Eastnets CEO Hazem Mulhim on revolutionising compliance with AI
REWRITING THE RULES
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THE FINTECH MAGAZINE
6
CORPORATE BANKING
Tomorrow’s treasury today
A rigorous focus on the needs of clients and their customers shapes BNY’s approach to technology adoption and development, as Carl Slabicki explains
8
ARTIFICIAL INTELLIGENCE Planning for AI
Whether it’s buried deep in the operational heart of an organisation or powering customer-facing chatbots, AI is a tool that requires careful preparation and a clear sense of what you want it to achieve, says Finastra’s Adam Lieberman
10 SME BANKING
The great rebundling U.S. Bank is becoming a trusted resource of integrated back-office services for its 1.5 million small business customers, reversing a decadelong banking trend and addressing a real need
12 CORE BANKING
Zee whizz! Adapting to a new banking generation Legacy banks and fintechs could just stay in their lanes, but as digitally native customers come to dominate the workforce, pairing up adds value for both of them, as Joud Zaumot from Mambu and Andrzej Szelemetko of GFT Technologies discuss here
14 SEPA INSTANT Instant connection
The heavy lifting has been done. Now the moment of truth. SEPA Instant Credit Transfer is about to go live. Bank of America considers what the reality might be for banks and their corporate clients
18 LENDING Leaning into lending
Open banking and AI have contributed to a turnaround in UK bank TSB’s lending procedures. It empowers customers with detailed information about their financial circumstances and provides the bank with more accurate risk ratings
20 REGTECH Rewriting the rules
Eastnets’ Hazem Mulhim and Daoud Abdel Hadi on why they’re convinced AI is the enabler for effective compliance and enhanced fraud prevention
THEEDITOR’S VIEW
There were two massively anticipated events poised to take place as we went to print.
One moves the world a step closer to the holy grail of truly global instant payments. The other sees many of those involved in that crusade gathering to consider the next frontiers in finance at Sibos.
Go-live for SEPA Instant – the final implementation for both receivers and issuers under the Instant Payment Regulation – marks a profound change for payment service providers in Europe. They can no longer choose to offer instant payments; they must – and, crucially, at the same price as transactions that use the slower SEPA Credit Transfer rail.
Ultimately, it will be users who drive demand and determine how successful it will be. And adoption is still hard to predict. Nearly half of Brazil’s transactions were instant within four years of launching Pix. Roughly the same percentage now goes through India’s UPI.
But the UK, which has been chipping away at it since 2008, still only sees 10 per cent of transactions over its Faster Payments service.
Confidence in the system’s ability to protect payments made at the speed of light will likely be a determining factor… although a frightening spike in financial crime didn’t seem to damage the love for Pix.
Fast and fraudproof. We really need to breach that frontier.
Sue Scott, Editor
This issue's spinetingler quote comes from legendary fashion designer and businessman Georgio Armani, who died in September 2025, aged 91
22
ARTIFICIAL INTELLIGENCE
Smarter decisions, stronger operations
Rebranding is tricky for a company as established and respected as Smartstream. But with AI broadening the customer base and transforming its relationships with existing clients, CEO Akber Jaffer has decided it’s time for change
24 INNOVATION BANKING Raising the phoenix
Two years on from Silicon Valley Bank UK’s assimilation into HSBC, Ad van der Poel, Chief Commercial Officer at HSBC Innovation Banking UK, shares its journey to becoming the go-to bank for the nation’s tech ecosystem
26 REGTECH
Taking the pain out of compliance
As the EU’s new AML package of reforms approaches, Sinpex is helping cure the headache that is KYB onboarding
29 DATA
Sharing is caring
Bank of Ireland’s payments data analytics team produces information that’s useful to the bank, its customers and the wider economy. But could it play an even more important role?
32 CROSS-BORDER PAYMENTS
Game changer
No business wants to be sitting on cash that’s not working for it. But that’s precisely what many higher-risk sectors are forced to do if they need to make cross-border payments. Freemarket has a solution to release that lazy liquidity
34 PAYMENTS
Passion project
We don’t just want to buy ‘stuff’ any more. We want to experience it. And Mastercard’s vision for an agentic future can help deliver that for consumers
36 ARTIFICIAL INTELLIGENCE
The right tool for the job
Marcus Rabe of Insight Softmax Consulting is one of AI’s biggest cheerleaders, but even he cautions it’s not a silver bullet
38 SUSTAINABILITY
Turning back the tide
G+D’s partnership with sustainability-bydesign champion Parley for the Oceans is helping financial services answer one of the biggest environmental challenges of our time
40 CUSTOMER RELATIONSHIPS
Mission-driven banking
We go inside USAA’s digital transformation to deliver the ultimate service to military personnel and their families
42 SME LENDING
‘Shadow’ boxing
Banks want to win back the portfolio of SME loans they’ve lost to the private credit market. Acuity Knowledge Partners is helping them achieve it with AI and
experience
44 CORE BANKING
Move fast… and fix things!
Temenos has sharpened its focus in response to one of the biggest technology shifts of a generation. Barb Morgan explains how its helping clients through this transformation
46 REGTECH
Scaling safely without debanking
Another hefty fine for a UK neobank highlights the need for better compliance controls in fast-growing fintechs. Flagright’s Imam Saygili says its AI-driven system offers a nuanced solution that keeps genuine customers and regulators happy
49 BRANCH BANKING
Face the truth
Restoring in-branch banking to thousands of UK communities isn’t just possible – it’s happening, with or without the banks, says Ron Delnevo
Simplify global transactions with our cost-effective payment platform. We support everything from traditional POS to SmartPOS and SoftPOS, with integrated apps, on-device reporting, smart routing, and more.
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CORPORATEBANKING
Tomorrow’s treasury today
A rigorous focus on the needs of clients and their customers shapes BNY’s approach to technology adoption and development, as Carl Slabicki explains
A significant force in global banking, Bank of New York (BNY) processes digital payments at a rate of $3trillion a day in around 130 different currencies.
Its banking-as-a-service infrastructure fuels almost 2,500 organisations that are operating in a vast number of markets globally, by facilitating local and cross-border transactions, including US dollar payments into and out of local regions.
BNY’s Executive Platform Owner for Treasury Services, Carl Slabicki, is at the heart of that fast-paced, rapidly evolving operation, responsible for providing ‘really deep, integrated working capital through the entire life cycle’ – from payments, cash management and trade finance to bank, broker-dealer, fintech and money service business clients globally.
We asked him what developments, opportunities and threats he believes are currently foremost in financial services players’ minds.
THE FINTECH MAGAZINE: What does the day-to-day look like for BNY’s Treasury Services division?
CARL SLABICKI: We’re involved in facilitating global money movement and giving clients access to foreign exchange (FX) markets, letters of credit and trade finance and receivables financing, as well as cash management capabilities to help safeguard their assets.
It’s about working with bank treasurers, corporations, CFOs, accounts payable and receivable managers, or
the financial services product managers who are serving their own clients, providing them with services to help them offer better products downstream to their customers.
This gives us a great sense of what’s going on across these markets, the trends our clients are seeing, what they need to do to stay competitive, what’s really important to their businesses. Ultimately, how our services can help them achieve those goals.
The main theme is both financial services and the broader business ecosystem moving into more of a 24/7, always-on operating model.
It means payments need to be able to move instantly, not just within specific regions but cross-border, too. We’re doing that in a lot of markets
Carl Slabicki, Executive Platform Owner, Treasury Services, Bank of New York
worldwide using our direct clearing or correspondent network partners to connect into instant payment rails and facilitate real-time money movement.
We’re also looking to help our clients analyse and manage their cash flow, balances and liquidity. Then there’s seven-day accounting and interest calculations for always-on FX services.
TFM: How do you deliver true always-on capability in a world where doing so 99.99 per cent of the time isn’t, ultimately, good enough?
CS: Knowing how important this is to our clients, we’ve invested in the infrastructure to ensure they can provide a resilient offering to their clients, including rotation between data centres.
APIs help us and them stitch together multiple capabilities for a more seamless real-time workflow – including third-party partner capabilities for real-time processing of things like sanctions screening, fraud anomaly detection, checking for balances and updates and funds control, to support their millisecond-driven service level agreements.
We have lots of great data, and also bring in components from partners to offer our clients better value. So, they might take pieces of our API workflow to validate a data point, a beneficiary or an account number before a transaction process. Then they might use another API to get a status for that transaction,
This concentrates the leadership, technology, skill sets, tooling and processes into a once-and-best owner – often through APIs – so every use case has a single, best-in-class source. That’s helped us move faster and deliver repeatable components to a higher standard.
Then, in terms of technology, strategy and architecture, we’re also looking at AI in areas including engineering to accelerate our output. We can use it to supplement the people writing user stories within product management, or help our engineers draft code as a starting point to then finish and put into deployment.
Then, once the code’s written, we can use AI to write and run more robust test cases to assist our testers with deployment – adding quality and speed along that lifecycle. These two things together are positioning us well for the future.
TFM: How do you ensure your digital transformation delivers real strategic value and substance to clients?
CS: There’s always a hype cycle around new technologies – buzzwords and investment going in to chasing technology that’s maybe not grounded directly in a problem.
Our approach is to look at what our clients are trying to do – like the moving to always-on operation in multiple currencies, globally, including FX. In this example, we work that back to the fact that this means they need a seven-day operating calendar for their accounts, investments, working capital, and interest on balances, investments and lending – which means their systems need to be able to consume our APIs continuously.
we’re thinking and what proof-of-concepts we’re building. It means they can drive the products that we either build, deploy, pivot or, ultimately, scrap and move on from
We take the same approach to our interactions with peer banks and market infrastructure providers, like The Clearing House, Federal Reserve and Swift, where there are investments to be made.
There’s a lot of work and proof-of-concept going on around blockchain, stablecoin and tokenised deposit infrastructure, for example. These are all technical tools for helping bridge legacy infrastructure and enable our clients to achieve round-the-clock capability. We ask ‘what do we need to do to make that infrastructure more available, resilient and digitised to meet the modern demands of this evolving market?’. We’ll support and lead on those things that are going in the right direction, strategically, and let our clients know where the market is headed, what the benefits could be for their business and what that means for them.
We always try to represent their voices in deciding where we place our bets in both the short and long term.
TFM: Finally, what excites you most about the future of financial services technology and its potential to transform not just the client experience but how you best equip your internal teams to deliver that?
which they share with their client through a mobile or web interface.
Essentially, our clients can merge pieces of their ecosystem into a workflow for a customer to offer an instantaneous front-end experience, whereas much of the treasury ecosystem used to be an afterthought, a batch process that happened end-of-day or next day.
TFM: All of this clearly improves external processes, but can it also help internal stakeholders deliver more?
CS: We’re considering what common capabilities we can do once and best to remove duplication, a proof point being the platform operating model we have deployed across our entire enterprise for dealing with core requirements like know-your-customer, billing, onboarding and risk management across multiple lines of business and products.
Lots of financial ecosystem layers need to come together through technology solutions that help us and our clients make the jump from legacy infrastructure.
With digital transformation, I always ask ‘what is it helping our client do?’. For example, is it helping them move assets more efficiently than the legacy model? Is it helping them exchange assets more seamlessly, or improving fraud and anomaly detection and cash forecasting? If the answer is yes, and it usually is, we can continue to test the benefit for the end user, i.e. is it helping them function faster, safer or more autonomously?
We don’t want to build tools because they sound cool or make a nice headline. We want things that help businesses and consumers, at scale, to move their assets more efficiently.
Some investments are short-term, some are mid-term and some long-term and, if we’re pairing a new technology, model or capability, we always bring our clients into that journey. We showcase things, let them know what
CS: Collectively managing the future will involve being able to navigate the intersection of evolving legacy technology and expanding its operating hours to 24/7. It’s also about building associated fraud controls, speeding up the infrastructure’s money-moving capabilities, connecting assets together from an exchange perspective, and bridging some of the newer technology being built by private banks.
It involves things such as the tokenised deposit models that banks are rapidly deploying, evolving market infrastructure, new technologies, instant payments ecosystem, leveraging AI as an acceleration tool, and increasing fraud controls.
And then you have to consider how you deploy all this to make a difference to what the consumer at the end of it all actually cares about. It’s important to ensure we’re leveraging the tools that are growing at a very rapid pace to funnel things in the right way.
There’s a lot of opportunity and potential to harness the momentum of what’s coming across the industry, and to maximise that for all the users at the end of that workstream, whoever they might be.
Planning for AI
Whether it’s buried deep in the operational
heart of an organisation or powering customer-facing chatbots, AI is a tool that requires careful preparation and a clear sense of what you want it to achieve, says Adam Lieberman
THE FINTECH MAGAZINE: With so much investment going into AI today, what advice would you give financial services organisations to help them maximise their return on AI initiatives?
ADAM LIEBERMAN: The desire to deliver efficiency and automation with AI is understandably the key driver of adoption, but projects will fail to deliver return on investment (ROI) when there is a lack of solid objectives from the outset. Setting the parameters of success, such as well-defined metrics and KPIs, is crucial.
An organisation with a mature AI roadmap will have clearly defined strategic objectives, against which AI implementation and integration is mapped, so that the technology directly supports organisational goals. Jumping straight into adoption, without considering the technological and cultural limitations and challenges will almost certainly lead to poor ROI.
Banks and financial institutions are full of legacy technology, and with that comes a culture that leans towards legacy practices and ways of working. In this regard, AI projects that support internal workflows, such as those underpinned by generative AI tools, require a shift in the organisation’s mindset that prioritises upskilling employees and updating security and governance frameworks to achieve ROI. For more advanced projects, such as those that relate to the development and delivery of products and services, bottlenecks may occur that can also affect ROI. For example, in industries in which sensitive data are commonplace, gaining access to datasets may take some time or new regulations may emerge that restrict or limit access to data. Being aware of potential restrictions from the outset will help to protect against these bottlenecks.
TFM: Chief artificial intelligence officers are still a relatively new addition to the C suite. Speaking as a CAIO yourself, how important is effective leadership when it comes to implementing and developing AI initiatives?
AL: Leaders can be well-intentioned, but if they do not involve all stakeholders from the inception of AI initiatives, successful projects will elude them.
Success relies on buy-in and validation of AI use cases from internal stakeholders and delivery teams, from product owners, data science teams and developers, to the C-suite, with all agreeing on KPIs and the wider roadmap. This ensures a critical mass of investment and resource bandwidth and ensures everyone is working towards the same goal.
As well as stakeholder management, AI leaders should be familiar with the core principles and ethical concerns that will govern the development and use of AI-powered solutions across the organisation. Across financial services, there has been a rise in the number of AI-related leadership roles. This is evidence that AI maturity is an increasing priority for the C-suite.
TFM: How should financial services firms measure their level of AI maturity?
AL: AI maturity can be measured against a number of factors, from educational initiatives and skills development programmes, to ensuring the right talent and leadership is in place across technical roles. Measuring how often employees are using the available AI tools is also a good way to assess the general state of enterprise fluency with the technology.
When it comes to the development and delivery of AI-powered products and services, maturity is measured by the business’s approach to defining use cases, so that a robust AI roadmap can be
determined, incorporating architectural best practices and frameworks, so that systems are able to adapt and scale as the technology advances.
A crucial point for financial services firms is that data infrastructure must be mature enough to ensure organisational data is AI-ready. If this is not in place, the focus must be on data transformation and the modernisation of systems.
TFM: How can organisations upskill their employees and increase AI maturity?
AL: AI maturity will ultimately mean different things for different employees. For example, developer teams will already likely be working with AI coding tools and applications regularly, while marketing teams will still be experimenting with generative AI to assist with content development. There is no one-size-fits-all approach to advancing users from low-maturity to high-maturity, but looking at the requirements of departments and teams across an organisation can help leaders establish bespoke frameworks for upskilling and increasing engagement with AI-powered tools. Identifying AI evangelists and superusers within departments and teams is another way to help advance other employees’ understanding and engagement with available AI tools, enabling them to deliver efficiencies within their own workflows. Creating a collaborative culture around skills development comes back to leadership, as employees must be given the space and opportunity to upskill and share their learnings and expertise with peers.
TFM: What does the future hold for AI in financial services?
AL: AI is poised to supercharge the industry across multiple tiers. Enhanced and streamlined customer support will
Adam Lieberman, Chief Artificial Intelligence Officer at Finastra
be a primary focus, with AI-powered chatbots and virtual assistants providing instant, accurate responses to customer inquiries. These systems will handle complex interactions, from account management to support issues, freeing up human agents to focus on more nuanced issues.
In-product assistance will enable users to navigate traditional financial products through natural language interactions. This will make complex financial tools more accessible and provide a seamless UI/UX experience.
Agentic workflows will represent the next evolution, with AI systems connecting to tools and functions, capable of executing
coverage, and overall improve the productivity and enjoyment factor of software development. As AI continues to evolve, its impact will strengthen, creating a future of more efficient, personalised, and intelligent financial services.
TFM: Talk us through some use cases for AI in areas such as payments and lending.
AL: We’re exploring AI to solve some of the real-world challenges facing banks. This includes providing instant assistance to operational staff in areas such as trade finance, lending and payments processing.
Trade finance is complex, and it’s notable that the industry faces a significant talent gap. AI
The
realisation of fully autonomous agentic AI systems is where we are heading, and banks and fintechs need to understand how they can incorporate them into their service offerings
complex tasks autonomously, assisting users with their daily tasks. By automating routine tasks and providing data-driven insights, AI will significantly boost productivity for financial institutions, enabling employees to focus on high-value activities.
AI will also continue to drive developer productivity – serving as a first-line assistant to auto-complete code, streamline the documentation process, provide better test
tools can help new team members learn and become productive much more quickly through prompt-based assistance. They can navigate processes much more easily without having to sift through extensive documentation.
Payments teams can also benefit in using AI, particularly in relation to data. The power to analyse vast amounts of complex payment data through natural language processing drives more robust insights for banks, particularly
around payment activity and in turn about the best products and services to offer.
It’s clear that AI can remove time-consuming, low-value work across the board. Significant efficiency gains can be realised using AI for transcription, for translation and for digitising paper-based contracts. For lending teams, the ability to digitise, query and manage high volumes of complex loan documentation at scale, and to incorporate the data in downstream applications, is transformational.
TFM: What emerging AI technologies should financial services firms be paying close attention to right now?
AL: The rise of AI agents is leading to the development of many business use cases for AI. One of the main reasons behind this is that agents are able to plug into the investment most organisations have made over the last two years in generative AI tools.
By extending the capabilities of chatbots, for example, organisations can revolutionise customer experience, as well as deliver advanced knowledge and data search and discovery for internal teams. Through combining agents with frameworks like LangChain, agents can connect LLMs to external data and APIs, allowing them to provide further context and detail when responding to prompts.
The realisation of fully autonomous agentic AI systems is where we are heading, and banks and fintechs need to understand how they can incorporate them into their service offerings. Payments and retail are both areas where use cases for agentic AI systems will be delivered in a meaningful way, with experts believing agentic commerce will account for a significant portion of all commerce by 2030.
Connected to this is the use of different protocols for agents and LLMs to connect and communicate with one another. In simple terms, agent-to-agent (A2A) protocols are frameworks that enable them to communicate and collaborate with one another, creating larger, more dynamic AI systems. The Model Context Protocol (MCP) is another framework that allows LLMs to access other databases, APIs, and tools, such as agents, extending the capabilities of the LLM to the systems organisations prefer to interact with.
These protocols are supporting the rapid evolution of agentic systems and should be key investments for financial services organisations and fintechs alike.
n Adam Lieberman will be at Sibos from 29 September to 2 October. If you’d like to speak to the Finastra team at Sibos, visit booth #H036
The great rebundling
U.S. Bank is becoming a trusted resource of integrated back-office services for its 1.5 million small business customers, reversing a decade-long banking trend and addressing a real need
Much of the past decade’s digital progress in financial services has been achieved through the so-called ‘unbundling’ of banks, with non-banks satisfying customers’ fast-evolving service needs, by overriding the limitations of legacy systems and offering nimble – and often substantially cheaper – solutions.
It was perhaps inevitable that incumbents would seek to reinstate their proprietary advantage by ‘rebundling’ such services within their own estate – sometimes even subsuming the competitors through buy-outs/buy-ins or partnerships to do it.
One of the most fought-over segments by fintechs has been small
and medium-sized businesses (SMBs) who, for years, got a raw deal from banks. In the States, U.S. Bank is reversing that.
Many of its fellow banks have struggled to support SMBs due to the imbalance between cost-of-provision and revenue potential. But U.S. Bank is finding new ways to service this segment cost-effectively, utilising digital advances like artificial intelligence to its, and their, advantage.
For three years, the bank, which serves around 1.5 million such enterprises with up to $25million turnover in the States, has sought SMB owners’ views via its annual small business survey. Its most recent results, gathered just as new economic and trade policy was being introduced, were published this Spring.
Shruti Patel heads up U.S. Bank's business banking arm and says respondents’ calls for help to future-proof their businesses through tech and ensure growth amidst significant macroeconomic stressors, have been getting louder.
The bank is using that feedback to directly inform its technology strategy. It’s giving SMBs access to
Shruti Patel Chief Product Officer for Business Banking at U.S. Bank
tools to help run their back-office functions more efficiently.
By engaging in integrations, acquisitions and partnerships with fintechs it’s helping them up their game in light of the new economic playbook. That includes everything from new products and technologies to enhanced support from its frontline sales team, offering both hardware solutions and plug-in functionality that businesses can access via a single U.S. Bank online banking hub.
Patel says: “We’ve certainly seen an increasing reliance on digital tools over the past decade. This year’s survey showed a 15 percentage point jump from last year in terms of how much small businesses are relying on digital tools to run their back office, whether for workflow automation or cash flow management.
“More than 50 per cent of our respondents told us they are already using and deploying genAI tools, or plan to do so, over the next 12 months. Most of these businesses are using budget-friendly genAI solutions with a cost of less than $50 per month for uses that include content and marketing strategies, and back office efficiency.”
But they need help navigating the right path – and who better than banks like this one, with its longstanding legacy of trust, to do that?
“Most of our small business owners wear multiple hats. They are running their operations, focussed on consumer spending, bringing production costs down and bottom-line profitability up. So, they are struggling to keep pace with how quickly genAI technology is changing, in terms of learning about it and deploying it,” says Patel.
“Our survey has shown small business owners are increasingly overwhelmed by the number of software solutions now in the marketplace. It’s almost mental gymnastics to calculate the cost and how these solutions come together, so they’re relying more and more on their banks to provide integrated products across banking, payments and software.
“Our more notable investments include embedded payroll and accounts payables and receivables, as well as spend management capabilities. We’re trying to bundle these and bring them to market as one holistic solution for our small businesses.”
So, by focussing on their pain points, U.S. Bank is positioning itself as a transformation gateway.
“We are taking a multifaceted approach,” says Patel. “We want to continue to invest in our own infrastructure, data layers, and the technology systems needed to deploy genAI at scale and with speed.
“In parallel, we are looking at use cases
across the bank, such as smart assistants to help our bankers with product recommendations, as well as small business-facing tools to help them navigate our software solutions more seamlessly.
“We’re also using genAI to help our customer services support teams utilise data transcription and synthesisation when someone calls us, to increase our response speed and efficiency.”
The bank’s Connected Partnership Network support platform is building out a marketplace of solutions from partners, including cash management and treasury solution providers, who integrate with U.S. Bank APIs.
Similarly, businesses can see which platforms are certified to easily plug into Elavon, U.S. Bank’s merchant processing business which also operates in Europe. WorksWith Elavon is a searchable, digital platform designed to help businesses find integrated software and payment solutions compatible with Elavon's payment processing services.
Meanwhile, the bank’s free Business Resources Central support hub, created with the help of small business training and solutions provider Next Street, complements the technology with educational courses on topics such as accessing capital, business continuity planning and how to prepare to seek financing.
“We also recently launched our Business Essentials, best-in-class premium checking account coupled with merchant and payment acceptance capabilities,” says Patel. “It’s a no-monthly-maintenance-fee account offering SMBs unlimited digital transactions.
“When they sign up for our payments capabilities, we also give them a free card reader, fraud prevention tools, with same-day availability of funds, and the ability to integrate a business’s accounting and budget management software
as this is still the primary way that a lot of small businesses transact,” says Patel.
The Connected Partnership Network of fintech services facilitates such innovations, and it continues to grow as U.S. Bank collaborates with hundreds of fintechs every year.
Upbeat and determined
Patel describes the overall mood among business owners participating in its latest survey, as being relatively upbeat. But, above all, they are determined. They recognise the need to remain fighting fit – with technology being a key enabler, she says.
“Small businesses have viewed their businesses as very successful over the last 12 months, and, generally speaking, are optimistic that future growth will remain strong.
However… macro-environment challenges such as tariffs were very top of mind [in the survey], followed by access to working capital and inflation increasing cost to their businesses. There were also concerns around consumer spending and whether that will remain strong.”
The report acknowledges that this adds up to a ‘pivotal moment for small business owners, who are navigating a rapidly evolving landscape’. They are responding to these by focussing on ‘streamlining operations, adopting new technologies, and making deliberate decisions about the future’, it said.
Eighty-three per cent said that using modern tools and technologies is a major success factor, while a similar number said they need more innovative tools to make their job easier and/or they were consolidating their digital tools to streamline their workflows.
Small business owners are overwhelmed by the number of software solutions in the marketplace… so they’re relying on their banks to provide integrated products
“And all this is within a simple application and single onboarding event.”
Bento, added to US Bank’s suite in 2021, completes the circle by pairing this payments capability with banking services like spend tracking and card transaction controls, using its accounts receivable software solutions to help SMBs track and control spend.
“We’re investing in our online digital capabilities, making our app seamless for money movement and electronic transfers as well as improving our online banking offering,
In this context, there is clearly a prime opportunity for banks to claim space as most trusted suppliers of key services, embedded into SMBs’ accounts.
U.S. Bank is helping lead the way on a ‘great rebundling’ of services that had been lost to fintech players. And Patel makes it clear it intends to stay right out front of that.
“We’ve always kept a keen eye on the marketplace to see who’s doing a fantastic job with new innovations,” she says. “And so, as we think about some of the needs of our small business owners, whether this is embedded payroll, embedded accounts, payables, or receivable solutions, we're going to continue to look at partnerships with fintechs.”
The right fit: SMBs are looking to U.S. Bank for digital solutions
Zee whizz! Adapting to a new banking generation
Legacy banks and fintechs could just stay in their lanes, but as digitally native customers come to dominate the workforce, pairing up adds value for both of them, as Joud Zaumot from Mambu, and Andrzej Szelemetko of GFT Technologies discuss here
“Collaboration between banks and fintechs is an instance of where two plus two equals five.” That’s how GFT Poland’s Andrzej Szelemetko describes the value that can come from the two working together to meet not just their own business needs but also those of a generation that’s reaching financial app overload.
GFT – a core banking specialist –partners with composable core banking provider Mambu and Amazon Web Services (AWS) to develop and deploy full-stack technology that has propelled the likes of challenger banks Alba, Allica and Raisin. But they also help legacy institutions move to a modern multi-core banking environment that allows them to play to their strengths.
Here, Andrzej Szelemetko from GFT Poland, and Mambu’s Joud Zaumot, who lead their respective companies’ solutions engineering teams in EMEA, discuss the challenges and the opportunities for those established providers in meeting the needs of Gen Z.
THE FINTECH MAGAZINE: How is the changing customer demographic influencing banks’ technology choices?
JOUD ZAUMOT: Gen Z is now entering the workforce [and will become the largest generation by 2035], so banks need to start catering for them in terms of products and services, and by focussing on the digital engagement layer. This new generation definitely prefers to deal with their financial institutions digitally, using their mobile app and internet banking.
Joud
Zaumot, Senior Solutions Manager at Mambu
Andrzej
Szelemetko, Client Solution Director PL & CEE from GFT Technologies
ANDRZEJ SZELEMETKO: Gen Z were raised with phones in their hands that have access to the internet. They’re used to completely different experiences. They trust the internet more: it never fails them, it is always available. They shop differently. They communicate differently. Onlineexperiences-first is normal to them.
In order to attract this generation, banks need to be where these customers are. We’re talking about embedded banking, seamless banking, even invisible banking, so that the financial products are available at the point of sale, without the customer having to move to another application.
TFM: How does data and personalisation play into this?
AS: Data is key here. But this is often a challenge with legacy systems that have monolithic databases built around them – making that data usable is a project in itself. Whereas, with a modern core, that data is being streamed all the time, with every transaction and interaction with the core banking system.
Then, the banks have to be smart about using it, because this information is a gold mine – you can understand user behaviour, their habits, what they are spending on and where, whether it’s over the internet, in the shops. Using this information, the experience can be really tailored by differentiating their experience in the journeys they use, as soon as they log into the app.
JZ: Being offered the right product at the right time is one of the
main attractions for Gen Z. I mean, how cool is it if your banking app says on the purchase of your 10th cup of coffee, ‘you’re going to get a discount’?
Gen Z loves this kind of small personalisation and, because fintechs know how to use data, they’re giving it to their customers.
Offering more personalised service and products, based on the customer needs, creates customer stickiness because they feel they’re heard. They feel they’re seen.
TFM: How important are partnerships to this new banking era?
JZ: Fintechs take the partnership approach very seriously. They don’t focus on building everything themselves, which is completely different to what we’re used to seeing from traditional banks, where they want to build everything, from front end to core to the back end.
Fintechs focus on specific partnerships and sometimes strategic partnerships. So, for example, TymeBank [part of the South African banking group that launched with a Mambu core banking system in 2019 and has now expanded into South America and is poised to enter Asia] has partnered with different retailers in order to offer more products to a wider customer base.
If traditional banks want to survive in today’s economy, they need to collaborate more with fintechs, for sure. There’s room for both to work together and create value by offering the right product to the right customers.
They need to focus on what they do best: banks on their customer base, because they’ve already created that trust, and fintechs on their agility, flexibility and ability to create different products at a very fast pace and time to market.
A good example of a collaboration is ABN Amro’s BUUT, a new neobank, specifically for Gen Z, based on Mambu’s underlying technology, which was built with the ABN Amro team behind Dutch payment app Tikkie.
When you see big names such as this involved in such collaboration, you realise they understand the competition, they feel the
The digital experience: Gen Z want nimble and intuitive banking at their fingertips
do it under the regulatory supervision.
The fintechs pay for this, but it is a very innovative model and creates new value for the market. When the customer is looking for clothes or looking for cars, the loan to finance what they want to buy could be available there.
VeloBank in Poland has built on this to create exactly that solution. In this case, when you’re shopping, you can take a photo of the product you like, along with the price tag. Based on the photo, VeloBank will give you an offer for a loan, right there in the shop, which, if you agree, can pay you instantly.
AS: I talk to technology directors all the time, and I often hear ‘my best experts for the current core banking system are now starting to retire’. It’s becoming an issue, and we need to deal with it.
When it comes to innovation, one of our customers has a release cadence of three months, whereas tech companies can release daily – multiple times a day, as soon as the new feature or bug fix is available. And upgrades make the issue worse because sometimes these projects block business as usual and the release of anything that’s innovative.
burn. But it’s great for customers, because they end up with multiple offerings, multiple products, multiple services to choose from.
AS: Collaboration between banks and fintechs is an instance of where two plus two equals five. You get more value than working separately. You can deliver those fintech experiences within the banking context, within the banking app.
But there is another angle to this. The bank does not have to be in front of the customer for many services. For instance, the customer wants to be able to access a loan. But that doesn’t have to happen in the banking channel. Enabling fintechs to use banking products and to innovate around them is also important. Although not a bank, the Polish Credit Bureau, which enabled collaboration with fintechs by providing their data for APIs, illustrates the point. Fintechs can use this data and, instead of the Credit Bureau building new views on the customer, new models, they enable fintechs to
TFM: What are the dangers for banks that delay modernising their core systems?
JZ: When banks delay, they’re increasing business risk, especially when competing against agile fintechs. There are not only the risks around efficiency and cost – dealing with and maintaining those old tech stacks is very expensive. There is also the huge knowledge gap around core systems created when expert employees retire, which they are now doing.
Another risk is related to innovation. Traditional banks face a lot of innovation roadblocks. An average fintech rolls out, on average, 20 to 30 releases or features per year. Traditional banks are barely maintaining the minor upgrades for their tech stack. This inability to be flexible, and to create new features and products, means they can’t keep up with the market.
Cloud-native systems gives them this agility – the ability to create different products, very quickly and gives them time to market.
It’s a bank,
BUUT different
Launching in 2025, BUUT claims to be the ‘first bank developed entirely around the world as young people experience it’.
BUUT uses Mambu’s underlying technology to integrate ABM Amro’s super-successful Tikkie payments platform with AI-powered tools for simplified budgeting and with the parent bank’s full banking services.
ABM Amro says BUUT is a response to the confusion of payment choice available to young people. A 2024 Nibud study found that 60 per cent of young Dutch adults can’t track their spending due to multiple apps, cards, and digital wallets.
At the same time, BUUT recognises that they handle their money differently to previous generations. By adopting an Insta-like interface and solving Gen Z’s financial pain points it aims to disrupt the disrupters and capture this emerging cohort of customers before the neos do.
The performance issues are where the agility issues are. So, you need to focus on the core, otherwise you can do only so much around it in terms of modernising the middleware and front-end channels.
The heavy lifting has been done. Now the moment of truth.
SEPA Instant Credit Transfer is about to go live. What will be the reality for banks and their corporate clients?
When visitors go back to their banks from Sibos, they’ll walk into a new, always-on world of instant payments in Europe. They can rightly congratulate themselves on having got everything in place in time – the heavy lifting has been significant.
But it’s not until Europe pulls that big switch on SEPA Instant Credit Transfer on October 9 that we’ll see the true impact on liquidity and treasury teams.
From that date, all banks are mandated to both issue and receive instant payments. But is it a catalyst for a revolution or an evolution? Specifically, are corporates ready to take advantage of the opportunities that instant payment transfers bring?
We asked Chris Jameson and David Voss of Bank of America’s Global Payments Solutions (GPS) team in EMEA to give their insights into what SEPA Instant payments means for their corporate clients who are dealing both inside and with the European bloc.
THE BACKGROUND
For Jameson, Head of Product Management for GPS EMEA, the October deadline marks a ‘hugely important development’ for the banking industry that creates ‘an important change for us and our clients’.
“What we and corporates need are resilience, convenience and security, and the SEPA Instant infrastructure provides all of these things,” he says.
Chris Jameson,
Head of Product Management
for
Global
Payments Solutions EMEA at Bank of America
David Voss, Head of Payments and Receivables for Global Payments Solutions EMEA at Bank of America
“Up until now, we’ve seen instant payments used in sectors such as ecommerce, where there’s a retail element to the payment flow. Now, we’re going to see that open up to other sectors, with SEPA Instant becoming more mainstream.”
Voss, Head of Payments and Receivables for GPS EMEA, adds: “What the regulation essentially does is make SEPA Instant payments just as accessible as SEPA Credit Transfers. It’s put them on equal terms with classical payment methods.
“While we may not see an overnight avalanche [in increased usage of instant payments], clearly, for the industry, it’s a very important milestone, and we see it as a potential inflection point for instant payments to grow.
“It’s a call to action for corporate treasuries to think about what an increase in volume of instant payments means for them. From a treasurer’s perspective, we need to be prepared for scenarios that didn’t exist before.”
CORPORATE TREASURIES
With the emergence of national real-time payment systems in the EU, starting with the UK in 2008, the European Payments Council developed SEPA Instant to facilitate flows across the economic area.
It was launched in November 2017 but was only available to businesses and consumers whose banks chose to support it – many charged a premium for using it, and some subsequently withdrew. Mandating instant capability, charged at the same price as credit transfers, breathes new life into the framework.
October’s deadline for all EU banks and payment service providers to be able to send instant payments follows January’s deadline for them all to be set up to receive payments. At the start of 2025, the proportion of credit transfers made via instant payments
in the EU was below 20 per cent – so the potential for growth is huge. But a key implication is the need for banks to have an increased liquidity buffer to cope with money being withdrawn from accounts outside traditional office hours. Conversely, businesses can take advantage of faster money flows that arrive around the clock.
Voss says new payment scenarios include ‘large volumes of instant payments that are coming in out-of-hours – it could be receiving payments in patterns that they’re not typically used to seeing, in terms of liquidity, and that may require them to be more flexible to have different approaches to pooling and payments’.
He adds: “In a digital world, speed is key to our clients, their users and end-users. There is an opportunity now for corporates to differentiate themselves by using speed of payment as a way of more actively managing their liquidity line, and, ultimately, building new kinds of client experience.
“So, we think this is potentially a big change for corporates over time, and one that our corporates will need to look at from both a technology and staffing perspective.”
Jameson says new instant payment use-cases could include wage payments to staff or the settlement of invoices between businesses.
But just because payments can be made at any time, he doesn’t believe firms will necessarily switch overnight.
“Despite us being really bullish about instant payments and SEPA Instant, at the outset, many of our clients will continue to be focussed on ‘on time’,” he says. “Based on their own infrastructure and payments landscape, the clients they have and counterparties they need to pay, they’ll be considering what’s best for them.
“Many large companies have run their treasury organisations in a certain way for many years. They will be
INSTANT CONNECTION
using batch processing structures, and using instant payments would be a material shift from a process and technology perspective for many corporates.
“Some of the newer companies that have grown in the last 10 years will be digitally native, API native and will be ready to move quickly, and some are already using SEPA Instant, for example, with us, via API.
“But, for other companies, this will require a lot of effort. They will need to evaluate their current processes and infrastructure and consider whether the benefits outweigh the costs of making a change.
“Some will want to move to instant collections. From a working capital perspective, that definitely makes sense. Corporates could collect money faster and perhaps pay money slightly later, so that could be a first step, and it’ll be a gradual process for clients to move along that continuum.
“When you start to make payments 24/7, your treasury team and your accounts payable
teams may also need to align their availability accordingly. How do you build out the talent within your corporate treasury organisation that can facilitate that across time zones and 24/7? There’s a lot for clients to think about.”
Jameson also points out that the data richness offered by SEPA Instant will allow for more automation of reconciliation processes, and thereby reduce administrative costs. It could even result in lower prices all round – for both SEPA Credit Transfer payments, which typically clear in one day, and SEPA Instant payments, which cannot cost more than its slower cousin under the regulation.
“A treasury team may be able to leverage SEPA Instant to solve a new challenge or opportunity within their business, and doing that would help them justify the technology
From a treasurers’ perspective, we need to be prepared for scenarios that didn’t exist before David Voss
build and dip their toe in the water from a SEPA Instant perspective,” he suggests. “Then, if there is an opportunity for them to shift some of the core SEPA Credit Transfer activity and move that across, that will come over time.”
Regarding use cases that suit SEPA Instant payments in the near term, Voss and Jameson can draw on what they’ve witnessed in other regions when instant payment systems were rolled out.
Jameson suggests insurers could use it to forward cash to policyholders in the process of making a claim – for example, someone with injuries who needs to pay for care in a foreign hospital. Likewise, emergency payments of social security benefits is another ideal candidate for SEPA Instant.
Voss adds: “Logistics, cash-on-delivery and anything that’s related to movement of goods is a key place to look at. If you l ook at the finance area, beyond insurance, things like high-value deposits, auto deposits, mortgage deposits. These kinds of use-cases come into play as well.”
A point of inflection: SEPA Instant Credit Transfer is a game-changer
CONNECTION
FRAUD AND LIABILITY
Under the EU Instant Payments Regulation, a SEPA Instant payment must be received, with funds available to the payee and confirmation sent to the payer’s payment service provider, within 10 seconds.
In an effort to mitigate against criminal activity, from the October 9 deadline, EU banks must screen all customers daily against EU sanctions lists. Banks are managing potential fraud threats with a range of screening systems to flag problems and reduce volumes of false positives.
Payment service providers must also facilitate SEPA Instant’s Verification of Payee feature from October 9 [see also CBI’s Name Check tool, page 16], which cross-checks the payee’s account name and IBAN. If they don’t match, the payer is alerted.
focus on fraud risk. That was certainly seen in Brazil with Pix.”
Instances of ‘lightning kidnappings’, where people were forced, often at gunpoint, to initiate a Pix transfer, soared in Brazil within a year of the payment system’s introduction, and the government was forced to take measures to limit its use.
Real-time payments mean the money goes out of the door in real-time, and that equates to real-time fraud, too.
“In the UK, a 50-50 liability split [between the respective payment service providers involved in an authorised push payment fraud] was brought into play.
“There was a high [liability value] cap, which ultimately came down because that would have been extremely restrictive for some smaller PSPs to operate in the market – the
parties outside the SEPA zone via its One Leg Out Credit (OCT) Instant scheme, which can allow payments from across the globe to arrive in participating EU bank accounts in seconds, 24/7, via an entry-payment service provider within the SEPA zone.
Voss says: “There are clear opportunities for cross-border real-time payments to really take off. That is something that many of us in the industry have been working on for many years, and for which there is a lot of client demand.
“They are looking to manage their liquidity position for all of their trade, including complex supply chains, so this becomes something that is really high value.
“As the SEPA scheme goes live and matures, we have to think how we can help move money cross-border in a real-time fashion. As a global bank that has witnessed and participated in many of these schemes in other parts of the world, we realise there remain challenges, but we’re already seeing good examples of collaborations, whether that’s between India and Singapore, or in the Middle East, based on ISO 20022 or other standardisation.
“There are also other initiatives, from Swift, or, in the SEPA space, there’s the OCT Instant initiative, largely used at the moment by banks in Spain and Andorra, but there’s an ongoing consultation about potentially expanding that.”
For Jameson, the fact that SEPA Instant payments feature ISO 20022 messaging standards gives him hope that global connectivity isn’t too far away.
It's a small world: Will regulation see global instant payments become the norm rather than the exception?
Ultimately, much of the responsibility to minimise fraud is carried by payment service providers. But once money is transferred to a payee’s account, it’s gone, and consumers and businesses don’t have the consumer protections offered by a credit card payment, for example.
While Jameson and Voss believe Verification of Payee will go a long way to boost confidence in SEPA Instant payments, they say more will continue to be done at an industry level.
“As a global bank, we’ve benefited from insights from other parts of the world.” says Jameson. “So, if you think about Brazil and its Pix infrastructure, or India with UPI, where some of these payment systems have grown rapidly, there’s been an increased
liabilities would have been so significant for any payment that they initiated.
“For the EU, Verification of Payee is really being pushed as the main protection tool as we go into the real-time payments era. But I do think there’s more work needed around that liability piece.”
GLOBAL INSTANT PAYMENTS
After decades of navigating labyrinthine global payment systems, the holy grail for instant payments is surely integration that allows money to flow in real-time between continents.
The latest milestone for SEPA Instant Credit Transfer mandates access to the system for all EU bank customers. But more than that, the European Payment Council provides access for
The huge body of work the industry has done around ISO 20022 will be a core foundation to build on for that interoperability we’re all looking for Chris Jameson
He says: “The huge body of work the industry has done around ISO 20022 will be a really firm foundation. It won’t be a silver bullet that ties all of these infrastructures together, but it’s certainly a core foundation to build on for that interoperability that we’re all looking for.
“From an interoperability perspective, the ISO layer underneath SEPA Instant will be a major facilitator. And all of this is tied into what the G20 was trying to achieve by 2027 in terms of faster, cheaper, more resilient cross-border payments which will come about by tying these real-time payment schemes together.”
Leaning into lend ing
Open
TSB
banking and AI
have contributed to a turnaround in UK bank
’s lending procedures. It empowers customers with detailed information about their financial circumstances and provides the bank with more accurate risk ratings
“Data, data, data” – that’s the mantra of Delphine Emenyonu, who heads up Unsecured Lending and Open Banking at UK retail bank TSB. And its use at an increasingly granular level is at the very heart of the bank’s drive to better serve and grow its more than five-million-strong customer base, particularly when it comes to fair and affordable lending decisions.
That has meant leveraging open banking and AI together – a powerful combination that has not only resulted in creating safer, more personalised borrowing for its customers but also substantially reduced the number of missed payments they make.
Through real-time analysis, Open Banking enables much more precise income and expenditure assessments.
Emenyonu says: “With a click of a button, we give customers clear visibility of their expenditures, so they can really understand what they can afford. With all that data, we can then guide our customers – maybe in how they can potentially reduce expenditure to enable them to pay for what they need. That’s the first element.
“The second is income verification. Gone are the days when you had a job for life. Customers move jobs all the time now, and, in the gig economy, people’s incomes change, month to
Delphine Emenyonu, Head of Unsecured Lending and Open Banking at TSB Bank
month. While the average consumer might not understand how much they really earn, by leveraging open banking, we’re now able to categorise all that income information and give it back to them, to help them make more informed decisions.”
Keeping the customer in the loop and ensuring they are provided with easy-to-understand personal financial information is not only important at a societal level (up to seven million people in the UK are deemed to be at risk of financial exclusion due to limitations in the information used by providers that make key decisions that shape their lives), but it can also help banks stay within the UK’s Consumer Duty law and not fall foul of irresponsible lending regulations.
Now, more than two years into a tech-enabled project to bring Open Banking, personalisation and data-driven financial marketing to life – with a mission to create money confidence for its customers – the bank’s digital strategic reset is starting to bear fruit.
Open and insightful
By 2024, it had the data to be able to reach out to more than 120,000 customers who were at heightened risk of falling into financial difficulty, to offer extra support and help them to avoid personal financial harm.
A step in the right direction: TSB is using data to help customers better manage their finances
Its own probe into overdrafts identified a set of customers who did not have direct debits set up, affecting their credit score when they failed to pay on time. It resulted in a significant uplift in payments in the first week after the bank sent personalised messages to those affected.
Things are undoubtedly tough for many consumers. Millions continue to experience their own cost of living crisis, which was starkly highlighted in a 2024 survey by the Civil Justice Council that found about 28 per cent of adults were not coping financially. It’s an area where Emenyonu passionately believes TSB can help its customers through the use of open banking and AI.
“The current lending stack is very much based on bureau data,” says Emenyonu. “But the reality here is that there is a lag within that data. If you, for example, change your job in February, then you apply for a lending product in March, the information that the bureaus have is based on the information they had as of January.
By leveraging open banking we’re now able to categorise all that income information and give it back to customers, so they can make more informed decisions
“The beauty of Open Banking is that if you apply for a loan and say ‘my new salary is £50,000’, we can see that has come into your bank account to support with a lending decision. So I do think that open finance is going to play a great role in terms of improving financial inclusion as well.”
When it comes to repaying loans, specifically business loans for those who took advantage of the 2020 Bounce Back Loan (BBL) scheme, TSB has an ongoing relationship with Flexys, which provides collection management technology, based on real-time insights provided by open banking. TSB is using it to help customers manage their BBL repayments and Pay As You Grow options.
And, as financial literacy has a direct impact on how well customers handle their money, TSB also runs a schools education programme for pupils aged from 13 to 18. The programme encourages students to complete short learning modules to boost money confidence.
“It’s focussed on supporting them in reducing financial anxiety, but also really improving the understanding of finance,” says Emenyonu.
TSB is working hard to help its older customers overcome the barriers they face in an ever-changing digital world, too.
“I see TSB as a digital bank with a human touch,” says Emenyonu. “We are very fortunate in that our brilliant team of Money Confidence Experts is available in our branch network, as well as on the phone, on video call and online – meaning all our customers, including older customers, can access the support they need from a person. Having that human interaction does make a difference.”
The continuing development and increasing use of digital wallets – UK consumers are now the third heaviest users in Europe behind Denmark and Norway – is a key part of TSB’s tech drive.
“From an industry perspective, I think the UK is moving towards what I consider to be a smart-wallet-first society where payment is instant, intelligent and identity-based,” Emenyonu says. “Our role is to enable that ecosystem safely for customers who wish to use it, but at the same time, anchor it to ensure money flows securely and inclusively. It’s not just about payments, but also working with customers in terms of identifying the value that wallets have.”
Rewriting therules
Eastnets’ Hazem Mulhim and Daoud Abdel Hadi on why they’re convinced AI is the enabler for effective compliance and enhanced fraud prevention
“The fight against financial crime is no longer just a regulatory obligation; it is central to preserving trust in the financial system. As criminals adopt advanced technologies, banks and regulators must move just as fast, if not faster. At Eastnets, we believe artificial intelligence is not simply another tool, but a turning point: it enables compliance teams to move from chasing alerts to preventing crime before it happens. This is why AI must be embedded at the heart of the compliance model, explainable, scalable, and always aligned with global regulatory expectations.”
Hazem Mulhim, CEO, Eastnets
Our CEO is right. Financial crime is evolving at a rapid pace, and we’re seeing an explosion in sophisticated new fraud tactics.
According to a 2024 Regula survey, nearly half (49 per cent) of businesses worldwide reported experiencing deepfake or AI-related scams, which resulted in losses per company reaching $600,000.
The creation of synthetic identities, cross-border mule networks co-ordinated via the dark web, and the use of privacy coins and decentralised mixers in crypto laundering are all on the rise. For banks and institutions, tackling these tactics is one thing, but they must do it against an increasingly complex regulatory environment. It requires a new approach to both fraud and compliance – one that goes beyond the traditional models in use today.
Legacy systems rely on fixed rules that often lack the nuance to distinguish between suspicious and benign activity, leading to high false positive rates, operational inefficiencies, overwhelmed compliance teams, and ballooning compliance costs. More critically, these rigid systems also divert attention away from complex, high-risk cases that demand deeper investigation.
The result is a compliance model that’s reactive, inefficient, and increasingly unsustainable. And this is where artificial intelligence (AI) comes in. It’s revolutionising how banks and financial institutions meet today’s challenges, not by replacing human judgment, but by enhancing it.
AI offers a smarter, more scalable alternative. By learning from vast historical datasets, AI models can identify patterns of both legitimate and illicit behaviour across thousands of variables – something static rules simply can’t do.
Automated systems can detect subtle anomalies and evolving fraud tactics, and prioritise high-risk alerts with greater precision, reducing false positives and operational overhead. AI not only increases the accuracy of alerts but also enables compliance teams to focus on what matters most: investigating genuinely suspicious activity and staying ahead of emerging threats.
And, of course, AI can continuously adapt with new data, which is vital in an evolving ecosystem with ever-more sophisticated scammers and fraudsters.
If you want to move compliance and fraud detection from a reactive burden
Hazem
Mulhim, Chief Executive Officer at Eastnets
Daoud
Abdel Hadi, Data Science Lead at Eastnets
to a proactive intelligence-driven function, AI is now a must-have.
Making the change
But the transition to AI can seem daunting for banks and institutions. That’s why we, as a global provider of financial crime compliance and payment solutions, implement AI using a three-step phased approach, enhancing what institutions already use and gradually building trust rather than a one-and-done switch-over from legacy systems.
First, using an institution’s existing transaction data, we insert our Calibration Module, which works on refining the existing rule thresholds. It does this by simulating various rule settings and scenarios before recommending the optimal thresholds to use, each tailored to specific customer segments.
There is no one-size-fits-all approach to this, and by segmenting clients into more homogeneous groups, banks and institutions can significantly reduce false positives.
Next, with an optimised rule system in place, we deploy AIDa (AI Detection Advisor), a machine learning engine that predicts which alerts are likely to be false positives. AIDa is able to do this by analysing and learning from past alert outcomes, intelligently suppressing low-value alerts and sharpening its focus on truly risky transactions.
With a strong AI foundation now established, we introduce an advanced deep learning model that is able to identify when an entity’s actions
diverge from historical patterns, flag when a client behaves significantly differently from others in their segment, and map suspicious clusters and relationships within financial networks.
These insights provide compliance teams with much richer, smarter and more informed views of risk, empowering them to spot sophisticated laundering schemes and hidden financial crime networks. A human member of the compliance team can then investigate further, knowing that the due diligence has been completed beforehand.
Boxing clever
In a regulated industry, black-box solutions won’t suffice. In accordance with the EU AI Act, any AI system used in credit scoring and fraud detection is subject to stringent requirements. And this is why our suite of AI solutions offers, as standard, everything needed to be explainable and auditable.
We embed explainability into every single AI-generated alert, offering clear, plain-language justifications and visual tools, like link analysis and behaviour charts. Before deployment, we provide comprehensive documentation, outlining the model’s design, methodology and intended use.
During an in-depth, pre-deployment analysis phase, our data scientists run simulations using the bank’s historical data, fine-tuning the model to align with the institution’s specific risk profile and operational realities.
This process ensures the bank has a clear, upfront understanding of how the model will perform in day-to-day scenarios, fostering trust and accountability from day one.
Predicting the future
As AI capabilities continue to evolve, the next major leap lies in agentic AI; intelligent systems that are capable of acting as digital compliance assistants and operate beyond simple question-answering.
They can ingest multiple large data sources and use third-party applications to independently answer your queries, analysing challenges, developing strategies and executing tasks.
Imagine an AI agent being alerted by the transaction monitoring system after a particular entity is flagged. Instantly, it initiates a comprehensive investigation, gathering and synthesising data from both internal and external sources. Within moments, it produces concise, coherent, and actionable insights, enabling
the investigator to make a well-informed decision about whether the entity’s activity is genuinely suspicious.
And it doesn’t stop at surface-level checks. The agent can autonomously review the outputs of related rules and models, analyse historical alerts, and assess transaction patterns over time. Simultaneously, it scours external data sources such as news articles or public databases to uncover any additional context that could inform the case.
The result is a thorough, context-rich narrative that brings clarity to even the most complex scenarios, saving valuable time and effort for human investigators. When it’s time to file a suspicious activity report (SAR), that too can be just a click away. The agent can generate a detailed and well-structured write-up, incorporating all relevant findings and insights, streamlining the reporting process while enhancing its quality and completeness. All from a single user query.
Agentic AI will free up human officers, allowing them to transition into strategic oversight roles. They can then use their expertise for high-value decision-making rather than time-consuming reviews. It promises to revolutionise the world of compliance, allowing banks and institutions to work with speed, precision and scalability.
AI promises to revolutionise the world of
compliance, allowing banks and institutions to work with newfound speed, precision and scalability
And Agentic AI is closer to reality than many think – we’ve already embedded large language models (LLMs) into key compliance workflows, enhancing sanction screening and detecting trade-based money laundering risks such as
over- and under-invoicing. For example, we’ve built a lightweight AI agent that’s capable of browsing the web to validate the market pricing of goods and services, an early demonstration of autonomous, real-world decision support.
But this is just the beginning. By the end of 2025, we will launch a fully capable agentic AI copilot designed to support investigators across sanction screening, AML, and KYC.
This next-generation assistant will allow compliance teams to interact with the AI through natural language, enabling it to retrieve relevant data, summarise alert histories, and provide contextual insights to support human decision-making.
And we’re actively developing the core agent framework, validating use cases with clients, and conducting rigorous evaluations on real-world data. Our focus is on delivering transparent, explainable, and regulation-ready agentic AI that works seamlessly within existing compliance ecosystems.
Financial crime and regulatory complexity mean that banks and institutions can no longer stay static; they have to move with the times. Compliance doesn’t have to be a burden. With the right AI strategy, it truly becomes a strategic advantage.
“What gives me confidence is that this is not a distant future; it is happening now. Institutions that embrace AI today will not only cut costs and reduce risk, they will also gain a strategic advantage in speed, precision, and resilience. At Eastnets, we are committed to ensuring that this transformation is safe, transparent, and built on trust. Compliance is evolving from a burden into a source of competitive strength. And AI is the catalyst.”
Hazem Mulhim,
CEO, Eastnets
Special agents: By transforming legacy systems, agentic AI can help banks stay ahead of fraudsters
When Akber Jaffer took over as CEO of data solutions provider Smartstream in 2023, its reputation as a global financial technology giant among more than 2,000 clients – including the majority of Tier 1 institutions – was already firmly cemented. Understandable, therefore, that the new boss wouldn’t rush to shake things up. Instead, he invested time listening to colleagues, clients, and the market, before starting to chart a bold new strategic course for delivering automation and operational excellence with AI at its core. And he is signalling that intent through a rebrand designed to reflect both Smartstream’s evolution into a more agile, AI-driven partner to its existing financial services clients while raising its profile in other data-driven industries and markets.
There’s a change to the Smartstream domain, refreshed messaging, a new website and a product naming strategy whereby each solution now carries the ‘Smart’ prefix.
We asked Jaffer to talk us through the rationale behind the new visual
identity, with its interlocking links representing an industry shift from the transactional provision of software-as-a-service (SaaS) bolt-ons to relationship-based interconnectivity, and his broader vision for Smartstream as he takes it into a new era.
THE FINTECH MAGAZINE: Tell us about the journey that’s brought you to this rebrand, and what it means for Smartstream’s strategic direction.
AKBER JAFFER: Smartstream is widely recognised as a mission-critical part of our clients’ business operations, unlocking insights from very complex data for them. We wanted to reflect the value we were providing with the right narrative.
The rebrand has been about making sure there’s a clear articulation and understanding of our business, what we stand for, the value we deliver, how we should be perceived and the kind of relationship we want to have with our clients and the relationship they want to have with us.
Akber Jaffer,
Chief Executive Officer at Smartstream
I’ve been CEO for just under two years now, so this change isn’t something that happened straightaway. It’s been percolating in the background and resulted from having conversations internally and talking to customers about the core value of what Smartstream provides. We consulted internally, too, to make sure all views were reflected, which is why it took a little time to complete – and our people feel really good about it. So, the end result you see is a reflection from multiple stakeholders, including our own folks.
It’s also important to recognise we come from a place of having done some really great work with great brands – particularly in the capital markets, financial services and investment management space, both buy side and sell side – as well as on a broader basis with insurance and other corporates.
TFM: So, you’ve obviously taken the time to really understand not just Smartstream but its stakeholders, too. How
Smarter Decisions. Stronger Operations.
Rebranding is tricky for a company as established and respected as Smartstream. But with AI broadening the customer base and transforming its relationships with existing clients, CEO Akber Jaffer has decided it’s time for change
has that period of reflection impacted on your view of future priorities?
AJ: There are shifts going on in the market, in terms of how insights are garnered from data, and we’re seeing a marrying of human intelligence with artificial intelligence (AI). As consumers, we can see the real value of that and, increasingly, business is acknowledging it, too.
That’s certainly the focus of the technology evolution as it stands today. There’s real opportunity for connected, frictionless enterprises where data is connected, clean and capable of being used to not only improve operations, but also decrease costs, get more efficient, move people to higher-value activities and generate more revenue.
This is potentially empowering for Smartstream as we already have real credibility in this space, and we also see the next technology evolution that’s coming as a massive opportunity for our clients and, therefore, for us.
So, we wanted to make sure we made the adjustments in our business strategy and investments to reflect that narrative and then work back from that.
We launched AI Reconciliations, our SaaS product, and major features of that in the middle of last year and it’s really resonating in the market. That’s not the only thing we do – we have a number of services and product offerings – but, ultimately, what ties it all together is fusing that human intelligence with our AI to maximise value for our customers.
TFM: How would you summarise the message behind the new logo and how will you reflect that in tangible activities and in which regions?
AJ: One of the messages we’re trying to get across is how we’re helping our enterprises connect the dots, part of which is taking disparate data, connecting it and providing insight and intelligence from that. We’re investing a lot in research and development to support our proposition.
Another shift is anchoring everything in customer success and what I call postcustomer success, because we’re seeing our relationship with them evolve.
Where, historically, people used to have solution sets, and enterprises would procure them, now enterprises subscribe to them, which is a commercial model as well as a usage model.
Our very high customer retention rates show we’re delivering for them, but we want to ensure that continues.
For example, North America is obviously a very large market, but I don’t think we were set up perfectly to capture that, so we’ve really re-energised and reformatted the way we look at North America.
We’re investing significantly to maintain the spirit of our business globally by ensuring the solutions customers take from us are continually delivering value for them.
Then, we continue to invest in our existing products – not just in things like Smartstream Air, but others, too, to make sure they’re using the latest technologies, which ensures our clients are able to scale with their customers much more easily, with much more agility and ability to adapt and change.
TFM: New logos can be really powerful in driving growth for companies when they’re correctly aligned to business strategy, Amazon’s ‘smiley arrow’ launch in 2000 being a great example. How does your new logo change or reflect your ambitions?
AJ: It reflects that enormous opportunity I’m talking about. Historically, we’ve really focussed on capital markets and financial services, but we also see wider opportunity in other segments facing the same issues, and our solutions can be applied to those as well.
The rebrand has been about making sure there’s a clear articulation of what we stand for, the value we deliver, and the kind of relationship we want to have with our clients
Our history means we are very referenceable with key brands in the market and the changes we’re making to support the rebrand in terms of geography, technology, product and how we talk about ourselves – form the pillars which will ensure we can really capitalise on that opportunity going forward.
TFM: Two years into the job, are there things you’ve discovered from the various consultations you’ve done that have blown your expectations out of the water?
AJ: Before I joined as CEO, obviously I checked around to see how the business was perceived and, I have to say, Smartstream had a really good reputation in the market – customers would say things like ‘these guys really
understand their business and are able to deliver value for us’.
What constantly amazes me is the deep subject matter expertise we have in the business, because, ultimately, good customer service, customer success and technology improvements come down to having people in the organisation that really understand – that’s what shifts the needle. Also, my management team are deep thinkers and doers, in terms of how we can constantly enhance customer value.
We’re not a new kid on the block, we’ve been serving customers for a long time, which is a testament to our investments in continuous improvement. Years ago, we established a data science, machine learning and innovation lab in Austria, and we’re still making such investments today, which continue to pay dividends.
TFM: AI is the buzz phrase of the moment, with a perception that you sprinkle a bit of AI on something and it turns to gold. Looking at some of your tangible improvements in product delivery, experience and execution, how is this embracing of AI, by individuals and businesses, impacting how you bring products to market?
AJ: There are two aspects to this, and the first relates to how we operate the business. There are technologies and applications we use that provide what I call productivity boosts for our people, so that they can get more things done, to a higher quality, at a faster pace.
But maintaining our customer focus also ensures we focus this on providing a better service with much more specific responses, and we’ve seen good use cases for that.
For customers, we’ve been producing new capabilities within our technology and services that leverage machine learning and AI, and we continue to see customer take-up for these. Now, they do have challenges in terms of ensuring they have all the components to get maximum productivity from these tools, like making sure their data sets are centralised and clean, but they’re gradually overcoming those and we really are seeing some good use cases and feedback.
We’ll see what the next phase of evolution brings for these technologies, but we believe it’s combining our exceptional human expertise with artificial intelligence in our tools, products and services that will ensure we continue to deliver for this and future generations of clients.
INNOVATIONBANKING
Raising the phoenix
Two years on from Silicon Valley Bank UK’s assimilation into HSBC, Ad van der Poel, Chief Commercial Officer at HSBC Innovation Banking UK, shares its journey to becoming the go-to bank for the nation’s tech ecosystem
Founded in California in 1983, Silicon Valley Bank Financial Group became the financial partner of the innovation economy in the US. By 2022, it provided banking services to over half of the country’s venture-backed technology and life science startups, as well as their venture capital and private equity investors – a sector considered too high risk by many traditional banks.
The same year, its UK branch, which had been operating since 2012, became a wholly owned subsidiary, such was its success in providing a crucial banking infrastructure to startups who struggled to open accounts with high street banks, typically due to their high cash burn profile and lack of historic accounts.
That desperate need for specialist banking services to serve the UK’s tech entrepreneurs didn’t disappear when the financial dominoes began falling spectacularly in March 2023.
The potential impact of the now well-documented collapse of Silicon Valley Bank on its UK subsidiary was starkly illustrated by a lightning survey conducted by the UK Business Angels Association when the bank here began
Ad
van der
Poel, Chief Commercial Officer at HSBC Innovation Banking UK
to teeter. The survey, which informed crucial rescue decisions over one very tense weekend, revealed that 61 per cent of UK startups banking with SVB UK didn’t have access to other banking facilities at the time.
Despite the rise of challenger banks, it was obvious that SVB UK was at the heart of an interconnected funding system with a highly concentrated customer base of investors and innovators. As such, it was systemically important to the UK tech economy and couldn’t be cut adrift.
The UK tech ecosystem held its breath while officials worked with regulators to facilitate a transfer of SVB UK to a private buyer by market open at 7am on Monday, March 13. That buyer was HSBC.
One hundred days later, HSBC Innovation Banking came to life as a new brand – a phoenix from the ashes. It continues to serve a concentrated customer base in life sciences and healthcare, as well as in high-growth technology sectors such as fintech, enterprise software, climate tech, consumer tech and frontier tech, the last of which includes AI and quantum enterprise software.
HSBC Innovation Banking is part of HSBC Group, bringing together HSBC’s
worldwide reach and the strength of its balance sheet with the former SVB UK team’s unique understanding of the tech startup ecosystem.
Customer-first approach
The speed and intensity of the upheaval two years ago was undoubtedly painful for all concerned.
Ad van der Poel, now Chief Commercial Officer at HSBC Innovation Banking UK, had barely been in post six months at SVB UK when the unthinkable happened. But he says the existing team’s ‘long-standing relationships’ across the innovation ecosystem – from clients, to partners and influencers –helped everyone navigate the transition together, including a migration to a different online banking environment and internal systems.
These close-knit relationships and additional resources have enabled HSBC Innovation Banking to take an agile approach that’s closer to its startup clients’ mindset than that of the legacy bank behind it. The strategy was to literally build a bank around them.
“As you can imagine, our clients are slightly different from the normal HSBC clients, so we had to focus on the customer experience and the customer journeys,” explains Van der Poel.
This customer-first mindset leads every decision – from product development to marketing. Even the organisational structure reflects that – both of those disciplines, for example, are combined into one team to more effectively translate client insights into tools.
These learnings also influence ‘how we market – and how we go to market’, notes Van der Poel.
Leaning into open banking
The SVB experience, perhaps inevitably, prompted startup and investor clients to reconsider their approach to banking and risk.
Van der Poel observes they are increasingly taking a more prudent approach by using multiple banks for their services, which is made easier now by APIs and open banking. HSBC Innovation Banking is leaning into that. By leveraging HSBC’s open banking architecture and, more specifically, a mature set of treasury APIs, HSBC Innovation Banking has access to greater capabilities and a more ‘robust proposition’ than SVB UK ever had.
That means HSBC Innovation Banking can not only provide a seamless experience for clients who are operating across multiple bank accounts, but it can also fine-tune each customer’s journey as their business grows, and give potential investors a window into an investee’s financial position.
“For investors, HSBC Innovation Banking offers innovative banking solutions, leveraging APIs and connecting fund managers to a virtual account system, giving them direct, near-real time insights into a company’s payment flows and providing increased control and visibility,” says Van der Poel. “These insights are aided by
their portfolio companies also banking with HSBC Innovation Banking.”
HSBC Innovation Banking continues to support businesses at the start of their journey with basic banking services, such as payments and credit cards. However, as they raise capital and scale internationally, they develop more complex needs, such as cross-currency transactions and confirmation of payee in international payments. And, if you’re a startup in the fintech category, your demands are likely even more complex.
“Our fintech clients also use our APIs to offer propositions to their clients, and if they connect it to a virtual account platform, it almost creates a wallet-like situation,” says Van der Poel. “So there is ongoing development in that space, and it’s exciting to see where it’s going to take us.
“Previously, clients would maybe connect with the bank once a day or once a week, but now it’s every 15 or 30 seconds. The more usage, the better, really. That shows the success of the APIs.”
February 2025 warned that the UK risks becoming an ‘incubator economy if we don’t take action to support our tech companies to scale up’.
HSBC Innovation Banking is demonstrating its commitment to that tech ecosystem with a flurry of activity, including £30million of debt financing to fintech ClearScore and £20million to healthtech Numan, as well as record onboarding of new clients.
Ecosystem impact
Two years since the fall of SVB, the fundraising environment has only become more difficult for investment hopefuls as investors’ risk appetite hardened in the wake of continued economic instability. Few investors today consider a startup to be investable without a proven concept, commercial traction or – in the case of later-stage companies – progress since their previous funding round.
The investment journey can be even more complex for life sciences and technology companies who require significant capital for R&D and face a long runway to revenue.
Van der Poel vows to continue to support these clients, developing increasingly fine-tuned customer journeys that help them ‘get the best out of innovative ideas’ and championing their success.
Just two years on from that fateful weekend in March, he is realistic about the progress
HSBC Innovation Banking offers innovative banking solutions, leveraging APIs and connecting fund managers to a virtual account system, giving them near real-time insights into a company’s payment flows
Supporting the UK funding landscape
While not an investor in startups, HSBC Innovation Banking offers a range of scalable lending solutions to help startups grow at every stage of the company life cycle. “From pre-seed all the way up to Series A, B, C, and potentially IPO and post-IPO when they become a corporate client,“ says Van der Poel.
This long-term support is a differentiated offer in an innovation ecosystem that has been criticised for adopting overly complex ‘piecemeal’ initiatives that fail to give scaleups a coherent pathway of financial support as they grow. In fact, a government report in
made and the hill that HSBC Innovation Banking still has to climb.
“We should not think that we are the core business of our clients: we are serving them to get the best out of their innovative ideas, but the bank will be more integrated into their core business. What success looks like is that our clients become bigger than us and are enormously successful themselves.
“We need to be the easiest bank for them to use, almost without them even realising that they use us,” he adds. “We have a long way to go, but I think we’ve come a long way.”
Taking the pain out of compliance
As the EU’s new AML package of reforms approaches, Sinpex is helping cure the headache that is KYB onboarding
When a leading German healthcare billing and software company requested KYB information from thousands of client pharmacies in the run-up to Christmas 2022, there was dismay among business owners.
In order to comply with Germany's Anti-Money Laundering Act, pharmacies would have to resubmit personal and business details, and declare if they were acting as a beneficial owner in their own name or if they were a politically exposed person.
Many of them had been using the company's billing services for years, but if they didn’t respond in a matter of a few short, festive-filled weeks, they risked having their accounts suspended.
As a financial entity, the company was legally required to gather the information in a tight timeframe, but the episode demonstrated how the end customer’s experience of KYB and AML compliance can negatively rebound on
Camillo Werdich, Founder and CEO at Sinpex
a provider. With the clock ticking on full implementation in 2027 of Europe’s new, far-reaching package of AML measures, many others will be wondering how to avoid a similar scenario.
The enterprise, which is well known for its forward-thinking approach to technology adoption, went on to partner with German regtech Sinpex on a re-KYB project to make the whole process easier and more timely for everyone concerned.
“We are an API-first architecture, so we easily integrate into any existing tools, like a core banking system or a CRM,” says Sinpex Founder and CEO Camillo Werdich. “We can adjust our standard product very easily to meet client-specific needs – adapt to their rules, their thresholds, or their processes, within our platform.”
Sinpex began building its AI capability five years ago, training it to extract targeted information from documents in real time, in multiple languages.
“We acquire documents from official primary data sources in every country and give the technical capabilities to our customers through an API so they can consume whatever they need,” explains Werdich. “By doing so, we are able to automate 80 per cent of the checks they need to run.
“We’re connected to services like politically exposed persons sanctions
lists, negative news data providers and identity verification providers, to build a full KYB profile. But our proprietary capabilities, like the ultimate beneficial owner analysis, are key to this exercise.”
Ready for regulation
Focussed principally on KYB compliance, Sinpex was born from Werdich’s experience of working on large-scale
bank KYC remediation projects for Deloitte. Having built his own algorithm to automate 60 per cent of the document handling he was required to do – and consistently reaching the top of his team’s leaderboard – he left the firm to develop the concept further.
Now, his former employer is one of Sinpex’s key partners – and it's rewriting the rulebook to help ensure Sinpex
users, wherever they are operating, comply with the latest local regulatory framework. And this summer, the two companies commissioned a joint pan-European survey to assess how well-prepared compliance teams are for the EU AML package of reforms coming down the track. This includes operational challenges and concerns, and the likely human and financial investment needed to meet the obligations by 2027.
Werdich describes today’s compliance environment in Europe as a ‘very intense time’. The new measures, which include a sixth AML directive, as well as a new AML Regulation and the establishment of an AML Authority to oversee and enforce the rules, is the first attempt to harmonise a fragmented compliance system that has failed to keep pace with financial crime.
The package brings risk-based supervision, enforcement and data-driven compliance together with stricter measures – such as requiring firms to verify UBOs independently, rather than relying on national registers – and enhanced transparency.
The transition is driving momentum for faster, more accurate and auditable compliance processes, says Werdich. And that demand no doubt played into an over-subscribed seed round last year for Sinpex, jointly led by Ace Ventures and TX Ventures, which raised €4million for the Munich-based startup.
You can easily get into a situation of over-compliance where you just do too much and lose business
It was the beginning of whirlwind 18 months during which Sinpex extended contracts and onboarded a clutch of major clients, including Raisin Bank, which selected Sinpex to solve the specific challenge of identifying UBOs as it scales its banking-as-a-service offer. The regtech also cemented partnerships with new third-party solutions providers, such as the identity verification specialist Fourthline.
And in June, it won the Startup Product Pitch at Money20/20 Europe, exposing it to a vast audience of potential financial services clients. Werdich says that has led to ‘a lot of interesting conversations’ with
companies where tension is growing between meeting regulatory targets and keeping genuine customers happy.
“How do you balance that tightrope of being super-secure, making sure you’re not breaking any regulations – ultimately ensuring money is being used for what people say it’s being used for – while also meeting the demand for simplicity and speed of onboarding?” says Werdich.
Speaking from his own experience, he’s sympathetic to the pressures that’s putting on compliance teams, too.
“Taking clear steps in order to be ready for an audit later on is very time-consuming. Checking documents is error-prone and expensive if you handle these things manually, and a lot of companies struggle with very fragmented data and inconsistent processes,” he says. “It’s boring and repetitive and not fun for anyone. More importantly, it doesn’t scale.
“For customers who operate across different jurisdictions, it becomes very complex and you can easily get into a situation of over-compliance where you just do too much and lose business,” he says, adding that the onboarding process can take weeks, if not months.
“Basically, compliance becomes a bottleneck for further growth.”
Which is why, he believes, firms that get it right enjoy a strategic advantage, reducing time to revenue by making compliance a built-in process that’s ‘seamless for both sides – the customer and the provider’.
Having rolled out to clients in Germany, France and the Netherlands, Sinpex is now looking to expand into the US and the Nordic countries – some of its seed investment was the first to be made by Ace Venture’s new Swiss Tech Outliers fund.
“We are also looking into more vertical-specific features,” says Werdich. “For segments like banks or factoring companies, we will certainly enhance our feature capabilities.”
The team is also developing an AI co-pilot program for analysts.
“We cannot automate everything, and we cannot take the ultimate decision for a customer,” says Werdich, “but we are able to give time back to the analysts to really focus on the edge cases where they need to make a judgment.”
DATA
Sharing is caring
Bank of Ireland’s payments data analytics team produces information that’s useful to the bank, its customers and the wider economy. But could it play an even more important role?
According to the Central Bank of Ireland, the epidemic of payment fraud spreading across mainland Europe, has reached Irish shores. Its Behind the Data paper, revealed fraudulent payments rose by 26 per cent to €126million in 2023 – the most recent year for which it has statistics. Online card payments made up 86 per cent of the total value of card fraud, totalling €37.4million, while the value of money remittance frauds more than tripled between 2022 and 2023 to reach €8.2million. The report also showed that about 60 per cent of the total fraud during 2022-2023 involved cross-border payments, amounting to €77million. Banks everywhere are under pressure to keep customers safe from criminals – but also from themselves. The same payments data analysis that can raise a red flag on suspicious transactions made with or without a customer’s knowledge, could also identify self-harming behaviours, such as
problem gambling. In both scenarios banks face legal, moral and commercial arguments around what to do with that information. And, in the case of fraud, that’s made even more complex by the fact that the regulations designed to keep customers safe prevent banks from sharing the very data that could stop bad actors. It’s a Catch-22 that technology providers, regulators and banks are trying urgently to address.
Jamie Renehan is head of the Behavioural Insights team for the high street Bank of Ireland. He’s acutely aware of how compliant payments data analysis by responsible organisations such as his own can deliver huge advantages for customers, the bank and wider society. But also of the inherent conflicts surrounding it – which can impact a bank’s technology choices.
“There are a lot of amazing tools out there that can increase the speed of analysis and personalisation of data.
Large language models, such as ChatGPT have incredible capability. But right now, is it safe to put our customers’ data through these models, albeit, they will provide rapid insight at scale?
“That’s the question holding many banks back,” he says. “That said, the same technology is available to those who want to take advantage of consumers, so there is an onus on financial institutions to try to use them to protect our customers.”
Renehan’s team provides higher-level strategic analysis to the bank. But, elsewhere, categorisation engines can
Jamie
Renehan, Head of the Behavioural Insights team at the Bank of Ireland
help colleagues communicate products and services to individual customers at key points in their lives. “They might be looking to buy that first home or getting engaged or starting their first job,” says Renehan. “Customers in those different categories have different financial needs as well.”
They are all benign events around which it’s possible to create greater engagement. There is one instance, though, in which Bank of Ireland uses customer data to stop that engagement – and that’s in relation to gambling. It’s worked with Visa and the new Gambling Regulatory Authority of Ireland to introduce a voluntary payment block on debit cards that can be applied across all betting, gaming and lottery sites licensed in the Republic. The bank’s own data for the first quarter of this year revealed that 90 per cent of bets took place online, with 99 per cent funded by debit cards.
Tackling financial fraud is a much bigger problem that unilateral action won’t solve. But there are winds of change in Europe, propelled by the latest Anti-Money Laundering Directive (AMLD6), which must be fully implemented by European institutions by 2027. It’s based on four central tenets: consistent application of AML rules across the EU; holding more individuals and entities accountable; incorporating emerging risks like cybercrime into the AML framework; and, crucially, facilitating better information sharing and collaboration between authorities.
The National Crime Agency (NCA), which is the UK’s lead agency against organised crime, has already announced a data sharing partnership with seven UK banks – Barclays, Lloyds, Metro Bank, NatWest, Santander, Starling Bank, and TSB. The project involves the banks voluntarily sharing customer and transactional data with the NCA, with the aim of tackling crime and preventing the flow of dirty money through the UK’s financial system. Initial results, announced in January 2025, revealed that eight new criminal networks have already been confirmed. A further three suspicious networks have been referred to the NCA’s intelligence division, while new leads have been uncovered related to 10 of the agency’s largest ongoing investigations.
Roseman Labs’ work is especially interesting, in relation to encouraging collaboration across the ecosystem to support the fight against financial crime. Indeed, the Central Bank of Ireland’s Deputy Governor, Derville Rowland, said in February of this year that: “The lack of an ability to share such information has long been pointed to as a real weak link in the system, which could allow someone who had an account closed by one bank on money laundering/terrorist financing grounds to seek to open an account in another.”
Roseman Labs has partnered with spotixx, a leading fintech in AI-powered financial crime detection, to develop Qorum. This encrypted computing platform allows financial institutions to jointly investigate suspicious activity while
In January 2025, the Central Bank of Ireland created its first regulatory sandbox on combating financial crime, with the stated aim of using ‘innovative technology, foster(ing) and develop(ing) innovative solutions that minimise fraud, enhance KYC/AML/CFT frameworks, and improve day-to-day transaction security for consumers’.
Thirty-eight applications were received to join the initial cohort, which were whittled down to seven startups, scaling firms, partnerships and established financial services organisations.
Among the participants, which all come at the problem from different fincrime and fraud vulnerability points, is AMLYZE, headquartered in Lithuania, which is building an AML/CFT information-sharing framework that uses structured taxonomies and synthetic data to simplify detecting and preventing fraudulent activities, and Roseman Labs, which is enabling secure, GDPR-compliant collaboration and analysis on sensitive data for regulated industries.
maintaining strict privacy safeguards.
For instance, Qorum facilitates banks in detecting whether a client flagged for suspicious activity at one institution is connected to alerts at others, whilst helping identify potential mule accounts early by checking if a new client has opened multiple accounts across institutions in a short time frame.
Renehan acknowledges that the industry is at something of a crossroads.
“Fraud and financial crime are increasing at pace, so we need a solution that uses the technology at our disposal, whilst ensuring it is a safe process. It certainly requires fresh thinking and collaboration within the industry,” he says.
Collaboration is key
The Bank of Ireland already partners with particular vendors and experts in the fincrime space that have capability and experience in other markets. Their input, says Renehan, helps ‘arm’ the bank when working to combat fraud.
“Technology partners and vendors bring a unique experience. It’s not just their product; they have relationships with a lot of the large banks across Europe and the world, and they understand the key things that banks are working on. They can, in a subtle way, translate a little bit. They can understand the problem you have, recognise that another financial institution in the UK market or in the US market, for example, has had a similar experience, and communicate that to us. This approach has worked well for our business.”
Renehan believes the wider financial environment could benefit from the same pooling of experience. Indeed, that will be encouraged by the Payment Services Regulation, which will be introduced as part of the PSD3 reforms next year. The Regulation allows payment service providers to exchange, on a voluntary basis, personal data of their users, such as unique identifiers of a payee. A similar arrangement already exists in the Netherlands, where five of the biggest banks set up a Transaction Monitoring Netherlands, an initiative to flag unusual patterns in payments traffic that individual banks cannot identify.
“Banks sharing information is not something that has been looked at en masse before,” says Renehan. “But for the greater good, it might just work.
Banks sharing information is not something that has been looked at en masse before. But for the greater good, it might just work
“The connectedness of banks across Europe could be a valuable asset for them to work together in combating crime because, individually, the technology stocks available to those in financial crime is immense, and they obviously don’t have to worry about not wanting to use a technology because of ethics.
“So we have to be really careful that the right tools are used, which are strong enough to combat that.
“The power of technology is there to serve our customers’ needs and wants, but to also protect them from those that wish to do them harm. Working together across institutions is a logical way to achieve that goal.”
The shared data conundrum:
The same customer information that’s shared inside one bank, could help prevent crime if accessible to others
Smashing it: Freemarket’s cross-border payment solution for high-risk entities frees up liquidity
CROSS-BORDERPAYMENTS
Game changer
No business wants to be sitting on cash that’s not working for it. But that’s precisely what many higher risk sectors are forced to do if they need to make cross-border payments. Freemarket has a solution to release that lazy liquidity
One event next year will be writ large in the calendars of payment services providers: May 26. That’s the day Rockstar Games releases Grand Theft Auto VI. Eleven years in the making, it’s widely predicted to become the biggest-selling video game of all time – just as its predecessor, Grand Theft Auto V, was in 2013, racking up $815.7million in sales in 24 hours.
But the way the successor phenomenon will be sold is different. The market has massively moved on from buying physical copies at stores to purchasing downloads, using digital payments. As millions of fans hunch over their consoles at zero hour, ready to pay and play, they’ll be expecting those payments to be executed in seconds.
The first spike in Grand Theft Auto VI transactions will arrive as fans grab the game
in story (single player) mode. That will likely be followed, a few ironed-out glitches later, by the multiplayer release, prompting another surge as competing gamers start exchanging real-world cash for Shark Cards loaded with Grand Theft dollars for making all those in-game microtransactions.
It’s not only the global payment service providers’ ability to handle the scale and speed of these transactions that will be put to the test, but also their ability to simultaneously comply with the raft of regulatory controls in different jurisdictions, which address concerns such as Consumer Protection, data privacy and financial crime.
Historically, fintechs, neobanks, gaming and igaming entities that want to avoid high-cost, slow and complex legacy systems for making these kinds of real-time cross-border payments, have used pre-funded
account models, holding cash in the country in which they are making the payouts.
But that traps liquidity, leading to a less-than-efficient use of funds which can, ultimately, impact major strategic decisions, such as around NPD or investment.
UK-based Freemarket, which specialises in global money movement for regulated businesses, sees that scenario play out all the time in what are regarded as high-risk industries. Navigating what it describes as the ‘fragmented’ traditional cross-border infrastructure is one of the biggest challenges faced by its clients.
“It wasn’t built for today’s globalised digital-first businesses,” says Andy Lyons, Freemarket’s Sales and Relationship Manager.
"Liquidity needs to move seamlessly across borders, yet capital controls, limited banking corridors, and inconsistent regulatory
frameworks often create bottlenecks. Funds can become trapped in certain jurisdictions, forcing companies to overfund multiple accounts just to maintain operational continuity. This is inefficient and costly, tying up working capital that could otherwise be deployed more productively.
“These challenges are amplified in evolving markets where regulation is shifting quickly, and where the appetite of traditional providers to serve higher-risk sectors is often limited.”
A recent report by PwC highlights those concerns. It estimates that, globally, there are €1.56trillion of working capital not being used efficiently. While not all of that will be tied up in cash accounts, waiting for the next surge in payouts, Freemarket has developed an Instant Liquidity Solution with a third-party partner to specifically help release the portion that is.
“Our Instant Liquidity Solution is designed to remove one of the biggest inefficiencies in cross-border payments: the need to pre-fund accounts in multiple jurisdictions,” explains Lyons.
“Instead of tying up capital, clients can access liquidity instantly through Freemarket’s multi-bank network with intelligent routing. This ensures funds are available where and when they’re needed – without the friction and delays of traditional pre-funding.
“The solution combines Freemarket’s cross-border payments and FX expertise with the capabilities of our partner. Together, we enable instant settlement as well as real-time access to EUR and USD short-term financing solutions, giving treasury teams greater flexibility in how they manage cash flow.
“Whether it’s supporting day-to-day operations or responding to sudden opportunities, Freemarket's clients benefit from increased speed, transparency, and resilience. For example, during a major game launch, one of our clients faced a surge in inflows across several PSPs worldwide.
“Revenue was arriving in multiple currencies, and needed to be consolidated, converted, and redeployed in near real-time to pay developers, marketing partners, and suppliers.
“Traditional providers would have struggled with the complexity and
timing. But, through Freemarket’s infrastructure, the client was able to consolidate those inflows, manage FX at competitive rates, and ensure liquidity was available exactly where it was needed – whether that was funding payouts, covering hosting costs, or supporting expansion activity.
“The ability to do this without operational friction gave them confidence that, even during high-volume periods, liquidity would never be a limiting factor.”
Managing that cash flow is, of course, a core function of any successful business, and it is an area in which Freemarket is keen to help its clients by developing the tools to do so.
“We recognise that liquidity management isn’t just about access, it’s about foresight,” Lyons explains. “Treasury teams increasingly need real-time visibility to predict cash flow, plan funding, and avoid unnecessary capital being tied up.
“We’re exploring capability enhancements that, combined with our existing infrastructure, would
Funds can become trapped in certain jurisdictions, forcing companies to overfund multiple accounts just to maintain operational continuity. This is inefficient and costly
enable a more proactive approach to liquidity management – helping businesses anticipate demand spikes, manage cashflows or new market entries with confidence.”
That customer centricity is fundamental to Freemarket’s approach.
“We have a lot of conversations with our clients to understand where their growth is coming from and what markets they’re coming from,” says Lyons. “And then we look to partner with the right people that add value to our Network Settlement System to make sure that their needs are served by Freemarket, not only today, but also in the future.”
Tokens in the mix
Stablecoins are likely to become an increasingly important part of that matrix.
Freemarket is seeing rapidly increasing demand for these digital tokens whose value is fixed against a fiat currency. But they’re not a universal solution. While some jurisdictions are moving quickly to regulate and integrate stablecoins, others remain cautious, citing AML/CFT risk and concerns over consumer protection.
In Europe, the Market in Crypto Assets Regulation (MiCA), currently being implemented, is seen as an important step in providing the legal framework to instil trust in stablecoins, and several non-compliant coins have already been delisted by exchanges in response to it. But, in the UK, regulation is not expected until 2026. Elsewhere – in Asia, South America, the US, the Middle East – there is a patchwork of rules.
Lyons doesn’t believe stablecoins will provide a panacea for speedy, cost-effective cross-border transactions. But they have their place.
“We certainly see stablecoins less as a wholesale replacement for fiat settlement, and more as a complementary layer in the liquidity matrix – a way to add flexibility, speed, and resilience to cash management strategies,” he says.
“Ultimately, trust is critical, so the growth of regulated stablecoins, backed by high-quality reserves and robust frameworks, will be key to broader adoption.”
Every new Freemarket customer brings with them a unique set of settlement challenges that incrementally expand the Network Settlement System, says Lyons ‘whether that’s in the money services business, payment services business, or whether that’s in stablecoins’.
“We bring huge value to our customers, but the connectivity points are where Freemarket really takes off. The ability to connect companies from the gaming, the contract-fordifference, the crypto space, with the money services businesses, all on one platform to make cross-border domestic payments – that’s the uniqueness of our business.”
Andy Lyons, Sales and Relationship Manager at Freemarket
FINTECH
It’s been a tough few years. A world-changing pandemic, followed by fierce economic volatility, has prompted many people to reassess what’s truly important to them.
And that’s manifested in a trend towards experiential consumption. Rather than stacking up material possessions, consumers are seeking enjoyment, pleasure, or emotional satisfaction from their purchases.
This focus on intentional living is reshaping how banks serve their customers, too. Financial institutions are tapping into consumers’ desire to share unforgettable moments and forge connections with their loved ones.
“Consumers have changed,” says Brice van de Walle, Executive Vice President – Core Payments
Brice
van de Walle, Executive Vice President – Core Payments Europe at Mastercard
Europe at Mastercard. “Especially since the COVID-19 pandemic, people are interested in trying to live their passions more intensely.”
The payments technology and global card scheme provider is committed to blending these experiences with new AI-led ways to execute payments that prioritise personalisation and convenience.
Curating a compelling collection
The company recently introduced The Mastercard Collection, a suite of carefully curated, elevated benefits aimed at its most affluent cardholders.
It straddles three central pillars: Dining, offering priority reservations at sought-after restaurants and specially crafted menus and experiences; Entertainment, with presale
ticket access and premium seating for in-demand sporting and music events; and Travel, including streamlined airport experiences, such as access to fast-track security lanes and more than 1,350 airport lounges at major international airports across nearly 150 countries, as well as Mastercard-exclusive dining spaces.
Passion project
The Mastercard Collection, which is accessible through a dedicated channel called priceless.com, hones in on what people value most and is informed by Mastercard’s extensive consumer research.
It revealed that three-quarters of cardholders feel at their best when spending time on their passions, including culinary exploration, artistic endeavours, and cultural immersion. It also showed that around two-thirds are becoming more intentional about how they spend their time, focussing on the relationships that matter most. While this shift is reflected across all demographics, it’s especially true among the top 30 per cent of earners, who spend more than twice that
We don’t just want to buy ‘stuff’ any more. We want to experience it. And Mastercard’s vision for an agentic future can help deliver that for consumers
of the average cardholder. For financial institutions, capturing this audience’s attention and building long-term relationships is key.
Further expanding its portfolio for high-spending cardholders, Mastercard has also released the World Legend card – which it refers to as its ‘most prestigious consumer card to date’. Designed for those who want access to the most exceptional and exclusive experiences, World Legend will be available to banks globally and has just debuted to cardholders in the US.
Some voice-activated agents even allow users to shift their investments around while at the wheel of their (soon-to-be driverless) cars. But it’s fair to say Mastercard, and the other major networks, are now betting big on an agentic future for us all.
“Agentic payments are going to be the next big thing,” believes van de Walle. But that raises some equally big questions.
The pivotal role of partnerships Mastercard is busy collaborating with the likes of Microsoft and IBM to scale agentic commerce, as well as to accelerate B2B use cases. This could see AI agents handle sourcing, optimise payment terms, and manage logistics with international suppliers, before completing cross-border purchases using a Mastercard virtual corporate card token.
These new propositions complement issuing banks’ own benefits and rewards programmes, explains van de Walle, and enable them to create more differentiated products that drive loyalty and brand affinity. Through priceless.com and Mastercard’s integrated partner channels, cardholders can browse, book, and enjoy curated experiences.
“We’ve seen from our conversations with issuers that they’re constantly looking for things that can provide more benefits to consumers,” van de Walle adds. “So, we’re helping our banking partners provide specific benefits around the three passions we’ve specifically identified.”
Thanks to developments in AI, finding and paying for such ‘priceless’ experiences is also becoming effortless.
The age of agentic payments McKinsey & Company, among others, has highlighted how customer experience is set to change even more drastically, with every home page and app expected to look very different over the next few years. Each touchpoint, it says, will become conversational, and there may well be a personal AI agent doing most of the talking.
“Over time, the normal website you’re using to purchase your trip may not be the first destination anymore,” says van de Walle. “Consumers will just use their AI agent to look for the best options for a holiday or business trip, and everything will be done automatically, from confirming the recommendation, selecting the hotel, and actually paying – potentially managing chargebacks or complaints, too.”
The high-net-worths of the world have likely already experienced a flavour of this. A number of wealth management firms have already embraced an early form of agentic AI to give their clients the ability to interrogate and execute investment decisions.
“AI relies on a tonne of data, so we will leverage that data but always with consumer consent,” he says. “Consumers remain in the driving seat – they can let us know if they want us to customise their purchasing experience using all the data attached to their card number or not.”
Earlier this year, Mastercard revealed new agentic AI capabilities that enable smarter software to make purchases on behalf of consumers. It own solution, Agent Pay, will deliver more secure, personalised payments experiences to consumers, merchants, and issuers.
Mastercard’s pioneering agentic payments technology is rooted in tokenisation, based on the system it introduced a decade ago, which replaces sensitive card credentials with secure, merchant-specific tokens. As of June 2025, almost half of Mastercard’s e-commerce transactions in Europe were tokenised, but the company wants to go further.
“Tokenisation is simply replacing a card number with a cryptographic number that nobody can crack,” says van de Walle. “It’s not just encrypted at the merchant level or the PSP level, it’s also encrypted along the whole network, from the merchant to the acquirer, all the way to the issuer.
“We’ve seen huge improvements in terms of the approval rate for tokenised transactions because issuers now feel very confident about them. This is why we want to make sure the whole ecosystem is going to be leveraging tokens, and our ambition is that by 2030, all of our online transactions will be tokenised.”
Additionally, the company is working with acquirers and checkout players like Braintree and Checkout.com to enhance the tokenisation capabilities they are already using with merchants to deliver safe, transparent agentic payments.
“It’s all about creating an ecosystem,” says van de Walle. “We have merchants who work with PSPs on one hand, and on the other, we have cardholders who work with banks, fintechs, and other issuers.
“At the end of the day, you want to make sure everybody is on the same page, in order to create that ecosystem. You need to talk to everybody – we appreciate we're no one without our partners.”
In 2022, Mastercard added to its suite of services by acquiring Dynamic Yield, a state-of-the-art optimisation platform and decision engine that helps retailers use their data to make personalised recommendations to consumers at speed.
Agentic payments are going to be the next big thing
This hints at what an agentic future actually means. An affluent influencer, for example, perhaps approaching a landmark birthday, will be able to rely on their AI agent to proactively curate the perfect experience, from choosing exclusive seats at an upcoming concert from The Mastercard Collection, to bolting on a premium dining experience, and even drawing on personal data to select the right outfit for the occasion, based on the venue’s ambience and weather forecasts!
With Agent Pay, this approach is extended to allow trusted AI agents to transact without ever exposing real payments data – a critical guardrail in an environment without direct human oversight, which will allow both consumers and businesses to transact with greater confidence.
Informed by their preferences and feedback, the agent can execute all the payments, leaving the customer to enjoy the experience.
“Things will become simpler,” concludes van de Walle. “What we need to ensure, though, is that the principle of excellent user experience sits at the centre of the shift, along with a focus on security.”
And that really will be priceless.
Can we fix it? Yes we can, but the successful application of AI still depends on reliable data
ARTIFICIALINTELLIGENCE
The right tool for the job
Marcus Rabe is one of AI’s biggest cheerleaders but even he cautions it’s not a silver bullet
“If you play AI bingo – where you have to take a drink each time ‘AI’ is mentioned – everyone at Sibos would be drunk by lunchtime,” says Marcus Rabe.
The COO and Co-founder of Insight Softmax Consulting (ISC) is very much
aware that this particular branch of digital transformation will be a hot topic of conversation at the 2025 conference in Frankfurt this autumn.
The technology is being celebrated by many as the panacea for the industry’s ills, while being regarded with lingering suspicion by others. Rabe and his company are navigating a path between those viewpoints.
Founded in 2016 and headquartered in San Francisco and Zurich, ISC is a global, fully remote consultancy, specialising in high-performance computing, data science, and quantum
Marcus Rabe, Chief Operating Officer and Co-founder at Insight Softmax Consulting
computing. It prides itself on serving both startups and Fortune 500 companies across a variety of industries, including automotive, technology, manufacturing, retail, gaming and financial services.
Through its partnership with Amazon Web Services (AWS), ISC uses tools like SageMaker, Bedrock, and Comprehend, to develop secure, scalable, and compliant AI solutions tailored to clients’ needs.
Unsurprisingly, Rabe is an unapologetic ambassador for AI adoption, but he acknowledges that
the hype surrounding the technology is reminiscent of that which accompanied blockchain, back in 2017. Except this doesn’t look to be fading any time soon.
As he outlines in this interview, institutions need to be aware of both AI’s potential and its limitations, especially within a financial ecosystem that often lacks the unified data it needs to function effectively.
THE FINTECH MAGAZINE: In your experience of talking to financial services organisations, how interested are they in genAI as a technology driver?
MARCUS RABE: Most of the companies that talk to us are certainly hugely curious about what genAI can do for them. They actually have a bit of FOMO, fearing that others are pulling ahead because they’re using genAI and that those companies can either do more/gain more business, or save costs.
Of course, those are two big levers of being more profitable, so they come to us to try to separate the hype from what we can actually do with the technology.
For example, we have recently talked to a lot of hedge funds that had the feeling that an agentic system could completely take over the trading for them. They wouldn’t have to do anything, except rake in the money. Sadly, it’s not that easy yet!
So, while a lot of people approach us, in very many cases, we have to bring it back to the basic principles of what data do you have, what is the quality of the data, and where does it live? Because no AI or genAI system can make good recommendations, good decisions or good optimised processes, if it’s based on bad data. In the end, shit in, shit out. It’s the same if a human makes decisions, based on data: if the data is bad, the decision will likely be bad.
So, in a lot of cases, we say OK, let’s look at your data and your business processes and how data flows through them. We ask, ‘where’s the optimisation potential here?’ because not everything should be done with AI systems. And then we ask what’s the data quality? How can we ensure that you have good data at your fingertips at the points where you need it?
A lot of our customers have the same sort of data in different systems, too. They might have all sorts of system spreadsheets, reports, and it’s problematic if this data doesn’t match. Perhaps your customer’s point of contact changes in one system, but not in the other. Suddenly, you’re sending your reports to the wrong person, to the wrong
email address. That contact point might not even exist anymore. A lot of these sorts of things need to be fixed before using AI and genAI makes much sense.
If this groundwork is not done, putting a genAI system on top doesn’t really help. It costs a lot, or maybe not a lot, but it certainly doesn’t help.
Even worse, it creates false confidence, because the beauty of agentic AI, is also a big problem. It will always give you an answer, but the answer might not be what it should be. And yet it looks very convincing.
TFM: You refer to inconsistent data reporting. Can you give us a specific example that you’ve come across that would be a hindrance to the application of genAI?
MR: Well, let’s look at a hedge fund that has to create investor reports and check the risk profile. Then there is its sales function with a customer relationship management system (CRM). Then it has a trading system and, in many cases, a risk management system.
So, here there are multiple systems that are often completely air-gapped. They don’t even talk to each other very well.
Sometimes they’re just spreadsheets, sometimes Word documents stored somewhere on a drive, on a SharePoint, in an unstructured form. There might be inconsistencies with name changes or contact details, as I mentioned, but in addition to that, hedge funds use different brokerages and custodian banks to do their trading.
No AI or genAI system can make good recommendations, good decisions or good optimised processes, if it’s based on bad data
While the ISINs (International Securities Identification Numbers) are, of course, the same across those, a lot of the other data points are not formatted in a standard and default way.
Then there is the time stamp. In one, it might be the US format, the next might be European, and the next uses the NATO standard. I’ve seen a situation where all the data has been pulled together in one place, but the time stamps or dates are completely messed up. This is a genuine example of where manual intervention is still required.
In an ideal world, of course, we would just have, let’s say, an ISO standard for all of the different datums that we need, which allows for standardised APIs, where systems of any sort can just talk with each other and understand each other because they know data that’s coming in is in this format and this is what it means.
But, more often than not, this is not the case at the moment. Each bank, each brokerage, each stakeholder in the financial services realm is kind of doing their own thing, trying to create their own standards, which isn’t a solution, I’m afraid.
This is where we, as a business, come in. We help our customers create value from their data by breaking down the problems we’re asked to solve, doing root cause analysis and the strategy work to create a road map of things that need to be implemented.
A road map in itself isn’t a solution – you need implementation. So, we either implement the solutions ourselves, or we work with partner companies or other implementers to do so, depending on what makes sense.
We can then hand it over to the client’s internal IT to manage thereafter. Or, in a lot of cases, we create managed services packages because a lot of our customers just don’t want to deal with that. They’d rather have a software-as-a-service-like solution or managed service where they pay for a problem to go away and not even have to think about it.
And then, of course, at the end of the stream, all the users need to be trained to use the new technology. Business processes have to change because if you don’t alter the way you’re working, it’s likely the outcome or output will remain the same. So, we try to cover the whole transformation journey.
TFM: So, we guess the message is that data is indeed king? Simply bolting technology onto fragmented systems isn’t going to deliver the results customers want?
MR: Absolutely. We are close to the peak of inflated expectations of AI. AI is a good tool, but it’s like a hammer. You might be able to hit many things with a hammer, but it’s not the right tool for everything. I mean, a screw is still better screwed in than hammered into a block of wood!
AI is a big hammer, but I think over the next year or two, people will become more realistic of what we should actually use AI for, and maybe what we shouldn’t.
And without good data, it will not really be the solution at all.
G+D’s partnership with sustainability-by-design champion Parley for the Oceans is helping financial services
answer one of the biggest environmental challenges of our time
“The ocean is our planet’s life support system, and our greatest ally against climate catastrophe, yet it’s at a crossroads – we are draining the life from our ocean.”
Those are the words of broadcaster, biologist and nature historian Sir David Attenborough, introducing his landmark film Ocean, which opened in cinemas in May 2025. The man who has shaped how we understand our ‘blue planet’ for the better part of seven decades chose his 99th birthday to launch what might be his most compelling message yet.
As he says: “After living almost 100 years on this planet, I now understand that the most important place on Earth is not on land, but at sea… [but] we are almost out of time.”
A protest against our careless destruction of the ocean, the film also had a strong message of optimism, investigating inspirational stories from around the world that point to an opportunity for redemption.
This message of hope is something that runs through many environmental organisations, including Parley for the Oceans, which takes action to protect
Earth’s largest and most vital ecosystem through an approach led by community, creativity, eco-innovation and collaboration, including partnerships across the financial industry.
It’s not just the waste it contributes to. The 3.5 billion banking cards made every year produce a carbon footprint equal to 288,000 passengers flying from New York to Sydney. And the amount of plastic used to produce them annually
is equivalent to the weight of 95 Boeing 747s. But once those cards reach their expiry date, the plastic can take 400 years to degrade. So, our flexible friends are a problem, but can they also be part of a solution?
The global security technology company, Giesecke+Devrient (G+D) is working with Parley for the Oceans to find one. It has lined up alongside major and influential brands, including adidas, American Express, Stella McCartney and Dior, who are helping to reduce the use of virgin plastic and repurpose the stuff we leave behind.
together to create more than an eco-friendly card, but a campaign that put ocean conservation in the hands of the lendtech’s customers – quite literally.
The first recycled ocean plastic card to be launched in Australia, the external overlays are made from recycled PETg and the remaining layers are upcycled plastic (primarily water bottles), recovered from areas where waste poses a threat to marine life and
coastal communities. They’re collected, cleaned, processed, and manufactured into plastic sheets that G+D then uses as an alternative to virgin PVC.
This resonates with Australians: 75 per cent of all waste around the country’s magnificent coastline is made of plastic.
The partnership between WLTH and Parley for the Oceans doesn’t stop there. For every loan settled by WLTH, the lendtech also helps clean up to 50 square metres of Aussie coast, the WLTH team regularly pulling on their gloves to support Parley's efforts.
In 2023, there were nearly 18 billion credit, debit and prepaid cards in circulation worldwide, and G+D believes the industry has to own that issue.
Back in 2021, it announced the production of the Convego Parley Ocean cards. Made from materials supplied by Parley, including plastic granules, bales and flakes that have been recycled from mismanaged waste that poses a threat to marine life and coastal communities, these cards can be customised to individual banks’ branding. The WLTH card in Australia is just one example.
WLTH, G+D and Parley worked
“We can’t just give a product back to Nature and hope that it disintegrates and becomes part of Nature again. That’s not how it works with plastic,” says Simon Rosenberger, Head of Payment Card Program at Parley for the Oceans
“Plastic will just break down into smaller pieces, and the smaller the pieces, the bigger the problem becomes.”
He believes manufacturers need to think carefully about what’s going to happen to a product after its lifespan.
“That’s why it’s super, super important to create in a way that it can be recycled again,” says Rosenberger.
Maya Tuyen Reisinger, Product Management Director at G+D
Simon Rosenberger, Head of Payment Card Program at Parley for the Oceans
Parley is guided by the AIR Strategy –a plan to end the threat of plastic pollution, emissions, and other toxic substances. AIR stands for: Avoid plastic wherever possible, Intercept plastic waste, and Redesign methods, mindsets, and the material.
When it comes to its work with G+D, Rosenberger says: “We started with the goal
to create an eco-innovative card alternative that can be seen as a symbol of change to disrupt the market. And we are really creating this impact together.
“Adapting to a new material was a challenge for G+D, but with a clear vision rooted in purpose and impact, what began as a bold shift has become a remarkable success.”
Maya Tuyen Reisinger, Product Management Director at G+D, says: “Consumers are looking for new ways towards a more sustainable lifestyle. That is why we empower banks with eco-innovative payment cards. When consumers place this card at the top of their wallet, it becomes their daily reminder of their own and their bank’s commitment to protect the planet.”
Sustainable credibility
G+D has come a long way in its eco-friendly journey. In July 2022, it pledged to replace all virgin plastic in its payment card products by 2030 to support consumers and banks in fulfilling their own sustainability aspirations.
When it issued that announcement, G+D claimed to be the first in the payment industry to make such a commitment.
“Consumers today are making more conscious decisions than ever before and are increasingly aware of the impact their actions have on the environment,” says Reisinger.
“Banks are therefore looking for payment solutions that enable them to address the need for convenience and reliability, but
that also allow them to meet their customers’ expectations around sustainability.
“By reducing virgin plastic from our payment card products, we are taking an important step in helping them to do so. With G+D, banks have a reliable partner at their side that protects their environmental credibility.”
A lot of that credibility comes from
reassuring consumers, Generation Z in particular, that much-lauded sustainable initiatives are not simply an exercise in greenwashing – portraying products, services, or practices as more environmentally friendly than they actually are.
We can't just give a product back to Nature and hope that it disintegrates and becomes part of Nature again. That’s not how it works with plastic
Simon
Rosenberger, Parley for the Oceans
Parley says it goes the extra mile to ensure authenticity. It wants environmentally friendly messages to be more than just a sales tool for banks and payment companies, so it gives them an auditable supply chain that can be used to demonstrate real-world impact to customers.
It’s important for banks to communicate those messages to counter consumer cynicism, says Rosenberger.
“In order to ensure credibility and transparency, we have a digital data trail, which starts with weighing the material during our collections on beaches and coastlines and continues across the supply chain until the point where we recycle the material.
“Physical ID Tracers are also added into the
plastic pellets, which are a unique set of nano ceramic markers that allow verification at every stage of the supply chain.
“Ultimately, the more material we can collect and recycle and turn into these symbols of change, the more impact we can create.”
Many customers clearly now expect
sustainability as a standard, and initiatives like G+D’s Convego Parley Ocean cards are the expression of that mindset. But if Sir David Attenborough’s optimism is to be rewarded, there’s still a lot more work to do.
“Solving environmental issues requires collaboration across sectors, including science, art, fashion, and technology,” says Rosenberger.
“It’s key for everything that we’re doing.
“For fintechs who want to stand out in the market, collaborating on something that has a purpose, that can drive engagement, makes absolute sense,” he adds.
It’s not just about new entrants, of course.
“Financial institutions often feel that it’s necessary to be green before they start working with us. That’s a myth. If you want to make lasting change, you have to start somewhere.”
Bugat also has a positive message for the financial ecosystem going forward, but it comes with some forthright caveats.
“The future of payments is sustainable, but decision-makers need to lead it with action, not just intention,” she says. “They need to set bold goals that go beyond compliance and hold their teams accountable with measurable KPIs.
“They should also partner with companies that innovate responsibly in materials, production, and digital ecosystems. Transparency also needs to be a priority because consumers, investors, and regulators are all watching.
“And, most importantly, they should make sustainability a core business value. This is their competitive edge, their compliance strategy, and their contribution to the planet.”
CUSTOMERRELATIONSHIPS
Mission-driven banking
In the world of banking, few institutions carry the weight of purpose quite like USAA (United Services Automobile Association). Founded in 1922 by a group of US Army officers who couldn’t find auto insurance, the San Antonio-based financial services company has grown into a $220billion powerhouse. With more than 14 million members – exclusively military personnel, veterans, and their families – USAA isn’t just a financial services provider. It’s a lifeline for those who serve. And in an era of digital disruption, it’s betting big on technology to deliver not just convenience, but care – well aware of its responsibility towards those giving the ultimate service for their country. A USA-wide bank, it must be able to deliver on its commitment by
also operating efficiently across international borders, given that many of its members routinely spend periods overseas, sometimes at short notice, leaving their families behind.
“Finances are personal. They can spark joy or anxiety,” says Kristina Tanner, USAA’s Digital Banking Lead. She describes how, ironically perhaps, digital innovation is at the heart of how the bank delivers a human touch.
“Digital banking is even more intimate. You hold that phone six inches from your face, and there are very few things you get that close to in your life!” she says. “That’s why I believe if we get digital banking right, we can make finances easier for people. They can do the tactical stuff quickly, but we can also help them manage their money a little better, and improve their financial security.”
We go inside USAA’s digital transformation to deliver the ultimate service to military personnel and their families
Kristina Tanner, Digital Banking Lead at USAA
In fact, Tanner’s team is obsessed with making every digital interaction count. USAA members – whose close relationship with the bank is fostered also by their direct voting say in the business’s direction – log in more than 22 times a month, and each login is a chance to offer insight, ease anxiety, or improve their financial security.
“We’re member obsessed,” she says. “Every tap, every scroll, every moment is an opportunity to serve. USAA is known for two things, really: exceptional service and being digital first. Like most people working in the digital space, I love my digital metrics, but what I’m really driven by is that human element of digital banking.”
USAA’s approach to innovation is about getting the basics right, especially for members who might be deployed overseas at a moment’s notice.
“When we first introduced instant account verification, I couldn’t even remember my passwords,” Tanner laughs. “Now, biometrics make it seamless. That’s the kind of friction we’re always trying to eliminate.”
USAA doesn’t aim to be edgy. It aims to be safe, secure, and relentlessly efficient. “We ask: ‘will this delight?’, ‘will it protect?’, ‘will it help someone feel more financially secure?’,” Tanner says. “If the answer’s yes, we build it.
“We’ve been digital for a long time, and we made the transition to better serve our members. It wasn’t about technology for technology’s sake; it was introduced to serve our members better, especially given they’re all over the world.”
And it seems to be working. In 2024, USAA group, which includes banking and insurance services, posted record revenue of $48.6billion and near-record profit of $3.9billion – tripling its earnings from the previous year. Its net worth rose 10 per cent to $32.1billion, too, and total assets hit $220.6billion.
Behind those numbers is a story of resilience. After its first-ever loss in 2022, USAA rebounded by doubling down on member service and operational efficiency. Its insurance business paid out $4.3billion in catastrophe-related claims, handling 439,000 cases with technology that cut settlement time in half.
It focussed on prevention, too, with innovative offerings like the SafePilot driving telematics programme promoting safer driving, and Connected Home, which rewards members for using smart devices for detecting
issues in the home like leaks, designed to help avoid costly repairs and save on insurance. Meanwhile, USAA Perks, which gives members access to discounts on everyday products and services, delivered $1.2billion in savings over five years.
“We really don’t want to get it wrong for folks who are risking their lives for us,” Tanner says. “That motivates me just that much more.”
USAA’s commitment goes far beyond financial services, however. In 2024, it donated $62million to non-profit causes, including $3million for hurricane recovery and $1million to fight food insecurity. Its Recycled Rides programme provided refurbished vehicles to veterans, and employees logged 279,000 volunteer hours. It also invested $25million in suicide prevention initiatives, aiming to save 6,500 lives among active service personnel, veterans and their loved ones, by 2032.
Since 2019, when the Office of the Comptroller of the Currency (OCC) put the bank under scrutiny for its AML/KYC and fraud controls, the bank ratcheted up use of financial crime prevention tools. Digital transformation – inspired by agenda-setters both in and outside financial services – is at the heart of its strategy to ensure regulators and members alike have full trust in USAA Bank.
“We’re learning from outside banking,” Tanner says. “People expect the same ease they get from retail or streaming apps. So we’re not just looking at what other banks do, we’re looking at what great digital experiences look like.”
More than 94 per cent of USAA members interact digitally. More than three-quarters of sales happen online. And younger members, Tanner notes, ‘don’t want to call us if they can avoid it’.
For Tanner, the acquisition process is like a first date. “If it’s clunky, they won’t come back,” she says. “But if it’s smooth, and we follow through with great service, maybe we’ll be married and be happy forever.”
Internally, tools like EagleGPT help staff answer questions by analysing more than 20,000 documents at a time. Developers use external AI developer tools to boost coding efficiency and automate data workflows.
Externally, AI powers image processing for insurance claims and supports partnerships with open-source large language models. USAA even trains proprietary models for specialised tasks.
But it’s not just about tech. It’s about trust. Following its regulatory brush past, USAA has its dedicated AI Council evaluate every use case for value, feasibility, and risk. And every model undergoes strict performance checks.
In 2023, it ran extensive generative AI pilots. In 2024, it implemented a dozen new tools. Now, it’s scaling agentic AI to automate low-risk processes, end-to-end.
One of USAA’s most urgent priorities is modernising its fraud and dispute management with the goal to boost efficiency and compliance, and ensure confidence. And with vast data reserves, USAA is turning digital banking into a source of financial wisdom, too.
“We can give members insights they wouldn’t get from a representative,” Tanner says. “It’s like sneaking a vitamin into candy.”
Most people aren’t tracking their finances daily. But if USAA can deliver bite-sized insights – like spending habits or savings opportunities – it can help members become more financially savvy.
“The one thing I’d love to measure,” Tanner says, “is how we actually make people more financially well-off. If their balances are higher, their credit scores are better, and they’re saving for the future, that’s real impact.”
We’re member obsessed. Every tap, every scroll, every moment is an opportunity to serve. We literally listen to member feedback every day
That philosophy drives every digital decision.
“We literally listen to member feedback every day,” Tanner reveals.
“Some changes are small. Some are big. But they all come from the same place: making people feel good.”
This quest has seen USAA deploy 200-plus artificial intelligence (AI) tools across its business, blending machine learning with cutting-edge generative and agentic AI.
USAA knows it can’t always offer the best rates. But it can control how it treats its members.
“That’s what the company has done since long before I worked here,” Tanner says. “And it’s why people stay.”
In a crowded market, service is the ultimate differentiator, she believes.
“People have multiple banks and credit cards,” Tanner says. “But they keep their primary account where they’re treated the best.”
And for USAA, that means leading with empathy, specialist understanding, and bespoke products and services, powered by technology.
Punching their weight:
Banks are starting to fight back against private credit providers
SHADOW BOXING
Banks want to win back the portfolio of SME loans they’ve lost to the private credit market. Acuity Knowledge Partners is helping them achieve it with AI and cross-sector experience
Businesses – particularly small and medium-sized ones – have had it tough sourcing the credit they need to succeed. Hobbled by post-credit crunch regulatory tightening and cumbersome legacy systems, mainstream institutions have struggled to service them.
Into that void has stepped non-bank private financing – once known as ‘shadow lenders' – offering quicker execution and fewer regulatory hold-ups, with tailored loan structures to fit complex or high-risk transactions and providing competitive returns for investors in low-yield markets.
They’ve become such a significant market force that, according to Boston Analytics, private credit assets will
surpass $1.7trillion worldwide in 2025, up from just $500billion a decade ago, with major global players like Apollo Global Management, Blackstone Credit, Ares Capital, and KKR, amassing multi-billion-dollar portfolios, rivalling the lending volumes of regional banks.
But now, technology is giving those banks a way to retake the SME loan territory, and solutions provider Acuity Knowledge Partners is working with them across the lending value chain to help achieve it.
Acuity brings the team’s deep knowledge of processes and systems in both bank lending and private markets to bear on all asset classes and portfolios and is now augmenting that expertise with proprietary AI and genAI-driven technology.
“Private credit has been able to challenge the monopolistic status of traditional banks and add competition by offering bespoke deal structures, superior rates and faster credit processing,” explains Rajul Sood, Acuity’s MD and Global Head of Banking.
“However, banks are now showing real resilience in evolving strategically to compete with shadow lenders. Many are cautiously entering private markets through partnerships with asset
Rajul Sood,
Managing Director
and Global Head of Banking at Acuity
managers, establishing regulatory structures that allow them limited strategic participation. For example, JP Morgan working with Apollo Finance, and PNC Bank with TCW Group.”
Some are also investing in in-house credit platforms; collaborations with private equity platforms; hiring new talent with credit market experience; and entering new markets.
AI, and particularly genAI, is an enabler of this re-entry. A recent EY blog, How Artificial Intelligence Is Reshaping The Financial Services Industry, says that ‘the strategic deployment of genAI is much more than a trend; it is a comprehensive reimagining of operations, product development and risk management’. It has specific applications, it says, in fostering innovation, streamlining operations, enhancing customer service, boosting risk management and reshaping capital markets.
It adds that organisations are utilising models like GPT to deliver ‘personal services and novel solutions while streamlining mundane tasks’. It’s what Sood refers to as a shift from ‘run the bank to change the bank’.
“Most banks we work with are aiming for complete and large-scale
digital transformation, and 65 per cent have adopted genAI through either fintech partnerships or strategic partnerships with us,” says Sood. “The first priority for banks is to improve their loan management.”
Acuity Knowledge Partners leverages its knowledge of popular loan management systems, such as nCino, Moody’s, and Loan IQ, to help clients short-circuit adoption, reducing the time taken to hire, train, and onboard software and staff.
“A lot of banks are adopting nCino, for example, to improve their legacy systems for a better, hyper-personalised customer experience,” says Sood.“Then it’s about implementing generative or agentic AI. Banks are taking a proof-of-concept approach over three or six months to evaluate the benefits before looking at large-scale deployment.
“They’re also migrating to Cloud-based systems to modernise their core platforms for better agility, resilience and cost-efficiency.
“Given the pace at which technology is moving, every bank has a large list of technology, modernisation and professionalisation priorities. To achieve them, they’re looking at strategic partnerships to either build something in-house or buy something off the shelf that can give them immediate returns, or a mixture of both.
“Some banks, like Morgan Stanley, are investing in technology startups which started with proofs of concepts but have delivered significant benefits in domains like corporate lending and are accelerating innovation.”
One of AI’s key applications is enhancing banks’ ability to mine and analyse often unstructured data at speed, improving and accelerating their loan decision-making.
“What gets providers stuck is their legacy systems not speaking to each other and non-standardised data,” says Sood. “Technology doesn’t understand anything that is not standard, and banks have an inherent problem of taking a non-standard approach, with bespoke processes and micro services, so it’s very important they overhaul these systems.”
A story of growth
Established 23 years ago, Acuity boasts a 7,000-strong specialist financial sector team, 1,000 of whom are technology specialists and programmers. That depth of knowledge goes to the very top. Its Chief Operating Officer, Jon O’Donnell, joined the company last year from IBM where he led the EMEA Business and Technology Consulting Divisions of up to 15,000 practitioners with $3billion turnover.
The company, which is currently bringing
bespoke research, analytics, and technology solutions to 650 financial services businesses worldwide, spanning investment banking, asset management, and private equity, has experienced its own growth spurt in the past 12 months. It’s added 100 new clients and expanded its presence to include the US, UK, Germany, Switzerland, Costa Rica, Sri Lanka, India, China, Australia and the UAE. And it is investing in in-house AI capabilities to support the growing need among that customer base.
In July 2024, Acuity bought European AI and machine learning provider PPA Group, with expertise in structuring global financial and ESG data for commercial lending.
In April, it launched its own scalable agentic AI platform, Agent Fleet, combining ‘domain-trained Al agents with Acuity’s deep sector expertise and robust data infrastructure’ to enable firms to ‘scale their businesses and improve decision-making and efficiency without expanding headcount’.
Its complementary digital tool RFP Pulse uses genAI to provide semantic search and a structured content repository to help asset and wealth managers transform how they handle requests for proposals (RFPs) and due diligence questionnaires (DDQs), boasting 25-30 per cent efficiency gains among clients that have introduced it so far.
Acuity’s new credit report writing and analysis tool, Credit Pulse, automates and speeds up credit report creation, and it has just partnered with fintech Databricks to provide Agent Fleet with better data retrieval and analytics, enabling firms to more effectively mine their data at scale.
coming with a lot of new creative ideas, but if that change is not communicated from the top and implemented across an organisation, it creates resistance to adopting something new, and the biggest initiatives fail,” says Sood.
She doesn’t see it as a battle for survival between human and machine.
“AI is at a tipping point, and it is important to think about integrating tech-led efficiencies with human judgment, rather than balancing the two, to make things simpler and cheaper over time. Organisations have to consider how they can achieve those goals in the best way, because their internal processes don’t change, the people and technology do.
“While technology does a brilliant job with standardised data sets and structured data queries, human judgment becomes extremely important when the work gets more bespoke.
“One interesting concept is that of human on the loop (HOTL), as opposed to human in the loop (HITL) models. HOTL is ideal for more low-risk, high-volume reversible tasks. Here, automation can operate independently, with humans monitoring, intervening or overriding decisions if necessary – things like customer relationship management integration, KYC processing and real-time fraud alerts.
Banks can pretty much match the responsiveness and agility of the non-bank lenders by using centralised teams… with AI accelerating underwriting and improving overall risk governance
“Banks can pretty much match the responsiveness and agility of the non-bank lenders by using centralised teams in cost-effective locations, giving them the time advantage by avoiding duplication, with AI and automation accelerating underwriting and improving overall risk governance,” says Sood.
“Embracing these things and expanding into regional markets like India and Southeast Asia is giving them an equal and opposite competitiveness in the market.”
Change on such a dramatic scale is not without its challenges, however, particularly when it comes to balancing rapid technological advances with the role of human workforces.
“Innovation is moving fast, people are
“By contrast, HITL is essential for high-stakes, ethically sensitive, heavily regulated and bespoke domains, such as loan approvals, anti-money laundering, investment advisory and so on. Here, human judgement is central to ensure fairness, empathy and compliance. AI can analyse the data and generate a recommendation, but the final decision must be human.”
Adopting such significant change often requires a workforce rethink.
“Reskilling is a top priority, as is a focus on organisational culture,” says Sood. “Many early AI adopters with a change mindset are providing experiential learning to let people feel how it can empower them. Big banks like Morgan Stanley and Bank of America have developed their own genAI tools to empower employees. At Acuity, we have genAI training programmes and an AI community for excellence – an experiential and collaborative platform, innovation lab and service delivery programme that encourages everyone to innovate.”
COREBANKING
Move fast… and fix things
Temenos has sharpened its focus in response to one of the biggest technology shifts of a generation. Barb Morgan explains how its helping clients through this transformation
The mindset in traditional banks is defined by caution –and for good reason. What corporate and retail customers want from a bank is trust, dependability, and safety. Those aren’t words you associate with the tech bro culture of move fast and break things.
But, as the pace of technology quickens, specifically technology powered by artificial intelligence, including agentic AI and general artificial intelligence, the so-called ‘legacy’ banks face a dilemma.
They can’t risk becoming bystanders in a technology revolution that’s redefining how their customers run their lives and businesses. But, across the vast, complex and often bespoke workings of a bank, how do they identify the ‘right’ fit for AI, ensure they’re not wasting investment on technology that won’t adapt to regulatory change, and – perhaps the hardest question – how do they ‘undo’ the mindset in order to move fast … and fix things?
That’s something Barb Morgan, Chief Product and Technology Officer at core banking provider Temenos has given a lot of thought to recently. Since the company took a leadership role in creating safe spaces for banks to explore AI, she’s been talking to C-suites and teams about how they can rapidly reimagine an organisation’s human and technical resource.
That includes engaging directly with those who might, understandably, be
Morgan, Chief Product and Technology Officer at Temenos
worried that they are engineering themselves out of their own jobs.
“The mindset we really want to create is around the art of the possible, and creating that psychological safely,” says Morgan.
Why does it matter to Temenos? As a leading provider over many years to banks, it’s held their hands, one-on-one, through progressive technology shifts and built a global community of clients and delivery partners who’ve also supported each other along the way.
But AI is different, so fundamentally challenging to the banking world order, that, over the last couple of years, Temenos decided to not just hand-hold, but to co-develop solutions with clients, officially launching the Temenos Design Partnership Programme (DPP) at its Temenos Community Forum event in May, following successful pilots.
That signalled a major change in the company’s approach to product design, and with it comes the need to bring client organisations – from the top to the bottom – along with it.
So, when Morgan presents Temenos’ latest offers to banks now, she starts from a position of inclusivity. The conversation isn’t limited to IT and compliance; rather, she addresses the AI elephant in the room, including with departments who historically are simply presented with a new solution and a manual to operate it, rather than being involved in its creation.
As she says: “If the operations team are not part of the discussion, they are
Setting the pace:
Temenos is helping companies understand, and then embrace, the new possibilities of AI
doubtful they are part of the future.” That creates an unsympathetic environment for positive change, although being part of the discussion doesn’t shield staff from an uncomfortable truth, either.
“Jobs of the past will not be jobs of the future,” says Morgan. “But that doesn’t mean jobs go away. A big part of the cultural work we do is helping people see how it enhances how they work, versus replicating it. Because you can give an organisation all the tools you want, but if staff are not going to use it, if they are scared or do not understand it… demystifying AI is where organisations need to focus.”
There is a commercial imperative to all this. According to Gartner, last year more than half of the financial services companies it surveyed had abandoned an AI product due to ‘mis-steps in
Barb
estimating and calculating costs’. Key areas where these companies experienced setbacks were regulatory compliance, technological integration, and workforce adaptation.
In other words, pretty much all spheres of their business. That hasn’t necessarily dampened banks’ curiosity in how AI can solve
aligning product development to support the ISO 42001 standard, ensuring we are building to the highest bar possible.”
That said, pushback from some authorities is inevitable as the technology develops, particularly around the use of agentic AI, both by, and interacting with, financial services.
some of their challenges, but those ‘mis-steps’, combined with increasing scrutiny of AI by regulators, has made them a lot more selective in where they spend their budget.
“I don’t think the dollar will go down when it comes to investment in AI, but I do think the money that goes into it will be more intentional,” agrees Morgan.
In this era of post-AI hype, being the vendor who offers structured product co-development and is prepared to invest time in making organisations implementation-ready through cultural coaching is smart if you want sticky customers, invested just as much in you as you are in them. But what about that other stumbling block: regulation?
“There are many AI products being launched, but not all meet the expectations of financial regulators,” says Morgan. “Our strategy is to give clients AI tools embedded within our core banking products, creating traceability and reliability that builds trust. We are also
a bespoke, compliant product. The work Temenos did with a Tier 1 institution to improve financial crime management with agentic AI suited to its requirements spun out into a general product launch this summer of the Financial Crime Management AI Agent.
Seeing the potential to bring value to the wider Temenos Community by, where possible, creating more projects like this, is now a deliberate part of its product development strategy. It’s also reflected in the upcoming release of a Microsoft Teams-based genAI Product Manager Copilot that was co-developed with Design Partner banks in Europe and the US.
“Half a dozen customers have had the copilot in private preview, and it’s been fascinating to see the response,” says Morgan. “By unlocking the full innovation potential of Temenos Core using generative AI, we’re helping banks to deliver better products, faster.”
A forum for change
At the Temenos Community Forum this summer, an invitation for the audience to work closer with the company on AI development resulted in a stampede of interest.
“We have certainly seen the dial shift. We are seeing our customers go from just curious to now ‘what do I do with it? We need your help!’,” says Morgan.
“What we found when we got back to people who’d expressed an interest in the programme was that they were all at different levels of AI engagement. For those who were still just curious, we offered two hours of learning to
Our strategy is to give clients AI tools embedded within our core banking products, creating traceability and reliability that builds trust
Some see that particular development as being so transformational as to be ‘the new API’. And while multiple agent-to-agent discourse is ‘still frontier’, says Morgan, MCP (Model Context Protocol) servers, are certainly rapidly facilitating it. No two regions’ regulatory approach to that, or anything else, is likely to be the same.
“The US tends to take a more flexible, principles-based approach to AI regulation, while the EU has opted for a more prescriptive framework,” observes Morgan.
By working directly with customers in dialogue with regulators, Temenos is reinforcing its role as a trusted partner - helping banks navigate the complexities of AI adoption across jurisdictions with confidence and clarity.
The Design Partnership Programme doesn’t just benefit individual banks looking for
run with their teams. That teaches the concept of design thinking and how to bring more parts of the organisation into that. But there were other clients where we could identify specific use cases, and we signed up roughly half of those to be co-design partners. We’ll now work on a sprint with them over three months to develop the ideas.”
A prototype sprint with one banking client saw staff involved from across the organisation. It wasn’t a conventional technical development programme: spaghetti even featured at one point! But it gave teams ownership of the idea and a stake in not just the bank’s future but also their own.
And that’s the mindshift that Morgan wants to create, seeding the ground for responsible, scalable adoption of AI – by individuals and organisations, technically and culturally.
Scaling safely –without debanking
Another hefty fine for a UK neobank highlights the need for better compliance controls in fast-growing fintechs. Flagright’s Imam Saygili says its AI-driven system offers a nuanced solution that keeps genuine customers and regulators happy
The debanking of high-profile UK politician Nigel Farage by Coutts Bank made headlines back in 2023. The lasting shift was a push for clearer reasons, longer notice, and audit-ready decisions before banks closed any personal or business account.
Customers, regulators, and ombudsmen now expect decisions that can be explained. That requires controls that are specific to the customer in front of you, transparent and logical, with individualised thresholds and evidence you can show later.
According to Flagright – an AI-native, no-code platform for transaction monitoring and AML compliance – the answer isn’t ‘debank faster’; it’s ‘decide better’ and document why. Flagright has a ‘glass box’ model approach. Each alert and decision carries its own rationale: rule logic, key contributing signals, and a human-readable narrative. Rules are
version-controlled with who/what/ when/why, so every change is auditable. Furthermore, Flagright’s AI monitors customers individually, applying rules based on knowledge of their precise circumstances, rather than slapping a broad-brush on everyone.
“We’ve got a pet peeve about organisations applying a blanket approach across their entire customer base,” says Flagright’s Founding Solutions Consultant, Imam Saygili.
“A customer who has been with you for three years, has been loyal and has never had any kind of suspicious activity report or other risk signals, should not be treated the same as someone who has been with you for three weeks.
“Compliance analysts often talk about false positive rates. But the reason they’re getting those false positives is because they’re applying a blanket approach to all customers.
“So, get rid of the ability to apply a rule across your entire customer base,
Imam Saygili, Founding Solutions Consultant at Flagright
and think instead about who that rule is most relevant to, and whether a threshold needs to be increased or decreased for individual customers.”
A subject access request to Coutts by Farage revealed its decision to debank him was influenced by his political views, which, according to the bank, put him in a high-risk category. A subsequent investigation by the UK’s House of Commons’ Treasury Committee revealed that 140,000 business accounts (2.7 per cent of accounts held by small businesses across eight providers) had also been closed by those providers during the previous 12 months.
UK Finance said in its defence of the finance industry that providers take the issue of access to banking seriously, and the main reasons for account closure are financial crime concerns, a failure to complete customer due diligence, or an account being left dormant.
But if banks don’t have the ability to closely scrutinise customer account
activity, there is a temptation for them to turn down a higher proportion of account applications or debank existing customers to reduce the risk of a regulatory breach – especially if the issues of KYC and anti-moneylaundering are running hot with the regulator, which they are in the UK.
The £21million fine imposed by the UK’s Financial Conduct Authority on fintech bank Monzo in July 2025 and the £29million penalty on Starling Bank in November 2024 are stark examples of the consequences of running a weak compliance infrastructure.
Monzo’s customer base grew from 600,000 in 2018 to 5.8 million in 2022. By 2020, the FCA had identified the bank’s onboarding, customer due diligence, and transaction monitoring were not up to the job and banned it from opening accounts for high-risk customers – but high-risk customers continued to be welcomed.
It was the bank’s lack of customer address verification that grabbed the headlines, with accounts opened under addresses including Buckingham Palace.
As fintechs innovate with new products and face evolving criminal tactics, their transaction monitoring rules must adapt, too. So, Flagright offers a version-controlled rule engine for AML transaction monitoring that tracks every change to a detection rule and the system records who made the change, why and when. This allows new rules to be deployed quickly to counteract emerging risks, and provides a clear audit trail.
Changing compliance culture
Flagright uses AI to detect potentially suspicious activity, such as behaviour changes. Every individual or organisation has their own alert parameters. Users deemed low risk have a higher anomaly threshold than higher-risk users, which, overall, Flagright claims, results in a 93 per cent reduction in false positives.
It encourages firms to be audit-ready by regularly generating management data on compliance, such as the volume of suspicious transaction reports filed and the results of quality assurance checks on alerts.
Starling Bank’s customer base had also grown rapidly – from 43,000 customers in 2017 to 3.6 million in 2023. The FCA identified serious concerns with the anti-money laundering and sanctions framework in place at Starling in 2021 during a broader review of challenger banks.
Starling and Monzo were not alone. The FCA had observed that many challengers had poor customer risk assessment frameworks, some had none at all, and the collection of KYC information was limited, with even basics missed, such as not establishing a customer’s income or occupation.
Flagright says the key problem is often an organisation growing faster than its ability to develop its compliance systems – not an uncommon situation among fintechs .Its solution addresses that issue holistically, while also providing a roadmap for future expansion. It recommends a range of measures to strengthen a bank’s defences and, ultimately, avoid regulatory sanctions, including dynamic risk scoring, which replaces one-time risk assessments and instead continuously updates a customer’s risk level, based on their activity. For example, if a previously low-risk customer starts receiving high-value transfers from abroad, a dynamic system would elevate their risk rating and trigger a review.
Then there are real-time onboarding tools, which verify key customer information, such as identity documents with facial recognition or document verification APIs, and confirm addresses using reliable sources.
Businesses should also conduct internal audits or independent reviews of financial crime controls periodically, regardless of whether a regulator demands this, it says.
And all this should operate within the context of a company-wide compliance culture, rather than treating compliance as a tick-box exercise or obstacle.
Saygili says: “We’re not a KYC/IDV provider. We ingest KYC outputs and orchestrate everything after – transaction monitoring, ongoing sanctions/politically exposed persons screening, rule management with full version control, investigations and reporting – so every decision is explainable and audit-ready.
“Using our platform, rather than just finding a point solution that fixes one of the challenges a client may have, means changes can be made to a compliance model, and there’s the ability to apply a risk-based approach to customers.
features provided by partners via an API, such as sanctions screening, ID verification and blockchain analytics.
As well as using AI to help institutions address individual areas of compliance, it has a family of AI agents with superpowers that scan the whole compliance landscape and can help predict future threats (regulatory or fincrime), which can be used to inform an institution’s compliance policy.
Saygili says client interest around the use of AI is huge but careful consideration must be given to its potential to generate unintended consequences.
“We must remember the importance of what we do, and when we use AI we must make sure we’re not doing a disservice to the end-user,” he says.
“If someone is trying to access their banking services to buy food, or make a life-changing payment such as purchasing a property, then you can’t debank them just because an AI bot has told you to do so.
“We take a measured approach to how we use AI, and for us, there are two models. Firstly, there are the things that AI can holistically do for all customers. Things like writing case narratives, or suggesting rules that might perform well for them, based on a client’s customer base. The second is around building dedicated models that can detect fraudulent patterns and money laundering signals – these are built bespoke for the client.
If someone is trying to access their banking services to buy food, or make a life-changing payment such as purchasing a property, then you can’t debank them just because an AI bot has told you to do so
“Being SaaS-hosted, we take care of the expensive and often complicated stuff that compliance teams just don’t natively want to be dealing with.”
Flagright’s platform has proprietary features for transaction monitoring, case management, risk scoring and AML screening, as well as
“It’s important that we keep the analyst at the centre of decision-making but what we can do by using AI is reduce the time it takes for an analyst to service an alert.
“Analysts don’t want to be moving between three or four screens – the AI can capture the information, summarise it, and give the analyst what they need to make a decision in 30 seconds rather than five minutes.”
Launched in 2022, Flagright is currently working to boost awareness of its products after receiving $4.3million from a funding round in January.
“It’s about meeting people and explaining the approach we take, compared to some of the legacy vendors in the market,” says Saygili.
“During the next 12 months, we hope more people will hear about us and we can have more and more interesting conversations.”
Power instant FX and multi-currency accounts – built for g aming, money service, and digital asset companies ready to scale without the slog.
BRANCHBANKING
Facethetruth!
Restoring in-branch banking to thousands of UK communities is not just possible – it’s happening, with or without the banks, says Ron Delnevo
Among the speakers at a financial services event I chaired earlier this year was a senior member of staff from a major UK bank. During his presentation, he remarked that nostalgia should be avoided in financial services.
A few months later, I attended the brilliant play Make It Happen, which fully exposed the disastrous reign at Royal Bank of Scotland of CEO Fred ‘the Shred’ Goodwin.
It only took Goodwin 10 years to destroy a bank that had been part of the fabric of Scotland since 1727. He is also credited by some as having played a significant role in the world banking collapse of 2008.
The audience was on its feet at the end of the play, roaring, as Goodwin was deposed from his throne at the Palace of Gogarburn, the bank’s global headquarters. How fitting that Gogarburn was built on the former site of a hospital for the mentally unwell.
Talking to people after the show, what came across was how the Scots in the audience wanted their bank back –as it was before Goodwin and his dismal top management team destroyed it.
That experience confirmed to me that there is absolutely nothing wrong with nostalgia, when it simply reflects the public wanting something that has been stolen from them returned.
UK branch banking has largely been ‘stolen’ from the British public, particularly in the last decade.
Once upon a time – actually, as recently as the 1980s – there was only one kind of UK banking and that was face-to-face in every community.
In 1950, there were 10,000 bank and building society branches for 50.4 million people. At their peak, in 1986, there were 21,643 branches, covering a population of 56.7 million.
In 36 years, the population of the UK increased by 12.5 per cent, whilst the number of branches exploded by 116 per cent. Why? Partly because, in the 1950s, the vast majority of UK workers were paid weekly in cash, which meant they rarely went to bank branches. However, from 1960, wages began to be paid directly into bank accounts. Workers were forced to go to branches to get their cash, and those deposits also facilitated a massive increase in bank lending, encouraged by the end of rationing in 1954 and a marked increase in advertising, including via the newly-created ITV.
Wages did not increase significantly to fund this demand, but debt did. Two of the biggest areas of credit were for cars and housing. And how were the finances of such purchases – and many others – negotiated? Mostly via face-to-face visits to bank or building society branches.
Ron Delnevo,
Chair of the Payment Choice Alliance
Whether it was to open an account, withdraw or deposit cash, obtain a personal loan, negotiate a mortgage, or make any banking arrangement for a business startup, in the 1980s, a visit to the bank or building society was both necessary and expected.
A branch manager was a local person of stature and authority, with a significant discretion to take decisions to assist people and businesses in the local community.
So what happened to face-to-face banking? A good place to start is the 1986 Building Societies Act, which provided an easy route for demutualisation.
In 1986, there were 161 building societies in the UK, with more than 6,500 branches. Today, there are 42 building societies, with around 1,300 branches. Every building society that demutualised has GONE, except when retained as a brand by one of the Big Five UK banks.
This decimation was definitely NOT implemented to satisfy the wishes of the British public.
How do I know? Because in 2025, there are 26 million building society members, more than at any time in the 250-year history of the UK mutual movement. And both they and the societies that serve them, value face-to-face contact.
The growth of the UK’s biggest building society – Nationwide –illustrates what can be achieved by a financial services organisation that genuinely gives the British public what they want.
Nationwide had seven million members in 1986. Having avoided demutualisation by a few thousand votes in 1997, it had more than 16 million members by 2025. With Nationwide’s acquisition of Virgin Money in 2024, it increased its total customers to around 24 million.
Within two years, based on current growth, Nationwide will become the biggest building society and bank in the UK, measured by customer numbers, overtaking the likes of Barclays, HSBC and Lloyds Bank Group.
Nationwide has committed to keeping all of its more than 600 branches open until at least 2028, providing community financial services countrywide. A mutual, with a stable branch network, delivering what its customers want.
The UK banks have been trying since 1986 to get rid of face-to-face banking – not to give customers what they want, but to earn even fatter profits by diminishing service standards.
It was in 1997 that Royal Bank of Scotland (RBS) became the first UK bank to launch internet banking services. In 1997, RBS had more than 600 UK branches and added a further 600 in 2000, when it acquired NatWest Bank. Out of that 1,200 total, fewer than 500 will remain by the end of this year.
recent years, still has more than 11,500 branches across the country.
Perhaps one result of the consultation could be to revive the 2020 Labour manifesto pledge to launch a 3,000-branch Post Office bank, offering a more comprehensive range of financial services than the Post Office currently offers, including current accounts.
At the very least, most commentators agree that the Post Office branch network must be safeguarded to meet, at a minimum, the basic financial needs of the public and businesses in thousands of communities around the UK that don’t have a bank.
In 1997, Nationwide became the first building society to launch internet banking services. In 1997, it had 150 branches. Today it has more than 600. Is any more proof required that the launch of internet banking was not the driving force behind branch closures?
Nationwide is giving its customers what they want, which is the choice of using both branches and the internet. The UK banks have suited themselves. Period.
There has been numerous research done by the likes of Accenture, Deloitte and PwC, which show that many financial services customers still want face-to-face contact, especially for more complex transactions.
A User Testing survey in 2023 found that 83 per cent of respondents preferred traditional banks, largely due to a preference for speaking face-to-face. So how can their wishes be met?
Certainly not by urging the Big Five UK banks to keep branches open, because that’s been going on for at least two decades. Their strategy for what remains of the branch network is to serve only those communities with more than 60,000 residents.
But I think there are several reasons to be optimistic that face-to-face banking will be restored more broadly.
Firstly, the UK Government is currently engaged in a public consultation on the future of the Post Office, which, despite losses over
It’s good to talk: Customers continue to value personal interaction
Nationwide is giving its customers what they want, which is the choice of using both branches and the internet
Then there are banking hubs. These are meant to stabilise community financial services provision where the last bank branch has been closed. However, though the UK has lost around two bank branches every day since 2017 – around 7,000 closures – so far, only 350 banking hubs have been promised by 2029.
Harriett Baldwin, the Conservative MP for West Worcestershire, in a debate on bank branch closures held in the House of Commons in June 2025, called for a banking hub to be provided in every community that loses its last bank branch. And, according to a YouGov survey, 98 per cent of MPs agree with her.
It would mean providing between 1,200 and 1,500 hubs, mostly covering communities with fewer than 50,000 residents. The UK
Government response to this is still awaited. The expansion of the building society branch network continues to provide reason for hope, too. And these new branches are increasingly using innovations, including opportunities provided by open banking, to deliver even better services.
And, finally, there are new organisations, which are planning to repopulate many high streets with their own branches that go beyond single brand services. It seems likely that these market entrants will concentrate on communities of between 40,000 and 60,000 residents, and offer more comprehensive access to financial services than banking hubs or Post Offices.
One example of these new entrants is banxlocal, due to open its first branches in the latter part of 2025. Its mission is to become the next new ‘bank’ on the high street, but as a non-bank player.
There are more than 1,500 financial services providers registered with the Prudential Regulation Authority (PRA). Banxlocal plans to provide many of them with a high street presence, giving the public access to multiple banks and services in a single shared location and allowing them to seamlessly switch from branch services to digital and digital to branch services, under one roof. This will allow many of those providers to extend their reach and market share.
The banxlocal model is sustainable via a fair revenue share with PRA-registered partners, across multiple services and revenue streams, including retail savings, investments, lending and insurance. Its aim, ultimately, is to serve 400-plus UK communities and that will include cash services.
Kevin Smith, CEO and Founder of banxlocal, has spent around 30 years in UK retail banking.
“For the last 18 years, I’ve worked as an outsourced branch agent for a UK challenger bank,” he says. “That’s given me a unique insight into the demand for face-to-face branch services. And the narrative the Big Five banks have created to justify branch closures has painted a false picture. Tens of millions of British adults want branch access and definitely prefer to have their financial services needs met face-to-face.”
So, what do we conclude? That, between a reimagined Post Office, expansion of building society branches, banking hubs, and innovators such as banxlocal, there are multiple opportunities to deliver the face-to-face community financial services that the British public wants. And do it profitably.
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