Asia Behind the Idea Fintech

Behind the Idea: biz.Clarency

The launch of the biz.Clarency trade-enabling platform in January sees Singapore-based Clarency move fully into the fintech arena. The platform is a development of the system that has powered the global payments services operated by its associate, Choice International in the UK, since 2004.

Currently handling in excess of £3 billion a year, it delivers powerful KYC and EDD functions with multi-currency payments to allow financial institutions to deal confidently and compliantly in challenging jurisdictions. These functions are integrated seamlessly with bank-linked payments, allowing every transaction to be monitored for continued compliance and living diligence.

Strong partnerships feature throughout the platform, allowing it to access cutting-edge technologies without needing to re-invent proven solutions. Among these are two next-generation blockchain repositories to provide immutable ledger information to regulators and law-enforcement agencies.

Jem Shaw heads up technology and communications for Clarency, as well as functioning as CEO for the non-profit Ethical Payments Foundation. He’s a strong advocate for financial inclusion and transparent world trade. Jem believes that these aims can be achieved only with a change of compliance culture from shifting blame to directly targeting financial malfeasance.

What has been the traditional company response to financial technology innovations nationally?

Our historical approach has been more solution-based than innovation-grabbing. We’ve made cautious use of technologies where there’s a clear business case, but never been swayed by flavour-of-the-hour trends

How has this changed over the past few years?

I’m not entirely sure that it has. Our latest launch melds two distinct, highly innovative blockchain technologies with AI-driven recognition systems, machine-learning mail scanning and other highly current systems, but they’re there for exactly the same reason as the manual MLRO decisions that they fuel. We choose the best way of solving a task, not the latest in-fashion hi-techery.

Is there anything that has created a culture of change inside the company?

I think we’ve always had a culture of change. The business we’re running today is very different from the one we operated twelve months ago. It’s what’s allowed us to adapt to the COVID-19 world and grow strongly through a crisis that’s destroyed far too many good companies.

What Fintech ideas have been implemented?

Our adoption of blockchain was probably the most visible. The evidential audit trail it offers has strong advantages for accountability. That said, we researched the offerings with great care before we settled on InterlockLedger’s solution. Traditional blockchain has serious shortcomings in its flexibility and – as it turned out earlier this year – its security. Those had to be resolved before we could deliver the vision of faster, easier and safer global trade.

What benefits have these brought?

That’s an interesting question. A direct benefit has been the intended immutable audit trail and strong security. But there’s been another, less expected but equally important gain. In working with a willing blockchain partner we’ve been able to place the evidential data layer outside the core platform processes. This meant that, when the opportunity presented to integrate with China’s forthcoming government-approved financial blockchain, we were able to plot an easy course to implement the same together-but-separate architecture. This gives all parties the security and confidentiality they want without sacrificing the transparency required for safe trade.

Do you see any other industry challenges on the horizon?

While the financial institutions continues to see compliance as a no-blame tool, the world will continue to shrink. Africa’s superb emergence as an economic powerhouse will be bulldozed by inaccessibility to correspondent banking and cross-border mistrust. The wrongdoers will continue to hide among the mountains of false-positives generated by compliance systems that do no more than check boxes. Our biggest challenge is to embrace a culture change and address the problems instead of simply ensuring we’re not to blame.

Can these challenges be aided by Fintech?

FinTech can provide solutions, but Fintechs are the solution. They’re driven by commercial opportunity while the banks are motivated by avoidance of risk. Look at the vast investments they’ve made in compliance, most of it in raising staffing levels. So the great innovations are coming from small, visionary companies who are bold enough to explore solutions that question and often threaten established structures.

Final thoughts…

2020 has shown us changes that in many ways are as profound as those experienced in and after two world wars. We’ve been brought face-to-face with the fragility of our civilised business world. Some of the business casualties couldn’t survive whatever they did, but many collapsed – and will continue to collapse – because they failed to adapt. Whatever happens to the world, trade will be the core of our survival for as long as our race survives. We have to ride the changes and be ready to change our thinking. The monolithic financial bodies have to learn to respond like the new, fast-moving business organisms that are beginning to surround them.

They have to work with them, or leave their bones to be found in a glacier.

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