Fintech

How can resistance to the implementation of DEI initiatives be managed within Fintech?

Published

7 months ago

27 June, 2024

How can resistance to the implementation of DEI initiatives be managed within Fintech?

This June at 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 now 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 from moving forward.

Despite the need for diversity initiatives, some companies (or even just executives) may be reluctant to make the change. We spoke with several industry members to learn how to handle any resistance to DEI.

Reformulate perspectives

Ron J. Williams, Partner at Venture Studio, Co-created

Ron J. Williams, partner at Venture Studio, Co-created, She said:

“If you are experiencing resistance to DEI initiatives, you need to reframe the perspective of those around you. Most organizations tend to think of DEI as an act of charity or a department within an organization that is a subset of the resources When truly finding ways to build and innovate inclusively is much broader and should be part of any company’s overall growth strategy. good growth,” that is, growth that also generates impact. Aiming for good growth is smart, not a distraction or detour.

“Bringing diverse perspectives to the table to create better products is smart. Targeting new markets to serve traditionally commercially marginalized populations is a significant business opportunity. Combining the two is a winning strategy. Smart leadership is striving to make impact and inclusion key features of their business growth models.”

Competitive advantage

Bella Renney, product director, Liberis

Beautiful Renney, Product Director at Free, an embedded financial platform, said:

“You need to frame it as an explicit competitive advantage with material revenue impacts such as attracting talent. Once people, especially executives, understand the benefits to the company and themselves, it’s a no-brainer that they will come on board and become advocates themselves.”

“At Liberis, we run a semi-annual baseline survey that allows us to be intentional about data collection during onboarding. We also have a Diversity, Inclusion, and Belonging Council made up of members of varying seniority from across the company. To join of the board you need to submit a short application to demonstrate commitment and genuine interest. This group is passionate, dedicated and all about action. Instead of sitting around talking about ideas, they execute various projects to improve our business from the inside out ‘external.

“To ensure all of our executives are engaged and informed about our DEI initiatives, we have a rotating executive team member on the board. So far we have had the Chief Risk Officer and Chief Operating Officer, and our CFO will take the throne next quarter! “

Active champions

Motie Porta Motie Door Motie Bring, CEO, PPRO

Motie door, CEO of PPRO, a payment service provider, said:

“Resistance to change can come in many forms—from passive disengagement to active reaction—negatively impacting hiring practices, company culture, and DEI strategies. Resistance can often stem from a variety of factors, including fear, skepticism, or, most commonly, misunderstanding. Fintech leaders have a responsibility to shape organizational culture from within, and it’s essential to have leadership that not only supports these efforts but actively champions them. Leaders must be vocal advocates for diversity and inclusion, both in words and in action. This starts with leading by example and demonstrating commitment to DEI principles from the top.”

“My job is to help people take the journey in any way I can, while remaining unapologetic in doing so. I use my experiences to promote the need to have DEI initiatives, as well as demonstrate that when this is done well, it is very positive for businesses and society in general.”

True value

Betsy Samuel, Marketing Manager, Thredd

Betsy Samuel, marketing manager at payment issuer processing partner, Threaded, She said:

“We believe team diversity brings true value to our organization; therefore, we have seen very little resistance to such initiatives. We are fortunate that some members of our Thredd team speak openly about their DEI experiences and perspectives. This buy-in and personal authenticity are essential to success, particularly at the top of the organization. If leaders model the right DEI-focused behaviors and share their experiences with colleagues and the broader organization, the challenge of being more diverse becomes much more personal and individuals embrace changes to support their colleagues.

“It’s also good to focus on a few DEI initiatives and create quantitative and qualitative measures to evaluate and integrate them successfully; rather than trying to do everything at once. Using anonymous peer surveys allows you to collect more data and guide your DEI strategy accordingly, ensuring that you continue to focus on what’s most relevant and important to your peer mix, while still ensuring that your recruitment methods are diverse.”

Walk as you walk

Justina Craston, Justine Craston, Head of Social Values at Dojo

Justine Crastonresponsible for social values at The Dojo, one credit card terminal supplier said:

“The rapid pace at which technology companies develop can pose a challenge when implementing DEI initiatives. Diversifying candidate pipelines, rebuilding existing practices and processes to be more equitable, and taking the time to listen to diverse perspectives takes time, which can conflict with competitive market demands. Taking the time to develop mutual awareness and understanding is critical and often requires unlearning or a reset in teams as a company matures beyond the startup phase. growth.

“It is also important to recognize that many of your practices will not be sufficiently inclusive and that most workplaces are designed and built by an automatically excluding majority. Knowing this will help you be receptive to change and inform your approach to implementing and developing an effective DEI strategy.

“Tech companies have also been seen to be de-prioritizing or quietly abandoning some DEI efforts. It’s too easy to make a compelling statement, demand rewards and make commitments, but without function leaders setting tangible goals, these ambitions will remain just wishes. Create non-financial KPIs. Address your inclusion issues as they arise. Walk the walk. Don’t just talk.

Culture of diversity

Priya Giuliani, CEO of EarthID

Priya Giuliani, CEO at Earth Identification, a decentralized identity platform, he said:

“EarthID follows a strategic and empathetic approach to instill a culture of diversity, equity and inclusion within itself. Our leadership actively demonstrates a commitment to DEI. By visibly participating in and supporting DEI initiatives, our leadership sets the tone for the entire organization, demonstrating that DEI is a top-down priority.

“We ensure that the purpose and benefits of DEI initiatives are clearly communicated to all employees. This includes explaining how these initiatives align with EarthID’s mission and values and how they contribute to the company’s overall success and innovation.

“We identify and empower allies and advocates within the organization who are passionate about DEI. These individuals help champion DEI initiatives, provide support to their colleagues, and model inclusive behavior.”

Take care of yourself

Alessandra Chirica, founder of recruiting company, Find again, She said:

Alessandra Chirica Alexandra Chirica, founder, Recfindr

“Previously, at my recruitment firm, I helped fintechs and start-ups hire staff for their financial crime fighting functions. Unfortunately, I’ve often had to ask CEOs and founders point blank, “Is your priority diversity or filling the role?” They often asked for a “female” CV as the icing on the cake. But they didn’t really care, nor did they create an inclusive environment (i.e. no flexible working, 5 times a week in the office, but that’s okay because they offered Delivery credits for lunch…)

“It is not surprising that many women did not find the offer so attractive that they did not want to apply.

“I decided to stop working with the client. I guess it was the quickest way to deal with the resistance!”

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

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.”