Fintech

Why this fintech isn’t pushing retirees out the door | EBA

Published

9 months ago

10 May, 2024

Why this fintech isn't pushing retirees out the door | EBA

A group of DCI employees enjoy a shaved ice truck during a kickoff event for the company’s rebranding. The fintech is looking for ways to retain workers, including offering a part-time program for retirees.

Collaboration was a core tenet of DCI’s founding more than 60 years ago, when four banks in Hutchinson, Kansas, came together to build a core processor for institutions of all sizes.

Those ideals remain important today. DCI has created a loyalty program for employees who want to reduce their working hours but not retire completely.

The birth of the company’s part-time retiree program came in early 2022, after a conversation between Janet Seiler, then head of development for DCI, and her manager Sandra Schmitt initially led to the prospect of helping employees to make your way in the world of work. next stage of their life. Seiler was close to retirement age but was interested in staying with the company in some capacity.

To know more: From rock star to golf reporter, side hustles are bringing retirees back to work

“Through many discussions, [Seiler and Schmitt] talked about hearing from friends and former retirees that they were enjoying retirement but feeling a sense of boredom. … That’s what drove them [boss] toss out the idea to see if a part-time arrangement might be possible,” said Katie Albers, vice president of human resources for DCI.

To determine whether an employee is eligible to remain on part-time, they must first meet program-specific criteria. This starts with making sure the opportunity is mutually beneficial for both the DCI and the individual. This includes a discussion of the employee’s interest in the arrangement and determining whether there is a business need that could be addressed with the person only partially retiring.

After initial discussions, both parties work together to build an appropriate plan for what the reduced workload will look like, help train the employee’s successor, and set a potential target date to leave the company completely. Seiler, who was the first employee to take advantage of the program, ended up working for two more years after her original retirement date and resigned earlier this year.

“This first use case was so successful that employees nearing retirement age began asking about the possibility of a similar arrangement,” Albers said. “Although it is not suitable for all cases and scenarios, it is a great option to explore and use when the conditions are right.”

Overall, four staff members participated in the part-time retiree program.

To know more: Americans want $1.5 million for retirement, but their savings are nowhere near that amount

Employee retention and succession planning are two big issues the financial services industry has grappled with in recent years. Top executives who delayed their planned retirements due to the COVID-19 pandemic in 2020 resigned in a wave of departures, creating a shortage of experienced talent.

More recently, institutions such as Zions Bancorp in Salt Lake City, Toronto-based TD Bank Group, Navy Federal Credit Union in Vienna, Virginia, and JPMorgan Chase have appointed new heads or have begun to grapple with the question of who to appoint to positions senior managers.

Allowing the partial retirement of veteran workers can help facilitate these transitions within an organization and preserve important institutional knowledge so that it can be passed on to the next generation of workers.

And it’s an issue that companies will likely have to address in the coming years as baby boomers outline their retirement plans.

To know more: Do you want to increase employee enthusiasm? Give them the skills to grow

According to the Pew Research Center, about 62 percent of older employees, those who are 65 or older, work full time, up from 47 percent in 1987. Last year, the nonprofit analyzed the data on earnings, hours, and employment characteristics from the U.S. Census Bureau’s Current Population Survey, as well as findings on employment, retirement, and gig participation from the Federal Reserve’s 2022 Survey of Household Economics and Decisionmaking to better understand the current situation. role of the 65 and older workforce in the United States

Factors such as higher levels of education, better healthcare standards, and advanced pension plans have allowed older Americans to remain in the workforce. Wages have also risen, averaging $22 an hour in 2022, nearly double the $13 an hour rate in 1987.

The combination of these market conditions led older workers to account for 7 percent of all wages and salaries last year, more than triple the 2 percent share in 1987.

But beyond the financial and employment benefits offered to both employers and employees, experts say retirement experiences are individual to each person, and programs like the one offered by DCI can help dispel negative stereotypes against workers older.

“Semantic memory, that is [storing and recollection of] facts and information, it’s something we know is well retained into old age,” said Dr. Laura Richmond, a psychology professor at Stony Brook University in New York. “As you might imagine, it’s not uncommon for older workers to serve as mentors or leaders in their field and help hire new workers, help get [them] integrated and provide guidance on how to think about solving complex problems in the workplace.”

To know more: When baby boomers retire, don’t let their connections leave the workforce, too

Richmond, who specializes in research into everyday cognition, said older members of the workforce, by virtue of time spent in their respective fields, presumably have more skills than others.

Programs like these that help use a knowledge base about aging to support ongoing projects and train successors “speak against some of the typical ageist attitudes that we might see pervading the workplace and I think Western culture as a whole” , Richmond said.

Hiring employees with diverse skills and knowledge remains a key focus for many organizations in the financial services industry, prompting leaders to develop programs like mentorship, employee resource groups and more in hopes of attracting and retaining talent. The part-time retiree program is just one example of concerted efforts to strengthen staffing.

“Even after they’re gone, how many companies can say they stay in touch with their retirees at the level that we do… It’s the relationships we’re building with those people as they work here and within our four walls” , Albers said. “Let’s be a family.”

To know more: How to retire without regrets

DCI has taken other steps to help ensure smooth transitions as staff members consider retirement. Earlier this year, Fintech surveyed all 307 employees to gauge interest in taking on a management or leadership role, as well as what the ideal timeline for such a change would be.

They found that by allowing employees to express those goals without the need for an in-person interview, more staff members than expected were interested in leadership positions.

These opportunities are not exclusive to early-career professionals, as many experienced employees are also eager for advancement.

“It was really cool to see [those responses] and then be able to start sifting through responses to match interested employees with current experiences “to make them better suited and ready for when that opportunity comes knocking on the door,” Albers said.

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Related Topics:Contents of the EBA EBA functionality Employee benefits Fintech Retirement Technology Workplace culture

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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.”