Fintech

FDIC’s McKernan Says Fintech Banking Guidelines Need More Clarity

Published

9 months ago

11 July, 2024

FDIC Orders Thread Bank to Step Up BaaS Oversight

Amid increased regulatory scrutiny of banking-fintech partnerships and a series of recent enforcement actions, regulators are now calling for more guidance on how to manage these collaborations.

Speaking Wednesday at a conference hosted by Semafor in Washington, D.C., Jonathan McKernan, a member of the board of directors of the Federal Deposit Insurance Corp., said there is room for specific guidance on activities under current regulations. Interagency guide on third party relations.

The guidelines could articulate “more clearly, even some black-and-white rules of the road,” he said. Banks need to constantly monitor to ensure fintech partners are meeting obligations and identify gaps, McKernan said, noting that often doesn’t happen.

He did not comment on the fallout from the Bankruptcy of the synapse case, in which more than 100,000 customers were excluded from the current accounts of partner banks due to disputes over user balances, stressing that the development of the facts in the case is still in its early stages.

McKernan echoed comments made Wednesday morning by Consumer Financial Protection Bureau Director Rohit Chopra about the governance challenges of banking-fintech partnerships.

“A lot of banks are marketing themselves as the bank of choice for fintechs, and sometimes that leads to situations where there’s a kind of ‘move fast and break things’ mentality, or things aren’t really buttoned up,” Chopra said. “In some circumstances, that’s fine. In other circumstances, like Evolve [Bank]-The Synapse fiasco is simply catastrophic.”

Another area of concern for bank-fintech partnerships, McKernan said, is the improper use of the FDIC logo in fintech advertising. The agency has finalized a new rule in December that governs the use of official FDIC signs and advertising claims. It clarified the agency’s regulations on deceptive advertising, misrepresentations of deposit insurance coverage, and misuse of the FDIC name or logo.

“I don’t want this issue to unduly hamper innovation or help consolidate incumbents, but some have taken advantage of the deposit insurance issues, the logo issues, in ways that have created some confusion among customers to their detriment,” he said, noting that he hopes the agency is “vigorously enforcing” the rules.

FDIC as a Champion of Innovation

McKernan argued that the FDIC can position itself as a driver of innovation in financial services, with regulation that does not further entrench incumbents in their positions.

“There’s definitely a lot of potential for innovation to help reduce barriers to entry,” he said.

Some of the largest financial institutions have dominant market positions tied to traditional payment systems and other systems that are ripe for “creative disruption,” he noted.

A Path Forward on the FDIC’s Cultural Problems

With Acting Comptroller of the Currency Michael Hsu, McKernan led a panel that oversaw an investigation into allegations of sexual harassment and other interpersonal misconduct at the FDIC. He called the path forward challenging, with a change in leadership needed to credibly implement changes.

“If we don’t do that, I think it’s really going to be a challenge to our ability to ensure safety and robustness, consumer protection. [and] financial stability mission,” he said. “Our inspector general has highlighted human resources issues, and retention in particular, as one of our biggest strategic risks. These issues will only get worse if we don’t address our very real and very serious and shocking cultural issues.”

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Fintech

Lloyds and Nationwide invest in Scottish fintech AI Aveni

Published

9 months ago

29 July, 2024

FinCrypto Staff

Lloyds and Nationwide invest in Scottish AI fintech Aveni

Lloyds Banking Group and Nationwide have joined an £11m Series A funding round in Scottish artificial intelligence fintech Aveni.

The investment is led by Puma Private Equity with additional participation from Par Equity.

Aveni creates AI products specifically designed to streamline workflows in the financial services industry by analyzing documents and meetings across a range of operational functions, with a focus on financial advisory services and consumer compliance.

The cash injection will help fund the development of a new product, FinLLM, a large-scale language model created specifically for the financial sector in partnership with Lloyds and Nationwide.

Joseph Twigg, CEO of Aveni, explains: “The financial services industry doesn’t need AI models that can quote Shakespeare, it needs AI models that offer transparency, trust and, most importantly, fairness. The way to achieve this is to develop small, highly tuned language models, trained on financial services data, vetted by financial services experts for specific financial services use cases.

“FinLLM’s goal is to set a new standard for the controlled, responsible and ethical adoption of generative AI, outperforming all other generic models in our selected financial services use cases.”

Robin Scher, head of fintech investment at Lloyds Banking Group, says the development programme offers a “massive opportunity” for the financial services industry by streamlining operations and improving customer experience.

“We look forward to supporting Aveni’s growth as we invest in their vision of developing FinLLM together with partners. Our collaboration aims to establish Aveni as a forerunner in AI adoption in the industry, while maintaining a focus on responsible use and customer centricity,” he said.

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Fintech

Fairexpay: Risk consultancy White Matter Advisory acquires 90% stake in fintech Fairexpay

Published

9 months ago

29 July, 2024

FinCrypto Staff

Treasury Risk Consulting Firm White Matter Alert On Monday he announced the acquisition of a 90% stake in the fintech startup Fair payment for an undisclosed amount. The acquisition will help White Matter Advisory expand its portfolio in the area of cross-border remittance and fundraising services, a statement said. White Matter Advisory, which operates under the name SaveDesk (White Matter Advisory India Pvt Ltd), is engaged in the treasury risk advisory business. It oversees funds under management (FUM) totaling $8 billion, offering advisory services to a wide range of clients.

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White Matter Advisory, based in Bangalore, helps companies navigate the complexities of treasury and risk management.

Fairexpay, authorised by the Reserve Bank of India (RBI) under Cohort 2 of the Liberalised Remittance Scheme (LRS) Regulatory Sandbox, boasts features such as best-in-class exchange rates, 24-hour processing times and full security compliance.

“With this acquisition, White Matter Advisory will leverage Fairexpay’s advanced technology platform and regulatory approvals to enhance its services to its clients,” the release reads.

The integration of Fairexpay’s capabilities should provide White Matter Advisory with a competitive advantage in the cross-border remittance and fundraising market, he added.

The release also states that by integrating Fairexpay’s advanced technology, White Matter Advisory aims to offer seamless and convenient cross-border payment solutions, providing customers with secure options for international money transfers.

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Fintech

Rakuten Delays FinTech Business Reorganization to 2025

Published

9 months ago

29 July, 2024

FinCrypto Staff

Rakuten (Japan:4755) has released an update.

Rakuten Group, Inc. and Rakuten Bank, Ltd. announced a delay in the reorganization of Rakuten’s FinTech Business, moving the target date from October 2024 to January 2025. The delay is to allow for a more comprehensive review, taking into account regulatory, shareholder interests and the group’s optimal structure for growth. There are no anticipated changes to Rakuten Bank’s reorganization objectives, structure or listing status outside of the revised timeline.

For more insights on JP:4755 stock, check out TipRanks Stock Analysis Page.

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Fintech

White Matter Advisory Acquires 90% Stake in Fintech Startup Fairexpay

Published

9 months ago

29 July, 2024

FinCrypto Staff

White Matter Advisory Acquires 90% Stake in Fintech Startup Fairexpay

You are reading Entrepreneur India, an international franchise of Entrepreneur Media.

White Matter Advisory, which operates under the name SaveDesk in India, has announced that it is acquiring a 90% stake in fintech startup Fairexpay for an undisclosed amount.

This strategic move aims to strengthen White Matter Advisory’s portfolio in cross-border remittance and fundraising services.

By integrating Fairexpay’s advanced technology, White Matter Advisory aims to offer seamless and convenient cross-border payment solutions, providing customers with secure options for international money transfers.

White Matter Advisory, known for its treasury risk advisory services, manages funds under management (FUM) totaling USD 8 billion.

Founded by Bhaskar Saravana, Saurabh Jain, Kranthi Reddy and Piuesh Daga, White Matter Advisory helps companies effectively manage the complexities of treasury and risk management.

The SaveDesk platform offering includes a SaaS-based FX market data platform with real-time feeds for over 100 currencies, bank cost optimization services, customized treasury risk management solutions, and compliance guidance for the Foreign Exchange Management Act (FEMA) and other trade regulations.

Fairexpay is a global aggregation platform offering competitive currency exchange rates from numerous exchange partners worldwide. Catering to both private and corporate customers, Fairexpay provides seamless money transfer solutions for education, travel and immigration, as well as simplifying cross-border payments via API and white-label solutions for businesses. Key features include competitive currency exchange rates, 24-hour processing times, extensive currency coverage of over 30 currencies in more than 200 countries, and secure, RBI-compliant transactions.

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