Fintech

The future of fintech is in the palm of users’ hands, literally

Published

8 months ago

7 June, 2024

The future of fintech is in the palm of users' hands, literally

An interesting and in-depth conversation with Abdallah Abu Sheikh, founder of Astra Tech and CEO of Botim. He walks us through the strategy behind Palm Pay and provides insights into the region’s fintech sector. It emphasizes innovation, financial inclusion and the use of artificial intelligence (AI) for social impact.

Astra Tech is at the forefront of the digital revolution in the MENA region. As a founder, what do you think are the biggest challenges MENA tech companies face?

To achieve a significant digital revolution it is necessary to ensure that no one is left behind, this is especially necessary in the context of how quickly the technological landscape is evolving, which means that the solutions for which they are created must be accessible to the masses.

Therefore, I see two main challenges for technology companies. First, it is essential to ensure widespread access to technology and digital solutions. Reliable and affordable internet access is vital to digital adoption. While the GCC boasts a commendable internet penetration rate of 92%, the North African region lags far behind, standing at just 64.5%. This discrepancy highlights the need to bridge the digital divide to ensure equitable access to technology across the region.

Second, addressing financial inclusion is critical to the advancement of technology companies, particularly in the fintech sector. Despite the rapid growth of fintech in the region, 32% of the UAE population remains unbanked. This disparity highlights the importance of expanding access to digital financial services and overcoming barriers to financial inclusion. By tackling these challenges head-on, we can create a more inclusive and prosperous digital future for everyone in the MENA region.

You recently launched Palm Pay at the Dubai Fintech Summit. Can you share with us how this contactless palm recognition service could revolutionize the payment process?

Palm Pay is more than just a way to make payments – it’s a bold step towards a cashless future in the UAE. By introducing secure palm recognition alongside other digital methods such as cards and phones, we are rewriting the rules of the game.

The essence of Palm Pay’s contribution lies in the use of biometric authentication, which guarantees unparalleled security. Our goal has always been to facilitate seamless, secure and inclusive payment experiences by decreasing reliance on physical currency and improving the efficiency and security of transactions on a global scale. Palm Pay’s success has the potential to spark further advancements in biometrics and contactless payment technologies.

Our vision is to work towards a future where payments are seamless and where technology serves people, making life smoother, safer and significantly easier. Palm Pay is part of this vision coming to life.

Security is a major concern for digital payment users. Can you elaborate on the security measures employed by Palm Pay, especially in terms of biometric authentication?

Security is paramount in the design of Palm Pay, and our commitment to protecting user data is unmatched. Palm Pay stands out for its use of advanced biometric authentication, using your unique palm print as a highly secure identifier.

Biometric authentication has been proven to be 1,300 times more secure than other methods, significantly reducing the risk of fraud and unauthorized transactions. For example, while phones or cards can be stolen, hacked or damaged, biometric payment ensures that the payment comes directly from the user. Therefore, the human palm, with its many unique identifiers, offers exceptional security. And we hope to make this functionality readily available to our employees so they can potentially enjoy greater peace of mind, knowing that their financial transactions are better protected.

Looking ahead, what are the next big technological horizons in the MENA region and how does Astra Tech intend to take part in these developments?

Given the rapid wave of AI, I think it’s fair to say that the next big thing in the MENA region would be its widespread adoption. At Astra Tech, we are fully committed to leveraging AI to drive innovation and move the region forward. Our focus on integrating AI into our platform, for example through conversational AI within our app, is testament to this commitment.

Ensuring that our AI-based solutions are creative and tailored to the uniqueness of the market, we introduced “Arabic ChatGPT”, which was the first Arabic language conversational AI in the world from the United Arab Emirates.

Furthermore, this year during Ramadan, we also launched “CharityGPT” in collaboration with Ma’an on the Botim app, allowing users to donate in a simple ChatGPT style. With simple text commands, users could contribute to the cause, demonstrating our commitment to using AI for social impact. This initiative also highlights our belief in the power of technology to drive positive change in the communities where we operate.

How do your subsidiaries, Botim, Payby and Rizek, complement each other under the Astra Tech umbrella?

With AstraTech, we are building an ecosystem of ecosystems, driving various fintech innovations and consumer products that fuel significant technological advancement in the region. All our branches are an integral part of this ecosystem. Therefore, Botim, Payby and Rizek are not stand-alone entities but rather essential components of a foundation that drives transformative change both regionally and globally.

At the center of this ecosystem, we positioned Botim, transforming it to become the world’s first ultra app. Through this transformation, Botim’s social services, such as VoIP and instant messaging, integrate seamlessly with Astra Tech’s fintech services, including PayBy, as well as other essential offerings provided by Rizek. This technological fusion facilitates a smooth flow of transactions and services, enhancing user experience through a connected approach.

Astra Tech payment palm

Could you explain how Palm Pay fits into the broader ecosystem of services offered by Astra Tech?

Palm Pay is an integral part of Astra Tech’s vision to disrupt the financial ecosystem. In the near future, Palm Pay will integrate seamlessly with other Astra Tech services, allowing users to make transactions within the Ultra app through various features. However, the patented technology also aims to urge other market players to innovate, as we have seen a stagnant approach lately. In any case, this integration will transform the Ultra App into a centralized hub for all financial activities, making money management easier for users.

In particular, all our efforts are promoting inclusivity and accessibility, helping people who may not have access to traditional banking channels to participate in the digital economy. As we prepare to launch Palm Pay, we remain committed to constant innovation. We understand that the world is incredibly diverse and that a one-size-fits-all approach won’t always work.

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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.”