Fintech

In profile: Raman Korneu, CEO of myTU

Published

9 months ago

23 July, 2024

While individuals and businesses across the financial sector continue to innovate at a rapid pace, many still find it difficult to access the services and accounts offered by traditional banks. However, some entities are trying to change this and make financial services more accessible to all.

With this in mind, we spoke with Raman Korneuco-founder and CEO of myYOUthe neobank that uses cloud-only infrastructure and artificial intelligence to make essential financial services easier to access, more secure and more affordable.

Here, Korneu shares his thoughts on the fintech industry, some of the biggest hurdles myTU has overcome, recent successes

Raman Korneuco-founder and CEO of myTU

Tell us more about your company and its purpose

myTU is a fintech pioneering the use of cloud-only infrastructure and AI to transform consumer banking. It’s not technology for technology’s sake; we’re leveraging these innovations to make essential financial services more accessible, secure and convenient. That’s exactly what we’re all about. Our team aims to reshape banking by harnessing the power of technology to deliver innovative and convenient solutions to our customers.

Our approach is tailored to the needs of underserved markets and customers. Initially, we focused on the travel industry and digital nomads, with the name TravelUnion reflecting that focus. Once COVID hit the travel industry, we successfully pivoted to serve individuals and families with a full-featured mobile banking app that supports accounts, cards and payments in multiple languages. For corporate customers, the focus is on fully digital onboarding, instant SEPA payments and easy integration with accounting systems.

What are some of your recent successes that you would like to highlight?

We are proud to have recently launched our innovative ‘Payments API’, which enables businesses to streamline their finance operations and increase revenue through automated, real-time payment processing and loan management. This solution integrates seamlessly with our customers’ existing systems, enabling them to reduce operational costs and manual errors.

I would like to highlight in particular the advanced security of this solution. We achieved it through custom multi-factor authentication, which integrates multiple ECDSA keys with IP and DNS data verification and uses secure timestamps along with out-of-band two-way communication, ensuring the highest standard of security and compliance.

Additionally, we have successfully integrated artificial intelligence into our operations, achieving significant efficiency gains and maintaining a robust technology infrastructure with a lean IT department.

How did you get into fintech?

I have spent 25 years in the banking industry, holding board of director positions in conventional banks. I have also held advisory roles at Ernst & Young AND PwCworking on over 100 projects for over 50 major banks and corporations, including Merrill Lynch Securities AND Raiffeisen Bank.

While working in banking, I started to see the potential of financial technology and joined a financial technology company as a strategist. This experience, combined with my EMBA at Judge School of Commerce in Cambridge, inspired me to start my own fintech startup. Together with my co-founder Thomas Navickasexpert software architects with over 20 years of experience, we focus on leveraging new technologies to solve industry pain points.

What’s the best thing about working in fintech?

I believe it is an opportunity to drive innovation and have a real impact on people’s lives. That is why we are using our technology and strategy to increase people’s financial inclusion in the digital economy. Instead of chasing large, saturated markets, myTU is focused on becoming a leading digital bank in smaller countries that are often overlooked by traditional banks and Europe’s largest neobanks. We are currently approaching 50,000 customers representing over 100 nationalities, with 40 percent actively engaging on a weekly basis.

What frustrates you most about fintech?

The pace at which incumbents adapt to new technologies and innovations is an area where I would like to see change. While many established banks and financial institutions are making great strides in embracing digital transformation, there is still room for improvement in terms of collaboration and knowledge sharing between incumbents and fintech companies. By working more closely together, we can create a more inclusive and innovative financial ecosystem that benefits all stakeholders.

Another challenge is navigating the regulatory landscape, which is essential to ensuring the stability and integrity of the financial system. While regulations may sometimes appear to be playing catch-up to rapid technological advances, it is critical to recognize the importance of a robust regulatory framework to protect consumer interests and maintain trust in the financial sector.

How have your previous roles influenced your career?

They have given me a deep understanding of industry pain points and the potential of technology to solve them. Holding senior positions in the banking and finance industry has given me extensive exposure to leading banks and companies, providing valuable insights into the challenges they face. These experiences have shaped my vision for myTU and guided our focus on leveraging technology to create innovative solutions that meet the evolving needs of our customers.

What was the worst mistake you ever made?

Initially, we built our infrastructure on a third-party banking platform. While this seemed like a quick way to get to market, we quickly realized that it limited our ability to innovate and adapt to our customers’ needs. This experience led us to make the bold decision to develop our own core banking system from scratch, which was a game changer for myTU.

Now, our cost to acquire a customer is less than €10, compared to over €100 for some competitors. What else is that our team decided to build entirely on Google Cloudmaking it one of the first digital banks to run entirely on the public cloud. This allows myTU to remain agile while offering an exceptional user experience.

What does the future hold for your company?

We are focused on expanding our product offerings, including enabling international transactions, introducing travel loans, and enhancing our loyalty system. In particular, we see a big opportunity in “Travel Now, Pay Later” (TNPL) services that allow travelers to book now and spread the cost over multiple installments.

While BNPL giants love Clarify have partnered with a number of OTAs, myTU sees an untapped opportunity with more traditional tour operators and travel agencies. By incorporating TNPL into these operators’ booking flows, we can help them increase sales among budget-conscious consumers.

With the launch of our Payouts API, we expect to drive substantial growth and increase our enterprise customer base in the coming months. With a strong focus on embedded finance, we aim to become the preferred payment method across platforms from niche service providers to larger e-commerce sites. We are also committed to further leveraging AI and automation to drive operational excellence and deliver even more value to our customers.

What will be the next topics of discussion or challenges for your industry as a whole?

The fintech industry is at a critical stage, with several key challenges and opportunities on the horizon. One of the key issues is the need to rethink the Banking-as-a-Service (BaaS) model as it exists today.

The recent failure of Synapsesa fintech BaaS, highlights vulnerabilities in the often interdependent fintech ecosystem. Similarly, By Monese The shift from a retail banking model to a B2B technology business highlights the difficulty of transforming retail banking into a profitable enterprise.

Fintechs relying on third-party BaaS providers often find themselves in a homogeneous landscape, with difficulty differentiating themselves due to the “heavy” and inflexible technological infrastructure. Regulatory requirements further complicate the situation, with standardized processes that do not adapt to the specific needs of individual fintechs. The main challenge is the lack of differentiation in compliance settings, which become costly to change. I believe that differentiated compliance settings and products are essential to quickly adapt to market dynamics and regulatory changes.

Furthermore, the continued adoption of Artificial intelligence and automation will be a key driver of change, enabling fintech companies to offer their customers more personalized and efficient services.

Source

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

Source

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.

Source

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

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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.”