Weekly Analysis And Opinion Highlights – 20 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!

Generative AI Adoption at Banks: Opportunities for Fintechs? (Fintech Nexus)

Fintechs eyeing generative AI opportunities in banking should be mindful of senior bank leaders’ increased involvement in technology decisions, driven by a 96% interest in generative AI. Top concerns for fintech purchases include data security issues and AI regulatory compliance challenges, according to a survey by the Harris Poll for Google Cloud, indicating a growing trend in generative AI adoption among banks, with 47% in the proof-of-concept stage and 35% piloting use cases. Read more

The irony of incumbent core banking vendors (Fintech Futures)

Traditional core banking vendors, once selling solutions to replace outdated systems, are now grappling with the challenges of reinventing their offerings in the era of MACH (Microservices, API-first, Cloud, Headless) architecture. While some incumbents try to build new platforms and others pursue technology migration, the evolving landscape presents a dilemma for these vendors. New players adopting MACH architecture provide a Lego-like approach to banking technology, offering increased flexibility and the ability to swap individual components. The irony lies in traditional vendors becoming what they aimed to replace, prompting banks to explore modernization rather than complete replacement of core systems. Read more

Open Letter: Protect employees amidst tech turmoil (Altfi)

Amidst the turmoil in the tech market affecting valuations, founders are urged to be transparent with employees about the impact on their equity, considering the substantial stake many employees have in the company’s success. The call is for tech firms to educate employees about their equity, be transparent about its value, and take steps to protect employee equity during challenging times related to personnel, fundraising, or exit events. Transparency, education, and progressive equity clauses are emphasized to maintain team motivation and avoid a potential crisis of morale. Read more

Profitability has ended the halcyon days of racy valuations (Altfi)

In 2023, the fintech landscape witnessed a notable trend as major players, including ClearBank, Revolut, and Monzo, actively pursued profitability. This shift coincided with the collapse of traditional banking giants like Silicon Valley Bank, First Republic, and Credit Suisse, highlighting the contrasting trajectories. The industry, once fixated on sky-high valuations, experienced a transformation, with fintech startups embracing profitability as a key objective. Amidst this drive, over 3,000 layoffs were announced, funding levels dropped 70% in the first half of the year, and investors became more cautious, demanding rigorous scrutiny of potential returns. This marked a turning point, emphasizing the fintech sector’s evolution, maturation, and a heightened focus on sustainable financial results. Read more

Between challenges and opportunities: deploying latest tech to combat fraud (The Paypers)

The Paypers’ latest piece  explores an interview with Dr. Shlomit Wagman, Global Chief Regulation and Compliance Officer at Rapyd. Dr. Wagman discusses her inspiration for joining Rapyd’s leadership, emphasizing the company’s commitment to compliance. She addresses the challenges fintech companies face in combating financial crime, highlighting the importance of global collaboration. Dr. Wagman outlines her proactive approach to identifying and mitigating financial crime risks, especially related to terrorism financing. The interview delves into Rapyd’s strategy for AML compliance in the cryptocurrency space, advocating for the full implementation of the FATF framework. Read more

Binance’s crypto dominance under threat after loss of founder Changpeng Zhao (Financial Times)

Binance’s cryptocurrency dominance is threatened after the US imposed a $4.3bn settlement, increased scrutiny, and the departure of its founder, Changpeng Zhao. The new CEO, Richard Teng, faces the challenge of meeting stringent conditions, including complete exit from the US, as part of the settlement. Read more

Sam Altman’s back. Here’s who’s on the new OpenAI board and who’s out (CNBC)

Sam Altman has resumed his role as the CEO of OpenAI after a period of crisis, with three new board members replacing the previous leadership. The new board, still under construction, includes Bret Taylor, former co-CEO of Salesforce, Larry Summers, former Treasury secretary, and Adam D’Angelo, CEO of Quora, while previous members such as Helen Toner, Tasha McCauley, and Ilya Sutskever are no longer on the board. Negotiations are ongoing to include representation from major investors like Microsoft. Read more

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