Fintech: innovation in payments and settlements

Fintech: innovation in payments and settlements

FinTech: Innovation in Payments and Settlements

September 30 - October 01

The impact of FinTech is being felt across the payments ecosystem: from micro retail debits to wholesale security settlement. Both within and across border. This doesn’t just present a new dynamic for those responsible for system oversight: digital currencies and stablecoins strike at the very core of central banking itself.

Increasingly, central bank overseers and operators understand that, as with markets and technologies, their approach and framework cannot stand still. The risks are clear and managing those risks will be a key part of central banks and regulators mandates into 2020 and beyond.

This course, “FinTech: Managing Innovation in Payments and Settlements” is designed to equip central bankers to meet these challenges and more.

 

Agenda

Participants will have access to pre-recorded presentations two weeks before the course

00:0000:00

Digital money: a central banker’s guide
Pre-recorded presentation

00:00 - 00:30

  • Taxonomy of digital money: CBDCs, stablecoins and crypto assets
  • Overview of key projects around the globe
  • Implications for the work of central bankers, regulators and supervisors
  • Key features of emerging regulatory and supervisory frameworks
James Chapman

Senior Research Director, Funds Management and Banking

Bank of Canada

James Chapman is the senior research director in the Funds Management and Banking Department at the Bank of Canada. He received a Ph.D. in Economics and an MSc in Statistics from the University of Iowa in 2006. He joined the Bank of Canada as a senior analyst in that year. His primary research focus has been on interbank market and financial market infrastructure issues such as liquidity risk and credit risk in large-value payment systems as well as the efficiency of interbank markets. Recently his research focus has evolved to include research on fintech related topics. These topics include the use of distributed ledger technology in financial market infrastructure, specifically the Bank’s Project Jasper, as well as questions related to digital currencies such as Bitcoin, Ethereum and initial coin offerings.

Sandboxes, incubators and accelerators: the key pillar of nurturing compliant innovation
Pre-recorded presentation

00:00 - 00:30

  • Sandboxes, incubators and accelerators: a central bankers guide
  • Role and functions in innovation strategies
  • Tips for helping innovation comply with legal and regulatory requirements  
  • Issues for funding resourcing cross-jurisdictional cooperation
Brian Knight

Senior Research Fellow

George Mason University

Brian Knight is the director of the Program on Financial Regulation and a senior research fellow at the Mercatus Center at George Mason University. His research focuses on numerous aspects of financial regulation, including the creation of pro-innovation regulatory environments and the role of federalism in fintech regulation. Prior to joining Mercatus, he worked for the Milken Institute, where he headed up the FinTech and Capital Access programs. Mr. Knight also has experience working for a broker-dealer with a focus on the emerging online private-placement market and was the co-founder of CrowdCheck, a company providing due-diligence and disclosure services to companies and intermediaries engaged in online private offerings. Mr. Knight received his Law degree from the University of Virginia and his bachelor’s degree from the College of William and Mary.

Innovation: understanding the risks of issuance, operations and oversight
Presentation followed by Q&A

11:00 - 12:00

  • Overview of financial, operational and regulatory risks of disruptive innovation
  • Frameworks for cost-benefit analysis of digital money
  • Key lessons learned from leading projects and initiatives
  • Discussion: cross-sectoral and cross-jurisdictional efforts: an update
Data analytics for AML/CFT: AI and Machine Learning in focus
Pre-recorded presentation

00:00 - 00:30

  • State of the art in AI and Machine Learning
  • Key opportunities for AML and CFT
  • Implications for data management, processing and analysis
  • Examples of Machine Learning based software solutions for the regulators and the regulated
Kimmo Soramäki

Founder and CEO

Financial Network Analytics

Kimmo Soamäki is the founder and CEO of Financial Network Analytics (FNA) and the founding editor-in-chief of The Journal of Network Theory in Finance. He started his career as an economist at the Bank of Finland where he developed in 1997 the first simulation model for interbank payment systems. In 2004 while at the research department of the Federal Reserve Bank of New York, Mr Soramäki was among the first to apply methods from network theory to improve our understanding of financial systems. During the financial crisis of 2007-2008 he advised several central banks, including the Bank of England and European Central Bank, in modelling interconnections and systemic risk. This work led him to found FNA in 2013 provide solutions to monitor the complex financial networks that play a continually larger role in the world around us. Mr Soramäki holds a Doctor of Science in Operations Research and a Master of Science in Economics (Finance), both from Aalto University in Helsinki.

Timings are subject to change as we evaluate geographic limitations of participants

11:0011:30

Course introduction
Opening remarks with the course chair

00:00 - 00:30

  • Introduction of the chairman
  • Overview of the training course
  • Discussion of the delegate expectations

11:3012:30

CBDC: the state of the art
Presentation followed by Q&A

00:00 - 00:30

  • Difference (and similarities) between CBDCs and crypto assets
  • Implications of CBDCs for the banking sector and financial stability broadly
  • Monetary policy: how will implementation change?
  • Discussion: what are the next steps and key dynamics?
Ron Berndsen

Chair of Financial Market Infrastructures and Risk

Tilburg University

Professor Ron Berndsen is an independent director of LCH and chairs the LCH Risk Committees. He is also attached to the Tilburg School of Economics and Management at Tilburg University as full professor of Financial Market Infrastructures and Systemic Risk.

Ron is editor-in-chief of the Journal of Financial Market Infrastructures and a member of the Advisory Council of the SWIFT Institute.

The author has been active in the field of payments and market infrastructures for over 15 years. He was Head of the Oversight Department and Head of the Market Infrastructures Policy Department at De Nederlandsche Bank. Ron also served as a member on the Market Infrastructure Board at the European Central Bank and as member of the Committee on Payments and Market Infrastructures at the Bank of International Settlements. He also co-chaired the FSB Group on Cross-Border Crisis Management for Financial Market Infrastructures and was a member of the oversight committees of CLS, EuroCCP, Euroclear, LCH, SWIFT and TARGET2. 

He was awarded a doctorate of Tilburg University in 1992 for his PhD thesis in Economics and Artificial Intelligence.

12:3012:45

Break

12:00 - 12:15

12:4513:45

e-krona case study: a digital compliment to cash
Presentation followed by Q&A

12:15 - 13:15

  • Key features and frameworks of the e-krona project
  • Prospects of e-krona as a complement to – or replacement of – physical currency
  • The role of communication with – and feedback from – the public
  • Overview of necessary legislative and regulatory amendments for a systematic e-krona issuance
Hanna Armelius

Senior Advisor

Sveriges Riksbank

Hanna Armelius works as a Senior Advisor at the Sveriges Riksbank. Her main focus is on the macroeconomic effects of structural changes in the payment markets. She has been extensively involved in the analytical part of the Riksbank’s digital currency project (the e-krona project). Hanna has a Ph.D. in Economics from the Uppsala University and has published work in the fields of public economics, monetary policy and digital currencies.

13:4514:00

Break

13:15 - 13:30

14:0015:00

Project Jasper: can DLT settle wholesale?
Presentation followed by Q&A

13:30 - 14:30

  • Motivations and technological foundations behind the Project Jasper
  • Lessons learned from key phases of the project
  • Overview of the next steps and prospect for the following phases
  • Discussion: can a distributed ledger service a core wholesale payment system?
James Chapman

Senior Research Director, Funds Management and Banking

Bank of Canada

James Chapman is the senior research director in the Funds Management and Banking Department at the Bank of Canada. He received a Ph.D. in Economics and an MSc in Statistics from the University of Iowa in 2006. He joined the Bank of Canada as a senior analyst in that year. His primary research focus has been on interbank market and financial market infrastructure issues such as liquidity risk and credit risk in large-value payment systems as well as the efficiency of interbank markets. Recently his research focus has evolved to include research on fintech related topics. These topics include the use of distributed ledger technology in financial market infrastructure, specifically the Bank’s Project Jasper, as well as questions related to digital currencies such as Bitcoin, Ethereum and initial coin offerings.

15:0015:00

End of day 1

00:00 - 00:01

Timings are subject to change as we evaluate geographic limitations of participants

11:0012:00

How will big tech, DLT and digital money affect financial market infrastructure?
Interactive workshop with delegate participation

12:15 - 13:15

  • Financial market infrastructure: a guide to the new normal
  • Overview of key disruptive forces and dynamics challenging FMIs
  • How are FMIs changing to utilise FinTech?
  • Discussion: what do these changes mean for central banks as overseers and settlement providers?

12:0012:15

Break

12:00 - 12:15

12:1513:15

How to effectively regulate FinTech – a user’s guide
Presentation followed by Q&A

12:15 - 13:15

  • Overview of policies and approaches to regulation and supervision of FinTech
  • Examples of strategies, frameworks and indicators helping to balance the support for innovation with consumer protection
  • Implications for resourcing and institutional organisation of central banks and regulators
  • Successes and challenges from delegates’ home jurisdictions
Allan Kearns

Head of Prudential Analytics Division, Insurance Supervision

Central Bank of Ireland

Allan Kearns is head of analytics within the Insurance Supervision Directorate at the Central Bank of Ireland (CBI). In this role, he is responsible for the establishment of a new analytics function as part of the Solvency II change programme within the central bank. The vision for this function is to extract insights from the new Solvency II Pillar 3 reporting to enhance data-driven supervisory and financial stability decision making. Prior to this role, Allan was a founding member of the CBI's risk management division, with responsibility as a deputy chief risk officer for both financial and non-financial risk management frameworks. Allan has an MSc Economics (London School of Economics), an MSc Risk Management (University College Dublin) and a doctorate from Trinity College (Dublin). He lectures on risk management topics domestically and internationally, including governance and culture, and has published on a broad range of central banking topics.

13:1513:30

Break

13:15 - 13:30

13:3014:30

What does FinTech mean for central banks, central banking, currencies and payments?
Pre-recorded presentation

00:00 - 00:30

  • The state of the art of financial technology in 2020
  • Key forces, trends and dynamics shaping financial market innovation
  • Unavoidable risks, critical challenges and emerging opportunities
  • Discussion: how do central banks need to change to make the most of FinTech?
Klaus Löber

Head of Oversight Division

European Central Bank

Klaus Löber is a senior adviser in the Directorate General Market Infrastructure and Payments of the European Central Bank (ECB). His areas of responsibility encompass the ECB’s global regulatory policy activities with a focus on payments and market infrastructures. More specifically, he works on the ECB’s FinTech and digital innovations agenda and acts as chair of the Committee of Payments and Market Infrastructures (CPMI) working group and co-chair of the CPMI-IOSCO working group looking into these developments. Previously, Mr Löber was head of the CPMI Secretariat, after being head of the oversight division of the ECB.

14:3014:45

Break

12:00 - 12:15

14:4515:15

Delegate action points and course conclusion
Course conclusion

14:45 - 15:15

  • Summary of the training course
  • Discussion of the observed trends and case studies
  • Application of learning points in the delegates’ home organisations
  • Preparation of action points

Participants will continue their learning post-event

00:0000:00

Post training survey and feedback

00:00 - 00:30

Course alumni group

00:00 - 00:30

CPE/CPD certificate

00:00 - 00:30

Klaus Löber

Head of Oversight Division

European Central Bank

Klaus Martin Löber is head of the Oversight Division of the European Central Bank (ECB), in charge of the oversight of financial markets infrastructures (FMIs) and payments instruments. His areas of responsibility encompasses the ECB’s global regulatory policy activities with a focus on payments and market infrastructures. Furthermore, Mr. Löber contributes to the ECB’s FinTech and digital innovations agenda and acts as chair of the Committee on Payments and Market Infrastructures (CPMI) working group on digital currencies. He is also co-chair of the Committee on Payments and Market Infrastructures – International Organisation of Securities Commissions (CPMI-IOSCO) working group on digital innovations looking into relevant developments. Prior to his current position, Mr. Löber was head of the Secretariat of the CPMI, hosted by the Bank for International Settlements (BIS) in Basel, Switzerland, a global regulatory standard setting body in the areas of payments, clearing and settlement. Mr. Löber also regularly publishes on financial markets legal, regulatory and infrastructure issues.

Learning outcomes

By the end of the training course, participants will have gained new knowledge and a more comprehensive understanding of:

  • Fintech driven evolution of RTGS
  • CBDCs and their impact on the future of money
  • Policies and frameworks for effective supervision and regulation of privately issued crypto assets and stablecoins
  • How will the cross jurisdictional regulatory requirements fit in with the technological revolution? – Hands on exercise
  • Case studies of cross border payment platforms and their oversight
  • Strategies and tools for identification and containment of cyber and financial crime risks
  • Tips for balancing innovation with consumer protection
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