How a 190-Year-Old UK Bank Is Reimagining Payments

Slow processing times, high banking fees, and complex and overlapping regulatory requirements continue to create pain points for individuals sending and receiving remittances worldwide. And although technology has simplified cross-border payments over the years, Bhairav Trivedi, CEO at U.K.-based Crown Agents Bank (CAB), says not all markets have fully tapped into the power of innovation.

“There’s not a very consistent use of technology across markets, especially in emerging economies,” Trivedi told PYMNTS in an interview. “That could [translate to] a situation where you may send some money to some remote geography, and you do not hear back from the [remittance] organization for several days about where your money is.”

That’s where the value of CAB, an FCA-regulated bank and foreign exchange (FX) provider, comes into play, he said, leveraging the latest technologies to simplify and streamline the way payments and FX move through emerging and frontier markets.

One wouldn’t expect a 190-year-old bank to thrive in the digital age, but Trivedi said CAB has stayed on top of emerging technology trends over the years by using automation to replace repetitive and labor-intensive back-office tasks, which in turn has enabled greater efficiency and a better experience for customers.

And like many industries, the Sutton-based cross-border FX and payments provider is also tapping into the power of artificial intelligence (AI) and machine learning, which Trivedi added have been key to reducing false positives by assessing fraud risks much faster and more accurately than humans without compromising on financial crime compliance.

Take transaction screening, for example. Having a bad actor named X doesn’t necessarily mean every individual, entity or corporate with that name is the same, he explained, which is why training their systems to automatically recognize “that the same person it eliminated the last time is not the same one on the bad list,” has been a game changer.

He also credits the acquisition of CAB by Helios Investors in 2016 as a strategic move that boosted their technology adoption with new investments in an automated FX trading platform and a payment gateway tailored to customers’ needs in hard-to-reach markets.

The company, which partners with banks, FinTechs, governments, central banks and international development organizations, also offers a unified API solution to execute bulk payments through multiple payment providers, such as banks and mobile money operators across more than 100 currencies and markets.

Altogether, these digital advancements have contributed to significant growth in recent years, with CAB’s revenues more than doubling between 2021 and 2022 to £109 million ($135.7 million), Trivedi noted.

“If you’re selling to the largest banks, governments and international development organizations around the world you need to make sure that you can support them,” he remarked, “so we made sure to develop the infrastructure, invest in it, and now we’re seeing the results.”

Stablecoins, CBDCs Hold Instant-Payments Promise

Real-time payments are quickly becoming table stakes globally. Still, for instant payments to be really effective, “both sides of the equation” have to be able to adapt to those systems,” Trivedi said, pointing to some emerging market economies that have been slow to adopt real-time payments en masse.

It’s a gap that several of these markets are looking to solve with stablecoins and central bank digital currencies (CBDCs), he explained, adding that there’s a huge opportunity in these regulated virtual currencies to facilitate instant cross-border settlements.

He added that the same cannot be said about cryptocurrencies, given that they are not suited for development aid flows, corporate funds and remittances that need to be converted to fiat currency before they can be spent in local markets.

“When you look at aid flows, ultimately it’s money sent to sustain some of the poorest and most disadvantaged individuals in the world,” he explained, “and those people don’t want crypto, they want something they can use immediately in the local market.”

Promoting Business-Friendly Regulation

Moving forward, Trivedi said regulation is going to be the biggest issue in the global cross-border money transfer business, and though government oversight is necessary, the goal should be to create a “business-friendly” regulatory environment that fosters growth and development.

Regulation will also play a key role in minimizing growing fraud, he added. “Ultimately, it’s not about the 100 people that are sending money for the right reasons. It’s about catching the one person that is sending it for the wrong reason.”

Meanwhile, CAB will look to expand its global market share, especially in post-Brexit Europe, where the financial institution (FI) has applied for a payment license to operate across all 27 European Union states.

Enabling customers to get access to a 24-hour trading service is also a top priority: “We want them to trade when they want to trade, not when they have to trade,” he noted, adding that selling to customers in their local markets, instead of operating solely from their U.K. headquarters, is also on their to-do list.

Overall, Trivedi said it boils down to creating an environment where customers can send money quickly, cheaply and securely, and at the most competitive exchange rates.

“What are the key things if I’m sending money? I want speed. I want efficiency. I want security. I need to know that my money is going to get sent at the best price possible, and that means a low fee and an amazing exchange rate,” he pointed out. “Those are really the core drivers for the business going forward.”

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