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Welcome to The Payment Expert weekly podcast, brought to you by SBC Media. Each week we analyse the news driving the global payments industry forward; the innovation, the infrastructure, and everything that has to happen to make it all possible.
Louis (00:05.368)
Hello and welcome back to the Payment Expert podcast, your source for the latest news, insights and analysis on the payments industry. I'm Lewis Tompstet, news editor here at Payment Expert and with me today, I'm delighted to have Claire Gates, Global Head of Payments and Solutions at Crown Agents Bank. Claire, thank you so much for joining me.
claire_gates (00:27.407)
Thank you very much for asking. Pleasure to be here.
Louis (00:30.412)
No worries at all. An interesting one to start with perhaps, because your career path is quite fascinating. I believe you started out as an engineer, am I right? And so not in finance at all. So how did that end up being where you are today in payments at CAB?
claire_gates (00:49.947)
Yeah, so yeah, I did. I started out as a chemical process engineer and when I graduated all those many years ago, I actually got an opportunity to work in some research for genetic engineering. So nothing to do with actually even my course or my degree. I got this opportunity to work in Japan to do this research and I did that for a year and I realised pretty quickly that was not going to be for me at all doing the same sort of research day in, day out.
Then I worked in my family's business, which was industrial, commercial, heaters, boilers. Did that for a number of years. Then went and did an MBA. I was actually at the MBA. I got headhunted into consultancy and I started to work for restructuring turnarounds and did quite a lot in certain sectors.
that led me to be able to apply for a role when I wanted to get out of the consultancy into American Express. So a bit of a long process, but eventually by serendipity, I got into American Express and started my career in payments. And I didn't think I'd ever stay this long, but 30 odd years and I still enjoy that. it's a gift that keeps offering lots of different angles to it, innovation.
Louis (02:02.573)
Hey.
claire_gates (02:11.227)
creativity and it's been insightful over the period.
Louis (02:14.893)
Yeah, absolutely. And I think part of that as well is you had your own buy now pay later business, I'm right in saying that, and then you obviously went off into cross border banking. That's also a kind of swerve from that to where you are now. Is that something you, you fell into that or I guess?
claire_gates (02:35.098)
No, think what I would say is, I fall into what the common theme would be? I love to see where there are opportunities in a market or there's needs in a market that not yet being met. And so what you can do is be quite creative in thinking about what solutions, what services, what proposition can you offer that you know is going to add value to the sectors or to the customers that you're actually serving?
Louis (03:04.877)
Absolutely. Well, great stuff. Well, here you are now at Crown Agents Bank. Let's talk about money movement, shall we? It's one of the key areas of payments in Africa, those remittance flows. So say I'm trying to send money to Nigeria or into Francophone West Africa somewhere. Typically from what you see, what goes wrong with those payments from other areas in the world? Where does it tend to fall down?
claire_gates (03:35.074)
Well, although it may seem to a consumer or to a business, a straightforward transaction between one person or one entity and another, the ultimate beneficiary, it's got to go through a number of processes, some of which will be relatively easier to control, especially if you are an app user and you've got a remittance app and you're remitting that money to somebody, a friend or a family, whoever it may be, and who's also holding the same app.
quite close linked, otherwise it's open linked and you've got various different people needing to actually enable the process. You also got money flowing over different rails. you know, if you big ticket items, they might be flowing over Swift. If it's a mobile wallet, it will be a mobile operator. If it's an ACH, it could be a different rail as well. And then you've got local schemes.
And ultimately you send a notification, a note that you want to share, I'll send 100 pounds, euros, dollars, whatever it may be. And you want to cross currency that as well. The person receiving it in Nigeria wants to receive Naira. And so there is an FX leg to it that somebody has to get involved in. And then there is that payment leg that also somebody, a rail, a payment rail that needs to be done. Ultimately also we've got to check that, you know, that money that's being sent is going into the right.
wallets, it's also no money laundering, so you've got KYC, you've got screening of it, and all of that has to be ultimately various different parties having a role in that. So this can be quite complicated situation.
Louis (05:13.645)
Yes, definitely. Obviously, cross-border payments is, I suppose, innovation snag across the payments industry. Interoperability is a big theme at the moment. Historically, though, and typically in Africa, there's a cost element. So can, in some areas, still cost maybe 6%, 7 % to get money into various parts. And that's been stuck in certain areas. Why do you think that's so stuck and entrenched?
claire_gates (05:42.87)
some of it, so first of all we've got a lot of the innovation that's happened to date has been very much on the consumer side. So we as consumers we expect instant settlement, we? That's what we've seen, especially when you've got open banking capabilities that makes it easier to do. But once that transaction has left there's very, there's no recourse, it's gone. So what you've seen is the innovation very much going at the consumer side, not going so much in the
or a B2B side, yeah, because of the size of the tickets. If I send an instant payment tomorrow for 10,000, 20,000, 30,000 million and it goes wrong, that makes it really difficult. And when you start talking about these emerging markets, a lot of these networks are not integrated, yeah. There's a lot of still paper type of processes being done. So I might send a payment over to a market, and I'm just saying in Tanzania.
and that bank that is doing those local payments out, may be somebody manually coding it in and sending it out because there's not this interoperability between all of the different links in the chain yet.
Louis (06:55.925)
Yeah, one of the I suppose much discussed remedies for that is stable coins, not even specifically in Africa, but other markets too. What are your views on stable coin uses for money flows? Is it all positive? Should there be more caution into how it's used?
claire_gates (07:17.843)
I do, you this is personal perspective. think that the Sabrecoin rails will form a part in like the rails that I spoke about earlier in the future, for sure, without a doubt. Is it going to three, five years? Depends what it is. Today, it's not the whole of it, but there's a lion's share of Sabrecoins being used to extract, you know, to be able to get dollars out of the market. Yeah.
get currency and convert the local currency where there's not enough dollars coming in, hard currency, and using the stablecoin structure. So in that way, in many ways, they're circumventing the local central bank, the infrastructure. So I do think it's a rail. It's a bit like a, like I said, an ACH rail, a real-time rail, a mobile rail, a swift rail. What we need to see though going forward is
I expect some more regulation to ensure that it's not just being used in a way that is potentially hurting the local currency in a particular market.
Louis (08:23.859)
That's an important point because obviously most stable coins, I think probably 99 % of the minute are dollar denominated. They're backed by the dollar. So that in a way does pull people out of their own currencies, which is the whole point of what money moving is. So you're of shifting currencies. yeah.
claire_gates (08:41.317)
Indeed, you know, for a lot of those markets, especially in Africa, we talked about, they need the dollars coming in, you know, to be able to help, you know, they've got all requirements that they need to fulfill themselves as a central bank or Ministry of Finance. And therefore, they need to have that degree of control of what is being operated or managed directly within that market versus what's going on, what we'd call potentially the parallel market.
Louis (09:08.525)
Absolutely. I mean, in summary, I guess on Africa there, I could say that they're playing catch up, but from where you sit in that ecosystem, one of the, I guess, positives in terms of how different markets are starting to connect. Yeah.
claire_gates (09:23.77)
They are. Yeah. And actually, you know what? Why stablecoin will be particularly interesting is its ability to send liquidity into markets really quickly, rather than it taking a few days to be sent from one bank to another bank, yeah, the many banks and nostril partners. It does it, you know, almost immediately 24-7. Now the ultimate solution though is being able to off-ramp it. Yeah.
So then being able to make sure that their local banks accept it, want to accept it, can use it, can be part of the ecosystem and also be able to off ramp it into currency for the individual that ultimately might want a particular currency in their wallet as opposed to a stable coin.
Louis (10:10.421)
Yeah, and yeah, that's the, suppose, in jurisdictions all around the world, that's where the connections are slowly but surely happening. Yeah, sure. Well, let's talk a bit about Crown agents banks specifically then, because I mean, perhaps historically many banks sort of walk away from maybe risky markets or where there's a lot of friction between different countries, but Crown agents banks sit sort of in...
claire_gates (10:18.201)
Yeah, indeed.
Louis (10:37.353)
in the middle of that. Tell us a bit about the role.
claire_gates (10:41.278)
Yes, well, that's what Crown Agents Bank do really well. And that's our specialist area of expertise. We've been in the regions for just short of 200 years. A bank originated from Crown Agents Bank and we were there helping with cross-border banking, banking services, trade finance, FX for markets that historically many of the traditional big banks did not want to go near. And then we've evolved our product proposition accordingly.
to support that. we have in our area of expertise, we have correspondent banking. So we are able to offer dollar clearing for banks across Africa, emerging markets, Asia Pacific, emerging in Latam. So that's really a lifeline for many of these banks. We then have a wholesale effects portfolio. So for many of these markets, we are leading
in being able to offer wholesale currencies. And that is because of our close ties and relationships with the central banks that we have in those markets. Then you have trade finance. So for many of the markets as well, you've got wholesale effects, you've got the cross-border banking, and what they're also looking for is support with the trade finance. We have a great portfolio of trade finance capabilities, which also supports the markets or the particular market.
And then we have derivatives and then also cross border payment capabilities. So we enable payments into, out of and across these emerging markets. With all of our suite of products, especially wholesale effects and for payments, we do what we call the G10 as well. But people aren't coming to us for the G10. They're coming to us because they know that we've got a depth of expertise, depth of knowledge, capabilities, relationships, networks.
and to be able to make the really difficult seem straightforward.
Louis (12:45.678)
Totally. And another important part is, I suppose, working with aid partners, big international development organizations, and moving aid money into markets that need it too. I suppose when it goes from taking days to move that, as these African systems interconnect to minutes, that will have a benefit for people at the other end.
claire_gates (13:09.823)
Yeah, absolutely they do. And that's a really important thing. So we've got the capabilities, and then we've got different, various different client bases. And one of which you said is humanitarian organizations, the IDO, doing goods, sending money in, where often it's a crisis that's happened in various forms. So they've got to get the money in really quickly and being able to disperse that to the various different individuals within that market.
It's also important to have it very, you know, the transparency of it. We're FCA, PRA regulated. So that holds a lot of value for many of the UN agencies because their donors need to know that there is a level of transparency. There's, you know, we've got credibility, the compliance behind it is all as you'd expect from an FCA PRA regulated entity. So that's really important as well.
Louis (14:05.646)
Absolutely. I want to touch a little bit on AI. It's impossible at the minute for me not to do a Parkhouse episode and discuss it. A lot of chat about agentic payments, is that something, a conversation, obviously a large part of what AI does is supposed to democratize access to certain services. Is that something you're seeing in the African markets you're working in, or is it still maybe a rich world conversation that hasn't got there?
claire_gates (14:30.922)
We're not yet, but we're developing it so that you will have it in certain markets that are in Africa that are actually as a domestic payment infrastructure is really quite advanced. So if you think about Nigeria, if you think about Kenya, et cetera, Ethiopia coming there, there are certain markets in Africa that actually because they've leapfrogged technology, which sometimes more mature markets have had to have the legacies of, they've been able to leverage that.
And I see it being really key for them to be able to accelerate development and capabilities quicker and less expensive than maybe others have gone through before it was available so readily. For us, we're using it absolutely from anything from optimizing flows, optimizing screening, all these checks.
and date name checks. You know, if you're going in and pay making payments in a particular market where there is lots of, you know, the equivalent of, you know, a Mr. Smith or Mrs. Whatever, and where there's a common name, we're lucky because we've got an infrastructure behind us or mature place, whether it's the US, Europe, UK, where you can easily check names, date of births and also.
addresses etc. So therefore ensuring STP straight through processing rates are high when you start going into those other markets that are still maturing that's when AI can really help to optimize flows.
Louis (16:07.394)
Yeah, absolutely. Exciting times, I suppose, in all markets around the world. Just lastly then, Claire, you've obviously been in your role for a long time. part of that is, I believe you've mentored a lot of young women coming through within the industry, within payments. From your perspective, has it got better in terms of women in the right leadership roles, or are we still at a place where there needs to be?
claire_gates (16:13.948)
Yes.
Louis (16:36.268)
More work needs to be done.
claire_gates (16:38.625)
good question. I think in the payment space, what we've seen is there's more women into payments, really good experience. So that's really pleasing to see because there are, there's a lot of quality of individuals. So I think, and it's become exciting and it's sexy, was when I started off payments was not necessarily considered the forward thinking frontier that many people wanted to really go into.
Whereas if you fast forward and I look through, and that's why I say it's a gift that keeps on giving. Every time I think we've reached an area where payments has, what innovation are you going to think about? What new product or capability? There's something new that comes up during the course of it. And that's why it's been able to attract and continues to attract some amazing talent across all demographic actually, not just everywhere. And I think that's why we're starting to see more people
young people coming in, male, female, wanting to continue to drive this forward. So I think there will be a chance for us to see even more women in senior roles leading payment organisations, whether the big players or even the innovation ones as well, the startups. And the local startups are so important because they've got the flexibility and the agility to create, I think beyond sometimes what we do in larger organisations.
Louis (18:02.882)
Yeah, absolutely. That flexibility in the market will be key going forward. Well, Claire, thank you very much. That's all we have time for today, unfortunately. If you've been watching and you're not already subscribed to the Payment Expert podcast, make sure to subscribe where you do get your podcasts with plenty more insight and analysis to come. And for the latest news as it happens, you can head over to paymentexpert.com. We'll see you all next time.