Author: Stefan Stafrace

Principal Consultant at Consult Hyperion. Stefan is an experienced technical solution architect and a Certified Information Systems Auditor (CISA), with a solid background in information security and privacy. Over the past 20 years, he has been honing his skills and acquiring experience in various aspects of large-scale solution delivery, especially in financial services, including: problem analysis, solution design and optimisation, information security management and quality management.

2020 | Challenging our Resilience

9th June 202025th August 2020by Stefan Stafrace1 Comment

Twenty-Twenty. What could go wrong in such a perfectly numbered year? Sadly, we all know the answer to that: Everything.

2020 has been dominated by the COVID-19 pandemic threatening our way of life, challenging our resourcefulness and resilience, on a global scale not experienced since the World War ended 75 years ago.

In 2020, some businesses with a strong digital presence have shown resilience by shifting all their operations online and moving to full-on remote working, adapting to a period of indefinite social distancing. Broadband connectivity was a key factor in keeping the lights on for those businesses. When the stay-at-home order came into full force in the UK, most feared the impact this would have on broadband performance all around. They anticipated a struggle along with their neighbours, stuck at home looking for ways to keep connected with their loved ones and colleagues, and to keep themselves entertained online. No doubt these were all valid concerns for us, domiciled warriors, called to take up arms to save lives by, ahem, manning the recliner, among other things. Yet, lo and behold, most of the ISPs in the UK had no major trouble adapting, and stood their ground as their resilient systems faced this sudden, indefinite surge in demand as the pandemic unfolded.

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Alchemy at Money 20/20 Europe

17th June 201928th May 2020by Stefan StafraceLeave a comment

The most sought goal in alchemy is turning metal into gold. Our colleagues at Money 20/20 Europe chose this as the apt theme for this year’s event. What better way exists, other than alchemy, to describe a congregation of pretty much everyone that matters in the financial community, experimenting with propositions, skills and technologies, catalysed by their unwavering dedication, to determine the right mix that creates that metaphor? A symbolic representation of a continually evolving and innovating financial ecosystem that will yield a golden age of solutions for financial services. As I witnessed this event, numerous inspirational people spoke about different aspects, goals and aspirations of such an evolving ecosystem, hopefully grounded in adequate regulations that don’t stifle innovation.

Various sessions described the ongoing architectural paradigm shift in the ecosystem towards cloud-based platforms for acquiring, banking, issuer processing and digital wallet solutions, which enable existing and new players, including airline operators and retailers, to enter the market to provide financial services to their customer base with relatively less capital and operational expenses. These platforms are built using microservices, which allow for various functions to be developed and deployed in a modular fashion with minimal impact to existing services. Such a paradigm allows a banking system, for instance, to easily scale to the demand as required, whilst being resilient in an agile manner to changing product requirements and needs of their stakeholders including regulatory authorities.

There was also a focus on highlighting the benefits of collaboration and partnerships at various levels to innovate and to fight crime, whilst ensuring fair competition amongst existing and new players. Partnerships between BigTech and FinTech companies provide the required resources, including the right talent to maximise the use of latest technologies and access to various data sources, to build innovative value propositions and commercial models that deliver enhanced and personalised financial services that meet customer needs.

The concept of being open has featured heavily in various sessions throughout the event. Of course, this included the Open Banking track, brilliantly chaired by our own global ambassador, Dave Birch, where the current state of the matter was discussed, along with the opportunities and challenges that Open Banking has presented. However, the concept of openness extended beyond that, with panellists at the Financial Crime Summit calling for open collaboration, amongst financial institutions and regulatory authorities, to efficiently share AML and KYC data to combat financial crime, particularly to reduce identity theft, fraud and money laundering. This was reiterated when discussing real-time payments which could benefit from access to different data sources and techniques for detecting fraud in real-time and, as a minimum, keeping one step ahead in this adversarial game with fraudsters. Speakers sanctioned the idea of open communication, with an aim of unifying the ecosystem through standardisation, to circumvent challenges, break down barriers and plug vulnerabilities that fragmentation brings about.

The future of commerce was discussed, including the role of data along with ubiquitous and reliable connectivity, made possible through 5G. They will be key in providing personalised customer experience and engagement. I was thrilled to see innovative on-demand insurance models from WeFox and Lemonade, leveraging Machine Learning (ML) and IoT, to dynamically tailor their products to their consumers. It was only a couple of years ago that Consult Hyperion started discussing the possibility of pay-as-you-go commercial models revolutionised by technologies like IoT and ML. In fact, Dave Birch has even highlighted these predictions in our Live 5 this year, including the need to understand the risks these models incur.

The correct use of AI was an interesting panel discussion covering various points. They pointed out the need to leverage and operate technologies, like ML, in a transparent and accountable manner, addressing issues like ensuring customers know when they are dealing with an AI agent or a human and, addressing potential data bias by ensuring proper breadth and depth of data being sourced to fuel ML algorithms.

Various speakers emphasised the importance of placing the consumer at the centre of this evolving ecosystem. It is the key factor that ensures we design consumer-centric, personalised services, which help improve their quality of life, whilst protecting them and rewarding them for their loyalty. This was corroborated by OVO when they presented the incredible work they accomplished, in Indonesia, by deploying innovative mobile-based, instant credit and lending solutions to aid businesses and help boost the developing economy.

In an era of fake news causing a reputation crisis, digital identity and authentication schemes warranted a whole track, which was insightfully chaired by our COO, and resident Identity expert, Steve Pannifer. Various speakers and panellists discussed the importance of such schemes to enable data security and privacy controls in line with increasingly demanding privacy regulations.

Ultimately, I was glad to have come across various sessions promoting the need for diversity and equal opportunity in this financial ecosystem, so that we can capitalise on skills from a talent pool, without regard to gender, race or age, and better reflect the society that we serve.

Indeed, Money 20/20 have enabled dialogue and championed collaboration amongst different players in the financial ecosystem for the betterment of financial services. Therefore, in the spirit of this year’s theme, aim to be an alchemist and surround yourself with ones at the next event, and maybe you too can experience the magic! As Consult Hyperion, we are proud to have taken part in this dialogue, shared our knowledge and experience, and will continue with our hard work in helping various clients evolve along with the financial ecosystem.

P.S. If you missed out on the winner announcement of the wacky payments race around the world between cash, crypto, card and mobile. I am glad to report that Team #mobile emerged victorious, revealing that Seattle, home of some of the big tech companies, was ironically the most challenging location in accepting mobile payments. Team #crypto found it the most difficult – the fact that the value of a crypto coin changed every five minutes probably didn’t help! 😊

Avoiding Costs Abroad

18th June 201812th May 2020by Stefan StafraceLeave a comment

Vacation season is upon us! In a few weeks’ time, you could be leaving your home country for some relaxation. Perhaps to the Mediterranean for some sun or somewhere further afield off the beaten track. In full holiday mode, as the sun shines high and mighty, you’re about to indulge in another sundowner. Just only one last hurdle before you can quench your thirst, as you hand over your credit card and are promptly presented with the mobile POS, whilst being asked politely “Would you like to pay in Sterling or local currency?”.

What will you choose?

It is a familiar situation experienced by many of us who have ventured abroad. In that instance, we must decide our fate without fully comprehending the ramifications of our choice. EUR or GBP? And with seeming enlightenment, many rookie fingers have floated reluctantly towards the more familiar currency, GBP, sheepishly smiling, whilst not knowing whether it was the right choice and perhaps not thinking further of the implications (because after all, there is only one cardinal rule during vacation time – no stress allowed!). Was it the right choice though? Well, not according to Starling Bank who have shed some light on the matter through an experiment on Dynamic Currency Conversion (DCC), as reported by This is Money in the article (http://www.thisismoney.co.uk/money/news/article-5784137/The-proof-pay-local-currency-never-pounds-holiday.html).

DCC is the capability that allows a purchase or cash withdrawal to be done either in the local currency abroad or in the home currency associated with the debit or credit card being used. If the home currency is selected, then the POS terminal does a currency conversion on the spot from the local (e.g. EUR) to the home currency (e.g. GBP) at an exchange rate decided by the merchant. The merchant could potentially add their own commission to that conversion operation, resulting in a more expensive purchase than it would be if the local currency were selected. Whereas, in the case of the latter, the purchase or withdrawal is carried out in the local currency, following which a currency conversion is done by the issuer bank or credit card provider at an exchange rate defined by the card scheme network, which is invariably about as good as you can get.

As an example, in their experiment, Starling Bank have found out that an ATM cash withdrawal of EUR 200 costed £195.18 when GBP was selected, meaning that the withdrawn amount was converted on the spot to the home currency (i.e. GBP) by the local bank. In comparison, when EUR was selected whilst keeping all other factors alike, the same withdrawn amount costed £177.44 since it got converted later by the Issuer bank or credit card provider at a better rate. Indeed, that is £17.74 in savings when carrying out the transaction in local currency (EUR) rather than converting it on the spot to the home currency (GBP). This was also true for all the purchases made; albeit the difference was much less (in pence) for each individual purchase. Yet, we all know that the cumulative amount of these smaller differences over purchases made during an entire week’s holiday could potentially result in significant savings. The bottom line from the experiment, and the article, is that you are much better off almost always paying in the local currency.

Understanding the workings of DCC is only one part of the puzzle when trying to save costs for card usage abroad; but there are additional “hidden” costs, which we need to be aware of. More specifically, Issuer banks or credit card providers could charge a fee per transaction for purchases or withdrawals abroad (on top of the conversion rate), which could accumulate during a holiday stay and set you back considerably. Personally, I prefer to completely avoid these costs by opting for payment cards (prepaid, debit or credit) tailored for frequent travelling that do not charge for usage abroad and can offer additional features. However, you do need to be familiar with the terms and conditions for using these cards, since the card providers could restrict their usage, for instance, by limiting the total daily spend, or the number of times you can withdraw cash from an ATM in a day. Most of these restrictions align with typical leisure spending behaviour abroad, including mine so I never had an issue, but every person has different needs. The advantage is that the majority of these travel-specific payment cards come with a companion mobile application that allows you to manage your card, including various features such as viewing your transaction history, topping up your balance (in case of prepaid), blocking your card if stolen or lost, requesting emergency cash, etc.

Prepaid travel cards are quite popular for usage abroad since they allow you to manage spending overseas with ease. An advantageous feature of prepaid travel cards is that they can be associated with different currencies. So, I could load the balance on the prepaid card with a choice from various popular currencies such as GBP, EUR, USD, etc whilst potentially locking in the exchange rate at the time of loading. This gives you total control (and certainty) over planning your holiday spending budget allowing you to make significant savings when compared to using any payment card not tailored for usage abroad. There are many prepaid travel card products available with different features and costs, so it is important to choose the right product that suits your needs and demand. Also, be aware of other costs that prepaid card providers might impose such as card inactivity fee. There are various comparison web sites that table out the different fees and limits associated with the various prepaid products, and of course always refer to the terms and conditions for each card product. For more information on different types of prepaid travel cards I suggest checking out a web site like the following https://www.moneysavingexpert.com/credit-cards/prepaid-travel-cards.

Although prepaid travel cards are ideal for daily spending abroad, I still recommend that you take other types of payment cards, preferably from different card network schemes, only as a fall-back. Unfortunately, a prepaid card might not be accepted in certain situations that would require pre-authorisation such as petrol stations, car rental deposits or hotel reservations, so it is best to have other travel specific debit or credit payment cards in hand. Also, as witnessed recently with the service disruption of one of the international card scheme networks, it is best to diversify the scheme network as a contingency measure.

Working for Consult Hyperion, I’ve had the opportunity to work for the kind of payments innovators who identify areas like this where customers get a bad deal and there are opportunities to make things better. It is thanks to the work of those striving to improve payments, with the support of people like us, that in today’s world we have different payment products to choose from. It is just a question of finding the right product for you, whilst making sure that you fully understand the terms and conditions, such as fees and limits for operating the product. Understanding DCC and carefully planning for the right payment instruments before travelling abroad could help you avoid certain costs, ultimately having more funds available to spend on that well-deserved vacation. So, start looking for the right payment instrument, so you can fully enjoy a stress-free summer vacation! Oh, and if during your vacation you have a great idea for a new payments product, we’d love to hear from you and help you turn the idea into reality.