Fintech

DEI in action: Fintech companies that are getting involved

Published

10 months ago

28 June, 2024

This June on The Fintech Times, we’re focusing on diversity, equity, and inclusion (DEI). No longer just a trending topic, but an essential consideration for not only your business operations, but your offerings, this topic seems more relevant than ever.

The fintech sector is known for its reputation for innovation and flexibility, but it still faces a significant diversity problem that risks stunting its growth and preventing innovation.

Rather than just focus on the work that still needs to be done, we here at The Fintech Times also wanted to recognize the great work already being done by fintech companies that are shining a light on DEI. Here are just a few of the companies that are stepping up and showing diversity in action.

Huge value

Raf De Kimpe, London Fintech Week Raf De Kimpe, CEO of Fintech Week London

Raf De Kimpe, CEO at Fintech Week London, She said:

“For Fintech Week London, diversity, equity and inclusion is one of the pillars on which our events are built. I firmly believe that a diverse event, both on and off stage, has a huge value added. Since our first event in 2021, over 50% of speakers have identified as women at our flagship conference. However, it doesn’t stop there. We work hard to ensure our stage represents society, focusing on the inclusion of people of colour and diverse voices everywhere. We are delighted to see the diversity on stage reflected in our audience.

“As a business-to-business event in the fintech and financial services sector, I believe it is important to shed light on how fintech can be used for good. In fact, throughout the afternoon sessions of Fintech for Good, we worked with My clear text, a text-to-speech company who agreed to sponsor us by providing closed captioning for these sessions, once again making our event more inclusive for people who are hard of hearing or neurodiverse. These subtitles were also provided during the panel “Women in Fintech: Inspiring Inclusion and Achieving Together” and our charity partner’s keynote speech Street child.”

A welcoming workplace

Lina Burdenkova, Director of Organizational Development, ConnectPay

Lina Burdenkova, director of organizational development at the all-in-one financial platform for businesses, ConnectPay, She said:

“ConnectPay has a strong focus on making the workplace friendly for specialists with children. As Lithuania has the fourth largest number of young professionals (aged 24-34) with higher education in the EU, many demanding and highly responsible jobs are performed by parents with young children. ConnectPay supports employees with families by allowing them to decide how to work best: they can work from home more often during their children’s holidays or bring them to the office. In addition, parents have flexible working hours, which means they can easily align their parenting responsibilities with their work at ConnectPay.

“We recognize that the need for flexibility can arise for a variety of reasons, so all ConnectPay employees are encouraged to utilize flexible hours and take extra days off to prioritize their mental wellbeing.

We also aim to bring greater gender equality to Lithuanian fintech and consistently maintain a balanced gender ratio at all levels of the company. In particular, 63 percent of employees at the executive and director levels are women. The pay gap varies very slightly between different levels, as we are keen to achieve the best possible balance. For example, women in specialist positions earn about 4 percent more than their male colleagues.”

Why and what?

Emmanuel Smadja, co-founder and CEO

Emanuele Smadja, co-founder and CEO of MPOWER financing, International student loan providers said:

“The company I co-founded and have run for the past decade, MPOWER Financing, is one of the most diversified companies on the planet and won 6 DEI awards last year alone. But DEI is not an end in itself, it is a means to improve decision making and ultimately improve a company’s profitability and sustainability. Starting with the “why” you want DEI and the “what” it means in your workplace are therefore critical to ensuring that DEI efforts support your business goals and are not just a box-ticking exercise.

“At MPOWER, this meant building a team that reflected the diversity of our international student customers, in terms of gender, age, nationality, religion and marital/family status, so we could better understand and address the unique needs and challenges of our customers. Another important ‘Do’ is ‘Do start early’ or ‘Don’t accumulate Diversity Debt’. At MPOWER, this meant we started recruiting outside of my network and the co-founder’s network since first employee”

Social impact

eve harvester Eve Picker, Founder & CEO, SmallChange.co

Eve the Gatherer, founder of the real estate investment portal, Small change, She said:

“Many companies declare a strong commitment to DEI but neglect to take concrete and effective actions. To ensure DEI efforts go beyond formal commitments, fintechs should identify clear goals and measure progress against them. One of the most important initiatives we have undertaken at Small Change is the creation of a proprietary index (The Small Change Index) that measures a wide range of factors to determine the social impact of a project. These factors include the representation of minorities and women in project leadership, the extent to which communities surrounding a project are underserved, and environmental standards.

“We only list projects that achieve a 60% impact score. This has resulted in strong branding and DEI returns for Small Change. Although the criteria we use are specific to real estate development, fintechs in other sectors can and should develop their own rigorous criteria. Additionally, they should be prepared to report on their progress to various stakeholders, which will increase accountability. No one should expect overnight success, but clear and decisive steps will slowly but surely improve DEI in the fintech sector.”

Prioritize inclusion

My friend Lovan Outhay Lovan, Chief Strategy Officer, VizyPay

My friend Lovanstrategic director of VizyPay, a fintech company serving small businesses in rural America, said:

“At VizyPay we act proactively to prioritize inclusion in the workplace. Our initiatives are included in all strategies, policies and programs that aim to promote our number one “why”: culture. In an unfamiliar area, when referring to DEI, people automatically think of the color of someone’s skin or their gender and check the box to indicate that they have DEI covered. This is not DEI. In VizyPay’s eyes, it’s about understanding the differences in each of us and applying inclusion strategies.

“It all starts with our talent acquisition process, which is centered around the candidate experience. Resumes don’t drive us, the individual does. To create a powerful and inclusive fintech workplace, you must first know your employees. Many of our employees don’t have college degrees or specialized backgrounds in a specific role, so VizyPay’s talent development programs include areas for skills training. Likewise, because many of our leaders are homegrown, we reframe the role: Our leaders are not bosses and shouldn’t be referred to as such. Our leaders are coaches, who understand their employees and bring out the best in them. We operate with open lines of communication, promoting our transparency and bringing awareness to trending issues that impact our people.”

Different voices

Nicole Valentine, fintech director at the Milken Institute think tank Nicole Valentine, Director of Fintech, Milken Institute

Nicholas Valentine, fintech director at Milken Institute, a think tank, said:

“DEI is integrated into the mission, values and activities of our fintech program. Our focus on financial inclusion and access to capital guides our research and analysis, policy priorities and the content we amplify. Diverse voices and leaders of thinking are essential to both telling the stories of fintech’s evolution and designing the future of finance On our global platforms, private policy roundtables and publications, we highlight founders and experts who bring unique and strategic perspectives from diverse groups across. including people of color, Indigenous people, LGBTQ people, and immigrants. The impact of ensuring representation in all these spaces enables representation at major fintech companies and government committees and initiatives. Our approach to DEI is ongoing and intentional.

“Diversity of teams, ideas and experiences brings solutions to our most complex and difficult problems. At the Milken Institute, we focus on equity that leads to the creation of new systems that value ownership and profit sharing. And inclusion is the big why of financial technology, as it is a fundamental element that puts the end user at the center and reminds the industry that we are building products and services for all people and that all people have a role in making them work better.”

Everyday reality

Zahra Alubudi, co-founder and COO of Levenue

Zahra Alubudico-founder and COO of Level, alternative financing provider for SaaS businesses,

“Given that Levenue is a post Series A scale-up, we are in a unique position because for us the company culture is still very much informed and set by our founding team’s purpose for creating the company in the first place. As a co-founder and COO of Levenue, are a rather rare example in the world of financial services, and even more so in financial technology, where women represent only 4 percent of CEOs, only 18 percent of executive committee members and a paltry 7.7 percent of entrepreneurs in financial technology. I’m female, I’m young, and I have a diverse ethnic background. So when I talk about DEI, it’s not just a theoretical and conceptual point, it’s my actual lived experience that I bring to our business, in service of mine. team and our customers and partners.

“Since Levenue’s inception, we’ve placed DEI at the center of our company’s policies, considering three key things: what DEI means to us; how our leadership can set the tone for DEI efforts; and how we will adapt and evolve to translate ambition into daily reality. Especially in the early stages, when we didn’t have an HR team, leadership engagement was critical in making hiring and advancement decisions and holding each other accountable. It continues to be a priority as our company grows and our DEI policies evolve to reflect and support our goal of being a truly inclusive and exceptional company to work for and with.”

Polly Jean Harrison
Polly is a journalist, content creator and general opinion leader from North Wales. She has written for a number of publications, usually focusing on topics such as fintech, technology, lifestyle and body positivity.

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Fintech

US Agencies Request Information on Bank-Fintech Dealings

Published

9 months ago

30 July, 2024

FinCrypt Staff

Federal banking regulators have issued a statement reminding banks of the potential risks associated with third-party arrangements to provide bank deposit products and services.

The agencies support responsible innovation and banks that engage in these arrangements in a safe and fair manner and in compliance with applicable law. While these arrangements may offer benefits, supervisory experience has identified a number of safety and soundness, compliance, and consumer concerns with the management of these arrangements. The statement details potential risks and provides examples of effective risk management practices for these arrangements. Additionally, the statement reminds banks of existing legal requirements, guidance, and related resources and provides insights that the agencies have gained through their oversight. The statement does not establish new supervisory expectations.

Separately, the agencies requested additional information on a broad range of arrangements between banks and fintechs, including for deposit, payment, and lending products and services. The agencies are seeking input on the nature and implications of arrangements between banks and fintechs and effective risk management practices.

The agencies are considering whether to take additional steps to ensure that banks effectively manage the risks associated with these different types of arrangements.

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Fintech

What changes in financial regulation have impacted the development of financial technology?

Published

9 months ago

30 July, 2024

FinCrypt Staff

Exploring the complex landscape of global financial regulation, we gather insights from leading fintech leaders, including CEOs and finance experts. From the game-changing impact of PSD2 to the significant role of GDPR in data security, explore the four key regulatory changes that have reshaped fintech development, answering the question: “What changes in financial regulation have impacted fintech development?”

PSD2 revolutionizes access to financial technology
GDPR Improves Fintech Data Privacy
Regulatory Sandboxes Drive Fintech Innovation
GDPR Impacts Fintech Data Security

PSD2 revolutionizes access to financial technology

When it comes to regulatory impact on fintech development, nothing comes close to PSD2. This EU regulation has created a new level playing field for market players of all sizes, from fintech startups to established banks. It has had a ripple effect on other markets around the world, inspiring similar regulatory frameworks and driving global innovation in fintech.

The Payment Services Directive (PSD2), the EU law in force since 2018, has revolutionized the fintech industry by requiring banks to provide third-party payment providers (TPPs) with access to payment services and customer account information via open APIs. This has democratized access to financial data, fostering the development of personalized financial instruments and seamless payment solutions. Advanced security measures such as Strong Customer Authentication (SCA) have increased consumer trust, pushing both fintech companies and traditional banks to innovate and collaborate more effectively, resulting in a dynamic and consumer-friendly financial ecosystem.

The impact of PSD2 has extended beyond the EU, inspiring similar regulations around the world. Countries such as the UK, Australia and Canada have launched their own open banking initiatives, spurred by the benefits seen in the EU. PSD2 has highlighted the benefits of open banking, also prompting US financial institutions and fintech companies to explore similar initiatives voluntarily.

This has led to a global wave of fintech innovation, with financial institutions and fintech companies offering more integrated, personalized and secure services. The EU’s leadership in open banking through PSD2 has set a global standard, promoting regulatory harmonization and fostering an interconnected and innovative global financial ecosystem.

Looking ahead, the EU’s PSD3 proposals and Financial Data Access (FIDA) regulations promise to further advance open banking. PSD3 aims to refine and build on PSD2, with a focus on improving transaction security, fraud prevention, and integration between banks and TPPs. FIDA will expand data sharing beyond payment accounts to include areas such as insurance and investments, paving the way for more comprehensive financial products and services.

These developments are set to further enhance connectivity, efficiency and innovation in financial services, cementing open banking as a key component of the global financial infrastructure.

Sebastian Malczyk

General Manager, Technology and Product Consultant Fintech, Insurtech, Miquido

GDPR Improves Fintech Data Privacy

Privacy and data protection have been taken to another level by the General Data Protection Regulation (GDPR), forcing fintech companies to tighten their data management. In compliance with the GDPR, organizations must ensure that personal data is processed fairly, transparently, and securely.

This has led to increased innovation in fintech towards technologies such as encryption and anonymization for data protection. GDPR was described as a top priority in the data protection strategies of 92% of US-based companies surveyed by PwC.

Arid Islam

Financial Expert, Sterlinx Global

Regulatory Sandboxes Drive Fintech Innovation

Since the UK’s Financial Conduct Authority (FCA) pioneered sandbox regulatory frameworks in 2016 to enable fintech startups to explore new products and services, similar frameworks have been introduced in other countries.

This has reduced the “crippling effect on innovation” caused by a “one size fits all” regulatory approach, which would also require machines to be built to complete regulatory compliance before any testing. Successful applications within sandboxes give regulators the confidence to move forward and address gaps in laws, regulations, or supervisory approaches. This has led to widespread adoption of new technologies and business models and helped channel private sector dynamism, while keeping consumers protected and imposing appropriate regulatory requirements.

George Blandford

Co-founder, UK Linkology

GDPR Impacts Fintech Data Security

A big change in financial regulations that has had a real impact on fintech is the 2018 EU General Data Protection Regulation (GDPR). I have seen how GDPR has pushed us to focus more on user privacy and data security.

GDPR means we have to handle personal data much more carefully. At Leverage, we have had to step up our game to meet these new rules. We have improved our data encryption and started doing regular security audits. It was a little tricky at first, but it has made our systems much more secure.

For example, we’ve added features that give users more control over their data, like simple consent tools and clear privacy notices. These changes have helped us comply with GDPR and made our customers feel more confident in how we handle their information.

I believe that GDPR has made fintech companies, including us at Leverage, more transparent and secure. It has helped build trust with our users, showing them that we take data protection seriously.

Dr. Rhett Stubbendeck

CEO & Co-Founder, Leverage Planning

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Fintech

M2P Fintech About to Raise $80M

Published

9 months ago

30 July, 2024

FinCrypt Staff

Application Programming Interface (API) Infrastructure Platform M2P Financial Technology has reached the final round to raise $80 million, at a valuation of $900 million.

Specifically, M2P Fintech, formerly known as Yap, is closing a new funding round involving new and existing investors, according to entrackr.com. The India-based company, which last raised funding two and a half years ago, previously secured $56 million in a round led by Insight Partners, earning a post-money valuation of $650 million.

A source indicated that M2P Fintech is ready to raise $80 million in this new funding round, led by a new investor. Existing backers, including Insight Partners, are also expected to participate. The new funding is expected to go toward enhancing the company’s technology infrastructure and driving growth in domestic and international markets.

What does M2P Fintech do?

M2P Fintech’s API platform enables businesses to provide branded financial services through partnerships with fintech companies while maintaining regulatory compliance. In addition to its operations in India, the company is active in Nepal, UAE, Australia, New Zealand, Philippines, Bahrain, Egypt, and many other countries.

Another source revealed that M2P Fintech’s valuation in this funding round is expected to be between USD 880 million and USD 900 million (post-money). The company has reportedly received a term sheet and the deal is expected to be publicly announced soon. The Tiger Global-backed company has acquired six companies to date, including Goals101, Syntizen, and BSG ITSOFT, to enhance its service offerings.

According to TheKredible, Beenext is the company’s largest shareholder with over 13% ownership, while the co-founders collectively own 34% of the company. Although M2P Fintech has yet to release its FY24 financials, it has reported a significant increase in operating revenue. However, this growth has also been accompanied by a substantial increase in losses.

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Fintech

Scottish financial technology firm Aveni secures £11m to expand AI offering

Published

9 months ago

30 July, 2024

FinCrypt Staff

Aveni, Investment Management, AI, NLP, UK

By Gloria Methri

Today

To come
Aveni Assistance
Aveni Detection

Artificial intelligence Financial Technology Aveni has announced one of the largest Series A investments in a Scottish company this year, amounting to £11 million. The investment is led by Puma Private Equity with participation from Par Equity, Lloyds Banking Group and Nationwide.

Aveni combines AI expertise with extensive financial services experience to create large language models (LLMs) and AI products designed specifically for the financial services industry. It is trusted by some of the UK’s leading financial services firms. It has seen significant business growth over the past two years through its conformity and productivity solutions, Aveni Detect and Aveni Assist.

This investment will enable Aveni to build on the success of its existing products, further consolidate its presence in the sector and introduce advanced technologies through FinLLM, a large-scale language model specifically for financial services.

FinLLM is being developed in partnership with new investors Lloyds Banking Group and Nationwide. It is a large, industry-aligned language model that aims to set the standard for transparent, responsible and ethical adoption of generative AI in UK financial services.

Following the investment, the team developing the FinLLM will be based at the Edinburgh Futures Institute, in a state-of-the-art facility.

Joseph Twigg, CEO of Aveniexplained, “The financial services industry doesn’t need AI models that can quote Shakespeare; it needs AI models that deliver transparency, trust, and most importantly, fairness. The way to achieve this is to develop small, highly tuned language models, trained on financial services data, and reviewed by financial services experts for specific financial services use cases. Generative AI is the most significant technological evolution of our generation, and we are in the early stages of adoption. This represents a significant opportunity for Aveni and our partners. The goal with FinLLM is to set a new standard for the controlled, responsible, and ethical adoption of generative AI, outperforming all other generic models in our select financial services use cases.”