Cryptocurrencies continue to be a hot topic, with new guidelines being introduced by different governing bodies to gradually create regulations for the digital assets. The latest of these to tackle the evergrowing problem that is digital asset regulation is Dubai: in March, it announced a new law (Law No.4 of 2022) to create a legal framework for investors, and Dubai Virtual Assets Regulatory Authority (VARA) to enforce this law.

In addition to a more established framework, the law will create international standards for virtual asset (VA) industry governance to promote responsible business growth, under prudential regulations. It will be applicable throughout the emirate, including special development zones and free zones, but not Dubai International Financial Centre. VARA has a legal personality and financial autonomy and is linked to the Dubai World Trade Centre Authority (DWTCA).

VARA will be responsible for licensing and regulating the sector across Dubai’s mainland and the free zone territories (excluding DIFC). This is because DIFC’s regulator, the Dubai Financial Services Authority (DFSA), is working on its own regulation for the virtual asset sector.

Knock-on effect

The new law has allowed various global VA exchanges to expand into Dubai. With regulatory oversight from VARA, Binance, the cryptocurrency exchange, will be permitted to extend limited exchange products and services to pre-qualified investors and professional financial service providers.

Changpeng Zhao (CZ), founder and CEO of Binance, said: “High standards of regulation and compliance are critical to the development and maturing of the global crypto and blockchain industry, which is why our team has been working tirelessly to demonstrate how we meet and exceed the requirements of regulators such as the VARA.”

“Binance is appreciative of being awarded this license in such a progressive regime, targeting uncompromised governance and market security. The collaborative way in which Binance has been engaged to bring proven industry compliance leading experience to the Dubai ecosystem is indicative of the unique operating model that the VARA is creating for the global industry.”

Additionally, Crypto.com, the cryptocurrency platform and Investopia, the UAE platform that brings together stakeholders from throughout global finance, technology and sustainability sectors to formulate innovative new platforms for economic progress, inclusion and diversity, have hosted a press conference for the Investopia Summit and launch the company’s founding partnership, following a Memorandum of Understanding (MoU).

As the exclusive global cryptocurrency trading platform founding partner of the Investopia Summit, Crypto.com will play a prominent role in furthering the role of digital assets and their accompanying infrastructure by bringing sector-leading expertise and capability to such an important global platform.

“The United Arab Emirates is committed to championing the industries of the future and to developing an ecosystem that attracts pioneers, innovators and investors to bring them to fruition,” commented H.E. Dr. Thani Al Zeyoudi, Minister of State for Foreign Trade and the Minister in Charge of Talent Attraction and Retention. “Cryptocurrencies, virtual assets and the blockchain are exciting new sectors that are already revolutionizing how money, information and value is stored and transferred. The UAE is now developing a robust governance and regulatory framework to ensure that we are providing a best-in-class environment for companies in this space to flourish – and to position the UAE as the ideal platform for disruptive ideas with global impact.”

Abu Dhabi Global Market (ADGM), Abu Dhabi’s international financial centre, is partnering with AirCarbon Exchange (ACX) to create the world’s first fully regulated carbon trading exchange and carbon clearing house.

The clearing house will be established in Abu Dhabi, the capital of the United Arab Emirates (UAE).

Pursuant to its recently released consultation paper, ADGM is set to become the first jurisdiction globally to regulate carbon credits and offsets as emission instruments and to issue licenses for exchanges to operate both spot and derivative markets.

The regulatory framework will allow corporates to trade and finance carbon credits like conventional financial assets, thus increasing participation and investment in global carbon reduction and offset programmes.

Expected to launch in 2022, ACX will be established as a recognised investment exchange (RIE) and regulated by ADGM. As a regulated RIE, ACX aims to offer efficient trading and a regulated transparent price discovery mechanism.

In addition, ACX aims to set up a regulated recognised clearing house (RCH) – which will be known as ACX Clearing Corporation – for the purposes of custodising, clearing and settling commodities and commodity derivatives.

ACX intends to initially use its distributed ledger technology within a traditional commodity trading construct to create tokenised carbon credits for spot trading.

At a later stage, ACX plans to offer carbon credit futures as commodity derivatives for trading. All digital tokens will be custodised by the RCH, settled and cleared using the RCH’s blockchain smart contracts providing efficient settlement for all spot transactions.

It is intended that the RCH, once established and operating within ADGM, will play a pivotal role in other markets and financial instruments, including virtual asset markets, adding vital market infrastructure to the digital trading ecosystem. ACX intends to extend its trading platform offering to include clean energy products, in addition to carbon credits.

Ahmed Jasim Al Zaabi, chairman of ADGM, said: “We are excited to be partnering with ACX to enable and facilitate the trading of high-quality carbon credits, and in that aspect, encourage more companies to reach their decarbonisation goals.

“As the first country in the Gulf to commit to net-zero by 2050, this new trading platform is a further extension of Abu Dhabi’s drive to support sustainability ambitions and underlines ADGM’s focus on carbon neutrality as an international financial centre.”

William Pazos, managing director and co-founder of ACX and Kevin Iwanaga, COO MENA region, added: “Abu Dhabi and by extension ADGM, are an integral part of ACX’s global expansion. Our recent partnership with the Deutsche Börse Group, expansion into Brazil and our already well advanced full exchange and clearing application in ADGM complement each other to deliver a truly global marketplace from the heart of the MENA region. We are excited to work within a dynamic and forward-thinking ecosystem such as ADGM.”

In January, ACX partnered with the UN Framework Convention on Climate Change (UNFCCC) to promote carbon offsetting via UNFCCC certified emission reductions (CERs) to allow clients representing 30 different countries to purchase and retire CERs for their carbon offsetting purposes.

It will be the first exchange in MENA to list CERs held in the UNFCCC Clean Development Mechanism registry.

ACX aligns with the UAE’s goal to accelerate national economic development. Last year, the UAE became the first nation in the Middle East and North Africa to announce a plan to achieve net-zero emissions by 2050.

Through the net-zero by 2050 initiative, the UAE aims to attract inflows from global capital markets as investors increasingly seek ESG-compliant investments.

In January 2022, ADGM announced that it had achieved carbon-neutrality status by offsetting its carbon emissions in 2021, which underpins ADGM’s commitment to building a progressive and more sustainable economy. It was the world’s first international financial centre to become carbon neutral.

Dubai Chamber of Commerce & Industry has expanded its partnership with Mastercard to leverage Mastercard’s data and intelligence services to drive economic growth in the Emirate. The strategic partnership aims to spur the use of digital payments, enable Dubai’s shift towards a digital economy and further support small and mid-sized enterprises (SMEs) in the market.

Through this collaboration, Mastercard will offer its data-driven analytics technology to provide insights into the rapidly evolving spending patterns of consumers, including measuring the use of online channels. A selection of these insights will be showcased during a series of workshops hosted by the Chamber.

“We are delighted to work with Mastercard to support our decision-making when it comes to boosting commerce and trade in the UAE. A key pillar of our new 2022–2024 strategy is growing Dubai’s digital economy and improving the business environment. By utilising Mastercard’s global-best technologies, we will ensure these goals are achieved through deliberate and precise insights that ultimately serves to benefit the government, businesses, and residents,” said H.E. Hamad Buamim, President & CEO of Dubai Chamber of Commerce & Industry.

Last year, the institution transitioned to a new model in a paradigm shift for business in Dubai, in order to strengthen the Emirate’s position as a digitally-driven economy and global business hub. The newly adopted Dubai Chambers strategy is based on four main pillars, including enhancing and developing the business environment, attracting international companies to Dubai, facilitating the global expansion of local companies, and advancing the emirate’s digital economy.

“As Dubai continues to embrace the power of technology in fostering business growth and sustainability, Mastercard is supporting our government partners in this dynamic journey. With our ability to transform big data into meaningful insights, we are geared to help accelerate the transition of the city towards a smart economy. This partnership further supports our ongoing commitment to empower SMEs so they can thrive in a digital world,” said Khalid Elgibali, Division President – Middle East and North Africa, Mastercard.

According to the Mastercard Economics Institute, economic growth in the UAE is on an accelerating path in 2022. Alongside the strength in the economy comes the rise of inflation following years of deflation. The pent-up demand of domestic consumers in the UAE is another pillar of growth, and the strong recovery in travel which began in the second half of 2021 is expected to continue this year. Consistent with the increase in travel, spending on hotels, taxis and car rentals, particularly in Dubai and Sharjah, has also increased. Online penetration in products such as electronics has remained high while the most notable upward e-commerce share shift has been for restaurants.

Mastercard has been driving digital inclusion with governments across the region and leading the way in the enablement of smart cities, which hold the key to a more connected and inclusive future. Through its partnerships, Mastercard uses smart solutions and innovative technologies to make cities more efficient and inclusive.

The UK personal tax app untied is to partner with Eazitax, the specialist accountant to the private-hire trade to provide taxi drivers and operators with industry expertise and accessible technology.

April 2022 will mark a month of major change for the private hire industry; most notably for taxi drivers.

From 4 April 2022, drivers will have to prove that they are registered and either paying or ready-to-pay tax. It is a ‘condition’ of being licensed to be a driver, which is why HMRC are calling it conditionality.

If drivers are unregistered and not ready-to-pay tax, they won’t be licensed to drive.

This will undoubtedly mean, after the April deadline, that some drivers are unable to work. untied and Eazitax are working together to help drivers meet their obligations, ensuring that drivers stay on the road.

“Conditionality is the biggest thing that has happened to the private-hire industry for a long time, and HMRC’s timing isn’t great,” comments Eazitax CEO Gary Jacobs. “The industry is still in recovery from the pandemic, and it’s important that operators get the support they need.

“Conditionality will affect half a million people. By working with untied, we aim to make things easier for everyone involved. untied has great software that’s easy-to-use for drivers and allows us to support our clients with technology.”

Eazitax and untied’s partnership will mean a greater product offering for their clients with a new suite of taxation products, for clients who are tech-savvy or tech-phobic.

Kevin Sefton, CEO of untied, added: “We clicked with Gary and the team as soon as we met. Together we can reach more drivers at scale and this partnership brings together two best of breed propositions – a great combination of untied’s technology with Eazitax’s strength of relationships and hands-on experience in helping drivers and operators.

“This is particularly important at a time of significant change in the sector.”

Each week we take a look at some of the latest fintech news to hit the industry. This week, digital business account Mettle reaches 50,000 customers and a third of adults believe they have been misled by ‘finfluencers’.

Lloyds Bank to close 60 more branches across UK

Lloyds Banking Group has announced the closure of 60 branches across the UK, with 24 Lloyds Bank branches, 19 Bank of Scotland branches and 17 Halifax branches toshut as customers move towards online and mobile banking.

The bank has advised that the number of online banking customers has increased by 12 per cent over the last 2 years, and mobile banking customers increased 27 per cent over the same period. 

Vim Maru, group retail director, said: “Our branch network is an important way for us to support our customers, but we need to adapt to the significant growth in customers choosing to do most of their everyday banking online.”

A third of adults believe they have been misled by ‘finfluencers’

A survey of 2,000 UK adults by investment brokerage XTB found that 33 per cent regret taking advice from social media financial influencers – dubbed as ‘finfluencers’ – who they now believe overstated their own credentials.

The UK has seen a rise in online content creators sharing their finance advice on social media, with the study revealing that there are now 71,159 UK finfluencer accounts on Instagram, TikTok, and YouTube alone.

Of these, 37,847 provide investment guidance and 7,246 offer cryptocurrency advice. Only 5.5 per cent of UK finfluencer accounts analysed were verified, and 61.4 per cent demonstrated signs of suspicious activity.

However, nearly half (46 per cent) of Britons found the volume of online finance advice overwhelming and didn’t know how to identify who was legitimate, while nearly a third (29 per cent) spent less time verifying the credentials of online finance experts, compared to those they met in person.

Mettle reaches 50,000 customers

Mettle, the NatWest-backed digital business account, has seen 500 per cent customer growth since the start of 2021, reaching a milestone of 50,000 side hustlers, freelancers and small businesses in the UK. 

Despite challenges for these small businesses, Mettle – which was built to serve the self-starters of the UK – has also seen customer deposits increase by almost 600 per cent, and has processed £2billion worth of customer transactions through the platform since January 2021, showing strong growth in the sector.

Newly appointed CEO of Mettle, Andy Ellis said: “Hitting this customer milestone is a testament to how active this segment of the market is. Traditionally, smaller businesses and side hustlers have been too expensive to service and their needs too diverse. Our unique position being backed by NatWest’s regulatory and financial know-how gives us the space to focus on putting our customers’ needs first.”

Men are nearly twice as likely as women to feel optimistic about finances despite being more reliant on credit

New research from the subscription loan provider, Creditspring reveals that men in the UK are feeling much more optimistic about their finances compared to women.

Men are 50 per cent more likely than women to feel more optimistic about their finances than ever before – a quarter of men (25 per cent ) felt this way compared to just 15 per cent of women. However, men are also more likely to rely on credit, with around one in six (15 per cent ) men admitting that they will need to borrow money in the next six months, compared to one in ten women (11 per cent ).

Neil Kadagathur, Co-Founder and CEO of Creditspring, comments: “Despite the UK struggling through a cost of living crisis, many men remain surprisingly optimistic about their finances. With soaring living costs, purse strings will need to be tightened and men are at real risk of sliding into unmanageable debt if they’re not vigilant.

SmartSearch launches high-risk country report

A new high-risk country report service has been launched by anti-money laundering specialist, SmartSearch in response to the introduction of sanctions against Russia. The service enables regulated businesses to scan existing clients and check for residency or citizenship in Russia, Belarus, or any other high-risk countries.

The aim is to support those companies looking to quickly and efficiently evaluate their existing client bases following sanctions placed on a number of Russian individuals and businesses.

Martin Cheek, managing director of SmartSearch explained: “This new product will give businesses peace of mind that they aren’t working with anyone they shouldn’t be. The information will be provided quickly and efficiently, and will also be regularly updated for ongoing monitoring purposes.”

Fintech Scotland announces new strategic partnership with NCR Corporation

FinTech Scotland, the cluster management body, has announced a new strategic partnership with NCR Corporation, an enterprise technology provider to further advance innovation for financial institutions.

The partnership builds on NCR’s strong innovation track record as a software and services provider with a long-established heritage of applying new technology developed through its Dundee Discovery Centre.

Nicola Anderson, Chief Executive, FinTech Scotland, said, “We are hugely excited about the strategic partnership with NCR and their dynamics and pioneering approach to developing technology will further accelerate innovation with fintech SMEs and large financial firms in the cluster. Our industry-driven, action-orientated R&I Roadmap will provide the ideal framework to advance new financial services innovations with NCR and we look forward to the collaboration with the NCR team in Dundee as well as the USA and across the globe”.

58 per cent of young Brits have bought crypto; most think it’s ‘future of finance’

According to a new opinion poll commissioned by StarkWare Industries, 58 per cent of Brits aged 18-to-24 have invested in cryptocurrency. This age group is also convinced that crypto is the “future of finance,” with 52 per cent subscribing to this view.

Those who have invested are constantly checking and adjusting their assets. Some 81 per cent have at least one crypto tracker on their phone, and 40 per cent say they “fiddle or amend” their holdings daily. Only 19 per cent of those with crypto holdings let a week pass without making changes.

“This poll shows how widespread crypto has become while indicating just how huge it will soon become,” said Eli Ben-Sasson, co-founder and president of StarkWare Industries.

“We see that young Brits, those who will soon shape the economy, are especially tuned in to crypto. It’s an important insight that they are investing in large numbers, and overwhelmingly convinced crypto will be ‘the future’.”

On track to reach $5.4billion this year, the insurtech industry is expected to expand north of $152billion over the next 8 years. An increasing number of companies across banking, lending, financial planning, benefits, and even lifestyle verticals are all taking advantage of this trend by partnering with insurtechs and integrating digital insurance products right into their offerings.

Someone who understands this is Jeff Merkel, Co-Founder and Chief Distribution Officer at Ladder. Offering life insurance built from the ground up, Ladder’s digital-first approach is smart, easy, and accessible for the next generation. Prior to Ladder, Jeff was Director of Sales and Partnerships at Google. He joined the company from AdMob, where he was Vice President and General Manager of Asia Pacific.

Here he shares his thoughts on the key traits to look for as embedded insurtech rises. 

Industries are increasingly looking for sustainable, long-term ways to offer a holistic solution for their users as people turn more and more to digital platforms to manage the full spectrum of their lives. Let’s take financial services for example, these companies are at the backbone of people’s financial health, yet the space has traditionally felt complicated and intimidating for many. Digital innovations in this vertical are so exciting because they help people better understand the fundamentals of their finances and take action where it counts. Fintechs now have the opportunity to provide a bridge for their customers to protect their financial lives in a way that they understand and can easily accomplish – and that’s where integrated insurance comes in.

With so much activity in the space, the natural question that arises is how to pick an insurtech partner that will set you and your customers up for success. With that, here are four key things to look for:

User-focus & innovation

Placing the customer at the centre and innovating around their needs should be a hallmark of any good insurtech company. It can also be a hallmark of any good insurtech partnership. Let’s say you start planning your financial life – odds are that you want to be able to see all of your data in one place to make the most effective decisions for yourself. Insurance is a key component of that financial picture, and being able to surface it where it’s most relevant puts the user at the centre.

Companies looking to embed insurance are in a unique and powerful position when it comes to being able to best serve their customers. At Ladder, we find that our partners have unique data and insights that enable them to recommend life insurance in a more personalised way at the right time to the right people, right in their experience. Beyond the initial purchase, we also offer the unique ability to change your coverage as your needs change, giving customers the flexibility to manage their coverage over time right from the partner’s site or app.

A true digital experience

More and more insurance solutions appear to be digital. The user enters some basic information but quickly comes to encounter the same old traditional process lurking below the digital surface. If they want to get a good fully-underwritten price, they often have to at least get on the phone with someone if not endure a medical exam and still wait weeks for a decision. Finding an insurtech that is digital end-to-end will create a seamless experience for your customers from start to finish, and will also be able to share important and actionable insights to help more of your customers get the coverage they need.

The ability to integrate seamlessly

It should go without saying that embedded insurance solutions need to actually have the capability to be embedded, but that’s not always the case. The ability to provide a solution that delivers a seamless experience for customers is the difference between a holistic product and one that merely makes suggestions for where to check out different products. Embedding the insurance solution directly into the experience — whether that’s through a mortgage, savings, financial advisor, you name it — is key. Look for companies that offer deeper API integrations in order to do this well.

Look for the activation gap

Opportunities often lie in the gaps — the barriers to entry that need to be broken down to provide a clear and easy path to access. Take life insurance, for example. Unlike home and auto, which are compulsory for homeowners and drivers, life insurance is not a requirement for those who need it. 102 million underinsured or uninsured Americans know that they need life insurance, but are getting stuck in the traditional processes or procrastinating because there’s a perceived barrier to entry. It is in this activation gap where the opportunity lies to best serve people using your products and services.

Life insurtechs took the first big step in stripping out barriers to entry — transforming a typically weeks-long process of appointments, phone calls, and medical exams into a seamless, near-instant experience. The next layer down, then, is embedding directly into platforms where people are already managing other aspects of their lives. As soon as the product is brought directly to where the customer already resides, it becomes a no-brainer.

With the inaugural event due to take place on 13 July 2022, Fintech Awards London has confirmed the judging panel for the 2022 Awards. This stellar group of industry experts is excited to meet the shortlisted entries and hear their stories and vision for the future. 

Led by Charlotte Crosswell OBE, Chair of Open Banking, the judging team includes known names and trailblazers in the fintech sector.

Fintech Awards London MD, Matt Hyde, said: We’re proud to announce an outstanding judging panel as we bring the Awards to London for the very first time. As we recognise the fintech professionals across the capital, the Awards will place the spotlight fully on the emerging and established tech companies and entrepreneurs who are helping millions of customers with technology-enabled financial products. I’m excited to form a new community in London where we can truly celebrate the achievements in this exciting sector”

Charlotte Croswell who is leading the judging panel, added: “I am delighted to chair the upcoming awards panel. London is a key destination for fintech talent and innovation, and the Awards are a valuable opportunity to put a spotlight on the incredible companies driving our industry forwards, as well as recognise the leadership role of UK fintech on a global stage.

“Fintech Awards London provides the opportunity to celebrate those exciting firms and individuals who are bringing competition and innovation to financial services and I encourage everyone to nominate those individuals who they feel deserve to be recognised for their work in the sector.”

Joining Charlotte will be:

• Mark Hipperson, Founder & CEO Ziglu and former co-founder of Starling Bank.
• Kate Rosenshine, Global Technology Lead, Unicorns & Scale-Ups at Microsoft, with a strong background of building technology partnerships and supporting their expansion at scale.
• Stephen Kelly, Chair of Tech Nation and former CEO of high-growth global tech firms including Sage, Micro Focus and Fintech Unicorn Chordiant (Nasdaq) and whose ongoing commitment to the UK tech spans many roles including chairing the Science & Technology Honours committee.
• Neil Shah, Director and Tech Sector Specialist at the London Stock Exchange who brings with him, 15+ years of experience in helping entrepreneurs raise capital and execute mergers and acquisitions around the world.

The judging process will include in-person interviews with the shortlisted candidates, providing an excellent opportunity for those involved to meet the judges personally and demonstrate their passion for all things Fintech.

The Awards, which are also welcomed by the Economic Secretary to the Treasury & City Minister John Glen, are planned for 13 July 2022, to be held at The Underglobe, within the iconic Globe Theatre. Nominations are welcomed from now until 15 April 2022, in 14 categories, via www.fintechawardslondon.com, Shortlisted individuals, teams and organisations will be announced later in the spring.

Core provider Fiserv expects more fintechs to adopt the company’s AllData Connect platform. Fiserv announced last week that data aggregation fintech MX was the first company to access tokenized consumer data through its AllData Connect Platform, a part of the company’s AllData Aggregation data suite. Ann Cave, director of public relations at Fiserv, told Bank […]

• HR and payroll platform Papaya Global has acquired global money transfer company Azimo.
• The deal will allow Papaya Global to offer payments in hours instead of days.
• Financial terms of the deal were not disclosed.

Global money transfer company Azimo has agreed to be acquired by HR and payroll platform Papaya Global. Terms of the deal were not disclosed, but TechCrunch is reporting a purchase price of somewhere between $150 million and $200 million.

The Israeli payroll company will leverage Azimo’s payment platform to offer clients a payroll solution that makes immediate payouts across the globe. “We will build an innovative new payments and finance offering for clients in cash advance and credit-related products, and in cryptocurrency,” the company said in a blog post. The purchase will also enable Papaya Global to add remittance services to its lineup.

Founded by Michael Kent in 2012, Azimo offers a low-priced way for individuals and businesses to send money across the globe. The U.K.-based company charges a fee as low as $0.77 (£0.59) and boasts a more favorable exchange rate, as well. Azimo counts more than two million customers of its digital money transfer platform, which allows users to send money from 25 countries to more than 200 countries and territories worldwide.

In addition to its payment network, Azimo has something Papaya Global may consider quite valuable– payment licenses in the U.K., the Netherlands, Canada, Australia, and Hong Kong. “Azimo’s global digital payment network, multiple payment licenses, and deep fintech expertise strengthens our ability to help companies manage and pay their remote teams,” said Papaya Global CEO Eynat Guez.

Azimo has raised $88.1 million in combined debt and equity. Financial terms of the deal, which will bring all of Azimo’s employees over to the Papaya Global team, were undisclosed.

Photo by Kaboompics .com

• Alkami has entered a definitive agreement to acquire financial analytics company Segmint for $135.5 million in cash.
• The acquisition will combine Segmint’s data insights with Alkami’s digital account opening and digital banking technology.
• Both companies are Finovate alums. Alkami made its Finovate debut as iThryv in 2009. Segmint made its most recent Finovate appearance at FinovateFall in 2012.

Another day, another big acquisition in the fintech space. Today we learned that cloud-based digital banking solutions provider Alkami Technology has agreed to acquire Segmint, a financial data analytics and transaction cleansing specialist. Alkami will pay $135.5 million in cash for the Cuyahoga Falls, Ohio-based company, and expects its total addressable market to grow by $1 billion courtesy of the acquisition.

“Our customers want to deepen their customer relationships and grow revenue,” Allkami CEO Alex Shootman said. “To do so, they must transform raw account and transaction data into insights that lead to highly personalized communications. Segmint applies machine learning to transaction data to help FIs better understand their account holders and automates messaging with incredible precision and personalization across multiple channels.”

The acquisition will enable financial institutions partnered with Alkami to benefit from the combination of data sets from both Alkami and Segmint. In addition to providing a more comprehensive view of account holders, the combination also will bring greater precision and additional use cases to Segmint’s data models. Further, financial institutions will be able to use this data to leverage digital banking to better target, engage, and build customer relationships.

Approved by the boards of directors of both companies, as well as Segmint stockholders, the acquisition is expected to close in Q2 of this year – assuming regulatory approvals and customer closing conditions are met.

As we noted, the Alkami/Segmint acquisition is the second big fintech acquisition involving a Finovate alum this week. We reported yesterday that Canadian identity verification company – and Finovate Best of Show winner – SecureKey – agreed to be acquired by digital security and privacy company Avast.

Photo by Anthony

Visa is planning to connect its real-time platform to digital wallets, which could provide greater access to the company’s payments network. Linking the Visa Direct payments platform to digital wallets could provide greater access to digital wallets for the 5 billion bank accounts and cards connected to Visa Direct globally, said Catherine Gu, Visa’s head […]

FinovateEurope 2022 is a wrap. Our first European fintech conference in what we all hope is truly the post-pandemic era was an excellent opportunity for Finovate veterans and newcomers alike to meet and share insights on the most critical issues in fintech today.

In many ways, the two keynotes that began each day of our two-day event served as reminders of both the accomplishments of fintech to date, as well as the challenges that innovators in fintech and financial services will face going forward.

From commodity products to intelligent services

In his keynote address on how fintech trends in 2022 will drive transformation in financial services, David Brear contextualized his remarks by describing the journey financial services has traveled from analog through digitization en route to becoming truly digital. CEO and co-founder of fintech consultancy 11:FS, Brear underscored the notion that this journey was defined by the evolution of financial services from “commodity products to intelligent services.” He suggested that many companies in financial services were still essentially bringing digital tools to enhance analog solutions – not unlike attaching a carriage to a Clydesdale. As such, he sees the transition toward truly digital banking as “only 1% finished” with plenty of room to go.

For Brear, the current moment is one of execution rather than ideas. Entrepreneurs and companies in financial services have a better idea than ever of what their customers want, and now is the time for firms in this space to ambitiously act to meet those needs. Interestingly, and foreshadowing the themes of the next day’s keynote from AI scientist Inma Martinez, Brear observed that fulfilling these needs will help banks and financial services companies gain or regain the kind of intimate, personalized relationships that are more reminiscent of the kind of connections that smaller, more community-based versions of these institutions historically have enjoyed with their customers and members.

Solving complexity to better serve humanity

Creating an appropriate role for artificial intelligence (AI) was the topic of our Day Two keynote address – How To Use Data Analytics & AI To Create Human Centric Financial Products – from AI scientist Inma Martinez. As someone with decades of experience with artificial intelligence, Martinez has a healthy respect for the capacity of AI to do things that human beings cannot. At the same time, however, Martinez insists that these capacities need to be harnessed in a way that enables AI’s complexity-solving abilities to respond to human needs for “safety, enjoyment, and purpose.” Reminding her audience that the world is not merely “computational,” Martinez said that AI needs to be imbued with EQ, or emotional intelligence, that prioritizes rather than simply includes the role of human cognition. This would support an evolution in design thinking from the basic objectives of “usability, functionality, and convenience” to the more satisfying, emotional, and human-centered goals of being “memorable, assuring, and wholesome.”

Martinez also emphasized the importance of a modern approach to data and data management called the data mesh. This concept calls for leveraging distributed architecture to give end users the ability to readily access and query data where it lives rather than having to deal with a singular, centralized location such as a data lake. Improving the ability to access data is critical, Martinez explained, in a world in which data is both the key to a deeper, more meaningful understanding of customer behavior and the primary source of insights that can streamline the process of creating and innovating new products and services.

Photo by Andrea Piacquadio

• FintechOS has launched a pair of accelerators – for mobile lending and mobile onboarding – to enable institutions to support small businesses.
• The new offerings are built for speed, enabling companies to lower account opening times to less than 15 minutes.
• Headquartered in London and founded in 2017, FintechOS made its Finovate debut last September at FinovateFall in New York.

Digital banking and insurance solution provider FintechOS unveiled a pair of new accelerators to help financial institutions better serve their SME clients. The offerings, announced this week, support SME mobile lending and onboarding, and enable institutions to reduce the amount of time required to open a current/checking account to less than 15 minutes.

Calling SMEs “the backbone of the global economy”, FintechOS CEO and co-founder Teo Blidarus decried the “lending gap” that has kept many small businesses from being able to secure the critical funding they need in order to grow. “Our high productivity fintech infrastructure, digital and core financial technology blocks combine here with a low-code approach to help institutions close the gap by rolling out tailored financial services experiences at speed.”

FintechOS’ accelerator for mobile onboarding gives financial institutions the ability to implement a modern UX. This will enable them to readily configure both design and content, as well as journey sequence and product logic. The accelerator for mobile lending allows SMEs to access the financing solutions they need in minutes with an out-of-the-box loan origination journey that can be easily configured and requires no technical expertise. Both accelerators embrace a mobile-centric approach that allows small businesses to use their device of choice for both onboarding and financing, which will help lower abandonment risk during the account opening and lending process.

The launch of FintechOS’ account onboarding and mobile lending accelerators comes just days after the company announced a collaboration with digital transformation consultancy Tesselate Group. Together, the two companies will work to bring innovative lending solutions and strategic planning to financial institutions. The partnership will focus on product verticals including digital journey accelerators, ecosystem connectors, and lean core components.

“We’re on a mission to enable companies to build innovative financial services and products at the speed the market requires,” FintechOS VP of Ecosystem Todi Pruteanu said. “Our ecosystem is fundamental to achieving this objective, and FintechOS is investing significantly to build an industry-leading partner infrastructure.”

In February, FintechOS forged a global partnership agreement with fellow Finovate alum Onfido. The pact integrates Onfido’s identity verification solution into FintechOS’ customer onboarding, lending, and claims management journeys. Two of FintechOS’ customer-centric platforms for banks and insurers – Lighthouse and Northstar – feature Onfido’s identity verification and liveness technology.

Among Finovate’s newer alums, FintechOS demoed its technology on the Finovate stage for the first time in September at FinovateFall. At the conference, FintechOS’ Paula Costea and Steve Rooney demonstrated Sunglow, the company’s “super app for banking.” Sunglow enables consumers to finance and book vacations in a seamless, end-to-end customer experience that factors in every component of the lending and booking processes.

Photo by Pixabay

Sift is integrating technology from Keyless, the passwordless and multifactor authentication (MFA) provider, into its core platform to provide businesses with extensive consumer account security.

The integration with Keyless, which Sift acquired in November 2021, adds MFA step-up authentication as an option directly within the Sift Connect App Gallery so that users can authenticate by simply looking into their device’s camera. The integration can be triggered within Sift’s Account Defense and Payment Protection products.

Account takeover (ATO) attacks have grown rapidly over the past several years due to the expanding Fraud Economy—the global, interconnected network of online abuse that threatens merchants and consumers.

Specifically, ATO attacks across Sift’s network soared over 307 per cent between April 2019 and June 2021, and are becoming increasingly more automated and sophisticated. The evolution of ATO attacks is demonstrated in an animated visualisation on Sift’s new Fraud Intelligence Center, which deconstructs the Proxy Phantom fraud ring identified by Sift in Q3 2021.

To combat evolving risk posed by the fraud economy, businesses need solutions that provide account security, streamline their operations, and optimise growth.

The new integration creates true interoperability between Sift and Keyless by allowing businesses to route higher-risk login attempts through Keyless’ privacy-preserving biometric MFA. As a result, users can easily verify their identities via the front-facing camera on any trusted device.

“Account takeover attacks have reached new heights—in turn, many trust and safety teams are actively seeking out passwordless alternatives,” said Geoff Huang, senior vice president of product at Sift. “Through the new integration, businesses no longer need to choose between fraud and friction to more securely and seamlessly authenticate users.”

“As a digital wallet and trading platform, trust with our users is imperative,” said Rob McCall, director, fraud prevention at Uphold, a multi-asset digital money platform offering financial services to a global market, and Sift customer. “Sift’s approach to account security and its integration with Keyless’ passwordless authentication technology brings a compelling value proposition for any business that prioritises the trust and safety of its customers.”

Investopia and cryptocurrency platform Crypto.com recently hosted the inaugural press conference for the Investopia Summit and formally launched Crypto.com’s founding partnership. Following an agreement between the pair, the organisations gathered to discuss how they will collaborate on meaningful projects that will accelerate the development of future economies and financial innovation.

Launched by the UAE Government in September 2021, Investopia brings together stakeholders from throughout global finance, technology and sustainability sectors to formulate innovative new platforms for economic progress, inclusion and diversity. As the exclusive global Cryptocurrency Trading Platform Founding Partner of the Investopia Summit, Crypto.com will play a prominent role in furthering the role of digital assets and their accompanying infrastructure by bringing sector-leading expertise and capability to such an important global platform.

“The United Arab Emirates is committed to championing the industries of the future and to developing an ecosystem that attracts pioneers, innovators and investors to bring them to fruition,” commented H.E. Dr. Thani Al Zeyoudi, Minister of State for Foreign Trade and the Minister in Charge of Talent Attraction and Retention. “Cryptocurrencies, virtual assets and the blockchain are exciting new sectors that are already revolutionising how money, information and value is stored and transferred. The UAE is now developing robust governance and regulatory framework to ensure that we are providing a best-in-class environment for companies in this space to flourish – and to position the UAE as the ideal platform for disruptive ideas with global impact.”

“At a time of unprecedented change in the world, with new centres of growth and important financial markets emerging, there is ever greater demand for innovative cross-border investment mechanisms as well as long-term sustainable solutions,” said Eric Anziani, chief operating officer of Crypto.com. “The role of technology, advanced AI, and quantum computing is driving the need for digital assets and cryptocurrencies, while also supporting the journey towards greater financial inclusion. Our partnership with Investopia will enable us to progress these aims on a global scale.”

Crypto.com further highlighted the event’s inaugural press conference by announcing its long-term commitment to the region with the establishment of its regional hub office in Dubai. Crypto.com is focused on establishing a significant presence in the market and will be launching a substantial recruitment drive in the coming months to achieve this goal.

“We are opening a regional head office for the Middle East and Africa here in Dubai. It is going to be a great addition to run our operations from here because the UAE is diversifying its industries and trying to be bold and create opportunities. We are not here only to gain more market share but to create a broader ecosystem where there are more opportunities for all,” Anziani said during a press conference at the World Government Summit on Monday.

Dubai accounts for 57 per cent of scaleup funding in the Middle East and North Africa, while the emirate is home to 39 per cent of the region’s scaleups, according to a new report developed by Dubai Chamber of Digital Economy in cooperation with Mind the Bridge and Crunchbase.

The report, titled UAE Venture Outlook, examined key trends reshaping the maturing entrepreneurial ecosystem in the region, and highlighted the leading roles of the UAE and Dubai in attracting promising scaleups and tech giants.

The number of scaleups in MENA saw exponential growth in 2021, compared to 2020, as 587 scaleups were accounted for in the region by December 2021, compared to 139 in the previous year.

MENA scaleups have collectively attracted $9.1billion, representing 0.12 per cent of the region’s GDP. Data shows that a few countries are driving the effort of the MENA region to compete with the top global tech ecosystems.

On a country level, the UAE accounted for the largest number of scaleups (251) which attracted the majority of funding in the region, or 59 per cent, having raised $5.4billion. Meanwhile, Dubai alone accounted for 57 per cent of funding, as the emirate is home to a major of the region’s tech giants. Saudi Arabia came second as the kingdom is home to 106 scaleups (18.1 per cent of total) that raised a total of $1.2billion of growth funds. Egypt ranks third, accounting for 84 scaleups and $1.4billion raised.

The report revealed that 26 MENA scaleups (4.4 per cent of total) relocated their headquarters inside the region to boost their growth. The UAE was the preferred destination for relocation with 8 scaleups setting up in the country, followed by Saudi Arabia with 7, and Egypt (4). Additionally, a total of 41 scaleups opted to expand their footprint beyond MENA, primarily to the US (13), the UK (5), France (5), India (3), and Canada (2).

H.E. Omar Sultan Al Olama, Minister of State for Artificial Intelligence, Digital Economy and Remote Work Applications and Chairman of Dubai Chamber of Digital Economy said the findings of the report reflect ongoing efforts to advance Dubai’s digital economy and create a conducive environment in the emirate for scaleups to thrive and grow.

He noted that the report’s results indicate that Dubai is achieving considerable headway in achieving the vision of His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, position Dubai as a global leader in digital economy. He also said the Dubai Chamber of Digital Economy last year, along with the market research conducted by the Chamber would support the sector’s growth and development.

“Despite its vast competitive advantages, the UAE continues to add more incentives for businesses and startups. The introduction of golden visas, green visas, freelancer and entrepreneur visas are all bold and positive steps the country has taken to boost its value proposition,” said H.E. Hamad Buamim, President & CEO of Dubai Chambers.

“Venture capital is a crucial element needed to nurture thriving entrepreneurial ecosystems and advance digital economies. We will continue to work closely with public and private sector stakeholders to ensure a conducive environment for VC firms and investors, as well as entrepreneurs from around the world,” H.E. Buamim added.

This week, The Fintech Times spoke with David Jones, head of fintech, UK and Ireland, at Mastercard about the payment giant’s evolution to keep up with innovative fintechs and evolving payment preferences. 

What is the Mastercard offering?

Mastercard is customer-centric, collaborative and consultative. We started with card payments, but now we also focus on cultivating new technologies to deliver new types of payment experiences.

We operate a multi-rail network that offers our customers one partner to turn to for their domestic and cross-border needs. It’s simple, it’s frictionless. It’s delivering today that one seamless onramp to choose and activate any type of payment; cards, account to account, blockchain and new open banking and digital currency capabilities.

To give you an idea of our scale there are three billion Mastercard branded cards in circulation around the world, accepted at over 80 million acceptance locations. In 2021 alone 112 billion transactions were switched on the Mastercard network.

What is driving partnerships for Mastercard in the UK? Why are partnerships in fintech important?

Tech is easy. Scale is hard. You need an ecosystem to thrive, and we have that. Competition and partnerships are good for us and makes us better as we empower people and power economies.

We believe innovative fintech and bold ideas should be supported by a partner whose beliefs and ambition match their own. Working with fintech is a two-way street for us. We help them focus and grow, whilst also learning from them and innovating with them.

We have fintech partnerships in 172 countries and we’ve supported a diverse mix of 260 companies across 40 countries through our award-winning Start Path startup engagement program.

How have partnerships evolved over the years – and what can you offer new and innovative fintechs?

Mastercard has been partnering with fintech builders for years. The more fintech companies we partner with, the more powerful our network becomes – as a result, we’re building on our leading position. Our approach to relationships with our customers and partners is maximising the unique value, experience and know-how that we hold, whilst supporting innovation to enable choice and create value for all of our stakeholders.

As we transform, fintech is playing an increasingly important role and we know that many of them benefit from our years of experience, in fact we’d say we are one of the original fintechs.

Why are partnerships in fintech important and will they continue to be relevant in 2022?

There are many challenges for new fintechs entering the market – some sectors of financial services have more barriers to entry than others – but one of the biggest ones we hear from fintechs is not knowing where to turn for advice. Being able to speak to others in the industry who’ve been in the same situation and who know the challenges and have connections or insider knowledge can be invaluable.

We have an entire portfolio – Mastercard Developers – dedicated to fintech programmes, products and tools that fintech companies of any size can benefit from even as the sector continues to evolve.

Mastercard Developers is a portfolio of products, tools and programmes to support fintechs on their scaling journey. From high-potential startups to fintech enablers, fintech companies of all sizes can gain access to everything they need to build, launch and grow through the Mastercard Developers portfolio.

We provide valuable resources for developers across the globe, offering a simple interface and user experience – and this includes a big focus on community and networks:

• Partner Network: Qualified fintech enablers receive access to the Mastercard network to pre-integrate or bundle products and services so they are better equipped to meet customers’ needs and/or locate the right third-party partner to enable their own growth.
• Fintech Community: Any fintech builder can sign up to be part of Mastercard’s new global fintech community of like-minded companies that use the platform to be inspired, stay informed and connect to peers, helping them evolve their business at pace.

What does the future of credit cards look like? Especially with the growing payment option that is BNPL and its popularity. What impact does BNPL growth have on a giant like Mastercard? 

Credit cards are hugely popular and will remain so, but equally payment innovation, like BNPL, is offering alternatives to tradition forms of credit, which for some people will be preferable.  It’s important that consumers have choice and can decide what type of payment works for them. Ultimately, competition is good for customers – it makes for better services and more choices. It’s also good for us – it makes us better and helps drive more innovation.

Last year we launched Mastercard Instalments – our own Buy-Now-Pay-Later (BNPL) programme. It enables banks, lenders, BNPL players and wallets the ability to offer BNPL experiences at scale with merchants across the entire Mastercard acceptance network.  This builds on Mastercard’s investments in open banking to deliver a simple and convenient experience for consumers, merchants, and lenders by accessing a person’s account-level transaction history to support the underwriting process, enabling credit to be safely extended and facilitating a preferred method of repayment from a debit or savings account.

What are the major trends in the fintech/payments industry currently, and how has Mastercard reacted/been affected?

It’s been almost two years since the start of the pandemic. As we progressed through it, we’ve had two choices; react to the trends of each day or use this moment to take the work we have done and the diverse set of capabilities we have developed leveraging our scale, technology and expertise to reignite the future – and the future of innovation.

For us, the pandemic has been an accelerator to our strategy as opposed to something that necessitated a change in strategy for us – we have proven our resiliency by putting customers and consumers first. Payments, and more specifically Mastercard, are at the core of the digital revolution – powering a new economy, with new products, new sales channels and new consumer experiences, like never before.

The change in preferences, values and attitudes among consumers and wanting to be able to do things remotely to minimise contact with other people and things – are all areas we’ve been investing in for years. Over the past two years, consumers and businesses have had problems to solve. A key theme throughout is the acceleration of digitisation – driven not only by the pandemic, but also by innovations in payments in areas including eCommerce, the consumer experience at the point of sale, digital wallets, instalment programs, digital currencies, open banking, and more.

With innovation comes the opportunity to work with our partners – both existing and new – to better serve the needs of consumers and businesses as we shape the future of payments.

How is financial inclusion going to be achieved through Mastercard? What is being done to ensure this in the UK? How can Mastercard help aid financial inclusion in the UK?

Mastercard is aligning its mission to connect one billion people to the digital economy by 2025 with fintech companies in more than 172 countries, curating a global network of innovators with the goal to co-innovate solutions that enable a more inclusive economy.

In the UK, recognising the cross-section between digital and financial inclusion we’ve developed a programme with not for profit organisations Good Things Foundation and Clean Slate called “Nobody in the Dark”, which aims to respond to the emergency needs of, and provide immediate support to, people in poverty in the UK who are digitally and financially excluded. We give households in poverty access to digital devices and/or data, plus basic digital support. This project also provides money guidance support and upskills to use tech to help with money management. This is now live in 20 regional centres across the UK.

The principal challenge is that the individuals who are most financially excluded are also usually those who are hardest to reach. Their needs are often complex, they will tend to also be digitally excluded and often have a degree of social exclusion too.

This means that a one size fits all approach does not always work.

As banking and financial services evolve, we see exciting potential for fintech to support financial inclusion – as the Kalifa Review of UK fintech has highlighted. But this potential may not be realised without a culture shift and we are working with across the public and private sector to facilitate this.

How is the evolution of crypto impacting Mastercard?

The potential for digital currencies to change everyday payments is massive. Mastercard needs to be in the space, helping shape it, guide it, and provide consumer protections and security.

Our work with digital currencies builds on our strong foundation to enable choice and peace of mind when people shop and pay. A principled approach to innovation is the best – and only – way to navigate a space as dynamic as payments, now and in the future.

No matter the platform or technology – in this instance the digital currency type – we believe in three foundational principles that guide our decision making in the space:

• Stability: A connection to fiat currency will help provide reliability and assurance, starting with reducing significant fluctuation in the perceived value. This makes it more relevant for everyday purchases.
• Regulatory Compliance: This starts with whether it is permitted as a medium of exchange in a specific country and continues through all forms of regulation, including AML and sanctions compliance.
• Consumer Protection: People expect guaranteed payments, defined value, data privacy, data security, and protection against fraud or theft, as they do when using more established electronic payment systems.