Icon Solutions Lands New Investment from Citi

Icon Solutions Lands New Investment from Citi
By Julie Muhn (@julieschicktanz) Posted on
Categories: Alumni News, Daily news, Funding, Icon Solutions
  • Icon Solutions received a strategic investment from Citi Treasury and Trade Solutions.
  • The amount of the recent investment, as well as the amount of the company’s 2020 funding round, are undisclosed.
  • Citi Treasury and Trade Solutions also announced it will expand its use of Icon Solutions’ Icon Payments Framework (IPF) to enhance its ecosystem.

Payments technology and consultancy services company Icon Solutions recently announced it received a new funding installment from Citi Treasury and Trade Solutions (TTS).

This marks Icon Solutions’ second funding round since it was founded in 2009. Prior to this round, the company received a Corporate Round in 2020 that was led by JP Morgan Chase. The amounts of both today’s round and the company’s 2020 round were undisclosed.

Citi TTS holds banking licenses in over 90 countries and manages a global network with membership in over 270 clearing systems. Clients use Citi TTS to make payments in 145 currencies. As a key part of today’s partnership, Citi TTS will expand its use of the Icon Payments Framework (IPF) to enhance this ecosystem. Icon Solutions’ IPF is a low-code based framework that enables banks to develop their own payment processing solution.

“We are on a journey to unlock the full potential of the Citi network and respond to the need for a streamlined and efficient payment processing system,” said Citi TTS Head of Payments Debopama Sen. “Through this relationship, we are removing platform complexity across our multiple products by following a process of ‘de-platforming’ common business services and creating reusable and extensible services that can be orchestrated using the IPF framework.”

Part of this “de-platforming” will help Citi remain flexible and accelerate its ability to respond to changes in infrastructure, regulation, and evolving customer expectations. “Our new approach will empower our engineering teams to respond quicker and more efficiently to industry developments, such as ISO 20022, and deliver high-quality innovation and functionality for our clients,” Sen added.

Icon Solutions delivers payment and technology solutions to banks and financial services organizations across the globe, including BNP Paribas, Lloyds Banking Group, Nationwide, and HSBC. The company’s payments platform, IPF, is used by Tier 1 banks to help them accelerate their payments transformation and roll out instant payments around the world.

Photo by Declan Sun on Unsplash

Share this:

Send Post Twitter LinkedIn Facebook

SumUp Scores $306 Million in Equity and Debt to Power Global Expansion

SumUp Scores $306 Million in Equity and Debt to Power Global Expansion
By David Penn Posted on
Categories: Alumni News, Daily news, Funding, SumUp
  • SumUp has raised $306 million (€285 million) in combined equity and debt funding.
  • The round was led by Sixth Street Growth. Bain Capital Tech Opportunities, Fin Capital, and Liquidity Capital also participated in the investment.
  • The funding round does not change SumUp’s valuation which, as of June 2022, stood at $8.5 billion (€8 billion).

London-based fintech SumUp has secured $306 million (€285 million) in growth funding. The round was led by Sixth Street Growth and featured participation from Bain Capital Tech Opportunities, Fin Capital, and Liquidity Capital. The company will use the funding, which includes a combination of equity and debt, to support international expansion.

The round reportedly does not change the company’s most recent June 2022 valuation of $8.5 billion (€8 billion). It follows SumUp’s announcement of a $100 million credit facility from Victory Park Capital earlier this year.

In a statement, SumUp CFO Hermione McKee credited the merchants on the company’s platform – more than four million strong – for the company’s growth. “(It) is a direct result of the success of the traders we serve and would not be possible without the unwavering trust and support of the investor community,” McKee said. “This funding gives us additional firepower to pursue growth opportunities and accelerate products that empower small businesses.”

Founded in 2012, SumUp provides businesses of all sizes with affordable payment products and financial services. The company won Best of Show in its Finovate debut at FinovateEurope in 2013, and has since grown into a major payment solutions and point of sale systems provider active in 36 markets around the world. These markets include Australia, where SumUp launched in August.

More recently, the company introduced Tap to Pay on iPhone for SumUp customers in both the U.K. and the Netherlands. This enables SumUp merchants to accept all types of contactless payments using only an iPhone and the SumUp iOS app. No additional hardware is required. SumUp sees the offering as ideal for new and smaller merchants looking to potentially scale their businesses and broaden payment options for customers. SumUp Senior Strategic Growth Manager Giovanni Barbieri underscored the technology’s ability to support financial inclusion. “I am especially pleased with the exceptional functionality of the product and the fact (that) it lowers barriers to entry, with the potential to fuel entrepreneurship.”

This spring, SumUp launched its multi-product subscription offering, SumUp One. The new solution amalgamates the company’s product suite in a single, unified solution for merchants. SumUp One initially launched in Italy and the U.K.

Photo by Humphrey Muleba

Share this:

Send Post Twitter LinkedIn Facebook

Scalable Capital Raises $64.7 Million

Scalable Capital Raises $64.7 Million
By Julie Muhn (@julieschicktanz) Posted on
Categories: Alumni News, Daily news, Funding, Scalable Capital
  • Scalable Capital received $64.7 million (€60 million) in a venture round led by Balderton Capital.
  • The new funds boost Scalable Capital’s total funding to $352 million (€326 million).
  • Scalable Capital is facing new competition, with U.S.-based stock brokerage app Robinhood entering the market this fall.

Digital investment platform Scalable Capital landed some capital of its own this week. The broker and roboadvisor announced it received $64.7 million (€60 million) in a venture round led by Balderton Capital.

The round, which saw participation from HV Capital’s new growth fund and existing investors, is an extension of the company’s 2021 Series E fund. Today’s investment boosts Scalable Capital’s Series E Round to $227 million (€210 million) and brings its total funds to $352 million (€326 million).

According to TechCrunch, Scalable Capital’s valuation with the new round sits at $1.4 billion, the same valuation the company held at its 2021 Series E round.

The Germany-based company will use today’s investment to grow its investment platform and to “capitalize on its position as a leading provider of easy and cost effective investing solutions for retail clients.”

Founded in 2014, Scalable Capital has a mission to empower everyone to become an investor. The company, which is active in Germany, Austria, France, Italy, the Netherlands, Spain, and the UK., has 600,000+ users who currently hold $17.3 billion (€16 billion) in stocks, ETFs, derivatives, bonds, commodities and crypto on its platform. The fintech’s cost for brokerage range from free to $5.39 (€4.99) per month. For users who prefer an automated approach, Scalable Capital also has a roboadvisor offering that has a varied fee structure based on the client’s holdings.

Earlier this year, Scalable Capital launched Credit, a tool that offers users access to secured loans in the Scalable Brokerage product. Residents of Germany can buy additional securities or withdraw a personal loan without having to liquidate existing positions.

As part of today’s fundng announcement, Balderton Capital General Partner Rana Yared will join Scalable Capital’s board. “Scalable’s one-stop, digital-first, wealth building and generating platform brings a suite of top-class financial products to individuals across Europe, and is unparalleled in the market. We’ve been impressed by Erik, Florian, and team’s vision and execution to date and are delighted to be supporting them in this next chapter.”

Scalable Capital recently began facing new competition in the European wealthtech market, as U.S. stock brokerage app Robinhood launched operations in the U.K. Today, the California-based company unveiled it will offer crypto trading for its European Union-based users.

Photo by Monstera Production

Share this:

Send Post Twitter LinkedIn Facebook

Brim Financial Adds Open Banking Capabilities to its Credit-Card-as-a-Service Offering

Brim Financial Adds Open Banking Capabilities to its Credit-Card-as-a-Service Offering
By Julie Muhn (@julieschicktanz) Posted on
Categories: Alumni News, Daily news, MasterCard
  • Brim Financial has partnered with Mastercard.
  • Brim Financial will embed Mastercard’s open banking capabilities into its own platform.
  • “This partnership with Mastercard will be transformational for companies seeking a sophisticated, modern credit card platform to better serve their customers,” said Brim Financial Founder and CEO Rasha Katabi.

Credit-card-as-a-service Brim Financial announced it has partnered with Mastercard this week. Under the partnership, which aims to fuel innovation in U.S. credit card platforms, Brim will embed Mastercard’s open banking capabilities into its own platform.

“There is significant momentum happening in the U.S. market when it comes to innovating credit card infrastructure across consumer, small-and-medium-sized-business, and commercial segments,” said Brim Financial Founder and CEO Rasha Katabi. “This partnership with Mastercard will be transformational for companies seeking a sophisticated, modern credit card platform to better serve their customers.”

Canada-based Brim was founded in 2015 and provides a credit-card-as-a-service offering for organizations including Air France KLM and Canadian Western Bank. With Brim’s platform, clients can deploy, run, and scale their own branded commercial and consumer credit card offering quickly.

By adding Mastercard’s open banking capabilities to its platform, Brim will provide clients with a more seamless payment experience by embedding payment solutions across its end-to-end platform. “In partnership with Brim, we’re able to help our customers and partners remain competitive, with innovative payment solutions that create seamless, secure experiences,” explained Mastercard EVP of North America Business Development Hunter Woolley.

Mastercard became more involved in the open banking scene after it acquired Finicity in 2020 in an $825 million deal. Mastercard currently partners with brands including Brex, LoanPro, and Experian to help connect their customers’ permissioned financial data to their app. Mastercard is currently connected with 95% of financial institution accounts in the U.S.

Photo by Ron Lach

Share this:

Send Post Twitter LinkedIn Facebook

What Will Be the Top Fintech Trend in 2024? Hint: It’s Not AI.

What Will Be the Top Fintech Trend in 2024? Hint: It’s Not AI.
By Julie Muhn (@julieschicktanz) Posted on
Categories: List series, Thought Leadership

When it comes to predicting the next leap in fintech, you have to risk not only getting things wrong, but also being ok with it. So while I could play it safe and predict that the top fintech trend in 2024 will be AI, or industry consolidation, or even growth in the use of buy now, pay later tools, I’m going to step into less charted territory and say that the 2024 fintech buzzword will be quantum computing.

Why quantum computing?

The concept of leveraging quantum computing in financial services is dated; it has been around since the early 2000s. However, there are three main factors why 2024 may be the year the conversation around this topic really takes off.

  1. Cost savings opportunities
    Banks and other industry players are currently in a wrestling match with today’s economic environment, the expensive cost of capital, and an increase in competitors vying for customer attention. This, combined with an onslaught of new regulatory constraints that not only restrict operations but also result in new costs, has banks looking for new ways to both cut costs and add new revenue streams. Quantum computing’s promise to help firms increase speed, efficiency, and decrease risk appears to be a green field of revenue opportunity for organizations across the sector.
  2. Technological demands
    The financial services industry loves generative AI, but even though it is the hottest topic in fintech at the moment, it comes with its own set of restrictions. Because it relies on enormous sets of data to work effectively, generative AI requires scalable computing power. As the use of AI evolves and data sets become increasingly larger and more complex, quantum computing may become a requirement to train AI models quickly.
  3. Hardware developments
    Developments in quantum computing hardware have been slow over the past few years, making the technology inaccessible and unreasonable, even for larger financial services firms. IBM may be changing this, however. Earlier this month, the computing giant unveiled its latest computing chip, Condor, that has 1,121 superconducting qubits and can perform computations beyond the reach of traditional computers. IBM also released Heron, a chip with 133 qubits that boasts a lower error rate.

    Along with these hardware releases, IBM also unveiled its development roadmap for quantum computing, which pegs 2024 for the launch of its code assistant and platform.
Image courtesy of IBM

What to expect in 2024?

Let me be clear that next year won’t be the year that financial services organizations experience widespread adoption of quantum computing. The industry has a long road ahead when it comes to leveraging the new technology and will face challenges with hardware stability, algorithm development, and security.

Despite these challenges, we will see a small handful of larger firms dabble in quantum computing in 2024. Many already are. Earlier this year, Truist Financial joined IBM’s Quantum accelerator program and MUFG purchased an 18% stake in a quantum computing startup called Groovenauts. And just today, HSBC announced it has implemented quantum protection for AI-powered foreign exchange trading, using quantum cryptography to safeguard trading data against cyber threats and quantum attacks.

These firms’ developments in quantum computing will spark conversation and development plans among mid-market firms. It is the conversation– rather than the implementation– around quantum computing that will burgeon in 2024.

Use cases in financial services

So how will firms end up using quantum computing? Specifically, the new technology will enable organizations to develop better algorithms around risk assessment, portfolio optimization, encryption, and security.

In the coming years, as quantum computing chips become more accessible, we’ll see use cases including faster transaction processing for high-frequency trading and settlement systems, customer behavior analysis and personalized financial services, and financial modeling that can more accurately predict market behavior and economic scenarios.

Photo by Dynamic Wang on Unsplash

Share this:

Send Post Twitter LinkedIn Facebook

Napier Teams up with Customer Lifecycle Management Specialist KYC Portal

Napier Teams up with Customer Lifecycle Management Specialist KYC Portal
By David Penn Posted on
Categories: Alumni News, Daily news, KYC Portal
  • Intelligent compliance technology company Napier has teamed up with client lifecycle management platform KYC Portal.
  • The partnership wil help companies eliminate the problem of siloes in compliance operations by integrating know your customer (KYC) and compliance processes.
  • KYC Portal made its most recent Finovate appearance at FinovateEurope in 2019.

Intelligent compliance technology company Napier and client lifecycle management platform KYC Portal have announced a new partnership. The two companies will work together to help companies integrate know your customer (KYC) and compliance processes, removing the problem of siloes from compliance operations.

KYC Portal’s KYC Portal CLM is a Customer Due Diligence (CDD) and anti-money laundering (AML) orchestration platform. The solution works in real-time to automate, centralize, and simplify the due diligence process. KYC Portal CLM boosts efficiency with a dynamic workflow that reduces both risk exposure and the cost to maintain that risk. Integrating KYCP’s technology with Napier’s transaction monitoring module will provide faster, more accurate alerts to compliance professionals.

“KYC is the ability to know your customer, their activity, and whether it poses risk to your organization,” KYC Portal founder and CEO Kristoff Zammit Ciantar said. “With knowledge on the entire customer lifecycle, from onboarding and beyond, compliance teams are empowered to have a greater view on customer risk.”

Founded in 2008, KYC Portal most recently demoed its technology at FinovateEurope in London in 2019. At the conference, the company demoed its compliance solution that enables organizations to collate all data on subjects under review. This data resides in a single, centralized, secure repository with customizable parameters, rules, user rights, and collaborative functionality.

KYC Portal began the month with news that its platform had earned a spot on the RegTech 100 for 2024. Earlier this year, the Malta-based company announced an integration with global identity verification platform Shufti Pro. KYC Portal also announced this year a number of platform enhancements to make integration with third-party data sources easier.

Looking to demo your latest fintech innovation? Applications are now being accepted for demoing companies at FinovateEurope in London, February 27 and 28, 2024. Visit our FinovateEurope hub for more!

Photo by Polina Kovaleva

Share this:

Send Post Twitter LinkedIn Facebook

AML Specialist Refine Intelligence Raises $13 Million in Seed Funding to Fuel Global Growth

AML Specialist Refine Intelligence Raises $13 Million in Seed Funding to Fuel Global Growth
By David Penn Posted on
Categories: Alumni News, Daily news, Funding, Refine Intelligence
  • Financial crime and AML specialist Refine Intelligence has raised $13 million in funding.
  • The round was led by Glilot Capital Partners and Fin Capital. The capital will be used to fuel international expansion.
  • Refine Intelligence made its Finovate debut at FinovateEurope earlier this year in London.

Financial crime solution provider Refine Intelligence has secured an investment of $13 million. The funding round was led by Glilot Capital Partners of Tel Aviv, Israel, and FinCapital of San Francisco, California. Also participating in the round were SYN Ventures and Ground Up Ventures, among others. The company, which made its Finovate debut earlier this year at FinovateEurope in London, will use the capital to help fuel international expansion.

“Banks used to have a superpower: knowing their customers’ life stories so they could provide personalized financial service,” Refine Intelligence CEO Uri Rivner said. “With banking increasingly done online and a significant drop in face-to-face interactions, banks’ understanding of customer behavior is limited.”

To this end, Rivner explained, Refine Intelligence helps banks better identify the false alarms that can be inadvertently triggered by otherwise legitimate customer activity. This strategy of helping banks “catch the good guys,” as Refine Intelligence puts it, enables financial fraud teams to focus on truly suspicious behavior.

The list of transactions that most often trigger false alarms is fairly alarming in its own right. According to Refine Intelligence, 64% of all AML alerts come from just five scenarios: payments for cash-intensive workers, gift giving or receiving, automobile purchases or sales, and payment for construction projects. Devoting resources to the false alarms that plague these transactions is a time-consuming and inefficient process that Refine Intelligence helps eliminate for banks.

Founded in 2033, Refine Intelligence made its Finovate debut earlier this year at FinovateEurope in London. At the conference, the company demoed its Life Story Analytics solution. An anti-money laundering solution “designed for real life,” Life Story Analytics leverages AI to identify the “life story” behind any alert issued by the transaction monitoring system. The technology automatically explains the issue with the transaction in question to the fraud monitoring team. This enables teams to clear alerts faster, provide full explainability to regulators, lower caseload, and improve overall risk management. Refine Intelligence says the technology has produced a 90% reduction in time and resources devoted to managing alerts.

In addition to the company’s recent funding, Refine Intelligence was recognized this summer in the AI FinTech100. The roster highlights companies in financial services that are innovating in the field of AI.

Read our Finovate Global interview with Refine Intelligence CEO Uri Rivner. Long time fintech fans may recall that Uri Rivner previously founded behavioral biometrics company and Finovate alum, BioCatch.

Looking to demo your latest fintech innovation? Applications are now being accepted for demoing companies at FinovateEurope in London, February 27 and 28, 2024. Visit our FinovateEurope hub for more!

Photo by Manel and Sean

Share this:

Send Post Twitter LinkedIn Facebook

Adyen Partners with Klarna as Acquiring Bank

Adyen Partners with Klarna as Acquiring Bank
By Julie Muhn (@julieschicktanz) Posted on
Categories: Alumni News, Daily news, Klarna
  • Adyen and Klarna are extending their partnership, with Adyen agreeing to serve as the acquiring bank for Klarna.
  • The two fintechs first partnered ten years ago, when Adyen started offering Klarna’s buy now, pay later technology to its customers.
  • Klarna has evolved from BNPL into a shopping marketplace and currently hosts 500,000 merchants on its platform marketing to 150 million shoppers who transact two million times each day.

Netherlands-based fintech platform Adyen and Sweden-based ecommerce solutions provider and shopping platform Klarna are doubling down on their partnership. The two announced this week that Klarna will leverage Adyen’s acquiring capabilities to power card payments for its 150 million consumers and 500,000 retail partners across the globe.

The fintechs’ initial partnership dates back ten years, when Adyen began offering Klarna’s buy now, pay later (BNPL) technology to its customers. The new acquiring bank agreement will begin in Europe, North America, and Asia in 2024.

“Klarna has, in many ways, revolutionized the digital shopping experience,” said Adyen Co-founder and Co-CEO Pieter van der Does. “I am proud to say we are now joining forces in a partnership set out to simplify payments and shopping in our respective areas of expertise. Adyen’s financial technology platform combined with Klarna’s various consumer offerings will raise the standard of payments and consumer experiences worldwide.”

Adyen was founded in 2006 and offers payment acceptance, embedded payments, virtual card capabilities, authentication, risk management, insights, and more. Among the company’s corporate clients are Meta, Uber, H&M, eBay, and Microsoft.

“Adyen, a world-class financial technology platform for businesses with global ambitions, aligns seamlessly with Klarna’s role as the preferred payments network and shopping assistant for consumers and retailers worldwide,” said Klarna Co-founder and CEO Sebastian Siematkowski. “In our journey towards strengthening our global commerce offerings, Adyen will play an integral role as our trusted partner.”

Originally launched as a BNPL technology provider, Klarna has evolved into a shopping marketplace similar to Amazon or Walmart. The company works with more than half a million retail partners who list goods across a range of categories. Klarna counts 150 million shoppers– 40 million of which are U.S. based– who make two million transactions on its platform each day.

Earlier this year, Klarna teamed up with Open AI to leverage ChatGPT to help enhance the shopping experience to power a product recommendation engine. Klarna was founded in 2005 and is now live in 45 countries.

Share this:

Send Post Twitter LinkedIn Facebook

Climate Engagement Innovator ecolytiq and Visa Bring Carbon Emission Tracking to Qatar Islamic Bank

Climate Engagement Innovator ecolytiq and Visa Bring Carbon Emission Tracking to Qatar Islamic Bank
By David Penn Posted on
Categories: Alumni News, Alumni profile, Daily news, ecolytiq

Qatar’s leading digital bank, Qatar Islamic Bank (QIB) has teamed up with Visa and sustainability-as-a-service innovator ecolytiq to help customers better understand the environmental impact of their financial activity.

“This partnership marks a monumental shift in the market,” ecolytiq co-founder and Managing Director Davis Lais said. “Climate engagement in banking is coming to Qatar.”

Courtesy of the partnership, QIB will integrate a new Carbon Emission Tracker feature into its mobile app. The tracker will help foster environmental awareness among banking customers and encourage climate-friendly spending behavior and consumption habits. The technology will also enable QIB to determine the carbon footprint created from its retail banking customers spending activity and use that data to refine both specific transactions as well as customer profiles.

Lais added, “Our innovative work with QIB and Visa is giving banking customers in Qatar more transparency and choice to live sustainably. We are proud to have been chosen to help QIB guide their customers through the complexity of the environmental crisis by making this a fundamental part of QIB’s banking experience. QIB has decided to embrace the future of banking by being a part of it.”

The new partnership follows the release of QIB’s third sustainability report. The report articulated the bank’s sustainability initiatives, noting progress in steps taken to manage climate-related risks. This includes QIB’s adoption of the Equator Principles, making ESG concerns a part of the bank’s risk management process.

This month, QIB was named “2023 Bank of the Year in Qatar” by The Banker magazine, a Financial Times publication. In accepting the award, QIB Group CEO Bassel Gamal referenced the banks efforts toward greater sustainability. “We have assumed a substantial role in championing the shift towards a more sustainable economy, incorporating ESG (Environmental, Social, and Governance) factors in our credit assessment and risk management processes, thus promoting sustainable practices among our corporate borrowers.”

Established in 1982, Doha, Qatar-based, QIB reported total assets of more than $4.6 billion (QAR 187 billion) this year. The bank has 23 branches, more than 170 ATMs, and approximately 36% of the total assets of domestic Sharia-compliant banks.

ecolytiq’s partnership with QIB is the fintech’s second big win in MENA in as many months. In November, ecolytiq – along with Visa – worked with Dubai-based Mashreq to facilitate the launch of the bank’s climate banking platform. The platform overlays carbon emissions calculations onto transaction data, and leverages advanced carbon footprint analytics to personalize climate insights.

Founded in 2020 and headquartered in Berlin, Germany, ecolytiq introduced itself to Finovate audiences at our developers conference, FinDEVR 2021. In addition to its bank partnerships, ecolytiq also has teamed up with a number of fintechs. These include partnerships with fellow Finovate alums Mambu in July and Tink in June. Mambu will make ecolytiq’s sustainability-as-a-service solution available via its marketplace that serves more than 100 million end users. The Tink partnership will embed ecolytiq’s carbon tracking services and other sustainability features into its open banking platform.

“Pairing open banking with sustainable banking is good news for financial institutions looking to make a difference,” ecolytiq co-founder and Managing Director Ulrich Pietsch said.

Photo by Abdullah Ghatasheh

Share this:

Send Post Twitter LinkedIn Facebook

What ChatGPT Got Wrong about Top 5 Fintech Trends of 2024

What ChatGPT Got Wrong about Top 5 Fintech Trends of 2024
By Julie Muhn (@julieschicktanz) Posted on
Categories: Julie's Column, Thought Leadership

I’ve received dozens of 2024 fintech trends prediction pitches in my email inbox over the past month. And while many of them are insightful, I wanted to see what our AI overlord ChatGPT had to say about the matter.

My prompt read, “What are your predictions for the top five newest and hottest trends in fintech for 2024?” Here is how the AI responded:

Predicting the exact trends for 2024 is speculative, but here are potential emerging trends in fintech:

  1. Embedded Finance: Further integration of financial services into non-financial platforms like e-commerce, SaaS, and marketplaces. This trend will offer users seamless access to financial products within their daily activities.
  2. Metaverse Finance: With the growing popularity of the metaverse, fintech might explore virtual currencies, digital assets, and decentralized finance (DeFi) solutions tailored for this space.
  3. AI-Powered Personalization: Enhanced AI-driven tools for hyper-personalized financial recommendations, wealth management, and banking services. AI will further analyze vast datasets to offer tailored financial advice.
  4. Climate and Sustainable Finance: Continued growth in green finance, impact investing, and ESG-driven financial products as consumers and investors prioritize sustainability.
  5. Regulatory Evolution: Fintechs navigating evolving regulations, especially around data privacy, digital currencies, and open banking. Compliance and adapting to regulatory changes will remain crucial.

As usual, ChatGPT not only did a pretty good job, but it also sounds pretty convincing. And while there are truly no blatant errors in the prediction, it could be better. Here’s what’s wrong or what’s missing in each of the five predictions.

Embedded finance

ChatGPT was spot on. It is quite obvious that this will be a big trend in 2024. Why? Because it’s a big trend right now. However, this is more of a continuation of a current trend rather than a new trend in 2024. Also, ChatGPT failed to mention the role that regulation will likely play in embedded finance next year, especially in the U.S. That’s because partner banks have become more wary to partner with fintechs after the FDIC issued a consent order to Cross River Bank, saying that it was involved in unsound banking practices. Where there is opportunity, there is liability.

Metaverse finance

ChatGPT was wrong. This is one trend that can be thrown away with all of those 2023 desk planners out there. The metaverse offered a fun distraction during the pandemic, when the industry was obsessed with moving all of a bank’s operations to digital channels. However, most consumers lack interest in moving their lives to the metaverse, and banks have realized that their investments in more traditional channels are more likely to pay off.

AI-powered personalization

This is another win for ChatGPT. However, personalization is not the only AI-powered aspect of banking and fintech that will surge in 2024. Many organizations are now turning toward generative AI, which has the potential to produce creative outputs for generating investment strategies, designing financial products, building marketing campaigns, simulating data to predict market movements, simulating economic scenarios, or stress-testing financial systems.

Climate and Sustainable Finance

While I want to believe ChatGPT on this prediction, I wouldn’t list it among the top five trends for 2024. There are two major reasons why sustainable finance will take a backseat (though not disappear) next year. First, the high cost of capital has both banks and fintechs searching for new revenue opportunities. Given this high interest rate environment, firms are more focused on direct cost-saving and revenue growth initiatives such as AI. Second, in many geographies, regulation has not caught up with sustainability initiatives. This lack of regulation and industry standards makes it difficult for organizations to pose definitive claims about what they are doing for the environment.

Regulatory evolution

This is absolutely among the top trends I have my eye on for 2024. Again, this is a continuation of a current trend and not a new development, but it will remain at the forefront in fintech next year. ChatGPT cited regulatory changes across data privacy, digital currencies, and open banking. In regards to open banking, the CFPB released its notice of proposed rulemaking to implement Section 1033 of Dodd-Frank earlier this year and made clear that it will issue the final regulation in the fall of 2024.

One piece that ChatGPT left off its list of anticipated regulatory changes is the formalization of rules around buy now, pay later (BNPL) companies. As consumers rely on BNPL payment technologies as an alternative to traditional credit models, regulators in both the U.S. and the U.K. have announced their intent to formalize regulation in the space.

Photo by Matheus Bertelli

Share this:

Send Post Twitter LinkedIn Facebook

Enfuce Lands $9.2 Million Investment

Enfuce Lands $9.2 Million Investment
By Julie Muhn (@julieschicktanz) Posted on
Categories: Daily news, Funding
  • Enfuce closed a $9.2 million follow-on investment, adding to the $49 million it received in 2021.
  • Vitruvian Partners led the round, which saw contributions from existing investor Maki.vc and new contributor Visa.
  • Enfuce will use the funds to prepare for growth in the enterprise segment, as well as expand into more European markets.

Card issuing and payments processing innovator Enfuce recently announced it received a $9.2 million (€8.5 million) follow-on investment. The new funds are added to the Finnish company’s $49 million (€45 million) Series C round in 2021 and bring Enfuce’s total funding to $67 million (€62 million).

Leading today’s follow-on round is Vitruvian Partners. Existing investor Maki.vc, along with new contributor Visa, also participated.

Commenting on the new investor, Enfuce Co-founder and Co-CEO Monika Liikamaa said, “Visa’s trust isn’t just a validation of  our business, it’s a testament to our significant growth during challenging economic times. With Visa’s investment, we will continue to bring our bold vision of shaping the future of embedded finance to life.” Enfuce Co-founder and Co-CEO Denise Johansson added, “This investment represents more than mere financial backing for us. It’s the continuation of an extensive and productive partnership between Visa and Enfuce.”

Enfuce was founded in 2016 with the intent to offer a cloud-based processing system that could allow any business to start issuing payment cards. In addition to payment card issuing, the company also offers digital wallets, fraud and dispute managements, card program analytics, and more. Enfuce processes $2.2 billion (nearly €2 billion) in transactions annually for clients including Pleo, OKQ8 and Memo Bank.

Enfuce will use today’s follow-on investment to prepare for its next area of growth, the enterprise segment. Additionally, the company plans to expand across European markets including Benelux, Germany, and France.

The rise in banking-as-a-service (BaaS) tools, such as the ones provided by Enfuce, offers businesses across a range of industries access to financial infrastructure. Integrating financial services into non-financial platforms not only enhances the customer experience but it also offers businesses new revenue streams. As we enter into 2024, BaaS and embedded finance solutions are set to rise. However, as regulators begin to take notice and find new risk factors, adoption of this trend will likely be cautious.

Photo by Anna Shvets

Share this:

Send Post Twitter LinkedIn Facebook

Treasury Prime and Risk Management Platform Effectiv Bring Transaction Monitoring to Banks

Treasury Prime and Risk Management Platform Effectiv Bring Transaction Monitoring to Banks
By David Penn Posted on
Categories: Alumni News, Daily news, Effectiv
  • Treasury Prime, an embedded banking software platform, has signed a strategic partnership with fraud and risk management platform Effectiv.
  • Companies and FIs on Treasury Prime’s network will leverage Effectiv’s platform for transaction monitoring.
  • Effectiv made its Finovate debut in September at FinovateFall. The company is headquartered in San Francisco.

Embedded banking software platform Treasury Prime has forged a strategic partnership with fraud and risk management platform Effectiv. The new relationship will enable companies and FIs on Treasury Prime’s network to access transaction monitoring technology from Effectiv to reduce fraud and improve risk management.

Effectiv offers a no-code, fraud, risk, and compliance platform that helps FIs fight fraud at every point in the customer journey, from onboarding to real-time transaction monitoring. The platform identifies and monitors high-risk and high-value transactions for potentially anomalous or fraudulent behavior. This lowers the risk of financial loss for customers and the potential for reputational damage to institutions. Effectiv’s technology automates compliance and risk management, providing more than 80% reduction in manual review, and 58% reduction in fraud and risk management costs. Since inception, Effectiv has processed more than $41 billion in automated risk and fraud decisions.

“Over the past year, we’ve seen a rise in fraud with real-time payments,” Effectiv co-founder and CEO Ravi Sandepudi said. “As banks get ready to adopt FedNow and AI fraudsters increasingly get more sophisticated, it’s critical that fintechs and banks invest in technology that can improve their security posture.”

Effectiv made its Finovate debut earlier this year at FinovateFall. At the conference, the company demoed how its unified fraud, risk, and automated compliance platform helps institutions safely facilitate high-risk and high-value transactions.

Headquartered in San Francisco, California, Effectiv has raised more than $9 million in funding. This sum includes a $4.5 million seed round in July led by Better Tomorrow Ventures. Effectiv also used the funding announcement to preview its new biometric solution, DeviceIntel. The telemetrics and intelligence solution analyzes and identifies suspicious activity on user devices. Effectiv COO and co-founder Ritesh Arora referred to DeviceIntel as part of the company’s “holistic evaluation approach” to fighting fraud.

Interestingly, the team that founded Effectiv in 2021 previously launched fraud detection company Simility. Acquired by PayPal in 2018. Simility introduced itself to Finovate audiences as part of our developers conference series FinDEVr in 2017.

Founded in 2017, Treasury Prime offers a range of core banking solutions including accounts, payments infrastructure, and enhanced FDIC insurance. The San Francisco, California-based company also leverages its embedded banking software to facilitate connections between banks and enterprise partners, as well as offer a partnership marketplace. Chris Dean is co-founder and CEO.

Photo by Mitchell Luo

Share this:

Send Post Twitter LinkedIn Facebook