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Finovate Blog
Tracking fintech, banking & financial services innovations since 1994
As we enter into the last few days of July, there’s a lot to think about. The days are slowly getting shorter, but the list of tasks needed to complete 2024 objectives by the end of the year isn’t shrinking. Fintech news is set to pick up its pace as summer slows down, and we’ll be here to cover it. Stay tuned throughout the week to read the latest news this week as we post updates and evolutions.
Payments
Marqetabecomes certified to enable Visa flexible credential.
Cybercrime analytics company and Finovate Best of Show winner SpyCloudaddsConsumers’ Risk Module to its Check Your Exposure tool for banks and financial institutions.
Munich, Germany-based Hawk announced an extension of its Series B funding round this week.
The amount of the extension was not disclosed. But the anti-financial crime regtech said that the investment did increase its valuation.
Hawk made its Finovate debut at FinovateSpring in 2022.
Germany-based regtech Hawkannounced an extension of its Series B funding round. The amount of the extension was not disclosed, but the company noted that the investment did significantly boost its valuation. The extension included funding from Rabo Investments, and also featured participation from existing investors BlackFin Capital Partners, Sands Capital, DN, Picus, and Coalition. Hawk will use the additional capital to fuel international growth and to help the firm meet growing demand for its AI-powered anti-financial crime solutions.
“We’re honored that Rabobank has recognized the significance of our technology and joins us in building a global market-leading enterprise, while also benefiting first-hand from our solutions and experience,” Hawk CEO Tobias Schweiger said. “I would also like to gratefully thank our existing investors for their ongoing support and look forward to continuing our partnership.”
Hawk, which rebranded from “Hawk AI” earlier this year, offers anti-money laundering (AML) and counter-the-financing-of-terrorism (CTF) technology that leverages explainable AI to detect more financial crime and reduce false positives. In fact, the company’s AI-powered technology delivers a 3x to 5x increase in risk detection and a 70% average reduction in the number of false positives. Banks, payments companies, and other financial services firms benefit from the ability to combine AML transaction monitoring, payment screening, and (Perpetual KYC) pKYC in a single solution that also includes powerful fraud prevention capabilities.
“Rabobank has been working with machine learning applications for many years,” Rabo Investments Managing Director Martijn Scholtes said. “What impressed us most about Hawk is that they’re delivering compelling results using explainable AI. Their advanced screening, detection, and monitoring capabilities align very well with our mission to build a more secure and robust financial ecosystem.”
Founded in 2018 and headquartered in Munich, Germany, Hawk AI made its Finovate debut at FinovateSpring 2022. At the conference, the company demoed its AML Surveillance Suite, which leverages traditional rule-based models and AI to provide financial institutions with next generation AML compliance. “AI should be used to achieve three major outcomes,” Hawk GM of North America Steve Liú explained at the event, “one, finding suspicious and risky behavior that peer rule systems simply cannot; two, decrease the number of false positives drastically by using behavioral profiling on top of existing rules; and third, that all of this is fully explainable for operators and auditors, and available to our users on a platform allowing for secure information sharing.”
Hawk began the year by appointing former HSBC executive Michael Shearer as its Chief Solution Officer. Less than a month later, the company introduced new APAC General Manager Robin Lee, formerly of Napier. In February, Hawk won the XCelent Advanced Technology 2024 award and, in May, the company earned a spot on the 2024 FinTech Global Fincrime Tech 50.
This week on Finovate Global, we feature an extended conversation with Paga founder and CEO Tayo Oviosu.
Serving more than 21 million unique users in Africa, Paga is a payments and financial services ecosystem that makes it easy for people to request, send, and receive money; pay bills; get remittances and more. Founded in 2009, Paga is Nigeria’s leading mobile money company.
We caught up with Tayo Oviosu to discuss the current state of fintech in Nigeria and in sub-Saharan Africa, in general. We also talked about how Paga is helping boost financial inclusion and empowerment in the region, and what we can expect from the company in 2023.
Paga was recently recognized with placement on the CB Insights 250 list – one of seven African start-ups featured. What is going right with fintech in sub-Saharan Africa these days?
Tayo Oviosu: It was an honor to be ranked by CB Insights in its Fintech 250 list and, as one of only seven African start-ups featured, it speaks to the pioneering approach we are introducing to the world – revolutionizing payments and creating a financial services ecosystem for Africa.
As sub-Saharan Africa gains recognition on the global stage, we are seeing innovative and pioneering products emerge and rise in popularity amongst consumers, diversifying the products they can choose from.
In 2020, we saw Stripe acquire Nigerian fintech Paystack – which disrupted the ecosystem and spoke to a future-oriented outlook that has validated the region as an exciting space, full of potential. This speaks to the increase in funding and investment opportunities in the region.
As the ecosystem continues to rapidly grow, the vision of an integrated African market is closer to being realized, with new opportunities constantly emerging. At Paga, this is something particularly pertinent to our mission of making life possible for businesses and individuals. Our consumer ecosystem (Paga) helps people send, pay, and bank digitally. We now serve over 21 million unique users at our agents and consumer direct channels. We developed our seller ecosystem (Doroki) to help businesses digitize their payments and to manage their business operations digitally. Our Platform-as-a-Service offering enables ecosystem businesses and developers to build, launch, and grow, via our API infrastructure.
Looking at Nigeria specifically, what is the most interesting thing going on in fintech in Nigeria right now?
Oviosu: We are seeing more options for customers come to fruition through a growing market. Fintechs are competing innovatively to meet customers’ different needs with various tailored products.
Subsequently, there are more lending products and services, which are crucial in affording consumers more flexibility, and options to help them reach their goals and needs, and unlock their potential.
Overall, the landscape is improving in terms of communication between companies and regulators – helping firms overcome short and long-term obstacles in compliance.
The recognition of Paga amongst such a global cohort speaks to the innovation we are driving – and the calibre of our ecosystem. Our market potential, investor profile, technological innovation, and business relationships are on a global scale. To have a Nigerian platform lauded globally is an achievement in the Nigerian fintech space in and of itself.
Let’s talk about Paga. What services does Paga offer and who is the company’s target market?
Oviosu: Paga offers an extensive, hybrid payments ecosystem for online and offline customers. We make it easy for people to send, pay, and bank digitally.
For the individual customer, we allow simple seamless payment transactions, transfers, and bill payments – embedding our services into the daily needs of our users. We also help businesses to achieve their goals; powering reliable, real-time transactions, allowing online payment collections, and bill payments – all with minimal transaction charges. For Paga agents in our offline channels, we create jobs and incentives for those helping serve their communities – and also offer financial support via our overdraft offering. We also help developers to build, by enabling them to leverage our extensive platform via our (payment) APIs and providing them with the needed technical support.
In November, we launched our cards in partnership with Visa – both physical and virtual cards – enabling our consumers to pay at over 100 million merchant locations globally, anywhere Visa is accepted. This is just another example of how we make life possible for all our users.
Our current target market is largely contained in Africa, and driving accessibility to what is still a comparatively under-served market. That said, we have plans to expand beyond this and we will keep you posted on our journey.
What makes Paga unique in the payments business?
Oviosu: Paga emerged within the context of a largely cash-dependent economy, with both individuals and businesses suffering from this inefficiency. We took on the mission of improving financial accessibility in Africa as part of the digital payments revolution – and our growth is ever-accelerating as we do so. Our transaction values are soaring: from achieving our first two trillion Naira (over $4 billion based on current official exchange rates) from January 2012 to March 2020, to achieving our most recent two trillion Naira from February 2022 to September 2022 – in just eight months!
Our ecosystem aims to solve payments and services for consumers and sellers, but what makes us unique is our ecosystem approach. We understand that cash is still popular in Africa, and so we provide onramps and offramps in order to increase our reach. Our on-and-offline infrastructure makes us accessible and we pride ourselves on our deeply connected ecosystem – connecting our users to all the banks, enabling seamless transactions to individuals and merchants, and ensuring convenience for our users in their day-to-day lives.
Our customer-first approach is embedded into our DNA, and as we enter new phases of innovation, we strive to solve problems and provide opportunities for our users – whether that be helping people to save, helping businesses digitize, or offering lending services to consumers and SMEs amongst others. Foundational to this is our Platform-as-a-Service and our strong infrastructure – for consumers, sellers, and third parties.
You recently launched a Visa-branded virtual naira card. Why virtual first?
Oviosu: We wanted to address the need in Nigeria for effective virtual cards. As a digital financial services company, we felt a digital product would adhere to our mission and address our customers’ needs quickly and effectively. We have always sought to simplify the use of and access to payments and financial services.
Customers are able to activate their digital cards in less than 20 seconds – immediately gaining access to Visa’s global network. Moreover, for both physical and virtual, we offer benefits unique to Paga’s digital platform, such as real-time transaction notifications, seamless payments via unique ‘JustPaga.me’ pages, and unique Nigerian Uniform Bank Account Numbers (NUBANs) that serve as added protection for the card.
Paga and Visa have worked together before. What makes Visa a good partner for Paga right now?
Oviosu: On our mission to power payments and accessibility, our partnership with Visa has facilitated the growth of our reach. Visa’s significant coverage means we can reach even more consumers and diversify our offerings for our existing consumers. Through our strategic partnership, we can carry more Africans into the financial system and bridge the accessibility gap.
The partnership has also further strengthened aspects such as reliability and security – facilitated in collaboration with Visa’s Cybersource in launching our direct online card processor. The partnership has been instrumental in bettering the user experience.
What can we expect from Paga in 2023? New services? New markets?
Oviosu: We are focused on deepening our current offerings in our ecosystem. We are staying true to our customer-focused mission and are constantly seeking to better serve all our users.
In 2023, we expect to see more significant partnerships occurring in the fintech space, as well as more niche focuses. This will widen options for businesses and consumers to meet their needs. More widely, this will accelerate economic growth as jobs are created, and infrastructure is improved. We are also looking to increase our reach. Currently, our customer base stands at over 20 million, with 140,000 agent points. We are projected to reach 40 to 50 million users in Nigeria – but are also looking beyond this. Earlier last year, we announced our operational license in Ethiopia – in partnership with the Bank of Abyssinia – and as we continue to work towards making it simple for people to send, pay, and bank digitally, we invite you to watch this space!
Here is our look at fintech innovation around the world.
Germany-based fraud prevention and AML solution provider Hawk AI has raised $17 million in Series B funding this week.
The round was led by Sands Capital and featured participation from DN Capital, Coalition, BlackFin Capital Partners, and Picus Capital, and adds to the $10 million Hawk AI raised in 2021.
Hawk AI made its Finovate debut at FinovateSpring 2022.
In a round led by Sands Capital and featuring participation from DN Capital, Coalition, BlackFin Capital Partners, and Picus Capital, Germany-based fraud prevention and anti-money laundering solution provider Hawk AI has raised $17 million in Series B financing. The capital adds to the $10 million in Series A funding the company raised in June of 2021, and will be used to help fuel both product development and global expansion.
“My co-founder Wolfgang Berner and I started this business based on the strong belief that only leading edge, real-time surveillance technology can deliver the change needed to fight financial crime,” Hawk AI CEO and co-founder Tobias Schweiger said. “This contrasts (with) the obvious, drastic deficiencies in legacy technology. Hawk AI’s growth will continue to be fueled by industry-wide demand for AI, cloud outsourcing, and a convergence of fraud and AML technology.” Schweiger added that this week’s investment would help Hawk AI “become the leading global surveillance platform faster.”
Founded in 2018, Hawk AI made its Finovate debut last year at FinovateSpring in San Francisco. At the conference, the company demoed its AML Surveillance Suite, which combines explainable AI with traditional rule-based strategies to monitor transactions for fraud and evidence of potential money laundering in real time. The technology alerts financial crime specialists when suspicious behavior is detected while at the same time significantly limiting the number of false positives – by more than 70% – compared to legacy systems.
In its funding announcement, Hawk AI noted that more than $2 trillion is laundered every year, with U.S. fraud losses in 2022 topping $41 billion. Additionally, for what the company referred to as “high-growth markets,” fraud increased by more than 37% over the past 12 months. This has put additional pressure on institutions as both the volume and sophistication of financial crime continue to grow. Complicating matters further are an ever-changing array of regulations which Sands Capital’s Chris Eng said has made fighting financial crime “historically” challenging. To this end, Eng noted that, “Hawk AI’s sophisticated technology and use of explainable artificial intelligence present critically needed straightforward solutions for institutions across the payments landscape.”
Hawk AI’s funding news comes in the wake of a year in which the company realized year-over-year revenue growth of nearly 3x. Hawk AI also expanded its operations to Singapore last year, and now operates in more than 60 countries across Europe, North America, Asia, and Latin America. Hawk AI includes fellow Finovate alums VISA, Diebold Nixdorf, and Mambu among its partners.
AML surveillance technology specialist Hawk AI forged a strategic partnership with digital onboarding and business KYC solutions provider Know Your Customer.
The partnership will give businesses an integrated anti-fraud solution that will help them avoid the problem of siloed compliance technologies.
Munich, Germany-based Hawk AI made its Finovate debut in May, demoing its technology at FinovateSpring in San Francisco, California.
Hawk AI, an anti-money laundering surveillance technology company for banks and fintechs, announced a strategic partnership with Know Your Customer this week. The alliance will combine Know Your Customer’s digital onboarding and business KYC solutions with Hawk AI’s transaction monitoring technology. The new offering will give businesses an integrated anti-fraud solution to enhance their defense against financial crime.
“There is a wave of technological innovation taking place in RegTech,” Hawk AI CTO and co-founder Wolfgang Berner said, “from cloud native infrastructure enabling scalability, real-time native processing in a performant, safe and secure way, to fully explained AI and machine learning that augment traditional AML approaches and ensure efficient and effective crimefighting.”
Berner also underscored the challenge of fraud prevention solutions that are not well integrated. “Cutting-edge technology is not enough if information remains siloed,” he said. Berner noted that Know Your Customer shared Hawk AI’s “vision of modular solutions that foster a more holistic approach to fighting financial crime.”
Hawk AI’s Steve Liú, General Manager North America
Processing billions of transactions in more than 60 countries every year, Hawk AI’s technology leverages explainable AI and cloud technology to detect financial crime while keeping false positives low. The company reported that reducing false positives can help AML compliance officers save up to 70% of their workday, enabling them to focus on more complex compliance challenges.
Hawk AI made its Finovate debut earlier this year at FinovateSpring 2022 in San Francisco. Headquartered in Germany, and founded in 2018, the company demoed its AML Surveillance Suite. The technology blends AI with traditional, rule-based strategies to monitor financial transactions in real-time and help financial institutions and fintechs better detect suspected cases of fraud, financial crime, and money laundering. This method helps identify minor, easily missed anomalies that can be overlooked by traditional rule-based approaches alone.
Hawk AI includes financial services consultancy Capco, and KYC and customer onboarding specialist Ondato – as well as fellow Finovate alums like Visa, Mambu, and Diebold Nixdorf – among its partners. A member of the RegTech 100, Hawk AI has raised $10 million in funding from investors including BlackFin Capital Partners and Picus Capital. Co-founder Tobias Schweiger is CEO.
New Finovate alum Hawk AI announced a collaboration with Diebold Nixdorf.
The partnership will facilitate the distribution and implementation of Hawk AI’s AML Surveillance and Fraud Prevention suite to banks.
Hawk AI made its Finovate debut earlier this year at FinovateSpring in San Francisco.
Hawk AI, a fraud-fighting and AML platform based in Germany, announced a new partnership with fellow Finovate alum Diebold Nixdorf. Together, the two companies will collaborate to distribute and implement Hawk AI’s AML Surveillance and Fraud Prevention suite in banks to enable them to combat financial crime more effectively. The initial focus on the collaboration will be in Germany, Austria, and Switzerland, and will make it easier for Diebold Nixdorf customers in particular to access Hawk AI’s financial crime fighting technology.
Hawk AI CEO and co-founder Tobias Schweiger said that the willingness of financial institutions to adopt technology like Hawk AI’s AML Surveillance and Fraud Prevention suite is due to both “operational considerations” as well as the demands of regulatory authorities, which are “starting to ask for answers to fast-changing financial crime trends which no longer can be addressed with old technology and too much labor.” Instead, Schweiger said, Hawk AI’s partnership with Diebold Nixdorf helps alleviate one of the critical problems to answering these regulatory queries; namely the challenge of implementing newer, better financial crime fighting technology. Schweiger credited Diebold Nixdorf for having the “strong know-how, and professional services capabilities” to make implementation easier and less risky for customers.
“We’re thrilled to work with Hawk AI, a pioneer in explainable AI-powered AML and modern fraud prevention,” Diebold Nixdorf Director Solutions DACH Walter Gries said. “While combating new fincrime techniques is urgently needed, financial institutions must ensure a transparent process where frontline workers, auditors, and regulators trust the results. Hawk AI’s systems provide this trust, and we look forward to bringing the technology to new financial institutions together.”
Founded in 2018 and headquartered in Munich, Germany, Hawk AI made its Finovate debut at FinovateSpring earlier this year. At the event, the company demoed its technology that combines AI with traditional, rule-based strategies to monitor financial transactions in real-time. When suspicious activity is observed, the platform sends alerts to financial crime specialists for further investigation. This helps limit the amount of false positives that can weigh-down the effectiveness of a financial crime solution and create unwanted friction for customers.
Hawk AI’s partnership with Diebold Nixdorf comes just one month after the German company reported that it was working with KYC and customer onboarding specialist Ondato. Announced last month, Hawk AI and Ondato have teamed up to offer an integrated KYC validation process that features AML transaction monitoring and behavioral analysis. Ondato CEO and co-founder Liudas Kanapienis highlighted this aspect of the partnership in his statement, noting that the collaboration will enable Ondato to “expand client onboarding and compliance management towards behavior monitoring.”
Also in August, Hawk AI teamed up with Aux, a credit union service organization (CUSO) that serves more than 200 credit unions in the U.S. The partnership will make it easier for credit unions to access Hawk AI’s financial fraud and AML solutions. Aux VP of Compliance Services Gaye DeCesare praised Hawk AI’s technology as “easier to use and more cost effective than other legacy products on the market today.” DeCesare also underscored the fact that HAWK AI’s technology is “enhanced with new features and functionality” on a regular basis.
A look at the companies demoing at FinovateSpring in San Francisco on May 18 and 19. Register today and save your spot.
Hawk:AI’s AI-based, real-time AML and fraud surveillance detects patterns that purely rule-based systems miss.
Features
AI is explainable and auditable
Allows users to detect and prevent financial crime faster
One interface for maximum efficiency
Why it’s great
Efficient, effective, and explainable AML & fraud detection, powered by AI.
Presenter
Steve Liú, General Manager, North America Liú is a veteran in the fraud and regtech industry, with years of experience directing teams in operations and global expansions across the U.S. and APAC. LinkedIn
