Nordic Fintech Magazine Fall 2024

DISTRIBUTION COMMUNITY

Nordic Fintech Magazine exclusively works together with selected Nordic Community Partners for insights and distribution, giving us unparalleled reach with audiences across the Nordics and Baltics

Thank you to all the fintech heroes contributing to this magazine!

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Welcome, Fintech Heroes, to the Fall Edition of Nordic Fintech Magazine

AI on Board

Visa and TOMRA Bring Trailblazing Sustainability System to Nordic Fintech Week 2024

The Danish fintech environment is thriving but needs careful attention p. 14-15 p.16-17

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Titans of Finance: Mastercard and Nexi Joining Forces to Transform Payments

It is a never-ending battle - but it is by no means lost

Decoding Denmark p. 20-22

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Ready to take on the tech giants

Vodeno and Aion Bank Explain Why Baas From a Bank Is a Smart Choice

AI, Financial Crime, and the Battle for Control: Who’s Winning the Arms Race?

AI, Compliance, and the Brutal Truth About Payments: Monika Liikamaa’s No-Nonsense Take p. 26-27 p. 28-29

Scoutz will deliver the best Advisor universe to Danish Banks

A Day in the Life of Frank

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Fintechs Navigating AI Growth

Firi: Largest Crypto Exchange in the Nordics Makes It Safe to Invest in Crypto

Why Partner With Froda for SME Lending?

How Confidential Computing will help pave the way for secure data use for financial institutions in the quantum era p. 40-41

EUDI Wallet: Scaling Up Opportunities for EU SMEs p. 42-44

Is Ecosystem Enabled Banking the Solution to Banks’ Transformation Challenges?

PSD3: Revolutionising Fraud Prevention and Empowering Consumers p. 46-47

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What’s in a word? Fincrime in the era of endless risk

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Checkout.com’s Intelligent Acceptance Solves the $50B Problem of Lost Revenue

Meet the AI-Enabled Fraud Prevention Tool That Saved a Bank €7.5m in Potential Losses

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Fintech’s AI: Balancing Bytes and Rights

Introducing Hybrid Payments - On The Verge Of Digital Dominance

Close collaboration resulted in an exceptional customer advisory system

The Embedded Banking Imperative

The Power of Data: How AdvanThink is Redefining Financial Security

Health Meets Wealth: Can Banks Boost Loyalty with Holistic Care?

Brian Lawlor on B4B Payments Supporting Nordic Fintechs for Global Growth

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From Local Roots to Global Reach: Latvia’s Fintech Success Story

Green Finance: Banks & Fintechs Embrace Energy Data

Why Malta for Fintech? Fintech in Malta is booming

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Collaborative Defense: The Future of Fighting Financial Crime

Navigating EU regulations and harnessing emerging technologies

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to Watch

ThetaRay’s Explainable AI Helps Tier 1 Bank Catch Bad Actors in Colossal “Dirty” Money Scandal

Skaleet Helps Financial Institutions Implement Core Banking “Speedboats” in 4 Months

Rethinking Customer Interactions: How LINK Mobility is Shaping the Future of FinTech Communication

Future-Proofing Investments: InvestSuite’s Portfolio Optimizer is a game-changer for financial institutions

Conversational AI: The Next Banking Interface

Fintechs

Welcome, Fintech Heroes, to the Fall Edition of Nordic Fintech Magazine

It’s that time of year again when we bring together the most remarkable voices, innovations, and ideas from across the Nordics and Baltics fintech landscape. This issue coincides with Nordic Fintech Week and ECOM’21 where we celebrate what makes our region a global leader in financial innovation.

By Chris Crespo

Fintech is alive and relentless, continuing to reshape the industry in ways no one could have imagined a decade ago. The disruptors at the forefront of this transformation pour their heart and soul into solving problems that impact not just customers in the Nordics and Baltics but customers around the world. Their efforts aren’t limited to traditional retail or business banking; they’re addressing challenges across industries and borders, unlocking new opportunities at every turn.

This fall, we’re focusing on how technology, especially AI, is solving real-world problems. Companies like Lucinity and Gilion are using AI to

transform financial crime prevention and decision-making. Lucinity’s AI helps institutions fight fraud with transparent, explainable processes, while Gilion leverages machine learning for smarter, unbiased business forecasting. AI is enhancing operations while making finance smarter.

But it doesn’t stop there. The conversation around sustainability has evolved into action. Just take the Visa and TOMRA collaboration, where a new system for reusable packaging is already cutting CO2 emissions in Aarhus, Denmark, and will be showcased at Nordic Fintech Week 2024. This isn’t just good PR; it’s proof that fintech can really make a difference towards

a greener future, turning everyday actions like returning a coffee cup into a step toward a better planet.

We’re also exploring AI’s impact on governance in the financial world with a provocative piece by Jakob Frier. Boards aren’t just overseeing technology—they’re becoming part of the AI transformation themselves. As Clara Durodié discusses, it’s no longer enough for boards to understand the basics of tech; they need to ensure that AI is integrated into strategy, ethics, and decision-making at the highest level. The stakes have never been higher.

In addition, this issue explores how Scoutz, BEC Financial Technologies’ new innovation hub, is shaking up the

world of customer advice. By creating a centralized platform for Salesforce development, Scoutz is enabling financial institutions to deliver personalized, customer-focused services faster and more efficiently. This is the kind of forward-thinking solution that helps banks meet the ever-changing expectations of today’s digital-first customers.

But this issue doesn’t stop at showcasing new technologies. It’s packed with ideas, insights, and challenging opinions that will make you rethink— and maybe even re-evaluate—your most precious beliefs about fintech. We’ve brought together astounding collaborations from some of the loudest, deepest, and most respected

voices in fintech, including Dr. Leda Glyptis, Ewan MacLeod, Marine Krasovska, Dharmesh Mistry, and Dave Wallace. This lineup makes this one of the most insight-dense and thought leadership-rich compilations of fintech thinking out there.

As always, we’re not just showcasing the technology but the people behind it. The founders, developers, and teams driving these innovations are worthy of our admiration and support in their pursuit of solutions that improve lives. Their stories are at the heart of this edition, and we’re excited to share their journeys with you.

At Nordic Fintech Magazine, we believe in celebrating the innova -

tors who are determined to shake things up. This fall edition is a tribute to those bold problem spotters and solution seekers who refuse to settle for the status quo, writing the next chapter of financial services and creating solutions that will shape the future of how we bank, transact, and interact with money.

We are incredibly proud to present this issue, one that reflects the energy, creativity, and relentless drive of our ecosystem. Whether you’re a fintech hero or heroine, an industry leader, or just someone curious about where the future of finance is headed, we invite you to explore these stories with us.

Enjoy the issue and stay disruptive!

Chris Crespo Head of Content at Nordic Fintech Magazine

By Thomas Krogh, CEO at

AI on Board

As artificial intelligence reshapes the financial services industry, the role of boards has become more critical than ever. Boards must guide their organisations through this transformation as AI drives significant changes in how financial institutions operate, innovate, and compete.

To remain competitive and fuel growth, leveraging advanced technologies and collaborating with fintech companies at all stages is essential. Boards must lead these efforts, ensuring technological advancement aligns with strategic vision.

In this interview with Clara Durodié, a leading authority on artificial intelligence and its impact on the financial sector, we dive into the evolving responsibilities of boards in this dynamic landscape. We explore how boards effectively navigate the complexities of AI, from formulating strategic initiatives to establishing robust governance frameworks that ensure ethical and effective use of technology.

How is AI transforming the financial services industry, and what strategic role should boards play in guiding their organisations through these changes and preparing for future developments?

AI transcends the realm of IT, becoming a critical business issue that influences governance and strategy at the highest levels. Boards must, therefore, take an active role in steering their organisations through this transformation. This involves integrating AI into the core strategic framework, anticipating future advancements and disruptions, and understanding the new types of risks that AI systems bring in.

The board’s responsibility extends beyond ensuring that AI adoption drives competitive advantage and aligns with the organisation’s long-term objectives. The board needs to exercise informed risk oversight and carefully select AI systems that support business objectives.

In practice, the board should focus on implementing AI that delivers clear business value rather than getting

caught up in pursuing the latest, fashionable technologies merely to keep up with competitors. The business value is where there’s less competition. By prioritising business-driven technology adoption, the board ensures that AI serves as a tool to enhance the organisation’s strategic aims rather than as a distraction that diverts resources from core business objectives. Critical thinking skills and the ability to actively seek independent sources of information instead of relying solely on one source of strategic advice would enable the board to make informed decisions. Critical thinking is critical. Seeking impartial advice is equally important. What steps can boards take to ensure the development and implementation

AI transcends the realm of IT, becoming a critical business issue that influences governance and strategy at the highest levels.

Clara Durodié CEO, COGNITIVE FINANCE GROUP

Copenhagen Fintech

Thomas Krogh, CEO at Copenhagen Fintech

Data never forgets.

Clara Durodié CEO, COGNITIVE FINANCE GROUP

of ethical AI systems, and how can they establish a sustainable governance structure for AI within financial institutions?

The deployment of AI within financial services must be underpinned by a strong ethical framework to differentiate services and unlock the business value of AI ethics, accuracy, reliability, safety and security, the five pillars of long-term business success in the AI age.”

Boards are responsible for establishing governance structures that ensure AI systems are developed and implemented transparently, accurately, fairly, and clear accountability. This includes addressing critical issues such as data ethics, data sources, bias, and privacy. Ethical AI is not just a technical challenge but a governance imperative.

Boards must cultivate a culture that embeds ethical considerations at every stage of AI development, from the initial concept to deployment, thereby safeguarding trust and integrity in AI-driven processes. Ethical AI is fundamentally a matter of corporate culture; it’s not about cutting corners simply because oversight might be lacking.

On the contrary, as I often say, “data never forgets.” If companies don’t champion ethical AI out of alignment with their moral compass, they should at least do so because “data never forgets.” Every time corners are cut to inflate profits or obscure mistakes, the data remains, documenting these actions. Such records can always be revisited, potentially exposing intentional or accidental missteps.

With AI playing a growing role in decision-making processes, how can boards ensure that AI systems remain transparent and that their outputs are explainable and understandable to human decision-makers?

As AI assumes a greater role in decision-making, the need for accuracy, transparency and explainability becomes paramount. Boards must

ensure that the AI systems in use within their organisations are not only accurate but also interpretable by human decision-makers. This involves integrating explainability into the AI governance framework, enabling decisions made by AI to be understood, scrutinised, and justified. Such transparency is essential for regulatory compliance and building trust among stakeholders, ensuring that AI enhances rather than undermines the decision-making process.

How can boards effectively balance the need for AI-driven innovation with the imperative to manage associated risks, such as bias, transparency, accountability, and data privacy?

Boards should foster an environment where AI-driven innovation can thrive, but not at the expense of accuracy, accountability, transparency, and data privacy. A robust risk management framework should ensure that AI systems are thoroughly tested and continuously monitored. This approach

allows for mitigating risks while preserving AI’s innovative potential. At the board level, directors need to gain and maintain a high level of AI literacy to enable meaningful discussions about the types of AI risks they are willing to assume. The board’s risk appetite ultimately determines the type of long-term commitment to digital transformation. This all hinges on the assumption that boards are able to understand the AI risks introduced into the enterprise.

Clara Durodié Technology strategist & experienced advisor in the use of AI

Visa and TOMRA Bring Trailblazing Sustainability System to Nordic Fintech Week 2024

Disposable paper cups might seem better for the environment, but a 2023 study reveals that they’re just as problematic as their plastic counterparts. That’s because paper cups aren’t just paper. If they were, the hot beverage would leak right out. Disposable “paper” cups are in fact made up of paper and a thin plastic lining which can take decades to biodegrade.

By Paulo Delgado

Manufacturing paper cups exacts another unseen toll on the environment—20 million trees must be cut down each year to produce 500 million disposable cups each year. In the USA, only 0.25% of those cups will be recycled. In Germany, 2.6 billion paper cups end up in landfills every year. Denmark uses 300 million disposable cups a year, and the average lifecycle of a cup is 15 minutes.1 Many of those cups end up in the ocean because no part of Denmark is more than 50 km from the coast.2 In response to this crisis, Visa and TOMRA—a global leader in reverse vending machines (RVMs)—teamed up to create a workable Reusable packaging solution, which they’re piloting in the municipality of Aarhus for the next three years. The solution allows users to receive instant payouts—facilitated by Shift4—to their credit or debit cards for returning reusable packaging to a set of innovative machines. They’re also bringing a taste of that solution to Nordic Fintech Week 2024 in September.

Reusing versus recycling

The percentage of paper cups which are recycled is shockingly low. The plastic

lining in these cups also means that they can only be recycled in special facilities.

For those cups that aren’t recycled and end up in landfills, the plastic coating releases methane—a potent greenhouse gas—as it breaks down.3

According to a report by Eunomia Research and Consulting, even if a country has implemented separate paper and card trash bins, takeaway packaging often contains residuals which complicates the recycling process.

Paper cups also have a “high wet strength” which makes them difficult to recycle, and they’re often extracted from the recycling process and sent to an incinerator.

A small number of coffee shops offer BYOC—bring your own cup—discounts, but the solution is unfeasible for any significant impact, and many coffee shops don’t offer it at all.

Eunomia’s study modelled a reuse system versus a recycling system, establishing what the return rate for a reuse system must be to reduce greenhouse gases (GHG). If a reusable cup is reused at least six times, and the return rate for the cup is 83%, it will produce lower emissions than its disposable counterpart.4

In the Aarhus pilot, the Visa-TOMRA

collaboration is already achieving an 85% return rate—2% higher than the break-even point—and each reusable cup can be reused hundreds of times, according to an email received by Nordic Fintech Magazine.

How the Visa-TOMRA system works

The Visa-TOMRA collaboration introduces a 100% open system where users scan a Visa or other EMVco card at a return station, then receive 5 danish kroner back to their credit or debit cards after returning the cup. The return stations aren’t vendor-specific, so they don’t lock users into using one reusable package scheme only.

The system also removes friction by not forcing users to carry around slips of paper or to go to specific retailers to claim their voucher.

Another point of friction has existed with previous systems which has caused those systems to fail—the need for companies to collect and clean the cups themselves. With the Visa-TOMRA collaboration, cafe owners don’t have to deal with dirty dishes on their counters or handle additional cleaning duties.

TOMRA takes care of the cleaning using automation and industrialised

Heidi Gohn Visa Head of Merchants Sales & Acquiring in the Nordics & Baltics

Geir Saether Senior Vice President Circular Economy & Head of TOMRA Reuse

cleaning methods, allowing the system to scale to other forms of reusable packaging.

The municipality of Aarhus three-year trial

The Municipality of Aarhus in Denmark has signed up to be the first city to test the TOMRA and Visa solution.

For the pilot in Aarhus, TOMRA has provided reusable cups to over 40 participating cafes. At least once every 48 hours, TOMRA collects all returned cups from return stations situated across the city, then washes and sanitises them following all the stringent standards set by the relevant food authorities. After the cleaning process, personnel manually verify the status of each cup before returning it to the loop.

TOMRA collects all cups using electric vehicles, and the overall drop in CO2 emissions compared to using a disposable paper cup can be as high as 70%. The cups are made of PP (polypropylene), an extremely durable and hard plastic that can be washed many times, and which is recyclable.

Each cup has an ID, allowing TOMRA

It is easy to get excited when Visa’s technology is used to help partners such as TOMRA accelerate sustainable commerce and support consumers and businesses to make greener choices.

Preliminary estimates suggest that the system in Aarhus has contributed to a reduction of approximately eight tons of CO2 emissions to date.

The initial trial focuses on hot and cold beverage containers, which has the lowest benchmarks for emission reductions. Once the system proves successful, Visa and TOMRA plan to expand the solution to include other takeaway containers, creating an open, convenient, and sustainable system for food packaging.

TOMRA-Visa coffee at Nordic Fintech Week 2024

All coffees at NFW24 will be served in reusable cups. Once you’re finished with your drink, you’ll be able to return it at any of the return stations that will be spread around the event space.

“We are thrilled for this partnership with TOMRA, as it fits perfectly with our core mission,” says Heidi Gohn, Visa Head of Merchants Sales & Acquiring in the Nordics & Baltics. “It is easy to get excited when Visa’s technology is used to help partners such as TOMRA accelerate sustainable commerce and support consumers and businesses to make greener choices.”

to monitor how many times the cup has been reused.

Although the Aarhus trial is still in its first year, the numbers paint an impressive picture. The reuse loop has circulated approximately 400,000 cups so far.

Some cups have been reused at least 25 times, well above the six-cup benchmark to achieve reductions in emissions.

The environmental impact of an event with 2,000 attendees can be significant if circular measures aren’t implemented. In response, Visa and TOMRA will be bringing the reusable packaging solution to Copenhagen to the TAP1 venue where Nordic Fintech Week will be held in September.

Attendees at the Nordic Fintech Week 2024 in September will be able to experience the reusable packaging experience first-hand. TOMRA is bringing its machines and 10,000 cups to the event, all of it sponsored by Visa.

“We’re thrilled to see Visa supporting this initiative at the Nordic Fintech event,” says Geir Saether, Senior Vice President Circular Economy & Head of TOMRA Reuse. “We believe our novel automated collection points can play a crucial role in reducing environmental impact by fostering more sustainable behaviours.”

1. https://worldmetrics.org/coffee-cup-waste-statistics/ 2. https://europe.oceana.org/press-releases/oceana-callsdenmark-phase-out-single-use-coffee-cups-prevent-marine/ 3. https://www.theguardian.com/environment/2024/ jan/22/disposable-coffee-cups-environmental-impact 4. https://circulareconomy.europa.eu/platform/sites/default/ files/2023-09/Assessing-the-Climate-Impact-Reusablesystems-vs.-Single-Use-Takeaway-Packaging-v-2.2.pdf

Heidi Gohn Visa Head of Merchants Sales & Acquiring in the Nordics & Baltics

PHOTO: Copyright 2024 Henrik Nordlie

Lund Olsen, chairman of Copenhagen Fintech

The Danish fintech environment is thriving but needs careful attention

Since the establishment of Copenhagen Fintech, thousands of new jobs have been created in the Danish financial sector, and there is a strong appetite for investment. However, for this positive development to continue, careful nurturing of the fintech environment is required. This is the view of the new chairman of Copenhagen Fintech.

By Henrik Malmgreen

Steen Lund Olsen, Vice Chairman of the Financial Services Union Denmark (Finansforbundet), is the new chairman of Copenhagen Fintech. He has been passionate about the fintech environment since Copenhagen Fintech was founded in 2015 and is working to develop Copenhagen as one of the leading fintech hubs in the global financial services sector. This is achieved, among other things, through Copenhagen Fintech Lab, which houses several startups, the annual Nordic Fintech Week, and Copenhagen Fintech Policy, which engages in political advocacy for the fintech environment in Denmark.

“Copenhagen Fintech has achieved significant results in its relatively short existence through focused efforts to create growth and jobs in finance and technology in Denmark. It is thanks to

strong collaboration across sectors that the fintech ecosystem has laid the foundation for an entirely new industry and a position of strength for Denmark.

I am pleased and proud to lead this effort, and I will work purposefully to further strengthen our potential together,” says Steen Lund Olsen.

The growth layer should be strengthened

However, he is well aware that growth does not come without limits, and he has previously argued that distorted competition is slowing the international growth of the Danish fintech environment. Fundamentally, the Danish fintech environment is thriving, with innovation and creativity creating many new and exciting companies, but outdated legislation hinders opportunities for expansion - not just in Denmark but also globally.

Steen

The future will feature an interplay of many different technologies, and the companies that master this discipline will be the winners. Artificial intelligence will play a significant role in the future fintech environment, but it is important that we use the technology prudently and seriously to maintain trust in the digital society.

“The growth layer for Danish fintech is not just sprouting; it has truly taken root, so now it’s about creating optimal conditions to strengthen it. Not just nationally, but also in relation to competition from abroad. We have a huge potential, and it would be a shame if it, so to speak, should slip through our fingers,” explains Steen Lund Olsen. By this, he means there is a risk that foreign investments from, for example, the USA and China will make it more attractive for startups to relocate rather than stay in Denmark.

Investment interest must be nurtured

“If you establish a startup in the fintech sector, you are almost immediately subject to the Financial Business Act. This imposes a number of legal challenges that can be difficult to meet and, all else being equal, can make it hard to attract interested investors. Compared to the EU, markets like the U.S. and Asia are much easier to operate in, which naturally increases investment willingness,” says Steen Lund Olsen.

Since the establishment of Copenhagen Fintech, around 4,300 new jobs have been created in this part of the financial sector, and a study by the analysis firm Genome shows that Danish startups raised the third most venture capital per capita among the

Steen Lund Olsen, Vice Chairman of the Financial Services Union Denmark (Finansforbundet) and the chairman of Copenhagen Fintech together with Kent Damsgaard, Managing Director of F&PForsikring & Pension and deputy chairman of Copenhagen Fintech.

120 leading European ecosystems in 2023. Of this, the fintech environment represents 32% of investments. Steen Lund Olsen believes it would be a shame to throw away this positive trend due to rigid legislation and heavy legal burdens.

Focus on data ethics is essential

One area where the chairman of Copenhagen Fintech, Steen Lund Olsen, sees rapid development is artificial intelligence. Fintech largely involves serving consumers in new ways and on new platforms, but this also means that the sector must meet existing legal requirements in completely new ways.

Better cooperation with authorities “I am well aware that it is a balancing act because we must not compromise on all laws and regulations, but in my view, there should be an opportunity for startups in the fintech environment to cautiously get started and be

allowed to test their business ideas and concepts, for example, in a closed sandbox environment. Preferably in cooperation with the authorities. Too many of the new companies struggle with the rules, and I think it’s a shame when, from a business policy standpoint, Danish fintech is specifically highlighted as a position of strength,” elaborates Steen Lund Olsen.

He calls for better and, not least, continuous cooperation with the authorities. In his view, this is in society’s interest, as it ultimately concerns creating and, importantly, maintaining jobs in Denmark, which is one of the reasons why the Financial Services Union Denmark has entered into a framework agreement with the Employers’ Association for Fintech in Denmark. The new chairman of Copenhagen Fintech sees the potential for good interaction between startups, the established financial sector, and the Financial Services Union Denmark as an organization.

Staying ahead of development

“We must stay ahead of where the industry is heading and what new competency requirements our members will face in the future, just as we must keep a close eye on the new technologies the industry adopts. Therefore, it is only natural that we need to take advantage of an organized labour market and the corporation between employers and employee. That is a valuable Danish trademark, which is why we place great importance on the Employers’ Association for Fintech, as well as the collective bargaining agreement between the association and Financial Services Union Denmark,” says Steen Lund Olsen, for whom another area of focus is how to help the fintech environment attract capital, partly through foundation work.

In this context, it is important that there is still full compliance. Steen Lund Olsen sees artificial intelligence as a game-changer in the financial sector, but he emphasizes that there must be a focus on both data ethics and developing responsible solutions.

The desire for innovation in the sector is strong, and the new chairman is pleased to note that the previous mindset - that if you tried a business idea and failed, you were pretty much out - has changed. Today, the attitude is different, similar to the tech environment in Silicon Valley for decades, meaning that one or two failures are not an obstacle to later success and certainly not something to look down on. You learn from both the projects that succeed and those that don’t.

Steen Lund Olsen, chairman of Copenhagen Fintech

Titans of Finance: Mastercard and Nexi Joining Forces to Transform Payments

At Nordic Fintech Magazine, we believe that the best outcomes happen when two strong entities come together with a shared purpose. As the saying goes, “Partnerships multiply power, not just add it.” This perfectly describes the synergy that occurs when organizations with complementary strengths and goals collaborate. So, when Mastercard and Nexi Group, two titans in the financial world, joined forces, we were excited to see what would be the impact on merchants and consumers alike.

By Chris Crespo

We were eager to understand how these industry leaders decided to combine their capabilities and market influence to boost their reach and innovation in account-to- account payments across Europe. Mastercard, a global leader in payment technology, and Nexi Group, a leading pan-European payment service provider which is represented as Nets in the Nordics, are forces with enormous gravitas in their fields. Together, their potential to reshape the account-to- account payments landscape in the Nordics is significant.

We spoke with Ian White, who leads Mastercard’s go-to-market strategy for open banking in Europe, and Nabeel

Moosa, who heads up strategy for Nexi’s e-commerce business unit. Our conversation about the partnership’s early successes and its benefits, also centered around celebrating how these two financial powerhouses are amplifying the industry’s value through their collaboration.

What was the foundation of the partnership between Mastercard and Nexi Group?

Nabeel: Open banking is a rapidly growing area. As a payment service provider, we are always looking for new payment methods that align with changing consumer habits. Mastercard stood out for its high-quality products and collaborative approach. We decided to work together to implement open

banking solutions for our merchants across Europe.

Ian: Account-to-account payments are becoming significant, making up about 20% of all e-commerce volumes in Europe. Open banking, a subset of A2A, has faced challenges in the past, but we’ve seen a significant shift in the last 12 to 18 months. This partnership with Nexi is about leveraging those changes and oTering new, compelling use cases that benefit merchants and consumers alike.

How does this partnership create synergies between Mastercard and Nexi Group?

Nabeel: Our industry is complex, and partnerships help simplify the ecosys-

tem. For years, we’ve collaborated with Mastercard, particularly through our brand Paytrail in Finland, where A2A payments are dominant. Together, we’ve been working to provide a cutting-edge solution that enhances the existing payment infrastructure.

Ian: The combination of Mastercard’s experience in running large-scale payment networks and Nexi’s deep knowledge of A2A payments creates a powerful synergy. We bring together the best of both worlds to drive innovation and improve the payment experience.

What practical benefits have merchants experienced through this partnership?

Chris Crespo, Head of Content at Nordic Fintech Magazine, sat down with Ian White, who leads Mastercard’s go-to-market strategy for open banking in Europe, and Nabeel Moosa, who heads strategy for Nexi’s e-commerce business unit, to explore their exciting new partnership.

Nabeel: In markets where A2A payments are already common, we focus on reliability, trust, and user experience. For new markets, our collaboration ensures that merchants can oTer a seamless, secure, and trustworthy payment option to consumers, ultimately improving conversion rates.

Ian: Security and trust are paramount. By integrating Mastercard’s secure channels and advanced authentication methods, we’ve been able to enhance the overall payment experience, making it not just secure but also convenient for consumers.

How does the partnership with Nexi align with Mastercard’s broader strategy?

Ian: Account-to-account payments are core to Mastercard’s multi-rail strategy, which means we are more than just a card company. We’ve made several acquisitions, including Vocalink and Nets Business Services, to strengthen our presence in this space.

Open banking is a natural extension of our capabilities, allowing us to oTer data and payment services that are infrastructure-agnostic, enhancing our value proposition for partners like Nexi.

How do diFerent markets in Europe adopt A2A payments, and what’s next in terms of innovation?

Nabeel: Payment needs vary across markets. In Europe, we’re moving towards instant payments, which will

only grow with the implementation of new regulations like PSD3. Open banking is paving the way for more consumer-oriented payment solutions, which could significantly change the dynamics of cost and conversion for merchants.

Ian: The Nordics, for example, are ahead in digital payments. However, the key to success in any market is adapting to local preferences while ensuring trust and security. As regulations evolve, so will the opportunities for innovation in payments, particularly in how open banking can be integrated into everyday transactions.

How does Mastercard’s technological innovation contribute to this partner-

ship, particularly in enhancing user experience?

Ian: We’re focused on bringing secure, innovative solutions to the table. For example, using app-to-app redirection and biometric authentication, we’ve streamlined the payment process. Consumers can now make payments with just one click, without manually entering information. We’ve also integrated features like account balance displays, improving both security and user experience.

Nabeel: From a merchant perspective, it’s crucial to oTer payment methods that are not only secure but also easy to use. By working closely with Mastercard, we ensure that our merchants benefit from cutting-edge solutions that increase conversion rates, reduce friction, and ultimately improve the overall payment journey.

What have been the early successes of this partnership?

Nabeel: Paytrail in Finland is a great example. In a market where A2A payments are already well-established, we’ve seen significant growth, not just maintaining but increasing our share of A2A payments. We’re also making strides in enabling high-value digital payments, which were previously challenging due to bank-imposed limits.

Ian: The scale and experience that Nexi brings, combined with Mastercard’s ability to run secure, large-scale payment networks, have led to promising results. We’re already seeing the impact in markets like Finland and are excited about the potential in other regions.

What are you most excited about for the future of this partnership?

Nabeel: As we gather more insights from merchants and consumers, we’ll refine our oTerings and explore new use cases for open banking. The ongoing evolution of regulations like PSD3 will also open new opportunities for growth.

Ian: Regulation is a catalyst for innovation. We’re looking forward to leveraging PSD3 and other regulatory changes to expand our oTerings. The future is about combining data and payments in ways that add real value to consumers and merchants.

It is a never-ending battle - but it is by no means lost

The fight against cybercrime and financial scams goes on and on. The fraudsters get cleverer by the day, but the financial sector and the banking sector are doing a pretty good job keeping up. Both sides use new technologies such as Artificial Intelligence, but now the fraudsters face a new weapon - global cohesion between multiple entities in the sector.

By Henrik Malmgreen

At Nexi Group, which owns Danish Nets and is today one of Europe’s largest players in payment solutions - The European PayTech - they naturally keep an eye on the developments in how both consumers and businesses are increasingly, and in ever more advanced ways, being swindled and defrauded. It may seem like a hopeless fight, but according to Sean Neary, who is Head of Fraud Risk Management Services at Nexi Group, there is no reason to fear that the battle is lost in advance.

“There is no doubt that we have experienced a paradigm shift within IT fraud driven by the changes we are seeing not least through Artificial Intelligence. Fraud is ocurring on such a large industrial scale today that it would be completely naive to think we can eradicate it. It will be there going forward, but the good news is that we, who fight it, have just as good tools at our disposal as the fraudsters,” says Sean Neary.

We have to fight seamlessly It is in fact a never-ending battle, but the battle is by no means lost. It’s rather about adopting new technologies first, and here Artificial Intelligence will play a big role. As Sean Neary puts it, “We are in a spike of innovation due to the

exponential growth of generative AI and because it has been made publicly available. Today it is a commodity everyone can afford, so it is a continuous scheme, where the advantage and strong hand will constantly swing from one side to the other.”

“Technology is an advantage for both sides in such a battle, but first of all, we have to fight cybercrime in a seamless way that doesn’t annoy customers by making it harder and more complicated to perform online financial transactions. Secondly, the financial sector and the banking sector are heavily regulated, while the fraudsters are not, making it a bit trickier for us to make use of the full potential of new technologies. We have a lot of issues to consider,” Sean Neary continues.

New markets open for fraud

At the same time, he sees another challenge. In all markets Banks and financial institutions have become more willing to take responsibility in connection with fraud, making it easier for customers to cover potential losses. Sean Neary is somewhat concerned that this might cause consumers to think less about how they should act online to avoid being scammed. Whether the number of cases of financial fraud online is increasing can be debated, but the number

Just because a fraudster is turned away at one door doesn’t mean he gives up. On the contrary, he will try many other doors, and therefore it is important that we have the opportunity to exchange information to uncover patterns and history so that all doors remain closed.

Sean Neary Head of Fraud Risk Management Services in Nexi Group

undoubtedly rises and falls in tandem with who is leading the arms race.

“The amount of fraud varies from country to country and from region to region. This is partly because some markets have been easier for fraudsters to conquer than others. For example, the English market has been accessible, while the Nordic market, including Denmark, has been more difficult due

Sean Neary Head of Fraud Risk Management Services in Nexi Group

The so-called ‘fourth industrial revolution’ in computing and Artificial Intelligence isn’t just helping legitimate firms. As fraudsters professionalize, banks and fintechs need to fight back - and a ‘one size fits all’ approach focused on Al alone won’t work.

to linguistic challenges in particular. But thanks to Artificial Intelligence and Machine Learning, this has now changed. Local demographic challenges have become easier to overcome through technology,” Sean Neary continues.

United we stand across the sector

Regardless of how user behaviour may develop in the future, he has no doubt that the financial sector and banks’ increased sense of responsibility is for the greater good. But he also emphasizes that no sector can solve the challenge alone. Every layer and every actor, from individual web shops to global banks, must work together, and here a technology like Artificial Intelligence becomes a crucial factor. It is about accumulating information to understand often very complex risk scenarios.

“Just because a fraudster is turned away at one door doesn’t mean he gives up. On the contrary, he will try many other doors, and therefore it is important that we have the opportunity to exchange information to uncover patterns and history so that all doors remain closed. In this area, we have an advantage over the fraudsters, namely the ability to accumulate knowledge across both types of trade and types of transactions. You could almost call it a form of distributed cybersecurity,” Sean Neary evaluates.

The best weapon is cooperation

He doesn’t hesitate to call modern fraud in the financial sector brute force

that must be fought with all means. One of these, in his view, is cohesion between multiple entities to a degree we haven’t seen before. The cooperation is not only national but global, which is also necessary with the many new types of channels on social media through which financial services are offered. The dialogue between providers and customers is constantly expanding, which has also meant that the telecom industry has now seriously entered the security work.

“The risk of experiencing fraud has exploded, just as both fraudsters and technology have improved, making the potential fraud market much more addressable and accessible. The effort has largely become industrialized in an attempt to maximize profits. Therefore, as I mentioned earlier, it is a continuous fight against fraudsters, but the battle is by no means lost. The biggest risk would be if the financial sector and the banking world do not understand how to coordinate their efforts. That would worry me,” concludes Sean Neary.

Understanding and Preventing Deception

Our podcast miniseries – Nexi Talks: Payment Fraud – brings you insights from those who know payment fraud best, speaking to a range of experts on current trends and challenges within the world of payments and security.

Listen now to understand the fast-changing threats coming your way and learn what you can do to prevent deception during the intensifying battle with fraudsters.

Nexi whitepaper - how to fight fraud’s new industrial revolution

Decoding Denmark

The Nordic region, especially Denmark, has led the way in integrating digital financial services with the public sector, providing efficient, user-friendly platforms. However, challenges persist due to regulatory hurdles, and some individuals find it difficult to access public services due to barriers to digital platforms, underscoring the importance of ensuring inclusivity and providing additional support.

By Jakob Frier

The Nordic countries are at the forefront of digital governance, where financial services are seamlessly integrated with public sector functions. This includes everything from tax filing and social security to digital banking and payment systems.

Citizens across the Nordic region benefit from highly efficient, user-friendly platforms that simplify complex financial processes and ensure accessibility for all.

“We usually say that (almost) all users are both citizens and customers in a bank. With this “overlap” in the user group, and both sectors being highly digitised, the collaborations have proved to be very beneficial and make it possible to develop solutions that are either linked or can be used across both sectors,” says Michael Busk-Jepsen, Executive Director, Digitisation, at Finans Danmark.

Denmark was one of the earliest countries to adopt digitisation fully. For many years, Danish banks have been pioneers in going digital, focusing on making banking more convenient for customers while cutting costs. Additionally, the banking sector has a strong tradition of working together on major infrastructure projects.

The financial sector has a history of being an early adopter of digital technologies. For example, Denmark was the first country to make electronic securities trading, replacing physical securities with digital records in 1983.

At the same time, the public sector in Denmark has pursued a strong

digital agenda for many years, guided by Joint Government Digital Strategies. These strategies involve collaboration between national, regional, and local governments to build a unified digital public sector.

“We have always had a strong tradition of good collaboration between the private and public sectors. That also goes for the banks’ cooperation with different public entities. With the public sector focus on digital strategies, it has therefore been quite natural to extend the collaboration to the public sector in the digital realm,” says Busk-Jepsen.

MitID revolutionizing security

A significant milestone in the digitisation of Denmark’s public sector was the launch of the digital ID NemID (EasyID), the electronic ID, in 2010, and since 2021 the next generation of digital ID - MitID (MyID).

“NemID was based on a collaboration

Selected e-nettet solutions:

Digital Tinglysning

Digitalisation of land registration provides society with significant savings of more than 100 million euros annually. The solution serves real estate agents as well as financial and mortgage institutions, ensuring that registration processes are carried out efficiently.

eSkatData

Allows banks to access customers’ tax information directly in the systems they use daily. This creates a solid

The collaboration is driven by a strong desire to create a single solution that can be used across public and private selfservice solutions.

Michael Busk-Jepsen

Executive Director, Digitisation, Finans Danmark

between the banks and the public sector, and the collaboration on NemID has been crucial for the digital development we have seen in Denmark over the past 10 years. And this has continued with MitID,” says Busk-Jepsen and adds:

foundation for customer advice and credit assessment without manual data entry and scanning of physical documents, resulting in less paperwork for all parties.

Ejendomsdata

Provides access to data such as property characteristics and historic prices, helping both real estate agents and financial institutions when setting the right listing price or offering a loan. The solution saves time on documentation and data entry.

Michael Busk-Jepsen Executive Director, Digitisation, Finans Danmark

Finanssektorens Hus

“The collaboration is driven by a strong desire to create a single solution that can be used across public and private self-service solutions.” Today, MitID is used by all Danish banks and Public Authorities. It is also used by more than 1,400 third-party service providers, ranging from the Danish version of Craigslist, DBA, the Danish dating portal Scor.dk, to the national lottery and gaming company in Den-

mark, Danske Spil. According to Finans Danmark, MitID has approximately 20 million transactions each week. MitID also serves as a great example of how the quality of the digital solutions has increased security when it comes to avoid misuse or fraud. Neither MitID nor NemID has ever been hacked due to multiple layers of protection. MitID also protects against identity theft and meets high standards for identity verification.

“The solution is a good example of effective collaboration between the public and financial sectors. A solution that ensures that Danes can easily and securely be identified and communicate with authorities and businesses online,” says Daniel Vittrup, Deputy CEO at e-nettet.

e-nettet is the financial sector’s joint digitisation enterprise and has contributed to many crucial digital solutions.

PHOTO: FINANS DANMARK

Digitisation empowering banking

Due to the high degree of digitisation, the financial sector can offer products faster. As a customer, you no longer need to go to the bank during business hours to sign a piece of paper. As a bank, you get the desired response immediately and are no longer dependent on physical locations.

According to e-nettet, the vast majority of banking transactions and interactions can be handled remotely today, making bank operations much more efficient. This has led to the closure of many physical bank branches.

Public-private partnerships have created networking opportunities for companies, allowing them to connect with potential partners, investors, and customers.

“Systems like MitID and a generally high level of digitisation in Danish society make Denmark the perfect sandbox for fintechs to launch new solutions and services. The well-developed digital infrastructure serves as a strong foundation for many new start-ups. New users can easily identify themselves, and digital communication channels are already trusted and well established,” says Vittrup.

Data from the European Commission confirms that we have one of the EU’s most digital economies and societies.

“We are quick to adapt to new digital solutions, and our public and private sectors are among the most digital – not just in Europe – but the entire world. This is an excellent foundation for the introduction of new solutions,” says BuskJepsen and highlights that public-private collaboration on digital ID has been essential in enabling the development and launch of several other solutions, such as the digital driver’s license, a Corona passport, and strong customer authentication for card payments.

“It is unique in the EU to have a single digital ID that can be used both for online banking, at the doctor’s, on several private companies’ websites, and for general communication with the public sector. It makes it easier to act digitally as a bank customer and citizen.” He/ she says.

Factors such as public sector budget constraints, procurement rules, and regulatory requirements can delay the development of solutions through public-private partnerships in Denmark.

“Strong governance and ongoing

The well-developed digital infrastructure serves as a strong foundation for many new start-ups.

Daniel Vittrup Deputy CEO, e-nettet

dialogue are crucial to navigating these complexities. We believe overcoming these challenges will ultimately lead to more satisfied citizens and bank customers,” says Busk-Jepsen.

Digital inclusion challenges

One approach to ensuring widespread digitisation in Denmark is through consistency. The chosen strategy mandates everyone to adopt a particular platform or solution, with exceptions only granted under specific conditions.

However, this approach also presents particular challenges.

Some estimates suggest that nearly 20% of the population aged 15 to 89 face digital challenges due to various factors, including disabilities, limited IT skills, a choice to avoid technology or lack of registration in Danish systems for those who have recently moved to Denmark. This presents a challenge that demands additional support from authorities.

“A specific challenge for Denmark is that the public solutions must be capable of accommodating all citizens in all situations. This brings additional complexity and cost into any collaboration and the financial and public sector must work together well in order to secure effective ways of supporting the non-digital citizens,” says Vittrup.

Denmark has reached out to non-digital citizens by offering in-person assistance at places like Citizen Service Centers (Borgerservice) and bank branches. For example, Danish banks helped with the roll-out of MitID by using their branches and support teams to guide citizens who needed help. Other approaches have included running awareness campaigns for specific groups and working with interest organisations to gather feedback and ideas.

Daniel Vittrup Deputy CEO at e-nettet

Finanssektorens Hus

PHOTO: FINANS DANMARK

Ready to take on the tech giants

Vipps MobilePay is well on its way to becoming the largest platform for mobile payments, not only in the Nordic region but throughout Europe. The competition is tough, but CEO Rune Garborg looks forward to what he calls “a battle between giants.”

By Henrik Malmgreen

From my perspective, there is no doubt that the competition in the mobile payments market will intensify over the coming years. I believe, among other things, that Apple will ramp up its efforts significantly, but I am actually looking forward to a more competitive situation. Since the merger between Denmark’s MobilePay and Norway’s Vipps in 2022, we have become so much stronger and grown rapidly.”

So says Rune Garborg, CEO of Vipps MobilePay, and even though the competition will get tougher, he expects the company to show a profit by 2026 at the latest. He is, in fact, looking forward to the heightened market competition, which he calls “a battle between giants.” It may seem like bold and grand words when it comes to competing with global tech giants, but he is convinced that the company now has a position that makes it possible.

The Champions League of the mobile world

“With a Nordic platform, where we have now opened up for payments across Denmark, Norway, Finland, and soon Sweden, we are ready to compete in what I would call the Champions League of the mobile payment world. We already have a very strong position in Denmark and Norway, while there is

great potential for further growth in Finland, and the same goes for Sweden,” explains Rune Garborg.

Currently, Vipps MobilePay has not yet launched in Sweden, but he expects the launch of the new crossborder payment option will also help open up this market. He sees a single, unified Nordic platform and, not least, payments across borders as two of the strongest parameters in competing with international and global players among the tech giants.

Feeling privileged in the competition

“It’s simply about reaching a critical mass of users, and I feel we are well on our way. At the same time, it is important that we are local and closely connected with the banking world.

This builds trust among our customers, which is important not only when we talk about private customers but also when we talk about businesses. This is an area we are also going to invest heavily in, so I actually feel we are quite privileged in our market position,” Rune Garborg explains.

He sees the mix between private users and business users as a strong competitive parameter that can and should significantly help spread awareness of the services and offerings Vipps MobilePay provide. Rune Garborg adds that if the company

Rune Garborg, CEO of Vipps MobilePay, is looking forward to what he calls “a battle between giants” in the mobile payments arena. With a joint Nordic payment platform and a successful merger between Vipps and MobilePay behind them, he sees an organization that is ready to strengthen growth in the markets it operates in with power and enthusiasm. Already, they are a clear number one when it comes to the number of users in the Nordic market.

also succeed in the Swedish market, it could eventually become the largest mobile payment platform in Europe.

Finally, competition is going to be free

Since June 2024, when payments were opened up across Denmark, Norway, and Finland, the number of transactions has exceeded expectations. Vipps MobilePay had an expectation of 1,000 daily payments across border, but after just two months, they reached 65,000 payments, and now Sweden is also going to be included in the arrangement. Meanwhile, in 2024, there was positive news that the EU Commission reached an agreement with Apple, allowing other wallets besides Apple Pay to be used for contactless payments on iPhone.

“This is a milestone and a big victory after years of fighting for free competition in the mobile payments area. It is important for us to be present in all

We are ready to compete in what I would call the Champions League of the mobile payment world.

Rune Garborg CEO at Vipps MobilePay

payment situations including in stores, and now we finally have the opportunity to launch an in-store payment solution that will simplify payments for our users. Our ambition is to be the leader in contactless payments in the Nordic region, and we are working hard to build a user-friendly and cost-effective solution,” Rune Garborg concludes.

Vodeno and Aion Bank Explain Why Baas From a Bank Is a Smart Choice

Vodeno and Aion Bank are partners offering BaaS solutions to European companies. In July, UniCredit announced their agreement to acquire Aion Bank and Vodeno. This is the first major European bank to recognise the BaaS model as a future growth opportunity and invest in its development. NFM caught up with Noah Sharp, CEO of Vodeno, for a quick chat about the state of BaaS in Europe.

By R. Paulo Delgado

What makes the Vodeno and Aion partnership special?

Vodeno/Aion is a well-established player in the European BaaS sector.

Vodeno has built a fully cloud-based core banking system, leveraging a private blockchain for maximum data integrity. The platform isn’t just a thin layer. We deeply integrate all banking services, including ledgers, accounts, payment messaging, and regulatory reporting. The system is extendible, scalable, and flexible enough to expand easily into different geographies, enabling seamless embedded banking solutions.

Our partner Aion is a fully regulated digital bank and credit institution, operating with an ECB licence, supervised by the National Bank of Belgium, with additional branches in Poland, Germany, and Sweden.

The ECB licence means Vodeno/Aion can offer a complete suite of banking services, combining API-based tech stack for quick integration with banking licence and regulatory and compliance expertise in a fully end-to-end offering.

When would a company choose to use a BaaS solution?

Any business with a built-in customer base—where financial solutions embedded directly into their customer journey can add value and create a

better experience—should consider BaaS. We see use cases in the e-commerce and marketplace sectors that want to offer a choice in payment solutions, such as instant payment, regulated lending or BNPL—these companies want to offer banking products, but aren’t interested in building their own tech or becoming a regulated bank.

Tell us about some of the BaaS regulatory troubles we’ve seen recently.

All BaaS providers aren’t the same. Some are strictly IT specialists, while others hold licences limited to payment products.

BaaS products are regulated banking products, so they must be fully compliant. We’ve seen some BaaS providers with inadequate procedures in KYC and AML. We’ve also seen providers without the necessary licence outsource these responsibilities to third parties, causing complications.

In reality, which banking licence a

Noah

Sharp CEO of Vodeno

Access to local payments, especially for instant payments, is a major issue for many businesses.

Noah Sharp CEO of Vodeno

BaaS provider has (if any) dictates the services they’re able to offer, just as much as their underlying technology.

So, companies don’t need a banking licence if they use your BaaS service?

Correct. Previously, it was all about technology. In today’s BaaS landscape, API-based platforms are table stakes, and businesses are looking for providers that can offer the tech stack, as well as the licence and compliance expertise to help them scale.

However, if a client already has a licence, they can—and some do—use our tech for their banking services.

What geographies do you operate in?

We can passport our services across 15 EEA markets with Aion’s Belgian

home licence. Aion’s branches in Sweden, Germany and Poland also mean we have access to local payment services, can issue virtual IBANs, and use local clearing schemes.

Access to local payments, especially for instant payments, is a major issue for many businesses. Also, IBAN discrimination still exists, with settlements sometimes taking up to five days. Increasing local payment support increases acceptance rates. We offer local payment methods in several zones.

What should Nordic businesses considering BaaS take into account?

1. Determine the friction points in your customer journey and then model your embedded finance offering based on that.

2. GTM is just as important as the product itself: businesses can’t adopt BaaS with a mindset of “build it and they will come.” Careful planning must go into the GTM strategy for any BaaS solution.

3. Finally, regulation and compliance are critical. Their BaaS provider must be licensed to offer the services they need, or the business itself must already have the applicable licence and compliance procedures in place.

AI, Financial Crime, and the Battle for Control: Who’s Winning the Arms Race?

Banks have been using machine learning (ML) and artificial intelligence (AI) for decades to determine credit scores, predict trends, and spot fraudulent transactions. However, the emergence of a new type of AI—generative AI—caught even experienced data scientists off-guard with regards to its sophistication.

By R. Paulo Delgado

The emergence of GenAI poses numerous opportunities in the banking sector, particularly in the area of customer service. However, the new technology also enables sophisticated levels of attack that have never been seen before, forcing banks to urgently reevaluate internal processes.

“Not everyone is aware of the urgency. Financial institutions should take action now rather than later,” says Sophia Qureshi, Vice President, Fraud Solutions

at Provenir, a decisioning platform for financial services providers.

Deepfakes and no-code phishing websites

The threats posed by the dozens of GenAI tools now available affect a bank both internally and externally.

Internally, one of the immediate areas for attention is KYC processes, says Qureshi. Using freely available tools, numerous viral online posts have already demonstrated that automated KYC might

soon come to an end. Online tutorials even exist on how to use a popular AI image generator to generate an image of a person’s face against any background— such as the typical photos of a person holding a card with some text on it that are used in KYC verifications.

Voice AI scams are a growing threat, CBS News reported just a few months ago. The article details their experience with an online AI voice cloning tool that costs only $5 and requires just a small sample of a voice to generate voice content from any text.

“For example, in a news interview, you could take quite a good sample of how I talk, what words I use, and the intonation. You could then feed that into a generative AI tool, and it would be able to generate my voice to say whatever you typed,” says Qureshi.

Just before this article went to press, Thomas Krogh Jensen, the CEO of Copenhagen FinTech, participated in an experiment demonstrating the shocking accuracy with which anyone can create a full-scale video deepfake using only a voice sample, basic video footage, and the right GenAI software. The resultant deepfakes are remarkably accurate, and signs indicate that they will become even more so.

External threats

The other problem is that GenAI empowers any criminal to easily create phishing websites without any coding knowledge, and to write compelling phishing emails without any grammatical errors.

“You can tell the tools to write to a certain persona and use a certain style of language, and it does so incredibly

Sophia Qureshi Vice President, Fraud Solutions at Provenir

Not everyone is aware that an urgency exists. Financial institutions should take action now rather than later”

Sophia Qureshi Vice President, Fraud Solutions at Provenir

well,” Qureshi tells NFM. “ChatGPT can also write code very well. Whereas, before, you’d require some level of skill for these attacks, now anyone will be able to do them.”

Where the solutions lie

Qureshi says that the first stage of combatting this growing problem is awareness. “I studied computer science and yet even I was surprised by the immense capabilities of this new technology. I believe that many in this space are perhaps not yet fully aware of how powerful it truly is,” she says.

That awareness extends to bank employees so they understand how believable text, voice, and videos created by generative AI might be.

On the technological end of the spectrum, Qureshi envisions a battle of AI versus AI as banks start to use their own AI, trained on customer behaviour patterns, to detect deviations from those patterns.

The option opens up numerous ethical questions about how much customer data a bank should collect. These questions can’t be ignored, just as the growing threat can’t be ignored.

“The main thing is that financial institutions should start thinking that they must have a strategy around this. Moving forward, they should look at everything in their processes and policies from behind that lens,” Qureshi says.

AI, Compliance, and the Brutal Truth About Payments: Monika Liikamaa’s No-Nonsense Take

Late summer is the perfect time to visit Paris—not just for the warm, sunny weather, the sublime croissants, and exceptional coffee, but also for the unique opportunity to meet some of the most influential voices in fintech. This time around, my trip to the La Ville Lumière was made even more memorable by a one-on-one conversation with Monika Liikamaa, Co-CEO and Co-Founder of Enfuce, one of Finland’s most successful fintech startups.

By Monika Liikamaa

Amidst the bustling scene of industry leaders and innovators attending Visa’s Payment Forum at La Defense , Monika is always a refreshing source of insight—not only for her role in founding and scaling one of Finland’s most successful fintech startups but also for her clear vision and decisive approach to overhauling the world of payments.

Monika’s thoughts on the current state of fintech were as sharp and insightful as expected. When asked about the most impactful trends in 2024, Monika quickly pointed to the rising prominence of AI. “There’s a lot of hype around embedded finance, but it’s really just old concepts becoming useful again,” she said. “The adoption of AI, however, is something truly transformative. We’re already using AI at Enfuce to improve fraud monitoring, KYC processes, and customer service. AI helps us fight human trafficking, detect

terrorist financing, and combat money laundering more effectively.”

She emphasized how AI, particularly in fraud detection and compliance, is proving to be a valuable tool, helping to identify patterns and risks much faster than traditional methods. “AI is just advanced machine learning. The real power lies in its ability to process massive amounts of data and learn from it. It’s especially effective when it comes to detecting fraud, which is a critical issue in today’s world,” Monika explained. “AI can help businesses, both on the consumer and corporate sides, understand financial behaviors and risks much better than before.”

Beyond AI, Monika touched on other emerging trends in the industry. She noted the significant buzz around account-to-account payments and the ongoing evolution of regulations like PSD3. “I’ve seen PSD from its very beginning, and while the first two versions

didn’t deliver on their promises, PSD3 feels like a step in the right direction. It’s designed to give payment institutions better access to banking services, and that’s crucial for the ecosystem’s growth,” she said.

As the conversation unfolded, Monika’s passion for the importance of regulatory evolution and compliance was evident. “Living in Europe and the Nordics, we are very compliance-driven. Some see this as a burden, but I believe it’s a strength. If you can make it here, you can make it anywhere,” she said with conviction.

During our conversation, Monika touched on an often-overlooked aspect of fintech and innovation: human behavior. Drawing from her background and experience, she emphasized the behavioral component that frequently hinders progress, even when the right tools and technology are in place. “Humans are predictable,” she remarked,

Monika Liikamaa Co-CEO and CoFounder of Enfuce

standing people and finding ways to align their behavior with the solutions that truly serve them best.

We need to stop being apologetic and start exporting our successes to the rest of Europe.

Monika Liikamaa

Co-CEO and Co-Founder of Enfuce

“we’re herd animals, often acting in systematic ways that aren’t always rational.” Monika pointed out that despite having the technology to drive better decision-making—whether through AI or other advanced tools—people’s natural resistance to change, fear of new technology, or even ingrained habits can slow down adoption. “Tech is never the problem,” she explained, “it’s the people behind it. In the end, politics, fear of mistakes, or simple inertia can be the biggest barriers to doing what’s right or pushing innovation forward.”

Her candid reflection on behavioral economics underscored how much fintech, at its core, is about under-

Monika is also realistic about the challenges facing the fintech world, particularly when it comes to partnerships between financial institutions and non-financial entities like retailers and mobility companies. She believes these partnerships are driven by necessity, often because existing payment solutions aren’t tailored to specific industries. “Sometimes, businesses just aren’t good at buying the right solutions, so they try to build their own. But honestly, nothing truly new has been invented in payments since the card schemes came about. It’s all about adapting existing solutions to meet new needs,” she remarked.

Monika’s pragmatic approach to the industry was clear throughout our conversation. When asked about the potential of central bank digital currencies (CBDCs), she responded with cautious skepticism. “I’d love to be proven wrong, but I don’t believe CBDCs will succeed. The central banks are political entities, and they move too slowly to keep up with market forces. Business-driven solutions are always going to be more

effective,” she said.

One of the most compelling parts of our conversation was Monika’s deep commitment to using fintech as a force for good, particularly in the fight against human trafficking. “We’re seeing an increase in human trafficking across Europe, and it’s heartbreaking. At Enfuce, we’re leveraging AI and our payment services to help combat this issue. It’s not just about making payments faster or more efficient—it’s about using our technology to do real good in the world.”

As we wrapped up, Monika shared her excitement about the future.

“We’re seeing so many amazing things happening in the Nordics, especially around ESG and sustainability. But we’re too humble about it. We need to stop being apologetic and start exporting our successes to the rest of Europe,” she urged.

Monika Liikamaa’s clarity of thought, combined with her passion for driving meaningful change, makes her one of the most compelling voices in fintech today. At Enfuce, she’s scaling a successful business, while modelling the future of payments in a way that prioritizes compliance, innovation, and social responsibility.

Scoutz will deliver the best Advisor universe to Danish Banks

In January, BEC Financial Technologies launched its new development hub Scoutz. The ambition is to create the strongest innovation and development hub for Salesforce in the Nordics and elevate qualified customer advice to a completely new level.

By Henrik Malmgreen

Over time, the financial ecosystem has changed significantly in the sense that more and more financial services and offerings have become much more nuanced than before. In other words, the options for consumers have become more diverse, as they can now combine different loan offers and types in ways that were not previously possible. At the same time, new technological platforms open up a higher degree of self-service.

This means that the daily routine has changed for the customer advisors employed in banks. Previously, when a customer wanted a loan, it was typically the advisor’s responsibility to handle the entire process from start to finish. Today, it often happens that the customer research different loan options in advance and therefore only contacts their financial institution at a later stage in the process.

More of a partnership with the customer

“You could say that it is now more often a partnership, where the customer and the advisor together figure out how to solve a current loan situation. It is a daily reality that banks must be prepared to handle, and it is a reality that places entirely new demands on the customer advisors,”

explains Peter Smith, Head of Scoutz, an innovation and development hub established by BEC Financial Technologies.

The goal is to boost IT development in the 17 affiliated Danish financial institutions and create a modern platform that

can connect customers and advisors in a way that elevates customer service to a whole new level. At the same time, it is a platform that opens up new collaboration opportunities with the fintech environment, allowing them to contribute new and customer-friendly solutions.

Northern Europe’s largest competence centre

“We have chosen to base future development work on Salesforce, and with

Scoutz, we have established Northern Europe’s largest combined Salesforce competence centre. For several years, we have worked with Salesforce at BEC, and some of our larger financial institutions have used solutions developed here plus they had own Salesforce teams. However, they have been somewhat diverse, so now we have chosen a strategy where all Salesforce development is moved to Scoutz for the benefit of our community.”

Peter Smith Head of Scoutz

This is according to bank director John Lundsgaard from one of the affiliated banks, Spar Nord. He further explains that by pooling resources, agility is increased, allowing new technological solutions to be brought to the banks more quickly, enabling them to better serve consumers - both through their own solutions and third-party solutions.

A

common platform offers new opportunities

“With a common platform like Sales-

We strongly believe that the consumer and the customer advisor should be brought closer together. Today, the consumer doesn’t start by calling the advisor. He or she typically explores several options in the financial universe before contacting the customer advisor. Therefore, today’s dialogue is much more characterized by a partnership between the consumer and the advisor. We must be prepared to handle that situation.

Peter Smith Head of Scoutz

force, it is relatively easy to create an API (Application Programming Interface) for new solutions and thus make it possible to deploy them in our environment,” John Lundsgaard continues. Peter Smith fully agrees and emphasizes that the establishment of Scoutz is based on a strategic decision involving all 17 member banks in BEC.

“Fundamentally, the banking and customer advisory solutions developed at BEC are good, but we can make them even better by pooling the teams, and we have had a clear plan for this since we launched Scoutz in January 2024. It is entirely up to each bank how they want to serve their customers, but we need to provide the foundation that creates the optimal synergy between the digital world and personal advice,” Peter Smith elaborates.

Based on a leading global platform Initially, 11 solutions previously developed within the BEC framework will now benefit all the banks, but in the long term, only the imagination sets the limit for what new Salesforce solutions can be developed. Salesforce is one of the leading platforms globally for customer service, so Peter Smith clearly sees opportunities to be inspired by good solutions from other industries.

“Today, traditional banking services are increasingly intertwined with other types of services, such as insurance and pensions. This means that the financial universe is becoming more complex, and as consumers, we are also increasingly motivated to operate on digital platforms, which means that entirely new demands are being placed

A Completely new organization has been created

Scoutz consists of approximately 120 employees located in Aalborg, Copenhagen, and Warsaw. The employees in Aalborg came from Spar Nord, while the employees in Copenhagen came from BEC, Nykredit, and Arbejdernes Landsbank. The employees in Warsaw came from BEC, which already has a large presence in the Polish capital. At all three locations, employees have moved to new offices to strengthen the specific Scoutz culture, which should be characterized by a shared drive for innovation.

Scoutz is established as a separate unit under BEC Financial Technologies, and a board of directors has been set up with people from BEC’s management, Arbejdernes Landsbank, Nykredit, and Spar Nord. In daily development work, Scoutz itself handles direct contact with the customers, i.e., the 17 banks in the BEC community. All Salesforce competencies have now been transferred from BEC and the banks to Scoutz, and through collaboration with Salesforce, Scoutz has gained a very strong technology partner.

I have very high expectations for Scoutz. I am sure that we have created a fantastic workplace and a fantastic organization, which means that we can move very quickly in line with consumers’ increasing demands and expectations. Consumer demands are constantly growing, and in that context, I am pleased that with Salesforce, we have chosen a platform that, from a development perspective, makes it relatively easy to integrate solutions from the surrounding fintech environment.

John Lundsgaard, Managing Director, Spar Nord bank

on customer advisors in financial institutions,” Peter Smith continues.

Technology as a competitive parameter

Both he and John Lundsgaard are convinced that agility combined with technology is an essential competitive parameter today. They are therefore pleased that they have managed to create a competence centre with employees who know the industry. The financial sector is characterized by a high degree of regulation and legislation, so technological knowledge alone is not enough.

“We all need to be ready to fully enter the digital world, but we must not forget compliance with legislation. Therefore, we also make extensive use of the financial sector’s educational programs so that customer advisors in banks can feel up to the task when serving customers. But with Salesforce backing us, I am confident that we have strategically chosen the right solution,” concludes Peter Smith.

John Lundsgaard Managing Director, Spar Nord bank

A Day in the Life of Frank

The future of banking is about to disappear—blending into the fabric of our daily lives. Imagine AI and data working together, not just managing your finances, but predicting your needs before you even think about them. Your financial avatar will seamlessly handle everything, from optimizing your spending to planning your day, making every decision automatic and effortless. No more budgeting, no more stress—just a world where your life is powered by intelligence, freeing you to live with more freedom and precision than ever before. We are not talking about just the future of banking, but about the future of living.

By Dharmesh Mistry

Frank woke to the soft glow of his circadian lamp, the gentle hum of his apartment’s environmental systems creating a soothing ambiance. As his consciousness drifted upwards, a subtle vibration from his wrist alerted him to a new message. A glance at his biometric interface confirmed it was his financial avatar, “Neo,” with a routine morning update.

“Good morning, Frank,” Neo’s voice, smooth and reassuring, projected into his mind. “Your sleep quality was excellent, contributing to your overall wellness score. Your energy levels are optimal for a productive day. So far this week your personal data has generated €57 of income. Based on your current expenditure patterns and income projections, you have a discretionary spending allowance of €127 for today.”

Frank smiled. A simple message, yet it encapsulated the seamless integration of finance into his life. No more budgeting apps, no more manual tracking. Neo handled it all.

As he showered, the bathroom mirror displayed a subtle overlay of product recommendations based on his skin type, past purchases, and current inventory. He chose a new facial

cleanser, the cost added seamlessly to his daily expenditure. Stepping out, his wardrobe was projected as a holographic display, with outfit suggestions tailored to the day’s weather, social events, and even his mood, calculated from his biometric data.

Breakfast was a simple affair. A nutritionally balanced meal prepared by his smart kitchen. As he ate, the kitchen display showed the nutritional breakdown, cost per serving, and even suggested recipes for leftovers. A subtle notification indicated a delivery was scheduled for later that day, a refill of his favorite coffee pods.

Heading out, Frank’s autonomous solar powered car was waiting. As he settled in, the car’s AI suggested the optimal route to his office, factoring in traffic, weather, and matched to preferred routes. His car had booked a parking space which would maximise his solar recharge as it was running low. His car’s exterior acted as a dynamic canvas for advertisements tailored to his interests, this was just one part of his personal data income.

At work, Frank’s role as a software engineer was demanding but fulfilling. His augmented reality glasses gave

him the option of unlimited screens displaying code, data visualizations, and communication channels. As he worked, Neo monitored his focus levels and offered short breaks to optimize productivity. When he ordered lunch, the cost was automatically deducted from his daily allowance, with a healthy discount applied due to his company’s partnership with the local eatery.

Mid-afternoon Neo interrupted Frank in his break. “Frank, an unexpected expense of €243 has arisen. Would you like to use your savings, reduce discretionary spending, or explore alternative financing options?”

Frank paused, considering his options. “Neo, provide a detailed breakdown of the unexpected expense please” he requested.

A holographic display appeared, outlining the issue: a minor repair needed for his apartment’s environmental system. Neo re-presented various options and Frank chose a slight reduction in discretionary spending, confident in Neo’s ability to manage the adjustment.

As the workday ended, Frank’s attention turned to leisure. He scheduled a virtual reality gaming session with

friends, the cost of the session added to his entertainment budget. Later, he browsed through potential vacation destinations, Neo provided real-time cost comparisons and suggesting optimal travel dates based on his work schedule and historical preferences.

Returning home, Frank relaxed on his couch. His smart home adjusted the lighting, temperature. He reflected on the seamlessness of his life. Finances were no longer a source of stress or anxiety. Neo was more than a financial manager; it was a partner, anticipating his needs, optimizing his spending, and ensuring financial security. It was a world away from the days of manual budgeting, bank visits, and the constant worry of overspending.

Frank was about to select an evening

meal that his smart kitchen would prepare based on his dietary preferences and the day’s nutritional needs. However, he was interrupted by a notification from his social platform. An old friend, Sarah, was in town and suggested a dinner meetup. Frank accepted and Neo sprang into action immediately suggesting a restaurant based on both their dietary preferences and previous experiences. The reservation was made automatically, and a detailed itinerary, including directions and potential outfit choices, were presented.

At the restaurant, the experience was seamless. The host recognized Frank and Sarah, their preferences already loaded into the restaurant’s system. The menu was personalized, highlighting dishes aligned with their tastes. As they

dined, the restaurant’s ambient lighting adjusted to create a cozy atmosphere, and soft background music played. Payment was effortless, with the bill split evenly and charged to their respective digital wallets.

On the way home, Frank received another notification from Neo this time about an unexpected income: a small dividend from an investment account. Neo suggested potential uses for the funds, including increasing savings, making a charitable donation, or treating himself to a small purchase. Frank opted to increase his savings, feeling a sense of satisfaction in his growing financial security.

Back home, Frank decided to engage in some personal development. His learning platform suggested courses aligned with his career goals. He chose a course on artificial intelligence, and as he progressed, the platform adjusted the pace and complexity based on his learning style and comprehension.

As sleep approached, Frank’s bedroom transformed into a serene environment. The temperature was adjusted, soft sleep-inducing sounds played, and the circadian lamp gradually dimmed. Neo provided a final update for the day, summarizing expenditures, income, and overall financial health. With a sense of contentment, Frank drifted off to sleep, knowing his financial life was in capable hands.

The next morning, Frank woke refreshed and ready to face the day. As he stretched, Neo’s voice greeted him, providing a summary of his sleep quality, weather forecast, and a personalized morning routine suggestion. Another day began, seamlessly integrated with the financial fabric of his life.

Frank’s life was a testament to the evolution of banking. It was no longer a series of transactions but an invisible infrastructure supporting his every decision. From the moment he woke to the time he slept, financial considerations were present, yet unobtrusive. It was a world where money was not a master but a tool, managed intelligently to enhance life’s experiences.

This future envisioned a world where technology, not humans, becomes the primary financial manager. It’s a world of convenience, efficiency, and personalization, where financial worries are minimized, allowing individuals to focus on other aspects of their lives.

Dharmesh Mistry

Fintechs Navigating AI Growth

AI in fintech is set to grow rapidly as it helps improve security, streamline processes, and meet strict regulations. Companies like Lucinity and Gilion are on the frontlines, confronting major challenges such as maintaining transparency, addressing ethical concerns, and staying ahead of complex regulations. Their strategic use of AI isn’t just about gaining an edge; it’s about staying relevant and trusted in a changing landscape.

By Jakob Frier

Cutting-edge technologies like AI are becoming more essential to finance, offering cost reduction, streamlined financial management, and increased earnings for businesses and clients. The exact figures vary from survey to survey, but the conclusion is clear: AI in fintech is projected to grow significantly over the next five years.

AI’s ability to prevent fraud and cyberattacks is a key market driver, as customers prioritise secure banking experiences. Meanwhile, companies and startups in the industry are actively developing next-gen AI solutions.

Lucinity leverages generative AI and machine learning through its Generative Intelligence Process Automation (GIPA) framework to revolutionise financial crime prevention. Key components include Luci Studio, a no-code platform for creating and deploying AI skills, and federated learning for privacy-enabled algorithm improvement.

“The framework offers customised AI solutions that learn and improve over time. This helps financial institutions streamline operations, meet regulatory requirements, and increase efficiency,” says Theresa Bercich, CPO and Co-founder of Lucinity.

As AI systems become more central to decision-making processes, the need to mitigate risks like algorithmic bias and ethical issues has grown significantly.

“To avoid biases, we must ensure that the training data is diverse and representative of different populations. Second, regular audits are conducted on AI models to detect and correct any biases that may develop over time,” Bercich says.

We must ensure that users can trust the AI’s outputs and understand the rationale behind its decisions

Theresa Bercich CPO and Co-founder of Lucinity

A third key component, explainable AI techniques, are implemented to make AI decisions transparent and understandable.

“We must ensure that users can trust the AI’s outputs and understand the rationale behind its decisions,” says Bercich.

The rise of XAI

Explainable AI, or XAI, techniques provide insights into how AI models aim to make the decision-making processes of AI systems more transparent and understandable to humans.

Several techniques collectively help in understanding and trusting AI decisions. The more common methods include feature importance, which shows which inputs affect decisions the most, and visualisation techniques

like heatmaps illustrating input-output relationships. Also, simple surrogate models can mimic complex models, and counterfactual explanations show how input changes can alter outcomes, and some models, like decision trees, are naturally easy to interpret.

The need for explainable XAI is multi-faceted and varies based on the audience including end users, AI developers, and product engineers. End users require trust and reassurance through understandable processes and feedback. AI developers must grasp current model limitations to validate and enhance future versions. Product engineers across various domains need access to and optimisation of decision explanations to effectively deploy AI systems in real-world environments.

Theresa Bercich

CPO and Co-founder of Lucinity

Stakeholder-Specific Requirements for Explainable AI

Who? Why? For what?

End-user

Understand decisions

AI developer Understand limitations, improve future visions, debug algorithms

Product designer System design, integration, and deployment

Lucinity addresses transparency issues in AI by implementing explainable AI techniques that provide clear and understandable explanations of decisions. The aim is to build trust and ensure users can comprehend AI outputs.

“We maintain comprehensive audit logs and traceability, allowing every AI decision to be tracked and reviewed, further enhancing accountability,” Bercich says.

Research from McKinsey shows that companies achieving significant returns from AI - those attributing at least 20 per cent of EBIT to AI - are more likely to follow best practices for explainability. Additionally, organisations that build digital trust with consumers by making AI explainable are more likely to see annual revenue and EBIT growth rates of 10 per cent or more.

“We prioritise transparency and understandability in our platform, designing with data experience at the core, which is essential for us and our customers,” says Elin Bäcklund, CTO at Gilion.

Gilion is a Swedish fintech that offers real-time growth loans and analytics to help businesses accelerate their growth.

Many of us have been using AI to support investment decisions since long before the rapid AI development started a couple of years ago.

Persuasive explanation

Intrinsic explanation, training and validation

Complete explanation

“Our customers rely on our advanced forecasting capabilities to plan scenarios, fundraise and monitor strategic bets. At the same time, we’re using the platform’s capabilities for our financial decisions regarding millions of euros. So, having precise, unbiased models is an essential part of our business model. The same precision as well as transparency that our own team needs, we give back to the founders,” Bäcklund explains.

Dealing with built-in biases

The finance industry is rife with inherent bias, evident in the overrepresentation of certain types of founders and companies in equity-funded data sets, according to Bäcklund.

“Fundraising has been a game of knowing the right people and making the right pitch. Money is inaccessible, and the funding process lacks transparency,” she says.

One often-cited example of algorithmic discrimination in the financial sector pertains to credit decisions, where automated systems magnify historical trends or exclude certain demographic groups because of the data they were trained on.

AI systems are only as reliable as the data they are trained on: incomplete or unrepresentative datasets can compromise AI’s objectivity. At the same time, biases within development teams may further reinforce these biases in the system.

By employing a systematic, data-driven approach to investment decisions powered by AI, Gilion aims to minimise unconscious biases and enhance the accuracy of company analysis.

“It’s much easier to do bias training or

Source: Yang, W., Wei, Y., Wei, H. et al. Survey on Explainable AI: From Approaches, Limitations and Applications Aspects. Hum-Cent Intell Syst 3, 161–188 (2023).

Elin Bäcklund CTO at Gilion

Elin Bäcklund CTO at Gilion

diversify our portfolio when AI plays a part in our decision-making. Our scoring models can be tweaked, and we can clean our data sets to make them more representative. It’s much harder to iterate a human gut feel,” says Bäcklund.

COMPLIANCE EVOLUTION

Regulations and legislation in the Nordic region, such as GDPR and the proposed EU AI Act, heavily influence AI startups in the fintech industry by enforcing strict standards on data privacy, transparency, and ethical AI use. These regulations require fintech companies to prioritise compliance from the outset, potentially increasing costs and time to market.

However, they also provide a competitive edge for companies that can meet these high standards, fostering trust and credibility in a region that values responsible AI practices.

“The Nordic region’s emphasis on sustainability and ethical business practices aligns well with our commitment to responsible AI. The generally favourable regulatory environment supports innovation while ensuring robust data protection and ethical standards,” says Bercich.

However, regulatory hurdles do exist.

“Navigating the varying regulations across different jurisdictions can be challenging. As AI technology and its applications evolve, ensuring compliance with new and existing regulations requires continuous monitoring and adaptation,” Bercich adds.

Both Bercich and Bäcklund agree that a key advantage has been the availability of a highly skilled talent pool in AI, machine learning, and financial technologies.

“The innovation-friendly environment has attracted tech talent and contributed to a richer tech scene, which has been imperative for us in building our tech team and reaching our initial customers,” Bäcklund says.

The Nordics accounts only for 2 per cent of global AI talent, as noted Silo Research and OECD’s findings from 2022.

To address this, the private and public sectors in the Nordics have developed innovative educational programs to nurture digital and tech talent, such as Finland’s “AI for Built Environment” certification and Sweden’s national “AI competence for Sweden” curriculum, along with the “Elements of AI” online course available across all Nordic countries.

It’s increasingly important for companies to bridge gaps in AI talent and skills, and according to a report from Accenture, more Nordic companies now have a defined AI talent strategy that includes protocols for hiring data scientists and domain experts, while many are also developing new strategies to collaborate and maximise value from data science capabilities.

Staying ahead of the curve

A report from Accenture states that only 6 per cent of Nordic companies have successfully integrated AI into their core operations and strategies, achieving significant business outcomes as a result, compared to 12 per cent of companies in Europe.

Fintechs like Gilion and Lucinity, are leading in developing cutting-edge solutions transforming the financial industry. Their ability to leverage advanced technologies like machine learning and data analytics gives them a significant advantage in creating innovative products that meet the evolving needs of consumers and businesses.

Staying ahead of the curve will require them to not only refine their existing technologies but also explore new opportunities, address emerging risks, and keep pace with regulatory changes.

“Many of us have been using AI to support investment decisions since long before the rapid AI development started a couple of years ago. We feel compelled to lead the advancement and innovation of the field. We’re constantly experimenting with the latest technologies within AI to stay at the forefront,” Bäcklund says and adds:

“But we’re keeping our strategy of applying these new models where it makes sense. LLMs are outstanding at certain tasks, like making sense of hundreds of PDF documents with financials and turning them into structured data. So, we can put these models to work on isolated tasks, which makes our humans work more efficiently and leaves room for important analysis and decision making.”

Given the rapid advancements in AI, Lucinity avoids potential negative impacts while continuing to attract investment through several key strategies.

“We prioritise ethical AI development by implementing explainable AI techniques, ensuring our systems are transparent and accountable. Regular

The

Nordic region’s emphasis on sustainability and ethical business practices aligns well with our commitment to responsible AI

Theresa Bercich CPO and Co-founder

of Lucinity

audits and comprehensive audit logs help detect and correct biases, maintaining the integrity of our solutions,” Bercich says.

Lucinity’s UI and UX differentiate between AI-generated content and human actions, ensuring transparency. The UX is designed for expandability, allowing users to easily customise AI skills to meet specific needs.

“We maintain open and transparent communication with investors, demonstrating our commitment to ethical AI and long-term sustainability,” Bercich concludes.

Firi: Largest Crypto Exchange in the Nordics Makes It Safe to Invest in Crypto

Buying cryptocurrency in the Nordics has always had its challenges. Many banks in the zone have been wary of allowing users to purchase crypto with their Nordic bank cards, quickly blocking transactions when detected.

By R. Paulo Delgado

The problem is especially prevalent in Denmark,” says Karina Rothoff Brix, country manager for Denmark at Firi, the largest cryptocurrency exchange in the Nordics, now used by 250,000 people. “Banks have also often blocked users from transferring their crypto earnings back to fiat because the banks fear AML violations.”

However, in Norway, where Firi is based, banks place no restrictions whatsoever on transactions to and from Firi. The exchange has proven itself thoroughly as a reliable partner with robust AML procedures that adhere to the country’s strictest standards.

“Firi has an e-money license in Norway, which is far stricter than the VASP—virtual asset service provider— license used in other Nordic countries for crypto exchanges,” says Karina.

The stricter license means that Firi had to build in solid AML practices from the start.

Firi—a lighthouse in rocky waters

“Firi” is an Old Norse word meaning “lighthouse.” The company’s two founders—Thuc Tuan Hoang and Øyvind Kvanes—chose the word to represent the company’s guiding principle: A place

of safety in the sometimes tumultuous world of crypto.

Recent fiascos with other crypto exchanges made it clear that it does matter where a company is regulated.

However, Firi’s effort to make it safe for Nordic residents to invest in cryptocurrency goes beyond mere compliance. It forms part of the company’s very culture.

For example, the company started out by first offering only Bitcoin, then moved on to other, reliable tokens such as Ether, Tether USDT, and ADA (Cardano’s token). Unlike other exchanges, the company resolutely avoids so-called “shitcoins”—tokens with no intrinsic value and zero utility. Shitcoins are often used in cryptocurrency scams such as the “pump and dump,” where scammers artificially inflate the price of a token and then cash out just before the price plummets.

No one can guarantee success in investing—whether that’s cryptocurrency or traditional stocks—but Firi makes it a point to do its own due diligence before offering a coin to its customers.

Firi also works hard to educate its users, providing daily news inside its app in Norwegian and Danish—the exchange is currently active in Norway and Denmark, and will open in Sweden at the end of

the year—and a weekly Danish podcast with the latest news about the global cryptocurrency market.

Security of funds

Firi holds all customer funds in separate accounts to its own so that those funds cannot become part of the bankruptcy estate if anything should ever happen to the company, as stipulated by the Norwegian Accountancy Act.

Customers can also choose to hold the keys to their cryptocurrency in “cold” (offline) or “hot” (online) wallets. For hot wallets, Firi works with leading blockchain security provider Fireblocks to ensure maximum security of customer funds.

Also, no single employee can access

Norwegian banks tend to always accept our clients’ conversion back to fiat because they trust our exchange’s AML procedures.

any wallet directly, and multiple signatures must be present to do so.

Built-in tax calculation

One of the largest challenges for Nordic residents regarding cryptocurrency is the complexity of calculating taxes. Firi takes care of this automatically. Users simply click a button, and Firi prints out a report with all the relevant tax data.

Norway has the highest crypto adoption Firi’s work to make crypto safe might very well be why Norway has the highest crypto adoption of all the Nordic states, with 9.2% of Norwegians owning crypto, according to a recent report by EY and K33. Norwegians also have the highest percentage of people using local exchanges, whereas the other Nordic states tend to use international exchanges.

The situation might change when MiCA goes into full force at the end of this year, compelling foreign exchanges and smaller exchanges to leave Europe because of MiCA’s stringent rules. However, Firi is already compliant with MiCA because the company has had to adhere to the strict e-money licensing regulations since 2019.

Karina Rothoff Brix Country Manager for Denmark at Firi

Karina Rothoff Brix, Country Manager for Denmark at Firi

Why Partner With Froda for SME Lending?

The Swedish fintech has experienced 300% growth with its Froda Embedded solution.

By R. Paulo Delgado

In late 2015, the founders of Froda saw a gap in the SME lending space and decided to fill it. Today, the Swedish company is active in the Nordics, Germany, the UK, and Ireland, and should be active in two more markets by the end of the year. The goal is to spread internationally by allowing partners to use the company’s embedded finance solution to offer SME lending with no risk to the partner.

The SME backbone, and the lack of financing

In Europe, 99% of all businesses are SMEs, employing 85 million people, according to the European Commission website.

“These SMEs have a really hard time finding external financing,” says

Oliver Mohseni Skoglund, one of Froda’s co-founders. “High street banks are great at helping corporates and consumers, but small businesses are difficult for them to take on.”

SMEs pose more risk than a bank can comfortably accept. From the SME’s perspective, the loan application process is also cumbersome.

“The ticket size is another problem for the banks,” says Skoglund. “Loans of this size require the same amount of work to approve as large loans. The only way to offer them on a mass scale is to automate the process using technology.”

Froda did precisely that, building a machine learning solution that analyses the SME’s historical transaction data

and can give a Yes or No for a loan within seconds.

Loans backed by the European Investment Fund

One of Froda’s KPIs is the number of loans approved. The company is willing to take on more risk than banks to fulfil this purpose. However, the risks are surprisingly low.

When Froda began its operations, it was told that 10% of its loans would default. The company operates at a 3% default rate. That’s still too high for banks, but it works for a data-driven fintech.

Even the EIB seems happy with that percentage. The fund entered into a partnership with Froda and is now guaranteeing many of the loans on Froda’s

We have far less risk when working with partners because they bring immense customer data that our algorithms can accurately analyse when establishing if we can approve a loan.

Oliver Mohseni Skoglund Froda Co-Founder

books. “That just goes to show how important SME lending is,” Skoglund says. “We’ve developed the perfect balance between risk and success for the EIB to be satisfied enough to back us up.”

Loans without bias

Froda’s data-driven approach to lending means the company’s loan analyses are entirely objective. “You can be born in Europe or a recently arrived immigrant and both have the same chance of being approved for a loan because it’s completely data-driven. We’re extremely proud of that,” says Skoglund.

Froda’s data-driven analysis looks only at transactions. Either the company is making sales or it isn’t. Period.

Froda’s loan portfolio indicates a high percentage of immigrants, young people, and new business owners—just the types of loan applicants that banks would typically turn away because the applicants don’t have a long enough history with the bank and so have poor credit scores.

White-labelled lending

Froda’s rapid growth is largely due to its white-labelled embedded finance solution that partners can plug into. “We have even less risk when working with partners because they bring immense customer data that our algorithms can accurately analyse,” Skoglund explains. “With partners, the customer journey is far smoother for us, so everyone wins.”

In 2023, the company secured a partnership with neobank Lunar in Denmark, allowing it to approve SME loans within seconds while leveraging Lunar’s card rails. Froda is seeking similar partnerships in other countries, following the same “everyone wins” attitude that has brought it success so far.

Oliver Mohseni Skoglund, Froda Co-Founder

How Confidential Computing will help pave the way for secure data use for financial institutions in the quantum era

The threat posed by quantum computers is not just a distant concern; it’s already taking shape. Determined attackers can store encrypted sensitive data now, with the intention of decrypting it later using quantum computing - a tactic known as the “harvest now, decrypt later” attack. This highlights the urgent need to transition to quantum-proof technologies sooner rather than later.

By Sofie Krabbe

Globally, the volume of data is so large that it is challenging to comprehend.

Just to put it into perspective, over 360 billion emails are sent worldwide each day. Despite this huge amount of dataflow, the potential of data is still significantly underutilised.

As a nation, as a society, and also as an individual, we haven’t at all reached the great opportunities this data can actually provide. There is still a huge potential for a more effective way to gather information, in order to drive innovation, improve decision-making processes, create new essential insights, and enhance various aspects of our lives.

One of the reasons why this data isn’t being used to its full potential, is largely due to security and privacy concerns, which are crucial to address due to regulatory and legal reasons, as well as human considerations. Data

often contains sensitive information, either personal identifiable information subject to the EU’s GDPR directive, data protected by intellectual property rights, or simply data that is business critical. In other words, in order to utilise this data it must be done in a way where the data is fully protected, and this is where Partisia’s technology comes in with the solution.

Originated from the University Environment

Partisia is an innovative software company and a trusted partner empowering companies to operate and compute on encrypted data. Providing a platform that ensures data from individuals, governments, and private companies remains secure and compliant, while still being fully activated, creating the perfect balance between transparency and privacy. Partisia, which was established in

2008, as a direct spin-off from the Cryptography and Cyber Security group at Department of Computer Science, Aarhus University.

Securing confidential information for the quantum age

Getting a quantum computer to solve hard problems is one thing - ensuring that these computations are done in a secured and protected way is another and equally important challenge.

At the moment the only quantum computers that exist in the world are commercial - understood in the sense that they are “rented” through large, global companies.

This means that there is a security challenge regarding the secrecy of classified information, and this is where Partisia comes into the picture, addressing these concerns with innovative privacy solutions tailored for the quantum era.

Learn more about Advanced Fraud Detection with the Partisia Platform

When considering how to work with quantum technologies in regulated industries such as finance, there are at least two important quantum-proof techniques commonly referred to as “post-quantum cryptography” (PQC) and “quantum key distribution” (QKD). Before delving into how these technologies will help secure confidential information, let’s start by introducing them:

• PQC refers to cryptographic algorithms designed around computational problems that are believed to remain difficult for quantum computers to solve.

• QKD on the other hand, is a method of exchanging encryption keys using quantum mechanics, ensuring security by leveraging the principles of quantum physics and specialised hardware.

The Quantum Rocket: A 3-step way of utilising quantum

“To fully harness the potential of quantum computing while minimising the risks, Partisia has outlined a three-step approach. The so-called “Quantum Rocket.” Mark Medum Bundgaard, Chief Product Officer at Partisia, and he adds: “To truly unlock the potential of quantum computing and quantum key distribution (QKD), we must address and reduce the risks.”

Here’s an overview of the three steps: In general, post-quantum ready means that we are preparing our present to be secure in a world where a quantum computer exists, so data stays protected and secured.

Step 1. Protecting the world

The first step focuses on securing our current systems using privacy enhancing technologies. As we are now entering the beginning of a quantum revolution, transitioning to post-quantum cryptography is essential to protect our sensitive data.

Step 2. Exploring the possibilities of new technologies

The second step is about embracing and exploring the possible game-changing technologies that are offered by quantum computing combining PQC and QKD. Quantum technology has the potential to disrupt many industries in the future, and in order to fully use this potential we must rethink traditional cryptography.

Step 3. When the quantum computers are here how do we ensure data privacy

In the future, quantum computers will be able to break many of the encryption methods that are currently considered unbreakable. This poses a significant risk to data privacy.

Preparing for this reality means creating resilient, quantum-proof security measures.

Addressing this challenge is not only optional; it is vital to manage and reduce these future risks.

Protecting financial data in the quantum era

The financial industry, in particular, faces unique challenges but also opportunities as quantum technology improves. As quantum computers become available and more advanced they will eventually - possibly sooner than later - pose a serious threat to traditional encryption methods.

As a response against these risks in our current world Post-Quantum Cryptography is being developed. The goal of PQC’s is to create encryption algorithms that are impossible to break and therefore also resistant to attacks. This way financial data stays protected.

At the same time, Quantum Key Distribution (QKD) combined with PQC will open the doors to new possibilities for secure communication in the financial world. By using this technology to exchange encryption keys, financial institutions will be able to detect and prevent fraud and other cybercrimes on a much more effective level.

QKD’s ability to detect intruders during the key exchange process adds one more layer of security for financial transactions.

While protecting privacy and securing sensitive information is the primary goal, the rise of quantum technologies opens doors for the financial sector to many more innovative solutions.

The primary focus is that quantum

computers will likely be owned by external entities rather than the financial institutions themselves. Therefore to securely harness this computing power, confidential computing becomes essential.

When quantum computers become available, financial institutions should be able to leverage them for generating new insights, optimising models, developing innovative products, and processing data in new ways. However, a significant challenge is that computations require data input, and in the financial sector, this data is heavily regulated.

Confidential computing offers a solution by enabling computations to be done on encrypted data, ensuring that financial institutions can securely utilise outsourced quantum computers in a way where only the financial institution knows and gets the value.

“It is crucial that we position Partisia’s technology as a key enabler for securing and sharing confidential and sensitive information in the quantum era. This ensures that information requiring confidentiality remains protected. With the integration of Partisia’s confidential computing, secure use of quantum computing becomes achievable.” says Mark Medum Bundgaard, CPO of Partisia.

Exploring the possibilities of data’s full potential without compromising privacy

The challenge we’re facing here isn’t just about securing data, it is also about utilising the full potential of data, without compromising its privacy.

Recent technological advancements now makes it possible to perform joint data analysis within an encrypted ecosystem. This allows for collaborative insights without exposing the underlying raw data, creating a powerful synergy of knowledge while maintaining confidentiality.

The quantum age presents both significant risks and immense opportunities. Securing data, particularly in sensitive industries like finance, requires a proactive approach - one that embraces the potential of quantum computing while staying ahead of the security threats it introduces.

With the focus being on privacy-enhancing technologies, quantum-proof cryptography, and innovative solutions like QKD, Partisia is at the forefront of this quantum revolution, ensuring that sensitive information remains protected and still fully enabled.

Mark Medum Bundgaard Chief Product Officer at Partisia

EUDI Wallet: Scaling Up Opportunities for EU SMEs

The EUDI Wallet presents a major opportunity for SMEs in the EU to enhance efficiency, simplify regulatory processes, and improve customer experiences, potentially driving significant growth. However, the critical challenge will be ensuring widespread adoption and providing the necessary education and tools to fully leverage the system’s potential.

By Jakob Frier

In an increasingly digital world, the European Union is making significant strides toward simplifying and securing citizens’ and businesses’ online interactions.

The European Digital Identity (EUDI) Wallet is one of the most ambitious initiatives. This digital wallet is designed to provide a secure and standardised means of identification across the EU, enabling seamless access to a wide range of public and private services.

From verifying identities to conducting secure transactions, the EUDI Wallet is set to revolutionise how individuals and businesses engage with the digital economy.

While the EUDI Wallet promises convenience and security for EU citizens, it also offers substantial opportunities for small and medium-sized enterprises (SMEs) across Europe.

For SMEs, the EUDI Wallet could be a game-changer. It simplifies regulatory

compliance and cross-border operations and opens up new avenues for growth and innovation.

“If done right, SMEs can scale their operations, enhance customer trust, and unlock new markets, all while reducing costs and administrative burdens with the EUDI Wallet,” says Thomas Rysgaard Christiansen, Partner in Netcompany.

He believes that the EUDI Wallet will pave the way for more collaborative and

open ecosystems where smaller players can contribute to the value chain alongside larger corporations:

“The wallet could allow larger companies to rely on smaller, specialised providers for certain services rather than developing everything in-house. This shift creates opportunities for smaller businesses to enter the market and add value, fostering a more dynamic and competitive ecosystem,” he adds.

Rysgaard Christiansen notes that

If done right, SMEs can scale their operations, enhance customer trust, and unlock new markets, all while reducing costs and administrative burdens with the EUDI Wallet

in countries like Denmark, where many digital processes are already in place, the EUDI Wallet might offer incremental improvements rather than a complete overhaul. However, in other EU countries that still rely heavily on physical documents, the EUDI Wallet could be a significant driver of digital adoption, making it easier for businesses to operate across borders.

Citizen centric

The core idea behind the EUDI Wallet is that it allows easy acceptance of identity and other documents across EU countries. According to Michael Andrew Buckland, Head of Digital Identity at the Estonian company Cybernetica, using secure electronic signatures as valid as handwritten ones creates more opportunities for innovation and efficiency, especially for small and medium-sized businesses.

“Any business that requires the creation of user accounts tied to an actual Any business that requires the creation of user accounts tied to an actual identity or requires the collection of signatures for documentation is an immediate winner in the wallet ecosystem

Michael Andrew Buckland Head of Digital Identity, Cybernetica

identity or requires the collection of signatures for documentation is an immediate winner in the wallet ecosystem. These presentation-type use cases also mean the possibility of not storing and securing customer identity data, lifting the burden and risk of this,” he says.

The wallet can become a powerful tool for SMEs, enabling them to perform Know Your Customer checks and other document-related tasks more

efficiently, securely, and at a lower cost. This will reduce the potential for fraud and streamline and automate various business processes.

Buckland emphasises that the administrative burden is often generated by the repetitive, redundant provision of evidence that needs to be fully digitised and long processing times. Digital and trustworthy proofs, such as those provided by the wallet in the

form of qualified electronic attestations of attributes (QEAAs).

According to Buckland, another significant cost-saving and overall benefit for SMEs is the hiring process, where verifying degrees can be expensive and time-consuming. With the EUDI Wallet, universities can directly issue education credentials to the wallet, which can be shared easily, ensuring they are legitimate.

Thomas Rysgaard Christiansen, Partner in Netcompany

Thomas Rysgaard Christiansen Partner in Netcompany

Michael Andrew Buckland, Head of Digital Identity, Cybernetica

Tobias

Link, Division Manager in Public Sector Consulting, msg systems ag.

Scaling through data

Not only can SMEs use the EUDI Wallet to provide services to citizens and leverage it to access and share compliant data with other businesses and public institutions, ensuring that all necessary information is accurate and trustworthy.

The QEAA attestations enable companies to exchange verified information and evidence with various stakeholders. SMEs can then utilise this verified information in statutory reporting and verification processes, ensuring that all relevant data provided to authorities is accurate and reliable.

As a result, businesses, particularly SMEs, can expand their operations more effectively, entering new markets and handling increased workloads without the burden of fragmented or inconsistent processes. This scalability is crucial for growth in today’s competitive digital economy.

“Efficient scaling is made possible by a uniform identity ecosystem with data-driven processes. The decisive factor for each process is the required

If verification obligations and approval procedures within Europe require a standardised data set, this can be transferred directly from a wallet in the form of secure digital evidence.

Tobias Link

Division Manager in Public Sector Consulting, msg systems ag

data to achieve the desired result. This data must be semantically flawless and legally compliant,” says Tobias Link, Division Manager in Public Sector Consulting at the German IT and business consulting firm msg systems ag.

According to Link, one of the biggest challenges in using the EUDI Wallet is creating and establishing uniform standards, especially for the

QEAAs. The more that evidence and data are standardised, the easier it is to share and present them through the EUDI Wallet.

“Processes with high-quality and standardised data can be accelerated enormously through automated procedures and the possible use of AI. Previously time-consuming checking and processing procedures could be optimised,” he says.

This is particularly helpful for SMEs that want to expand into other European countries, as they won’t need to meet different organisational requirements for each country. Instead, they can operate within a unified European identity system.

“For example, if verification obligations and approval procedures within Europe require a standardised data set, this can be transferred directly from a wallet in the form of secure digital evidence,” he adds.

A matter of uptake

Starting in November, the EUDI Wallet will transition into a new phase of

full-scale deployment, integration, and ongoing monitoring. From this point, EU countries will have 24 months to introduce a national wallet to their citizens.

This is where the wallet must prove itself, as the key challenges and obstacles revolve around its adoption and uptake.

“It does not matter how secure, trusted or convenient a Digital Identity is. If it doesn’t have use cases demonstrating the value proposition to end users and relying parties, then people will not use it,” says Buckland.

European companies should play a key role in demonstrating how it can be used within the ecosystem by exploring how to integrate it into their business processes. However, this also presents the challenge of providing education and offering more tools to help businesses fully utilise the ecosystem’s potential.

“This falls on wallet providers, member states and other peripheral entities to help inform, educate and encourage SME’s to embrace these solutions,” Buckland adds.

He is confident that there will be strong demand for a unified digital wallet system across the EU, particularly among SMEs. This system offers significant efficiency benefits for SMEs and provides a highly convenient user experience.

“If an SME opts out of integration, and their competitor integrates, this may pose dire impacts on competitiveness. Suppose you can turn those gains into lower-priced service for a customer and make the user experience of using your product smoother and quicker. In that case, market forces will favour those SMEs that embrace the ecosystem,” Buckland says.

The risks of joining the ecosystem seem minimal, especially compared to the traditional risks of paper—and physical-based fraud in similar scenarios.

“Are the risks zero? No. But are they greatly reduced? Absolutely,” Buckland adds, and goes on to use the adoption of a national eID in Estonia as an example: Statistics on bank fraud in Estonia illustrate the impact of a solid digital identity system. Before 2017, bank fraud was reported at about 1 in every 200 citizens. However, this rate has improved significantly after the launch of an internationally used eID application in 2017, with fraud now occurring at roughly 1 in every 2,500 citizens.

Is Ecosystem Enabled Banking the Solution to Banks’ Transformation Challenges?

Executive banking consultant and director of Samlink Advisory Services, Pål Krogdahl, discusses the obstacles banks face in modernisation and how to overcome them.

By R. Paulo Delgado

Banks run into three common problems when it comes to modernisation, says Pål Krogdahl, executive banking consultant and director of Samlink Advisory Services:

1. Driving the modernisation as an IT program with limited or no business sponsorship, leading to misalignment and underperformance.

2. Focusing too heavily on the legacy tech, which constrains the future target.

3. Heavy reliance on in-house development, significantly slowing down time to market.

“Eighty-five percent of what banks do is generic, and exists to help them operate as a bank, offering almost no differentiation from their competitors,” says Krogdahl. “The remaining is what separates them from their peers and drives their competitive advantage.

Banks should focus on these differentiations and seek ecosystem partners to help deliver on everything else.”

Pål Krogdahl Executive Banking Consultant & Director of Advisory Services at Samlink

The question then becomes: How?

Banks typically don’t see a way to build those IT solutions for their unique services without ripping up the entire yard—which consists of legacy tech and thus takes years to redevelop.

“The problem with a five-year project that changes the entire infrastructure is that it’ll be outdated by the time it’s done, putting the bank back at square one,” says Krogdahl.

What is Ecosystem Enabled Banking

Samlink, a Finland-based banking platform provider and banking industry consulting organisation with 30 years of experience, offers a solution called Ecosystem Enabled Banking. After its acquisition by international IT services company Kyndryl, Samlink now leverages a global team of 80,000+ employees to serve banks worldwide.

“Our experience has shown us that ‘Big Bang’ transformations don’t work, which prompted us to approach the transformation problem using a more progressive and sustainable method,” says Krogdahl.

At its core, Ecosystem Enabled Banking is a framework supported by several of Samlink’s internal tools. The framework allows a bank to carry out either a progressive transformation, or to start off from scratch, such as if they want to become a new digital challenger or even

IndustryAlignment

Flexibility

Samlink’s approach to Ecosystem Enabled Banking combines partnership and innovation to deliver impactful business value.

create a digital bank on the side.

The paradigm-shift provided by Ecosystem Enabled Banking is to move from the traditional custom development approach to using best-of-breed offerings from ecosystem partners to accelerate the journey.

By focusing on ecosystem-provided solutions that already exist, banks can offer iterative transformations within six months rather than several years, allowing them to remain competitive.

“The future is not single-core or single-vendor. It’s multi-core and thin-core to deliver the unique services that a bank is capable of,” says Krogdahl.

Legacy systems are the last thing to look at Bank transformations are a business-driv-

en problem, not a technology one. When working with a bank, Samlink first determines the business-driven outcomes and focus, establishing what’s critical. The key question to ask is: What must this bank do immediately to stay relevant?

Samlink then analyses the necessary capabilities to establish what ecosystem services the bank can use to enable those business-driven outcomes. In some cases, the bank might need custom development.

However, the choice to use ecosystem solutions versus custom ones is driven by the business need, not the legacy tech. If the legacy tech aligns with the new solutions, great. If not, the ecosystem enabled approach allows banks to become competitive anyway—and fast.

PSD3: Revolutionising Fraud Prevention and Empowering Consumers

With PSD3, the EU will enhance fraud prevention and data security while fostering innovation in financial services and giving consumers greater control over their financial data.

By Jakob Frier

By the end of this year, the EU will bolster its fight against financial fraud by introducing stronger regulations and enhanced security measures for digital payments across the region.

PSD3 will introduce new rules to prevent fraud linked to digitalising our habits and emerging technologies, like generative AI. It will also update the rules on who is responsible when fraud happens, aiming to protect users better and encourage awareness and understanding of digital payments and fraud prevention. It builds on the foundation laid by PSD2, addressing its limitations and introducing new measures to keep up with the evolving digital landscape.

As Rainer Olt, Head of Payment & Settlement Systems Department at Eesti Bank, says:

“PSD2 introduced Strong Customer Authentication (SCA) and a secure framework for Open Banking, successfully reducing fraud. In PSD3, SCA remains central to fraud prevention, potentially driving the adoption of national eID solutions, including the future EU Digital Identity Wallets, for customer authentication and payment authorisation, while ensuring accessibility for those without smartphones.”

The change will fundamentally change the payment industry. With access to cross-border payments and introducing a new EU digital identity for all European citizens, banks and financial institutions can now reach all Europeans as potential customers, expanding beyond just regional consumers.

“It will make it easier for me as a consumer to open a bank account wherever I like, take a mortgage in another region, and pay my service providers wherever they are. All with the bank I trust, prefer, or located in the country which is most convenient for me,” says Silje Nesvik, Managing Partner at BCG Bono Consulting Group and ex-Managing Director of Payments in EY.

Nesvik states that PSD3 will open new opportunities for banks, fintech companies, and third parties. It will allow them to provide innovative consumer services by leveraging financial data through Open Banking APIs and various financial service ecosystems.

Dashboard revolution

The PSD3 was approved in April of this year. Most payment institutions are well-prepared to meet the new requirements and ready for the implementation timeline. However, the changes also bring new responsibilities, especially in managing and safeguarding data, Nesvik notes.

Consumer dashboards, which will soon be mandatory, are expected to be the most impactful feature for users. They will give insights into how data is used and accessed, potentially changing user behaviour and requiring payment service providers to monitor emerging trends.

“To aggregate consumer data in a user dashboard, you also need to have absolute control of your data and data management, which needs to be designed for that purpose. With many changes simultaneously and with a short

Most likely best in class will be the ones that

combine all necessary solutions helping to prevent fraud from happening without requiring banks to implement multiple connections and infrastructures.

Rainer Olt

Head of Payment & Settlement Systems Department at Eesti Bank

implementation time, it can be difficult for many institutions to achieve and meet this requirement in time,” Nesvik says.

This shows the importance of following the regulations and managing data carefully. Still, balancing that with creating new and useful data dashboards for consumers can be tough.

“This can potentially be the most innovative and user-friendly consumer data management service in a long time,” Nesvik adds.

Trust in wallet

Data sharing under PSD3 involves both Open Banking and fraud prevention. The main goal is to minimise the amount of shared data, ensuring that only necessary information is accessed by third-party providers, which aligns with GDPR rules.

Rainer Olt Head of Payment & Settlement Systems Department at Eesti Bank

Silje Nesvik

Managing Partner at BCG Bono Consulting Group and ex-Managing Director of Payments in EY

Regarding fraud prevention, new rules will allow payment service providers to share certain data (such as user location, transaction history, devices used, spending habits, etc.) without explicit user consent.

“With PSD3, the race is on for building such information sharing and transaction monitoring solutions in addition to payee IBAN-name verification, most likely best in class will be the ones that combine all necessary solutions helping to prevent fraud from happening without requiring banks to implement multiple connections and infrastructures.” says Olt.

The Financial Data Access (FIDA) regulation proposal will regulate the sharing of financial data beyond payment account data necessary for

Open Banking. This will set the framework for Open Finance and ensure that all consumers and firms have tools to monitor and control the use of their financial data.

“All this should increase trust in “wallet” solutions that, in addition to one-off payments, help optimise customers’ purchase and payment habits and find the best options for financing, insurance, or investments,” adds Olt.

This is where the challenge and the opportunities lie for a true Open Finance ecosystem.

“An ecosystem which can utilise all the beneficial data sharing schemes and be the platform for diverse offerings and services to consumers and the best playfield for innovation. FIDA will be the commercial version of

This can potentially be the most innovative and user-friendly consumer data management service in a long time

Silje

Nesvik

Managing Partner at BCG Bono Consulting Group and ex-Managing Director of Payments in EY

the Open Banking infrastructure from PSD2 that never became a commercial success, but with FIDA, it may happen,” Nesvik says.

What’s in a word? Fincrime in the era of endless risk

First we had Fintech, then Finserv and now we have Fincrime. The words, I mean.

By Dr. Leda Glyptis

Financial crime and technologies to combat it are as old as the hills. The word is what’s new. It hashtags better than the alternatives, I guess. It allows our compliance colleagues to join the RegTech party.

But why, seriously? Do we need a sexy new word to get the world interested? Have things gotten that bad?

I guess it depends who you ask. For some, it is an attempt to get things like AML and sanction screening off the ‘boring things we have to do’ list onto the ‘critical things we need to continue doing well’ list. And if a new label helps with that, then bring it on.

For others, it is an attempt to get headspace.

The world was always a dangerous place, it says, and it is always more so. The new technology that captures our imaginations, scares and thrills us in its endless possibility is also in the hands of the bad guys. In this context we can’t see our AML and KYC hygiene as another item on our corporate to-do list. It’s existential. It should be where most of or attention and innovation is focused on because it’s where we have the most to lose arguably.

I appreciate I have just had an imaginary conversation with a composite

noun which, if anything, is proof that I need to get out more.

But as I type this: on the aftermath of the CrowdStrike outage; a mere few weeks after the darling of European neobanks got slapped with a fine and set of restrictions for AML failures; a much-delayed license for another darling was granted with a multi-year delay and with severe restrictions because of concerns, among other things, around compliance; and about 4 months before DORA is meant to kick in.... the real question is not why are we talking about risk but how on earth we manage to talk about anything else.

From cyber risk to reputational risk, identity fraud, fraudulent transactions or money laundering the world is more rife with danger than ever before. And the bad guys are getting smarter and thankfully, so is our technology. And regulation is getting more complicated.

And it’s all a lot. It’s a lot. There’s a lot to learn and a lot to manage and a lot to think about and none of it is optional: because you choose to sit out a particular cycle of technology adoption for commercial gain but you can’t really delay regulatory compliance or AML protection. You can’t sit out a

single cycle of cyber related learnings because while you are having a breather the bad guys are not.

From cyber risk to reputational risk, identity fraud, fraudulent transactions or money laundering the world is more rife with danger than ever before. And the bad guys are getting smarter and thankfully, so is our technology.

Dr, Leda Glyptis Author of Bankers Like Us

Dr. Leda Glyptis is a veteran in financial services, author of Bankers Like Us and regular contributor to industry events and publications. She is an advisor to a number of companies including FinScan and an authoritative voice in Financial Services Transformation.

So maybe that’s what’s in a word: the urgent appeal from those who get it to everyone else that the innovative, creative applications of technology are good and well but they were the preamble to the main event which is applying everything we learned to staying safe in this world where the night is dark and full of terrors.

It’s a shiny way of getting our attention. Because any decision maker in finance is stretched thin and bombarded with new information, often out of context, urgent decision-making requests, often with incomplete information, and a million things all trying to be the priority for the season. And of course somethings’ gotta give and usually that ‘something’ has been the thing that is under control The thing that is already happening and happening well. The thing that isn’t on fire.

For a well run organisation, their risk team is usually that very thing. The thing that is not on fire, that does the thing it is meant to do and does it consistently and well. And the reward for this, is reduced headspace from the top decision-makers.

But the reality is, if this particular part of your organisation is on fire it’s way too late for your attention. Now is the time to listen and reflect and think about how this part of your world stays resolutely not on fire. How your risk-manage your way into the future without stumbling upon expensive consultant reports to risk-accept things you didn’t have time to get around and quietly budgeting for potential fines rather than really applying 20 years of fintech innovation to your Fincrime challenges.

See what I did there? The right word can bring the conversation into the right room. And that’s a start. But the word alone can’t keep it there. That is our job.

I have long been saying that the Chief Risk Officer is the new CEO.

20 years ago I used to say the CTO is the next CEO because we were transitioning through the time where the proudly technophobic technocrat whose EA took dictation (I know boys and girls, it’s crazy but it’s true: when I started my career the truly important folks did not have computers in their offices, they had People for that sort of Thing)... my point was (and I was right so I can happily stand by that) that technology went from tooling to op-

erating context and decision-making needed to be more deeply informed about the art of the possible than ever before. I was right. I like being right. But also, it happened. It’s done. Decision-makers across the board are technically literate. They are not necessarily technical but that wasn’t ever necessary.

And now? That technical knowledge is table stakes. It’s risk that is the next frontier.

Not the static, backward-looking, checklist and risk-appetite statement view of risk but a transition to seeing everything we do an don’t do as an exercise in calibrated, deliberate and conscious risk management. Holistically seen and deliberately managed.

Everything is about risk management and risk management is everywhere.

But of course none of us want to say that out loud because we’ve all met some of those risk people who say no before you’ve even finished describing what you want to do, who shut you down and hark to a past when the world was simpler, less connected and slower. Although their forefathers thought that world was pretty risky too so it goes to show.

It goes to show that risk managing the moment in time you are in is never comfortable but it is the job. The only job, really.

So, now that the shiny word got us in the room... how are we going to do things differently?

How will we bring all the innovative might of 20 years of fintech to tackle the questions of navigating the choices and perils of the current landscape better? Because it’s all about risk and unless we bring different tools, skills and mindsets to the party it becomes a very risky business indeed.

And surely risk management is one thing we get in financial services.

What would it look like if our operational set up reflected what we know to be true: namely that in a time of ever-accelerated technology adoption, regulatory change and political turmoil everything is about risk-management. Not just the risk department. Literally everything. And therefore everything we do and don’t do is an exercise in risk mitigation. Or not.

Knowing that, the only question that matters is not what we call it after all. But whether we are doing it to the best of our abilities.

Checkout.com’s Intelligent Acceptance Solves the $ 50B Problem of Lost Revenue

The solution uses machine learning to optimise payments, increase acceptance rates, and reduce payment costs.

By R. Paulo Delgado

In 2022, merchants in the US, UK, France, and Germany lost $50.7 billion solely due to declined payments. Adding salt to the wound, 42% of consumers will feel deterred from using that merchant again because of a failed payment.

Oxford Economics estimates that businesses lost up to 2.1% in revenue in 2022 due to inadequately optimised payment acceptance. For companies making $1 billion a year, that’s a $21-million loss, and a $210-million loss for companies making $100 billion a year.

“As online sales skyrocket and buying a pair of shoes becomes easier, so does the amount of money lost by merchants whose payments fail on completely legitimate shoppers who then go buy them somewhere else,” says Daniel Linder, Senior Director, Payment Performance at Checkout.com.

Why false declines occur

Payment processing is complicated, to say the least. Add to that increased regulations, cross-border payments, disjointed scheme and issuer rules, disjointed payment tech stacks, and a lack of data, and it’s a wonder that false

Daniel Linder Senior Director, Payment Performance at Checkout.com

As online sales skyrocket and buying a pair of shoes becomes easier, so does the amount of money lost by merchants whose payments fail on completely legitimate shoppers who then go buy them somewhere else

Daniel Linder

Senior Director,

Payment Performance at Checkout.com

declines aren’t even higher.

In some cases, declines come about through crude implementation. For example, Europe requires SCA—Strong Customer Authentication—for many transactions, unless an exemption exists. SCA requires that buyers verify their identity through a combination of methods, such as biometrics, a PIN, or their smartphone. A common way to implement SCA is using the “3DS” (3 Domain Server) technical standard.

Unfortunately, non-compliant 3DS traffic means merchants will receive a “soft decline” for the transaction. Soft declines can be tried again, whereas hard declines are final. In the case of misconfigured 3D traffic, simply

retrying the transaction will only lead to repeated declines.

Some exemptions exist for SCA, yet even these suffer from complexities. Transactions can have different exemption types, and issuers have different preferences for the exemption types or what authentication routes they want to be used. “Approve” and “Decline” response codes don’t always get sent for a transaction, leaving the merchant guessing how to retry the transaction— and the customer frustrated, dropping the shopping bag, and leaving.

Checkout.com’s Intelligent Acceptance brings data, ML, and AI to payment performance To solve the global payment acceptance issue, Checkout.com has developed an AI-driven solution called Intelligent Acceptance.

These days, people automatically connect AI with generative AI, whose inaccuracies have become well-known. However, the financial sector has been

using another form of AI for decades, which relies on predictable results based on machine learning.

Checkout’s Intelligent Acceptance AI solution leverages in-house machine learning, advanced AI, global network data, and deep payment expertise to optimise payment acceptance and increase conversions.

In the example above where a merchant receives no response code for a failed 3DS transaction, Intelligent Acceptance would use its in-house AI— which has been trained on over 20 billion data points—to determine the likely exemption type and route, then try the transaction again.

The results speak for themselves. For one customer, Intelligent Acceptance reduced soft declines related to 3DS by 75%, recovering as much as $400,000 in revenue per month. Another major brand reduced chargebacks from 22% to 1%, while also reducing customer payment issues from 40% to 5%.

In addition to leveraging its vast data sources, Intelligent Acceptance also provides a detailed data dashboard that gives merchants insight into their payments so they can act on any areas that need attention. The merchant remains in control and sets boundaries on what the AI can do.

Meet the AI-Enabled Fraud Prevention Tool That Saved a Bank € 7.5m in Potential Losses

In October 2023, Cleafy’s cutting-edge fraud detection technology stopped a bot-driven attack that had been sifting through 2.1 million credentials stolen from the dark web. Cleafy’s technology stopped 100% of the attacks, potentially saving the all-digital bank €7.5 million in losses.

By R. Paulo Delgado

What is Cleafy?

Matteo Bogana, CEO and founder of Cleafy (pronounced “clee-f-eye”), describes Cleafy as a platform that leverages core cybersecurity concepts and applies them to fraud prevention.

“Fraud is the last mile of a planned attack, but people typically focus on the fraud, not the attack,” says Bogana. “Cleafy neutralises cyberattacks before they become fraud.”

To achieve this, Cleafy absorbs massive quantities of data, then processes that data using in-house ML and AI to determine potential fraud.

The proof is in the pudding: Three major banks in Europe have reduced their fraudulent transactions from millions a month to only several thousand, and all of it is done without causing user friction.

Cleafy provides an interface that describes potential attacks in a way that fraud (risk) and cybersecurity teams can both understand, easily reconstructing the attack vector so it becomes clear what is happening. The result is that these teams can act faster to mitigate attacks.

How Cleafy works Cleafy integrates at the network-level or directly at the mobile-level. The company closes the loop regarding a bank’s data and is able to process every step of a user’s interaction with a banking service. It monitors all sessions across all digital channels and devices, and can

correlate all ongoing live sessions to trace back and see if anyone has tried to hack the service, the device, or the user session, at any stage.

Using in-house AI and ML, Cleafy analyses the data, then categorises, explains, and labels it, giving the data vitally needed context and logical meaning. If the system detects that an attack is in progress, it either alerts a human or takes automatic actions to neutralise it.

Data interpretation and the decision to act or not are precise and deterministic. This approach reduces friction for users. Instead of blocking a transaction at the last minute and risking false-positives, Cleafy works with patterns and predictions instead, detecting and managing a potential threat before it becomes a real fraud.

Cleafy integrates directly with the bank’s SIEM——the security information and event management tool, which is a cybersecurity solution that gathers immense quantities of data from different sources. Cleafy correlates this data with an identity access manager. If Cleafy detects behaviour that’s typical of fraud, such as attempting to change a customer’s phone number for SMS verification, Cleafy then automatically reduces the user’s authorization level to thwart the attack.

This is just one example of how the service integrates deeply with a bank’s existing systems.

Even in major banks, it can take from a couple of weeks to a few months to be implemented, with a very short time to value.

Cleafy in the Nordics

Regarding identity protection and preventing highly sophisticated attacks, Cleafy has already substituted the key players offering that service to major European and South American banks. Now the company has its sights on the Nordics.

“The Nordics are a step ahead of other regions because banks already share threat information between each other,” says Bogana. “However, what they lack is deeper visibility in events and a way to communicate about and understand that data in a way that all stakeholders can grasp, which is what Cleafy brings to the table. Given the

The Nordics are a step ahead of other regions because banks already share threat information between each other”

data-driven nature of our solution, I believe it can significantly enhance their visibility and data-sharing approach by adding proactive threat identification capabilities and providing valuable insights based on attack techniques.”

Cleafy founders, from left to right: Matteo Bogana, Nicolò Pastore, and Carmine Giangregorio.

Matteo Bogana Founder and CEO of Cleafy

Fintech’s AI: Balancing Bytes and Rights

While AI holds immense potential to revolutionise financial services, it also sparks urgent ethical issues like bias, data privacy, and transparency. To deploy AI ethically, it’s not enough to comply with regulations; organisations must urgently embed ethical practices into their culture, drive transparency, enforce accountability, and ensure robust human oversight to build trust and fairness in AI systems.

By Jakob Frier

Artificial Intelligence is revolutionising many fields, including financial services, by mimicking human decision-making through data analysis and adaptive algorithms. As AI models learn and improve with human feedback and new data, they offer significant potential to enhance financial decision-making processes.

However, this technological advancement also brings a host of ethical concerns. In finance, issues such as data quality, bias in decision-making, compliance with legal standards, and the potential for systemic injustice require careful consideration.

“The most mentioned ethical concerns associated with the development and deployment of AI are fairness, explainability, privacy and accountability. For example, since AI is trained on historical data, we know it can perpetuate or even exacerbate existing biases, leading to a structural disadvantage of an often already marginalised group,” says Joris Krijger, AI and Ethics Officer at De Volksbank in the Netherlands.

In his research and work at De Volksbank, Krijger developed the ‘ethical infrastructure’ to identify and manage the ethical aspects of AI. He emphasises the need to operationalise key ethical principles of responsible AI within an organisational context with specific goals and targets.

“There is no such thing as a free lunch regarding operationalising ethics. This means that we need to carefully balance conflicting desiderata in our AI systems, including the ethical aspects of these systems,” as he puts it.

The hidden bias crisis in fintech Algorithmic bias in AI systems is often mistakenly attributed to developers intentionally programming biased values. In reality, most bias arises from unrepresentative data, data reflecting a socially biased society, or oversight due to a lack of diversity among developers.

“Since AI works on inferences, no model will be perfect, and so statistical bias will very often be part of any algorithm,” argues Krijger.

According to him, the issue arises when statistical bias intersects with social biases, such as racial or gender discrimination, causing AI to replicate or

We need to carefully balance conflicting desiderata in our AI systems, including the ethical aspects of these systems.

Joris Krijger

amplify these biases in its predictions and decisions. In the financial sector, this can result in unfair credit scoring or loan approvals that disproportionately affect historically disadvantaged groups.

“This could mean reduced access to financial services, hampering individuals to realise their full potential and subsequently reinforcing the downward spiral of economic inequality,” Krijger says. The challenge lies in ensuring data relevance and quality, using models appropriately, and guaranteeing that their contextual application does not result in unfair or undesired impacts.

“Specifically for the fintech sector, it is aggravated as it deals with essential services, where the categorisation of people and predictive models are both challenging to govern while having a high negative impact if being unjust to the customer or users,” Giovanni Leoni, Global Head of AI Governance Advisory at Credo AI, a company specialising in AI governance, risk, and compliance.

Privacy pitfalls

Both Krijger and Leoni agree that AI could potentially misuse sensitive financial data, leading to significant implications for data privacy. AI systems can inadvertently perpetuate biases and make erroneous decisions based on flawed data, compromising individuals’ financial security and trust in financial institutions.

As Leoni states: “It is always the human that has the governing control to decide in what ways AI should be used. If one deploys an AI system and intentionally or unintentionally, has it create profiling of individuals with explicit and indirect

Joris Krijger

AI and Ethics Officer at De Volksbank in the Netherlands

AI and Ethics Officer at De Volksbank in the Netherlands

If fairness and consumer rights pose an impediment, you might want to rethink your product and how it aligns with social values.

demographic data, it could create a direct risk to data privacy. The privacy risk comes when the categorisation of the group is narrowed down to an identifiable person, which could lead to consequences of recommendations of AI systems that are unfavourable for the individual.”

Ensuring robust data privacy measures and ethical AI governance is crucial to mitigate these risks and protect consumers’ sensitive information. The ethical question is, how do we navigate the technical possibilities we have where there is a grey area in terms of legal obligations?

“Developing the best possible risk profiles of our customers to prevent them from financial harm might require us to leverage all the data we have on them, but on the other hand, this would conflict with the data minimisation principles of privacy norms. The trade-off, then, is how we navigate these conflicting norms. A customer might hold us accountable if we had the information but failed to act. At the same time, data protection authorities might criticise us when we use an inappropriate amount of data to develop such an early warning system,” says Krijger.

Explaining AI Transparency

When an AI model is developed for the banking sector, it is trained using historical, anonymised, and aggregated data to learn how to predict events and score transactions based on past patterns. Once deployed, the model processes millions of data points from approved sources, interacting in billions of ways to produce outputs at speeds far beyond human capability.

The risk is that the model may generate these outputs in a closed environment, understood only by the team that originally built it. This lack of explainability was highlighted as the second-highest concern by 38 per cent of financial executives in a survey on AI on credit risk conducted by LendIt and Brighterion in 2022.

According to Krijger, transparency, including the explainability of AI models, is a crucial value for the trustworthy development of AI.

“It allows oversight bodies to evaluate compliance with regulatory standards and serves as a key component in promoting accountability,” he says. Together with academic researchers De Volksbank has conducted ongoing research on explainable AI. Their findings emphasise that transparent AI systems, which provide tailored explanations to different stakeholders, are essential for building trust. He explains that transparency fulfils at least three critical functions: it justifies decisions to customers, enables compliance, audit, and oversight bodies to control AI usage effectively, and assists developers in improving or debugging the system.

“Fintech companies will encounter these challenges too, and by developing explainable AI models that fit the information needs of the various stakeholders, will certainly have an advantage in the market,” Krijger adds.

When asked how fintech companies can balance technological innovation with the need to ensure fairness and protect consumer rights, he argues that the perceived conflict between innovation and ethical or legal norms is a false dichotomy.

“While regulation might heighten the cost of compliance, the fact that there is regulatory clarity on the requirements means we can bring to market AI applications faster and with a much better future direction. If fairness and consumer rights pose an impediment, you might want to rethink your product and how it aligns with social values,” he argues.

According to Krijger, ethics involves balancing values and making thoughtful, weighted decisions. Based on his research, he emphasises the importance of structuring your organisation with appropriate processes, policies, and personnel to address these ethical aspects. For fintechs, this means

Giovanni Leoni Global Head of AI Governance Advisory at Credo AI

Giovanni Leoni Global Head of AI Governance Advisory at Credo AI

Survey: Which one of the following concerns does your organization have about adopting AI for credit risk?

integrating ethical considerations into their AI development and deployment processes.

How the rubber meets the road Regulatory standards are essential for providing a clear framework for the ethical use of AI, ensuring the protection of consumer rights and promoting fairness. However, due to the complexity and rapid evolution of AI, more than these standards are needed. Ethical practices must also be embedded in organisational culture, requiring proactive commitment and stakeholder engagement.

Effective, ethical AI deployment necessitates transparency, accountability, and human oversight beyond regulatory compliance.

“As the GDPR demonstrates, clear regulatory expectations create an urgency for implementing data protection frameworks. Similarly, with the EU AI Act, we can anticipate the same emphasis on fairness, transparency, and human oversight. The best way to ensure compliance, I would say, is by not considering these requirements as externally imposed obligations but as criteria to develop the best possible product or application,” says Krijger.

Leoni was recently part of developing the Responsible AI Playbook for Investors at the World Economic Forum. He points out that new regulations will increase the rules for the already regulated fintech industry. It’s not just about following the law exactly as it is written; the ethical part is about respecting the

true intention behind the law. He shares an example with EU AI Act, founded on the idea of trustworthy AI and aspires to secure human rights:

“While one could adhere to a minimal level of compliance if the consequences of deploying AI would counteract the spirit of the law, it would still not be good. Furthermore, some enterprises deliberately do not follow the law –exemplified with GDPR – as they find it more profitable to pay the fines, if it comes to that,” he says.

In his academic work as PhD candidate Krijger developed an AI Ethics Maturity Model that outlines the key organisational requirements to engage in AI ethics meaningfully.

“If we can make progress on these developments, I think it will tremendously foster our ambitions to use AI in the financial sector more responsibly,” says Krijger.

According to him, there are more than 200 ethical frameworks and most of them converge to a couple of critical values, such as establishing clear principles for fairness and non-discrimination, ensuring transparency in AI decision-making processes, and having an accountability framework in place.

“Even more important than the guideline is how the rubber hits the road. In other words, what matters is not necessarily which framework you adhere to as an organisation since they mainly share the same values; what matters is how you decide to bring them into practice.”

Model governance/ regulatory requirements

Black-box models are hard to interpret and explain

Implementation difficulty Other No Concerns

INTRODUCING HYBRID PAYMENTS - ON THE VERGE OF DIGITAL DOMINANCE

Bridging alternative and standard rails to facilitate proximity and in-app payments

By IDEMIA Secure Transactions

The seamless fusion of in-store and online payments

Traditionally, in-store and online payments were considered separate, each with its own set of processes and technologies. However, the distinction between these two worlds is becoming increasingly blurred. Shoppers expect the same level of convenience whether they are paying in-store or online.

Retailers are adopting unified payment platforms that allow customers to seamlessly transition from shopping in a physical store to completing their purchase online, and vice versa. Notably, by 2030, these two payment experiences will blend seamlessly.

As of today, bridging physical and digital means of payments has already taken place with wallet solutions offered by both Big Tech Wallets (e.g. ApplePay, Google Pay and Samsung Pay), and Domestic Wallets (such as MobilePay, Vipps, and Swish in the Nordics) running on card rails, i.e., VISA, Mastercard, or Domestic Card Scheme (Dankort in Denmark and BankAxept in Norway). In other words, we have by long embarked on the Phygital experience, arising from online-to-offline strategies.

What are Hybrid Payments?

At IDEMIA Secure Transactions (IST), hybrid payments are facilitated by tokenizing a unique end-user asset, such as a payment card, bank account, or card reference. This tokenization allows payments to be processed both at the point of sale (POS) and within apps, using alternative payment methods like Account-to-Account transfers, Account Based Ticketing, or Central Bank Digital Currencies. Leveraging EMV technologies, hybrid payments integrate the global acceptance of traditional payment cards with these alternative methods, ensuring a seamless payment experience for the end-user. In other words, we support payments networks in ensuring the continued global ability to pay by expanding their payment acceptance across existing rails - supporting both worlds, the digital savvy and the digital conservative. Users will receive a hidden payment token on their mobile phones, enabling them to make contactless, e-commerce, or in-app payments through standard EMV card rail. For hybrid payments, the alternative network must support card

issuing, tokenization, and connect with Acquirers, either directly or through a partner’s network infrastructure.

Market trends fueling the shift Digital Payments have soared becoming the second preferred method of payment1. They are led today by Big Tech wallets such as Apple Pay, Google Pay... However, in the Nordics, digital domestic mobile wallets (MobilePay, Swish, Vipps) have gained enormous traction with an adoption rate of 85%2. Thanks to their popularity, mobile wallets have contributed to a seamless introduction of A2A payments in the Nordics. Additionally, a study conducted by VISA and IPSOS in 2022 shows the most important features desired by mobile wallet users in Europe such as: paying in store (63%), Peer-to-Peer payments (61%), paying abroad (59%) and bill splitting (49%). Various ways of paying in-store have been introduced in the Nordics with Domestic Digital Mobile Wallets. There has been a significant investment in alternative acceptance rails in the Nordic payment landscape. Some of the key

learnings showed that Nordic consumers are early adopters of fast and familiar payment methods that seamlessly integrate their current user journey.

On July 11, 2024, the EU commission accepted a proposal by Apple to commit to open access to ‘Tap and Go’ technology in Europe. Consequently, third-party wallet providers will get access to the NFC input on iOS devices, without having to use Apple Pay or Apple Wallet. Essentially, all iOS users with an Apple ID registered in the EEA, or traveling temporarily abroad, can use their iPhone for in-store payments through an alternative wallet while preserving the same user journey provided by Apple Pay3

Furthermore, the European Payments Council have together with its member states introduced SEPA Instant Credit transfers and SEPA Request to Pay, enabling instant money transfer through domestic and cross border payment rails.

Multiple benefits for all interested parties

We are truly at the verge of digital dominance and disruption of traditional payments as we know it. Now is the time

~10,000

~10,000 employees across 50+ countries

2400+

Serving 2400+ customers in 150+ countries

€ 150M

More than €150M invested in R&D in between 2020 and 2023

1900

Serving 1900 Financial Institutions worldwide with physical and digital payments products

to prepare for the battle of customer interface. New and coming digital wallets across Europe, have an opportunity to truly compete on the same acceptance rails as Big Tech and established international schemes, introducing A2A payments. Wallets and issuing banks can capitalize on Open Banking and creating rich ecosystems in a B2B2C approach

750+

750+ active patent families

400M+

400M+ token provisioned for different token requestors, including major mobile wallets

to enhance their brand recognition, providing Merchants with attractive loyalty offers for their customers– this will open doors for many future opportunities allowing for a full market disruption.

For more information on how IDEMIA Secure Transactions can support you, please visit idemia.com or your local sales representative.

IDEMIA Secure Transactions

Close collaboration resulted in an exceptional customer advisory system

Over the last decade, Festina Finance and SDC have collaborated to develop a customer advisory system that is not only equipped to handle today’s tasks but is also constantly evolving to meet new demands from both customers and regulators.

By Henrik Malmgreen

What can a fintech company and an experienced IT provider learn from each other?

Quite a lot, if you ask Festina Finance and SDC, which serve financial institutions in Denmark, Norway, Sweden, and the Faroe Islands. Currently, SDC uses Advisor from Festina Finance in Denmark and the Faroe Islands as the daily foundation for customer advisory services in 21 Danish and 3 Faroese financial institutions.

“ This journey brought together two cultures, allowing us to learn a great deal from one another. It’s valuable for a young fintech company to gain from maturity, just as it’s refreshing for an established company like ours, with a long history in financial IT services, to embrace fresh thinking and agility. This is probably one of the reasons why we have had a fruitful partnership for 10 years,” says Hilde Seljom, Area and Development Director at SDC.

Trusted a young company as a partner

Today, SDC’s systems are built on a modern and open platform aimed at ensuring a great customer experience for both advisers and end users. Today’s financial landscape offers a vast array of options, placing high demands on customer advisory systems. These systems must balance security, compliance, agility, and flexibility.

“ To rise to this challenge, we sought a partner who could help us innovate and keep us competitive. We saw interesting opportunities with Festina,

even though at the time it was a young and relatively untested company. It was a strategic decision to ensure our continued growth,” Hilde Seljom elaborates. For completeness, she adds that it was also the right decision for Festina Finance to accept the task.

Advisor has become an essential tool Now, 10 years later, both SDC and Festina Finance look back on a process that has

SDC’s goal is to deliver modern IT solutions that support the work of bank advisers. This is crucial for us, and we ally ourselves with the best partners in the market to ensure we remain at the forefront, nurturing innovation and new ideas that can help our customers in their work.

Hilde Seljom Area and Development Director at SDC

Hilde Seljom Area and Development Director at SDC

We constantly look for ways to improve Advisor through our own efforts and inputs from the fintech environment. One of the things we are considering is artificial intelligence, as we must continuously improve customer advisory and meet the bank customers’ needs, not just with numbers but with solutions based on specific desires.

Peter Norsker Chief Business Development Officer at Festina Finance

evolved from being mainly ad hoc from project to project to filling a framework agreement that continually develops as banks face increased customer demands and, as a result, bring new requirements for the functionality in Advisor.

Peter Norsker Chief Business Development Officer at Festina Finance

“Ten years ago, we were just a small development house, but we have grown with the task together with SDC. There is confidence in our ability to deliver the required services, as Advisor has become a central part of daily banking operations, with SDC continuing to invest in the platform,” says Peter Norsker, Chief Business Development Officer at Festina Finance, who is responsible for Advisor.

At Sparekassen Danmark, we’ve been using Advisor since its launch, and today it’s an essential tool for 700 to 800 of our employees. We’re very satisfied with the solution, and we especially value our close relationship with Festina Finance. Having direct access to the SDC and Festina developers gives us a significant advantage in our day-today operations, ensuring quick and precise responses to our needs.

Kristian Dahl Johnsen Head of Advisor at Sparekassen Danmark

The collaboration with Festina is a testament to a strong partnership that has evolved over the years. From a small calculation engine initially capable of calculating disposable income to today, a complex advisory engine covering everything from credit to mortgage, investment, and pension. We continue to refine and develop the tool together with Festina Finance for the benefit of the advisers in our partner banks.

Maria Kirketerp Business developer at SDC

Focus on quality customer advisory

Peter Norsker adds that both SDC and Festina Finance have their own roadmaps, but they work methodically to align them as closely as possible. This way, Festina Finance can deliver the desired functionality when SDC needs it while also occasionally pushing for new functionality when good ideas surface. In daily operations, it is essential to understand each other’s business strategies. Practically speaking, this means some of SDC’s staff physically work one day a week at Festina Finance. Video meetings are fine, but personal contact is indispensable in a collaboration like this, explains Maria Kirketerp, a business developer at SDC.

Regular meetings for joint idea exchange

“One of my tasks is to ensure that the requests for Advisor are in sync with the tool’s capabilities. Financial institutions regularly request new functionality, but the industry also faces growing demands from authorities and regulators. Therefore, the system must handle these to make advisers’ work as efficient and simple as possible,” explains Maria Kirketerp. To create the best possible foundation for development work benefiting

financial institutions, SDC, and Festina Finance, one or two events are held yearly where representatives from all sides meet for informal discussions and idea development. According to Maria Kirketerp, this ensures that individual banks are heard and can help shape Advisor’s continued development.

Customer advisory around the clock

“Our goal is to create solutions in close collaboration that help and provide value for advisers, making them easy, modern, and intuitive, with automated solutions so advisers can focus on customers rather than administrative tasks. This also demands that the customer advisory system we offer is stable,” says Hilde Seljom, Development Director at SDC.

She adds that despite challenges over the 10-year collaboration, we never doubted the decision to work with Festina Finance.

A Critical Tool for Decision Support

“As consumers, we expect things to work smoothly, and the speed of customer advisory has significantly increased. We can no longer shuffle customers between areas like housing, investment, and pension, so there’s pressure on individual advisers. With Advisor, we have helped SDC’s banks, and their advisers have a more efficient day,” continues Peter Norsker from Festina Finance. He believes that today’s consumers, instead of initially contacting the bank, often shop around and explore different options, such as investments. Today, sustainability and the desire to invest green are significant factors, and this is

Fintech company with vast experience

SDC chose Festina Finance as the supplier of their customer advisory system for a specific reason, namely the company’s experience in the pension world. Festina Finance counts PFA Pension and PensionDanmark among its customers. So, even though SDC entered into a partnership with a company that was relatively unknown in the banking sector 10 years ago, Festina Finance was already ready with version three

of its calculation engine.

SDC wanted a full-service advisory platform covering investments, housing and car loans, and pension savings. The latter is a particularly complex affair, and it was a strategic choice to partner with someone highly skilled in life and pension. With such a core service, building the banking part is relatively easy, whereas it can be quite complex the other way around.

Our collaboration with customers has been a key factor in securing our position as a leading supplier to the financial sector. We wouldn’t be where we are today without the skill and adaptability of our clients. Additionally, we’ve been fortunate to develop solutions in a region where digitalization is essential. This has placed us in a unique position, enabling us to create world-class financial solutions that succeed not only locally but also internationally.

also an agenda the customer adviser must handle. The financial ecosystem has become complex, and the ability to provide effective decision support has become the most significant demand for an efficient customer advisory system.

Mikael Braagaard CEO at Festina Finance

Mikael Braagaard CEO at Festina Finance

Maria Kirketerp, Business developer at SDC

The Embedded Banking Imperative

Traditional banks are at a pivotal crossroads. Many don’t fully acknowledge where they are—after all, they still dominate in the markets in which they operate, having weathered the fintech revolution and still having customers who use them. But, the latest technology, changing customer behaviour, and regulations are upending the industry.

By Dave Wallace

Historically, banks have been product manufacturers and distributors. However, product and distribution are being truly separated, and several existential threats exist. Banks must decide whether to stick with the status quo or look for new opportunities.

Over the past three decades, retail banks have been actively embracing the opportunities presented by digital.

Despite the common perception of the financial services industry as a laggard, it has, in fact, been a leader in the digital revolution. I’ve had the privilege of witnessing this firsthand; from initial tentative steps online in the mid-1990s to the comprehensive adoption of digital solutions across all aspects of banking.

It has been fascinating to observe motivations and priorities as the pace of digital change has accelerated. And how decisions have been affected by increased globalisation, the global financial crisis, innovation, big tech, and COVID. Digital has often been the solution.

Since the late 1990s, banks have recognised the potential of providing platforms for customers to manage banking activities themselves. Ear-

ly adopters glimpsed the increased efficiency and cost reductions on offer. Soon, the whole industry realised that the Internet offered significant opportunities for value extraction, and Internet Banking became a key focus.

With the arrival of the iPhone and the subsequent smartphone revolution, banks shifted their focus towards mobile banking solutions. As the use of mobile devices skyrocketed, banks launched mobile apps. This shift was a pivotal moment in adopting digital as the primary banking channel. Banks were able to start moving off the high street and streamline call centre operations, saving significant costs.

However, now, the value has largely been extracted.

Mobile technology also paved the way for neo-banks, offering digital-only propositions. These banks, often targeting a younger demographic, leveraged the latest technology to enable digital onboarding and servicing. Brands like Starling and Monzo use cloud technology and microservices to improve flexibility and reduce costs.

Neo-banks don’t require switching and often work alongside a primary

banking account, and ease of applica

tion has helped drive penetrations; Monzo now has 7 million customers. Almost 40% of UK people have a digital-only bank account or accounts. For many people, they are point solutions solving a particular pain point. I, for example, have Monzo for day-to-day spending, Revolut for FX and Crypto and Chase for its high savings rates. Using these has chipped away at the transactional activity of the legacy banks.

In 2014, open banking was launched in Europe. The end consumers could now share their banking data with 3rd parties. This opened the door to a raft of fintechs who have seized the opportunity to use banking data to provide value-added products and services.

At the same time, a few notable brands, such as Uber and Lyft, were driving onto the scene, showcasing the impact of the latest cloud-based embedded banking technologies.

Embedded banking, a concept that may be new to some, refers to integrating banking services into non-banking platforms, making financial transactions seamless and invisible to the end user. But what is new is how technology

Dave Wallace Founder, Podcast host, Writer and Advisor

Riksbankshuset,

has made the whole process seamless. You could now catch an Uber and get out of the car at your destination without making a physical payment. It is all done behind the scenes. I still remember the first few times I used Uber, feeling like a criminal as I jumped out of the car without having to pay the driver directly. Once launched, mobile wallets were quickly adopted. Apple and Google Pay negate the need for physical cards and have become the de facto interface to day-to-day payments for many. In the UK, open banking has enabled balances in the Apple Wallet, further moving banks into the background.

Buy Now Pay Later (BNPL) embedded payments into the retail customer journey. Suddenly, consumers had a new mechanism for paying for goods, with Klarna leading a raft of new players. Their growth demonstrating the winning formula of combining a slick UX with deferred payments.

The reasons for visiting a bank’s digital real estate are slowly being eroded, and banks are being pushed into the background; the psychological tethering that has underpinned their relations with customers is inextricably

Doing nothing and trying to maintain the status quo is not a viable strategy for banks.

being severed.

This is further compounded by their physical real estate becoming a rarity.

As banks close branches and retreat from the high street, they diminish the tangible presence that once solidified customer loyalty. A physical branch used to be a critical reason for choosing a bank—it symbolised stability and provided a fallback option if digital services failed. Today, 12% of people with digital-only accounts cite the lack of local branches as their reason for switching (Finder, 2024).

So, how should banks respond?

A positive way would be to embrace

what is happening and join the Embedded Club. Aligning with customer behaviour allows banks to use their operations to tap into brands with large customer bases. Many neo-banks have seen a chance to use their platform real estate and, in some cases, their license to launch Banking-as-a-Platform (Baas) propositions, essentially selling platforms to third parties to be able to offer financial services products. XYB, which came out of Monese, Engine by Starling, and Monument are examples.

Of the traditional banks, a few innovators such as Standard Chartered and Natwest have also seen the opportunity.

Standard Chartered’s Audax leverages the Bank’s global banking licenses and a robust, cloud-based technology stack to enable swift deployment of financial services. This setup allows partners, including e-commerce platforms, ride-hailing services, and airlines, to offer comprehensive banking services to their customers without the need for significant investment in banking infrastructure.

Natwest’s Boxed is a joint venture between NatWest and the European BaaS provider Vodeno. Boxed is designed to help non-financial companies integrate banking services seamlessly into their offerings, allowing them to enhance customer experiences and create new revenue streams. The platform provides fully documented APIs, built-in regulatory compliance, and end-to-end operational support, ensuring businesses can quickly and securely deploy financial services.

Doing nothing and trying to maintain the status quo is not a viable strategy for banks. The world is changing to the point where old models are no longer fit for purpose. So, banks must consider the embedded opportunity and invest in developing their BaaS offerings. The potential for whole new revenue streams by tapping into the customer bases of other third parties is there for the taking. By systematising and productising an offering, banks can use their product manufacturing capabilities, operations, and licenses to provide third parties with what they need to deliver products securely and in a fully regulated way, which will enhance their customer propositions and drive loyalty. And for more than just retail customers. The smart banks are already on the case with business and corporate banking.

Dave Wallace Founder, Podcast host, Writer and Advisor

Stockholm

The Power of Data: How AdvanThink is Redefining Financial Security

As financial crime escalates in complexity and scope, AdvanThink is revolutionizing financial security by harnessing the power of data and advanced machine-learning technologies to empower banks and businesses in their fight against payment fraud.

By Marria Qibtia Sikandar Nagra

The pervasive nature of financial crime, compounded by evolving tactics and sophisticated technologies, presents significant challenges for banks. Further complicating the situation are legacy systems and fragmented approaches to fraud detection, making it even more challenging for financial institutions to adapt effectively and implement robust solutions. As a result, many banks need help to keep pace with the increasing complexity of financial crimes. This underscores the need for a more integrated and collaborative framework in crime prevention. By adopting a unified strategy and leveraging advanced technologies, the banking sector can enhance its defenses and create a safer financial environment for all its customers. This is where AdvanThink comes through.

Leading globally in the field of Machine Learning and serving as the preferred software provider for 90% of banks in France and major CAC40 companies in their Data and AI initiatives, AdvanThink’s commitment to financial crime prevention has allowed it to deliver innovative software that em-

powers organizations to make real-time decisions through comprehensive data analysis across various sectors.

“With three decades of experience rooted in research and innovation, AdvanThink has been at the forefront of developing artificial intelligence, data science, and data management solutions tailored to diverse business needs. With our extensive experience in machine learning, we are able to deliver cutting-edge solutions that effectively analyze, explore, and leverage vast amounts of data, thus helping in fraud detection, safeguarding financial transactions, and maintaining customer trust. We strive to pave the path for new opportunities for organizations to achieve fraud prevention goals. Not only that, but our solutions also facilitate the automated generation of audits and financial reports, streamlining operations while ensuring compliance. Additionally, our marketing tools empower organizations to craft personalized offers for each customer, enhancing engagement and loyalty,” shares Brice Perdrix, CEO of AdvanThink.

Brice Perdrix CEO, AdvanThink

Through our solutions, we are poised to lead the industry into a new era of financial security by playing our due part in creating a safer and more resilient economic future.

Brice Perdrix CEO of AdvanThink

Real-Time Fraud protection with Amadea and FraudManager

Fraud prevention for businesses is made possible through AdvanThink’s modular solutions, Amadea and Fraud Manager, potent tools that combat fraud in real-time. Amadea is a Data and AI platform designed to address various

business challenges through advanced data management and analytics. It offers a unified, no-code interface that allows real-time data-driven decisions thanks to its capabilities to connect to multiple data sources, manage metadata, and automate data exploration, data preparation, and data science tasks to achieve a clean dataset ready to provide all the secrets

“Amadea features a comprehensive data science library for modeling and analysis, enabling organizations to enrich, aggregate, and publish their data effectively. Our innovative platform supports seamless integration with third-party applications and promotes efficient data workflows. It is a powerful tool for businesses to leverage data-driven insights for improved decision-making and operational efficiency. For instance, in the healthcare sector, we harness hundreds of billions of data points to support medical research and contribute to advancements in public health. Meanwhile, our focus on continuous optimization helps industries refine their processes, boosting efficiency and reducing costs,” explains Perdrix.

On the other hand, FraudManager employs advanced Behavioural Analysis and Machine Learning to detect suspicious activities by identifying unusual patterns in financial transactions. With its ability to process data from multiple sources, FraudManager provides comprehensive insights that allow organizations to respond swiftly to emerging threats while minimizing false positives.

“It is perfectly tailored for the unique challenges of the banking and e-commerce sectors. This means you get to protect your customers’ transactions and offer them a secure and seamless user experience. A notable use case is in retail banking, where our solutions protect all means of payment. FraudManager allows banks to secure customer transactions while managing operational costs and minimizing inconvenience. By offering a reassuring and instantaneous payment experience, we ensure that customers can transact confidently regardless of their chosen payment method. Through our solutions, we are poised to lead the industry into a new era of financial security by playing our due part in creating a safer and more resilient economic future,” affirms Perdrix.

Health Meets Wealth: Can Banks Boost Loyalty with Holistic Care?

The growing prevalence of health-related financial crises, from unexpected medical expenses to the long-term costs of chronic illnesses, demands action to protect individuals’ financial stability and well-being. Without swift integration of health considerations into financial services, institutions risk failing to meet the evolving needs of their clients, potentially leading to widespread financial insecurity and a loss of trust in the financial system.

By Jakob Frier

Financial institutions across sectors like general insurance, life insurance, pensions, and banking are increasingly recognising the critical importance of addressing the holistic well-being of their customers, encompassing physical, mental, and financial health.

As interest grows in adopting an ecosystem approach—where companies move beyond traditional value-chain strategies to consider the broader network of influences in their customers’ lives—the landscape is rapidly evolving.

“Both personal and corporate clients now find themselves in an increasingly complex environment, where emerging needs and advanced technologies are transforming how those needs are met, requiring financial institutions to adapt and innovate in response,” says Stefan Knapp, partner at PA Consulting and adds:

“Innovative ambitions around more integration of products, services, suppliers and partners are becoming more commonplace as a way of standing out in the market and winning the battle of the customers.”

Several studies over the past decade indicate that one of our primary concerns as citizens is how we will navigate our daily lives if we encounter certain illnesses or health-related challenges.

“Financial security is a key trait here - and as such, the Danish society is in a

We seek security and safety as per Maslow’s pyramid of needs, and thus addressing a health-related financial risk is a powerful driver for attracting customers and creating loyalty

Stefan Knapp Partner at PA Consulting

strong position with our ‘Tab af erhvervsevne’ (Loss of earning capacity) product typically tied to pension schemes, where we get payouts throughout long-term sick leaves. We seek security and safety as per Maslow’s pyramid of needs, and thus addressing a health-related financial risk is a powerful driver for attracting customers and creating loyalty,” Knapp says.

Personalising prevention

Health tech companies usually work on personalising care, predicting health issues, and preventing them.

By leveraging technology to collect and organise data, it becomes possible

to understand better what maintains health or causes illness. This insight enables the education of individuals on how to enhance their overall well-being, both mentally and physically, actively.

“This in turn, leads to fewer claims if prevention efforts are successful - and can create a more directive and effec tive use of our pension savings if we can better predict and act on how our lives are are likely to turn out, although not being an exact science,” Knapp says.,” Knapp says.

Financial institutions face challeng es in integrating health and wealth management into their services, such as aligning these two distinct areas and ensuring seamless customer experi ences. Overcoming these obstacles re quires a cohesive and valuable offering for clients.

“Looking at the landscape of health tech apps, many today are focused on prediction. You can hardly swing a dead cat without hitting an app that can predict your likelihood of attaining specific physical and mental disorders based on your lifestyle or how your genes can be mapped to show your disposition to certain illnesses,” Knapp says.

According to him, the core challenge lies in achieving effective outcomes, or what I refer to as true prevention. To address this, it is essential to

1) understand the ecosystem, 2) map out customer journeys, and 3) apply behavioural design to foster alternative behaviours while monitoring and tracking the real changes.

“We dont see good examples in Northern Europe - the fields of health and wealth have historically been quite separate and treated as different business lines, as we see it with Nordic banks and their pension arms, which are typically just being used as a product provider to the banks enabling them to up-sell to their customers, which also have legislative reasons,”

Integrating health and wealth

Despite the abundance of technologies available to gather and structure data— whether through physical devices or various apps that track mental load and capacity—Knapp anticipates that more of these solutions will emerge.

“I believe the focus should shift towards better integrating these technologies into the devices we use daily, allowing for a more seamless connection between health and wealth offerings and reducing reliance on specific apps,” he says.

Knapp expects BigTech companies, particularly those in the phone and watch markets, to lead by leveraging data to drive meaningful behavioural changes.

This

proactive approach not only ensures a healthier workforce but also minimises financial losses related to absenteeism, reduces future insurance costs to medical, workers compensation and disability insurances

Søren Würtz CEO of Precure

“Additionally, I envision solutions that encourage healthier purchasing habits, such as rewarding the purchase of more fruits and vegetables or making it harder to buy candy by allowing credit card providers to implement restrictions,” he says.

Integrating health and wealth management presents potential risks and downsides, particularly in managing data across product lines and services while navigating the challenges of regulation and personal data protection.

“In Denmark, we tend to say we have the world’s best health data - but we are very far from making it possible to

utilise this data to create real scalable innovation in personalisation, prediction and prevention. Synthesising data is one - still very unexplored in financial services terms - way of developing high effectiveness prevention initiatives to help lift the well-being of our citizens,” Knapp says and continues:

“Partnerships are one of the key themes to be aware of to mature their market position - and that is an area where many of the incumbents and health tech start-ups are far from the potential.”

AI wearables for workplace wellness

The Danish company Precure is a health tech firm that integrates health and wealth with financial services. They have developed a wearable device that utilises AI-driven analytics to prevent workplace injuries and chronic conditions, ultimately aiming to reduce absenteeism.

“By reducing the risk of musculoskeletal disorders, we help organisations improve their consistent delivery, decrease their total spend to all healthcare and people-related costs and improve productivity, leading to more sustainable outcomes for employers, employees, insurers and even society,” say CEO of Precure, Søren Würtz.

According to the European Agency for Safety and Health at Work, musculoskeletal disorders are the leading cause of work-related health problems. Throughout Europe, they affect millions of workers and cost employers billions of euros.

“This proactive approach not only ensures a healthier workforce but also minimises financial losses related to absenteeism, reduces future insurance costs to medical, workers compensation, disability insurances while also improving the overall value proposition for the workplaces that they do actively take care of their employees,” Würtz says.

While Precure offers scalable and adaptable solutions, the necessity for customisation and comprehensive training underscores the difficulties in achieving seamless integration.

“We provide comprehensive training and support to ensure smooth integration and adoption. Building strong partnerships and maintaining open communication with stakeholders have also been crucial in addressing implementation challenges,” Würtz says.

Søren Würtz CEO of Precure

Brian Lawlor on B4B Payments Supporting Nordic Fintechs for Global Growth

The Nordic region is known for its stable financial systems, and its fintech sector is rapidly growing and becoming a significant source of economic growth for startups. With high adoption rates of mobile payments, a focus on sustainability and robust regulatory frameworks, it is an ideal environment for exciting innovations and beneficial collaborations.

By B4B Payments

For ambitious Fintechs in the region seeking global domination in other markets like the US, UK, and EEA, the increasing number of regulations to comply with can be cumbersome in helping pave the way for new unicorns to emerge.

Fortunately, innovating with B4B Payments as your Banking-as-a-Service Provider offers an alternative path to worldwide success. This collaboration showcases the opportunity to utilise their infrastructure, adhere to regulatory standards, and seamlessly scale your operations as you extend your global footprint. B4B Payments has a proven track record of success with other Nordic Fintechs such as JUNI, Zento, and OneMoneyWay.

We caught up with Brian Lawlor, Group Chief Commercial Officer at B4B Payments. Brian has a wealth of knowledge and experience in the industry, managing the relationships of major corporations and FinTechs within the payments ecosystem.

He is a senior business development executive with over 20 years of knowledge and experience selling and managing the relationships of major corporations and FinTechs within the payments industry.

Brian has been instrumental in launching various FinTech companies into the market, such as Soldo, Revolut, Wise, Monzo, and Juni. His expertise in navigating the complexities of the payments industry has been invaluable in driving growth and innovation within these companies throughout his career.

In 2020, he joined Banking Circle’s card-issuing strategy team. Through his efforts, Banking Circle acquired B4B Payments, an EMI operating in the United Kingdom and Europe and holding the status of a principal member of Mastercard, Visa and Discover. Brian played a crucial role in this acquisition, significantly expanding Banking Circle’s capabilities and market reach.

Brian, given your successful 20-year career in payments, what are some exciting developments in the fintech industry?

The fintech industry is undergoing a transformative phase, fueled by rapid technological advancements and evolving consumer demands. One of the most exciting developments I’ve witnessed is the rise of embedded finance, where financial services are seamlessly integrated into non-financial platforms and applications, leading to

new revenue streams for businesses across various industries.

Another noteworthy development is the increasing adoption of open banking and APIs, which facilitate secure data sharing and enable third-party providers to develop innovative financial products and services. This openness fosters collaboration and competition, benefiting businesses with a broader range of tailored solutions. Furthermore, the fintech industry embraces sustainability and environmental, social, and governance (ESG) principles, driving the development of green finance solutions and responsible investing practices. This alignment with global sustainability goals is ethical and presents lucrative opportunities for fintechs to tap into the growing demand for sustainable finance.

How do you see the Nordic market evolving, and what opportunities does it present for global expansion?

The fintech market in the Nordic region is set to experience significant growth and innovation. The area offers a fertile ground for fintech companies to thrive with a tech-savvy population, high mobile penetration rates, and a regulatory environment encouraging innovation.

Brian Lawlor Group Chief Commercial Officer, B4B Payments

One notable trend is the increasing emphasis on financial inclusion and accessibility. Nordic fintechs are developing solutions that cater to underserved segments, such as gig workers, immigrants, and small businesses, ensuring that financial services are available to all.

For global expansion, the Nordic fintech ecosystem offers a unique testing ground for innovative products and services. Companies that succeed in this highly competitive and technologically advanced market can leverage their expertise and proven solutions to gain a foothold in other markets abroad.

How does the B4B Payments solution align with these opportunities and Nordic FinTechs’ strategic vision for global growth?

At B4B Payments, we recognise the immense potential of the Nordic fintech market and local companies’ ambitions to expand globally. Our Banking-as-aService solution is designed to empower these ambitious fintechs by providing a robust infrastructure that adheres to regulatory standards across multiple jurisdictions.

By collaborating with B4B Payments, Nordic fintechs can leverage our expertise in navigating complex regulatory landscapes, ensuring compliance and seamless scalability as they extend their global footprint.

Our platform offers a comprehensive suite of payment services, including card issuing, accounts, and cross-border payment solutions, enabling fintechs to focus on their core offerings and innovation.

In global growth, how do B4B Payments address and mitigate potential risks associated with collaboration with Fintechs, especially in a rapidly evolving financial landscape?

Navigating the complexities of global expansion and adhering to evolving regulatory frameworks can be daunting for fintechs. At B4B Payments, we understand these challenges and have implemented robust risk management strategies to mitigate potential risks associated with our collaborations.

First and foremost, we prioritise compliance and regulatory adherence. Our legal and compliance experts

Companies that succeed in this highly competitive and technologically advanced market can leverage their expertise and proven solutions to gain a foothold in other markets abroad.

Brian Lawlor

Group Chief Commercial Officer at B4B Payments

stay abreast of regulatory changes across jurisdictions, ensuring that our partners’ operations remain compliant as they scale globally. We also conduct thorough due diligence to assess potential risks and implement appropriate safeguards. Our modular and flexible solutions enable fintechs to quickly adapt to changing market dynamics, regulatory shifts, and emerging technologies, minimising disruptions and mitigating risks associated with obsolescence.

Looking ahead, what are your expectations for the future of the fintech space, and how do you envision the role of evolving AI technology in this context?

The fintech space is poised for continued disruption and innovation, driven by the convergence of emerging technologies and evolving consumer demands. I expect to see an even deeper integration of financial services into everyday life, facilitated by artificial intelligence (AI) advancements.

AI will enhance customer experiences, enabling personalised and intelligent financial services tailored to individual needs and preferences.

Furthermore, AI will be instrumental in fraud detection, risk management, and regulatory compliance, providing real-time monitoring and analysis capabilities that enhance security and ensure adherence to ever-changing regulations.

With a proven track record of success and a deep understanding of the industry’s complexities, B4B Payments is poised to be a trusted partner for Nordic fintechs, empowering them to navigate the challenges of global growth and unlock new frontiers of innovation in the ever-evolving financial landscape.

From Local Roots to Global Reach: Latvia’s

Fintech Success Story

LIIA Latvia’s fintech ecosystem is on the rise, driven by a forward-thinking regulator and a highly skilled, tech-savvy population. Unlike many small markets, Latvian fintechs think globally from the start, designing solutions for international scalability. The country has emerged as a strong player in blockchain, payments, and regulatory tech, gaining recognition for innovations in anti-money laundering and fraud prevention. As in the proverbial leapfrogging, Latvia’s hunger, impetus, and accelerated transformation are setting new standards in fintech, positioning it as one of the upand-coming global powerhouses of technology and financial savviness.

By Chris Crespo

Fintelligence

Fintelligence provides an automated reputation-checking tool that assesses publicly available information on customers and partners. The platform analyzes and categorizes data as negative or neutral, with clear justifications for each classification. Designed to identify negative news that could indicate risk, the web-based solution supports searches in over 100 languages and offers secure API integration. Discover the power of publicly available information!

Liga Vinkele Founder&CEO

Upwood.io

Upwood is a platform facilitating investments in forest plantations, alongside carbon offset certificates. Utilizing blockchain technology and geospatial data, Upwood ensures transparency, security, and accessability in forest and carbon credit ownership. Our platform lets individuals and entities easily buy shares in real-world forests, offering profits from asset appreciation and carbon credit income. We handle maintenance for investor, making forest investments accessible and profitable.

Lauris Borodovskis Chief Executive Officer

Latvian Blockchain

association ( LBAA )

LBAA is a non-profit organization that unites blockchain industry specialists since 2017. LBAA actively promotes the integration of blockchain technology into the economy of Latvia. Latvia has one of the lowest MiCA license supervision fees in the EU. In addition companies can access dynamic licensing and acquire the license in 3 months. Start a pre-licensing process already now.

Mission: Latvia becomes a major Web 3 hub in the European Union.

Reinis Znotiņs Executive Director

VIAINVEST

VIAINVEST makes investing easy and accessible for everyone. Whether you’re looking to grow your wealth through diversified consumer loan investments or seeking financing to expand your business, VIAINVEST has you covered. We streamline the process, offering opportunities across Europe with competitive returns. Join our community and discover how easy it is to invest or fund your next big idea with VIAINVEST.

Eduards Lapkovskis Chief Executive Officer

Green Finance: Banks & Fintechs Embrace Energy Data

In the pursuit of decarbonisation targets, banks with mortgage books are actively seeking ways to reduce carbon emissions associated with home ownership. A significant portion of these emissions arises from the energy consumption within homes.

By Eliq

To address this challenge, innovative tools are being developed to help banks and financial institutions engage with customers, capture and utilise energy data, promote energy-saving practices, and provide recommendations for green home upgrades. These initiatives not only contribute to green financing and mortgages but also enhance the understanding of climate risk within mortgage portfolios.

Engaging Customers for Sustainable Homes

To facilitate the transition towards sustainable homes, various approaches are being adopted. One of these methods involves providing customers with tools and incentives to save energy, and money. By capturing energy data and obtaining consent from customers, banks can analyse energy consumption patterns and offer personalised recommendations for home improvements. This empowers customers to take proactive steps in reducing their carbon footprint while optimising their energy bills.

Leveraging Data for Climateconscious Banking

Data plays a crucial role in enabling banks to implement effective strategies. For instance, some banks have access to an extensive database of energy-related information. This data serves as a valuable starting point, allowing banks to comprehend energy flows within

households. However, obtaining real customer data requires consent and the provision of user-friendly interfaces for managing energy bills.

Enhancing Customer Experience through Technology

Improving customer journeys and expe-

riences is a priority for banks seeking to differentiate themselves in a competitive market. By leveraging technology, banks can offer innovative solutions that not only attract and retain customers but also genuinely assist them in achieving their sustainability goals. The ability to quickly adopt and deploy tech solutions

becomes paramount, especially considering the growing demand for smart meters and the fast-paced adoption of green practices.

Building an Ecosystem for Digital Transformation

In the quest for digital transformation, banks and fintech companies are embracing the concept of ecosystems. Collaborative partnerships between vendors, fintech, and energy utilities are emerging as powerful platforms for implementing tech-driven solutions. This ecosystem-driven approach facilitates faster problem-solving, allowing banks to match their specific needs with proven solutions that have undergone rigorous testing. Speed-to-market and time-to-value become key considerations in this collaborative journey.

A data powered future

The convergence of banking, fintech, and energy data presents a promising avenue for accelerating green finance and sustainable practices. By harnessing energy data, banks can engage with customers, offer personalised recommendations for energy-efficient retrofits, and effectively manage climate risk within their mortgage portfolios. The adoption of innovative technologies and collaborative ecosystems further strengthens banks’ ability to meet customer expectations, drive digital transformation, and contribute to a greener future.

Why Malta for Fintech?

Fintech in Malta is booming

In 2023, an elite advisory team from Mastercard recognized Malta’s fintech growth and conducted a study resulting in a 100-page report delineating the precise actions needed to support fintech growth in Malta. Visa also recognized the boom and extended its Visa Innovation Programme Europe—a programme designed to help early-stage fintechs scale—to Malta in January 2023.

By R. Paulo Delgado

Alan Cuschieri Governor of FinanceMalta

Spearheading this growth is FinanceMalta, a public-private initiative dedicated to promoting Malta as an international financial centre.

Reasons for Nordic fintech companies to consider Malta Malta, an island country in the Mediterranean, is business-friendly, with an accessible regulator who’s willing to do business with the right companies, says Alan Cuschieri, governor of FinanceMalta.

The country is ranked in the topthird performers in Europe by global consultancy firm McKinsey & Company. Other countries ranked in the top third include the United Kingdom, Sweden, Switzerland, and Ireland.

The Malta Financial Services Authority (MFSA) recently launched version two of its fintech sandbox. “Within this sandbox, startups can test new ideas

without going through the full regulatory process, all under the close supervision of the MFSA,” says Cuschieri.

English is also one of the country’s official languages, which is well-suited to the Nordic countries, where English serves as the de facto business language between Nordic states.

Malta is a pioneer in crypto and blockchain

Malta was one of the first jurisdictions to introduce clear and comprehensive regulatory guidelines for blockchain companies. Its foresight in recognizing the possibilities of this new technology led to a rush of companies setting up headquarters in Malta.

Europe took several years to catch up with Malta, finally releasing its MiCA (Markets in Crypto-Assets) Regulation. This new regulation solidifies what Malta already has in place.

Any company already licenced

Malta’s regulator is open to new ideas and eager to engage with the right quality companies”

Alan

Cuschieri Governor of FinanceMalta

in Malta under the Virtual Financial Assets Act will automatically be compliant with MiCA and able to passport across Europe as soon as MiCA goes into force.

More focus on VC and PE Malta has managed to attract numerous high-quality companies and continues to do so, with several new applications currently at the regulator.

To set up in Malta, you’re required to have a physical presence in the country and demonstrate substance on the ground.

Malta is also making a considerable effort to make it easier for fintechs to work within the complexities of ever-growing fintech regulations and reporting requirements, such as DORA, CESOP, MiCA, and others. For example, the country is working on simplifying the reporting process for banks, fintechs, and FSPs to avoid duplicate reporting to different agencies.

Focus on quality within a business friendly-environment Malta has managed to attract numerous high-quality companies and continues to do so, with several new applications currently at the regulator.

To set up in Malta, you’re required to have a physical presence in the country and demonstrate substance on the ground.

Malta is also making a considerable effort to make it easier for fintechs to work within the complexities of ever-growing fintech regulations and reporting requirements, such as DORA, CESOP, MiCA, and others. For example, the country is working on simplifying the reporting process for banks, fintechs, and FSPs to avoid duplicate reporting to different agencies.

And then there’s the sunshine Despite the country’s relatively small size, its leadership position in the fintech space is unmistakable, making it an obvious choice for Nordic fintech companies to set up in.

It also helps that the sun shines there for more than 300 days a year— something anyone in the Nordics will agree is a massive value-add.

Collaborative Defense: The Future of Fighting Financial Crime

As criminals increasingly leverage advanced technologies like cryptocurrencies and decentralised finance to outsmart financial institutions, the fight against financial crime becomes more complex and challenging. Financial institutions must adapt by embracing collaboration, intelligence sharing, and cutting-edge tools to combat threats while navigating the delicate balance between data privacy and security.

By Jakob Frier

The landscape of financial crime is constantly evolving, with criminals adopting more sophisticated methods to launder money and finance illicit activities.

Cybercrime, digital currencies, and cross-border transactions add layers of complexity, making it harder for institutions to detect and prevent these activities. Financial institutions must stay ahead of the curve with advanced technologies like artificial intelligence, machine learning, and big data analytics, further increasing their operational burden.

“Criminals are brilliant at using the latest technologies–like instant payments, e-wallets, or cryptocurrencies–but financial crime technologies don’t follow fast enough. This is why, historically, criminals are always a couple of steps ahead of crime fighters,” Taavi Tamkivi, CEO and Co-Founder of the fintech Salv.

If financial institutions continue working in siloes, it will be impossible to beat big, complex criminal networks.

Taavi Tamkivi CEO and Co-Founder of Salv

With 20 financial institutions as clients in the Baltic and Nordic regions, Salv brings financial crime teams across different organisations. It is the only licensed financial crime platform that facilitates intelligence sharing, fully compliant with the latest EU regulations, among professionals combatting financial crime.

Tamkivi points out that financial institutions are falling behind mainly because criminals collaborate effectively and share intelligence through advanced networks. In contrast, those combating crime in financial institutions often work in isolation or within silos.

“If financial institutions continue working in siloes, it will be impossible to beat big, complex criminal networks,” he says.

Taavi Tamkivi CEO and Co-Founder of Salv

Lead Compliance Officer at Nordea

With the advance in technology, we are seeing a tool that can sit across the different pillars of the anti-financial crime space as a case management tool.

Louie Vargas Lead Compliance Officer at Nordea

In God we trust – rest must bring data

According to last year’s Fraud and Financial Crime Report from the global risk management and investigative services firm Kroll, financial organisations have significant data on customers, transactions, and money flows that could be very useful in fighting crime and helping other financial institutions. However, most of this data is not used effectively. Only a small amount is used to stop financial crime, and it’s often not done well.

Financial institutions worldwide use similar tools, though they vary in maturity and complexity. The effectiveness of these tools is subjective and can differ depending on the context.

“A tool that works well for transaction monitoring may not be as effective for managing sanctions or preventing fraud,” says Louie Vargas, Lead Compliance Officer at Nordea.

While financial institutions may currently lag behind criminals, promising changes are on the horizon that could help close the gap.

“With the advance in technology, we are seeing a tool that can sit across the different pillars of the anti-financial crime space as a case management tool that can highlight risk across the customer life cycle instead of the traditional siloed view most have access to today. We are also seeing how the increased use of machine learning assists with decision reapplication, saving human manpower for repeatable tasks or decisions,” Vargas says.

According to Vargas, AI is increasingly playing a larger role, not with direct decision-making but by utilising its ability to source information and data more rapidly, especially from

different sources.

“Tech has helped in many ways, but there is still no ‘silver bullet’, and there is always the feeling that once we see advancements in our space, criminals have already found a way to exploit it,” he adds.

Tamkivi expresses concern that companies using the most advanced technologies struggle to keep up with financial criminals. However, there is a growing trend towards “collaborative crime fighting” through intelligence sharing, and this approach is beginning to show significant value.

“Even those companies using modern technologies still aren’t collaborating and leveraging their networks. In countries such as the Baltics and Nordics, intelligence sharing – which we call collaborative crime fighting – is starting to pick up; we’re seeing real value in it,” he says.

No silver bullet

Strict data privacy regulations in the Nordic region can challenge information-sharing initiatives among financial institutions.

“There are not many success stories about information-sharing initiatives between financial institutions in the Nordic region because of data privacy concerns. Strict data privacy regulations in Nordic countries can create hurdles in information sharing. Finding a balance between security and privacy is crucial for these initiatives to be truly effective,” says

Mindaugas Petrauskas, Head of Financial Crime Prevention at AMLYZE.

Petrauskas sees potential in platforms like the Nordic Financial CERT (NF CERT), established in 2023, which aims to overcome these challenges by fostering collaboration among member banks. NF CERT replaces the Norwegian FinansCERT and is a central platform where financial institutions can share information about cyber threats, collaborate on handling cyberattacks, and develop best practices.

Tamkivi acknowledges that regulatory changes can create challenges for financial institutions, but he also sees these changes as opportunities to impact the fight against financial crime positively. He highlights the new EUwide AMLA regulation, which includes article 75, which states that banks and fintechs can share intelligence so long

Louie Vargas

as it relates to a financial fraud case.

“We’re also beginning to see other countries slowly but surely adapting to the most modern guidance from the Financial Action Task Force (FATF), which follows data protection principles that clearly state that financial institutions like banks, fintechs, and money service providers are allowed to exchange some detailed information about a possible crime, high-risk customers and fraudulent transactions,” Tamkivi says.

Tamkivi emphasises that even in countries where technology isn’t fully enabling intelligence sharing, the simple act of professionals coming together to exchange knowledge and strategies leads to positive developments in the fight against financial crime. He points out that frameworks like the FATF, EU-wide legislation, and local laws support these collaborative efforts.

The looming threat in the digital age

As businesses increasingly depend on online services, their vulnerability to these cyberattacks grows. And criminals will look to exploit this even more in the future.

A cyberattack occurs every 39 seconds, amounting to over 2,000 attacks daily. According to Microsoft, the global cost of cybercrime, which stood at $6 trillion in 2021, is projected to surpass $10.5 trillion by 2025.

The emergence of new blockchain technologies, such as Web3, coupled with the growth of the Metaverse and increasing crypto fraud, presents significant cybercrime risks that could impact financial crime.

“Where it begins, and ends is that most financial institutions do not have access or visibility into the blockchain world. Because they don’t understand the technology nor have a view into the flows, you see a general alienation of the technology and a reluctance to adapt,” Vargas says.

Financial institutions face the challenge of detecting illicit transactions as criminals use methods like mixing services (CoinJoin or tumblers), privacy coins (Monero or Zcash), and blockchain hopping to obscure the origins and destinations of funds.

“Cryptocurrencies offer a degree of anonymity and ease of transfer, making them attractive for criminals

Cryptocurrencies offer a degree of anonymity and ease of transfer, making them attractive for criminals looking to launder money.

Mindaugas Petrauskas Head of Financial Crime Prevention at AMLYZE

looking to launder money. Cryptocurrencies are the preferred payment method in darknet markets where illegal goods and services are sold,” says Petrauskas and adds:

“These tactics make tracing and monitoring illegal activities difficult, complicating efforts to enforce anti-money laundering and counter-terrorism financing measures.”

While crypto transactions offer some anonymity, the underlying blockchain technology is inherently transparent. All transactions are recorded on a public ledger, which can be analysed by law enforcement and forensic firms to track the movement of funds.

“The rise of cryptocurrencies has spurred the development of new AML tools and technologies. These tools can analyse blockchain data to identify suspicious patterns, track transactions across different wallets, and help flag potential money laundering activities,” Petrauskas says.

He suggests that financial institutions can fight blockchain-based financial crime by utilising advanced analytics tools to identify suspicious patterns and monitor illicit transactions, even when criminals employ complex tactics like mixing services and privacy-focused cryptocurrencies.

“Collaboration with law enforcement and implementing stricter KYC/AML procedures on P2P platforms further enhance the ability to identify and disrupt criminal networks. Additionally, monitoring decentralised finance activity with specialised tools is crucial for preventing the laundering of illicit funds through these emerging platforms,” he says.

Mindaugas Petrauskas Head of Financial Crime Prevention at AMLYZE

Navigating EU regulations and harnessing emerging technologies

The fintech industry in the European Union (EU) is on the cusp of significant transformation driven by recent regulatory changes: Markets in crypto-assets regulation (MiCA), Digital operational resilience act (DORA), AI act, and advancements in technologies, such as blockchain and artificial intelligence. These developments and some other that currently are under development, such as PDS3 and FiDA, promise to open up new avenues for growth and innovation, while simultaneously introducing a fresh set of compliance challenges for participants operating within a dynamic sector.

By Marine Krasovska, Head of the Financial Technology Supervision Department at Latvijas Banka

The implementation of regulations demonstrate the EU’s commitment to enhancing the stability and security of the financial sector. These regulations are designed to address the operational risks and cybersecurity threats that come with increasing digitalisation, ensuring that financial entities, including fintech firms, are better prepared to handle disruptions and protect customer data. A short overview of each follows.

MiCA: Markets in crypto-assets

For the first time, the EU has established a unified legal framework for the crypto-assets industry with the introduction of MiCA. This regulation harmonises conditions and requirements for companies across the EU, addressing the gaps in national regulations that have led to market fragmentation. MiCA aims to create a more cohesive crypto-assets

market, leveraging the advantages of the EU’s single market. Market participants will be required to obtain a licence from national supervisory authorities which will be recognised across the EU. MiCA regulation applies to financial entities involved in the issuance, offering, and trading of crypto-assets or providing services related to crypto-assets. MiCA introduces a new form within the EU crypto-asset industry: crypto-asset service providers (CASPs) that cover a broad range of activities, such as custody and administration of crypto-assets, operation of trading platforms, and exchange services. Additionally, MiCA defines issuers of asset-referenced tokens and issuers of electronic money tokens, each with specific regulatory requirements and operational frameworks. This will enhance transparency and ensure consumer protection across the EU’s crypto market. While MiCA brings opportunities, it also poses considerable compliance

challenges. Companies will need to navigate a comprehensive set of requirements, which may lead to industry consolidation at the EU level. This could result in improved business models and corporate governance standards. This is a critical juncture for companies to recalibrate their business models and operations to align with the new regulatory framework. This will likely involve significant changes in organisational structures, business processes, particularly in the areas related to compliance with the anti-money laundering (AML) and counter-terrorism financing (CTF) areas. Firms must demonstrate the effective operation of their internal control systems, as well as the necessary knowledge, skills, tools, and expertise to ensure sustainable operations.

DORA: strengthening ICT resilience for financial institutions Starting in 2025, DORA will introduce

new regulatory requirements for financial institutions across the EU. DORA aims to harmonise and consolidate ICT regulatory standards, enhancing financial institutions’ capacity to manage ICT risks, mitigate threats, and boost cybersecurity capabilities.

DORA focuses on four areas: ICT risk management framework, ICT incident reporting, Digital resilience testing, ICT third-party service provider risk management.

In the financial industry, robust cybersecurity is crucial for protecting business data and assets. Financial institutions are frequent targets of cyberattacks, which can lead to substantial financial losses, reputational damage, and legal repercussions. Emerging threats, such as AI-powered cyberattacks, further complicate the cybersecurity landscape. Inadequate cybersecurity measures can result in data breaches, business disruptions, loss of authorisation, and destabilisation of the financial system. Financial institutions must allocate sufficient resources, invest in advanced technology and skilled personnel to counter cyber threats.

Growing reliance on cloud infrastructure and outsourcing services

necessitates stringent risk management.

Current frameworks inadequately address some IT outsourcing risks. DORA introduces stricter standards and mandates for European supervisory authorities to oversee critical external service providers, ensuring a more resilient and secure financial ecosystem.

AI act: ensuring safe and trustworthy AI

The European Commission has enacted the AI act to address both the risks and opportunities presented by AI. This regulation aims to enhance the application of AI within the EU market while ensuring legal clarity and establishing a robust foundation for the development and deployment of human-centred and trustworthy AI.

AI act seeks to improve the integration and application of technologies across the EU, promoting innovation and development within a secure and regulated framework with clear guidelines.

The regulation is also designed to ensure that AI technologies respect fundamental rights and are used in a manner that is highly secure, safeguarding individual freedoms and privacy. The requirements of regulation defines AI applications that are prohibit-

ed, particularly those that pose significant risks to safety. AI act lays down requirements for high-risk AI systems, including testing, documentation, and compliance obligations for operators.

PSD3: evolution of payment services

The PSD3 proposal introduces stricter regulations for strong customer authentication and access to payment systems and account information. Aimed at protecting consumer rights and personal data, PSD3 also seeks to enhance competition in the payments industry.

The aim of the regulation is to protect the consumer rights and personal information while improving competition in the payments industry. It merges the provisions of PSD2 and the E-Money Directive, reclassifying e-money institutions as payment institutions, though they can still issue e-money. These changes aim to create a more secure, efficient, and competitive payments ecosystem within the EU.

FiDA: new reality of financial data

To support innovation in the financial services sector and to improve the control of the EU customer data, the FiDA/OpenFinance proposal

While MiCA brings opportunities, it also poses considerable compliance challenges.

Marine

was drafted. It aims to develop open finance by stipulating requirements and creating incentives for data holders to share data in an efficient and standardised way. At the same time, customers would retain control over their data, and their data privacy and safety would be preserved. This should simplify the process of opening financial accounts and promote more personalised financial services based on the shared data, thereby enhancing overall access to and availability of financial services.

The recent changes in regulation reflects the evolution of the financial sector. Market players and policy makers expect that the regulatory frameworks will not only strengthen the trust in new technologies, but will also act as catalysts for adoption. Clear regulation ensures that the European ecosystem can evolve with both creativity and integrity. Approved and proposed changes in regulation support the development of innovative technologies and safeguard the interests of customers. It creates robust foundation, enabling sustainable growth and innovation in a trustworthy and secure environment.

Krasovska, Head of the Financial Technology Supervision Department at Latvijas Banka

Fintechs to Watch

Every quarter, our editorial team explores the fintech landscape to discover standout companies that get our adrenaline pumping. This fintechs-to-watch list is one of our favorite projects. It’s our chance to sift through the market and spotlight the companies that truly excite us—the ones that make us go “wow” with their bold ideas and innovative approaches. We don’t focus on typical metrics like market share, funding, or revenue. What draws us in is the boldness of these founders, their creative energy, and their relentless drive to tackle problems in ways that surprise and transform.

It’s a real pleasure for us to share this with our readers and spotlight the companies that have caught our eye and gotten our adrenaline flowing. We hope you’ll find them as exciting as we do, and we’re confident that these fintechs will give you a glimpse into just how much disruption and innovation is brewing in our region.”

By Chris Crespo

myTU

Neobank myTU is pioneering the use of cloud-only infrastructure and AI to make essential financial services easier to access, more secure and cost-effective. It’s an approach that precisely matches the needs of underserved markets and clients, including families, freelancers, digital nomads, and businesses often overlooked by larger banks. myTU is growing rapidly and currently counts with more than 50,000 customers representing over 100 nationalities. Headquartered in Vilnius, Lithuania, myTU was founded in 2019 by banking veteran Raman Korneu and technology expert Tomas Navickas. The startup has raised €7 million to date. mytu.co

Aila Money

Aila is on a mission to close the gender wealth gap, by giving every woman a personal trainer for her finances, so she can be comfortable, confident and in control of her money. Aila helps users achieve their life goals and creates lasting behaviour change, by leveraging behavioural science, hyperpersonalised data and AI, as well as human expertise. Aila assists users with budgeting, saving and investing through providing bespoke insights and actionable plans tied to their life-goals, as well as connecting them to a community of others that share the same life goals to support and hold them to account. Unlike other solutions, users also have access to human expertsfinancial coaches and a network of financial advisors if things are complex. ailamoney.com

Paysafe

At Paysafe, transactions are seen as more than just numbers—they’re the gateway to experiences, opportunities, and achievements, all built on trust. This belief drives Paysafe to provide a platform that ensures secure and seamless transactions, empowering businesses and customers to do more, backed by their deep expertise in the payments industry.

With innovators across twelve global locations, Paysafe makes transactions not only secure and seamless but also memorable. The company connects merchants and customers through safe, cutting-edge solutions, supporting growth and success. Paysafe’s vision is clear: to build a modern payments network for the modern economy.

paysafe.com

Two

Two is on a mission to fuel economic growth by making net term selling as easy as selling on card. Two is fixing b-commerce, relentlessly making it as simple for businesses to purchase online as it is for an end-consumer. Two helps businesses grow by removing credit risk, losses, and the delay in payment for products sold. The Two team is leading the way to a brighter future for B2B payments with their experience from large banks, B2B e-commerce, lending, and payments. two.inc

Mifundo

Mifundo is a cross-border finance platform that connects people with banks, no matter where they are. Its mission is to make lending truly borderless by breaking down barriers between individuals and banks across the EU, turning the entire region into one unified credit market. With Mifundo, customers can now choose from multiple banks across different countries, flipping the script so it’s no longer the bank choosing the customer. Mifundo’s user-friendly solution simplifies crossborder lending, giving customers more options and greater control. Their advanced AI, developed in partnership with STACC and data scientists from the University of Tartu, is backed by the European Union’s European Regional Development Fund and Enterprise Estonia. mifundo.com

LIBERNETIX

The story of LIBERNETIX is one of vision and innovation. It all began in 2023 when co-founders Alex and Kostya, driven by a passion to reshape global commerce, coined the name ‘LIBERNETIX.’ ‘Liber’ reflects their commitment to freedom, ‘net’ highlights global connectivity, and ‘X’ symbolizes their mission to break boundaries and create new opportunities. This name encapsulates their vision perfectly. Guided by the belief that artificial borders shouldn’t limit business, LIBERNETIX quickly became a symbol of financial freedom. At its core, the brand promotes the unrestricted flow of capital, envisioning a world where money moves without barriers. With a team of 35 experts, LIBERNETIX is set to overhaul finance. What distinguishes them is their deep understanding of each client’s unique needs. They’re not just advisors but dedicated partners, committed to leading clients to financial success, standing alongside them every step of the way. libernetix.com

ThetaRay’s Explainable

AI Helps Tier 1 Bank Catch Bad Actors in Colossal “Dirty” Money Scandal

In the banking world, laundered money is colloquially referred to as “dirty” money, and it’s one of the worst offences in banking.

By R. Paulo Delgado

Unfortunately, more than a handful of tier 1 banks have violated AML regulations — wittingly or unwittingly — with settlements and fines often hitting billions of dollars. Even more unfortunate is when a bank violates AML laws because its AML procedures aren’t advanced enough to catch crooks at what they do best — evading detection.

Tier 1 bank asks ThetaRay for help during AML investigation

One unlucky Tier 1 institution found itself in the crosshairs of an investigation — also involving other entities — for processing hundreds of millions of dollars in laundered money. Internal probes revealed that the problem came from its correspondent banking arm, where visibility and control were lacking. Dirty money transactions continued to flow, and the bank — and others — were unable to detect the source. Regulators demanded an explanation, but despite the institution’s best efforts,

Peter Reynolds CEO of ThetaRay

The question isn’t whether explainable AI will transform the industry but whether financial service providers will leverage it wisely to build a more resilient future.

Peter Reynolds CEO of ThetaRay

they had none to give. The regulators weren’t pleased.

That’s when the bank called in ThetaRay — a company providing AI-powered AML solutions — to help.

Explainable AI versus generative AI

The frenzy surrounding AI since ChatGPT’s release makes it necessary to differentiate between the types of AI.

AI has many subdivisions. Generative AI works in a black box fashion.

Explainable AI doesn’t.

The financial industry has increasingly adopted machine learning since

the 1980s, and the concept of explainable AI, which focuses on making AI models more transparent and accountable, has gained prominence more recently. In ThetaRay’s case, their proprietary AI algorithms can ingest massive datasets, determine standard behaviour, and then recognise deviations from that behaviour.

“The question isn’t whether explainable AI will transform the industry but whether financial service providers will leverage it wisely to build a more resilient future,” says Peter Reynolds, CEO of ThetaRay.

How ThetaRay’s AI found 56 bad actors out of 200 million transactions

At a high level, ThetaRay’s proprietary solution works by initially training the AI on the bank’s existing data so it can determine patterns. In this particular case, ThetaRay’s algorithms ingested 200 million transactions, including all SWIFT messages, amounts, and geographies involved, allowing it to model what comprised normal banking behaviour.

The system then began looking for anomalous behaviour, beyond simply flagging high-risk countries or transactions. Out of 200 million transactions, ThetaRay’s system detected 8,400 suspicious anomalies connected with 56

customers who were using nine different schemes to move dirty money around.

The bad actors used a “rotation” scheme, moving money through multiple correspondent banks to make it look “clean” before sending it directly to a European bank. The transactions came from multiple business accounts, ranging between £300,000 and £700,000, which is typically under the radar of investigation.

ThetaRay’s analysis — completed in just two weeks — allowed the bank to manage the crisis and explain to stakeholders what had occurred.

Explainable AI for AML

All of ThetaRay’s solutions — Transaction Monitoring, Customer Risk Assessment, Transaction Screening and Customer Screening — use transparent AI. This type of AI provides clarity and explanation to analysts regarding the sources that triggered an alert, allowing for thorough and streamlined investigations, and data-backed reports to regulators. At the 2024 Digital Transformation Awards, ThetaRay’s explainable AI, together with Santander bank, won the award for Best Use of Data for Human Trafficking and Modern Slavery Detection, a type of risk normally considered highly complex to deal with.

Skaleet Helps Financial Institutions Implement Core Banking “Speedboats” in 4 Months

Customer perception of banking has changed. Their expectations of services provided by banks have altered dramatically and there’s no going back. Customers now demand a personalised, real-time, omnichannel experience, and banks running on legacy core banking platforms (CBPs) struggle to bring it to them.

By R. Paulo Delgado

Enter Skaleet: A 100% API-first core banking solution that serves as the back-end for 30 customers and millions of users in 20 countries. The company’s core module handles account management, auxiliary accounting, and service orchestration. Around those core services, it further offers a payment engine, card module, lending and deposit modules, a business process automation tool, and connectors to third-party solution providers.

“Using Skaleet, banks can form de novo banks—or ‘speedboats’—in as little as four months,” says Martin Della

Martin Della Chiesa Co-CEO of Skaleet

Chiesa, Co-CEO of Skaleet.

Multi-niche partnerships are the key to rapid implementation. “Our go-tomarket strategy drives our understanding of the demand and thus what’s needed to go live. In that super-tight timeline, and from that solution, we draw up what local ecosystems must look like to make that happen,” says Della Chiesa.

Fintechs also need core banking solutions

Skaleet’s solution applies equally to fintechs. Less funding and the need to scale means fintechs must now look outwards to a reliable core banking provider when launching their own “speedboats” as fully licensed EMIs, PIs or credit institutions.

“Banking technology is complex. When we tap our card at a store or wire money to a friend, we don’t consider the multiple back-end actions, accounting entries, file exchanges, customer instructions, SEPA

bank connectivity, regulatory reporting, AML filtering, and controls involved. All financial institutions need a core banking solution to manage this complexity,” says Della Chiesa.

He further explains that it’s cheaper for fintechs to buy than to build and that even modern technology can eventually lead to technical debt.

Using Skaleet

Trust Merchant Bank (RDC Congo) digital bank grew to 1.2M customers (+45% transactions 3Y CAGR, +20% customer-base 3Y CAGR)

• BMCI (Mauritania) digital bank onboarded 800K customers within three years of launch BPCE (French Tier 1 Banks) launched a new business

Skaleet features and achievements

Some of Skaleet’s features and achievements include:

EU cloud-based

• API-first

• Realtime, event-driven design 1,000 configuration points across 200 product capabilities

• Configurable workflow automation

100% digital compliance checks Connecting customers to SCT Inst within 12 weeks (compared to 12 months by competitors)

99.99% uptime since 2015

• Leverages private cloud settings in EU providers (thus, zero CLOUD Act exposure) 60%-80% reduction in IT running costs

“Using Skaleet, you can confidently run a regulated financial institution with as few as 10 people,” says Della Chiesa. The statement is backed up by evidence: One of Skaleet’s customers runs 1.5 million yearly transactions with only two full-time engineers.

Start “de novo” or migrate?

Launching de novo businesses is a well known strategy for financial institutions, says Della Chiesa, as it avoids the “migration fear factor.”

“What’s interesting is that we’re seeing situations where the speedboat is almost overtaking the cargo and becomes the backbone for deep digital transformation,” says Della Chiesa. “Skaleet not only provides a solution to swiftly start a new business but also to migrate from legacy providers with confidence.”

abroad combining two software platforms and central infrastructure in less than a year

PSP SSP (French Fintech) daily transactions multiplied 5X in two years

• eZyness (subsidiary of La Banque Postale French Tier 1 bank): 50% cost reduction vs. previous CBP

Rethinking Customer Interactions: How LINK Mobility is Shaping the Future of FinTech Communication

By transforming various communication methods into mini-customer meetings, LINK Mobility not only meets the needs of financial clients but also enriches the customer experience, fostering engagement and creating a competitive advantage in the fast-evolving Fintech landscape.

By Marria Qibtia Sikandar Nagra

With traditional selling points like loyalty and security becoming less important for consumers, the Finance industry is undergoing significant change. Instead, factors such as competitive offerings and terms have taken precedence, compounded by increasing globalization and regulation introducing new players into the market. As a result, Fintech companies face challenges in communication and customer engagement, even as their core objectives - customer acquisition, upselling, retention, and brand loyaltyremain constant.

With physical engagement becoming real and customer bases spanning diverse geographies and demographics, consumers today expect immediate responses and seamless interactions. LINK Mobility focuses on enhancing customer satisfaction and experience to address these evolving expectations, now as vital as the products and terms offered.

“LINK Mobility aims to transform traditional interactions into meaningful customer engagements by streamlining communication to provide a centralized platform that

ensures comprehensive oversight of customer interactions, making it easier for financial institutions to be available and responsive. This efficiency facilitates cross-selling opportunities across departments, ultimately driving customer engagement and retention to empower our clients. It also emphasizes the importance of a

multi-channel communication strategy. By allowing companies the most effective channels for their objectives, whether high engagement SMS or rich content email, we help Fintech firms break free from the limitations of the existing communication tools,” shares Stian A.S. Johansen, Growth Manager at LINK Mobility.

We help Fintech firms break free from the limitations of the existing communication tools.

Stian A.S. Johansen Growth Manager at LINK Mobility

Enhancing SMS security with sender ID protection

As one of the most widely used communication channels in the finance industry, SMS offers unparalleled impact with high read rates, engagement, and conversion. However, the underlying technology behind SMS has remained unchanged since its inception, posing potential security risks.

“In the past, bad actors could easily spoof the sender ID on SMS messages pretending to be legitimate financial institutions. To address this vulnerability, LINK Mobility collaborated with mobile network operators in the Nordic region to develop an additional security layerLINKS SenderID Protection. This innovative solution safeguards the sender ID of LINK Mobility’s clients, ensuring that only pre-approved companies and individuals can use their brand in SMS communications in the mobile net-

work. By implementing LINK SenderID Protection, financial institutions can enhance the security of their SMS-based interactions, protecting their brand reputation and preventing formulant activities”, explains Johansen.

Fortifying customer trust with 2FA Solutions

LINK Mobility’s two-factor authentication (2FA) is another critical tool for enhancing security and improving customer experience in the financial sector. Primarily deployed through SMS, 2FA is globally accessible and can be quickly integrated with most multifactor authentication (MFA) engines. Customers’ familiarity with SMS ensures immediate delivery and high engagement rates.

“While some concerns exist regarding SMS security, LINK addresses these through SenderID protection, which verifies the sender’s identity. Additionally, emerging channels like RCS offer verified sender communication options. Beyond just sign-on processes, 2FA can be employed in various scenarios, such as confirming loan payouts, where banks can automate SMS notifications to verify legitimacy. This prevents identity theft and enhances security,” adds Johansen.

Transforming customer interactions through feedback mechanisms

Customer feedback is essential for measuring customer experience across personal and automated interactions. Traditionally, LINK Mobility conducts

mini-satisfaction surveys via SMS immediately following customer service engagements, focusing primarily on data collection. Integrating these services with other systems allows for effective service recovery measures, such as enabling supervisors to contact dissatisfied customers directly.

“This is particularly important in finance, where preventing churn can save significant costs, as a qualified lead can be as expensive as €1000. We also conduct more extensive annual surveys via email to gather overall customer feedback and rapid responses to interactions, explains Johansen.

“We see development opportunities in two main areas: expanding the timing and methods of mini-surveys after interactions, which are increasingly replacing physical and digital meetings, and leveraging new richer channels to enhance data quality and customer experience. For example, while SMS surveys can limit responses and frustrate users, rich channels allow for interactive questions where customers can respond with a click, improving engagement. In marketing, we combine SMS and email to harness their strengths; SMS excels in open rates and engagement, while email provides extensive content. New channels like RCS and WhatsApp complement these methods, allowing us to risk customers in their preferred environments without replacing traditional channels, concludes Johansen.

Stian A.S. Johansen

Growth Manager at LINK Mobility

Future-Proofing Investments: InvestSuite’s Portfolio Optimizer is a game-changer for financial institutions

As the demand for digital wealth management solutions grows, retail and private banks seek innovative tools to enhance their investment capabilities. InvestSuite’s Portfolio Optimizer stands out as a transformative platform enabling financial institutions to refine their strategies through advanced analytics and personalized features, ultimately delivering a tailored investment experience.

By Marria Qibtia Sikandar Nagra

Amid ongoing volatility in financial markets, abrupt downturns can significantly undermine investors’ economic security and confidence. While highly speculative assets and aggressive trading strategies may promise faster returns, they’re often accompanied by increased volatility and stress. And using “volatility” as a measure of risk to optimize the portfolios isn’t necessarily aligned with how investors perceive “risk”. Recognizing this challenge, InvestSuite’s Portfolio Optimizer an in-house risk-metric - iVaR - was developed with a specific goal in mind- to provide long-term investors with a smoother, more stable investment experience.

“This focus on smoothness is a key differentiator for the optimizer. It considers factors like risk profile, investment duration, and client objectives but prioritizes creating a portfolio that

feels safe and predictable. The optimizer’s unique risk measure called ‘Invest Value at Risk’(iVaR) is a key component of this platform allowing it to construct portfolios that align with the desired level of smoothness and stability. This aims to reduce the emotional impact of market fluctuations, a common concern for investors, and encourage longterm investment confidence,” shares Bart Vanhaeren CEO and Co-Founder of InvestSuite.

Retail and private banks often leverage their proprietary mutual funds when launching digital advisory services. However, this preference can present some challenges regarding asset coverage and data integration. InvestSuite’s portfolio optimization solution is specifically designed to address these pain points. “When you work with a private bank, it’s unlikely they’ll use trackers because their expertise is in their funds,” explains Vanhaeren. “Port-

folio Optimizer allows them to leverage their existing funds while expanding into new asset classes, regions, and sectors outside their immediate expertise. The modular, API-driven architecture of InvestSuite’s portfolio optimizer enables quick integration with the bank’s existing infrastructure. “Setup can typically be done in a day, with the ability to connect to core banking systems, portfolio management software, and even custom data sources,” adds Vanhaeren.

Offering Unparalleled Personalization

InvestSuite’s Portfolio Optimizers’ real strength is handling complex constraints and preferences, at scale. With over 120 customizable parameters, the tool can optimize portfolios based on granular ESG criteria, Shariah compliance, tax considerations, and a wide range of risk measures while seamlessly integrating with a bank’s existing

Bart Vanhaeren CEO and Co-Founder of InvestSuite

investment processes. “We can allow for optimization focused on companies with high diversity. This level of personalization is crucial for banks and wealth managers looking to differentiate their offerings,” reveals Vanhaeren. And, greatly improving on Model Portfolios, each investor can have their own individually optimized portfolio. Even if there are several thousands of them.

Adapting to Evolving Regulatory Landscapes

Since InvestSuite’s Portfolio Optimizer solution has been implemented across various countries and continents, the team has worked with clients in diverse markets, allowing them to better understand different regulatory environments and client preferences. “We treat regulatory requirements as dynamic parameters that must be closely monitored and updated. Leveraging our global experience we have developed robust processes to quickly adapt the Portfolio Optimizer to changing rules and guidelines. Our team closely collaborates with the compliance departments of partner banks to ensure necessary adjustments are made allowing the solution to stay

When you work with a private bank, it’s unlikely they’ll use trackers because their expertise is in their funds.

Bart Vanhaeren CEO and Co-Founder of InvestSuite

aligned with local regulations.” remarks Vanhaeren.

This agile approach enables InvestSuite to provide clients with a future-proof portfolio management tool that maintains regulatory compliance regardless of the shifting landscape. By staying ahead of changes, InvestSuite empowers banks and wealth managers to confidently offer tailored investment solutions to their customers.

Enhancing Risk Profiling with Dynamic Adaptability

InvestSuite’s Robo Advisory solutions go beyond portfolio optimization and

static risk profiles, recognizing that an individual’s risk appetite can fluctuate based on market conditions and personal circumstances. The team is focused on developing more dynamic risk profiling capabilities to address this. The key insight is that risk tolerance can change significantly over time, even for the same person.

“For instance, an investor may feel more risk-seeking when markets are bullish, but become more conservative when downside risk materializes.

InvestSuite’s approach aims to capture these real-world behavioral shifts by regularly reassessing risk profiles, rather than relying on a one-time assessment, explains Vanhaeren. “The company is also exploring integrating this dynamic risk profiling directly into mobile applications and conversational interfaces. The system can continuously adapt the risk profile to reflect the user’s evolving preferences and market conditions by fostering ongoing engagement and dialogue with clients. This holistic approach ensures the portfolio policies and optimizations remain closely aligned with the investor’s true risk appetite, even as it shifts,” concludes Vanhaeren.

Conversational AI: The Next Banking Interface

The other day, I came across a job advert hiring for a Chatbot Product Owner at a large European bank. Outlining the importance of the role, it explained, “We expect Conversational AI to be our #2 customer interface in 2025.”

By Ewan MacLeod

Ithink it’s fair to say that Conversational AI – or the technology behind chatbots deployed by many companies – is beginning to play a highly influential role in the customer experience journey across the financial services sector.

It’s only when you peek behind the curtains to see some of the metrics that you begin to appreciate the importance of the technology across the financial services ecosystem. In my role as an executive advisor and consultant, I’ve researched almost 90 chatbot implementations internationally to develop assessment criteria, maturity frameworks, strategies and best practices to companies succeed. Many of us still remember chatbots as useless website popups that never worked. Today’s technology is nothing short of astonishing. Some chatbots are already processing millions of customer conversations automatically at 90%+ accuracy rates. Many of the best examples are directly integrated into dozens of core systems, enabling the chatbots to rapidly orchestrate resolutions.

All of this is happening in seconds –it’s incredibly satisfying for the customer and exceptionally efficient for the organisation. Here’s a case in point: I needed a replacement debit card

If your company isn’t an active user of Conversational AI yet, my strong recommendation is to start investigating it now.

Ewan MacLeod

Chief Digital Officer at New Era Digital Partners

from my bank, Santander UK. Instead of navigating the menus in the mobile app, I opted to chat with “Sandi”, the bank’s chatbot. I typed my enquiry and confirmed a few questions with Sandi and – boom – it was done. Sandi did the rest. My card arrived 2 days later.

Not only is this reducing the cost to serve (and increasing my satisfaction), it’s freeing up Santander’s call centre teams to focus on higher-value tasks.

It’s Not Just About Text

We use the phrase “Conversational AI” because the technology is multi-modal –that is, you can type and use your voice.

All of us have used poor-quality voice

systems that can just about understand “speak to human” demands from frustrated customers. Those are your parents’ Virtual Assistants (“VAs”). Today’s VAs are highly capable, fast and smooth.

Some companies are using VAs to triage large volumes of incoming calls, redirecting customers to the right teams, or – where possible – resolving the customer’s query directly, without them needing to speak to a human.

For instance, if you’re calling your insurance company to check your renewal date, the VA can look up the answer instantly. No need to wait for a human. Likewise, if you need a statement or want to make a payment. If you’ve got a complex issue to discuss, then you’ll be more likely to get through to a human quickly, because the low-level queries have been answered by the VA.

Anecdotally I’m seeing a fascinating trend emerge in the debt collection market. Customers in financial difficulty can find it frustrating to talk about their situation with another human. Getting any contact with some customers can be a challenge. However, it’s a different reality when interacting with a VA, either by voice or chat. Customers are reporting that they are far more comfortable discussing their situation and debts with a non-judgemental VA.

Ewan MacLeod, Chief Digital Officer at New Era Digital Partners

In many cases, the resulting recovery figures are better too.

Empowering (Super) Human Agents

Internally, VAs are having a transformative effect, helping human agents rapidly respond to customer queries.

Sometimes the VA will listen along with the agent, automatically surfacing context-relevant records, policies or sentiment analysis for the human agent. Other times, the human agent will use the VA to quickly search for a particular record, or give the agent the right internal system link to complete a transaction. For complex or intensive scenarios, the VA can guide the agent through a series of predetermined prompts for the customer, helping eliminate errors and ensure regulatory compliance. This not only improves efficiency but also enhances the quality of service provided by human agents, turning them into ‘superhumans’ in the minds of customers.

FinTechs Are Chatting Too

It’s not just banks and insurance companies introducing the technology.

Many FinTechs have embraced VAs. I was a huge fan of Pluto.ai, recently acquired by US trading behemoth

Robinhood. Pluto was an ‘investment buddy’ VA helping customers analyse investment strategies and receive real-time custom market updates. Another FinTech, Uome, a platform for solo entrepreneurs recently launched a Conversational AI sales assistant to help its customers get more done.

Start Today

If your company isn’t an active user of Conversational AI yet, my strong recommendation is to start investigating it now. Start playing. Start evaluating. Kick off a discovery project as soon as you can. As part of your analysis, you might consider a beauty parade with some vendors – managed correctly, this can be a great source of insight into what others are doing and where others are having great success.

A good first step is an internal proof-of-concept. For example, with just a little integration, you can place your whole knowledge base of data (guides, policies, processes, manuals) into a VA and get the call centre team to start querying it. This can be a great way of evidencing the potential and building the case for a larger approach. Plenty of vendors can help you do this efficiently, and very quickly.

Getting Started With Your Conversational AI Journey

If you’re looking to get started, here are some suggestions to consider:

1. Conduct a Thorough Initial Assessment

• Evaluate current systems, processes, and readiness for AI

• Consider engaging experienced consultants for insights and strategy development

2. Set Clear Objectives and Choose the Right Use Cases

Define specific goals (e.g., customer service improvement, cost reduction)

Start with high-volume, low-complexity tasks for quick wins

Consider internal projects before customer-facing applications

3. Identify the Right Vendors

• Look for proven experience in financial Conversational AI

• Prioritise scalability, security, and ongoing support

Evaluate through demonstrations and trials

4. Focus on User Experience and Integration

• Ensure intuitive interfaces and extensive user testing

Seamlessly integrate with existing systems & APIs

Maintain consistency across all channels (chat, voice, app)

5. Prioritize Security and Compliance

Implement robust measures to protect sensitive information

• Ensure adherence to financial industry regulations

6. Plan for Growth and Continuous Improvement

• Design for scalability from the start

Establish processes for regular updates based on feedback and data

Set clear KPIs and monitor performance

7. Consider the Human Element Design AI to complement, not replace, human agents

• Prepare for cultural adaptation and language nuances

• Educate customers on effectively using the AI interface