Demystifying Banking and Payments: Insights from Viktoria Soltesz CEO of PSP Angels Group

Viktoria Soltesz, CEO of PSP Angels Group and author of "Moving Money: How Banks Think and Who You Can Trust," shares insights into the complexities of banking and payments. She discusses global regulatory challenges, the evolving role of payment systems, and how businesses can navigate risks while optimizing financial strategies for the future.

Key Words

• Viktoria Soltesz
• PSP Angels Group
• Moving Money
• Banking and Payments
• Financial Strategy
• Regulatory Arbitrage
• Cryptocurrency Risks
• Payment Providers
• Banking Compliance
• Financial Technology

Transcript

Hello and welcome to Banking on Information. I'm your host, Rutger van Faassen. Today I have with me Viktoria Soltesz, the founder and CEO of PSP Angels Group and the author of the book "Moving Money, How Banks Think and Who You Can Trust". 

Welcome to the podcast, Viktoria. Well, thank you so much for the invitation. And it's an absolute pleasure to be here and share my insight. So I was really excited to join you today. Great, great, well as as you know, I put people on the spot right immediately, and I asked them why, why do you do what you do? So, Victoria, why do you do what you do? Right. For that, we have to go back a little bit in time when I was younger, 20 years ago, to be precise.

I was a tax accountant, tax advisor, and a lot of my clients came to me to set up international taxation structures to optimize taxes on an international level. But after a few years, my clients came to me not with the question of what to do with the taxes, but what to do with the bank accounts. How to make sure that the banks that we are choosing or the payment providers that we are trusting our money with are going to process all those transactions that we want cheaper, safer, and in a more effective way. And I was just as clueless as most probably a majority of you are at the moment, why certain things are allowed in banking, why some is not, why they are good enough for one bank and rejected by another.

So that's when I started to look for answers, and then I realized that unfortunately there isn't that much information out there about this, but it seems like that everybody has the same questions, so then I started to dig and educate myself. This is when I realized that banking and payments, it's a whole industry on its own. And it affects every part of the operation as of today. It affects your marketing, your profitability, the risk, the technology, the integration. So then I realized that we really need to talk about this. And just to help all of those people like I was a couple of years ago, not knowing this answer, maybe I will be able and my company. company, obviously, will be able to reply to all those questions of what is going on, how banks think, and how money moves internationally.

All right. So you're passionate about learning. And then when you learn, you're passionate about teaching others, telling people what is going on, who they can trust, and telling them the ins and outs. That is a great, great why. So with that why, what do you want? Do you do for customers what do you help them solve? What use cases right so um As I said, it seems like that everybody has problems with banking and payments, but no one seems to have the answers. So my consultancy company is helping them to demystify all of those seemingly obvious questions. But if you really don't understand the history of banking, you don't understand why banks are acting as they do today. And you can't plan for the future.

If you don't really understand how people used to try to outsmart the system, you will not really understand what are the whole point of the regulations as of today; and again you will not be able to plan anything for the future. So what we are doing currently is helping any kind of company to understand why certain things are happening to them and how to set up an overall banking and payment strategy which can affect every part of the operation, so we understand where the money comes from, how much, how often, what currency, who is holding the those funds? How are they regulated? Meaning what is the risk that you are taking by trusting your money? Your most valuable asset, obviously, with these providers, how you can scale up and have those banking and payment partners for the future, how you integrate them.

What about data security? What about fees? So we put everything in a holistic bird's eye perspective and make them ask those questions which can have a lot of, hmm, I actually never thought about this kind of moment. Why are you keeping deals on one bank account? Why you ever negotiate your fees with a bank that you opened account with 20 years ago? Those are all the very easy questions, but it can spare a lot of money and headache for you in the long term. Right. So you're a trusted advisor in this world where it's not always clear what is what and how to do things. So that is very, very valuable. Can you tell me a story of one of your customers that you work with and how they got value from that valuable information that you gave them?

Right. It was actually a personal story. I was in Cyprus working for this client as an accountant a long, long time ago. And we kind of lost contact. And one day the guy calls me and he says that, oh, Victoria, you know, there is this new thing, crypto, back in 2017. And he says to me that I bought Bitcoin for 500 euros, and everything was great. Money went up, and I cashed out 550. Now, little he know that the high street bank had a history of seeing the money coming from a crypto exchange so they put him on a higher risk category which means, uh, which meant that they increased his mortgage rate; then they restricted him from certain financial services and products.

And unlucky for him, he was a director and shareholder on multiple companies which also felt therefore because he was a key personal under a high-risk category. So this This little hiccup costed him thousands and months to justify with the bank. So these seemingly very innocent kind of mistakes can really cost a lot if you don't know what you're doing. Right. And you helped him out, and you made sure that it all got sorted out so that he didn't. Yes, exactly. So usually what we are saying to our customers is that talk to the bank and think before you act. Right because maybe it could be good for one bank or one payment provider but it could be a complete restricted activity for another.

You know your responsibility as a business owner to really understand what is your relationship with the different banks, how are you moving money internationally and obviously um internal and external within the group and how you are managing those flows to make sure that everything is risk-as-much optimized for risk and fees as possible and of course, you know that what are the decisions that you do, you're making informed decisions over all of those aspects what payment and banking can affect. Yeah, no, that sounds very, very valuable. Now let's talk a little bit about the future. I like to do this thing called future stinking. We both don't know what the future is going to hold, but we can think about a possible future.

So if you think 10 years out, so 20-34, what do you see in the market, in the market that you are currently in? What does that look like 10 years from now? That's the thing that I honestly believe that payment and banking is going to evolve. Technology is definitely going to shoot out in the sky. However, the regulation is not going to be harmonized all over the globe because certain countries cannot just go to another country and say that, hey, you need to increase your tax rate. Hey, you need to enhance your compliance procedures. Of course they can, but there are some limitations. So there's always going to be opportunity for some regulatory. Arbitrage and that means that banks and financial institutions will still evaluate transactions in a different way now, in the same way that we thought that blockchain is going to save the world because everything is automated.

We see that still, we don't have enough cross to put in the system to outsource the decision making and the full compliance, the full overview of our financial system to one hand, because we just don't trust all of us in the same third-party provider. So there are still going to be some differences in my opinion how you're evaluating one transaction from another, what are the risk scores, and obviously, what are the fees which the banking and payment provider is going to attach to that. But I honestly believe that payment and banking is going to act as an independent department and function in any kind of business. Because it's not finance. It's not something about investment. I mean, I'm an accountant. We were never taught about Visa, MasterCard, Chargeback, SWIFT, ACH, open banking.

So we need some kind of um separation from the classic accounting and finance function and focus a bit more on understanding the banks' understanding of compliance, and of course, in fact, the technology got part of that too because nowadays every company is going online and becomes a tech company too, which just adds to the complexity. Correct? So with this growth in in the pavement industry and actually becoming much more sort of an independent industry if that's sort of what we see 10 years from now. What do you need to do today to be ready for a possible future like that? Well, you really need to understand that there is a problem and you need to get ready for it.

It's no longer enough that you are just Googling payment processor and you are trusting your money to the top finding on the Google ranking, right? You do need to do your overall due diligence. You really need to understand how the money is being stored, being handled. What is the risk that a certain payment provider or bank can pose on your operation? Meaning if you can't call your bank from one day to another, how is it going to affect your operation? Are you going to go bankrupt? Do you have a backup for that? So those questions are getting more and more apparent. And with the abundance of the different payments methods, digital wallets and the mobile payment options, your responsibility as a business owner to really understand the benefits and the complexities and make the relevant decisions on how to improve your customer and user experience by using different payment methods.

But overall, how are you going to integrate that in your internal operations? It's not easy, but you have to have these questions and you have to make these decisions earlier the better to know what are the risks which are just hanging on top of your operation at the moment, not even knowing when when it's going to hit you. Yeah, so great. So with the complexity increasing, you really need the right trusted advisor by your side. I can think of one. I'll let the viewers decide who they want to pick, but there might be one that knows something about moving money. Thank you very much, Victoria, for being on the podcast. Thanks, everyone, for watching and listening. This was another episode of Banking on Information. You can find both Victoria and myself on LinkedIn. And until next week, choose to be curious. Thank you so much. Thank you.