Moorwand is a London-based financial services provider offering issuing, digital banking and acquiring services. It provides access to card schemes and banking services, in addition to Electronic Money Services, to banks, fintechs, and payment companies. Unlike other BIN sponsors, Moorwand consistently strives to reduce payment friction and transform payments compliance into an enabler of innovation.
Market developments such as Open Banking, wearables and digital currencies are transforming the payments industry as we know it. Compliance is an integral part of innovation, allowing the creation of new and different offerings in a safe and secure manner to ensure market readiness. Payment providers need compliance to be as fast, agile, and dynamic as their technical implementations have become -with answers in hours rather than weeks.
Luc Gueriane, formerly Head of Business Development at Wirecard, was appointed by Moorwand as its Chief Commercial Officer in 2019. Gueriane’s role is focused on driving commercial success through the growth of Moorwand’s client base, programme portfolio, and client retention. Gueriane has advised flagship fintechs like Revolut, TransferWise, Monzo and Curve on their payment strategy.
What has been Moorwand’s response to financial technology innovations?
Working with pioneering fintechs means we need to understand how technology innovations are altering the payment ecosystem, especially from a regulatory point of view.
Fintech innovation has accelerated at breakneck speed over the last decade and regulators have been playing catch up. The sheer number and complexity of regulations are unprecedented – we have seen three European AML directives in five years for example.
Our response therefore has been to understand the practical ramifications of the latest compliance requirements to ensure our customers can continue to deliver innovative and compliant products to market, without delay and additional cost.
How has this changed over the past few years?
For the last 20-30 years the world of payments has been focused on cards and card schemes, with the four-party model the dominant market structure. This is fast changing for a number of reasons.
Firstly, how we pay has changed. Cards were designed for a physical retail world. Today, the majority of commerce is now online and increasingly mobile-first. This has heralded the rise of tokenisation, virtual cards and a shift from single transactions to re-occurring revenues through subscriptions.
And while cards are fast adapting from a physical to online environment new ways to pay have arrived. Real-time payments, Open Banking payments and digital currencies for example.
Secondly, what we pay for has changed. Not only is the majority of commerce digital, but increasingly payments are non-merchant focused and either person-to-person or business-to-business. These types of transactions are very different from merchant transactions.
As new technologies have arrived, they’ve not just changed how we pay but the underlying market structures that govern our industry. Over the last few years, this has made ensuring compliance even more challenging. Not just because of the proliferation of technologies and systems, but because these different technologies and systems need to talk to each other. We are seeing fintechs looking to offer both fiat and crypto wallets and payment capabilities for example.
As the market continues to diversify, service providers need an agile and dynamic approach to regulatory compliance to succeed.
Is there anything that has created a culture of change inside the company?
Defining our company values was an excellent way to ensure our team was aligned not only on business objectives but on creating a collaborative and agile culture that thrives on change. While the core spirit of our values is permanent, our culture will constantly be evolving as we continue to grow as a business.
Firstly, our success is driven by our ability to create excellence through collaboration. We are constantly driving forward as a unit with a shared vision and mutual support. Secondly, being a leading payments provider requires unrivalled vision, inventive minds and dynamic execution, so we pride ourselves on thinking differently and delivering innovation that matters. Thirdly, agility is the key to our success. Being adaptable ensures we are always open to change and are constantly moving forward. We’re flexible and ready to shift our approach to keep up with the fast-moving environment around us – we have to keep ourselves and our clients one step ahead of the game.
Finally, passion underpins everything we do. Our passion drives and motivates us to excel and drive positive change in our industry.
What Fintech ideas have been implemented?
To transform payments compliance into an enabler of innovation, Moorwand must embrace innovation itself and we utilise a number of fintech approaches to do so:
- Onboarding – We have digitised the onboarding system for our clients, allowing them to handle KYC and CDD requirements online.
- Self-service – Increasingly our clients are able to take control of their programme and directly access the tools and systems required.
- Collaboration – We continue to forge new partnerships to improve our client experience and make our offering more widely available to the market.
- Enablement – We’ve monitored the tech-first approach of challenger banks, responding by providing the permissions required to enable mobile payments for our clients to include in their service via Google Pay, Apple Pay and Android pay.
- Disruption – Working with fintechs like VIALET to enable its new credit line, we are changing the way the industry views credit provision. Previously considered exclusive to the big banks, we’re working with credit BINs disrupting the market
What benefits have these brought?
Overall, it’s about our ability to serve a greater number of clients and empower those clients with the tools to help grow their business. Industry collaboration and integrations allow us to further develop our solutions and make them easily available to partners and customers. Onboarding and a self-service approach allows them to drive their programme forwards and speed time to money.
Do you see any other industry challenges on the horizon?
Despite having registered over two million users in the UK, Open Banking is still failing to meet its objectives of creating a more competitive retail banking landscape. Open Banking’s two million active monthly users is a miserly 3% of the UK population. To put the numbers into context there were 247m cheques sent in 2019 according to Pay UK, estimating that cheques are used by over four million people. Yes, cheques are still more popular than Open Banking. This is an immediate challenge facing the fintech industry today.
Despite this slow start, we’re confident that the adoption of Open Banking will accelerate in time. We are therefore ensuring that our clients have a roadmap to ensure compliance with PSD2 and ideally take advantage of the numerous innovations that it offers.
Can these challenges be aided by Fintech?
Of course! Fintechs will widen the adoption of Open Banking and help it to fulfil its promise. To date, one of the biggest problems for Open Banking is the cost and expertise required by non-bank service providers to access the necessary infrastructure. This means fewer service providers and therefore lower rates of adoption. Fintech technology providers from dedicated Open Banking players to issuers and acquirers are making this infrastructure more accessible. In 2021, we will finally see Open Banking use cases that go beyond account aggregation and we think these will be driven by fintechs not incumbent banks.
For a long time, universal banking dominated the financial services sector—a handful of banks, enabled by a handful of monolith technology providers, offered a plethora of services to all. Then fintech erupted, unbundling and, in some cases re-bundling, the concept of a bank. By introducing competition and colour to a previously monopolised and grey industry, fintechs changed the mantra from being everything to everyone, to placing value upon specialisms.
As the market has grown, the demand for technology and the number of one-stop-shop financial service providers have increased. Fintechs starting out today are facing tighter regulatory scrutiny, greater competition for investment and a race against time to forge a path to profitability before they lose relevance, luring some start-ups into using a one-stop-shop provider. However, the events of 2020 revealed the risks of relying on one sole supplier, with HMRC Treasury investigating these risks further as part of its work to ensure operational resilience.
While one-stop-shop fintech providers have their place, to create the best solutions fintechs must work with the best and most specialised partners.