BFC FinTech Monitor (May 2024)

Tags Artificial Intelligence Cryptocurrency Cybersecurity Digital Banking Events Payments Regulation

Stay up-to-date on all the latest FinTech news and information from around the world in the BFC FinTech Monitor.

Around the World

#Reports and Studies

• According to MHP Group, more than 75% of European fintechs are expecting to see business growth in 2025, with the most optimistic fintechs operating in France, Germany, Italy, Spain and the UK. »»»

#Payments

• Visa has introduced new digital products, including Visa Flexible Credentials, Tap to Everything, Payment Passkey, Pay By Bank and data tokens. »»»
• The Reserve Bank of India will create a smart digital payments platform to combat fraud. »»»
• Apple Pay users in the US will be able to use buy-now-pay-later (BNPL) services from Affirm and other companies this year. »»»
• Alipay+ will provide convenient payment options and preferential offers to fans around the world as the official payment sponsor of UEFA EURO 2024. »»»
• Visa and Mastercard will pay USD 197 million to settle a lawsuit over ATM fees. »»»
• The government of Australia is preparing legislation that will require BNPL service providers to carry out basic credit checks on new customers. »»»
• The US Consumer Financial Protection Bureau (CFPB) intends to force BNPL lenders to provide consumers with the legal protections and rights that apply to standard credit cards. »»»
• PayPal plans to launch an advertising platform that leverages extensive data collected on customers’ transactions and purchasing habits. »»»
• Nepal Clearing House (NCHL) and Ant International have agreed to collaborate to enable QR payments via Alipay+ for those traveling to Nepal. »»»

#Artificial Intelligence (AI)

• A new report from the Bank for International Settlements (BIS) highlights that generative AI is already being used by 71% of central banks to ensure cybersecurity, with another 26% planning to implement relevant tools in the next couple of years. »»»
• Yuwei Yang, economic director of BIT Mining, believes that investor interest has shifted from cryptocurrencies to AI. »»»
• The European Central Bank (ECB) believes that the development of AI in the financial sector may require new regulations. »»»
• OpenAI CEO Sam Altman has announced that the GPT-5 model will be tens of times more powerful than the previous GPT-4 model. »»» Notably, OpenAI has also recently introduced GPT-4o, a powerful multimodal generative AI model with greater capabilities for working with text, images and audio. »»»
• The European Parliament has approved a new law on AI.
• Tech giants Microsoft, Amazon and OpenAI have entered into an agreement to ensure the secure development of their most advanced AI models. »»»
• Robinhood has launched the Harmony AI research lab. »»»
• Spain’s Banco Bilbao Vizcaya Argentaria (BBVA) became the first European bank to enter into a collaboration with OpenAI. »»»
• AI companies are now turning to “small” language models as a new source of revenue growth. »»»
• According to a PwC study, labor productivity is growing nearly 5 times faster in sectors that are more susceptible to the impact of AI. »»»
• A study conducted by the European company Signicat has found that more than 30% of fraud attempts against financial institutions are carried out using AI. »»»
• Swift will use AI to improve the Payment Controls service, which helps banks identify anomalies that indicate fraud. »»»
• JPMorgan will train all new employees in AI. »»»
• Alibaba plans to invest in young Chinese companies working on generative AI. »»»
• The Michael Kors brand has become the first to integrate an AI-based shopping assistant from Mastercard. »»»

#Innovations, Neobanks and Open Banking

• According to a report by the Spanish company Platformable, open banking is actively developing all over the world, with 987 such products now available globally. »»»
• Mastercard, in collaboration with Atomic, is launching the open banking solutions Deposit Switch and Bill Pay Switch. »»»
• Western Union will use Plaid’s infrastructure to offer seamless payments to its European customers via open banking solutions. »»»
• The number of regulated third-party open banking providers in the European Economic Area (EEA) in the first quarter of 2024 was 367. »»»
• VantageScore has introduced a new credit scoring model that integrates alternative data through an open banking system. »»»
• European neobank bunq has launched open banking solutions with Mastercard. »»»

#Cryptocurrencies, Blockchain, Non-Fungible Tokens (NFTs) and Decentralized Finance (DeFi)

• Coinbase reported a record surge in cryptocurrency and blockchain initiatives among Fortune 100 companies. »»»
• Mastercard has launched Crypto Credential, a pilot project for P2P cryptocurrency transfers. »»»
• Binance will restrict access to certain stablecoins in the EU starting June 30, 2024. »»»
• Tether has launched the gold synthetic dollar (aUSDT), which is intended to imitate the value and functionality of USD without being directly backed by it. »»»
• Elon Musk has decided not to add cryptocurrency payments to X. »»»
• The volume of funding for crypto startups in the world reached USD 2.4 billion in the first quarter, an increase of more than 40% from the fourth quarter of 2023. »»»
• The director of analytics at SHARD discusses what is happening with the crypto markets of Central Asia. »»»
• The implementation of Basel rules for crypto assets has been postponed until January 2026. »»»
• Chengyi Ong, Chainalysis’ head of policy for the Asia-Pacific region, called the ban on cryptocurrencies in China ineffective. »»»
• Turkish legislators intend to introduce a tax on transactions with cryptocurrencies for companies. »»»
• Telegram is preparing to launch the Stars digital currency »»» as well as an app store within the messenger platform. »»»
• Argentina has begun working with El Salvador to expand the adoption and regulation of cryptocurrencies. Argentina had earlier stated its intention to legalize cryptocurrencies for payments under certain conditions. »»»
• Israeli fintech lab Kima and Mastercard have launched a project to develop a use case for combining DeFi tools with traditional services (e.g. credit cards, bank accounts). »»»
• Two fraudulent campaigns targeting Hamster Kombat players were discovered on Telegram. »»»

#Central Bank Digital Currencies (CBDCs)

• The World Economic Forum (WEF) is warning of the vulnerability of CBDCs to attacks by quantum computer systems.
• BIS has launched Project Rialto to explore opportunities to improve instant cross-border payments using wholesale CBDCs. »»»
• A money laundering scheme using the digital yuan was uncovered in China. »»»
• The mBridge Project to create a CBDC will involve representatives of the private sector along with central banks to further develop the MVP. »»»
• The Italian Banking Association has rated Project Leonidas’ trials of a wholesale central bank digital currency (wCBDC) as successful. »»»
• The Bank of Israel is inviting participants from other countries to join in the development of innovative use cases for CBDCs. »»»
• The National Bank of Rwanda intends to launch a CBDC within two years. »»»

#Miscellaneous

• Google Pay is abandoning CVV codes in favor of biometrics. Now, if a user uses the auto-fill option in Chrome or on Android when placing an order, they will be able to enter full card details using a fingerprint, face scan or screen lock PIN. »»»
• Mastercard has opened the European Cyber Resilience Center at its headquarters in Belgium. »»» The company has also launched the Mastercard for Fintechs Program for fintech projects in Western Europe. »»»

Ukraine:

• The Ukrainian parliament plans to allow the disclosure of banking secrets in the event of imposed sanctions. »»»
• A national development institution could be created in Ukraine that is specialized in lending issues, particularly issues related to business and distressed projects. »»»
• Fintech Farm, a British company with Ukrainian roots, has attracted USD 32 million in investments to expand its activities.  According to one of the founders, Nikolai Beskrovny, new investments will help Fintech Farm launch operations in India, one of the largest markets in the world. »»»
• The crypto exchange KUNA plans to focus on the European market and sell its business in Ukraine. »»»
• Google has selected Ukrainian startups to receive USD 100,000 for development and scaling. »»»
• NovaPay cards can now be used to receive salaries. »»»
• Privatbank has launched cashback for international transfers to Visa cards. »»» The bank has also now enabled the integration of terminal solutions into third-party apps. »»»
• Ukrainian Startup Fund and WNISEF will provide grants to 13 Ukrainian startups, including fintech and AI startups. »»»
• The National Bank of Ukraine plans to limit P2P transfers between cards. »»»

Kazakhstan:

• Zhaslan Madiyev, the Minister of Digital Development, Innovation and Aerospace Industry, has stated that the introduction of 5G in Kazakhstan should be completed by the end of next year. »»»
• The National Bank of Kazakhstan will launch an anti-fraud center to protect transactions. »»» Other plans of the regulator include plans to increase the number of banks participating in a project on the use of the digital tenge, explore new scenarios for using a wholesale CBDC, introduce smart contracts to ensure that the level of the digital tenge corresponds to stablecoin reserves, introduce vouchers for educational services and launch offline CBDC payments and transfers. »»»
• The presentation of new fintech projects from Kazpost and its partners took place as part of QazPost Demo Day Fintech 2024. »»»
• The number of online banking users in Kazakhstan has increased 15%. »»»
• Beeline Kazakhstan and QazCode are developing AI in the Kazakh language. »»»
• QIWI Kazakhstan will pay out the remaining funds from QIWI wallets with a balance in rubles, dollars and euros. »»»

Kyrgyzstan:

• The International Association of Cryptoeconomics and Artificial Intelligence is expected to be created in Kyrgyzstan by the end of this year. »»»
• The National Bank of Kyrgyzstan has lifted the ban on replenishing electronic wallets from the balance of a mobile phone. »»» The regulator has also developed the Kyrgyz Som app to demonstrate the security elements of 2023 banknotes in an interactive format. »»»
• The head of the Kyrgyz Cabinet of Ministers, Akylbek Japarov, has proposed replacing the dollar with stablecoins for trade with Russia. »»» He also advised Aiyl Bank to use AI to issue online loans. »»»
• The International Financial Forum was held in Bishkek. »»»
• Kuanysh Tankiev, Visa’s Director for Commercial Solutions in Central Asia and Azerbaijan, discusses how the digitalization of the economy of Kyrgyzstan is taking place. »»»

Tajikistan:

• Ganjina Oripova, cofounder of the fintech startup Planet9, wants to launch the first fully digital bank in Tajikistan. »»»

Uzbekistan:

• KPMG has presented its Fintech: B2C payments, POS financing and BNPL in Uzbekistan report. »»»
• Askarzhon Zakirov, Head of the Crypto-Asset Currency Turnover Development Department of the National Agency for Prospective Projects, talks about the work being done in Uzbekistan in the field of regulating digital assets. »»»
• The Korean Institute of Public Administration is supporting the creation of a training center for digital technologies and artificial intelligence in Tashkent. »»»
• Vyacheslav Pak, First Deputy Director of the National Agency for Advanced Projects, believes that Uzbekistan is a leader among CIS countries in regulating the cryptosphere. »»»
• Consulting agency Markswebb has presented the results of the Mobile Banking Rank Uzbekistan 2024 study. »»»
• Oliver Hughes, Head of International Business at TBC Group, shares his opinion on the future of fintech in Central Asia. »»»
• The FinTech Association of Uzbekistan and the International Association of Financial Advisers (IAFA) will cooperate within the framework of the FinTech 360 Project to develop financial literacy courses. »»»
• Crypto Week Uzbekistan 2024 was held in Tashkent. »»»
• Vladimir Norov, Chairman of the Association of Artificial Intelligence of Central Asia, believes that Islamic banking can attract up to USD 10 billion annually to Uzbekistan. »»»
• The Institute of Macroeconomic and Regional Research (IMRI) has analyzed the level of competition in Uzbekistan’s banking system for the first quarter of 2024. »»»

Azerbaijan:

• During Fintex Summit 2024 in Baku, Vusal Gasimli, Executive Director of the Center for the Analysis of Economic Reforms and Communications, announced that Azerbaijan is currently developing a fintech strategy. »»»
• United Payment (Birlesik Odeme) became the first Turkish fintech company to receive the right to operate as an electronic money issuer in Azerbaijan. »»»
• The Azerbaijan Fintech Association and the Uzbek company SBO have signed a memorandum of understanding within the framework of the Fintex Summit 2024 in Baku. »»»
• The akart virtual card from Azercell has become the first fintech solution in the telecommunications sector to receive a license from the Central Bank of Azerbaijan. »»»

Armenia:

• Valentina Drofa, CEO and cofounder of Drofa Comms, discusses how the fintech industry in Armenia is developing. »»»

Georgia:

• The National Bank of Georgia plans to involve Ripple Labs in the digitalization of the Georgian economy. »»»
• For the first time, the Bank of Georgia has purchased Uzbek government bonds through a regulatory sandbox. »»»
• Georgian fintech company CityPay.io, which provides payment solutions, plans to enter the Azerbaijani market. »»»

Moldova:

• Moldindconbank is collaborating with Salt Edge to ensure their compliance with open banking legislation in Moldova. »»»
• Representatives of the largest bank in Moldova, maib, took part in the Money 20/20 Conference in Amsterdam. »»»
• Nikolina Turcan, Head of the FinTech and Electronic Payments Department at ACI Partners, speaks on how Moldovan legislation regulating financial technologies is in line with EU standards. »»»