Fintech

Does having a diverse team make your Fintech company better?

Published

7 months ago

16 June, 2024

This June at Fintech Times we will focus on diversity, equity and inclusion (DEI). No longer just a trending topic, but an essential consideration not only for your business operations but also for your offering, this topic seems more relevant now than ever.

The fintech sector is known for its innovative and agile reputation, yet it still faces a significant diversity problem that threatens to stunt its growth and halt the movement of innovation.

But what do fintechs gain from it? Aside from obviously being the right thing to do, how can implementing DEI improve your business? We spoke to industry leaders to find out how embracing diversity can help improve your operations and offerings.

A necessity

Deepak Jain, CEO and founder of Wink

Deepak Jain, CEO and founder of multi-factor biometric authentication provider, Winking, said: “At Wink, our commitment to diversity is central to the development of our cutting-edge multi-factor, multi-modal biometric platform. We understand that creating technology that works seamlessly across different genders, races, ages, and ethnicities isn’t just an option—it’s a necessity. This commitment is driven by the diverse perspectives and experiences within our team.

“Having a diverse team allows us to identify and mitigate potential errors early in the design phase, ensuring our technology is fair and highly efficient for all users. Throughout all phases of development, from testing and fine-tuning our AI models to final implementation, our focus on inclusiveness has been an integral part of our product philosophy. This approach has not only improved the robustness and reliability of our software, but also increased customer satisfaction.

“The integration of diverse perspectives has pushed Wink to the forefront of innovation and excellence. Our success is a testament to the power of diversity, reinforcing that it is not just a goal but a vital element in creating technology that truly serves everyone.”

Creativity and innovation

Katie Barnes, HR Manager, BHG Financial

Katie Barnes, HR manager at a financial solutions company BHG Financial said: “Having a diverse team fosters creativity and innovation.

“Team members from diverse backgrounds bring unique perspectives and experiences from all walks of life, which helps create a richer pool of ideas and solutions.

“A diverse team allows us to address a broader range of our customers’ needs and preferences, leading to more innovative and market-relevant products.

“Overall, diversity within a team fosters better decision making, improves problem-solving capabilities, and ultimately leads to better performance and competitiveness in the marketplace.”

Child’s play

Ed Thompson, founder and CEO of Uptimize

Ed Thompson, founder and CEO of Optimizea company that has helped the likes of JP Morgan enhance the performance of your teams by leveraging the talents of all neurotypes said:

“Because our mission is to show companies how they can enhance team performance by embracing neurodiversity, diversity is a no-brainer for our organization. We practice what we preach. We attract and hire a highly neurodiverse team. This informs our product, as we create training courses that show how to leverage all neurotypes. It makes sense to have a diverse range of thinkers developing these materials.

“I myself have suffered a traumatic brain injury, so I understand what it’s like to deal with the challenges of information processing and memory. Additionally, we have a very neurodiverse team. We take time to understand how each other’s brains work and how we work best. We all understand “what” we need to do, but we give each person the flexibility to determine “how.”

“Ultimately, all of our collective experiences allow us to create a comprehensive and comprehensive training program.

“And the results speak for themselves. After working with our clients on their neurodiversity programs, they have seen retention rates of over 90% and increases in team productivity of between 50 and 90%.

This is a competitive advantage that companies cannot afford to give up.”

Navigating change

Jen O’Ryan, DEIB Strategist, Double Tall Consulting

Jen O’Ryan, DEIB Strategist at Double Tall Consulting, said: “Without multiple perspectives in the real (or metaphorical) room during design, you miss potential barriers to customer engagement. Without equitable access and representation, companies lose access to new markets. Without an authentic approach to inclusion and belonging, customers will only stay there until there is a viable alternative.

“Diverse systems are inherently better suited to managing change. But they only thrive when other aspects (psychological safety, inclusion, healthy levels of challenge) are ingrained in the organization.

“Doing this work, I discovered that most companies don’t notice the problem. Industry leaders think their product or culture is welcoming, or at least acceptable enough to get by.

“Or they simply don’t know where to look for (and how to resolve) experiences of exclusion. All those experiential micro-inconveniences that exclude people from a company’s offerings.”

Different perspectives

Michael Bystrov

Michael Bystrov, Chief Revenue Officer at an online payments company Node said: “Diversity, equity and inclusion are essential for companies like Noda in the fintech sector as they drive innovation and creativity.

“At Noda, our team is made up of people from all over the world, who bring a wealth of diverse perspectives that are crucial to developing innovative solutions in open banking. This global diversity allows us to better understand and meet the needs of a global customer base, enhancing our competitiveness and reach.”

Critical importance

Kate Hampton, NMI strategy director

Kate HamptonHead of Strategy at NMI, integrated payment solution providers, said: “Having worked in the technology and payments industry for nearly two decades, I have gained a deep understanding of the critical importance of addressing DEI in the fintech sector.

“Women in fintech are still significantly underrepresented, especially at the highest levels, and I often found myself being one of the few, if not the only, women in high-level meetings and discussions. I have had a very positive experience, supported by numerous mentors who encouraged me to dream big, however I recognize that many women in fintech do not share the same journey. That’s why it’s important for me to serve as a mentor and set an example for other women in the industry.

“Fintech organizations must actively support and uplift women by creating enrichment opportunities, establishing mentorship programs, and providing a safe space for those seeking support and guidance. Supporting women in fintech can lead to significant changes in the tech workforce, encouraging organizations to prioritize DEI efforts. This change needs to be championed by board members and senior executives, ensuring it starts at the top. The fintech sector has immense potential, and intentional DEI efforts will lead to success for both organizations and their employees. Diversity at all levels undeniably creates better business outcomes, and success in DEI outcomes will also benefit fintech as a whole.”

A healthy work culture

Sylvia Baffour, speaker, author and trainer

Silvia Baffour, speaker, author and trainer, said: “When you consider the main objectives of fintech companies (improving accessibility, promoting innovation, increasing efficiency and improving user experience), it is clear that these objectives they cannot be fully realized without a diverse and inclusive workforce.” . Why? Because diverse teams bring multiple perspectives and the kind of creativity and strong problem-solving skills needed for innovation.

“But having a diverse team is not enough. Your true impact as an organization occurs when your employees feel included, valued, and free to openly share their ideas and concerns. This is the sign of a healthy work culture that people want to be part of. Fintech companies with a reputation for psychological safety and inclusiveness are more attractive to skilled professionals, which is vital in this dynamic industry.

“Moreover, creating a culture where everyone feels a sense of belonging is not just a moral imperative; It makes good business sense. Inclusive businesses are better positioned to thrive and remain competitive in the rapidly evolving fintech landscape. Word spreads quickly about company culture, and those who are known for valuing and including diverse voices will attract top talent. Ultimately, DEI is essential to innovation, employee retention and overall business success in fintech.”

Empowering diverse voices

Belton Flournoy, managing director, technology consulting, Proviti

Belton Flournoy, managing director of technology consultancy at a management consultancy firm, Protivitis, She said:

“48% of all startups in 2023 were tech startups. Despite this, the number of fintech startups has slowed. To thrive and remain competitive in this digital world, fintechs must ensure they continue to innovate and leverage the diversity within their organizations.

“An innovative culture is essential, one that not only allows people to speak openly and challenge ideas that the company could implement, but also allows a diverse group of people to share their thoughts. The concept of M-Pesa and the rapid spread across Kenya is a great example of an idea that has benefited millions of people, but wouldn’t have happened without different thinking. Design Thinking is a technique that can be used to empower diverse voices, as well as considering diversity when you are a small team: ask yourself, do you really have diverse perspectives on your current team?

Polly Jean Harrison
Polly is a journalist, content creator and general opinion maker from North Wales. You have written for numerous 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

6 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

6 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

6 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

6 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.”