Our Top Reads of 2023

What an eventful year 2023 was: bank runs, the collapse of FTX, an age of investor austerity (a carryover from the market correction of last year)—and that’s just the markets. Beyond, there were world conflicts, massive stadium concert tours of two women, and the continued rise of AI impacting the national and global economy. A lot has changed since we posted last year’s reading list.

These events prove our co-founder and CEO, Dimitri’s often-shared belief that nothing is predictable—and yes, if you look closely at the date, you’ll see this tweet (X?) precedes the SVB crisis. Every record, written or otherwise—this blog post included—is but a snapshot of what’s known in the present. Big decisions are made based on those knowns, and this year illustrates that those knowns can change in an instant.

Through all the noise of the year, our team centered itself in reading—about historical context, future-proofing, industry and company profiles, and more. Our culture of learning runs so deep that our #stuff-to-read and #stuff-to-listen-to Slack channels are the most engaged channels cross-functionally. Here’s a list of the team’s favorites from the year.

What We Read (And Listened To)

We noticed a few themes that continue to push the boundaries of traditional financial services:

First, FedNow’s launch started new conversations about instant payment rails. TechCrunch dove right into FedNow’s legal terms and a potential boon for nonbanks and fintechs to incorporate instant payments directly into their offerings. And Payments Dive confirmed our long-held suspicion that FedNow will drive instant payment adoption across rails, including its supposed rival RTP. The Fed and The Clearing House (TCH) don’t view themselves as rivals though; as David Watson, CEO of TCH puts it:

“Yes, we’ll compete, but at the end of the day, we’re both working in organizations that are not driven by commercial profit. We’re both working in organizations driven by the impact we can have to the economy.”

Across the world in India, where the Unified Payments Interface (UPI) instant rails have existed since 2016, Paytm smart speakers are driving a rise in digital payments.

Second, with the interest rate environment, credit cards are facing competition from banks and software offerings. Deloitte’s 2024 banking and capital markets outlook seems to posit that this is just the beginning of that trend (and we agree). More companies are vying for a cut of interchange. And Lithic’s Nikhil Konduru writes that the competition is on for debit cards as well, though old school networks and acquirers in this space seem to have a major leg up. (I would be remiss if I didn’t mention the Visa episode of one of the team’s favorite podcasts, Acquired, here. It’s three hours long, but so fascinating, and not just because Ben and David mention Modern Treasury as a bear case for Visa two-thirds of the way through).

Third, AI is in its boom era—and it’s coming for payments. We were impressed with the nerdier explainers that delved into the math behind AI and Large Language Models (LLMs), like a16z’s “Navigating the High Cost of AI Compute” and scientist Stephen Wolfram’s “What is ChatGPT Doing and Why Does It Work?” For something a bit easier to follow, UC San Diego professor, Sean Trott explained LLMs with “a minimum of math and jargon.” Glenbrook Partners put out the top six GenAI use cases for financial services. The general consensus is that AI can enhance pieces of the payments value chain, from customer service to fraud detection, but that maintaining trust and ensuring privacy is paramount.

Finally, as BaaS companies flounder (or die, which was Simon Taylor’s spicy take in his weekly Fintech Brain Food newsletter), bank and fintech partnerships are partnering to deliver better customer experiences. This is happening mostly via embedded finance experiences, bringing the bank capability into the customer’s natural workflow.

Among these macroeconomic think-pieces, were interspersed some in-depth profiles trying, with all the benefits of hindsight, to highlight every red flag that was a harbinger of SVB’s collapse or FTX’s fraud (imagine if they had an immutable ledger to enhance visibility). But they weren’t only highlighting the bad news; they also took a look at the year’s winners, like how JP Morgan became the biggest bank in the world after acquiring First Republic.

We were also impressed by industry podcasts this year, tackling bigger questions about trends and what the future holds. The Wharton Fintech Pod’s episode, “Klaros on Advising the Future of Financial Services” talks about how businesses work through economic uncertainty and the opportunities that can be seized in a bear market. Emerj’s AI in Business podcast interviewed Goldman Sachs’ CIO Marco Argenti on “Future GenAI Use Cases for Financial Services,'' about novel applications of AI and what happens to the industry when these tools are commonplace.

Other podcasts featured some compelling stories about people and companies taking non-traditional routes to success:

• On The Twenty Minute VC (20VC), Tooey Courtemanche, Jr. talks about going “From Construction Worker to Billionaire CEO” of Procore.
  
• On Crucible Moments, Jensen Huang talks about the 30-year journey of Nvidia, and the twists and turns that made them the sixth most valuable company in the world.

What We Wrote‍ (And Said)

Our Journal remains the main forum for us to share our thoughts about the industry, announce new product features, and generally give a voice to Modern Treasury. Here are the five posts that received the most feedback, social media love, and comments from partners, customers, and the community in 2023:

1. RTP For Developers, a technical look at how developers can implement the instant payment rail into their products.
2. Resilient Payment Systems: 3 Things to Consider This Week, a few reminders for building lasting payment operations in light of the banking crisis.
3. Why Digital Finance Transformation is Key to Visibility, Growth, and Success, a Q&A with former CFO of Palantir, Colin Anderson, on the urgency for modern payment operations.
4. Real-Time Reconciliation: A Chat with Wayne Lin and Sean Bolton, a recap of our tech talk with learnings for businesses looking to improve visibility on their financial data.
5. Reconciliation is a Knapsack Problem, which delves into the math to highlight the pain points of reconciliation at scale.

Honorable mentions include Lessons from Five Years at Modern Treasury, our third annual report on The State of Payment Operations (conducted with The Harris Poll), and our eBook Setting Up Your Payment Operations Architecture.

We were also in five (yes, five) panels at Money 20/20 this year. You can read about them in our recap of the massive fintech event here.

Additionally, Modern Treasury team members participated in some notable podcasts and webinars, including:

• “Golden Ticket” on the GRIT Podcast, which featured our COO Rachel Pike and her journey through academia, investing, and startups to help build Modern Treasury.
• The episode of Social Radars where Jessica Livingston and Carolynn Levy interviewed Co-founder and CEO, Dimitri Dadiomov, who told the Modern Treasury story in the context of the early days of Y Combinator—and learnings since.
• Episode 262 of the Leaders In Payments podcast, where Co-founder and CTO, Sam Aarons, talks through the pain points of payments at scale and how Modern Treasury can help.
• “Responding to a (Banking) Crisis with Modern Treasury” on the Fintech Family Hour podcast, where Dimitri, and our Head of Marketing and Communications, Julie Mullins, talked about navigating through the bank failures to help customers.
• “Tech Talk: Building a Central Ledger,” an in-depth conversation with in-house experts Koji Murase and Matt McNierney on how ledgers can power innovation and efficiency.

Be sure to check out our Newsroom for the full list of coverage; read (and hear) about what else we’ve been up to this year.

As always, we wish you all a restful and well-read holiday season. Thanks for reading with us, and we look forward to putting out more great content for you in 2024!