1039. Insights: Stablecoins, clearing and the future of payments with Emma Hagan, UK CEO of ClearBank

19:46Emma Hagan:Welcome back to Fintech Insider. We're chatting with ClearBank's UK CEO, Emma Hagen. We're talking about growth. I mean, a big part of growth. I always kind of think, you know, every business around the planet, whether you're, you know, you're a clearing bank or you manufacture sneakers, whatever. Like, it's the people within those organizations that do all of those things, right? I probably have to revise that as the robots do take over. But, you know, people and culture is a big driver for what you're doing and how you're getting there. And obviously, over the last 10 years, Emma, Clearbank has scaled significantly from, you know, pretty humble roots in terms of it being, you know, a very small team to, as you say, much larger ambitions in terms of where you're going and what you want to achieve.

20:30Emma Hagan:So, I mean, how do you, probably maintained not the right word, but how do you evolve that culture as you've scaled the business?

20:38David M. Brear:I think we've done a few things as a team, and it's definitely something we spend a lot of time on in terms of culture. I think we've looked very much recently at our hiring processes. So, how do we look and find the right people, the kind of people that are going to really enjoy the environment here at Clearbank and also have the opportunity to thrive? How do we bring in also new ideas and diversity of thinking? And so how do we get that ingredient mix right? So yes, we kind of keep the core of our culture in terms of the focus on innovation, the client-centricity and the mission, if you like, from our perspective, but also we don't stagnate and we create an environment where people want to thrive.

21:25David M. Brear:So we've definitely spent time on the hiring process and we spend a lot of time on behaviours and what do our values mean for us and what do we expect to see from people? What can they expect from us in return? And that, I think, has helped us. But the culture's definitely evolved over time, as it will do, when you go from a relatively small number to, for us, not only an increase in the number of people that are with us, we've set up new functions as everyone does, but we've also obviously opened in Europe too. So now we've kind of got a multi-jurisdictional piece to wrap in as well. But I think the really exciting thing has been seeing kind of new talent come in, seeing the growth in existing talent, but still keeping that core of who we are as an organisation.

22:09David M. Brear:And I think that hopefully shows up really well for clients and they still get the same feeling from us as they did many years ago, but recognizing that we are adding products or coming to the market with new innovations that help support them at the same time.

22:24Emma Hagan:It's interesting, isn't it? And again, having run a business for 10 years, the beginning is very easy because there's four or five people and you all agree wildly and yada, yada, yada. And then there's 50 people. And then you're like, oh God, those things that we thought we all knew, we've got to start writing down. And then, you know, the changes over that time are really interesting. But I mean, I'd say in my experience last 10 years, the market stuff, the competitive stuff, the blah, blah, blah, not pales in significance to the crazy things people might do at some point or another. So, and it's almost the cycles are really interesting as well.

23:06Emma Hagan:I'm sure you've seen this, Emil, which is it's a little bit like building a sports team. Do you know what I mean? Like you'll have a brilliant team and the cycle shifts and you've got to change things. And, you know, it changes as you get bigger. And as you say, with you guys now being in multiple geographies, then actually, you know, every place has a different culture and, you know, building yours to be resilient to all of those things is actually a really interesting challenge. but it's what makes your job super interesting, isn't it? It's the problems you get out of bed every day and, you know, want to evolve those things towards, you know, solving for those problems.

23:41Emma Hagan:But yeah, the behaviors bit, I think, is really important, as you say, because, I mean, that's what creates the environment, isn't it?

23:51David M. Brear:Yeah, absolutely. And to be honest, it would be really boring if nothing changed. I don't think people would want to come to that kind of company where it's sort of the same year after year and there's no growth. And again, we tend to find that we attract those people, the people that love the idea of doing something new and something different. And they can see the, I think the other part we see a lot is, I'm sure you have too, people who feel like they can make an impact. The work they do matters. What they do and how they show up every day really matters. And I think that's quite exciting for people to know that their work and what they do makes a difference in the world.

24:27Emma Hagan:yeah well and we say the the industry's shifting you know the the things i mean 10 years ago you know the the digital asset scene is a good example wasn't really as as mature as it is today and and you guys have been making some really interesting noises and steps in that space i think there's there's some collaborations you guys have been doing with circle and and tourists do you want to talk to us a little bit more about uh what they are and and what it is that you're trying to achieve?

24:55David M. Brear:Yeah, sure. So, yeah, it feels like it's moving quite fast now, which is quite exciting because there was a lot of talk for a long time and not necessarily quite as much movement. And it feels like the pace is really picking up. So, yeah, we announced our partnership with Circle and we are in the process of building that out, it's fair to say, with Ataurus, our technology partner in that space and initially we're looking primarily kind of in Europe starting in Europe there with Circulantaurus obviously we know that the UK kind of regulatory regime has been under development and there's a ton of progress now that we've seen in this space but as we talked about before knowing what good looks like and building and regulatory compliance is quite important for us and also making sure that we're all clear about how, from our perspective, how and where do we play to make a difference?

25:56David M. Brear:So what adds value to the market and our clients? So we are looking from an EU perspective at how we partner in the Circle Partner Network, payment network. We're also looking at, and we've talked a lot in the market about stable coins. So what role can ClearBank play in stable coins? I think kind of the connections with Circle obviously a huge, huge player in stable coins and also Taurus in terms of infrastructure, important developments in that. From a UK perspective, we're spending a lot of time on, we've spent a lot of time on the policy side of it in terms of kind of the input into what should the regulatory framework look like.

26:37David M. Brear:We obviously work with a lot of digital asset companies in the space. So the likes of Coinbase, we also work with Revolute, both our embedded banking clients. Coinbase we worked with for a very long time. We've got a number of other digital asset companies. So we're constantly looking ways that we, from a clear bank perspective, stay relevant. So how can we participate in whether it's tokenized deposits or something in a stable coin ecosystem, but also then what can we do from infrastructure's perspective, going back to what we do best, what does that look like in terms of supporting those companies as we go through, hopefully, the next phase of exciting innovation where we see kind of real traction on stable coins and tokenized deposits, particularly in the UK market, where it's been a little bit quieter over the last couple of years.

27:23Emma Hagan:Yeah, it's interesting that, isn't it, being, you know, the sort of UK ecosystem and, you know, I know there's a lot of push to move outside of London, but still, you know, within London, actually the engagement that the regulators and the government do with leading players in the market to help shape, you know, the narratives around these things, or as you say, where the legislation sort of goes is really important, isn't it? So playing a part of that education capability and shaping what that future looks like, it's, you know, the clearing banks that started 250 years ago, I don't think have maintained that leading sort of innovation sphere.

28:06Emma Hagan:So, you know, I guess, as you say, a big part of the mandate for Clearbank is sort of staying on that edge. I guess with this particularly where we're talking about, you know, digital assets more broadly, I mean, taking that step from, you know, helping shape an observation into, you know, action is clearly a step that you guys are taking. Is that due to the confidence that you've got in the market or the confidence in your ability to have impact? What sort of driven the shift?

28:36David M. Brear:I think it's a bit of several things. Firstly, we were founded on the premise of delivering innovation for the good of the market, for the good of clients, the good of the financial services. I think we still believe that. So we certainly want to be involved in innovation and we see digital assets as kind of the next wave of innovation that's kind of already sort of a bit here. We also have seen, I think from our perspective, the UK is in a really great place. It's also been a really exciting place historically for fintech and innovation. And I think we think that that is a place that we want to, a crown that we want to maintain, if you like.

29:16David M. Brear:And there's a lot going on in the world around digital assets and stablecoin. I think particularly when we look at opportunities on cross-borders, so stablecoins and the use of making cross-border payment remittance easier, it feels like there's a real use case there. And certainly we've seen the impact of how challenging it can be to get that cross-border money remittance working in the same way that ClearBank was founded on, as in real-time, seamless, scalable, cost-efficient. So we look at that stablecoin as potentially an option for delivering that on a cross-border basis. So we want to be relevant in terms of doing that.

29:57David M. Brear:And I think from where the world is moving in terms of the development of stablecoin and tokenized deposits, it's so important that we play a part in that from a UK perspective. and ClearBank, when we look at our role, aside from sort of supporting developments in regulatory regimes or policy, working with government and regulators, I think that fits really closely with what we're trying to do, which is provide the infrastructure that helps support innovation in our clients. So Stablecoin and tokenized deposit as kind of a thing alongside fiat, but potentially being that next wave of innovation feels like there must be a role for an infrastructure player to come in and support that next level of innovation in the market.

30:43David M. Brear:And that's why I think ClearBank in particular is looking to support both people looking at issuing stable coins, tokenization, and potentially at some point playing in that market ourselves, again, all for the benefit of our clients and the market we serve.

30:59Emma Hagan:Yeah, it's interesting, isn't it? You know, initially, as all sort of, you know, breaking technologies do, it's, you know, it's about replacement or, you know, you know, Pirates of the High Seas stuff, you know. But increasingly, as you say, the narrative around stable coins is much more of a sort of a complementary one than it is, you know, an A or a B. So, and as you say, from an infrastructure player perspective, giving people options across those things is hugely important. I think the other point that you made there as well around the UK's thing, actually, you know, the UK, British common law and all that good stuff, you know, we're very good at creating the agenda that essentially sets the standard for the globe, which is, you know, it's a precarious place sometimes because you keep having to swing for the fences, don't you?

31:49Emma Hagan:But from an organizational perspective, that's a real, back to that point around culture, then, you know, continually evolving, continually looking for opportunities and, you know, pushing those boundaries. That's a great place to be.

32:02David M. Brear:Yeah, definitely. Definitely. And I think we're committed to the UK market. We think it's still a really exciting place to be. So very committed to making sure that we, again, adopt. to your point it's it's as well as not instead of um but embracing innovation and technology for the

32:20Emma Hagan:good of the market yeah and and do you see that sort of uh it's interesting when you know sort of culture and that drive for change becomes a a competitive advantage because obviously you know 10 years ago nobody done it for 250 years but but increasingly people whenever you're successful somebody thinks you know somebody's going to have a go i can't believe somebody hasn't started 12fs yet you know i mean like just just to be antagonistic you know i mean but uh uh i think i feel like i've just put an idea in a listener's uh ears there which is uh probably a bad idea but um but the space is getting i guess a little bit more crowded than it was before like how do you maintain that edge how do you stay competitive in this space is it is it about continually

33:05David M. Brear:challenging yourselves to to evolve yeah so i think we've always looked at competition as a good thing because it means we must be doing something right so that someone does want to do what we want to do and also again competition is being good good for the market as a whole I think for us how how do we how do we kind of stay sort of relevant in the cutting edge it is continuing to listen to our clients and what they need so that we're developing products that are useful to them genuinely and help support their growth I think for us it's also and we we touched on a little bit how the early days are really hard.

33:41David M. Brear:So getting the scale and the resiliency and the red compliance, the bank rate, it takes quite a lot of work. And I think, again, we're incredibly focused on continuing to deliver that level of resiliency and the scalability that we've always enjoyed to date. And I think that, again, helps us to be competitive in the market. We're able to, we've proven that we can do it. We've proven we can do it at scale. I think we'll continue to make sure though, to the point about stable coins and digital assets, that we remain relevant. Again, markets move quickly, probably quicker than they ever have done before.

34:18David M. Brear:The kind of technology advances move so fast. I think for us, we're always focusing on how do we stay relevant to what our clients and the market need. So how do we make sure that we're not complacent sitting back and going, okay, we're done yet. We're never going to be done. There's always going to be something new that we could be doing and we'll always be focused on that. So that balance of kind of innovation, how we stay at the cutting edge, as well as making sure that we continue to deliver on the promises we made from the beginning about being resilient and scalable and red compliance built in and supporting what our clients, the client base needs.

34:59David M. Brear:So it's a really, it's a challenge we spend a lot of time on about where are we spending our time? Are we doing enough of this? Should we do some more? Where do we invest next? What are our clients telling us we should be doing? And really making sure we're trying to balance all of that conversation so that we're doing the right things at the right time based on, again, with the view of how do we stay sustainable and continue to grow in the market.

35:23Emma Hagan:Yeah, I mean, it's amazing how many times we've had, you know, the CEO of a business on and, and, you know, the, the comment of like, listen to customers and evolve with them is like, is a mantra, whether it's you or whether it's Patrick Collinson or whether it's like, so actually like that to see, it sounds so obvious when you say it out loud, but actually it really is a major secret success, isn't it? But I guess on the broader context for the UK, and as you say, you're, you know, you're UK business, you sort of founded here and growing out from here. It kind of feels like we've got our mojo back a little bit.

35:57Emma Hagan:You know, I was quite vocal recently of it felt like we dropped off a little bit after the high of, you know, the, you know, everything that came out of eight years, 10 years ago in terms of, you know, the flurry of opportunities and the rise of all of the fintech players here. But there's been some really great appointments of within the regulators, within, you know bodies within businesses it it sort of feels like the uk's got its mojo back and not not quite overcoming passporting yet but uh but i think they're having a good go at it um you you must see lots of change in that market as well yeah definitely i think there's there's always a

36:35David M. Brear:part i think in the uk where we sort of maybe it's a it's quite a it's quite a cultural thing we like to talk ourselves down um quite a lot and actually very humble humble yeah exactly Always focusing on what we haven't done quite right rather than all the things we have done right. And there's a, I think to your point, there's a reason why we saw, you know, back about 10 years ago, we saw so many new startups, fintech start here and lots of them have grown enormously successfully. So if you look to that, you say, well, we must be doing something right because there's been an environment that's allowed those businesses, including us, to establish here, grow here, flourish here, and then take that success into other markets.

37:21David M. Brear:And so you've got to say, okay, well, we're doing something right. It did feel, particularly in some of the areas, that maybe we lost a little bit of momentum. Again, digital assets, a good example. Everyone else was kind of doing stuff and it felt like we were a little bit so, but it feels like we're back at the party now and we've remembered how successful we are when we focus and we look at how we support growth in the UK. And it feels incredibly exciting when you look at that opportunity now, both in terms of those established fintechs that have gone absolutely enormous, unicorn, multi-market, but were founded here in the UK.

38:02David M. Brear:And then you look at some of the challenges we're seeing start up now. Again, there will be hopefully that next wave here. And as we kind of get that, hopefully the kind of digital asset space and the new payments vision and everything else kind of starts to take shape and embed. Again, that feels like another wave of hugely things to be optimistic about in the market, that we're kind of back with a bang. We've remembered who we are and we're really set up to be, again, another leading player in the world stage in the fintech space and UK as a whole. Fantastic.

38:39Emma Hagan:I mean, that seems like a beautiful place to leave this, like in such a point of optimism. But again, I guess it is amazing how much of that is down to people, you know, and actually, you know, I don't think during that period where things were a little bit more difficult, I don't think it was down to like the wrong policies or the long, you know, procedures or whatever, you know, I think it was just having the right people in the right place to challenge the boundaries and, you know, try and establish the leads that way. we once had. So yeah, I feel like everybody's very uplifted. I feel like that's a nice place to leave it.

39:16Emma Hagan:So Emma, we're going to have to wrap up the show, I'm afraid. Really, really great to chat to you. And thank you so much for making the time to come and talk to us. Where can people learn a little bit more about you and the great work that you guys are doing over at Clearbank?

39:29David M. Brear:So you can find me and Clearbank on LinkedIn, but also at clear.bank, which is our website.

39:36Emma Hagan:Very good. Do you know what? I usually say LinkedIn, but do you know what, guys? Send me an email. It's nice to hear from you guys. David at 11FS.com. Thank you very much for listening, everybody. If you like what you've heard, please follow our podcast, whatever platform of podcasts you get them from. You can get that there, I'm sure. If you like what you've heard, why not share the podcast with a colleague, a friend, an enemy, that you want to learn more about financial services, whatever it is that you want to do. As always, if you do want to join the conversation, you can find us on pretty much every social media channel at this stage.

40:03Emma Hagan:Just search for 11FS or search for Fintech Insider. Or if you want to, then email us on podcasts with an S at 11FS.com. Thank you very much for listening, everybody. Goodbye.