Information and Analytics about Embedded Finance, BaaS and Open Banking

The intersection of fintech and automotive finance is reshaping the financial landscape by introducing innovative solutions that enhance customer experiences and expand market reach, as stated in the article by Finance Online. As fintech continues to disrupt traditional financial services, its impact on the automotive finance sector has been transformative. Let’s explore the key trends and disruptive innovations driving this change. Fintech companies are utilizing advanced technologies such as AI, biometrics, robotic process automation (RPA), big data, and smart contracts to streamline financial services. Peer-to-peer (P2P) lending platforms, mobile payments, robo-advisory tools, and InsurTech innovations have changed how consumers and businesses interact with financial services. According to research by McKinsey, the automotive finance industry is primed for a revolution led by fintech solutions. These innovations include automated loan offers, credit underwriting, document compliance, and delinquency management. Digital lending platforms have also transformed the auto loan process, offering online applications and instant approvals, eliminating the need for time-consuming paperwork. Additionally, blockchain technology enhances transaction security, while AI and machine learning improve credit scoring and personalized financing offers. The automotive finance industry is embracing subscription-based models, car sharing, and flexible ownership, providing customers with alternatives to traditional car ownership. Big data analytics play a key role in personalizing financing options for consumers, offering tailored deals based on individual preferences. Fintech’s ability to integrate with digital ecosystems, including e-commerce and super-apps, is creating seamless customer experiences. As the industry moves forward, regulatory compliance and the adoption of environmentally responsible financing options, particularly for electric vehicles, will shape the future of automotive finance. Fintech’s integration into automotive finance is revolutionizing traditional models, making them more efficient, transparent, and customer-focused. With technologies such as AI and mobile payments, the automotive finance sector is poised for significant growth and innovation. To stay competitive, stakeholders must embrace fintech solutions and capitalize on emerging opportunities.

Outpayce, a travel payment solution provider, has partnered with the International Air Transport Association (IATA) to enable airlines worldwide to accept account-to-account (A2A) payments, as highlighted in The Fintech Times. Through this partnership, airlines will now be able to process payments made via IATA Pay through Outpayce’s Xchange Payments Platform (XPP). The collaboration addresses the growing demand for lower-cost payment methods, while enhancing the customer experience for travellers. A2A payments offer an alternative by allowing passengers to pay for air tickets directly from their bank accounts. This payment method has gained popularity globally, supported by initiatives such as UPI in India, Ideal in the Netherlands, PIX in Brazil, and QR Ph in the Philippines. IATA Pay is already available in over 30 countries. Jean-Christophe Lacour, SVP and head of product management and delivery at Outpayce, emphasized the company’s commitment to expanding payment options for the travel industry: “We’re committed to helping travel companies accept the widest possible range of payment methods through a single connection to XPP, and IATA Pay represents an interesting new option for the industry.” The integration of A2A payments allows travellers to select their bank or use a QR code at checkout, depending on their location. IATA handles the payment transfer and settles the funds with the airline the following day. Juan Antonio Rodriguez, IATA’s director of financial settlement operations, highlighted the benefits for airlines: “The trend towards account-to-account payments is gaining more momentum. It provides a seamless experience for passengers and an attractive option for airlines to lower the cost of payment acceptance.” Additionally, the new self-service APIs launched by Outpayce in 2024 make it easier for payments and fintech companies to integrate with XPP, increasing choices for travel companies. Anna Isabel Bengzon, CFO of Philippine Airlines, praised the new system: “Outpayce’s XPP system helps us to intelligently accept a wide range of payment methods… Moreover, we can access various payment methods and partners through XPP, with detailed analytics on the performance of payment flows.”

Moody’s latest report highlights how artificial intelligence (AI) is transforming financial analysis, creating a divide between tech-savvy and traditional investors, as stated in FinTech Magazine. Institutional investors leveraging AI are poised to gain a significant edge in the investment landscape. AI’s role in financial analysis goes beyond a trend, marking a fundamental shift in the industry. By automating routine tasks and uncovering patterns in large datasets, AI enhances forecast accuracy, risk management, and portfolio optimization. However, it requires significant investment and specialized teams to be fully effective. John Smith, Chief Investment Officer at Global Asset Management, comments, “Effective AI strategies will prioritize applications with proven track records.” He also notes the challenge AI faces with models becoming unreliable as financial markets rapidly change. AI models, such as OpenAI’s GPT, are boosting productivity by processing vast amounts of data, including annual reports and market research. “Large language models can automate the creation of earnings reports and generate investment ideas,” says Sarah Johnson, Head of AI Integration at Tech Investments Ltd. Beyond text processing, AI is also advancing in the use of alternative data from sources like social media and satellite imagery, providing valuable insights. “AI enables the conversion of alternative data into interpretable signals for investors,” says Michael Brown, Data Scientist at Quant Solutions. As AI continues to reshape risk assessment, Emma Thompson, Head of Private Credit at Capital Investments, notes, “AI could streamline financial and legal document analysis, facilitating investment valuations in private markets.” AI’s potential lies in combining traditional models with new tools, setting tech-savvy investors apart and offering a more comprehensive understanding of risk in a complex global economy.

Small and medium-sized businesses (SMBs) are confronting a widening digital transformation gap, especially in areas like back-office operations and payment functions, compared to larger enterprises, according to PYMNTS. This growing challenge is prompting many SMBs to adopt FinTech solutions tailored to their unique needs. On September 3, UNIPaaS announced a partnership with American Express to provide small-business-focused invoice payment solutions. This is a step towards helping SMBs manage their payment processes with greater simplicity, affordability, and flexibility, which are critical for businesses with limited resources. FinTech innovations are particularly beneficial to SMBs as they help automate processes like accounts receivable and accounts payable. Despite these advancements, only 5% of small businesses have fully automated their AR and AP processes. Brett Sussman, Vice President of Marketing at American Express, explained, “Businesses are worried about the investment in terms of time and resources.” Embedded lending is another growing trend, offering SMBs the ability to access credit directly within platforms they already use. Jennifer Marriner, EVP of Global Acceptance Solutions at Mastercard, highlighted how embedded finance makes it easier for SMBs to manage cash flow and access financial services without the friction of separate applications. These developments are paving the way for more efficient operations, better cash flow management, and ultimately a transformed business landscape.

The financial services sector is undergoing a significant transformation as AI adoption accelerates, especially with the rise of Generative AI, as stated in Fintech Global News. Industry experts consider the technology a game changer, enhancing the efficiency and effectiveness of financial operations. In an interview with FinTech Global, Dr. Janet Bastiman, chief data scientist at Napier AI, emphasized the growing need for instant responses in the industry. «I think we’re already seeing the need for instant responses,» Bastiman said. «So AI and technology need to be able to support that.» AI plays a pivotal role in addressing regulatory challenges, offering probabilistic approaches to problem-solving and detecting suspicious transactions. “AI is really there to support the scale and speed of the digital real-time economy that we all want,” Bastiman noted. She also highlighted how AI can improve compliance efforts by working closely with regulators. The integration of AI in financial services is not only streamlining operations but also ensuring more robust compliance and fraud detection processes, positioning it as a key driver in the sector’s future.

2024 continues to be a significant year for the regulatory technology (regtech) space, drawing attention for both positive and challenging reasons. The Fintech Times, in its September focus, dives into the pressing issues around compliance, financial rules, and the solutions that aim to ease these processes for fintech firms, promoting fairness and safety. Regtech, the use of technology to streamline regulatory compliance, is experiencing rapid growth. The global market, valued at $12.82 billion in 2023, is projected to rise to $15.80 billion in 2024 and reach a staggering $85.92 billion by 2032. One of the major developments on the horizon is the Digital Operational Resilience Act (DORA), set to take effect in January 2025 across the EU. This legislation will push fintechs to enhance their cybersecurity and operational resilience, though many firms are already highlighting the costly challenges of this transition. Despite the hurdles, the cost of non-compliance is far greater. This month, The Fintech Times will explore the largest regulatory challenges, the innovations in regtech that can help, and how these solutions can create a safer, more transparent financial landscape. By speaking with industry experts, the publication will also examine how AI is influencing regtech, the role of collaboration, supervisory technology (suptech), and what the future holds for the regulatory technology space.

Apple, widely recognized for its technological innovation, is making significant strides in the fintech sector with a series of strategic initiatives, diverse financial products, and the integration of cutting-edge artificial intelligence (AI), as highlighted in Fintech America News. A recent analysis by C-Innovation, a French fintech research firm, sheds light on how Apple is transforming itself into a major player in financial services, driven by its expanding range of products and innovative use of technology. According to the report, Apple’s foray into the financial services industry is reshaping how people manage their finances. Apple Pay, Apple Card, and other offerings have not only disrupted the market but also positioned the company as a leader in the fintech space. Products like Apple Wallet, a digital repository for cards and financial services, and Apple Pay, a contactless payment solution introduced in 2014, have played a central role in this transformation. Apple’s financial ecosystem also includes: Apple Cash: A peer-to-peer money transfer service via the Messages app, launched in 2017. Apple Card: A credit card introduced in 2019, developed in collaboration with Goldman Sachs and Mastercard, offering cashback rewards and enhanced security. Apple Tap to Pay: A softPOS solution launched in 2022, allowing merchants to accept payments directly via Apple devices without the need for additional hardware. Apple Pay Later: A Buy Now, Pay Later (BNPL) service launched in 2023 that allows users to make interest-free payments in installments. Apple Savings: A high-yield savings account launched in 2023, integrated with the Apple Card, offering competitive interest rates. The adoption of these services has been impressive. The Apple Card has garnered over 12 million users, while Apple is estimated to have controlled US$800 billion worth of payments in 2022, according to Flagship Advisory Partners, a Dutch consultancy. Apple’s fintech strategy is evolving, with several significant changes in recent months. One of the most notable moves is the proposed termination of its partnership with Goldman Sachs, first reported in November 2023. According to the Wall Street Journal, Apple is working on “Project Breakout,” an initiative aimed at bringing more financial services, such as the Apple Card and Apple Savings, in-house to increase flexibility and profitability. In addition, Apple made the decision to shut down its BNPL service, Apple Pay Later, in the U.S. in June 2024. Instead of continuing this service, Apple is now focusing on partnerships with BNPL providers, allowing the company to minimize risks while still profiting from transaction fees. Looking ahead, new features for Apple Pay will allow users to make purchases and access installment loans directly from the mobile app, starting this fall in countries like Australia, Spain, the UK, and the US. These loans will be facilitated by Apple’s financial partners, including major institutions like ANZ, CaixaBank, HSBC, Monzo, Citi, and Affirm. As part of its evolving strategy, Apple is also integrating AI into its financial ecosystem. In June 2024, Apple introduced Apple Intelligence, an AI platform designed to revolutionize its product offerings. The company has partnered with OpenAI to integrate generative AI capabilities, including ChatGPT, into its iOS operating system. This partnership has the potential to reshape how users interact with Apple’s financial services and devices, according to C-Innovation’s report. Apple Intelligence combines generative models with personal user data, providing tailored insights and recommendations. This platform will introduce new capabilities in areas like language processing and image creation, with wide-reaching impacts across the entire Apple ecosystem, particularly in the financial sector. «Apple Intelligence is poised to revolutionize the banking industry by leveraging the vast amount of user data Apple has accumulated over the years,» the C-Innovation report states. The integration of generative AI is expected to personalize and enhance user experiences, further cementing Apple’s position at the forefront of the fintech industry. Apple’s strategic focus on fintech, combined with the power of AI, positions the company to lead in the rapidly evolving financial services landscape. By leveraging its vast ecosystem, bringing financial services in-house, and harnessing the power of generative AI, Apple is not just redefining fintech, but setting the stage for future innovations.

Artificial Intelligence (AI) is reshaping the financial services sector, significantly enhancing efficiency and customer satisfaction, as highlighted in FinTech Magazine. Monica Hovsepian, Head of Worldwide Financial Services Industry Strategy at OpenText, discusses how AI is transforming the landscape by automating processes, enhancing decision-making, and improving customer experiences. AI has become a vital tool in the financial services industry, particularly in fraud detection, document processing, and customer support through AI-driven chatbots. Monica Hovsepian notes that AI’s ability to process large datasets quickly and accurately has accelerated its adoption in the sector, driven by the need for operational efficiency, regulatory compliance, and the increasing competition from fintech companies. AI technology offers numerous benefits to the financial services sector, including improved accuracy in risk assessments, personalized customer experiences, and faster, more secure fraud detection. However, Hovsepian highlights challenges such as the complexity of implementing AI systems, concerns around data privacy, regulatory compliance, and potential biases in AI models. Ensuring transparency and trust in AI decisions is crucial for its broader acceptance in the sector. AI complements human efforts by automating routine tasks and freeing up professionals to focus on higher-value activities such as strategic decision-making and personalized client interactions. Hovsepian explains that AI enhances human efforts in areas like risk assessment, fraud detection, and investment analysis, leading to greater efficiency and innovation in the financial services industry. Trust in AI is essential for financial services, where institutions handle sensitive data. Hovsepian emphasizes that businesses must prioritize transparency, security, and ethical practices to maintain digital trust with clients. Key strategies include clear communication about data use, robust cybersecurity measures, ethical AI governance, regulatory compliance, and providing customers with control over their data. OpenText leverages AI to enhance operational efficiency, drive personalized customer experiences, and ensure regulatory compliance. The company uses AI-powered tools for content management, fraud detection, risk management, and decision-making, helping financial institutions deliver better, more secure services. OpenText also prioritizes data privacy and security in its AI development process, adhering to global data privacy regulations and ethical AI practices. Looking ahead, Hovsepian sees AI as a key driver of greater agility, responsiveness, and value in the financial services sector. She envisions AI enhancing automation, personalization, and security for OpenText clients, ultimately empowering them to stay competitive and innovative in a rapidly evolving market.

Mastercard has partnered with FinTech company Rellevate to enhance payment and disbursement services in the public sector, according to PYMNTS. This collaboration aims to leverage Rellevate’s digital banking, disbursement, and wallet solutions to provide underserved communities with greater access to digital payments technology. According to a joint release from the companies, the partnership will focus on helping local, city, and state governments implement digital payment solutions that offer safety, security, transparency, and speed. «Together, Rellevate and Mastercard will work with local, city, and state governments to create ways for their constituents to access and manage their money faster and more efficiently,» the release stated. Stewart Stockdale, Rellevate’s co-founder, chairman, and CEO, highlighted that the partnership began with Georgia’s $1 billion One-Time Cash Assistance Program. This initiative supported three million residents and included one of the largest deployments of virtual wallets in a government program. Rellevate has also worked with organizations such as UNICEF, Detroit Crime Stoppers, Baltimore African American Male Engagement Program, St. Lucie Public Schools, and foster care agencies to implement a unique digital wallet solution. The rise of digital wallets is transforming the payments landscape. A recent Worldpay report, as noted by PYMNTS, projects that digital wallets will surpass debit cards in transaction value within three years. By 2027, digital wallets are expected to account for nearly half of all point-of-sale transactions globally, with their use by 53% of Americans driving this shift. The report suggests that digital wallets could dominate payment methods, increasing their share of transaction value from 15% to 31% by 2027. This shift is attributed to the convenience digital wallets offer, leading to increased consumer spending. On average, digital wallet users spend 31% more than those using other payment methods, a trend especially pronounced among younger generations, including 60% of Gen Z and 51% of millennials.

Nvidia has launched a new set of pretrained and customizable artificial intelligence (AI) workflows, aimed at providing a “jump start” for enterprise developers working on AI applications, as stated in PYMNTS. These workflows, called Nvidia NIM Agent Blueprints, include sample applications, reference code, customization documentation, and a Helm chart for deployment, according to a press release issued by the company on Tuesday, August 27. The Nvidia NIM Agent Blueprints are designed to be adaptable, allowing enterprises to modify them using their own business data. This customization enables businesses to run generative AI (GenAI) applications across accelerated data centers and cloud environments, with the ability to continuously refine these applications based on user feedback. Currently, the NIM Agent Blueprints are available for three key generative AI use cases: customer service, drug discovery, and data extraction from PDFs. Nvidia has announced plans to expand these offerings further. «The enterprise AI wave is here,» said Jensen Huang, founder and CEO of Nvidia. «With the Nvidia AI Enterprise toolkit — including NeMo, NIM microservices, and the latest NIM Agent Blueprints — our expansive partner ecosystem is poised to help enterprises customize open-source models, build bespoke AI applications, and deploy them seamlessly across any cloud, on premises, or at the edge.» The blueprints will be distributed to enterprises by global system integrators and technology solutions providers such as Accenture, Deloitte, SoftServe, and World Wide Technology (WWT). Additionally, companies like Cisco, Dell Technologies, Hewlett Packard Enterprise, and Lenovo are offering full-stack Nvidia-accelerated infrastructure and solutions to facilitate the deployment of these blueprints. Nvidia also revealed that more NIM Agent Blueprints are in development for various applications, including customer service, content generation, software engineering, retail shopping advisors, and research and development (R&D). «Nvidia plans to introduce new NIM Agent Blueprints monthly,» the company stated in a recent blog post. As AI agents gain traction among tech investors, there is a surge in funding for startups focused on building these advanced software programs. AI agents, which are designed to perform tasks and make decisions based on their environment, inputs, and predefined goals, have the potential to transform industries such as eCommerce and customer service. By providing personalized and emotionally intelligent assistance, these AI agents blur the line between human and machine interaction.