What Island Nations Can Teach Us About Moving Cash - Jamie Cockerell [Season 3 | Episode #22]

Speaker A: Hello. Welcome to Pitt Exchange, a, uh, podcast by Currency Research. Join us as we discuss the latest in payments innovation and technology with the industry's most innovative thought leaders. Today's payments are changing and moving around the world faster than ever before and PID Exchange gives you the knowledge and insights to keep up. Uh, sit back and relax as we join Currency Research, exchanging ideas with today's special guest.

Speaker B: Hello everybody. Thank you for joining us on the next exciting episode of the Pit Exchange where we talk about the latest in payments innovation and technology. I'm your host again this week, Sean Ferrari. Uh, thrilled to be coming to you live or recorded. Live anyway. Ah, in Fiji at the Island Nations Payments and Currency Summit. Um, and I'm here with Shit. Jamie Cockrell, um, with ecm. Jamie.

Speaker C: Good afternoon everyone.

Speaker B: How are you? Great to see you.

Speaker C: Fantastic event, fantastic location. Who couldn't be in awe where we are?

Speaker B: I know it was one of those where we didn't know in Fiji if people would actually attend the event or go out to the beach. And we did some workshops today and I will say, um, uh, everybody, we held throughout the entire, uh, workshop experience. So it looks good for the next couple days that we're going to have a full room. So we're thrilled to be here. Um, the event is, um, co hosted with the Reserve bank of Fiji, um, and we're taking the opportunity while we're here again to talk with Jamie, um, about some recent exciting news, um, for ECM with work with the Central bank of the Solomon Islands. Um, I understand you've won a digital transformation project.

Speaker C: We have, yes. So as part of the bank's ongoing drive towards general digitization of the cash supply chain and actually anything relating to financial services in the island, um, they spearheaded really from the governor down. So it started off as a strategic direction as opposed to a small individual project in isolation. It's part of a much bigger body of work that the central bank are doing. Um, and one of the things they were looking at in our space is, um, what can they do around the cash supply chain. So it's part of, um, a wider strategic body of work driven by the central central bank and from the governor down, basically across not just what the central bank are doing, but also the wider financial industry. Um, the area that we're looking at is very focused on the cash supply chain and taking what the central bank do and other stakeholders in that supply chain and digitising it and turning it into a more automated and smooth process. Um, and that starts with what's happening inside the Central bank, but also their engagement with the commercial sector as well.

Speaker B: Interesting. So maybe on, on that point you mentioned the central bank but also the commercial market.

Speaker C: Yeah.

Speaker B: Um, it must be challenging to. Well, I don't know. Last question. Is it challenging to get the market to, to work together or have you really gotten that far yet in the,

Speaker C: in

Speaker B: the project?

Speaker C: As it happens. I mean as we're sitting here speaking right now, the system has been up and running for about two weeks. Okay, two to three weeks. So um, we announced the, um, sort of announced the project um, at the same time, um, as part of the agreement we have with the bank. And I think what makes it different is it started with an initiative bringing everyone together as opposed to um, the central bank doing something in isolation and then trying to get the commercial sector on board to work with them. So it was very much done with all those stakeholders consulted from the very, very beginning. Um, and so it's worked from the center out. If you can imagine it, a bit like an onion. So you've got layers of an onion. It's a bit like that. So you've got the central bank worrying about their operations first and what they're doing inside and then how can they integrate the commercial sector into that supply chain? M and so elements of it are about sharing information with the commercial sector, but also with gathering information from the commercial sector as well. So when the commercial sector, um, making a deposit, that is done electronically through an electronic submission now rather than paper based or on email, um, vice versa. When they are withdrawing currency from the central bank, that is done electronically online through an online system as opposed to um, um, paper based or traditional methods of doing it. So part internal transformation and then part external transformation as well.

Speaker B: Okay, and how challenging was it? Again? We had some workshops this morning and some of them were on. One of them was on AI. I'm not getting into the AI topic at the moment, but a piece of that was around data and sharing data and how difficult that can be sometimes when you're talking about difficult and difficult, different partners, um, in the process, was that, was that a challenge at all in terms of data sharing amongst the commercial players?

Speaker C: Could have been a challenge. And I think if it had been approached differently by the central bank and they tried to do it in isolation first and then bring in the other stakeholders, they probably would have had 25 different voices, all with their own different opinions because it was all done as a sort of a, as a group effort almost. Um, the central bank worked on to the best way to think about is a standard, a common way of interacting with the central bank and a common way of these things were going to be done. And so um, we brought in the best practice of how we've done this in other geographies, how we've done this in other nations of both large and small. And then they took from that what would work best for the M. Solomon Islands and with their stakeholders. And that made the process much smoother. Now it wasn't without challenge. Um, these things always are. Um, but it was a much smoother path than trying to sort of do it piecemeal and piece by piece.

Speaker B: Okay, that makes sense. And then uh, just because I'm been familiar with a lot of the work going on in the US Is the, is the project similar to the cash visibility project in the US or is that something.

Speaker C: It has its similarities. Yeah. So I mean one of the goals that the central bank had was um, just general visibility of cash across their own estate. But also what was coming in and coming out, um, going out to central commercial banks. Sorry. And so there are a lot of similarities. What there isn't in this particular program which you have in the central bank, sorry in the United States is the interplay between the commercial providers.

Speaker B: Okay.

Speaker C: So there isn't so much just because of the geography of the country and the um, control the central bank needs to have over things. There isn't so much interplay between one commercial bank and another which the um, cash visitability program in the US covers off. Um, but um, within the supply chain with the central bank then it's very, very similar.

Speaker B: Okay, cool. Um, so you mentioned it's part of a broader digital transformation plan in the Solomon Islands. Um, what about how what they're doing could influence the region as a whole? Is this, is this something that other island nations particularly that were at a, an island nations event here? Uh, could it, could this um, have some knock on effects or does it play into something broader going on in the region as a whole?

Speaker C: I think it does play into a broader trend. So I mean I can't speak for the central banks that we're speaking to. Um, but there are a number of central banks at this event who've had. I think all the central banks in this part of the world are here. Um, and the majority of them we are now in discussions with about how do we take what we did in the som lines and we apply it to their own geographies in their own countries. Um, because they all strive for the same thing. And part of it is about just okay, um, eating an elephant in bite sized chunks I think is one of the phrases. Where do I start with something like that, you know, or wood for the trees, depending on your choice of phrase. But I think it's once, now they've seen somebody else doing it and they can see what good looks like and how it, how it can happen. I think what we'll see is we'll see a faster trend for that sort of movement because the benefits of particularly the challenges that island nations face are unique compared to other geographies. Um, just, you know, the way that the countries are constructed, the land masses and the fact that there are, you know, some of the currency moves around by ship or it moves around by aircraft. These, the, this all introduces challenges that you just don't see in other parts of the world. And so having somebody who's now built a template to do that, um, and how to answer to some of those challenges, I think you can't help but look at that and see, can I apply that in Tonga? Can I apply that in other territories as well? And so I think we will see a speeding up of that onboarding m of those types of ideas and technologies.

Speaker B: Yeah, no, I think that makes a lot of sense. Is there, there might not be in this case, but are there cases where the different regions or the different countries or central banks would need to interlink these types of this type of data? It's mostly around their own currency though. I guess so Maybe, maybe not so much

Speaker C: it is. But there is, there is an opportunity there. Particularly where you've got either nations that do, um, trade in other currencies or do have need for repatriation of banknotes, um, there is definitely an opportunity there. So the same principle where you've got, um, probably in the case of the Solomon Islands, you've got the Solomon Irons and the commercial banks holding currency that they want to ship back to the central bank. That same principle about visibility works across borders as well. So if I've got, um, a central bank of a particular island nation where there's a lot of tourism, a lot of trade from other island nations and they find themselves with, um, with reserves or large volumes of another nation's currency, there is a benefit there to knowing that if you're the central bank that needs to repatriate them back or you want your banknotes back to use them elsewhere, there is a benefit to that. So I think over time there's strength in numbers as well. So I think as you see, particularly like conferences like this one here where you've got a particular geographic region coming together to talk about their unique challenges. I think out of that you will also see partnerships that emerge to strengthen those ways of working as well.

Speaker B: Nice. Yeah, that makes a lot of sense. So here, uh, you're also planning to give a talk, um, here at the event, talking um, about the importance of being able to track banknotes, um, and how just data in general, um, plays a piece of that. Um, not to spoil what you're going to talk about here, but assuming most of our listeners aren't in the room, um, what's kind of like a highlight of what you'll be talking about on stage here, uh, tomorrow or the next day?

Speaker C: Yeah, so I'm participating in a panel discussion as well about sort of private and public partnerships, that sort of thing, which falls right into the sweet spot of the type of thing we talk about on this um, podcast today. And then I'm also doing a presentation on the value of bringing some of this data together. Um, and what can central banks and also commercial um, operations benefit from bringing different types of data, Some of it obvious, um, supply chain data, inventory data, some um, of it less so. So um, obviously the integrations with equipment, whether it's um, one manufacturer or another and what data we can glean. And I'll be touching on how you can drive value from that um, predominantly as a central bank in the presentation because the majority of the audience, but not exclusively our central bank, um, audiences, um, but also about how we can take that data and use it regardless of its source and how you can make connections there that perhaps weren't possible many years ago. Obviously, um, AI which we promised ourselves we weren't going to touch on

Speaker B: but

Speaker C: AI, um, plays a big role and analytics around has become much, much more accessible um, in using that type of technology. Um, but also how do we harness that data uh in other ways. So not necessarily looking at AI for analytics but um, how can we reuse information, how we can share that information for the benefit of others which may or may not be immediately apparent. Um, and we'll be covering off a lot of that aspect, um, in the presentation as you say.

Speaker B: Not

Speaker C: to steal my own thunder but yeah there'll be elements of that which we'll be covering off and um, over the coming months we'll be talking more about as a business, we'll be talking more and more about that um, a lot more of our ah, social media content will be focusing on different aspects of how data can be used and how we Source data from different um, points where it may not be immediately apparent as to why would you be looking at a particular technology or a system, um, but it does all help um, benefit.

Speaker B: Yeah, no, I think, I think the audience here is going to be really receptive to that, um, based on. I mentioned that we did this AI and cache workshop um, this morning and a lot of the feedback and the discussion in the room was around data. And how do you even first understand the data you have? Um, how, how do you structure it? Right. How do you all of those sorts of things before then being able to actually have AI run loose on it, um, and help draw some conclusions and that sort of stuff. So I think, I think that data piece uh, will be really interesting for, for this group

Speaker C: for sure. I think certainly when you're looking at using data you can, you can gather massive wealth of data, uh, without. If you don't know what you're looking at, feeding it into an AI model or any other sort of model isn't really going to help you if you don't know what you're pumping in, in the. And it will throw back answers to you. And the issue of course you have with a lot of AI, um output is you still need to understand your subject area to understand what it's showing you. Otherwise you don't know actually what conclusions it's drawing and whether or not it's valuable information or is it just. I wouldn't say AI speculates, but we know of the issue that you have within AI around um,

Speaker B: hallucinating,

Speaker C: hallucinating, um, output and stuff like that. And so one of the things we do with our um, our analytics and AI is we always cite where the data came from.

Speaker B: M.

Speaker C: Um, so and if you, if you don't ask it to do that then you tend to get, it will go off and find its own sources of information and that you're not in control of where it's getting information from.

Speaker B: Yeah, for sure.

Speaker C: And so, um, and you know what comes through as a perfectly robust, appearing to be factually accurate, uh, response to your query can sometimes actually be wildly inaccurate without you even realizing

Speaker B: it. Yeah, it is, it is. AI is great at ah, um, the way it comes back. It is always very confident in its answer

Speaker C: and very complimentary about your question as well.

Speaker B: The

Speaker C: best

Speaker B: question

Speaker C: I've

Speaker B: ever

Speaker C: positive.

Speaker B: Yeah. And

Speaker C: I'm not, I'm not dismissing it entirely because we use a lot of it ourselves and we use a lot of AI technology and our newest solutions. But it's about um, Working with it in the right way I think is crucial.

Speaker B: Yeah, no that's, that's great. And as I say, I think this region in particular in the island nations, um, I think there's a lot of uh, a lot of appetite to have partners come in and collaborate in that you mentioned public, private. But in that kind of partnership to be able to, to work with different players to try to figure this stuff out because it's complicated. Um, and uh, you know, particularly where there's um, there seems to be a particular need to bring in experts in the area and help provide some systems. So I think like what you're doing in the Solomon Islands for, for this, I mean I think it makes a whole lot of,

Speaker C: you know, no, no bank is an IT department, no bank is an AI specialist. Um, and you've got to look beyond your own expertise. Otherwise the other option is you grow your own expertise. But that's a very expensive undertaking to do that. And ultimately long term is not something you necessarily need. Once you've got what you need, um, and you've built it out, it's a very expensive thing to maintain. Which is why we're kind of straying into the other part of the conversation. Um, I'll be having um, at ah, the seminar but um, is around. Okay, well if you're going to make that investment yourself, you've got to be able to make that investment for the long term consistently every year. Um, whereas if you are working with commercial providers, whether it's people like us or others, um, we do that already. So you don't, you don't have to um, burden that full cost yourself when you can use a piece of a supplier like us or another partner to be able to get the answers you need or look to your peers. And this is a great element of this forum here is people already have answered some of these questions already. So conversations like the one we're having at this um, seminar this week means um, that they find those answers out of their peer network as opposed to having to come to a provider all the time. Which might sound odd as somebody who makes their money out of working with, with central banks and commercial banks to answer these questions. But actually it is beneficial to everyone if people are learning from one another.

Speaker B: Yeah, I think so. And great timing for the, the project with the Solomon Islands, um, in that they're, they're here as well. And I'm sure there'll be opportunities to, to share um, from them and talk about what, what they're, what they're doing. With you guys as well. So that's exciting. Um, well, cool. I think that that is a lot of what we're talking about here. Um, I think. Where are we. We're off to. I'll see you in Cape Town at our, at our Cape Town event in I guess a little over a month at this point. Um, is coming up quickly. Um, so we're looking forward to that.

Speaker C: Absolutely.

Speaker B: It's another interesting area. I mean that, that whole EMEA kind of area, there's so much going on as well. It

Speaker C: is, yeah. It's a very big market for us. We have a lot of, in almost all of the install processing cash operations in, in South Africa particularly, um, run our platforms. So we've got a lot of learning to share there as well. And so. So yeah, I'll be on stage again on that one. But, um, with a, with a panel of M people we've curated ourselves, um, to look at specifically around risk mitigation. That's obviously a challenge in parts of Africa and so, um, yeah, we'll be focusing a lot on that aspect rather than data this time it'll be about mitigating risk, but I can promise you data will come into that as well.

Speaker B: Great. No, I love it. Um, well, as always, it's great to see you, um, exciting. Congratulations on the Solomon Islands project. Um, and I look forward to choosing, chatting with you again maybe in Cape Town, but I'll definitely be talking to you, um, you know, throughout the week here. But thanks for taking some time to talk with us.

Speaker C: Excellent. Thank you very much.

Speaker B: All right, thanks for uh, listening to this, uh, this podcast, um, of the Pit Exchange. Um, please remember to like subscribe, download, listen, um, do what it, what it is, wherever it is, you do it with your podcast. Um, and we look forward to chatting with our, our next guest, um, another, another week from now or so. So thanks for joining us and we'll talk to you soon. Take care.

Speaker A: Thank you for listening to the PID Exchange, a podcast by Currency Research. Check out our upcoming events and publications@currencyresearch.com and join us for our next episode to hear what's trending in payments innovation.