Two of the biggest news items in international fintech this week also reflect two of the biggest trends in the industry in recent years: interest-free retail financing and the rise of digital assets.

With regard to the first, Stockholm, Sweden-based Klarna announced this week that it hauled in a whopping $639 million in new funding in a round led by SoftBank. The investment gives the company a valuation of $46 billion and makes it the most highly-valued fintech company in Europe.

“Consumers continue to reject interest- and fee-laden revolving credit and are moving toward debit while simultaneously seeking retail experiences that better meet their needs,” Klarna founder and CEO Sebastian Siemiatkowski said. “More transparent and convenient alternatives align with evolving global consumer preferences and drive worldwide growth.”

Read our coverage of Klarna’s big fundraising news.

The other major trend in fintech relates to the boom in cryptocurrencies. El Salvador, a small nation in the middle of Central America, announced earlier this week that it will recognize bitcoin as legal tender – the first country in the world to do so.

The move came as the result of a 62-22 vote in the Salvadoran Congress, which overwhelmingly backed the initiative proposed by President Nayib Bukele – whose party controls the legislature. After the vote, Bukele tweeted that the move would be a boon for the country “bring(ing) financial inclusion, investment, tourism, innovation, and economic development.” The law would require companies to accept bitcoin as payment for goods and services, as well as enable citizens to pay their taxes using bitcoin. Bukele further directed the country’s state-owned geothermal power company LaGeo to develop a strategy to leverage the power of El Salvador’s volcanoes to power bitcoin mining.

Skeptics of the move range from those who point to the country’s economic assistance program with the International Money Fund as a potential complication, to others who simply have no idea what bitcoin is and can’t imagine using it. “How am I going to agree with this? I haven’t seen it even in photos.” Reuters quoted one El Salvadoran shopper speaking in response to the news. “I know nothing about it. You need to understand your currency.”

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Here is our look at fintech innovation around the world.

Central and Southern Asia

• Indian personal finance startup Index agreed to be acquired by digital banking company Niyo.
• BharatPe made its first acquisition, purchasing loyalty program Payback India from American Express and ICICI Investments Strategic Fund.
• Nikkei Asia looked at how India’s fintech unicorns are looking at opportunities to expand into southeast Asian markets.

Latin America and the Caribbean

• Brazilian fintech Nubank announced a $750 million extension to its Series G round. The round’s total now stands at $1.15 billlion.
• Mexican digital payments platform Clip raised $250 million in new funding at a unicorn valuation of nearly $2 billion.
• Challenger bank IRIS launched in Colombia this week.

Asia-Pacific

• Visa introduced a new program for Bangladeshi-based startups and fintechs.
• MSME-focused Indonesian fintech BukuWarung raised $60 million in Series A funding.
• MatchMove Pay, an embedded finance company based in Singapore, secured $100 million in funding from Nityo Infotech Corp to fuel international expansion.

Sub-Saharan Africa

• Technext Singapore reviewed the most popular fintech apps in Africa.
• TechCrunch featured African liquidity provider for SMEs Float.
• A partnership between Ukheshe, Mastercard, Nedbank, and Telkom has produced Africa’s first virtual card for making transactions on WhatsApp.

Central and Eastern Europe

• German financial app for Gen Z youth, wajve, secured $6 million (€5 million) in seed funding.
• Latvian fintech Nordigen topped 1,000 bank integrations this week.
• UKRSIBBABNK launched a new digital banking solution in the Ukraine courtesy of a partnership with Finovate Best of Show winner Dreams.

Middle East and Northern Africa

• Abu Dhabi Islamic Bank (ADIB) announced plans to launch an e-commerce-focused biometric authentication solution in partnership with Visa.
• Egyptian fintech startup MoneyHash secured a six-figure investment to develop its payments API.
• Egyptian agri-fintech startup Monzare3 announced a seven-figure pre-seed investment to help provide financing for smallholder farmers.

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How have financial services companies coped with the rising challenge of cybercrime in the Work From Anywhere era? We caught up with Tamas Kadar, co-founder and CEO of SEON, a cybersecurity startup based in Hungary, to learn how the company – featured in Forbes’ Hottest Young Startups in Europe – helps firms meet regulatory obligations and better defend themselves against fraud.

Tell us about SEON. When was the company founded and what problem was the company founded to solve?

Tamas Kadar: Founded in 2017, SEON was born out of necessity. Prior to its launch, co-founder Bence Jendruszak and I owned a budding crypto exchange, which was repeatedly hit by instances of fraud. We urgently needed a solution that would help us resolve the problem, but found that there were none on the market suitable for our business structure.

The problem was that most anti-fraud solutions in the industry had long integration times, lengthy contracts, and different packages for different sized businesses. We needed a solution that was more flexible and could be integrated and functional almost immediately. So we took matters into our own hands and developed a solution that would meet these needs. This later became SEON.

SEON’s services remove the barriers to fraud prevention that many companies face today. The solution can be integrated into business structures in minutes – a far cry from the usual weeks it takes for many mainstream solutions. It is suitable for businesses of any size, has a free trial period, and works on a rolling monthly contract, meaning that businesses can cancel and take up our services without being bound by long contracts – much like a Netflix for fraud prevention. 

What in your background gave you the confidence to tackle this challenge?

Kadar: Having studied Deep Info Comms at the elite Corvinus University, where Bence studied General Management, we both had the knowledge needed to get SEON off the ground. It was there that I learned about the fraud tactics being used to get around the latest fraud prevention strategies. Having this insight, along with my technical know-how and Bence’s managerial skills, we had the confidence to move forwards with SEON.

It was clear that there were some pain points in the fraud prevention industry that needed addressing. We felt that we were the right people to do so.

Who are your primary customers in financial services and how do their needs differ from those of your customers in other industries?

Kadar: Neo banks, traditional banks, PSPs, buy now pay later (BNPL) and other fraud tech companies, account for about 25% SEON’s portfolio. The rest is made up of a whole range of different industries, including some of the most high-risk. Other sectors we serve include iGaming, eSports, cryptocurrencies and online trading, and travel.

The services we provide to financial institutions differ from others as they focus more on regulatory compliance, reducing cost when it comes to Know Your Customer (KYC) checks, and preventing money laundering. We also protect account openings, reduce customer acquisition costs, decrease bonus abuse, and flag fraudulent merchants using stolen credit cards.

By contrast, other industries use us to protect themselves against fraudulent activity such as account takeover, while we mitigate chargebacks for ecommerce merchants. We also prevent fraud surrounding ticketing in the airline industry.

Tell us a little bit about the technology behind your solution. What are the most effective tools for combating cybercrime?

Kadar: SEON has a number of solutions that are highly beneficial for helping businesses prevent fraud, including the SEON Sense Platform and Intelligence Tool. We draw on data from across the internet to establish customers’ digital footprints, weaning out false accounts and actively preventing fraudulent transactions from taking place. 

Driven by transactional data, the SEON Sense Platform provides a comprehensive end-to-end solution for fraud managers that can be tailored to the individual needs of a company.

Meanwhile, our Intelligence Tool increases fraud detection accuracy with just one click. Users can simply enter an email address, IP address, phone number or location into the browser extension to get background information, which then enables fraud managers to see complete user profiles and flag suspected fraudulent ones. As a result, companies can detect fake accounts with ease.

These solutions address a number of problems in the fraud prevention industry. They can be integrated via a Google Chrome link or API within minutes, and as they work in entirely in the back-end, there are no added layers of friction for consumers.

In addition, our solution acts as a marker for the move away from the industries overreliance on artificial intelligence (AI) and machine learning (ML) alone. AI and ML are often seen as a magic pill that will solve all of a business’ fraud woes and are left to resolve issues without the proper supervision. This impacts reportability because it isn’t always easy to establish the reason for certain decisions that a solution has made. Instead, our solutions are based on a supervised learning approach, giving fraud managers the information needed to make effective decisions. 

How has COVID-19 impacted your company and its customers? What are your biggest takeaways from the experience?

Kadar: The flexibility of our solution has meant that we have been able to easily adapt to changes imposed by the pandemic. One of the largest changes we’ve seen in terms of fraud is the amount that is taking place. Many businesses moved into the online space in order to survive lockdowns and social distancing measures. The problem is that online fraud grows in line with online activity, so the amount of fraud that is taking place there has rapidly grown. As a result, our main focus has been on industries that have felt these changes the most – especially high-risk industries such as iGaming and eSports.

The solutions developed by SEON have made an enormous impact on the way our customers can manage, monitor, and mitigate fraudulent activity. Key to our ability to provide such solutions has been our open lines of communication with our customers. It’s important that newly digitised businesses understand that fraud prevention is an evolving practice and their feedback is vital to its success.

For example, our customers know they are encouraged to contact us whenever something changes within their business, be that a release of a new software update or simply a realisation that their customers often use other social registries that we haven’t been monitoring. With this knowledge, we can quickly begin developing new lines of defence.

What is the most important thing about the technology scene in Hungary that many people outside of the area might be surprised to learn?

Kadar: Setting up SEON wasn’t all plain sailing. Bias can often hamper the growth of startups outside of traditional European hubs such as London and Munich, meaning it’s difficult for businesses to secure the investment needed in order to scale.

This is especially true for Central Europe. Bence and I found this out the hard way. When getting SEON off the ground, we found that many European investors were skeptical when it came to startups from Central and Eastern Europe.

Still, we see launching SEON in Hungary as not only a blessing, but an advantage when it came to creating a unique product that the fraud prevention industry was desperately in need of. Being outside a typical startup hub has resulted in the company being more creative, more agile and, contrary to many seed level businesses, more resilient.

Establishing SEON in Hungary also greatly reduced our outgoings, allowing us to use the initial investment we secured to grow. This is because the talent pool in Eastern Europe met the needs of the business. It’s naturally abundant in people with mathematics, computer science, and AI-based skills, which has provided us with the human capital necessary to develop and maintain our fraud solution, without initially having to set up offices elsewhere. 

You recently received a major investment – the biggest Series A round in Hungarian history. How important was this funding and what will it enable SEON to do?

Kadar: As part of the funding round, which was led by leading European early-stage investor Creandum, we secured €10 million (USD 12 million) in series A investment. This is a pivotal point in our company’s growth and will drive us in our mission to democratize fraud prevention by removing the barriers that many companies face.

With the investment, we plan to expand our presence in the U.S. and U.K., with the aim of having our London headquarters account for more than 30% of our revenue. We will also be shortly announcing the launch of our new U.S. office, along with our plans for the region.

In all, this investment will take our company to the next level, enabling us to not only better serve our existing customers but also provide our services to even more businesses across the globe.

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Here is our look at fintech innovation around the world.

Asia-Pacific

• KrAsia looked at Vietnam’s experiment with introducing mobile money services via its telecom companies.
• South Korean fintech Kakao Pay moved closer to an IPO.
• Malaysian challenger bank Bank Rakyat Indonesia Agroniaga (BRI Agro) announced Kaspar Situmorang as its new CEO.

Sub-Saharan Africa

• Asante Financial, a Nigerian-led fintech headquartered in Mauritius, earned a spot in Mastercard Start Path accelerator program.
• Kenyan digital banking platform Kwara selected to participate in the inaugural JICA Ninja Accelerator
• One year after being acquired by Stripe, African online payments company Paystack announced its expansion to South Africa.

Central and Eastern Europe

• German mobile banking app provider Vivid Money secured $72 million (€60 million) in Series B funding in a round led by Greenoaks.
• Germany challenger bank N26 introduced IBANs for sub-accounts to ease invoice and payments administration.
• Budapest Business Journal looks at the growth of electronic payments in Hungary.

Middle East and Northern Africa

• Nuvei acquired Israeli-based fintech Simplex for $250 million.
• Egyptian fintech Flextock raised $3.25 million in pre-seed investment, the largest pre-seed round to date for a MENA-based startup.
• TipRanks secured $77 million to fund its stock investment research platform.

Central and Southern Asia

• Pakistan’s CreditBook secured $1.5 million in seed funding for its technology that supports micro-entrepreneurs.
• Times of India looked at the performance of the country’s fintech industry during the COVID-19 pandemic.
• JazzCash, a branchless banking service based in Pakistan, launched its new app for business owners.

Latin America and the Caribbean

• Uruguayan fintech dLocal announced plans to launch an IPO in the U.S.
• Brazilian challenger bank alt.bank secured $5.5 million in new funding.
• BNAmericas weighed in on the challenges faced by Chile as it develops its regulatory framework for fintech.

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From U.K.-based Standard Chartered to Germany’s Deutsche Bank, banks around the world are adapting to the post-COVID world with fewer branches. In separate announcements only a few days a part, two of the globe’s bigger banking presences (Standard Chartered is the 44th biggest bank in the world by total assets; Deutsche Bank is ranked 21st) have signaled that hybrid workplaces will join digital transformation as defining aspects of banking operations in the future.

Standard Chartered’s announcement comes as the firm reports better-than-expected profits for the first quarter. The bank plans to reduce the size of its branch network to 400 – and move to a hybrid remote working setup – as part of a cost-cutting maneuver. Standard Chartered also announced that it will look to automation to “enable the re-shaping of the workforce.” Standard Chartered has a strong presence in Asia, Africa, and the MENA.

As for Deutsche Bank, company CEO Christian Sewing cited fewer branch customers and a growing preference for digital options among the reasons driving the move toward a hybrid model. Deutsche Bank expects to close 150 Deutsche Bank and Postbank branches this year with an additional 50 Postbank branches to be closed in 2022. At the same time, the company said it will introduce a hybrid workplace model for its employees that will allow them to work remotely up to three days a week.

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Hybrid workplaces aren’t the only things that financial services workers will be getting used to in 2021. If the new employee training initiative from Spain-based BBVA is any indication, bank workers may find themselves being reskilled and upskilled just by playing a game.

BBVA has announced a new global reskilling and upskilling experience, The Camp, that is designed to enhance the employability of its professional workers. Part of BBVA’s learning model, Campus BBVA, the new experience focuses on 14 strategic skills that are taught using a digital, gamified environment in which the workers are the primary actors who determine their own development.

“The challenge of ensuring the survival of organizations entails adapting and being flexible enough for teams to be able to navigate this uncertainty and constantly incorporate the skills that are needed to promote the strategy,” Global Head of Learning at BBVA Pilar Concejo said.

Each of the 14 strategic skills has a different training itinerary. And each itinerary has three levels of specialization that uses a mountain-climbing analogy to assess the employee’s progress. Starting out as a metaphorical hiker, the employee advances from the valley (basic level) to the mountain (intermediate level), earning status as an “explorer.” Successfully advancing from the mountain to the summit (expert level) gives the employee the rank of “alpnist” – the highest level of specialization in the knowledge category.

“Gamification is a very important element at Campus BBVA, and now also at The Camp, as it allows us to design experiences in which employees feel much more identified and increase their level of commitment to the learning process,” Concejo said. “In the end, we try to ensure that the employee is motivated enough to move forward with their development in a continuous and sustainable manner over time.”

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Here is our weekly look at fintech innovation around the world.

Latin America and the Caribbean

• Argentina-based mobile payments company Ualá agreed to acquire the country’s first digital bank Wilobank from local billionaire Eduardo Eurnekian.
• Brazilian payment infrastructure and self-described “fintech factory” Hash raised $15 million in funding.
• The Mexico Fintech Association announced its new president Mariate Arnal, director of Stripe in Latin America.

Asia-Pacific

• Singapore-based digital wealth management firm StashAway secured $25 million in Series D funding in a round led by Sequoia Capital India.
• Thailand and Singapore linked their instant payment systems this week.
• Malaysian fintech MyMy moved closer to securing a large scheme E-money license from the country’s central bank.

Sub-Saharan Africa

• Microfinance fintech Barko Financial Services launched with Temenos SaaS.
• Kenya’s Ajua, which offers integrated customer experience management solutions for businesses, acquired cross border banking and payments platform provider WayaWaya.
• Troygold, the company that developed South Africa’s first gold-backed savings account, picked up an investment from Crossfin Technology Holdings.

Central and Eastern Europe

• Raiffeisenbank Russia unveiled new automatic passport recognition capability that leverages technology from Smart Engines.
• German deposit marketplace Raisin introduced an ETF Configurator to its Raisin Invest solution that enables investors to build their own exchange-traded fund portfolios.
• Russian financial and lifestyle services company Tinkoff announced its acquisition of a majority stake in mobile app developer Beskontakt.

Middle East and Northern Africa

• Israel’s third biggest bank, Mizrahi-Tehafot Bank, selected Finastra’s pre-packaged payments solution, Fusion Payments To Go.
• ThetaRay introduced its AML for cross-border payments offering as a cloud-based solution.
• Washington, D.C.-based digital banking infrastructure company Securrency announced plans to expand in the UAE in the wake of its $30 million fundraising.

Central and Southern Asia

• Inc 42. profiled Indian neobank Zeta ahead of the company’s anticipated $250 million Series D round.
• Pakistan-based B2B ecommerce marketplace Bazaar gained more than 100,000 merchants for its mobile app Easy Khata in less than two months after launch.
• Financial Times featured Fusion Microfinance, a company that specializes in providing microloans of between Rs10,000 ($136) and Rs60,000 ($816) to poor women in India.

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This week we learned that Norway-based Finovate alum Signicat has teamed up with a German software company Cryptshare to market a new B2B identity verification solution. The technology combines email encryption and secure file transfer with trusted sender and recipient identities to make business communications safer and more accountable.

In other fintech news from the Nordics, Santander Consumer Bank in Norway went live with a new PFM app that leverages open banking solutions from Nordic API Gateway. Founded in 2017 and headquartered in Copenhagen, Denmark, Nordic API Gateway made its Finovate debut last month at our all-digital fintech conference, FinovateEurope.

At the event, co-founder and CTO Gudmundur Hreidarsson demonstrated how the company’s platform simplified open banking payments and access to financial data, offering powerful account-to-account payment services through a single API. More than 40 financial institutions in Europe – including Lunar, Danske Bank, OP Financial Group, and Checkout Finland – rely on Nordic API Gateway’s open banking services.

“Current payment rails such as cards are very expensive for businesses and and increasingly inconvenient for consumers,” Hreidarsson said during his presentation last month. “Open banking changes that. It enables payments with low fixed fees per transaction rather than the high percentage fees of cards which can mean very significant cost savings for businesses – and is very convenient for consumers.”

“But getting into open banking and using open banking is hard,” he added. “It’s really hard. The APIs of the banks are slow to mature and there is still quite some way to go. Businesses are just starting to realize what kind of use cases can be solved with open banking. And consumers are only now discovering the convenience of paying with their accounts. That’s why we built Aiia, to offer an open banking platform that simply works.”

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Companies from the Nordics (Denmark, Norway, Finland, Sweden, Iceland, and Greenland) have been well represented at FinovateEurope of late. This year alone featured – in addition to Nordic API Gateway – two companies from Sweden: Stockholm’s Dreams and Gothenburg’s Econans. Our most recent in-person FinovateEurope conference – held in Berlin, Germany – featured three companies from the region, as well: ReceiptHero and NordCheck of Finland, and Subaio of Denmark. Other Nordic fintechs that have demonstrated their technologies live on the FinovateEurope stage over the years include BehavioSec, Tink, and Klarna (Sweden); Encap Security, EVRY, Monobank, and Spiff (Norway); Meniga and Trustev (Iceland/U.K. and Iceland); and Mistral Mobile (Finland).

“It certainly seems that Schumpeterian destruction, where creating new markets is preceded by old ones being challenged or even destroyed, applies in the Nordics,” the team of Frida Jonsdottir, Olli Toivonen, Visa Jaatinen, Arttu Utti, and Richard Lindqvist wrote in the introduction to their FinTech in the Nordics: A Deloitte Review. “The Nordic FinTech market is rapidly growing and diversifying, with more companies and new technologies being created. This is happening regardless of the fact that the incumbent financial institutions are challenged by the lagging economic growth rates and ever changing regulatory burden, both of which afflict those who are looking to enter the market.”

Read the rest of the Deloitte report on fintech in the Nordics. For more about fintech in the region, check out:

• Four Influential FinTech Companies Disrupting Norway’s Financial Space – IBS Intelligence
• Top 5 FinTech Companies Leading the Swedish Market — IBS Intelligence
• Biggest Fintech Companies and Startups in Finland – Fintech Farm Helsinki
• Fintech Infographic of the Week: Danish Fintech Startup Scene – Fintechnews Switzerland
• The Nine Hottest and “Coolest” Fintechs in Iceland – Fintech Baltic

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Here is our look at fintech innovation around the world.

Central and Eastern Europe

• Mambu partnered with Raisin Pension to provide a new pension plan for its workers.
• Real-tine cash, collateral, and liquidity management solution provider Planixs opened new offices in Frankfurt, Germany.
• Penta co-founder Lav Odorovic announced plans to launch a SME-based digital bank in Switzerland called Relio.

Middle East and Northern Africa

• UAE-based digital banking service provider for migrant workers, NOW Money raised $7 million in a round led by Exponential Ventures.
• More progress for Saharan Africa as the first Visa card ever is issued in Sudan.
• Egyptian fintech Dayra secured $3 million in debt and equity, pre-seed funding.

Central and Southern Asia

• Pakistan-based challenger bank SadaPay secured $7.2 million in funding ahead of its planned launch.
• Business Insider India looked at Revolut’s plans for expansion in the country.
• Indian digital financial services platform MobiKwik began an investigation of a potential data breach.

Latin America and the Caribbean

• MENA-based account-to-account payments company Dapi launched in Mexico.
• Eastern Caribbean Central Bank launched its digital currency, DCash.
• Brazil’s central bank gave WhatsApp approval to relaunch its P2P payments service in the country.

Asia-Pacific

• Japanese BNPL firm Paidy raised $120 million in Series D funding this week.
• National University of Singapore announced new Masters and PhD graduate programs in digital financial technology.
• Fundiin, a Buy Now Pay Later platform based in Vietnam, secured funding in a round led by 1982 Ventures and Zone Startups Ventures.

Sub-Saharan Africa

• Airtel Africa secured a $100 million investment from Mastercard to support its mobile money business.
• Nigerian fintech Xerde launched its new social funding app for businesses, Tudo.
• The Africa Report profiled Indicina, a Nigeria-based startup that offers automated tools to assess creditworthiness, as it nears completion of a million dollar investment.

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