Promoth Manghat - Chief Executive, UAE Exchange Group
Articles

Promoth Manghat – Chief Executive, UAE Exchange Group

June 12, 2019



I think what would be helpful is a place to start if you could give us a sense of your role at the UAE exchange and a little bit about what Finn abler does and how it works with different entities for people who don't know there's a booth out in the city of the future exhibit there where people can learn more but perhaps if you could just give us a sense of your role to a certain degree within the UAE exchange and then what Finn abler is offering to different companies so we are a institution of born and brought out of UAE started 1980 largely focusing on worker remittances and then we graduated the capability that we have build in moving money at scale into a larger cross-border payments and then into FX and building a large amount of community of consumers both at the first mile of ordination as well as on the last mile of distribution with handling the complexity of processing the payments in between so as Finn a blur we have multiple go-to-market Bronx UA exchange is one such we operate it in UAE we are operating in 44 markets directly we handle 150 million of transactions globally with a throughput volume of 114 billion dollars so we are a global player in covering 44 markets focusing on payments and foreign exchange as a platform both for consumers as well as for businesses and you've been looking at blockchain as a technology for a number of years how would you say that it solved some of the challenges within the cross-border payments services industry what is it done that perhaps other technologies haven't done in the past in terms of either speeding up the transactions making them more or less less but more frictionless is I guess the way to think about it as people are exchanging money across all these different borders and expecting it to be done in a relatively quick manner these are people who need that money to get to a place as soon as possible what is it that blockchain is doing helped to address that in your mind I think you know we should acknowledge that we are living in a world of immense possibility where mobility connectivity and freedom is the order of the day that's at random and specifically if you look at it not only in the developed markets but also in the emerging markets Digital is getting adopted at a pace that we have never imagined so far so naturally the consumers and businesses are pushing the envelope and they are looking for making sure that the way they transact you know to realize their ambition because specifically has been a blur we were quite extend with financially excluded customers into the financial inclusion that's one of our theme as well as well as businesses want to realize their full potential but what you see is that when it comes to the innovations in payments it does not really caught up so actually you are in a two-speed world one world where consumers and businesses want to really progress and where the innovation payments have held it back payments are not seamless payments are opaque payments are not even making it embedded in the case for example you look at the digital experience where checkout experience coming out doing it so blockchain is looked at as a messiah which will come and solve all the problems that is quite natural you know you cannot look at that because you have a problem there but having said that the reality is quite different so you know we if you look at the cross-border movement of money international movement of money you have got the complexities of regulation it's a regulated moment of money that's one part of it and to quite a lot in the morning session I was hearing the kind of standardization the thing of interoperability because you have got my raid of intermediaries in sitting in between when moving the money so how do you make sure that you make a system which is in row operable one common standard which can run to do that and lastly the compliance comes an important aspect so a batch the way you have to really balance this so to what you see now on blockchain specifically you see quite a lot of innovation happening or the use case is happening largely on the settlement layer focusing on messaging focusing on reconciliation and potentially on settlement of money itself but you have not seen real amount of innovation happening on the first mile on the or generation like the KYC challenge though you could bring down the cost on the on the processing side but a quite a lot of cost happening on the first mile on the KYC and the AML compliance and – and understand on the last mile distribution a fifth of the world is still unbanked so you have to have different ways of distributing this so the or interoperability complexity is quite different there as well so what we have used blockchain at this point of time is for messaging so we have used triple net because we see that standard is the better way to use to overcome they media challenge of interoperability so he has used triple net as way of messaging it so it has definitely given us the efficiency in terms of turnaround of transaction it is real-time online versus it takes twenty four days of for 24 hours or 48 hours number one – on a medium to long term we are quite a bit that it brings fast efficiency that brings definitely the return case of the investments that that you are doing and thirdly more importantly we will potentially move from we talked about trust quite a lot you should move from cost of managing trust into the network of trust I mean that's the way we look at it blockchain and the use case that immediately that we have applied apart from that – other use cases we are working on is specifically one ease of talk and I see the payments so we have made an investment we are quite a company in us largely focusing on electronic gifting course which where we have used underlying the technology as blockchain to use that as well and also we are making working with institutions in UAE of looking at kyc as an another use case are using blockchain so you mentioned switch talk to me about the the work that you're doing with ripple the partnership with ripple people may know ripple is one of the largest crypto currencies out that get confused if it's a theory of a ripple sometimes but in terms of the partnership what is that opportunity represent to to you a clear distinction between blockchain and crypto so we are still on a fee at the world we are not working we are not using crypto quite clear as I mentioned we are moving this money on a regulated compliant manner so we have to be very clear that if you want to get the scale we have believe that you have to be having the legal purview structure putting in place otherwise you can't get scalability so we are using Fiat so we are not using X we are not using the the crypto behind upon which is X RP so we are we are usually using ripple net as the messaging tool which is rapid which you are using that to messaging where we are connecting with the bank's using one single protocol standard framework allowing us to message things on a real-time online basis so the immediate benefit that we have realized as I mentioned is that we have moved away from 24 hours on a weekday for a 48 hours on a weekend into a real-time instant messaging of putting a payments across that's the immediate benefit that we have realized by going live blockchain and I imagine the more seamlessness is for any consumer the more willing or interested they are participating in this process the more satisfied they are with the experience so there's some amount of customer acquisition involved in this people feel that their money's moving at a faster rate than it was in the past and they don't have to worry about anything involved how much of this can you give me just give us a sense of a user journey experience in other words if I'm a a person using a game or a messaging app or needing to transfer money somewhere or whatever it is just walk me through what it is that the blockchain and at what fin abler is doing allows that to just be easier better for the average person I think from from an end consumer perspective you know blockchain is irrelevant right that's that's the technology sitting at the behind now what consumer experience is the seamlessness or what we say in our parlance you make payments invisible right that's the embedded nature that you want to bring in so if you look at the world erstwhile where you were not using blockchain a customer walks into a branch goes into a kiosk or they log into our app or website when you transfer them it takes me 24 to 48 hours depending upon the kind of connectivity I have is a true API or through a file transporter call whatever be the way connectivity I'm using it it takes an AP 24 to 48 hours to do that so here by doing this your instant so we say that you could put across the money into the beneficiary's account depending upon the need of the current symbol of the businesses in less than five minutes so that's the kind of experience the consumer is experiencing it so definitely you bring seamless experience to the consumer at at the same cost or a lesser cost than what you are incurring earlier definitely helps in acquiring more consumers coming in because consumers feel that this is very instant you can do it much more Q curve you know you're taking the anxiety out of the person who is transferring money a piece of mine and seamlessness coming in so again what we are looking at this is not from a short-term hurdle the hurdle that we are looking at is more from Adm to long term and when you think about that medium to long term future and for the folks here who are beginning their journey into thinking about what blockchain means to them you have the thin a blur blockchain labs which I understand it to be quite an Rd investment in thinking about what's next what what do you see on the horizon that's important to solve what is the sort of the focus of the of the fin a blur lab what are what are some of the issues that you're hoping to tackle so some what teams again we are focusing on other blockchain Labs is three things again focusing on the payments is that first what are the innovations that you could do on the first mile on the origination kyc is one one one thing which we are really spending on what kind of the Identity Management you could bring in and work into the registries that are available available for us to go and integrate and use it so that you know you don't end up duplicating as an industry you don't end up making it a lot of you know not a great onboarding experience for the consumers coming in and more importantly to make sure that the regulator's get a comfort in terms of the kind of ky seeing and the onboarding experience that you are doing that's one thing which we are really focusing on the second thing is on the settlement settlement specifically you know how Gani looking at they know a coins not getting into criticals basically as it back coins we use for your settlements potentially and you are hearing many of the large banks using deposit back coins to use as a settlement mode is one one of the another thing which we are progressing we are in a good stage of doing a pilot or rather a POC between us to Philippines on a deposit back coin off for more moving of the money that's something which we are in a very advanced stage of our innovation on D on the processing or on the settlement piece of it the last mile distribution to me is the largest cost takeout or the biggest opportunity nobody talks about because that's the heavy lifting you know you could do bring a great app experience on the front end but to build the last mile distribution or talking about interoperability talking about consumers who are include of the financial system those who are not in to define a system excluded one that's the real complexity we we have not really figured out out there we still have lot of heavy lifting to be done to get some some exponential innovation you will find in game and innovation but to make it scalable and to make a meaningful impact we have a long way to go you've talked about customer acquisition and customer satisfaction what about customer loyalty when people think about being involved in whatever payment system or process that there may be invisible to them but sustaining that over time and if you could talk to me about the your investments in loyal and and what that means to to customers or to any other enterprise this is the very point thing you know we need to understand however the new technology come in terms the bus or in terms of solving it cross-border payments are two things this is a business of trust people have to trust you to do that right – this is a business which is regulated you cannot take it out there so you need to make sure that the rule of the game has to be really really coded well whatever you do you need to take these two boxes that you gain trust you continue to have the R and Trust is a key aspect for consumers of businesses coming into your platform place money again and again and believe that so that is her experience to me is really facilitating trust and end of the day it increases the stickiness and so to enhance of the lifetime value of the consumer to that slide so you don't end up a query new customers you work the same consumers to bring new experience so that's to me is the key aspect but if you are not able to bring that new seamlessness or the newer way of making it very invisible you have a greater chance of losing those consumers to those platforms who will offer that and that's where you know the paranoia and it's very important to make sure that you bring that newer elements of it that you continue to retain and sustain and increases stickiness and in the end you enhance the lifetime value of the consumer with the blackball Trust is such a it's so wrapped up in security and privacy and people concern about where their money goes and how is are there greater challenges with regards to security and privacy within blockchain or do you feel like they've just evolved in a way that is no different than what it used to be you need to ensure that people feel safe with their information I think the top of the priority in terms of the agenda which is concerned more towards to me is not security at this point of a time I think you know you are working on a very you know well established technology architecture on that the biggest thing is to make sure that how you make the money the money that is moving on a cross-border specifically using blockchain and talking about it is to make sure that how can you make from a regulatory and a compliance perspective you can give the comfort is the biggest such agenda that we are looking at point of time so you know that's that's the biggest thing which you're looking at it but otherwise you know in terms of KY seeing in terms of onboarding those consumers that are the biggest agenda that we are looking at this point of a time not immediately on security or but larger level theme of data privacy and larger level because we are seeing that the data is no more it is no more a you know no more a provider-centric data is becoming more of a consumer centric so that's a theme that you are seeing you have seen that with GDP are in Europe and you should just expect that data will be more of a user centric than a providers and is that's a larger level theme any new technology coming in should embrace and exercise our last panel was about interoperability and I wonder how much of that is necessary within the larger fin a blur and even within the UA exchange and how much you think about that as a challenge within blockchain I think that that is an important me more than interoperability is a mindset right upping you know it this this you have to have a network mindset here do very very collaborative it's very important so it means that payment providers like us or technology companies regulators other industry players have to come in to tank W would have a network if up here you can know that's why the move from a managing trust using cost you know to go to trust management through networks so you need to have you know interoperability is the key aspect of here you can't get scalability you will be able to do incremental e for a press releases or creating excitement but if you want to make a meaningful impact you need to go far in trouble that's what standards are a key factor here when I go forward business and that's the challenge when you do join me as an industry along with regulators and technology companies we need to unlock potential I want to go to some questions from the audience in just a second maybe lastly if you could give people a sense that the exhibit over there is about the city of the future how do you imagine if in a blur in people's lives whether it's in Dubai or elsewhere what is sort of the future vision for you and all those born out of UAE and you know very thankful to you know apply shy on the dynamic leadership of a smart to buy in hosting this conference a successful one quite energetic great representation great meeting of minds from all across the globe you know this you know innovation and technology is definitely been the centerpiece of going forward for enabler as well so whatever we are doing we want to make sure that how we are bringing these experiences how we are making it payments seamless available how are we making sure that the consumers fulfill their ambition and how do we make sure that the financially excluded one are brought into the financial realm that's an important agenda for us as well going forward basis and in the process with a scale we we derive efficiencies and these efficiency is what we want to share and another day and get a global scale and which otherwise if you don't get a scale you don't get that officials it's very important to share that efficiency that you can get the next level of growth and that's our aspiration and abusin for enabler born out of UAE and the become a global institution you

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