Fintech

What will Trump’s vice president, JD Vance, bring to fintech?

Published

9 months ago

18 July, 2024

“AI raises a number of security concerns, and I fully admit that there are a number of issues that concern me as AI continues to develop. In particular, you could imagine a scenario where AI makes these chatbots much more efficient, much more believable, allows predators to prey on children more easily online. That’s a real concern and something that I think we on this committee should be very concerned about. And I know it’s a bipartisan concern.

“On the other hand, I also worry that this legitimate concern justifies some overregulation or some attempts at preemptive overregulation that would, frankly, entrench the technology incumbents that we already have and actually make it harder for new entrants to create the innovation that will kind of fuel the next generation of American growth and American job creation.”

This is what JD Vance, Senator from Ohio, said on July 11, 2024 at the Committee on Commerce, Science, and Transportation of the United States Senate hearing on “The Need to Protect Americans’ Privacy and the Acceleration of Artificial Intelligence.”

Vance continued: “Very often, CEOs, particularly of big tech companies that I think are already in a strong position in AI, come in and talk about the terrible security dangers of this new technology and how Congress needs to step in and regulate as quickly as possible. And I can’t help but worry that if we do something under pressure from the incumbents, it will be for the benefit of those incumbents and not for the benefit of the American consumer.”

Days later, on July 15, 2024, Donald Trump named the former Republican “never Trumper” as his vice presidential nominee. Delegates to the Republican National Convention (RNC) formally chose Vance the next day. But who is JD Vance and what impact will he have on the U.S. fintech ecosystem?

Who is JD Vance?

Best known for his memoir-turned-film Hillbilly Elegy, Vance is a former venture capitalist with ties to Silicon Valley, an advocate for open-source artificial intelligence and cryptocurrency, and has brought his tech savvy to the 2024 U.S. presidential race.

Second The buzz of technologythe current senator could “significantly influence policies affecting the startup and VC ecosystem if the Trump-Vance duo is elected.” Having previously worked at Peter Thiel’s firm, Mithril Capital, Vance continued to receive support from the former PayPal CEO. After that, Vance co-founded Narya Capital, an early-stage venture capital firm focused on using technology and science to serve startups in underserved regions of the United States.

Furthermore, as the quote above suggests, Vance is not anti-AI and takes a measured approach to the technology, questioning how it can best be regulated. While former President Trump has denied association with the ideas presented in
Project 2025With more than 100 conservative organizations involved in its creation, some of these policies could be implemented if Republicans retake the White House in November.

One such ideology is that the U.S. is unwittingly feeding data and improving AI datasets to companies beholden to the Chinese CCP. It remains to be seen whether Vance, who favors open-source AI, will lead the shift in attitudes within the Republican Party.

Even the publisher of Project 2025, Heritage, is firmly opposed to a CBDCarguing that “a CBDC would provide unprecedented oversight and potential control of financial transactions without providing additional benefits available through existing technologies.” Alongside this, there is the belief that it is the SEC and the Transparency Commission have been “irresponsible actors in the digital asset space. They have had more than a decade to promulgate rules governing digital assets, yet the SEC has utterly failed to do so and the CFTC has provided only minimal guidance.”

At the end of June 2024, Vance started A draft bill is circulating that would revamp the way the U.S. regulates digital assets and improve on Republican-led legislation that the House passed with the support of 71 Democrats. The plan would reorganize how the SEC and CFTC oversee the cryptocurrency market, and in turn, Vance could become a popular choice among crypto industry leaders.

The last VC on a ticket was Mitt Romney, and it remains to be seen whether the policies of 2012 will emerge in 2024. At the time, Gov. Mitt Romney
priority tax reform and, in addition, has made a series of public statements encouraging skilled immigrants to remain in the United States, while also pushing for more STEM graduates.

What do the financial and fintech industries think of JD Vance?

Susannah Streeter, Head of Finance and Markets, Hargreaves Lansdown:

“US indices look set to hold on to a wave of positivity that has swept the market. With hopes of multiple US interest rate cuts rising and a triumphant Trump at the Republican National Convention easing immediate concerns about volatility, Wall Street stocks posted further gains.

“There are glimpses of further optimism about the timing of the Federal Reserve’s interest rate cuts, with two or three cuts this year now priced in by financial markets. It comes after an interview with Fed Reserve Chairman Jerome Powell at the Economic Club of Washington. He said the Bank had come closer to cutting interest rates because the economy was in much better balance and, crucially, that the 2% target did not have to be reached before borrowing costs could come down.

“Rising applause greeted Donald Trump at the Republican National Convention when he picked J.D. Vance as his running mate. Vance has gone from a fierce Trump critic to a friend-enemy and now a running mate. He will be popular among rank-and-file Republicans, especially given his backstory, chronicled in his memoir “Hillbilly Elegy,” about his family’s struggles with poverty and addiction. But questions remain about how much he will win over swing voters, especially given his anti-abortion stance.

“However, Trump’s triumphant return to the stage appears to have further raised expectations of a November victory. His company Trump Media and Technology Group Corp jumped 31%. Oil majors such as Exxon Mobil also gained ground, despite the drop in crude prices, given expectations that another Trump presidency would likely emphasize energy independence and continue the increasing pace of drilling permits that took place under the Biden administration.

“Trump has promised to ramp up fossil fuel production and roll back some of Biden’s greener policies in the Inflation Reduction Act. Private prison operators Geo Group and CoreCivic have also made big moves, given the expansion the industry underwent during his first administration.”

Nigel Green, Chief Executive Officer, deVere Group

“Vance, an outspoken advocate of Bitcoin and other digital currencies, represents a significant and strategic move in the evolving political landscape where cryptocurrencies have become a major issue. This decision is not only smart, but also a potentially transformative masterstroke. This shift has also made cryptocurrencies a hot topic in political discourse. Younger generations, in particular, are deeply invested in the promise of decentralized finance, seeing it as a way to democratize access to financial tools and economic opportunity.

“In selecting Vance, Trump is tapping directly into this zeitgeist, aligning his campaign with the forward-looking aspirations of a significant voter base. Vance’s support for crypto signals to these voters that the Trump campaign is forward-thinking and committed to embracing innovation. This is in stark contrast to President Biden, whose age and perceived reluctance to fully support the crypto revolution will likely alienate younger voters. The Trump campaign is drawing deep support from crypto industry executives.”

“With over $100 million already pledged, the campaign will have the resources to mount an aggressive, far-reaching campaign. This influx of funds will enable targeted advertising, broad grassroots outreach, and sophisticated digital outreach, all of which are crucial in a competitive election. Trump’s promise to fight what he calls Biden’s restrictive cryptocurrency policies has struck a chord with these deep-pocketed executives. The crypto industry’s financial contributions could prove to be a turning point in the election. By choosing the pro-Bitcoin Vance, Trump is further strengthening that proposition.

“Vance’s support for cryptocurrency also puts him on the right side of history when it comes to innovation and economic freedom. Cryptocurrency represents a radical shift from traditional, centralized financial systems. It offers the promise of greater financial inclusion, lower transaction costs, and greater privacy. Vance’s alignment with these values positions him as a champion of the future, supporting policies that promote technological progress and economic freedom. This stance is likely to resonate with voters who feel disenfranchised by the current financial system and are looking for alternatives that offer more control and opportunity.

“Vance’s pro-crypto stance not only highlights his youth, but also his willingness to engage and promote innovative solutions to contemporary problems. This youthful vigor could be a deciding factor for voters looking for a candidate who represents the future rather than the past. Selecting J.D. Vance as his running mate is a shrewd move by Donald Trump, who is positioning his campaign to capitalize on the growing importance of cryptocurrencies in American society, business, and the financial system. Vance’s pro-crypto stance appeals to younger voters, attracts influential donors, and positions Trump’s campaign on the right side of history when it comes to innovation and economic freedom. In a political landscape increasingly shaped by technological advances and the search for economic alternatives, it would appear that the selection of Vance is a stroke of genius.”

Source

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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

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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

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.”