Eidsson, formerly analytics director at Klarna, spoke extensively to Milne about the challenges of regulating the BNPL space in order to protect the end consumer. When asked about the controls that have been brought in (or are currently being introduced) to the BNPL space by regulators, Eidsson commented that there is absolutely no reluctance toward new rules from the BNPL providers. “I think any serious BNPL provider is going to welcome regulation […] Regulation for BNPL is only good, will strengthen the process for providers, will create trust for consumers in using a more regulated product, and will ultimately help the growth of this as a product.” The conversation continued to the subject of BNPL growth expanding “hand-in-hand with the growth of e-commerce,” explained Eidsson, as these solutions offer a much nicer way to check out than rummaging through your wallet at to pay in store. As the Covid-19 pandemic provided a long enough period for consumers to truly change their personal shopping habits, BNPL and other digital payments providers are all trying to remove as much friction as possible in order “to get to the nirvana of a one-click checkout model,” Eidsson furthered. Milne countered that this objective is where a key part of the problem lies. By removing all of the friction or pain-points from the check-out experience, this arguably makes it easier and faster to make purchases, which may lead to vulnerable consumers spending at an unsustainable rate, damaging their financial health. Milne posed Eidsson the question as to whether he sees BNPL products as potentially leading to significant financial distress for consumers down the line. “It depends,” he responded, “on what kind of BNPL product is being used.” “A huge proportion” of users pay within 30 days at no additional expense to themselves, he observed, while users who finance their purchase over a longer time period, sometimes between three and 36 months, will incur greater costs. He argued that it isn’t in the interests of the BNPL provider for customers to overextend their credit, and they carry out creditworthiness checks to assess customers for that reason. Furthermore, Eidsson added that while BNPL is a new and innovative product, the same issues can be associated with credit cards or consumer loans - we’re just more familiar with those products. Web3.0 and digital assets: the physical vs. the virtual Closing the day’s sessions with a forward-looking panel, moderator Niamh Curran, reporter for Finextra, dove into the discussion titled ‘Web3.0 and digital assets: the physical vs. the virtual’ to assess and predict just how influential these industry trends will be in the coming years. Not one to hesitate on the technical debate, Infosys’ Manish Malhotra, vice president, financial services, proposed that web3.0 has the potential to answer the challenges of cross-border payments. He stated that web3.0 is a great answer to the challenges of interoperability and inconsistent regulatory frameworks which had already been discussed during earlier panels. “If you really look at the heart of it, web3.0 is a very decentralised architecture. You can connect directly peer-to-peer, you can establish a trust network between the two peers, and execute payments without the need for intermediaries.” Malhotra pointed to the example of the Emirates NBD bank and the ICICI Bank in India which looked at how to use blockchain for inward remittances. One of the busiest networks for remittances in the world is between the UAE and India. The two banks piloted a bilateral blockchain solution which in addition to providing the direct payments, has given the banks the opportunity to innovate on top of the blockchain solution to create a trade finance platform. “This is the advantage of web3.0, where you can do instant payments and cross border payments seamlessly, build very strong bilateral or multilateral relationships with the banks, alongside operational efficiencies.” Hanna Khrystianovych, fintech and head of partnerships, Sigma Software Group, continued that while talking about web.30 opportunities - be it tied to the multiverse or cyberspace - there needs to be a closer level of cooperation and communication with your customers. “Branches in cyberspace, customer service, educational programs are examples where banks can try to help them understand the complexity of some services. Tools can also be specifically designed for employees.” This kind of technology fundamentally changes the way that we will do business with or interact with the customer. Khrystianovych continued that if we are to do this, “the first step is to have the willingness to understand what is inside and how it works.” The second is about trying to dig deeper. Misunderstandings are problematic in this area because “you cannot understand how to deal with the technology if you do not even understand what it is about. Even for people completely focused on business, it is important to be a technology ‘geek’ and dig deep,” Khrystianovych added. This subject of education was echoed by Sarah Häger, regional manager, Enable Banking, who recognises that there are similarities in the conversations around web3.0 being had now, as there were about Open Banking in 2017. It’s a viewpoint of our curiosity, Häger noted, when these new innovations start to appear, and we ask ourselves: “Is this an opportunity or a threat? Is this something we can use? Yes or no. If you think you’re going to be able to use it, then you should understand it. So I think I advocate for curiosity in the sense of asking how it can actually be used? Is this the technology that will enable new innovations?” Häger added: “We have a responsibility to really try to create that level of communication, to cut through the ‘BS’ and get to the sharp end of asking what is this about and how can we use it?” Bringing the conversation to a conclusion, Curran turned to Ville Sointu, head of MFS solutions and strategy, Ericsson, to ask the best ways for us to overcome the trust roadblocks in the way of adopting innovative opportunities - particularly in light of FTX’s criminal actions damaging trust. Sointu explained that given the mixed signals and deception of FTX, “we need better supervision, better transparency to be able to see into these companies. The types of regulation that FTX was pushing would not really have exposed the kind of scam that they were running. We need broader based, carefully enhanced regulation, and greater transparency of these intermediaries which are increasingly part of the ecosystem as well.” As it’s very difficult for individuals to truly understand the technology, they ultimately find themselves putting a lot of trust in institutions to protect their assets, which means there must be very “careful supervision of how things are being marketed to the public,” added Sointu.