Fintech

What role do Fintech leaders play in promoting an inclusive workplace?

Published

7 months ago

19 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.

Leading by example is often the best way to see real change, and fintech senior leaders have a chance to create an industry we can all be proud of, but they must make those changes first. We spoke with several industry insiders to understand just how important a role fintech leaders can and will play in the world push for diversity.

Vision and values

Nikolai Denisenko, the co-founder and CTO of the digital banking app, Bright application, She said:

Nikolay Denisenko, co-founder and CTO, Brighty App

“Leadership is critical to fostering an inclusive environment for any business. It starts with the vision and values that people in leadership positions share within the organization, which are then implemented into company policies, allocated resources, and the ongoing development of the company and its team.

“While this may be more difficult to do for a start-up, given that resources are more limited and teams tend to be smaller, it is important that leaders keep diversity, equity and inclusion top of mind to ensure both the well-being of their teams, as well as how the company progresses. For example, during the hiring process, our human resources department ensures fair recruitment processes and considers candidates based on merit, regardless of their origin. Being in the fintech industry, at Brighty we provide our team with flexible working arrangements, so they can work from any corner of the world.

“The fintech space as a whole has a role to play in providing inclusive services to the general public, including serving the underbanked population, providing alternative and low-cost banking services, as well as offering educational resources and tools to help people understand products financial, budgeting and investments.

“Overall, businesses can play a significant role in addressing social inequality and promoting a more equitable economic environment.”

Moral imperative

Yael Malekhead of staff at Blue vine, a digital banking platform, said:

Yael Malek, Chief of Staff, Bluevine

“As leaders, we are tasked with both leading by example and guiding our teams toward understanding the meaning of inclusive language and actions. By taking time to educate and illuminate the broader impact of our words and decisions, we can help activate leaders equipped to drive change from within.

“We must prioritize inclusive hiring to accommodate a more diverse candidate pool. Today, it is essential to move beyond hiring practices that can inadvertently limit opportunities for capable, underrepresented individuals. We should challenge ourselves to think creatively and not just stick to the existing mold, which might seem easier but ultimately stifles diversity efforts and therefore diminishes the potential for greater creativity and innovation, stronger financial results and overall value for the customer.

“When we hire, we have a crucial opportunity to represent voices that aren’t in the room. Working collaboratively is key to identifying candidates we might otherwise overlook. It involves taking a critical look at evaluation criteria and processes to ensure they are truly inclusive.

“Ultimately, our commitment to DEI is not just a moral imperative, but a solid business strategy that moves us toward greater innovation and a deeper understanding of the communities we serve.”

Set the tone

Katie Barnes, HR Manager, BHG Financial

Katie Barnes, HR manager at personal and business loan provider, BHG financial, said: “Success and company culture begin with strong leadership and the ability to motivate, influence and lead by example.

“Leadership plays a crucial role in promoting a healthy environment by setting the tone. Our leaders are committed to promoting inclusivity by actively creating opportunities and showing their employees that great ideas come from all backgrounds and work levels.

“We strengthen DEI through continuity education and training opportunitiestracking our progress through data and incorporating leadership skills that include inclusion in performance reviews and continuous feedback.

Aysun Ahi, Chief People Officer at Openpayd

Aysun OuchCPO at the Banking-as-a-Service platform, OpenPay, said: “Leadership plays a critical role in fostering an inclusive environment. Leaders have the power to shape values and behaviors, embedding DEI into the company’s mission and vision. By setting the tone for the organization, they can inspire others to support DEI initiatives. An inclusive environment is unattainable without leaders who embrace and exemplify these values.

“Indeed, DEI should be on the agenda of all business leaders and it is vital that they are held accountable for taking it forward. There are several key measures that should be used to ensure that leaders can be held accountable to DEI goals. These are:

Openly Setting Expectations: Leaders must clearly communicate DEI expectations to all employees.
Lead by example: Demonstrating commitment through your actions is key to inspiring others.
Provide resources and support: Ensuring that adequate resources and support are available for D&I efforts is essential.
Judge the results: Evaluate the diversity of the board of directors and executive team, as well as the company as a whole. Incorporate DEI metrics into performance evaluations to ensure leaders are meeting these goals.

“By integrating these measures, organizations can hold leaders accountable and drive meaningful progress toward an inclusive environment.”

Sustaining and uplifting

Maggie Vo, general partner and chief investment officer at Fuel Venture Capital

Maggie Vo, general partner and investment director at Fueling venture capital, said, “Leadership plays the most important role in fostering an inclusive environment because decisions come from the top of a company.

“At Fuel Venture Capital, we have built our team with a culture of inclusion and diversity since the beginning by supporting, uplifting and ensuring there is always a woman at the table. Leaders must commit to forming strong networks and communities with other diverse people in the finance and technology ecosystem to develop mentorship and sponsorship programs to foster the growth and development of future generations of powerful and diverse people. You can hold leaders accountable by encouraging diverse hiring practices and, if you are a venture capital firm, actively seeking out companies with a diverse founding team.”

Transparent career paths

Gloria Garcia Cisneros, wealth manager, LourdMurray

Gloria Garcia Cisneros, asset manager at financial services provider, Loud Murray, She said:

“While there has been an increase in diversity among companies, the work is not done yet. To ensure this DEI work is not performative, representation must extend beyond entry-level roles when we look at managers and C-suite roles. This requires transparent career paths, intentional mentorship/ERG groups, and clear professional development/training opportunities.

“When looking at product offerings and creation, it’s still common for executives to apologize and say they don’t understand when they make mistakes. You need to put checks and balances in place to do better. If they care, they will implement it. The best way to ensure you create innovative and inclusive products is to have the right seats at the table. Leadership must recognize the power of diverse thinking and include representation at the decision-making table.”

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.”