The FinTech sector has changed how we manage our money. From mobile banking apps to robo-advisors, FinTech offers a new…

The FinTech sector has changed how we manage our money. From mobile banking apps to robo-advisors, FinTech offers a new level of convenience and efficiency. But with this convenience come challenges and cybersecurity responsibilities: safeguarding the vast amount of sensitive financial data entrusted to these platforms.

Cybersecurity is no longer an afterthought for FinTech companies; it’s an essential foundation for their success. Breaches exposing financial information can have devastating consequences, not just for the companies involved but for their users as well.

Understanding these cyber threats is crucial for FinTech companies aiming to safeguard their operations and customer data. Here are the top 10 cybersecurity risks FinTech firms must be aware of in 2024.

1. Phishing Attacks

Phishing attacks trick people into divulging personal information. Cybercriminals often pose as legitimate companies through emails, texts, or phone calls. They llure victims into clicking malicious links or revealing passwords.

Phishing attacks significantly threaten financial companies because they target the human element rather than technological weaknesses. Hackers impersonate trusted sources like banks or colleagues to trick employees into revealing sensitive information or clicking malicious links. It can lead to data breaches, financial losses, and account takeovers.

2. Ransomware

Ransomware attacks involve cybercriminals holding sensitive data hostage and demanding a ransom from the victim. FinTech companies are particularly vulnerable to ransomware attacks because they rely on digital systems and customer financial data.

These attacks can impair operations, damage reputations, and lead to significant financial losses. They can be devastating, as there is no guarantee that paying the ransom will result in the safe return of the data.

3. Insider Cybersecurity Threats

FinTech companies may face a unique cybersecurity threat from their employees, known as insider threats. These insiders can be malicious, accidentally negligent, or even tricked into compromising sensitive data. Malicious insiders might steal financial information or sabotage systems for personal gain. Negligent insiders could leave data exposed or fall victim to phishing scams, unintentionally giving away access.

4. DDoS Attacks

Distributed Denial of Service (DDoS) attacks overwhelm online systems with traffic, making them inaccessible to legitimate users. FinTech firms are attractive targets for these attacks because they offer multiple entry points (banking systems, online accounts) and prioritise constant service availability.

DDoS attacks can severely hurt a FinTech company’s reputation and finances by causing downtime, raising security concerns among customers, and potentially leading to data breaches during the distraction.

5. Malware

FinTech companies are prime targets for malware attacks, accounting for 19 percent of all attacks and suffering nearly US$18.3 billion in losses in 2017. While the number of traditional banking malware strains is decreasing, it doesn’t represent a decline in overall threat. Instead, attackers are developing more sophisticated malware that uses techniques like obfuscation and slow, staged attacks to bypass antivirus detection.

6. Data Breaches

FinTech companies are under fire due to data breaches exposing sensitive financial information. Hackers exploit security flaws to steal user data, leading to financial losses, identity theft, and damaged trust. To combat this, strong encryption methods like end-to-end encryption and tokenisation can scramble data, making it useless to attackers.

7. Mobile Security Risks

Despite offering convenient access to financial services, mobile apps are a double-edged sword for FinTech companies. These apps are vulnerable due to their popularity, making strong security practices essential. Regular security updates, secure coding from the start, and robust data encryption during transmission are crucial to patching weaknesses.

8. Third-Party Cybersecurity Risks

The reliance on third-party vendors for services and integrations creates a security blind spot for FinTech firms. To address this, thorough vetting through due diligence and vendor risk assessments is crucial before forming partnerships.

9. API Vulnerabilities

FinTech companies rely heavily on Application Programming Interfaces (APIs) to enhance customer interfaces and share information across systems. While APIs are essential for data exchange, they also open doors for cyberattacks.

To fortify their defences, FinTech companies need to focus on secure API design with solid authentication methods (like OAuth or API keys), constant monitoring, and regular security assessments to identify and fix weaknesses before they become exploited.

10. Artificial Intelligence & Machine Learning Risks

The use of artificial intelligence (AI) and machine learning (ML) has increased in FinTech for decision-making processes. While beneficial, these systems also present risks if they make inaccurate decisions based on incorrect data. Rigorous testing and monitoring of AI and ML systems are necessary to minimise these risks.

Steps to mitigate threats

The cybersecurity threats facing FinTech in 2024 are varied and complex. FinTech firms must prioritise cybersecurity to protect customer data and maintain trust. By researching technology usage, training employees on cybersecurity, regularly monitoring suspicious activity, and building advanced security systems, FinTech companies can improve their defences against these evolving threats.

  • Cybersecurity in FinTech

Neobanking, the fusion of technology and financial services, is reshaping the banking landscape. As we look towards the future, neobanks may bring transformative changes that will impact financial institutions worldwide.

Neobanking emerged around 2017 as a new model in banking, offering fully online services without physical offices and branches. It has rapidly evolved, attracting a growing customer base with its convenience and accessibility. As we enter a new banking era, several predictions will shape the future of neobanking.

There are several key trends and predictions for the future of neobanking, such as the growth of AI-powered services, the increasing focus on cybersecurity, the expansion of neobanking services, and more. These insights are essential for financial leaders facing the evolving financial technology landscape.

1. AI-powered Services

Artificial intelligence (AI) is set to transform neobanking. Financial institutions are increasingly using AI to enhance their services. AI-driven features, such as personalised financial advice, automated customer support, and advanced fraud detection, will become standard offerings. These technologies will enable neobanks to provide more accurate risk assessments and deeper insights, allowing human operators to focus on strategic improvements.

2. Integration with Existing Tech

Integrating emerging technologies such as blockchain, Internet of Things (IoT), and 5G also opens new possibilities for neobanks. These technologies can enhance transaction security, provide real-time data insights, and enable more efficient banking operations, further driving the evolution of neobanking.

3. Expansion of Neobanking Services

Neobanks should diversify their service offerings to meet the evolving needs of their customers. Beyond traditional banking services, we can expect innovations in areas such as personal finance management, investment advisory, and integrated payment solutions. These expanded services will position neobanks as comprehensive financial hubs that fulfil various financial needs.

4. Focus on Cybersecurity in Neobanking

As neobanks operate entirely online, cybersecurity becomes increasingly important. Protecting customer data from cyber threats is critical to maintaining trust. They should anticipate a significant investment in advanced cybersecurity measures, including encryption, multi-factor authentication, and continuous monitoring. They must ensure strong security protocols to prevent data breaches and protect their reputation.

5. Strategic Partnerships

To remain competitive, neobanks will likely form strategic partnerships with traditional banks. These collaborations are a win-win: neobanks gain access to established infrastructure and a broader customer base, while traditional banks benefit from cutting-edge technology. Ultimately, such partnerships will enhance customer experiences by combining the strengths of both banking models.

6. Regulatory Adaptation

The shift in the landscape requires regulatory frameworks to adapt. Governments and regulatory bodies will be crucial in ensuring fair competition and consumer protection in this evolving environment. We can expect new regulations that address the unique challenges posed by digital banking, promoting innovation while safeguarding financial stability.

7. Enhanced Customer Experience

The future of neobanks hinges on their ability to deliver a seamless digital experience and bridge the gap in customer service. Building trust and replicating the human touch, strengths often associated with traditional banks, will be crucial in converting users into primary customers. The shift in focus will be vital for driving long-term profitability.

8. Banking-as-a-Service (Baas)

Beyond their core offerings, neobanks may disrupt the financial landscape further through Banking-as-a-Service (BaaS). Using their expertise and technology, they can empower other businesses to offer embedded financial services, creating a win-win situation for both parties.

9. Green Banking Initiatives

Sustainability will become a priority for neobanks. We expect to see an increase in green banking initiatives, such as offering eco-friendly financial products and investing in sustainable projects. They can leverage their digital platforms to promote environmentally responsible banking practices.

10. Global Expansion

Neobanks will expand their reach globally, entering new markets and catering to an international customer base. The expansion will be driven by the increasing demand for digital banking services and the universal appeal of innovative financial solutions.

A neobanking future

The future of neobanking is bright, with a dynamic and evolving landscape supported by AI, advanced security, and broader financial product offerings. As the model matures, the most successful players will likely be those who can adapt to changing economic conditions, solidifying their position as the industry leader.

  • Neobanking

Blockchain has transformed transaction security. Blockchain platforms use the technology to create a shared digital ledger that records every transaction. This ledger is distributed across a network of computers, making it almost impossible to alter or tamper with the data.

Blockchain also makes financial transactions more efficient. Traditional financial systems often involve multiple intermediaries, such as banks and payment processors. Blockchain removes the need for intermediaries, speeding up the transaction process and decreasing costs.

Still, blockchain’s high level of security is its most essential feature. It helps prevent fraud and unauthorised access, ensuring that users can trust the safety of their financial transactions. This article explores the top ten blockchain platforms that facilitate secure transactions.

Bitcoin (BTC)

Known for its decentralised architecture and security through the proof-of-work consensus mechanism, Bitcoin stands as the pioneering blockchain platform. It offers users a secure method for peer-to-peer transactions, and the BTC token is a reliable store of value globally.

Ethereum (ETH)

Ethereum revolutionised blockchain technology by introducing smart contracts, enabling the creation of decentralised applications (dApps) and various financial services. It has a vibrant developer community and ongoing upgrades, including the transition to Ethereum 2.0 aimed at improving scalability and reducing energy consumption.

Ethereum is ideal for developers and users interested in decentralised applications and smart contracts.

Ripple (XRP)

Ripple specialises in facilitating rapid and cost-effective cross-border payments and remittances, appealing to financial institutions seeking efficiency. It ensures fast transaction speeds and low costs, positioning itself as a competitive option in the global payment landscape.

Ripple is a practical choice for financial institutions needing fast and affordable cross-border transactions.

Stellar (XLM)

Stellar shares similarities with Ripple, focusing on fast and low-cost cross-border transactions but also targeting individual users alongside financial institutions. It aims to simplify the process of international money transfers while maintaining strong security.

Stellar serves as a viable option for users and institutions seeking accessible and cost-effective solutions for cross-border payments, emphasising simplicity and security.

Hyperledger Fabric

Hyperledger Fabric caters specifically to enterprise needs, offering a permissioned blockchain platform that prioritises security and privacy. Its modular architecture enables tailored solutions for businesses requiring controlled access to data and secure financial transactions.

Implementing and managing Hyperledger Fabric demands substantial technical expertise, limiting its accessibility for non-enterprise users. Enterprises seeking secure and customisable blockchain solutions should consider Hyperledger Fabric for its features and enterprise-grade security.

Cardano (ADA)

Cardano distinguishes itself with a research-driven approach to blockchain technology, emphasising security, scalability, and sustainability. It supports smart contracts and aims to offer a platform that is both secure and capable of accommodating a wide range of decentralised applications.

Cardano’s ecosystem and developer community are still growing, impacting its pace of innovation. However, Cardano remains appealing to users and developers seeking a scientifically rigorous blockchain platform with a focus on security and scalability.

Tezos (XTZ)

Tezos introduces a self-amending blockchain capable of upgrading without hard forks, ensuring long-term stability and continuity. It supports smart contracts and decentralised applications, offering flexibility and security.

While Tezos’ innovative governance model may seem complex to newer users, it offers a compelling option for those interested in a self-amending blockchain with robust security features and a focus on long-term sustainability.

Binance Smart Chain (BSC)

Binance Smart Chain, developed by Binance, emphasises high performance and low transaction costs, making it particularly suitable for decentralised finance (DeFi) applications. It supports a broad range of financial transactions with efficient throughput.

BSC is a preferred option for DeFi developers and users seeking a platform with fast transaction processing and minimal fees, though caution is advised regarding centralization risks.

Polkadot (DOT)

Polkadot excels in interoperability, connecting multiple blockchains to enhance scalability and security across decentralised networks. It offers a scalable platform for developers to build interoperable applications spanning various blockchains.

Similar to Cardano, Polkadot’s ecosystem is still evolving, with ongoing development efforts to broaden its functionalities.

Polkadot appeals to developers interested in building interoperable and scalable decentralised applications across multiple chains.

Solana (SOL)

Solana distinguishes itself with high throughput and low transaction costs, capable of processing thousands of transactions per second. It aims to support scalable decentralised applications, particularly within the DeFi space.

Solana has maintained its appeal among developers and users looking for high-performance blockchain solutions. It continues to be a preferred option for its efficient transaction processing capabilities.

  • Blockchain

InsurTech is an emerging sector of huge importance. It transforms an old and crucial industry by creating insurance technology that brings major tech advances to enable widespread change.

The top InsurTech companies aim to revolutionise the industry with a rapidly evolving and advancing series of insurance technologies. All of these seek to make insurance more accessible and customer-centric. This improves insurance products and creates opportunities for new ones.

By adopting a mobile-first approach, InsurTech reduces the need for face-to-face interactions. This means lower operational costs, allowing InsurTech startups to offer more competitive pricing models.

The InsurTech landscape owes its growth to startups. These early-stage companies disrupt the insurance sector by bringing new tools to the game. These include AI, which can handle traditionally resource-exhausting and time-consuming tasks, such as determining the right policies to offer customers.

According to a report by Spherical Insights, the InsurTech market was valued at $3.85 billion in 2021. Based on a CAGR of 52 percent, Spherical forecasts that it will grow to $166.7 billion by 2030. This growth is mainly fuelled by Insurtech startups. Read on to discover the top Insurtech companies to watch in 2024, as they make strides forward into a period of accelerating growth.

According to a report by Spherical Insights, the InsurTech market was valued at $3.85 billion in 2021. Based on a CAGR of 52 percent, Spherical forecasts that it will grow to $166.7 billion by 2030. This growth is mainly fuelled by Insurtech startups.

Read on to discover the top Insurtech companies to watch in 2024, as they make strides forward into a period of accelerating growth.

1. Lemonade

Lemonade brands itself as “an insurance company built for the 21st century.” With Maya, its cutting-edge AI tool, Lemonade can “craft the perfect insurance” coverage in as little as 90 seconds. The AI also contributes to the seamlessness of the insurance claims process, with customers needing to wait only three minutes after claim submission to get paid.

In November 2023, Lemonade was serving 2 million active customers. It ticked the first million mark in 2020. Throughout the period, the premium per customer increased by 70 percent.

In Q1 2024, the average premium per customer was $379, an eight percent increase year on year. The in-force premium was $749. The figure represents a 22 percent increase year-on-year and corresponds to total revenue growth of 25 percent.

2. NEXT Insurance

Next Insurance caters to small businesses, offering products such as workers’ compensation and equipment insurance. The company provides coverage for diverse professions, from contractors to entertainers.

Next has developed an AI tool called Copilot, not to be confused with Microsoft’s AI with the same name. The tool allows insurance agents to increase operational efficiency and profitability by streamlining the quoting and binding process. It also helps reduce underwriting delays.

Established in 2016, Next was serving 500,000 active customers in 2023, an increase from 420,000 in 2022. It has received $1.1 billion in funding from big-name investors such as Munich Re, Allstate, and Allianz X. Per November 2023, the company has a market valuation of $2.5 billion.

3. Oscar

The Oscar Health team provides digital-based health insurance. The company offers services for individuals and families. Through its app, customers can access remote health care anywhere, anytime. Established in 2012, Oscar has over 1.4 million customers across 20 states of the US.

4. Metromile

Metromile revolutionises automobile insurance with its premium-per-mile scheme. Premium rates are based on driving habits, which is claimed to allow customers to save around 47 percent, or $947 per year, compared to traditional car insurance.

Metromile was acquired by Lemonade in 2022 for $145 million worth of LMND shares. In return, Lemonade took control of “over $155 million in cash, over $110 million in car premiums, an insurance entity with 49 state licenses, and precision data from 500 million car trips.”

5. Asurion

Asurion specialises in technology care. This InsurTech company provides electronic equipment coverage, catering to owners of smartphones, laptops, TVs, and smart home appliances. By using its services, customers gain access to quick repairs of only 45 minutes for their electronics through local repair experts and tech repair stores across the US.

6. Zego

Zego offers smart and flexible insurance coverage for self-employed drivers and fleets. A wide selection of insurance products is available to meet the needs of private taxi companies, haulage truck drivers, and courier vans. Zego became the UK’s first InsurTech unicorn in 2021 after raising $150 million, bringing its valuation to $1.1 billion.

7. Hippo Insurance

Hippo Insurance combines home insurance with smart home devices. The company provides customers with smart home monitoring systems to detect potential issues. These include leak sensors, motion detectors, and smart smoke alarms. In 2024, Hippo provides coverage for 200 US households.

8. Pie Insurance

Pie Insurance caters to small businesses. This InsurTech startup uses advanced analytics tools to determine the best premiums, considering comprehensive possible risks. The company aims to make insurance affordable and accessible to small businesses in the US.

9. Clearcover

Clearcover uses AI technology to speed the claims process up to just seven minutes. The startup has raised a total of $515 million over nine financing rounds. Its latest funding round was in April 2024, when it raised $55 million in a second Series E. The investment round was led by Omers Venture, with several undisclosed investors participating.

10. Shift Technology

Shift Technology is a claims fraud detection platform that uses AI to detect fake claims in real time. This InsurTech platform also detects underwriting risks and improper payments. Its financial crime detection feature ensures compliance with AML and KYC regulations. Shift’s technology speeds up the decision-making process, allowing insurance companies to operate with greater efficiency. With a market capitalisation of $2.89 million per June 2024, the company has raised $316 million since its inception in 2014, raising $219 million in its latest Series D.

These top InsurTech companies are disrupting the market with advanced technologies such as AI tools. With their capabilities to streamline user experience, lower costs, and improve decision-making processes, these InsurTech startups will continue to challenge legacy insurance companies.

  • InsurTech

FinTech Strategy hears from Till Wirth, EVP of Product at Wise Platform, to find out more about its mission to make international payments fast, low-cost, convenient and transparent

At Money20/20 Europe in Amsterdam, Till Wirth, EVP of Product at Wise Platform, took part in an impactful session titled “From Personal Payments to Enterprise: The Changing World of Cross-Border.” Wirth’s panel talk focused on the transformative trends in cross-border payments and their implications for both personal and enterprise financial transactions.

Wise is a global technology company building the best way to move money around the world. Wise Platform is Wise – but for banks, large businesses and other major enterprises.

We allow our partners to embed the best way to send, receive and manage money internationally into their existing infrastructure, creating value for their business and customers.

Over the past decade, Wise (formerly known as Transferwise) has built a global payments infrastructure that has revolutionised how money moves around the world. Now, thanks to Wise Platform, other companies can gain access to our industry-leading, reliable service seamlessly.

We save partners time and money by allowing them to deploy new products and services to customers seamlessly, helping them to speed up innovation and serve, retain, and grow their customer base.”

FinTech Strategy spoke with Wirth to learn more…

Tell us about the genesis of Wise… Why is this an exciting time for the company?

“For us at Wise, it’s all about continuing towards our mission of making international payments fast, low-cost, convenient and transparent for our customers and partners.

It’s an exciting time for us as we’ve moved over £118bn on behalf of our 12.8 million active customers in the last financial year and helped them save more £1.8bn in fees. Over 62% of Wise’s transfers are completed instantly (in 20 seconds or less). Wise Platform, our global payments infrastructure for banks and enterprises is growing quickly, too, which allows us to bring the benefits of Wise to more people around the world.”

Tell us about your role…

“I lead the Wise Platform Product team building the global payments infrastructure for banks, financial institutions and enterprises around the world. For example, my team built the product behind the collaboration we announced with Swift last year.”

What are some of the key challenges financial institutions are facing that you can help them with? What problems are they asking you to solve?

“Consumers now expect their cross-border payments to be instant, convenient and transparent. And they are moving to providers they can trust to provide these services. As a result, we’re seeing banks focusing on retaining and winning back their customers through improving their cross-border payments experience. This is exactly what Wise Platform is helping them to do.

We work with more than 85 partners globally, including Bank Mandiri, Indonesia’s largest bank by assets, Shinhan Bank, one of South Korea’s oldest and largest national banks, and GMO in Japan to provide them with the capabilities, technology and network to enable fast, secure and cost-effective international payments for their customers. Quickly, directly from their own apps, without any major technical overhaul.”

Tell us about a recent success story…

“In June this year, Wise Platform hit a major milestone when our integration with Nubank, the world’s largest digital banking platform with over 100 million customers, went live.

Thanks to our partnership, Nubank’s premium Ultraviolet customers can now access multi-currency accounts and debit cards powered by Wise directly from their Nubank app. Customers benefit from a convenient user experience that we’ve tested and iterated over the years for our own customers to seamlessly manage their finances internationally.”

Why do you think the evolution of collaboration between banks and fintechs is set to continue?

“One of the reasons is that while banks have scale, they can gain agility in non core focus areas by working with fintechs and deliver significant customer benefits quickly.

Most banks have been built to focus on domestic banking, meaning their global cross-border payments are often not a priority. However, fintechs are better able to specialise and focus on one specific customer pain point. This means they can innovate much more quickly.”

Why Money20/20? What is it about this particular event that makes it the perfect place to showcase what you do? What’s the response been like for Wise?

“It’s a great event that brings the industry together and enables us to discuss the progress we’re collectively making. This year in particular, it was great to be on a panel to discuss how the cross-border payments landscape is evolving and the latest trends we’re seeing. We look forward to the upcoming event in the US later this year.”

  • Digital Payments

With more financial transactions shifting to digital platforms, having proper cybersecurity measures becomes a priority.

Moreover, data is at the heart of every fintech company, which makes them attractive targets for hackers and malicious actors.

Financial technology has created new opportunities for customers and businesses in the finance industry. Individuals can now borrow, transfer, save, and invest from the convenience of their homes. Also, the growth of the industry is massive, with fintech revenues projected to grow sixfold from $245 billion to $1.5 trillion by 2030.

However, following that growth are security risks associated with it. Accounting services firm BPM predicts that cybersecurity attacks aimed at fintech companies will only continue to grow in 2024 and beyond. Furthermore, these attacks can end in monetary losses, reputational damage, and brand erosion.

To prevent such cases, fintech security leaders globally have implemented cybersecurity measures.

1. Stripe

Founded in 2010 by Patrick and John Collison, Stripe specialises in payment processing software and application programming interfaces (APIs).

Based in South San Francisco, California, the company offers top-tier encryption and secure transmission protocols. The protocols, which adhere to the PCI DSS standards, are in place to ensure the security of credit and debit card data.

Launched in 2018, Stripe’s innovative tool Radar detects and blocks fraudulent transactions. After its 2.0 update in 2018, the company claimed it helped reduce fraud rates by an additional 25% for its users.

With other services like Stripe Terminal, Stripe Tax, and Stripe Capital, Stripe has become a trusted name in online payment processing. It powers payments for major companies like Amazon, Google, and Shopify, all of which demand high-security standards.

2. Square

Owned by Block, Inc., Square was launched in 2009 by CEO Jack Dorsey and co-founder Jim McKelvey. Square offers an all-in-one financial services platform, including customer booking, e-commerce, payroll, shifts, loan financing, and banking.

In 2021, Square received FDIC approval from the Utah Department of Financial Institutions. Additionally, with end-to-end encryption, regular vulnerability assessments, and secure data storage, Square reached Level 1 PCI DSS certification. This is the highest level for payment processor certification.

3. PayPal

Launched in 2000 from the merger of Confinity and X.com, PayPal is a leader in secure online transactions.

Acquired by eBay in 2002, PayPal became the leading global payment application after eBay discontinued its Billpoint service. It has arguably outpaced competitors like Citibank C2IT, Yahoo! PayDirect, and BidPay from Western Union.

PayPal uses advanced encryption technologies and multi-factor authentication to protect user data. With its continuous monitoring and fraud prevention mechanisms, the company is compliant with industry standards.

According to the company, its fraud detection tools are informed by data from 1 billion monthly transactions. It claims that the tool gets smarter with each transaction.

4. Ant Financial (Alipay)

Ant Financial’s Alipay, is the second-largest international payment processor after Visa.

Founded in 2014 by Jack Ma as an affiliate of Alibaba, Ant Financial offers a range of products. Available services include electronic payment processing, banking, and mobile payments through brands like Yu’ebao, Huabei, and Xianghubou.

Ant Financial combines advanced cybersecurity measures such as AI-driven fraud detection, biometric authentication, and data encryption. Alipay itself also holds the internationally recognized ISO/IEC 27001 cybersecurity certification.

Used by more than 1.2 billion users, Ant Financial is protected by its AI-powered risk engine AlphaRisk. With the tool, Alipay’s fraud loss rate has been kept under 0.64 in 10 million, way lower than the industry average.

5. Plaid

Established in 2013 by Zack Perret and William Hockey, Plaid is an embedded financial platform. It facilitates secure online payments and transactions by connecting users’ bank accounts to finance applications.

Plaid ensures authorised access to bank data through secure bank portals, which eliminates the need for user credentials. In October 2020, Plaid introduced “Plaid-Link,” a service that enables real-time payments for loans, insurance, and wages. It securely connects 12,000 US financial institutions, plus many more in Canada, the UK, and Europe.

6. Chime

Founded in 2012 by Chris Britt and Ryan King, Chime partners with regional banks to offer fee-free mobile banking services. Chime uses encryption, access protocols, continuous monitoring, and proactive fraud prevention to keep its payment processes secure.

In April 2020, Chime launched the fee-free overdraft product “SpotMe.” It successfully processed $375 million in Economic Stimulus Payments one week from the scheduled government disbursement.

7. Adyen

Adyen, listed on Euronext Amsterdam, is a Dutch FinTech company founded in 2006 by Arnout Schuijff and Pieter van der Does. Primarily catering to businesses, Adyen offers e-commerce, mobile, and POS payment solutions. The company successfully achieved 1.3 billion euros in revenue in 2022.

Adyen’s cybersecurity measures include encryption, tokenization, secure data storage, and regular security assessments, all backed by Level 1 PCI DSS certification.

8. Sift

Founded in 2011, Sift is one of the cybersecurity companies providing AI-powered fraud platform. It uses machine learning combined with data network scoring 1 trillion events per year to offer security solutions.

The company notices that online fraud is a growing problem, especially for retailers and financial institutions. Therefore, Sift’s algorithm distilled over hundreds of millions of user actions to create fraud pattern recognition tool.

Sift has received several accolades, including being named a leader in 2023 Forrester Wave for Digital Fraud Management and G2’s Momentum Leader in Spring 2024.

9. Darktrace

Cybersecurity company Darktrace, established in 2013, uses AI to respond to cyber threats in real time. Since its inception, the tools it created has been deployed over 9,000 times.

With its Enterprise Immune System technology, Darktrace is able to handle Industrial Operational Technology, email, SaaS, cloud, network, and endpoint safety. More than 9,400 organisations, including major financial institutions, rely on its advanced solutions.

The company was included in The Cyber Award’s AI Product of the Year in 2020 and Fast Company’s top 10 most innovative AI companies for 2022.

10. Netskope

Cloud-based cybersecurity company Netskope was founded in 2012 to help organisations apply zero trust principles. The company’s solutions protect data across cloud services and apps, which makes it pivotal for fintech institutions relying on such technologies.

The California-based firm helps financial services companies meet compliance requirements such as FINRA, PCI-DSS, GLBA, and GDPR. Not only that, it provides necessary protection, such as SWG, CASB, ZTNA, DLP, Cloud Firewall and SD-WAN.

In 2024, Netskope is recognized as a leader in the Gartner Magic Quadrant for Cloud Access Security Brokers (CASBs).

What makes these a success

These top cybersecurity firms in fintech have set high standards in cybersecurity. Their efforts have significantly contributed to a safer digital landscape for fintech.

They have also demonstrated collaboration with fellow financial or cybersecurity experts. Collaboration means having access to specialised knowledge that may not be available in-house. This includes latest threat intelligence, security tools, and tailored audits.

Additionally, it is imperative that companies adhere to industry standards and regulations. Compliance is the first step in building trust with users and stakeholders alike.

With 64% of financial services institutions falling victim to ransomware attacks last year, finance organisations should follow best practices from these companies.

  • Cybersecurity in FinTech

Embedded finance refers to the integration of financial services into non-financial apps.

Embedded finance offers convenience, allowing users flexibility and greater accessibility.

It enhances flexibility by merging multiple services in one platform, allowing users to make purchases, pay bills, and perform peer-to-peer fund transfers in one place.

Despite the convenience it offers, adoption still faces challenges. This article discusses the main opportunities it brings and the challenges it faces.

Opportunities

The advent of embedded finance has brought about new opportunities; they are, among others, as follows:

Supporting growth of financial technology

Embedded finance is a significant booster for the growth of the financial technology sector. Traditional finance has struggled to reach traditionally unbanked communities. By making finances integrated into non-financial apps, these communities can now access financial services.

Promoting peer-to-peer transactions

While the integration of financial services into non-financial apps is important, one of embedded finance’s most important functions is facilitating seamless peer-to-peer transactions.

Increasing payment channels

Embedded finance allows companies and services to accept payment from more channels, allowing them to expand their reach.

Focus on customer experience

Embedded finance has an emphasised focus on customer experience. By integrating multiple financial services into one platform, customers can now access them with ease.

Challenges

As embedded financial services are still in their early stages of development, they face several challenges.

Complexity in integrating multiple services

Integrating multiple services entails some technical complexity.

Regulatory challenges

A platform integrating multiple financial services into one platform might have to navigate diverse regulatory challenges that bind to each service, not to mention the challenges that come from the partnerships with the service providers.

Risk management

By integrating multiple services into one platform users are at an increased risk of having their accounts and data compromised.

Notable Embedded Finance Platforms

Multiple successful embedded finance platforms have emerged in various countries. For example, there is Alipay in China, GoJek in Indonesia, Plaid in the U.S., and Adyen in the Netherlands.

These platforms all owe their success to the same factors. These are user trust, widespread adoption, security, innovation, and an extensive network of partners.

User trust stems from data security. Embedded finance platforms employ tools such as encryption and secure API designs and ensure security compliance to secure user data. Then, they also have extensive networks of partners, ensuring the comprehensiveness of their service offerings.

Due to the convenience they offer, embedded finance enjoys public support. It provides opportunities for companies and services to reach more users. That said, embedded financial services also face challenges such as cybersecurity.

  • Embedded Finance

Digital payments are now the preferred payment method for much of the world, and they continue to evolve.

They were first introduced through the creation of credit or debit cards. These physical cards allowed consumers to spend money without needing cash.

Advances in mobile technology led to online banking apps, mobile wallets, and contactless payments. These methods are even more convenient and are transformative for commerce, online and in physical outlets.

Throughout 2024, there are ten key trends expected to rise as digital payments evolve:

1. Rise of cryptocurrencies in everyday transactions

Cryptocurrencies, or crypto, are digital currencies maintained by a decentralised blockchain system rather than any government or institution. Owning a crypto means possessing assets that are not tangible, hence it is more popular as an investment currently.

Many platforms are gradually integrating crypto into their financial ecosystem. For example, PayPal — the online payment giant — allows users to buy, hold, and sell crypto.

Despite its volatility issues, crypto is predicted to keep growing. It offers fast transactions, easier cross-border payment, and lower transaction fees than traditional methods.

2. Biometric Authentication

The security concerns surrounding digital payments are unchanged, but the method for securing them is improving all the time. This has led to widespread growth in biometric authentication. Biometric authentication allows for more security and convenience than traditional passwords and PINs, which can be forgotten or stolen. It makes impersonation far more difficult.

Biometrics requires users to input unique physical characteristics like fingerprints or facial features (via a camera). Approved in an instant, consumers can make payments easily by verifying with the tap of a finger or by staying still for the camera.

3. Growth of Peer-to-Peer Payments

Peer-to-peer payment apps allow users to send money directly to another user using a mobile device. The convenience of this payment mode made it popular.

Among the most used apps are Zelle, Venmo, and Paypal. Zelle, for instance, gained $307 billion in transactions in 2020, 58% growth on the previous year, and part of a wider trend in digital payments growth during the Covid-19 lockdowns.

This method offers instant transactions advantageous for time-sensitive transactions like splitting bills or sending emergency funds. It also commonly has a low-cost or free transaction compared to traditional banking options.

4. AI fraud detection with digital payments

AI technology has greatly impacted many sectors, including digital payments. Fraud detection with AI is a solution that uses algorithms to analyse large transaction data. This AI tool can recognise suspicious patterns and identify discrepancies that indicate fraudulent activity.

Companies like Visa introduced AI fraud detection this year. The AI-powered security tools are included in the Visa Protect suite. The fraud detection tool, including digital wallets, can be used for immediate payments.

5. Real-time payments (RTP)

Real-time payments make immediate transactions between accounts significantly better than traditional banking systems, which might take days. This is a preferred option for both consumers and businesses.

Businesses can improve cash flow with faster payments, and consumers can access funds immediately. Currently, the RTP frameworks continue to be adopted by worldwide financial institutions. It is expected to be the standard for various transactions, including payroll and cross-border payments.

6. Voice-activated transactions

Voice-activated payment is an innovative method for users to do transactions simply using speaking commands. A payment system such as this can be more convenient for users than the common typing password method.

This form of authentication is possible through voice recognition tools used in mobile apps. Additionally, voice-activated payments offer a high level of security and a smoother consumer experience. As more companies adopt this trend, it is expected to become even more popular in 2024.

7. QR code payments

QR code payments uses a unique QR code that smartphones can scan to authorise transactions. It is usually connected to consumers’ mobile banking apps or mobile wallets as the source of payment.

This contactless payment offers a seamless payment experience that is highly desirable for users. Businesses also benefit from the simplicity of the method by making transactions faster and seamless.

8. Cross-border payments

Cross-border payments are expected to grow consistently as the world moves on from the restrictions of the COVID-19 pandemic. Also, more businesses are engaging in cross-border payments, and 80 percent expect a transaction volume increase in the next 12 to 24 months.

International payments often suffer from high fees and lengthy transaction times. However, companies are expected to improve their capabilities as cross-border payments increase.

9. Buy Now Pay Later (BNPL)

Buy Now Pay Later (BNPL) services are a more accessible of borrowing for payment than traditional methods like credit cards.

They allow consumers to make purchases and spread the cost over time. This method enables minimal or zero percent financing and no initial credit check.

Many e-commerce platforms have integrated these payment system as they become more popular. 

10. IoT devices integration for digital payments

Integrating Internet of Things (IoT) devices with mobile payments helps make the consumer experience more convenient. This innovation allows wearables and smart home appliances to make contactless payments.

Furthermore, IoT devices can also generate data that can be analysed to create a more personalised experience.

  • Digital Payments

Blockchain technology has come a long way since its emergence in the mid-2000s. Initially associated only with cryptocurrencies, it is now known as a tool that revolutionises the finance industry.

In 2024, blockchain has seen transformative growth. According to a Coinbase report, on-chain projects announced by Fortune 100 companies have increased 39 percent from last year. Furthermore, 56 percent of Fortune 500 executives say their companies were working on on-chain projects.

Major actors in financial services are now embracing blockchain technology. From HSBC, IBM, and Nasdaq to JP Morgan, big names are now driving blockchain innovations. Here, this article explores ten blockchain trends expected to dominate the second half of this year.

1. Decentralised finance (DeFi)

A financial disruptor, DeFi enables peer-to-peer financial services without intermediaries such as banks. DeFi services such as Uniswap, Aave, or SushiSwap offer products and services like lending, trading, and asset management, often at competitive rates.

Under a Decentralised Autonomous Organisation (DAO), governance is placed in the hands of token holders. This results in a more inclusive decision-making process.

2. Smart contracts

Smart contracts are computer programmes that automatically execute agreements when predefined conditions are met.

One example of the financial institutions that have experimented with this is BNP Paribas. In 2020, it announced a collaboration with fintech company Digital Asset to design real-time and settlement applications using DAML smart contracts. It has also been involved in pilot projects for trade finance using blockchain.

Other than finance applications, smart contracts are also used in government services, legal industries, and notaries.

3. Cross-border payments

Most cross-border transactions are complicated and costly. Often, they also involve multiple intermediaries and currency conversions.

Blockchain offers a more efficient and cost-effective solution by allowing funds to be transferred directly between individuals and institutions. Blockchain-enabled payments take only a few seconds compared to traditional payments, which may take 3-5 business days.

Companies like Faster Payments Service, Ripple, IBM World Wire, and Strike have already demonstrated successful blockchain-based cross-border payments.

4. Digital identity verification with blockchain

Last year, 3,205 data compromise cases affected 353 million victims in the US. Nearly all were data breaches, affecting 349 million victims.

Blockchain-based digital identity verification offers a solution to this problem. Personal identity verification protocols like Civic and decentralised identity networks like Sovrin allow users to control their personal information in a way that prevents identity theft and phishing.

Additionally, these platforms simplify and speed up the data verification process, allowing service providers to reduce the time, cost, and resources spent on manual verification.

5. Asset management

Blockchain’s technological capability can reduce the risk of losses when facilitating asset management. Tokenised securities, for instance, allow users to trade digital tokens representing ownership of assets such as stocks, investment funds, and bonds.

An example of this is Paxos Gold (PAXG), an asset-backed digital token with a total market capitalisation of $327 million.

Blockchain also allows for real-time tracking of asset ownership, transactions, and changes throughout the asset lifecycle management.

6. Fraud prevention with blockchain

With blockchain, organisations can permanently track and verify transactions, which makes it a powerful tool against fraud.

Cryptography and encryption techniques help ensure the authenticity and integrity of information, making it difficult to counterfeit. Institutions like Barclays Bank, JP Morgan, and HSBC have already integrated blockchain technology into their payment infrastructures.

7. Supply chain finance

Blockchain-based supply chain finance models are becoming increasingly popular. This is because it allows supply chain partners to share information more easily.

An immutable digital ledger can track all information, from assets to product quality, saving time and money for all parties involved. IBM Food Trust uses this feature in the food supply chain sector. With a permanent, tamper-proof record of every transaction, from farm to table, the technology helps ensure the authenticity and safety of food products.

The Provenance network also uses blockchain to allow consumers to verify the origins and authenticity of products. This system makes sure that product histories are permanently recorded and easily accessible.

8. Blockchain-based trading

This year saw an increasing ownership of digital assets. The global user base for digital currencies reached 562 million people, a significant increase from 420 million in 2023. Within virtual worlds and the metaverse, trading volumes have only been increasing since the bullish run in 2023.

Blockchains can also be used to trade various assets, such as luxury goods, real estate, and intellectual property rights.

9. Internet of Things (IoT)

Blockchain can connect IoT devices to ensure safety in interactions between devices and networks. This feature opens up new opportunities for financial services such as micropayments and decentralised insurance.

Hyperledger Fabric, for example, acts as a distributed transaction ledger for various IoT transactions, helping keep track of millions of connected devices.

Another ledger, IOTA, is specifically designed for the Internet of Things (IoT). It secures sales and trading data streams to facilitate micropayments between IoT devices without transaction fees.

10. Insurance

Smart contracts built on blockchain technology can protect health records and detect fraudulent claims. Aside from that, its ability to automate claims processes can minimise human interference.

Etherisc is a company that claims to be a pioneer in parametric blockchain insurance, having used the technology since 2016. It is a decentralised insurance protocol built on blockchain technology that has developed solutions like flight delay insurance and crop insurance.

Another example is Insurwave, a blockchain-based platform developed by EY and Guardtime in collaboration with insurers and shipping companies.

  • Blockchain

FinTech Strategy and Interface joined Publicis Sapient at Money20/20 in Amsterdam for the launch of its third annual Global Banking Benchmark Survey and spoke with Head of Financial Services Dave Murphy about its findings

The third annual Global Banking Benchmark Study from Publicis Sapient draws on insights from 1000+ senior executives in financial services across global markets. The study focuses on the goals, obstacles, and drivers of digital transformation in banking.

Global Banking Benchmark Study

The study was launched during Money20/20 Europe in Amsterdam last month. Eoghan Sheehy, Associate MD, and Grace Ge, Senior Principal, highlighted the banking industry is focused on improving existing processes rather than introducing new ones. Data Analytics and AI are identified as key priorities for digital transformation. Additionally, there is a focus on internal use cases and efficiency.

Eoghan and Grace also discussed the challenges faced by the banking industry. These include regulation, competition from companies like Amazon, and the need to attract talent. They emphasised the importance for financial institutions of modernising core infrastructure. Also, building cloud infrastructure to support ongoing digital transformation. Moreover, the study notes the prevalence of the development of custom-made tools and internal use cases for AI implementation. Furthermore, Eoghan and Grace provided examples of repeatable use cases and discussed the success factors for Data Analytics and AI.

Four key takeaways from Publicis Sapient

Four key tracks came out of the study…

  • Modernising the core will always be important. But modernising the core for its own sake and also building the cloud infrastructure that supports it or allows for it to be modern. A decent chunk of the survey responders are still very focused on this. Executives are stating they want to make sure their people can make the best use of the beautiful core they’ve now built.
  • GenAI is an area of thoughtful experimentation for the Neobanks. We’re talking about scaled microservices here. Instances where, across Neobanks, you’ll have the same machine learning model and the same GenAI text generator facilitating retail and SMEs. That’s pretty sophisticated and something everyone has to contend with.
  • Data Analytics transformation is a key priority using GenAI to do so along with bringing new talent into the game.
  • Payments has been a big theme at Money20/20… We’re seeing lots of activity around ancillary individual product areas.

“The study focuses on how to think about solving problems end-to-end. Banks are dealing with legacy issues and taking a customer first view into solving the challenges. The practical application of AI across the banks is a significant theme as they look to automate decision-making and deliver better credit risk models. AI is finally delivering a set of use cases that truly can impact the way banks operate and build their own technology.” Dave Murphy, Head of Financial Services, EMEA & APAC

Be among the first to receive the study by signing up here


  • Artificial Intelligence in FinTech

The RAI Amsterdam Convention Centre was the location for the world’s leading fintech conference.

Money20/20 Europe offered a unique blend of insightful keynotes, panel discussions, and networking opportunities. These underscored the transformative power of emerging technologies in financial services.

This year’s theme was ‘Human X Machine’. Money20/20 Europe explored the relationship between humans and intelligent machines, focusing on how the partnership between artificial and human intelligence will forge a new era in finance…

Innovations in AI and Open Banking

Artificial Intelligence was a major theme throughout Money20/20. A notable session featured Patrice Amann from Microsoft and Kevin Levitt from NVIDIA. They discussed the role of Generative AI in transforming customer experiences in banking. They highlighted the importance of integrating business-specific data to enhance the accuracy and effectiveness of AI solutions​​.

Open banking also garnered significant attention at Money20/20. Mastercard and bunq announced a partnership enabling users to consolidate multiple bank accounts through bunq’s AI-driven money assistant, Finn. This move is part of a broader trend towards greater financial integration and personalised banking experiences​​. Additionally, Token.io and Prommt unveiled a collaboration to improve open banking payments. This illustrated the increasing importance of seamless, user-friendly payment solutions in the fintech landscape​​.

Why Money20/20?

Fintech Strategy met with SC Ventures, Lloyds Banking Group, OSB Group, AirWallex, Plaid, Paymentology, Episode Six, Mettle (NatWest Group) and more to take the pulse of the latest trends across the fintech landscape…

Mettle

Michelle Prance, CEO, Mettle (NatWest Group): “It’s good for Mettle to come here because we are a fintech that was incubated inside a large bank for fintechs. Quite often their route to market, and capitalisation, is by going into a main bank being acquired. It’s a marriage between a big organisation and the small nimble fintech. People are really interested in what we’re doing because big incumbents want to be fast and nimble. They don’t always have the capital to invest in something like we’ve been able to do with Mettle. So, they’re interested to know the right route. Do they incubate in house? Or do they buy it in? And what’s the right way to do that without killing the culture? These are the types of interesting conversations we’ve been having here.”

Episode Six

Craig Ramsay, MD Business Development, Episode Six: “Networking is really important for us as a small company. There are lots of people here who can actually solve problems and it’s the collaboration I get quite excited about. What I’ve seen change in recent years is that the big banks are looking to find small organisations like us to figure out how to solve their payments problems. And that’s different to when I was working for a bank only a few years ago. You just have to be here at Money20/20… What I’m seeing, since we returned after Covid, is how many people from different parts of the world are coming here to actually talk to each other in person. If you’re not here at Money20/20, then it’s actually hard to be relevant in this industry.”

Read the full review here

  • Artificial Intelligence in FinTech
  • Digital Payments