From trusted stewards of money to data

Inflation rates hit a 40-year high in June, and Americans are struggling to keep up with rising prices, according to published reports. With a potential recession on the horizon and no sign that prices will drop soon, it’s more important than ever for financial institutions to build trust with consumers. In fact, research from technology platform MX has shown that trust and security are the No. 1 priorities that customers consider when choosing a financial service provider.

David Whitcomb, vice president, product at MX

Historically, that trust has been grounded in how financial providers safeguard and manage money. Consumers turn to banks and credit unions to keep their money safe, to make sure transactions are accurately reflected on their accounts and to make sure their funds are accessible when they need them. But in today’s data-driven world, being a trusted steward of the consumer’s money is just one piece of the equation.

Every customer, every account and every transaction also comes with a set of personal and financial data that must be protected. Think about it: The typical consumer has an average of five to seven different financial accounts. If there’s just one transaction each day on each account, that’s at least 1,825 transactions each year with a host of data behind each one, including transaction amount, merchant name, location, account type, account number, the consumer’s name and contact information, etc. — and the list goes on. And, according to Cornerstone Research, it’s not uncommon for a young couple to do business with 30-40 financial providers.

This equates to hundreds of thousands, perhaps millions, of financial data points per person every single year. The data is now just as important as money. So how do financial institutions move from just being trusted stewards of money to also being trusted stewards of data?

Becoming a trusted provider

The good news is that we’re on the right track. A new survey conducted by MX shows that 69% of respondents who indicated they have a primary financial provider say they trust them with their personal data. However, that still means at least three in 10 may not trust financial institutions with their personal data. This ultimately could cost businesses customers. Research from McKinsey shows that 87% would not do business with a company if they had concerns about its security practices. And 71% said they would stop doing business with a company if it gave away sensitive data without their permission.

To become a trusted steward of data AND money, here are three considerations for banks and credit unions:

1. Younger generations see data-sharing as a necessity. While trust and security is the top priority across all generations when choosing a financial service provider, the attitude and expectation for data-sharing is shifting, particularly among digitally native Gen Z and millennial consumers.

In essence, sharing personal information is a requirement for a better user experience today. In fact, 62% of U.S. adults say it’s impossible to go about their daily lives without companies collecting their data. And, while Gen Z may worry about the data being collected, they accept it as the price of admission to get the products, services and experiences they want.

For financial institutions, this is an opportunity. Trust is inherently granted until there is a reason for Gen Z and millennial consumers to take it away. Younger consumers want to share their data so that they can get more value out of their financial apps and services.

Financial institutions should focus on making it easy for them to aggregate their various financial accounts into one view, backed by strong security controls to maintain that trust for the long term. This may include:

  • Leveraging credential-free, tokenized access to share data instead of asking for usernames and passwords; and
  • Giving consumers control over who has access to their data — and which data — through a consent dashboard, where they can manage and revoke access at any time.

2. Experience is the first step in building a trusting relationship. Trust isn’t won or lost by security and privacy practices alone. Consumers also have much higher expectations for superior customer experiences.

One MX survey found consumers have a significant interest — and expectation — for a more personalized and proactive role from their financial services providers and apps. Seventy percent of consumers expect their financial services providers to give them personalized notifications and insights. At the same time, 63% want their providers to proactively help them better manage their finances.

While many now see data-sharing as a necessity to gain access to the products and experience they want, customers will go elsewhere if that experience doesn’t measure up. For instance, MX data shows that 72% of consumers said they would seek out a different bank or credit union if their preferred provider did not support connecting to their favorite fintech apps. This was even higher for millennials and Gen X at 75% of respondents.

This is just one example of how experience is now a driving factor in establishing trust. If banks and credit unions don’t deliver a good experience, security isn’t enough to keep customers loyal.

3. Data-sharing regulations will dictate the future of the financial ecosystem. While other parts of the world like Australia, Japan and the U.K. have been regulating open banking for some time now, we’re just beginning to see some regulatory movement here in the U.S. that may apply to the broader open finance ecosystem.

The Consumer Financial Protection Bureau (CFPB) will soon codify a consumer’s right to access and share their financial data through Section 1033 rulemaking. This right is the foundation for the future of financial services, beginning with open banking. In simple terms, open banking represents:

  • The clear positioning of individuals as rightful owners of their data;
  • The ability for individuals to give consent to share their financial data with third parties; and
  • The data-sharing technology, like APIs, that make open banking possible.

And, more recently, the CFPB took measures to increase federal oversight of the fintech industry, with the announcement of a new use for old authority, known as 1024, to supervise non-bank companies that it believes pose risks to consumers.

By invoking 1024 authority, the CFPB is looking to “level the [regulatory] playing field” between banks and certain fintech companies not currently subject to federal oversight. Importantly, the CFPB views “uncontrolled flows of consumer data” as risky and may recommend, through examination, that covered entities establish secure data-sharing methods (i.e., APIs) with third parties, including depositories.

Until a consumer’s right to access and share data is codified, access to consumer data, along with technical standards, disclosures and security processes tied to the data, primarily will continue to be left up to the organizations involved. Both financial institutions and fintechs should start now in creating the foundation to be trusted stewards of data before it becomes a mandate.

Becoming a trusted steward of data requires financial institutions to think like a data company — leveraging data itself as a primary function of their business. Beyond building customer loyalty, trust and satisfaction, this approach can enable new revenue opportunities, better lending decisions, stronger risk management, more efficient business processes and more personalized, proactive insights and recommendations for consumers.

David Whitcomb is Vice President, Product at MX. David has more than 15 years of experience in financial services, with a focus on how technology enables greater outcomes for end users as well as financial institutions and providers.

Astra partners with Visa for real-time transfers

Payment platform Astra announced today that it will partner with Visa to enable faster funding to new accounts and allow users to move funds across accounts in real time with the Visa Direct money movement platform. Visa joins Plaid, Lithic, Unit, Rize and MX in partnering with Astra to fuel quicker transactions. The connection between […]

Inside look: Tab Bank accelerates automation under new CEO

Since Chief Executive Rick Bozzelli took the helm at Tab Bank in June, he has been focusing on its team, customers, partners — and automation. “As a digital bank we’ve centered around automated, positive experiences, account openings, data collections and better analytical tools for customer data that allows our customers to make better business decisions,” […]

Jack Henry Acquires Payrailz for an Undisclosed Amount
  • Jack Henry Acquired payments-as-a-service startup Payrailz.
  • Jack Henry anticipates the acquisition will enhance its payments-as-a-service strategy and offer its 8,000 clients the ability to enable embedded finance.
  • Financial details were not disclosed.

Core banking provider Jack Henry & Associates has agreed to acquire digital payments startup Payrailz. Financial details of the acquisition, which is expected to close at the end of this month, have not been disclosed.

Jack Henry anticipates the acquisition will support banks and credit unions by enhancing its payments-as-a-service (PaaS) strategy and offering its 8,000 clients the ability to enable embedded finance. Jack Henry currently has a virtual payments hub that consolidates money transfer tools which support numerous payment channels and types. Payrailz’s technology complements this hub by adding consumer and commercial bill pay; real-time person-to-person (P2P), account-to-account (A2A), business-to-customer (B2C) payments; and more.

“We are excited about the opportunity to add these next-generation solutions to our payments capabilities,” said Jack Henry President and COO Greg Adelson. “Our company is engaged in technology modernization that is supporting banks and credit unions with innovative solutions that enable them to respond to business opportunities and challenges, and to improve the financial health of their accountholders. Considering the importance of modern digital and payments strategies to financial institutions, we plan to acquire Payrailz as a strategic addition to our payments ecosystem, which enables our clients to simplify the complexity of payments, modernize their existing payment channels, and remain at the center of their account holders’ payment experiences.”

Payrailz consumer and commercial digital payment solutions help banks compete with third party players with its PaaS offering. The company was founded in 2016 and had since raised $24 million. Earlier this year, Payrailz integrated with Q2’s digital banking platform to enable Q2 clients to provide P2P payment services.

Founded in 1976, Jack Henry most recently presented at FinovateFall 2015 where the company showcased the Banno solution after acquiring Banno in 2014. Among Jack Henry’s other fintech acquisitions are Geezeo, iPay Technologies, and Stackfolio.

Photo by Albin Berlin

FinovateFall 2022 Sneak Peek: Finotta

A look at the companies demoing at FinovateFall in New York on September 12 and 13. Register today and save your spot.

Finotta is a provider of embedded fintech for digital banking. Finotta’s Personified platform is a combination of products that help financial institutions better meet the needs of their customers.


  • Personalized financial guidance
  • Predictive product recommendations
  • Gamification

Why it’s great

Finotta empowers its FI customers to deliver the right experience, service, or product at the right time to their users with a gamified Financial Health Level that helps improve their financial life.


Parker Graham, Founder and CEO
Parker Graham serves as Founder and CEO of Finotta. Graham began his professional career in the NFL. After working at BOK, Graham founded Destiny Wealth in 2018 and pivoted to Finotta in 2020.

FinovateFall 2022 Sneak Peek: Cable

A look at the companies demoing at FinovateFall in New York on September 12 and 13. Register today and save your spot.

Cable was founded in 2020 to provide automated assurance of financial crime controls, enabling real-time, continuous monitoring for regulatory breaches and control failures across all of a business’ accounts.


  • Reduces remediation projects with real-time regulatory breach or control failure detection
  • Automates and centralizes partner bank oversight of fintech partners
  • Increases ROI of other compliance tools

Why it’s great

Why manually test 100 accounts when you can automatically monitor 100%? Scale efficiently and compliantly with Cable by ensuring your controls’ effectiveness as you grow.


Natasha Vernier, CEO
Before founding Cable, Vernier was Head of Financial Crime at Monzo Bank, one of the first UK fintechs to become FCA-authorized and regulated.

FinovateFall 2022 Sneak Peek: autologic

A look at the companies demoing at FinovateFall in New York on September 12 and 13. Register today and save your spot.

autologic was founded in 2021 and lets non-technical people build highly complex logic to power automated decisioning and digital experiences across any division of a financial services organization.


  • Build complex rules & calculations with no code at the cost of spinning up a server on Google
  • Deploy into any application (custom or third party) that supports JSON in minutes

Why it’s great

UNO (a mortgage broker) maintains pricing, underwriting, servicing, documentation and policy information for 20 lenders with 1 non-technical person.


Vincent Turner, CEO
4x Founder, 2 exits across Australia and US. Built technology used by 90% of Australian banks. Founder of UNO Home Loans, #1 Online Mortgage Broker in Australia.

FinovateFall 2022 Sneak Peek: ebankIT

A look at the companies demoing at FinovateFall in New York on September 12 and 13. Register today and save your spot.

ebankIT is an Omnichannel Banking Platform. This Finovate, ebankIT will demo new features, from crypto management to open banking, all while gathering user feedback.


User Engagement Hub to transform FIs:

  • Knowledge based with in-app interactive demos of all features
  • Ability for users to vote on new feature releases
  • Features available through an early adopter program

Why it’s great

It’s all about agility and having financial institutions launch exceptional user experiences at a fast speed. ebankIT does it all through its Omnichannel Digital Banking Platform.


Pete Atkinson, Vice President of Sales
Atkinson has spent much of his career working at the convergent point of technology, business, and consumers. He is VP of Sales at ebankIT and for the last 15 years has helped FIs to digitally transform.

Joana Lucas, Sales Development Representative
Financial industry enthusiast, experienced in Financial Markets, Banking, and Fintech space. Current mission: help FIs humanize their digital banking worldwide via ebankIT’s omnichannel capabilities.

Truework Raises $50 Million to Redesign the Credit System
  • Truework has raised $50 million to bolster its income verification product.
  • The Series C round brings Truework’s total funding to $95 million.
  • G Squared led the round, which the company plans to use to grow its business “through instant, accessible, and accurate consumer data.”

Income and employment verification startup Truework is taking on an extra $50 million in capital today in a Series C round. When added to the $45 million in funding the California-based company has raised since it was founded in 2017, Truework’s total funding now reaches $95 million.

The round was led by G Squared; with contributions from existing investors Sequoia, Activant, and Khosla Ventures; as well as new investors Indeed, Human Capital, and Four Rivers Group. “Support from these incredible teams inspire[s] us to keep building the future of financial identity, and is bolstered by our continued focus on promoting transparency and data ownership for consumers,” the company said in a blog post.

Truework’s goal is to change the way consumers’ personal information is shared during life events such as a home purchase or getting a new job. The company has built a network for verified identity that places the consumer in control of their data by offering them the decision when to share their information and when to withhold it.

Truework anticipates it will power more than 12 million income and employment verifications by the end of this year, which will service more than 20,000 small businesses and 100 enterprises. The company will use today’s investment to help customers grow their businesses “through instant, accessible, and accurate consumer data.”

Last year, Truework launched a few new offerings, including Payroll NetworkPreapprovals, and Credentials. The Payroll Network tool offers consumers visibility into and control over how their data is being shared with third parties and also enables consumers to generate their own employment verification letters. The Pre-approvals product offers lenders more accurate underwriting and increased conversions, while the Credentials tool allows applicants to instantly and directly share their payroll data in their loan application.

“Truework is putting millions in control of their data and streamlining the lending process for both lenders and borrowers,” the company said in a blog post announcement. “Building the future with a consumer first mindset goes into every decision we make, and Series C funding will help us further empower both sides of the verification equation to help build a more efficient, secure, and stable credit system.”

Photo by Monstera

Carried interest is both boring and disruptive

Carried interest is the percentage of an investment’s gains that a fund manager takes as compensation. At most private equity/VC firms and hedge funds, the share of profits paid to managers is about 20%. Under existing US law, that money is taxed at a capital gains rate of 20% for top earners. That’s about half the rate of the top individual income tax bracket, which is 37 %

Yes, carried interest is a boring wonky subject.

Back in 2017 I opined that carried interest was the wild card that could disrupt the massive fund management business. That is the exciting disruptive part of carried interest, so please keep reading.

The recent news is that an agreement was reached between Senators  Chuck Schumer and Joe Manchin that could end the special tax treatment of carried interest.

Latest news is political again which was that, in order to get Kyrsten Sinema on board with the main bill, the casualty was ending the special tax treatment of carried interest.

I still believe that politicians will find a way to explain a boring wonky subject to electors in a populist way and that it is only a question of when(not if) carried interest gets taxed at income tax rates.

Many smart investors are already thinking this way. This will make the massive fund management business move from 2 and 20 to 0 and 30 and that is wildly disruptive to the status quo.Let me explain.

Let’s say you are an angel investor with a good track record. You invest your own money which is properly taxed at the capital gains rate – it is a high risk investment. You then invite other investors to copy/follow your investments if they will pay you 30% of the profits. Investors will probably pay 30% to the angel, rather than 20% to a traditional fund because investors won’t have to pay the usual 2% Assets Under Management fund fee to the angel. The following investor could make a return on 70% without any upfront risk.

That 30% carry/follow fee will be taxed at income tax rates, as it should be as it is risk-free income.

Angel List could be the firm that makes this happen and will reap a big reward if they do.

Angel List shows why boring is good business. They have built a huge business connecting Angel investors and entrepreneurs by taking care of all those “boring” back office details – like being paid correctly! Angel List clearly understand carried interest.

One boring detail that Angel List could take care of is tax deductions for the 30% carry/follow fee.

What to Keep Your Eye On in the Final 5 Months of 2022

We’re more than halfway through the year, and before you know it, we’ll be publishing trends predictions for 2023. However, a lot can happen over the course of five months, so we’ve decided to examine what to look for and what you can expect in fintech between now and the new year.

Beginning the era of “neo super apps”

Over the past year, there has been much debate on whether or not the U.S. and Europe will ever have a super app. Plaid CEO Zach Perret takes a different angle on this. He is expecting “neo super apps” to rise in popularity.

“Within lending, brokerage, and banking, super apps will emerge, adding every bit of functionality within financial services. Over time, they’ll actually be able to add in things that are above and beyond financial services,” said Perret in a Plaid report.

Accelerating M&A activity

It’s no secret that fintech funding is down, especially in later stage deals. Because of this, some fintechs have been driven to sell sooner than they had hoped. As for acquirers, many are looking to cash in on the “neo super app” trend by adding to their firm’s expertise, bundling multiple services into a single offering. In the first half of the year, we have seen an increase in M&A activity over 2019 levels, and we expect that to continue into the second half of the year.

Ramping up a focus on ESG

Fintech companies and traditional financial institutions alike have sharpened their focus on ESG initiatives in the past couple of years. And while climate change may be enough of a reason for firms to implement new ESG practices, the SEC is giving laggards an incentive to step up their game. The commission recently proposed amendments to rules and reporting forms to promote consistent, comparable, and reliable information for investors concerning funds’ and advisers’ incorporation of ESG factors.

Increasing solutions surrounding consumer credit

After dipping in 2020, Americans’ credit usage is now on the rise. Inflation, and especially the increase in costs of everyday expenses such as housing and gas, is prompting higher credit usage while consumers iron out their budgets and adjust their lifestyles to fit the extra expenses.

Dwindling conversation around digital transformation

We have finally arrived at the moment when digital offerings have become the rule, not the exception. While we can still expect to hear the phrase “digital transformation,” it is becoming less and less common.

More discussion around Central Bank Digital Currencies (CBDCs)

The progress toward CBDCs has been slow, but steady. Currently, 10 countries have fully launched a digital currency and more than 105 countries are exploring them. Just two years ago, only 35 countries were considering a CBDC. This digital currency race will only become more heated as more countries seek to be among the first to offer a CBDC.

Growing competition in alternative business payments solutions

After launching just five years ago, Brex has quickly risen to become one of the most successful fintechs, boasting a valuation of $12.3 billion. The startup is a super app for businesses, offering companies credit cards and cash management solutions.

At three years old, Brex’s competitor Ramp isn’t too far behind. The company is valued at $8.1 billion. Clearly, these companies are filling a need for businesses that has not previously been met. We can expect others to follow their footsteps to cash in on the gold rush.

BNPL takes a backseat

It’s no secret that BNPL payment schemes are causing cash flow difficulties for younger, less financially savvy consumers. Many are finding it difficult to keep up with the repayment obligations. This, combined with a lack of regulatory oversight, is tarnishing BNPL’s reputation.

We can expect to see a slowdown in BNPL newcomers, though I do think we’ll still see more large firms add BNPL schemes to their existing offerings.

Subsiding talent acquisition

A year ago, the workforce shortage was taking its toll on the fintech industry and we were discussing strategies to acquire new employees. After the economic sedation started this spring, however, this discussion has slowed. Startups have started to worry about burn rate and corporations have shifted their focus to their bottomline, which has already resulted in layoffs. With VC funding down, we can expect to see a continuation of this decline in the next five months.

Providing everything-as-a-service

These days companies can fill holes in their offerings by purchasing just about anything as a service, including ESG-investing-as-a-service, credit-cards-as-a-service, accounting-data-as-a-service, and more. As banks, startups, financial services, and even non-financial players seek to build up their customer base and play into the “neo super apps” trend Perret discussed, we can expect to see even more companies take the “-as-a-service” model to increase their customer base.

Photo by Dany Kurniawan

PayOps Innovator Infinicept Unveils New Embedded Finance Solution, Infiniport
  • Denver, Colorado-based PayOps innovator Infinicept unveiled its open payment operations solution, Infiniport.
  • The new offering will support orchestration between multiple processing platforms, enabling businesses to “bring their own processor” (BYOP) to their payments operations.
  • Infinicept secured $23 million in new funding this spring in a round co-led by SVB Financial Group and Piper Sandler Merchant Banking.

PayOps innovator company Infinicept launched its new open payment operations capability, Infiniport. The new offering gives customers the ability to interface with the processor or alternative payment rail of their choice, enabling companies using embedded payments to “bring their own processor” (BYOP) to their payments and business operations.

Infiniport will help support orchestration between processing platforms, which is essential for businesses that rely upon more than one payment processing relationship. The new offering from Infinicept means that companies will no longer be forced to choose between the cost and inflexibility of having a sole provider on the one hand, and building their own embedded payments platform on the other. Instead, Infiniport provides a universal platform giving firms the ability to work with a variety of payment processors, gateways, terminal providers, token solutions, and more.

“Infiniport is part of our vision to help the payment ecosystem avoid lock in and choose the right combination of solutions which best support their business needs,” Infinicept co-founder and co-CEO Deana Rich explained. “Most off-the-shelf payments solutions come with trade-offs, but Infinicept is focused on allowing customers to keep their payments revenue, ownership of their data, and control over their payments product and ultimately the customer experience.”

Among Infiniport’s features are compatibility with any gateway, terminal, orchestration solution, across any processor; standardized fee management and settlement operations across multiple processor relationships; and a one-to-many capability to operate and manage payments with any processor. The offering also enables companies to mix and match payment types, processors, and payout vendors.

Infinicept’s new product announcement comes as the company acknowledges a 1,400% increase in payment volume since 2020. A major player in the embedded finance market, more than 300 software companies are served either directly by Infinicept or through its banking and payments customers. Headquartered in Denver, Colorado and founded in 2011, Infinicept secured $23 million in new funding in May. The investment was led by SVB Financial Group and Piper Sandler Merchant Banking and featured participation from existing investor MissionOG and others. The company said that it will use the capital to further develop its PayOps technology, pursue market expansion opportunities, and invest in ways to continue supporting embedded finance.

Photo by SevenStorm JUHASZIMRUS

Avalara Acquired by Vista Equity Partners for $8.4 Billion
  • Tax compliance firm Avalara has agreed to be acquired by Vista Equity Partners for $8.4 billion.
  • Avalara has more than 30,000 customers in 95 countries.
  • The transaction will take Avalara private, removing it from the New York Stock Exchange.

Avalara is starting the week with a big move. The tax compliance firm has agreed to be acquired by global investment firm Vista Equity Partners for $8.4 billion. Vista Equity Partners is acquiring Avalara at $93.50 per share, which represents a 27% premium of Avalara’s closing share price on July 6, 2022.

Founded in 2004, Avalara helps its more than 30,000 customers in 95 countries comply with tax regulations. The Washington-based company offers compliance solutions for various transaction taxes, including sales and use, VAT, GST, excise, communications, lodging, and other indirect tax types. In addition to tax compliance, Avalara also helps companies secure business licenses and provides sales tax data analysis that offer business insights. Among the company’s clients are Zillow, Pinterest, and Roku.

“Avalara is a mission-critical platform serving customers in a variety of end-markets, including retail, manufacturing, hospitality, and software,” said Vista Equity Partners Managing Director Adrian Alonso. “Avalara’s solutions, its commitment to product innovation, and its network of extensive partner integrations, resellers, and accountants make it a true leader in the space.”

Once complete, the transaction will take Avalara private, removing it from the New York Stock Exchange. Prior to going public in 2018, Avalara had raised $341 million. Scott McFarlane
is co-founder and CEO.

Photo by Monstera

US Treasury, banks drill down on AML

Banks are leveraging automation in transactions to weed out suspicious activity from fraudsters, and the U.S. government is taking action to ensure financial institutions can continue testing new anti-money laundering (AML) tactics without running afoul of regulators. The U.S. Department of the Treasury issued the 2022 National Strategy for Combatting Terrorist and Other Illicit Financing […]

Listen: How automation, AI are changing the compliance officer role

The role of the chief compliance officer (CCO) at financial institutions has evolved as technology, automation and access to data present new opportunities and challenges for executives. “Today’s compliance officer faces that very burdensome trade-off of creating a really good frictionless experience for their end users … but also building compliance confidence within their organization,” […]

Built acquires Nativ after weighing buy v. build

Cloud-based loan software provider Built Technologies announced it has acquired deal management platform Nativ to provide lenders with a risk management solution that shifts away from analog processes. Terms of the deal were not disclosed. “The Nativ product, which is classified as a deal management product in commercial real estate, assists with underwriting the future […]

The Customer is King: Achieving a 360 View for Hyper-Personalized Results

This is a sponsored post by Ann Kuelzow, Global Head of Financial Services at InterSystems.

A staggering 86% of financial services firms globally are concerned about using data to drive decision-making within their organizations, according to the latest research from InterSystems of 554 business leaders within financial services companies, including commercial, investment, and retail banks, across 12 countries globally. This lack of confidence largely stems from an inability to access data from all the needed sources and the time taken to access data. Given the wealth of data financial services firms have, this is a major concern, with the potential to open organizations up to risk and severely impede key business initiatives. In fact, more than a third of firms in the survey cite the primary impact of these challenges as being difficulty in gaining a 360-degree picture of customers.

As competition intensifies within the financial services sector, customer 360 is something that all firms must confidently be able to obtain. Doing so will empower firms to provide clients with the products, services, and hyper-personalized, real-time experiences they have come to expect across all aspects of their lives. But this relies on gaining access to accurate, consistent, and real-time data encompassing all touchpoints. Consequently, firms must first address underlying issues with their data architecture.

Solving data challenges

Gaining a holistic view of the customer requires firms to pull together all available information on each customer. As customers are likely to interact with a variety of different departments and personnel within the firm, this information can be spread across multiple systems and silos, including trading, savings, credit cards, loans, insurance, CRM, support, data warehouses, data lakes, and other applications and silos, as well as data from external sources and suppliers. The data is often in dissimilar structures and formats and follows different naming conventions and metadata. Therefore, making sense of this dispersed data typically requires significant effort and expense, and using it to make informed, accurate, and fast decisions is a major challenge.

As organizations look to solve these problems, data fabrics, a next-generation architectural approach, have emerged to provide financial services firms with a way to speed and simplify access to data assets across the entire organization. It does this by connecting to existing systems and data silos containing relevant data, both inside and outside the organization, and ingesting the relevant data on demand as it’s needed. It accesses, integrates, and transforms the data as it’s being requested, providing a real-time, consistent, harmonized view of the data from different sources, all from a single view. This allows firms to gain a complete 360-degree view of the customer.

Going a step further

A smart data fabric takes this approach a step further by providing built-in analytics capabilities which enable business users to understand customer behaviors and actions better and even to predict the likelihood of future behaviors, such as purchase of new services, churn, or response to targeted offers. It also provides the business with self-service analytics capabilities, so line-of-business personnel can drill into the data for answers without relying on IT, eliminating the usual delays associated with adding custom requests to the IT department’s queue.

This next generation approach also helps solve latency issues, as smart data fabrics lets the data reside in the source systems, where it’s accessed on demand, as it’s required.

Adopting this approach will help to restore firms’ trust in their data, ensuring that they can quickly access consistent, reliable, and accurate information on which to base decisions, fuel data initiatives, and build up a comprehensive view of the customer.

Elevating the customer experience

Being able to leverage the wealth of customer data inside and outside of the organization for customer 360 will empower firms to offer a vastly improved customer experience. For instance, with a single view of the customer, advisors, help desk, and support teams will be able to provide customers with the immediate answers and recommendations and thereby enhance their interactions with the organization.

Armed with customer 360, firms will also be able to increase revenue streams by predicting customer behavior to maximize cross-sell and up-sell opportunities. For example, incorporating and analyzing dozens of data points from different systems enables firms to determine which customers are likely to respond to a premium credit card offer and least likely to default on payments. This allows firms to identify which customers to target with particular offerings and services.  Similarly, firms will be able to predict which customers are at risk of churning and take appropriate corrective actions in advance to reduce churn.

Together, these capabilities will help to elevate the experience and services being offered to customers, while also helping financial services firms to create and cement a competitive edge.

Restoring trust in data

Ultimately, by adopting smart data fabrics, firms will be able to overcome the data challenges that are currently preventing them from using their data to make better decisions by leveraging a more complete and more current 360-degree view of each and every customer. With a complete and trusted 360-degree view of the customer, firms will be in a strong position to fuel new customer initiatives, enhance the customer experience by delivering cohesive and personalized interactions and offerings across departments, and set their institution apart.

Find out more, and read the full InterSystems here >>

This has been a banner year for hackers targeting the industry. Last week, a couple of hacks totaling hundreds of millions in losses and thousands of affected users rattled an already shaken market.

On Monday, Nomad, a crypto bridge was the latest victim of hackers, which walked away with close to $190 million. A crypto bridge connects blockchains and allows users to swap from one cryptocurrency to another. It works like an FX service, so if you have Bitcoin but want to spend it like Ethereum, you can do that using a bridge.

The Nomad hack started with an upgrade to the code. One part of the code was marked as valid whenever users decided to initiate a transfer, which allowed the hackers to withdraw more assets than were deposited onto the platform. Once other attackers caught on to what was happening, they deployed armies of bots to carry out copycat attacks. The attack was known as a “free-for-all,” because the hacker’s original code allowed anyone to copy it and steal the crypto for themselves.

A few months ago, Ronin, another bridge was hacked for more than $600 million in crypto. Harmony, another bridge, was drained of $100 million in a similar attack.

About $2 billion in cryptocurrency has been stolen from cross-chain bridges like Nomad in 13 separate hacks in 2022, according to crypto analytics firm Chainalysis. As the market grows, we are going to see more headlines and a lot more types of attacks.

Given the huge amounts stolen from these crypto bridges, it’s apparent that their security standards are not adequate. This clearly highlights a fundamental flaw with crypto bridges and the need for native ecosystems which are not prone to exploits.

Two days after the Nomad hack, Solana wallets were hacked. Over 8,000 wallets were compromised and $5.2 million worth of SOL, SPL, and other Solana-based tokens were stolen. The hack affected wallets such as Slope and Phantom — hot wallets, which are always connected to the internet to provide users an easy way to send, store and receive crypto.

These hacks just reinforce the idea that crypto is still the wild west.

Cryptocurrency’s security —or lack thereof— will likely continue to be a more pressing issue in the years ahead.

Everything from exchanges to cryptocurrencies themselves is made of software, and software can be hacked. lost $30 million earlier this year, KuCoin lost $281 million last year and BitFinex lost $3.6 billion in 2016. These are just a few off the top of my head. It’s crazy how everything lines up: coins are valuable, easy to liquidate, and anonymous.

Last year $14 billion was stolen, a 79% rise from 2020, marking an all-time high for cryptocurrency-based crime. According to blockchain analytics firm Chainalysis, which cited the explosion in mainstream cryptocurrency adoption as a main catalyst.

Market players range from large, established exchanges like Coinbase to the latest DeFi project someone started in their living room. Regardless of size, security is paramount. Rapid growth combined with a mostly unregulated environment poses a challenge for standardizing security across the industry.

But in March, the SEC outlined new cryptocurrency accounting standards that would protect crypto assets held by companies for users against hacking losses.

Cryptocurrency regulation can be a controversial topic, but we need to build a safer system and regulation may very well be the route we need to take. If everything fails, you want some way to get things back to normal. Instead of losing money to hacks or CEOs who die with their passwords, you would have a system you could trust.

by Ilias Louis Hatzis is the founder and CEO of Kryptonio wallet.

Image Source

Subscribe by email to join the other Fintech leaders who read our research daily to stay ahead of the curve. Check out our advisory services (how we pay for this free original research

Finovate Global Interview: Abdulla Almoayed of Tarabut Gateway on Open Banking in the MENA Region

This week’s edition Finovate Global is an interview with Abdulla Almoayed, founder and CEO of Tarabut Gateway. Founded in 2017 and headquartered in Dubai, Tarabut Gateway is the first and largest regulated open banking platform in the MENA region. The company enables secure and friction-free data flow and connectivity between banks and fintechs in its regional network, leveraging its universal APIs to bring the benefits of open banking to financial services consumers in Bahrain, the UAE, KSA, and elsewhere.

This year, Tarabut Gateway has secured major banking partnerships in Saudi Arabia, teaming up with Riyad Bank, Saudi British Bank, Alinma Bank, and Banque Saudi Fransi as the Kingdom begins to embrace open banking. In June, the company was selected as platform partner by the Dubai International Financial Centre (DIFC) for its new Open Finance Lab. Last month, Tarabut Gateway announced a pair of C-suite appointments, introducing new Chief Product Officer Nino Ocampo and new Chief Commercial Officer Adnan Erriade.

We caught up with Abdulla Almoayed to learn more about Tarabut Gateway, its role in driving open banking and fintech innovation in MENA, and what we can look forward to from the company in the future.

How strong is the Open Banking trend in the MENA region? 

Abdulla Almoayed: While the Gulf region might have been slower to adopt Open Banking than some Western countries, such as the U.S. and U.K., the fintech ecosystem in MENA is developing rapidly and has the potential to leapfrog other regions. Open Banking is a relatively new phenomenon globally, but there is great interest around it in our region and especially in the Gulf states.

Open Banking in MENA is highly driven by forward-looking regulators that are setting implementation plans in motion. This trend is also driven by increased consumer demand for personalized products and services – a pattern of consumption consumers have come to expect from the Netflix/Amazon experience, i.e. product recommendations based on consumers’ wants and needs.

Financial apps and products providing an enjoyable user experience are at the centre of this personal finance revolution. Improved financial literacy has caused customers to research and test more before deciding which financial product or service to use, while entrepreneurs and regulators have been motivated to spearhead change.

Using insights from data to create individually tailored products prioritizing an optimal, overall customer experience, Open Banking helps transform traditional one-size-fits all financial products into more intuitive financial products experiences. Through Open Banking, the consumer gets a new level of control, far in excess of today’s standard because traditional banks’ internal systems hoard valuable, personalized data about consumers. With Open Banking, consumers regain ownership over their personal financial information.

What are the forces that are driving open banking in the area? 

Almoayed: The compelling combination of customer demand, progressive regulators, and entrepreneurial ambition is driving Open Banking. The resulting technology provides vastly increased transaction speed and the capability to manage personal finances like never before.

Internet connectivity across the MENA region has increased rapidly in recent years, covering potentially 93% of the population, or 580 million people, according to telecommunications association GSMA. Smartphone penetration is estimated to reach 80% in 2025, and over 90% in GCC countries.

MENA’s young and tech-savvy population is still underbanked, and a driving factor behind Open Banking’s growth are companies and regulators who are keen to facilitate this huge opportunity in a responsible manner.

Moreover, banks in the region understand the benefits that Open Banking brings to their institutions. Open Banking enables them to stay relevant and to compete in today’s banking sector by providing enhanced digital offerings and customer-centricity.

Tarabut Gateway acts as the matchmaker between service providers and customers, creating a competitive fintech ecosystem where users receive the best, personalized products, and services.

How has Tarabut Gateway become a major player in MENA-based open banking?

Almoayed: Tarabut Gateway was launched in 2017 and our mission is to provide the Open Banking infrastructure for the entire region; growing an Open Banking ecosystem to benefit consumers, start-ups and legacy financial institutions.

Having graduated as the first company from Bahrain’s Open Banking sandbox program, our pioneering product offering made Tarabut Gateway’s rapid expansion possible. Not only did we enter the UAE market and become the first licensed Open Banking service provider, but also we have established partnerships with major KSA banks to participate from the start in the Kingdom’s fast-moving fintech sector development.

The Middle East’s financial services industry is just beginning to implement many of the personalized services new technologies and regulation make possible. Tarabut Gateway is at the forefront to fill these gaps, offering Open Banking APIs to support banks, fintechs, and third-party service providers (TPPs) in creating new products and services. Fintech sector growth has been stunning in recent years, and is still on an exponential path. Currently, there are approximately 500 fintechs in the region.

This has been a big year for Tarabut Gateway. What accomplishments stand out to you the most this year? 

Almoayed: The major milestones achieved in 2022 – the launch of the Open Finance Lab in partnership with Dubai International Financial Centre (DIFC), Open Banking license in the UAE, KSA bank partnerships, and newly appointed leadership roles – are all of great importance and reflect the different frontiers we are pushing as a company.

Open Finance Lab is an initiative led by DIFC. Tarabut Gateway was selected as the platform partner for the program. The Open Finance Lab is a 6-month program that will educate and engage banks, regulators, and the industry to showcase and shape the positive impact of Open Finance on the economy

To be acknowledged by the Dubai Financial Services Authority with the country’s first Open Banking license, including regulation as Account Information Service Provider and Payment Initiation Service Provider (AISP/PISP), is a symbol of our role as an ecosystem enabler.

Growing deeper roots in KSA’s market by being the fintech player with the largest, and most developed, network of partnerships validates our mission – to sit at the junction between regulators, banks, fintechs and TPPs.

Finally, the appointment of Nino Ocampo (CPO) and Adnan Erriade (CCO) further established Tarabut Gateway as international challenger, and points towards our role as a regional leader interacting with the global fintech revolution. We have attracted some of the most achieved Open Banking professionals, from leading organizations like HSBC, OpenWrks, and TrueLayer to join our team and contribute to our vision for Open Banking in the MENA.

What is something about fintech in the MENA region that many of those unfamiliar with the region would find surprising or interesting? 

Almoayed: An organic driver of fintech growth across MENA is the large number of underserved customers. MENA’s population is double that of Europe – but the region has fewer banks than Germany alone! Reaching out to the underserved and underbanked is the greatest challenge, but one of today’s most rewarding business and investment opportunities.

Unsurprisingly, developed Western markets, especially the U.S. and U.K., had a considerable head start in all things Open Banking – i.e., number of startups, amount of funding and regulation.

However, most observers underestimate the i) velocity of MENA’s regulator-led fintech sector growth during the last years, ii) the region’s demographic advantages, entrepreneurial culture, and business-friendly environment, and iii) the “second mover advantage” of designing Open Banking frameworks utilizing experiences made in pioneering developed markets.

Taken together, we think some MENA jurisdictions could leapfrog Western Open Banking development, especially with a stalling regulatory environment in the European Union.

Working closely with regulators and banks, Tarabut Gateway provides the groundwork for a thriving fintech ecosystem. Nimble fintech companies fill the gap left by traditional banking and complement the existing system. KSA, UAE, Bahrain, and even Oman and Egypt are rolling out far-sighted regulatory regimes and providing incentives to develop and implement ‘enabling’ technologies such as banking APIs.

What are some of Tarabut Gateway’s top priorities over the balance of this year and into the next? 

Almoayed: This year, the Saudi Central Bank (SAMA) plans to go live with its Open Banking framework – part of the Kingdom’s “Vision 2030.” With “Fintech Saudi,” a strong platform was created to support Saudi fintech entrepreneurs and the number of fintech start-ups in the KSA increased 37% to 81 during 2021.

We are at the forefront of Open Banking progression in KSA, and it is a priority for us to support the country’s economic policy as Open Banking infrastructure provider benefitting Saudi consumers, merchants, banks and fintechs.

Our recently announced participation in the Dubai International Financial Center’s Open Finance Lab is an important step towards our exploration of Open Finance solutions – the idea of integrating even more areas of traditional finance in an Open Data framework, for example pensions, mortgages, loans, insurance, and investments. Tarabut Gateway is determined to also be the pioneering API provider for Fintech innovation in the UAE (and elsewhere).

In our first market, Bahrain, phases one and two of the Central Bank of Bahrain’s Open Banking Framework have been successfully implemented, with the regulator’s focus now shifting to Open Finance solutions. Tarabut Gateway will strive to remain the most trusted provider for the incredible growth to be expected through continual financial services innovation.

We are excited to see many new use cases developed on our platform including AIS/PIS solutions like cross-border payments, digital wallets, know your client processes and personalized financial management products.

Photo by Aleksandar Pasaric

Automation allows for scale as Envestnet revenue rises 10%

Envestnet has had a busy first half of 2022 in terms of acquisitions, technology launches, integrations and internal digitization efforts, which have resulted in a 10% increase in total revenue. The Berwyn, Pa.-based wealth management company’s total revenue reached $318.9 million in Q2, up from 288.7 million in Q2 2021, according to its Q2 earnings […]