Balancing Growth, Sustainability and Support of MSMEs
Patrick Nkongo, CEO, FPM SA
YEARS STRONG
We celebrate the lives impacted, dreams realized, and futures secured through our financing solutions.
®
Chairman and CEO
Varun SASH
Editor
Wanda Rich email: wrich@gbafmag.com
Managing Director
Martin Murphy
Project Managers
Megan Sash | Raj Gopal | Rima Attar
Customer Service Representative
Tamara Yavtushenko
Head of Operations
Robert Mathew
Office Manager
Priya KV
Business Consultants - Digital Sales
Paul Dus Davis | Cora Joseph Shefali Kochhar | Aakarshita Gautam
Business Consultants - Nominations
Sara Mathew | Adam Luiz
Divyansh Vaid | Sowmya N Ashish Mishra | Anurag Rajak
Business Analysts
Varshitha | Jackson Brize
Video Production & Journalist
Phil Fothergill
Graphic Designer
Jesse Pitts
Advertising
Phone: +44 (0) 208 144 3511 marketing@gbafmag.com
GBAF Publications, LTD
Alpha House
100 Borough High Street London, SE1 1LB United Kingdom
Global Banking & Finance Review is the trading name of GBAF Publications LTD
Company Registration Number: 7403411 VAT Number: GB 112 5966 21 ISSN 2396-717X.
The information contained in this publication has been obtained from sources the publishers believe to be correct. The publisher wishes to stress that the information contained herein may be subject to varying international, federal, state and/or local laws or regulations.
The purchaser or reader of this publication assumes all responsibility for the use of these materials and information. However, the publisher assumes no responsibility for errors, omissions, or contrary interpretations of the subject matter contained herein no legal liability can be accepted for any errors. No part of this publication may be reproduced without the prior consent of the publisher
editor
Dear Readers’
Welcome to Issue 67 of Global Banking & Finance Review. As the financial landscape continues to evolve, we’re delighted to bring you insights from industry leaders who are shaping this transformation. In this issue, we explore innovations in banking technology, sustainability practices, and data integrity that are setting new standards across the sector.
Our Cover Story, "Shaping the Future of Banking: Diebold Nixdorf on Technology, Resiliency, and Sustainability," features Helena Müller, Vice President of Banking Europe at Diebold Nixdorf. Recently in London, Helena shared her perspectives on how the company is pioneering solutions to meet the needs of today’s banks and customers. From ATM pooling and the future of physical branches to their commitment to resilient and sustainable practices, Diebold Nixdorf is redefining how financial institutions can deliver seamless, reliable service in a digital world (Page 24).
Kenneth Grant and Carlos Pareja’s article, "Scope 3 Emissions: Seeking Clarity in a Sea of Uncertainty," dives into the complex landscape of Scope 3 emissions reporting. As CFOs navigate evolving standards, this timely piece unpacks the challenges and opportunities in achieving transparency for long-term environmental impact (Page 18).
In "The Open Banking Challenge: Ensuring Compliance with API Standards for the Financial Industry," Jamie Beckland discusses the compliance and security standards necessary to support the open banking ecosystem. With regulatory expectations rising in the EU, US, and beyond, he highlights proactive steps that financial institutions can take to maintain robust, reliable API structures (Page 28).
Dr. Tendü Yogurtcu, CTO of Precisely, addresses the crucial issue of data integrity in "Navigating AI Bias: Ensuring Data Integrity in the Age of Generative AI." From the impacts of biased credit scoring to strategies for achieving reliable AI outcomes, Dr. Yogurtcu shares how organizations can reinforce data quality and governance to reduce AI bias and support fair, accurate insights (Page 32).
Professor Karl Schmedders from IMD contributes "Integrating Sustainability for Long-Term Business Resilience and Value Creation." As investors demand greater commitment to ESG, Professor Schmedders explores how the TCFD framework supports companies in building resilient, future-focused strategies that address climate risks and drive long-term growth (Page 20).
At Global Banking & Finance Review, we strive to be your trusted source of insights and perspectives in the financial sector. Whether you are an industry veteran or a curious newcomer, there is something here for you. We value your feedback and invite you to share your thoughts on how we can better serve your needs in future editions.
Enjoy the journey through our latest issue!
Wanda Rich Editor
Stay caught up on the latest news and trends taking place by signing up for our free email newsletter, reading us online at http://www.globalbankingandfinance.com/ and download our App for the latest digital magazine for free on Google Play and the Apple App Store
Dr. Hsiang-Chieh (Alex) Yang, Assistant Professor, Hull College of Business Augusta University
of
Matt Phillips, Head of Banking – UK and Ireland, Diebold Nixdorf
Banking digitisation in the US and UK: it’s a marathon, not a sprint
Alex Reddish, Head of Market Expansion & GTM Strategy, Tribe Payments
How
Alicia Skubick, Chief Customer Officer, TrustPilot:
Matthew Marion, Senior Product Manager,
Attracting, not mandating: why financial services should rethink the role of the workplace
Rob Frank, CEO EMEA, Unispace
The UK’s EMIR Refit is finally here – is your firm ready?
Ben Parker, CEO and founder, eflow Global
Embracing Humanity in Finance – The Rise of B2H (Brand-to-Human) Marketing
By Toby Strangewood, co-founder, Wake the Bear
Creating a Financial Legacy: Practical Steps for Lasting Impact
Juan Luis Rosas III, Financial Advisor and Managing Director, Northwestern Mutual’s Las Colinas Office
Hype vs Fraud – How to spot the modern day ‘red flags’ when investing in a startup Olivia Bishop, Reputation Management Lawyer, Slateford
How Geospatial technology and Earth Observation data can unlock value for Financial Services
Mark Tabor, Principal Consultant, Ordnance Survey
Global Banking & Finance Review interview with June Ahi, Cashflows June Ahi, Chief People Officer, Cashflows
Cover Story
Jim Richberg, Head of
and
Understanding
Jim Richberg, Head of Cyber Policy and Global Field CISO, Fortinet
Barath Narayanan, Global BFSI and Europe Geo Head, Persistent Systems Preparing
Andy Vrabel, General Manager, Payment Ecosystem Solutions, LegitScript
Patrick Nkongo, CEO,
Who is shaping Africa’s future?
Nga tatufwile, ninga banani?
Fa re sa dire rona, ke mang yo o tlaa dirang?
Ha ba sa lo ita ba bika, bana ba?
Nga tatwaikala fwe, ninshi banani?
Ngati si ife, ndani angatichitire?
Tí àwa kò bá ṣe, ta ní yóò ṣe?
Uma singakwenzi thina, ubani ozokwenza?
Tulekana basobela ba bika?
As ons dit nie doen nie, wie sal?
Loko hi nga endli hina, i mani loyi a nga ta endla?
If not us, then who will do it?
Partner with us today to invest in Africa’s tomorrow.
Three digital transformation trends to watch in the years ahead
Recently, JPMorgan Chase and Apple have been in talks about the former possibly replacing Goldman Sachs as the latter’s banking partner for its Apple Card. These talks are only one recent reminder that banking and finance are continuing to undergo digital transformations that are altering the financial services from the perspectives of both the industries and consumers alike. Moreover, these trends are set to not just continue but grow in speed and scope, and it will become increasingly important for industry professionals to stay abreast of them. From where I sit, there are three that particularly stand out among the many developments on the horizon.
The Arrival of Fintech Revolution 2.0
The word “revolution” is sometimes used to mean any kind of significant shift or trend without the original disruptive meaning of the word. But the fintech revolution of the last 14+ years has been genuinely revolutionary in the sense that fintech poses a real threat to the dominance long enjoyed by traditional banks and financial institutions. Major disruptors such as Robinhood, Square, Stripe, Affirm, and SoFi have been radically reshaping and democratizing investing, point-of-sale (POS) payment processing, online payments, buy now-pay later (BNPL) financing, and banking and financial services.
The last few years have seen the fintech sector run up against some challenges, leading some to proclaim that fintech may be “dead. But this is far from the case. Yes, the sector has stumbled somewhat in recent years due to a range of societal, economic, and regulatory factors including traditional banks stepping up their response to the fintech threat. Despite this, there are signals that fintech may be poised to make a big comeback. In fact, research from MicKinsey & Company show that between 2023 and 2028, fintech revenue is set to grow nearly three times faster than that of the traditional financial sector. How and why? It has a lot to do with the next two digital transformation trends: convergence between tech and traditional financial services and the growing prominence of AI and new sub-trends such as hyper-personalization that will be possible due to AI.
The Tech-Banking Convergence Will Continue
The aforementioned talks between Apple and JPMorgan – and, previously, Apple’s partnership with Goldman Sachs – point to an ongoing convergence between tech and the financial services sector. Driving this convergence forward are the many mutual benefits for legacy financial firms, on one hand, and tech giants such as Apple, on the other. Tech companies, with some notable exceptions such as SoFi, generally do not have their own bank charter. Pairing up with traditional financial firms therefore enables
tech giants such as Apple and Google to offer a greater range of services and convenience to their customers. At the same time, by offering a range of financial services they can keep these customers in their digital ecosystems, deepening brand loyalty and selling more of their own products and services in the process.
Financial institutions, for their part, also reap numerous benefits from this convergence. Generally speaking, they do not have the same level of brand strength and loyalty commanded by tech brands such as Apple, Microsoft, Amazon, and Google which occupy 1st, 2nd, 3rd, and 4th place in Interbrand’s ranking of the Global Best Brands, respectively. The highest rank for a financial institution is JPMorgan at 26 followed by American Express and Visa at 28 and 37.
Traditional banks have moreover struggled to provide enjoyable digital user experiences for their customers who are becoming increasingly likely to abandon traditional banks and flock to fintech brands for their needs. Rather than compete with fintech, it makes sense for traditional banks such as JPMorgan to partner with a giant like Apple whose credit card services have a proven track record of customer satisfaction and loyalty. Partnering with tech companies also enables financial firms to tap into the vast amounts of customer data collected by tech companies and leverage it to offer more personalized services through a proven user experience.
AI Will Empower Multiple Sub-Trends
There’s a third digital transformation that links back to both fintech’s future comeback as well as the tech-banking convergence. It will also empower numerous sub-trends of its own. And that is of course artificial intelligence and machine learning. The full implications of AI for the banking and finance sectors are so farreaching that we cannot possibly cover them all in a single article, but here are a few to look out for.
Data-driven decision making: Banking and finance inherently rely on the so-called Four Vs of big data: volume, velocity, variety, and veracity. In other words, there are vast amounts of data, it is generated at tremendous speed, there are
many different types of it, and making good decisions relies on the accuracy of that data and the effective analysis of it. Since AI is able to analyze vast amounts of data much faster and easier than humans or traditional data processing tools ever could, we can expect to see data-driven decision making powered by AI playing an increasingly important role in banking and finance.
Regulatory compliance and risk management: AI will also be increasingly used for managing risk and compliance. For example, in a recent study of mine I looked at how the implementation of CECL regulation has influenced the loaning practices of banks. Because CECL, in contrast to the incurred loss model, requires banks to factor in potential losses at the outset of issuing loans, I found that this leads to capital-constrained banks raising loan pricing and reducing their lending. By leveraging AI’s ability to efficiently process the aforementioned Four Vs of big data, banks will be able to lower risks, comply with regulations, and make better decisions through automated, data-driven decisions – in the process displaying the interdependent nature of these trends.
Personalizing financial services: Another major future trend will be an increased focus on personalized financial services. There is the perception that younger generations, Millennials and Gen Z, want more personalized products and services, but while this is true, when it comes to banking and financial services this is not limited to young people. Fintech company Q2, in collaboration with The Harris Poll, found that 74 percent of consumers of all generations want
more personalized banking services and are comfortable with financial firms using their data to provide those personalized services. Yet despite this, a study by Accenture suggests that only 23 percent of consumers think that their banks are doing a good job at personalizing their financial services. This clearly represents an unmet need and an area of future opportunity. Here again, as with regulatory compliance and risk management, AI’s ability to quickly and effectively process big data will undoubtedly be key in the banking and financial sector’s shift towards more and more personalized services.
These are by no means all of the digital transformation trends that we will likely see for banking and finance in the years ahead, but in my view they are among the most prominent ones. And rather than develop as separate and self-contained trends, I expect that we will see these trends merge with and cross-fertilize each other in various ways, leading to some interesting surprises and entirely new transformational trends tha as-of-yet may be difficult to imagine.
By Dr. Hsiang-Chieh (Alex) Yang, Assistant Professor at the Hull College of Business Augusta University
Creating a Financial Legacy: Practical Steps for Lasting Impact
In today’s fast-paced world, the concept of leaving a financial legacy has gained increasing importance. Research from Northwestern Mutual’s Planning and Progress Study revealed that approximately 25 percent of Americans expect to leave an inheritance to their heirs. This statistic not only highlights the desire to pass down wealth but also the various forms a legacy can take. Whether it’s monetary assets, investments, or philanthropic contributions, everyone will inevitably leave some type of legacy—financial or otherwise. With thoughtful planning and guidance, you can shape a legacy that aligns with your values and goals.
Leaving a financial legacy extends beyond monetary transfers—it encapsulates your values, priorities, and hopes for future generations. A well-planned legacy communicates the lessons learned throughout your life, guiding your heirs on how to manage and appreciate their inheritance. It also contributes to your family’s financial security and stability, ensuring that your loved ones are wellprepared for the future.
Moreover, a financial legacy can have a far-reaching impact outside one’s immediate family. Considerations of charitable giving, community investments, and educational funds can all contribute to a more meaningful legacy. By understanding the significance of leaving a financial legacy, you can approach this endeavor with purpose and intention. Here are some steps to consider:
1. Assess Your Current Financial Situation – Before you start planning your legacy, it’s essential to have a clear understanding of your current financial situation. This includes evaluating your assets, debts, income, and expenses. Creating a comprehensive financial picture will help you determine what you can realistically pass on to your heirs or allocate to charitable causes. Consider compiling a detailed inventory of your assets, including real estate, bank accounts, retirement accounts, investments, and personal valuables. Additionally, think about any liabilities, such as mortgages, loans, or credit card debt. This assessment will serve as the foundation for your legacy planning.
2. Define Your Legacy Goals – What do you want your financial legacy to represent? Take time to reflect on your values and aspirations. Do you want to ensure your children have access to quality education? Are you passionate about supporting specific charities or causes? Or perhaps you want to create a reserve for future generations to invest in their entrepreneurial pursuits? Clearly defining your legacy goals will not only give you direction but will also allow you to communicate your intentions to your family. This can foster a sense of responsibility and stewardship among your heirs and instill in them the importance of managing finances wisely.
3. Explore Estate Planning Options – Estate planning plays a pivotal role in leaving a financial legacy. This process involves preparing for the management and disposal of your estate during and after your lifetime. Common estate planning tools include:
1. Wills: A will outlines how your assets will be distributed after your death. It can also designate guardians for minors and specify how debts should be settled.
2. Trusts: A trust can provide more control over how your assets are managed and distributed. For example, a revocable living trust allows you to retain control of your assets while you are alive, and it can streamline the transfer process after death, bypassing probate court.
3. Beneficiary Designations: Ensure that your beneficiary designations on retirement accounts and insurance policies are up to date. These designations supersede will provisions, so it’s crucial to review them regularly.
4. Gifting Strategies: Consider making gifts to heirs or charities during your lifetime. This can reduce the size of your taxable estate and allow you to witness the impact of your gifts firsthand.
4.Consider Charitable Giving – Many individuals wish to leave a legacy that positively impacts their communities or supports causes they care deeply about. Charitable giving can take several forms, from direct donations to establishing foundations or scholarship funds. Engaging in philanthropy not only creates a lasting impact but can also provide tax benefits. You might consider strategies such as:
1. Donor-Advised Funds (DAFs): A DAF allows you to make a charitable contribution, receive an immediate tax deduction, and recommend grants over time.
2. Charitable Remainder Trusts (CRTs): A CRT provides income during your lifetime, with the remainder going to charity upon your death.
5. Engage a Financial Advisor –Navigating the complexities of estate planning, taxation, and investment strategies can be overwhelming. A financial advisor can provide invaluable expertise in shaping a legacy that is right for you. They can help evaluate your financial situation, develop a strategic plan, and implement effective solutions tailored to your goals. Working with a financial advisor also allows you to gain insights into various legacy-building vehicles, such as trusts, wills, and other estate planning tools. Advisors can assist in optimizing your investments to ensure your assets grow over time, maximizing the financial impact on your heirs or chosen charities.
Juan Rosas
Financial Advisor and Managing Director
Northwestern Mutual’s Las Colinas Office
**Juan Rosas, CFP**, is an experienced financial advisor and the Managing Director of Northwestern Mutual’s Las Colinas Office. He oversees a committed team of 25 advisors and 15 support staff, working closely with clients to navigate the complexities of financial planning, wealth management, and insurance planning.
Attracting, not mandating:
why
financial
services should rethink the role of the workplace
In this new reality, mandates alone will not solve the problem of getting employees to return. Employees have become accustomed to the benefits of flexible working and financial services firms must now reimagine their workplaces as magnets: spaces that draw people in by offering something unique and valuable beyond what they can achieve at home.
The pitfalls of mandates
Considering the employee’s point of view allows us to understand the challenges of mandating. For example, employees believe that mandates are ‘imposed’ on them with a broadbrush approach, across a range of roles, without businesses truly understanding the core functions and requirements of employees in their day-to-day tasks. Also, they do not take into consideration why employees need to physically be in a workplace. Is the technology and infrastructure better within the office environment, enabling people to perform their roles with greater ease and efficiency? Simple logistical considerations also come into focus, such as teams not having enough desks together or the ability to prebook them before travelling into the office. This often leads to teams being separated while in one place, which is counterproductive and results in employees feeling frustrated. A simple solution could be seat booking systems, where team leaders can book out sections of a workplace so that collaboration can be coordinated and supported.
These frustrations and approaches to returning to the office can make employees dissatisfied with businesses and leave them disconnected from the company, the opposite effect the employer is hoping for. After all, the aim was to reconnect employees by bringing them back into an office in the first instance.
The evolving role of workplaces
People choose to come into workplaces when they are positively motivated to do so. Face-to-face collaboration with colleagues is a primary driver for encouraging people back into the office. Additional drivers include building social and professional connections, learning and mentorship, and making it easier for people to bounce ideas off each other.
Driven by the benefits of face-to-face collaboration, people now view the office as the ultimate hub for connection and alignment, enabling them to feel more productive. It is no longer a purely functional space with a desk, computer and access to technology or resources. This means the footprint of the office itself needs to be reviewed, as we’ve witnessed this year from City AM’s news(4) on HSBC’s headquarters in Canary Wharf. From 2027, the skyscraper will be transformed into a multi-use location with workspaces, leisure, entertainment, education, and cultural attractions. It will almost certainly consist of a variety of spaces to complete different types of work, whether private, focused or collaborative.
Modern financial services workplaces also need to ensure employee wellbeing is front of mind when considering any office design. Though there are a number of considerations, flexible spaces incorporating natural light and access to outdoor spaces with fresh air are principal among them. Acoustic design is also crucial to ensure noise-related distractions do not impact on an employee’s ability to complete day-to-day activities. By understanding ways of working, companies can better support their workforce while also attracting people back into buildings, safe in the knowledge that the physical building itself is fulfilling everyone’s needs.
The UK financial services sector is a vital part of the economy, which means competition to attract, engage and retain talent is imperative to sustaining it. We are at a crossroads with returning to the office. Businesses know that employees are not solely motivated by salary, flexibility and the overall physical working environment play a huge part in employees’ motivation to return to the office.
If workplaces do not adapt to understand and offer better equipped surroundings, flexibility, and competitive working policies then there is a risk of losing talent to other sectors or up and coming competitors that do.
Though mandating may feel like the first step in encouraging colleagues to return to the office, it shouldn’t be. Focusing on the policies and physical spaces at your disposal will be far more meaningful and impactful in the long-term, whilst also maintaining positive engagement and productivity.
Mandating will not solve the challenge of getting people back into the workplace, it’s the workplaces themselves that need to be ready to welcome employees back.
Rob Frank CEO EMEA Unispace
Proactive and Responsible Disclosure Strengthens Business Cybersecurity
Cyberattacks on businesses are growing in size and complexity, with almost one in three UK firms suffering an attack in the past year. With threat actors targeting businesses regardless of size and industry, attacks are now a matter of “if” and not “when.”
Identifying and disclosing vulnerabilities before they have the chance to affect the wider business is crucial to lowering the risk of an attack. With most vulnerabilities stemming from coding errors, early detection is key to protecting devices, businesses and customers from cyber threats. Ensuring this is done responsibly by aligning with government standards and communicating with customers on new and existing vulnerabilities plays a crucial role in protecting businesses against future threats.
Making impactful change
All digital devices and software are built on code. According to one recent industry analysis, an average software code sample contains 6,000 defects per million lines of code. Research indicates that about 5% of those defects can be exploited, roughly translating to three exploitable vulnerabilities for every 10,000 lines of code. In a world of imperfect code, who would we want to find the problems — the manufacturer, users and third party researchers, or malicious actors? While having users or third parties find problems is a common approach, a product’s manufacturer usually has the greatest expertise and resources to bring to bear to finding problems and vulnerabilities.
Every producer of IT products and services is responsible for following robust security standards at all stages of the product development lifecycle. These vendors must also practice responsible radical transparency and proactively search for and disclose vulnerabilities in their software. If a defect poses a security vulnerability it should be reported as such, and not labelled a functional fix or performance upgrade, since many large organizations will apply security patches but are more selective in applying functional fixes. Mis-labeling a security vulnerability as another type of problem doesn’t fully inform users of risk. Practicing radical transparency not only protects product users before they are exploited but also allows other organisations to examine their own code for similar vulnerabilities. There are several ways to do this; selfdiscovery through rigorous manual code analysis, penetration testing and automated fuzzing; encouraging thirdparty threat researchers to report discovered vulnerabilities to vendors; and detection via indications of active exploitation (where an organisation discovers a vulnerability itself).
Not all organisations follow the same standards for transparency in vulnerability disclosure regardless of how the gaps in defence are discovered. While there are a number of industry best practices for encouraging responsible disclosure processes, including the National Cybersecurity Centre (NCSC)’s Vulnerability Disclosure Toolkit, adhering to these guidelines is unfortunately not required.
Ensuring collaboration and transparency
IT manufacturers who prioritize building security into their products and services from day one benefit in a variety of ways, ranging from producing more secure offerings that will require less security patching after delivery to building a solid foundation of trust with customers, partners, and the public. Measures manufacturers should include aligning to industry-recognized standards from government organisations, such as the NCSC in the UK and the Cybersecurity and Infrastructure Security Agency (CISA) in the United States.
Also, having timely and ongoing communication with customers is essential in protecting and securing businesses from external threats. Doing so allows for threats to be responded to appropriately. It also allows for remediation measures to be quickly and transparently published. Robust communication enables everyone within a business to understand where associated threats may lie, allowing teams to be proactive in taking additional cybersecurity measures as needed.
Understanding the potential for vulnerabilities to surface while setting high standards for responsible development and disclosure to mitigate them empowers businesses to make informed risk-based decisions about their cybersecurity.
To take this one step further, once this policy has been implemented by an organisation, the next step is to adopt a ‘secure by design’ approach.
Secure by design is a concept that prioritises security as a core business requirement. Secure-by-design covers every stage of product development, from concept to end-of-life, while also operating in accordance with leading standards such as NIST 800-53. Embracing secure by design principles also encompasses being transparent about potential risks, proactively disclosing vulnerabilities, and sharing actionable steps to help customers improve their cyber resilience.
Introducing a comprehensive framework
As the threat landscape grows more complex, customers will begin demanding that their vendors embrace secure by design principles, making this approach far more than a “nice to have” feature when procuring software.
For technology providers, having an effective cybersecurity framework in place is vital and requires a continual commitment to transparency, collaboration, and proactive vulnerability disclosure. With code defects posing significant risks, leaders must identify, patch, and disclose vulnerabilities responsibly. Ensuring responsible disclosure empowers organisations to make more securityinformed decisions, which improves cybersecurity for all.
Jim Richberg Head of Cyber Policy and Global Field CISO, Fortinet
Hype vs Fraud – How to spot the modern day ‘red flags’ when investing in a startup
No investor wants to live with the regret of missing out on the next big startup hit. Imagine, for example, having the recurring nightmare of those investors who missed out on buying shares in Apple in the early 90s. But how can you tell apart the future unicorns, vs the flops? Or worse, the fraudsters.
Chasing funding is integral to the start-up experience and the squeeze to succeed is real. However, while that start-up spirit and keen desire to grow is what so often captures an investors imagination, it is important not to be taken-in by inflated figures and false profit margins. The start-up community is unique in the sense that it is a struggle. It is so often that we hear about founders’ sofa surfing and drawing the most minimal of salaries for the first five years of operations. To build a business from the ground up, can involve risking everything you have and huge penalties for failure. Predictably, this can create the incentive to tweak data, adapt the narrative, or say anything that will get the deal over the line.
There’s a fine line between a business putting its best figures forward and fraud – the trick is spotting it. There are some common indicators that suggest a start-up will have issues in the future, the most common in disruptive businesses is the distance between expectations of the sales function and innovation teams. A gap between these two functions of a business leads to – often, but not always, inadvertent –misrepresentations.
Red flags
Everyone in business has experienced a sales call where the pitch given for a revolutionary new product has not quite matched performance when it comes to trying it out for real. This is the disconnect between the sales and the operations and while it may seem like a rudimentary example, it spills into investor risk very quickly.
When evaluating the potential of a start-up business, it is worth asking what the internal targets for sales and operations are, and whether the way the business incentivises its staff could risk those staff stretching the truth around their statistics. Having aggressive targets, combined with a disconnect between function vs sales too often leads to misreported figures.
Overlooking the internal workings of a business can also easily lead to a future reputational crisis, that could have been easily avoided. A classic example of this is where an investor could have taken a little more notice of the negative Glassdoor reviews which revealed the fact that staff were overworked with unattainable targets. If the company culture is projecting one thing, but (unattainable) targets are still being met – you must ask how they are being met – or if the data has been skewed.
The next thing to look at is whether the data being published is or even can be verified. Consider how susceptible it is to fraudulent activity, for example. Subscription models are often the most difficult structures to uncover and true performance can be masked in arcane and often esoteric metrics.
Regulation
An interesting point of the start-up market, is the fact that these new and developing businesses, are often operating in unregulated spaces. They take advantage of opportunities early on and this can lead to inflated figures, which aren’t being reviewed or scrutinised by any external parties. There are, however, numerous examples of instances where fast-growing businesses have come crashing down once policy catches up with the fact that a sector of the market is, as often happens, being taken advantage of.
It may be that in the future, we see regulators keeping a tighter eye on the activities of startups, but it is also important for any investors to be aware of possible incoming regulation when they are considering putting their money into a business. Be sure to ask questions that test the longevity of growth plans and have in mind that rules and regulations can change quickly.
Any investor that has fallen victim to startup fraud needs to consider what matters to them the most. The start-up space is full of creative failure and embracing that makes the sector unique. But failure because of fraud can be a difficult pill to swallow. It is embarrassing and can affect your credibility as an investor.
Currently, there’s no effective legal protection for the damage done to the reputation of those who are victims of these types of crime. On that basis, all you can do is deal with the reputational crisis as it comes, and work with professionals to mitigate the damage done.
When considering any investment, you must look for the indicators early on. Ask questions about internal operations, dig deep into how the numbers have been produced, challenge sweeping statements and try to spot the indicators of crisis. Remember the age old saying – if something seems too good to be true… it probably is!
Olivia Bishop Reputation Management Lawyer Slateford
The reputational impact on investors
The UK’s EMIR Refit is finally here – is your firm ready?
The long-awaited EMIR Refit regulation has now come into force in the UK. The EU’s deadline came and went in April this year, and now it’s the turn of UK businesses to adhere to the updated regulations – with the added benefit of having had five more months to prepare.
The updates to EMIR have introduced sweeping modifications to the way derivatives are +reported to trade repositories (TRs), including how they are formatted and the number of data fields that need to be submitted. Adapting to the complexity of these changes has required firms to radically reassess their processes and technology.
EMIR Refit in the UK largely mirrors the EU version, helping to provide some consistency with reporting on the continent, but there are also some key differences. For firms operating in both jurisdictions, this can be both a blessing and a curse depending on the tools being used.
While the changes are significant and would have required extensive planning, updating and testing of reporting systems beforehand, firms will need to adapt to the new regulations quickly; companies will need to fine-tune their EMIR reporting system and processes for accuracy and efficiency during the six month transition period, which ends on 31 March 2025.
For many firms, the introduction of EMIR Refit may have left them realising that their current systems and processes are not robust enough to deal with the significant increase in the volume and complexity of data that they now need to report. If this is the case, then they must act quickly to implement appropriate processes to ensure that they aren’t the subject of enforcement action and the hefty fines and reputational damage that comes with it.
So, what are some of the changes? And how can firms ensure they adhere to them?
What firms need to do
By now, companies should have thoroughly assessed their reporting processes and made the necessary changes ahead of the deadline. Firms operating in both the EU and UK should be well and truly adjusted to the new regulations, having already had to adhere to the EU rules since 29 April 2024. This means they should be well placed to adapt existing working processes in line with the UK EMIR Refit – on the face of it, this should be an easier transition. However, operating across both jurisdictions can also create more complications.
Differences between the Financial Conduct Authority (FCA) and the European Securities and Markets Authority (ESMA) can mean that validation rules for fields vary between the two jurisdictions. If a firm’s transaction reporting technology is not able to automatically adjust fields to UK and EU rules from one trade to another trade, then a lot of manual work is needed to carry out the process. These firms may also be using two different solutions for each region, creating a lack of coherence and increasing compliance costs.
What EMIR refit really necessitates is sophisticated and accurate record keeping – something a one dimensional compliance system is unlikely to provide in the long run. If they haven’t done so already, firms should be looking to adopt a holistic solution that is capable of providing specialised EMIR Refit-compliant reporting – systems that can join up reporting processes across the company while also adapting to changing regulatory demands, both in the EU and the UK.
Why delegated reporting isn’t enough
Many firms will have considered, and possibly selected, the option of delegated reporting as part of their plans to comply with EMIR Refit. While this approach might seem like an easier solution, it doesn’t eliminate the core responsibility firms have for the accuracy and quality of their data. In fact, many firms relying on counterparties to manage their transaction reporting are discovering that this approach may not be enough to meet the stringent demands of regulators.
According to a consultation paper by ESMA, 30-40% of firms using delegated reporting have raised concerns about the reliability of the data submitted on their behalf. This lack of confidence has led businesses to seek greater control, either by turning to external vendors or exploring in-house solutions to ensure the quality of their data.
Moreover, as technology automation continues to advance, more firms are shifting towards third-party solutions that enhance their reporting processes. A 2023 survey by RegTech Insight found that 47% of financial institutions have either adopted or are considering automated solutions for EMIR and MiFIR reporting, up from 30% just two years prior.
These systems integrate data enrichment, validation, and automation to provide more reliable reporting, allowing firms to swiftly identify and resolve discrepancies. In an environment where the cost of errors can be significant, this level of control and transparency is becoming essential for maintaining compliance and peace of mind.
By embracing technology, firms are moving beyond delegated reporting and streamlining their reporting processes to ensure they remain compliant with evolving regulatory requirements.
Keeping apace with change
Technology allows firms to claw back time. For trades entered into before 30 September 2024, the FCA has said there is “six-month transition period for entities responsible for reporting to update those outstanding derivative reports to the new requirements”. The implementation of a robust EMIR reporting system can tackle this backlog efficiently while also facilitating current and new trades.
However, EMIR Refit is not just tweaking how derivatives are reported to trade repositories – it is delivering considerable changes to the process that underpins it. It takes time to embed new reporting systems into a firm’s dayto-day operations and align employees to new processes. It also requires a commitment from senior management to invest in compliance.
Rather than view the new regulations as another regulatory challenge, firms should see EMIR Refit as an opportunity to strengthen their regulatory processes while also driving operational efficiencies that will help their business to scale. Employees should also be trained on the importance of accurate reporting and how the use of technology will ultimately make their lives easier in the long run.
Even if companies have introduced updates to legacy systems, the pace and scale of Refit changes means that they are likely to require a more agile and modern approach for the future. With more updates coming into play as part of EMIR Refit – Phase 2 in 2026, taking a long-term view is likely to help firms put sound foundations in place. If implemented successfully, this should make future transitions a significantly easier challenge to navigate.
Ben Parker CEO and founder at eflow Global
Embracing Humanity in Finance –The Rise of B2H (Brand-to-Human) Marketing
In an era where technology has fundamentally changed how we communicate, purchase, and interact with brands, the traditional marketing dichotomy of Business-to-Business (B2B) and Business-to-Consumer (B2C) thinking is increasingly blurred, and arguably antiquated and irrelevant.
Is the eradication of these two marketing mindsets and practices long overdue and, if so, what do we replace them with?
From transactions to interactions
Historically, financial institutions have rigidly adhered to the B2B and B2C distinctions, tailoring their communication, product offerings and service delivery to these siloed audiences. B2B marketing in finance is focused on logic-driven propositions, emphasising cost savings, efficiency, and ROI to attract corporate clients, and often highly targeted to a specific job title or key decision maker. Meanwhile, B2C efforts are often swayed towards emotional engagement, brand loyalty, and personal benefits to lure individual consumers.
However, this demarcation overlooks a crucial commonality: at both ends of the spectrum, we are engaging with humans.
If a financial marketer is targeting an end consumer who is looking for a new financial services solution that provides a value proposition that meets their needs, keeps their money safe, grows their investment, makes their life easier, cheaper and also keeps their data safe, they’re having to pull both functional and emotional levers in their brand communications to win that customer over.
The same is true for a CMO, CTO or other key stakeholder within an organisation looking for an FS solution to meet their organisation’s needs. They are still…humans. Humans that think logically, illogically, functionally and emotionally, who worry about reputation or about getting something wrong, and have spheres of influence and different attitudes to innovation and risk.
Today, a corporate procurement officer and an everyday consumer share similar expectations: personalised experiences, seamless service, and genuine brand engagement. They research, interact, and even advocate based on these parameters, making it clear that the heart of effective marketing lies in recognising and responding to these universal human needs and behaviours.
A case for B2H (Brand-to-Human) for all marketing, including in financial services
Why not mix this up further to a full human-to-human distinction? I’d argue that, at the end of the day, one side of this communication is always a business with the objective to sell, whether that’s a sole trader or a global organisation. People who think that businesses can communicate with people ‘like a friend in a pub’ - which was once said to me by a global banking brand manager - are deluded about the perceived naivety of their consumers. Unless your friend in the pub, however funny or interesting they may be, is always trying to sell you something. A Brand-to-Human relationship acknowledges the reality of the dynamics in that conversation, and the brand is at least the best human face and personality that the business has. If created properly, a good brand can still make a human and emotional connection to the recipient, but always with the transparent truth that the individual or human speaking is representing the business they work for.
The argument for B2H in financial services is not merely philosophical but grounded in practical, observable shifts in consumer and client behaviour. Consider the proliferation of social media and content marketing as pivotal tools for engagement. These platforms do not distinguish between a corporate executive and a personal account holder; they offer the same content, the same interface, and the same opportunity for engagement. This universality underscores the essence of B2H: focusing on relatable, accessible, and valuable content that speaks to individuals irrespective of their role or capacity.
Moreover, as financial services become increasingly digitised, the emphasis shifts from the product to the experience. Fintech startups have been at the forefront for some time, leveraging technology not just to innovate product offerings but to redefine customer experience and expectations. Their success lies not in targeting B2B or B2C segments but in solving human problems with intuitive, user-centred solutions.
In conclusion, the lines that once divided B2B and B2C are fading, giving way to a more inclusive, human-centric approach. For financial services brands, the future lies in embracing this Brand-to-Human perspective, recognising that regardless of the transaction's nature, the ultimate engagement is always human.
This shift doesn't just promise more effective marketing but heralds a more connected, empathetic, and responsive financial sector that's geared towards meeting the evolving needs of our diverse, digital societies.
Wake the Bear is a Marketing & Media Agency that’s a specialist in navigating ambitious brands through their growth challenges. They’ve helped clients such as Stripe, NatWest, Check My File, and Legal & General. Toby previously led media strategy for Barclays and Barclaycard whilst at a global media agency.
Toby Strangewood, Co-Founder, Wake the Bear
Is Shared Banking the Next Wave of Banking Evolution?
The how, where and why of financial services provision continues to evolve across every economy and every country globally. As a consumer 10 years ago, you would have been unlikely to imagine how much the face of banking has changed in recent years. These changes have accelerated particularly quickly in the last few years as new services are introduced, alongside a shift in the locations where services are offered and consumed.
As part of this shift in how and where consumers can access cash and banking services, the adoption of shared banking solutions is on the rise. What was considered a relatively new and potentially risky concept a few years ago is fast becoming a proven way for some countries to maintain accessibility for consumers. Whether it is a combined network of ATMs under a new brand in the market or a collaborative effort between banks, the rise and rise of this setup is likely to continue to accelerate as a way to balance availability and efficiency.
With this in mind, what can we learn from those first-mover countries where shared banking solutions are already in play?
Firstly, and very evidently, there is no size solution that fits all. Population density, country geography, bank network set up and how far a country is along its digital adoption path all play a significant role in developing a fit-for-purpose solution. Alongside this, consumer attitudes and the appetite to adopt new services will determine overall success. Extensive market and consumer research can help shape strategic decisions, as well as analysing the models already implemented across European markets.
Once an overall approach has been assessed and agreed upon, the physical infrastructure is another critical consideration. Again, we have seen variations in strategies in different countries with established shared banking solutions ranging from a complete outsourced solution, to banking hubs, to managing networks in close and dedicated partnerships. Reliability is essential for both providers and consumers. Therefore, the creation of robust and adaptable networks and services is non-negotiable. As we have seen in recent years, economies, politics and consumers can pivot dramatically within short timeframes, so the ability to withstand this and offer service stability is essential for sustainability.
The narrative around access to cash differs across Europe. Some countries have progressed to digital too swiftly and are now backtracking, whereas other cash-heavy markets are at a different stage of evolution in maintaining access to cash. Regardless of the progression stage, local governments and local policies need to be an integral part of a shared banking solution. In some countries, we have seen governments introduce legislation around the proximity of services, for example, ensuring an ATM is available within a certain distance of every consumer. As the need to protect vulnerable members of society remains strong –as well as the ability to simply offer all consumers a choice of payment options - it is likely that governmental involvement in future shared banking rollouts will increase.
The ability to be quick to market is also a top priority for new implementations of shared banking solutions, but equally one of the most difficult to achieve. The combination of the factors already discussed – set up, infrastructure, government involvement and unique country requirements – all create a hugely complex set of variables to manage and navigate in a timely manner. Starting early and taking the lessons learnt from other countries and setups can all help manage the journey in the most effective way possible.
Finally, the standalone and most important factor in the decision-making process for shared banking services is the consumer. In the effort to streamline services and drive operational efficiencies, it can be easy to lose sight of the ultimate reason the services are being provided: to satisfy consumers and deliver the financial services they want and need.
Taking a truly customer-led approach and involving customers in the progress at every stage can be the difference between first-time success and missing the mark, essentially adding more cost and time to a new implementation. Naturally, solutions and offerings will also evolve and adapt over time. Therefore, an ongoing commitment to consumer involvement and education at every turn will increase the likelihood of delivering the right services in a cost-effective and sustainable manner for the long term.
In summary, shared banking solutions will continue to advance as the world of financial services shifts, advances and diversifies. Providing accessible and reliable services for all members of society will remain a pivotal priority for the financial industry. Collaborative efforts to deliver services in new ways will continue to form a stable backbone of this commitment, ultimately creating a blended mix of both physical and digital services for all consumers in all societies.
Matt Phillips Head of Banking – UK and Ireland
Diebold Nixdorf
Revolutionizing Trading: Meet OCBC Securities' A.I. Oscar –
Your
Personalized AI Trading Assistant
Leading brokerage firm OCBC Securities was established in Singapore in 1986 and offers reliable, secure, end-to-end encryption trading. An early adopter of electronic platforms, OCBC Securities is an awardwinner many times over, its accolades including Global Banking & Finance awards for Best Mobile Trading Platform – Singapore and Most Innovative Trading Platform – Singapore for three successive years.
This year, OCBC Securities launched A.I. Oscar, Singapore’s first AIpowered stock-picker tool, and Managing Director Wilson He talked to Wanda Rich, editor of Global Banking & Finance Review about its development, the benefits it provides, and how its personalised recommendations compare with traditional human analysis.
Can you give us an overview of A.I. Oscar and its main purpose on the iOCBC platform?
A.I. Oscar, which stands for OCBC Securities Customer Artificial-Intelligence Radar, was developed in-house by OCBC’s AI Lab and OCBC Securities. The creation of A.I. Oscar aligns with our corporate strategy to focus on accelerating transformation and digitalisation as a key pillar. It is an AIpowered virtual trading assistant that is redefining the role of technology in the stockbroking industry. Unlike other AI-enabled applications, A.I. Oscar goes a step further by providing personalised stock ideas tailored to each individual user based on their trading history on our platform. Built to function much like a personal trading assistant, A.I. Oscar monitors the market round the clock and offers users timely insights. Whether you are a seasoned trader or a beginner, A.I. Oscar continuously learns from your past trading behaviour to refine and deliver insights that are more relevant to you. As such, A.I. Oscar aims to empower users to make more informed trading decisions and enhance their overall trading experience on the iOCBC platform.
How does A.I. Oscar differ from other AI-enabled applications offered by competitors in the stockbroking industry?
A.I. Oscar sets itself apart from other AI-enabled applications through its highly sophisticated deep learning network. Unlike typical rulebased models that make decisions based on a few pre-set criteria, this machine-learning technology mimics the decision-making process of the human brain. This enables the model to go beyond simple rules and dynamically learn from the vast amounts of trusted market data from reputable partners like Nasdaq and LSEG Data & Analytics. Instead of being limited to predefined conditions, A.I. Oscar’s deep learning algorithms can identify and predict possible market patterns. To provide more relevant stock ideas, it also looks at a customer’s trading history with us to provide 15 personalised stock ideas for them every week. When we launched A.I. Oscar for the Singapore market in 2023, we saw that trading activity among young investors under 35 increased by 50% during the pilot period compared to the months before. Going forward, we aim to triple our active customer base in this segment.
Could you explain how A.I. Oscar’s deep learning network operates and how it contributes to stock price predictions?
A.I. Oscar is built on a transformer-based neural network model that incorporates additional deep learning components specifically suited to forecasting. Unlike simpler models, A.I. Oscar takes a multiperspective approach. It looks at the data through both short-term and long-term lenses simultaneously to uncover complex patterns for each stock. It also selectively combines information across stocks, capturing interdependencies between different stocks, and determines the most relevant information to refine its prediction. A.I. Oscar also consumes a huge volume of premium data that OCBC Securities obtains from LSEG Data & Analytics each day. Apart from indexes and fundamental and technical indicators, A.I. Oscar also makes use of up to intra-day granularity of global transactions for each stock. These data flow through the deep learning network model that has millions of parameters, like volume knobs, that are tuned in combination to silence or amplify certain signs to detect possible trends and potential stock price movements.
What are the main benefits that customers can expect to see from using A.I. Oscar?
A.I. Oscar serves as a highly efficient and intelligent trading assistant. Compared to human analysts who can realistically analyse only a handful of stocks each day due to time and cognitive constraints, A.I. Oscar is capable of scanning through massive amounts of data from thousands of stocks across major markets simultaneously. It is able to evaluate stocks in parallel, quickly generating insights and reports that would otherwise require an entire team of analysts working around the clock.
A.I. Oscar was trained with data from over 4,000 stocks across major exchanges like SGX, HKEX, NASDAQ and NYSE, which include more than a decade’s worth of stock fundamentals, macroeconomic factors, market patterns and technical indicators. This allows it to generate stock ideas that align with diverse trading strategies and market conditions. I believe that speed is crucial in trading, as traders need to respond to market events and make informed decisions swiftly. With A.I. Oscar, investors can easily recognise potential opportunities in the market that are relevant and act on them without delay.
In addition, while human intuition and judgement remain invaluable, emotions can sometimes cloud decisions, especially in today’s volatile and uncertain markets. This is where A.I. Oscar can complement human decision-making in stock trading. As A.I. Oscar has no emotions and hence is not swayed by emotional biases or market noises, this allows traders to combine their personal insights with the AI’s objective analysis for a more balanced and informed approach to trading.
How does A.I. Oscar personalise trading recommendations for individual users?
In today’s information-heavy world, investors are often inundated with an overwhelming volume of information, much of which is either irrelevant or too time-consuming to analyse manually. A.I. Oscar addresses this issue by using advanced machine learning algorithms to sift through all these data and curate trading ideas that are most relevant to each individual investor, based on their past trading activities. For instance, if a customer frequently trades SIA (Singapore Airlines) stock, A.I. Oscar will prioritise sending insights related to SIA to the customer whenever it detects significant market signals from that stock.
INTERVIEW
The power of A.I. Oscar lies in its ability to generate a wide range of personalised stock ideas. From a pool of diverse stock ideas, A.I. Oscar can intelligently select the five most relevant ones for each investor based on their past trading history. This dynamic and tailored selection process means that each user could potentially receive a different report, providing a highly customised trading experience. Such precision is achieved through a sophisticated CRM (customer relationship management) engine that operates behind the scenes, significantly enhancing both productivity and customer engagement. The result is a trading assistant that is not just smart but also highly attuned to each investor.
How has A.I. Oscar performed in stock market predictions compared to human analysts so far?
Earlier this year, we ran an in-house challenge to explore the difference in the performance of A.I. Oscar and human traders in predicting stock movements. The participants, who included staff from various front- and back-office functions, used diverse strategies like fundamental analysis, technical analysis and intuition. Both A.I. Oscar and the human traders had their winning moments – there were weeks when A.I. Oscar outperformed and weeks when human traders came out ahead. Interestingly, we found that A.I. Oscar particularly excelled in bearish markets, maintaining objectivity and analytical rigour in offering unbiased, data-driven insights free from emotional influences. In contrast, human traders are tuned to identify bullish opportunities, leveraging their instinctive market judgement and intuitive insights. The challenge highlighted the significance of integrating AI’s data-driven precision with the creativity and intuition of humans to achieve a more balanced and comprehensive strategy for stock trading by leveraging the best of both human and AI capabilities. In fact, in Season 2 of the challenge, we observed a shift in how human participants predict stock movements. They started learning from A.I. Oscar’s approach and displayed greater confidence in identifying and acting on bearish markets compared to Season 1. This demonstrates the potential for continued advancements in stock trading processes, as AI and humans continuously learn from one another and leverage each other’s strengths to deliver more informed predictions.
What measures are in place to ensure the continuous improvement of A.I. Oscar’s prediction accuracy?
Financial markets are inherently volatile and subject to various factors, so it’s essential that A.I. Oscar evolves with these constant shifts in market dynamics. We are employing a multi-faceted approach centred around ongoing refinement, data expansion and customer feedback. Our dedicated team of data scientists and trading strategists are always exploring the latest AI modelling techniques to improve A.I. Oscar’s ability to predict potential market movements and better comprehend the market. As investors make more trades on our platform, A.I. Oscar also constantly analyses such data to understand the individual’s trading history. This enables A.I. Oscar to refine its algorithms and provide more personalised watchlists for that investor moving forward. While we continue to fine-tune A.I. Oscar’s algorithms and expand its data sources, we continuously strive to make A.I. Oscar highly responsive to market fluctuations and deliver more timely insights to our customers.
How does A.I. Oscar engage with customers? What channels are used to deliver trading ideas and insights?
A.I. Oscar can be found on multiple channels, including the iOCBC Mobile Trading app, the iOCBC online trading platform, and email. Within the iOCBC Mobile Trading app, A.I. Oscar can be found under “AI Watchlist,” where it features 15 personalised stock ideas, which have now expanded to cover the Singapore, US and Hong Kong markets. This is weekly and customers can enable push notifications on the app to ensure they do not miss out on any new stock ideas.
What were some of the challenges faced in developing A.I. Oscar, and how did the collaboration between different departments help overcome them?
Developing an AI tool that can effectively support human investors in trading was a challenging endeavour that required a collective effort and collaboration across multiple departments within OCBC Securities. Each team brought unique expertise to the table to tackle the complexities involved in this project. One of the primary challenges was translating the skills and instincts of a human trading strategist into codes that an AI model could understand and replicate. The inputs and feedback from seasoned trading strategists were invaluable in fine-tuning A.I. Oscar, helping it become a robust tool capable of providing useful insights based on a wide array of data points. In addition to the technical hurdles, there was also the challenge of creating a user-friendly interface that could effectively convey A.I. Oscar’s complex insights in a way that was understandable and actionable for customers. The Customer Experience team played a pivotal role here, working closely with customers to create a user-friendly interface. It used feedback from customer labs to identify areas that users found confusing, to simplify the presentation of data. This feedback loop allowed for rapid iterations and continuous improvements, ensuring that the final product was not only effective in generating insightful stock ideas but also intuitive and easy to use. This collaborative effort between various departments was the key to turning A.I. Oscar from a concept into a fully functional reality. The blend of diverse skills and perspectives made the journey of developing A.I. Oscar a successful and transformative one for OCBC Securities.
What future enhancements or features can customers expect to see in A.I. Oscar?
As customers look for faster and more succinct news, A.I. Oscar is constantly evolving to keep pace with these expectations. In a rapidly changing market environment, investors are seeking tools that not only provide accurate information but also deliver it in a timely and accessible manner. To address this, we are focused on further enhancing A.I. Oscar’s capabilities to make it even more responsive and adaptive to user needs. As we continue to leverage AI and incorporate customer feedback, future versions of A.I. Oscar will focus on making it more interactive with customers, such as allowing users to ask questions and receive answers to further streamline their trading experience on our platforms.
Mr. Wilson He Managing Director OCBC Securities
Balancing Growth, Sustainability and Support of MSMEs
FPM SA is a Congolese financial institution licensed by the BCC (Central Bank of Congo), with KfW, BIO, Cordaid and Incofin as shareholders. As a key player in economic and social development in the DRC, FPM aims to help reduce poverty and improve living conditions in DR Congo by building and developing an inclusive and responsible financial system. Over the past decade, FPM’s achievements have included the disbursement of a credit volume reaching nearly 120 million USD and the granting of more than 480,000 loans to MSMEs via its financial institution partners. In addition, 2024 has seen FPM SA pick up the Global Banking & Finance award for Best Asset Management Company – RD Congo.
CEO Patrick Nkongo was recently interviewed by Global Banking & Finance Review editor Wanda Rich, when he elaborated on the role played by FPM SA in the DRC’s financial sector.
“Our primary mission is to promote financial inclusion by raising mediumand long-term funds to support MSME needs in the financial sector,” he explained. “We then lend these funds to local financial institutions like banks, MFIs (microfinance institutions) and COOPECs (credit cooperatives), who lend to MSMEs (micro, small and medium enterprises) and low-income individuals. We also provide partial loan portfolio guarantees, ensuring financial institutions can take more significant risks while maintaining financial stability. FPM SA is playing a central role in promoting access to finance in the DRC, particularly for MSMEs, which are often underserved by traditional banks.”
He revealed that, in striking a balance between supporting MSMEs and generating returns, FPM’s approach to asset management is built around support for sustainable development. “We allocate resources to institutions that demonstrate both social impact and solid financial performance, enabling us to generate returns while contributing to the growth of MSMEs and the financial ecosystem,” he said. “Our dual objective - impact and profitability - requires careful assessment of credit, counterparty and sector-specific risks while ensuring that our investment decisions are aligned with financial inclusion objectives. Our balanced approach ensures that, while we seek returns for our investors, we continue to stimulate the Congolese economy by supporting the businesses that need it most.”
Patrick went on to detail how fund allocation is prioritised across different financial institutions and sectors, noting the specific criteria used to determine where more attention or funding is required. “Fund allocation is guided by several criteria, including institutional resilience, social impact and alignment with our mission of financial inclusion,” he reported. “We prioritise financial institutions that have a strong commitment to serving underserved populations and that can demonstrate sustainable growth in areas with low access to finance. This is especially critical in regions like the eastern DRC, where the conflict has severely affected financial access. We also consider sector-specific priorities with an emphasis on agriculture, energy, gender, youth and digitalisation.”
Given that many of its partners operate in high-risk regions, such as the conflict-affected east, Patrick highlighted risk management as a central pillar of FPM’s operations. “We employ a multi-tiered approach that includes stringent credit risk assessments, monitoring of our financial institution partners, and regular stress testing of our portfolio to identify vulnerabilities,” he said. “We place great emphasis on understanding their strategies for resilience and adaptation. Moreover, our partial loan guarantees allow financial institutions to take calculated risks while minimising potential losses. The presence of a dedicated Risk and Compliance Director ensures that all decisions are made with a comprehensive understanding of regulatory requirements and market conditions.”
Wanda also asked him about the need to balance long-term growth with short-term liquidity needs, which he described as an essential consideration in a challenging market like the DRC. “We achieve this by carefully structuring our investment schedules, ensuring that we maintain sufficient liquidity to meet the shortterm needs of our partners while pursuing long-term growth strategies for sustainable returns,” he said. “We use instruments such as shortterm loans and guarantees that offer flexibility while maintaining a diversified portfolio to spread risk and manage liquidity. The key lies in the strategic alignment between liquidity needs and the maturity profiles of our assets, which are regularly reviewed to ensure they remain adaptable to market conditions.”
Patrick Nkongo CEO FPM SA
The guarantee funds that FPM SA manages are an integral part of its overall asset management strategy, Patrick revealed; by providing partial guarantees on loan portfolios, FPM enables financial institutions to extend credit to sectors that would otherwise be deemed too risky. “These guarantees enable us to catalyse lending to MSMEs and underserved segments, thereby promoting economic activity while keeping risk under control,” he explained. “Guarantee funds also help to improve the credit profile of our partner institutions, making them more attractive to other investors and ensuring their long-term viability. In this way, guarantees are a tool not only for mitigating risk but also for reinforcing the impact of our asset management efforts.”
The need to incorporate a strong ESG (environmental, social and governance) proposition into its decision-making has a significant influence on FPM SA’s asset management strategy. “Sustainability is at the heart of what we do,” Patrick confirmed. “We ensure that our investment and lending decisions take ESG factors into account. This means prioritising projects and financial institutions that have a positive social impact, contribute to environmental conservation or are governed by strong ethical standards. We also have strict policies against financing activities that could harm communities or degrade the environment.”
Finally, Patrick provided some insight into FPM SA’s ambitious plans to develop its asset management operations over the coming years. “We will focus on developing our partnerships with lenders to increase the volume of funds under management up to 300 million USD by 2028. We will invest in sectors or segments with high social impact such as gender, youth, agriculture, clean energy and digitalisation.
“We also plan to expand our geographical footprint in the DRC, particularly in areas that are still underserved,” he added. “In addition, we plan to diversify our product offering, possibly including more innovative financial instruments tailored to the specific needs of the Congolese market, like individual guarantee schemes, factoring and housing loans.
Banking digitisation in the US and UK: it’s a marathon, not a sprint
The journey that banking digitisation has taken in both the US and UK has been less of a sprint and more of a marathon, with some twists, turns and potholes to navigate along the way. As the years have rolled on, technology innovations have gradually influenced how people interact with money. We’ve seen how embedding convenience, security and flexibility into consumers’ payment journeys has reshaped the entire payment landscape.
As the famous saying goes, the US and UK are two countries divided by a common language. Both markets have lots of characteristics in common – mature, well-regulated financial and payment systems, populations that have a high engagement level with financial services, and excellent telecom and internet penetration levels. But the way each market has embraced widespread digital banking shifts over the past few years tells two very contrasting stories.
The UK and mainland Europe can boast near-total saturation of digital banking services, thanks to commonalities including chip and PIN infrastructure, and in a post-Brexit world, a mirroring of regulations enabling laws to be transposed easily. On the other hand, the US has charted a slightly different path. Chip and PIN was implemented in the US a good 10 years after the rest of the world had done so, and to some extent enabled the US to skip certain stages like contactless payments and move straight to digital wallets.
It’s fair to say significant progress has been made on both sides of the pond, however major challenges remain. When it comes to modernising outdated banking systems and navigating complex regulatory frameworks, the US and UK have drifted in different directions, at the expense of interoperability and cross-border banking efficiencies.
So, we need to ask: how can these regions continue to remove these roadblocks and give customers the feature-rich, hyper-personalised banking experiences they expect?
Digital banking: a tale of two markets
In the UK and across mainland Europe, digital banking is now second nature for many. With extensive and longestablished digital channels in place for more than 20 years now, consumers in these regions expect to manage their finances online with ease, whether that’s checking balances, transferring funds, or applying for loans. This shift reflects how convenience and access have become the cornerstones of modern banking.
But while the UK and Europe may be close to ‘peak’ digital banking, the pace of innovation is not slowing down. As regulatory frameworks emerge to provide guardrails to new services (like AI) and consumers expect faster, more immersive payment experiences, banks have to ensure that they can continue to adapt and meet shifting consumer demand with dynamic, future-proof services that will keep customers coming back for more.
Over in the US – which unsurprisingly happens to be the world’s largest financial services market – the pace of change has lagged, but the journey is just as interesting and with some quirks not found in other markets. A great example is contactless – thanks to Europe’s chip and PIN infrastructure, the rollout of contactless was relatively easy from a technical standpoint, whereas the US skipped this step and embraced digital wallets instead. Tech providers leapt into action much sooner than their UK and European counterparts, forming partnerships with banks and merchants to create wallet-based services that could provide a host of appealing services.
For many US consumers, smartphones are now their all-in-one portal for financial management, bill splitting with friends, rich reward schemes and ecommerce, with the added security of tokenisation and biometric authentication. But as impressive as this adoption has been, there are considerable challenges ahead.
The battle against legacy systems
One commonality affecting both the US and UK to their disadvantage is legacy banking tech. Updating outdated banking systems is arguably the biggest roadblock in the way of greater banking efficiencies for both regions. For example, the 2024 launch of Santander’s digital bank, Openbank, in the US was met with both excitement and caution. A huge success in Santander’s native Spain, Openbank may not achieve the same degree of success in the US, due to systems like the Automated Clearing House (ACH), which aren’t built for today’s digital-first world.
While traditional banks seek to overhaul their legacy systems and embrace the latest technologies to emulate the success of neobanks, neobanks are shifting their strategies too. A growing number of neobanks are going full circle and are now expanding into traditional banking products like mortgages and personal loans, offering customers a fuller range of services and building deeper, more meaningful relationships.
Overcoming the obstacles
Both markets face similar and familiar challenges as they strive to realise the full potential of digital banking. Neobanks have to operate under regulatory frameworks designed for conventional banks, which can restrict their pace of innovation. They also face high customer acquisition costs and relatively low revenue per customer.
Meanwhile in the US, long-standing loyalty to credit products, driven by rewards and incentives, still plays a significant role in deepening customer trust. You only have to look at how brands with big pockets like American Express and Chase dominate consumer spending to see that in action. In a market where trust is largely the preserve of traditional banking giants, it’s clear to see that digital banking providers will have to work harder to tempt them away.
This is where the UK has a slight advantage, with banks and consumers having already embraced digital banking more widely, but the journey is not over yet. Banks in both regions can’t afford to be complacent when it comes to building consumer trust, developing personalised experiences, and offering tailored solutions that grab the interest of customers.
The future of banking
Like I said, digital banking transformation is a marathon, not a sprint. As digital banking evolves, there is massive potential to enhance customer experiences even further. The key to doing this successfully and sustainably is by embracing cutting-edge technology and harnessing the full power of data. Banks can then create intuitive, personalised services that make everything from onboarding to credit applications faster, more accurate and more compelling for customers.
As for what the future of banking will look like, it will be shaped by how well institutions in both the US and UK approach and resolve challenges through updating infrastructures, navigating regulatory complexities, and meeting the ever-changing needs and demands of consumers. If banks on both sides of the pond succeed, the rewards will be immense, and everyone will benefit from richer, more personalised banking experiences.
Alex Reddish Head of Market Expansion & GTM Strategy Tribe Payments
How Geospatial technology and Earth Observation data can unlock value for Financial Services
In today’s dynamic financial services landscape, understanding the connection between location data and Earth Observation (EO) technologies is becoming increasingly important. As part of the UK Space Agency’s Unlocking Space for Business initiative, a feasibility study by Ordnance Survey (OS) has illustrated how precise, comprehensive location data can drive informed investment decisions—particularly in areas of sustainability and biodiversity net gain.
The financial sector faces persistent challenges in linking asset location data with risk assessment. This disconnect limits the effectiveness of EO data applications, which can be crucial for better understanding environmental, social, and governance (ESG) requirements. As sustainability concerns grow in prominence, financial institutions are under more pressure to respond. Yet, without a precise understanding of where assets are located, companies struggle to harness the full potential of EO data, leading to gaps in risk evaluation and investment insight.
By integrating OS’s trusted geospatial data with EO insights, we can create a robust framework that bridges financial services with their physical asset environments. This enables more effective monitoring of environmental impact, improves ESG compliance, and strengthens investment strategies tied to asset location.
Despite these opportunities, significant barriers remain. There is a lack of trust in location-based assessments, along with limited awareness of the benefits that space-derived insights can bring. Financial institutions are already spending millions trying to navigate a complex data landscape with limited success. Authoritative data platforms, like the EO DataHub, which is a single portal for accessing and processing satellite data, could be the catalyst for the widespread adoption of EO technologies across the financial sector, providing clarity of where assets are located for risk management and sustainability efforts.
OS has been working closely with the UK space sector to make EO data more accessible for the financial services sector. Through collaboration with initiatives like Space4Climate, the UK Space Agency funded feasibility study, and leveraging new EO technologies, OS has identified a critical need for improved understanding and interpretation of EO data within the financial industry.
The combination of EO and location data can significantly enhance due diligence, portfolio monitoring, and predictive analytics, transforming risk management in sectors including real estate, agriculture, utilities, and manufacturing. The OS National Geographic Database (OS NGD), for example, holds over 25 million land-use parcels. This vast data reservoir can be used to identify prime investment sites, assess flood risks, and evaluate land cover, providing detailed insight into a site’s potential risks and value.
“There are large gaps in terms of understanding what you can and cannot do with EO data,” says Mark Tabor, Principal Consultant at Ordnance Survey. “With a trusted organisation like OS providing data and expertise, financial institutions can unlock real value, enhancing their ability to track investments, identify vulnerabilities, and make more informed decisions. From funding climate-resilient assets to understanding climaterelated risks, the potential for EO data to influence positive change is immense.”
Tracie Callaghan, Innovation Lead for Climate Data at NatWest, echoes this sentiment. “At NatWest, we’re exploring how EO data can help meet our environmental ambitions, fulfill regulatory obligations, and support our customers’ sustainability journeys. Tools like our ‘Explore Solar’ report generator have shown us what’s possible, providing our customers with solar potential insights within minutes.”
While the opportunities are evident, challenges remain. As Callaghan notes, “Better location data is key to maximising the practical application of EO data, unlocking its unique value for financial services.”
The applications for EO data in financial services are broad and impactful, from regulatory compliance and project financing to climate risk assessment and resilience-building. Geospatial insights can help identify environmental risks, monitor changes, and make portfolios more resilient to climate impacts. This not only gives firms a competitive advantage in ESG investing but also offers a proactive strategy for safeguarding assets from climate-related threats.
According to the United Nations, economic losses from climaterelated disasters exceed USD 330 billion per year. Further analysis from the Green Finance Institute shows that 8% to 53% of the portfolios of the seven largest banks are exposed to transition risks. EO data could support financial regulators such as the Financial Conduct Authority (FCA) and the Bank of England in stress-testing scenarios, reinforcing the resilience of banks and insurers against future crises linked to climate and asset exposure.
“Harnessing precise location data alongside EO technologies is pivotal to transforming the financial services sector, financing more sustainable behaviours, and enhancing risk management,” notes Hannah Cool, COO of Bankers for Net Zero. She underscores the importance of data standards, saying, “We need clear data standards and open data sharing frameworks that mid-market players can adopt, as well as collective data-sharing agreements to tap into standardised asset-based information.”
The financial sector is witnessing a shift as more investors seek sustainability-linked opportunities. This demand for socially and environmentally responsible investments requires clear, datadriven evidence of impact. EO data, combined with geospatial insights, provides that essential verification, helping investors make confident, ESG-aligned decisions.
The integration of satellite EO data with location intelligence empowers financial institutions to align with net-zero targets, optimise resources, and guide investments toward climateconscious strategies. Whether it’s monitoring greenhouse gas emissions or preventing environmental degradation, the transformative potential of EO data is vast.
EO data also opens avenues for sustainable investment in sectors like energy and mining. For example, monitoring environmental impact in these sectors can ensure compliance with sustainability standards. In real estate, EO data can refine asset valuation and market trend analysis by incorporating microclimate insights. EO data can even enhance global trade monitoring, combining Automatic Identification System (AIS) data with satellite images to track emissions and manage ESG risks in shipping and supply chains.
As the financial services sector evolves, the integration of geospatial and EO data offers a powerful toolset for more informed and sustainable decisionmaking. By closing knowledge gaps, promoting data standardisation, and fostering trust in EOderived insights, the financial industry can mitigate environmental risks and seize new opportunities for nature-positive investments.
This integration will play a crucial role in driving sustainability and strengthening risk management, creating a more resilient and future-focused financial system. As technology advances, geospatial and EO data stand ready to guide financial services towards a future where economic success and environmental stewardship go hand in hand.
Mark Tabor Principal Consultant, Ordnance Survey
Understanding the importance of cybersecurity threat intelligence in the financial services industry
The past year has seen numerous ransomware attacks on the financial services industry, with nearly two-thirds of organisations falling victim in one way or another. As a core pillar of modern critical infrastructure, it is no surprise that the sector is being heavily targeted, and as a result, institutions are under constant pressure to enhance their cyber defence strategies to prepare for any eventuality.
A big part of the challenge is that security teams are faced with a constant barrage of never-ending cyber threats. To stay ahead of the risks, threat intelligence has become an important process enabling security teams to understand the capabilities, goals and tactics employed by cybercriminals. When used effectively, this information helps organisations understand and anticipate potential attacks by gathering and analysing data from various sources.
The problem is that only 35% of security professionals say their organisation has a comprehensive understanding of the threat landscape, according to recent research. Even more concerning is that 79% make security decisions without any insight into the threats they face.
The impact of this knowledge gap can be extremely serious, leading to a range of problems, from a delayed response to security threats and increased vulnerability to poor risk mitigation and higher incident response costs. Even for those organisations that focus on threat intelligence, the sheer volume of alerts can overwhelm busy security teams, who need all the help they can get in deciphering which threats need their attention and which don’t.
Proactive protection
This is where automated threat intelligence platforms (TIPs) increasingly come into play. Their role is to help security teams gather, organise and manage threat data to improve detection and response efforts.
Automated TIPs work by aggregating and analysing threat data from internal and external sources to give users actionable security insights. They automate the detection of potential threats, correlate indicators of compromise (IOCs) and integrate this information with other security tools, such as Security Information and Event Management (SIEM), Endpoint Detection Response (EDR), and Cloud Security Posture to improve effectiveness.
Instead, users can enhance threat prevention, detection, and mitigation efforts by applying real-time intelligence to significantly improve their security posture and release security professionals to focus on more complex tasks.
TIPs can also integrate structured data, such as IP addresses and malware signatures, alongside unstructured data, including threat reports and emails, providing teams with more detailed insights. This, in turn, helps organisations quickly identify threats and efficiently integrate this intelligence into existing security systems.
This kind of approach also means threat intelligence can be more easily integrated into broader enterprise security infrastructure, removing existing inefficiencies and promoting a strategy that is more closely geared towards threat prevention and mitigation. Collective access to these insights enables security teams to proactively identify and respond to emerging threats, reduce the risk of attacks, and improve the overall effectiveness of the organisation’s defence strategy.
Collaboration is key
Threat intelligence platforms and processes are also at their most effective when organisations are members of relevant Information Sharing and Analysis Centres (ISACs). These nonprofit organisations facilitate the sharing of cybersecurity threat intelligence to protect critical infrastructure and enhance collective security.
According to the National Council of ISACs, these organisations help critical infrastructure owners and operators protect their facilities, personnel and customers from cyber and physical security threats and other hazards. They offer a range of capabilities and services, with most ISACs providing “24/7 threat warning and incident reporting capabilities and may also set the threat level for their sectors. And many ISACs have a track record of responding to and sharing actionable and relevant information more quickly than government partners.”
Terrence Driscoll Chief Information Security Officer Cyware
In the finance sector, for example, the role of FS-ISAC is to protect financial institutions and the individuals they serve. With around 5,000 member firms worldwide, it operates a realtime information-sharing network that amplifies the intelligence, knowledge, and practices of its members for the financial sector’s collective security and defence.
Despite the success of this and other ISACs across a wide range of industry sectors, they remain underutilised. In fact, recent research revealed that 53% of organisations don’t yet use these invaluable resources, while 28% weren’t even aware of ISACs and their crucial role in managing cyber risk.
In contrast, organisations that integrate today’s highly effective automation technologies with a collaborative approach put themselves in an ideal position to meet cybersecurity challenges head-on. Looking ahead, these capabilities will only continue to increase in importance as the risks facing the finance sector continue to grow in volume and sophistication.
How challenger banks have used a customercentric model to shake up the banking sector
Everybody has a bank, they have to really, it’s a modern day essential. But not everyone trusts their bank. In fact, widespread mistrust in the sector has led to many commentators to state in recent years that the banking industry is fundamentally broken.
Unsurprisingly, trust in the sector plummeted after the 2008 financial crash – a low from which it has never fully recovered. Even now, consumers are 50%* more likely to say their level of trust in financial services providers has fallen over the last three years. Yet, trust is imperative if you expect customers to share potentially sensitive or confidential information with you. It even ranks higher than price (45% vs 43%)** when it comes to choosing a bank.
So what are challenger banks doing?
There are newer, challenger banks entering the market that are shaking things up. But successfully building a strong brand in the fintech space requires not only proving the product’s functionality and ability to keep financial details safe, but listening to customers too. At the end of the day, trust binds a Fintech to its huge audience.
One such challenger making great strides is UK Fintech Monzo. The challenger bank invites customers to invest in the company through equity crowdfunding rounds and often organises community events at their offices or venues favoured by customers.
This example shows how challenger banks can build strength by involving their customers, keeping them informed, and tapping into topics that resonate with them; all of which strengthen brand reputation.
How can that inspire growth?
And that’s a great launch pad. But once you have customers engaged, it’s vital that banks are using customer content to grow their reach effectively. It can cost around five times as much to acquire a new customer than it does to retain an existing one. Therefore, anything you can do to encourage consumer loyalty will pay dividends in the long run.
Although the finance industry is heavily regulated by the FCA, prospective customers will still want reassurance that you’re a credible enterprise. After all, they’re trusting you with their finances so it’s only natural for them to be cautious. This is especially true if you’re an online-only business with no physical bricks-and-mortar presence.
So showcasing real, honest customer reviews is a great way to alleviate consumers’ concerns and demonstrate you’re a legitimate business that can be trusted to handle their finances.
Challenging the norm to improve
Once reviews have been collected they can also be used to improve the customer experience, and innovate just like challenger banks do. Take another look at Monzo, with its Monzo Call Status feature, allowing consumers to verify they are in fact talking to their bank and not a fraudster.
Not all reviews and ratings will be positive, but that’s not necessarily a bad thing. Negative reviews not only show the positive ones are genuine, but they can also give banks valuable insight into their customers’ experiences. This feedback can then be used to identify areas for improvement, rectify problems and provide a better overall service. Not to mention the fact that if other customers see negative comments being dealt with promptly this will reflect positively on the business.
Final thoughts
Adopting a customer centric approach has huge potential to shake up the banking industry. Not only can you build brand equity and attract customers, but it enables banks to foster trust. Collecting reviews can help banks turn feedback into growth, in fact a new study conducted by Forrester Consulting on behalf of Trustpilot found that organisations that deployed Trustpilot received a 401% return on investment over three years***. As mistrust in the banking sector prevails, it’s vital that more of the industry stalwarts adopt this challenger bank mindset.
Alicia Skubick Chief Customer Officer Trustpilot
AI-Driven strategies to overcome complex banking regulations
Regulatory frameworks in the financial sector have evolved significantly since the global financial crisis. Initially focused on risk management and capital controls, regulations now encompass a broader range of concerns, including data privacy, technological innovation, and operational resilience. As banks navigate this increasingly complex landscape, the integration of AI has graduated to a strategic advantage lever to mitigate risks, ensure compliance, enhance operational efficiency, and elevate customer experience.
The growing intricacy of regulations—from cybersecurity protocols to the ethical use of Data and AI—requires financial institutions to adopt more agile, technology-driven compliance strategies. Banks that fail to adapt quickly risk not only financial penalties but also reputational damage, making it crucial for them to continuously evolve their operations. Supervisory scrutiny of financial institutions is expected to increase materially going forward, particularly regarding the timely remediation of supervisory findings. While larger banks have traditionally been the primary focus of regulatory attention, this scrutiny is expanding across the entire banking industry, with midsize regional banks being included in the ambit of new regulations, including liquidity, debt, capital requirements, and consumer control. The recently released CFPB’s 1033 ruling exemplifies the increasing power and control that regulators are placing with consumers.
Banks can adopt several key strategies to meet these regulatory challenges effectively, while also enhancing operational efficiency and mitigating risks. These include leveraging AI-driven compliance automation, strengthening data governance, enhancing cybersecurity and resilience, utilizing predictive analytics for risk management, and fostering cross-department collaboration. By embracing these approaches, banks can navigate the changing regulatory landscape more successfully and ensure sustainable growth and resilience.
1. Adopt AI-Driven Compliance Automation
It is important for risk and compliance leaders to put strong governance around the use of AI. However, the complexity and volume of regulatory demands have rendered manual compliance efforts increasingly untenable. Here, AI-driven automation emerges as a solution, streamlining compliance processes and ensuring real-time adherence to changing rules. By automating these tasks, banks can reduce human error and enhance their ability to respond swiftly to regulatory updates.
Moreover, AI systems can process vast quantities of data, flagging potential compliance risks in real-time. For instance, when changes occur in frameworks like the Basel III revisions or the EU’s MiCA (Markets in Crypto-Assets), AI can help banks quickly interpret and implement new requirements, allowing them to stay compliant with minimal disruption.
As per Statista, the banking sector’s spending on Generative AI is projected to surpass $85 billion by 2030, highlighting financial institutions’ commitment to integrating and leveraging AI technologies. However, automation alone isn’t enough. Financial institutions must ensure their AI systems are trained on high-quality data to prevent biases and inaccuracies.
2. Strengthen Data Governance
Data governance serves as a critical foundation for regulatory compliance. As AI becomes more integrated into banking, the importance of data accuracy and transparency cannot be overstated. Regulations increasingly demand that banks ensure the quality and security of their data, especially when that data is being used for risk management, customer interaction, or regulatory reporting.
A well-structured data governance framework ensures that banks can confidently manage the integrity and security of their information. This framework encompasses not only data management but also the policies that dictate how data is stored, shared, and protected. By ensuring the traceability and accuracy of data, banks can better meet the stringent requirements set by global regulatory bodies.
For example, when preparing for audits or compliance checks, a strong governance framework allows organizations to quickly retrieve and present accurate data, significantly easing the process. In an increasingly scrutinized environment, having clean, well-organized data that can be trusted is not just the best practice; it’s a necessity.
3. Enhance Cybersecurity and Resilience
As financial institutions accelerate their digital transformation journeys, they face a growing number of cyber threats. Regulatory bodies have responded by tightening cybersecurity requirements, adding layers of complexity to compliance efforts, and amplifying the stakes for financial institutions.
To address these challenges, banks must adopt AI-driven cybersecurity measures beyond traditional defenses. AI can identify and respond to threats in real-time, significantly minimizing the risk of breaches and ensuring compliance with evolving regulations. These advanced systems can detect anomalies in network traffic, spot suspicious behavior, and trigger automatic responses to mitigate threats swiftly.
In today’s regulatory climate, where fines for cybersecurity lapses can be severe, proactive measures are essential for compliance and preserving customer trust. Building resilience extends beyond preventing cyberattacks; financial institutions must implement robust recovery protocols to maintain compliance even during an attack. Whether through automated backups or AI-driven threat detection, the interplay between cybersecurity and regulatory compliance is increasingly crucial. Forward-thinking organizations are implementing Cyber Fusion Centers to enable rapid detection, response, and mitigation of sophisticated cyber threats.
4. Leverage Predictive Analytics for Risk Management
With the regulatory environment becoming more dense, predictive analytics has emerged as a valuable tool for anticipating risks before they materialize. Banks that leverage AI-powered analytics can better understand potential compliance challenges and take action before they escalate into critical issues.
Predictive analytics allows organizations to identify patterns in their data that may indicate a potential regulatory breach. For example, if a particular operational process consistently leads to minor compliance issues, predictive models
can highlight these trends, enabling teams to correct them before they become significant problems.
Additionally, predictive analytics can model potential future regulatory changes and their impact on operations, helping banks prepare in advance and minimizing disruption caused by new regulations.
5. Embed risk management in organization culture by making it a collaborative effort
Generative AI can transform risk management in banks by enabling risk leaders to focus on strategic risk prevention and integrate controls early in new customer journeys, known as a “shift left” approach. To navigate today’s regulatory complexities effectively, collaboration between compliance, IT, and operations is critical. Aligning AI solutions across the organization ensures they meet regulatory requirements while being flexible enough to adapt to future demands.
Cross-department collaboration enables a more holistic approach to compliance. Compliance teams provide regulatory context, while IT and operations ensure the technical infrastructure supports compliance efforts. When all departments work together, the organization meets
Global BFSI and Europe Geo Head, Persistent Systems
regulatory requirements efficiently and effectively. For example, AIdriven compliance systems require the IT team’s technical expertise for integration and management, while compliance teams ensure these systems meet standards. Collaborating creates a unified strategy leveraging AI for operational efficiency and regulatory adherence.
In a world where regulatory landscapes shift rapidly, banking leaders must adapt and innovate. Embracing a proactive mindset towards compliance is essential; think beyond mere adherence to regulations and explore how these frameworks can catalyze transformation. Additionally, banks can streamline operations by investing in AI and data analytics and uncover new avenues for growth and customer engagement.
Looking ahead, the most successful financial institutions will be those that prioritize collaboration across departments and foster a culture of agility. By creating environments where cross-functional teams can thrive, banks will be better positioned to anticipate changes and navigate complexities with confidence. In this dynamic landscape, the ability to pivot and embrace change will define the leaders of tomorrow.
Barath Narayanan
Preparing for 2025: Securing Payments in the GenAI Era
As we approach 2025, financial organizations and e-commerce platforms face unique risks amplified by generative artificial intelligence (GenAI). Changes to AI-related policy priorities and governance in the wake of the November elections are likely to accelerate these risks. As a new administration enters the White House, financial institutions and payments professionals can expect to see deregulation efforts and faster adoption of AI, which is a double-edged sword. While GenAI offers many capabilities and benefits for content creation, it has also opened doors to novel methods of fraud, which have already impacted the way payment service providers manage merchant risk.
Cybercriminals use AI to generate realistic and persuasive content, bypass traditional fraud detection methods, and target payment providers. Stakeholders in the payments space—ranging from payment facilitators to acquiring banks, e-commerce merchants, and consumers—need to be vigilant as AI-driven risks increase. Juniper Research forecasts that online payment fraud will accumulate to more than $362 billion by 2028. By understanding these emerging threats, businesses can take proactive measures to protect themselves against fraud, preserve brand reputation, and uphold compliance standards.
Here are some of the key GenAI-driven risks payments professionals should expect for 2025:
• Supercharged Synthetic Identity Fraud
Synthetic identity fraud, involving the creation of new, fictitious identities using a blend of real and fabricated contact information, makes up more than 80% of all new account fraud and is expected to grow throughout 2025. Fraudsters can employ GenAI tools to automate the generation of synthetic identities at scale, creating seemingly legitimate applications for accounts or credit lines and allowing them to conduct illicit activities such as money laundering or making unauthorized purchases.
This method is especially concerning because synthetic identities are already challenging to detect, and they can appear even more realistic as a result of the complexity and randomness that GenAI introduces..
To mitigate these risks, organizations can strengthen their identity verification processes using a combination of automated identity verification tools and human review. Additionally, adopting more granular AI-driven monitoring tools can help detect inconsistencies in applications that are telltale signs of synthetic fraud.
• AI-Enhanced Transaction Laundering
Transaction laundering is an ongoing concern made more challenging with emerging technologies. With new AI-driven website design tools, fraudsters can create high-quality, realistic front pages to establish false merchant profiles that make illegal transactions appear legitimate. Traditional detection methods that rely on template-based detection models may fail to identify these sophisticated, highly custom merchant websites. This puts financial institutions at risk of fines, penalties, and regulatory scrutiny.
Transaction monitoring tools can help detect unusual transaction patterns, while merchant monitoring and transaction laundering detection solutions can identify sophisticated operations built by criminal networks. Because transaction launderers are persistent, ongoing monitoring is important to catch reoffenders.
• Brand-Damaging Content and Reputational Risks
GenAI’s ability to generate highly realistic images, video, and audio can create harmful or offensive content, including deepfakes and other manipulated media. This can damage brand reputation, especially if payment providers inadvertently process transactions linked to copyright-infringing, non-consensual, or illicit adult content. Such risks are exceptionally high in cases where AI platforms are used to create impersonations or spread misinformation, which may lead to financial and reputational repercussions for payment companies.
Payment providers should implement strict monitoring protocols and partner with third-party AI-content filtering services to protect brand reputation. Establishing clear policies and content guidelines, combined with AI-powered content moderation, can help identify and prevent potentially damaging transactions.
Solution Pathways for 2025
As the industry confronts these GenAI-driven threats, it’s essential to manage payment risks proactively. The rapid development of AI technology means that regulations are continuously evolving to keep pace. To remain compliant and mitigate penalties, companies should adopt real-time compliance monitoring solutions. These systems can flag potential risks, ensuring compliance even as regulatory standards shift. Partnering with specialized third-party monitoring services can provide additional oversight and help companies maintain up-todate compliance across their ecosystem.
Investing in tools that enable companies to monitor regulations in real time allows payment providers to anticipate regulatory changes across jurisdictions. This is particularly critical for addressing GenAI fraud, where regulations are progressing and may vary widely from country to country and even between states.
Many payment providers are turning to adaptive identity verification solutions that evolve alongside emerging threats. These solutions offer greater resilience against fraud, providing a stable foundation for onboarding and monitoring processes.
Preparing for the AI-Driven Future of Payments
Industry-wide collaboration and knowledge sharing offer a unified approach to combating AI-driven risks that will be essential in 2025. Collaborative coalitions between payment platforms, banks, regulators, and e-commerce stakeholders can facilitate knowledge sharing and enable early detection of fraud trends. The industry can create a more resilient front against GenAI abuse by forming alliances with regulatory bodies and participating in trade organizations and other advocacy groups.
The risks associated with GenAI highlight the importance of adaptable, proactive risk management strategies in the payments industry. The threats of synthetic identity fraud, transaction laundering, and AI-generated content abuse reinforce the need for advanced technology, rigorous compliance frameworks, and industry collaboration. By investing in adaptive tools, strengthening compliance, and embracing a cooperative approach to knowledge sharing, payment providers and financial institutions can build resilience in time to mitigate the threats of an AI-driven future.
Andy Vrabel General Manager, Payment Ecosystem Solutions LegitScript
Andy Vrabel is the General Manager of Payment Ecosystem Solutions at LegitScript, where he is responsible for ensuring the success of their payments-related products. Andy oversees the delivery of meaningful and actionable merchant risk intelligence to clients, sets the strategic path for payment ecosystems solutions within the company, and ensures the team of expert analysts and staff supporting the organization can deliver on LegitScript’s mission of making the internet and payment ecosystems safer and more transparent. Andy holds a bachelor’s degree in criminal justice and a master’s degree in management and leadership. He is a certified anti-money laundering specialist (CAMS).
Global Banking & Finance Review interview with June Ahi, Cashflows
1. Thanks for taking the time to speak with us June. Can you tell us a little about yourself and your responsibilities as the Chief People Officer at Cashflows?
At my core, I’m a people person. I’ve built my career around getting the best out of people in every aspect of business and firmly believe that great outcomes are rooted in investing in people and cultivating a positive organisational culture. ‘Payments perfected by people’ is a term we live by at Cashflows, so not only do you need the great payments solutions, but the critical need is great people. I think by having someone head this up it shows how as a business we’re ahead of the curve.
Having joined Cashflows in 2022, my focus has been on championing employee well-being, attracting top-tier talent, driving engagement, creating learning environments for growth, and building on the business’ DE&I commitments. In the last few years, I’m pleased to have completed unconscious bias training with the leadership team, leading to 40% of hires in 2023 being female, while increasing our engagement score to 80%. I’ve also over seen a reduction in carbon emission due to our ESG initiatives, with Cashflows on target to achieve net zero by 2040.
2. How has HR evolved in recent years, especially in fintech and payments?
As will have been the case for the majority of businesses across the world, the pandemic and subsequent lockdowns completely changed the working landscape, as well as the top priorities and initiatives for HR professionals. Naturally, adapting remote and hybrid working policies that work for employees, while still ensuring that engagement levels with the company are high, is important for anyone working in the HR space. Looking after people’s wellbeing, particularly when there may not be an opportunity to see them face-to-face on a weekly or daily basis, has also become hugely important.
When it comes to how HR has evolved for fintech and payments companies, I have noticed a shift in the industry towards a more contemporary approach to their people in the past couple of years. People who work in fintech are often innovative and disruptive, and I think this funnels through to all aspects of the business. Rather than worrying about policing policies rigorously, here at Cashflows we have adopted an agile approach to the business across all different areas, including HR. We try to be as flexible as possible with our people –which is important when working in a sector that is as fast-paced and everchanging as fintech is.
3. At Cashflows, you’re a champion of DE&I initiatives. Could you share some of the most impactful DE&I policies you’ve implemented, or hope to?
Firstly, we led a recruitment drive to bring more women into STEM roles at Cashflows and, as a result, several branches within Cashflows’ tech operations (including risk, settlement, compliance, and QA testing) now consist of 50% or more women within respective teams, compared to the industry average of 18%.
I fundamentally believe that companies need to ensure they are consistently committed to DEI, and having regular sessions can help with this. We launched an Equality, Diversity, and Inclusion Policy which perpetuates Cashflows’ open and welcoming culture and helps us to challenge hidden bias and ensure true equality. As per the new policy, all new team members now attend DEI training on at least an annual basis.
Companies should prioritise ways of making sure all employees feel a sense of belonging and recognition – celebrating differences and inviting employees to take part – it can increase performance by 56%.
4. It’s an incredibly worthy goal, but what benefits could such policies have for businesses and their bottom lines?
For any business, people are the biggest asset. A diverse and inclusive organisation gives itself a greater chance of gaining access to a larger talent pool and ensures it can hire employees with the skills, experience, and knowledge needed to build high-performance teams. Employee performance in diverse organisations is 12% higher than in companies with no inclusivity efforts.
5. What other HR initiatives are you passionate to explore?
Neurodiversity is a particular area that I’m very passionate about. Between 15-20% of the UK population are neurodivergent, but only 22% of autistic people are employed. Research shows that conditions such as autism and dyslexia can bestow special skills in pattern recognition, memory, or mathematics. These are key skills for our industry – looking at things in a different way is an asset to any business.
As part of Neurodiversity Week, we hosted a Lunch & Learn and had the pleasure of hosting Elisabeth Goodman from River Rhee Consulting, who provided an introduction and discussed the importance of raising awareness to support those who are neurodivergent. What was so empowering was people opening up about their own experiences being neurodivergent and those with family members who are. It was truly inspiring to see how comfortable people felt about sharing their stories.
6. Sustainability is another area where you’ve made an impact since joining Cashflows. Can you take us through your activity as well as why the world of fintech and payments should be implementing ESG initiatives?
As a business, Cashflows is committed to reducing the environmental impact and continually improving our environmental performance. This is as an integral part of our business strategy and standard operating processes.
Over the last two years, we launched our plan for Net Zero, working with Go Green Experts. We were able to reduce our Greenhouse Gas (GHG) emissions, measured as CO2e, in the first financial year, and our scope 1+2 emissions have also reduced. We are also pleased that our key carbon intensity metric has reduced in the period, from 15.3 tCO2e per £M Turnover in 2022 to 11.33 tCO2e per £M Turnover. This highlights that, as we’ve grown as a business, we continue to drive down our carbon footprint, in absolute terms, through the lens of the key intensity metric.
As with many in our industry, we’ve continued to embrace home working and adapt our office spaces, to help lower commuting emissions while also providing a base that is low carbon. We’ve also introduced paperless systems, promoted emissions reduction to our suppliers and introduced cycle to work schemes. Combined, it means we’re on target to achieve net zero by 2040: an achievement even many of the largest fintech companies have yet to obtain. So, these are just some examples that others in the industry, especially SMEs, could implement.
7. Finally, as a HR leader in the world of fintech, what’s the most important lesson you’ve learned since working at Cashflows?
The biggest lesson I’ve learnt in my time here is how important it is to have buy in from the whole company, from employees right up to the Board. Without this, it’s hard to make significant impact and positive changes.
We’re very lucky here at Cashflows, as we’ve managed to really embed a lot of our initiatives into the culture of the business. There are some very passionate individuals who are taking time out of their own lives to spear head projects. For example, an organic group has been set up by our employees who work on lots of topical projects around diversity and inclusion.
This buy in and going the extra mile fuels real change and embodies the company culture.
June Ahi Chief People Officer, Cashflows
June joined Cashflows in 2022, with extensive experience of leading and executing HR strategy and business transformation. Commercially focused and operating at senior level for many years, she most recently held the position of Head of People at rapid-growth global fintech company Bango, in mobile carrier billing. June has a strong generalist background, which has helped her in building a high-performance culture in scaling businesses delivered through a contemporary approach to HR; by ensuring there is a vibrant, innovative environment for talented individuals to thrive.
CCaaS + AI = An A+ CX: The new math for improving the banking customer experience
Financial institutions operate in a world where the quality of the customer experience (CX) matters as much as the quality of a product or service itself, and customers are inclined to take their business elsewhere if interactions with their bank aren’t consistently rich, seamless across channels, and ultimately fruitful in their outcome.
It’s no surprise, then, that CX is also a strong predictor of a financial institution’s overall success. Research from McKinsey, for example, indicates that banks that excel at customer satisfaction also excel in areas like total shareholder return, increased growth, and decreased costs. What’s more, McKinsey found a positive correlation between customer satisfaction and greater wallet share, as “customers who are satisfied with their banking experiences say they will purchase more of that bank’s products.”
Therein lies the challenge. To stand out from the competition, financial institutions must find new and creative ways to elevate their customer journeys across digital channels. That’s where the latest wave of artificial intelligence (AI)-driven capabilities can help, enabling banks to curate the highly personalized, on-point customer experiences that today’s consumers expect.
That’s not always a straightforward proposition for institutions that continue to rely upon outdated, manually driven systems and processes. Indeed, as banks close more brick-and-mortar branches and place greater emphasis on digital channels to serve customers, the first critical step in upgrading the customer experience happens at the contact center level, by moving away from older, poorly integrated legacy systems, to a fully integrated multichannel contact center platform with built-in AI. Usually these platforms are available in the cloud, in the form of a contact-center-as-a-service (CCaaS) offering.
The combination of CCaaS and AI can help financial organizations reinvent how they interact with customers — and provide other benefits along the way, such as enhanced productivity among customer service teams, reduced infrastructure and administration costs, and greater scalability based on the needs of the business. Let’s look at a handful of areas where intelligent CCaaS capabilities are enabling financial institutions to provide better customer service, faster:
1. Highly personalized interactions and support across channels. AI-powered chatbots and assistants that engage with customers from the start of an interaction can eliminate major customer pain points like long wait times, repetitive authentication processes and a lack of context from one channel to another. Instead, customers get natural conversations and interactions that seamlessly jump between text, voice, web, chat and email, without losing context. With predictive engagement capabilities, AI also can help hyper-personalize service, drawing from past clicks, preferences and order history to deliver recommendations during a virtual assistant or chatbot interaction, or to an agent during a conversation with a customer.
2. Better-informed agents = better customer outcomes. An AI-powered copilot can “listen” to customer-agent interactions in real time and guide agents toward effective issue resolution with best next action recommendations and resources to use during a conversation based on the context. AI also can be a highly effective gatekeeper, automatically and dynamically routing customer inquiries to the most appropriate agent or automated service, so customers don’t have to wait or bounce around, and instead land exactly where they need to be for the swiftest resolution of an issue. It also can identify more complex cases that require a higher human touch, routing them accordingly.
Here’s an area in which AI-powered sentiment analysis can also prove valuable by taking the temperature of an interaction (using the customer’s tonal nuances to identify sarcasm, for example), then suggesting best next actions to help an agent appease an unhappy customer. An AI copilot also can be trained to understand and use industry-specific terminology to give customers the impression they’re dealing with a subject-matter expert.
3. Automation to smooth and simplify the customer journey. By infusing intelligent, automated prompts, data-gathering and submission capabilities into customer-facing processes like loan servicing or collections deferment, the customer journey is not only smoother but less resource-intensive. AI virtual agents also can be used to accept and process customer orders without human intervention, and through integration with a customer relationship management system or a core banking system like FIS, Jack Henry or FISERV, provide details to the customer on exactly where their request, inquiry or order stands.
4. Intelligent capabilities empower customers with self-service options. Customers can get answers fast with the help of a virtual agent to provide in-the-moment support on account inquiries, transfers, card management, password management, travel notifications and other routine tasks.
5. Advanced fraud prevention and data protection to give customers peace of mind. As frequently as financial institutions are targeted by cyber criminals, it’s important that a CCaaS platform include security measures that meet elevated standards for protecting sensitive customer information and customer privacy. AI-driven capabilities can support advanced agent and customer authentication within a CCaaS platform, for example, to protect against both internal and external threats.
6. Analytics to support continuous CX improvement. The new wave of intelligent sentiment analysis and customer interaction analytics tools enable contact center managers to pull insights from all the customeragent interactions that occur across channels, helping them identify high-level quality trends, as well as trends in customer queries, and issues with specific agents. Predictive capabilities also can spot emerging customer issues quicker and alert managers to address them proactively. What’s more, AI’s natural language processing capabilities can quickly review, summarize and analyze large volumes of recorded customer interactions, sparing contact center managers from what can be a hugely time-consuming process in evaluating agents.
McKinsey neatly summed up the business case for financial institutions to beef up their CX when it said, “Improving customer experience creates ‘stacked wins’ of higher returns, faster growth, and lower costs.” Those wins can add up quickly for institutions that understand how to harness the power of CCaaS and AI.
Matthew Marion Senior Product Manager, UCaaS & CCaaS, Windstream Enterprise
LOCAL EXPERTISE GLOBAL REACH
We are humbled to announce that Pangaea Securities Limited has been recognized at the 2024 Global Banking & Finance Awards® with two prestigious honors:
These awards affirm our commitment to delivering tailored, hands-on service that meets the highest standards of financial excellence.
Partner with us today to unlock tailored financial solutions that drive your success.
www.pangaea.co.zm | info@pangaea.co.zm
