Ep. 135 - From Inclusion to Participation: The Bank's Role in Cross-Border Payments, with Deutsche Bank

Liam Gray (0:05)

Hello and welcome. My name is Liam Gray, co-host of The Payments Shed Podcast, live from Fintech Meetup Europe in Lisbon. Today I'm joined by Kliment Andasorov, head of Fintech Sales for Institutional Cash Management at Deutsche Bank. Welcome Kliment.

Kliment Andasorov (0:18)

Thank you very much for having me. A pleasure to be here.

Liam Gray (0:20)

Thank you for coming. Before we dive into it, could you just give everyone a quick intro of yourself?

Kliment Andasorov (0:26)

Yes. I spent the last 10 years into payment, primarily in the European fintech space. My role currently at Deutsche Bank is focusing on partnerships with fintechs, with digital banks, with non-bank financial institutions, with a strong focus on cross-border payments, on making sure that the cross-border payments are faster, trusted, more meaningful, more flexible.

We're looking also for everything else that is coming up in terms of technologies, the banks of tomorrow, in terms of cross-border payments, what will be needed, which partnerships need to be developed, which technologies need to be supported, while keeping the basics in place.

Liam Gray (1:07)

And when we're talking about that payment space in particular, there are so many players there, I'm really keen to understand the role that banks, like Deutsche Bank, are playing in that payment space today.

Kliment Andasorov (1:18)

I think banks in general, at least in our experience, tends to move slowly more into the infrastructure layer.

We do say that ultimately then the interface, the client-facing interface potentially then changes. You see more and more Fintechs owning that type of relationship, but the banks are still remain quite active and quite relevant also in the digital payment space. They're in the background, they're doing the safeguarding, they're providing the liquidity, the access to credit, the foreign exchange. They're still quite active in that space, but at the same time they just move like a layer in the back. They're the trusted partner that makes cross-border work, make sure that the settlement is actually happening. They provide also then the security, and they most importantly, in my opinion as well, they provide also then the governance model and the regulatory oversight and compliance that is needed to make sure that the payment is reliably managed from end to end perspective.

Liam Gray (2:23)

And do you feel like this is the role that banks like Deutsche Bank will continue to play going forward?

Kliment Andasorov (2:29)

Absolutely, and that's one, that's the reason why I'm also at this event, because we're looking also then for partnerships, we're looking also for other entities that help us get better, be better, and it's also not just building everything ourselves, but also potentially looking for the next frontier of what is coming in terms of technology, and should we have everything develop in the house, or what can we potentially focus also in terms of what will be needed tomorrow.

Liam Gray (2:52)

Absolutely. Let's talk a little bit about financial inclusion, and what that actually means, and then also moving into the shift to financial participation and what that means for banks. What does that financial participation piece mean in particular?

Kliment Andasorov (3:06)

When my journey in the payment space started around 10 years ago, money was cheap, a lot of newly founded companies popped up and the main KPI back then was just number of new customers. Monetization wasn't really a concern, actual profitability wasn't really a concern, it was just finding a niche and being able to scale there.

I think nowadays, we're all, independently are we talking about fintechs, are we talking about banks, every entity that is engaged in this type of transaction is looking for utilization, and just providing access is not enough. You need to make sure that all the solutions that you bring to the market, they actually solve a problem obviously, and they actually are meaningfully used and flexible enough, or connected to as many as different platforms or solutions or technologies in order to bring additional value. If you're corporate, you don't just want to have an account, you obviously want to have access to borrowing, you want to be able to do payroll, you want to be able to also make investments, move money cross border in a meaningful way, and ideally you should also have time and have the ability to also focus on new type of technologies like wallets, stable coins, tokenized bonds, something like that. Absolutely.

Liam Gray (4:23)

And if we talk about one element that you just mentioned there, that cross border payment, how do you support your customers in working on that at the moment right now?

Kliment Andasorov (4:33)

So whenever we're looking on the cross border payment, so we start with my background as also, and the role is we're focused primarily on the correspondent banking service as a backbone of everything that we provide. And then we beat the additional services around it. We have the liquidity solutions, we have the FX solutions as well.