dollars, which they have
invested in technology. As a Banking as a Service provider, I am leveraging
their investments. They have invested in user interfaces on phones and apps, and
our bank intends to leverage these customer-facing investments to bring users to
our platform. As an industry, we are going through a seismic transformation. The
things that made us successful until now won’t be the things that bring success
in the future. Technology and new ways of looking at business models and
revenues are something we need to really commit to. Mayank: I would agree with
Curt; banking is ripe for disruption. Fintech players like Revolut are already
so close to operating as a bank. Those banks that have invested in cloud
technology and microservices and partnered with fintechs are the ones which are
leapfrogging their competition, by being innovative and adopting to
customer-centric models. Arguably, they are the ones that will remain relevant.
To gain additional insight on the uses of fintech across financial services read
the Fintech Leaders www.cefpro.com/connectCLICK HERE TO READ THE FULL MAGAZINE



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