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    2024 Session 3

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    sfalcao91
    The document discusses fintech ventures including payments, regtech, and banking as a service. It covers companies in various fintech sectors like payment processing, money transfers, credit scoring, and infrastructure providers. Regulatory issues and business implications for different fintech areas are also mentioned.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd

    2024 Session 3

    Uploaded by

    sfalcao91
    19 views22 pages
    The document discusses fintech ventures including payments, regtech, and banking as a service. It covers companies in various fintech sectors like payment processing, money transfers, credit scoring, and infrastructure providers. Regulatory issues and business implications for different fintech areas are also mentioned.

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    2024_Session_3

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    The document discusses fintech ventures including payments, regtech, and banking as a service. It covers companies in various fintech sectors like payment processing, money transfers, credit scoring, and infrastructure providers. Regulatory issues and business implications for different fintech areas are also mentioned.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    19 views22 pages

    2024 Session 3

    Uploaded by

    sfalcao91
    The document discusses fintech ventures including payments, regtech, and banking as a service. It covers companies in various fintech sectors like payment processing, money transfers, credit scoring, and infrastructure providers. Regulatory issues and business implications for different fintech areas are also mentioned.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 22

    Fintech Ventures

    Session 3
    Agenda

    • Payments

    • RegTech

    • Banking as a Service (BaaS)


    B2B companies: the enablers
    Payments

    Payment processers

    Adyen and Stripe are leading B2B payment


    companies

    Money transfers

    Transferwise and CurrencyCloud bring FX solutions


    for banks and other businesess

    Old but gold

    What about Visa, Mastercard and PayPal


    Payment processers
    Valuation records

    Stripe, private valuations around


    95bn Usd

    Adyen, public company, worth


    58Bn Eur

    BNP Paribas and Deutsche Bank,


    some of the biggest European
    banks, worth 80bn and 29bn
    respectively

    JP Morgan and Bank of America,


    some of the biggest US Banks,
    worth 450bn and 392bn
    respectively.

    Payments are a small part of


    business how does this happen?
    Payment processers
    Cutting the middle man
    Money transfers
    Solving cross border (FX) transfers

    Why are cross border transfers so


    complicated?
    Is the wise system riskless?

    SWIFT system (Society for


    worldwide Interbank Financial
    Telecommunication) was
    developed in the 1970s and the
    system has endured until today.
    Old but gold
    What about VISA and Mastercard?

    Visa, Mastercard and PayPal have been


    very active in the M&A space – a
    continuous reinvention story.

    Visa and Mastercard played a crucial


    role in the introduction of strong
    customer authentication (SCA) in online
    payments in Europe through PSD2
    Old but gold
    Payment Services Directive II (PSD2)

    AISP
    Account Information Service Provider

    PISP
    Payment Information Service Provider
    Old but gold
    SCA: security vs convenience
    Old but gold
    From open payments to open finance (API based)

    All major European banks


    have API stores and seem
    to embrace open banking.
    But what are the risks? Is
    it BigTech?
    Agenda

    • Payments

    • RegTech

    • Banking as a Service (BaaS)


    B2B companies: the enablers
    Regtech

    Know Your Customer (KYC) and Anti Money


    Laudering (AML)

    Feedzai and Ayasdi have market leading solutions


    to help banks with KYC and AML
    Onboarding and Digital Id

    Software providers that help digital onboarding and


    processes for banks

    Payment fraud

    Riskified and shield provide decision making as a


    service fo
    KYC & AML
    Compliance is a growing worrt

    Know Your Customer (KYC) and Anti-


    Money Laudering (AML), are regulatory
    requirements imposed on regulated
    financial institutions demanding they know
    more about their clients, monitor their
    transactions and report suspictious
    activities to authorities

    KYC and AML are a direct by product of


    9/11 and with each financial crisis overall
    compliance, internal control and internal
    audit have been gaining wait in the cost of
    doing business for financial institutions.

    Major reason: most of the work is done


    manually and still lacks automation.
    KYC & AML
    Textbook exemple of AI / MLS application in Finance

    Regulatory implications: Business implications:


    • KYC and AML are key pillars of regulation • Do you understand what the tool is doing?
    • Key responsability, can it be outsourced? • Key feature, can it be a supplier?
    Onboarding and DigitalID
    Having an ID is a human right

    ID is a “public business” and


    speed of adoption depends
    on many factors. Without
    official DigitalID there is no
    real virtual economy.
    Onboarding and DigitalID
    Building user efficient journeys

    Regulatory implications: Business implications:


    • Cyber threats can destroy reputation • Legacy infrastructure
    • IT systems are key – outsource? • Key feature – can it be provided by a supplier?
    Payment fraud
    Cybersecurity is a MAJOR concern

    Regulatory implications: Business implications:


    • Cyber threats can destroy reputation • Legacy infrastructure
    • IT systems are key – outsource? • Key feature – can it be provided by a supplier?
    Agenda

    • Payments

    • RegTech

    • Banking as a Service (BaaS)


    B2B companies: the enablers
    Banking as a Service

    Credit scoring

    Zest.ai and Credit Kudos are examples of


    alternative credit scoring companies

    Conversational interfaces

    AI machines for several different customer


    interacions

    Infrastructure providers

    Tech companies that give a turn key solution to


    open a bank. (ex: Plaid and This is Bud)
    BaaS
    Credit Scoring can leverage AI/MLS

    Regulatory implications: Business implications:


    • Outsourcing a key feature of banking business • Credit is a large space (personnal, auto, SME)
    • Technical issue: how to avoid discrimination • Are machines enough? Expert input?
    BaaS
    Soon we’ll all be talking to machines

    Regulatory implications: Business implications:


    • We might argue if this is customer servicee • Call centres / branches are a huge cost for
    or not institutions, automation is highly desired
    • Who takes responsability for bad advice? • Machines will probably be more consistente and
    maybe better at giving advice – higher prices?
    BaaS
    Build your own bank

    Tech wise building a new bank is easy.

    What’s the catch?

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