Author

Paul O'Sullivan

Published

20 May 2025

Estimated Read time

6Mins

Paul O’Sullivan, Global Head of Banking & Lending at Aryza, on how Open Banking is reshaping the financial ecosystem

As Open Banking continues to gain momentum, it is poised to fundamentally reshape the financial ecosystem. Not only regarding how institutions operate but also in how individuals understand, manage, and trust their money. With secure data sharing at its core, Open Banking represents more than just a technological shift. It signals a transformation in the relationship between people and their finances.

This piece explores five key areas where Open Banking is set to make its mark in the years to come…

Transforming Society’s Relationship with Money

Open Banking has the opportunity to reshape society’s relationship with money by providing greater transparency and enabling a more comprehensive view of personal finances. This heightened visibility is made possible by securely sharing financial data with trusted third-party providers. And empowering individuals to monitor spending habits, track expenses, and compare financial products and services more easily.

Providing greater transparency and access to financial data will improve financial education for all by enabling a deeper analysis of trends across various activities. As a result, consumers can make more informed decisions. This can improve overall financial education and help to foster a healthier, more sustainable relationship with money.

Additionally, Open Banking paves the way for more personalised financial solutions, as institutions compete to offer tailored services that meet the unique needs of customers. This increased choice not only boosts consumer confidence in managing their finances but also catalyses innovation within the financial sector. Ultimately, the shift toward Open Banking is poised to create a more dynamic, customer-centric financial services landscape. Moreover, one that will significantly enhance how individuals and businesses manage their money.

The Convergence of Open Banking and AI

The data provided by Open Banking should work hand in hand with AI to offer consumers advice on managing their finances. Whether that means making changes to their habits or finding more affordable products, in turn transforming financial guidance and creating a more personalised and efficient financial ecosystem.

By enabling the secure sharing of consumer data, Open Banking provides the foundation for AI-driven solutions to analyse real-time information and offer tailored recommendations. This coule be suggesting improvements to spending habits or automating routine processes. Such AI-enabled tools will empower individuals to make more informed, data-driven decisions about their money.

This synergy will go beyond surface-level insights, delivering hyper-personalised services that address each customer’s unique financial needs and preferences. The resulting efficiencies, such as automated account management, transaction processing, and even customer support, free human resources to focus on more complex issues. Ultimately, this combination of Open Banking and AI promises to enhance the overall customer experience. It can provide actionable, real-time support that helps individuals navigate their financial journeys more confidently and effectively.

Evolving the Role of Traditional Banks

While it’s still early to say for certain, traditional banks could indeed evolve into more utility-like services in an Open Banking world. We’re already seeing indications of this shift, with more consumers increasingly switching their banking services and using multiple accounts. Open Banking is a disruptive force that fosters greater competition and choice, enabling consumers to pick and choose the financial solutions that best meet their needs.

To remain relevant, traditional banks are urged to embrace Open Banking rather than resist it. By securely leveraging customer data and collaborating with FinTechs and other third-party providers, they can create more specialised, value-added products and services. In doing so, banks can move beyond mere utility status. They can position themselves at the forefront of innovation while enhancing the overall customer experience in an increasingly competitive landscape.

Redefining Financial Trust and Identity

Open Banking is not only transforming technology infrastructure; it’s also redefining core principles such as trust, identity, and control. It will increase transparency by giving individuals a holistic view of their financial data. In turn, empowering them to track spending patterns, compare financial products, and make more informed decisions. Secondly, it enhances consumer control over personal data, as customers can grant or revoke access to trusted third-party providers. Therefore strengthening accountability and fostering greater confidence in the system.

Furthermore, digital identity solutions replace traditional verification processes, enabling expanded access to financial services. This will ensure more people can participate in the banking system with ease. Underpinning these developments are trust frameworks, which establish standardised measures for data sharing, allowing banks, FinTechs and other providers to collaborate while maintaining consistent protection for users.

A key emerging factor is the use of advanced cryptography and multi-factor authentication so that both individuals and financial institutions can operate confidently in a secure environment. This heightened focus on security and privacy can help mitigate concerns around data breaches and identity theft. Further strengthening consumer trust.

By introducing new layers of transparency, giving consumers control over their data, and leveraging digital identity and robust security measures, Open Banking shifts our collective understanding of financial trust and identity. It moves us toward a future where trust is shared among various stakeholders. Security is paramount and individuals play a more active role in shaping their financial journeys.

Harnessing Open Banking Data for Monetary Policy

While often discussed through the lens of consumer empowerment, Open Banking may also prove to be instrumental in supporting smarter economic decision-making at a national level. Financial data through open banking could play a significant role in creating new tools for monetary policy. Particularly as the global financial system becomes increasingly interconnected. By providing governments and regulators with real-time insights into consumer spending patterns and business creditworthiness, Open Banking allows for more precise and targeted policy interventions. This data-driven approach can enable policymakers to respond swiftly to economic shifts. They could tailor interest rates, liquidity measures, and other monetary policy tools to specific sectors or demographics.

Having access to comprehensive, standardised data can enhance the accuracy of economic forecasts and models. This leads to more informed decisions that can foster stability and growth in the economy. However, implementing these advanced tools requires robust data protection measures and regulatory frameworks to ensure the privacy and security of financial information. When managed responsibly, the fusion of Open Banking data and monetary policymaking promises to bolster both economic resilience and consumer trust.

Charting the Path Ahead for Financial Innovation

Open Banking is not just a new chapter in financial services, it’s a complete rewrite of how we engage with money, institutions, and technology. From personalised advice and AI integration to regulatory impact and redefined trust, the changes ahead are both profound and far-reaching. The next decade will be shaped by how institutions adapt, how consumers respond, and how effectively we harness data to deliver meaningful, secure, and transparent financial experiences.

  • Embedded Finance
  • Neobanking

Author

Dan Brightmore

Published

15 May 2025

Estimated Read time

5Mins

Join FinTech’s greatest event when Money20/20 Europe returns to Amsterdam’s RAI Arena June 3-5

FinTech Strategy is proud to be a media partner for Money20/20 Europe 2025.

Launched by industry insiders in 2011, Money20/20 is the heartbeat of the global FinTech ecosystem. Some of the most innovative, fast-moving ideas and companies have found their feet (and funding) on its show floor. From J.P. Morgan, Stripe, and Airwallex to HSBC, Deutsche Bank, and Checkout.com.

Furthermore, this is where you’ll find new connections, business-critical insights from inspirational speakers, innovation, and partnerships you need to ensure your business succeeds for whatever comes next in money.

The Agenda for 2025

Come and create the future for financial services at Money20/20 Europe… This year’s agenda tracks cover Beyond FinTech, Digital DNA, Embedded Intelligence and Governance 2.0. Expert speakers include leaders from Mastercard, Monzo, Bank of England, Visa, IBM, Starling Bank, Revolut and more offering key insights on everything from agentic AI and cross-border payments to open banking and embedded finance.

Why Money20/20?

FinTech Strategy spoke with a host of leaders from across the FinTech spectrum. They all agreed on one thing, Money20/20 Europe is ‘the’ place to make connections and build your business.

Gurdeep Singh Kohli, Founder, SC Ventures

“It’s the first time I’ve attended Money 20/20 and, we’ve had some fascinating impromptu conversations that will lead to great opportunities. All the big names are here and it’s clearly a popular event from a thematic perspective – payments is a big theme this year. I have a very high regard for the quality of what’s on offer and the way the event has been organised – it’s a great customer experience, the way it’s all been structured, at scale, is actually one of the best I’ve ever seen. The response has been fantastic…”

Stephen Everett, MD Payables & Receivables, Lloyds Banking Group

“The majority of people at Money20/20 genuinely get up in the morning with a growth and innovation mindset. Therefore, you have to balance and recognise that when you walk into this big venue that there will be some wacky ideas. From my experience, I have seen many infant ideas turn into successful ventures, whereas I have also seen some ventures becoming unsuccessful despite having great innovation ideas. Fintechs will fail. Innovation will fail. Experiments will fail. And that’s fine. That’s what Money20/20 is all about.”

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 (NatWest) for fintechs. Quite often their route to market, route to capitalisation, is by going into a main bank being acquired. So, it’s that 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 to go down. 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.”

Ryan O’Holleran, Head of Sales, AirWallex

“The great thing about Money20/20, here in Europe, and in Asia and the US, is the good division between buyers and sellers. So, you have all these service providers like AirWallex, Amex, Stripe… And then you have the Heads of Payments from companies like Booking.com, Minted and Summit who are coming here with their team to meet with providers. If you think about that from a sales perspective, those meetings are very hard to get outside of this environment. But over a week you get 15 different meetings each day with that would normally take months to arrange. So, the ROI from this week is really powerful just from being able to have these conversations.”

Merusha Naidu, Global Head of Payments, Paymentology

“Paymentology is homegrown out of the UK so it’s important for us to make sure we’re representing the business across Europe. This is the centre of the world for banking innovation. We have customers here from Singapore, Dubai, Saudi Arabia, Ghana and beyond. People look to this event to really learn about what’s happening in the industry globally and discover what trends are going to come up. What should we be doing? How can we innovate together and learn from each other? That’s one of the things I really love about Money20/20; the talks in all of the panels are so interesting and I always leave knowing more. Being in the payments industry, and especially being an issue processor, it’s important for us to learn from the industry and understand where we need to move so that we can stay at the forefront of developments.”

Zak Lambert, Product Lead & Europe Lead, Plaid                                                                            

“This is my sixth straight Money20/20 and it gets busier every year! It’s great to learn more about the ecosystem at large. You can see developing trends each year, and it’s always a little bit different. You build relationships at Money20/20 that stay with you for the rest of your life. And it’s a perfect opportunity to meet people in the flesh that you might normally only see on screen. You can get a pretty direct read on what they’re working on and it’s exciting to be here making new connections.”

Book Your Money20/20 Europe Pass Now

To get a flavour of what you can expect from next year’s conference check out our review of Money20/20 Europe 2024.

Book your pass now and save €200 with the code FTS200.

  • Artificial Intelligence in FinTech
  • Digital Payments
  • Neobanking

Author

Melinda Roylett

Published

14 May 2025

Estimated Read time

5Mins

Melinda Roylett, Managing Director of Merchant Services at Lloyds Banking Group, on how the UK’s small and medium sized businesses can navigate the payments maze

Cashflow is the lifeblood of any business, yet it remains one of the most unpredictable aspects for SMBs. According to the Federation of Small Businesses, half of UK businesses have experienced cashflow problems. Many cite late payments as a major issue. Thankfully, banking and payment providers are stepping up with innovative and integrated services that make every transaction count.

At the recent ‘Payments Disrupted’ event, co-hosted by Lloyds and Visa at the Shard in London, they revealed exclusive business sector trends and consumer spending data. It highlighted areas of opportunity for SMBs – provided they have the tech and expert support to guide them.

The most recent Lloyds Business Barometer shows that business confidence has rebounded to the highest level since August 2024. Nevertheless, firms still cited rising costs and economic uncertainty as major obstacles to growth and investment. These challenges are not new. However, many SMBs could be overlooking an effective way to deal with them through unified payment solutions.

With the right strategies and tools, businesses can navigate complexities and unpredictability with confidence. Furthermore, they can unlock data-driven insights, cost savings, and the increased operational resilience and adaptability to cope with whatever the future throws at them.

Cashflow challenges

Sectors like retail and hospitality, where many businesses are operating on razor-thin margins, are particularly affected. Supply chain disruptions, the need to invest in growth, and seasonal fluctuations, like summer holidays, or peak sales events like Black Friday, can strain available funds.

For instance, businesses may experience cash-rich periods during peak seasons but struggle to meet operational expenses during quieter times. And with inflation still relatively high, the rising costs of materials, transportation, and labour further exacerbate cashflow challenges.

Cashflow problems inevitably have a way of seeping into other areas of the business. When cashflow is constrained, it prevents investment in the tools and tech businesses need to function properly. And they could miss out on new services that could streamline operations and lower costs.

Payment method and integration complexities

In a world of e-commerce, customer loyalty is not just about offering the best products or services. It’s about delivering a seamless and personalised experience at every touchpoint. According to UK Finance, 85% of UK consumers now use contactless payments – mobile wallet transactions are expected to account for 39% of all POS transactions by 2025. However, only 60% of small businesses have fully integrated digital payment solutions, leaving many at risk of falling behind.

Businesses can feel bewildered when confronted with the array of payment services that have emerged. Today’s customers expect seamless, secure, and diverse payment options, whether they’re shopping online or in-store. From contactless payments and mobile wallets to QR codes and pay-by-bank solutions, businesses must keep pace with these trends to remain competitive.

A smooth checkout experience, for instance, can be a significant competitive advantage. According to Visa, 59% of consumers consider a good checkout experience as important as having the best products. And 57% say a poor payment experience is enough to make them switch to a competitor.

However, integrating the payment methods that customers want can be complex, especially for SMBs with limited resources and expertise. Lloyds’ own research found that 49% of businesses say they find the choice of payment gateways in today’s market overwhelming. Considering the many data security and compliance obligations they’re facing, it’s no wonder that SMBs are asking for more help from their payment providers.

SMBs can navigate payment complexities with the right partner

To overcome these complexities, SMBs can partner with payment providers like Lloyds Merchant Services that offer integrated payment solutions, spanning point-of-sale (POS) and omnichannel acceptance. Such solutions not only simplify the payment process but also provide valuable insights into customer behaviour, enabling businesses to tailor their offerings and enhance the customer experience.

There are other benefits of working with integrated payment solutions. Independent Software Vendors (ISVs) are increasingly powering a lot of the business decisions that SMBs make. For example, to foster loyalty, businesses must go beyond basic payment processing and offer value-added services such as loyalty programmes, personalised discounts, and data-driven insights.

By analysing spending behaviours, businesses can identify trends and tailor their offerings to meet customer needs. For instance, a restaurant might use payment data to identify its most loyal customers and offer them discounts to encourage repeat visits. So, being connected to these ISVs is increasingly important to ensure consistent payment performance.

Lloyds Merchant Services has fostered partnerships with leading ISVs and tech vendors to offer the most comprehensive service range in the market. From our partnerships with PayPoint and extending our services to its 60,000-strong merchant network, to our POS device and infrastructure relationships with Fiserv, FreedomPay and Epos Now, we cover almost every business need, with scalability built-in. With Epos Now’s advanced POS, offering a powerful end-to-end solution, SMBs have access to payment acceptance technology that is robust yet flexible and can adapt changing customer needs.

That includes our flexible Merchant Cash Advance offering which provides quick access to capital based on future card sales. Differing to traditional loans, MCA allows businesses to pay the advance as a percentage of their card transactions, ensuring that payments are in sync with their cashflow. This flexibility is particularly beneficial for businesses with seasonal revenue streams, as it removes the stress of fixed monthly payments during low-income periods.

Prepare for the future now

The future of payments is increasingly digital, and businesses that provide customers with the best payment experiences will thrive. Businesses must invest in scalable payment solutions that can adapt to evolving technologies and consumer preferences. By adopting integrated payment solutions, SMBs can navigate the complexities of cash flows, rising operational costs, and evolving customer expectations. Moreover, by leveraging value-added services and staying ahead of technological trends, businesses can foster customer loyalty and drive sustainable growth.

Partnering with a knowledgeable payments provider that offers service and support that meet different business needs, dedicated relationship management, and industry insights can be a game-changer. It can give SMBs the agility and access to innovation they need to be profitable now and into the future. With expert support at every step, businesses can not only survive today but also seize the opportunities of tomorrow.

  • Digital Payments
  • Embedded Finance

Author

Dan Brightmore

Published

13 May 2025

Estimated Read time

2Mins

The global InsurTech sector experienced a notable resurgence in the first quarter of 2025. Funding levels surged to $1.31 billion…

The global InsurTech sector experienced a notable resurgence in the first quarter of 2025. Funding levels surged to $1.31 billion – an impressive 90.2% increase compared to the previous quarter. This was driven by AI and P&C Sector Investments. It marks the strongest funding performance since Q3 of 2022. This signals renewed investor confidence and a maturing ecosystem poised for innovation.

P&C

A major catalyst behind this upswing is the significant capital flow into Property & Casualty (P&C) insurance technology providers. P&C-focused InsurTechs accounted for a staggering $1.13 billion of the total Q1 investment. This highlights a strategic shift among investors towards sectors with proven demand for digital transformation. The ability of these firms to deliver scalable, tech-enabled solutions for underwriting, claims processing, and risk assessment has made them highly attractive investment targets.

AI

Furthermore, artificial intelligence (AI) has emerged as a dominant theme in this funding cycle. Roughly 61.2% of the capital raised – totalling over $710 million – was allocated to AI-driven InsurTech companies. These firms are leveraging AI to disrupt traditional models by automating decision-making. This further enhances customer experience, detecting fraud, and enabling hyper-personalised policy offerings. The increasing reliance on AI reflects a broader trend across FinTech sectors, where data-driven technologies are reshaping business models and customer engagement.

What does the future hold for the InsurTech sector?

Meanwhile, despite this funding resurgence, early-stage startups in the InsurTech space saw a notable decline in capital inflows, hitting a five-year low. This suggests a market preference for more mature, proven business models with clearer paths to profitability. Investors appear to be adopting a more cautious, value-driven approach. Moreover, the focus is on companies with strong fundamentals and existing market traction rather than speculative early-stage ventures.

The Q1 2025 results not only point to a healthy rebound for the sector but also underline a directional pivot towards sustainable innovation. InsurTechs that can integrate AI and address the evolving needs of insurers and policyholders alike are positioned to lead the next wave of growth. As the industry continues to digitise, the emphasis on efficiency, personalisation and resilience will likely guide future investment patterns.

  • InsurTech

Author

Dave Murphy

Published

8 May 2025

Estimated Read time

5Mins

Dave Murphy, Head of Financial Services EMEA & APAC at Publicis Sapient, on why retail banking is at an important crossroads and must react

Retail banking stands at a pivotal juncture. As digital-first generations reshape customer expectations and competitive pressure from FinTechs and neobanks intensifies, traditional banks face a critical choice: modernise now or risk obsolescence. Publicis Sapient’s latest Global Banking Benchmark Retail Banking Report underscores that “digital by default” is no longer an aspiration. It’s an immediate necessity.

Drawing on insights from 600 retail banking executives across 13 countries, the report highlights a convergence of transformative forces… The accelerated adoption of Gen AI, the decline of legacy IT infrastructure, and an urgent need to reimagine customer engagement for a younger, mobile-first demographic.

Digital or Die: A Defining Moment

Retail banking has been evolving for over two decades, but the stakes have never been higher. In Q1 2025, JPMorgan Chase reported a net income of $14.6 billion, up 9% year-over-year. This was driven by robust trading revenues and investment banking fees. Meanwhile, UK neobanks are making significant strides. Revolut achieved a net profit of $1.0 billion in 2024, marking its first billion-dollar annual profit, with revenues soaring 72% to $4.0 billion. Monzo also reported its first full year of profitability, posting a pre-tax profit of £15.4 million and doubling its revenue to £880 million.

Despite these advancements, 62% of retail banking executives admit their pace of transformation lags behind competitors. This isn’t a minor delay – it’s a strategic disadvantage in a market where 44% of new currents accounts are already being opened with digital banks and FinTechs.

Gen AI: Catalyst and Compulsion

Among all the changes underway, generative AI has emerged as the most powerful and potentially disruptive force. According to the benchmark study, data and AI are the top investment areas for digital transformation over the next three years. Executives are betting big on AI not only to improve customer engagement but also to modernise operations and accelerate core transformation. The impact of Gen AI in banking is tangible. It can:

  • Personalise customer journeys at scale
  • Accelerate software development lifecycles
  • Write code and automate data management
  • Deliver hyper-relevant product recommendations
  • Power AI agents with human-like customer service abilities

In short, Gen AI makes what was once prohibitively expensive and time-consuming not only possible but scalable.

The banking customer has changed

The report makes it clear: retail banks must stop building for yesterday’s customer. Gen Z, who will make up one-third of the workforce by 2030, already prefer mobile-first, always-on banking. They value immediacy, customisation, and authenticity. A staggering 83% of Gen Z consumers say they are frustrated with current bank processes.

Compounding this generational shift is the growing irrelevance of traditional customer segmentation. Today’s consumers defy linear categorisation. The same individual can be a small business owner, a parent, and a new homeowner. Yet banks often treat them as three separate customers because of product-centric data silos.

The core problem with legacy thinking

Legacy systems continue to be the biggest barrier to meaningful transformation. 70% of banking executives say their legacy infrastructure is hindering their ability to deliver the digital experiences customers expect. Many core systems are COBOL-based and nearing end-of-life. Yet banks are reluctant to modernise due to perceived risk and complexity.

The irony is clear: the risk of maintaining outdated systems now outweighs the risk of change. With Gen AI, banks finally have the tools to confront the 800-pound gorilla in the room – core modernisation.

Why Core Modernisation is the linchpin

Modernising the core is about more than infrastructure. It’s the key to unlocking the full value of AI, data, and digital transformation. A modern, cloud-native core enables:

  • Real-time access to first-party and third-party data
  • Agile delivery through microservices
  • Better governance and regulatory transparency
  • Faster go-to-market with new apps and services

Retail banks that modernise their core can stop building costly middleware just to access data. Instead, they gain a unified view of the customer and the agility to respond to banking market shifts in real time.

The virtuous cycle of AI and Core

What’s truly powerful is the feedback loop between Gen AI and a modernised core. Gen AI helps accelerate the core transformation by generating code, automating testing, and streamlining documentation. Once modernised, that core then enhances Gen AI’s capabilities with clean, structured data. This virtuous cycle creates exponential value, making digital transformation faster, cheaper, and more sustainable.

Retail banks are already allocating 35% of their customer experience digital transformation budgets to Gen AI. Furthermore, many are embedding AI across the entire software development lifecycle using tools like Sapient Slingshot to reduce human error, increase test coverage, and ship better code faster.

From Product-Centric to People-Centric banking

Ultimately, the report urges retail banks to shift from a product-centric to a people-centric mindset. That means designing experiences around life moments, not product categories. It means knowing that the mortgage customer is also a small business owner and a parent, and offering solutions that reflect that reality.

With modern core systems and Gen AI, banks can personalise outreach, tailor financial advice, and meet customers where they are. This holistic view is essential not only for growth but also for loyalty.

The era of deferral is over. Banks can no longer afford to delay core transformation. Gen AI has lowered the cost, reduced the complexity, and increased the speed of change. The only question left is whether banks are ready to lead or risk falling behind.

Publicis Sapient is working at the intersection of Gen AI and core modernisation every day… Helping banks link strategy to execution and deliver on the full promise of digital transformation. The future of retail banking isn’t coming – it’s already here. The time to act is now.

  • Artificial Intelligence in FinTech
  • Neobanking

Author

Dan Brightmore

Published

7 May 2025

Estimated Read time

3Mins

Sprout, the creator of a smarter mortgage payment platform to drive financial freedom, has been named the winner of of…

Sprout, the creator of a smarter mortgage payment platform to drive financial freedom, has been named the winner of of Pitch360 at Level39 during UK FinTech Week.

Sprout’s Co-Founder, Asis Tewari, thanked the judges and organisers for running an inspiring session and offered praise for fellow finalists. “It was a privilege to pitch alongside such passionate and innovative founders. We learned a lot… Thank you also to London Business School and Jeff Skinner for helping validate our journey, and to Sir Andrew Likierman for giving us the confidence to kick off. And for introducing us to Professor Joao F. Cocco and his white paper on Portfolio Choice in the Presence of Housing.”

Sprout

Sprout empowers homeowners to build lasting wealth by making smarter mortgage decisions. With AI-driven insights, smart automation, and a user-friendly interface, it can simplify homeownership – aligning your mortgage with long-term financial goals and future flexibility.

Tewari was inspired to launch Sprout after a dinner with Anil Agarwal, billionaire industrialist and Chairman of Vedanta… “He told me: The only way to build real wealth is through investing in markets — and every generation needs to start as early as possible.”

Why Use Sprout?

  • Do you know the true return of your property? Sprout tracks the real costs and value of your property to give an accurate return.
  • Are your mortgage repayments really building wealth? Sprout makes it simple to allocate your payment wisely, giving you the ability to pay down your mortgage smarter.
  • Is your money working hard for you? Sprout gives you exclusive access to best-in-class funds.

Pitch360

Innovate Finance’s flagship pitching competition, Pitch360, is taking place across the UK in 2025. There are six regional pitch events across a 12-month campaign, featuring live events in the North, South West, Midlands, Scotland, Northern Ireland and Wales. Pitch360 shines a spotlight on the best FinTech talent and emerging technologies the UK has to offer. It’s aim is to showcase how FinTech innovation can help drive the growth agenda and transform financial services.

Find out about future events, and apply to pitch, here.

About Innovate Finance

Innovate Finance is the independent industry body for UK FinTech. It’s mission is to accelerate the UK’s leading role in the financial services sector. It does this by directly supporting the next generation of technology-led innovators to create a more inclusive, more democratic and more effective financial services sector that works better for everyone.

  • Embedded Finance
  • Neobanking

Author

Vikas Krishan

Published

28 April 2025

Estimated Read time

6Mins

Vikas Krishan, Chief Digital Business Officer & Head of EMEA at Altimetrik, on the disruptive power of AI in FinTech

AI is already disrupting every area of the Financial Services Industry, and is being included in almost every strategic conversation around technology-enabled transformation. This transformation is exemplified by industry leaders like JP Morgan Chase. CEO Jamie Dimon has championed a £12 billion annual investment in data and technology, overseeing over 400 AI use cases. These include fraud detection, customer service improvements and operational efficiencies across the bank. The core platforms underpinning the industry risk buckling under the weight of modernisation. AI is gradually loosening the components of legacy institutions and presenting fresh opportunities. These are scalable, resilient and adaptable to the agile needs of Financial Services. Through this reimagining of core platforms, those who choose to act now can expect to leapfrog their competition. Meanwhile, those who fail to act now risk obscurity, lack of productivity and being disregarded by their consumer base. 

The transition to new architectures 

For decades, banks have relied on legacy systems to power their core operations. These often ageing platforms are becoming increasingly difficult and expensive to maintain. They have been built both in languages not commonly used and architected with a different business reality in mind. Many frequently lack the flexibility required to meet the demands of today’s digital-first customers. They also struggle to integrate with modern financial technologies. A significant challenge facing organisations is the accumulation of technical debt. There is a cost to additional work or rework caused by choosing quick or limited solutions over more robust, maintainable approaches. Over time, this can lead to significant issues that compound the challenges of legacy systems.

This lack of nimbleness is often the byproduct of a Frankenstein approach to architectural systems. Many financial institutions have traditionally built new features or attempted to fuse together two platforms. This is a delicate balancing act, requiring extensive planning and careful execution. If done with limited oversight, challenges can arise. These include operational disruptions, increased security risks and obvious incompatibility issues. The high risks and cost burdens associated with maintaining legacy platforms has led many banks to reconsider traditional merger approaches. Increasingly opting for modern, cloud-based microservices driven solutions that offer enhanced scalability, security and integration potential. 

Meeting the challenge

As the industry establishes governance around this necessary transition, core platforms are being replaced by newer, more adaptable microservice-based architectures. Navigating this evolution requires leveraging an industry partner with a deep understanding of the complexities and risks involved. There are challenges moving from monolithic core systems to flexible, modern frameworks. 

If we think back five years or so, many players in the market were already aware of this critical shift. Companies like Misys and Avaloq were acquired by private equity firms and given substantial investment to advance digital initiatives, developing solution suites. The reason for this was clear, everyone understood the market was changing. However, the challenge still remains in managing the migration of large, complex platforms. The key question has always been how to de-risk these migrations when moving to newer architectures. This is an issue across organisations, and it is something that we at Altimetrik actively work with clients in financial services to address. 

Data first with AI

If we consider platforms such as core banking or payments systems, the data generated from these transactions should, in theory, hold value. However, gaining insights from legacy platforms is significantly more challenging and the cost of extracting and utilising that data is often prohibitive. It is here that a data-driven approach to AI must be agreed upon.  

High-quality, accurate data lies at the core of every successful AI implementation. AI thrives on data; the more precise the data, the better the AI can learn and provide reliable insights. This fundamental truth highlights the importance of data integrity within the AI ecosystem. However, many financial institutions are struggling in this area, both in effectively using internal data and leveraging accurate, timely external data. As companies grow, their data environments become increasingly complex, adding to these challenges. 

As financial services organisations expand, they often face the challenge of data silos, declining data quality and scattered, disconnected data repositories. This leads to a fragmented data ecosystem. It can limit AI’s potential to deliver meaningful insights and drive improvements. This transformation requires active leadership from the top. Successful digital transformation depends on executive-level commitment and understanding. Leaders like Charles Scharf of Wells Fargo demonstrates how CEO ownership of data and AI initiatives drives organisation-wide adoption and success. Their hands-on approach ensures these technologies aren’t just IT projects, but core business strategy enablers.

A Single Source of Truth with AI

To overcome this, financial institutions should establish a Single Source of Truth (SSOT) and in doing so move away from older, somewhat clumsy core platforms. An SSOT will provide a unified, consistent view of data across the organisation. This accelerates decision-making with greater confidence. As demonstrated by successful implementations across the industry. For exmple, Bank of America’s AI-powered virtual assistant Erica providing personalised financial advice to Wells Fargo’s modernised data infrastructure. This enables enhanced risk assessment and management. By centralising core data, an SSOT enables the identification of operational inefficiencies, better monitoring of customer behaviours and effective execution of strategies to foster growth. 

The key question is how to successfully de-risk this transition from a fixed cost base to a more flexible, agile one. This transition is essential for becoming an outcomes-focused business with greater adaptability. So, how can technology help achieve this?  

One approach involves what is often (unfortunately) referred to as a Strangler Pattern. Instead of a wholesale shift from one platform to another, this modulated approach guides clients on a journey that focuses on gradually moving specific functionalities. By decomposing the legacy system function by function, we rebuild each component within the new platform. This allows the old system to run in parallel until fully replaced. Thus shrinking the monolithic structure in a manageable, low-risk way. It is a method preferred by many large financial services players when they move to become digital businesses.

By working within a digital business methodology that prioritises outcomes over technology, we gain significant advantages. The beauty of this function is its flexibility. When implementing a new function, the management of a FS firm may discover it isn’t meeting expectations or fulfilling business needs. And yet these clients still have the security of the old platform to fall back on and can easily revert back to the original system and refine the new function before trying again. This way of working ensures a safety net. It can reduce risk and enable iterative improvements without causing major disruptions to business operations. 

The full picture  

The transformation of core platforms through AI presents both immense opportunity and significant challenges. Those institutions willing to embrace this change, adopting data-first approaches and modern architectures, are poised to redefine the industry landscape. The transition, whilst complex, can be managed through measured strategies allowing for gradual, low-risk modernisation. As we move forward, the success of financial institutions will increasingly hinge on their ability to harness AI’s potential. They will need to create unified data ecosystems and adapt to the evolving needs of the digital age. Financial services businesses must embrace AI and modernise their core platforms or risk becoming as obsolete as a floppy disk.

  • Artificial Intelligence in FinTech

Author

Dan Brightmore

Published

25 April 2025

Estimated Read time

5Mins

Ayre Group founder Calvin Ayre stresses the power of Blockchain in helping to overcome security and transparency challenges in financial data

The financial services sector is built on trust. However, ongoing data breaches, security vulnerabilities, and inefficiencies have severely eroded confidence in the industry. In the past five years alone, 69% of financial institutions have experienced at least one data breach, exposing the sector’s ongoing Cybersecurity challenges.

Financial institutions handle vast amounts of sensitive customer data, including personal identification details, transaction histories, and confidential records. All of which are prime targets for sophisticated cyber criminals. Furthermore, in exploiting weaknesses in legacy systems, third-party integrations, and cloud infrastructures, attackers gain unauthorised access, manipulate data, and compromise financial integrity.

Leveraging Blockchain technology

Recently, studies have been testing and trialling data breach detection systems that leverage Blockchain technology. This includes utilising smart contracts, self-executing agreements with predefined rules, to generate alert notifiers. These studies underscore the potential of Blockchain to enhance the speed and accuracy of data breach detection. Improvements from the standard 200+ days can be made up to as little as 10 seconds.

However, external threats are only part of the problem. Internal risks such as human error, data mismanagement, and outdated compliance frameworks further exacerbate data integrity issues. Nearly a third (28%) of financial service organisations cite mistakes from manual processes as their biggest data reconciliation pain point. Another key issue is the continued reliance on legacy systems, which lack the automation, security, and scalability required to maintain accurate and tamper-proof records. This highlights the growing need to restore confidence in financial data.

These ongoing challenges have far-reaching consequences. Alarmingly, 40% of CFOs express doubts about the accuracy of their financial records. This raises serious concerns about governance, regulatory compliance, and financial stability. Insider fraud, unauthorised transactions, and data manipulation remain major risks; calling for institutions to implement immutable systems. One such solution is Blockchain technology. As a decentralised ledger that guarantees data integrity, Blockchain can play a crucial role in enhancing the reliability of data.

Many institutions hesitate to adopt new technologies due to high costs and operational disruption. A report by Duco and the Financial Technologies Forum revealed that 64% of financial institutions perceive the transformation of manual processes as too expensive or time-consuming. But Blockchain technology presents a new era of data resilience that. It can address these challenges head-on, enhancing security, and restoring trust in financial data.

Restoring resilience with the power of Blockchain

One of the most powerful features of Blockchain is its ability to create immutable records. Every transaction is securely logged, forming transparent and tamper-proof audit trails. By enabling real-time auditing and decentralised verification, Blockchain reduces the risks associated with human error, fraud, and outdated systems.

BSV Blockchain, with its focus on scalability and low-cost transactions, enhances these benefits by enabling high-volume data processing on-chain. It makes real-time auditing more efficient and cost-effective. Additionally, its data provenance capabilities allow institutions to track the origin, history, and any modifications of every data entry. Moreover, it offers complete accuracy, ensuring the creation of auditable and reliable records that help to eliminate discrepancies. This can also minimise information asymmetry across the financial ecosystem.

Accurate risk assessment is the cornerstone of financial services. Investors and institutions need reliable data to evaluate risk levels in specific markets and positions. Blockchain enhances this process by providing trustworthy data that can be verified and traced back to its source. It also reduces information asymmetry by ensuring wide accessibility to high-quality data. These features boost efficiency, making markets work more effectively and enabling money to flow to investments that are correctly priced according to their risk. Furthermore, because the data is always available and immutable, it allows for quick risk assessments. This helps individuals respond faster to market changes.

Blockchain also has the ability to revolutionise credit ratings, making assessments more transparent, automated, and fair. Further ensuring businesses and individuals gain more equitable access to financial services. Traditionally, credit assessments have been opaque, slow, and prone to biases. Blockchain enables automated credit scoring using real-time data and self-executing smart contracts. This approach can provide a more accurate and unbiased measure of creditworthiness.

For example, companies like Lendoit leverage blockchain-based platforms that use decentralised credit ratings to offer fairer access to financial services. This especially benefits individuals and businesses traditionally underserved by standard credit systems.

A new era of trust and efficiency in financial services

Financial institutions face an increase in sophisticated cyber threats and the challenge of managing vast data volumes. Adopting Blockchain-based solutions will be essential for long-term sustainability. With immutable records, real-time reconciliation, and automated auditing, the financial sector can reduce risks, lower operational costs, and rebuild trust among investors, regulators, and consumers. The adoption of Blockchain will be crucial in addressing the data integrity challenges highlighted earlier, helping to restore confidence in the industry.

By embracing Blockchain, financial institutions can future proof their operations. This can foster greater financial inclusion, and redefine trust in the financial ecosystem. Those who adopt these advancements will not only strengthen their competitive position but will also help shape a new era of transparency, security, and innovation in global financial markets.

For more Blockchain insights from Calvin Ayre visit Ayre Group

  • Blockchain
  • Cybersecurity in FinTech

Author

Dan Brightmore

Published

24 April 2025

Estimated Read time

2Mins

HBX Group eWallet incorporates advanced features such as integrated financing, access to invoices and complete traceability of transactions

HBX Group, a leading independent B2B travel technology marketplace has launched the HBX Group eWallet. This innovative B2B payments platform is specifically designed for the travel industry. The product has been developed in collaboration with FinPay, an e-money institution regulated by the Bank of Spain. It will be initially available in Spain in April 2025, with plans to expand to OECD countries starting in June.

B2B eWallet

A B2B eWallet is a digital solution that allows companies to securely store and manage payments quickly, and efficiently. Operating similarly to a digital wallet for consumers, it is designed to facilitate instant, cross-border transactions between companies. HBX Group eWallet, developed specifically for the travel industry, goes a step further. It incorporates advanced features such as integrated financing, invoice access, and full transaction traceability. Its aim is to digitise and automate B2B payments, reduce transaction costs, and improve the operational scalability of the travel ecosystem.

“HBX Group eWallet represents a decisive step toward modernising B2B payments in the travel ecosystem,” says Daniel Nordholm, chief product and new business officer at HBX Group. “We want to set a new standard for efficiency and security in the sector. The partnership with FinPay allows us to achieve this with a solution tailored to the industry’s needs.”

“This collaboration with HBX Group leverages the full potential of financial technology applied to real-world business contexts,” says Juan Antonio Soriano, CEO of FinPay. “FinPay represents a breakthrough in the digitalisation of B2B payments and financing. And we are proud to be the technology partner making it possible.”

Registration on the platform implies acceptance of the terms and conditions of FinPay, the entity responsible for the payment and financing services integrated into the solution.

About HBX Group

HBX Group is a leading global independent B2B travel technology marketplace. It owns and operates Hotelbeds, Bedsonline, and Roiback. It offers a network of interconnected travel technology products and services to partners. These include online marketplaces, tour operators, travel advisors, airlines, loyalty programmes, destinations and travel suppliers.

The vision is to simplify the complex and fragmented travel industry through a combination of cloud-based technology solutions. This includes curated data and a broad portfolio of products designed to maximise revenue. HBX Group is present in 170 countries and employs more than 3,600 people worldwide. It is committed to making travel a force for good, creating a positive social and environmental impact.

  • Digital Payments

Author

Dan Brightmore

Published

14 April 2025

Estimated Read time

2Mins

In a major move for blockchain-powered finance, Kinexys by J.P. Morgan has launched GBP-denominated Blockchain Deposit Accounts at its London…

In a major move for blockchain-powered finance, Kinexys by J.P. Morgan has launched GBP-denominated Blockchain Deposit Accounts at its London branch. This marks a significant expansion of its Kinexys Digital Payments platform into the UK market. The innovation introduces one of the first blockchain-native banking products of its kind in the region. It is designed to facilitate 24/7 real-time payments and cross-border transactions for institutional clients.

SwapAgent, a London Stock Exchange Group Post Trade Solutions business, and Trafigura, a global leader in commodities trading, are the inaugural clients on the platform. The deployment signals a meaningful step in the evolution of blockchain in mainstream banking infrastructure, particularly in foreign exchange (FX) settlement, liquidity management, and programmable finance.

Blockchain delivering Programmable, Round-the-Clock Liquidity

The new offering allows corporate clients to settle GBP-denominated payments anytime, including weekends. And while accessing same-day FX settlements and real-time cross-border capabilities. This follows the platform’s earlier rollout of EUR-denominated blockchain accounts in Frankfurt and continues Kinexys’s push for global digital payment standardization.

SwapAgent will integrate Kinexys accounts into its digital post-trade pilot, with an eye toward broader adoption that could see blockchain accounts become a central part of its settlement architecture.

“As we expand SwapAgent’s settlement capabilities and enhance our digital presence, we’re eager to collaborate with Kinexys by J.P. Morgan”

Nathan Ondyak, CEO, SwapAgent

Trafigura Eyes Transformation in Cross-Border Treasury

Trafigura plans to leverage Kinexys accounts for real-time payments across New York, London, and Singapore, integrating programmable fund movement to streamline treasury operations across its global network.

“We are excited to advance our capabilities… [and] benefit from a transformative financial solution that will streamline our operations and enhance our competitive edge”

Chris McLaughlin, Global Head of Group Treasury, Trafigura

Kinexys: Momentum Behind the Numbers

Since inception, Kinexys has processed more than $1.5 trillion in transactions, with daily volumes exceeding $2 billion and 10x year-over-year growth. Its programmable payments feature, offering a self-serve “if-this-then-that” interface, provides users with automation options that traditional banking infrastructure has struggled to match.

This move cements J.P. Morgan’s blockchain unit as a first mover in institutional-grade digital payments infrastructure in the UK, positioning Kinexys as a major player in the convergence of blockchain, treasury, and cross-border payments.

  • Blockchain
  • Digital Payments

Author

Dan Brightmore

Published

10 April 2025

Estimated Read time

2Mins

Ozone API launches industry-first tool that enables US banks to calculate the cost of building and maintaining their own open banking APIs 

Ozone API, the global leader in open banking technology, has launched an industry-first tool. It forecasts an accurate estimated cost for US banks planning on building their own API infrastructure. It comes in response to the recent Section 1033 rulemaking under the Dodd-Frank Act. This means that American consumers will have the right to access and share their financial data.  

API Build It Calculator

The “Build It Calculator” can estimate the cost to a US bank of building and maintaining its own API infrastructure. It does this by analysing data points including, but not limited to, the desired length of time for project completion, the financial institution’s hosting costs and the value of a bank’s deposits. This information is then fed into a formula built according to Ozone API’s extensive experience delivering open banking infrastructure globally.

Moreover, the final cost even includes the salaries of employees required to support the project. This is calculated in line with the proportion of their annual working hours that would be spent on the API build, implementation and maintenance. 
 
Having already been tested and validated by banks in the US, the tool helps financial institutions understand the complexity and cost involved in building APIs. Furthermore, it also reveals the hidden costs of maintenance, which can often be as much as half the cost of initial implementation every single year.  
 
Using the Build It Calculator, banks of all sizes can estimate both the up-front cost and maintenance costs of building their own open banking APIs in a single phone call with Ozone API. This brings significant clarity to initiatives that often reach eight-figure budgets. 

Open Banking with APIs

“Open banking technology brings huge benefits to financial institutions as well as businesses and consumers, but building API architectures does require significant investment. We are making this tool available to help banks understand the scale of the undertaking and effectively prepare to comply with Section 1033. It’s crucial that banks are armed with accurate data to help them make the best decision, whether that is to build their own infrastructure or work with partners that can offer off-the-shelf or bespoke solutions.”  

Eyal Sivan, General Manager, North America, Ozone API
 
The tool has been rolled out in the US already and is set to expand into new regions globally, including the UK, MENA, LATAM and APAC.   


About Ozone API

Ozone API empowers banks and financial institutions around the world to deliver high performing, standards-compliant open APIs.  
 
As open banking and open finance sweep the world, Ozone API helps banks and financial institutions to adapt and thrive in the new era of open data, by providing the technology to unlock the power of open finance globally.  
 
The UK-based FinTech is the leading standards-based open API platform, supporting all global standards and providing the tools and expertise to help banks and financial institutions comply with regulation and create real commercial value.  
 
With a founding team that led the development of the UK open banking standards, Ozone API continues to shape open finance globally helping regulators, banks and technology platforms to accelerate open finance. Learn more: https://ozoneapi.com/

  • Digital Payments
  • Neobanking

Author

Anish Kapoor

Published

4 April 2025

Estimated Read time

5Mins

AccessPay CEO Anish Kapoor examines the positive impact of DORA on the digital payments industry

The EU’s Digital Operational Resilience Act (DORA) is a positive step for the payments industry and will help boost the resilience of an ecosystem that has changed radically over the last twenty years. Even so, the implications of this landmark regulation for payment service providers (PSPs) are complex and far-reaching. It will require investment in processes and infrastructure, which must also factor in the ongoing shift to real-time payments.

The technology backstory

Two decades ago, payment technology predominantly referred to back-end systems used by banks and PSPs to process electronic transactions. Online banking was still in its infancy, the smartphone hadn’t yet been launched, and traditional payment methods such as cash and cheques were much more prevalent.  

Today, it is a very different story. The number of electronic payments made via cards and digital wallets, credit transfers and direct debits has exploded. Technology is front and centre in payment service delivery, as individuals and businesses use online portals and mobile apps to manage accounts and initiate payments. While the rise of real-time payments, such as the EU’s SEPA Instant Credit Transfer (SCT Inst), means an increasing proportion of bank transfers are settled instantly rather than over several working days, which also means that anti-fraud measures and other compliance checks have to take place in real-time given the heightened fraud risk.

So, if there is a technological failure at any point in this new world of payments, it can have immediate and considerable ramifications for individuals and businesses. The now-infamous CrowdStrike outage in July 2024 affected several sectors, including banking, with some PSPs unable to process payments. More recently, an hours-long glitch at Bank of Ireland in December 2024 caused delays in processing payroll transactions for some employers, while a two-day outage at Barclays in February 2025  left customers unable to make bank transfers and use their debit cards. To catch up, Barclays had to process payments over the weekend and extend call centre operating hours.  

DORA’s goals

DORA aims to make the EU’s financial institutions (FIs) more resilient to information and communication technology (ICT) risks. It will minimise the potential for IT outages and require FIs to be back online as quickly as possible when they do occur. From a practical perspective, it will oblige them to create and implement ICT risk management frameworks. And meet new requirements for resilience testing, outage reporting, and information sharing.

Of course, the advent of DORA adds to the compliance burden for FIs, who will partly be spurred to comply to avoid fines for non-compliance and the associated negative press. Still, its rollout should be seen as positive for the industry. It should help to improve resilience across the ecosystem and boost customer confidence in the sector.

Improving infrastructure resilience with DORA

One angle that is less widely discussed when it comes to DORA is its implications for a PSP’s infrastructure. Whether developed in-house or outsourced, payment systems will need to have the capacity to accommodate peak loads following any outage. This will require PSPs to scale by multiples of their standard throughput.

For example, if a PSP’s average processing volume is 1,000 transactions per hour and its systems are down for three hours, it will need to have the capacity to process those 3,000 outstanding transactions once service resumes. And without impacting new transactions coming through the system. Additionally, if they are real-time payments, the delayed transactions must be settled as soon as possible. In this hypothetical example, such an outage would mean the system needs to handle 4,000 transactions in one hour, four times its usual capacity.

This requirement to recover quickly from IT outages will necessitate additional investment in infrastructure and automation. Especially given the move towards real-time settlement. In particular, it will likely drive interest in cloud-native technology, which can scale more readily on demand.

Third-party vendor relationships

DORA will also significantly impact how PSPs manage third-party IT vendor relationships. This development has been driven by the growing complexity of the financial ecosystem in the wake of digitisation and the rise of open banking. Research from McKinsey Digital highlights how the growth in the number of apps and vendors has increased the complexity and pressure on IT leaders.  

Under DORA, FIs are expected to monitor third-party providers, update supplier contracts to cover IT resilience, and establish an oversight framework for critical third-party providers. Consequently, conducting due diligence on third-party providers, particularly new vendors, and their approach to resilience is essential. Generally, we are likely to witness a flight to quality, with the providers that invest in controls and resilience set to fare best in the long term.

Adjusting to DORA

The arrival of DORA is a positive development for the payments industry. The sector has changed significantly in recent decades and relies heavily on technology for service delivery. Likewise, its customers depend on the PSPs to deliver their services so that they can conduct their business uninterrupted. However, the changes required by DORA are extensive and will require PSPs to invest in their infrastructure, processes and third-party relationships. As they adjust to the requirements of DORA, PSPs should ensure that infrastructure is resilient and flexible enough to handle surges in transaction flows. And factor in the shift to real-time settlement, which will only add to the demands made of payment systems.

  • Cybersecurity in FinTech
  • Digital Payments

Author

Arsalan Minhas

Published

3 April 2025

Estimated Read time

5Mins

Arsalan Minhas, AVP Sales Engineering, EMEA & APAC, at Hyland, on how AI revolutionising financial services

Artificial intelligence (AI) is revolutionising financial services, reshaping how institutions detect fraud, personalise customer experiences, and optimise investment strategies. From AI-powered chatbots assisting customers to machine learning models predicting market trends, the technology is driving unprecedented efficiency and insight.

Yet, alongside these advancements come new challenges. AI-driven scams are evolving in sophistication, algorithmic biases raise ethical concerns, and regulatory scrutiny is increasing. As financial institutions accelerate AI adoption, they’re walking the fine line between harnessing its benefits and mitigating its risks. 

AI in fraud detection and prevention – strengthening security measures

One of the most critical areas where AI has transformed financial services is fraud detection and prevention.

Traditional fraud prevention methods relied on static rule-based systems, which were often ineffective at identifying evolving threats. Such systems aren’t necessarily equipped to keep up with the sheer pace of financial service operations today, which has led to a surge of interest in automated alternatives.

AI, particularly machine learning algorithms, offers a dynamic solution by analysing vast datasets in real time to identify anomalies and potential fraud. AI also enhances biometric authentication methods, such as voice and facial recognition. This can ensure secure access to accounts, reducing the reliance on passwords, which are vulnerable to breaches.

According to a recent McKinsey report, AI-driven fraud detection systems can reduce financial fraud losses by up to 50%. Making them a crucial asset for financial institutions. These unprecedented levels of speed and versatility has made AI a priority for even the biggest players.

Of course, fraud detection is not without its challenges. Criminals are also leveraging AI to create sophisticated scams, such as deepfake-based identity fraud. And the introduction of new technologies can challenge cybersecurity initiatives.

With that in mind, financial institutions must constantly update their AI models to stay ahead of emerging threats. Regulatory compliance adds another layer of complexity, as AI’s decision-making much align with consumer protection laws and data privacy regulations like GDPR and CCPA.

The future of Customer Experience

On the customer-facing side of things, Artificial Intelligence is transforming the customer experience through hyper-personalised financial services. Gone are the days of generic banking interactions. AI now enables financial institutions to tailor services based on individual customer behaviours, preferences and financial goals.

Leading UK banks like NatWest and Lloyds Bank have invested heavily in AI-powered virtual assistants. NatWest’s digital assistant, Cora, has handled millions of customer interactions, providing real-time financial insights, bill reminders, and even fraud detection alerts. Similarly, HSBC uses AI-driven tools to analyse spending patterns and offer personalised financial advice. The ability to assess transaction data allows banks to recommend budgeting strategies, suggest tailored loan offers, and predict future financial needs, making banking more intuitive and customer centric.

AI-driven robo-advisors, such as those offered by Nutmeg and Moneyfarm, have revolutionised investment management by providing algorithm-based financial planning. These platforms leverage AI to assess risk tolerance, market trends, and historical data to offer personalised investment strategies with lower fees than traditional financial advisors. 

While such tools can be incredibly effective, they do raise concerns about data privacy and algorithmic bias. The more AI knows about an individual’s financial habits, the greater the risk of data misuse or bias in lending and investment recommendations.

Financial institutions must therefore ensure transparency and fairness in AI decision-making to build customer trust and meet regulatory regulations. The basis upon which customers share their personal data, and the protections that it is afforded, are a non-negotiable for any serious financial organisation.

Redefining market strategies in trading and investment

According to Deloitte, Artificial Intelligence is poised to be one of the most disruptive forces in investment management. High-frequency trading (HFT) firms now rely on AI algorithms to process vast amounts of market data within milliseconds. It also enables hedge funds and investment firms to predict market movements by analysing patterns from historical data, social media sentiment, and global economic indicators.

Leading firms like Man Group and XTX Markets have harnessed AI to enhance their trading strategies and portfolio management. Man Group, managing $175 billion in assets, utilises machine learning tools to develop its platform, ManGPT, to analyse trades and optimise investment decisions.

Similarly, XTX Markets, a London-based trading firm, employs advanced AI models to execute millions of trades daily, emphasising AI-driven strategies over sheer speed. Predictive analytics have become an indispensable tool in portfolio management, helping firms adjust their strategies based on real-time market fluctuations.

Naturally, these automated tools require to-the-second oversight from the business itself. The 2010 Flash Crash, in which the stock market plunged nearly 1,000 points within minutes, was exacerbated by algorithmic trading. AI-driven trading models can react unpredictably in volatile markets, amplifying risks if not properly regulated. Humanised AI – the combination of human and AI working in concert, rather than automated systems working in isolation – is crucial.

The future of AI in financial services

As Artificial Intelligence continues to evolve, its integration within financial services will only deepen. Institutions that successfully integrate AI into their operations will gain a significant competitive advantage. Benefiting from enhanced fraud detection, superior customer experiences, and data-driven investment strategies.

These businesses must also navigate the complexities of regulatory compliance, data privacy, and ethical AI deployment. The EU’s AI Act is one of many policies aiming to create the most robust governance structures for AI applications, and finance is no exception.

Striking the right balance between innovation and regulation will be crucial to ensuring AI remains a force for positive transformation rather than disruption. Financial institutions must prioritise transparency, human oversight, and ethical considerations in deployment to fully realise its potential while maintaining consumer trust.

The financial industry is on the brink of an AI-driven revolution. With careful implementation and responsible oversight, the technology has the power to make financial services more secure, efficient, and customer-friendly than ever before. Institutions that embrace this technology while addressing its challenges will shape the future of finance, redefining the way money is managed, invested, and protected in the years to come.

  • Artificial Intelligence in FinTech

Author

Dan Brightmore

Published

26 March 2025

Estimated Read time

2Mins

Itaú Unibanco reinforces its foreign exchange solutions, enabling instant payment in foreign currency directly through the app

Itaú Unibanco has partnered with Wise Platform to enable customers to send and make digital payments in foreign currency instantly and directly through the Itaú app. The goal is to deliver an even more complete solution for its customers, who already have currency reserves through the app and an international account.

Itaú expanding reach in Brazil

Itaú is strengthening its presence in the Brazilian foreign exchange market, where it achieved leadership in the primary ranking published by the Central Bank of Brazil. In partnership with Wise Platform, the solution it is launching will transform the experience of individual customers with international foreign exchange needs. Offering immediate digital payments and remittances, with tracking of transactions.

The new solution will allow customers to make international digital payments or send money in the same way and with the same simplicity as Pix. This can be done at any time of the day, every day of the week, overcoming business hours restrictions. In addition, the entire process can be monitored in real time, with transparency and visibility over each stage of the transaction. 

“Over the past few years, we have evolved our foreign exchange solutions for tourists, offering currency exchange reservations directly through the app and withdrawal at our branches or 24-hour ATMs. We launched the international account and expanded the benefits of points on our credit cards, and now we have evolved in international remittances. People need to send money abroad, whether to make a payment or to send money to a child who is on an exchange program, for example. To meet this need, we believe that sending money abroad should be as easy and fluid as Pix and directly in the Itaú app.”

Gabriel Rombenso, Superintendent of Products and Corporate Sales at Itaú Unibanco

Instant Digital Payments with Wise Platform

Initially, it will be possible to send and pay instantly in Euros and Pound Sterling for transactions under the same holder. The aim is to offer 12 additional currencies for digital payments, including US dollars, Canadian dollars, Australian dollars, Japanese yen, and New Zealand dollars, by the end of 2025.

“The partnership with Itaú, is a true testament to how banks can deliver better cross-border payments experiences to their customers at scale by leveraging the capabilities of Wise Platform. Itaú shares our strong vision of improving cross-border money movement. We are excited to work with them to make cross-border payments – fast, transparent, affordable and convenient – a core element of their service.”

Steve Naudé, Global Managing Director of Wise Platform

With this initiative, Itaú Unibanco advances its innovation strategy and reaffirms its commitment to placing the customer at the centre of the journey, It is offering solutions that combine cutting-edge technology with the solidity and trust of a leading institution in the Brazilian financial market.

  • Digital Payments

Author

Scott Zoldi

Published

25 March 2025

Estimated Read time

4Mins

Scott Zoldi, Chief Analytics Officer at FICO, explains why there should be no AI alone in decision making processes

Many AI models are black boxes and developed without proper consideration for interpretability, ethics, or safety of outputs. To establish trust, organisations should leverage Responsible AI. This defines standards of robust AI, explainable AI, ethical AI, and auditable AI. Under Responsible AI, developers define the conditions that lead to some transactions having less human oversight and others having more. But can we take people out of the decision-making loop entirely? To answer that question, let’s look at some developments in Responsible AI.

Trust in Developing AI Models

One best practice that organisations can adopt is maintaining a corporate AI model development standard. This dictates appropriate AI algorithms and processes to enable roles that keep people in the loop. This will often include the use of interpretable AI, allowing humans to review and understand what AI has learned for palatability, bias, ethical use and safety. Auditable AI will then codify the human-in-the-loop decisions and monitoring guidelines for operational use of the AI.

Responsible AI codifies all the essential human decisions that guide how AI will be built, used and progressed. This includes approving or declining the use of data, removing unethical relationships in data (i.e., illegal or unethical data proxies), and ensuring governance and regulation standards are met. Responsible AI leverages an immutable blockchain that dictates how to monitor the AI in operation. And the decision authority of human operators, which can include conditions where AI decisions are overruled, and operations move to a ‘humble AI model.’ AI Practitioners are keenly aware that even the highest performing AI models generate large number of false positives. So, every output needs to be treated with care and strategies defined to validate, counter, and support the AI.

A Responsible AI framework

There should be a well-defined process to overrule or reverse AI-driven decisions. If built in a Responsible AI framework, these decisions are codified into a crystal-clear set of operating AI blockchain frameworks well before the AI is in production. When there is a crisis you need clear preset guidance, not panicked decision making. This blockchain will define when humans can overrule the AI through alternate models, supporting data, or investigative processes. This AI operating framework is defined in coordination with the model developers, who understand the strengths and weaknesses of the AI. And when it may be operating in ways it wasn’t designed, ensuring there is no gap between development and operation. When auditable AI is employed, there are no nail-biting decisions in times of crisis. You can rely on a framework that pre-defines steps to make these human-driven decisions.

Companies that utilise Responsible AI frameworks enforce usage adherence by auditable AI, which is the operating manual and monitoring system. Embracing Responsible AI standards can help business units attain huge value. At the same time they can appropriately define the criteria where the businesses balance business risks and regulation. Domain experts/analysts will be given a defined span of control on how to use their domain knowledge and the auditable AI will monitor the system to alert and circumvent AI as appropriate.

Drawback prevention begins with transparency

To prevent major pull-back in AI today, we must go beyond aspirational and boastful claims to honest discussions of the risks of this technology. We must define how involved humans need to be. Companies need to empower their data science leadership to define what is high-risk AI, and how they are prepared or not to meet responsible/trustworthy AI. This comes back to governance and AI regulation. Companies must focus on developing a Responsible AI programme, and boost practices that may have atrophied during the GenAI hype cycle. 

They should start with a review of how AI regulation is developing, and whether they have the tools to appropriately address and pressure-test their AI applications. If they’re not prepared, they need to understand the business impacts of potentially having AI pulled from their repository of tools. And get prepared by defining AI development/operational corporate standards. 

Companies should then determine and classify business problems best suited for traditional AI vs. generative AI. Traditional AI can be constructed and constrained to meet regulation using the right algorithms to meet business objectives. Finally, companies will want to adopt a humble AI approach to have hot backups for their AI deployments. And to tier down to safer tech when auditable AI indicates AI decisioning is not trustworthy.

The vital role of the Data Scientist

Too many organisations are driving AI strategy through business owners or software engineers who often have limited to no knowledge of the specifics of AI algorithms’ mathematics and risks. Stringing together AI is easy. Building AI that is responsible and safe and properly operationalised with controls is a much harder exercise requiring standards, maturity and commitment to responsible AI. Data scientists can help businesses find the right paths to adopt the right types of AI for different business applications, regulatory compliances, and optimal consumer outcomes. In a nutshell: AI + human is the strongest solution. There should be no AI alone in decision-making.

  • Artificial Intelligence in FinTech
  • Blockchain

Author

Dan Brightmore

Published

17 March 2025

Estimated Read time

6Mins

MoneyLIVE Summit 2025: A stellar combination of thought leadership, cutting-edge technology showcases and unparalleled networking opportunities

The MoneyLIVE Summit 2025, held on March 10th-11th at London’s Business Design Centre, once again positioned itself as one of the most significant events in the banking and financial services industry. With over 1,500 attendees, 200+ speakers, and an agenda packed with insights on digital transformation, AI-driven innovation, and payment advancements, the event delivered a comprehensive overview of the future of financial services.

As one of Europe’s most influential FinTech and banking conferences, MoneyLIVE Summit attracted executives from leading institutions, including HSBC, Revolut, Standard Chartered, Barclays, Google, and Mastercard, providing attendees with unparalleled networking opportunities and deep dives into the latest industry developments.

The 2025 edition of MoneyLIVE Summit focused on several key themes within the financial sector, including:

  • AI and Automation in Banking
  • The Future of Payments and Open Banking
  • Sustainability and ESG in Finance
  • The Evolution of Embedded Finance
  • Cybersecurity and Fraud Prevention
  • Modernising Legacy Systems

AI and Automation: The Next Frontier

One of the most anticipated discussions centredd on Artificial Intelligence (AI) and Automation in Financial Services. Keynote speakers such as Taylan Turan (CEO, Retail Banking, HSBC) and Francesca Carlesi (CEO, Revolut UK) highlighted how AI is revolutionising customer interactions, risk assessments, and fraud detection.

A standout panel featured representatives from Google Cloud, Lloyds Banking Group, and Monzo, discussing the ethical implications of AI-driven banking and how institutions can balance efficiency with regulatory compliance. The consensus? AI is no longer a futuristic concept but an operational necessity.

On the opening day we spoke with Tim Mason, Managing Director for Artificial Intelligence at Deutsche Bank, and Publicis Sapient VP Jan-Willem Weggemans, about the rise of Agentic AI. Look out for this feature in the May edition of FinTech Strategy Magazine. Publicis Sapient also hosted an AI Champions Meet Up.

The Future of Payments and Open Banking

With open banking continuing to disrupt traditional financial models, this year’s summit included multiple sessions on its evolution. Speakers from Visa, Mastercard and Stripe explored how real-time payments and digital wallets are reshaping the customer experience.

One of the most engaging sessions was on CBDCs (Central Bank Digital Currencies) and the impact of digital currencies on global trade. Representatives from the Bank of England and the European Central Bank provided valuable insights into regulatory developments and the long-term feasibility of CBDCs in mainstream banking.

Sustainability and ESG in Finance

The financial industry’s role in Environmental, Social, and Governance (ESG) initiatives was another critical theme. With growing investor interest in sustainable finance, executives from Barclays, NatWest, and BlackRock discussed how banks can integrate ESG principles into lending and investment strategies.

A major highlight was a fireside chat with Ana Botín, Executive Chairman of Santander Group, who emphasised the need for banks to take the lead in financing climate action while maintaining profitability. She stressed that FinTech innovation must align with sustainability goals to drive real change.

Notable Speakers & Thought Leadership

MoneyLIVE Summit 2025 featured an impressive lineup of speakers, including CEOs, policymakers, and FinTech pioneers. Notable names included:

  • Francesca Carlesi (CEO, Revolut UK) – Discussed the role of challenger banks in redefining customer expectations.
  • Taylan Turan (CEO, Retail Banking, HSBC) – Spoke about how traditional banks must adapt to stay competitive in an increasingly digital world.
  • Saif Malik (CEO, UK, Standard Chartered Bank) – Shared insights on the rise of embedded finance and its impact on global banking.
  • Anne Boden (Founder, Starling Bank) – Highlighted the impact of neobanks on legacy banking institutions.
  • Google Cloud & AWS Representatives – Covered AI’s growing role in fraud prevention and customer engagement.
  • Lee McNabb (Head of Payment Strategy, NatWest) – Shared views on modernising core payment architecture for the long term.

The diversity of perspectives provided attendees with a well-rounded understanding of the industry’s challenges and opportunities in the coming years.

MoneyLIVE Networking & Attendee Experience

Networking has always been a key highlight of MoneyLIVE Summit, and the 2025 edition did not disappoint. The event provided ample opportunities for professionals to connect, with dedicated networking zones, private meeting areas, and an exclusive VIP lounge for C-level executives.

The FinTech Startup Village was a must-visit area, showcasing some of the most innovative fintech startups in Europe. Several emerging companies, specializing in AI-driven financial advisory, blockchain-based payments, and RegTech solutions, presented their groundbreaking products.

A standout initiative was the Women in Finance Roundtable, which focused on fostering greater gender diversity in leadership roles within the financial industry. Featuring influential female leaders from Citi, JPMorgan, and Monzo, the discussion encouraged actionable steps towards inclusivity and representation. Publicis Sapient also hosted a networking session on Celebrating Women in Finance.

Exhibition & Innovation Showcase

The exhibition hall was bustling with activity, featuring booths from major players like IBM, Microsoft, Accenture, and Salesforce, as well as FinTech disruptors showcasing cutting-edge solutions. Attendees had the opportunity to experience hands-on product demos, including AI-powered chatbots, biometric authentication for secure banking, and blockchain-based smart contract platforms.

One of the most talked-about innovations was Quantum Computing in Financial Services, presented by IBM. Experts explored how quantum computing could enhance complex financial modelling, risk analysis, and fraud detection, potentially transforming the industry in the next decade.

Key Takeaways & Industry Impact

MoneyLIVE Summit reaffirmed its reputation as a forward-thinking, insightful event that brings together the brightest minds in finance and technology. Some of the key takeaways included:

  • AI is mainstream – Banks and fintech firms must embrace AI-driven solutions to enhance customer experience and operational efficiency.
  • Payments are evolving rapidly – With open banking, digital wallets, and real-time payments on the rise, banks need to innovate or risk being left behind.
  • Cybersecurity remains a top priority – With increased digital transactions, fraud prevention and regulatory compliance are more critical than ever.
  • Sustainability cannot be ignored – ESG-focused financial strategies are no longer optional but a necessity for long-term growth and investor confidence.
  • Embedded Finance is the future – Traditional banks and fintechs must collaborate to integrate financial services seamlessly into everyday life.

MoneyLIVE: The Verdict

MoneyLIVE Summit 2025 lived up to expectations, delivering a stellar combination of thought leadership, cutting-edge technology showcases and unparalleled networking opportunities. For professionals in banking, payments, fintech, or regulatory compliance, this event provided invaluable insights into the industry’s trajectory.

The only potential downside? With so many high-quality sessions running simultaneously, attendees had to make tough choices about which discussions to prioritise. However, the availability of on-demand session recordings meant that all the key insights attendees need were available.

With an impressive lineup of speakers, a strong focus on industry trends, and excellent networking opportunities, MoneyLIVE Summit remains a must-attend event for financial professionals looking to stay ahead in an ever-evolving landscape.

  • Artificial Intelligence in FinTech
  • Digital Payments
  • Embedded Finance

Author

Philipp Buschmann

Published

12 March 2025

Estimated Read time

6Mins

Philipp Buschmann, co-founder and CEO of AAZZUR, looks at the changing face of Embedded Finance and the rise of the API economy

The business world is changing. If you are paying attention, you will notice one of the most exciting transformations happening right now is Embedded Finance. We hear a lot about APIs (Application Programming Interfaces) and how they power our digital lives. However, what’s really grabbing attention is the rise of the API economy. Specifically, people are excited about how embedded finance is reshaping how businesses interact with their customers.

So, what’s all the fuss about, and why should you care? Let’s dive in.

What is Embedded Finance Anyway?

At its core, Embedded Finance means integrating financial services into non-financial platforms. It allows companies to offer banking-like services – think payments, lending, and insurance – directly within their apps or websites, without needing to be a bank themselves.

It’s like how Uber lets you pay for your ride without ever leaving the app. Uber isn’t a bank, but through embedded finance, it can offer seamless payment options, providing an effortless user experience. The user doesn’t need to think about the financial side of things; it just happens in the background. And that’s the magic of embedded finance – it’s smooth, simple, and frictionless.

APIs: The Backbone of Seamless Integration

APIs (Application Programming Interfaces) are the unsung heroes enabling the smooth interaction between different software systems. They allow platforms to communicate and share data effortlessly, acting as bridges between various services. For instance, when companies like Airbnb incorporate payment processing, they rely on APIs to connect with third-party providers like Stripe or PayPal. Without these connections, seamless financial interactions would not be impossible.

In the past, businesses that wanted to offer financial services had to build out much of the infrastructure themselves. However, with the rise of the API economy, this complexity has been drastically reduced. Companies can now integrate ready-made financial services quickly and focus on their core offerings. 

However, while APIs handle much of the heavy lifting, they aren’t the whole solution. They still need to be connected to the devices or systems using them. This involves stitching them together through a middle layer that coordinates the various API functions, along with coding a front-end interface that users interact with.

In essence, APIs provide the building blocks, but there’s still a need for a tailored architecture to ensure everything operates smoothly – from the back-end infrastructure to the user-friendly front end. This layered approach ensures businesses can offer a seamless experience without getting bogged down by technical complexities.

Why the API Economy is Booming

The API economy is booming because it allows businesses to be more agile, innovative, and customer-centric. APIs give companies the flexibility to offer services they wouldn’t have been able to in the past. A clothing retailer can offer point-of-sale (POS) financing without becoming a bank, or a fitness app can offer health insurance with the click of a button.

Think about Klarna, a company that’s become a household name by offering “buy now, pay later” services. Klarna partners with thousands of retailers, allowing them to provide flexible payment options directly within their checkout process. The retailer doesn’t have to worry about the complexities of lending—it’s all handled by Klarna’s Embedded Finance platform through APIs. 

This creates a win-win situation: customers get more flexible payment options, and retailers can drive conversions without any of the financial headaches.

How Embedded Finance is Connecting Customers to the World

Embedded Finance is all about breaking down barriers between industries and creating better, more holistic experiences for customers. And it’s not just about payments—it extends to lending, insurance, and even investments.

Take Revolut, the digital bank that started as a foreign exchange app but now offers everything from insurance to cryptocurrency trading. By using APIs to embed these financial services into their platform, Revolut has transformed into an all-in-one financial hub. Customers don’t need to visit different apps or websites for banking, insurance, or investments – they can do it all within Revolut.

The world of e-commerce has certainly embraced the world of embedded finance, Shopify, the e-commerce platform, has built it directly into its ecosystem. Through its Shopify Capital programme, the company offers its merchants quick access to business loans. This seamless integration is made possible by APIs, allowing Shopify to assess a merchant’s financial data and offer lending without the need for the merchant to seek out external financing. It’s fast, convenient, and keeps businesses within the Shopify ecosystem, further strengthening customer loyalty.

A New Level of Personalisation

This is more than just making payments easier – it’s about giving customers a more personalised, seamless experience. By tapping into financial data, businesses can offer products and services that really hit the mark for each individual.

Take travel apps like Skyscanner, for example. They’ve made things super convenient by embedding travel insurance right into the booking process, so, when you’re booking a flight, you can easily add travel insurance without even leaving the app. It’s all about creating a one-stop shop that gives you exactly what you need, right when you need it.

The Future 

The API economy, particularly in the realm of Embedded Finance, is just getting started. Over the next few years, we can expect to see more industries leveraging this technology to enhance their offerings and create richer customer experiences. Everything from health tech to real estate is ripe for disruption.

Businesses that adopt embedded finance solutions early will have a competitive edge. They’ll be able to offer seamless, integrated experiences that meet the modern consumer’s demand for convenience and personalisation.

However, it’s not just about jumping on the bandwagon. Companies need to be strategic about how they implement embedded finance. It’s not a one-size-fits-all solution, and it’s crucial to understand how these services align with your business goals and customer needs.

The rise of the API economy and embedded finance is opening up new doors for businesses and customers alike. By embedding financial services into non-financial platforms, companies are not only streamlining operations but also creating more value for their customers.

Embedded Finance is already making waves across industries, from retail to tech, and the businesses that are brave enough to embrace it are positioning themselves at the cutting edge of this transformation. For customers, it’s opening the door to a world that’s more connected, convenient, and tailored to their needs. It’s not about whether embedded finance will change the way we do business – it’s about how quickly it’s happening, and which companies are ready to step up and lead the charge. 

So, whether you’re running an e-commerce business, developing a tech platform, or simply thinking about how to better serve your customers, it’s time to consider how embedded finance can connect your customers to the world in ways you never thought possible. 

The future is embedded, and it’s here.

  • Embedded Finance

Author

Dan Brightmore

Published

11 March 2025

Estimated Read time

2Mins

The UK-Australia Insurtech Pathway has been introduced as a joint effort to support insurance technology firms seeking expansion opportunities in…

The UK-Australia Insurtech Pathway has been introduced as a joint effort to support insurance technology firms seeking expansion opportunities in both markets.

The programme was launched in Australia on 18 February 2025, while a launch event is scheduled in the UK on 20 March 2025. 

It has been developed through a partnership between the UK’s Department for Business and Trade (DBT), Insurtech UK, and Insurtech Australia. The initiative is designed to help Insurtech companies navigate regulatory frameworks, establish business operations and connect with investors and industry stakeholders.

InsurTech Pathway

The pathway will offer structured support to selected firms looking to enter either market, addressing key challenges related to compliance, business development, and market integration.

The UK and Australia both have well-established insurance sectors that encourage innovation through regulatory structures and technology adoption.

The Insurtech Pathway aims to lower entry barriers for firms by providing targeted guidance and fostering industry collaboration.

The initiative builds on the UK-Australia Free Trade Agreement (FTA), which took effect on May 31, 2023. The agreement is intended to reduce trade restrictions and facilitate easier market entry for businesses, including through streamlined visa pathways, expanded access to government procurement, and lower investment barriers.

Facilitating cross-border market access

Louise Cantillon, Deputy Trade Commissioner for Australia and New Zealand, said the initiative reflects both regions’ commitment to strengthening trade ties in financial services and technology:

“By working together, we can unlock new opportunities for insurtech companies in both markets, driving innovation and supporting job creation.”

Insurtech UK CEO Melissa Collett said the initiative aligns with UK firms’ interest in the Australian market:

“Insurtechs consistently feedback to us on their appetite for the Australian market due to its strong insurance industry, wide-spread insurance uptake and anglophone ties.”

Simone Dossetor, CEO of Insurtech Australia, further highlighted the pathway’s benefits:

“The UK is the top-rated market for global expansion for our insurtech members and with Australia being the fourth largest market for Lloyd’s there are strong synergies between the two regions.”

The program will provide tailored support, including regulatory and compliance guidance, networking with insurers and investors, trade delegations, and engagement with key regulatory authorities to streamline market entry.

  • InsurTech

Author

EY Insurance Leaders: Isabelle Santenac (Global), Jeff Gill (Americas), Anita Sun-Young Bong (Asia-Pacific) & Philip Vermeulen (EMEIA)

Published

7 March 2025

Estimated Read time

6Mins

EY Insurance Leaders Isabelle Santenac (Global), Jeff Gill (Americas), Anita Sun-Young Bong (Asia-Pacific) & Philip Vermeulen (EMEIA) present EY’s Global Insurance Outlook 2025 report. Learn how insurers can embrace InsurTech to accelerate value creation from gaps to gains

Even as shifting global dynamics challenge insurers, EY’s 2025 Global Insurance Outlook Report shows there have never been more viable paths to innovation-led growth across the industry. Indeed, the huge gaps in protections against cyber and climate threats – with 99% of losses from cyberattacks and 60% from natural disasters uninsured – plus the massive shortfall in retirement savings present compelling value creation opportunities. Strategically orienting the enterprise around richer data and fully modernised technology is one critical step.

Uninsured Losses

99% of losses from cyber-attacks are uninsured

60% of losses from natural catastrophes are uninsured

But whether insurers prioritise new product development, M&A or geographic expansion in their growth strategies, a few key actions can unlock growth through innovation.

1. Design purposeful products

The biggest protection gaps – retirement savings and climate- are poised to get even bigger. The global retirement savings gap is set to grow from US$106 trillion in 2022 to US$483 trillion in 2025. Thanks to longer lifespans and aging populations worldwide, there is greater need for products that deliver income for older citizens. That’s how insurers can promote financial security across society.

The “silver tsunami” – the huge demographic wave of Baby Boomers reaching retirement age – will cause a spike in demand for financial estate planning services as well as life and health insurance augmented with wellness programs. In the US alone, those aged 65 and over will grow from 58 million in 2023 to 82 million in 2050. Leading insurers will need to position themselves for the coming transfer of assets by demonstrating clear value propositions.

Global Retirement Savings Gaps

$106t in 2022

$403t projected gap in 2050

Purpose can also provide the motivation to deliver climate solutions with more robust coverages and tailored prevention services for the huge populations – over 40% worldwide, according to Geneva Association – that live in high-risk areas. Strengthening climate protections necessitates rethinking traditional approaches to risk management, pricing and claims modelling. Purpose can also fuel positive collaborations and partnerships with governments and other stakeholders, an important step given the increasing likelihood of new government mandates.

US Citizens Aged 65+

58m in 2023

82m in 2025 (projected)

2. Personalise offerings to expand share of wallet

Usage-based products, modular add-on features and tailored pricing demonstrate to consumers that you are committed to serving their unique needs – a proven way to promote loyalty and engagement. Artificial intelligence (AI) tools can help in this area with tailored messaging, more accurate pricing and faster underwriting and binding processes.

On-demand coverage and real-time risk prevention are other ways that personalisation strategies can add value. AI and advanced analytics can also target the highest-potential customers for product bundles and other offerings that maximise customer value.

Technology Boost

10-25% increase in operating profits for insurers with successful data and analytics strategies

35% increase in employees’ underwriting capacity from generative AI (GenAI)-enabled automation

3. Seek innovation at scale

With a lean and highly automated operating environment, insurers can look to scale low-margin products to new segments via partners and ecosystems and other channels. The rapid expansion of embedded offerings demonstrates what’s possible.

Parametric insurance – policies that pay out when specific events occur – expands the type of attractive products insurers can deliver to new customers and is expected to grow to US$29.3 billion by 2031. Parametric solutions have gained traction in the agricultural industry and as protection against natural disasters, but can also be applied to business interruptions, supply chain disruptions and cyber-attacks.

Parametric Insurance Market Size

$11.7b in 2021

$29.3b in 2023

4. Use regulation as a prompt to innovate

The combination of more and more stringent rules in Europe and softening oversight in the US may create an unbalanced competitive playing field, with 61% of insurers cite evolving regulatory requirements as the top operational challenge for the year ahead. But firms that go beyond a minimalist, check-the-box approach may generate business value from their compliance programs.


Consider how the EU Financial Data Access (FiDA) legislation, slated to be enacted in 2025, paves the way for consent-based data sharing across pension, savings and nonlife insurance companies and products. That’s an invitation for firms seeking to expand their offerings. Similarly, the opportunity to participate in government pension schemes requires insurers to enhance their ability to share data securely and seamlessly. The Danish Compromise is reshaping the competitive landscape by creating new opportunities in bancassurance channels in Europe. Lastly, more detailed disclosure and reporting standards should prompt more automation and integration of data flows.

Regulation Prep

61% of insurers cite evolving regulatory requirements as the top operational challenge for the year ahead

5. Embrace a unified data strategy for the entire enterprise

Success in the digital age demands that every business have a unified data strategy – one that is comprehensive and led by the C-suite. Because better data underpins every aspect of the business and is crucial to innovation, the data and technology agenda must be driven by the CEO, rather than the IT team. Further, strategic planning and resource allocations – basically any and all senior management decisions – should be redesigned to reflect the richer data sets executives now have at their disposal.


A data strategy must reflect the need to harness the power of AI and other advanced technologies and define the necessary components of a flexible, future-ready data infrastructure. It will also need to establish appropriately robust governance models and controls environments for fully automated processes to ensure quality and build trust.

6. Commit to serving the underserved

What industry wouldn’t like to find tens of millions of new customers? For insurers, devising new solutions (e.g., micro coverages, starter policies) for just 1% of the estimated 4 billion underserved people worldwide could result in 40 million new customers, according to research from Forrester. Here again, it’s all about purpose – delivering protections to the people who need them most.

New products – more affordable, easier to buy and modify – hold the key. Parametric policies, microinsurance for smaller farmers and precise coverages for small businesses and gig workers are just a few of the ways to create value for underserved segments. Carriers in some emerging markets offer health and life insurance for as little as $0.20 per month. It will take bold strategic thinking and creative action to deliver what these customers want (and can afford), but the underserved (who contribute to the lion’s share of the worldwide protection gap) offer the biggest potential for insurers to sustain their solid bottom-line performance.

Serving the Underserved

40m projected new customers from engaging just 1% of the 4 billion uninsured, low-income people worldwide

Summary 

Volatility and uncertainty – both within individual markets and across regions – define the global insurance industry to an extent not seen in decades. The run of economic prosperity and integration that benefitted the financial services sector for several decades seems gone forever. But insurers are uniquely qualified to create value during periods of instability. Those that target investments in AI-enabled tech and stronger data management capabilities to personalise communications and products will be able to create more value, create it faster and deliver it to more customers and communities than ever before.

Read the full Global Outlook Insurance Report here

  • InsurTech

Author

Dan Brightmore

Published

6 March 2025

Estimated Read time

5Mins

Read in brochure format

Our maiden cover story follows the irresistible global rise of Revolut and the customer-focused growth agenda for the leading global…

Our maiden cover story follows the irresistible global rise of Revolut and the customer-focused growth agenda for the leading global financial technology company.

Read the launch issue of FinTech Strategy here

Revolut: All-in-one digital money management

Our cover story follows the irresistible global rise of Revolut. We hear from its Australia & NZ CEO Matt Baxby about the customer-focused growth agenda for the leading global financial technology company. “Traditional banks are great at putting their head in the clouds around strategy and what the vision for the future looks like. Where they really fail is translating that to what needs to happen in the next quarter to begin to realise that vision. And that’s where Revolut’s strengths lie, with a real orientation to action.” 

ClearBank: A new era in Financial Services

We speak with ClearBank’s UK CEO, Emma Hagan, about how the digital bank is disrupting the market to deliver regulated banking infrastructure – at speed. “We are not encumbered by legacy platforms, systems or technology and don’t have to battle outdated processes. Everything was built new based on what our clients need from an infrastructure-type bank in the market.”

NatWest: Banking open for all

Head of Group Payment Strategy, Lee McNabb, explains how a customer-centric vision, allied with a culture of innovation, is positioning NatWest at the heart of UK plc’s Open Banking revolution: “The market we live in is largely digital, but we have to be where customers are and meet their needs where they want them to be met. That could be in physical locations, through our app, or that could be leveraging the data we have to give them better bespoke insights. The important thing is balance… At NatWest, we’ll keep pushing the envelope on payments for a clear view of the bigger picture with banking that’s open for everyone.”

EBRD: People, Purpose & Technology

We speak with the European Bank for Reconstruction & Development’s Managing Director for Information Technology, Subhash Chandra Jose. With the help of Hexaware’s innovation, his team are delivering a transformation programme to support the bank’s global investment efforts: “The sweet spot for EBRD is a triangular union of purpose, people, and technology all coming together. This gives me energy to do something innovative every day to positively impact my team and our work for the organisation across our countries of operation. Ultimately, if we don’t get the technology basics right, we can’t best utilise the funds we have to make a real difference across the bank’s global efforts.”

Innovation Group: Enabling the future of Insurance

“What we’ve achieved at Innovation Group is truly disruptive,” reflects Group Chief Technology Officer James Coggin. “Our acquisition by one of the world’s largest insurance companies validated the strategy we pursued with our Gateway platform. We put the platform at the heart of an ecosystem of insurers, service providers and their customers. It has proved to be a powerful approach.”

OSB Group: Building the bank of the future

Group Chief Transformation Officer Matt Baillie talks to Interface about maintaining the soul of a FinTech with the gravitas of a FTSE business during a full stack tech transformation at OSB Group. “We’ve found the balance between making sure we maintain regulatory compliance and keeping up with customer expectations while making the required propositional changes to keep pace with markets on our existing savings and lending platforms.”

Begbies Traynor Group: A strategic approach to digital transformation

We learn how Begbies Traynor Group is taking a strategic approach to digital transformation… Group CIO Andy Harper talks to Interface about building cultural consensus, innovation, addressing tech debt and scaling with AI: “My approach to IT leadership involves creating enough headroom to handle transformation while keeping the lights on.”

Read the launch issue of FinTech Strategy here

Author

Dan Brightmore

Published

3 March 2025

Estimated Read time

2Mins

MoneyLIVE Summit is coming to London’s Business Design Centre March 10-11. Book your tickets now!

Hosted in the FinTech capital of the world, MoneyLIVE Summit is the global payments and banking event bringing together industry leaders at the top of their game. This is where ground-breaking partnerships are forged, where innovation is accelerated and where the brightest ideas are born.

MoneyLIVE Summit sets the agenda for the future of banking and payments

For over 30 years, MoneyLIVE has brought together the movers and shakers of the banking and payments industry. Through impactful conferences, webinars, reports, roundtables and digital content.

Join 1500+ attendees and hear from 200 expert speakers across five stages. Revolut’s UK CEO Dr Francesca Carlesi, Lloyds Banking Group COO Ron van Kemenade, Standard Chartered UK CEO Saif Malik, ABN-AMRO’s CDO Jorissa Neutelings and Groupe Crédit Agricole Group COO Philippe Coue are among the baking leaders sharing insights across Payments Infrastructure, Digital ID, AI & Operations, CX, Digital currencies and Blockchain, Open Banking and much more.

“An unmissable event for those serious about banking and payments transformation.”
Global Head of Strategy & Innovation, ING

Startup City

Welcome to Startup City, the innovation epicentre of MoneyLIVE Summit 2025. This designated hub is designed to accelerate start-up and scale-up growth, featuring a dynamic stage, exclusive networking zone, and high-impact deal booths.

If you’re on the hunt for funding, seeking scaleup opportunities, or looking to forge distribution partnerships, you’ve found your ultimate arena.

AI-powered Networking at MoneyLIVE Summit

4000+ QUALIFIED MEETINGS & CONNECTIONS

Benefit from:

The AI matchmaking tool

Search, sort and filter the full attendee list

Instant messaging

Book and accept meetings

Build your own personal agenda

Book your ticket now!

  • Digital Payments
  • Neobanking

Author

Dan Brightmore

Published

25 February 2025

Estimated Read time

5Mins

Brendan Thorpe, Customer Success Manager at Auriga, on how banks can gain valuable insights from ATM data

Everyday customer interactions with ATMs or ASSTs to withdraw cash or check their account means these touchpoints emit hundreds of thousands of data points per day. This data holds the answers to how customers interact with those end points and how they are performing. However, currently this data is not being fully analysed or harnessed at all.

Data Analytics

This is surprising when you consider how better data analytics is widely understood to be crucial to enable banks to stay ahead of the competition. Indeed, one major study found that nearly half (48 percent) of banking executives globally agreed on this. However, many do little with it. The data which is harvested from the self-service banking network, including ATMs and ASSTs, is a critical way for banks to lower their operational costs. At the same time it can improve their offerings and increase their bottom line.

Real-time data collection and analysis is more than just critical for managing operational costs. It also plays a significant role in how banks realise their omnichannel ambitions to improve customer engagement and experience. For this to be successful, banks must leverage tools which provide actionable insights into performance across a number of channels including in-person services, ATMs, online and apps. The insights which are collected on these channels provide a complete and integrated picture of banking performance across all touchpoints.

Actionable Insights from Data

No matter how a customer interacts with the bank, every touchpoint provides large amounts of data which can be collected, sorted, and analysed for actionable insights. However, taking this information from raw data and transforming it into valuable insights is a challenge for many financial services organisations.

To do this, it involves strong data management and analytics processes and end-to-end mapping of all self-service banking channels, in-person and online. Real-time insights are also key to understanding how the network is performing and how customers are interacting with the endpoints. Importantly, this information must be easily accessed throughout the organisation. Doing this will enable the bank to identify if there are any inefficiencies or issues throughout the network which can be fixed swiftly, with minimal disruption to services.

Significantly, with real-time monitoring, banks can see any attacks on their services or endpoints from threat actors. The sensors are not only on the ATM. Those around the machines will be able to collect any interactions with the endpoints and in the surrounding area. For the most part, the sensors will pick up harmless interactions, but other times this may be an indicator that a threat actor was trying to take money out of the machine. As such, collecting, sorting, and analysing real-time data from the sensors can protect the bank and their customers and mitigate any harmful threats.

Furthermore, predictive analytics and continuous monitoring will enable banks to forecast the future performance of each touchpoint. Banks are able to apply specific parameters. Depending on their current business objectives they can better understand how each service channel is forecasted to perform in a specific situation.

How advanced analytics is transforming banking

As budgets tighten with rising costs, banks need to approach their ATM networks in a smarter way to optimise cash management and data forecasting. Real-time data tracking gives banks a greater understanding into customer behaviour. This is key to service performance improvements, including knowing in real time whether the ATM self-service interface is working or not. However, banks must get their data right, before they lean on the insights.

From real-time monitoring of customer interactions, financial services institutions can collect data based on the transaction flow, which can indicate if there is a better way for customers to complete their transaction. This will allow banks to see where network inefficiencies lie and then drive a culture of continuous improvement. The ATM is a vital touchpoint for a full omnichannel service, so banks leveraging data in the right way will ensure that the endpoint and the network are more user friendly.

Moreover, real-time tracking will also enable banks to predict when cash cartridges need to be replenished. As such, this will ensure there is enough cash in the machines for customers, and be able to better forecast how much cash the endpoint will need. This creates efficiencies around how banks deliver cash to the machines that need it. It reduces their Cash-In-Transit (CIT), security, interest and insurance costs.

Digital Transformation

To make sure that banks are making the most out of the data, they should leverage a dynamic, industry-specific banking business analytics platform. This should be available to all in the business and be able to seamlessly integrate into their current systems. The platform must collect and analyse the data in real-time from all key touchpoints in a bank’s network. Importantly, this data should be converted into usable insights for customer behaviour and performance metrics for the ATM. This will enable banks to adapt their offerings to changes in customer needs and market conditions. This will place banks on the front foot so they can focus investment in the up-and-coming areas.

The banking industry shows no signs of slowing down when it comes to digital transformation and development. The key here is to understand how all service channels, in-person and online, are performing to ensure customer demands are met. The way to do this is through leveraging real-time insights and data analytics. Financial services organisations must transform their approach to self-service banking strategies as data analytics is not only a driver of competitiveness, but also of long-term success.

Learn more at https://www.aurigaspa.com/en/

  • Neobanking

Author

Dan Brightmore

Published

21 February 2025

Estimated Read time

3Mins

Read in brochure format

Parag Pawar, Partner – Banking & Financial Services, on how Hexaware’s services and platforms can streamline any transformation journey

Parag and his team at Hexaware have been working closely with the European Bank for Reconstruction & Development (EBRD) on a digital transformation program focused on the bank’s Compass ERP program.

This ongoing collaboration is set to scale to meet EBRD’s future needs says Parag: “Hexaware’s strategy is based on building and deploying AI-infused technology platforms. With our talented and passionate workforce, we are uniquely positioned to enable transformation.”

Why Hexaware?


With 32,000+ professionals across Asia Pacific, Europe, and the Americas, Hexaware—backed by The Carlyle Group—delivers a blend of deep domain expertise and transformative technologies.

Its proprietary platforms help address the unique challenges of financial services and FinTech:

  • RapidX™: Accelerates software engineering and code analysis, enabling legacy modernization and faster time-to-market.
  • Amaze®: This platform simplifies cloud migrations and helps customers streamline their cloud operations and leverage the potential of AI.
  • Tensai®: Drives automation, streamlining workflows and enhancing operational efficiency.

But technology is just part of the equation – expertise drives transformation. From modernising legacy systems to deploying intelligent automation, Hexaware’s tailored approach helps ensure that solutions align with your business goals.

Hexaware strives for a record of delivering scalable growth, reducing costs, and elevating customer experiences. Whether you’re an established financial leader or an emerging FinTech innovator, Hexaware looks forward to be your partner for thriving in the digital era.

Hexaware: Shaping the future of financial services, one solution at a time

Let’s transform together! Visit us at hexaware.com or contact us at marketing@hexaware.com to learn how we can support your business

“A CIO will only be as successful as the team and the partnerships they build around them. It’s why we chose Hexaware as the strategic partner for our Compass program, EBRD’s ERP transformation. Having the right partner to work closely with us is key to any successful change journey within an IT organisation. You can’t run a bank at the scale of EBRD without this type of partnership. The nuances required, the skill they’re offering along with the design thinking and innovation they’re able to bring to the table in a short space of time is truly impressive. We’re counting on Hexaware to continue making a big impact.”

Subhash Chandra Jose, Managing Director for Information Technology, EBRD

Click here to read more about EBRD’s journey towards delivering a transformation programme to support the bank’s global investment efforts

  • Fintech & Insurtech

Author

Dan Brightmore

Published

12 February 2025

Estimated Read time

1Min

Aviva, one of the UK’s leading insurance, wealth and retirement businesses, has chosen AutoRek, a leader in automated reconciliations, as its…

Aviva, one of the UK’s leading insurance, wealth and retirement businesses, has chosen AutoRek, a leader in automated reconciliations, as its reconciliation and CASS tool.

The collaboration will ensure greater efficiency and compliance through automation. Aviva will leverage AutoRek’s end-to-end platform to implement a fully audited, rules-driven reconciliation process, ensuring complete transparency for CASS auditors and internal stakeholders.

With AutoRek, Aviva will gain an improved automated solution for client money and regulatory reporting, reducing the manual effort and inherent risk associated with manual processing.

This new capability will enable Aviva to reduce operational inefficiencies, streamline compliance, and enhance overall financial control.

“Aviva is dedicated to investing in technology to further our growth strategy. Following an extensive tender process, we were highly impressed with the quality of the AutoRek tool. The implementation of the AutoRek solution will streamline our processes and allows us to confidently address future scalability and volume requirements.”

Chris Golland, Head of CASS & Middle Office, Aviva

“We’re thrilled to onboard Aviva as a client to the AutoRek platform, empowering them to achieve greater efficiency and accuracy in their operations. Together, we’re driving innovation and setting new benchmarks for financial excellence.”

Jack Niven, VP Sales, AutoRek

  • InsurTech

Author

Amber Thetford

Published

4 February 2025

Estimated Read time

4Mins

OnAfriq’s Amber Thetford, Chief Product Officer – Card issuing and processing, on how prepaid debit cards can enable companies to take advantage of of trade opportunities across the African continent

As businesses seek to expand across African borders, cashless payment solutions offer a safer method of transferring money. Prepaid debit cards provide security while mitigating many infrastructure and regulatory challenges.

The African Continental Free Trade Area Agreement (AfCTA) is moving into the operational phase. It is becoming clearer that part of its success lies in ensuring entrepreneurs and small businesses can effectively trade and receive payments across borders.

African Trade

As the African Union has noted, the trade area will be the biggest since the World Trade Organization was formed in 1995. Africa’s population is currently 1.2 billion people. A figure expected to reach 2.5 billion by 2050.

South Africa took its first step in making AfCTA a reality when former Minister of Trade, Industry, and Competition, Ebrahim Patel, launched the implementation of the start of preferential trade this year. The South African Revenue Service also certified two consignments to Ghana and Kenya.

Yet, with trade expected to grow among members from 15%-18%, a safe way of moving money is required given the risk that cash presents. Some nine-tenths of transactions in sub-Saharan Africa are, based on World Bank information, in cash.

Card payments in the digital ecosystem

The large amounts of cash involved in trade are also cumbersome and difficult to physically transport between markets. Card payments, part of the digital ecosystem, can enable efficient, secure, and transparent transactions. These are essential for facilitating trade.

Card payments can eliminate the need for manual intervention and reconciliation when it comes to banking and bookkeeping. This, the World Bank states, makes them, on average, three times more cost-effective than conventional purchase order costs.

Mobile money payments have greatly improved Africa’s ability to make cross-border payments. However, they do not meet the full scope of needs of individuals or businesses. As the United Nations points out, there are regulatory bottlenecks. Furthermore, a lack of interconnectivity among mobile transactions in some countries means people cannot transfer money across borders. Moreover, limitations of infrastructure, accessibility, and interoperability make it difficult for their users to access the global digital economy. As a result, this type of cross-border payment can be limited.

Prepaid cards can solve trade problems

There are solutions to these trade dilemmas. Prepaid cards can enable businesses and individuals to transact with global institutions and marketplaces without the need to own a bank account. This option removes a pain point for a business that would otherwise need to accept local alternative payment methods or cash. Navigating challenges like high fees, currency shocks and a lack of access to traditional banks can be simplified through prepaid cards. This makes them a pivotal instrument that enhances Africa’s connection to the global economy.

For example, one of OnAfriq’s customers provides payroll solutions for seafarers and cruise ships, which frequently travel to different countries. Once the card is loaded, it is very convenient for sailors to use it as one would a normal debit card. They can swipe to pay for purchases or transmit money across borders. The beauty of this option is that whoever is loading the card with money, can be based anywhere in the world. Moreover, the same is also true of the person holding the card.

Prepaid cards can also be used to manage expenses because they can be provided to managers. For example, a bookstore could make independent decisions about business-related purchases. But only up to a certain amount. This has the added advantage of speeding up operations as there are no lengthy delays across the company when it comes to acquiring stock. Furthermore, it goes some way towards eliminating fraud as the card has a set limit.

Larger companies with staff who travel extensively can also provide gratuities for their employees. They can then cover incidental expenses without having to dip into their own pockets or bring back paperwork to be reimbursed.

AfCTA dream can become a reality

A platform that simplifies a user’s ability to transfer money to cards brings the AfCTA dream closer to reality. The versatile power of prepaid cards can be used to promote free trade between countries and unite Africa’s fragmented payment landscape.

Prepaid solutions can aid businesses seeking to operate in other African countries to thrive – making AfCTA’s aim a reality and boosting economic growth for all.

  • Digital Payments

Author

Dan Brightmore

Published

31 January 2025

Estimated Read time

5Mins

Jan-Willem Weggemans, Vice President, Commercial Payments Lead at Publicis Sapient on the outlook for payments modernisation

The payments industry is transforming rapidly, driven by customer demand shifts, regulatory developments and technological advances. Payments players need a tailored innovation approach for each value opportunity, based on their strategic position and ambition and each driver of change.

Understanding the drivers of payments modernisation

Driven by technological advancements, shifting customer expectations and regulatory developments, banks and financial institutions must adapt their offerings. They must modernise their payments to remain competitive in this ever-evolving landscape as we start this new year.

Customers expect real-time, seamless and personalised payment experiences that are now standard expectations across financial services. Not only that, but users are demanding frictionless cross-border transactions, alongside advanced features like biometric authentication.

Massive advances in technological capabilities drive customer expectations. Cloud computing, data platforms, Artificial Intelligence (AI), and Application Programming Interfaces (APIs) enable faster, scalable, resilient, and more secure payment solutions. These enable opportunities to innovate customer propositions and experiences. Moreover, supporting the modernisation of processes and technologies can lower costs and improve resilience.

Regulatory developments are a key factor. From new (instant) payments schemes to ISO standards to KYC/AML requirements, there is an ongoing need to change/modernise the payments operating model. And possibly innovate client solutions.

For these reasons, legacy banks can struggle with the pace of change and inefficiencies. Including enabling FinTech disruptors to gain a competitive advantage. So, how can banks examine these learnings and implement better change?

Progressive modernisation and the impact of GenAI

Banks and financial institutions can take a tailored approach to payment innovation and modernisation. In all of these approaches, modernising an incumbent player with significant legacy challenges is generally a process of progressive modernisation. Big bang approaches and the building of neo banks to move a legacy bank forward have generally not delivered success.

Progressive modernisation enables a bank to move in a controlled way from the legacy to the modern state. This requires running the legacy and modern services in parallel. Meanwhile, the integration is enabled by decoupling the hardwired systems top and bottom (integration and data). Only then can you spin up the modern enterprise and core services and progressively direct more clients/transactions/products over the new stack.

Progressive modernisation is becoming more attractive and suitable for many clients. Furtherore, GenAI can materially alter the cost and duration of these programs, offering lower risk and a significantly improved business case. With new and innovative solutions that utilise GenAI at their core, the whole journey can be greatly accelerated. Including Legacy system discovery, Target state design, Backlog creation, and Building and Testing.

Three key approaches when facing the need to modernise Payments

Payments players are facing an ongoing modernisation need, driven by changing client behaviours, technology innovation and regulatory activism. 

Broadly, we recognise three approaches to payment modernisation, including:

Fix the edge – either top of the stack or bottom, a small fix, without touching 90% of the existing tech. 

Incremental uplift – installing a modern solution (but not fully end-to-end). For example, a new core system for a set of products/customers.

Move to native build – setting steps on the progressive modernisation journey, after investing in decoupling the hardwired legacy systems.

To select the right approach, we consider two key factors: the event and the players. The event looks at the size of the opportunity (or materiality of the threat) and the size/complexity of the change. The player looks at the performance of the existing operating model, whether payments are core, and whether the ambition is to be a leader in payments or to be part of the majority of players.

How a player’s participation strategy drives modernisation choices. A client offers white label card processing services, and in their market, they need to offer the most modern solution and lead with modern technology, AI, and embedded compliance/risk solutions. A major incumbent bank decided to invest primarily in customer value propositions, driving value from the broader client relationship. The bank opted for a processing-as-a-service model when it needed to modernise the processing platform.

Looking at the two extreme options, we see that fixing the edge works well for players where payments are not core, when they do not need to be the first mover, or when their existing operating model is performing well. From an event perspective, it fits when the opportunity is small and/or the change is minor in effort and complexity.

At the other end of the spectrum, moving on the journey to native build is most suited for players where payments are core. Where they want to be the first mover in the market, and where the existing operating model is facing major challenges. From an event perspective, it is more suited when the event supports a significant value opportunity (or threat to the business) and requires a significant change.

Making payments progress real

Many new payment options, including A2A payments and instant payments, offer incremental benefit cases for many players. These are not large enough to kick off the incremental modernisation journey. Thus, most players will opt for a “fix the edge” or “incremental” modernisation approach and wait for another event for a full modernisation.

Regarding regulation. The new ISO20022 standard is due to come into full force in November 2025. However, less than a third of messages were exchanged using the new standard in late 2024. An often cited reason for delays in implementing regulatory changes is the edge approach replanning required to keep up with the evolving set of rules regarding the ISO standards. The evolving set of rules is inevitable, as the regulator is responding to market experiences and feedback from trying to implement the initial rules set. Thus, in regulatory change with this level of impact, a cloud-native approach would be better, enabling a more nimble/agile response to continuous changes.

What is the next move?

Faced with the inevitable need to invest in payments, we suggest taking a portfolio approach and looking 2-3 years ahead when evaluating individual modernisation events. And your strengths/weaknesses and strategy. Modernisation is not just a technical upgrade but a strategic enabler that can drive efficiency, resilience, and innovation. You can ensure that each modernisation effort contributes to a cohesive, future-ready payments ecosystem by aligning your investments with long-term business goals. This approach will help you avoid costly short-term fixes. And build a scalable, agile infrastructure that supports evolving customer expectations, regulatory requirements, and competitive pressures.

  • Digital Payments

Author

Dan Brightmore

Published

27 January 2025

Estimated Read time

2Mins

ClearBank, the enabler of real-time clearing and embedded banking, recently announced its partnership with Airwallex. A leading global Digital Payments and…

ClearBank, the enabler of real-time clearing and embedded banking, recently announced its partnership with Airwallex. A leading global Digital Payments and financial platform for modern businesses. Through this collaboration, Airwallex will leverage ClearBank’s agency banking solution to enhance its UK offering with virtual business accounts, GBP collections, and Confirmation of Payee (CoP) functionality.

Partnering for Digital Payments with ClearBank

ClearBank has enabled the global FinTech to issue virtual accounts and IBANs under its own brand identity. This reinforces Airwallex’s robust financial platform, while also allowing the company to maintain seamless customer branding. Moreover, through the partnership, Airwallex will have access to UK payment schemes. These include Faster Payments, BACS, and CHAPS. Accelerating Airwallex’s strategic goal of helping businesses simplify their global Digital Payments and financial operations, unlock new opportunities, and grow without limits.

“Our priority is to provide businesses with fast, flexible and seamless financial services. ClearBank’s agency banking solution aligns perfectly with our vision, allowing us to enhance our product offering in the UK while maintaining our brand identity. The team’s deep understanding of our business needs and their speed of execution have been invaluable throughout the partnership development and integration process.”

Vivien Cheung, Head of Financial Partnerships – EMEA, Airwallex

The partnership is founded on the companies’ shared ambition to utilise innovative technology to bring streamlined financial services to more customers in new markets. Furthermore, it highlights a growing demand for innovative financial solutions that combine the flexibility of FinTech with the security of traditional banking. ClearBank’s cloud-based approach allows for efficient integration, enabling Airwallex to deliver the features and functionality businesses need to make Digital ayments faster and more cost-effective.

“We’re proud to partner with Airwallex as the business enters its next phase of growth. Our unique combination of innovation and security was essential in supporting the premium customer experience that Airwallex is looking to provide. We look forward to deepening our relationship with Airwallex as we explore further opportunities for collaboration.”

John Salter, Chief Customer Officer, ClearBank

About Airwallex 

Airwallex is a leading global financial platform for modern businesses, offering trusted solutions to manage everything from Digital Payments, treasury, and spend management to embedded finance. With our proprietary infrastructure, Airwallex takes the friction out of global payments and financial operations, empowering businesses of all sizes to unlock new opportunities and grow beyond borders. Proudly founded in Melbourne, Airwallex supports over 100,000 businesses globally and is trusted by brands such as Brex, Rippling, Navan, Qantas, SHEIN and many more. For more information, visit http://www.airwallex.com

About ClearBank 

ClearBank is a purpose-built, technology-enabled clearing bank. Through its banking licence and intelligent, robust technology solutions, ClearBank enables its partners to offer real-time payment and innovative banking services to their customers. For more information, visit www.clear.bank

  • Digital Payments

Author

Dan Brightmore

Published

23 January 2025

Estimated Read time

2Mins

According to a new report published by WiseGuy Reports (WGR), The Insurtech Insurance Technology Market was valued at $ 31.05 billion in…

According to a new report published by WiseGuy Reports (WGR), The Insurtech Insurance Technology Market was valued at $ 31.05 billion in 2024 and is estimated to reach $322.7 billion by 2032. It is set for growth at a CAGR of 33.99% from 2025 to 2032.

InsurTech revolution gathers pace

The insurtech insurance technology market is revolutionising the traditional insurance sector by integrating advanced technologies such as artificial intelligence (AI), machine learning (ML), blockchain, and data analytics. InsurTech solutions streamline operations, improve customer experiences, and enable data-driven decision-making. These technologies cater to various aspects of insurance, including underwriting, claims processing, and policy management.

The market has witnessed robust growth due to the rising demand for digital solutions and personalised insurance products. With startups and established insurers collaborating, the industry is becoming more agile and competitive, creating new opportunities for innovation in risk assessment and fraud prevention.

InsurTech’s key players

The InsurTech insurance technology market features a dynamic mix of startups and established players. Key companies include Lemonade, Metromile, and Hippo, known for their innovative approaches to insurance delivery. Traditional insurers such as AXA and Zurich are also investing in InsurTech partnerships to modernise their operations.

Companies like Policybazaar and Root Insurance are leveraging AI and big data to enhance customer engagement. Furthermore, tech giants like Amazon and Google are exploring the sector, further intensifying competition. Moreover, these players focus on integrating advanced technologies and developing user-centric platforms to stay ahead in a rapidly evolving market.

  • InsurTech

Author

Stuart Cheetham

Published

22 January 2025

Estimated Read time

4Mins

Stuart Cheetham, CEO at MPowered Mortgages, on how AI-powered technology allows mortgage lenders to fully underwrite loan applications in minutes

AI technologies are about to have a huge impact on the mortgage market… In November last year the founders of Revolut announced plans to launch a “fully digital, instant” mortgage in Lithuania and Ireland in 2025. Details were sketchy but the company said that mortgages will be part of a “comprehensive credit offering” it intends to build.

Neobanking progress with AI

Digital only banks, like Revolut and Monzo, are renowned for using the power of technology and data science to create efficiencies and improve customer experience. The reason neobanks have been so successful is because they provide a modern, convenient and cost-effective alternative to traditional banking. This is done a transparent way, through fast onboarding, 24/7 app access and instant notifications. All with a user-friendly interface.

While many financial services sectors have embraced financial technology in the way Revolut and Monzo have for the retail banking sector, the mortgage sector has struggled to make a real breakthrough here. Why hasn’t the mortgage industry caught up one might ask? Mortgages are complex financial products, existing at the intersection of justifiably stringent regulation. They represent the single biggest financial commitment people make in their lifetimes. Financial advisors who source mortgages on behalf of borrowers are hindered at every stage by outdated systems and inadequate or commoditised product offerings.

Disrupting the Mortgage Market

The mortgage industry is one financial services sector that has been yearning to be shaken up by the FinTech industry for some time. While it’s encouraging to see a successful brand like Revolut enter this market, what is less known is that huge progress is being made already by smaller and less well known FinTech disruptors.

For example, the mortgage technology company MQube has developed a “new fast way” of delivering mortgage offers using the cutting edge of AI technology and data science. Today, it still typically takes several weeks to get a confirmed mortgage offer. This is one of the major reasons the homebuying process can be so time consuming and stressful for brokers and borrowers. The mortgage process is characterised by bureaucracy, paperwork, delays and often frustratingly opaque decision-making by lenders. This leads to stress and uncertainty for consumers, and their advisors. And at a time when they have plenty of other property-purchase related challenges to contend with.

Our proprietary research shows us, and this will come as no surprise, that the biggest pain point for borrowers and brokers about the mortgage process is that it is time consuming, paperwork heavy and stressful. Imagine a world where getting a mortgage is as quick and as easy as getting car insurance. This is MQube’s vision.

MQube – AI-powered Mortgages

MQube‘s AI-powered mortgage origination platform allows mortgage lenders to fully underwrite loan applications in minutes. MPowered Mortgages is MQube’s lending arm and competes for residential business alongside the big banks. It uses MQube’s AI-driven mortgage origination platform and is now able to offer a lending decision within one working day to 96% of completed applications.

The platform leverages state-of-the-art artificial intelligence and machine learning to assess around 20,000 data points in real-time. This enables lenders to process mortgage applications in minutes, transforming the industry standard of days or weeks. It automates the entire underwriting journey, from application to completion. This helps to provide a faster service, reduce costs, mitigate risks, and to make strategic adjustments quickly and effectively. By assessing documents and data in real-time during the application, it is able to build a clearer and deeper understanding of a consumers’ circumstances and specific needs. Applicants are never asked questions when MQube can independently source and verify that data, leading to a streamlined and paperless experience. Furthermore, this whole process reduces dependency on human intervention.

The benefits of AI

More and more lenders are seeing the benefits AI and financial technology can bring to their business. They are beginning to adopt such AI-driven financial systems which are scalable and serve to address systemic problems in this industry. The mortgage industry is still some way behind the neobanks, but what’s hugely exciting to see is the progress that has been made so far. Moreover, if FinTechs continue to innovate this sector and if lenders continue to embrace financial technology and use at scale, then getting a mortgage could genuinely become a quick, easy and stress free process. At this point, the mortgage industry could begin to see a shift in consumer perception and change in consumer behaviour. A new frontier for the mortgage industry is upon us.

  • Artificial Intelligence in FinTech
  • Neobanking

Author

Dan Brightmore

Published

21 January 2025

Estimated Read time

2Mins

Plumery, a digital banking experience platform for customer-centric banking, today announced it has launched Digital Lending. The fully end-to-end digital…

Plumery, a digital banking experience platform for customer-centric banking, today announced it has launched Digital Lending. The fully end-to-end digital loan origination journey allows bank customers to go from application to disbursement in 180 seconds.

Digital Lending

Plumery Digital Lending offers market-leading speed with banks, digital lenders and other financial institutions who are able to launch their new lending products in as little as 18 weeks. Moreover, allowing firms to triple their loan portfolio and capacity while maintaining the same staffing levels.

Many financial institutions are still unable to offer a fully digital loan origination process to customers. This forces them to partially complete a process online before finalising with human intervention. Yet, firms need to move quickly to stay competitive in today’s fast-paced world and benefit from the highest interest rates in a decade. 

Transforming the loan process

“By transforming the loan origination process into a fully digital experience, banks and other financial institutions can meet the demand for seamless and efficient customer journeys. Firms can configure every aspect of the process, safe in the knowledge they are on top of bank-grade security and infrastructure.”

Ben Goldin, Founder and CEO of Plumery

Digital Lending includes:

  • Digital application through web and mobile interfaces
  • Secure capture and storage of customer information
  • Streamlined, compliant onboarding experience
  • Automated application processing and data collection
  • Integration with external data sources for accurate scoring and vindication
  • AI/machine learning driven credit decisioning with customisable rules
  • Digital document generation and e-signatures
  • Loan disbursement and integration with core banking or loan management systems

With customer journeys built on the Plumery platform, firms can align with their unique workflows or adapt to changing regulatory requirements – and continue making rapid improvements from there. Plumery offers tools which both developers and business users can employ to make final adjustments, ensuring fast and affordable automation.

About Plumery

Headquartered in the Netherlands, Plumery’s mission is to empower financial institutions worldwide, regardless of size, to craft distinctive, contemporary, and customer-centric mobile and web experiences.

Plumery operates with a diverse team that embodies a unique combination of seasoned expertise and vibrant innovation. This blend has been cultivated through years of experience at start-ups, scale-ups, and established financial institutions, and most notably at globally leading financial technology companies, where they were instrumental in creating disruptive digital banking solutions and platforms that now serve 300+ banks globally. 

Plumery’s Digital Success Fabric platform provides banks with the foundation for success beyond fast-time-to-market by expediting the development of their digital front ends while significantly cutting costs compared to in-house initiatives or solutions with high total cost of ownership (TCO).  

  • Neobanking

Author

Dan Brightmore

Published

20 January 2025

Estimated Read time

5Mins

Ben Hunter, Senior Director of Financial Services at Gigamon, on the impact of the Digital Operational Resilience Act (DORA) and what financial institutions can do to ensure lasting compliance

The Digital Operational Resilience Act (DORA) came into force on January 17th. It’s high time for financial institutions to refine their compliance and Cybersecurity efforts. This regulation isn’t just another box-ticking exercise. It represents a shift in the financial services industry that touches everyone in the ecosystem. And every corner of the organisations within it. From IT teams to the board, every department must pull together under a cohesive cyber strategy to meet the challenge. It’s not simply about systems and software. DORA demands a cultural shift toward organisation-wide cyber resilience.

At this stage, the big changes should already be in place. However, the focus now must be on the finer details. The overlooked pieces that could potentially make or break compliance and prove extremely costly. Organisations must tweak processes and ensure every element of their plan works seamlessly and aligns with the broader goal of operational resilience. Here are three areas of focus to perfect preparedness and ensure DORA compliance is not just a box checked but a new standard embraced by the whole organisation.

Criticality of third-party Cybersecurity management

One of DORA’s requirements is reducing reliance on single ICT service providers. This is designed to safeguard financial institutions against concentrated risk. By now, all structural changes should already be in place, with organisations diversifying their ICT providers. Or improving internal capabilities to reduce their external dependencies. However, compliance doesn’t end with restructuring. The focus must now shift from restructuring to managing these relationships effectively. Organisations should be looking to perfect their third-party risk assessment, monitoring, and due diligence strategies. They must ensure their processes for vetting ICT service providers are not just in place but are meticulously detailed. Contracts need to leave no room for ambiguity, with explicit terms outlining providers’ security and risk management strategies. These agreements must be revisited and stress-tested to confirm they align with DORA’s standards.

Equally critical is ironing out the specifics of ongoing monitoring and oversight. Institutions should be finalising the structure and frequency of their performance reviews and audits. Ensuring these mechanisms are robust enough to identify and address any emerging vulnerabilities. Moreover, by focusing on the details now, organisations can build a resilient operational framework that doesn’t just meet DORA’s requirements but builds resilience into their core operations for years to come.

Global efficiency through multi-cloud environments

Adopting a multi-cloud strategy has become essential for financial institutions operating on a global scale. It mitigates concentrated risk by avoiding dependence on a single provider and allows organisations to address the unique regulatory and operational challenges of different regions. However, the complexity of multi-cloud environments brings its own challenges. Particularly in ensuring the visibility and control required under DORA. This is why it’s crucial for organisations and their third parties to refine the tools and processes that support this level of visibility and allow the security teams to continuously monitor their environments.

According to recent data, 50% of CISOs say their confidence in risk management hinges on having full visibility into all data in motion, including encrypted and lateral traffic across both on-premises and cloud environments. This underscores the importance of advanced monitoring capabilities to effectively manage the complexities of multi-cloud infrastructures. While DORA mandates comprehensive visibility, the benefits go beyond just meeting compliance requirements. Deep observability strengthens organisations’ ability to detect vulnerabilities in real-time, ensuring seamless operations across regions and providers, and service continuity. For multi-cloud strategies to be effective, they must be paired with the right network-level monitoring capabilities. It’s important to build resilience from the inside out.

Organisational alignment to demonstrate Cybersecurity compliance

Demonstrating compliance isn’t just about avoiding fines and ticking regulatory boxes. It’s about preserving trust and protecting the organisation’s reputation. Reputational damage and financial penalties hit the top of the organisation hardest. This makes board-level engagement essential to ensuring Cybersecurity efforts are prioritised and aligned with broader business objectives. Boards must recognise that Cybersecurity is not a siloed function; it’s a key aspect of business resilience.

While security leaders are responsible for designing and implementing security strategies, their ability to deliver is directly tied to the board’s involvement. Board members control the decisions that shape an organisation’s Cybersecurity posture, from budget allocation to strategic priorities. Without their active engagement, security leaders may lack the resources, influence, or organisational buy-in necessary to implement comprehensive security measures. This can lead to significant gaps in compliance efforts and overall resilience.

To demonstrate compliance effectively, organisations need a unified approach to gathering, standardising, and presenting evidence to regulatory authorities. This includes aligning on consistent formats for documenting key areas like risk assessments, incident management, security testing, and third-party oversight. By finalising internal policies and leveraging automation tools, institutions can ensure their compliance evidence is regulator-ready and accessible. Such coordination not only satisfies DORA’s demands but also signals a strong, unified commitment to operational resilience. One that must come from the top and ripple throughout the entire organisation.

With penalties for non-compliance reaching up to 2% of global annual turnover, financial institutions cannot afford to be anything less than fully aligned on their compliance strategies going forward. Furthermore, as the broader compliance frameworks are now finalised, the focus must shift to perfecting the finer details that will ensure long-term resilience and success.

About Gigamon

Gigamon offers a deep observability pipeline that efficiently delivers network-derived intelligence and insights to your cloud, security, and observability tools. This eliminates security blind spots, optimises network traffic and reduces tool costs. Therefore, enabling you to better secure and manage your hybrid cloud infrastructure.

  • Cybersecurity in FinTech

Author

Dan Brightmore

Published

16 January 2025

Estimated Read time

2Mins

Industry leaders join forces to host groundbreaking event during ETHDenver 2025 where Stablecoin innovation meets B2B finance

PayPal, Deloitte, and Bitwave will co-host On-Chain B2B Payments Day. A transformative event dedicated to accelerating the global adoption of Blockchain powered B2B payments.

Exploring Blockchain technologies

On-Chain B2B Payments Day will bring together hundreds of senior financial leaders, accountants, auditors, and enterprise executives on February 27 at ETHDenver. They will explore how stablecoins and Blockchain technologies are reshaping the future of payments for businesses.

“With the broader adoption of blockchain networks and digital assets, stablecoins play a critical role,” said Deloitte Tax LLP Partner, Global Tax Leader – Blockchain & Digital Assets, Rob Massey. “Business transactions take on a whole new dynamic when these ‘programmable’ funds interact with the software applications on a near real time basis. Furthermore, with that, we end up with unique tax, accounting and risk considerations.”

Redefining payments with Blockchain

The Blockchain event will be presented alongside ETHDenver – the annual conference for Ethereum developers and Blockchain advocates. On-Chain B2B Payments Day kicks off with a networking brunch and panel discussion featuring some of the leading voices in payment innovation. The event is sponsored by NetSuite alongside other key industry contributors.

“Stablecoins offer an unprecedented opportunity to transform payment operations for global business,” said Bitwave Co-Founder and COO, Amy Kalnoki. “At Bitwave, we expect to see on-chain payments become one of the fastest-growing areas of Blockchain adoption in 2025. Moreover, this event will provide financial leaders with insights into how on-chain technology will redefine cross-border payments, liquidity management, and real-time reporting.”

Why Attend On-Chain B2B Payments Day?

  • Gain Practical Insights: Learn from financial experts about accounting, tax, and regulatory frameworks for building a compliant and future-ready payment practice.
  • Discover Real-World Use Cases: Explore how stablecoins are transforming B2B payments, from accounts receivable (AR) to accounts payable (AP) and beyond.
  • Engage with Industry Leaders: Connect with top decision-makers from leading enterprises, institutions, and crypto-native organisations advancing on-chain payments between vendors and payers.

Bonus: Take the “Bitwave Vendor Payment Pledge” and join an exclusive network of business partners accepting stablecoin invoice payments.

  • Blockchain

Author

Ben Goldin

Published

15 January 2025

Estimated Read time

5Mins

Ben Goldin, Founder & CEO of Plumery, on how Digital Banking innovations are reshaping the financial landscape, creating a greener future and new opportunities for millions

Digital banking is making waves in emerging markets, evolving beyond simple transactions to deliver rapid access to credit, broaden economic inclusion, and support sustainable solutions. As smartphone adoption rises and AI reshapes lending processes, digital banking is significantly expanding in underbanked regions, enhancing financial inclusion for people and businesses while minimising environmental impact.

According to McKinsey, several trends have accelerated this Neobanking evolution in emerging markets. The pandemic drove a shift from cash to contactless and digital payments. E-commerce grew significantly – global transaction volumes increased by 25% from 2019 to 2020 and are expected to continue growing at 12-15% annually. Governments introduced cashless payment systems like Wave in Côte d’Ivoire, UPI in India, and Pix in Brazil to enhance interoperability and improve aid distribution. Furthermore, investor interest surged, with payments-focused fintechs receiving nearly 40% of the $5.2 billion in tech startup capital in Africa in 2021.

Together, these factors have fuelled innovation in digital finance. This has helped meet rising demand and enabled AI-driven, mobile-first platforms to deliver fast access to capital, fostering financial empowerment in underserved communities.

Additionally, smartphone penetration is set to reach 88% in Sub-Saharan Africa by 2030. Setting the stage for even greater financial inclusion. Combined with a growing focus on sustainability, digital banking in these regions is positioned to offer services that are both inclusive and environmentally conscious. Here’s a look at how digital banking is breaking down barriers, expanding financial empowerment, and building a greener future across emerging markets.

The evolution from basic transactions to fully-fledged Digital Banking

Digital banking initially gained traction by providing essential services like balance checks, peer-to-peer (P2P) transfers, and bill payments. This bridged gaps left by limited banking infrastructure. However, with evolving needs, digital banks and fintech companies now offer advanced products such as digital lending. This is among the most transformative aspects of digital banking in emerging markets.

Traditional access to credit was often challenging due to strict requirements, physical infrastructure, and extensive documentation. Digital lending platforms eliminate these barriers, enabling users to apply for loans directly through mobile devices, often receiving decisions within minutes.

AI-driven credit assessment models leverage alternative data points like mobile usage, purchase history, and digital wallet activity. This allows customers to secure funds without a formal credit record. Quick access to capital can be a lifeline for small business owners. Allowing them to act on opportunities as they arise. Digital lending thus meets immediate financial needs and supports broader economic growth by empowering local businesses.

Banking on a sustainable tomorrow

As digital banking expands, the need for environmentally sustainable operations becomes critical. The infrastructure supporting digital banking requires significant energy, especially as usage grows. To address this, financial institutions in emerging markets are adopting cloud-based platforms and energy-efficient data centres, reducing resource consumption while scaling services.

Cloud-based solutions are not only more scalable but also more energy-efficient, enabling banks to expand their reach responsibly. Automated processes further enhance energy efficiency, allowing Neobanking providers to serve more customers while minimising their environmental impact. This focus on sustainability aligns with broader goals of economic development and environmental stewardship, especially in regions vulnerable to climate change. For instance, Nubank in Brazil has achieved significant milestones by focusing on digital-only services, reducing the need for physical branches and their associated environmental impact.

Bridging gaps and expanding reach

Financial inclusion remains at the heart of digital banking’s impact in emerging markets. Digital platforms provide an entry into the formal financial system for millions. This allows them to save, invest, and plan for their futures. For small businesses, mobile applications and digital wallets offer essential tools for growth, empowering them to compete and contribute to local economies.

Digital platforms are also helping bridge the documentation gap by offering digital identity verification. This allows individuals without formal identification to open accounts and access financial services. Moreover, this approach is critical in regions where many people lack traditional IDs, which has historically excluded them from banking. By incorporating digital identification and security measures, financial institutions extend their reach, supporting resilience and inclusion.

Pioneering financial access through Digital Banking innovation

Emerging technologies like Blockchain, AI, and Biometrics are another factor in redefining digital banking in emerging markets. Blockchain provides a secure and transparent transaction method, which is particularly valuable in regions with less stable financial systems. AI enables credit assessment using alternative data, while biometrics and electronic Know Your Customer (e-KYC) simplify account creation. This makes it easier for individuals in remote areas to access financial services without physical documentation.

These technologies not only broaden financial access but also ensure that digital banking systems are efficient, secure, and scalable. By integrating these advanced tools, banks and fintech companies can provide reliable services to underserved populations, raising the standard for accessibility and security. An example of this in action is Moniepoint, a Nigeria-based FinTech. It has secured significant funding to enhance digital payments and banking solutions across Africa. By applying advanced technologies it reaches many who still lack access to banking services.

The future: Empowerment, Inclusion, and Sustainability

The future of digital banking in emerging markets holds great potential. With rising smartphone and internet connectivity, even remote areas gain access to financial services, breaking down traditional barriers to inclusion. This evolution goes beyond technology, creating pathways for financial empowerment and economic resilience.

A new generation of digital banking solutions is enabling financial institutions to extend their reach into emerging markets with a comprehensive range of services. From account management to lending. Designed with flexibility in mind, these platforms support customisation, allowing banks to tailor services to local needs through open APIs and modular infrastructure. By embracing sustainable practices and sustainable technology, these solutions not only broaden financial access but also foster growth in underserved regions in an environmentally responsible manner.

  • Neobanking

Author

Dan Brightmore

Published

14 January 2025

Estimated Read time

3Mins

Yuno and PayPal team up to simplify Digital Payments for merchants with flexible options to broaden market reach and unlock new revenue streams

Yuno a leading payment orchestration platform, has announced a strategic collaboration with PayPal, a global leader in Digital Payments processing. This collaboration significantly enhances Yuno’s offering, giving merchants seamless access to PayPal’s vast active user network. This now surpasses 400 million worldwide.

Unlocking revenue streams with Digital Payments

Yuno-powered merchants can now effortlessly offer PayPal’s secure and flexible payment option, broadening their market reach and unlocking new revenue streams. Trusted by millions worldwide, PayPal allows users to make purchases, transfer funds, and pay bills in a fast, easy, and secure way, without the need to repeatedly enter card payment information, contributing to reducing digital footprint and providing the security users are looking for. 

Including this partnership, Yuno now supports over 300 global payment methods via its intuitive, user-friendly interface, making it easy for merchants to scale quickly by offering the most popular and locally-relevant payment methods in each market. Yuno’s platform also provides access to other innovative features. These include one-click checkout, advanced fraud protection, and optimised payment routing. This boosts transaction success rates and prevents lost sales in the wake of outages at a payment provider.

Catherine Kaupert, Global Head of Partnerships of Yuno, commented: “We’re thrilled to team up with PayPal, a well-known and trusted name in Digital Payments processing globally. This integration further strengthens Yuno’s capabilities, allowing our merchants to tap into PayPal’s extensive network and drive growth with ease. Together, we are simplifying payments, making them more secure, and enabling businesses to scale without friction.”

Paola Fuentes, Head of Partnerships for Hispanic Latam at PayPal, added: “Our affiliation with Yuno integrates our entire product portfolio. Including PayPal Checkout and credit and debit card payment processing to provide cutting-edge payment solutions for both customers and businesses. By joining forces, we are expanding the benefits of both companies’ offerings, giving consumers the option to select the payment method that suits them best and take advantage of instalments. According to recent data from AMVO, this is one of the main incentives for Mexican consumers to make purchases through the digital channel”.

Last year, Yuno secured $25 million in a Series A round led by Andreessen Horowitz, Tiger Global, DST Global Partners, Kaszek Ventures, and Monashees, fuelling its expansion across Asia, Europe, the Middle East, and Africa.

About Yuno

Yuno has emerged as a dominant force in global payment orchestration. Its core mission is to empower global commerce by enabling businesses of all sizes to accept and disburse Digital Payments anywhere in the world. Furthermore, fostering financial inclusion.

Yuno enables businesses to access over 300 payment methods worldwide. As well as innovative features including one-click checkout, smart routing, and robust anti-fraud tools via a single unified, easy-to-use interface. Yuno serves a global customer base that includes McDonald’s, inDrive, Rappi and other renowned brands across more than 80 countries.

About PayPal 

PayPal has been revolutionising commerce globally for more than 25 years. The company creates innovative experiences that make moving money, selling, and shopping simple, personalised, and secure. PayPal empowers consumers and businesses in approximately 200 markets to join and thrive in the global economy.

  • Digital Payments

Author

Bharat Mistry

Published

9 January 2025

Estimated Read time

5Mins

Bharat Mistry, Director – Product Management at Trend Micro, on why attack surfaces are more difficult to mange than ever and the need for greater Cybersecurity controls to tackle the problem

Some surprising news emerged in mid-December. A Freedom of Information request sent to the Financial Conduct Authority (FCA) revealed that the number of c

Cybersecurity attacks reported to the regulator by large financial institutions fell 53% from the previous year. Reported data breaches also fell, by 29%. While welcome news, there are some big caveats.

The fall in reports could signify attacks are getting more sophisticated and harder to spot. The reporting periods also didn’t quite align, meaning two-and-a-half months of possible regulatory reports weren’t included in 2024’s figures. In fact, we’re seeing attacks and breaches at financial services industry (FSI) firms surging. In line with these organisations ramping up investment in digital transformation and IT modernisation projects.

Threat actors are grasping the opportunity with both hands. To keep them at bay, IT and cybersecurity leaders in the sector may need to rethink their approach to cyber risk management.

Cybersecurity controls are urgently required

Digital transformation is on an inexorable path. Driven by customer demand for seamless cross-channel experiences, and the quest for more streamlined business processes and productivity gains. Cloud adoption, mobile and app-centric services, remote workforces, and expansive supply chains are the result. However, this rapid change comes at a price. Research warns that half (49%) of global FSI leaders believe their attack surface is spiralling out of control.

Put simply, the ‘attack surface’ is the total expanse of all the IT and OT systems in a business that could theoretically be hacked. It includes everything from on-premises desktops and servers to cloud containers and even employees. Vulnerabilities and misconfigurations across these systems and services are inevitable. And the more assets there are, the more chance there is that a determined threat actor will find a weakness. This allows them to compromise the corporate network or a critical cloud account.

Heeding the warning

The likelihood of them doing so is increasing all the time. Not just because the typical FSI attack surface is increasing, but also because cybercriminals and nation-state operatives are getting better at using AI to their advantage. The National Cyber Security Centre (NCSC) warned back in January 2024 that AI “will almost certainly increase the volume and heighten the impact of cyber-attacks over the next two years”. It’s right. Generative AI in particular lowers the bar for budding threat actors by enabling them to create highly effective social engineering campaigns. And perform reconnaissance at scale to find weaknesses in organisations’ attack surfaces. In some cases, these weaknesses may exist in AI tools brought in by workers themselves. One report claims over a third of firms are struggling with shadow AI.

Our adversaries are also aided by the sheer complexity and interconnectivity of modern digital environments. APIs, microservices and third-party integrations -including frequently buggy or downright malicious open source components – expand the attack surface yet further.

Why it’s time for change

Managing risk across these environments should be a priority for obvious financial and reputational reasons. Open Banking rules and the growth of FinTech have made it easier for dissatisfied customers to jump ship. Furthermore, providing more options for those looking for a new provider. A serious breach could be the catalyst for a mass exodus. It’s also expensive in other ways. FSI is the second-top sector overall in terms of the average cost of a data breach. This is estimated to be over $6m per incident, assuming no more than 113,000 records are compromised.

However, there’s increasingly a regulatory imperative for FSI firms to rethink their Cybersecurity strategy. Any operating in the EU now has to comply with a rigorous new set of requirements in the EU Digital Operational Resilience Act (DORA). From January 1, 2025, those in the UK deemed to be critical third parties (CTPs) will be required to put in place a number of “technology and cyber risk management and operational resilience measures”.

A new mindset

So what does this mean in practice? Modern technology environments are dynamic, with new assets appearing and disappearing. Furthermore, new vulnerabilities are emerging and fresh misconfigurations surfacing on a daily or even hourly basis. Managing risk across this vast, incredibly volatile and highly distributed environment requires a new approach. Traditional perimeter defences are no longer sufficient.

Instead, FSI firms need continuous monitoring of risk across their entire attack surface. From endpoints and networks to servers and cloud workloads. Ideally, such a platform will flag areas of concern and either suggest improvements or automatically remediate. It could be something as simple as changing an insecure password, or patching a critical vulnerability newly published by a key vendor. This is the way to build resilience for the long term.

But there’s more. Some threats will always sneak through corporate defences. That’s why it’s also vital to expand security operations capabilities with AI-driven analytics and cross-layer detection and response (XDR). The goal is to correlate threat data across multiple layers and automatically prioritise alerts for stretched analyst teams. Robust incident response processes are also key here, to ensure no time is wasted in containing the threat and minimising any damage caused.

More broadly, it’s about fostering a culture of cyber resilience. Continuous improvement, proactive defence, and a willingness to adapt are ingrained in the corporate mindset. More Cybersecurity regulations are promised by the government in 2025. The clock’s ticking.

  • Cybersecurity in FinTech

Author

Dan Brightmore

Published

8 January 2025

Estimated Read time

4Mins

Industry thought leaders from Marqeta, the global modern card issuing platform, offer a detailed outlook of the fintech industry for 2025, with predictions around personalisation, digitalisation and the evolving regulatory landscape

Payments will turn fully personal, with tailored credit, rewards, and BNPL at scale in 2025

In my opinion, a major global payment trend of 2024 has been hyper-personalisation. A new generation of customers is driving a shift toward personalisation at scale, expecting their FinTech services to be unique and tailored to individual needs. Modern consumers want a future where financial services integrate seamlessly into their digital lives and keep pace with their evolving needs. 

As a result, we are seeing trends, such as personalised credit offerings and rewards booming. In an industry with increasingly low consumer loyalty, brands and financial institutions must go beyond traditional interactions with FinTech. For example, the recent Marqeta State of Credit report found that of UK consumers who use more than one credit card, 43% confirmed that they would use a credit card more frequently if better rewards were offered. By moving to a dynamic, rather than set rewards structure, consumers can earn benefits tailored to their spending habits and preferences in real time. 

Increasingly with innovations like Buy Now Pay Later (BNPL), consumers are guided to credit options specifically suited to them and their needs. In 2025, we will increasingly see personalised BNPL payment plan options being offered in real time. Often within existing payment apps and products we already use daily. We are also seeing B2B payments emerging as a strong trend. Ensuring gig workers, sellers and partners get paid efficiently while offering robust expense management and financing. I anticipate we’ll see more demand for innovative B2B payment solutions that enable seamless money management across 2025.    

Marcin Glogowski, SVP Managing Director for Europe and UK CEO

2025 will be a year of rapid innovation in financial services  

In today’s digital-first world, traditional payment infrastructure is no longer enough to keep up with the demands of consumers. The front door of a bank is now an app, digital wallet usage is increasing. New, flexible services have a growing prevalence on the market. In 2025 and beyond, customers will continue to drive a shift toward modern services which keep up with the rate of digital and mobile innovation.

The ramifications of changing consumer trends could lead to the traditional roles of banks, such as ATMs and as physical branches, disappearing. To ensure continued customer loyalty, all financial service providers will be forced to innovate and offer consumers the embedded, seamless and instantaneous services that they desire. 

Consequently, across 2025, we are likely to see new technology and solutions being offered to reduce unnecessary friction for consumers trying to pay and get paid. We are already seeing increased demand for Accelerated Wage Access (AWA). A Marqeta study shows that 74% of gig workers ages 18-34 would be interested in an employer who offered an option to get paid immediately. As businesses and workers grow tired of cash flow restrictions and having to wait for monthly pay slips in an otherwise instant, digital world. As new services evolve, competition in Fintech will be enhanced and the financial industry will be forced to grow and evolve. 

Nicholas Holt, Head of Solutions and Delivery, Europe

Proactive compliance strategies will lay the foundation for fintech in 2025

With banking and FinTech partnerships under increasing regulatory scrutiny, the stakes around compliance have never been higher. In this environment, Fintechs can no longer afford a reactive approach to compliance. Instead, they should adopt proactive compliance strategies that go beyond simply seeking to avoid fines and that are embedded into the everyday makeup of their culture and product strategies, helping to build trust, ensure stability, and foster sustainable growth. 

At Marqeta, we’re committed to embedding compliance into our company’s culture, helping to mitigate risks and create a foundation for long-term success for us and our customers. Proactive compliance strategies allow organisations to leverage advanced tools and position themselves to adapt to shifting regulatory demands while showcasing a genuine commitment to transparency. 

Alan Carlisle, Chief Compliance Officer

  • Cybersecurity in FinTech
  • InsurTech

Author

Dan Brightmore

Published

7 January 2025

Estimated Read time

5Mins

Alex Mifsud, CEO of Embedded Finance platform Weavr, on the outlook for Banking-as-a-Service (BaaS)

If any FinTech trend is painfully making its way through the archetypical Gartner hype cycle, it is Banking-as-a-Service or BaaS. At its core, BaaS is an API-driven platform enabling third-parties to develop financial products that make use of the banking and payments capabilities, and the regulatory permissions, of financial institutions that offer it.

This means non-regulated businesses can, in effect, make financial services available to customers without having a banking or financial licence themselves. The bank gets to monetise their licence efficiently, while FinTechs bring ingenuity, market insight and usually, superior digital experiences to customers. It sounds wonderful in concept, but the reality is far more complex. The recent collapse of Synapse, a prominent BaaS provider, as well as the sheer number of regulator interventions across many developed world economies, has highlighted critical vulnerabilities in the BaaS model.

The BaaS Model

While no one, including regulators, seems to be denying the opportunity to create customer value, it is increasingly evident that the BaaS model as it has developed over the past five years will not survive in its present form. There are several evolutionary directions that are being talked about for BaaS, even if not yet established. Here, I would like to present a specific variant. The European regulatory model not only makes this possible, but also presents a strong win-win opportunity for banks to collaborate with non-bank financial institutions like e-money institutions and payment institutions (I’ll use the acronym “EMI” to mean either of these). In this model, banks get access to the benefits of BaaS with minimal exposure to the now-better-understood risks. Moreover, EMIs get access to the powerful capabilities and economics that are the sole preserve of banks as deposit-taking institutions.

These collaborations – in effect, a multi-tier approach to BaaS – should offer safer exposure to Embedded Finance for banks. And richer capabilities available to embedders, and ultimately, end-customers.

Antipattern Matching

Recent announcements that Clearbank, a digitally-savvy clearing bank now promoting itself as an embedded finance platform, has hit profitability is a welcome tonic to investors despairing of the stream of bad news hitting BaaS players in the US and Europe. Even JP Morgan, one of the most respected global banks, has shown that size is no obstacle to ambitious, or even radical, innovation, as it also offers Embedded Finance. And at the other end of the size scale, Griffin announced earlier this year that, having secured a banking licence specifically to offer BaaS and embedded finance, it is now ready to start operating.

In the face of the mentioned challenges that EMI BaaS players have faced with regulators in Europe, some in the investment community have been proclaiming that, to do BaaS effectively, a financial institution needs to have a banking licence. An e-money or payment institution licence simply won’t cut it.

While such pattern matching and extrapolation is understandable, it is not necessarily correct, so let’s look at an alternative view: both EMIs and banks are viable financial institutions to support Embedded Finance, but each have strengths and weaknesses. Better still, by working together in a multi-tiered configuration, each type of financial institution can play to its strengths enabling the combination to deliver high capability, highly adaptive delivery models of Embedded Finance.

Banks doing Embedded Finance

While a banking licence does confer specific advantages – mainly, that deposit-taking provides one of the most attractive financing models for financial institutions to raise funds for lending – there are also disadvantages to being a bank compared to being an EMI. In the UK, for instance, banks need to hold more capital than EMIs, and perhaps more importantly, banks are supervised by both the Financial Conduct Authority (FCA) and the Prudential Regulatory Authority (PRA), the latter of which does not supervise EMIs.

Navigating innovative operating models like Embedded Finance with two regulators can create greater risk aversion and therefore slow down or even discourage the experimentation that is required to find the right risk-value formula that works. We know from recent experience that getting the balance right between great customer value and sustainable compliant operations can be a delicate balance.

The Benefits

One way to square the circle is for banks to provide wholesale financial services to EMIs which then serve end customers on their own licences in turn. While this doesn’t completely insulate the bank from censure in the event that the rules are broken – for instance, if money laundering occurs – it does place the biggest share of the burden of the customer on-boarding and monitoring compliance on the EMI. Given that EMIs were created initially to support money-related activities for a digital world, it may be easier for them by working with a single regulator to achieve the right balance. It also allows large banks with cumbersome on-boarding processes designed for large corporations to get access, via the EMI, to a community of small and medium sized business customers that, in aggregate, represent meaningful business volumes for the bank.

There is a strong win-win in this kind of bank-EMI collaboration, especially for banks which are used to dealing with other financial institutions as customers. EMIs, in turn, can source a range of wholesale financial services from multiple banks: foreign exchange from one, and lending capacity from one or more others.

A New Pattern: Multi-Tiered Banking with BaaS

The future of BaaS lies in collaboration. A multi-tiered banking model allows institutions to combine their strengths strategically. Such a model not only optimises the use of resources but also enhances the value proposition of BaaS by incorporating the strengths of various financial entities. EMIs, with their ability to offer commercial cards, credit lines, and foreign exchange services, reduce the risk for larger institutions and open doors for broader innovation.

  • Embedded Finance

Author

Dan Brightmore

Published

2 January 2025

Estimated Read time

5Mins

Martin Greenfield, CEO of Quod Orbis, on a troubling paradox within the cybersecurity landscape: despite substantial investments in security infrastructure, confidence levels and actual capabilities remain worryingly misaligned.

Financial institutions face concrete regulatory pressure on Cybersecurity with the European Union’s Digital Operational Resilience Act (DORA) coming into force in February. This landmark regulation demands robust ICT risk management and comprehensive security monitoring. Currently, many organisations continue to rely on disparate tools and spreadsheets that may leave them vulnerable to sophisticated threats. These include AI-powered deep fakes and targeted spear phishing campaigns.

This challenge transcends the financial sector as organisations across all industries face mounting pressure to demonstrate both security effectiveness and regulatory compliance. Our research reveals a stark reality. Organisations typically maintain an average of 19 security solutions per team. However, a surprising 41% still cite insufficient technology as the primary obstacle to maintaining a robust security posture.

This misalignment points to a fundamental issue. Organisations must recognise effective cybersecurity isn’t achieved through quantity of tools, but through strategic selection of the right solutions. Furthermore, perhaps most concerning is the false sense of security prevalent among IT decision-makers. While 93% express confidence in their infrastructure visibility tools, an alarming 95% acknowledge difficulties in accessing specific digital assets over the past year. This creates dangerous blind spots leaving organisations exposed to both security breaches and compliance shortfalls.

Understanding the Cybersecurity challenge

Today’s enterprise infrastructure resembles a tapestry of critical assets, connections and endpoints. To put this complexity into perspective: IT teams now manage an average of 31 endpoints per person across their organisation. For a company of 1,000 employees, this translates to more than 30,000 devices requiring constant monitoring and protection. This challenge intensifies with the widespread adoption of cloud services, hybrid working arrangements and an ever-growing ecosystem of connected devices.

Scale amplifies these difficulties markedly. Our research reveals organisations with more than 1,250 employees demonstrate the lowest confidence in their existing tools (88%) and face the greatest challenges in accessing critical assets (97%). Moreover, these larger enterprises typically wrestle with an unwieldy combination of legacy systems, bespoke solutions and modern platforms. This results in notably lower visibility rates (79%) compared to their smaller counterparts.

Perhaps most revealing is the stark confidence gap between technical and compliance teams. While 94% of information security directors express confidence in their system visibility, merely 66% of compliance directors share this outlook. This disparity exposes a crucial misalignment between technical capabilities and compliance requirements. One that poses serious operational risks as regulatory frameworks increasingly demand continuous monitoring. Organisations clinging to manual compliance processes face an unstable burden. Teams are stretched thin handling routine tasks while regulations grow more complex. Embracing automated technologies to handle routine monitoring requirements will allow compliance teams to pivot from being reactive box-checkers to strategic risk managers.

Moving from reaction to prevention

The impulse to combat emerging threats by rapidly acquiring new security solutions has led many organisations to create sprawling, inefficient systems. These often compound the very problems they aim to solve.

This reactive approach has trapped organisations in a costly cycle of diminishing returns. Despite substantial technology investments, nearly 40% of firms report a troubling lack of actionable intelligence, while 37% struggle with budget limitations. This paradox is increasingly drawing board-level scrutiny. And rightfully so. After years of approving emergency technology purchases to plug cybersecurity gaps, boards are now questioning the value of new investments. Furthermore, tthis creates a dangerous stalemate: organisations need smarter, not just more, technology investment.

However, a more strategic approach is gaining traction through integrated system monitoring platforms. These comprehensive solutions unite previously disconnected tools under a single dashboard. This can offer real-time visibility across the entire cybersecurity landscape. This unified approach enables teams to identify and address vulnerabilities before they evolve into security incidents. A capability that resonates with the 82% of organisations who recognise enhanced visibility would substantially strengthen their cybersecurity posture.

It’s encouraging that 72% of IT teams have secured increased budgets over the past three years. However, the path forward requires more than mere financial investment. Organisations must shift from reactive spending to strategic deployment. Although this presents its own challenge: convincing board members that additional tooling represents an investment in comprehensive visibility rather than merely plugging security gaps.

The path forward

The transformation from fragmented security to comprehensive oversight demands more than technological upgrades. It requires a fundamental reimagining of how organisations approach cybersecurity monitoring and compliance.

The advantages of this strategic shift are compelling and quantifiable. Our analysis reveals security teams anticipate multiple efficiency gains: 38% expect automation to streamline document creation, 37% foresee improved board pack preparation, and 36% anticipate dedicating more time to strategic security assessments. Perhaps most significantly, 35% predict a reduction in human error alongside enhanced data accuracy. The efficiency gains are substantial. Teams could reclaim up to 60 hours annually per member on board reporting alone, time better invested in strategic security initiatives.

With regulatory frameworks growing increasingly sophisticated across sectors, including the forthcoming DORA regulation, maintaining current practices is no longer viable. The disparity between perceived and actual security capabilities poses a tangible risk that organisations must address proactively.

About Quod Orbis

Quod Orbis is the single source of truth across security, risk and compliance, providing an orchestration layer for the entire tech stack whether in the cloud, on-premise, legacy or bespoke. Founded in 2018, Quod Orbis became part of Dedagroup, one of the leading Italian IT players, in 2024.

A pioneer in Continuous Controls Monitoring (CCM), Quod Orbis provides complete and constant visibility into a company’s cybersecurity, compliance and risk posture. Quod Orbis’ ability to connect with every piece of technology within a business, unrivalled automation capabilities and continual support enables the company to serve a global client base across a wide variety of industries.

  • Cybersecurity in FinTech

Author

Dan Brightmore

Published

20 December 2024

Estimated Read time

3Mins

‘FlyEasy’ parametric cover is now available on Zurich Indonesia’s Travel Product: offering real-time lounge access for delayed flights

Blink Parametric, in partnership with Zurich, has launched flight disruption assistance solution ‘FlyEasy’. Coverage is on the Zurich Indonesia direct channel via the Zurich Edge platform. Leveraging parametric technology, the proposition has been designed to instantly activate coverage benefits upon confirmation of a flight delay. This seamless, fully-digital approach provides ultimate convenience to customers, relieving them of traditional claims processes and allowing them to enjoy their travels with greater peace of mind.

The expansion is part of the agreement signed in January 2024. The award-winning flight delay solution can now be offered to Zurich’s customers across Asia Pacific via the Zurich Edge Platform.

Zurich Asia Pacific Network

This integration is the second rollout this year under the framework agreement to offer Blink Parametric solutions to Zurich Asia Pacific network partners and customers across Singapore, Hong Kong, Malaysia, Indonesia and Japan. The first was with Singapore-based OTA Klook in March.

Once a customer registers their flight details pre-travel, Blink Parametric monitors that flight in real-time. Also, in the event of a flight delay of two-hours, the customer will automatically be offered real-time assistance of complimentary access to a VIP airport lounge. The lounge pass will have extended validity with a shelf-life of six-months if not used on the day of disruption. The benefit will be applicable for single trip and annual multi-trip executive and premier international travel plan insurance customers. No claims filing or application processing is required.

Sukma Darman, Head of Digital, Zurich Indonesia commented, “One of Zurich Edge’s key objectives is to bring a fresh perspective on insurance to our partners and customers. We can then deliver personalised, customer-centric solutions using next-gen technology. Blink Parametric have helped us to achieve successful travel insurance integrations for the Asia Pacific region throughout this year. This includes delivery of innovative real-time assistance for our valued customers when they need us.”

“This latest Zurich Indonesia integration coincides directly with our strategic move to further expand and support our business development and partner activities across the APAC region,” says Richard Pollard, Director of Strategic Accounts, Blink Parametric. “Furthermore, our work with the Zurich team this year has been significant, with two successful launches to date. It’s now possible for Zurich partners to tap into the Zurich Edge platform and deploy our real-time travel assistance solution under the FlyEasy brand with speed and efficiency. Exactly how it should be!”

Blink Parametric is recognised as one of the most innovative and successful providers of travel InsurTech solutions to insurers world-wide. It offers real-time assistance and service choices to travellers impacted by flight disruption events. Blink Parametric travel solutions are fully customisable and designed to deliver operational efficiency. Moreover, processing high frequency, low value travel insurance claims when the traveller needs immediate real-time claim resolution.

  • InsurTech

Author

Dan Brightmore

Published

19 December 2024

Estimated Read time

5Mins

Benjamin Avraham, CEO and Founder at Okoora – the creators of Automated Business Currency Management, on Embedded Finance in global trade and the challenges of FX risk in global expansion

Embedded Finance is rapidly emerging as a transformative force in cross-border payments, reshaping how businesses handle transactions across borders. By making payments more efficient and accessible, it is becoming a key tool for companies navigating the complexities of global trade. While the concept isn’t entirely new, its adoption has accelerated, with the sector projected to generate an estimated $230 billion in revenue by 2025.

  • Embedded Finance is poised to reshape cross-border payments. It offers innovative solutions to address inefficiencies and create experiences with reduced friction for businesses and consumers alike. 
  • A key trend is the integration of multi-currency wallets. These enable real-time currency conversion and support localised payment methods tailored to specific regions. This not only reduces transaction delays but also enhances accessibility for global users. At the same time, embedded risk management tools are gaining traction. These provide businesses with automated FX hedging options and predictive analytics to better manage currency volatility.
  • Super apps with embedded cross-border capabilities are becoming more prevalent. These offer all-in-one solutions for payments, investments, and FX management. These apps are especially impactful in promoting financial inclusion, allowing underserved markets to access cross-border payment systems with ease. 

The Challenge of FX Risk in Global Expansion

For businesses aiming to expand globally and remain competitive, understanding and managing foreign exchange (FX) risk is paramount. Currency volatility, intricate markets, and hidden costs remain significant hurdles for companies operating internationally. Moreover, the solution lies in leveraging embedded currency risk management, which integrates FX tools directly into business workflows to streamline and mitigate these challenges.

Historically, small and medium-sized businesses (SMBs) have relied on traditional banks for cross-border payment services. However, slow, opaque, and cumbersome banking processes often fail to meet the modern demands for a frictionless experience. SMBs today require more than just service providers—they need trusted partners who truly understand their unique needs and can deliver tailored solutions. Embedded Finance levels the playing field by giving SMBs access to financial tools previously reserved for larger corporations, empowering them to compete effectively in global trade.

On a parallel track, larger players such as payment institutions, corporates, and banks are increasingly recognizing the potential of embedded finance to unlock new market opportunities and enhance the financial ecosystem. According to a recent report by Publicis Salient, embedded finance revenues are expected to grow by 40% annually in the coming years, underlining its critical role in the evolution of global financial services. This is encouraging organizations without in-house capabilities to actively seek partnerships with fintech providers to deliver integrated, relevant, and accessible financial services, while also creating new revenue streams.

Key features of Embedded Finance for Cross-Border Transactions

As businesses continue to navigate the complexities of cross-border transactions, Embedded Finance offers an array of powerful features that streamline processes, enhance efficiency, and mitigate risks. By integrating financial tools directly into business systems, companies can improve operations, reduce costs, and gain greater control over their international payments and currency management.

Below are the key features that make Embedded Finance a game-changer for businesses engaged in global trade:

Streamlining Payments

Frictionless Transactions: Embedded finance integrates payment processing directly into business systems, enabling businesses to send and receive funds across borders without needing separate third-party platforms.

Localised Payment Methods: It supports local payment systems, ensuring businesses can transact with customers and partners in their preferred currencies and payment formats.

FX Risk Management

Automated Hedging: Embedded tools can automatically hedge against currency fluctuations, reducing financial exposure and safeguarding profit margins.

Predictive Analytics: Advanced analytics help businesses anticipate and respond to currency market threats and opportunities.

Reducing Costs & Delays

Lower Fees: By bypassing traditional banking intermediaries, embedded finance platforms often reduce transaction costs.

Faster Settlements: Transactions are processed more quickly, enabling businesses to manage cash flow and working capital more efficiently.

Enhancing Transparency

Clearer Pricing: Embedded finance platforms provide real-time insights into exchange rates and transaction costs, ensuring businesses have full visibility into cross-border payment processes.

Regulatory Compliance: Built-in compliance tools streamline adherence to local regulations, reducing administrative burdens and risks of non-compliance.

Access to Financing

Embedded Credit & Loans: Businesses can access trade financing or working capital loans directly within platforms, supporting growth and smoothing cash flow challenges during cross-border trade.

Supply Chain Support: Financing solutions embedded in procurement platforms help businesses manage large international purchases with ease.

Simplifying Tax & Regulatory Compliance

Automated Tax Calculations: Embedded tools help businesses calculate duties, taxes, and other levies for cross-border transactions.

Built-in Compliance Checks: Solutions automatically ensure compliance with local and international regulations, saving time and reducing risks.

The road ahead for Embedded Finance

The evolution of embedded finance holds the potential to unlock new market opportunities and enhance the global financial ecosystem. Through strong collaboration among fintech companies, regulators, and technology providers, the industry can pave the way for embedded finance to deliver  highly relevant financial services in an accessible manner to  meet the needs of businesses globally.

About Okoora

Okoora is a leading fintech provider, offering businesses worldwide the financial infrastructure needed to scale their international operations. Recognized by CNBC and Statista as one of the world’s top 250 fintechs, the company’s automated platform, API, and embedded finance solutions empower businesses to collect and send payments, manage multi-currency accounts, and hedge FX risks. Okoora enables seamless operations in over 100 currencies and 180 countries.

  • Embedded Finance

Author

Dan Brightmore

Published

Estimated Read time

7Mins

Interface looks back on another year of ground-breaking tech transformations and the leaders driving them. We spoke with tech leaders…

Interface looks back on another year of ground-breaking tech transformations and the leaders driving them. We spoke with tech leaders across a broad spectrum of sectors – from banking, health and telcos to insurance, consulting and government agencies. Read on for a round up of some of the biggest stories in Interface in 2024…

EY: A data-driven company

Global Chief Data Officer, Marco Vernocchi, reflects on the transformation journey at one of the world’s largest professional services organisations.

“Data is pervasive, it’s everywhere and nowhere at the same time. It’s not a physical asset, but it’s a part of every business activity every day. I joined EY in 2019 as the first Global Chief Data Officer. Our vision was to recognise data as a strategic competitive asset for the organisation. Through the efforts of leadership and the Data Office team, we’ve elevated it from a commodity utility to an asset. Furthermore, our formal strategy defined with clarity the purpose, scope, goals and timeline of how we manage data across EY.  Bringing it to the centre of what we do has created a competitive asset that is transforming the way we work.”

Read the full story here

Lloyds Banking Group: A technology and business strategy

Martyn Atkinson, CIO – Consumer Relationships and Mass Affluent, on Lloyds Banking Group‘s organisational missive around helping Britain prosper, which means building trusted relationships over customer lifetimes by re-imagining what a bank provides.

“We’ve made significant strides in transforming our business for the future,” he reveals. “I’m really proud of what the team have achieved with technology but there’s loads more to go after. It’s a really exciting time as we become a modern, progressive, tech-enabled business. We’ve aimed to maintain pace and an agile mindset. We want to get products and services out to our customers and colleagues and then test and learn to see if what we’re doing is actually making a meaningful difference.”

Read the full story here

USDA: The people’s agency

Arianne Gallagher-Welcher, Executive Director for the USDA Digital Service, in the Office of the OCIO, on the USDA’s tech transformation and how it serves the American people across all 50 states.

“If you’d told me after I graduated law school that I was going to be working at the intersection of talent, HR, law, regulations, and technology and bringing in technologists, AI, and driving innovation and digital delivery, I’d say you were nuts,” she says. “However, it’s been a very interesting and fulfilling journey. I’ve really enjoyed working across a lot of different cross-government agencies. USDA is the first part of my career where I’m really looking at a very specific mission-driven organisation versus cross-agency and cross-government. But I don’t think I’d be able to do that successfully without the really great cross-government experiences I’ve had.”

Read the full story here

Virgin Media O2 Business: A telco integration supporting customers

David Cornwell, Director – SMEs, on the unfolding telco integration journey at Virgin Media O2 Business delivering for Business customers

“If you’ve got the wrong culture, you can’t develop your people or navigate change…” David Cornwell is Director of Technical Services for SMEs at Virgin Media O2 Business. He reflects on the technology journey embarked upon in 2021 when two giants of the telco space merged. A new opportunity was seized to support businesses with the secure, reliable and efficient integration of new technology.

Read the full story here

The AA: Driving growth with technology

Nick Edwards, Group CDO at The AA, on the organisation’s incredible technology transformation and how these changes directly benefit customers.

“2024 has been a milestone year for the business,” explains Edwards. “It marks the completion of the first phase of the future growth strategy we’ve been focused on since the appointment of our new CEO, Jakob Pfaudler.” Revenues have grown by over 20%, allowing The AA to drive customer growth with technology. “All of this has been delivered by our refreshed management team,” he continues. “It reflects the strength of our people across the business and the broader cultural transformation of The AA in the last three years.”

Read the full story here

Publicis Sapient: Global Banking Benchmark Study

Dave Murphy, Financial Services Lead, Global at Publicis Sapient, gave us the lowdown on its third annual Global Banking Benchmark Study.

The report reveals that artificial intelligence (AI) dominates banks’ digital transformation plans, signalling that their adoption of AI is on the brink of change. “AI, machine learning and GenAI are both the focus and the fuel of banks’ digital transformation efforts,” he says. “The biggest question for executives isn’t about the potential of these technologies. It’s how best to move from experimenting with use cases in pockets of the business to implementing at scale across the enterprise. The right data is key. It’s what powers the models.”

Read the full story here

Bupa: Connected Care

Chief Information Officer Simon Birch and Chief Customer & Transformation Officer Danielle Handley discuss Bupa’s transformation journey across APAC and the positive impact of its Connected Care strategy.

“Connected Care is our primary mission. We’ve been focusing our time, investment and energy to reimagine and connect customer experiences,” says Simon. “It’s an incredibly energising place to be. Delivering our Connected Care proposition to our customers is made possible by the complete focus of the organisation and the alignment leaders and teams have to the Bupa purpose. Curiosity is encouraged with a focus on agility, collaboration and innovation. Ultimately, we are reimagining digital and physical healthcare provision to customers across the region. Furthermore, we are providing our colleagues with amazing new tools to better serve our customers throughout all of our businesses.”

Read the full story here

ServiceNow: Tech disruption delivering change

Gregg Aldana, Global Area Vice President, Creator Workflows Specialist Solution Consulting at ServiceNow, on how a disruptive approach to technology can drive innovation.

While the whole world works towards automating as many processes as possible for efficiency’s sake, businesses like ServiceNow are supporting that change evolution. ServiceNow’s platform serves over 7,700 customers across the world in their quest to eliminate manual tasks and become more streamlined. We spoke to Aldana about how it does this and the ways in which technology is evolving.

Read the full story here

Innovation Group: Enabling the future of insurance

James Coggin, Group Chief Technology Officer on digital transformation and using InsurTech to disrupt an industry.

“What we’ve achieved at Innovation Group is truly disruptive,” reflects Group Chief Technology Officer James Coggin. “Our acquisition by one of the world’s largest insurance companies validated the strategy we pursued with our Gateway platform. We put the platform at the heart of an ecosystem of insurers, service providers and their customers. It has proved to be a powerful approach.”

Read the full story here

San Francisco PD: A technology transformation

Chief Information Officer William Sanson-Mosier on the development of advanced technologies to empower emergency responders and enhance public safety

“Ultimately, my motivation stems from the relationship between individual growth and organisational success. When we invest in our people, and we empower them to innovate with technology and problem-solve, they can deliver exceptional results. In turn, the organisation thrives, solidifying its position as a leader in its field. This virtuous cycle of growth and innovation is what drives me.” CIO William Sanson-Mosier is reflecting on a journey of change for the San Francisco Police Department (SFPD). Ignited by the transformative power of technology to enhance public safety and improve lives.

Read the full story here

  • Digital Strategy

Author

Dan Brightmore

Published

17 December 2024

Estimated Read time

2Mins

FICO’s use of Blockchain for AI model governance wins Tech of the Future: Blockchain and Tokenisation award

Global analytics software leader FICO has won the Tech of the Future – Blockchain and Tokenisation award. The Banking Tech Awards in London recognised FICO for its innovative work using Blockchain technology for AI model governance. FICO’s use of blockchain to advance responsible AI is the first time blockchain has been used to track end-to-end provenance of a machine learning model. This approach can help meet responsible AI and regulatory requirements.

More information: https://www.fico.com/blogs/how-use-blockchain-build-responsible-ai-award-winning-approach-0

FICO: Blockchain Innovation

FICO’s AI Innovation and Development team has developed and patented an immutable blockchain ledger. It tracks end-to-end provenance of the development, operationalisation and monitoring of machine learning models. The technology enforces the use of a corporate-wide responsible AI model development standard by organisations. It demonstrates adherence to the standard with specific requirements, people, results, testing, approvals and revisions. In addition to the Banking Tech award, Global Finance recognised FICO’s blockchain for AI technology with The Innovators award last year.

Responsible AI

“The rapid growth of AI use has made Responsible AI an imperative,” commented Dr. Scott Zoldi, chief analytics officer at FICO. “FICO is focused on technologies that ensure AI is used in an ethical way, and governance is absolutely critical. We are proud to receive another award for our groundbreaking work in this area.”

FICO is well-known as a leader in AI for financial services. Its FICO® Falcon® Fraud Manager solution, launched in 1992, was the first fraud solution to use neural networks. Today it manages some four billion payment cards worldwide. FICO has built advanced analytics capabilities into FICO® Platform, an applied intelligence platform for building decision management solutions.

See the full list of Banking Tech Award winners for 2024.

  • Artificial Intelligence in FinTech
  • Blockchain

Author

Adam Zoucha

Published

13 December 2024

Estimated Read time

4Mins

Adam Zoucha, MD EMEA at FloQast, on how businesses will modernise financial processes in 2025

With 45% of accountancy firms and in-house finance teams facing talent shortages, 2025 is going to be a critical year for many. Financial transformation is going to be the watchword. The conditions companies are facing will push them to speed up the transformation of their operations, modernising their financial processes while strengthening their company culture and vision.

The year ahead will likely see a continuation of the current period of instability, posing serious challenges for accounting teams looking to grow their business. The impact of global geopolitics is hard to predict which, twinned with the UK economy’s persistently slow growth rate, means companies will need to innovate to succeed – embracing automation, AI, and cutting-edge compliance processes.

It’s not all about the macro trends, though. On an individual level, our research this year has shown that employees are feeling the strain, and business leaders will need to take that seriously in 2025. The talent shortage is a vicious cycle – the harder it is for companies to find and retain talent, the more pressure remaining team members end up having to shoulder. The right technology can play a crucial role in reducing that stress and breaking the cycle.

Alongside those real challenges, there are real opportunities. The accounting business is changing fast, and it’s a great time to be in the industry. As we draw 2024 to a close, here are five key things accounting firms can expect to see in the new year.

Financial Transformation moving up the agenda

We’ve already looked at some of the reasons why financial transformation is going to be critical in 2025, but that doesn’t mean every CFO and accountant in the business is rushing to deliver. Based on our research  60% of accountants and CFOs still do not consider it a top priority – mainly because most don’t truly know what it means for their business, so education is key.

In essence, companies should aim to align their finance functions more closely with their organisational goals, enabling accountants to bring their expertise and insight to the decision-making process. As the finance function’s strategic role grows, there will be an urgent need for agile, digital tools that enhance collaboration and efficiency. For CFOs, embracing this transformation is essential to navigate new complexities with precision and effectiveness.

Accountancy teams will embrace new tools for the future

The talent gap present in the industry is unlikely to change any time soon. It takes time to train people, and accounting has a bit of a PR problem – its status as a secure, skilled job is battling with perceptions of stress and burnout.

As a result, in 2025, leaders will increasingly look to keep accountants motivated, engaged, and fulfilled as the declining population of new candidates continues to heap pressure on accounting teams—a trend that’s unlikely to reverse anytime soon. 

It’s essential that business leaders retain their finance professionals by fostering a fulfilling work environment. They can help by upskilling accountants and adopting technologies to reduce mundane and repetitive tasks. CFOs can play a key role by equipping their teams with future-focused skills, blending technology with strategic insight to drive real value within their organisations.

AI will power Tansformation in 2025

Transformation in 2025 won’t be limited to removing internal silos and improving staff retention, crucial though those things are. We’re also going to see AI helping accountants become key players in driving business success. The real value of AI will become apparent this year. For finance teams, it will act as a copilot, automating routine tasks and giving time back to accountants to become strategic assets for their organisations.  

This shift will help the industry tackle talent shortages with agility, turning challenges into opportunities for growth. Embracing AI isn’t just about keeping pace; it’s about unlocking accountants’ full potential as key players in driving business success.

Compliance will become a value-generating asset rather than a tick-box exercise

Compliance and risk, when managed properly, can drive real value for organisations. In 2025, the nuanced relationship between compliance, reputation, and risk means it’s likely to move up the corporate agenda. 

Technology can be a real driver here, and compliance strategies are fundamental to the larger accounting transformation journey. By taking a more holistic approach to compliance, rather than treating it as a mere check-box exercise, compliance can become a valuable asset. Currently, only 16% of organisations take this strategic view, revealing a significant opportunity for those willing to innovate and elevate their compliance efforts.

Overall, accounting businesses may be facing rough seas, but with the right tools and investments in place, they can unlock new value in 2025: transforming financial processes, improving employee satisfaction, and stepping further into their growing role as strategic advisors.

  • Artificial Intelligence in FinTech
  • Digital Payments

Author

Bryan Daugherty

Published

12 December 2024

Estimated Read time

3Mins

Bryan Daugherty, Global Public Policy Director at the BSV Association (BSVA) and Co-Founder at SmartLedger Solutions, on how blockchain technology provides the accountability and cybersecurity needed to prevent widespread IT catastrophes across sectors

By Embracing Blockchain, We Can Create a Safer Digital Future

The rapid increase in cyberattacks poses a severe threat to businesses. These attacks are becoming more sophisticated and costly by the day. The average cost of a data breach in the UK is £3.58 million, and in the US now $9 million. It typically takes 200 days for organisations to detect a breach, followed by another 70 days to contain it. These delays expose significant vulnerabilities in traditional data management systems. They rely heavily on third parties, making them prime targets for cybercriminals.

Blockchain technology offers a transformative solution to these challenges by creating a secure, decentralised model that can effectively mitigate risks. It provides an opportunity for both individuals and organisations to take control of their data. Therefore, improving cybersecurity and ensuring operational resilience.

The Problem with Centralised Systems

Traditional cybersecurity systems are built on centralised models, where data is stored in one location or through third-party intermediaries. This structure makes them attractive targets for cybercriminals, creating a “honeypot” of information that can be breached. A concerning statistic is that, for over a decade, organisations have taken an average of 200 days to detect breaches. Despite claims from cybersecurity vendors that they provide “instant detection,” real-world results show significant gaps in protection, putting data at risk for extended periods.

Blockchain: Game-Changing Cybersecurity Features

Blockchain’s decentralised model provides a powerful alternative. By distributing data across a global network of nodes rather than a central location, blockchain makes it exponentially harder for cybercriminals to compromise large datasets. Even if one node is breached, the entire system remains intact. This eliminates the single point of failure that centralised systems suffer from.

Another key feature of blockchain is its immutability. Once data is recorded on a blockchain, it cannot be altered or erased, making tampering nearly impossible. Therefore, this ensures any unauthorised access is immediately detectable, enabling quicker response times and minimising damage.

Real-Time Threat Detection with CERTIHASH

Blockchain’s potential in cybersecurity is already being realised through solutions like CERTIHASH’s Sentinel Node. A blockchain-based tool that provides real-time threat detection. Built on the BSV blockchain, CERTIHASH can detect breaches within 10 seconds or less, offering a proactive approach to cybersecurity. This is a significant improvement over traditional systems, which often take months to identify breaches, leaving organisations vulnerable to prolonged data exposure.

By leveraging blockchain, cybersecurity shifts from being reactive to proactive. This gives organisations the tools they need to stay ahead of evolving threats and safeguard data more effectively.

Overcoming Misconceptions About Blockchain

Despite the clear advantages of blockchain, many organisations remain hesitant to adopt the technology, often due to misconceptions. Furthermore, some still associate blockchain with cryptocurrencies like Bitcoin, which have been linked to ransomware. This outdated view overlooks blockchain’s real potential as a secure, decentralised data management tool.

Blockchain is not just about crypto; it’s about creating a new standard for data integrity and security. Moreover, it offers decentralised, tamper-proof records that give users control over their own identity and data, reducing reliance on vulnerable third-party systems.

A Decentralised, Secure Future

As global reliance on centralised systems grows, so do the vulnerabilities they present. A single point of failure can lead to widespread outages, as seen in numerous cyberattacks and technical malfunctions. Blockchain, with its decentralised architecture, offers a robust alternative that enhances the security and resilience of critical systems. By distributing data across multiple nodes, blockchain ensures continuity even during attacks or outages.

Conclusion

Investing in blockchain cybersecurity is no longer optional. With cyber-attacks growing in scale and sophistication, organisations must adopt cutting-edge technologies to protect their data, operations, and customer trust. Blockchain’s decentralised and tamper-proof architecture offers the key to building a safer, more secure digital future. One where businesses and individuals alike can operate with confidence, free from the constant threat of cybercrime.

  • Blockchain
  • Cybersecurity in FinTech

Author

Paul O'Sullivan

Published

11 December 2024

Estimated Read time

4Mins

Paul O’Sullivan, Global Head of Banking and Lending at Aryza, on the rise of AI in banking

The banking sector stands at the crossroads of technological innovation and operational transformation. AI is taking centre stage in reshaping how financial institutions operate. The banking sector is beginning to recognise AI’s potential. It can address challenges, enhance operational efficiency, and deliver more personalised customer experiences.

The Current State of AI in Banking

Research reveals that while a number of banking organisations have yet to fully integrate AI into their operations, key areas such as debt recovery are leading the charge. The slower pace of adoption can be attributed to the highly regulated environment of banking. Because transparency, compliance, and customer trust are non-negotiable. However, despite this cautious approach, banks that have implemented artificial intelligence are already seeing significant benefits, particularly in risk management.

AI’s Role in Risk Management

Effective risk management is a cornerstone of the banking sector. AI is proving to be a powerful tool in this area. By analysing vast amounts of data and providing predictive insights, AI enables banks to mitigate risks early. They can strengthen customer portfolio stability, and make data-driven lending decisions. These capabilities are essential in a landscape where financial risks can escalate rapidly.

Beyond the expected benefits, banks have also reported enhanced customer insights as an unexpected advantage. By leveraging AI to analyse customer behaviours and preferences, banks can tailor their products and services more effectively. Furthermore, they can improve customer satisfaction and experience, whilst fostering long-term loyalty.

Challenges to Adoption

Although organisations are experiencing a multitude of advantages, the integration of AI in banking is not without its hurdles. Legacy IT systems, stringent regulatory requirements, and concerns around data privacy pose significant challenges to widespread adoption. Banks must ensure AI-driven decision-making processes are effective. Moreover, they must also be fully transparent and compliant with industry regulations. Further highlighting the importance of a gradual, strategic approach to AI implementation.

Opportunities Ahead

The potential for AI in banking extends far beyond risk management. From streamlining operational workflows to enhancing customer personalisation and improving decision-making. AI is set to drive innovation across the sector. For example, AI-powered chatbots and virtual assistants transform customer service by providing instant, 24/7 support. They can handle complex interactions, enhancing customer satisfaction. At the same time, advanced analytics enable banks to analyse behaviour patterns, predict trends, and personalise product offerings. Furthermore. enhancing cross-selling opportunities and driving deeper customer engagement. These tools are becoming strategic enablers for innovation in the financial landscape.

A Call to Action

For banks to fully realise the benefits of AI, they must address the digital transformation gap, modernising outdated infrastructures and fostering a culture of innovation. This includes investing in technologies that align with their strategic goals, ensuring robust data security measures alongside maintaining compliance with evolving regulations.

As the banking sector continues its journey towards digital maturity, AI will play a pivotal role in defining its future. By overcoming current barriers and embracing AI-driven solutions, banks can not only enhance operational efficiency but also deliver the seamless, personalised experiences that customers now expect in an increasingly digital world.

About Aryza

At Aryza know that in today’s highly regulated world, there is huge value in quickly guiding your customers through the product that best fit their immediate needs, through a seamless journey that is tailored to their specific circumstances.

We created smart platforms, responsible and compliant products, and a unique system of companies and capabilities so that businesses can optimise their customers’ journey through the right product at the right time.

For our teams across the globe, the growth of Aryza is a good news story and a testament to our clear vision and goals as an international business.

And also front of mind as we build a global footprint is our impact on the environment. Aryza is committed to reducing its carbon impact through the choices it makes and we are pleased to say that we follow an active roadmap.

  • Artificial Intelligence in FinTech

Author

Dan Brightmore

Published

5 December 2024

Estimated Read time

3Mins

Innovative Systems, a leading provider of enterprise data, compliance, and integration solutions, has launched FinScan Marketplace

The platform will serve as a one-stop shop for anti-money laundering (AML) compliance. It offers a streamlined approach to managing compliance risk and unified case management via a central hub for all related activities. FinScan Marketplace positions itself as a trusted partner for organisations navigating today’s complex, global regulatory landscape.

Removing the complexity of AML compliance

“Our goal with FinScan Marketplace is to remove the complexity of AML compliance. We bring everything organisations need into one unified platform,” said Deborah Overdeput, Chief Marketing Officer at Innovative Systems. “This launch reflects our commitment to delivering solutions that simplify processes. We empower compliance teams to work smarter, and ensure organisations remain vigilant. And fully aligned with evolving regulatory requirements in a rapidly changing landscape.”

FinScan Marketplace revolutionises how organisations manage their AML portfolio. It provides a single, easy-to-navigate interface. Customers can seamlessly access a comprehensive suite of tools. These include sanctions screening, KYC checks, adverse media screening, payment screening, and risk scoring, with additional features continually in development.

FinScan Marketplace

At the heart of FinScan Marketplace is its unified case management system. This integrates all critical AML processes into a cohesive workflow. From performing due diligence checks to monitoring transactions and investigating potential risks, customers can manage everything within a single platform. This integration saves time, reduces errors, and ensures compliance efforts remain seamless and effective.

FinScan Marketplace provides customers with a clear vision of the platform’s evolution. Its intuitive interface lets users view in-progress product developments, register interest in upcoming features. Furthermore, they can participate in design feedback sessions. This approach ensures future enhancements align closely with real-world compliance needs.

“We are not just delivering tools; we are creating partnerships with our customers by building solutions that adapt to their challenges,” Overdeput added. “Transparency and collaboration are key pillars of the FinScan Marketplace.”

Innovative Systems for AML

FinScan Marketplace reflects Innovative Systems’ dedication to becoming a trusted partner for a host of organisations. These include financial institutions, insurance companies, fintechs, casinos and gaming entities, charities and non-profits, government agencies, and other organisations it serves. By continuously delivering value, anticipating industry needs, and prioritising customers’ feedback in its development process, the company demonstrates its commitment to supporting effective and reliable AML compliance.

Innovative Systems delivers enterprise data, compliance, and integration solutions through the company’s leading FinScan®, Enlighten®, and PostLocate® brands. These solutions offer actionable insights and enable organizations to identify the hidden opportunities or risks in their data. We have pioneered best-in-class data quality, data management, and risk and compliance solutions in thousands of applications across more than 65 countries. Our cloud-based (SaaS), on-premise, and hybrid offerings deliver dramatic, measurable improvements in accuracy, cost, and time to production over alternatives. Learn more at innovativesystems.com

About FinScan


Trusted by hundreds of organisations worldwide, Innovative Systems, Inc.’s FinScan offers advanced Anti-Money Laundering (AML) compliance technology and consulting solutions. Built on decades of experience in data management and proprietary matching technologies, FinScan provides a data-first, risk-based approach to ensure unparalleled accuracy and efficiency in identifying and reducing risk, accelerating AML compliance workflows, and optimising team productivity. FinScan’s comprehensive, integrated platform includes Know Your Customer (KYC), unparalleled sanctions screening, risk scoring, data quality, and advisory services for implementing a holistic compliance program. FinScan offers flexible deployment including SaaS, on-premise, and hybrid options. FinScan’s SaaS clients are screening more than 300 billion names a year. Learn more at finscan.com


  • Cybersecurity in FinTech

Author

Alex Mosher

Published

3 December 2024

Estimated Read time

4Mins

Alex Mosher, Chief Revenue Officer at Armis, on why businesses are prioritising their cybersecurity budgets, ensuring they have the resources needed to counteract emerging threats

Cybersecurity is no longer optional. In 2025, we expect a significant uptick in overall spending. With threats becoming more sophisticated, organisations recognise the imperative to invest adequately in cybersecurity measures. This trend is driven by the growing awareness that the cost of a cyber-attack far outweighs the investment required to prevent it.


Shift Toward Comprehensive Cybersecurity Solutions

In 2025, there will be a marked shift toward comprehensive security solutions that offer integrated functionalities. Companies will increasingly seek platforms that provide threat detection, incident response, and compliance management within a single solution. This trend arises from the need to simplify security management and reduce complexity. Siloed solutions are ineffective, expensive and reduce the efficiency of security teams with finite resources. Furthermore, by consolidating various security functions into a unified platform, businesses can streamline their processes and enhance their overall security posture. Integrated solutions offer a holistic approach to cybersecurity, addressing multiple aspects of an organisation’s security needs. The move toward comprehensive solutions also reflects a broader understanding of the interconnectedness of cybersecurity elements. A unified solution that addresses multiple areas provides a more robust defence against potential breaches.

Emphasis on Automation and AI

Automation and artificial intelligence (AI) are revolutionising the cybersecurity landscape. Organisations increasingly prioritise spending on AI-driven security solutions to enhance threat detection and response capabilities. The focus will be on tools that streamline incident response, reduce manual workloads, and enable security teams to focus on more strategic initiatives. Moreover, the trend will also include spending on analytics tools that help organisations understand and mitigate risks based on the current threat landscape. Threat intelligence and analytics play a pivotal role in enhancing an organisation’s security posture.

AI technologies offer a proactive approach to cybersecurity, allowing organisations to identify and mitigate threats in real-time. By leveraging machine learning algorithms and data analytics, businesses can gain deeper insights into potential vulnerabilities and respond swiftly to emerging threats. The emphasis on automation and AI is driven by the need to enhance efficiency and effectiveness in cybersecurity operations. By automating routine tasks and employing AI for advanced threat detection, businesses can optimise their resources and achieve a more robust security posture.

Investment in Cloud Cybersecurity Solutions

The migration to cloud environments continues to accelerate, driving the need for robust cloud security solutions. Key investment areas will include cloud security posture management (CSPM) and cloud workload protection platforms (CWPP). The emphasis on cloud security reflects the growing reliance on cloud services for business operations. Moreover, organisations recognise that securing their cloud environments is paramount to safeguarding digital assets and ensuring regulatory compliance. Investments in cloud security solutions also align with the broader trend toward digital transformation. Businesses are leveraging the cloud to drive innovation and agility. This neessitates a strong security framework to protect their evolving digital ecosystems.

Enhanced Budgeting for Compliance and Regulatory Needs

Data protection and privacy regulations are becoming increasingly stringent worldwide. Also, this necessitates enhanced budgeting for compliance-related cybersecurity solutions. I expect organisations to allocate more resources to auditing tools, risk management platforms, and solutions that help them meet regulatory requirements such as GDPR, CCPA, and HIPAA.

The emphasis on compliance reflects a growing awareness of the legal and reputational risks associated with non-compliance. Investing in compliance-related solutions also aligns with the broader trend toward data-driven decision-making. Moreover, by implementing tools that ensure alignment with regulatory requirements, organisations can demonstrate their commitment to ethical data practices and build trust among stakeholders.

Growth in Cybersecurity Insurance Expenditures

Cyber insurance is becoming an essential component of an organisation’s risk management strategy. The growth in cybersecurity insurance expenditures reflects a broader awareness of the financial implications of cybersecurity threats. Investing in cyber insurance aligns with the emphasis on accountability in cybersecurity spending. By securing coverage for potential losses, businesses can demonstrate their commitment to protecting their assets and ensuring business continuity in the face of unforeseen events.

By understanding the key cyber spending patterns outlined here, businesses can make informed decisions. They can enhance their security posture to protect their valuable assets and ensure business continuity as we move into 2025.

  • Cybersecurity in FinTech
  • InsurTech

Author

Waheed Mahmood

Published

26 November 2024

Estimated Read time

4Mins

Waheed Mahmood, Financial Services Lead at Rackspace Technology, on how cloud is elevating CX in the financial services industry

The importance of customer experience (CX) in financial services is growing. In July 2023, the Financial Conduct Authority (FCA) published its Consumer Duty guidelines, designed to set clearer standards of protection for consumers of financial services. The Consumer Duty was created to ensure that financial institutions (FIs) act fairly, while preventing customers from making poor financial decisions.

Despite the guidelines being implemented over a year ago, some FIs are still struggling to meet customers’ needs and are not working hard enough to protect them. In October 2024, for example, the FCA fined TSB Bank Plc £10,910,500 for failing to ensure that customers in arrears were treated fairly between 2014 and 2020.

According to Forrester, there has also been a significant decline in EU bank customer experience (CX) quality in 2024. This matters, because as CX quality declines, so does customer loyalty. Financial service executives must step up their game if they want to stay competitive and earn this loyalty. FIs that leverage technology can increase customer satisfaction, reduce the cost to serve and boost conversion rates and profitability. As we look ahead, here are some ways FIs can harness technology to drive customer satisfaction in 2025 and beyond.

Driving CX through the Cloud

The Consumer Duty’s objective was to guide individuals toward sound financial decisions. To achieve this, FI’s must leverage data and analytical insights. However, legacy systems often hinder effective data sharing and analysis, limiting the ability to provide personalised guidance.

Private cloud technology empowers banks to modernise their legacy systems. This can increase agility with the delivery of new services and products, enabling them to create and deliver enhanced CX. This includes offering seamless digital experiences, from smart self-service options and instant transaction tracking to tailored financial guidance and decision-making. Banks can also use cloud analytics to spot user pain points and service disruptions early, directly improving both customer satisfaction and profitability.

The integration of cloud services with existing banking systems also enhances data flow and interoperability. Real-time analytics platforms, such as Azure Stream Analytics help process and analyse vast amounts of data. This can reveal valuable insights into customer behaviour and preferences. Banks can then offer personalised advice and services, boosting customer satisfaction and interaction.

To maximise these benefits, FI’s need to ensure these customer insights are shared across departments. Eliminating departmental silos can drive improvements in product development, marketing strategies, and customer service protocols. Success requires integrating design expertise and data capabilities – involving teams from every business function to build a data framework and platform. This integration will help convert customer insights into actionable improvements.

Double down on service innovation for CX

Before leveraging cloud technology, FIs must evaluate their current technology stack to identify weak points before embarking on digital transformation initiatives. Legacy systems, which many FIs still depend on put them at a disadvantage as customer demands and expectations grow. This outdated infrastructure is particularly vulnerable, leaving sensitive customer data exposed to risk.

By updating their technology stack, FIs can improve customer interactions while streamlining critical systems for transaction handling and personalisation. These work together to deliver an experience that aligns closely with individual customer needs. 

FIs are also leveraging machine learning to gain insights into customer spending patterns, enabling them to offer personalised financial advice and recommendations. Additionally, GenAI is reshaping CX; AI-driven chatbots, for example, offer instance guidance and assistance, freeing up human staff to focus on more complex issues. However, to maximise the benefits of GenAI, FIs need robust infrastructure in place. GenAI models require high-quality, well-structured data for training and precise forecasting.

A cloud-based platform is particularly well-suited for FIs with specific demands around control, security and workload customisation. By adopting this approach, institutions can meet the high storage and encryption requirements of GenAI, thereby, enhancing both system performance and data security – key factors in scaling these technologies.

To respond to a continued decline in customer experience quality, financial service providers must make this a strategic priority. Delighting and engaging customers on a personal level has become vital and institutions that satisfy these expectations will be best equipped to attract new clients and build enduring loyalty.

  • Neobanking

Author

Dan Brightmore

Published

21 November 2024

Estimated Read time

2Mins

Mastercard integrates its Multi-Token Network (MTN) for tokenized deposits and tokenized assets with Kinexys Digital Payments (formerly JPM Coin)

Mastercard’s blockhain Multi-Token Network (MTN) has connected to Kinexys Digital Payments as a payment settlement solution. This will enhance the availability of B2B cross-border payments to business applications on MTN.

Kinexys Digital Payments is a next-generation payment rail powering real-time value transfer. Also, it uses commercial bank money and is offered through Kinexys by J.P. Morgan, the firm’s Blockchain business unit.

Mastercard’s MTN Blockchain meets JP Morgan’s Kinexys

Mastercard’s MTN brings together a set of API-enabled, blockchain-based tools and standards for innovative business models under one platform.

Kinexys by JP Morgan and Mastercard are respectively providing solutions designed to improve the efficiency of commercial transactions. Furthermore, these solutions aim to improve the cross-border payment experiences common for such transactions. They will achieve this by providing greater transparency and faster settlement as well as reducing time zone friction.

By integrating Mastercard MTN’s connectivity with Kinexys Digital Payments, mutual customers of MTN and Kinexys will be able to settle B2B transactions through a single API integration.

Kinexys – JP Morgan’s Blockchain business unit

“At Kinexys, we believe our solutions can play a transformative role in the ecosystem for digital global commerce and digital assets, where the value proposition of commercial transaction venues is enhanced by the availability of commercial bank payment rails that can natively integrate with any digital marketplace or platform. We look forward to supporting our clients engaging with the MTN ecosystem and collaborating further with Mastercard in the digital space.”

Naveen Mallela, Co-Head of Kinexys by JP Morgan

MTN – Mastercard’s Multi-Token Network

“For years, both Mastercard and Kinexys by JP Morgan have been committed to innovating for the future of digital asset and commercial infrastructure. By bringing together the power and connectivity of Mastercard’s MTN with Kinexys Digital Payments, we are unlocking greater speed and settlement capabilities for the entire value chain. Moreover, we are excited about this integration and the new use cases it will bring to life, leveraging the strengths and innovations of both organisations.”

Raj Dhamodharan, executive vice president, Blockchain and Digital Assets at Mastercard

  • Blockchain
  • Digital Payments

Author

Ozge Celik

Published

20 November 2024

Estimated Read time

4Mins

Ozge Celik, Head of Product at Turkey’s largest FinTech Papara, on how personalisation is making everyday financial transactions more manageable and embedded into our lifestyles

With unlimited choice from a global marketplace, customer expectations are continuing to reach new heights. Undeniably, we are seeing financial services – being led by the FinTech sector – undergoing a seismic shift towards personalisation and catering to this new form of demand. Users are no longer content with generic services. Furthermore, they want tailored, hyper personalised experiences that reflect their individual needs and preferences. This is particularly true for their banking experiences. Yet, many traditional banking institutions are struggling to keep up with these demands due to their legacy systems and traditional cookie-cutter approach. Whereas the FinTech industry, with its agile frameworks and state-of-the-art technologies, is demonstrating its capability to rapidly position solutions that cater to this demand.

The growing trend for personalisation

Personalisation in consumer services is not a novel concept, but its application within the financial sector is a relatively recent development. Despite its infancy, its impact on the industry is profound. Banking has always been a cornerstone of our daily lives, from withdrawing cash to transferring funds. As such, it is unsurprising that users increasingly view their financial services as an extension of their personal identity.

Over the past decade, we have seen the introduction of customisable physical bank cards, personalised digital tools on mobile banking apps and instant messaging services. Banks and fintechs are striving to meet users’ needs, reshaping the loyalty landscape that has traditionally favoured established banks. These institutions, with their often rigid and cumbersome systems, are being compelled to re-evaluate their user engagement strategies and the solutions they offer.

Leading the customisation charge

Startups and FinTechs are riding the crest of this wave of customisation. Traditional financial institutions frequently overestimate the costs associated with data collection and the development of meaningful personalised tools. FinTechs, on the other hand, harness their technological capabilities to sift through vast amounts of data, identifying individual preferences and behaviours. This insight enables them to better create personalised products and services that resonate with consumers on a deeper level. Offering such tailored experiences is not merely a competitive advantage; it is quickly becoming essential to attract and retain users.

The rise of the super app

The emergence of the super app epitomises this new paradigm. The inconvenience of managing multiple mobile banking apps is becoming a thing of the past as consumers increasingly favour a unified platform that addresses all their financial needs. This demand extends beyond financial services. The success of super apps like Alipay and WeChat Pay, which integrate services from ride-hailing to grocery shopping, illustrates how this model has become ingrained in everyday life. While the same level of adoption may not be universal due to various market factors, FinTechs are taking note and developing intuitive apps that combine financial and non-financial functions to deliver a seamless and efficient user experience.

FinTech’s personalisation extends to every facet of the financial journey. From customised budgeting tools and investment portfolios, to personalised insurance products and bespoke lending solutions, providers are redefining what it means to have a financial service that truly fits the individual.

The implications for personalisation in traditional banking

To stay relevant, banks must embrace digital transformation and consider partnerships with FinTechs or face the risk of further falling behind. Collaboration between established financial institutions and FinTech disruptors can yield the best of both worlds: the trust and scale of traditional banks combined with the innovation and agility of fintech.

As FinTechs continue to meet and exceed the hyper-personalised needs of consumers, they are establishing a new benchmark in the financial services industry. By making everyday financial transactions more manageable and integrated into our lifestyles, they are not merely responding to consumer demands but are also anticipating them. As this trend progresses, we can expect to witness further disruption, with fintechs at the helm, steering us towards a more personalised and accessible financial future for all.

About Papara

We are not a Bank; we are Papara, we are here for you.

We are a financial technology company that offers a new financial application experience. Keeping the user in mind against the traditional financial solutions, we strive to build the next generation financial super app. Our amazing community always suggest features and gives us constant feedback.

We integrate the most innovative technology to help our users control their money while being completely transparent.

In 2015,we started our services with the permission we received from the Banking Regulation and Supervision Agency to operate as an “Electronic Money Institution”.

Papara is the first non-bank to issue a Mastercard logo prepaid card in Turkey and currently a Mastercard, Visa, and Interbank Card Center member. In our seventh year of operation, we have acquired 21 million users and expanded our team to 1.000 happy people dedicated to creating the best financial experience.

Today, millions of our users choose Papara’s innovative products to make millions of transactions every month.

Image credit: www.dubaisims.com

  • Neobanking

Author

Dan Brightmore

Published

15 November 2024

Estimated Read time

2Mins

FinTech Connect shapes the future of financial services with the UK’s only full FinTech ecosystem event at London’s Excel December 4-5

Join us as FinTech Connect welcomes world leading Fintechs, Financial Institutions, Challenger Banks, Merchants, Scale-Ups and StartUps, Investors, Accelerators and Media to The ExceL, London. 

FinTech Connect

Each year we welcome visionaries from the UK, Europe and beyond all looking to innovate within the market, expand their footprint and drive businesses forward. The event brings all this under one roof, over two insight-packed days, sparking ideas, forging partnerships and accelerating change. 

Tackling the hottest topics and biggest challenges in the fintech market. Including: embedded finance, Web3, cross-border payments, investment, scaling, Gen AI, crypto, regulation, digital innovation and customer experience (CX).

Our mission is to connect the global thought leaders across the FinTech ecosystem in an event like no other. Set yourself up for a strong 2025 by signing up for the UK’s only full FinTech ecosystem event and join 2,000+ fintech leaders in London.

Insights from FinTech’s biggest names

We’ll be asking the big questions… What AI elements do financial institutions need to follow? Build, buy or partner? What opportunity works best in the modern ecosystem? How are banks advancing their digital transformations in 2024? Who owns the CX?

Gain insights on these topics and more from some of the biggest names in financial services. Speakers include Victoria Cleland, Executive Director – Payments, Bank of England; Rory Tanner, Head of UK Government Affairs at Revolut and Nick Kerrigan, Managing Director, Swift. Thought leaders will also be taking to the stage from HSBC, DZ Bank, Lloyds Banking Group, BT and a host of other leading institutions.

Keep up to date with the latest speakers, discussions and more. Download the full agenda here.

Book your place now!

Visit Fintech Connect to book your place at The Excel now.

For a 20% discount use the code: FS20

The Global FinTech Ecosystem. Connected.

  • Artificial Intelligence in FinTech
  • Neobanking

Author

Seth Ruden

Published

14 November 2024

Estimated Read time

4Mins

Seth Ruden, Director of Global Advisory at BioCatch, on how the UK’s financial institutions can be better prepared to deal with authorised push payment (APP) scams

The focus on authorised push payment (APP) fraud scams – where scammers impersonate reputable individuals or institutions – has increasingly shifted to whether banks should reimburse customers for funds stolen by scammers. We can gain valuable insights from the approaches taken by financial institutions in the UK. They are leading the way with their cybersecurity efforts compared to their counterparts in other regions.

First, British banks established a standardised reporting system and typology. This is a fundamental first step that every financial institution should take to grasp the full scope of how financial fraud affects banking consumers. Banks may disclose the type of fraud, the amount of money stolen, and the bank measures used to prevent the scam from occurring. This centralised view brings the true scope of the totality of scams into focus.

Three ways the UK’s financial institutions are leading in the fight against fraud

Second, the UK has developed strategies to identify specific scams and reduce their losses. The regulator added a slew of new controls to banks, including confirmation of payee, scam and transaction-specific interventions, and money mule account controls for those receiving the illicit funds. Before regulation, not every financial institution had implemented these controls, providing an uneven playing field and allowing scams to flourish. Banks outside the UK should not wait for regulators to mandate controls like these. They should do it on their own accord to prove they realise the magnitude of the scam problem and the severity of its impact on bank customers.

Improved consumer financial scam controls should be a minimum requirement for financial institutions in 2024. These controls should cover: authorised push payment behavioural analysis, money mule behaviour around both account opening and account activity, and analysis of both inbound and outbound transactions. Furthermore, detecting and then closing money mule accounts – used by fraudsters as an intermediate stop between the victim’s account and the final destination for the stolen funds – is absolutely critical, as they serve as the backbone for every consumer-based financial scam.

The third? Getting involved. Banks need to integrate themselves and participate with industry and trade associations – such as the FS-ISACs and GASA (Global Anti Scam Alliance). These associations provide opportunities to network with peer institutions and others in the fraud value chain to share scam information and learn from each other.

Effective Fraud Prevention: A practical assessment of Key Strategies

Many banks today use precision anomaly detection and behavioural biometrics to notify them when a fraudulent transaction takes place. Financial institutions in the UK often issue actionable alerts to clients in real-time. Santander UK, for example, now asks customers if they have seen the item in person before approving a payment through Facebook Marketplace. For online account opening, there are good solutions for bot-detection to prevent automated bots from opening new accounts, behavioural biometrics to detect suspicious patterns of data entry, and solutions that can analyse the customer KYC data. A secondary benefit of strong account opening controls is the reduction of operational costs to close bogus accounts.

For detecting existing money mule accounts, traditionally it required tracking the circulation of funds, both the inbound and outbound transaction activity and looking for anomalies (e.g. high value in and then immediately transferred out). Now, user behaviour anomalies – such as changes in the user’s input/output device activity or navigation preferences – may indicate a change in account control before the suspicious transactions take place.

Protecting Customers: What the future holds for Financial institutions

Since the UK’s introduction to faster payments, the region has become a centre of research for the rest of the world. However, eliminating threats to UK customers and their money has remained difficult despite an increase in regulation. While Governments and international groups are starting to identify and take down some of these organisations there are still hundreds of thousands of scammers and coerced individuals involved in these intricate schemes. A key challenge for financial institutions is understanding how scammers get their customers to initiate authorised payment. However, these challenges can be combatted by understanding the psychology behind how scammers work which can be a prominent factor in tackling the problem. Financial institutions must ensure that, in a few years’ time, they can confidently answer ‘yes’ to the question: Did we do enough to help eliminate consumer financial scams?

  • Cybersecurity in FinTech

Author

Nell Walker

Published

Estimated Read time

6Mins

Certain procurement pain points can prove debilitating for a business, freezing it in its tracks when it’s trying to grow…

Certain procurement pain points can prove debilitating for a business, freezing it in its tracks when it’s trying to grow and improve. This is where companies like Candex are able to step in and turn a headache into something so simple, it requires no further thought. 

Danielle McQuiston is the Chief Customer Officer at Candex. She’s been with the fintech startup for five years, spending two decades prior to that working in procurement at Sanofi. Candex is a technology-based master vendor that allows customers to engage with and pay one-off or small suppliers without setting them up in their system. This means that the system doesn’t get clogged up with suppliers that are rarely or never going to be used again. 

“We’re primarily used for what companies consider tail spend, and we typically deliver it as a punchout catalogue for a really simple user experience,” McQuiston explains. That ability to support lots of customers was what drew her to the role. “Coming to Candex, I was very excited about what they were doing and wanted to help as many companies as possible.”

Addressing tail spend

That ability to address tail spend in a unique way is the main thing that differentiates Candex. It’s an enormous problem for procurement professionals. The way Candex delivers it is through a digital plug-and-play solution, removing the need to be dependent on human intervention. “It’s a horizontal solution for any good or service, and it’s available in over 45 countries now,” says McQuiston. “It becomes part of the customer’s ecosystems and leverages the P2P process. It’s super compliant, and allows a lot of control.”

With this tool in place, Candex’s customers are able to gain much better control over their smaller purchases, defining what is allowed to be purchased. For many, this tool allows them to put tighter restrictions on purchases than their e-procurement systems are able to do. Additionally, Candex runs suppliers through screenings every day, which generally doesn’t happen for small, rarely-used suppliers.

“We run really detailed compliance and sanction screening against all those vendors, taking away a really daunting task from customers,” McQuiston states. “Customers probably check those suppliers once when they’re being set up, but then they never look at them again. Every day, we’re checking them, and keeping an eye on them when our customers can’t.”

Candex’s reporting is extremely detailed, and provides customers with the kind of real-time visibility they wouldn’t normally get – even in their own systems. Reports are generated weekly or monthly, including the diversity status of suppliers. This is data that a lot of clients then feed directly into their Power BI tools and data lakes, meaning they’re able to integrate it seamlessly into their other data.

Cleaning up the data

The whole purpose and aim of Candex’s tool is to make life easier for its customers, streamline its processes, and improve efficiencies. To that end, standardisation is key when it comes to business improvements, and that includes preparing data prior to implementing new technologies and processes. When it comes to ensuring a business’s data is healthy –  before launching into major tech changes – accepting the necessity of making foundational change is key. 

“Data cleansing processes are ugly, cumbersome, and long – and everyone has to do them,” McQuiston comments. “But you have to accept that you’re going to have to do something, if you want to get a handle on your spend. First and foremost, you need to standardise the way you name things, the way you put data in the system, and you need a really strict discipline around that. All of those things will make backend processes a lot easier.”

It’s just one of many considerations CPOs need to bear in mind when seeking out technology solutions and implementation. Modern procurement departments have a seat at the wider business table now, and what they do impacts the entire business. So when it comes to utilising solutions for the sake of the business at large, there are many factors to think about.

“As with any data or technology, it’s all about garbage in and garbage out,” says McQuiston. “Any advanced technology should be used with caution and viewed with a critical eye. You have to start with knowing what you want out of it. 

“A lot of times, people put technology in place because it looks interesting, but you need to start with the problem and work backwards. If the issue is user experience, you need to make sure that whatever you’re implementing focuses on a positive UX. If the problem is unclean data, you need to make sure you’re putting in place all the foundational elements you need to make that better. Always start from the perspective of implementing a technology based on a problem, rather than the other way around.”

Improving UX in 2025

It’s a seriously dynamic time to be involved in procurement right now, as evidenced by the intense buzz around us at DPW Amsterdam as we sit with McQuiston. As we look ahead, she envisions that procurement will have an increasingly powerful impact on user experience. This is particularly important at a time when tasks are becoming increasingly automated, with less and less direct human interaction.

“We’re also seeing a pretty big leap forward in terms of best practice sharing amongst our clients,” says McQuiston, something that events like DPW also encourage. “For Candex, a big theme of 2024 has been getting our clients together to share best practices and information, helping them to develop further expertise in the field. 2025 will have more of the same, but there’s now a higher level of maturity out there in the way customers are considering tail spend. As people continue to onboard solutions, it will be interesting to see how that impacts the UX in relation to Candex. We’re always looking for ways to make our tool more user-friendly and add better functionality.”

All of this is why Candex’s customers love the company. On a base level, Candex takes a complex pain point and makes it simple. In a broader sense, the reason Candex is becoming so popular is the way it works with people. “The most common feedback we get from customers and suppliers is that we’re great to work with because we’re so flexible,” says McQuiston. “We hired a team of procurement experts, so our team is made up of people who really understand the pain of our clients, and can anticipate their fears, their needs, and cater to those.”

Author

Nell Walker

Published

Estimated Read time

6Mins

Making procurement slicker, more streamlined, is the name of the game right now – and this is precisely why Globality…

Making procurement slicker, more streamlined, is the name of the game right now – and this is precisely why Globality exists. It’s an organisation which leverages advanced, native-built AI to make sourcing more autonomous for Fortune 500 and Global 2000 companies, meaning it has a finger on a pulse of the technology tools procurement now has access to as the industry shifts and evolves.

Keith Hausmann is the Chief Customer Officer at Globality. He has been working in procurement since the early 90s, both in industry as a service provider, and now, at a technology company. He came to Globality from Accenture, where he ran the operations business. During his first real job after college, Hausmann was also part of a training program at a major Fortune 500 company, working closely with a COO. At some point they got into a conversation about salespeople seemingly having an advantage over procurement people due to their access to information, knowledge, and training. The COO suggested that they launch a company to help support procurement. For Hausmann, it was a serendipitous entry to the industry.

“I came to Globality because I saw the business was struggling with how to scale, automate, and deliver a differentiated user experience. Ultimately, I found it really compelling, and joined about five years ago.”

Achieving 10X thinking

Hausmann admits that the concept of what procurement is has only been defined relatively recently, and he’s been in the industry long enough to have seen the shift happen and suddenly accelerate over the last few years. Now, procurement professionals are in a position where they’re able to think big, and they have the tools to support that way of thinking. One of the most-discussed topics right now is 10X, whereby businesses are setting targets for themselves that are 10 times greater than what they can realistically achieve.

“There continues to be, and always has been, so many mind-numbing manual activities that go on in procurement spaces,” says Hausmann. “We’ve built small armies of teams to handle those things. I think 10X has prompted us to take a step back and ask if there’s now technology that can uplift the role of people in the function and take on some of those automatable tasks. Whether that’s writing RFPs, discovering suppliers, or analysing proposals – these are all things that can be automated in today’s technological world. With 10X thinking, you can imagine the many, many, many things that can be automated and just go after them. 

“There are barriers, of course. The biggest one is not being able to convey a compelling vision of what we want people to do in the new world. It’s not necessarily about making them go away – it’s about making their daily jobs, lives, and work more valuable. There are so many things around category thinking and strategy that don’t get done because people are spending so much time on tasks that could be automated. So I think the barrier is creating that vision and that plan to shift the operating models, roles, and the skill sets to something new and different.”

People power

Hausmann believes that if roles are reshaped and honed in response to automation, it’s less likely that there will be resistance to change because employees will know exactly what they’re doing, rather than being concerned about their future. “They have to know what they’re doing before they jump on board. It just requires a mindset change and good change management.”

Hausmann believes it’s down to the CPO to drive that change management by conveying the activities, impacts, roles, and operating model they envision. If they can paint a picture of how humans can impact things in a new way, alongside the new technology rather than against it, suddenly it’s an exciting prospect and people are keen to make a bigger impact. 

CFOs and CPOs joining forces

While CPOs now have a long-deserved seat at the table to help push change business-wide, CFOs’ roles are also expanding and having an increased impact on procurement. “I think they’ve always influenced what’s going on in procurement,” says Hausmann. “CFOs are the champions of many things, but certainly improving the bottom line of the company. They’re also champions of using technology to make the organisation more resilient, more scalable, and more efficient. There was a time when people thought that the CTO or CIO would be doing that, but more often than not, the CFO is the ultimate owner of improving business impacts. More and more, we’re seeing our customers leaning on the CFO to help them make decisions about investments that have a big impact through technology and AI. 

“These days, the relationship between the CFO and CPO is wildly different to what it once was, and CFOs are showing more interest in procurement as a function than ever, making a difference to the bottom line. It makes sense because, in theory, procurement controls one of the biggest cost line items in a company, besides raw headcount.”

Matching the pace of technology

The fact that we still need to focus on change management and relationships confirms that the way procurement is changing isn’t just about the technology. Far from it. However, technology is moving at an incredible pace and needs to be taken seriously. There are things that are possible now which couldn’t be done even one or two years ago.

“A few years ago, technology couldn’t write an RFX document for you,” Hausmann says. “Technology could not instantaneously bring to light the most relevant suppliers from within a customer’s supply base, or in the broader market. It couldn’t write a contract, or an SOW, or a work order. It can now. Those are things that are near and dear to my heart that were impossible 3-5 years ago.”

With these tools in mind, procurement professionals are able to think about the future in short-term stints. Five-year plans are no longer good enough when it comes to the way procurement is shifting – a year is now the maximum for putting plans in place. 

“I’ve always thought that procurement, from the perspective of technological advancement and investment perspective, should sit under a broader business umbrella,” says Hausmann. “I’d guess that probably 50% of companies in the world right now have some kind of program in place to save money or improve agility by investing in technology. And speed to market is more important than ever, so sourcing can’t be a bottleneck.”

Looking ahead, Hausmann expects to see many of the unique, differentiated technology providers becoming interoperable together, because big enterprises want services that operate and scale well in combination with others. 

“We’re seeing that a lot, and working with our customers on how we improve interoperability and integration,” he says. “Tools will become more seamless, more easy-to-use, more scalable. Another big thing is, and will continue to be, analytics. It’s a hot topic in procurement, and I think there are profound opportunities to be deployed. For Globality, we’ll continue to endlessly innovate on user experience, ease of use, and beyond.”

Author

Nell Walker

Published

Estimated Read time

7Mins

“I’m overwhelmed,” are Matthias Gutzmann’s first words when asked about DPW Amsterdam 2024. At the end of the bustling two-day…

“I’m overwhelmed,” are Matthias Gutzmann’s first words when asked about DPW Amsterdam 2024. At the end of the bustling two-day event, we sat down with Gutzmann, the company’s founder, and Herman Knevel, DPW’s CEO, for a debrief. Gutzmann also quite rightly pointed out that the final word on summarising those 48 hours is in the hands of the sponsors and attendees, but if the countless conversations we had with said sponsors and attendees are anything to go by, it was the best DPW event yet. And Gutzmann and Knevel agree.

“I really think that’s the case,” says Gutzmann. “We almost doubled the number of exhibiting startups, we had over 120 sponsors, more startup pitches than ever, and all the feedback I’ve heard so far has been amazing. There are always things you can do better, but I’m absolutely happy.”

Across the 9th and 10th of October, DPW Amsterdam welcomed over 1,300 attendees through its doors at Beurs van Berlage, Amsterdam. Those attendees arrived from 44 countries across 32 industries, and the event itself featured 72 sessions with 140 speakers across five stages. It’s abundantly clear that people are deeply passionate about DPW.

“On day one, it was already packed at 8:30 in the morning,” Knevel states. “The energy in the room was contagious, and the numbers speak for themselves. The startups, the innovators, the corporates, the mid-market – everybody who’s here has a genuine interest in what these guys are bringing to the procurement space.”

Reconnecting with the vision

Gutzmann describes that intangible energy as “bringing a little bit of joy back to procurement”. For many years, procurement was a very ill-defined concept – almost as ill-defined as the role of CPO. The shift has been a quick one, accelerated further by the COVID-19 pandemic, and events like DPW Amsterdam are part of the reason why. CPOs having somewhere to go, to meet, to learn about the procurement landscape is vital, hence that inspiring energy that permeates every DPW event.

“A lot of people are missing that vibe,” Gutzmann continues. “It’s why I founded DPW. I was inspired by Mark Perera [Chairman of DPW], who I worked with at Vizibl, and had great technology while also being so inspiring. I realised we needed to connect founders with CPOs. I think every CPO should talk to one startup founder per week, at least. It’s important that we listen to their vision.”

Striving for 10X

The core of those visions for the 2024 event revolves around the concept of 10X, the idea being that you set targets for your business that are 10 times greater than what you think you can realistically achieve. It keeps people ambitious, always striving for greatness, and it’s especially prevalent in startup culture – hence Gutzmann’s belief that CPOs should be connecting with them more.

“Deciding on 10X for this year’s theme was serendipity,” says Knevel. “The term came along and Matthias said, ‘this is it – this is what we need in procurement’. This is what the industry needs, and we’re exploring it, diving deeper.”

“Last year’s theme was ‘Make Tech Work’, which was all about getting the basics right in order to scale,” Gutzmann continues. “This year we said, ‘how can we take it further?’ We are entering the biggest wave of AI yet. That technology is giving us the opportunity and the possibility to scale outcomes. The world around us is changing so fast, so we need to be more agile, scalable, and faster in procurement. It’s a very ambitious, maybe lofty theme, but it’s a mindset more than anything else.”

“It’s the mindset that drives innovation and speed,” Knevel adds. “That’s really important in this age of procuretech and supply chain tech.”

When it comes to honing that 10X mindset, it’s all about having a purpose in mind. A lot of the procurement professionals we spoke to at DPW Amsterdam called this a ‘north star’, which is the phase Gutzmann uses too. “That’s where it starts. There’s so much procurement can do. There are so many problems in the world, and I believe procurement can be the solution to many of those. So I think it starts with the CPO and their leadership, their vision. You also have to embrace startup innovation, be more experimental in the way you work, instigate new ways of working, and be bold in your thinking. You also have to remember it’s okay to fail.”

Growing DPW

Something that’s particularly impressive about DPW Amsterdam 2024 is that it’s actually the second of the year. Back in June, DPW ventured into the North American market with an intimate summit held in New York City, which CPOstrategy was fortunate enough to be invited to. Planning one wildly popular event a year is one thing, but venturing into a whole new part of the world with an additional one is incredibly dedicated.

“I’m a bit more conservative when planning ahead, so there probably wouldn’t be a New York event without Herman encouraging me,” says Gutzmann. “I’m glad he said ‘let’s go for it’. It was a short-term plan, but it was ultimately very successful and the right decision.”

Knevel adds: “The feedback we got from sponsors and delegates was quite impressive. They were asking for more. And it’s not just Matthias and myself – we have a great team here. This is a massive production, but we made the jump and it’s paid off.”

Inspiration for 2025

When it comes to the lessons Gutzmann and Knevel have learned in response to this event, it’s more about narrowing down the influx of ideas DPW gives them. By the time we spoke with them at the end of the Amsterdam 2024 event, their heads were spinning with inspiration.

“I have so many ideas,” says Gutzmann. “Every year we reinvent the show, so we never rest. We’re always asking what we can do better. How can we improve? I think this year we maxed out the number of sponsor stands that are possible to have. We doubled the number of under-30 attendees. There’s the potential to go a little deeper on the talent side, connecting students with the corporates and building a proper program around that.”

There was also the Tech Safari this year. The idea was to make the expo hall easier to navigate, since it was more crowded than ever this year. Members of the DPW team acted as ‘super connectors’ to help attendees find the right solutions and help startups find new customers. The aim was to simply make it easier for everyone involved to find what they’re looking for in small groups,enabling them to find who they wanted, talk to them, and ask questions. It turned out to be an amazing interactive experience for people, making sure they felt thoroughly looked after and valued.

“Plus there’s an opportunity to cater more to the corporates coming in,” Gutzmann continues. “Perhaps we will build a custom program for them around the event. Some of them are already coming in with teams and doing annual leadership meetings outside of the venue, but I think there’s scope to show them solutions and do some workshops within the event. We can also do more with day zero, where we have site events. There’s much more we can do.”

Giving CPOs what they want

As for the broader future of the event, DPW’s heart lies in Amsterdam and will continue to do so. The organisation is building its team even further and putting strategies in place for future events, allowing it to move forward. “We follow the demand of what our customers want,” Knevel says. That’s what really drives DPW and how the event is themed and set up. The organisation listens to CPOs so it can give them exactly what they need, and what will help the industry level up further and further. 

“There are things we’re still developing,” says Gutzmann. “For example, the podcast studio [something introduced in its current form for 2024] is something Herman is very passionate about, so it was great to test it out here. There’s more we can do with that. We have so many ideas and it’s important to engage our amazing team on these ideas and see what they think along the way.”

“We’re ideating a lot,” Knevel adds. “And we’re asking our ecosystem what we should do more of.”

“Ultimately, we’re bringing in the voice of the customer to make sure we’re giving them what they want and need,” Gutzmann concludes. “That’s the whole purpose of DPW.”

Author

Dan Brightmore

Published

13 November 2024

Estimated Read time

2Mins

Ozone API has provided Open Banking Limited (OBL) with an updated model bank as the model bank provider for OBL to reflect v4.0 of the Open Banking standards 

The global open banking leader, Ozone API, has launched an updated platform for Open Banking Limited (OBL) in line with the UK’s latest standards. It is the first major update since the introduction of VRPs. 

Ozone API has successfully updated the model bank to support the rollout of the UK’s Open Banking Standards v4.0. This positions Ozone API as the first provider to deliver fully compliant APIs, facilitating the transition for financial institutions and third-party providers (TPPs) operating in the UK. 

Open Banking Standards

The changes were announced by OBL in early July. OBLv4 introduces some mandatory updates for the UK’s CMA9 banks, with some required to be completed by as early as 31st December 2024. Additionally, ISO 20022 is set for implementation by 31st March 2025. Alongside the Bank of England’s publication of mandatory updates to payment regulations. These proposed changes have been driven by several significant factors, including the deprecation of key security standards such as FAPI 1 Implementers Draft 2.  

While the UK open banking standard was initially mandated just for the CMA9 banks, it has become the de facto standard for the UK market. However, many UK banks remain on old versions of the standard.   

The OBL model bank serves as a critical testing ground for banks and financial institutions, enabling them to experiment with and refine their API implementations in a controlled and secure environment. It will serve as a vital resource for banks, fintechs, and other TPPs by providing a safe space to develop and test their APIs in alignment with the new OBLv4 standards. It is designed to help institutions comply with the regulatory changes. 

Ozone API 

“We’re delighted to confirm that we’re the first provider to launch a platform that reflects v4.0 of the Open Banking Standards for Open Banking Limited. We’re excited to work with our partners to support fast and high-quality API changes, ahead of the first legislative deadlines coming into force later this year. Ensuring a smooth transition to the updated standards is critical for banking players who want to stay at the forefront of open banking industry changes into 2025 and beyond. We are extremely proud that our market-leading platform is ready to support our customers and partners as they transition to v4.0. I’m pleased that we’re able to support the entire UK financial ecosystem to start their OBLv4 journey by providing the OBL’s model bank. Our founding team were closely involved during their time working with the Open Banking Implementation Entity in the development of the UK Open Banking Standards, and we remain committed to enabling UK banks to make the most of open banking now and into the future.”  

Huw Davies, CEO of Ozone API

Open Banking Limited

“Open Banking Limited is not only committed to maintaining the open banking standard, but also supporting the ecosystem by helping participants with their journey to version 4. This includes upgrading the model bank to v4 to provide as much support and coverage to participants as possible including the FCS, Standards and technical guidance.” 

Henk Van Hulle, CEO, Open Banking Ltd

Ozone API has launched a comprehensive guide and a series of educational resources to accompany the new OBLv4 standards, aimed at helping banks and FIs navigate the changes smoothly and efficiently. The guide and resources provide actionable insights and best practices for institutions of all sizes.   

Since the UK Government announced it would revisit the Data Protection and Digital Information Bill in July 2024, it is anticipated that the UK will see more regulatory changes related to open banking, smart data and the open data economy.   

Ozone API is also supporting banks in the US market this year, following the US Government announcing new open banking legislation regulations under Section 1033 of the Dodd-Frank Act.  

  • Neobanking

Author

Dan Brightmore

Published

12 November 2024

Estimated Read time

3Mins

Other key findings include surge of info-stealers and botnets, an increase in evasive malware and a rise in network attacks across the Asia Pacific

WatchGuard® Technologies, a global leader in unified Cybersecurity, today released the findings of its latest Internet Security Report. The quarterly analysis details the top malware, network, and endpoint security threats observed during the second quarter of 2024. 

Among the report’s key findings was that 7 of the Top 10 malware threats by volume were new this quarter. Furthermore, this indicates threat actors are pivoting toward new techniques. The new top threats included Lumma Stealer. This advanced malware is designed to steal sensitive data from compromised systems. Also, a Mirai Botnet variant, which infects smart devices and enables threat actors to turn them into remotely controlled bots. And a LokiBot malware, which targets Windows and Android devices and aims to steal credential information. 

Cybersecurity fears for Blockchain

WatchGuard’s Cybersecurity Threat Lab also observed new instances of threat actors employing “EtherHiding”. A method of embedding malicious PowerShell scripts in blockchains such as Binance Smart Contracts. In these instances, a fake error message linking to the malicious script appears on compromised websites, prompting victims to “update your browser”. Malicious code in blockchains poses a long-term threat. As blockchains are not meant to be changed, theoretically, a blockchain could become an immutable host of malicious content. 

“The latest findings in the Q2 2024 Internet Security Report reflect how threat actors tend to fall into patterns of behaviour. Certain attack techniques become trendy and dominant in waves,” said Corey Nachreiner, CSO, WatchGuard Technologies. “Moreover, the report illustrates the importance of routinely updating and patching software and systems to address security gaps and ensure threat actors cannot exploit older vulnerabilities. Adopting a defence-in-depth approach, which can be executed effectively by a dedicated managed service provider, is a vital step toward combating these cybersecurity challenges successfully.”

Additional key findings from WatchGuard’s Report include: 

  • Malware detections were down 24% overall. This drop was caused by a 35% decrease in signature-based detections. However, threat actors were simply shifting focus to more evasive malware. Moreover, in Q2 2024, the Threat Lab’s advanced behavioural engine that identifies ransomware, zero-day threats, and evolving malware threats, found a 168% increase in evasive malware detections quarter-over-quarter. 
     
  • Network attacks increased 33% from Q1 2024. Across regions, the Asia Pacific accounted for 56% of all network attack detections, more than doubling since the previous quarter.
     
  • An NGINX vulnerability, originally detected in 2019, was the top network attack by volume in Q2 2024. It had not appeared in the Threat Lab’s Top 50 network attacks in previous quarters. The vulnerability accounted for 29% of total network attack detection volume, or approximately 724,000 detections across the US, EMEA, and APAC. 
     
  • The Fuzzbunch hacking toolkit emerged as the second-highest endpoint malware threat detected by volume. The toolkit serves as an open-source framework that can be used to attack Windows operating systems. It was stolen during The Shadow Brokers’ attack of the Equation Group, an NSA contractor, in 2016. 
     
  • Seventy-four percent of all browser-initiated endpoint malware attacks targeted Chromium-based browsers, which include Google Chrome, Microsoft Edge, and Brave.
     
  • A signature that detects malicious web content, trojan.html.hidden.1.gen, came in as the fourth most-widespread malware variant. The most common threat category caught by this signature involved phishing campaigns. These gather credentials from a user’s browser and deliver this information to an attacker-controlled server. Curiously, the Threat Lab observed a sample of this signature targeting students and faculty at Valdosta State University in Georgia. 
  • Blockchain
  • Cybersecurity in FinTech

Author

Dan Brightmore

Published

7 November 2024

Estimated Read time

2Mins

Bitget announces $100k seed funding through ‘Pitch n Slay’ roadshow competition

Bitget has launched the ‘Pitch n Slay’ roadshow competition, aiming to provide financial support, professional guidance and exposure for female entrepreneurs. This will be delivered through collaborations with organisations such as World of Women, Women in Web3, Bitget Wallet, Foresight Ventures and Morph. The initiative is designed to help female leaders expand their projects.

Bitget Blockchain boost for female entrepreneurs

The final will be held during DevCon in Bangkok, Thailand on November 15. The shortlisted “Pitch n Slay” project contestants will present their optimised projects to investors and a jury panel. The jury members include Gracy Chen – CEO of Bitget; Taya A – CEO of World of Women; Min Xu – Partner at Foresight Ventures; along with other outstanding Web3 leaders. Three winners will have the opportunity to share $100k seed funding.

Blockchain4Her

Bitget is the third largest exchange for crypto derivatives with a user base, surpassing 20 million registered accounts globally. Furthermore, it is one of the largest platforms for cryptocurrency copy trading. Meanwhile, the daily trading volume on Bitget exceeds 10 billion USDT, reflecting its significant market presence.

“Bitget is committed to gender inclusivity with women making up more than 45% of our management team. We are also dedicated to creating an inclusive culture for the LGBT community. Through the Blockchain4Her program we hope to create more growth opportunities for women-led startups We’ll continue to expand this platform, creating pathways for growth and amplifying women-led startups in Web3.”

Gracy Chen, CEO, Bitget

About Bitget

With a background in traditional finance, Bitget’s founding team discovered blockchain technology in 2015. But it was viewed as “tulip mania” by the industry back then. In 2018, we became intrigued by cryptocurrency after studying the Bitcoin whitepaper and Ethereum ecosystem. We believed that cryptocurrency would play an important role in the future and even benefit the unbanked groups.

Born in a bear market, Bitget insists on putting users first, focusing on product innovation, and advocating long-term development with the spirit of earnestness. The company aims to inspire people to embrace crypto and improve the way they trade, one at a time.

  • Blockchain

Author

Dan Brightmore

Published

6 November 2024

Estimated Read time

3Mins

Analysing “The State of Global Insurtech” report by Dealroom.co, Mundi Ventures, and MAPFRE

Insurance technology funding from venture capitalists is projected to close at $4.2 billion by the end of the year, according to “The State of Global Insurtech” report by Dealroom.co, Mundi Ventures, and MAPFRE.

Global InsurTech investment

In the first nine months, global insurtech investment already amounted to $3.2 billion. The fourth quarter is expected to see mostly Series B and C funding rounds for breakout-stage startups. These firms are said to be approaching pre-pandemic funding peaks.

“After the uncertainty of previous years, the global insurtech market is now showing signs of further stabilisation,” said Javier Santiso, Chief Executive and GM of Mundi Ventures. “While the frenzy has cooled, we are seeing a positive rebound in early-growth/breakout stages, particularly with Series B funding picking up.”

However, late-stage startups are facing significant funding challenges, with large-scale investments into Series D and later rounds seeing steep declines. The setbacks highlight investor caution around high-valuation, mature companies struggling to maintain momentum. Meanwhile, some late-stage ventures are refocusing on profitable unit economics to position themselves for potential initial public offerings in the next few years.

US leading on InsurTech

Regionally, the US leads InsurTech investment with $1.8 billion so far this year, followed by Europe at $1.1 billion. In contrast, emerging markets like Latin America and Africa continue to lag behind with $37.1 million and $32.4 million, respectively. Although funding in these regions remains limited, experts see growth potential due to a narrowing insurance gap.

“The Latin American ecosystem is resilient, and entrepreneurs continue to seek new formulas, models, and businesses to revitalize the sector,” noted Leire Jiménez, Chief Innovation Officer at MAPFRE. “The region has great potential, more so at a time when the insurance gap is gradually shrinking due to the large volume of opportunities in it.”

B2B growth

According to the report, business-to-business software-as-a-service (B2B SaaS) providers are seizing a significant share of InsurTech funding, capturing 43% of total investments in 2024. This category includes solutions for underwriting, claims management, risk assessment, and administrative efficiency.

Yoram Wijngaarde, founder and CEO of Dealroom.co, commented: “Insurance is a vast industry that has been largely unchanged for hundreds of years. It remains a huge target for tech efficiency and scale, but one that has been difficult to crack.

“Insurtech 2.0 is unbundling the challenge, zeroing in on niches like B2B SaaS, risk management, climate and cyber, with greater traction. Global breakout-stage investment is on track to grow year on year in 2024, and European insurtech VC has already passed 2023’s total. Insurtech is iterating.”

  • InsurTech

Author

Dan Brightmore

Published

5 November 2024

Estimated Read time

3Mins

New collaboration between Plumery and Payment Components
will enable financial institutions to adopt instant payments without overhauling existing core banking infrastructure

Plumery, a digital banking experience platform for customer-centric banking, has announced a new partnership with Payment Components, a leader in payments and open banking solutions. By decoupling digital experience and payments processes from legacy systems, institutions can now innovate more flexibly and efficiently. They can streamline operations while maintaining their existing core banking frameworks.

Progress for Payments

By leveraging Plumery’s innovative approach and Payment Components’ expertise, this partnership allows clients to accelerate time-to-market and future-proof operations against regulatory shifts such as the Instant Payments Regulation (IPR). Financial institutions can offload the burden of implementing new digital channels and instruments, such as real-time payments, without altering their core systems.

The IPR aims to make instant payments fully accessible to consumers and businesses across the EU. Currently only a minority of service providers support instant payments. While such regulatory changes usually impact core banking infrastructure, the Plumery and Payment Components partnership ensures these systems remain unaffected.

“This partnership is crucial for institutions needing to rapidly modernise without overhauling their entire infrastructure. Together, we offer a powerful, flexible solution that enables our clients to embrace innovation while staying ahead of regulatory changes like the IPR. Adding Payments Components to our partner ecosystem solidifies our commitment to creating cutting edge solutions that embrace digitisation.”

Ben Goldin, Founder and CEO of Plumery 

This global partnership offers a streamlined path to modernisation, enabling financial institutions to stay compliant, competitive and responsive to ongoing market shifts with solutions ready to support firms as they navigate the evolving financial landscape.

“Our collaboration with Plumery will empower financial institutions to seamlessly adopt modern payment technologies, addressing the complexities of regulatory changes, all while minimising disruptions to existing systems. We wanted to work with Plumery because both our company’s share a similar approach, work ethic and most importantly because of the compatibility of our products.”

Sotirios Nossis, Founder and CEO of Payment Components

Plumery

Headquartered in the Netherlands, Plumery’s mission is to empower financial institutions worldwide, regardless of size, to craft distinctive, contemporary, and customer-centric mobile and web experiences.

Plumery operates with a diverse team that embodies a unique combination of seasoned expertise and vibrant innovation. This blend has been cultivated through years of experience at start-ups, scale-ups, and established financial institutions, and most notably at globally leading financial technology companies, where they were instrumental in creating disruptive digital banking solutions and platforms that now serve 300+ banks globally.   

Plumery’s Digital Success Fabric platform provides banks with the foundation for success beyond fast-time-to-market by expediting the development of their digital front ends while significantly cutting costs compared to in-house initiatives or solutions with high total cost of ownership (TCO). 

Payment Components

At Payment Components, we’re reshaping the fintech landscape on a global scale. Today, our solutions are essential for more than 65 banks and financial institutions across 25 countries. We provide componentized solutions in a range of domains, including AI banking, open banking, account-to-account payments, and financial messaging technology. We achieve this through continuous innovation, building software components that help financial institutions become digital champions and deliver richer payment services to their clients. Our name reflects our belief: complicated processes in the financial industry will be replaced by AI-assisted dedicated components. We stand for simplicity, speed, and constant innovation

  • Digital Payments
  • Neobanking

Author

Dan Brightmore

Published

4 November 2024

Estimated Read time

3Mins

UnaFinancial study identifies cybersecurity as most influential factor driving FinTech growth

A recent study from UnaFinancial has identified cybersecurity as the most influential factor driving the development of FinTech worldwide, with a 63% significance. The second most impactful factor is the average hourly wage rate, with a 13% significance.

The study showed that FinTech growth in Europe, America, and globally has the strongest correlation with the size of the cybersecurity market, with correlation coefficients of 0.8714, 0.9762, and 0.8607, respectively.

In Asia, however, FinTech growth was more closely tied to the size of the consumer electronics market (0.9403). Meanwhile in Africa, it correlated with consumer spending volumes (0.7427). Therefore, globally, cybersecurity emerges as the most significant driver of FinTech growth. More vital protection facilitates a more robust FinTech environment.

Economic Disparities with Cybersecurity: High Income vs Low Income Economies

Economic status also plays a crucial role in shaping FinTech dynamics. High-income countries display pronounced correlations with various factors. Notably, the size of the cybersecurity market (0.6923), consumer electronics market (0.5839), average wage rates (0.6237), and consumer spending volumes (0.6971) are all significantly linked to FinTech growth.

Conversely, low-income economies exhibit no substantial correlations with these factors, highlighting a disparity in FinTech development influenced by financial resources and technological infrastructure.

Middle-income countries show a more nuanced relationship, with FinTech volumes correlating with nominal GDP (0.5373), the cybersecurity market (0.5727), consumer electronics (0.5637), fintech hubs (0.5409), and consumer spending volumes (0.6136). This suggests that while multiple factors impact middle-income countries, cybersecurity remains a vital component.

Quantifiable Cybersecurity Impact on FinTech

Furthermore, another interesting finding was the measurable impact of various factors on FinTech transactions. For example, for every $1 million increase in the global cybersecurity market, FinTech transactions per adult are expected to rise by $31.6. Similarly, a $1 increase in the average hourly wage could boost FinTech transactions by $67.5. The establishment of just one more FinTech hub could increase global FinTech transactions per capita by $839.

Remarkably, as a country’s income grows, the correlation between FinTech growth and two factors—cybersecurity market size and average wage rates—becomes stronger. This means these factors may indeed influence the development of FinTech across a country.

A deeper non-linear analysis further validated the significance of these factors. It revealed that the cybersecurity market is the most influential driver of FinTech growth, with 63% of significance, followed by the average wage rate (13%). As we advance into an increasingly digital future, the investment in and enhancement of cybersecurity will remain a cornerstone of FinTech innovation and expansion.

UnaFinancial Study

The UnaFinancial study considered data from 2022 for 146 countries, which were grouped into four regions: Asia, Europe, Africa and America. The potential factors under consideration included gender ratio, nominal GDP per capita, Internet penetration, cybersecurity market volumes per capita, consumer electronics market volumes, number of FinTech hubs per 100,000 people, average hourly wages, consumer spending per capita, direct investment as a share of GDP, unemployment rates, trade volume relative to GDP, and share of urban population.

The study not only illuminates the integral role of cybersecurity but also provides a roadmap for understanding how various factors interplay to influence the global FinTech landscape. In this digital age, safeguarding financial transactions and technologies is as critical as ever. Moreover, ensuring that FinTech continues to flourish amidst evolving challenges and opportunities.

  • Cybersecurity in FinTech

Author

Dan Brightmore

Published

1 November 2024

Estimated Read time

5Mins

Money20/20, operates the world’s leading fintech events in Europe, Asia and USA and is “the place where money does business”….

Money20/20, operates the world’s leading fintech events in Europe, Asia and USA and is “the place where money does business”. Money20/20 USA has unveiled seven startups poised to transform the financial sector. The selected startups are Brightwave, Casap, Eisen, Footprint, NALA, Ntropy, and Zumma. They were revealed during the Startup Media Session on October 29th in Las Vegas. The Startup Media Session was designed as part of the event’s goal to support startups at the intersection of finance and business.

“Money20/20 USA is focused on what drives the conversations most relevant to the FinTech industry. From economic and regulatory uncertainty to the future of payments and the impact AI will have on money moving forward. We are proud to highlight the work these startups are doing to move this industry forward.”

Scarlett Sieber, Chief Strategy and Growth Officer at Money20/20

Brightwave

Brightwave is the leading AI platform for financial services. It delivers accurate and insightful financial research enabling finance professionals to make better decisions faster. Its purpose-built AI systems synthesize insights across thousands of pages of primary sources. It can automate the most tedious parts of investing workflows and help users spot opportunities others have missed.

“Being named one of the Top 7 Startups at Money20/20 is a strong acknowledgment of the strides we’ve made in transforming how investment research is done. We’re also excited to announce our $15 million Series A funding at the world’s premier show for financial innovation. At Brightwave, we’re tackling one of the hardest problems in finance. We’re making sense of vast amounts of data to uncover deeper insights and relationships that others miss,” said Mike Conover, Founder and CEO at Brightwave.

Casap

Casap is an AI-powered disputes automation and fraud prevention platform. With built-in regulatory expertise and network integrations, Casap’s intelligent automation identifies fraudulent claims early. It delivers fast, frictionless dispute and chargeback resolution at a fraction of today’s cost.

“Money20/20 was the first conference I attended after starting Casap last year and it played a pivotal role in validating our vision. The connections, conversations, and insights I gained were invaluable. Exactly a year later, we’re back and launching out of stealth with live customers. We’re addressing some of the most pressing challenges in scaling payments. We’re starting with automating chargebacks and combating first-party fraud. We’re deeply grateful to Money20/20 for this opportunity to reach so many in the industry and help drive meaningful change in how payments are operated at scale,” said Saisi Peter, Co-founder of Casap.

Eisen

Eisen is the first escheatment automation solution that proactively manages the offboarding of dormant accounts, stale checks, wind-downs, and more. Financial institutions rely on Eisen to simplify the complex landscape of regulatory outreach, disbursement, and escheatment requirements. It ensures compliance while reducing operational risk.

“Money20/20 has been a cornerstone for Eisen since 2021, where the very idea for our company first sparked in the halls of the Venetian. It all started with conversations about the hardest challenges in FinTech. Each year, it’s helped us refine our vision and better serve our customers. For us, Money20/20 isn’t just about growth — it’s where Eisen began,” said Allen Osgood, CEO of Eisen.

Footprint

Footprint is a Series A identity company that has raised $20M from funds such as QED and Index Ventures. The company provides a single SDK that automates onboarding – KYC/KYB, fraud, security, and authentication – into an easy-to-integrate solution. Footprint works with leading companies across the Banking, Auto, and Real Estate sectors. Its technology portabalises identity, creating a centralised database of de-duplicated authentic identities.

“Money20/20 is at the vanguard of innovation. We’ve tried to be different at Footprint. Whether that be through our recent fraud indemnification program or our approach to labeling good actors. Some may think these are crazy ideas. But it is great to see Money20/20 continue to be where crazy can get a spotlight. That is how I would like to think true innovation happens,” said Eli Wachs, Co-founder and CEO of Footprint.

NALA

NALA is a global cross-border payments fintech company based in the US doing cross-border payments to emerging markets like Africa and Asia. It has two products, a consumer FinTech product enabling migrants to send money home and an infrastructure business called Rafiki, building payment rails for Africa. NALA recently became profitable and raised a $40m series A after achieving 10x revenue growth in 12 months.

“At NALA, we are on a mission to build payments for the next billion. Emerging markets are often overlooked but shouldn’t be underestimated as these regions have seen the fastest economic growth in the world. We have big ambitions for what we would like to achieve and have exciting plans in the pipeline in the coming years,“ said Benjamin Fernandes, Founder and CEO of NALA.

Ntropy

Ntropy is on a mission to organise the world’s financial data. 80% of the world’s financial data is unstructured and locked in transactions, documents, PDFs, and images. This means it is under-leveraged and cannot be used by models at scale. Ntropy was founded to solve this problem for any type of financial data, in any language, any geography, powering humans and more recently agents and agentic workflows in finance.

“Ntropy is processing hundreds of millions of transactions and documents weekly with over 98% accuracy, in under 100ms, 1000x faster, and cheaper than any other provider on the market. You can access Ntropy via our API-s directly, and more recently via NVIDIA NIM-s. This collaboration enables flexibility in deployment and allows our customers to scale immediately. This year’s Money20/20 has been about demonstrating the real value of GenAI and we have been very fortunate to have this exposure together with our partners at NVIDIA, Oracle, and AWS, who are accelerating Ntropy’s mission,” said Naré Vardanyan, Co-founder and CEO of Ntropy.

Zumma

Zumma is a financial copilot that automates and simplifies financial processes for Latin American businesses by leveraging existing tools they already use such as WhatsApp to save them time and money. The company is starting with automating expense management and expense invoicing processes, saving their customers more than $4,000 per employee per year in tax deductions.

“Being part of Money20/20’s Startup Media Session helps us spread the word about our product to the fintech community. The Money20/20 team has been key in our growth by connecting us to key players in the industry,” said Daniela Lascurain, COO and Co-founder of Zumma.

Launched by industry insiders in 2012, Money20/20 is the heartbeat of the global fintech ecosystem. Moreover, some of the most innovative, fast-moving ideas and companies have found their feet (and funding) on its show floor. From J.P. Morgan, Stripe, and Airwallex to HSBC, Deutsche Bank, and Checkout.com, Money20/20 is the place where money does business.

  • Digital Payments
  • Neobanking

Author

Scott Zoldi

Published

31 October 2024

Estimated Read time

4Mins

Scott Zoldi, Chief Analytics Officer at FICO considers whether the current AI bubble is set to burst, the potential repercussions of such an event, and how businesses can prepare

Since artificial intelligence emerged more than fifty years ago, it has experienced cycles of peaks and troughs. Periods of hype, quickly followed by unmet expectations that lead to bleak periods of AI-winter as users and investment pull back. We are currently in the biggest period of hype yet. Does that mean we are setting ourselves up for the biggest, most catastrophic fall to date?

AI drawback

There is a significant chance of such a drawback occurring in the near future. So, the growing number of businesses relying on AI must take steps to prepare and mitigate the impact a drawback or complete collapse could have. Research from Lloyds recently found adoption has doubled in the last year, with 63% of firms now investing in AI, compared to 32% in 2023. In addition, the same study found 81% of financial institutions now view it as a business opportunity, up from 56% in 2023.

This hype has led organisations to explore AI use for the first time. Often with little understanding of the algorithms’ core limitations. According to Gartner, in 2023 less than 10% of organisations were capable of operationalising AI to enable meaningful execution. This could be leading to the ‘unmet expectations’ stage of the damaging hype/drawback cycle. The all-encompassing FOMO of repeating the narrative of the incredible value of AI does not align with organisations’ ability to scale, manage huge risks, or derive real sustained business value.

Regulatory pressures for AI

There has been a lack of trust in AI by consumers and businsses alike. It has resulted in new AI regulations specifying strong responsibility and transparency requirements for applications. The vast majority of organisations are unable to meet these in traditional AI, let alone newer GenAI applications. Large language models (LLMs) were prematurely released to the public. The resulting succession of fails fuelled substantial pressure on companies to pull back from using such solutions other than for internal applications. It has been reported that 60% of banking businesses are actively limiting AI usage. This shows that the drawback has already begun. Organisations that have gone all-in on GenAI – especially those early adopters – will be the ones to pull back the most, and the fastest.

In financial services, where AI use has matured over decades, analytic technologies exist today that can withstand regulatory scrutiny. Forward-looking companies are ensuring they are prepared. They are moving to interpretable AI and backup traditional analytics on hand while they explore newer technologies with appropriate caution. This is in line with proper business accountability, vs the ‘build fast, break it’, mentality of the hype spinners.

Customer trust with AI

Customer trust has been violated by repeated failures in AI, and a lack of businesses taking customer safety seriously. A pull-back will assuage inherent mistrust in companies’ use of artificial intelligence in customer facing applications and repeated harmful outcomes.

Businesses who want their AI usage to survive the impending winter need to establish corporate standards for building safe, transparent, trustworthy Responsible AI models that focus on the tenets of robust, interpretable, ethical and auditable AI. Concurrently, these practices will demonstrate that regulations are being adhered to – and that their customers can trust AI. Organisations will move from the constant broadcast of a dizzying array of possible applications, to a few well-structured, accountable and meaningful applications that provide value to consumers, built responsibly. Regulation will be the catalyst.

Preparing for the worst

Too many organisations are driving AI strategy through business owners or software engineers who often have limited to no knowledge of the specifics of algorithm mathematics and the very signifiicant risk in using the technology.

Stringing together AI is easy. Building AI that is responsible and safe is a much harder and exhausting exercise requiring model development and deployment corporate standards. Businesses need to start now to define standards for adopting the right types of AI for appropriate business applications, meet regulatory compliances, and achieve optimal consumer outcomes.

Companies need to show true data science leadership by developing a Responsible AI programme or boosting practices that have atrophied during the GenAI hype cycle which for many threw standards to the wind. They should start with a review of how regulation is developing, and whether they have the standards, data science staff and algorithm experience to appropriately address and pressure-test their applications and to establish trust in AI usage. If they’re not prepared, they need to understand the business impacts of potentially having artificial intelligence pulled from their repository of tools.

Next, these companies must determine where to use traditional AI and where they use GenAI, and ensure this is not driven by marketing narrative but meeting both regulation and real business objectives safely. Finally, companies will want to adopt a humble approach to back up their deployments, to tier down to safer tech when the model indicates its decisioning is not trustworthy.

Now is the time to go beyond aspirational and boastful claims, to have honest discussions around the risks of this technology, and to define what mature and immature AI look like. This will help prevent a major drawback.

  • Artificial Intelligence in FinTech

Author

Dan Brightmore

Published

24 October 2024

Estimated Read time

4Mins

Fred Fuller, Global Head of Banking at Endava, on how banks can effectively communicate AI advancements and demonstrate ROI to investors

There is no single solution, AI or otherwise, that can prepare financial institutions for the modern world. To build a bank capable of successfully navigating the challenges of the future, a long-term digital transformation strategy is required. Especially relevant in the wake of recent IT outages,

At present, according to Endava’s Retail Banking Report 2024, 67% of banks are still heavily reliant on legacy systems. This leads to wasted budget and decreased efficiency. With limited resources available to modernise their tech stack, company leaders are often forced to choose which technology-type to prioritise. When doing this, 50% have chosen artificial intelligence (AI).

Is AI alone enough?

Can AI overhaul archaic processes or are there too many hurdles in the way? The first hurdle to successful digital transformation in financial services is overcoming the employees’ perception of the process. Time and time again, corporations have failed in the goal to integrate solutions that successfully feed into a long-term tech strategy. Often, this is due to wide-spread change fatigue. When exhausted by continuous efforts to change their day-to-day, workers become resistant to transformation. The best way to overcome change fatigue, and drive digital transformation in financial institutions, is through overhauling legacy systems. And adopting solutions that will stand the test of time.

Legacy Systems

Across the world, outdated legacy systems are holding financial institutions back and costing them billions. From 2022 to 2028, this expense is expected to grow at a rate of 7.8%. Not only do these archaic processes cost money, but they force banks to contend with a multitude of siloes. From departments to data. We live in a world where neobanks are growing in popularity. They are able to provide a frictionless customer experience using their modern tech stack. Traditional organisations must rid themselves of siloes to enable all areas of the business to leverage AI. In turn, this will provide them with strong data collection and support from departments who are agreed on next steps.

At present, three quarters of financial institutions feel they need to modernise their core. Without this change, they lack the secure, data-driven foundation necessary to utilise AI and see return on their technical investments.

The benefits of AI integration

Once a strong foundation has been laid, it becomes easier to see the practical benefits of integrating AI. For example, when data is no longer siloed by legacy systems, using chat bots to support customers with simple queries creates an efficient consumer experience. There are internal benefits too. AI can spot potentially suspicious activity, flagging it before it is too late. Or analysing data to ensure risk management and process automation. Despite its wide-reaching capabilities, AI alone is not the only option for financial institutions…

Routes to the future

Endava’s Retail Banking Report also showcased the variety of solutions that banks are using to improve their tech stack. 45% of respondents recognised data analytics, in and of themselves, as a top area for investment. Meanwhile 30% flagged IoT, and 14% the Metaverse.

There’s a reason for the emphasis on strong data. It not only supports the integration and use of AI-fuelled capabilities, but it is the driving force behind numerous functions of the bank itself. Of those surveyed, 37% aimed to use data to improve customer service. 34% to strengthen security, and 33% to personalise products and improve the customer experience.

As well as attracting and retaining consumers, business leaders can benefit from their access to strong data by attracting and retaining talent. With 39% of failed digital transformations viewing lack of employee buy-in as a factor, financial institutions are encouraged to educate workers on their technology integration plans, and ensure solutions are user-friendly. Fortunately, looking ahead, 20% of banks surveyed seek to use data to improve the workplace.  

A bank’s priority – looking ahead

More than ever, banks are reliant on data to keep operations running smoothly. From providing customers with a personalised experience to improving the workplace in the competition for talent, there are a multitude of reasons to ensure the foundations of your tech stack are strong.

Doing so makes integration of new technology a smoother experience for all. To this end, it’s no shock that 50% of banks are keen to embrace AI, using it to benefit customers and speed up processes. However, with many hampered by the legacy technology and the ever-looming threat of change fatigue, integration of any technology should be carefully planned, customer focused and data led.

  • Artificial Intelligence in FinTech

Author

Lucian Daia

Published

23 October 2024

Estimated Read time

5Mins

Lucian Daia, CTO at Zitec, on the rise of embedded finance driving customer loyalty across financial services

The frenzy of Christmas and Halloween marketing is already in full swing, with date reveals of Christmas market returns to pumpkin patch locations. Retailers are gearing up to execute their strategies as the Golden Quarter approaches. This year, however, retailers have another string to their bow, another key message to snag a customer: ‘Buy Now, Pay Later’ (BNPL).

Business is booming in the BNPL game, with the market quadrupling in size since 2020. It is expected to hit a record level of £30bn in 2024. The payment option is fast becoming a staple in the digital wallets of millions for the major retail milestones of the year.

Halloween is the first major retail moment in the run-up to the festive season as Britain settles back into its winter routine. However, the rise of BNPL points to consumer behaviour that’s fast evolving and anything but predictable.

But BNPL is just one piece of the puzzle. The Financial Conduct Authority (FCA) estimates that it’s likely more than half of UK adults are now using digital wallets. Furthermore, it’s expected to comprise half of all e-commerce spend (£203.5 billion) by 2027. Instant payments are also a growing part of the payment mix, with the innovation expected to represent 10.8% of overall payments by 2028. Retailers must navigate a wave of new technologies that are redefining check-out and payment processes.

Allowing new payment innovations like BNPL

Retailers sink or swim based on the customer experience they deliver. From the rise of omnichannel strategies to speedy same-day deliveries, click and collect options, and attention-grabbing immersive experiences… There’s no shortage of initiatives to drum up customer loyalty. Now, payment solutions are part of the equation. Embedded Finance is front and centre of this change, integrating financial services (like loans, insurance, debit cards etc.) into businesses that don’t usually handle finance.

Application Programming Interfaces (APIs) offer a “Plug and Play” type functionality. Retailers can offer seamless payment solutions like BNPL or digital wallets directly on their systems. This integration keeps shoppers on the site and reduces the tiresome friction of third-party pop-up systems. Moreover, it offers features like zero-interest point-of-sale loans or app-based rewards. Of course, it allows them to check-out as easily and as quickly as possible too.

Bye-bye Velcro

Bye-bye Velcro, hello snazzy digital wallet that holds payment cards and bank account details all in one place. Digital wallets have become essential components of modern payments and offer a convenient and less risky way for shoppers to buy their items.

Gone are the days of searching for physical cards under stashes of files or keying in repetitive digits on a keyboard. Digital wallets also offer a reduced risk of fraud because of advanced encryption and tokenisation technologies. Beyond security, digital wallets provide retailers with valuable consumer insights.

For instance, if a customer buys a Halloween costume and decorations, retailers can use this data to target them with personalised offers. Such as a discount on     themed candy bowls or matching spooky accessories. This level of personalisation is make or break for retailers today. Customers are setting a higher bar than ever for personalised content, offers and experiences that meet their needs and interests.

Speeding up cash flow with BNPL

Another innovation retailers need to have on their radar is instant payments. Unlike traditional systems that mean transactions can take hours or even days to complete, instant payments ensure funds are transferred within seconds.

For retailers, especially those operating on thin margins or managing high transaction volumes, the speed at which funds are made available can be make or break. The quick availability of cash means retailers can better manage their finances, buy new stock and address operational costs at pace.

Contrary to common belief, Brits don’t love queuing; in fact, they hate it. Faster payment options in-store have been pivotal in giving customers the speedy experience they demand so they can get on with their day. Quick transactions not only improve cash flow and reduce delays but enhance the customer experience. Making it ideal for those who’ve left their shopping too late, or forgotten an item on their list. As a result, customers walk away with the right impression.

Ditch the lines and pay with a tap

Retailers should be equipped with mobile point-of-sale (mPOS) systems that allow customers to make payments through their smartphones or other mobile devices, cutting down on wait times and speeding up the checkout process.

Retailers also stand to benefit from digital receipts, detailed sales reports, and real-time inventory management from having this system in place. This efficient processing not only improves cash flow but also provides valuable data for managing stock levels and customer preferences.

Beyond the Golden-Quarter

As retailers prepare for the Golden Quarter and beyond, understanding and leveraging FinTech payment innovations can seriously pay dividends. By adopting technologies such as embedded finance, digital wallets, instant payments, and mobile payments, retailers can improve their operational efficiency, enhance customer experiences, and position themselves for future growth in a digital-first world. Indeed, in recent years marked by economic shocks, huge tech advancements – especially with AI – and increasingly unpredictable consumer behaviour, it is crucial for retailers to stay ahead of payment options.

Providing consumers with flexibility, choices, and ultimately, ways to manage their outgoings and spread the cost will be key. Retailers will need to take a view on which innovations align best with the changing expectations of their customers and who they partner with to help them remain competitive.

  • Embedded Finance

Author

Dan Brightmore

Published

21 October 2024

Estimated Read time

2Mins

DBS Token Services, marks new milestone in financial services with blockchain

DBS has announced the introduction of DBS Token Services. The new suite of banking services integrates tokenisation and smart contract-enabled capabilities with award-winning banking services. It aims to unlock new transaction banking capabilities and operating efficiencies for its institutional clients with blockchain.

DBS Token Services via Blockchain

DBS Token Services unlocks instant, 24/7 real-time settlement of payments. It integrates the bank’s Ethereum Virtual Machine-compatible permissioned blockchain. This is the core payment engine and multiple industry payment infrastructure for DBS. In addition, smart contracts enable programmability for institutions to govern the use of funds according to predefined conditions. Enhancing security and transparency. Using a permissioned blockchain provides DBS full control over these services. It enables the bank to harness the benefits of blockchain technology while adhering to compliance standards.

The project is the culmination of several years of industry collaborations and experimentation in digital money innovations. The suite of solutions includes Treasury Tokens, Conditional Payments, and Programmable Rewards. It exemplifies how established financial institutions can leverage blockchain technology and smart contracts to deliver new client experiences.

Lim Soon Chong, Group Head of Global Transaction Services, DBS Bank

“To capture the massive shift of human and corporate activity to on-demand digital services, companies and public sector entities are reimagining their operating models and customer engagement strategies. A new generation of ‘always-on’ banking services is essential to support this shift and transformation.

“By leveraging tokenisation and smart contract capabilities, DBS Token Services enables companies and public sector entities. They can optimise liquidity management, streamline operational workflows, strengthen business resilience, and unlock new opportunities for end-customer or end-user engagement. It marks a significant step forward in transaction banking. It demonstrates how established financial institutions can leverage blockchain technology to deliver new ground-breaking features and experiences.”

DBS: Shaping the future of finance with Blockchain

Since 2016, DBS has been a driving force in several industry initiatives led by the Monetary Authority of Singapore. It has been exploring the potential of blockchain technology in enhancing Singapore’s financial landscape. Key initiatives include Project Ubin, Project Orchid and Project Guardian.

DBS Token Services continues to explore broader applications of blockchain enabled solutions. These include the tokenisation of securities and digitalisation of trade finance. These innovations reflect DBS’ ongoing commitment to building a more robust and innovative banking landscape..

  • Blockchain

Author

Amelia Lowe

Published

18 October 2024

Estimated Read time

5Mins

Amelia Lowe, Vice President of Operations at SquareTrade, on the potential for AI to revolutionise InsurTech

We have all witnessed the growth of AI in the past year. It’s quickly becoming an innate part of how we work. In the UK alone, the number of AI registered companies has increased by over 600% in under a decade. While the size of the AI market is expected to grow to over £800 billion by 2035. AI holds the power to radically reshape the way we live, learn, and conduct business. It can unlock possibilities we once only imagined. In the past two years, we’ve witnessed this transformational potential come to life. It’s driving innovation and redefining industries at an unprecedented pace.

We stand on the brink of a new era. AI is poised to become an integral force that not only enhances our daily lives but also paves the way for a more effective way of doing business and connecting with customers. AI holds the key to supercharging the customer experience, by creating seamless, intelligent customer journeys. So how do we do it?

In today’s highly competitive world, great customer service is essential. Customers do not want to feel like just another number. They want their individual needs to be recognised and addressed with personalised responses.

At SquareTrade, we aim to engage with our customers in ways that feel authentic and personal, even when they are engaging with AI. Our objective is to deliver a level of personalised interaction that was once thought of as unattainable with automated systems. Furthermore, ensuring every customer feels appreciated and understood in each exchange.

Enhancing customer experiences with AI for seamless, intelligent journeys

At the core of any customer relationship is the confidence that issues will be resolved quickly and effectively. Your team, and the people behind your company, play a pivotal role in delivering that trust across all customer touchpoints.

When integrating AI into a business, it is essential to align the technology with the company’s core objectives. For us, the focus has been on driving innovation and streamlining processes while ensuring customer service remains uncompromised. Our goal is to ensure, no matter how AI is implemented, the customer experience feels personal and authentic. Even with automated systems, we want to provide a level of personalised interaction that was once unimaginable. We see AI as an extension of our team. In light of that we apply the same values and principles to those we apply to our team, which focus on trust, transparency and respect.

Have you met Sally?

We now live in a world where AI tools and customer experience must work in harmony. According to Statista, 73% of consumers believe AI can enhance customer experience, with 80% reporting positive interactions with AI so far. Clearly, AI has reached a point where customers can appreciate its benefits during their times of need. It can seamlessly recognise and addresses issues productively.

When businesses explore integrating AI solutions, it’s crucial to align them with their unique standards, customer service approach, and company culture. No two AI solutions are alike. For us, it was vital that any AI implementation seamlessly complemented our existing operations. A key example of how we’ve achieved this is through the introduction of Sally, our AI chatbot. Sally provides one of the quickest and most efficient ways for customers to engage with us when visiting our website. This enhances the user experience while staying true to our service values.

We are already witnessing the benefits of introducing Sally. She consistently achieves high success rates in resolving customer incidents autonomously. By deploying her in a strategic and targeted manner, we can reserve human interactions for more complex queries and claims.

AI Training for Operational Excellence

AI’s potential goes beyond customer interactions. It is increasingly being leveraged for training and education within organisations. In an industry like insurance, where no two claims are the same, InsurTech companies need training systems that prepare team members to adapt to a wide variety of scenarios.

Given that individuals learn in diverse ways and at varying speeds, the ability to create personalised learning experiences is immensely valuable. We see AI training tools as the equivalent of providing each employee with a personal tutor. Moreover, one that can adapt to their unique strengths, challenges, and learning styles.

And the learning doesn’t stop when the training does. AI-powered platforms can now continuously assess performance in real-time. If an employee is struggling in a particular area, the AI can automatically adjust the learning program to address those needs. This ensures ongoing growth and development tailored to each individual.

Fraud Detection

AI is poised to revolutionise fraud detection and prevention. It is becoming an invaluable asset to the teams that monitor for suspicious activity. In the insurance industry, AI can be deployed at multiple levels to enhance fraud detection. For example, through intelligent automation that swiftly analyses large datasets and flags potentially fraudulent claims for further investigation. This can save valuable time and resources.

AI can also enable the creation of predictive models that forecast fraud based on historical data and emerging trends. This helps insurance players to stay one step ahead of evolving threats. These models improve risk assessment accuracy by reducing false positives and allowing us to focus more effectively on genuine risks.

Looking ahead, the potential for AI in fraud detection is immense. AI is breaking new ground in areas where traditional rule-based systems fall short. Its ability to process vast amounts of data in real time, identify patterns and anomalies that would be nearly impossible to detect manually, makes it a game-changer in tackling complex problems.

Embracing AI Advancements

AI has the potential to revolutionise countless industries, but its impact is particularly profound in InsurTech. Given the critical role insurance plays in people’s lives, the opportunities for innovation and improvement are vast.

As an industry, it’s essential we recognise AI’s ability to transform customer experiences. As early adopters, we have witnessed its potential firsthand. We will continue to leverage these advancements to enhance personalised and automated processes. We can bridge language barriers, and create new methods of interaction.

However, our focus must always be on finding the right balance. Identifying where these solutions can deliver the greatest impact in serving customer needs quickly and effectively. Moreover, also ensuring that we retain the opportunity for human connection whenever it is needed. As well as ensuring compliance and security are a core part of how we think about implementing solutions to enhance business operations.

  • InsurTech

Author

Dan Brightmore

Published

17 October 2024

Estimated Read time

3Mins

WaveBL Completes a new groundbreaking network connectivity Proof of Value (POV) with Swift, the participation of five global banks, and leading ocean carrier eBL Issuer MSC

WaveBL, the leading blockchain based electronic Bill of Lading (eBL) platform, has completed a groundbreaking Proof of Value (POV). It worked with Swift and the participation of five global banks. Lloyds, Emirates NBD Bank, Federal Bank Limited, and other banks. Furthermore, MSC Mediterranean Shipping Company (MSC), a leading ocean carrier acted as an eBL issuer on WaveBL.

The POV successfully demonstrated the transfer of structured electronic document presentations (including eBLs) originated on the Platform. They were sent to and between Swift members, and back to the Platform, all as part of a Letter of Credit (LC) transaction. The process was executed utilising a series of Swift FIN messages and FileAct transfers from WaveBL to the different banks. The process maintained possession and title management of the electronic trade documents on WaveBL’s ledger of issuance.

Describing the Flow of the POV with WaveBL

The POV involved two eBLs – one straight and one negotiable – both issued by MSC on the WaveBL platform. The eBLs were first sent to an exporter on the WaveBL platform. Here, commercial documents like a packing list, invoice, and certificate of origin were added. These were then sent to the advising bank by the platform over the secure and resilient Swift network, using an MT message and a FileAct document transfer. In turn, the advising bank and the issuing bank exchanged the presentation between them while WaveBL’s ledger maintained the tracking of possession and title of the contained eBLs.

Ultimately, the issuing bank released the documents to the LC applicant, who is the importer, including the endorsement of the negotiable eBL from the issuing bank to the order of the importer on the Platform. All of which was instructed to the platform through a Swift MT message. This streamlined process allows for payments to be received within hours, rather than days. This is often the case with transactions that involve the physical transfer of documents. Similarly, with the eBLs surrendered back to MSC on the platform, the importer was able to collect the goods at the port of destination without delay.

Strengthening the supply chain-trade finance connectivity: The WaveBL Swift gateway

This groundbreaking POV underscores WaveBL’s dedication to making its network fully integrated with the financial system. This allows customers to seamlessly interact with Swift members and among participants themselves. For Swift members, electronic trade documents could soon be exchanged via WaveBL using their existing Swift infrastructure. And without requiring the installation or use of any specialised software or service.

WaveBL anticipates that the concept led through this POV will further its mission of creating seamless connectivity between the supply chain and financial markets. It will drive the shift towards 100% adoption of eBLs, as outlined in the FIT Alliance Declaration of September 2023. WaveBL is also looking forward to becoming the first electronic trade document provider to achieve full connectivity with the entire Swift community. This allows all banks a simple, standardised way to receive and send electronic bank presentations originated on the platform.

Innovative approach by leading banks

The participating banks have all previously demonstrated exceptional innovation by using WaveBL as their entry point to the eBL market. They gained experience by exchanging electronic trade document presentations in live commercial transactions. As part of the POV, WaveBL, Swift and the banks established a joint working group. This was aimed at analysing the methodologies and structure of the Swift MT messages and the electronic presentations proven during the POV. Moreover, their involvement highlights a commitment to advancing trade finance through digitisation and cutting-edge technologies for document exchange. WaveBL is eager to continue working with the joint working group as its expected integration with the Swift network unfolds.

Boaz Lessem, Chief of Legal Regulation and Partnerships, WaveBL:


“As the eBL market continues to grow, this POV solidifies our vision of seamless connectivity between WaveBL and Swift, providing a new, standardised solution for banks that prefer not to use the platform’s interface directly. By leveraging Swift’s trusted infrastructure, banks will now be able to exchange electronic trade documents with ease. Enabling greater flexibility and efficiency in trade finance. I believe this connectivity will lead the way to an increased value proposition for the electronic transformation to eBLs. I thank the Swift team for its ongoing leadership and support as part of this POV, driving forward this important initiative in trade finance digitisation.”

  • Blockchain

Author

Dan Brightmore

Published

15 October 2024

Estimated Read time

2Mins

SemFi by HSBC will deliver innovative embedded finance solutions for businesses

HSBC has launched its new jointly owned venture, SemFi by HSBC. It aims to deliver Seamless Embedded Finance solutions to business clients.

The new technology company is a joint venture between HSBC and B2B global trade network Tradeshift. Furthermore, SemFi will embed HSBC payment, trade and financing solutions across a range of e-commerce and marketplace venues, including Tradeshift’s own B2B network.

SemFi will deliver its solutions in the UK to begin with. Furthermore, it will enable SME suppliers on e-commerce venues to access digital invoice financing from HSBC. Via a seamless experience it also aims to offer SMEs greater flexibility and security in their spend management through the bank’s virtual card solutions.

SemFi by HSBC

“Businesses are increasingly looking for seamless financial solutions that are embedded within their e-commerce journeys. So they can access these when and where they need them.

“SemFi by HSBC aims to deliver such embedded capabilities to help businesses grow. It will seek to bring the best of both worlds to our business customers and e-commerce partners. A startup technology mindset coupled with the global scale and expertise, of an international bank.”

Vinay Mendonca, Chief Executive Officer

The new venture is led by senior leadership drawn from HSBC. This includes Vinay Mendonca as CEO and Shehan Silva as Chief Operating Officer (COO). Additionally, Jo Miyake, Interim CEO of Global Commercial Banking, joins the SemFi board.

HSBC has been steadily building its capabilities and presence in embedded finance. It is driven by business customers seeking connected financial journeys to e-commerce venues.

  • HSBC supports around 1.3 million businesses worldwide. Moreover, it is the world’s largest trade bank, facilitating over $800 billion of trade flows annually.
  • Tradeshift supports over $260 billion of annual gross merchandise value for a million business users on its platform.
  • The global embedded finance market is estimated to be worth USD 82.48 billion in 2023  It is predicted to grow by 35% on annual basis over the next five years.
  • SemFi is intended to be a technology company and will not operate as a banking entity. Clients will be onboarded by the bank and the bank’s balance sheet will be leveraged for financing.
  • Embedded Finance

Author

Sejal Mehta, Andrew Rodgers & Randy Bean

Published

11 October 2024

Estimated Read time

5Mins

Sejal Mehta and Andrew Rodgers from Odgers Berndtson’s Global FinTech Centre of Excellence and Randy Bean, a Senior Advisor to Odgers Berndtson and industry author, explore the dynamics shaping leadership in the UK fintech sector

The UK FinTech sector is undergoing a significant transformation, marked by maturation, consolidation, and a more selective investment landscape. Funding is increasingly funnelled towards profit-generating scale-ups, and away from newer entrants.  

At the same time, the sector is shaped by a multi-generational workforce with varied perspectives. Meanwhile rapid advancements in AI foster apprehension and excitement. These converging factors make FinTech one of the most dynamic and competitive spaces to work in today. This presents both challenges and opportunities for its leaders.

From our perspective as global FinTech executive search and leadership advisors at Odgers Berndtson these shifts are reshaping the demands placed on leadership. They are also influencing what it takes to lead effectively in this fast-changing sector. Here, we explore the leadership trends that are emerging as a result.

Ethical FinTech leadership

Venture capital funding is now more selective and private equity investors are increasingly targeting fintechs with solid exposure. This is creating a difficult environment for new start-ups. Those attracting funding are typically cash-positive scale-ups.

Amidst these challenges, more FinTech firms are opting to list on the NASDAQ rather than the London Stock Exchange, as the UK navigates more stringent regulation. The need for payments licences, extensive reporting, and compliance demands weigh heavily on FinTech leaders.

In this landscape, we’re seeing leaders with experience in regulated financial services bring a valuable skillset. The ability to operate within defined regulatory frameworks while generating growth. FinTech boards are looking for leaders with high authenticity and who can make ethical decisions. And while balancing ambition and growth with the realities of working in a highly regulated space.

Founder replacements

We are in the midst of the FinTech sector’s maturation. Start-ups are transitioning into scale-ups, requiring different leadership competencies. For many, this requires the founder to step down or step into a board role and appoint a CEO who can take the business through its next stage of growth.

This requires leaders who are commercially driven, capable of shaping market strategies, and adept at understanding customer needs and product-market fit. Navigating risk and regulation becomes crucial, while the founder’s creative, opportunity-led approach typically no longer dominates the new operational and strategic demands.

Boards and investors are looking for CEOs with a broader skillset and deep regulatory expertise. These leaders must also be able to attract and retain the type of talent that can sustain growth and innovation, while maintaining the ‘DNA’ that made the business so attractive in the first place.

A multi-generational workforce

Intergenerational divides are becoming more pronounced for all businesses and noticeably in sectors like FinTech. Here, younger generations with fresh perspectives are working alongside older, more experienced professionals – often from traditional financial services backgrounds.

This diversity in age, experience, and approach can be a powerful asset, but only if integrated effectively. Typically, Gen Z and Millennials prioritise flexibility, technological integration and experimentation. Meanwhile, Boomers bring valuable expertise in regulatory environments and operational effectiveness, but may be more accustomed to traditional structures and leadership styles.

Increasingly, we see FinTech leaders attempt to bridge these divides by emphasising open communication, promoting mentorship opportunities, and encouraging cross-generational collaboration. With less funding and more regulation, FinTech leaders recognise the need to identify and capitalise on the strengths of a multigenerational workforce if they are to succeed.

Leadership team dynamics

As FinTech companies scale, leadership is no longer just about the capabilities of individual leaders but about the dynamics of the entire executive team. Successful scale-ups understand the importance of assembling a leadership team that brings a diverse mix of skills, and generational perspectives to the table.

We are starting to see FinTech companies think about leadership team dynamics as they scale up. Boards are looking for a blend of strategic, operational and ethical considerations. As well as how well team members work together. Do they solve problems cohesively? Are there any unresolved tensions or conflict? Are they aligned and equipped to collectively deliver on the leadership mandate?

Many leadership teams are not optimising their potential due to misalignment of strengths. For example, we recently worked with a FinTech creating an executive team profile to identify the leadership competencies needed to deliver their mandate. This exercise enabled the team to reallocate executive responsibilities for strategic initiatives based on the required strengths, regardless of traditional job roles.

Polarising views on Gen AI

Leading organisations are experiencing a transformational moment due to accelerated interest in AI and Generative AI. 89.6% are increasing their investments in AI, while 64.2% of companies have indicated that AI will be the most transformational technology in a generation. In response, organisations are hiring for the data and AI leadership roles required to prepare their companies for an AI future.

However, this integration of Gen AI has sparked both excitement and nervousness, particularly around issues of data protection and privacy. Generational differences are especially noticeable. Younger professionals are often less concerned about data privacy, while older generations remain cautious about the security implications.

This divergence in attitudes can create tension within the organisation, as leaders grapple with how best to leverage Gen AI while ensuring compliance with stringent data protection regulations. For some FinTechs, AI is seen as a specialised area requiring dedicated focus. Meanwhile, others believe AI represents a fundamental shift in how business can be conducted and AI strategy should be woven into the fabric of every leader’s responsibilities.

This divide in attitudes reflects the broader challenges we see FinTech companies face in incorporating AI. Leaders must now navigate the balance between embracing innovation and safeguarding sensitive information. They must also ensure AI is not seen as a siloed function. It must be an integral part of their commercial and strategic vision. Given the fundamental changes in the sector, the emphasis on leadership capabilities is changing for both the individual and executive team.

  • Artificial Intelligence in FinTech
  • InsurTech

Author

Gunnar Már Gunnarsson

Published

9 October 2024

Estimated Read time

4Mins

Gunnar Már Gunnarsson, Co-founder & CTO of PAYSTRAX on the potential for tokenisation to improve digital payments

The forward to the Bank of England’s most recent report on innovation in payments begins with the words:

“The concept at the heart of money is trust – a trust which is hard won but easily lost.”

In today’s financial climate, where digital transactions have become the norm, trust and security are more crucial than ever. However, 84% of consumers don’t completely trust online payments, and many drop out before they complete a purchase online due to safety concerns and a lack of payment options.

Tokenisation presents a way forward, offering an increased level of trust and efficiency that could tackle the concerns of consumers. And offer business increased security in the payments process. By replacing sensitive payment card information with unique identifiers (tokens), this technology provides a safe way to handle payment data from seller to consumer.

As the future of payments continues to evolve, safety, simplicity and global alignment will be essential. Tokenisation stands at the forefront of this with the potential to not only reduce fraud but also improve the customer experience.

An extra safeguard against cybercrime with tokenisation

The issue many businesses and customers face is that their data remains exposed during transactions. This increases the risk of fraud and company liability issues in the event of data breaches. Tokenisation technology replaces sensitive data with a unique, randomly generated string of symbols that cannot be easily interpreted. This provides an extra safeguard against cybercrime. This added level of security benefits both consumers and businesses. It can reduce vulnerabilities in everything from online purchases to mobile payments.

For merchants, this is particularly beneficial. By keeping sensitive information, such as customers’ card details, outside their own systems, they minimise the risk of security breaches. Tokenisation also helps businesses meet compliance standards, such as PCI-DSS (Payment Card Industry Data Security Standard). With no need to store or transmit sensitive data, companies can lower their security management responsibilities and reduce the overall costs of compliance. Tokenisation facilitates this easier compliance by deferring regulatory requirements across regions. Businesses can then rely on tokenised data instead of managing the security of the original PAN (Primary Account Number).

Enhancing the payment experience with tokenisation

Friction during transactions has long been an issue in finance, costing the industry $2 billion dollars a year in lost payments. Consumers increasingly expect faster and more seamless payments in all aspects of their life, from in store shopping to online purchases.

With tokenisation technology, the payment process becomes faster. Sensitive information no longer needs to be re-entered or verified externally during each transaction. This reduction in data exposure reduces the risk of fraud while maintaining the rapid pace of real-time payments. Overall this creates a secure and safe payment process for businesses while not interrupting the real-time user experience.

Frictionless payments aren’t the only benefit of tokenisation. With customers being more likely to complete purchases when a tokenisation system is in play, with Visa reporting that authorisation rates improve by 2.1% using the technology. This is mostly due to the dynamic card-on-file information that tokenisation provides. It reduces payment failures and ensures a smoother purchase process, with failed payments no longer an issue.

A final example for how tokenisation enhances payment experience both user and provider side can be found in B2B Cross-Border payments. The market is projected to grow significantly, with estimates indicating a 43% increase to reach $56.1 trillion by 2030. The risk of fraud grows with this, alongside increasingly in depth and complex international laws and national regulations, companies need both security, and to be customer facing in their plans. Technologies that secure payments and provide seamless transactions, like tokenisation, are pivotal in supporting this growth by reducing risks and improving efficiency.

The future of payments

As alternative payment methods and RTP networks continue to rise, tokenisation will be crucial in creating a global payments ecosystem that is both secure and frictionless. Visa has issued over 9.5 billion tokens globally, with Mastercard reporting over 50% year-over-year growth in tokenised transactions. This rapid adoption highlights the importance of tokenisation in building secure, efficient payment networks.

By reducing fraud, simplifying security management, and improving the overall customer experience, tokenisation is set to play a leading role in shaping the future of payments. Especially as digital and cross-border transactions become increasingly important.

It’s more than just a security measure. It’s a critical technology that enhances the entire payment ecosystem, making transactions faster, safer, and more efficient for all parties involved.

Gunnar Már Gunnarsson, Co-founder & CTO of PAYSTRAX

  • Cybersecurity in FinTech
  • Digital Payments

Author

Berkley Egenes

Published

7 October 2024

Estimated Read time

4Mins

Berkley Egenes, Chief Marketing & Growth Officer at Xsolla, on the legislation changing financial services

The European Union’s Digital Market Act has sent tremors through digital payments. The legislation is designed to stop Big Tech’s monopoly over vital online services, from search engines to messaging apps. But beneath the surface, one of the most fascinating battlegrounds is how the Digital Markets Act will impact the lucrative world of digital payments. A space long dominated by a few influential players. This will affect how industries, including the video game industry, monetise these services.

Big tech’s digital tollbooth

For years, the platform owners have controlled much of the infrastructure around digital payments. Major platforms have tightly controlled access, charging app developers and merchants fees for every transaction processed. Furthermore, they take hefty cuts from each purchase through their ecosystem. The impact of the Digital Markets Act may vary across different platforms. Some companies will need to adjust their models to fit the legislation. Others may push back or delay changes through legal and regulatory channels. 

The Digital Markets Act specifically targets a select group of ‘gatekeepers’, defined by their user base, revenue, and platform reach. Not every platform or company will be obligated to follow the Digital Markets Act’s rules. However, companies like Apple and Google, fall under the Digital Markets Act’s direct scope. The legislation now obliges these companies to open their platforms. This will allow smaller players and third-party services to operate without being strangled by eye-watering fees or exclusionary policies. 

The impact on monetisation with Digital Payments

The big question is how this will impact the business models of the gatekeepers and the developers who rely on these platforms. For years, the mobile platforms have depended on hefty commission fees. Often as high as 30%, these monetise digital payments within their ecosystems. These fees have been a central sticking point for developers, particularly video game studios, which sometimes generate billions in revenue through in-app purchases and microtransactions. 

Free-to-play mobile games specifically rely heavily on players making in-game purchases, from cosmetic skins to virtual currency. Under the current system, a significant chunk of that revenue is siphoned off by platform holders. They collect commissions on every transaction. This has forced game developers to either raise prices or accept slimmer margins while operating within the confines of strict payment policies. 

The Digital Markets Act is disrupting this current model. Game developers have been fighting the ability to direct players to alternative payment methods. They may now have the freedom and access to offer alternative ways to market and monetise their game while still having the player experience on the mobile phone. As a result, for the first time, consumers may be able to choose alternative payment processors. This potentially reduces costs for players and developers alike. 

For video game developers, particularly indie studios, the Digital Markets Act could represent a long-awaited relief from the large hold of app store economies. Developers can now distribute, market and sell their digital items and bundle packs through their online web shop or mobile SDK. By exploring these alternative options, developers will be retaining more of the profit per transaction. They could invest in better content or offer custom promotions to players – a win for both creators and consumers in the gaming industry across Europe.

Don’t ignore the challenges

The Digital Markets Act ushers in a brave new world of competition and choice for consumers, but it’s not all plain sailing. While the Digital Markets Act is designed to promote competition, the actual implementation of its provisions is still subject to regulatory developments and potential litigation. This means the full impact of the Digital Markets Act could take time to materialise. Moving towards a more open payment system demands a mountain of technical tweaks and a watchful eye from regulators. The real headache will be getting all these different payment systems to talk to each other while keeping security watertight. 

Consumers also have to consider how they will adapt to these changes. While there are many benefits, changing habits takes work. The success of the Digital Markets Act will depend on effective communication, education, and transparency to ensure consumers are aware of the new options and their benefits.

A new era for Digital Payments?

While the Digital Markets Act promises greater choice and a more level playing field, the road ahead will be anything but smooth. While the Digital Markets Act’s potential to break down monopolistic practices is significant, its effects may not be felt immediately. Regulatory processes, litigation, and slow consumer adoption could mean the transition to a more open digital payments landscape occurs gradually over time. Gatekeepers have maintained a firm grip on payment infrastructure for years, charging high fees that have eaten into developers’ profits. But with the Digital Markets Act tearing down some of these walls, game studios may have the flexibility to finally bypass gatekeepers and offer cheaper in-game purchases, subscriptions, and services directly to consumers.

While the Digital Markets Act opens doors for smaller developers and alternative payment options, it also forces companies to rethink their monetisation strategies. This could potentially pass new costs onto consumers in other ways. What is clear is that the digital payments landscape is in flux. How the tech giants, game developers, and consumers adapt to this new reality will define the future of monetisation in the digital economy. The game is far from over, and the real winners have yet to be decided.

Berkley Egenes, Chief Marketing & Growth Officer, Xsolla

  • Digital Payments

Author

Dan Brightmore

Published

4 October 2024

Estimated Read time

7Mins

FinTech Strategy spoke with Ryan O’Holleran, Head of Sales, Enterprise, EMEA at Airwallex, to learn about the global payments and financial infrastructure provider

Airwallex, a financial infrastructure provider, offers a range of services. Including multicurrency accounts, payment acceptance card issuing, foreign exchange (FX) payouts, treasury and expense management. In addition to supporting small and medium-sized businesses, the company also provides APIs and a software layer for direct access to enterprise businesses. As well as an enterprise platform product called Scale. Airwallex has found success working across various industries. It works with the likes of Bird (formerly MessageBird) to handle global accounts and backend treasury, and partners with Qantas to offer financial tools for their business partners.

The company also enables faster and more efficient payments through its patchwork network of financial partnerships and licenses. Airwallex has experienced significant growth even during economic downturns. As of August this year, Airwallex globally processed transactions worth more than $100 billion annually and saw a 73 percent year-on-year increase. It is now focused on embedded finance solutions and global expansion.

At Money20/20 Europe, FinTech Strategy spoke with Airwallex’s Head of Sales, Enterprise, EMEA, Ryan O’Holleran, to find out more…

Tell us about the genesis of Airwallex?

“Our co-founder, Jack Zhang, started a coffee company in Melbourne, Australia, which is still around today, with a few friends from university. And while they were building out this coffee shop, they were buying beans from abroad, along with supplies and packaging. They found how hard it was to actually pay for services, send funds abroad and deal with multiple currencies. So, they saw an opportunity to help streamline the financial infrastructure for small businesses. That’s when Jack and his co-founders put Airwallex together and built out an initial SME’s use case to allow multicurrency accounts and FX payouts. Since then, the business has really expanded…

Today, Airwallex provides a set of APIs – we’re really providing financial infrastructure to move money globally. On those APIs, we also have a layer of software that we can offer direct access to enterprise businesses. The third part of this, which is kind of the new product over the last three years, is our enterprise platform product called Scale. Scale allows you to embed those financial services into a product as well as a platform or marketplace. So, you kind of think about it as a direct treasury product, APIs and a platform product.”

Tell us about your role at Airwallex?

“I’m originally from San Francisco, grew up in the Bay area, started in tech, did a couple of startups, and I actually got into payments via Stripe. I joined Stripe back when there were about 200 employees in San Francisco. Spent some time in Chicago and then moved to the UK initially with Stripe. I was there for about five and a half years, as we went from 200 staff to 6,000. At that point, I wanted to get back to something a little bit different. To help more cross-functioning with product and help scale businesses. The opportunity with Airwallex came along where I saw the company addressing many things my customers at Stripe were asking for.

So, the FX piece, mass payouts, treasury, all complimented what Stripe is doing with acquiring. Since I joined the team three years ago, we’ve been scaling across EMEA. We now have offices in London, Amsterdam, Vilnius and just last year launched our office in Tel Aviv to cover Israel. And we have teams in the Americas and APAC where Airwallex was founded.”

What are some of the key challenges financial institutions are facing that you can help them with? What problems are companies asking you to solve? In doing so, what are the challenges for Airwallex?

“We work in different areas. This is where I think we have differentiated the business and also where I see the industry moving. If you look back over the last five, 10 years, there was this approach where you had Stripe and all the major players coming in and saying, we can do things and we can do it really well and you only need to use us, you don’t need to use a patchwork of providers. I think that is starting to shift. You see this with orchestration layers like Primer or Gravy, allowing people to be agnostic on PSPs. And then you’re seeing people think about redundancy. So, the heads of payments we’re talking to this week are looking at two or three providers because they need redundancy or want to use the best provider in each region. They don’t want to be siloed.

Airwallex can be used in a segmented approach. So, if you just need us for payouts, you can do that. If you just need us for FX, you can do that. If you just need us for acquiring, you can do that. Or we could do that globally and you can adjust as you see fit. So, the flexibility of Airwallex I think is one of our superpowers.”

Tell us about some of the successful partnerships Airwallex has been involved in…

“The interesting thing about Airwallex is that since we’re providing financial infrastructure, there’s a huge variety of customers we work with. One of the local ones is Bird (a cloud communications platform that connects enterprises to their global customers). Using our software product they are creating global accounts, handling backend treasury, payroll, suppliers and more. We’ve also worked with Qantas to build out an SMB solution embedding all of the Airwallex financial services and they call it Qantas Business Money.          

Elsewhere, Brex in the US were looking for a provider to help with their payout rails. One of the things Airwallex has done is rebuilt the Swift network via local rails. So, we have a patchwork network of financial partnerships and licences where if you are located, let’s say in the US, but you want to pay somebody out in the UK, you get access to faster payment rails having never set foot in the UK or separate rails via Europe having never set foot in the EU. So, you get this mass payoff solution of local rails, which is faster, cheaper, and more efficient than using something like Swift.”

“I think where we’re seeing a lot of opportunities, in EMEA specifically, in B2B, vertical, SaaS, travel and marketplaces, is this embedded finance solution. It was kind of a buzzword a few years ago and now we’re actually starting to see it develop. I view it as actually embedding all of these financial services – whether it be a wallet, issued cards, or local multi-currency accounts – and being able to monetize that. So, we’re seeing this with a lot of our customers actually wanting to white label our products, embed that and bring payments on platform.”

And what’s next for Airwallex? What future launches and initiatives are you particularly excited about?

“The growth of Airwallex, specifically on a global scale, over the last few years is one thing I’m very proud of because it’s happened during one of the worst economic downturns we’ve experienced. FinTech was almost retracting in terms of budgets and investments. You’re starting to see the tide turn, but we were able to grow over 100 percent year on year, through some of the toughest times for business. And now we’re really starting to see that pick up because the businesses, who actually decided this is going to be a building year for us now, they’re going live, they’re accelerating, they’re growing.

And so we’re seeing the ROI of that investment. It’s a testament to the global financial infrastructure we’ve built. Meanwhile, Airwallex became cash flow positive in 2023. It now processes more than $100 billion in annualised transaction volume. The company now employs over 1,500 people worldwide working across 23 international offices.”

Why Money20/20? What is it about this particular event that makes it the perfect place to showcase what you do? How has the response been to Airwallex?

“The great thing about Money20/20, here in Europe, and in Asia and the US, is the good division between buyers and sellers. So, you have all these service providers like Airwallex, Amex, etc… And then you have the Heads of Payments from companies like Booking.com, Vinted and SumUp who are coming here with their teams to meet with providers. If you think about that from a sales perspective, those meetings are very hard to get outside of this environment. But over a week you get 15 different meetings each day that would normally take months to arrange. So, the ROI from this week is really powerful just from being able to have these conversations. Three years ago, we first came to suss out the event and as we’ve grown the response has grown. People are being proactive and keen to engage with us which is exciting to see.”

  • Digital Payments
  • Embedded Finance

Author

Dan Brightmore

Published

3 October 2024

Estimated Read time

4Mins

Finch Capital report shows UK FinTech sector dominant across Europe

The latest annual State of European Fintech report by FinTech growth capital firm Finch Capital has been published. It shows the UK dominating Europe with 65% of deals in H1 2024. The UK is maintaining its dominance amid declining funding across the continent.

Highlights include:

  • Funding in UK FinTech increased 3% year-over-year to £2.3bn, highlighted by Monzo’s £500m deal.
  • UK sectors such as insurance set to gain from AI adoption, with 80% of actuaries using it for improved risk analysis.
  • FinTech sector beginning to see jobs market recover in Europe, up 10% YoY.

“The next wave of fintechs is shifting from unicorns to ‘half-a-corns,’ with £500m valuations becoming the new benchmark” Aman Ghei, Partner at Finch Capital

The UK has increased its dominant role in Europe’s FinTech sector. It now accounts for two thirds of the total volume of deals reached across the continent in the first half of this year. According to a new annual report analysing the sector, with investment and M&A anticipated to grow this year and into 2025. 

The annual State of European Fintech 2024 report found the UK is strengthening its position at the forefront of the European FinTech sector, despite an overall decline in funding across the continent. 

The report highlights the ongoing challenges faced by the sector. It notes that higher interest rates, a focus on cost efficiency and increased scrutiny on the sustainability of business models have driven the UK to account for around 65% of fintech deals in Europe.

Funding in the UK FinTech sector rose 3% YoY to £2.2bn compared with £1.9bn in H1 of last year. The largest deal done in Europe in H1 was UK’s Monzo, which raised £500m in equity. 

The European FinTech Picture

Overall, the 9th edition of the annual report,  authored and compiled by leading fintech growth capital firm Finch Capital, found that although it remains a challenging  environment for European FinTechs, there are clear signs of brighter prospects ahead.  

While the UK leads the way, the Netherlands showed resilience, with investment volumes holding steady. Meanwhile, Ireland, Germany, and France all saw major government-backed initiatives aimed at fostering growth through 2025. Signalling strong long-term commitment to the local technology ecosystems. 

Despite a notable contraction in funding across Europe, some key sub-sectors helped by higher interest levels, such as  challenger banks like Revolut and Monzo, are beginning to show profitable growth. 

Higher Rates and Boosted Profits

The report revealed that total capital invested in European fintechs in the first half of 2024 fell by 25% YoY, from £3.2 billion in H1 2023 to £2.4 billion in H1 2024. 

However, profitability in sub-sectors like banking is driving larger funding rounds. The top challenger banks are generating close to £600m in profit in 2024 compared to a £125m loss in 2023. 

As these banks emerge as success stories, the UK has become a hub for profitable growth, while other European nations work to adapt, the report found. 

Mid-Market Fintech M&A Thrives

The report also highlighted the increasing activity in the mid-market M&A space across Europe. Particularly in the UK, which is benefiting from consolidation in the sector. 

Funding rounds for fintech unicorns have slowed, the findings show, with investors prioritising companies with solid financial fundamentals and avoiding overly ambitious valuations based on hyper growth and unproven profitability.

European exits under £500 million now account for 32% of global M&A activity, although the market remains 2-3x smaller than the US for larger deals, according to the report.  

AI Creating Efficiency 

The report also found that, as a leader in fintech innovation, the UK is expected to benefit significantly from the adoption of AI technologies in the coming years, particularly in the insurance sector.

According to research, 4 out of 5 actuaries are now using AI to improve risk analysis and  pricing models and 65% of executives say they will invest more than $10 million in AI in  the next 3 years, making the industry more efficient. 

Commenting on the findings, Aman Ghei, Partner at Finch Capital, said:

“The challenges that fintech faced in 2023 were necessary for the sector to mature and become more sustainable. While funding may be down overall, and unicorn chasing has  slowed, there is plenty of opportunity for companies that are capital efficient and have a clear path to profit. With AI transforming the industry and significant dry powder still available, the next 12-18 months will mark a turning point for fintech in Europe. The next wave of fintech success stories will likely be built on sound financials rather than rapid revenue growth alone.”

  • Digital Payments
  • Neobanking

Author

Hugo Farinha

Published

2 October 2024

Estimated Read time

5Mins

Hugo Farinha, Co-founder and CTO at Virtuoso QA on why AI is driving organisational change across financial services

We’ve seen an enormous amount of discussion concerning all aspects of AI since the emergence of Chat GPT made it headline news. However, most articles and conversations focusing on its business impact seem to wilfully ignore the ‘elephant in the room’. Namely, the inevitable organisational change AI will usher in, especially for employees.

AI technology driving change

To ignore change is folly, and likely to have the exact opposite effect that businesses and AI technology vendors want. We can’t pretend workforces won’t be disrupted by such a seismic technological advance. Certain job roles will become obsolete. Business leaders can’t run the risk of creating a culture of fear and uncertainty among employees who are unlikely to be fooled.

It’s true AI could lead to leaner operations, particularly in insurance and finance companies, with fewer employees needed for routine tasks, but only half the story. Smart businesses will almost certainly reinvest cost savings into new growth areas that require specific human talent. Companies that maintain a strong human element in customer service and personalised offerings will differentiate themselves in a crowded market. The rise in AI-driven, agile companies will create faster market shifts and greater competition.

While AI has the potential for productivity and efficiency gains, and even to do the same with less if needed, I actually don’t predict major job culls in the next few years. AI is particularly good at data processing and data analytics, in insurance for example. So, when more data can be processed and analysed, human intervention can make better informed decisions as a result. In the short to medium term, data analysis and decision making will remain firmly in the human realm. But powered by AI.

The Future for Artificial Intelligence

Meanwhile, the technology is still evolving, and organisations need to build a model that layers over the top of AI – powered by it, rather than replaced by it. Despite the hype, we are still a long way from AI becoming an entity that can lead, implement and operate itself to a purposeful end. But it will increasingly power applications overlaid by strategic, human-led frameworks.

To achieve this, leaders must bring their teams with them on the journey. In the field of testing for example, developers have traditionally written code as part of their role. This is a very time consuming and laborious task. Historically skills gaps have led to delays in progress. But the ability to ‘outsource’ to AI has freed up the time of those developers to focus on the purpose of that code in relation to the product. And, ultimately, the customer. Similarly, leaders in all fields need a broader understanding of AI use cases such as these to make effective strategic decisions. For example, on hiring. Understanding when to bring in more people and when to bring in new technology to complement the skills of your existing team means understanding AI’s strategic implications, technical capabilities and limitations.

An Evolving Job Market

From the perspective of the employee, the job market will continuously evolve alongside AI advancements. It will require ongoing adaptation and learning to stay relevant. Skills such as empathy, communication, and negotiation will remain vital. These are differentiators and difficult for AI to replicate. Understanding AI tools and data analysis will be increasingly important, even for non-technical roles. The ability to adapt to new technologies and continuously learn will be essential. Moreover, as AI becomes more integrated, the need for professionals who understand the ethical implications and regulatory requirements will grow exponentially.

Driving growth and job creation in this new world will require a different mindset to the current received wisdom. From both employees and leaders. In addition to the advances and changes already discussed, AI also has the potential to level the playing field, enabling smaller or newer companies to compete more effectively with, and even seriously threaten, established players. With many traditional barriers to entry such as burdensome start-up costs removed, new business models are likely to emerge. In much the same way as they did in the early days of the internet. Investors will be on the lookout for the next ‘giant killer’.

This will create opportunities for those with the foresight to upskill, as well as for those looking to start their careers. Although those opportunities and the jobs of tomorrow may not yet be completely clear. What is clear, however, is that established businesses cannot afford to be complacent. Change is inevitable and empires can be toppled overnight by technology as disruptive as AI. By embracing it early, leaders in those businesses will have the opportunity to spot and fix the gaps and redundancies in their business models that the technology and its capabilities exposes before the market does so more painfully and publicly.

Our mission is to enable and lead the world’s quality-first revolution. QA tools haven’t kept up with the demands of the testing world. Virtuoso is here to deliver with AI-powered, low-code/no-code test automation to support the modern business.

“Virtuoso technology represents the foundation for software quality in the digital world, and we are proud to be a critical, guiding force in the era of AI.”

Darren Nisbet, CEO, Virtuoso

  • Artificial Intelligence in FinTech

Author

Dan Brightmore

Published

1 October 2024

Estimated Read time

2Mins

AXA UK has launched new online InsurTech tools to enable customers to notify claims digitally for both home and car insurance

AXA customers can now benefit from a new and improved digital service when making an insurance claim. They can use InsurTech tools that allow them to notify losses online. The improved online service allows customers to notify AXA of their claim online anytime they choose. Not only will it be more convenient, but it will also make for a more efficient claims experience. This allows AXA to offer support and resolve claims in a timely manner. 

AXA Online Insurance Tools

Car insurance customers can register claims for road traffic accidents, theft of vehicle, lost or stolen keys, misfuelling, storm or flood damage and malicious damage. Using this service gives customers the option of an end-to-end digital notification experience. It offers a broader choice in the ways they can interact with customer service teams.

Home insurance customers can also use the tools to register claims online for theft, escape of water, flood, storm, accidental damage and accidental loss. This is then picked up by the customer service team to take the claim forward.

Making an impact with customers

The improved service is already making an impact with customers. A recent home insurance claim was reviewed and a supplier was instructed within two hours of being registered online. Motor insurance customers have also been able to book in their vehicle for repairs within minutes of notifying AXA of a claim.

“We know that our customers’ expectations have evolved in recent years. They want the claims process to be quick, clear and simple. That’s why we’ve worked hard to ensure that these enhanced digital claims tools offer customers fast and seamless journeys. At a time when they need it most as well as offering increased flexibility and improving their overall experience.”

Suzy Tiffany, Retail Claims Director at AXA UK

Headshot of Suzy Tiffany, AXA Retail Claims Director

AXA has focused on how it can improve customers’ experiences and interactions by providing digital capabilities where possible across its claims journeys. The claims submission service can also be accessed by brokers, enhancing the claims journey for them and their clients.

However, all the usual channels will still be available for brokers and customers to contact the claims teams. Even if they have notified a claim online, they can still pick up the phone and speak to someone if they prefer.

  • InsurTech

Author

Philipp Buschmann

Published

30 September 2024

Estimated Read time

5Mins

Philipp Buschmann, co-founder and CEO of AAZZUR on how the customer becomes the investor with Embedded Finance at the heart of the wealth management revolution

Wealth management has traditionally been a game for the well-off. It often requires large sums of money just to get started. For decades, the idea of “investing” conjured up images of Wall Street brokers managing hefty portfolios for a small group of elite individuals. But, thanks to Embedded Finance, times are changing and the barriers to investing are coming down. The technology is reshaping how people handle their money. Here’s what it can do for you.

Tackling the investment problem

Historically, investing hasn’t been easy. Most brokers require a significant minimum deposit to open an account, often in the thousands. Fees and commissions on trades can add up quickly, and if you don’t have a large amount of capital, these costs can erode your profits. For many, these hurdles were enough to keep them from even thinking about investing. It simply didn’t feel like something for “ordinary” people with average incomes.

Even with the rise of online brokers, the stock market has remained intimidating to a lot of people, many of whom felt like they lacked the knowledge or resources to get involved.

On top of the classical challenges we must also discuss the upcoming wealth transfer. The next generation of users have no interest in sitting with wealth managers; at the same time they don’t have the knowhow to trade or invest.

Imagine being able to not only excite your customers but empower them as well. That’s what embedded finance solutions promise. As companies strive towards more inclusive messaging, adopting embedded finance tools has never been more valuable. One of the great perks is that it doesn’t require a complete overhaul of IT infrastructure, instead, it involves a seamless experience that even junior employees can understand and implement.

Embracing the solution with Embedded Finance

I’ve said it’s easy – but how easy? Embedded finance works by bridging the gap between traditional financial systems and the average consumer. By integrating financial services directly into everyday apps and platforms, it makes it possible for people to start investing without even realising they’re doing it. Monzo is an example of it in action. They used embedded finance solutions to enable customers to invest directly in the bank during its fundraising rounds. They raised millions by allowing users of the app to seamlessly invest and become shareholders, a great example of how “the customer becomes the investor”.

Think about how your business manages its money. You most likely use an app to track accounts and make payments. This is no different to customer budgeting, and it’s a window of opportunity for you to tap into. That app can offer you the ability to automatically invest any leftover money at the end of the month into a diversified portfolio. Customers don’t need to download a separate app or set up an account with a brokerage firm. Everything is integrated into the website they’re shopping on. This is the beauty of embedded finance – it makes financial services a natural part of your daily life.

For younger people just starting out on lower salaries and learning how to invest sensibly, there has never been a greater time to be innovative and branch out into financial services.

The second vector for investment is to centre it around a new social frame. Investment’s can be around supporting your ideals, for the environment, or for technologies sake. This means that there are apps/club/activities that can become another home for investment. The same way country clubs aren’t just for food, golf and banter. Embedded finance opens the door for classically aligned companies and charities to think about expanding their business model. I could imagine Greenpeace offering embedded investing. So, could the country club co-invest in art that is displayed (but also invested) in.

Equalising opportunity with Embedded Finance

Embedded finance allows financial services to be delivered in a more personalised, user-friendly way. Apps can now provide personalised investment recommendations based on a user’s spending habits, savings goals, and risk tolerance. And thanks to automation, these services are becoming more affordable and scalable. Instead of paying for an expensive financial advisor, users can rely on AI-driven tools to offer similar advice for a fraction of the cost, or even for free. Wealthfront does this by offering automated financial planning and investment management with AI-driven recommendations and tax optimisation strategies.

GoHenry is another example of a company taking the initiative and embracing its solutions. They allow customers to invest in the company using the Crowdcube platform. People can invest in as little as they want and become shareholders with ease. As a result, loyalty is enhanced and capital surges.

Another example is fractional investing. In the past, buying a single share of a company like Amazon or Tesla might have been out of reach for someone with limited funds. However, this no longer has to be the case as companies like Robinhood allow customers to invest in big stocks like Tesla for as little as £1, making it possible for anyone to grow their wealth without having to stretch themselves and get into debt.

What does the future hold?

As embedded finance continues to evolve, we can anticipate even more innovations in the world of micro-investing and wealth management. The lines between financial services and everyday life will continue to blur, making it easier than ever for people to manage their money, invest, and build wealth – all without needing a financial background or a large amount of capital.

Philipp Buschmann is co-Founder and CEO at AAZZUR, a one-stop-shop for smart embedded finance experience.  Recognised as a rising star in the FinTech space, AAZZUR’s mission is to build profitable banking whilst at the same time empowering consumers to have access to better informed financial choices.

Philipp is a serial entrepreneur with extensive experience of working in Challenger Banking, Financial Services, IT and Energy across the world.  He took one of his business’s public – Ignis Petroleum was publicly listed in the US and Germany. 

Having started as a developer in Financial Services, Philipp has first-hand experience of the banking revolution from both a technology and financial perspective. His interest in behavioural economics helped inspire AAZZUR’s revolutionary work on customer centricity in banking.

Philipp holds an MBA from the London Business School. He is passionate about entrepreneurship and loves exchanging ideas, insights and discussing FinTech’s future.  He has spoken at major Fintech events including Money 20/20, MoneyLive, Finovate, Fintech Matters, and the Future of Retail Banking.

  • Embedded Finance

Author

Russ Rawlings

Published

25 September 2024

Estimated Read time

4Mins

Russ Rawlings, RVP, Enterprise, UK&I at Databricks, on the future of AI in FinTech

Strict regulation, along with time and cost restraints, means financial services must take a measured approach to technological advancements. However, with the emergence of GenAI, particularly large language models (LLMs), organisations have an opportunity to maximise the value of their data to streamline internal operations and enhance efficiencies. 

Embracing GenAI has never been more important for organisations looking to stay ahead of the curve. 40-60% of the global workforce will be impacted by the growth of AI. Moreover, global adoption of GenAI could add the equivalent of $2.6tn to $4.4tn in value annually to global industries. The banking sector stands to gain between $200-340 billion.

But whilst the financial services industry can gain incredible benefits from GenAI, adoption is not without its challenges. Financial organisations must prioritise responsible data management. They must also navigate strict privacy regulations and carefully curate the information they use to train their models. But, for companies that persevere through these obstacles, the benefits will be substantial. 

Building customised LLMs for financial services 

Consumer chatbots have brought GenAI to the mainstream. Meanwhile, the true potential of this transformative technology lies in its ability to be tailored to the unique needs of any organisation, in any industry. Including the financial sector. 

Risk assessment, fraud prevention, and delivering personalised customer experiences are some of the use cases of custom open source models. Created using a company’s proprietary data, these models ensure relevant and accurate results. And are more cost-effective due to their smaller datasets. For instance, banks can use a customised model to seamlessly analyse customer behaviour and flag up any suspicious or fraudulent activities. Or, a model can leverage sophisticated algorithms to assess an individual’s eligibility for a loan.

Another huge benefit of these tailored systems is trust and security. Deploying a custom open-source model eliminates the need to share sensitive information with third parties. This is crucial for organisations operating within such a highly regulated industry. This approach also democratises the training of custom models. Furthermore, it allows organisations to harness the power of GenAI whilst retaining control and compliance.

Using data intelligence to boost AI’s impact

To truly harness the power of GenAI, organisations must cultivate a deep understanding of data across the entire workforce. Every employee, regardless of how technical they are, must grasp the importance of proper data storage. Also how data can be used to improve decision-making.

Organisations can use a data intelligence platform to help implement this. Built on a lakehouse architecture, a data intelligence platform provides an open, unified foundation for all data and governance. It operates as a secure end-to-end solution tailored to the specific needs of the financial services industry. By adopting such a platform, businesses can eliminate their reliance on third party solutions for data analysis. They can create a streamlined approach to data governance and accelerate data-driven outcomes. Users across all levels of the business can navigate their organisation’s data, using GenAI to uncover important insights.

The future of AI in the financial sector

The path to success lies in embracing GenAI as a canvas for crafting bespoke solutions. Whilst no two financial institutions are exactly the same, the industry’s tools must strike a delicate balance between supporting specific use cases and addressing broader requirements, Customised, open source LLMs and data intelligence platforms hold the key, sparking transformative change across the sector. These tailored solutions will empower financial businesses to integrate cutting-edge innovations and ensure  security, governance and customer satisfaction. Organisations that embrace this change will not only gain a competitive edge, but also pave the way for larger transformations, re-shaping the financial landscape and setting new standards for the industry.

Databricks is the data and AI company with origins in academia and the open source community. Databricks was founded in 2013 by the original creators of Apache Spark™, Delta Lake and MLflow. As the world’s first and only lakehouse platform in the cloud, Databricks combines the best of data warehouses and data lakes to offer an open and unified platform for data and AI.

  • Artificial Intelligence in FinTech

Author

Adam Edwards

Published

23 September 2024

Estimated Read time

5Mins

Adam Edwards, Product and Growth Director at Satago on how embedded finance is helping drive digitisation for the B2B financial space

Small and Medium Enterprises (SMEs) are at the heart of the UK economy. They contribute significantly to local employment and revenue across a wide array of sectors. However, the current economic landscape and consistently high inflation are inhibiting them from reaching their full potential.  

Three key challenges which prevent SMEs from investing in growth are tight cash flow, poor access to capital and the late payments crisis. With over £32 billion in late payments plaguing them, SMEs need longer-term, meaningful policy action from the government, alongside better Working Capital solutions. 

Investing in Embedded Finance

With a growing SME market needing better support than ever from lenders, banks are rapidly investing in IT adoption. Particularly, Embedded Finance tools, to better serve this sector. Indeed, analysts have forecast a staggering 148% growth in the Embedded Finance market. It is predicted to reach a revenue of $228 billion by 2028.  

Banks have been quick to offer flexibility to consumers in the business-to-consumer (B2C) Embedded Finance space. Offering lots of options for flexible finance in response to high demand. However, the business-to-business (B2B) market has in many ways been slower.  

There are certainly challenges here – but the opportunities are huge for the lenders that get this right to go on and serve the SME space. So, what can the B2B space learn from how Embedded Finance has succeeded in the B2C sector? And what are some of the benefits and new challenges that this investment could pose?  

The role of Embedded Finance in supporting SMEs and founders 

Embedded Finance emerges as an innovative approach to bolster SME support. It integrates financial services directly into non-financial platforms. This integration empowers SMEs to seamlessly access critical financial services. These include instant credit, streamlined payments processing, and optimised cash flow management. This enhances operational efficiency and financial resilience. 

When we look at B2C financial services, we can see traditional banks working hard to catch up with challenger banks. These competitors have presented consumers with entirely new means to access digital banking, improve their visibility on financial information, and manage their funds and savings with secure API access.  

This has forced traditional banks to digitise quickly in the B2C space to remain competitive and keep up with customer expectations. Embedded tools have become a key part of this. While the B2B financial services industry hasn’t traditionally faced the same level of market pressure to innovate – this is now starting to change. We will start to see the impact in a couple of ways.  

I predict we will begin to see rapid growth in the number of partnerships between FinTech companies and B2B lenders. Where banks such as Barclays have already been partnering with the likes of Amazon on the consumer side for a long time to offer flexible payment capabilities, we will see a lot more similar partnerships starting to take place in the B2B space, to support the growing SME market. As a result, I anticipate a rise in the number of online marketplaces dedicated to the B2B lending space. We will also see increasingly niche market areas – such as agriculture and dedicated equipment manufacturers, for example.  

The opportunities and challenges with Embedded Finance

There are several opportunities to be capitalised on via Embedded Finance in the B2B space. Lenders that have been held back by legacy systems in the past will now be able to offer a more flexible suite of digital finance options to customers, especially SMEs. SMEs, which may be run by a single founder or a small group of stakeholders, are likely to be used to an agile structure. They can take big decisions quickly and will be keen to be able to flexibly access financial tools. Through integration with expert providers, lenders can also benefit from new origination channels and access new pools of customers for bank accounts, financial consultancy and more.  

For the fintech partners and integrators, including those providing white-labelled products to banks, there’s a chance to take advantage of the trust customers have in their banking providers. And the lenders’ brand reputations can increase their own revenue and future opportunities for sale.  

Meanwhile, SMEs are set to reap the benefits of being able to offer better user and payment experiences to their own customers further up chain. They too, will benefit from better cash flow management, improved financial visibility and increased flexibility via different working capital tools. Just like consumers are able to – all of which will be facilitated by better digital tools.  

However, it is worth acknowledging that as the B2B space grows, heightened concerns around fraud risk associated with financial transactions are also likely to emerge. Going forwards, we’ll see more analytics and artificial intelligence built into Embedded Finance. This will feed into underwriting models and support fraud checks. With more complex transactions and shared financial data via Embedded Finance partnerships, the risks of non-compliance could become more perilous. Therefore, there are certainly challenges ahead.   

A competition for innovation in the B2B space 

For SMEs to thrive, sustained and reliable access to cash flow is essential. Collaborative efforts between the government and the financial services industry are critical. Establishing robust regulatory frameworks and fostering innovation in Working Capital solutions will be vital. 

The Embedded Finance market in over the next year and beyond can expect to see significant emphasis on B2B players, such as banks and corporate lenders. They are looking to catch up with the consumer market and serve SME customers with the most secure – and flexible – lending options.   

Consumers have realised the benefits of seamless, digital financial services for themselves. We’ll now see demand growing as SMEs expect the same innovation and experience when it comes to their B2B financing. Lenders and banks that want to satisfy this growing pool of customers hungry for flexibility and sustainable lending support, will need to be willing to evolve and digitise, or risk missing out on the competition.   

Satago is a leading fintech that enables lenders and corporates to streamline operations, boost revenue, and enhance their business customer experiences. This is achieved through cloud-native Working Capital and Cash Flow solutions, powered by real-time data, Open Banking, and API technology. 

  • Embedded Finance

Author

Luke Gall

Published

20 September 2024

Estimated Read time

5Mins

Luke Gall, Product & Engineering Director at Access PaySuite, part of the Access Group, on the open banking opportunity for FinTechs


In the rapidly evolving landscape of financial services, Open Banking is no longer a futuristic concept but a present-day reality. Recent findings reveal that the adoption of Open Banking payments has surged, with 32% of financial services businesses and an impressive 58% of fintechs now offering this innovative payment method to their customers.

This uptake signifies a noteworthy shift for fintechs. Open Banking payments have overtaken Direct Debits (54%) and card payments made over the phone (4%) in terms of availability. The sector continues to expand at a remarkable pace. There are over 26,000 startups currently in operation globally. Understanding and leveraging Open Banking has become an increasingly crucial consideration for organisations to stay ahead in a competitive market.

The rise of Open Banking

Open Banking allows third-party financial service providers to access banking data and initiate digital payments on behalf of customers, provided they have explicit consent. This model not only enhances convenience for users, but also fosters greater competition and innovation within the financial sector. The growing adoption rates reflect a broader acceptance of this technology. It is driven by the potential to streamline payments, enhance user experiences, and offer personalised financial services.

In the UK, FinTech adoption is particularly robust – 84% of individuals use FinTech services daily. The push towards Open Banking is both a response to consumer demand and a strategic move for FinTechs to differentiate themselves. The rise in Open Banking adoption is a signal that financial services must adapt swiftly. For FinTechs, staying ahead involves more than just adopting new technology. It’s about leveraging tech to redefine and enhance service offerings.

Why FinTechs must embrace Open Banking

Today’s consumers demand seamless and efficient financial transactions in order to complete their purchases. Open Banking meets these expectations by enabling quicker and more secure payments. FinTechs can provide this to their customers by integrating Open Banking into their services. This significantly enhances customer satisfaction and fosters loyalty.

The rapid adoption of Open Banking by FinTechs highlights its growing importance. Those that hesitate or overlook this trend risk falling behind. Early adopters of Open Banking have the opportunity to leverage its capabilities to introduce distinctive features. These include instant account verification, real-time payments, and enhanced financial insights. It’s a crowded marketplace for FinTechs, but these advancements can deliver a competitive edge.

By granting access to banking data, Open Banking creates the possibility for FinTechs to work with other financial service providers in a collaborative environment. Around 82% of FinTech startups say this helps them to innovate more quickly and effectively. The ability to partner with others in the industry can encourage the development of novel solutions and services. These can be pecifically tailored to evolving consumer needs.

The role of third-party payment providers

Third-party payment providers play a crucial role in helping FinTechs adopt Open Banking. They do this by offering the infrastructure and expertise needed to integrate with banks and other financial institutions. These providers facilitate secure access to customer data through APIs. This enables FinTechs to deliver innovative services like personalised financial management and account aggregation. And all without the need to build costly systems from scratch.

By leveraging the established networks and compliance frameworks of third-party providers, FinTechs can more easily meet regulatory requirements. Such as those outlined in the Revised Payment Services Directive (PSD2). This allows them to scale faster and focus on enhancing the customer experience. By prioritising simplicity and convenience, FinTechs can not only improve user satisfaction but also ensure their Open Banking offerings meet the high expectations of today’s consumers.

However, FinTechs must recognise not all customers are familiar with the nuances of Open Banking. To ensure a smooth transition and maximise the benefits of this technology, financial service providers, including FinTechs, should invest in educating their customers about its advantages and functionality. This will empower users to confidently engage with Open Banking and fully leverage its potential.

At the same time, safeguarding sensitive financial data is critical to building and maintaining this trust. Robust security measures, such as strong encryption protocols like Advanced Encryption Standard (AES) and Data Encryption Standard (DES), are essential to protect data during transmission and storage. Regular security audits help identify and address vulnerabilities. Meanwhile, transparent privacy policies demonstrate a commitment to data protection.

The future of Open Banking

The trajectory of Open Banking is set to continue its upward trend, as more financial institutions and FinTechs embrace its potential. For FinTechs, this is an opportunity to lead the charge in transforming financial services. By understanding and addressing the key factors associated with adoption, FinTechs can not only stay relevant, but also drive the future of financial technology.

Embracing Open Banking is not just about keeping up with industry trends… It’s also about positioning yourself at the forefront of a financial revolution. The ability to offer innovative, secure, and user-centric services will define the next wave of FinTech success. In this dynamic environment, staying ahead of the curve requires foresight, adaptability, and a commitment to leveraging technological advancements. FinTechs that navigate these considerations effectively will not only thrive but also shape the future of financial services.

Why Access PaySuite? Getting paid should be simple – and that’s where we come in! Backed by The Access Group a top 5 UK software company, Access PaySuite is led by a team of payments experts with over 20 years’ of experience in the industry. Access PaySuite is a reliable, resilient solution that helps your business thrive with every payment.

  • Neobanking

Author

Dan Brightmore

Published

19 September 2024

Estimated Read time

6Mins

FinTech Strategy spoke with Zak Lambert, Product Lead for Plaid in Europe, to find out more about the world-leading data network and payments platform

Plaid offers the world’s largest open finance platform. Plaid specialises in bank connectivity and provides a single API for customers to integrate with banks around the world. They have had innovative success stories working with companies like Western Union and MoneyBox. Plaid see opportunities around current trends such as account-to-account payments, variable recurring payments, and cash flow underwriting for businesses and consumers.

At Money20/20 Europe, FinTech Strategy spoke with Plaid’s Product Lead for Europe, Zak Lambert, to learn more…

Tell us about Plaid…

“I work in product management for Plaid in Europe. We’re the world’s largest open finance platform operating across 20 markets in Europe and North America. Back in 2019 when we first launched in Europe our bread and butter was bank connectivity. Integrating with over 10,000 banks through a single API. We still provide that connectivity in one API for our customers. Millions of users go through that journey every day for a number of different use cases.

Building on the core bank connectivity capabilities, we’ve spent the last few years building localised value added services. We launched underwriting services to help companies such as YouLend provide more credit with less risk. We optimised our Pay by Bank offering so companies like Western Union can provide instant transfers with higher thresholds, and companies like PokerStars can provide seamless and instant payouts.

Tell us about your role at Plaid?

“I was part of the team that started Plaid in New York and opened the office there. I did a variety of things from helping customers integrate, building new products, working with sales teams, and anything else that would help us grow, About a year after that, I moved over to London to be the first person on the ground there. Fast forward five years and I’m delighted to be the head of product in Europe. I’ve been with the company for about five and a half years. Overall, it’s just been an exciting journey from a hundred people to more than a thousand now.”

Talk about some of the successful integrations Plaid is involved in…

“We recently announced that we’re working with Western Union across Europe to fund transfers, whether that’s someone depositing in the UK and Germany, Italy or Spain. Plaid is powering account to account payments for Western Union across their various use cases. Particularly when you look at the growing trend around account-to-account payments and pay by bank, we’re thrilled to be working with brands of that caliber. Since launch we’ve seen hockey stick growth for their customer adoption of pay by bank. This shows trust and reliability of the open banking ecosystem which we’re excited to be a part of. We are also delighted to be supporting MoneyBox, one of the largest fintechs in the UK. They handle millions of transactions to fund and create ISAs. Moneybox have launched VRP (Variable Recurring Payments) through Plaid in order to optimise their customer flows and have more reliability in customer recurring payments. With our new flow, users can go through the journey once, set up their consent, and then money can move in the background. It’s like a card on file with a bank account. We see this as a significant trend in the coming years in the UK specifically, and then across Europe as that product set develops.”

The UK has always been an early adopter of open banking but we’re now seeing a surge in demand from mainland Europe. We are currently live in 18 markets in Europe and continue to focus on our reliability and depth in each market to ensure we can meet that demand.

This year, we’ve learned more about how our customers want to use VRP (Variable Recurring Payments). In June, we launched Moneybox’s VRP proposition to enable them to relaunch their Payday Boost offering which was previously restricted by direct debit limitations. Every week we’re having more and more conversations on VRP use cases. 

We’re also excited about how open banking and fintech more broadly can help make financial access more inclusive. For example, open banking can help the underserved get more access to credit by using real-time data to inform underwriting decisions. At Plaid, we’ve built specific products to do this such as the Financial Insights Report that companies such as Capital on Tap are already using to inform their decisioning programmes.

And what’s next for Plaid? What future launches and initiatives are you particularly excited about?

“There are three areas I would highlight… First, pay by bank globally for Plaid. You look at Western Union, they’re probably not the first company to adopt something, but the second they adopt something it probably is about to hit mainstream. That’s significant volume. They’re one of the world’s oldest companies. They’ve been fantastic to work with. So, as that trust and familiarity start coming into play, people that aren’t Western Union come and say, okay, we’ve seen this experience. It was really good. We want it now. We’re working with our teams across the globe to bring that to life for North America and Europe in the simplest way possible. It’s really exciting.

“Second, we have the significant opportunity to bring lending into the 21st century. Particularly because of the third thing, which is the Plaid network. We’ve touched hundreds of millions of consumers. We’ve spent a long time building products to make payments easy and to make underwriting easy. And now we’re in the third phase… We have all of these users, this large network, so how can we make this even simpler for people? And just giving smoother experiences when the user is actually in the workflow. So, boosting conversion, delivering network style experiences in the same way that other network businesses do.”

Why Money20/20? What is it about this particular event that makes it the perfect place to showcase what you do? How has the response been to Plaid?

“This is my sixth straight Money20/20 and it gets busier every year! It’s great to learn more about the ecosystem at large. You can see developing trends each year, and it’s always a little bit different. You build relationships at Money20/20 that stay with you for the rest of your life. And it’s a perfect opportunity to meet people in the flesh that you might normally only see on screen. You can get a pretty direct read on what they’re working on and it’s exciting to be here making new connections.”

  • Digital Payments

Author

Tetyana Golovata

Published

17 September 2024

Estimated Read time

5Mins

Tetyana Golovata, Head of Regulatory Compliance at IFX Payments, on builidng compliance into business culture

Regulation plays a critical role in shaping the fintech landscape. From Consumer Duty and FCA annual risk reporting to APP fraud, the tectonic plates of the sector are shifting. Whether you consider these regulations as benefiting or hindering the industry, businesses are struggling to keep up. 

According to research by fraud prevention fintech Alloy, 93% of respondents said they found it challenging to meet compliance requirements. In a new study by Davies a third of financial leaders (36%) said their firms had been penalised for compliance breaches in the year to June. The FCA brings in its operational resilience rules in March 2025. So, it is more important than ever to ensure your company makes the grade on compliance. 

Learning lessons from history

Traditionally, FX has struggled with the challenge of reporting in an ever-developing sector. As regulatory raise the bar on compliance, responsible providers must help the industry navigate the changes and upcoming deadlines.

Fintechs and payments companies are entering uncharted waters. They face pressure to beat rivals by offering more innovative products. Regulators have struggled to keep up in the past. Gaps in legislation have allowed some opportunists to slip between the net, as seen in the collapse of FTX. Because of this, implementation and standardisation of the rules is necessary. This ensures innovation remains seen as a force for good, and to help identify and stamp out illegal activity.

Culture vs Business

Culture has become a prominent factor in regulatory news. We have seen cases of large fines and public censure relating to cultural issues. FCA COO Emily Shepperd observed in a speech to the finance industry, “Culture is what you do when no one is looking”.

Top-level commitment is crucial when it comes to organisational culture. Conduct and culture are closely intertwined. Culture is not merely a tick-box exercise. It is not defined by perks like snack bars or Friday pizzas. Rather, it should be demonstrated in every aspect of the organisation, including processes, people, counterparties, and third parties.

In recent years, regulatory focus has shifted from ethics to culture. Recognising its crucial role in building market reputation and ensuring compliance with rules and regulations. Furthermore, boosting client confidence, and retaining employees. The evolving regulatory landscape has significantly impacted e-money and payments firms. Moreover, regulations are strengthening each year. Each regulation carries elements of culture, as seen in:

  • Consumer duty: How do we treat our customers?
  • Operational resilience: How can we recover and prevent disruptions to our customers?
  • APP fraud: How do we protect our customers?

Culture Drivers

Key drivers of culture include implementing policies on remuneration, conflicts of interest, and whistleblowing. However, for it to become embedded it must touch employees at every level.

This is showcased by senior stakeholders and heads of departments facilitating close relationships with colleagues across a company’s Sales, Operations, Tech and Product teams to build a collaborative environment. 

Finance firms must recognise the trust bestowed on them by their customers and ensure the protection of their investments and data is paramount. Consumer Duty may have been a wake-up call for some companies, but progressive regulation must always be embraced and their requirements seen as a baseline rather than a hurdle.

Similarly, the strengthening of operational resilience rules and the upcoming APP fraud regulation in October are to be welcomed, increasing transparency for customers. 

Compliance vs Business 

Following regulatory laws is often viewed as a financial and resource drain, but without proper compliance, companies are vulnerable to situations where vast amounts of money can be lost quickly.

A case in point is the proposed reimbursal requirement for APP fraud, which will mean payment firms could face having to pay compensation of up to £415,000 per case.

Complying not only safeguards the client and their money, but also the business itself. About nine in ten (88%) financial services firms have reported an increased compliance cost over the past five years, according to research from SteelEye.  Embedding compliance earlier in business cultures can be beneficial in the long run, cutting the time and money needed to adapt to new regulations and preventing the stress of having to make wholesale changes rapidly. 

Building a cross-business compliance culture 

Compliance is a key principle at IFX Payments, and we strive to be a champion in this area. In response to these challenges, the business restructured, establishing dedicated risk and regulatory departments, along with an internal audit function. 

Regulatory compliance aims to support innovation by developing and using new tools, standards, and approaches to foster innovation and ensure product safety, efficacy, and quality. It has helped the firm to navigate the regulatory landscape while driving growth and maintaining high standards.

This organisational shift allowed each business line to own its own risk, with department partaking in tailored workshops designed to identify existing, new, and potential risk exposure. Shared responsibility for compliance is the only way to create a culture which values it. We see this as a great way for organisations to drive innovation while sticking to the rules. 

  • Digital Payments

Author

Pat Bermingham

Published

16 September 2024

Estimated Read time

8Mins

Pat Bermingham, CEO of B2B digital payment specialist Adflex, asks what impact will Artificial Intelligence really have on B2B payments?

Visit any social media newsfeed and countless posts will tell you AI means “nothing will ever be the same again”. Or even that “you’re doing AI wrong”. The volume of hyperbolic opinions being pushed makes it almost impossible for businesses to decipher between hype and reality.

This is an issue the European Union’s ‘AI Act’ (the Act), which came into force on 1 August 2024, aims to address. The Act is the world’s first regulation on artificial intelligence. It sets out how to govern the deployment and use of AI systems. The Act recognises the transformative potential AI can have for financial services, while also acknowledging its limitations and risks.

Within the debate about AI in financial services, B2B payments are an area where AI has huge potential to accelerate digital innovation. Let’s go beyond the hype to provide a true perspective on what AI really means for B2B payments specifically.

Understanding what AI is, and what it isn’t

AI is a system or systems that can perform tasks that normally require human intelligence. It incorporates machine learning (ML). ML has been used by developers for years to give computers the ability to learn without being explicitly programmed. In other words, the system can look at data and analyse it to refine functions and outcomes.

A newer part of this is ‘deep learning’, which leverages multi-layered neural networks. This simulates the complex decision-making power of our brains. The deep learning benefits outlined later in this article are based on Large Language Models (LLMs). LLMs are pre-trained on representative data (such as payment/transaction/tender data). Deep learning AI does not just look at and learn patterns of behaviour from the data. It is becoming capable of making informed decisions based on this data.

Before we explore what this means for B2B payments, let’s make one caveat clear: human supervision is still needed to ensure the smooth running of operations. AI is a supporting tool, not a single answer to every question. The technology is still maturing. You cannot hand over the keys to your B2B payments process quite yet. Manual processes will retain their place in B2B payments. AI tools will help you learn, adapt and improve more quickly and at scale.

The AI Act – what you need to know

The Act attempts to categorise different AI systems based on potential impact and risk. The two key risk categories include:

  1. Unacceptable risk – AI systems deemed a threat to people, which will be banned. This includes systems involved in cognitive behavioural manipulation, social scoring, and real-time biometric identification.
  2. High risk – AI systems that negatively affect safety or fundamental rights. High-risk AI systems will undergo rigorous assessment and must adhere to stringent regulatory standards before being put on the market. These high risk systems will be divided into two further categories:
  3. AI systems that are used in products falling under the EU’s product safety legislation, including toys, aviation, cars, medical devices and lifts.
  4. AI systems falling into specific areas that will have to be registered in an EU database.

The most widely used form of AI currently, ‘generative AI’ (think ChatGPT, Copilot and Gemini), won’t be classified as high-risk. However, it will have to comply with transparency requirements and EU copyright law.

High-impact general-purpose AI models that might pose systemic risk, such as GPT-4o, will have to undergo thorough evaluations. Any serious incidents would have to be reported to the European Commission.

The Act aims to become fully applicable by May 2026. Following consultations, amendments and the creation of ‘oversight agencies’ in each EU member state. Though, as early as November 2024, the EU will start banning ‘unacceptable risk’ AI systems. And by February 2025 the ‘codes of practice’ will be applied. 

So, with the Act in mind, how can AI be used in a risk-free manner to optimise B2B payments?

AI will transform payment data analysis

Today’s B2B payment platforms are not one-size-fits-all solutions; instead, they provide a toolkit for businesses to customise their payment interactions.

AI-based LLMs and ML can be used by payment providers to rapidly understand and interpret the extensive data they have access to (such as invoices or receipts). By doing this, we gain insights into trends, buyer behaviour, risk analysis and anomaly detection. Without AI, this is a manual, time consuming task.

One tangible benefit of this data analysis for businesses comes from combining payment data with knowledge of a wide range of vendors’ skills, products and/or services. AI could then, for example, identify when an existing supplier is able to supply something currently being sourced elsewhere. By using one supplier for both products/services, the business saves through economies of scale.

Another benefit of data analysis comes from payment technology experts. Ours have been training one service to extract data from a purchase order or invoice, to flow level 3 data, which is tax evident in some territories. This automatically provides the buyer with more details of the transaction, including relevant tax information, invoice number, cost centre, and a breakdown of the products or service supplied. This makes it easy and straightforward to manage tax reporting and remittance, purchase control and reconciliation.

AI-driven data analysis isn’t just a time and money-saver, however. It also adds new value by enabling providers to use the data to create hyper-personalised payment experiences for each buyer or supplier. For example, AI and ML tools could look out for buying and selling opportunities, and perform a ‘matchmaking supplier enablement service’ that recommends the best payment methods – and the best rates – for different accounts or transactions. The more personalised a payment experience is, the happier the buyer and more likely they are to (re)purchase.

Efficient data flows mean stronger cash flows

Another practical application of AI is to help optimise cash management for buyers. This is done by using the data to determine who is strategically important and when to pay them. It could even recommend grouping certain invoices together for the same supplier, consolidating them into one payment per supplier, reducing interchange fees and driving down the cost of card acceptance.

AI can also perform predictive analysis for cash flow management, rapidly analysing historical payment data to predict cash flow trends, allowing businesses to anticipate and address potential challenges proactively. This is particularly valuable in the current economic climate where cashflow is utterly vital.

By extracting value-added, tax evident data from a purchase order or invoice, AI can rapidly analyse invoices and receipts to enable efficient, accurate automation of the VAT reclaims process. Imagine: the time comes for your finance team to reclaim VAT on recent invoices and receipts, but they don’t have to manually go through every receipt or invoices and categorise them into a reclaim pile or not reclaimable. It sounds like a dream but it will be the reality for business everywhere: AI does the heavy lifting and humans verify it, saving significant time and resources.

Quicker, more accurate invoice reconciliation

The third significant benefit of AI is automated invoice reconciliation. By identifying key information from an invoice and recognising regular payees, AI can streamline and automate the review process. This has the potential to significantly speed up transactions and enable more efficient payment orchestration.

Binding together all supporting paperwork, such as shipping, customs, routes, and JIT (just-in-time) requirements can also be done by AI, and it’s likely to be less prone to human error.

This provides an amazing opportunity to make B2B payments faster, reduce costs and increase efficiency.  Businesses know this: 44% of mid-sized firms anticipate cost savings and enhanced cash flow as a direct result of implementing further automation within the next three years. According to American Express, 48% of mid-sized firms expect to see payment processes accelerate, with more reliable payments and a broader range of payment options emerging.

When. Not if.

There are significant opportunities to leverage AI in B2B payment processes, making it do the heavy lifting. It is, however, essential to view these opportunities with a balanced understanding of the limitations of AI.

While all the opportunities for AI in B2B payments outlined here are based on relatively low-risk AI systems, human oversight of these systems is still essential. However, with all the freed-up time and resource achieved through the implementation of AI, this issue can be avoided.

AI in B2B payments is not an if, but a when. The question is, when will you make the jump, hand in hand with technology, rather than fearing it or passing full control over to it.

In order to grow, it is essential for users to see the tangible benefits. For example, by enhancing efficiencies in account payable (AP), businesses can reallocate time and resource previously spent in AP to other areas. Early adopters are starting to test the water but only time will tell how much of an impact AI will make.

Most businesses will likely wait for the early adopters to fail, learn and progress. If something goes wrong in B2B payments, it can have a huge impact on individuals, businesses and economises. Only when the risk is clearly defined and manageable will AI truly become the gamechanger in B2B payments that all the hype claims.

“Adflex has been at the heart of the B2B fintech revolution from the beginning. We are known for fostering innovation and helping companies harness the power of digital payments. Our technology and expertise bring together buyers and suppliers to make transactions fast, cost-effective and straightforward to manage. We take the pain out of the supply chain by delivering seamless and secure payment integration that adds value to both buyers and merchants.”

  • Artificial Intelligence in FinTech
  • Digital Payments

Author

Michael Donnelly

Published

12 September 2024

Estimated Read time

3Mins

Michael Donnelly, Head of Client Success at BlueFlame AI, on how to prepare your firm to attract and retain the next generation of AI talent

In the fast-paced world of financial services, a new generation is stepping in with high expectations for generative artificial intelligence (AI) in the workplace. Recently, BlueFlame AI conducted a specialised training session for one of our private equity clients, aimed at their newly hired summer intern class. The experience was eye-opening for us. Furthermore, it also provided a great lesson in the growing importance of AI in the industry and the expectations today’s young professionals have as they enter the workforce

AI & LLMs

The comprehensive training session covered vital areas such as AI and Large Language Models (LLMs), a review of the most popular use cases the industry has adopted, and hands-on practical training in prompt engineering. Moreover, our goal was to show this next generation the skills they’ll need to leverage these tools effectively. New roles could revolutionise alternative investment management processes like due diligence, market analysis, and portfolio management.

We also used this as an opportunity to survey the group about their experience of and expectations for AI use in the workplace – and it yielded some striking insights. A significant 50% of the interns reported using ChatGPT daily, with 83% utilising it at least weekly. Furthermore, these numbers suggest young professionals expect these tools to be available to them in their professional lives. In the same way they are available in their personal lives and set to become as commonplace as traditional software in the workplace. The interns’ expectations regarding AI’s impact on their work efficiency are even more telling. An overwhelming 94% believe these tools will enhance their productivity, indicating strong faith in the technology’s potential to streamline tasks and boost performance.

These high expectations have key implications for employers. A significant 89% of interns expect their employers to provide enterprise-grade AI/LLM access. This statistic is a wake-up call for companies that have yet to invest in AI technologies, highlighting the need to stay competitive not just in terms of products and services but also in workplace technology provision.

Talent Acquisition & Retention

Perhaps most important is AI’s potential impact on talent acquisition and retention. One-third (33%) of interns surveyed indicated they would reconsider their choice of employer if they didn’t offer access to enterprise-grade AI/LLM tools. A response that could throw a serious wrench into any Financial Services firm’s hiring plans.

The message is clear for businesses looking to stay ahead of the curve when it comes to supporting their employees. Investing in AI technologies and training is no longer optional. Firms must be ready to meet the expectations of the incoming workforce. They need to provide them with the best technology to maintain a competitive edge in an increasingly AI-driven business landscape. Companies that embrace AI and provide their employees with the tools and training to harness its power will likely see significant productivity, innovation, and talent retention advantages.

AI Revolution

Private and public investment firms stand to benefit greatly from this AI revolution. As this new generation brings its enthusiasm and expectations for technology tools into the workplace, firms that are prepared to meet these expectations will be better positioned to tap into fresh perspectives, drive innovation and reap significant efficiency and productivity gains. And if firms can take a proactive approach to training and commit to developing a forward-thinking, AI-enabled workforce, they will be able to enhance their teams’ capabilities and shape the future of work in the financial sector.

Generative AI and the workplace expectations it has created mark a new paradigm in the market. The next generation of professionals is not just ready for AI – they’re demanding it. Firms that recognize and act on this trend will be well-positioned to lead the pack when it comes to innovation, efficiency and talent acquisition.

Founded in 2023 BlueFlame AI is the only AI-native, purpose built, LLM-agnostic solution for Alternative Investment Managers.

  • Artificial Intelligence in FinTech

Author

Dan Brightmore

Published

11 September 2024

Estimated Read time

4Mins

Neobanks are transforming the financial sector as digital-only institutions that offer a comprehensive range of banking services through mobile apps…

Neobanks are transforming the financial sector as digital-only institutions that offer a comprehensive range of banking services through mobile apps and online platforms. These services encompass current and savings accounts, payments, loans, and investments — all managed seamlessly through digital channels.

With cutting-edge financial technology, neobanks provide faster, more affordable, and more convenient solutions for both customers and businesses. The surge in mobile phone use, cloud computing, and artificial intelligence has fuelled rapid growth. 

The neobanking market is even expanding rapidly, with a projected market volume of $10.44 trillion by 2028, according to Statista. This represents a 13.15 percent growth rate from 2024 to 2028.

Innovative Business Models

To offer a broader range of services and better customer experiences, neobanks leverage application programming interfaces (APIs). This model involves integrating various financial applications and services using APIs. It will allow them to manage Know Your Customer (KYC) verifications, do instant refunds, and arrange collections efficiently.

Then, the significant source for neobanks is interchange fees. This model involves charging transaction fees for every transaction and earning a portion of the fees from payment networks like Visa.

Furthermore, credit card business models use credit as a foundation, generating revenue from transaction fees and interest on carried balances to drive growth and profitability. This model starts with credit card services and later offers a bank account. 

Other models allow neobanks to offer high-yield savings accounts and certificates of deposits (CDs). Revenue will come from earning interest on the assets and charging fees for services related to these accounts, such as maintenance fees.

Technology Integration

Neobanks have redefined the banking landscape through a digital-first approach, prioritising customer experience, and leveraging technology to deliver innovative financial services. This combination sets them apart from traditional banks and allows them to offer unique and competitive financial services.

A core characteristic of neobanks is their digital-only operations. By eliminating physical branches, they significantly reduce overhead costs. These savings translate into lower fees for customers and increased competitiveness.

Furthermore, neobanks harness the power of cloud computing, data analytics, and artificial intelligence to deliver personalised financial solutions. These technologies enable them to gain valuable insights into customer behaviour, allowing for tailored product offerings and improved operational efficiency.

Neobanks have also pioneered innovative revenue streams. Unlike traditional banks heavily reliant on interest income, they generate revenue through various channels, including interchange fees and partnerships.

Finally, many neobanks embrace open banking principles. This collaborative approach allows third-party developers to create new financial products and services that complement the neobank’s offerings. By collaborating with third-party developers, neobanks create additional value and broaden their reach.

The Global Neobanking Innovators

Advapay expected the total number of neobanks users to increase to 3.6 billion worldwide by 2024. Moreover, they spread relatively evenly across the main regions. For example, neobanks in North America, LATAM, APAC, and the UK each now accumulate a total price tag of 50 billion dollars or more per region. 

Revolut, a UK-based neobank, stands as a leading example of digital banking innovation. Expanding its services to over 30 countries, Revolut offers multi-currency accounts, currency exchange, stock trading, and insurance.

The neobank employs various innovative business models including API integration, transaction fees, credit card services, high-yield savings, and certificates of deposit. Revolut’s software as a service (SaaS) approach enhances flexibility, scalability, and rapid product development.

Beyond Revolut, Nubank from Latin America showcases innovation through robust security features, diverse financial products, and blockchain-based loyalty programs. Meanwhile, WeBank in China excels in digital lending, mobile payments, and alternative credit scoring.

Future Prospects

The neobanking industry is rapidly evolving, with 278 neobanks operating globally as of March 2023. This intense competition forces neobanks to continuously innovate to differentiate themselves. 

As a result, traditional banks face increased pressure to adapt to these new market dynamics. Neobanks have the potential to drive financial inclusion, foster creativity, prioritise customer needs, and expand globally.

Looking ahead, neobanks can expect a surge in competitors. This will force incumbent banks to either adapt their strategies to defend their market share or become digital attackers themselves to stay competitive in the evolving market.

With competition growing and attention spans shrinking, innovative product launches aren’t something neobanks should do once. Instead, creating agile solutions that are in tune with current consumer needs must be an essential part of their growth strategy.

  • Neobanking

Author

Dan Brightmore

Published

9 September 2024

Estimated Read time

5Mins

Nada Ali Redha, Founder of PLIM Finance, on flexibility, consolidation, and the evolution of digital payments

Embedded finance, the integration of financial services into non-financial platforms, is no longer a niche trend. It has become a defining characteristic of modern commerce. Consumers are increasingly drawn to the convenience and flexibility it offers, leading businesses across industries to adopt embedded finance solutions. The rise of these platforms, combined with shifting consumer expectations, presents both opportunities and challenges for traditional banks and fintech players.

Customer-centricity with Embedded Finance

At the heart of this transformation is a desire for simplicity. Consumers are opting for solutions that allow them to bypass the inconvenient processes associated with traditional banking. They are avoiding excessive paperwork, account opening delays, or hidden charges. Instead, they are drawn to platforms that offer seamless integration of services. Enabling them to make purchases, manage their finances, and access credit without ever leaving the ecosystem of their preferred brands.

E-commerce giants like Amazon have been quick to recognise this trend, embedding financial services directly into their platforms. This allows them to offer a one-stop solution that caters to all their customers’ needs, from browsing products to making payments or accessing credit options. The appeal is clear: customers stay within the same digital environment, enjoying a frictionless experience that saves them time and effort. This development, however, raises the stakes for standalone payment providers like PayPal and Klarna, as they are increasingly excluded from these in-house ecosystems.

Shifting financial services

For legacy banking providers, this shift presents a major challenge. Traditionally, these institutions have relied on their extensive networks, trusted brands, and regulatory backing to maintain a dominant position in the financial landscape. But as businesses integrate financial services directly into their offerings, banks are no longer the first point of contact for many consumers. A growing number of businesses are bypassing traditional banks altogether, embedding payment and lending options at the point of purchase or within their own apps. This trend highlights a fundamental shift in how consumers interact with financial services, often without even realising it.

In response, payment providers and fintechs must find innovative ways to remain competitive. One potential strategy is for these companies to develop their own marketplaces. By creating an ecosystem of services that includes not only payments, providers can capture more customer loyalty and engagement. This would enable fintechs and payment solution companies to offer a holistic, embedded finance solution. Rather than relying on external platforms or partnerships.

PLIM Finance

A case study for this would be PLIM Finance’s marketplace, which offers a highly customised experience. PLIM connects consumers with their desired services in a way that prioritises personalisation and convenience. As a platform built with user-centric design at its core, it allows consumers to search for treatments based on location, type, and specific clinics, giving them the ability to make informed decisions effortlessly. This is achieved through a search engine that filters results to suit each individual’s exact needs. Enhancing the user experience by eliminating irrelevant options for a streamlined experience. PLIM’s marketplace also encourages partners to create detailed profiles, showcasing their services, reviews, and credentials, which enhances visibility and attracts new clients. By fostering a direct connection between consumers and clinics, PLIM’s marketplace stands out in the embedded finance space. Ensuring a seamless, personalised customer experience​ that is simple and easy-to-use.

Strategic partnerships

Another potential strategy is deeper collaboration with external partners. By integrating their services into a wide range of businesses, payment providers can continue to capture market share. Without needing to create their own consumer-facing platforms. Strategic partnerships can expand the reach of these payment solutions, allowing them to tap into user bases they might otherwise miss. For example, smaller or mid-sized businesses may benefit from embedding a well-established payment solution into their website or app rather than developing their own in-house system.

However, not every provider will be able to meet the demands of this rapidly changing landscape on their own. As the embedded finance space continues to mature, industry consolidation becomes a very real possibility. Larger players may acquire smaller fintech companies. Integrating their innovative solutions into existing platforms can offer a more comprehensive suite of services. This would mirror the broader trend in the tech sector, where big players often absorb disruptive startups to maintain their competitive edge. Consolidation offers both challenges and opportunities. While smaller companies risk losing their independence, they also gain access to the resources and customer base of their new parent companies.

Evolving financial landscape

This evolving landscape is also occurring at a time of significant economic uncertainty. Financial stress often pushes consumers to reevaluate their spending and financial habits, with many looking for greater control over their cash flows. This is where embedded finance stands out. The flexibility it offers allows consumers to manage their money more efficiently, whether through payment deferrals, buy-now-pay-later (BNPL) options, or quick access to credit. These features are particularly valuable when budgets are tight or income is uncertain.

Moreover, embedded finance solutions empower consumers by giving them more control over how they manage their transactions. For example, BNPL options give individuals the freedom to split payments over time, making larger purchases easier to manage without the immediate financial burden. This level of control resonates with modern consumers, who increasingly seek transparent, flexible financial solutions that can be tailored to their personal circumstances.

For businesses, this presents an opportunity to strengthen customer loyalty by offering embedded finance services that align with consumer needs. By removing barriers to purchasing, businesses can enhance the customer experience, which, in turn, can drive increased sales and long-term engagement. As a result, companies that adopt embedded finance solutions can gain a competitive edge, particularly in sectors like e-commerce, where convenience is king.

Conclusion

In conclusion, embedded finance represents a fundamental shift in how consumers interact with financial services. As more businesses adopt these solutions, traditional banking institutions and standalone payment providers will need to adapt or risk being left behind. Whether through developing their own marketplaces, forging deeper collaborations, or pursuing mergers and acquisitions, the financial services landscape is poised for continued transformation. Embedded finance, with its focus on flexibility and convenience, is likely to become an integral part of the future of commerce—benefiting both consumers and businesses alike.

  • Embedded Finance

Author

Dan Brightmore

Published

6 September 2024

Estimated Read time

4Mins

Digital banking offers increased convenience and accessibility. However, this growth also exposes banks to heightened cybersecurity risks. Protecting data and…

Digital banking offers increased convenience and accessibility. However, this growth also exposes banks to heightened cybersecurity risks. Protecting data and information is crucial to maintaining customer trust and preventing financial loss.

Cybercrime poses a significant threat to the digital banking industry. According to Cybercrime Magazine, cybercrime costs will increase by 15% over the next five years and reach $10.5 trillion by 2025. These attacks target sensitive information and funds, causing substantial damage to banks.

To mitigate these risks, banks must implement robust cybersecurity measures to safeguard digital systems and data.

1. Strong Authentication

The Payment Services Directive (PSD2) mandates strong customer authentication (SCA) to reduce fraud and enhance online payment security. This directive imposes specific requirements on market participants to meet new obligations. The European Banking Authority (EBA) developed regulatory technical standards (RTS) based on the Commission’s authority under PSD2. 

The RTS aims to protect consumers and create a level playing field within the evolving financial technology market. To achieve this, the RTS establishes security measures for payment service providers — including banks and other financial institutions — when processing payments or offering payment-related services. 

2. Encryption

Unencrypted data is a common cyber threat. Hackers can easily access this data type and give severe consequences for banks. According to Statista, the average cost of a data breach worldwide is $4.45 million dollars. However, data breaches not only cause substantial financial loss for recovery and ransom payments but also damage a bank’s reputation.

To prevent these issues, all digital banking data must be encrypted. This safeguards information and makes it difficult for cybercriminals to access even if stolen. Encryption transforms data into a coded format that requires a specific key to decipher. Only individuals with the correct key can view the original data. 

Encryption involves using an algorithm and a key to convert plain data into encrypted data. The original data can only be recovered by decrypting the ciphertext with the correct key.

3. Regular Cybersecurity Audit

A security audit is a thorough examination of an organisation’s IT infrastructure. This process verifies the effectiveness of security policies and procedures. Security audits assess how well an institution’s cybersecurity program operates. This includes reviewing policies, testing controls, and checking compliance with industry standards and regulations.

Banks and financial institutions face increasingly complex cyber threats. Regular security audits help identify vulnerabilities in systems. By discovering weaknesses, banks can strengthen defences with firewalls, antivirus, and antimalware software. A cybersecurity audit should be conducted by an independent expert to ensure objectivity.

4. Employee Training

The World Economic Forum reports that 95% of cyberattacks involve human error. This means hackers often exploit employee mistakes. They use tactics like phishing to deceive employees into revealing sensitive information. This can lead to data breaches and financial loss. For example, employees might click on malicious links, disclose confidential data, or leave devices unattended.

Therefore, bank employees must have training to recognize that cyberattacks are a constant threat. Moreover, the consequences of a breach can be severe for employees, customers, and the bank’s reputation. Cybercriminals operate in a lucrative industry, for that reason, it is imperative to equip employees with the knowledge to safeguard against these threats.

5. Incident Response Planning

An incident response plan is a formal document approved by bank leadership to guide the organisation before, during, and after a potential or confirmed security incident. The plan aims to reduce the impact of security events, limiting operational, financial, and reputational damage.

A successful incident response plan should be established before a security attack occurs and assigned to specific team members. IBM research shows companies with well-developed and tested response plans save an average of $2.66 million compared to those without such protocols. 

To create an effective incident response plan, banks can reference established frameworks. For specific incident handling steps, The National Institute of Standards and Technology’s SP-800-61 and SANS’s Incident Handlers Handbook provide detailed blueprints. Aligning the incident response plan with these resources ensures a focused and effective approach to managing cybersecurity incidents.

Importance of Cybersecurity Measures 

The increasing reliance on digital platforms exposes individuals and organisations to growing cybersecurity risks. Malicious actors exploit security weaknesses to steal personal information and compromise digital assets. Forbes reported a staggering increase in cyberattacks in 2023, impacting over 343 million people, with data breaches soaring by 72 percent from 2021 to 2023. These striking figures highlight the urgent need for state-of-the-art cybersecurity in digital banking.

  • Cybersecurity in FinTech

Author

Dan Brightmore

Published

5 September 2024

Estimated Read time

4Mins

The 2008 global financial crisis exposed vulnerabilities in the traditional financial system. In response, blockchain technology emerged, offering a solution. …

The 2008 global financial crisis exposed vulnerabilities in the traditional financial system. In response, blockchain technology emerged, offering a solution. 

With its ability to address these weaknesses, blockchain holds significant potential to transform the banking industry. This article will explore how blockchain can be used in banking and the benefits it offers for a more secure and efficient financial industry.

Introduction to Blockchain in Banking

Blockchain technology is changing the way data is stored and shared. It’s a digital record spread across a network of computers. This system uses cryptography for security, allowing authorised participants to update the records without needing a central authority.

Once information is added to the blockchain, it’s impossible to alter or erase. To add new entries, network participants verify transactions using complex algorithms.

Traditionally, banks and payment systems rely on intermediaries to facilitate transactions. However, blockchain’s distributed network allows for direct consensus and verification between participants, streamlining the entire process.

Blockchain Case Study: Payment Processing

Central and commercial banks around the world are exploring blockchain for payment processing. This interest extends to cross-border payments, traditionally dominated by companies like SWIFT and Western Union.

Several successful blockchain implementations in banking serve as case studies. In 2015, Commonwealth Bank of Australia (CBA) teamed up with Ripple, a fintech company specialising in blockchain solutions for international payments. Their goal was to build a system using blockchain to speed up settlement processes between CBA’s different branches.

Westpac, another major Australian bank, followed suit in 2016 by partnering with Ripple to create a cost-effective system for cross-border payments using blockchain.

Blockchain Case Study: Trade Finance

Trade finance, handling all aspects of domestic and international commerce, relies heavily on banks to facilitate transactions. Traditionally, this involves managing risk, providing credit, and allowing both exporters and importers to participate. However, the system often suffers from slow and outdated paper-based documentation.

Recognising this need for improvement, leading institutions like Standard Chartered and HSBC have joined groups exploring blockchain technology for trade finance. One example is Voltron, a platform designed by R3 and CryptoBLK to digitise letters of credit. 

Pilot projects across 14 countries with over 50 companies and banks participating yielded notable results, reducing letter of credit processing time from five days to less than 24 hours. Building on this success, Voltron rebranded as Contour in 2020, launching a digital trade finance network with R3 and other banks as supporters. 

Blockchain Case Study: KYC

Know Your Customer (KYC) processes are a slow hurdle in banking as they can take weeks to complete. The system also suffers from wasted effort, as each bank asks new clients for the same information. 

This inefficiency creates high costs for banks. Compliance burdens are heavy, and penalties for not following the rules are significant. The constant changes in regulations make it difficult for banks to stay compliant.

Chris Huls of Rabobank proposed a solution—storing KYC information on a blockchain. This secure and transparent technology acts as a shared platform for customer data. Once a bank completes KYC, a summary can be uploaded to the blockchain. Authorised institutions can then access this information, eliminating repetitive checks.

Benefits Realised

Blockchain technology offers a new way to store and manage data. Unlike traditional databases, blockchain spreads data across a network of computers and creates a public record that’s difficult to tamper with. 

Any attempt to change a record in one place would be caught by other computers in the network. This system eliminates the possibility of any single entity manipulating information.

Furthermore, blockchain promotes transparency. Transactions are visible to anyone who wants to see them, with tools allowing real-time tracking. This can lead to faster processing times for consumers, potentially reducing transaction completion to minutes, regardless of location or time.

Inter-bank transfers can also benefit from blockchain’s efficiency and security. Large sums involved in these transactions come with risk and cost during the current multi-day settlement process.

Lessons Learned and Future Outlook

These case studies demonstrate the technology’s ability to streamline transactions, reduce friction, and enhance security. The technology also promotes transparency and immutability of data.

However, a major challenge remains—ensuring customer data privacy. Public blockchains, with their inherent openness, create obstacles. Permissioned blockchains with strong encryption offer some solutions, but cybersecurity concerns still exist. Building trust and widespread adoption requires addressing these data privacy issues.

Regulatory uncertainty presents another hurdle. Currently, there’s no central authority overseeing and regulating blockchain protocols. The need for some form of governance is apparent, but careful consideration will need to be given to the distribution of power within such a system.

  • Blockchain

Author

Dan Brightmore

Published

Estimated Read time

3Mins

Read in brochure format

Our cover star, EY’s Global Chief Data Officer Marco Vernocchi, tells Interface why data is a “team sport” and reveals…

Our cover star, EY’s Global Chief Data Officer Marco Vernocchi, tells Interface why data is a “team sport” and reveals the transformation journey towards realising its potential for one of the world’s largest professional services organisations.

Welcome to the latest issue of Interface magazine!

Read the latest issue here!

EY: A data-driven company

Global Chief Data Officer, Marco Vernocchi, reflects on the data transformation journey at one of the world’s largest professional services networks.

“Data is pervasive, it’s everywhere and nowhere at the same time. It’s not a physical asset, but it’s a part of every business activity every day. I joined EY in 2019 as the first Global Chief Data Officer. Our vision was to recognise data as a strategic competitive asset for the organisation. Through the efforts of leadership and the Data Office team, we’ve elevated data from a commodity utility to an asset. Our formal data strategy defined with clarity the purpose, scope, goals and timeline of how we manage data across EY.  Bringing data to the centre of what we do has created a competitive asset that is transforming the way we work.”

PivotalEdge Capital

Sid Ghatak, Founder & CEO of asset management firm PivotalEdge Capital, spoked to us about the pioneering use of “data-centric AI” for trading models capable of solving the problems of trust and cost.

“I’ve always advocated data-driven decision-making throughout my career,” says Ghatak. “I knew when I started an asset management firm that it needed to be data-centric AI from the very beginning. A few early missteps in my career taught me the importance of having a stable and reliable flow of data in production systems and that became a criterion.”

LSC Communications

Piotr Topor, Director of Information Security & Governance at LSC Communications, discusses tackling the cyber skills shortage, AI, and bringing together the business and IT to create a cyber-conscious culture at a global leader in print and digital media solutions.

Topor tells Interface: “The main challenge we’re dealing with is overcoming the disconnect between cybersecurity and business goals.”

América Televisión

Interface meets again with Jose Hernandez, Chief Digital Officer at América Televisión, who reveals how the company is embracing new business models, and maintaining market leadership in Peru.

“Launching our FAST channel represents a pivotal step in diversifying our content delivery and monetisation strategies. Furthermore, aligning us with global trends while catering to the changing viewing habits of our audience,” says Hernandez.

Also in this issue of Interface, we hear from eflow about new approaches to Regtech; get the lowdown on bridging the AI skills gap from CI&T; and GCX on the best ways to navigate changing cybersecurity regulations.

Enjoy the issue!

Dan Brightmore, Editor

  • Digital Strategy

Author

Dan Brightmore

Published

4 September 2024

Estimated Read time

4Mins

Financial institutions are increasingly turning to artificial intelligence (AI) to gain a competitive edge. AI tools streamline operations, improve customer…

Financial institutions are increasingly turning to artificial intelligence (AI) to gain a competitive edge. AI tools streamline operations, improve customer support, and automate processes, making banks more efficient and customer-focused.

Research by McKinsey shows that over 20 percent of an organisation’s digital budget goes towards AI. The study links significant investments in AI to a 10-20 percent increase in sales. AI will play a central role in boosting efficiency, customer service, and overall banking productivity.

Introduction to AI in Personalised Banking

Delivering personalised experiences is crucial for customer satisfaction and retention. AI helps banks achieve this by collecting and analysing customer data. This data is then used to create recommendations, product offerings, and even financial advice tailored to each customer’s needs.

AI tools can optimise workflows through a technique called prescriptive personalisation, using past data to predict future behaviour. Real-time personalisation takes this further, incorporating current information alongside historical data. 

This allows banks to deliver highly customised virtual assistants and real-time recommendations powered by natural language processing (NLP) models. These AI-powered assistants not only build trust and user engagement but also simplify interactions with the bank.

Tool 1: Predictive Analytics

Predictive analytics, powered by AI tools, unlock a new level of customer personalisation in banking. These tools analyse data to uncover hidden patterns and trends that traditional methods might miss. This knowledge reveals sales opportunities, possibilities for cross-selling, and ways to improve efficiency.

Predictive analytics use past data to forecast customer behaviour and market trends. This foresight allows banks to tailor marketing strategies and sales approaches to meet changing customer needs and capitalise on emerging opportunities.

Tool 2: Chatbots and Virtual Assistants

One key advantage of chatbots is their constant availability. This is especially helpful for customers who need assistance outside of regular operating hours.

AI chatbots learn from every interaction, improving their ability to understand and meet individual customer needs. By integrating chatbots into banking apps, banks can provide personalised banking experiences and recommend financial products and services that fit a customer’s specific situation.

Erica, a virtual assistant developed by Bank of America, handles tasks like managing credit card debt and updating security information. With over 50 million requests handled in 2019 alone, Erica demonstrates the potential of chatbots as efficient assistants for customers.

Tool 3: Recommendation Engines

Banks use AI tools to analyse vast amounts of customer data, including purchases, browsing habits, and background information. This deep understanding helps banks recommend products that truly fit each customer’s needs.

These personalised recommendations extend beyond credit card suggestions. AI can identify potential investments or loans that align with a customer’s financial goals. By providing customers with relevant information, banks allow them to make informed financial decisions. 

Tool 4: Sentiment Analysis with AI

AI sentiment analysis translates written text into valuable insights. AI uses NLP to understand emotions and opinions in written communication. By examining things like customer feedback, emails, and social media conversations, banks gain a much clearer picture of customer sentiment.

Tool 5: Voice Recognition

AI-powered voice assistants offer a convenient way to handle everyday banking tasks. From checking balances to paying bills, all a customer needs are simple voice commands.

These assistants use NLP to understand customer requests and respond accurately. Voice authentication adds another layer of security by verifying customer identity during transactions.

Tool 6: Process Automation

Robotic Process Automation (RPA) automates repetitive tasks, boosting operational efficiency. It tackles up to 80 percent of routine work and frees up workers for more valuable tasks requiring human judgement.

RPA bots can handle tasks like issuing and scheduling invoices, reviewing payments, securing billing, and streamlining collections – all at once. NLP empowers these bots to extract information from documents, simplifying application processing and decision-making. 

Tool 7: Facial Recognition with AI

Facial recognition helps banks verify customer identities during tasks like opening accounts, accessing information, and making transactions. Compared to traditional passwords, facial recognition offers stronger security and greater convenience. It eliminates the need for remembering complex passwords or worrying about stolen credentials, making banking interactions smoother and less error-prone. This technology also helps prevent fraud by identifying attempts to impersonate real customers.

Capital One AI Case Study

Capital One demonstrates how AI can personalise banking. Their AI assistant uses NLP to understand customer questions and provide immediate answers. Capital One also incorporates AI into fraud detection. Machine learning and predictive analytics help pinpoint suspicious credit card activity to strengthen security measures.

Conclusion

AI tools offer a significant opportunity for banks to improve customer experiences and achieve long-term success. By personalising banking services with AI, banks can better meet individual customer needs. This leads to higher satisfaction and loyalty, which enhances the bank/customer relationship.

AI has the potential for an even greater impact. As banks integrate more advanced AI capabilities, they can create even more engaging and personalised interactions. This focus on ‘hyper-personalisation’ could be the next big step for financial institutions to set them apart in a competitive market.

  • Artificial Intelligence in FinTech

Author

Dan Brightmore

Published

3 September 2024

Estimated Read time

3Mins

Neobanking is different from traditional banking which is operated through physical intermediaries. By implementing an interface and various advanced features,…

Neobanking is different from traditional banking which is operated through physical intermediaries.

By implementing an interface and various advanced features, this type of bank can change people’s views on managing finances by keeping up with rapid technological advances.

In the US, many people have been underserved by traditional banks, facing high fees and a lack of branches. To help, some companies offered prepaid debit cards with checks for bill payments, but these were limited.

The 2010s fintech revolution introduced mobile-first banking through neobank apps. These apps allowed quick account signups with no minimum balance or overdraft fees and offered small, interest-free loans to keep people away from payday lenders.

This model attracted millions of customers, with neobanks profiting from higher interchange fees. However, they also faced challenges such as higher fraud and disputes, impacting their profitability.

In this article, we will discuss the five main benefits of neobanks: convenience, lower fees, a better user experience, faster transactions, and innovative financial products. These advantages will explain why customers are switching to this type of bank.

Convenience

One of the main advantages of neobanks is their ease of access. Customers do not need to visit the bank physically and can carry out all banking transactions anytime and anywhere.

This convenience extends to all processes, from opening an account to transferring money to the destination account. These tasks can be completed in minutes via a mobile phone.

Lower Fees

Apart from accessibility advantages, neobanking offers a competitive fee structure with relatively lower admin fees than traditional banks. This is because traditional banks incur overhead costs to maintain physical branches, while neobanks do not.

As a result, neobanks can pass on savings to customers through lower service rates. Additionally, neobanks save on costs by not requiring workers to operate physical branches.

Enhanced User Experience

Neobanks prioritise user experience by designing intuitive interfaces—making banking straightforward and accessible. They also offer personalised financial insights for each customer.

Neobanking’s mobile applications simplify financial management with budget tools and real-time transaction notifications. These features empower consumers to make informed financial decisions and maintain better control over their finances.

Faster Transactions

Neobanking offers convenience and lower costs while speeding up transactions with advanced technology. This allows users to manage their finances in real time.

For example, customers can quickly transfer money between local and international banks, thanks to the efficient systems deployed.

Innovative Financial Products

Not only are neobanks useful for fast transactions, but they also provide innovative financial products. One such innovation is automatic investment, which allows users to allocate and manage portfolios via a mobile app.

Additionally, neobanks offer unsecured loan products with a quick and transparent application process. This approach not only provides efficiency but also aligns with consumer behaviour in interacting with financial services.

Conclusion

The advantages of neobanking go beyond convenience and cost savings; they also include a consumer-oriented banking approach. By leveraging powerful digital innovations, neobanks offer an accessible and customisable banking platform.

This approach enhances the consumer experience with more innovative financial products and alternative solutions. Neobanking also implements financial transparency policies, allowing consumers to explore and benefit from various banking options.

In the future, neobanks may have a significant opportunity to attract high-value customers who manage large deposits. A mobile app could integrate all their accounts from different banks into one, simplifying deposit management. Additionally, neobanks could use AI to deliver personalised customer service and a premium experience.

  • Neobanking

Author

Dan Brightmore

Published

2 September 2024

Estimated Read time

4Mins

Fuelled by the Covid-19 pandemic and a projected market size of $166.4 billion by 2030, InsurTech companies are revolutionising the…

Fuelled by the Covid-19 pandemic and a projected market size of $166.4 billion by 2030, InsurTech companies are revolutionising the insurance industry. 

These firms offer digital alternatives in a typically slow-to-change industry. Furthermore, their innovative solutions have empowered traditional insurers to accelerate digitalisation and streamline processes. 

These are the leading firms that have helped this traditional field both adapt and start rapidly catching up to efficiency trends associated with more dynamic industries.

Introduction to InsurTech Innovation

The insurance industry is undergoing a transformative shift fuelled by InsurTech. 

Innovating technologies for insurers is about finding novel solutions to longstanding challenges and harnessing emerging trends to shape the future of the industry. 

Insurance leaders are almost unanimous in recognising that innovation as not just important, but critical to future success. Moreover, insurers who fail to embrace InsurTech advances, and the wave of digital insurance products and opportunities they represent, risk falling behind in an increasingly competitive and dynamic industry. 

Oscar Health

Oscar Health built itself from the ground up with a tech-first approach focused on member service. This unique strategy aims to make healthcare more accessible and affordable for all Americans.

Oscar’s commitment to exceptional service is reflected in its sky-high Net Promoter Score (NPS) of 50 and a near-perfect 97% member satisfaction rate for virtual care. With a presence in over 577 counties across 20 states, Oscar Health’s impact on the InsuTech industry is undeniable.

NEXT Insurance

A leader in small business insurance, NEXT Insurance offers easy-to-understand, digital coverage designed specifically for the self-employed. Also, their recently launched Copilot tool empowers agents to serve micro-businesses efficiently. Copilot streamlines the process for both sides. Business owners can get quotes and bind coverage online instantly, while agents gain a simplified workflow to boost revenue. 

Vouch

Since 2018, Vouch has emerged as a prominent force in the InsurTech space by transforming the way business insurance serves high-growth companies. Vouch recently launched AI Insurance, a groundbreaking product specifically designed to mitigate risks for AI startups in this rapidly developing field. 

Hippo

Hippo stands out for its proactive approach to homeowners insurance. Partnering with homeowners to implement smart home devices and personalised safety recommendations, Hippo prioritises preventing hazards before they occur. This commitment has secured their position as a top InsurTech firm, protecting over 200,000 homes across most US states.

Bestow

Bestow prioritises simplifying insurance and boosting financial security for everyone. It believes the process shouldn’t be daunting, so they leverage cutting-edge technology and data throughout the entire value chain to streamline everything. Furthermore, its commitment to innovation is evident in the recent launch of permanent life insurance and the addition of AI features to its underwriting workbench.

QuanTemplate

Founded in 2011, QuanTemplate uses machine learning and big data to empower businesses through digital transformation. Its core offering, a data integration, automation, and analytics platform, equips insurance professionals with the tools to unlock valuable insights and gain a deeper understanding of market dynamics.

Dinghy

Dinghy caters to the changing insurance needs of freelancers and businesses with its innovative pay-as-you-go model and focus on online and mobile accessibility. 

This focus on accessibility is further enhanced through its partnership with ARAG, providing ‘Freelance Assist’. This is a unique package combining Dinghy’s flexible insurance with ARAG’s online legal resources tailored for freelance professionals.

CoVi Analytics

CoVi Analytics tackles both regulatory compliance and operational efficiency for insurers. Its AI-powered CORE platform automates complex reporting for evolving regulations, while the app suite featuring Policy 2.0 simplifies risk incident capture and boosts operational efficiency.

ManyPets

ManyPets, formerly known as Bought By Many, has emerged as a leading pet insurance provider by taking a unique approach to customer needs. 

Born from a focus on analysing social media commentary, ManyPets uses customer feedback to shape its insurance policies. This customer-centric approach extends to its technology focus, making ManyPets the first pet insurance company to offer form-free online claims.

Shift Technology

Shift Technology provides a suite of AI-powered Software-as-a-Service (SaaS) solutions specifically designed to address the insurance industry’s needs. Its focus lies in fraud detection, empowering insurers with robust protection against financial losses, reputational damage, and cyber threats. 

Key Factors for InsurTech Success

Several key factors have fuelled the recent surge in InsurTech innovation. Digitisation plays a crucial role by speeding up information processing, leading to cost reductions, efficiency gains, and the development of new, customer-centric products.

Additionally, personalisation is another key factor, enabling insurers to tailor services to individual needs and preferences. They consider factors like age, location, and lifestyle before providing quotes. Finally, advanced analytics capabilities provide valuable insights into consumer behaviour, allowing insurers to better target customers, while also offering real-time risk assessment data.

  • InsurTech

Author

Dan Brightmore

Published

29 August 2024

Estimated Read time

4Mins

WatchGuard’s Threat Lab cybersecurity research team forecast headline-stealing hacks involving LLMs, AI-based voice chatbots and VR/MR headsets. They also assess…

WatchGuard’s Threat Lab cybersecurity research team forecast headline-stealing hacks involving LLMs, AI-based voice chatbots and VR/MR headsets. They also assess the impact of the war on talent, AI spear phishing and QR codes.

Watchguard leading on Cybersecurity

WatchGuard Technologies, a global leader in unified cybersecurity, offers an annual batch of predictions covering the most prominent attacks and information security trends that the WatchGuard Threat Lab research team believes will emerge each year. This year, these include malicious prompt engineering tricks targeting large language models (LLMs), managed service providers (MSPs) doubling down on unified security platforms with heavy automation, ‘Vishers’ scaling their malicious operations with AI-based voice chatbots, hacks on modern VR/MR headsets, and more…

“Every new technology trend opens up new attack vectors for cybercriminals,” said Corey Nachreiner, chief security officer at WatchGuard Technologies. “In 2024, the emerging threats targeting companies and individuals will be even more intense, complicated, and difficult to manage. Therefore, with an ongoing cybersecurity skills shortage, the need for MSPs, unified security, and automated platforms to bolster cybersecurity and protect organisations from the ever-evolving threat landscape have never been greater.”

Cybersecurity predictions

The following is a summary of the WatchGuard Threat Lab team’s top cybersecurity predictions for 2024:

Prompt Engineering Tricks Large Language Models (LLMs)

Companies and individuals are experimenting with LLMs to increase operational efficiency. However, threat actors are learning how to exploit LLMs for their own malicious purposes as well. During 2024, the WatchGuard Threat Lab predicts that a smart prompt engineer ‒ whether a criminal attacker or researcher ‒ will crack the code and manipulate an LLM into leaking private data.

MSPs Double Down on Security Services Via Automated Platforms

There are approximately 3.4 million open cybersecurity jobs, and fierce competition for available talent. More SMEs will turn to trusted managed service and security service providers, known as MSPs and MSSPs, to protect them in 2024. To accommodate growing demand and scarce staffing resources, MSPs and MSSPs will double down on unified cybersecurity platforms with heavy automation using artificial AI and Machine Learning.

AI Spear Phishing Tool Sales Boom on the Dark Web

Cybercriminals can already buy tools on the underground that send spam email, automatically craft convincing texts, and scrape the Internet and social media for a particular target’s information and connections. However, a lot of these tools are still manual and require attackers to target one user or group at a time. Well-formatted procedural tasks like these are perfect for automation via AI and machine learning. This makes it likely that AI-powered tools to combat cybersecurity will emerge as best sellers on the dark web in 2024.

AI-Based Vishing Takes Off in 2024

Voice over Internet Protocol (VoIP) and automation technology make it easy to mass dial thousands of numbers. Once a potential victim has been baited onto a call, it still takes a human scammer to reel them in. This system limits the scale of vishing operations. But in 2024 this could change. The combination of convincing deepfake audio and LLMs capable of carrying on conversations with unsuspecting victims will greatly increase the scale and volume of vishing calls. What’s more, they may not even require a human threat actor’s participation.


VR/MR Headsets Allow the Recreation of User Environments

Virtual and mixed reality (VR/MR) headsets are finally beginning to gain mass appeal. However, wherever new and useful technologies emerge, criminal and malicious hackers follow. In 2024, cybersecurity researchers forecast that either a researcher or malicious hacker will find a technique to gather some of the sensor data from VR/MR headsets to recreate the environment users are playing in.


Rampant QR Code Usage Results in a Headline Hack

Quick response (QR) codes provide a convenient way to follow a link with a device such as a mobile phone. They have been around for decades, but mainstream usage has exploded in recent years. Furthermore, Threat Lab cybersecurity analysts expect to see a major, headline-stealing hack in 2024 caused by an employee following a QR code to a malicious destination.

  • Cybersecurity in FinTech

Author

Dan Brightmore

Published

28 August 2024

Estimated Read time

4Mins

The growth of international trade and global mobility has fueled the demand for efficient cross-border payments solutions. Legacy systems are…

The growth of international trade and global mobility has fueled the demand for efficient cross-border payments solutions. Legacy systems are often slow and expensive, with multiple middlemen and complicated procedures.

With its decentralised and secure nature, blockchain technology offers a compelling alternative. Furthermore, as the cross-border payment market is expected to reach $290 trillion by 2030, blockchain and digital payments are emerging as strong contenders to streamline international transactions.

Introduction to Blockchain in Cross-Border Payments

While blockchains are not designed exclusively for payments, they offer a powerful foundation for streamlining cross-border transactions. Unlike traditional banking systems restricted by national borders, blockchains are global by nature. Also, in a blockchain payment system, payers and payees use a shared network with common data formats. This enables direct transactions to and from anywhere.

Traditional card and banking networks are controlled by individual institutions. Blockchains distribute this authority. Anyone with an internet connection can participate in these permissionless networks. Moreover, this removes the control of centralised systems, making them more accessible for both merchants and customers.

Benefit 1: Speed

Traditional reliance on central authorities can slow down transaction processing. For example, depositing a check on a Friday might not show up in the recipient’s account until Monday because of limited bank hours.

Blockchain technology operates 24/7 and enables much faster settlement times. On some blockchain networks, transactions can be finalised in minutes. This efficiency is especially beneficial for cross-border payments.

Benefit 2: Cost Savings

A report by Jupiter Research shows that by 2030, banks could save over $27 billion in cross-border settlements. This efficiency comes from blockchain eliminating the need for intermediaries. Also, consumers often pay banks or notaries for verification, but blockchain removes this dependency and its fees.

Benefit 3: Security

Traditional and centralised databases use a single point of access, making them vulnerable to cyberattacks. Blockchain technology offers a stronger alternative. It distributes encrypted data across a network of interconnected computers.

This system, called a distributed ledger, makes tampering very difficult. Any change would need to be reflected across the entire network at once. Additionally, blockchain allows controlled access. Only authorised participants can see or modify specific data. This granular control significantly reduces the risk of unauthorised access and fraud.

Benefit 4: Transparency

A key strength of blockchain technology is its transparency. This comes from a fully traceable and tamper-proof transaction record. Therefore, every transaction on the blockchain is permanent and unchangeable.

Once verified by the network, it cannot be altered or deleted. This permanence applies even to attempts to modify a transaction. Moreover, hanging it would require altering every single block after it in the chain, a nearly impossible task.

Benefit 5: Improved Liquidity Management

Liquidity describes how easily you can buy or sell something without affecting the price. For digital currencies, more liquidity means steadier prices with less fluctuation.

Blockchain technology has the potential to change how companies handle liquidity. By offering real-time information on a company’s financial health and available cash, blockchain helps treasurers. They get a complete picture of the company’s cash across all entities, departments, bank accounts, and locations, accessible at any time.

Transparency from blockchain technology empowers treasurers to make more accurate cash flow forecasts. It also helps them allocate cash resources more efficiently, for example, in supply chain finance and refinancing activities.

Benefit 6: Reduced Error Rates

Unlike traditional systems where human errors can occur, blockchain uses a network of computers for verification. Thousands of computers on this network work together to confirm each transaction, making errors much less likely.

Even if one computer makes a mistake, it only affects its copy and is rejected by the rest of the network. This strong verification process creates a highly accurate record of information.

Benefit 7: Better Compliance

Financial regulations create a complex compliance challenge for institutions. Blockchain technology offers a solution with its secure, transparent, and permanent record of transactions. It simplifies compliance processes for regulators, who can monitor and audit transactions more easily.

Blockchain can also streamline customer onboarding and anti-money laundering (AML) efforts. Secure identity management using blockchain streamlines these procedures and guarantees accurate records.

Conclusion

Blockchain technology promises a future of secure, efficient, and streamlined cross-border payments. With its shared record of transactions, it significantly reduces fraud and data breaches. By removing middlemen, blockchain also allows for faster, cheaper transactions with greater transparency throughout.

  • Blockchain

Author

Dan Brightmore

Published

27 August 2024

Estimated Read time

4Mins

Banks are adopting artificial intelligence (AI) technology to provide more personalised experiences. A study by the AI Development Company projects…

Banks are adopting artificial intelligence (AI) technology to provide more personalised experiences. A study by the AI Development Company projects that 75 percent of financial institutions will invest $31 billion in integrating AI into their existing systems by 2025. The trend is driven by customer demand for faster and more convenient banking options.

AI excels at analysing enormous amounts of data. This lets banks find patterns and trends to personalise customer service and boost efficiency. For example, AI-powered chatbots offer 24/7 help with basic questions, freeing up customer service staff for trickier issues. AI can also analyse customer behaviour to predict their needs and suggest relevant services or support, from personalised investment options to flagging suspicious account activity.

Benefit 1: Increased Efficiency

Long wait times and impersonal interactions often leave customers frustrated with traditional bank customer service. Fortunately, AI streamlines the experience by providing quick and accurate answers. It eliminates the need to navigate complex phone menus.

AI personalises interactions and saves customers from endless button-pressing and long hold times. AI in customer service can also analyse vast amounts of customer data. The data helps banks anticipate customer needs and recommend tailored solutions, preventing problems before they arise. This results in higher customer satisfaction and a smoother banking experience.

Benefit 2: Personalisation

AI can analyse vast amounts of customer data, including purchases and browsing habits, to create detailed customer profiles. These profiles help banks recommend relevant products and services that fit individual needs.

For instance, a customer who often pays bills online might be recommended a new budgeting tool. Similarly, someone who regularly saves for travel could receive information about travel insurance or currency exchange. These personalised suggestions can come through various channels, like the bank’s website, email alerts, or chatbots.

Benefit 3: Cost Savings

Cost savings are a major advantage of AI-powered customer service in banking. One key way AI achieves this is through automation. Chatbots powered by AI can handle many routine customer inquiries, freeing up human agents for complex issues. This reduces labour costs while also improving response times.

AI also helps with better staffing management. It can analyse past data to predict how many calls are coming in. Banks can then ensure they have the right number of agents available, avoiding overstaffing or understaffing that can significantly impact costs.

Benefit 4: 24/7 Support

Traditionally, reaching a support agent often meant waiting on hold during peak hours. However, AI in customer service is transforming the industry by offering immediate assistance through chatbots. These virtual assistants provide instant support the moment a customer reaches out.

Unlike human agents with limited working hours, chatbots are available 24/7. This ensures customers get help whenever they need it, regardless of location or time zone. This is especially valuable in the globalised world, where customers might need support outside of regular business hours.

A great example of this success is Photobucket, a media hosting service. After implementing a chatbot, they offered 24/7 support to international customers. This results in a three percent increase in customer satisfaction scores along with a 17 percent improvement in resolving issues on the first try.

Benefit 5: Multilingual Support

AI-powered chatbots offer multilingual support, breaking down language barriers and creating a positive banking experience. These chatbots can figure out a customer’s preferred language at the start of a conversation. This ensures clear communication, no matter what language the customer speaks.

Conclusion

A study by Global Market Insights predicts the conversational AI market will reach $57.2 billion by 2032. This technology is making big strides in banking, particularly by automating routine tasks and inquiries. By taking care of these repetitive tasks, AI frees up human agents to focus on more complex customer issues. This improves efficiency and helps banks manage their operating costs. A streamlined customer service experience builds trust and loyalty, which can lead to business growth for financial institutions.

  • Artificial Intelligence in FinTech

Author

Dan Brightmore

Published

26 August 2024

Estimated Read time

3Mins

A revolutionary trend has emerged and revolutionised the banking sector. Neobanking has changed market demand and become a consumer favourite….

A revolutionary trend has emerged and revolutionised the banking sector. Neobanking has changed market demand and become a consumer favourite.

Neobanks, or digital banks, offer banking services without physical presence. Unlike traditional banks, which require customers to access services on-site, neobanks can process all services online.

These solutions address the challenges of extensive physical infrastructure and aim to offer more user-centric services. Neobanking offers 24/7 operational access, lower fees, higher interest rates, enhanced customer service, innovative features, and more.

One of the many advantages is seamless digital wallet experiences. Customers can use international payments with competitive exchange rates and lower fees than traditional banks. Another advantage of neobank services is instant loans. This feature makes credit more accessible, including to those traditionally underserved.

Cryptocurrencies and blockchain adoption are growing in neobanking. Digital banks integrate blockchain for secure transactions and smart contracts. Cryptocurrencies like Bitcoin and Ethereum enable global transactions without intermediaries. As regulators adapt, neobanking harnesses blockchain’s potential for decentralised finance (DeFi) and offers access to lending, staking, and yield farming.

Technological Advancements

Neobanks apply the latest technological developments to enhance their services, utilising advancements like Artificial Intelligence (AI) to create personalised systems. Through machine learning, neobanks leverage algorithms for credit scoring, risk assessment, and fraud detection, improving their decision-making processes.

These technologies also strengthen customer service through chatbots, enhance risk assessment and credit scoring, and provide personalised financial advice. Furthermore, AI-driven insights enable neobanks to offer more relevant products and services, boosting customer satisfaction and loyalty.

Market Dynamics

The neobanking market is expected to grow at a CAGR of 35.8 percent during 2023-2030 due to increasing financial digitalisation, as predicted by UnivDatos. The neobanking market is expected to grow at a CAGR of 35.8 percent during 2023-2030 due to increasing financial digitalisation, as predicted by UnivDatos.

The growth can be attributed to the convenience neo-banks offer, such as 24/7 access to services through mobile apps, allowing customers to manage their finances anytime, anywhere. Neobanks have lower operating costs, due to the lack of physical branches, also contribute to their appeal.

Furthermore, supportive government regulations and investor confidence are crucial to this growth. Governments have introduced regulatory sandboxes to foster fintech innovation, encouraging entrepreneurs and investors to enter the market. The success of companies like Stripe, Chime, and Revolut highlights the potential of neobanks to meet the demand for efficient and cost-effective financial solutions.

The market is characterised by dynamic and rapidly evolving trends driven by technological advancements. For instance, some neobanks are exploring blockchain technology for secure transactions and offering cryptocurrency services. This technology caters to the growing interest in digital assets.

Future Directions

The future of neobanking is poised for transformative growth. Neobanks will increasingly target international markets, adapting services to local regulations and consumer preferences. Moreover, this expansion is set to broaden financial inclusion and capture diverse customer bases.

Machine learning algorithms optimise product recommendations and credit assessments. This technology will also grow the adoption of advanced security measures such as biometric authentication, multi-factor authentication (MFA), and real-time fraud detection systems.

Partnerships and ecosystem expansion will become key to sustained neobanking. Collaborations with fintechs, e-commerce platforms, and traditional banks will broaden offerings. Additionally, this ecosystem integration will offer customers access to various financial and non-financial services.

Conclusion

Neobanking is a disruptive force in the financial industry. It enhances financial management by providing a seamless system. Customers can quickly meet their various needs within reach, from transactions in diverse payments to cryptocurrencies and blockchain. These banks utilise the latest technology to provide data-driven services and products to ensure customer satisfaction.

The market is rapidly evolving, driven by technological advancements and changing consumer preferences. Therefore, as neobanks continue to innovate and adapt, they make financial services more inclusive and accessible.

  • Neobanking

Author

Dan Brightmore

Published

21 August 2024

Estimated Read time

3Mins

Alloy, the identity risk management company trusted by over 600 leading banks, credit unions and fintech companies, has released its…

Alloy, the identity risk management company trusted by over 600 leading banks, credit unions and fintech companies, has released its 2024 State of Embedded Finance Report.

The Report examines the year’s top trends in embedded finance risk management and compliance. Alloy surveyed more than 50 professionals at financial institutions operating bank sponsorship programs in the United States to learn how their businesses are responding to compliance challenges.

The Report is being published at a time when sponsor banks in the US are facing  increased regulatory scrutiny. A reported 25.6% of the FDIC’s formal enforcement actions have been directed at sponsor banks since the beginning of 2024.

Alloy’s report found that while embedded finance programs drive significant revenue (over 50%) for sponsor banks, a majority (80%) of respondents reported that meeting embedded finance compliance requirements as a sponsor bank is challenging in the current environment.

“Running a sponsor bank program is inherently complex because you have banks who are highly regulated working with companies that are often new, fast-growing, and creating entirely new ways for consumers to interact with money,” said Tommy Nicholas, CEO and co-founder of Alloy.

“Despite the challenge, we’re already seeing sponsor banks respond to regulatory developments by investing in better controls, training, and adding to their compliance tech stack.”

State of Embedded Finance Report 2024

Here are five of the key findings from Alloy’s State of Embedded Finance Report:

1. Over half of sponsor banks’ deposits and revenue come from embedded finance partnerships.

Partnerships between banks and fintechs are a cost-efficient approach to catalyze growth through increased deposits, seamless UI, and accelerated innovation.

2. As regulatory scrutiny grows, embedded finance partnerships are becoming harder to maintain.

The embedded finance boom resulted in many banks testing the waters of bank sponsorship programs. As the complexity of managing these programs grows, we may see sponsor banks with less sophisticated embedded finance programs and tech stacks leave the space entirely.

3. Respondents cite reputational damage as the top consequence of compliance violations.

Reputational damage often results in increased regulatory scrutiny, including more frequent examinations and document requests. This heightened oversight can strain resources and pose ongoing operational challenges.

4. 90% of financial institutions face challenges when meeting compliance requirements as a sponsor bank.

Lack of control and audibility over fintech partners’ policy controls were cited as top challenges to meeting compliance requirements. Managing compliance across multiple jurisdictions and adapting to evolving regulatory changes were also top concerns.

5. 94% of respondents say they plan to invest in new compliance technology to help them manage their embedded finance partnerships.

As attention surrounding compliance missteps has grown over the past few years, there are new tech solutions available to help bridge the gap between sponsor banks and fintechs.

Download the Report

Respondents included 51 decision-makers from financial institutions operating bank sponsorship programs in the United States.

Surveys were conducted by The Harris Poll, a leading survey platform for over 60 years.

For further insights you can download the full report here

  • Embedded Finance

Author

Dan Brightmore

Published

20 August 2024

Estimated Read time

4Mins

As digital payments continue their rapid ascent, understanding the accompanying cybersecurity challenges has never been more critical. Furthernore, with Statista…

As digital payments continue their rapid ascent, understanding the accompanying cybersecurity challenges has never been more critical. Furthernore, with Statista forecasting a robust 9.52 percent annual growth rate for digital payments from 2024 to 2028, the urgency to address these security concerns intensifies.

While this growth brings unparalleled convenience, it also introduces new security vulnerabilities that must be addressed. Cybersecurity is fundamental in safeguarding confidential data against hacking, fraud, and data breaches. Implementing effective cybersecurity measures can also maintain trust between businesses and clients while preventing financial loss. To optimise cybersecurity, identifying the current threats to digital payment systems is a must for businesses and consumers.

Current Cybersecurity Threats

Digital banks face various threats that continually evolve as technology advances. By addressing these challenges head-on, banks can protect their users and continue the growth of digital payment.

Many types of cyber threats can disrupt digital payment systems:

Phishing attacks: These attacks use deceptive emails, phone calls, or texts to trick victims into revealing personal information, such as login credentials and financial details. The scam can lead to other types of cyber threats.

Malware: Malicious software that infiltrates systems to steal data, monitor activities, or lock accounts. Various forms of malwares have different functions, such as Trojans, Worms, and Spyware.

Man-in-the-Middle (MitM) Attacks: intercept communications between the user and the bank allowing attackers to steal sensitive information or funds.

Data breaches: Unauthorised access to digital bank databases exposes vast amounts of sensitive information, including personal and financial data.

Ransomware: It is an attack that employs malware to infiltrate computer systems to steal data, monitor activities, or lock accounts. The attackers then demand payment and keep disrupting the devices/websites until they are paid.

Credential stuffing: Attackers use stolen usernames and password combinations from other breaches to gain unauthorised access to accounts.

DDoS and DoS attacks: Distributed Denial-of-Service (DDoS) attacks overwhelm the bank’s servers, making online services unavailable to customers. Unlike the Denial-of-Service (DoS) attack where a single source is used to flood the target, DDoS use multiple sources of compromised devices (botnets).

Insider threats: Employees or contractors with access to sensitive information may intentionally or unintentionally cause data breaches or other security incidents.

Social engineering: Manipulating individuals into divulging confidential information through psychological manipulation.

Zero-Day Exploits: Attacks that exploit previously unknown vulnerabilities in software or hardware before patches are available.

Cybersecurity Measures

Encrypting data is essential to convert the personal information into a secure format. This encrypted data can only be accessed with the correct key or description. This ensures that the data remains secure and unreadable after interception.

Multi-Factor Authentication (MFA) adds a layer of security by requiring some form of verification before granting access to the platform. Tokenisation replaces critical payment data with a unique or random token that cannot be hacked once intercepted.

Biometric verification, such as fingerprint and facial recognition, provides additional security by utilising unique physical characteristics. These include the shape of the face and the outline of a fingerprint, both of which are difficult to replicate.

Financial institutions have also innovated to improve cybersecurity by implementing artificial intelligence (AI). For example, JPMorgan Chase has implemented an AI-driven fraud detection system. This application is used for monitoring transaction activity in real-time. It can also detect potential threats or fraudulent transactions using the data analytics tool.

Regulatory Requirements

Financial companies are obligated to meet regulatory compliance. It is important to build customers’ trust and avoid legal or financial penalties. For global financial institutions, regulatory issues might be more complex as each country has its version of rules. As cyber threats evolve, regulators continuously update and enforce these requirements to address new challenges in digital payment systems.

For instance, UK regulations have set strict rules to ensure the security of digital payments. These include data protection measures, and companies that do not prioritise cybersecurity will face substantial fines. Similar regulations have been implemented across European Union (EU) Member States, compelling financial institutions to enhance cybersecurity to create a safe digital payments environment for consumers.

  • Cybersecurity in FinTech
  • Digital Payments

Author

Dan Brightmore

Published

19 August 2024

Estimated Read time

6Mins

FinTech Strategy met with Stiven Muccioli, Founder & CEO at BKN301, to discuss digital payment services connecting North Africa, the…

FinTech Strategy met with Stiven Muccioli, Founder & CEO at BKN301, to discuss digital payment services connecting North Africa, the Middle East, and Europe.              

BKN301 Group is a London based fintech provider that offers Banking-as-a-Service, connecting North Africa, the Middle East, and Europe. The company aims to address the financial inclusion gap in these regions. It provides digital payment and banking platforms to unbanked populations. BKN301 has successfully partnered with fintechs in Egypt and Qatar, serving millions of customers and providing access to financial services. They are also focused on expanding their market in Europe. The company aims to become a leader in the industry and bridge the gap between Europe and the Middle East.

At Money20/20 Europe, FinTech Strategy spoke with BKN301 Founder & CEO Stiven Muccioli to find out more…      

Tell us about the genesis of BKN301…

“I launched the company in 2021 with the vision to create the biggest tech provider for a digital banking service connecting North Africa, the Middle East, and Europe. We are looking at the demographic sheet of the world… In Europe, we are overserved by the banking system and it’s quite tough to create new projects in the FinTech space. It’s hard to scale past Europe, into the Middle East and North Africa. Ours is an operation in its early stages. There is a huge penetration with mobile devices in the Middle East and North Africa, but at the same time there are a huge amount of people unbanked.

So, we have created the platform to allow digital banks to start fast and with low cost. Basically, we are the ‘backbone’ for the new digital banking era in the Middle East and North Africa. We also work with many companies across Europe. However, we are very focused on the connection between the Middle East, North Africa and Europe. Also, we are focused on the remittances business and cross-border payments because many working abroad in Europe don’t have access to the banking system in Europe. And there are many digital banks in Europe trying to fulfil this gap for new customers.”

Tell us about your career journey…

“I began 15 years ago in the startup business and founded two other companies. The first one, Tippest, was a copycat of Groupon in Italy. This was founded with a group of friends in 2011 and we were able to scale successfully, leading to its sale in 2015. Following that, I moved to the US where I spent some time as an angel investor. In 2016 I came back to Italy to start a new company. It was a corporate venture operation inside of the Iccrea Bank, one of the biggest banking groups in Italy. We created a company named Ventis. It delivered the first super application that merged e-commerce and the digital bank.

We created a platform capable of delivering an e-commerce service, and at the same time digital banking services, payment cards, accounts and more. We managed this part of the business for the Group and reached good numbers. In 2020, we sold the company and today it is the third biggest payment player in Italy.”

Tell us about some of the successful partnerships BKN301 has been involved in…

“We have seen great successes with key partners such as Damen. Damen is a e-payment company in Egypt serving 18 million customers. Thanks to our technology, they are able today to provide a digital payment application to millions of Egyptians. They are now connected and have access to a range of financial services to save money and receive remittances from Europe and across the Gulf. A very successful story in terms financial inclusion.

It’s the same in Qatar where we serve a partner that provides service to labourers and construction workers – there are around 700,000 such workers in Qatar. A good example of financial inclusion because we provide the platform for a low-cost digital banking platform connecting unbanked people to Europe.”

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

“At BKN301, we’re focused on our technology and building an ecosystem based on APIs so we’re able to provide those APIs to digital banks – with us, they save time and money. So, the integration cost is far less than a traditional integration cost. They’re able to work multi-market because we are in different markets and they won’t have any legacy agreement with big corporates. We provide APIs so they can develop and use them for core banking and processing.”

“Every year there is a new wave of news, but we don’t know how long each trend will it last… A couple of years back blockchain was at the core and everyone want to add a feature, sometimes without any reason. Now it’s the same with AI. To build a concrete platform on AI or on blockchain, you need many years, and a lot of investment, to be focused. I don’t believe companies that come out after six months saying they are now AI based. It’s impossible to build a real platform based on AI that quickly. We need to define the real companies. So, which one has the mature technology. It’s a good wave and I think there is a huge need. For example, anti-money laundering controls driven by AI could be a game changer.”

And what’s next for BKN301? What future launches and initiatives are you particularly excited about?

“This year we want to get more established in the market in Europe, so we will be focused on expansion. The goal for us is to become the door, the access bridge, between Europe and the Middle East. We aim to become a backbone for the new financial ecosystem across the region.”

Why Money20/20? What is it about this particular event that makes it the perfect place to showcase what you do?

“Every year there is a new wave of news… A couple of years ago blockchain was at the core and everyone wanted to add some feature on blockchain, sometimes without any reason. And now it’s the same with AI. To build a concrete platform on AI, or on blockchain, you need to be focused for years and have a lot of investment – it can’t be done in six months. So, as with blockchain, we need to define the companies making real progress with established technology based on AI, the same as we did with blockchain. It’s a good wave that can meet a huge need, for example with anti-money laundering controls, and Money20/20 is a great place to learn more about where the industry is at today.”                                                                           

  • Digital Payments

Author

Harry Menear

Published

16 August 2024

Estimated Read time

3Mins

From fraud detection to reinsurance: the top five applications for blockchain technology in insurtech.

A blockchain is a digital record stored in encrypted blocks linked by a computer network. It uses a decentralised ledger to offer data security without relying on third parties. Its penetration into various industries, including insurance, has led to a new wave of innovations.

Blockchain in insurance improves efficiency and security, creating a better customer experience. This technology can transform the paperwork-heavy insurance industry into an automated digital system. Blockchain-powered storage systems are safer from fraud and theft. The claim processing process is also faster with blockchain technology, as it enables real-time data collection and analysis. 

Many insurance companies have adopted blockchain technology and seen significant benefits. 

Use case 1: claims processing

Blockchain streamlines and speeds up claims processes by the distributed ledger scheme. The ledger allows transparent tracking of the claim process from inception or First Notice of Loss (FNOL) until settled in court or otherwise resolved by the insurer. It contrasts the traditional processes that involve filing, validation, and approval manually, which can be time-consuming. 

Blockchain enables policyholders and insurers to monitor each stage of the process in real-time. Customers gain more control over their data, including access rights.

Use case 2: fraud detection

Combating fraud could also be facilitated by blockchain technology. The immutable ledger used in blockchain can record transactions securely, and once the data is stored, it cannot be altered or deleted. This creates an auditable trail for all transactions, allowing insurance companies to identify suspicious activities indicative of fraud. 

Blockchain can also validate the authenticity, ownership, and provenance of documents submitted while checking for police reports and claims history. This allows fraud detection linked to a specific identity possible. 

Use case 3: policy management 

Insurers can improve their policy management using blockchain. It can provide more secure and transparent data storage compared to traditional systems. 

Blockchain technology streamlined the policy issuance process by employing smart contracts. Smart contracts are digital contracts that self-execute automatically when the parties involved meet the predefined conditions. This simplifies the administrative process and eliminates the need for intermediaries. 

As a less human-dependent system, it also reduces the risk of errors or discrepancies. Human employees can then focus on more complex tasks and reduce overall operational costs. 

Use case 4: reinsurance 

Blockchain improves transparency and efficiency in the reinsurance market. Reinsurance involves transferring risks between insurance companies to mitigate and distribute risks while increasing capacity. Blockchain technology can simplify this process by allowing customers to submit claims similarly to traditional insurance policies but using the blockchain ledger. The security and transparency offered by the immutable and accessible ledger ensure the safety of this process.  

Customers can also get a faster settlement of claims and contracts due to the streamlined process. Payments can be triggered automatically once conditions are met, reducing delays and increasing efficiency. 

Use case 5: Peer-to-Peer Insurance 

Blockchain ensures transparency and efficiency in Peer-to-Peer (P2P) insurance processes. P2P is a collaborative insurance model where a group of people can pool their resources to insure each other against specific risks. This model has various types, such as auto, life, health, and homeowner insurance, and is usually shared by family members or business partners.  

Blockchain can facilitate enhanced security and transparency for P2P insurance policyholders due to the nature of the ledger used. The technology can encode P2P insurance terms and conditions into smart contracts, making it more efficient.

Using blockchain, P2P insurance customers can easily compare quotes from different insurance providers. Customers can also avoid concerns over hidden fees related to agents by using this technology. 

Conclusion 

Blockchain offers many ways for insurance companies to improve their management, services, and products. It provides a more secure environment, reduced operating costs, and efficient claims processes. Its vast potential for the insurance industry is expected to propel more adoption in the future.

  • Blockchain

Author

Harry Menear

Published

15 August 2024

Estimated Read time

3Mins

AI-powered threat detection, automation, and data analysis are empowering fintech cybersecurity teams to more effectively meet the challenges of an evolving world.

Artificial intelligence (AI) is driving a new generation of modern cybersecurity solutions. The technology is transforming how organisations protect against evolving digital threats, as predictive and big data analytics bring new benefits to the sector. 

How is AI transforming cybersecurity for fintech teams? 

AI’s importance in cybersecurity lies in its ability to provide advanced threat detection, automate responses, and adapt to evolving threats. It can also handle large amounts of data, making monitoring networks and detecting issues easier without increasing risks. 

AI learns from past experiences, recognising patterns and improving over time. This makes it good at spotting weak passwords and alerting the right people. AI can also block harmful bots that try to overload websites. AI automates large amounts of tasks, allowing for 24/7 monitoring and quicker responses to security threats.

Its machine learning algorithms analyse vast datasets in real-time, identifying patterns and anomalies to detect emerging threats. As AI excels in behavioural analytics, it establishes a baseline of normal behaviour to spot deviations that indicate security threats. 

Unlike traditional methods that rely on predefined signatures, AI can identify zero-day threats—new and previously unknown vulnerabilities—promptly. This proactive approach allows organisations to respond swiftly, preventing potential breaches before they occur.

AI also enhances threat intelligence by automating the analysis of code and network traffic, freeing up human analysts for more complex tasks. It, in turn, facilitates automated incident responses, rapidly mitigating attacks and minimising damage.

Predictive AI in Fraud Detection

AI is revolutionising fraud prevention by using predictive and behavioural analysis to detect and prevent fraudulent activities. By analysing historical data, AI identifies patterns that often precede fraud. This approach not only enhances detection accuracy but also reduces false alarms, distinguishing between normal and suspicious behaviours with greater precision.

In real-time, AI monitors multiple transactions simultaneously, flagging suspicious activities as they happen to mitigate risks promptly. It learns individual customer behaviours to detect anomalies, such as large transactions or unusual patterns. These triggers prompt alerts for investigation or automated protective measures, such as account freezing.

Despite challenges such as data privacy and the need for extensive datasets, AI’s advancements in machine learning promise increasingly effective solutions for protecting financial systems.

Industry case studies: Vectra and Kasisto

Fintech companies like Vectra use AI-powered technologies such as Cognito to automate threat detection and response. These systems analyse vast datasets to detect and pursue cyber threats swiftly, ensuring comprehensive security measures against malicious activities. 

Tools like Kasisto’s KAI enhance customer experiences by providing personalised financial advice through AI-driven chatbots. This demonstrates AI’s versatile applications in improving both security and service delivery within the fintech sector.

AI’s use cases in cybersecurity are expected to increase. AI will revolutionise how users are authenticated. It will use advanced biometric analysis and behaviour tracking to make it harder for unauthorised users to gain access while ensuring a smooth experience for legitimate users.

This approach strengthens security by verifying identities with methods like fingerprints or facial recognition and detects unusual behaviours for added protection. AI’s ability to learn continuously from new data means cybersecurity systems will become smarter and more effective over time, adapting quickly to new threats.

  • Artificial Intelligence in FinTech

Author

Dan Brightmore

Published

14 August 2024

Estimated Read time

3Mins

The insurance sector is witnessing a growing adoption of digital insurance solutions. Machine learning (ML), artificial intelligence (AI), and embedded…

The insurance sector is witnessing a growing adoption of digital insurance solutions. Machine learning (ML), artificial intelligence (AI), and embedded insurance are at the forefront of this wave across InsurTech.

According to Acumen Research and Consulting, the InsurTech market is expected to reach $166.4 billion by 2030. This projection is reinforced by a high compound annual growth rate (CAGR) of 39.1 percent anticipated between 2022 and 2030. This growth is attributed to a surge of insurance technology innovations.

Introduction to InsurTech

InsurTech, short for “insurance technology,” combines traditional insurance practices with cutting-edge advancements in AI and blockchain. It plays a key role in transforming the insurance industry by making it more efficient, transparent, and accessible. Furthermore, automation, improved risk assessment, and tailored coverage options ensure the digital insurance industry meets evolving consumer demands.

Digital Transformation

InsurTech is a driving force behind the digital transformation of the insurance industry. This transformation isn’t just about software upgrades or automation. It’s a strategic shift that revamps core operations and how insurers deliver value to customers.

Today’s consumers demand personalisation, speed, and convenience in everything, including insurance. They expect instant access to policy details and quick claims resolution—areas where traditional systems struggle. InsurTech empowers insurers to meet these changing demands by enabling customised interactions and faster service.

Customer Experience

InsurTech companies are transforming customer interactions with insurance. Convenience, speed, and personalisation are now priorities.

This change is driven by a focus on improved customer experience. Digital platforms and mobile apps from InsurTech firms make buying policies, managing them, and filing claims easier. Self-service tools and chatbots provide instant support and assistance, reducing the need for traditional customer service channels.

Efficiency gains with InsurTech

A crucial element of InsurTech’s contribution to the insurance industry lies in claims management. InsurTech streamlines insurance claims by automating tasks with AI and ML. This means faster claim assessments, processing, and payouts for policyholders.

InsurTech also boosts efficiency for insurers by automating tasks, which can lead to lower operating costs. These lower costs could potentially translate to reduced premiums for consumers. Consequently, digital insurance becomes more accessible and cost-effective.

Case Studies

Several insurance companies are demonstrating success through innovative InsurTech solutions. Chapter, for instance, uses online tools to connect users with advisors and advocates. These experts help people navigate the complexities of enrollment. They ensure people understand their options, deadlines, and how to choose the right plan for their needs.

Health plan selection is another area where InsurTech is making a difference. GoHealth utilises a sophisticated platform powered by ML algorithms to match consumers with plans tailored to their unique needs. Licensed agents and dedicated telecare teams offer support throughout the selection process and beyond.

Future Prospects

InsurTech presents a future brimming with possibilities for the insurance industry. However, as more processes become digital, security concerns come into focus. Future Processing’s InsurTech survey revealed that 81 percent of respondents believe insurers need stronger cybersecurity policies.

This underlines the need to revisit cybersecurity practices as digital transformation progresses. Looking forward, developments in AI and tools like ChatGPT, along with data privacy concerns, suggest quality will be the foundation of InsurTech’s future. By focusing on high-quality data and strong security, insurers can gain deeper customer insights and significantly improve the customer experience.

  • InsurTech

Author

Dan Brightmore

Published

13 August 2024

Estimated Read time

4Mins

Embedded finance is transforming e-commerce for the better. It enables online businesses to offer payment processing, lending, insurance, and other…

Embedded finance is transforming e-commerce for the better. It enables online businesses to offer payment processing, lending, insurance, and other financial services within their own platforms as a non-finance platform. The convenience and efficient shopping experience offered is changing the way people shop and how e-commerce businesses operate.

The companies that implemented embedded finance have seen significant growth in conversion rates of up to 12 percent, the average order value of up to 30 percent, and as much as a 7 percent incremental revenue. Brain & Company’s 2022 report also projected the embedded finance market value to grow to $7 trillion by 2030, indicating an increasing demand for this service. 

Embedded Finance benefits

Embedded finance offers integrated payment solutions for e-commerce businesses. Customers can access financing options at the point of sale without switching to other platforms. This seamless experience makes it easier for buyers to complete their purchases, ensuring revenues for the businesses.

This integration provides better access for financial products, especially digital banking. Commonly, digital bank accounts are easier to set up than their traditional counterparts. It allows non-banking populations can easily make their purchase in e-commerce platforms.

Embedded finance opens new sales and revenue stream opportunities for e-commerce businesses. They provide sellers with working capital loans based on sales data, enabling them to earn additional revenue through interest and fees. The integration also increases customer retention as they are less likely to switch to competitors. This leverage offers long-term success in a competitive market.

Personalisation is another embedded finance’s strong suit. E-commerce businesses can use the customer’s data from their platforms to offer financial products tailored to their needs, creating a better customer experience.

Accenture found that 63 percent of consumers are more likely to buy a financial product from non-financial platforms that they trust. This report emphasises the importance of personalised embedded finance in generating more financial product sales.

Case Study: Amazon

One of the e-commerce platforms that successfully uses embedded finance is Amazon. In 2007, it launched Amazon Pay, allowing users to make purchases on external sites using their Amazon account details. This move not only expanded Amazon’s revenue opportunities but also strengthened customer loyalty.

Over the years, Amazon has continued evolving its embedded finance offerings, including one-click payments, buy now pay later, and lending services. Their latest venture involves a cash advance program in partnership with fintech company Parafin, which provides select sellers easy access to capital without interest or collaterals.

Case Study: Shopify

Shopify also creates a good embedded finance ecosystem with its various financial products. The Canadian e-commerce platform launched Shopify Payments in 2013 to simplify payment. This was followed by Shopify Capital in 2016, a lending product now available in four countries. The latest addition is Shopify Balance, a financial product offering a bank account and a debit card for managing financial activities.

Shopify earns most of its revenue from “merchant solutions” rather than just e-commerce software. This segment, which includes financial and fulfilment services, is growing much faster than its SaaS offerings — 29 percent compared to 8 percent as of Q4 2022, according to the company’s financial report.

Future Outlook for Embedded Finance

The future of embedded finance seems promising, with experts projecting an increase in demand and market share. As customers expect better integrated financial solutions, many companies will continue to adopt this system.

Embedded finance will also continue evolving with new technological advancements like artificial intelligence (AI) and machine learning (ML). Both AI and ML are projected to play a significant role in increasing efficiency, security, and sales for embedded finance in the future.

To maximise the benefits of embedded finance, financial institutions and e-commerce businesses should collaborate to anticipate possible hurdles. Regulatory and compliance challenges are one of the complex issues that may hamper its development.

E-commerce platforms should also ensure their new sophisticated solutions are scalable. As new financial technology is adopted, the platforms should be capable of managing increasing transaction volumes without sacrificing performance or security.

  • Embedded Finance

Author

Dan Brightmore

Published

12 August 2024

Estimated Read time

5Mins

With the growing popularity of digital payments, cybercriminals have found a lucrative target. Cybersecurity data breaches rose sharply by 72%…

With the growing popularity of digital payments, cybercriminals have found a lucrative target. Cybersecurity data breaches rose sharply by 72% in 2023 compared to the previous record-breaking year. This shows the need for financial technology companies to implement strong banking security.

While digital payments offer benefits, businesses must protect themselves and their customers from cyber threats. Understanding the common cyber threats and implementing effective countermeasures are key to long-term success.

The Importance of Cybersecurity for Digital Transactions

With the increasing reliance on online platforms for financial activities, the risk of cyberattacks has grown exponentially. These attacks can lead to significant financial losses, damage to reputation, and erosion of customer trust. From identity theft to data breaches, the consequences of compromised security can be severe.

To prevent such consequences, cybersecurity measures are required for every financial institution. By applying cybersecurity best practices such as encryption, strong authentication, and regular security audits, organisations can protect customer data, prevent fraud, and maintain operational resilience.

Threat Landscape

Cybercriminals employ various tactics to exploit vulnerabilities in digital systems. Phishing attacks, a common method, deceive users into divulging sensitive information through fraudulent emails or websites. Another prevalent threat is ransomware, where cybercriminals encrypt a victim’s data and demand payment for decryption.

Additionally, unauthorised access to accounts through stolen credentials can lead to financial loss. These cyber threats highlight the need for a security framework to protect digital transactions against malicious activities.

Best Practice 1: Encryption

Cybercriminals can easily exploit vulnerable systems, leading to substantial financial losses and reputational damage. A data breach can cost millions of dollars to rectify, including expenses for recovery and ransom payments. A recent IBM report indicates that the average global cost of a data breach exceeds $4.45 million. 

Encryption safeguards sensitive information by transforming it into an unreadable format, accessible only to authorised parties possessing the correct decryption key. This cryptographic process employs complex algorithms and keys to safeguard data integrity and confidentiality.

Best Practice 2: Multi-Factor Authentication

Cybercriminals can easily steal passwords and pins through brute-force attacks, systematically testing numerous combinations until successful. Multi-factor authentication (MFA) offers a robust defence against this threat.

Requiring users to provide multiple forms of identification strengthens account security. This authentication combines different types of verification. This includes information only the user knows, like passwords, items the user possesses, such as security tokens, and unique physical traits, like fingerprints.

By requiring multiple verification steps, banks and financial institutions create a formidable barrier against unauthorised access to sensitive information and funds. Additionally, multi-factor authentication enhances user account management by requiring unique authentication factors for each individual.

Best Practice 3: Employee Training

Organisations with regular cybersecurity training experience a 40% reduction in security incidents compared to those without, according to  This emphasis on employee education is justified as human error remains a primary target for cybercriminals.

Hackers frequently exploit employee vulnerabilities through tactics like phishing, social engineering, and other deceptive methods. By training employees to recognize these threats, financial institutions can mitigate the risk of data breaches and financial losses.

Such incidents can result in substantial financial losses and damage to an institution’s reputation. Consequently, comprehensive cybersecurity training is essential for all bank employees to mitigate these risks.

Best Practice 4: Regular Security Audits

A security audit is an evaluation of an organisation’s digital infrastructure, designed to identify vulnerabilities that could compromise digital transactions. This process involves examining security policies, testing safeguards, and ensuring compliance with industry regulations.

Given the escalating complexity of cyber threats, financial institutions must prioritise regular security audits. Banks can uncover weaknesses before malicious actors exploit them by scrutinising systems and processes.

Regular security audits empower organisations to proactively strengthen defences by implementing essential safeguards such as firewalls, antivirus software, and antimalware solutions. To ensure impartiality and objectivity, it is essential to engage an independent expert to conduct these assessments.

Best Practice 5: Incident Response Planning

As the frequency and sophistication of cyber threats continue to rise, the need for robust defences becomes increasingly critical. Safeguarding digital transactions requires a proactive approach, including a well-defined incident response plan.

An incident response plan is a crucial component of any organisation’s cybersecurity strategy. This formal document outlines strategies for preventing, detecting, and responding to security breaches that could compromise financial data. By establishing clear protocols and assigning specific responsibilities, banks can minimise the impact of cyberattacks and protect both their reputation and customers’ assets.

To be effective, an incident response plan must be established in advance and assigned to specific teams. By following established frameworks, such as those provided by the National Institute of Standards and Technology (NIST) and SANS, organisations can develop comprehensive plans. These resources offer detailed guidance on handling various types of security incidents to ensure a coordinated and efficient response.

Conclusion

Protecting digital transactions requires a multi-faceted approach. Implementing cybersecurity measures is essential for protecting sensitive financial data and maintaining customer trust.

Encryption and multi-factor authentication are foundational elements of a strong security posture. Encryption safeguards data by rendering it unreadable to unauthorised individuals, while multi-factor authentication adds an extra layer of protection by requiring multiple forms of verification. These are just two examples of critical best practices financial institutions should adopt.

Financial institutions must prioritise cybersecurity to maintain customer trust and protect their bottom line. By investing in advanced security measures and staying vigilant against emerging threats, organisations can effectively mitigate risks and ensure the integrity of digital transactions.

  • Cybersecurity in FinTech

Author

Dan Brightmore

Published

11 August 2024

Estimated Read time

4Mins

The growing complexity of financial markets presents new challenges for asset and wealth managers. Therefore, to navigate this evolving environment,…

The growing complexity of financial markets presents new challenges for asset and wealth managers. Therefore, to navigate this evolving environment, many are embracing artificial intelligence (AI) for assistance with investment decisions. AI acts as a powerful tool, improving efficiency and effectiveness across various aspects of asset management.

From analysing market trends to building diversified portfolios, AI’s strength lies in processing massive amounts of data. Furthermore, it uncovers hidden patterns empowering managers to make data-driven investment choices across financial services.

Introduction to AI in Asset Management

Asset management involves managing investment portfolios for individuals, institutions, and businesses. This includes stocks, bonds, real estate, and other financial assets. The main goal is to grow value over time while minimising risk and meeting client goals.

AI is transforming asset management with its data processing and analytics capabilities. Additionally, AI algorithms can quickly analyse massive amounts of financial data, market trends, and economic indicators. This helps uncover hidden patterns and connections that human analysts might miss. A data-driven approach empowers asset managers to make better investment decisions and develop more accurate market forecasts.

Portfolio Management

AI is transforming asset management by offering powerful tools for better decision-making. Moreover, machine learning (ML), AI analyses vast amounts of historical market data to identify patterns and predict future trends, providing valuable insights for building portfolios.

Natural language processing (NLP) lets computers understand human language. NLP can unlock information from unstructured sources like news articles, social media, and analyst reports. The algorithms then analyse sentiment and extract key information that feeds into portfolio decisions.

AI optimisation algorithms help construct optimal portfolios. These algorithms consider risk tolerance, return goals, and investment limitations. By using these tools, portfolio managers can create portfolios designed to maximise returns while minimising risk.

Risk Management

AI is changing how investment decisions are made. The AI algorithms can analyse massive amounts of historical market data and complex risk models.

The analysis provides a deeper understanding of individual asset risk and the overall portfolio’s exposure. With this knowledge, investment managers can proactively identify potential risks and develop strategies to lessen them.

AI offers real-time risk monitoring. An AI-powered system continuously tracks portfolio performance, alerting managers to any significant changes in risk. This allows for swift adjustments as market conditions evolve.

Automated Trading

Traditional automated trading tools execute trades based on pre-programmed instructions from human traders. These tools function within the parameters set by the user and can’t analyse markets on their own.

AI offers truly independent systems with tools that can analyse markets using technical and fundamental analysis with minimal human input.

AI uses sentiment analysis, ML, and complex algorithms to process vast amounts of information and identify trends. This data-driven approach removes the emotional bias that can affect human traders.

Case Studies

The asset management industry is seeing a rise in firms using AI to improve performance. A recent example is Deutsche Bank’s collaboration with NVIDIA. This multi-year project aims to integrate AI across their financial services. This includes virtual assistants for easier communication and AI-powered fraud detection. The bank expects faster risk assessments and improved portfolio optimisation.

Morgan Stanley is also making strides in AI adoption. Partnering with OpenAI, their financial advisors now have access to a massive research library at high speed. Advisors can explore client portfolio strategies and find relevant information in seconds, leading to better-informed advice.

Future Prospects

A PwC report predicts artificial intelligence will significantly boost global GDP, contributing up to $15.7 trillion in 2030. This advancement could reshape asset management in the coming years, leading to entirely new business models and investment strategies.

One future possibility involves fully automated investment platforms powered by AI. These platforms would manage investment portfolios with minimal human involvement and use real-time data analysis to create personalised investment plans.

Moreover, AI could pave the way for more dynamic investment strategies that respond to market changes. By constantly analysing market conditions, AI can automatically adjust investment portfolios to optimise returns and minimise risks. This could lead to more resilient and adaptable investment systems that are better equipped to navigate various market environments.

  • Artificial Intelligence in FinTech

Author

Dan Brightmore

Published

8 August 2024

Estimated Read time

2Mins

Standard Chartered has joined a suite of other institutional investors in the Digital Transformation platform United Fintech United Fintech is…

Standard Chartered has joined a suite of other institutional investors in the Digital Transformation platform United Fintech

United Fintech is a London headquartered neutral Digital Transformation platform. It acquires and forms partnerships with fintech companies in the capital markets space. It is creating a fintech one-stop-shop to innovate with businesses. This is driven by collaboration with other cutting edge technology providers for the benefit of banks, hedge funds and asset managers.

Digital Transformation

The investment supports Standard Chartered’s ambitions to contribute to the advancement of digital transformation. Furthermore, these solutions work across capital markets, wholesale banking and wealth management, and the broader financial services arena.

As part of the investment Standard Chartered has been granted Board observer rights and subject to fulfilment of certain pre-conditions, will be offered a rotational Board seat. Additionally, this will enable it to share existing expertise and contribute to decisions around the platform’s strategic direction.

Stabdard Chartered

“We have been impressed by the growth in United Fintech’s portfolio of innovative, engineering-led technology companies. Standard Chartered share their vision for how technology can transform and disrupt market structure and infrastructure,” said Geoff Kot, Global Head, CIB Business Platforms & Partnerships at Standard Chartered. “We look forward to partnering with them as we continue on our journey of digital transformation.”

United Fintech

“The investment underscores Standard Chartered’s commitment to accelerate digital transformation. Also, it highlights their forward-thinking approach to collaborative innovation,” said Christian Frahm, CEO and Founder of United Fintech. “We are an Asia-focused multinational bank with an expansive footprint in Asia, Africa, Middle East, Europe and Americas. We are thrilled to have them complete our circle of global investors, joining Citi and BNP Paribas. They initially invested in February 2024, as well as Danske Bank, who followed in May.”

About United Fintech

Founded in 2020, United Fintech is an industry-neutral Digital Transformation Platform. Here, global financial institutions and cutting-edge technology providers come together to unleash their full potential and enable the future of finance.

“The financial services sector is a large part of any nation’s economy. Moreover, this sector to continue to thrive, we want to match the knowledge and expertise of our financial service providers with data-driven innovation to create an efficient symbiosis between customers, banks, and technology.”

  • Digital Payments

Author

Harry Menear

Published

7 August 2024

Estimated Read time

6Mins

From AI to multi-factor authentication, here are 7 cybersecurity solutions keeping financial institutions’ critical data secure.

Data belonging to 20.4 million UK citizens was affected by cyberattacks made against financial institutions at the end of 2023. This represents a 143% increase from the 8.4 million individuals affected in the previous year. The demand for robust cybersecurity is ever-increasing in financial institutions.

Financial Institutions encompass a wide range of businesses dealing with financial and monetary transactions, including banks, insurance companies, and brokerage firms. These institutions are pivotal for a functioning capitalist society, simplifying transactions, enabling individuals and entities to seek investment or lend money, and assisting in managing assets.

The increasingly digitalised nature of the economy, including the rise of online-only financial institutions like challenger banks, has accelerated the development of financial technologies and their adoption in the market. As a result, Software as a Service (SaaS) for finance, such as digital banking, electronic payment, online investment, and other online-based services, makes financial services more accessible to the consumer. But, with the ease of access technologies provided, new challenges have also emerged, especially regarding cybersecurity.    

Financial institutions are enticing targets for cybercriminals. Therefore, cybersecurity has become integral to banking security in protecting data from malicious attacks. 

Here are seven top cybersecurity solutions to secure data from online threats.

1. AI-Powered Threat Detection

The ability for AI models to perform pattern recognition on large amounts of unstructured data is opening up an exciting new frontier in threat detection for cybersecurity teams. AI tools can potentially flag subtle differences, anomalies, and patterns that could point to a zero-day threat or the presence of a bad actor in the system. 

Some industry experts believe that AI-powered threat detection will be pivotal in helping cybersecurity teams respond to rapidly evolving cyberattack strategies that are increasingly difficult to combat — somewhat ironically, this uptick in the frequency and sophistication of attacks is at least partially due to the availability of AI tools, which hackers are also putting to use. 

AI’s adaptive learning and advanced recognition capabilities enable automated responses to threats and can predict future risks by analysing past patterns. This helps reduce false positives and saves security teams time on assessments.

2. Multi-Factor Authentication

Multi-factor authentication has quickly become the standard in security and identity protection as more and more people bank, shop, and administer their lives entirely online. Put simple, it’s a multistep account login in which more information besides username and password must be provided. 

Typically referred to as “something you have, something you know”, multi-factor login procedures drastically reduce account hacking, allowing security teams to detect suspicious activity that occurs in the logging processes. 

3. DDoS Mitigation

Distributed Denial of Service (DDoS) is a coordinated cyberattack that overwhelmingly sends a request to the server simultaneously, which makes the server slow down or even go offline. DDoS mitigation is important for banking service security to prevent the interruption of vital services. 

Cynersecurity teams can perform DDoS mitigation by implementing a load balancer, restricting requests from certain places, and blocking communication from outdated or unused ports, protocols, and applications.

4. Compliance

Compliance is vital to both ensure the security of systems and organisations against cyber attack, but also to prevent legal penalties and repercussions if an organisation is found to be in breach of existing regulations. These regulations ensure that an organisation’s cybersecurity set up is in line with the security and data protection laws in the countries where it operates, with the end goal of mitigating risk to the consumer — or just people in general whose data is collected and kept by the company. 

There can be serious legal and financial risks associated with non-compliance — tied to both finance and cybersecurity. For example, in 2021, Natwest was fined over £264 million by the FCA for its extended failure to identify and prevent money laundering. Since the FCA was established, there has not been a year when its total fines issued have been less than £1 million. In the UK, other financial and cybersecurity compliance regulations are DPA 2018, UK GDPR, NIS regulations, and the Computer Misuse Act 1990.

5. Database Activity Monitoring

Database Activity Monitoring refers to any set of tools that monitors and analyses database activity. The goal of this monitoring is to flag and report deceptive, illegal, or undesired behaviour taking place within a system. Ideally, these tools run and operate without any serious impact on user experience.

Because most databases don’t monitor or flag suspicious activity by default, unless you have a tool that handles activity monitoring, making third party solutions a necessity in many cases. According to monitoring software solutions vendor Cyral, most systems also don’t collect enough data to enable “a full forensic investigation of historical breach events.” Also, databases that do often log and store this information inside the database itself. Any attacker that gains access to the database can then, supposedly, have write access to the full collection of tables (as is often the case), meaning they can easily delete any activity rows associated with their presence and theft of data.

6. SQL Injection Prevention

SQL injection is a code injection technique attackers use to steal, spoof, and manipulate data. An effective SQL injection attack can result in attackers gaining unapproved access to sensitive data like including credit card information, PINs, or other private information. In banking security, a failure to prevent SQL injection can result in attackers altering balances, voiding transactions, and even transferring money to their bank accounts. 

Cyberattackers inject malicious SQL code into the backend of a target system when they discover defenceless user inputs in a web application or web page. The hackers can then use this opening to locate the IDs of other users within the database, impersonating these users — usually those with data privileges such as the database administrator — to run malicious code within the system. 

7. Regular Risk Assessment and Training

Perhaps most importantly, the best defence against the rising tide of cybercrime is a cybersecurity conscious culture. Financial institutions should conduct regular risk assessments manually to identify potential vulnerabilities and threats to their systems and networks. 

They should regularly evaluate and revise systems and networks based on analytics and assessments to prioritise cybersecurity initiatives and protect vital assets. Security teams shouls also conduct periodic security awareness training, which can strengthen cyber-readiness among finance personnel. This is particularly important given the rise in generated AI-driven phishing campaigns and other technologically democratised forms of cyber crime.  

Case Study – Cybercriminals in UK Businesses

An investment article from IFA magazine reported 300,000 cybersecurity breaches in finance institutions across the UK in 2022 alone, making them the second-highest number of data breaches from all industries after the IT sector. Reports estimate losses in the region of £27 billion per year, with small businesses in the UK affected the most by cyberattacks, usually phishing. 

The UK authority encourages its citizens to be more aware of the possibility of cyberattacks, especially phishing and fake charity emails, as online threats are growing exponentially. Ledi Sallilari from the SEO consulting firm Reboot also suggested that more complex passwords can help prevent account breaches. 

The rapid expansion of internet usage brings new challenges for cybersecurity. Proper knowledge and awareness about cyber criminals should become mandatory for all Internet users to protect their online data.

Financial institutions, responsible for managing customer funds, need to implement strong cybersecurity measures. With more secure backend systems, they can protect assets and maintain customer trust in an increasingly digital world.

  • Cybersecurity in FinTech

Author

Harry Menear

Published

6 August 2024

Estimated Read time

3Mins

The financial technology sector is witnessing a surge in the adoption of blockchain technology, particularly for its transformative capabilities in customer verification.

Traditional methods of identity authentication often face limitations in security and reliability, exposing user data to potential breaches. Blockchain, however, offers a compelling solution. This article explores how blockchain technology is changing the way industries approach customer verification.

Blockchain and Identity Verification and Management

Customer verification is critical in ensuring the security of accounts and transactions. Traditional identity management systems relied on trusted authorities to issue and manage credentials. This centralised nature makes them lack transparency and vulnerable to data breaches.

Blockchain presents a transformative solution for this issue. This distributed ledger technology offers a secure and transparent way to store and manage data. Each piece of information is cryptographically linked within a chain of blocks. Each block in the chain contains a unique cryptographic hash, acting as a digital fingerprint. And, lastly, each block’s hash incorporates the hash of the preceding block. 

This makes it virtually impossible to tamper with the data once recorded. Any attempt to alter information in a previous block would change its hash, triggering a cascade of changes throughout the chain and exposing the tampering. This inherent security significantly reduces the risk of identity theft and fraud compared to traditional methods.

Another core strength of blockchain technology lies in its inherent transparency. Blockchain technology permanently records every transaction and instance of data entry on a shared ledger, accessible to all participants in the network. This fosters trust by promoting accountability and facilitating immediate verification for activities like dispute resolution.

How Blockchain Improves Efficiency

Customer onboarding for financial institutions hinges on verifying a customer’s identity. Traditionally, this involves multiple document submissions across various institutions. Blockchain technology streamlines this process.

One approach involves storing encrypted personal information (PII) like passports or driver’s licences on the blockchain. Customers would then grant permission to specific institutions to verify their identity. This eliminates the need to repeatedly submit documents for each new financial relationship. 

It also creates a more reliable data source for institutions since everyone would be referencing the same information. Additionally, customer control over access simplifies compliance with privacy regulations.

Case Studies

One example of how financial institutions are leveraging blockchain technology for customer verification is Tradle, a Know-Your-Customer (KYC) platform built on blockchain. This platform utilises bots to scan relevant customer information, such as financial data and employment history, providing banks with verifiable background checks to streamline loan approvals. 

The gathered information is then secured on the blockchain for both internal bank transfers and external data sharing, ensuring its immutability and trustworthiness. This approach offers financial institutions a secure and efficient way to conduct KYC checks, potentially reducing processing times and fraud risks.

Future Outlook

The future of digital identity management appears to be closely linked with the potential of blockchain technology. A report by Market Research Future predicts a surging market, reaching a valuation of $17.81 billion by 2030, driven by government initiatives that promote blockchain development worldwide.

Blockchain’s core strengths—security and transparency—offer a compelling alternative to traditional identity management systems. Ongoing advancements in blockchain technology and a growing focus on digital identity security point towards a promising future.

  • Blockchain

Author

Harry Menear

Published

5 August 2024

Estimated Read time

3Mins

Data analysis is critical for predicting risks and returns. The ever-growing size of data has overwhelmed human capacity. This is where artificial intelligence (AI) comes in.

AI is transforming the financial sector by automating routine tasks and efficiently analysing large and complex data sets. It can analyse vast amounts of data with unprecedented speed. The instant but comprehensive insights that this capability provides lead to significantly improved accuracy.

Introduction to AI in Financial Forecasting

Financial forecasting can be challenging for smaller businesses. They often rely on assumptions and human judgement. This can result in inaccuracy, especially when unexpected events occur.

AI can analyse massive amounts of data to find hidden patterns that drive revenue. It automates routine tasks and enables a more detailed analysis than humans can achieve on their own.

Predictive Analytics

By automating data processing and interpretation, AI empowers financial teams to make informed decisions based on a strong analytical foundation. It goes beyond basic analysis by employing advanced algorithms and machine learning (ML) to extract valuable insights from data.

This not only improves the accuracy of forecasts but also unlocks a deeper understanding of market complexities that were previously out of reach.

Risk Assessment

AI algorithms use advanced data processing to spot patterns, unusual activities, and connections that traditional methods might miss. 

By training ML models on past data, AI can learn to identify patterns associated with fraud. These models then analyse new transactions, compare features, and flag potential problems in real-time.

Real-time Data Analysis

Slow reporting and analysis have hindered companies’ ability to adapt. AI-powered systems overcome these issues by enabling real-time analysis and decision-making.

AI’s ability to process massive amounts of real-time market data helps financial experts identify opportunities and adapt to market shifts quickly. This translates to increased resilience and competitiveness for businesses.

Case Studies

Financial institutions are increasingly using AI to improve their forecasting and data analysis for managing operational risk. This trend is likely to continue as IndustryARC expects the AI market to reach US$400.9 billion by 2027, growing at a compound annual growth rate (CAGR) of 37.2% during the forecast period of 2022–2027.

Deutsche Bank‘s collaboration with NVIDIA on “Financial Transformers” shows the potential of AI for early risk detection. These models can identify warning signs in financial transactions and speed up data retrieval, helping banks address potential problems quickly and ensure data quality.

AI also plays a key role in anti-money laundering (AML) efforts. By analysing transaction patterns, customer behaviour, and risk indicators, AI can identify suspicious activities for investigation. This not only improves detection rates but also streamlines the process. Google Cloud’s AML AI is a prime example; it helped HSBC find many more real risks while significantly reducing false positives, saving them time and resources.

Future Prospects

AI in finance is expected to significantly reshape financial forecasting. Analysts and executives will see widespread AI adoption for tasks like data analysis, pattern recognition, and automation. This trend is driven by the projected growth of global AI in the finance market. A report by Research and Markets predicts it will reach $26.67 billion by 2026, growing at a rate of 23.1% each year. 

For investment firms, AI can make highly accurate forecasts and execute complex trading strategies, optimising investment decisions and returns. Banks will also benefit from AI’s capabilities. AI-powered data analysis can give banks a deeper understanding of their customers, enabling personalised financial services. Chatbots and robo-advisors used for customer service and financial planning will continue to evolve, becoming more advanced and even more human-like in their interactions.

  • Artificial Intelligence in FinTech

Author

Harry Menear

Published

2 August 2024

Estimated Read time

4Mins

Cost-effectiveness and digital-first strategies are positioning neobanks as genuine challengers to established financial institutions.

The financial services industry is experiencing a seismic organisational shift. Increasingly, growth is moving away from traditional brick and mortar banking and towards digital-first banking experiences. Neobanks, financial institutions that operate entirely online and forego physical branches, are at the forefront of this shift.

Catering to a tech-savvy generation, these institutions prioritise convenience and user-friendliness. They focus on providing innovative features, often powered by the latest technological advancements. 

How Neobanks work

Neobanks are financial technology companies that provide banking services entirely through mobile apps and websites. 

They prioritise a user-friendly experience with features like real-time transaction alerts, budgeting and investment tools, and faster account opening.  Neobanks may also offer access to a wider range of trading markets, including cryptocurrencies and stock exchanges.

Their cost-effective model is a key driver of their growth. Consumers benefit from lower or nonexistent monthly fees on core banking services and potentially faster loan approvals with lower interest rates, all managed through user-friendly mobile apps. These factors are fueling the significant growth of neobanks within the financial market.

Current State of Neobanks

Over the past decade, neobanks have carved a significant niche in the financial services industry. Their growth shows no signs of slowing down.

Statista predicts a user base of 376.9 million globally by 2027. This represents a remarkable twenty-fold increase from the 18.95 million users reported in 2017. While the full impact on traditional banking remains to be seen, these trends highlight a shift in the financial services sector.

Successful neobanks typically offer low or no fees on essential banking services like account maintenance, deposits, and withdrawals. They often stand out with faster loan approvals and funding compared to traditional banks, along with competitive interest rates. Additionally, these digital banking features are conveniently accessible through user-friendly mobile apps.

The outlook for neobanking is promising, driven largely by its core strengths – a fully digital experience and streamlined services. Neobanks empower customers to manage their finances entirely online and eliminate the need for physical branches. 

While traditional banks have embraced digitalisation to an extent, neobanks offer a more comprehensive online-only solution that attracts a growing customer base.

Several factors are fueling this growth. The massive adoption of smartphones has created a mobile-first generation comfortable with managing finances through apps. Moreover, collaborations between traditional banks and fintech companies are blurring the lines between the two sectors, potentially leading to a more dynamic and competitive banking environment.

Opportunities for Growth

Neobanks are poised to disrupt the financial services industry with their innovative technology and focus on customer-centricity.  These new financial institutions offer an attractive alternative to traditional banks. However, success in this competitive environment requires a smart strategy.

For neobanks to gain traction, it’s important for them to maintain strong customer acquisition and retention plans. Offering appealing account opening incentives and rewarding loyalty programs can encourage customers to switch or make neobanks their main financial partner.

Ultimately, neobanks that prioritise security, transparency, and excellent customer service while providing innovative digital banking features are best positioned for long-term success in the neobanking industry.

Challenges Ahead

Despite their emergence, neobanks face several challenges that could hinder their future growth. Cybersecurity remains a top concern, as the financial sector is a prime target for cyberattacks due to the sensitive information it handles. Data breaches can have severe consequences for both neobanks and their customers.

Building brand recognition is also a hurdle for new neobanks. Many consumers are unfamiliar with these digital banking options, therefore it’s hard for new players to establish themselves in a crowded market.

Additionally, relying too heavily on third-party partnerships can introduce risks. Conflicts of interest and less control over the customer experience can arise. This lack of control further hinders brand recognition efforts. 

Conclusion

Neobanks are no longer a futuristic concept, but a defining feature of the present financial landscape. This is evident in two key trends. First, mobile apps are becoming increasingly sophisticated. Second, traditional banks are witnessing a global decline in branch networks as they shift focus to online services.

Looking forward, the future of neobanks appears promising. Grand View Research predicts a compound annual growth rate (CAGR) of 47.7 percent for the neobanking industry between 2021 and 2028. 

However, a key obstacle to wider adoption lies in the varying levels of technological comfort among different age groups. While younger demographics readily embrace mobile applications, older generations may require more time to adapt.

  • Neobanking

Author

Harry Menear

Published

1 August 2024

Estimated Read time

4Mins

A closer look at how artificial intelligence, machine learning, blockchain, IoT, and more technologies are transforming the InsurTech space.

Customer expectations are changing fast. Great digital experiences set the standard, no matter the industry. This means insurance companies are no longer competing only with each other, but with every positive digital experience customers encounter daily.

Many companies are actively exploring new technologies and partnering with InsurTech firms to develop innovative tools. Others strategically shift resources to move successful pilot projects from idea to implementation. Regardless of their approach, many insurers are seeking ways to accelerate their digital transformation plans.

Technology is changing how the InsurTech space serves its customers

Technologies like artificial intelligence (AI), the Internet of Things (IoT), and cloud computing revolutionise insurance. Outdated systems are being replaced with modern solutions, which offer greater efficiency, security, and data-driven insights. 

This digital transformation enables a new generation of insurance services. For example, automated claims processing uses AI to speed up workflows and payouts. Additionally, AI helps detect fraud to protect both insurers and policyholders. 

Insurance technology is also improving the customer experience. From personalised plans to user-friendly interfaces, digitalisation is making insurance more accessible and convenient.

AI and Machine Learning

People want more personalised experiences with insurance products and services. InsurTech advances, powered by AI and machine learning (ML), can help insurers meet this demand.

ML algorithms analyse massive amounts of customer data, including behaviour and habits. This allows insurers to tailor insurance products and services to individual needs and create unique customer journeys.

Beyond personalisation, AI has the potential to streamline core insurance processes. AI can speed up claim processing and streamline underwriting. Faster data access and reduced human error lead to more accurate and efficient reporting.

A report by McKinsey suggests that AI could significantly change the insurance industry. It could shift the focus from reacting to problems to preventing them. This proactive approach would benefit everyone involved—brokers, consumers, and insurers.

Blockchain Technology

Blockchain technology offers a powerful solution for data security. It stores vital insurance information, such as claims and payments, in secure blocks on a shared ledger. Any attempt to alter this data would change the entire chain and make tampering easily detectable.

A study by Boston Consulting Group shows 60 percent of insurance companies are actively investing in blockchain. Additionally, 80 percent of C-suite executives in these companies believe blockchain has the potential to significantly improve efficiency.

IoT and Telematics

Many consumers are now willing to share personal data for lower insurance costs. This willingness unlocks the potential of the IoT in the insurance industry. 

IoT automates data collection from various sources, like smart home devices, car sensors, and wearables. This data becomes a key source of real-world information for insurance technology. By analysing it, insurers can improve risk assessment accuracy and refine pricing based on individual behaviour.

Telematics devices take personalised insurance a step further, particularly in car insurance. These devices, equipped with GPS and motion sensors, track driving habits in real time. They collect data on speed, location, time of day, and other factors linked to accident claims. This comprehensive data allows insurers to create even more tailored insurance policies.

Case Studies

Several insurance companies are already using InsurTech advances to streamline processes and improve risk assessment.

For example, FRISS uses AI software to quickly detect suspicious claims. Their system analyses data to find possible fraud networks and hidden patterns. With this, FRISS cuts claims handling time by 66 percent and saves insurers money.

Chubb Insurance is another example that shows the value of combining IoT devices with data analysis tools. By constantly monitoring environmental factors with sensors, Chubb can predict potential property damage. This proactive approach lets them offer personalised premiums based on risk profiles, ultimately helping policyholders avoid expensive incidents.

Future Prospects

Grand View Research projects the global InsurTech market size to expand at a compound annual growth rate (CAGR) of 52.7 percent from 2023 to 2030. This rapid transformation will be driven by advancements in various technologies, each presenting both opportunities and challenges.

As more insurance processes become digitalised, concerns around cybersecurity naturally rise. A Future Processing survey underscores this concern, revealing that 81 percent of respondents believe insurers need stronger cybersecurity policies.

The quality of data and security practices will be the cornerstones of successful InsurTech implementation. AI relies heavily on data, while strong security protects sensitive customer information. By prioritising these aspects, insurers can unlock deeper customer understanding and improve the customer experience.

  • InsurTech

Author

Harry Menear

Published

31 July 2024

Estimated Read time

3Mins

Drawn by increased flexibility and convenience, retailers are embracing embedded finance solutions in the hope of opening up new revenue streams.

Embedded finance is gaining significant traction among retailers. The term refers to the integration of financial services into non-financial applications and platforms. For example, an app that offers cashback on large purchases, or pay later features with zero interest. This new crop of digital tools is enabling retailers to strengthen customer relationships. 

Retailers can create a more convenient shopping experience by providing features like flexible payment options and personalised financial advice directly within their platforms. This approach not only builds customer loyalty but also opens doors to new revenue streams from integrated financial services. 

Enhancing Customer Shopping Experience

Embedded finance can keep customers engaged in the retail environment and enhance the customer shopping experience. By embedding payment options directly into their platforms, retailers can offer a faster and more convenient payment process. Customers do not need to leave the retail environment to complete a transaction.

One of the most significant benefits of embedded finance is the ability to offer point-of-sale financing. Customers can apply for funding at the time of purchase, rather than having to apply for credit separately. 

Referred to as BNPL (buy now and pay later), this feature makes purchasing decisions easier and more flexible. This flexibility is driving customer loyalty. A study by Vodeno found that 40% of respondents would only choose brands offering BNPL and similar financial technology features like cashback. This number jumps to 50% for young adults.

Increasing Sales

Research by Natwest and BCG shows promising results for businesses that adopt embedded finance. Retailers saw conversion rates jump by 12%, average order value increase by 30%, and revenue rise by 7%.

Embedded finance can be a strategic tool for maximising revenue. Instead of just processing transactions, retailers can offer additional financial services for a fee. For example, a procurement platform could charge for automated reconciliation. This will save businesses time and generate new income.

Successful Implementation and Future Innovations

Several retail companies have successfully implemented embedded finance. These include Amazon with its Amazon Pay. The feature allows customers to use their payment information stored on various platforms. Another example is Walmart‘s mobile app. This platform provides customers with a variety of financial services, from paying for their groceries to managing their Walmart MoneyCard.

John Lewis has also integrated its financial services, offering customers credit cards, insurance, and personal loans directly through their retail platform. There’s also Tesco Bank, which provides a range of financial products, including savings accounts, loans, credit cards, and insurance products.

According to KBV research, the global embedded finance market is expected to reach $384.8 billion by 2029, reflecting a compound annual growth rate (CAGR) of 30%. Parallel to the growth, retailers will continue to innovate, offering more integrated financial services. These can include more sophisticated loyalty programmes, personalised financial advice, new payment options, and enhanced data analytics to better understand and serve customers.

Retailers must embrace these innovations to remain competitive and meet the ever-increasing expectations of modern shoppers. By integrating financial services into non-financial products or services, retailers not only create added value for customers but also increase customer loyalty. In addition, embedded finance also presents opportunities for retailers to increase profits.

  • Embedded Finance

Author

Harry Menear

Published

30 July 2024

Estimated Read time

3Mins

Digital payments enable access to financial services by underserved members of society at a time when the digital divide is widening.

The United Nations emphasises financial inclusion as a driver for economic development, including it as component eight of the Sustainable Development Goals for 2030. The World Bank defines financial inclusion as crucial economic development and social progress that ensures equal access to financial products and services. 

In recent years, accessibility to financial services has improved rapidly as financial technology has advanced. The 2022 World Bank report revealed that 71 percent of people in developing countries had access to a bank account in 2021, a 42 percent jump from a decade earlier. 

The key driver of this development in financial inclusion is the growth of digital payments, which surged during the COVID-19 pandemic, according to the CFA Institute. 

Role of digital payments 

Digital payment technologies, such as digital wallets, online mobile banking apps, and contactless transactions, contribute to the growth of financial inclusion. Compared to traditional methods, digital payments offer multiple benefits.

Reduced costs are one reason digital payments have become a significant cause of economic growth. They allow lower barriers to entry for underserved people. 

With more people having digital financial accounts, the underprivileged can receive wages, government benefits, or remittances more easily. 

Digital transactions provide a safer alternative to physical cash transactions. The digital records for each transaction help people manage their finances and increase transparency in businesses. They also help mitigate the risks of theft or fraudulent activities. 

Accessibility

Digital payment solutions significantly improve accessibility to financial services. They eliminate geographical barriers for people living in remote areas as long as there is internet access. 

Online platforms make it easier for people to conduct transactions, pay bills, and access credit and insurance services from anywhere. They also allow instant payments that happen in seconds without the need for third parties. 

The accessibility of digital payments extends to people with disabilities. Mobile banking apps often include features such as voice commands, screen readers, and accessible interfaces that cater to them. 

Case Studies

Many digital payment initiatives have successfully promoted financial inclusion in marginalised communities. 

One of them is India’s Jan Dhan-Asdhar-Mobile (JAM) Trinity initiative, which was launched in 2014. The Pradhan Mantri Jan Dhan Yojana programme aims to provide universal access to banking facilities with at least one basic banking account for every household. This programme promotes financial inclusion in rural areas by offering zero-balance accounts with debit cards.  

Meanwhile, the Aadhar programme introduces a biometric digital identity for Indian residents, simplifying access to financial services. Lastly, the Mobile Network programme focuses on growing mobile network infrastructure to facilitate digital payments. 

Challenges and Solutions 

Still, the challenges of achieving financial inclusion through digital payments persist. In 2022, 1.4 billion adults remained unbanked. Meanwhile, increased accessibility also comes with the consequence of more people becoming prone to potentially unscrupulous lending practices, especially since the underprivileged often lack sufficient financial knowledge to avoid such schemes. 

Thus, financial education is crucial so that more people can effectively protect their wealth. The government should initiate financial literacy programmes for the people. The programmes could also be conducted through online platforms to reach more communities. 

In addition, increasing security technology is also important to overcome the risk of fraudulent activities. AI technology might solve this problem, as it can efficiently detect suspicious patterns and mitigate fraud schemes. 

Future Outlook

Digital payments’ future role in driving financial inclusion will become more prominent as mobile and internet penetration increases. Governments should prioritise investment in telecommunications and internet infrastructure to reach their optimal potential. 

AI-powered solutions are expected to continue to develop and offer many ways to accelerate digital finance adoption. With the advancement of technology, security and customer experience will also improve. 

  • Digital Payments

Author

Dan Brightmore

Published

26 July 2024

Estimated Read time

4Mins

AI, real-time monitoring, and machine learning are helping fintech firms stay ahead of growing cyber threats.

The financial sector faces a growing threat—cybercrime.

Cybersecurity Ventures predicts a significant rise in cybercrime costs, with the total impact of hacks, breaches, and data theft potentially reaching as high as $10.5 trillion a year by 2025. As attacks become more common and more severe, mitigating these risks and preventing fraud is paramount for financial institutions and financial technology companies alike.

Luckily, ongoing advancements in technology offer fintech organisations a powerful arsenal of weapons to combat cybercrimes. Adaptive fraud prevention systems use artificial intelligence (AI) to detect and prevent fraudulent activity in real-time. These intelligent systems continuously learn from new data, allowing them to identify evolving patterns and improve cybersecurity.

Introduction to cyber fraud protection

Cybersecurity is crucial in the financial services industry, where sensitive financial data and transactions are a prime target for cybercriminals. Moreover, cyber attacks can inflict significant financial losses, not just through direct theft but also via hefty regulatory fines, legal costs, and reputational damage.

Financial institutions have a responsibility to safeguard customer trust by implementing robust cyber fraud protection measures. This includes advanced technologies like network security, intrusion detection systems, and malware protection.

By securing financial transactions and customer data, these measures not only deter cyberattacks but also mitigate their impact, fostering customer confidence in the bank’s security posture.

Common types of Cyber fraud

The financial sector occupies a bull’s-eye for cybercriminals, ranking second only to healthcare in global cybercrime costs according to the IBM Cost of a Data Breach Report 2023. Financial institutions face an average loss of $5.9 million per cyber incident, highlighting the critical need for robust cyber fraud protection measures.

These attacks come in various forms. One of the most common isphishing scams. These are attempts to trick people into surrendering sensitive information. Meanwhile, ransomware attacks aim to disrupt operations or extort money by encrypting critical data. Distributed Denial-of-Service (DDoS) attacks overwhelm systems with traffic, making essential services unavailable to legitimate customers.

Advanced cybersecurity technologies

The fight against cyber fraud necessitates sophisticated tools, and advanced technologies like AI and machine learning (ML) are playing an increasingly crucial role.

AI fraud detection uses ML algorithms to identify fraudulent activities within vast datasets. These algorithms are trained to recognise patterns and anomalies that deviate from typical user behaviour and transaction patterns. Once the patterns are identified, attackers can be purged from the system before they have a chance to steal anything of value. Cybersecurity systems powered by ML can drastically reduce the amount of time bad actors spend inside a system.

ML algorithms excel at identifying patterns and trends that might signal potential fraud. Also, by analysing big data, these algorithms can adapt quickly to evolving fraud tactics.

They can detect and alert security teams within seconds of suspicious behaviour, such as unusual purchases or login attempts from unfamiliar locations. Thanks to continuous data analysis, businesses can gain an immediate advantage, allowing them to swiftly identify and respond to suspicious activity, ultimately minimising potential losses.

Case studies

The financial sector is actively exploring the potential of AI to combat cyber fraud. Mastercard’s Decision Intelligence technology exemplifies this trend. By analysing historical spending habits, this AI solution creates a personalised baseline for each cardholder’s behaviour.

This approach is a significant improvement over traditional, one-size-fits-all methods, which often lead to false declines. AI’s contextual analysis of transactions allows it to bypass common triggers for false positives, ultimately enhancing fraud detection accuracy.

Future prospects

The future of cyber fraud protection hinges on the continued evolution of technology. One promising area lies in adaptive technologies, such as behavioural biometrics. Additionally, these systems move beyond static passwords or fingerprints, creating a unique user profile based on a person’s interaction patterns.

These patterns are ‘behavioural fingerprints’ that include typing style, mouse movements, and even how an individual holds their phone. Over time, the system learns user habits, building a digital identity that can detect deviations indicative of unauthorised access.

This approach is particularly effective because it’s nearly impossible for hackers to replicate one’s unique behavioural traits, even if they steal the password. This adds a crucial layer of security that traditional methods cannot provide.

  • Cybersecurity in FinTech

Author

Dan Brightmore

Published

Estimated Read time

3Mins

Customer service significantly influences the overall customer experience and brand reputation. Artificial intelligence (AI) has taken customer service to new…

Customer service significantly influences the overall customer experience and brand reputation. Artificial intelligence (AI) has taken customer service to new heights, including in the insurance industry.

Financial technology development has offered a better customer experience with enhanced accessibility and convenience. Mobile banks and digital wallets make it possible to contact the customer service team through online platforms. With the help of AI, FinTech companies escalate their services by offering more personalised, prompt, and efficient service.

AI Chatbots and Virtual Assistants

Conversational AI, which focuses on creating human-like interactions like chatbots and virtual assistants, improves customer service efficiency.

Chatbots are automated programmes that promptly address customer service queries. They can assist customers with inquiries and provide support for product information, account balances, or transaction details. AI-powered chatbots can give an immediate response and handle multiple customers at the same time.

Meanwhile, virtual assistants are voice-activated apps that can comprehend and carry out tasks based on users’ commands. These assistants offer personalised support by understanding the customers’ needs. For instance, they can deliver investment guidance tailored to customers’ risk tolerance and financial objectives.

These AI solutions can also assist human assistants by handling routine tasks, allowing them to focus on more complex work. Thus, the employment of AI assistants can reduce operational costs and effectively allocate resources to more important tasks.

Personalised interactions with AI

This approach can provide more personalised interactions by using algorithms and predictive tools to understand and respond to each customer’s preferences. AI algorithms can analyse large datasets of customers’ past interactions, browsing behaviour, and demographic information.

Meanwhile, predictive analytics tools can be used to anticipate customer needs and offer relevant financial products or services. These recommendations are constantly updated based on real-time client interactions and feedback.

24/7 Support

AI-powered customer service has the benefit of around-the-clock availability. It can operate continuously without being bound by office working hours like human-based customer service. Faster response times and enhanced availability help FinTech companies improve overall customer satisfaction.

Case Studies

Paypal, a digital wallet company, is one of the FinTech companies that has successfully used AI to improve its customer service. After implementing chatbots, PayPal experienced a 20 percent decrease in customer support costs and a 25 percent increase in user engagement. These chatbots can handle routine inquiries, resolve issues, and make personalised product recommendations.

Another example is Citi, a US retail bank that developed an AI-powered Customer Analytic Record (CAR). This programme can consolidate customer data, including financial records, used products, and interactions across online banking. The data is linked to automated decision-making AI software for analysis. The system can then recommend personalised offers to customers via text and mobile banking.

Future prospects

According to David Griffiths, Citigroup’s chief technology officer, AI has the potential to revolutionise the banking industry and improve profitability. With the continuous development of AI technology, the fintech industry can further improve its customer service.

Ronit Ghose, another executive at Citigroup, predicts that in the future, every client will have an AI-powered device in their pocket. This innovation will improve their financial lives with enhanced AI in customer service.

However, there are still concerns about AI’s scalability limitations in handling vast amounts of tasks. In addition, AI’s access to customers’ data makes security an important area to ensure its credibility. FinTech companies should ensure digital compliance to earn customers’ trust.

  • Artificial Intelligence in FinTech

Author

Dan Brightmore

Published

Estimated Read time

4Mins

Blockchain technology has elevated transparency and accountability in the finance industry. By ensuring the integrity and security of financial data,…

Blockchain technology has elevated transparency and accountability in the finance industry. By ensuring the integrity and security of financial data, blockchain transforms how financial reporting is done, helps prevent fraud, and secures transactions.

Integrating blockchain into financial systems promotes trust among stakeholders, from investors to regulators. This potential stems from blockchain’s transparency, immutability, and security.

The technology offers investors clarity and security. It provides a transparent view of transaction histories and asset ownership, which reduces the risk of fraud and increases investor confidence.

For regulators, blockchain serves as a tool to improve monitoring and enforcement of compliance with regulations. Moreover, the immutable nature of blockchain records ensures accurate and permanent logging of financial transactions. Additionally, aiding in audit trails and regulatory oversight, particularly in areas like anti-money laundering and know your customer (KYC) rules.

Securing transactions with immutable ledgers

Blockchain’s immutable ledger ensures that once data is recorded, it cannot be easily altered or tampered with. Each piece of information, like transaction details, is stored in blocks and protected by unique hash values.

Hash values are alphanumeric strings generated for each block, linking it securely to the previous block. This chaining ensures that any attempt to change data in one block would invalidate the entire chain. Therefore, making tampering detectable and preventing unauthorised alterations.

The security of blockchain is reinforced by its decentralised nature. Copies of the blockchain are stored across multiple computers in a network, and consensus among these nodes ensures the integrity and originality of the data.

This robust system not only enhances security but also supports applications like smart contracts. These automate and enforce agreements based on set conditions.

Blockchain for real-time auditing

Blockchain technology enables real-time auditing, thanks to its decentralised and transparent nature. This ensures auditors can verify the authenticity and integrity of financial data without relying on centralised authorities or intermediaries.

This capability not only improves audit efficiency but also strengthens trust and confidence in financial reporting. Furthermore, auditors can track transactions from their inception through to completion in real-time, reducing the risk of errors. By eliminating the need for manual reconciliation and audit trails, blockchain reduces the time and resources traditionally required for auditing processes.

Meeting regulatory demands with blockchain

The technology helps businesses meet complex regulatory requirements more effectively. As data entries are permanent and secure once recorded, blockchain ensures information cannot be altered or deleted. It provides a reliable way to consolidate and verify data needed for regulatory reporting.

For regulators, blockchain simplifies oversight by offering a shared platform where transaction details are transparent and accessible in real-time. Moreover, this decentralised approach eliminates the need for extensive manual checks and balances, making it easier to monitor and enforce compliance across various stakeholders.

The ability to streamline regulatory reporting is particularly evident in industries like reinsurance. Here, blockchain facilitates faster and more accurate reporting among insured parties, insurers, brokers, and regulators.

Case Studies

Several financial institutions have demonstrated improved transparency through their adoption of blockchain technology. For example, J.P. Morgan offers a prominent use case, which launched its Quorum blockchain platform in 2016.

Quorum, based on Ethereum, has been used for various applications like debt issuance and financial transaction settlements. Moreover, this platform enhances transparency by providing a secure and decentralised way to record and verify transactions, reducing the risk of errors and fraud in financial operations.

Similarly, the African Development Bank Group (AfDB) partnered with BanQu to develop the Supply Chain Finance Blockchain. Additionally, this platform aims to streamline supply chain finance for SMEs in Africa, making transactions more transparent and efficient. Also, by leveraging this tech, AfDB improves visibility across the supply chain, ensuring funds are allocated and tracked accurately, thereby enhancing transparency in financial operations.

  • Blockchain

Author

Dan Brightmore

Published

25 July 2024

Estimated Read time

6Mins

FinTech Strategy met with Merusha Naidu, Global Head of Partnerships at Paymentology, to discover more about the global issuer processor

Banks, digital banks and fintechs, around the world, trust Paymentology to issue and process all forms of cards and transactions, at scale. Paymentology offers a cloud-based platform, rich data, a global footprint and proven track record powering industry leaders and game-changers.

A global issuer processor with on the ground teams in 50+ countries across 14 time zones, Paymentology’s founders saw that the payments industry was stagnant and limited, in both capability and ambition.

In March 2021, Tutuka and Paymentology merged, resulting in a ‘payments and card processing powerhouse’. The merger combined the ultra-advanced, multi-cloud platform of Paymentology with the global reach and experience of Tutuka to revolutionise cloud-based processing globally. 

Tutuka was traditionally a financial services company, that provided payment processing technologies, software and services, and application programming interfaces (APIs) for e-commerce and digital transacting across countries in Africa, Latin America, Southeast Asia, and the Middle East, while Paymentology processed for legacy banks in Europe and the UK. The merger enabled banks and fintechs to integrate into a single API, go live and issue cards almost anywhere in the world.

At Money20/20 Europe, FinTech Strategy spoke with Global Head of Partnerships, Merusha Naidu, to find out more…

Tell us about the genesis of Paymentology?

“Paymentology is a global neo processor. We work with banks and fintechs to help them issue their own cards, whether prepaid, debit or credit, virtual or physical. The beauty of the platform is that it’s fully cloud native. So, we’re scalable. We’re focused on speed to market so when you are working with a fintech, or a digital bank, it’s all about two things. How do you innovate? And then how do you go live quickly? Those are two areas of the business that we really focus on. Not only is our tech state of the art, with everything built in the cloud, all of our infrastructure is also in the cloud, including things like our connection to schemes.

We were the very first issuer processor to connect to Visa Cloud Connect, via cloud endpoints in Europe. Being first in embracing modern practices, we ensure our processes are next-generation, thanks to our fully cloud-native and digital infrastructure.

What makes us different? We operate across UK, Europe, the Middle East, Africa, Latin America and Asia Pacific; we are truly global, operating across all five regions. One of the things that makes that possible is our tech. A customer can integrate with us once and then launch across five regions if they wanted to, or multi-market rollouts. We offer a huge ability to scale using integration. Our customers are able to replicate that digital first experience across every single jurisdiction. So, whether it’s Kenya and Dubai and then Saudi Arabia and Portugal, they can have the same experience across the world.”

Tell us about your role at Paymentology?

“I’ve been with Paymentology for 14 years. Prior to taking up my current role as Global Head of Partnerships, I was the Regional Head of Asia Pacific. So, when you look at partnerships, I was asked a question recently at a talk: ‘What would my message be to issuers across the industry?’ My message is that you can’t do it alone. If you want to create truly scalable, innovative solutions, you’ve got to work with partners and collaborate with the best in class. We know we are best in class when it comes to issuer processing, but we also create ecosystem partners that close the gap when it comes to creating really valuable payment ecosystems.

Whether it’s top core banking providers, leading cloud services, or premier card manufacturers, these are the partners we collaborate with. This allows us to confidently assure our customers that we work with the best, to deliver the best, across the entire value chain.”

Tell us about some of the successful partnerships Paymentology has been involved in…

“We were the first company to deliver flip card technology for our client Mox. Paymentology embedded its global processing capability into the platform, to enable Mox to launch its ground-breaking feature to ‘flip’ between debit and credit spending on the all-in-one Mox card. This allows you to have one physical card, one virtual card number, but in the background, we link it to two different accounts. It gives the customer real flexibility around how they can spend, because if it’s everyday purchases, they can use their debit account or their prepaid account. If they have larger purchases, they can switch in the app and use their credit facility. So, it really gives customers flexibility and choice – two things at the heart of what we do.

“Cross-border payments for us is key. Meanwhile, everyone talks about being digital first. For us, tokenisation has helped and we have a superior partner, MeaWallet, to help us deliver this. Elsewhere, crypto has been seen as a sore point but it’s coming back and people again want that flexibility. So, having a way for customers to spend their crypto, converting crypto to free apps and making sure that data is at the heart of all that. It’s about learning about our customers, understanding what our customers want and using our data to make informed decisions, or giving our customers data so that they can make the decisions.”

And what’s next for Paymentology? What future launches and initiatives are you particularly excited about?

“We’re excited about being able to deliver flexibility, control, agility. Because the Paymentology platform is so agile, in the future you will be able to plug in even more different components into the offering. So, a customer can add in rewards and loyalty points. For example, airlines have a platinum MasterCard product, so it opens them up to all of the MasterCard loyalty rewards, airport lounges, all of those benefits. It’s all about being innovative and keeping up with that innovation and growing with customers.”

Why Money20/20? What is it about this particular event that makes it the perfect place to showcase what you do? How has the response been to Paymentology?

“Paymentology is headquartered in the UK so it’s important for us to make sure we’re representing business across Europe. This is the centre of the world for banking innovation. People look to this event to really learn about what’s happening in the industry globally and discover what trends are going to come up. What should we be doing? How can we innovate together and learn from each other? That’s one of the things I really love about Money20/20; the talks in all of the panels are so interesting and I always leave knowing more. Being in the payments industry, and especially being an issuer processor, it’s important for us to learn from the industry and understand where we need to move so that we can stay at the forefront of developments.”

  • Digital Payments

Author

Dan Brightmore

Published

24 July 2024

Estimated Read time

5Mins

The financial services industry is witnessing a shift towards digital-first solutions. Advancements in technology and infrastructure have fuelled the rise…

The financial services industry is witnessing a shift towards digital-first solutions. Advancements in technology and infrastructure have fuelled the rise of neobanking. It offers convenient, cashless transactions through digital banking features.

From just 12 neobanks operating globally in 2015, the number has skyrocketed to 300 as of 2023. Juniper Research expects neobank users to reach 850 million by 2030.

Introduction to Neobanking

Neobanks are digital-only banks. They rely on mobile apps and web interfaces to deliver their services. Customers access and manage their accounts, conduct transactions, and receive support from their devices. This approach allows neobanks to offer lower fees and greater convenience compared to traditional banks. There are ten key features differentiating successful neobanks.

Feature 1: User-Friendly Interface

Neobanks prioritise user-friendly and intuitive interfaces within their core platform—the mobile app. The app lets customers conduct all essential banking functions directly from their smartphones.

Neobanks eliminate traditionally time-consuming processes. Account openings are conducted entirely digitally. They also offer near-instant identity verification, funding, and activation of debit cards and accounts.

Feature 2: Personalised Services

Neobanks leverage artificial intelligence (AI) and machine learning (ML). This data-driven approach helps them understand their customers better. They analyse spending habits and financial behaviours to provide personalised financial advice. This empowers customers to make informed decisions about their money.

Neobanks also use customer data to create targeted marketing campaigns. These campaigns align with individual interests and financial goals. Neobanks’ real-time, personalised approach enhances customer satisfaction and strengthens customer retention and loyalty.

Feature 3: Robust Security Measures

Security is essential for neobanks, as they handle sensitive customer data and countless transactions. Neobanks embrace advanced technologies like AI-powered fraud detection and blockchain encryption. Multi-factor authentication (MFA), encryption protocols, and biometric identification form the first line of defence against cyberattacks.

By prioritising robust security, neobanks can offer the innovative digital banking features customers expect from financial technology. This also ensures they stay ahead of constantly evolving threats and vulnerabilities in the digital banking sector.

Feature 4: Innovative Products

Traditionally, launching new banking features took years. Now, with ML models analysing large amounts of customer data, neobank teams can develop and launch new digital banking features in just weeks. Moreover, this allows them to stay ahead of market trends and meet customer demands quickly.

Feature 5: Seamless integration with other services

According to PYMNTS, consumers are increasingly interested in super apps, with nearly 70 percent wanting a one-stop platform for managing digital finances. This demand pushes banks to embrace open banking.

Neobanks can collaborate more effectively by sharing their APIs with financial technology companies, digital payment providers, and other platforms. Open APIs grant access to a wider customer base, fostering partnerships between banks and e-commerce firms. This integration allows them to meet consumer demand for a more comprehensive digital banking experience.

Feature 6: Low Fees

One key advantage of neobanks over traditional institutions is their cost structure. Without the burden of physical branches, neobanks benefit from lower overhead expenses. This translates to a competitive edge in terms of fees and rates.

Neobanks can charge zero fees for services that typically incur charges at traditional banks. Additionally, they can also provide more attractive interest rates on savings accounts. These factors can be appealing to cost-conscious consumers.

Feature 7: 24/7 Customer Service

The use of AI and chatbots helps neobanks deliver 24/7 customer support. Customers do not have to wait on hold or schedule branch appointments. Instead, they can receive prompt answers to inquiries or resolve issues at any time.

Feature 8: Hassle-Free Account Onboarding

Neobanks are known for their swift account opening experiences. This is achieved through leveraging advanced technology. Intuitive mobile apps and web platforms let customers open accounts remotely within minutes. Also, technologies like AI-powered identity verification and digital document submission expedite the onboarding process.

Feature 9: Automated Saving Feature

One of the unique features offered by many neobanks is automated savings functionality. This functionality allows customers to set up automatic transfers from their checking accounts to their savings accounts. Additionally, these transfers can be triggered by various events, such as on payday or when a certain balance is reached in the checking account.

Feature 10: Cryptocurrency Services Integration

To expand their offerings and cater to a growing interest in digital assets, some neobanks are integrating cryptocurrency services into their platforms. Also, customers can manage their cryptocurrency holdings directly within their neobanking app and simplify the process of buying, selling, and sending these digital assets.

Case Studies

A successful example of neobanks is Revolut. The bank that allows users to buy, sell, and transfer cryptocurrency directly within their app. Revolut also removes any hidden fees associated with traditional cryptocurrency exchanges.

Conclusion

Neobanks’ core strength lies in its focus on flexibility and user convenience. Furthermore, designed specifically for the digital age, they prioritise a seamless user experience. Their focus on mobile-first design and intuitive interfaces makes banking easier and more convenient. This approach allows neobanks to offer a wider range of digital banking features compared to traditional banks’ online platforms.

  • Neobanking

Author

Dan Brightmore

Published

Estimated Read time

3Mins

An efficient and timely claims process is important in the insurance sector. Many companies use insurance technology or InsurTech innovations…

An efficient and timely claims process is important in the insurance sector. Many companies use insurance technology or InsurTech innovations to streamline this complex process.

The traditional insurance claim process is commonly stressful, lengthy, and vulnerable to fraud. However, by embracing digital innovations, such as AI, big data analysis, and machine learning, insurance companies can simplify this process and give a more positive customer experience.

Role of InsurTech

InsurTech solutions streamline claims processes by using user-friendly mobile apps or websites. Customers do not need to make cumbersome phone calls, paperwork, or office visits. Instead, claims can be initiated and managed seamlessly through the digital platforms.

InsurTech accelerates the claims process, reduces turnaround time, and minimises customers’ stress. It also provides an opportunity for immediate insurance claim submission, such as after a car accident.

Automation

Digital insurance employs advanced technology like AI and automation, unlocking many benefits for customers’ claim processes. Reporting automation tools play an important role in claims processing by simplifying and accelerating the process.

An automated system can be applied for data entry and extraction. AI algorithms can scan and extract document details from police or medical reports and automatically fill out digital claim forms.

Meanwhile, automated chatbots allow customers to access around-the-clock services. Policyholders can ask questions, report claims, and get information more conveniently using this feature rather than relying on office time-bound human employees.

Fraud Detection

InsurTech enhances fraud detection in claims processing by using predictive analytics tools. Fraud detection is important for insurance providers to avoid false claims or exaggerated losses that can lead to significant financial losses.

AI machine learning tools can detect suspicious patterns from a vast amount of data, allowing insurers to identify potential fraud.  This helps insurance companies reduce losses from fraud and mitigate potential risks.

InsurTech Case Studies

PwC reveals that 57 percent of insurance companies have invested in AI and machine learning technologies to enhance operational efficiencies.

Lemonade, a digital insurance company for renters and insurance, has successfully used AI to underwrite policies and claims. The company achieved a faster and more transparent claim process for customers. The digital automated process also reduces the processing time and keeps costs down.

Meanwhile, Metromile, an InsurTech company that provides pay-per-mile car insurance, offers AI-assisted automated claims named AVA. AVA can give guidance through damage photo collection and verify coverage. This system can also connect customers to repair shops and offer the option of reserving a vehicle if they have rental coverage.

Future Prospects

InsurTech’s potential impact on claims processing is expected to make a significant shift in the future. AI will be more integrated into the financial industry and will reshape the claim processes.

According to McKinsey’s prediction, claims processing will be largely automated by 2030, with advanced algorithms handling initial routing. IoT sensors and emerging technologies like drones will replace traditional methods for reporting claims. Policyholders will also use video streaming for damage assessments that AI can immediately assess to detect fraudulent activities.

Automated customer chatbots will manage most interactions, while human involvement will only be for complex claims and risk management. Integrated IoT and data aggregation will allow insurers to file accurate claims rapidly during major disasters.

  • InsurTech

Author

Dan Brightmore

Published

23 July 2024

Estimated Read time

3Mins

Small businesses are the backbone of the global economy. The World Trade Organisation reports that small and medium-sized enterprises (SMEs)…

Small businesses are the backbone of the global economy. The World Trade Organisation reports that small and medium-sized enterprises (SMEs) make up over 90 percent of all businesses, employ 60 to 70 percent of the workforce, and contribute 55 percent of GDP in developed economies. Despite their significance, they may face barriers to accessing financial services. Embedded finance services offer small businesses innovative solutions to traditional financial hurdles.

Embedded finance combines financial services with non-financial experiences. Technology companies partner with banking institutions to offer these services directly within their platforms. This means customers can access financial tools, like making payments or managing accounts, without leaving the platform.

Analysts at Global Market Insights predict the embedded finance market will reach a compound annual growth rate (CAGR) of over 29 percent between 2023 and 2032. A key driver of this growth is the increasing demand for faster and easier transactions.

Embedded finance allows businesses to offer sophisticated payment and banking services directly to their customers and suppliers. This removes many of the frictions associated with business-to-business (B2B) payments, especially as these transactions are typically made in real-time.

By embedding financial services into their offerings, businesses can increase customer loyalty, increase revenue opportunities, and become more competitive in the market. This integration allows customers to access various financial services without hassle, creating a seamless customer experience.

It also offers small businesses innovative solutions to traditional financial hurdles, such as cross-border commerce and evolving security and privacy requirements. Embedded finance also helps businesses provide services such as loans, insurance, debit cards, and investments through their platforms.

Access to credit

Getting credit remains a major challenge for many small and medium-sized businesses. A Goldman Sachs report found that 70% of small businesses struggle to access funding for daily operations, inventory management, and growth. According to the same report, this lack of financing hinders 76% of SMBs.

Embedded finance offers a potential solution. Businesses can integrate financing options, like credit cards, directly into their services. This provides much-needed financial flexibility for their small business customers. Improved cash flow for small businesses strengthens the partnership between both parties. The larger company becomes a key player in the small business’s growth journey.

Improved cash flow with Embedded Finance

Cash flow is a significant challenge for small businesses as many operate on thin margins. Embedded finance can help small businesses overcome that by integrating payment processes and real-time financial data into business operations.

For example, point-of-sale (POS) systems with embedded payment options allow businesses to receive funds instantly. Meanwhile, automated invoicing and payment reminders can reduce the time and effort required to chase down payment payments.

Enhanced Customer Experience

By integrating payment solutions directly into their platforms, businesses can offer features like one-click payments, installments, and digital wallets. This streamlines the checkout process and boosts customer satisfaction.

Loyalty programmes also become more attractive with embedded finance. Businesses can reward returning customers with discounts, cashback, or exclusive offers, strengthening brand loyalty and driving repeat business.

For example, Deliveroo’s ‘Deliver Money’ feature streamlines food delivery by enabling real-time payments. This eliminates the need for cash and waiting for change, speeding up transactions and creating a smooth checkout experience. Faster access to earnings empowers small businesses to fulfil orders quicker and potentially offer special promotions.

  • Embedded Finance

Author

Dan Brightmore

Published

Estimated Read time

3Mins

The digital banking industry faces cybersecurity challenges. A Statista report shows a 10 percent jump in global malware attacks in…

The digital banking industry faces cybersecurity challenges. A Statista report shows a 10 percent jump in global malware attacks in 2023, reaching 6.06 billion incidents.

Cybercriminals are growing more skilled, leading to more frequent data breaches that expose vulnerabilities in banking security. Moreover, effective risk management and strong network protocols are essential to securing digital banking operations.

Introduction to Cybersecurity in digital banking

As online transactions become the norm, strong cybersecurity measures become more crucial. Banks keep sensitive financial data and handle high-value transactions, making them prime cyberattack targets.

Effective cybersecurity is a multi-layered approach. Also, it combines advanced technology, strict policies, and constant monitoring to fight cyber threats. These security measures shield not only a bank’s finances but also customer personal information.

For that reason, cybersecurity is the foundation of trust and reliability in finance. Without strong security protocols, the balance between innovation and managing risk is disrupted, potentially shaking customer confidence in digital banking.

Early Cybersecurity practices

The rise of the internet gave birth to a new genre of malicious activity. Cybercriminals emerged to target this new frontier. They launched worms, malware, and phishing attacks.

In response to these escalating threats, the 1990s saw the introduction of firewalls and antivirus software. Additionally, these early security measures acted as barriers between networks to protect systems from unauthorised access.

Cybercriminals constantly develop new viruses and threats. Likewise, antivirus companies continuously create new software patches and signature updates to stay ahead. Despite that, the possibility of new threats slipping through these defences remains a challenge.

Technological advancements

Fraud is a major challenge for financial institutions. Artificial intelligence (AI) has emerged as a powerful weapon in the fight against this threat.

This technology excels at detecting various types of fraud. AI algorithms can detect suspicious activity in real time, helping prevent fraud before it happens.

AI solutions go beyond simple detection. By creating detailed profiles of each customer and tracking their activities, AI can predict potential risks and prevent fraud proactively.

Current Best Practices

A strong foundation is critical to banking security. This includes constantly checking for weaknesses through risk assessments. Digital banks must update their security protocols regularly to keep pace with changing risks. Collaborations with other financial institutions and government agencies help banks stay informed about the latest threats and how to respond.

Data classification is also essential. Banks need strict controls on who can access sensitive information. Employee security training must be regular to make them aware of threats.

Case Studies

The digital bank Starling Bank partnered with cybersecurity firm HackerOne in 2019. This partnership created a streamlined system for anyone to report weaknesses found in its apps and website.

The initiative initially focused on specific areas and common vulnerabilities. This collaboration revealed valuable insights into weaknesses often missed during standard testing. The project’s findings allowed Starling to develop automated detection tools that proactively prevent security issues.

A report by Statista predicts the global cybersecurity market will hit $271.90 billion in 2029, highlighting the growing need for strong defences in digital banking. While still new, quantum computing presents a future hurdle. Its ability to crack current encryption methods means new, quantum-resistant cryptography needs to be developed for banking security.

However, machine learning and AI are expected to be adopted more widely in cybersecurity. Beyond just reacting to threats, financial institutions will also increasingly focus on proactive threat hunting. This means identifying and stopping potential vulnerabilities before they can be exploited.

  • Cybersecurity in FinTech

Author

Dan Brightmore

Published

22 July 2024

Estimated Read time

3Mins

The banking industry is slowly adopting artificial intelligence (AI) technology. It offers many benefits for financial institutions, from upgrading customer…

The banking industry is slowly adopting artificial intelligence (AI) technology. It offers many benefits for financial institutions, from upgrading customer experience to automating menial tasks. However, many are still cautious about using AI in certain areas, such as regulatory compliance management.

Given the continuously evolving legal requirements, good regulatory compliance management is crucial for banks. AI solutions can help effectively manage compliance by automating repetitive tasks, detecting suspicious activity, and providing real-time insights.

Automated compliance monitoring with AI

Artificial intelligence allows banks to perform continuous tasks around the clock with automated compliance monitoring. The previously labour-intensive work can be done more efficiently to ensure the bank follows all regulatory obligations.

The bank’s compliance teams usually handle monitoring processes, but AI automation can reduce costs. The compliance team can also focus on more important tasks rather than repetitive work.

The increased efficiency also means reduced compliance risk and non-compliance damage like fines.

Risk management

Financial institutions face regulatory compliance risks in various areas, which can lead to legal sanctions, financial loss, or a bad reputation. Advanced AI solutions can aid in risk management by identifying and mitigating risks more effectively.

AI-powered solutions can develop more accurate risk models and provide real-time responses. Many banks use this technology to help streamline compliance while improving the security of sensitive financial data. Furthermore, AI can detect compliance gaps and ensure adherence to laws and regulations.

Data analysis

AI can quickly analyse large volumes of data, a novel capability in the industry. A data analysis system can be designed to keep track of the latest regulatory changes and ensure the bank remains compliant.

Machine learning models can identify suspicious patterns and detect anomalies to report any breach of regulation. They can also analyse historical data and predict compliance risks. These allow banks to mitigate risks and address compliance issues before they escalate.

Case studies

Several banks have successfully used AI for regulatory compliance solutions. HSBC, for instance, uses AI-powered Know Your Customer (KYC) verification. This system can analyse customer data quickly, identify potential risks, and alert compliance officers for investigation. This bank also used Google Cloud’s Anti Money Laundering (AML) AI to combat and detect fraudulent activities in real-time. With these, HSBC has reduced the verification time by 80 percent and experienced a significant reduction in false positives.

Meanwhile, Danske Bank has also earned benefits from using fraud detection AI. The bank witnessed a 60 percent reduction in false positives and a notable decrease in fraudulent activities.

Future outlook for AI in regulatory in compliance

AI solutions are predicted to fundamentally change financial institution compliance management in the next five years, according to McKinsey. In the future, implementation for regulatory compliance in banks will be more widespread. Over 80 percent of C-level executives who participated in an Accenture survey planned to commit 10 percent of their AI budget by 2024 to address regulatory compliance.

AI offers many benefits, and as accessibility to this financial technology increases, more financial institutions will be inclined to adopt it, according to the Financial Stability Review.

Technology will evolve, giving better automation capabilities, more extensive data analysis, and enhanced interpretation. This could further reduce the manual effort required in the banking industry.

As adoption increases, ensuring the AI systems used are ethical and unbiased is necessary. Thus, banks need to provide transparency for AI in banking and adherence to guidelines.

  • Artificial Intelligence in FinTech

Author

Dan Brightmore

Published

Estimated Read time

4Mins

Blockchain payments are becoming more popular. In 2023, the adoption of blockchain payments like cryptocurrencies reached a new height of…

Blockchain payments are becoming more popular. In 2023, the adoption of blockchain payments like cryptocurrencies reached a new height of 420 million users globally, per a Triple-A report. This number is an 800 percent increase compared to the previous year.

Blockchain is a decentralised digital ledger that records and verifies transactions through a network of computers. Unlike traditional payment methods, blockchain payments occur directly between parties. Each transaction is stored in a ‘block’ linked to previous blocks, forming a chronological chain.

The technology provides enhanced security and speed for cross-border payments. International payments used to be a complex process due to the different currencies and banking systems involved. However, the technology can simplify transaction processes significantly.

Speed and efficiency

Blockchain payments revolutionised traditional cross-border payments by enabling faster and more efficient transfers.

The decentralised network used in blockchain eliminates the need for a central authority. It simplifies the verification for transactions and avoids process delays. The technology also allows direct peer-to-peer transactions with no extra parties.

Thus, settlement speeds are much faster than in traditional banking systems. Unlike traditional ones, blockchain payments can be made within minutes instead of lengthy periods of days.

Cost reduction

Blockchain cross-border transactions come with significantly lower transaction fees than traditional systems. This is mainly due to the absence of intermediaries.

It also allows users to get lower currency fees than traditional modes. Moreover, cryptocurrency options offer no currency fees at all.

Security enhancements with blockchain

The security systems used by traditional banks involve third parties, which often means heightened vulnerability. The additional parties might experience operational issues that can affect the banks. Each third-party involvement adds possible risks to the main payment system. Blockchain payments remove the need for additional parties and enhance security with better transparency.

They use a decentralised network where multiple network participants verify and record each transaction. This makes it nearly impossible for system manipulation incidents to happen.

The technology also allows the use of smart contracts. These are digital contracts stored in a blockchain that automatically enforce themselves when specific conditions are met. These AI-powered contracts reduce reliance on transaction intermediaries and avoid potential fraud or errors. This contrasts with traditional systems, which require third parties to safeguard information

Case studies

Some financial institutions have already used blockchain for cross-border payments. Ripple is a prime example of blockchain technology’s effect on cross-border transactions. Its native cryptocurrency, XRP, plays an important role in this. Cryptocurrency can aid faster and cheaper international transactions. Moreover, its worldwide network of financial institutions allows a near-instantaneous settlement.

In the trade finance sector, cross-border payments play an important role. Platforms like Marco Polo have included blockchain payment options in their services.This simplifies and better secures trade financing transactions.

E-commerce platforms also included these payment options, like Bitcoin, to increase global sales. One of the online platforms that accept Bitcoin payments is CheapAir, an online travel agency. Another one is NewEgg, an e-commerce platform for computer parts and consumer electronics.

Future prospects for blockchain payment systems

Blockchain technology is still evolving and more companies will likely adopt blockchain payment systems. The rising need for faster and more secure global payments is expected to drive the broader adoption of blockchain payments.

Among the future trends that involve blockchain payments for cross-border transactions is the rise of central bank digital currencies (CBDCs). CDBCs are a digital version of national currency that is more efficient for cross-border transactions.

More blockchain-based platforms will emerge and further streamline international trade finance processes. These platforms will facilitate end-to-end trade finance, including documentation, tracking, and payment.

The security for blockchain transactions will continue to develop, as zero-knowledge proofs and advanced encryption are increasingly used.

Partnerships with traditional financial institutions and global payment networks will expand. This can further enhance the accessibility and adoption of blockchain payments.

  • Blockchain

Author

Dan Brightmore

Published

18 July 2024

Estimated Read time

3Mins

Neobanks, the digital-first financial institutions operating without physical branches, have emerged as a potent force in the financial services industry….

Neobanks, the digital-first financial institutions operating without physical branches, have emerged as a potent force in the financial services industry. Leveraging cutting-edge banking technology and a laser focus on customer experience, they are challenging traditional banks’ dominance.

Neobanks operate entirely online, offering a suite of financial services—from current accounts and debit cards to money transfers and budgeting tools—all seamlessly integrated through user-friendly mobile apps. Their core value proposition lies in:

  • Convenience: With their 24/7 access to banking services, they eliminate the need for physical branch visits.
  • Lower Fees: Decreased overhead charges for maintaining accounts and conducting transactions.
  • Seamless User Experience: Intuitive mobile apps prioritise user experience with streamlined account management and personalised financial tools.
  • Financial Inclusion: Neobanks can foster financial inclusion by offering services to those with limited access to traditional banking.

Neobanking benefits

Compared to traditional banks, neobanks excel in user experience and fees. Neobanks offers quick and paperless online applications and a mobile-first approach, allowing customers to access services quickly anytime, anywhere. Their services incur lower fees, with transparent pricing structures.

Consumers, particularly the tech-savvy generation, are increasingly drawn to neobanks due to the accessibility and convenience they bring to the table. The ability to manage finances anytime, anywhere resonates with nowadays on-the-go lifestyles. They are also cost-efficient, offering lower charges that result in direct savings for consumers.

Neobanking in numbers

In 2020, the global neobank market was valued at US$ 18.6 billion, according to a report by Mordor Intelligence. It is expected to record US$ 333.4 billion in 2026. This figure represents a CAGR of 50.6 percent. With a user penetration of 3.89 percent in 2024, the average transaction value per user is US$21,110 in 2024, according to Statista. In 2028, it is predicted that there will be 386.30 million neobank users worldwide.

Some of the biggest neobanking names include Chime. Serving 14.5 million users in 2022, around nine million relied on Chime as their primary bank., as reported by Forbes. In 2024, the number of users grew to 22 million, more than that of SoFi, Dave, MoneyLion, Varo Bank, and Current combined, also as reported by Forbes.

The aforementioned names are not small players either. Varo, for example, managed over 7 million accounts in 2023. Likewise, SoFi recorded 8.1 million users using its services in the first quarter of 2024, a 2.5 million, or 44 percent, increase from 2023’s last quarter.

Another big player is Revolut. The neobank had 40 million users per March 2024, a massive increase from 1.5 million customers in February 2018. It ticked the 30 million mark in 2023.

Impact on Traditional Banks

The rise of neobanks has forced traditional banks to re-evaluate their strategies. Many banks have undergone a digital transformation, investing in mobile banking platforms and improving user experience to compete with neobanks’ digital agility. Traditional banks are also securing partnerships and acquiring neobanks to absorb expertise and expand service offerings.

Future Outlook

The future of financial services may see a more collaborative landscape between neobanks and traditional banks. Neobanks may find value in partnering with established institutions for broader reach and access to a wider range of financial products. Conversely, traditional banks may leverage neobanks’ technological expertise and customer focus to enhance their offerings.

  • Neobanking

Author

Dan Brightmore

Published

17 July 2024

Estimated Read time

4Mins

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

Author

Dan Brightmore

Published

16 July 2024

Estimated Read time

4Mins

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

Author

Dan Brightmore

Published

Estimated Read time

4Mins

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

Author

Dan Brightmore

Published

15 July 2024

Estimated Read time

5Mins

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

Author

Dan Brightmore

Published

Estimated Read time

4Mins

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

Author

Dan Brightmore

Published

11 July 2024

Estimated Read time

6Mins

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

Author

Dan Brightmore

Published

Estimated Read time

3Mins

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

Author

Dan Brightmore

Published

Estimated Read time

5Mins

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

Author

Dan Brightmore

Published

10 July 2024

Estimated Read time

5Mins

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

Author

Dan Brightmore

Published

9 July 2024

Estimated Read time

3Mins

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

Author

Dan Brightmore

Published

3 July 2024

Estimated Read time

4Mins

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This month’s cover story sees our sister brand Fintech Strategy reporting from Money20/20 Europe in Amsterdam – a pivotal event…

This month’s cover story sees our sister brand Fintech Strategy reporting from Money20/20 Europe in Amsterdam – a pivotal event in the fintech calendar, drawing over 8,000 participants from 2,300 companies worldwide.

Welcome to the latest issue of Interface magazine!

Read the latest issue here!

In this month’s issue…

Money20/20 Europe Review

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 that underscored the transformative power of emerging technologies in financial services. We met with SC Ventures, Lloyds Banking Group, OSB Group, AirWallex, Plaid, Paymentology, Episode Six, Mettle (Nat West Group) and more to take the pulse of the latest trends across the fintech landscape.

Under the theme of ‘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…

Publicis Sapient: Global Banking Benchmark Study

Interface was also proud to partner with Publicis Sapient at Money20/20 Europe for the launch of its third annual Global Banking Benchmark Survey. The survey draws on the insight of over 1000 senior executives in financial services across various global markets and focuses on the goals, obstacles, and drivers of digital transformation.

We spoke with Head of Financial Services Dave Murphy about its findings. “The survey 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.”

At the launch event for the study, Eoghan Sheehy, Associate MD, and Grace Ge, Senior Principal, highlighted that banks are primarily focused on improving existing processes rather than introducing new ones. Data Analytics and AI are identified as key priorities for digital transformation, with a focus on internal use cases and efficiency.

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

STO Building Group: Enabling and Empowering People

Claudia Healey, Chief Human Resources Officer at STO Building Group, spoke to Interface about the HR platform empowering its people in pursuit of a strategic vision… “Culture is the number one priority in a people business like STO Building Group (STOBG). If you’re not nurturing and inspiring your folks, well, they can just vote with their feet. They don’t have to stay. Or they could do worse, they could quit and stay. And that’s something we would never want. Meeting your people where they’re at, understanding their goals and aspirations, and how you can help them reach their potential is vital. Realising how you can really see your people and truly understand what matters to them, is an incredible priority.”

Also in this issue, AI hype has previously been followed by an AI winter, we hear from Scott Zoldi, Chief Analytics Officer at FICO who asks, ‘Is the AI bubble set to burst?’ Elsewhere, we round up the top events in tech and learn how businesses can ensure their cloud storage is more sustainable in an age of rising demand for data and AI. Cloud storage without the climate cost is possible explains Fasthosts CEO Simon Yeoman.

Enjoy the issue!

Dan Brightmore, Editor

  • Digital Strategy

Author

Dan Brightmore

Published

6 March 2024

Estimated Read time

3Mins

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Our cover story this month focuses on the work of Arianne Gallagher-Welcher. As the Executive Director for the USDA Digital…

Our cover story this month focuses on the work of Arianne Gallagher-Welcher. As the Executive Director for the USDA Digital Service, in the Office of the OCIO, her team’s mission is to drive a tech transformation at the USDA. The goal is to better serve the American people across all of its 50 states.

Welcome to the latest issue of Interface magazine!

Welcome to a new year of possibility where technology meets business at the interface of change…

Read the latest issue here!

USDA: The People’s Agency

“We knew that in order for us to deliver what we needed for our stakeholders, we needed to be flexible – and that has trickled down from our senior leaders.” Arianne Gallagher-Welcher, Executive Director for the USDA Digital Service reveals the strategic plan’s first goal. Above all, the aim is to deliver customer-centric IT so farmers, producers, and families can find dealing with USDA as easy as using an ATM.

BCX: Delivering insights & intelligence across the Data & AI value chain

We also sat down with Stefan Steffen, Executive Leader for Data Insights & Intelligence at BCX. He revealed how BCX is leveraging AI to strategically transform businesses and drive their growth. “Our commitment to leveraging data and AI to drive innovation harnesses the power of technology to unlock new opportunities, drive efficiency, and enhance competitiveness for our clients.”

Momentum Multiply: A culture-driven digital transformation for wellness

Multiply Inspire & Engage is a new offering from leading South African insurance provider Momentum Health Solutions. Furthermore, it is the first digital wellness rewards program in South Africa to balance mental health and physical health in pursuing holistic wellness. CIO, Ndibulele Mqoboli, discusses re-platforming, cloud migrations, and building a culture of ownership, responsibility, and continuous improvement.

Clark County: Creating collaboration for the benefit of residents

Navigating the world of local government can be a minefield of red tape, both for citizens and those working within it. Al Pitts, Deputy CIO of Clark County, talks to us about the organisation’s IT transformation. He explains why collaboration is key to support residents. “We have found our new Clark County – ‘Together for Better’ – is a great way to collaborate on new solutions.”

Also in this issue, we hear from Alibaba’s European GM Jijay Shen on why digitalisation can be a driving force for SMEs. We learn how businesses can get cybersecurity right with KnowBe4 and analyse the rise of ‘The Mobility Society’.

Enjoy the issue!

Dan Brightmore, Editor

  • People & Culture

Author

Dan Brightmore

Published

31 January 2024

Estimated Read time

4Mins

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For our first cover story of 2024 we meet with Lloyds Banking Group’s CIO for Consumer Relationships & Mass Affluent,…

For our first cover story of 2024 we meet with Lloyds Banking Group’s CIO for Consumer Relationships & Mass Affluent, Martyn Atkinson, to learn how an ambitious growth agenda, combined with a people-centred culture, is driving change for customers and colleagues across the Group.

Welcome to the latest issue of Interface magazine!

Welcome to a new year of possibility where technology meets business at the interface of change…

Read the latest issue here!

Lloyds Banking Group: A technology & business strategy

“We’ve made significant strides in transforming our business for the future,” explains Martyn Atkinson, CIO for Consumer Relationships & Mass Affluent at Lloyds Banking Group. “I’m really proud of what the team have achieved. There’s loads more to go after. It’s a really exciting time as we become a modern, progressive, tech-enabled business. We’ve aimed to maintain pace and an agile mindset. We want to get products and services out to our customers and colleagues. We’ll test and learn to see if what we’re doing is actually making a meaningful difference.”

AFRICOM: Organisational resilience through cybersecurity

We also speak with U.S. Africa Command’s (AFRICOM) CISO Ryan Larsen on developing the right culture to build cyber awareness. He is committed to driving secure and continued success for the Department of Defence. “I often think of every day working in cyberspace a lot like counterinsurgency warfare and my time in Afghanistan. You had to be on top of your game every minute of every day. The adversary only needs to get lucky one time to find you with that IED.”

OLYMPUS DIGITAL CAMERA

ALIC: Creating synergy to scale at speed with Lolli

Since 2009 the Australian Lending & Investment Centre (ALIC) has been matching Australians with loans that help build their wealth. It has delivered over $8.3bn in loans to more than 22,000 leading Australian investors and businesses. Managing Director Damian Brander talks ethical lending and the challenges of a shifting financial landscape. ALIC has also built Lolli – a broker enhancement platform built by brokers, for brokers.

Sime Darby Motors: Driving digital, cultural, and business transformation together

Sime Darby Berhad is one of the oldest and most successful multinational companies in Malaysia. It has a twin focus on the Industrial and Motors sectors. The company employs more than 24,000 people, operating across 17 countries and territories. Sime Darby Motors’ Chief Digital & Information Officer Tuan Jean Tee shares how he makes sure digital, cultural, and process transformation go hand in hand throughout one of APAC’s largest automotive multinationals.

Also in this issue, we hear from Microsoft on the art of sustainable supply chain transformation, Tecnotree map the key trends set to impact the telecoms industry in 2024 and our panel of experts chart the big Fintech predictions for the year ahead.

Enjoy the issue!

Dan Brightmore, Editor

  • Fintech & Insurtech

Author

Dan Brightmore

Published

22 November 2023

Estimated Read time

4Mins

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This month’s cover story charts NAB’s journey to support SMEs with customer-centric digital solutions. Welcome to the latest issue of…

This month’s cover story charts NAB’s journey to support SMEs with customer-centric digital solutions.

Welcome to the latest issue of Interface magazine!

Interface showcases leaders at the forefront of innovation with digital technologies transforming myriad industries.

Read the latest issue here!

NAB: Reinventing Small Business Banking

A passionate advocate for diversity, inclusion and equity of opportunity, Executive GM Ana Marinkovic leads a team of 1,600+ small business experts. They lend over $1.2bn a month to Australian small businesses. National Australia Bank (NAB) plays a major role in propelling entrepreneurship across the country. Delivering better outcomes for small business owners sits at the very heart of NAB’s strategy. “Our scale and connectivity help us to tackle some of the biggest challenges facing our business and the communities we operate in,” says Ana.

TUI: Making travel plans mobile

The mobile side of TUI has never been more vital. TUI’s mobile apps were officially launched in 2013 and began as something of a proof of concept. For the entire international industry, moving from web to mobile devices was a huge shift. The initial set of apps were very skeletal and only integrated for UK and Nordic customers.

One of this year’s goals is to accelerate the native journey to make all the customer journeys native. This will further improving the customer experience. After a recent UI refresh, the app look and feel is fresh and sleek, and has plenty of exciting features for customers to enjoy. “Just in the last couple of months we’ve introduced an integration with OpenAI for a travel planner that helps you choose excursions,” Donia adds. “Seeing it grow over the years is so exciting.”

TARA Energy Services: tech fuelling growth

“Continuous improvement is woven into the fabric of the culture at TARA Energy Services,” says its proud Director of IT, Paul Parzen. “Every day, we face new challenges, both operationally in the field and strategically in the boardroom. We must make sure the organisation’s IT strategy for data management, core infrastructure, network architecture, and security is ready to meet them.”

“Some people might say, ‘wow, a pension. That sounds a little boring.’ But at the end of the day, what we do is help people retire in the best way possible and that’s a pretty good place to be.”

Those are the words of Dee McGrath, CEO of Link Group’s Retirement Solutions since May 2019. The company is a global, digitally-enabled business connecting millions of people with their pension assets – safely, securely and responsibly. 

Evara Health: Technology delivering care for all

Evara Health’s mission statement is to help people become healthy and live healthy lives, and that means all people. A lot of health organisations don’t serve everybody and their treatments aren’t available under many types of insurance. However, Evara Heath doesn’t turn anybody away. It supports the underserved and the uninsured, and patients are treated regardless of whether they can afford it. Around 25% of patients have no insurance at all, and over half are covered by Medicaid, which isn’t accepted by everyone.

Enjoy the issue!

Dan Brightmore, Editor

Author

Dan Brightmore

Published

Estimated Read time

4Mins

Read in brochure format

This month’s cover story charts NAB’s journey to support SMEs with customer-centric digital solutions. Welcome to the latest issue of…

This month’s cover story charts NAB’s journey to support SMEs with customer-centric digital solutions.

Welcome to the latest issue of Interface magazine!

Interface showcases leaders at the forefront of innovation with digital technologies transforming myriad industries.

Read the latest issue here!

NAB: Reinventing Small Business Banking

A passionate advocate for diversity, inclusion and equity of opportunity, Executive GM Ana Marinkovic leads a team of 1,600+ small business experts. They lend over $1.2bn a month to Australian small businesses. National Australia Bank (NAB) plays a major role in propelling entrepreneurship across the country. Delivering better outcomes for small business owners sits at the very heart of NAB’s strategy. “Our scale and connectivity help us to tackle some of the biggest challenges facing our business and the communities we operate in,” says Ana.

TUI: Making travel plans mobile

The mobile side of TUI has never been more vital. TUI’s mobile apps were officially launched in 2013 and began as something of a proof of concept. For the entire international industry, moving from web to mobile devices was a huge shift. The initial set of apps were very skeletal and only integrated for UK and Nordic customers.

One of this year’s goals is to accelerate the native journey to make all the customer journeys native. This will further improving the customer experience. After a recent UI refresh, the app look and feel is fresh and sleek, and has plenty of exciting features for customers to enjoy. “Just in the last couple of months we’ve introduced an integration with OpenAI for a travel planner that helps you choose excursions,” Donia adds. “Seeing it grow over the years is so exciting.”

TARA Energy Services: tech fuelling growth

“Continuous improvement is woven into the fabric of the culture at TARA Energy Services,” says its proud Director of IT, Paul Parzen. “Every day, we face new challenges, both operationally in the field and strategically in the boardroom. We must make sure the organisation’s IT strategy for data management, core infrastructure, network architecture, and security is ready to meet them.”

“Some people might say, ‘wow, a pension. That sounds a little boring.’ But at the end of the day, what we do is help people retire in the best way possible and that’s a pretty good place to be.”

Those are the words of Dee McGrath, CEO of Link Group’s Retirement Solutions since May 2019. The company is a global, digitally-enabled business connecting millions of people with their pension assets – safely, securely and responsibly. 

Evara Health: Technology delivering care for all

Evara Health’s mission statement is to help people become healthy and live healthy lives, and that means all people. A lot of health organisations don’t serve everybody and their treatments aren’t available under many types of insurance. However, Evara Heath doesn’t turn anybody away. It supports the underserved and the uninsured, and patients are treated regardless of whether they can afford it. Around 25% of patients have no insurance at all, and over half are covered by Medicaid, which isn’t accepted by everyone.

Enjoy the issue!

Dan Brightmore, Editor

Author

Dan Brightmore

Published

22 June 2023

Estimated Read time

5Mins

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Amit Thawani, CIO for Consumer Data & Engagement Platforms at Wells Fargo, on the journey towards becoming a customer-centric company

This month’s cover story reveals how a customer-centric approach to technology is helping Wells Fargo deliver stable, secure, scalable, and innovative services.

Welcome to the latest issue of Interface magazine!

It’s our biggest issue yet! The common theme this month is the focus on the creation of customer-centric technologies that offer reliable, secure and helpful user journeys from travel and banking to health and business.

Interface dives deep for insights on understanding, planning, implementing and communicating change across industries.

Read the latest issue here!

Customer-centric banking with Wells Fargo

Amit Thawani, Chief Information Officer (CIO) for Consumer Data & Engagement Platforms (CDEP) on the technology journey at Wells Fargo: “All tech employees at Wells Fargo are tasked with working towards delivering stable, secure, scalable, and innovative services at speed that delight and satisfy our customers while unleashing the skills potential of our employees.”

TUI: Developing a technology ecosystem

Kristof Caekebeke, CIO for Product & Engagement, is a member of the leadership team that is driving the transformation of the TUI technical ecosystem which has seen Master Domain Owners taking different blocks of the ecosystem under their control to roll out across the organisation.

TUI Group

Responsible for product and engagement, Caekebeke’s focus is on building products out of the thousands of hotels, flights, experiences and cruises TUI is offering. “I’m responsible for every contact point between the customer and TUI. The websites, the mobile apps, the retail systems – any contact point we have between the customer and TUI. It’s a large team of 1,100 tech people.

A digital bank transformation journey with Banco PAN

“Until 2018 Banco PAN was very much an analogue company reliant on legacy paper processes,” recalls Leandro Marçal. Joining the bank in December 2020, to become Technology & Operations Director (CIO/COO), Marçal was tasked with accelerating a digital transformation journey.

“Banco PAN invested in innovation before I arrived,” says Marçal. “It is my team’s job to formalise the path towards becoming a digital bank. Our legacy operation was digitalising. It was an opportunity to improve the customer experience with our checking account and credit card systems.”

Pohlad Companies: The power of people

A pillar of the community in Minneapolis, Pohlad Companies is well known to Minnesotans for its influence, its charity work, and the opportunities it has created for people since the 1950s.

Alongside significant commercial real estate investments, Pohlad Companies owns a custom engineering and robotics company, a group of automotive dealerships specialising in luxury vehicles, a film production studio, and many more businesses. Famously, the Pohlad family also owns the Minnesota Twins, a Major League Baseball team.

This variety is part of what makes Rachel Lockett’s job so exciting. She’s Pohlad Companies’ CIO and has spent a decade in her current role. Lockett began her career as a programmer over 25 years ago and quickly moved into IT leadership management.

Coalfire: Embracing change in cybersecurity

If you wait for something to happen, then it’s often too late. The art of having a finger on the pulse is an essential ingredient to success. Failure to manage change and implement cybersecurity protocols could mean leaving an organisation vulnerable to hackers. 

Sreeveni Kancharla, Coalfire’s first Chief Information Officer, is leading the company’s digital transformation with unwavering determination. As a cybersecurity advisor, Coalfire assists private and public sector organisations in managing threats, closing gaps, and mitigating risks. Kancharla ensures that her team stays up-to-date with the latest technologies to guard against zero-day attacks.

Uni of Kansas Health: Cybersecurity at the heart

Speed versus safety. The two topics are intrinsically linked and vital in their own individual way. But can you have both in healthcare when the risks are so great? Ultimately, there is no higher stake than saving people’s lives – it goes above everything and is why cybersecurity is so vital.

Protecting the healthcare system

“There’s nothing more important to me than patient care,” affirms Michael Meis, Associate Chief Information Security Officer at The University of Kansas Health System. “It is one of the highest callings you can imagine, to be able to help people. While the cybersecurity team and me, individually, do not directly care for patients, we enable a lot of that patient care to continue and to be able to achieve some of the goals that the health system has set to provide that healing, research, and innovation within the healthcare space.”

Also in this issue, we ask ChatGPT what the future holds for AI and learn from Zoom how businesses can leverage analytics for insights from their hybrid events.

Enjoy the issue!

Dan Brightmore, Editor

Author

Sean Galea-Pace

Published

28 March 2023

Estimated Read time

6Mins

How Minted is leveraging digital technology to make investment in precious metals, accessible, affordable and simple

Shahid Munir, co-founder of Minted, discusses how his firm is competing with larger banks for a spot at the top table of investment in fintech.

Few industries have boomed like the fintech space over the past few years. With a plethora of new technology at consumer fingertips like never before, banks are being properly challenged by upcoming startups offering an alternative solution. Among these is Minted, aiming to make the buying, selling, transferring and delivery of physical precious metals simple through flexible monthly plans and one-time purchases. The company was founded in 2018 by three close friends – Shahid Munir, Hamzah Almasyabi and Haroon Siddiq – with a shared passion for entrepreneurship, technology and the opportunities the financial industry presented. Their combined drive led to the creation of Minted.

Shahir Munir, Co-Founder, Minted

The rise of Minted

Munir, co-founder of Minted, admits the journey has been a “rollercoaster” since the trio decided to launch their venture. “It’s certainly been exciting,” he explains. “It’s been a great learning curve and was a case of taking an industry where so many people were so used to doing it one way and offering something new. This has been challenging because we have a great product, but no one understood it. We’ve had to go out and educate people first in what has been a journey of growth, but it’s a constant journey.”

A decade ago, financial technology was considered by many as ring-fenced by bigger banks. But Munir stresses he has tried to change that narrative and offer competition which provides tremendous value. “Previously, a bank was the only way you could provide financial products,” he says. “Technology has allowed more innovative and creative solutions to launch and test the bigger banks and what they became bad at which was the customer experience. Now you see bigger banks adopt a lot of the technology and some of the practices used by challenger banks which can only be a good thing. Being in London has also helped because it is one of the leading hubs for fintechs and really supports the financial technology industry.”

Armed with different skillsets, the three co-founders complement each other with a diverse range of experience. With Almasyabi bringing an operations background and Siddiq bringing business strategy, Munir completes the line-up with finance and technology know-how. “I think it’s what sets us apart and makes us different,” he says. “Our backgrounds mean we’re not tunnel visioned and can see clearly when things aren’t working. We have a great thinktank within the business which helps us come up with ideas.”

Making precious metals accessible, affordable and simple

“I recall seeing a meme about how the price of a Freddo chocolate had changed over the years, no longer being its trademark 10p, it was now 200% more expensive and also smaller in size. This led me down rabbit-hole of trying to understand why most items go up in price as years pass and rarely come back down again. I became fascinated with how the government increases the money supply and the concept of inflation – my money buys me less in the future than it does today.

“I met with the other two founders that same night and the thoughts extended from my mind into an intense conversation about quantitative easing, Brexit, cost of living – snacks were being consumed faster than the rate of government borrowing. Where could we park our money, what was better than money? That was when the penny-dropped (pardon the pun). Hamzah proclaimed: ‘What about gold, guys?’”

Digital disruption

Through Minted, customers will have full legal ownership over their gold and can also request to have their gold delivered to a verified address. The gold and silver are stored in a grade 10 vault in the UK with the highest level of security possible. The products are fully insured by Lloyds of London at the current value while in vaulted storage as well as when being transported.

As a digital disrupter, one of the biggest challenges Minted continues to face is a lack of understanding. Customer assurance is an important priority, and the organisation has established several initiatives to gain trust. Minted is registered and regulated by the Financial Conduct Authority (FCA) which means the firm operates to the highest financial standards and guidelines as determined by the FCA. “I feel like we need to go that extra mile,” stresses Munir. “What I think we underestimated at first was the extent to which people needed to ask questions until we launched a live chat facility on the website. This function helps build our knowledge base and allows us to hold the customer’s hand throughout the process. We’ve also found success when we’ve attended face to face exhibition events and had one-on-one interactions. It’s been brilliant to see first-hand the customer perception and look at what we can do better to meet their needs.”

Munir says he has noticed a trend of people starting with a “flutter” to test the water and check out the process. “I think it’s important that people build their confidence and recognise the value in what we offer,” he explains. “Once this is done, we often see those same customers make larger transactions. We know our difference can be a challenge for some people to accept which is why education is such an important topic to us. We have to keep doing explainer videos, use social media and hold community sessions to be there for customers.”

Scaling up

Minted recently launched its own app which offers customers an even easier way to manage their gold and silver, as well as introducing a tool to partner with businesses called Minted Connect. Munir believes the move has helped showcase an advanced, modern way for people to own physical items. “I love the app as it just makes things so much easier for customers via the platform,” he explains. “It’s been fantastic, a one-stop solution that helps stores the precious metals for free and allows them to be delivered at any time. In a world where everything is so digitally enabled it is nice to offer something physical – people don’t even buy cars anymore. Hopefully via customer feedback we can make improvements to the app that will help us develop new features.”

Munir believes gold is increasingly being seen as an alternative for savings and affirms global pressures like the threat of inflation amid economic uncertainty has helped people to realise the full potential of Minted’s offering. “In the past if you wanted to save money, you simply open a saver account and start adding money but with gold it was often a little trickier,” he says. “But with Minted we’ve simplified the process and tried to make it as automated as possible. Gold is a great alternative which has stood the test of time.”

Looking ahead, Minted is showing no signs of slowing down and is expanding into different territories. Munir remains positive for the next few years and what comes next for his organisation. “We’re working towards expanding the team because I feel like we’re at the stage now where each of our departments needs its own team of people to run each department,” he explains. “We’re scaling up and branching into new markets such as Turkey, and focusing in on developing the business to business side too.”

Author

Dan Brightmore

Published

24 January 2023

Estimated Read time

9Mins

The digital landscape is changing day by day. Ideas like the metaverse that once seemed a futuristic fantasy are now…

The digital landscape is changing day by day. Ideas like the metaverse that once seemed a futuristic fantasy are now coming to fruition and embedding themselves into our daily lives. The thinking might be there, but is our technology really ready to go meta? Domains and hosting provider, Fasthosts, spoke to the experts to find out…

How the metaverse works

The metaverse is best defined as a virtual 3D universe which combines many virtual places. It allows users to meet, collaborate, play games and interact in virtual environments. It’s usually viewed and accessed from the outside as a mixture of virtual reality (VR), (think of someone in their front room wearing a headset and frantically waving nunchucks around) and augmented reality (AR), but it’s so much more than this…

These technologies are just the external entry points to the metaverse and provide the visuals which allow users to explore and interact with the environment within the metaverse. 

This is the ‘front-end’ if you like, which is also reinforced by artificial intelligence and 3D reconstruction. These additional technologies help to provide realistic objects in environments, computer-controlled actions and also avatars for games and other metaverse projects. 

So, what stands in the way of this fantastical 3D universe? Here are the six key challenges:

Technology

The most important piece of technology, on which the metaverse is based, is the blockchain. The blockchain is essentially a chain of blocks that contain specific information. They’re a combination of computers linked to each other instead of a central server which means that the whole network is decentralised. This provides the infrastructure for the development of metaverse projects, storage of data and also allows them the capability to be compatible with Web3. Web3 is an upgraded version of the internet which will allow integration of virtual and augmented reality into people’s everyday lives. 

Sounds like a lot, right? And it involves a great deal of tech that is alien to the vast majority of us. So, is technology a barrier to widespread metaverse adoption?

Jonothan Hunt, Senior Creative Technologist at Wunderman Thompson, says the tech just isn’t there. Yet.

“Technology’s readiness for the mass adoption of the metaverse depends on how you define the metaverse, but if we’re talking about the future vision that the big tech players are sharing, then not yet. The infrastructure that powers the internet and our devices isn’t ready for such experiences. The best we have right now in terms of shared/simulated spaces are generally very expensive and powered entirely in the cloud, such as big computers like the Nvidia Omniverse, cloud streaming, or games. These rely heavily on instancing and localised grouping. Consumer hardware, especially XR, is still not ready for casual daily use and still not really democratised.

“The technology for this will look like an evolution of the systems above, meaning more distributed infrastructure, better access and updated hardware. Web3 also presents a challenge in and of itself, and questions remain over to what extent big tech will adopt it going forward.”

Storage

Blockchain is the ‘back-end’, where the magic happens, if you will. It’s this that will be the key to the development and growth of the metaverse. There are a lot of elements that make up the blockchain and reinforce its benefits and uses such as storage capabilities, data security and smart contracts. 

Due to its decentralised nature, the blockchain has far more storage capacity than the centralised storage systems we have in place today. With data on the metaverse being stored in exabytes, the blockchain works by making use of unutilised hard disk space across the network, which avoids users within the metaverse running out of storage space worldwide. 

In terms that might be a bit more relatable, an exabyte is a billion gigabytes. That’s a huge amount of storage, and that doesn’t just exist in the cloud – it’s got to go somewhere – and physical storage servers mean land is taken up, and energy is used. Hunt says: “How long’s a piece of string? The whole of the metaverse will one day be housed in servers and data centres, but the amount or size needed to house all of this storage will be entirely dependent on just how mass adopted the metaverse becomes. Big corporations in the space are starting to build huge data centres – such as Meta purchasing a $1.1 billion campus in Toledo, Spain to house their new Meta lab and data centre – but the storage space is not the only concern. These energy-guzzlers need to stay cool! And what about people and brands who need reliable web hosting for events, gaming or even just meeting up with pals across the world, all that information – albeit virtual – still needs a place to go.

“The current rising cost of electricity worldwide could cause problems for the growth of data centres, and the housing of the metaverse as a whole. However, without knowing the true size of its adoption, it is extremely difficult to truly determine the needed usage. Could we one day see an entire island devoted to data centre storage? Purely for the purposes of holding the metaverse? It seems a little ‘1984’, but who knows?”

Identity

Although the blockchain provides instantaneous verification of transactions with identity through digital wallets, our physical form will be represented by avatars that visually reflect who we are, and how we want to be seen. 

The founder of Saxo Bank and the chairman of the Concordium Foundation, Lars Seier Christensen, argues, “I think that if you use an underlying blockchain-based solution where ID is required at the entry point, it is actually very simple and automatically available for relevant purposes. It is also very secure and transparent, in that it would link any transactions or interactions where ID is required to a trackable record on the blockchain.”

Once identity is established, it is true that it could potentially become easier to assess creditworthiness of parties for purchasing and borrowing in the metaverse due to the digital identity and storage of each individual’s data and transactions on the blockchain. However, although it sounds exciting, there must be considerations into how it could impact privacy, and how this amount of data will be recorded on the blockchain. 

Security

There are also huge security benefits to this set up. The decentralised blockchain helps to eradicate third-party involvement and data breaches, such as theft and file manipulation, thanks to its powerful data processing and use of validation nodes. Both of these are responsible for verifying and recording transactions on the blockchain. This will be reassuring to many, given the widespread concerns around data privacy and user protection in the metaverse.

To access the blockchain all we will need is an internet connection and a device, such as a laptop or smartphone, this is what makes it so great as it will be so readily available. However, to support the blockchain, we’re relying on a whole different set of technologies.  Akash Kayar, CEO of web3-focused software development company Leeway Hertz, had this to say on the readiness of the current technology available: “The metaverse is not yet completely mature in terms of development. Tech experts are researching strategies and

testing the various technologies to develop ideas that provide the world with more feasible and intriguing metaverse projects.

“Projects like Decentraland, Axie Infinity, and Sandbox are popular contemporary live metaverse projects. People behind these projects made perfect use of notable metaverse technologies, from blockchain and cryptos to NFTs.

“As envisioned by top tech futurists, many new technologies will empower the metaverse in the future, which will support the development of a range of prolific use cases that will improve the ability of the metaverse towards offering real-life functionalities. In a nutshell, the metaverse is expected to bring extreme opportunities for enterprises and common users. Hence, it will shape the digital future.”

Currency & Payments

Whilst it’s only considered legal tender in two countries, cryptocurrency is currently a reality and there is a strong likelihood that it will eventually be mass adopted. However, the metaverse is arguably not yet at the same maturity level, meaning cryptocurrency may have to wait before it can finally fully take off. 

Golden Bitcoin symbol and finance graph screen. Horizontal composition with copy space. Focused image.

There is no doubt that cryptocurrency and the metaverse will go hand-in-hand as the former will become the tender of the latter with many of the current metaverse platforms each wielding its native currency. For example Decentraland uses $MANA for payments and purchases. However, with the volatility of crypto currencies and the recent collapse of trading platform FTX indicating security lapses, we may not yet be ready for the switch to decentralised payments. 

Energy

Some of the world’s largest data centres can each contain many tens of thousands of IT devices which require more than 100 megawatts of power capacity – this is enough to power around 80,000 U.S. households (U.S. DOE 2020) and is equivalent to $1.35bn running cost per data centre with the cost of a megawatt hour averaging $150. 

According to Nitin Parekh of Hitachi Energy, the amount of power which takes to process Bitcoin is higher than you might expect: “Bitcoin consumes around 110 Terawatt Hours per year. This is around 0.5% of global electricity generation. This estimate considers combined computational power used to mine bitcoin and process transactions.” With this estimate, we can calculate that the annual energy cost of Bitcoin is around $16.5bn. 

However, some bigger corporations are slowly moving towards renewable energy to power their projects in this space, with Google signing close to $2bn worth of wind and solar investments in order to power its data centres in the future and become greener. Amazon has also followed in their footsteps and have become the world’s largest corporate purchaser of renewable energy. 

They may have plenty of time yet to get their green processes in place, with Mark Zuckerberg recently predicting it will take nearly a decade for the metaverse to be created: “I don’t think it’s really going to be huge until the second half of this decade at the earliest.”

About Fasthosts

Fasthosts has been a leading technology provider since 1999, offering secure UK data centres, 24/7 support and a highly successful reseller channel. Fasthosts provides everything web professionals need to power and manage their online space, including domains, web hosting, business-class email, dedicated servers, and a next-generation cloud platform. For more information, head to www.fasthosts.co.uk

Author

Dan Brightmore

Published

Estimated Read time

3Mins

Todd Salmon, Executive Advisor for Strategic Services at GuidePoint Security, on the cybersecurity challenge of keeping up with the pace of the ever-changing digital world

This month’s cover story explores how GuidePoint Security, an elite team of highly trained and certified experts, cut through cybersecurity chaos and confusion to put control back in customers’ hands.

Welcome to the latest issue of Interface magazine!

Interface welcomes in 2023 with a need-to-know list of what we can expect from technology this year and how it can allow enterprises to gain a competitive edge in a disruptive and increasingly digital world. Faced with everything from process mining and AI to quantum-readiness and the metaverse we cut through the hype to bring you the facts.

Read the latest issue here!

GuidePoint Security: digital transformation in cybersecurity

“Cybersecurity is in such a reactive mode because of the sheer volume of risks and vulnerabilities an organisation faces,” says Todd Salmon, Executive Advisor for Strategic Services at GuidePoint Security. “We see a lot of copycats and repeat attacks happen, but at the end of the day it’s all about creating solutions to help combat those problems.”

GuidePoint’s elite team of highly trained and certified experts, cut through cybersecurity chaos and confusion to put control back in customers’ hands. Helping them make the smartest, most informed cyber risk decisions, and choose and integrate the best-fit solutions to build the most effective cybersecurity program, Salmon discusses the challenge of keeping up with the pace of the ever-changing digital world.

bp: a strategic reinvention

“We are investing in digital to drive process efficiency and improve insights; but also to develop our people with the skills we need for now, and the future at bp. This means we are playing to win while caring for our people through investing in their personal development,” says Head of Strategic Transformation Nick Hales.

“After setting the right foundations through various remediation and compliance initiatives, we embarked on our digital transformation journey,” adds Strategy & Transformation Manager Emmanouela Vlachantoni. “There was a clear opportunity to standardise and streamline our controls environment to reduce complexity and increase insight.”

Fairfax County: winning the IT war with cybersecurity

Meanwhile, across the pond, we learn how Fairfax County in the State of Virginia is reaping the rewards of a cybersecurity program enabling government services and keeping citizens safe. “My role is to educate our leadership to ensure they understand the business value of cybersecurity as it relates to government services. Being accountable for the security of their systems and data is a key factor in developing a successful cyber program,” explains CISO Michael Dent.

Also in this issue, we round up the key tech events and conferences across the globe and, with the help of the experts at Fasthosts, take a deep dive into the metaverse… Can virtual reality become our reality? Read on to find out.

Enjoy the issue!

Dan Brightmore, Editor

Author

Dan Brightmore

Published

6 September 2022

Estimated Read time

3Mins

Read in brochure format

Our cover story this month investigates how Fleur Twohig, Executive Vice President, leading Personalisation & Experimentation across Consumer Data & Engagement Platforms, and her team are executing Wells Fargo’s strategy to promote personalised customer engagement across all consumer banking channels

This month’s cover story follows Wells Fargo’s journey to deliver personalised customer engagement across all its consumer banking channels.

Welcome to the latest issue of Interface magazine!

Partnerships of all kinds are a key ingredient for organisations intent on achieving their goals… Whether that’s with customers, internal stakeholders or strategic allies across a crowded marketplace, Interface explores the route to success these relationships can help navigate.

Read the latest issue here!

Wells Fargo: customer-centric banking

Fleur Twohig, Wells Fargo

Our cover story this month investigates the strategy behind Wells Fargo’s ongoing drive to promote personalised customer engagement across all consumer banking channels.

Fleur Twohig, Executive Vice President, leading Personalisation & Experimentation across the bank’s Consumer Data & Engagement Platforms, explains her commitment to creating a holistic approach to engaging customers in personalised one-to-one conversations that support them on their financial journeys.

“We need to be there for everyone across the spectrum – for both the good and the challenging times. Reaching that goal is a key opportunity for Wells Fargo and I have the pleasure of partnering with our cross-functional teams to help determine the strategic path forward…”

IBM: consolidating growth to drive value

We hear from Kate Woolley, General Manager of IBM Ecosystem, who reveals how the tech leader is making it easier for partners and clients to do business with IBM and succeed. “Honing our corporate strategy around open hybrid cloud and artificial intelligence (AI) and connecting partners to the technical training resources they need to co-create and drive more wins, we are transforming the IBM Ecosystem to be a growth engine for the company and its partners.”

Kate Woolley, IBM
Kate Woolley, IBM

America Televisión: bringing audiences together across platforms

Jose Hernandez, Chief Digital Officer at America Televisión, explains how Peru’s leading TV network is aggregating services to bring audiences together for omni-channel opportunities across its platforms. “Time is the currency with which our audiences pay us, so we need to be constantly improving our offering both through content and user experiences.”

Portland Public Schools: levelling the playing field through technology

Derrick Brown and Don Wolf, tech leaders at Portland Public Schools, talk about modernising the classroom, dismantling systemic racism and the power of teamwork.

Also in this issue, we hear from Lenovo on how high-performance computing (HPC) is driving AI research and report again from London Tech Week where an expert panel examined how tech, fuelled by data, is playing a critical role in solving some of the world’s hardest hitting issues, ranging from supply chain disruptions through to cybersecurity fears.

Enjoy the issue!

Dan Brightmore, Editor

Author

Dan Brightmore

Published

30 May 2022

Estimated Read time

3Mins

Read in brochure format

This month’s cover story reveals the cycles of transformation, being led by CDO Lucho Torres, which are driving the disruptive digital journey at Peru’s second largest financial services group

This month’s cover story reveals reveals the cycles of transformation driving the disruptive digital journey at Scotiabank Peru, the country’s second largest financial services group.

Welcome to the latest issue of Interface magazine!

A customer-centric vision is often an important factor in the journey towards a digital transformation where a commitment to continuous improvement can bring scalability and lasting growth. Interface taps the brains behind some of the biggest tech successes happening across the globe today…

Read the latest issue here!

Scotiabank Peru

Lucho Torres, SVP & Chief Digital Officer at Scotiabank Peru is on a mission to leverage the trust in a global banking leader founded in 1832 and lead a transformation to create “the most relevant, simple and fast digital bank for consumers and businesses” across Peru. “The challenge was to build a digital bank with scalability and sustainability. We have created a customer-centric value proposition by building and taking to the market our own digital platforms and financial products to deliver personalised and intuitive customer experiences.”

IBM

We speak with IBM’s AI & Data guru Jean-Philippe Desbiolles who gives us a fascinating overview of his book AI Will be What you Make of It: The 10 Golden Rules of Artificial Intelligence. “I am passionate about the fact that at IBM we are transforming businesses by leveraging technologies in a broad sense of the word. And one of those key technologies is Artificial Intelligence.” Listen to our podcast with Jean-Philippe here or you can watch it below…

Digital Transformation in healthcare, education and telecomms

Also in this issue, Michael Haenelt, CIO at the Weed Army Community Hospital tells us the story of the development of a state-of-the-art medical facility at Ft Irwin, in California’s remote Mojave Desert, where a commitment to digital transformation is at the beating heart of the organisation.

Elsewhere, Michelle Murphy, superintendent of the Rim of the World Unified School District, reflects on 34 years in education and the way technology has driven change; talk with Tecnotree CEO Padma Ravichander about how the global provider of IT solutions for telcos is empowering digital communities; and hear the story of a unique challenge to digitise the self-sufficient City of Medicine Hat in Canada.

Enjoy the issue!

Dan Brightmore, Editor

Author

Dan Brightmore

Published

19 April 2022

Estimated Read time

2Mins

Read in brochure format

This month’s cover story explores the customer-centric digital transformation journey of leading insurer AXA being led by UK & Ireland CIO Darrell Ryman

Our cover story this month explores how leading insurer AXA‘s customer-centric digital transformation journey is refining the art of the possible to unite business with technology.

Welcome to the latest issue of Interface magazine!

The opportunity to leverage data & analytics to transform organisations seeking to sharpen their digital focus and better connect with internal and external stakeholders is at the forefront of a revolution in connectivity driving both operational efficiency and growth. In this issue we bring you some inspiring stories that reflect the impact today’s innovations are having on shaping the business journeys of tomorrow…

Read the latest issue here!

AXA

This month’s cover story explores the customer-centric digital transformation journey being led by AXA’s UK & Ireland CIO Darrell Ryman. “It’s both a challenge and an opportunity for the insurance industry,” he reflects. “Many of the legacy systems firms use are now outdated and based on the nine-to-five business operating model – they’re not designed for the modern digital experience.” Ryman’s IT team is driving that transformation pivot by focusing on three key pillars: developing a digital backbone, becoming a digital business and creating a digital ecosystem.

https://www.youtube.com/watch?v=i6wxgQ2gAmI

XGS

Today’s on demand transactions require custom logistics solutions. We discover how flooring supply chain specialist Xpress Global Systems (XGS) is combining existing data with employee experience to deliver technology solutions that form the core of the company’s humanised approach to digital transformation.

EY

Also in this issue, Ken Priyadarshi CT AI leader of EY Technology, explains how the leading professional services network is developing Digital Twins to deliver big-data and low-latency scenario planning models for financial services: “It’s time for the digital twin to become a mainstream tool for the C-suite and go beyond the traditional manufacturing or operational use-cases.”

Data management driving efficiency and growth

Elsewhere, we learn how specialist insurance broker Howden is achieving success in Asia by establishing a structured, data-driven, engagement and distribution strategy; and reveal the way America’s leading critical infrastructure damage prevention firm, Stake Center Locating, is future-proofing by transferring its expertise from legacy systems to the cloud.

Enjoy the issue!

Dan Brightmore, Editor

Author

Dan Brightmore

Published

15 December 2021

Estimated Read time

2Mins

Read in brochure format

Our exclusive cover story this month explores how IAG Firemark Ventures is disrupting insurance to reimagine the customer journey today…

Our exclusive cover story this month explores how IAG Firemark Ventures is disrupting insurance to reimagine the customer journey today

Welcome to the latest issue of Interface magazine!

Technology with the capacity to enhance customer journeys and evolve in line with our changing needs is the holy grail that the companies featured in this packed issue of Interface are on a quest to deliver…

Read the latest issue here!

Our cover star Scott Gunther, General Partner at IAG Firemark Ventures, embodies that pioneer spirit. Leading the investment arm of Australia and New Zealand’s largest insurer to think like a startup and drive innovation in the FinTech & InsurTech space, Gunther’s vision is being realised… “We not only provide staple financial services but the solutions that can make the world a safer place by reacting to everything from natural disasters to life-changing events.”

Trusted by 95% of Fortune 500 companies, Microsoft Azure is delivering transformative cloud journeys for organisations at all levels. Laurent Pierre Jr, General Manager for Azure Customer Experience Engineering Support (CXP), reveals how by creating a high trust environment, the speed at which you and your team can execute and perform becomes a force multiplier.

Keeping with the theme of transformative tech, BSI talk us through the innovation behind the extraordinary world of immersive auditing, outlining its advantages and the potential for a continuous wave of disruption set to provide deeper client value and change the dynamics of assurance forever.

Also in this issue, we hear from Lockton Re on how its global reinsurance business is benefiting from the deployment of smart solutions that leverage new technologies; speak with the CIO at the Office of Inspector General (a part of the US Department of Health & Human Services); discover advances in the digital approach to identity validation with Okta and get the lowdown from Vodafone on how blockchain has the potential to disrupt telcos.

Enjoy the issue!

Dan Brightmore, Editor

Author

Ammar Akhtar

Published

5 March 2021

Estimated Read time

4Mins

Three years on from Open Banking launched in the UK, let’s look at what we’ve done and where we can go from here…

Earlier this year, UK Open Banking celebrated three years. Since 13 January 2018, regulated third-party providers have been able to integrate with bank APIs to access customers’ financial data, in an effort to break down the barriers standing in the way of seamless data sharing. 


The overarching goal of this new regime was to give consumers and businesses greater visibility and control over their finances, with technology at the forefront of this mission. Specifically, the pioneering Open Banking initiative was created to enable financial technology (fintech) providers to bring innovative new propositions to the SME and consumer market. 


By extension, the users of Open Banking would benefit from products that were better suited to their unique financial situation, enabling them to compare available products in order to find the best deals on the market. 
So, as we reflect on three years of Open Banking, the question is: how much progress has been made, and what’s in store for the future?


Increasing collaboration through innovation 


The introduction of a new requirement for all UK-regulated banks to allow customers to share their financial data with authorised third-party providers introduced a new era of collaboration within a previously segregated market. 

Joined by one overarching mission – namely, to drive innovation and deliver the best possible customer experience – large banks and fintech startups began forming valuable partnerships. Thanks to more efficient data sharing, incumbents, for instance, have been able to integrate propositions developed by fintechs into their own platforms, in an effort to better meet the evolving needs of the customer. 


The benefits to the customer are evident: a more interconnected and open financial ecosystem, which enables them to browse available products and access the right services for their needs. 

Since its inception, Open Banking has served to shift the power to the customer and increase competition within the sector. By utilising new apps and digital platforms, banking customers now have access to a fuller and clearer view of their finances. This allows individuals to budget more effectively, switch products more easily, and generally make more informed decisions. 


Increasing uptake


Since the initiative was launched in 2018, Open Banking adoption among UK consumers and businesses has surged. While generating awareness about its benefits has been a slow process (a recent PwC study found that only 18% of consumers were aware of what Open Banking means for them), the COVID-19 pandemic has driven Open Banking usage. 


Today, over two million users utilise Open Banking-enabled applications and services. This number has doubled since January 2020, with the pandemic likely having a strong influence on the rate of uptake. 


As disruption took hold and personal finances took a hit, many people turned towards online banking and money management apps, in search of tech solutions that could bolster their financial confidence. Since the first lockdown in March 2020, almost one in five (17%) of UK adults have started using an online banking service to help with their money management goals, with this figure rising to 45% among 25-34-year-olds. 


Without the advent of Open Banking, the accessibility and value of such solutions would be questionable. After all, many of these fintech solutions use Open Banking to connect directly to users’ bank accounts to provide a more tailored service. 


At the same time, it has also enabled financial services providers to obtain an accurate and up-to-date view of an individual’s financial situation, as well as their past and present behaviours, in order to deliver more personalised guidance. 

How will Open Banking develop?

Open Banking today generally covers personal and business current accounts, credit cards and online e-money accounts. In the future, the concept will extend to cover all financial markets – from pensions to investments and insurance. 

Now that we have built the underlying infrastructure, it will become easier to build on top of this. More complicated use-cases of Open Banking will begin to develop, with competition from non-traditional players such as fintechs and challenger banks stepping in to provide a range of new services – particularly within industries that previously strayed away from large scale digital transformation.  

As the ability to let information flow between applications continues to improve, new products and iterations of existing offerings will be built, integrated and modified at a much greater speed than before. We will shift away from a closed banking system to one that encourages new aggregators, service partners, and payment providers to add value to existing businesses models, and in doing so, create a range of new customer-centred financial services. 

Examples of innovations that we are already seeing include services that provide personalised advice to banking customers looking to improve their credit score, and applications that enable employees to save directly from their salary. 

We’ve come a long way in the Open Banking revolution, giving consumers and businesses greater control over their financial lives and the ability to choose products and services that work best for them. As we progress further towards Open Finance, this initiative will give customers greater influence over a wider range of their financial data, and offer access to enriched financial services. 

Ammar Akhtar is the co-founder and CEO of Yobota, a London-based technology company. Founded in 2016, Yobota has built a fast, flexible, cloud-native core banking platform, which allows clients to create and run innovative financial products. You can follow Yobota on LinkedIn and Twitter. 

Author

Danny Scott

Published

28 December 2020

Estimated Read time

5Mins

CoinCorner’s CEO, Danny Scott, explains why he believes there is more positive growth set for Bitcoin in 2021

“As we come to the end of what has been an iconic year for Bitcoin, I can only see more positive growth in 2021 and here’s why…

By CoinCorner’s CEO, Danny Scott

Eggs with currency signs in wooden packing on a blue background. Golden egg with a bitcoin sign. Investment concept

“Living and breathing this extremely fast-paced industry and soaking up global bullish news daily means that I’ve forgotten more good news from this week alone than Bitcoin had in years back in its early days.

“Here are a few of the reasons why I’m incredibly bullish on Bitcoin for 2021.”

1. Supply and demand

“Starting simply, Bitcoin is finite and there will only ever be 21 million. Back in May, we celebrated Bitcoin’s third halving —an event that happens roughly every 4 years, halving the supply of Bitcoin coming into circulation —and this year saw it go from 12.5 Bitcoin to 6.25 Bitcoin per block (every 10 or so minutes). There are expectations for what might come after, with history telling us that the Bitcoin price will typically begin to rise significantly (20x+) within the 18 months following a halving — often simply put down to supply and demand.

“While we know the supply is fixed, what about the dynamic demand? This is the part that I feel has been underestimated at each halving, including by ourselves at CoinCorner following the 2016 halving which led to the bull run of 2017. During the bull run, we were signing up a record number of registrations but our system and processes weren’t ready for this, and we weren’t alone. Some of the larger exchanges had to freeze registrations as they couldn’t handle the throughput, while others experienced technical issues with their trading engines locking up and websites going down due to overload.

“This time around though the industry as a whole is better prepared for the predicted 2021 bull run… it’s not perfect, but it’s better.”

Where’s the current demand coming from?

“Compared to 2017 when demand came from the retail market (this will eventually happen again, of course), the current demand is coming from an institutional level completely flying under the radar for many people and it looks set to continue through 2021.

“Roughly 27,000 Bitcoin are mined (brought into circulation) each month and although this may sound like a lot, it’s really not. For context, Grayscale added 32,000 Bitcoin to their portfolio in October, CashApp received $1.6 billion worth of revenue from their customers buying Bitcoin in Q3 2020 and PayPal has entered the cryptocurrency market, allowing customers to buy Bitcoin with full global roll out planned for next year.”

“In October, Microstrategy became the first publicly traded company to add roughly 38,250 Bitcoin to their balance sheet, with Square closely following in their footsteps with a purchase of 4,709. I fully expect to see this trend continue through 2021 as more companies look for the best place to exit their fiat positions and choosing Bitcoin as their inflation hedge asset.

“At CoinCorner, our balance sheet (like many other Bitcoin companies) already holds Bitcoin and this is likely to be a growing trend as inflation begins to kick in due to the current financial climate.”

What about traditional investment?

“Companies aside, traditional investors are also beginning to make their moves. The well-respected Rauol Pal has this year become more and more bullish on Bitcoin and his position, even more recently mentioning that he was going to sell his gold to buy more Bitcoin.

“Another example is Stan Druckenmiller and Paul Tudor Jones — two high-profile billionaires who recently opened up about their Bitcoin investments and how bullish they are for the coming years.

Stan is yet another person to compare Bitcoin to gold as an investment, stating he owns both but believes Bitcoin should outperform gold. He was quoted saying:

“…so I own many, many more times gold than I own Bitcoin, but, frankly, if the gold bet works, the Bitcoin bet will probably work better because it’s thinner and more illiquid and has a lot more beta to it.” — Daily Hodl

“Again, this is a trend we can expect to see continuing as wealthy individuals look to inflation hedge assets.”

2. Previous Bitcoin Halvings

“There are lots of price models and predictions coming out, with Stock-to-Flow (S2F) from PlanB being one of the more popular ones, all ranging in price from $50,000 to $288,000 per Bitcoin in 2021.

“The chart below shows the previous halvings, with the red line indicating our current progress since the halving earlier this year. If it continues to follow the previous trends, we can expect to see the S2F model being somewhat accurate — meaning that $288,000 may not be an unrealistic target price.”

Source: PlanB

3. Coronavirus financial crisis

“Touching briefly on the unfortunate situation the world has suffered this year, the coronavirus crisis had the knock-on effect of causing a long-awaited financial crash in March. This resulted in Government bailouts: the U.S. FED printing $3 trillion (plus another $2 trillion on the way), the Bank of England likely printing towards £1 trillion and many more around the world following suit. Not to forget the introduction of negative interest rates which look to become the norm. Although this may be necessary in their eyes to stimulate the economy and its future protection, this comes with a huge risk of inflation on a scale unseen in these territories before.

“Putting this into perspective, the FED printed $3.9 trillion between 2008 and 2014 during the 2008 financial crisis, and they’ve already surpassed this in 2020 alone, with more likely to come.

“When it comes to financial uncertainty, people look for a safe haven and Bitcoin is becoming this.”

4. Bitcoiners

“61.71% of all Bitcoin in circulation hasn’t moved within the last 12 months. Bitcoin investors have stomached sharp drops greater than 50% this year and still didn’t sell. Bitcoin’s sitting comfortably around the $15,000 — $16,000 region right now and still those coins aren’t moving. Bitcoin investors are here for the long-term, they have strong hands and are preparing for the next 20x.

“This Bitcoiner crowd is also continuing to accumulate and hodl more every day, leaving less liquidity available for newcomers. In turn, this will drive the price. Once Bitcoin pushes past the $20,000 previous all-time high and starts hitting mainstream media again, retail investors will enter just as they did in 2017, but this time with the backing of public global companies, billionaires and hedge funds.”

Online searches for Bitcoin

“A quick look on Google trends for the search term “Bitcoin” shows that interest today isn’t anywhere close to that of 2017, sitting at only 13%. Yet, the Bitcoin price is hovering around 75% and looks likely to hit that $20,000 before the interest spikes again.

“Interest during the 2013 bull run was only 10% of what 2017 became and so, I fully expect the 2021 bull run to peak “Bitcoin” interest in excess of 5x, maybe towards 15x, of what we saw in 2017.”

Source: Google Trends

5. Interesting Bitcoin stats

“Numbers sometimes speak louder than words…”

Bitcoin vs alternative investments

“Comparing Bitcoin to alternative investments over the last 5 years, the trend is the same for 12 years also (the whole lifespan of Bitcoin so far).”

Source: Case Bitcoin

Yearly percentage returns for Bitcoin

“Bitcoin’s history shows that after a halving (2012 and 2016), the price sees an incredible increase in the following year, with the year after that being the only negative years (2014 and 2018).”

2010: 𝟵,𝟵𝟬𝟬%

2011: 𝟭,𝟰𝟳𝟯%

2012: 𝟭𝟴𝟲%

2013: 𝟱,𝟰𝟴𝟭%

2014: -𝟱𝟳%

2015: 𝟯𝟰%

2016: 𝟭𝟮𝟯%

2017: 𝟭,𝟯𝟲𝟴%

2018: -𝟳𝟯%

2019: 𝟵𝟮%

2020: 𝟭𝟮𝟭% (so far)

Is Bitcoin a success?

“The industry has been challenged by a lot of negativity over the years, but as time has passed, its reputation and sentiment has grown stronger.

“At what point do we call something a success? 10 years? 20 years? What if it fails in 70 years time? Would that make Bitcoin a failure? No, it would mean that it’s had its time and something better has surfaced.

“Personally, I’ve gone past the stage of treating Bitcoin like an experiment, or wondering when it will be considered a success — I already see Bitcoin as a success.

“The Bitcoin community is continuing to build a decentralised monetary future and this is only the beginning.”

Author

Tim Hardcastle

Published

26 December 2020

Estimated Read time

5Mins

Tim Hardcastle, CEO and Co-Founder of INSTANDA, on what will be top of mind for insurers in 2021 and why technology will be critical

“Insurance is the industry of risk. But the depth and breadth of COVID-19 – its impact on society and the economy – was not in insurers’ near-term planning models this year. Insurers and their customers enter 2021 in a world transformed. Physical and mental barriers have deteriorated. Walls separating businesses from customers have collapsed, with the discovery that digital can strengthen customer relationships.

By Tim Hardcastle, CEO and Co-Founder of INSTANDA

“As we enter this new world, insurance must reboot and reenergise. Reboot their business development plans, by investing in sophisticated digital tools and partnering with organisations that accelerate innovation. Reenergise their propositions and offerings, so their products continue to excite and stimulate customers.

“In practice, this means focusing on two areas: personalisation at scale and differentiation through digital engagement. Think Netflix and Disney plus, but in insurance. 

“There is a more urgent pressure behind this need: cost. To avert another drop in earnings, insurers need to accelerate their digitalisation plans so they can take full advantage of reducing costs to industry leading levels of less than $1 per policy.  

“What surprises could 2021 have in store? A potentially unavoidable one is the rapid acceleration of contextual or immersed insurance. Where customers buy insurance through another retail or business interaction – say, a new TV in Tesco – and insurance is embedded and sold through that. This not-so-surprise will bring new businesses challenges that only digital platforms can help solve.

“Another area which is exciting in the year ahead is the industry’s appetite to develop wider service-based offerings, such as pet and cyber insurance which provide extensive service wrappers. A pet wrapper, for example, may include advice on pet health and best practise to keep your pet healthy, with the aim to reduce bills and the insurance claim. This reflects the recognition of serving customers with a wider proposition than simply the claim pay-out.

“Our own business has adapted to respond to the challenge’s insurers faced this year. We’ve accelerated our plans to add more capability to the platform, such as launching our integration marketplace and digital billing and claims. We’ve done so in anticipation of a greater need from insurers to be braver in their approach to meet customer demand.

“Finally, I think the industry can expect a rebounding next year. There has been a downgrade in analysts’ predictions of 2020 results for several major players, as revenues slipped and claims increased. But we are also seeing rate increases in other segments so we anticipate 2021 earnings will rebound.  

“2020 has brought a year of surprises to an industry that has dealt with some of the worst kinds of surprises, for centuries. A lesson it has taught – as surprises often do – is the necessity of adaptability; to be able to respond to customer demand and regulation, quickly.

“To prepare for this new year, organisations need to look at their existing infrastructure and business models and ask themselves: am I ready?”

Author

Dale Benton

Published

22 December 2020

Estimated Read time

5Mins

The ‘Financial Sector, Threat Landscape 2020’ report revealed five top security challenges that the financial sector are currently facing, the risks of future threats, and how to spot these risks before it is too late. Here, CPOstrategy takes a closer look…

We are no stranger to the notion of cyber security, but one industry that suffers the most from cyber security threats is the financial secretary. Key security measures within the sector have evolved dramatically with the likes of key codes, two factor authentication, voice ID, behavioural analysis, one-time passcodes, protective messaging and digital fingerprinting. 

1. Ransomware

Amazingly, the term “ransomware” was only added to the dictionary three years ago. In that time however, ransomware has increased dramatically in terms of the frequency of incidents and the range of methods used to conduct them. Let it be known that the attackers are extremely sophisticated. Once they have your data, who’s to say that your data will be given back or decrypted even if you pay up. Worse still what’s stopping them coming back to attack you again?  The report found that once an attack is made, the bad actor will sell the details on to their associates to go after the victim again after deployment, because the payload can still be there, activated and deactivated.

2. Internal Threats

The report takes a look at the Verizon, 2020 Data Breach Investigations Report (DBIR) where it shows that ‘employees’ mistakes account for roughly the same number of breaches as external parties who are actively attacking’ the organisation. Now isn’t that terrifying? Misdelivery within the company, by which information has inadvertently been sent to the wrong person, stands tall as one of the most common issues when it comes to the notion of insider threats. Next time you forward an email or send one to the wrong person/recipient, click on the wrong mailing list, that’s a misdelivery. In the interests of fairness, misdelivery is almost always accidental and non-malicious, but the effects can be devastating. Especially if sensitive data is inadvertently shared to the wrong recipient.

3) App Developments

There’s an app for that. There really is. Apps in the investment and finance space have grown substantially in 2020 which is of course a good thing, as the ability to invest online is quick and easy, and accessible to all. But, with demand comes rushed development. Many of these apps were developed quickly and quite frankly are not ready for cyber-attacks. So that means no two-factor authentication, no protection from appropriate regulations, are not patched or maintained properly, and do not have contingency plans in place to mitigate the effects of a cyber-attack. What that means then is personal information of app users is relatively easy to steal and sell. This can be done by creating duplicate fraudulent apps to trick the user. On these duplicate apps, the imagery and language of the genuine app is mirrored. Once the personal information is supplied, all the money involved  (real and virtual) is up for grabs. And so begins the circle of ransomware life.  

4) Third-Party Risks

Few organisations work on their own. Quite rightly too. Think about third parties that they use. Vendors, partners, email providers, service providers, web hosting companies, law firms, data management companies, subcontractors. The list goes on. They are all essential to business operations and a lot of these third parties share IT systems and even sensitive information through legal teams so it goes without saying that third parties may very well be an open backdoor into your financial systems for attackers to infiltrate.

5) COVID-19

Yep, even cyber crime has been affected by COVID. It is that unavoidable. Cyber criminals are continuing to target the financial sector even during the pandemic. There has been quite the spike in cyber attacks on banks, financial organisations and the third parties connected to them. Going back to simpler times before COVID-19, if an attacker wanted to sabotage a company or steal data, they would target the business itself. They’d aim their sights at the website, the social accounts, the logins and all their vulnerabilities. In response, organisations had counter measures in place. But now, you just need to target a single remote worker and the house of cards comes tumbling down.

Author

Nell Walker

Published

14 October 2020

Estimated Read time

3Mins

While the virus has presented many challenges, it has also opened up opportunities for increased industry security and customer relationships. Agnė Selemonaitė, Deputy CEO at ConnectPay, explains.

1. Increased industry security

Banks and other financial institutions have been a major target for scammers since the beginning of the pandemic; in fact, cyberattacks between February and April alone spiked an astonishing 238%. The increased volume of threats has encouraged companies to face the situation head-on and implement new safeguards.

“Putting more safeguards in place will benefit market players long after the crisis has blown over, as market players will be better equipped to deal with the constantly evolving digital threats,” says Selemonaitė.

2. Growth of digital payments market

Alongside the World Health Organization encouraging us to go cashless, the crisis has stimulated the growing amount of e-payments. Selemonaitė notes Sweden’s example: amidst the uncertainty, Sweden’s central bank signed an agreement to gain access to EU TIPS platform, which will act as the basis for the country’s own platform for instant payments.

“Sweden’s approach shows that in order to be in a better spot to satisfy increasing demand for faster, more convenient services – you need to be proactive,” Selemonaitė explains. “We follow this approach too; having realised our clients’ needs for greater options amidst quarantine, we integrated more payment methods into our Merchant API.”

3. Accelerating digital banking development

As banks had to severely limit their working hours during the lockdown, digital banking picked up the slack to accommodate the financial needs of people working from home. “As the new wave of customers sieged the system, faster development of banking services took precedence,” says  Selemonaitė. In the US alone, over 45% of people have changed the way they bank amidst the crisis, and according to a European customer survey by McKinsey, there has been a 20% increase in digital engagement.

4. Enhanced customer experience

The aforementioned McKinsey survey showed that people who are highly satisfied with their digital banking experience are two-and-a-half times more likely to open new accounts with their existing bank than those who are just just satisfied. The aftermath of COVID-19 is expected to continue down the path of developing simplified UX to attract and retain clientele.

“Although requiring meticulous work, constant UX evaluation can greatly benefit product credibility and client retention, for instance, our first UX update led to doubling our monthly conversions,” says Selemonaitė. “It is likely that we will see a more customer-focused approach in the post-crisis industry too.”

5. A catalyst for fintech companies

The ’08 financial crisis gave a boost for the fintech industry, as, at the time, people were losing trust in the system, and in legacy financial institutions. In the aftermath, some entrepreneurs parted ways with the concept of traditional banking, aiming to present the market with a more technologically sophisticated solution.

“This time, the crisis could have an even greater impact for fintechs, as well as regtechs, as they rely on solutions fintechs can develop,” adds Selemonaitė. “Unfavourable circumstances drive the need to innovate across interconnected sectors.”

Author

Kevin Davies

Published

3 October 2020

Estimated Read time

5Mins

deVere Group reports that enquiries for Vault, its global money app and card service, has experienced a jump in enquiries of 67% in Quarter 3.

Growing demand for green, paperless banking and fears over post-Brexit rule changes have triggered a “monumental surge” in enquiries for money and challenger bank apps, reveals one of the world’s largest independent financial advisory and fintech organisations.

deVere Group reports that enquiries for Vault, its global money app and card service, has experienced a jump in enquiries of 67% in Quarter 3. 

The cutting-edge app allows users to deposit, store, transfer and exchange money in most major currencies.   The deVere Vault Prepaid Mastercard®️ can be used online, in-store and at any ATM location across the globe where Mastercard®️ is accepted.

Nigel Green, CEO and founder of deVere Group, which launched Vault in 2017, comments: “The monumental quarter-on-quarter surge for banking-style apps is, we believe, attributable to two main drivers.

“First, individuals and companies are increasingly embracing and expecting green, paperless banking. 

“This is partly fuelled by the pressing need for us all to drastically reduce waste and better protect the environment – something the pandemic and issues such as raging wildfires has collectively focused minds on – but also because a paperless system is, typically, a more convenient and efficient one.

“Traditional banks have a long way to go to catch-up with tech-driven challenger banks and fintech [financial technology] firms, which are intrinsically much greener and are leading the charge to a paperless future.”

He continues: “The other major point driving engagement with e-money apps in Europe specifically is that many of the UK’s banks are set to abandon their customers, by closing their accounts and stopping use of their services across Europe within weeks unless they have a valid UK address.

“Under post-Brexit rules, it becomes illegal for UK banks to service customers living in the EU without applying for new banking licences.

“This will cause significant disruption for many individuals, families, businesses and other organisations. 

“As such, people are flocking to firms that already operate under pan-European rules.”

The massive jump in enquiries, says Mr Green, underscores that “fintech is the future of finance” – not only for clients’ convenience and efficiency but also, in a large part, because it is more environmentally sustainable.

The deVere CEO concludes: “For Millennials and Gen Z clients especially there’s been a radical shift toward ‘less stuff, more impact’ in banking and financial services.

“And this is just the beginning of this global and far-reaching trend.”

Author

Nell Walker

Published

25 September 2020

Estimated Read time

5Mins

Nell Walker talks to James Shanahan, CEO Revolut Singapore, regarding a new dawn of digital banking

“By re-conceiving the infrastructure of a bank, the way that a bank delivers its services, you can take an order of magnitude off the cost and you can bring a level of experience to the customer that’s not hamstrung by old tech, by old thinking, by siloed approaches…” James Shanahan, CEO of Revolut Singapore

Author

Jim Logan

Published

18 July 2020

Estimated Read time

4Mins

Understanding what it isn’t is just as important as understanding what it is, says Jim Logan who has nearly three decades of experience in financial services and technology…

I’ve been working in the financial services space for close to thirty years now. I’ve seen many trends and technologies emerge. Some take hold, several are just a flash in the pan. Regardless of how long a concept sticks around, one thing remains: Terminology plays a material role in shaping perceptions. In a world where messaging tends to over complicate things, too many acronyms and too many buzzwords all work against what should be the primary objective: clearly illustrating value. I’ve found this to be equally true when it comes to artificial intelligence or ‘AI’.

Generally speaking, the word artificial doesn’t readily call to mind a positive image, does it? By definition, the word “artificial” has listed meanings of, “insincere or affected” and “made by humans as opposed to happening naturally.”  It is the second part of this definition I’d like to explore a bit further.

Artificial Intelligence is, in fact, created by humans. And it isn’t a new fad or concept. Many don’t realize that the term was first coined by John McCarthy, Ph.D. and Stanford computer and cognitive scientist, back in 1955.  AI has continued to evolve as a material concept, with practical applications across many industries, ever since.

For financial service professionals, particularly those of us involved with fighting financial crime and preventing money laundering, AI can have tremendous impact and practical application.  Before we dive a bit deeper, I feel it’s important to first understand what AI isn’t.

AI is not intended to simply be a digital worker, certainly not within financial services and fighting financial crime. Yes, AI can automate various functions. We’re all familiar with the concept of ‘bots’ and virtual assistants. However, those are rudimentary examples of robotic process automation. True AI is human led and a continuous, instantaneous learning process that drives tangible value. AI is not merely a play to cut costs or replace human capital. Rather, AI enhances the bottom line by keeping compliance staff costs flat in the immediate term and enables our human experts to more appropriately manage their time, by focusing talent on investigations that matter the most.

One of the most valuable aspects of AI, in the context of anti money laundering and compliance, is the speed by which it can be deployed. We’re talking about time to market and time to value in a matter of weeks. Not months, not multiple quarters – simply weeks. But I don’t mean a generic, black box concept. I’m specifically referring to a highly precise, tailored AI solution that has extensive proof points and, more importantly, far-reaching global regulatory approval.

AI shouldn’t simply be an extension of legacy rules-based routines, nor a way to further automate the process of scoring or risk weighted alert suppression. That simply dilutes the true value of AI, and does not maximize the cost and efficiency benefits.

The cost of compliance continues to grow at a staggering pace, particularly for financial institutions and insurance companies. Equally of concern, the impact of fines for non-compliance has also skyrocketed in the last decade. Specifically to the tune of $8.4 billion last year across North America alone.

What if you could literally solve every single name screen, sanction, and transaction alert? What if you could achieve this without sacrificing any aspect of control and security? What if you could increase the throughput, efficiency and accuracy of your compliance operations without adding a single dollar of staff expense to your budget?

Let’s stop talking in terms of what if and have a meaningful conversation regarding how. I’m helping clients achieve all of these measures today and that is from a perspective proven in production. Here at Silent Eight we’re a team founded by engineers and data scientists, solving real world challenges in the anti money laundering and financial compliance market.

Artificial Intelligence isn’t scary…it isn’t a black box…and it isn’t the futuristic world of tomorrow – it is the here and now, and it’s battle tried and tested.

Author

Andrew Woods

Published

26 April 2020

Estimated Read time

5Mins

Traditional banks will fall even further behind in market share and customer experience due to the global coronavirus pandemic, warns the CEO of one of the world’s largest independent financial advisory organizations.

The comments from Nigel Green, founder and chief executive of deVere Group, follow research that the use of financial apps is up by 72 per cent since mid-March.

Mr Green observes: “The pandemic has accelerated those trends that were already shaping business. These include greater inclusion of tech into our every day lives.

“Coronavirus has ushered in a new world, with digitalization and new technologies fuelling the changes. This can be seen by demand soaring for video-calling platforms such as Google Hangouts, Skype, FaceTime and Zoom amongst others, as more people than ever work remotely.  

“It’s also underscored by the increasing use of fintech apps which allow users immediate, on-the-go, 24/7 access to, use, and management of their money.”

He continues: “There’s a historical precedent for what’s happening now.

“Banks and other traditional financial services providers were, in most cases, spectacularly caught off guard by the 2008-2009 financial crash.
 
“As they found their way into a new world with a new regulatory landscape and new customer expectations, business and tech developments were way down their to-do list. They were in survival mode.

“This is when agile, tech-driven challenger banks and fintech firms swooped in to fill the void left between what traditional financial services companies, especially the traditional banks, were offering and what customers were expecting, especially in terms of customer experience.”

Mr Green goes on to add: “The fintech firms, which offer mobile banking, savings and investment apps, and peer-to-peer lending, amongst other services, now have a decade of development, experience and expertise over many traditional banks.

“As even more people are now embracing fintech due to Covid-19-triggered social distancing, isolation and lockdowns, and as the apps are growing in popularity due to their convenience, increased security, and as people become ever-more tech-savvy, it’s likely that ‘bricks and mortar’ banks will fall even further behind in market share and customer experience.”

The deVere CEO concludes: “Coronavirus is going to further disrupt the wider banking sector. It will act as another catalyst for people to seek fintech alternatives to access, manage, use, save and invest their money across the world.”

Author

Andrew Woods

Published

17 March 2020

Estimated Read time

5Mins

One of the world’s largest independent financial advisory organisations is offering free financial advice to anyone in the world on a remote basis as social distancing is universally embraced as the best tool to fight coronavirus.

deVere Group, which operates in more than 100 countries worldwide, is launching its Contactless Advice service with immediate effect.

The chief executive and founder of the $12bn organisation, Nigel Green, says: “We are launching Contactless Advice now – which is an industry first – for four clear reasons.

“First, social distancing is currently the only tool available to fight the spread of the coronavirus. As such, more and more cities, regions and countries are going into lockdown and people into enforced or self-imposed isolation to help fight Covid-19. This means that they might not be able to see their financial adviser face-to-face as they do ordinarily.

“And second, the economic landscape is shifting. The global economy is facing a short and deep recession. As always, new industries will emerge and, of course, there will be winners and losers in terms of sectors, jobs and wages – and this will, naturally, directly impact people’s finances. 

“Third, we’re moving towards an era of negative interest rates, which will affect people’s investment decisions, amongst other financial matters.

“And fourth because the ongoing volatility will present challenges that will need attention, but also major – perhaps once-in-a-generation – buying possibilities and ways to shore-up your retirement income.

“Against this backdrop, in order to create, build-up and safeguard their wealth as the world adapts to a new era, investors should be revising their portfolios to ensure they mitigate risk and take advantage of the opportunities.”

He adds: “Using a combination of existing technology, and our industry-leading applications, we’re able to offer unparalleled financial advice from the comfort of your home. 

“In these trying times we must all play our part, by removing physical interactions from our services, you can have peace of mind that your health, and your wealth will remain secure.

“The free Contactless Advice service will include a wealth scan in which you and your professional adviser will discuss your financial objectives and answer any questions you may have; a fact find in which your adviser will discuss your current financial situation with you; and a customised report which your adviser will analyse and discuss with you and outline your recommended next steps, if any are needed. 

“Moving forward, using our pioneering app, you’ll be able to track your entire portfolio and financial strategy in real time and book an e-meeting with your adviser, should you have any queries.”

The deVere CEO adds: “The world is changing fast and a short coronavirus-triggered global recession and the subsequent recovery will have lasting and far-reaching consequences for people’s wealth.

“Experts agree that very seldom is it a good idea to take a DIY-approach to something so fundamental to your life as your finances. With the financial and economic landscape shifting and evolving so rapidly, this, I suggest, is certainly not the time. 

“With this free service that offers professional, independent advice, there’s no need to do that.”

Mr Green concludes: “The ground-breaking Contactless Advice is designed for today’s world and with client experience and outcome expectations front and centre.”

Author

Tim Hardcastle

Published

27 February 2020

Estimated Read time

4Mins

CEO & Founder of INSTANDA, Tim Hardcastle, discusses how businesses leveraging technology are speeding up processes, increasing flexibility, reducing costs,…

CEO & Founder of INSTANDA, Tim Hardcastle, discusses how businesses leveraging technology are speeding up processes, increasing flexibility, reducing costs, freeing up resources and driving profits.

February 2020 brings with it the first leap day in four years, gifting us with a whole extra day of precious time. With this theme in mind, I asked myself: what could be achieved within the insurance industry if only we had more time?

The greatest challenge facing insurers and their time is inflexible technology solutions and legacy platform constraints. Whether it is by limiting the ability of insurers to improve existing processes, or to develop new ones, the legacy systems still used by the industry today waste time, create congestion and frustration, and simultaneously, stall improvement and progress.

But technology offers a solution. As we’ll explore, we see insurers increasingly challenging the constrains of time and, through the use of technology, they are beginning to set the path of a more streamlined, reliable and efficient way of doing business. In this article we show the businesses doing just that and outline the impact it’s having: speeding up processes, increasing flexibility, reducing costs, freeing up resources and driving profits.

Bringing products to market in record speed: Hiscox

The ability of digital platforms to drastically reduce time to market is not a new concept. But what speeds are we talking? Hiscox are leading the way when it comes to distribution and responding to market need. Hiscox’s car product in Germany for example was built in just 10 weeks and the second product, with more channels, was built in just 6 weeks.

Through the use of INSTANDA’s no-code technology, Hiscox has been able to create their own ‘agile product factory’. This means Hiscox have a team of in-house and partner configurators who are adding more books, building new products and making changes whenever the business requires it.

Increasing flexibility and driving innovation: Imperium

Imperium aims to empower its customers by making specialist products easy to purchase. This requires them to get highly tailored products out to brokers, proactively anticipate customers’ needs and respond to market changes – quickly.

But thanks to traditional systems, it often takes months to make adjustments to existing products, let alone build a new one. Implementing a digital pathway by working with INSTANDA allowed Imperium’s trained super-users to transform to product-build mode.

In the days following a new product launch, Imperium can now react immediately to broker feedback and make changes to their questions and rates within the hour. And for the management team, it has dramatically reduced the time spent with systems providers. Imperium can now spend time developing the business and fine-tuning their offerings.

Saving customers time: Aviva

It’s not only the product teams and insurers that benefit either, but the end consumers too. Aviva’s recent deployment of INSTANDA’s no-code platform to introduce innovative life and health cover offers a useful case in point. Aviva found that medium sized enterprises (SMEs) were citing product cost and lack of staff and resources as the two biggest barriers to managing insurance.

Using INSTANDA Aviva can deliver a solution that offers a flexible, highly tailored, yet simplified protection insurance for small businesses.

Driving efficiency: Top 5 global insurer

When it comes to speciality lines, time is complex. Combined with the limits imposed by legacy IT processes, they are additionally challenging given their complexity and diversity. As a result, many are manually run and slow as a result.

In this insurer’s case, despite a number of efficiency efforts their operational model was only able to assess and quote on 12-15% of the 10,000+ submissions received without increasing headcount.

However, in just eleven weeks, the team worked with INSTANDA and Deloitte to digitise the process, enabling the business to significantly increase the size of their book without increasing headcount.

Speeding up the process increased the potential for efficiency and growth by reducing costs, improving customer (broker) experience and thereby providing an opportunity to maximise profits.

Leaping ahead: A lesson in bettering insurance industry

The ability to free up time and resource is integral to insurers looking to revitalise and grow their business – and the only way that the insurance industry as a whole will be able to leap forward.

As the above examples demonstrate, we’re helping companies make the most of their time and create more of it as a result. Through technology, insurers are enabled to quickly build the products they know customers want whilst development teams are freed up, so profits can be maximised. Moreover, customers are increasingly empowered through easy-to-purchase, personalised insurance products delivered in never before seen timescales.

With technology, the insurance industry can leap forward on its own, without an extra calendar day.

Author

Andrew Woods

Published

7 February 2020

Estimated Read time

5Mins

Read the latest issue here! Our cover story this month features an exclusive interview with Jon Davis, CTO of Village…

Read the latest issue here!

Our cover story this month features an exclusive interview with Jon Davis, CTO of Village Hotel Club, who reveals how a digital transformation future-proofs a technology infrastructure. Village Hotels is currently undergoing a major digital transformation journey in order to better serve the modern guest and offer a digital ready experience like no other. Village Hotel Club operates 30 hotels across the UK and by its own admission, its hotels are “much more than a bed for the night – they are a place to meet, socialise, work and get fit” – a clear sign that the business understands that the guest experience has changed massively.

We also have a revealing interview with Bill Barry, Vice President of Procurement and Sourcing at Access, one of the fastest growing paper and digital document services and storage providers in the world. Barry, upon joining the company in 2018, was tasked with a vision of building out a best-in-class sourcing and procurement function, developing and implementing the policies and procedures in order to achieve that vision.

Elsewhere, we catch up with UBS CIO Mike Dargan and Carlo Aquilina, CIO of Maltese construction giant Vassallo Group. Plus, we list all the top events and conferences from around the world and highlight five top tech innovators to look out for in 2020.

Enjoy the issue!

Author

Kevin Davies

Published

23 January 2020

Estimated Read time

5Mins

Davos delegates urgently need to make a big, bold commitment this year to fintech, affirms the CEO of one of…

Davos delegates urgently need to make a big, bold commitment this year to fintech, affirms the CEO of one of the world’s largest independent financial services and advisory organizations.

The rallying call from Nigel Green, founder and chief executive of deVere Group, comes as world leaders, CEOs, academics, influencers and celebrities head to the Swiss mountain resort of Davos for the 50th annual World Economic Forum (WEF), starting Tuesday.

Mr Green comments: “As it celebrates its landmark 50th year, the World Economic Forum 2020 has the opportunity to champion and enhance the transformation of business, which has been dubbed the ‘Fourth Industrial Revolution.’

“We’re living through a pivotal moment in history in which increased and advancing technology is monumentally and profoundly changing the way we live, do business, and interact with one another.” 

He continues: “We can clearly see seismic shifts happening in the financial services industry – a sector trade and commerce is deeply reliant upon.

“The vast majority of this change is being driven by financial technology, or ‘fintech.’  Mobile banking and investment apps, peer-to-peer lending, cryptocurrencies like Bitcoin, robo-advisers, and crowdfunding are all part of this fundamental shake-up of the space.”

Mr Green goes on to add: “The momentum and energy of this evolution now needs to be harnessed by delegates in Davos.  

“They need to commit to fintech by using their time, energy and resources for its research and development for three principal, positive reasons.

“First, it benefits society. Fintech can speed up the pace of global financial inclusion. It can provide access to financial services for millions of people who live in remote areas and/or who might normally not be able to use financial services because of historical biases of traditional financial companies. Helping individuals, firms and organizations successfully manage, save and invest can only result in better, stronger and more stable communities for us all.

“Second, fintech offers companies the opportunity to be agile, to diversify, to cut costs, and to meet regulatory requirements all whilst improving the client experience. This will help them thrive in rapidly challenging times of change and disruption.

“And third, the revolution is happening with or without them. As consumers, we increasingly want all our financial services needs to be dealt with online and/or on their mobile devices. We demand personal service and instant access anywhere and at any time. This trend is only set to grow as we all become increasingly dependent on tech.”

The deVere CEO concludes: “Davos 2020 is the ideal forum in which to unite the best political and business leaders to galvanize the positive potential of the fintech revolution.

“With a slowing global economy, it is an opportunity that the world cannot afford to miss.”

Author

Dale Benton

Published

24 December 2019

Estimated Read time

8Mins

Jim Marous, internationally recognised financial industry strategist, and the publisher of the Digital Banking Report and Sonia Wedrychowicz, an experienced…

Jim Marous, internationally recognised financial industry strategist, and the publisher of the Digital Banking Report and Sonia Wedrychowicz, an experienced technology transformation professional of over 25 years discuss how digital transformation is more than merely technology while exploring the leadership and cultural issues surrounding digital transformation in banking.

How do you feel the conversation around technology has changed? Are businesses now driven more by technology and IT than ever before?

Sonia:

First, we need to understand that, in the last couple of years, the way people consume, communicate and commute has changed dramatically, and is increasingly being delivered using digital channels. In today’s world, the vast majority of our daily lives are supported by technology. So, by definition, all companies, including banking, are becoming technology companies. That realisation, however, is not universal yet, and in many organisations, I can still see the business and technology running separately. The transformation efforts focus on modernisation of the platforms on the technology side, and the digitisation of the customer experience on the business side, while the two functions, in my opinion, should work as one team with the common goal, driven by customer obsession.

Jim:

Financial organisations do know what they need to do. They do understand the technologies that have to be embraced, but the challenge is they’re not very far down the digital transformation process. This is a concern, given that the industry is moving so fast in the digital space. A lot of organisations have seen digital transformation as the purchase of technology and the implementation across different initiatives. This is opposed to an overarching perspective of digital transformation that really starts from the inside out, and looks at processes and programs, culture and leadership and then builds technology against that. We’re seeing a big challenge with regards to leadership and culture, and without that, the implementation of technology will probably never see its full optimal implementation.

How common is it that across different businesses in different industries, in different capacities, digital transformation means something different to each and every person and organisation? And how do you go about unifying it in a way that makes sense to everyone?

Jim:

When you’re talking about digital transformation, and you’re combining that with the financial services industry, it’s more difficult. You look at organisations that are going to need to embrace change, take modified risks, and actually disrupt themselves, and that’s not in the comfort zone of financial institutions. It’s the opposite of the legacy culture that’s been in play before.

Sonia:

There is a lot of misunderstanding regarding the difference between digitisation, digitalisation and transformation, and it comes to the old rule that people have the tendency to always see these things as the same, although they are actually different. There is a very common misconception of digital transformation, which is disruptive, and challenging the status quo, with change management, or restructuring, which is basically more of the same, but more lean and efficient.

A good example of this is centres around the difference between the process of digitisation versus digitalisation itself. Digitisation is all about making the current process, or product, digital without truly reimagining it. The same process can, however, be digitalised, rather than digitised. The digital transformation is being trivialised by being understood as bringing new technologies into place without truly reimagining the customer journeys, the customer experience, and actually making it much simpler and more transparent for the customers.

What are some of the biggest challenges and barriers to embracing digital transformation and embracing these new technologies?

Sonia:

The emergence of efficient fintech companies offering different banking services, not only cheaper, but mostly through an amazing, simple and friendly customer experience. The existence of banks is under a serious threat. Interestingly enough, the threat level varies in different parts of the world and so banks need to accelerate on the path of reimagining themselves, in order to keep pace with the emerging competitors who are, these days, coming from industries that were never associated with banking before.

Jim:

I think the biggest challenge we’re going to see, and the reason why banks right now are starting to rethink their complacency, is not because of the revenue, but because of the threat, while we’ve been thinking about what’s going to happen in the future, and what’s going to happen in the fintech banks and the challenger banks. To the large tech companies that is the biggest challenge.

The threat is real. The consumer’s going to start demanding more and more of their financial institutions. A consumer can now change a financial provider, invisibly. They don’t have to come into the branch anymore. They can do it with a click of a button on a phone and they can change their financial relationship. What we have to do is realise that there’s a major threat out there to financial institutions that sit back and hope that it’s going to be business as usual.

How important is it, during a transformation and during change, that you are keeping the customer at the very heart of everything you do?

Sonia:

Never focus on your competition. Always focus on your customer. For years we’ve been completely ignoring the customers and looking at what the competition was doing in order to keep pace. By focusing on your competition, you’re always going to be one step behind them. Technology-enabled tools are allowing us to be much closer with the customers without seeing them and even talking to them, but just focusing on how they behave, what they do, how they react to the different propositions we are giving to them, and whether it results in increased business generation.

Jim:

I think part of the difficulty with transformation is transparency. We get updates on our mobile apps from many organisations, updating you that changes are being made. It doesn’t happen that frequently in the financial services space because the communication isn’t there. There are a lot of organisations that believe: if you build it, they will come. The reality is, that’s not the case. We need to provide more information upfront and do a lot more research to find out what the consumer wants. What they’re looking for is simplicity and a lack of friction, and really what they’re hoping for is that the financial institution is going to know them, look out for them, and reward them.

Jim, you mention that non-financial institutions are now dominating the payment space, how is that impacting the decision-making and the approach to technology?

Jim:

Financial institutions are looking at the fintech companies because those companies looked at the digital companies and asked, “How can we take customer insight, AI, and digital technologies to make better experiences?” In every case twe’ve seen, what the competitors and non-traditional competitors have done is built solutions. They take data, insight, and technology to provide a seamless experience built on a digital platform, and that’s a very important component, because being built on a digital platform means that they’re not building on legacy infrastructure. The tech companies have streamlined the application process for loans or for a credit card because it builds on a tech platform.

 The case studies that we see going forward are coming from the fintechs, and I think traditional financial institutions are going to build more and more partnerships, because bankers can’t get out of their own way, and they really can’t build something that they’ve never done before.

Sonia:

When I look at the big fintech companies and companies like Amazon, I think they’re being watched closely by the banks for their customer obsession, delivered by technology. When it comes to small fintech companies; it’s very interesting. They are providing solutions on untested but interesting technologies like blockchain or AI. Once those technologies became more established, expertise will rise. So, they are not using the fintech start-up companies to integrate those solutions any more, but they want to have this expertise in-house.

Talk to me about the importance of bringing people along on these journeys, and in these transformations, and not necessarily equipping, re-equipping them with these new skills and new capabilities in order to drive the business forward.

Jim:

This is probably the biggest challenge that the banking industry is going to face. We do not have a large knowledge space of digital mind-sets in the marketplace and that includes everything from digital applications of AI, to just how the technology and coding works. There’s a major weakness. But just as big is how do we reach for the people internally, because when you talk about automation, robotics and AI, there’s going to be, if not an elimination of jobs, a transformation of jobs into new sets. So, we’re going to have to take it upon ourselves as an industry to retrain people across the organisation, so they’re prepared for the future. The challenge is, not many organisations right now are doing it.

Sonia:

I also think that a big challenge of the traditional organisations today is to attract young people. The attraction of the old conservative companies is fading away in favour of the Apples and Googles of this world. People are joining the new technology companies not for free food and gym on the premises, but for the ability to constantly learn new things. The financial institutions need to develop the leaders of the future. They need to reimagine, not only their equipment policies, but more importantly, change their hierarchical structures within the organisation to ones that are powered by people who are more willing to listen, with employee empowerment that is bringing the customer experiences of change much closer to where the customers are.

If you could give one piece of advice on how to be successful in these disruptive times as a professional in the financial space what would it be?

Sonia:

Keep reinventing yourself and have the courage to unlearn what you learnt in the past. Constantly learn new things. Brains change, so surround yourself with young people, as they will become your bridge between the past and the future.

Jim:

We have an industry filled with legacy bankers that have been in this industry for a very long time and have done very well in most cases. What we need to do is to look and say, “How can we, as people in organisations, build a culture that will make it so that organisations can truly be part of the future?” The future will happen very quickly, as will the impact of not making changes. We have to do better.

Author

Kevin Davies

Published

14 November 2019

Estimated Read time

5Mins

The Monetary Authority of Singapore (MAS) announced on Monday that it has set up a US$2 billion green investments programme…

The Monetary Authority of Singapore (MAS) announced on Monday that it has set up a US$2 billion green investments programme (GIP) to invest in public market investment strategies that have a strong green focus.

This will help to support the Singapore financial centre in promoting environmentally sustainable projects and mitigating climate change risks in Singapore and the region.

The GIP is a major prong of the green finance action plan announced by Mr Ong Ye Kung, Minister of Education, and Board Member, MAS at the 2019 Singapore FinTech Festival (SFF) x Singapore Week of Innovation and TeCHnology (SWITCH). The GIP aims to foster the growth of a strong and diverse ecosystem of green financing capabilities in Singapore.

MAS will place funds with asset managers who are committed to drive regional green efforts out of Singapore and contribute to MAS’ other green finance initiatives including developing green markets and managing environmental risks.

Selected managers will be those who have demonstrated a firm commitment to deepening their green investment capabilities across functions such as research, stewardship, policy and portfolio management, accelerate local capability transfers, and increase the management of green-focused funds in Singapore.

The green capabilities and experience of the team managing the strategies will be a key part of the evaluation. The deep engagement with these asset managers will help to further the development of Singapore’s green financing ecosystem, as well as strengthen MAS’ understanding of climate change risks and to better position MAS’ own investment portfolio for long-term sustainable returns.

MAS’ first investment under the GIP will be a US$100m placement in the Bank for International Settlements (BIS)’ Green Bond Investment Pool (GBIP). Together with other participating central banks, MAS hopes that this initiative will help catalyse further deepening of the green bond market.

Read similar stories…

Author

Kevin Davies

Published

13 November 2019

Estimated Read time

5Mins

The Monetary Authority of Singapore (MAS) has led the successful development of a blockchain-based prototype that enables payments to be…

The Monetary Authority of Singapore (MAS) has led the successful development of a blockchain-based prototype that enables payments to be carried out in different currencies on the same network.

This prototype network, developed by MAS in collaboration with J.P. Morgan and Temasek, has the potential to improve cost efficiencies for businesses.

It is currently undergoing industry testing to determine its ability to integrate with commercial blockchain applications. The applications that were tested successfully will be showcased at the Singapore FinTech Festival and Singapore Week of Innovation and TeCHnology (SFF x SWITCH) 2019, which kicked off on November 11.

This development marks the latest milestone for Project Ubin which is into its fifth phase. Building on the work of Phase 4 of Project Ubin, the payments network will provide interfaces for other blockchain networks to connect and integrate seamlessly.

It will also offer additional features to support use cases such as Delivery-versus-Payment (DvP) settlement with private exchanges, conditional payments and escrow for trade, as well as payment commitments for trade finance.

Beyond technical experimentation, the fifth phase of Project Ubin sought to determine the commercial viability and value of the blockchain-based payments network. To date, MAS and its partners have engaged more than 40 financial and non-financial firms to explore the potential benefits of the network.

John Hunter, Global Head of Clearing and Interbank Information Network (IIN), J.P. Morgan, said: “J.P. Morgan is excited to be an infrastructure partner of MAS and Temasek for Phase 5 of Project Ubin. By leveraging our key learnings from building the Interbank Information Network® (IIN) and the JPM Coin, J.P. Morgan is well-positioned to support the development of a blockchain-based payments network and operate at scale.”

Chia Song Hwee, President & Chief Operating Officer, Temasek, said: “Blockchain technology has great potential in transforming businesses and opening up new business opportunities.

“To better understand the impact and value of blockchain technology, we are pleased to have partnered with MAS and J.P. Morgan for the Ubin platform. The inclusion of non-financial services companies has demonstrated applicability of blockchain technology beyond capital markets and trade finance.

“We look forward to deeper collaboration and support for Singapore’s pioneering efforts in the blockchain space.”

Accenture has been commissioned to publish the project report in early 2020. The report will describe the blockchain use cases that would benefit from a blockchain-based payments network, and set out additional features that the network could provide.

In addition, the technical specifications for the connectivity interfaces that were developed will also be released for public access under Apache License Version 2.0.

Sopnendu Mohanty, Chief FinTech Officer, MAS, said, “There is growing evidence now that blockchain-based payments networks are able to enhance cost efficiencies and create new opportunities for businesses.

“We hope this development will encourage other central banks to conduct similar trials, and we will make the technical specifications publicly accessible to accelerate these efforts. We look forward to linking up with more blockchain networks to improve cross-border connectivity.

“This will be a big step forward in making cross-border transactions faster, cheaper, and safer.”

Author

Tracey Harris

Published

24 October 2019

Estimated Read time

5Mins

The latest episode of The Digital Insight welcomes Lisa Moyle, Director of Strategy at VC Innovations.  Lisa discusses the disruptive…

The latest episode of The Digital Insight welcomes Lisa Moyle, Director of Strategy at VC Innovations. 

Lisa discusses the disruptive market that is financial services, and she explores what it means to seek out and embrace innovation – whether you’re an incumbent or a startup. 

Lisa also discusses how VC Innovations works to enable businesses to demonstrate thought leadership and expertise, educate the market on new solutions and products develop and maintain business relationships and associate their brands to a community, theme, or subject. 

You can listen to the latest episode here

Author

Kevin Davies

Published

7 October 2019

Estimated Read time

5Mins

Listen here! The latest episode of the Digital Insight welcomes Jim Marous, internationally recognised financial industry strategist, and the publisher…

Listen here!

The latest episode of the Digital Insight welcomes Jim Marous, internationally recognised financial industry strategist, and the publisher of the Digital Banking Report and Sonia Wedrychowicz, an experienced technology transformation professional, having worked in the business management and corporate consumer banking across Europe, North America, and Asia for over 25 years.

Jim and Sonia discuss how digital transformation is more than technology and explore the leadership and cultural issues surrounding digital transformation in banking

Author

Kevin Davies

Published

4 July 2019

Estimated Read time

3Mins

The fintech startup Aximetria developed a new private keyless voice authorisation technology for mobile banking. Voice authorisation completely obviates the need for…

The fintech startup Aximetria developed a new private keyless voice authorisation technology for mobile banking. Voice authorisation completely obviates the need for private key generation and is sufficiently ingenious and pragmatic an approach, to secure monetary transactions.

Currently, there are many different mobile wallets on the market and each of them is built on a particular method of storing and working with private keys. The basic principle of operation of any wallet is remote or local storage of a private key, followed by password protection and/or additional physical protection.

The classical approach (besides the question of trust to remote storing) has at least one major drawback: if you forget your password or lose it, access to the wallet can be lost forever. This problem can be solved by using the protection factors of the user’s biometric information, like voice.

In the case of the use of biometric identification technology, the accuracy of which is high enough for 100% error-free identification, it is necessary to use a database of voice samples – which can also be compromised or attacked. Aximetria’s method, however, does not store voice samples. It preserves the possibility of identification through the use of a two-level neural network, with the help of which the identification first takes place and then the private key is generated.

Thus, in order to preserve the benefits of an individual wallet without having to store either a private key or a sample voice database, you need to save key information in such a way that it will not be accessible to anyone except the actual carrier of this biometric information or, as in the case of keyless technology, will be out most of the time (when the wallet is not in use), and will be generated only when necessary.

Aximetria was able to achieve the following main parameters of the keyless technology:

· Does not store voice print of registered users

· Does not store private keys of registered users

· For the registered user, its voice returns the same private key

· Allows you to register a new user

· Allows you to retrieve the private key of the registered user by his voice print

Development

The current state of our technology enables you to keep a single secret for each user. To resolve this restriction, coupled with an optional additional level of protection, the following approach can be used. The user’s secret is signed with a symmetric key, provided by the user both during registration and during authorization. The signature key is not stored on the platform’s side. Using different keys allows you to save several different secrets (one key = one secret) for the same user.

The user’s secret, along with the signature, is represented as a binary string. Each bit is encoded using the matching/non-matching voice print of the authorizing user to a predetermined known print. The next level of such an approach will be the replacement of a check for compliance/non-compliance for a similarity/non-similarity check with a predetermined threshold. This improvement will eliminate the necessity to store the voice print of the owner’s secret in any form.

Author

Kevin Davies

Published

13 June 2019

Estimated Read time

5Mins

Welcome to the June issue of Interface Magazine! Read the latest issue now! This month’s cover features Gary Steen, TalkTalk’s…

Welcome to the June issue of Interface Magazine!

Read the latest issue now!

This month’s cover features Gary Steen, TalkTalk’s Managing Director of Technology, Change, and Security, Gary Steen regarding the telco’s commitment to thinking, and acting, differently in a highly competitive marketplace…

TalkTalk is an established telecommunications company that fosters a youthful, pioneering spirit. “I like to think of TalkTalk as a mature start-up,” says Managing Director of Technology, Change and Security, Gary Steen. “We are mature in terms of being in the FTSE 250, with over four million customers, relying on our services every day through our essential, critical national infrastructure. But that said, I definitely think we start our day thinking as a start-up would. What can we do differently? How do we beat the competition? How do we attract great talent? We’ve got to come at this in a different way if we are going to succeed in the marketplace. We are mature, but we think like a start-up.”

Elsewhere we speak to Natalia Graves, VP Head of Procurement at Veeam Software who reveals the secrets to a successful procurement transformation. Graves was tasked with looking at the automating, simplifying, and accelerating of Veeam’s procurement and travel processes and systems around them, including evaluating and rolling out a company-wide source-to-pay platform. “It has been an incredible journey,” she tells us from her office in Boston, Massachusetts. We also feature exclusive interviews with PTI Consulting and cloud specialists CSI.

Plus, we reveal 5 of the biggest AI companies in fintech and list the best events and conferences around.

Enjoy the issue!

Kevin Davies

Author

Kevin Davies

Published

4 June 2019

Estimated Read time

6Mins

The World FinTech Report (WFTR) 2019, published today by Capgemini and Efma, indicates that even though Open Banking has yet…

The World FinTech Report (WFTR) 2019, published today by Capgemini and Efma, indicates that even though Open Banking has yet to reach maturity, the financial services industry is entering a new phase of innovation – referred to as “Open X” – that will require deeper collaboration and specialization. The report advocates that banks and other financial services ecosystem players must begin to plan accordingly and evolve their business models.

The WFTR 2019 identifies a dual challenge: FinTechs are struggling to scale their operations and banks are stalling on FinTech collaboration. As a result, industry players are looking to leapfrog beyond Open Banking towards Open X, which is a more effective, structured form of collaboration, facilitated by Application Program Interface (API)[1] standardization and shared insights from customer data. The era of Open X will create an integrated marketplace, with specialized roles for each player that will enable a seamless exchange of data and services, improving customer experience, and expediting product innovation.

Key findings of the report include:

Open X will transform industry norms and assumptions

The advent of Open X is being driven by four fundamental shifts:

  • A move away from a focus on products to an emphasis on customer experience
  • The evolution of data as the critical asset
  • A shift from prioritizing ownership to facilitating shared access
  • Emphasis on partnering to innovate instead of buying or building new solutions

Open X will lead the financial services industry to a shared ecosystem or marketplace, in which the industry reintroduces the re-bundling of products and services, and both banks and FinTechs must re-evaluate their strategy for innovation and serving customers. 

APIs will be critical Open X enablers

APIs, which allow third parties to access bank systems and data in a controlled environment, will be catalysts to creating the Open X marketplace. While customer data is already widely shared and leveraged in the industry, standardized APIs are not commonplace. Although requirements and regulations are complex, standardization will help to reduce fraud, improve interoperability, increase speed to market, and enhance scalability.

The WFTR 2019 also finds that industry players are looking at two potential monetization models for APIs – revenue-sharing (which 60% of banks and 70% of FinTechs think is feasible) and API access fees (supported by 46% of banks and 55% of FinTechs). However, only about a third of banking executives said they are currently well equipped to monetize APIs.

Privacy, security and collaboration concerns may slow progress

While banks and FinTechs said they understand the importance of collaboration, apprehension over privacy and security remain top of mind. When asked what concerns them about Open Banking, the vast majority of banks identified data security (76%), customer privacy (76%), and loss of control of customer data (63%). FinTechs were more optimistic about Open Banking, but 50% expressed fears over security and privacy, and 38% over the loss of control of customer data.

When asked about roadblocks to effective collaboration, 66% of banks and 70% of FinTechs pointed to a difference in the other’s organizational culture/mind-set, 52% of banks and 70% of FinTechs mentioned process barriers, and a lack of long-term vision and objectives were listed as gates by 54% of banks and 60% of FinTechs. Only 26% of bank executives and 43% of FinTech leaders said they had identified the right Open Banking collaboration partner. These responses suggest that many banks and FinTechs remain unprepared for Open Banking, let alone for the increased demands of data sharing and integration that Open X will bring.

Open X participants must choose strategic, specialty-based roles

Within the Open X marketplace, banks will need to enhance their integrated (traditional) model first and then focus on areas of specialized strength. The WFTR 2019 identifies three strategic roles expected to evolve as a part of Open X:

  • Suppliers will develop products and services;
  • Aggregators will amass products and services from the marketplace and distribute them through internal channels, holding onto customer relationships;
  • Orchestrators will act as market connectors and coordinators, facilitating partner interactions.

According to the report, integrated firms[2] are likely to struggle to match the time to market of an ecosystem of specialists and find it challenging to meet the unique demands from customers. Within the Open X marketplace, many incumbents may not be best positioned to compete as an Orchestrator and their strengths may lead them to other roles. No matter what role they assume in Open X, however, they must recruit the right talent, leverage data and technology, and collaborate with FinTechs to first ensure better internal capabilities for competitive delivery of relevant services in the current Open Banking scenario.

“Open Banking has long been regarded as transformational for financial services, but this report shows it is just one part of a much bigger picture,” said Anirban Bose, CEO of Capgemini’s Financial Services and Member of the Group Executive Board. “The industry is on the verge of a more comprehensive evolution, where there is opportunity to leapfrog into an integrated marketplace that we are calling Open X.  In Open X, there will be seamless sharing of data, and ecosystem partners will be able to collaborate in a far more comprehensive way. Our research suggests that banks and FinTechs need to prepare themselves for a more radical change than many previously anticipated.”

“The findings of the report could not be clearer: collaboration will be the foundation of the future of financial services,” said Vincent Bastid, Secretary General of Efma. “In the era of Open X, ecosystem players will have to work together more effectively than they have previously. Only by embracing collaboration and new, specialist roles can both banks and FinTechs thrive and best serve their customers. It’s clear that many barriers to collaboration still exist, and there is an urgent need to overcome them for collective benefit.”

Report methodology

The World FinTech Report 2019 is based on a global survey encompassing responses from 116 traditional financial services firms and 40 FinTech firms including banking and lending, payments and transfers, and investment management. Questions sought to yield perspectives from both FinTech and traditional financial services firms— exploring the emergence of Open Banking in the financial services industry. It sheds light on the impact the new ecosystem will have on all the stakeholders, the challenges and concerns that firms will face, and the emergence of new businesses and monetization models in this space.

[1] Application programming interface (API) refers to a set of functions and procedures that a player opens to the external world to allow the creation of applications that access the features or data of an operating system, application, or other service.

[2] Integrated firms refer to the firms that perform all the functions on their own without collaborating or leveraging other firms in the ecosystem. Many of the banks in the current ecosystem are integrated firms as they build, produce, and distribute their own products for all business lines (without leveraging FinTechs or other players in the ecosystem)

Author

Jason Walsh

Published

8 April 2019

Estimated Read time

5Mins

The Digital Insight speaks to Mike Dargan, Group CIO at the Switzerland-based bank UBS regarding digital transformation, as part of…

The Digital Insight speaks to Mike Dargan, Group CIO at the Switzerland-based bank UBS regarding digital transformation, as part of an exclusive series of podcasts…

Could you tell us the five pillars to digital transformation that UBS is implementing and how you’ve been getting them off the ground?

So, we introduced a framework for innovation or digital transformation, which were really the levers by which we achieve things, which is the A, B, C, D, E. A for AI and Automation, B for unbundling, C for cloud, D for data, and E for experience. These are really the levers we pull to try and drive the transformation. It’s also a good way for people to remember what we’re doing, and that will give the right focus to each of the areas.

Now, all of these are super linked. You can only really do this if you’ve got a cloud strategy because you can operate, obviously, in a hyper-scale environment. Getting the data organised is important to drive the right experience.

AI and automation is one of the biggest. We’ve been focused first on robotics or robotic process automation and moving along the value chain to try and drive AI, which can come in many different forms. The first is doing it in a very structured way, so almost like an event, and then moving into machine learning, which can be NLP (natural language processing) and chatbots.

The first area of focus is really in the non-client facing space, so what we’re doing in HR is to have a chatbot. What we’re doing in technology is to have a smart bot which helps everyone when they have a technology issue. They can communicate live if they do. The computer itself will resolve issues and drive things in that way. Click here to listen to the podcast!

Author

Tracey Harris

Published

19 March 2019

Estimated Read time

2Mins

IPsoft has introduced 1Bank, the first conversational banking solution featuring virtual agent Amelia. It has been rated the top virtual…

IPsoft has introduced 1Bank, the first conversational banking solution featuring virtual agent Amelia. It has been rated the top virtual agent in conversational AI by Everest Group.

Chetan Dube, CEO at IPsoft, commented: “With 1Bank we provide the most humanlike digital experience in the marketplace, built from the knowledge we’ve gained serving six of the world’s leading banks with conversational AI. We are giving banks the possibility of providing customers with their own personal banker around the clock.”

1Bank answers FAQs, but also resolves complex customer needs, by understanding customer intent. It can also switch context, mid-conversation. Its machine learning Learning (ML) abilities also mean that 1Bank can improve over time.

Some of the tasks 1Bank can carry out are:

  • advising on unpaid bills, proactively informing customers of an incoming bill and communicating any insufficient funds, making a money transfer and asking if the customer wants to set up payment for the bills when they are due.
  • recommending and setting up recurring payments, making payments from different accounts, opening and closing accounts.
  • helping customers locate transactions.
  • assisting with individual and potentially fraudulent charges on credit cards and disputing them, getting a new pin, getting a balance transfer or applying for a new credit card.
  • creating travel alerts after a customer made an airline purchase and proactively recommending the next step, such as, when traveling to exchange and withdrawing cash.

1Bank can integrate with existing tools and interfaces, and it can be added to existing applications to help customers quickly access the information and service they need. This includes mobile apps, desktop or kiosk apps, website modules, or within consumer chat applications, such as Facebook Messenger and Amazon Echo.