Weekly Analysis And Opinion Highlights – 13 November 2023

And we’re kicking off the week with new analysis and opinions on fintech with updates on the future of banking, generative AI, ransomware threats, and more. Dive into the latest fintech insights and have a great start to the week!

Three human mistakes VCs often make, and how understanding them can help entrepreneurs fundraise better (Tech Crunch)

It seems that venture capital faces a high failure rate, with recent reports from Standard & Poor’s indicating a surge in bankruptcies, including billion-dollar ventures like Vice Media. While VCs often attribute failures to external factors, the underestimated human nature of non-economic mistakes prompts a call for entrepreneurs to understand personal connections, as investors are more likely to support founders they connect with on a human level, a crucial aspect often overlooked in the industry. Read more

When Every Company is a Fintech Who Handles Compliance? (Fintech Nexus)

The rise of embedded finance, as predicted by a16z, is facing challenges in compliance as evidenced by a consent order to Cross River Bank for unsafe lending practices in partnership with a fintech. With over 60% of US-based fintechs paying significant compliance-related fines, the evolving complexity of fintech-banking partnerships highlights the need for enhanced risk compliance and self-regulation in the industry, despite potential short-term scrutiny and “derisking” actions by regulators and banks. Read more

Unlocking Alpha: how AI is helping investors fine-tune their strategies (Fintech Futures)

AI is significantly impacting stock investing, especially in the realm of Alpha and Beta investing, with UK-based start-up 3AI leading the way. Their Smart Alpha Insights function, powered by Deep Factor AI, analyzes 326 data factors per stock, providing investors with stock picking and live predictions that have outperformed the S&P 500. Despite the challenge of processing vast amounts of data, 3AI aims to empower hedge funds and global banks with actionable insights, utilizing Explainable AI to enhance transparency and overcome AI’s lack of interpretability, anticipating a future shift towards validated AI in the finance sector. Read more

Crossing the digital asset tightrope (Altfi)

The Financial Conduct Authority’s (FCA) recent implementation of the cryptoassets financial promotions regime in the UK has prompted concerns over aggressive regulatory measures, leading to disruptions for firms like PayPal. To find the right balance, the UK must consider the pacing of regulatory change, the extent of proactivity in decision-making, and the importance of employing both incentives and safeguards, ensuring a thoughtful approach that fosters innovation without compromising consumer protection in the growing digital assets sector. Read more

How AI Is shaping the future of risk management and compliance (Fintech Global)

AI is rapidly becoming an essential instrument for businesses around the world, particularly in the realm of risk management and compliance. A recent study by Moody’s, titled “Navigating the AI landscape: insights from compliance and risk management leaders,” highlights this trend, revealing that 70% of the 550 leaders surveyed anticipate AI will substantially impact their operations in the next one to five years. The integration of AI is particularly effective where the challenge of resource-strapped teams meets the need to manage extensive datasets for compliance and risk procedures. AI not only enhances the performance and capability of human staff but also excels in processing vast amounts of data, crucial for risk and compliance activities. Read more

How ESG considerations are changing the InsurTech landscape (Fintech Global)

As ESG (Environmental, Social, and Governance) considerations take center stage, insurance companies grapple with aligning their strategies with broader ESG landscapes. A recent study by Solera reveals that customers increasingly seek proof of ESG commitment, with 75% willing to switch or remain loyal to insurers demonstrating environmental friendliness. Insurers face challenges transitioning from short-term ESG initiatives to long-term strategic changes, navigating third-party risks, diverse portfolios, and supply chain complexities. Read more

Yet another former Silicon Valley darling is convicted of investor fraud (Tech Crunch)

Silicon Valley luminary Mike Rothenberg, known for extravagant parties, was convicted on 21 counts of investor fraud, marking a trend of startup figures facing legal consequences. The verdict follows a decade-long journey, from Rothenberg’s impactful entry into the Bay Area scene to his recent conviction on charges including bank fraud, money laundering, and wire fraud. Read more

Crypto market showing signs of recovery as prices, NFT sales rise on the month (Tech Crunch)

The crypto market shows signs of recovery as bitcoin and ethereum rise by 30% and 28%, respectively, from the month-ago date. The NFT space also rebounds with a 64% increase in total sales over the past 30 days, led by Ethereum, Bitcoin, and Solana blockchains, while crypto venture capital interest returns after six quarters of decline. Read more

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