Executive Summary
Welcome back to Tech Behind Fintech weekly news roundup!
The fintech industry is advancing rapidly, with notable progress in banking, payments, AI, and investments. This week saw Clop threatening to disclose victim data and the introduction of new regulations in the EU, showcasing both challenges and innovation. Despite resistance from traditional financial institutions, blockchain adoption continues to gain traction, while insurtech collaborations are enhancing efficiency in claims processing.
Let’s dive into this week’s top fintech news!
Trends in Fintech Verticals
Top Data Breaches
Dozens of Cleo victims’ data threatened to be exposed by Clop ransomware: Fifty-nine organizations claimed to have been impacted by intrusions involving the exploitation of vulnerable Cleo file transfer platform instances were threatened by the Clop ransomware gang to have their data exposed should they fail to enter ransom payment discussions by Friday, January 17th. Aside from leaking stolen data by Saturday, Clop also warned of revealing additional companies affected by the attacks on Tuesday, indicating that the toll of the Cleo compromise — which Clop claims to include Blue Yonder, Hertz, Chicago Public Schools, Western Alliance Bank, and Nissin Foods — may have been higher than initially reported.
Texas sues Allstate for collecting driver data without consent: Allstate has been sued by the state of Texas, which accused the insurer on Monday of illegally tracking drivers through their cell phones without their consent and using the data to justify charging more for car insurance.
Texas Attorney General Ken Paxton said Allstate created the “world’s largest driving behavior database,” with data on more than 45 million Americans, by paying mobile app developers millions of dollars to secretly incorporate tracking software.
How victims of PowerSchool’s data breach helped each other investigate ‘massive’ hack: Edtech giant PowerSchool has warned customers that hackers accessed its customers’ highly sensitive information — including student Social Security numbers, grades, and medical information. PowerSchool says that “sensitive personal information” was accessed during its December breach. The hackers broke into PowerSchool’s internal customer support portal using a stolen credential, the company previously said. The breach affects users of PowerSchool’s school information system, which schools use to manage student records, grades, attendance, and enrollment.
Latest Funding News
Despite VCs investing $75B in Q4, it’s still hard for startups to raise money, data proves: The VC slowdown completed its third year in 2024, and the trends provide mixed signals of strength and weakness amid the uncertain market. In the fourth quarter of last year, investors funneled $74.6 billion into U.S. startups, a substantial increase from the average of $42 billion invested in each of the previous nine quarters .
Whether 2025 will see a continuation of the high venture capital investment levels observed in Q4 of last year remains to be seen. However, most venture capital funding will probably continue to flow toward a small cohort of the most promising AI companies.
Instabase Secures $100 Million in Series D Funding Led by QIA: Instabase, a pioneer in unstructured data management, has announced its $100 million Series D funding round led by QIA, with participation from existing investors Greylock Partners, NEA, Andreessen Horowitz, and Index Ventures. The company, founded in 2015, plans to utilize the new capital to enhance the automation, analysis, and search capabilities of its unstructured data platform, AI Hub, catering to its customer base.
Instabase’s platform seamlessly integrates into existing systems, enabling enterprises to create AI-powered processes that handle complex, unstructured data at scale. The company has experienced rapid customer growth, particularly in the financial services sector, and has gained traction in healthcare, tech, and government industries. Notable partners include AXA, Uber, and Natwest.
Perplexity acquires Read.cv, a social media platform for professionals: Read.cv, a social media platform for professionals that competed with LinkedIn, has been acquired by AI-powered search engine Perplexity.
As part of the deal, Read.cv will begin to wind down operations Friday. Users will be able to export their data, including their profiles, posts, and messages, until May 16.
“We’ve long admired Perplexity and believe great things happen when the world’s knowledge is made more open and accessible,” reads a post on Read.cv’s blog. “In that spirit, we are thrilled to be joining the design and engineering team at Perplexity to continue in our shared mission of exploration and discovery.”
Banking and Payments
Guavapay Attributes Global Growth in 2024 to Customer-Centric Technology Innovation: Guavapay has seen revenue growth every quarter over the year which totalled a 71% increase compared to 2023. In 2023, turnover was £12.3 million, and the estimated revenue for 2024 is £21.1 million.The company now has over 500 employees worldwide. The company also opened a new IT Lab in Baku in November 2024. The London office also tripled in size during 2024 as the company grew in response to global demand for accessible finance options. Kamal Hasanov, Group CEO, Guavapay, commented, “Customer-centric technology innovation at Guavapay has been central to our growth. Our sales have steadily increased each month, with corporate clientele doubling each quarter this year with MyGuava Business alone. Our growing popularity and loyal customer base can vouch for our robust scalable solutions for both business and personal finance management. I see Guavapay is clearly positioned to lead the next-generation payment solutions, offering unparalleled speed, transparency and cost-effectiveness.”
PhotonPay launches Google Pay support for Mastercard users in Hong Kong: Digital infrastructure provider PhotonPay has announced its partnership with Google Pay in order to launch the latter’s services for Mastercard users in Hong Kong. Following this announcement, cardholders will have the possibility to take advantage of simple and secure contactless payments and digital card storage on both Android devices and WearOS.
In addition, the companies will continue to focus on meeting the needs, preferences, and demands of clients and users in an ever-evolving market, while prioritising the process of remaining compliant with the regulatory requirements and laws of the industry as well.
American Express to pay $230 million to settle US charges over deceptive sales practices: American Express said on Thursday it will pay about $230 million to settle U.S. criminal and civil probes into alleged deceptive practices in selling credit card and wire transfer products to small business customers.The credit card and travel services company agreed to pay $138.4 million, including about $108 million in fines, and enter a non-prosecution agreement to end criminal and civil probes by the U.S. Department of Justice. Amex said it also reached an separate agreement in principle with the Federal Reserve that should become final in the coming weeks.
The New York-based company said it cooperated extensively with investigators, discontinued some products, disciplined staff, and upgraded compliance and training.Amex also said the problems identified by investigators ended no later than 2021, and the payout does not affect its 2024 earnings forecast.
Apple Card Could Find New Home With Barclays or Synchrony. What Cardholders Should Know: Apple is in talks with Barclays to replace Goldman Sachs as the tech giant’s credit card partner, said two sources familiar with the matter, as the Wall Street giant steps back from its consumer finance ambitions. Credit card issuer Synchrony Financial is also in discussions with Apple about the card partnership, the first source said. Both sources declined to be identified discussing private talks.
Wealthtech
Revolut targets wealthy clients with move into private banking: The financial super-app has posted job listings for a private banking compliance manager, legal counsel and head of relationship management on its website.
States the relationship manager advert: “Our Private Banking team is the cornerstone of our exclusive new offering, driving long-term relationships with high-net-worth individuals across the globe. We operate with precision and expertise: from onboarding to ongoing financial guidance, we apply a solution-oriented approach and use our know-how to grow and nurture our high-value customer relationships.
Insurance Technology (Insurtech)
LA Wildfires: State Farm Receives Over 6,700 Claims as Losses Mount: State Farm, the largest insurer in California, has received over 6,700 claims for home and auto damages resulting from the recent wildfires in Los Angeles. As of the morning of January 14th, 2025, the insurer has been actively assessing and processing the claims.
Olé Life Raises US$13 Million in Series B Funding Led by PayPal Ventures: Olé Life, a leading Latin American InsurTech company, has successfully raised $13 million in a Series B funding round led by PayPal Ventures. Olé Life is a leading Latin American InsurTech company that offers a fully digital platform for accessing life insurance.
The investment will fuel Olé Life’s expansion across Latin America, enabling the company to establish operations in new markets and diversify its product offerings beyond its core life insurance solutions.
Regulatory Technology (Regtech)
DORA Takes Effect: Financial Firms Still Navigating Compliance Headwinds: DORA (Digital Operational Resilience Act) takes effect January 17, introducing an enforced universal framework designed to enhance Information and Communication Technology (ICT) risk management. In preparation for the regulation, banks have been restructuring their internal systems to anticipate compliance to ensure increased resilience and stricter security surrounding personal data.
UK’s Payment Systems Regulator sets out updated strategy: Payment Systems Regulator (PSR) recently published an updated strategy setting out its commitments for the next two years. The updated strategy sets out the following 3 core commitments that the PSR will focus on for the remainder of the strategy term:
Sharpening its focus on competition and innovation in payments systems, supporting economic growth and enabling the ecosystem of the future. Completing the work it already has underway that seeks to protect users and promote competition and innovation.
Driving forward (with the Bank of England) work to upgrade the Faster Payments system and reform of Pay.UK, as well as assessing long term retail infrastructure needs.
Google fund invests in KYB verification startup Arva AI: Google’s Gradient Ventures, its early-stage AI-focused fund, has led a $3 million seed funding round for Arva AI, a trailblazing startup set to revolutionize Know Your Business (KYB) verification. The funding round also drew participation from prominent players like Y Combinator, Amino Capital, Olive Tree Capital, and well-known fintech angel investors.
Arva AI is on a mission to streamline Anti-Money Laundering (AML) and KYB compliance processes for banks and fintech firms. This new investment will be used to enhance product development and expand the startup’s market presence. The backing from Google underscores Arva AI’s potential to address a growing demand for efficient, AI-driven compliance solutions.
Blockchain and Cryptocurrency
Could stablecoins rival cards for payments?: Atlanta Fed’s Chris Colson points to evidence that stablecoins have gone beyond their original use as a niche tool for crypto traders to avoid volatile price swings. Retailers such as Overstock, Chipotle, Whole Foods, and GameStop now accept them, though their impact is minimal. Payments giant Stripe recently enabled merchants to accept USD Coin while Travala lets users book travel services with USDC or USDT.
Bank of England to launch Digital Pound Lab: The Bank of England is to launch a Digital Pound Lab as it sets out its blueprint for the design phase of a future Britcoin.
Operating in a sandbox environment, the Digital Pound Lab will enable hands-on experimentation for testing API functionality, innovative use cases and potential business models for PIPs and ESIPs. The Bank’s consultation groups, the Engagement Forum and the Academic Advisory Group will continue, while the Technology Forum will be wound down. Engagement focused on technology will continue, says the Bank, but it will be more direct and detailed, supported by the Digital Pound Lab.
Crypto firm Digital Currency Group to pay SEC $38.5 million for misleading investors: Digital Currency Group, the crypto firm founded by Barry Silbert, and the former executive of a defunct unit are paying the SEC $38.5 million for misleading investors.
In a statement on Friday, the agency said that DCG and Soichiro “Michael” Moro, the ex-CEO of crypto lender Genesis Global Capital, will pay the civil penalties to settle charges for misleading investors about Genesis’s financial condition.”
Trump’s new meme coin soars on his first day in office, lifts other tokens: Donald Trump’s new crypto token soared to more than $10 billion in market value on Monday, while enthusiasm over his crypto-friendly administration helped briefly lift bitcoin to a new record.
Launched Friday night, Trump’s so-called “memecoin” surged from less than $10 on Saturday morning to as high as $74.59 before giving up some of its gains on Monday. The token, branded $TRUMP was last trading at $33.88, according to cryptocurrency price tracker CoinGecko.
Trump has pledged to hand management of his assets to his children, but the crypto asset is raising particular concerns due to its ability to quickly attract billions of speculative dollars with little transparency.
Artificial intelligence
OpenAI has created an AI model for longevity science: OpenAI says it trained a new AI model called GPT-4b micro with Retro Biosciences, a longevity science startup trying to extend the human lifespan by 10 years, according to the MIT Technology Review. The company is making a foray into scientific discovery with an AI built to help manufacture stem cells.
The work represents OpenAI’s first model focused on biological data and its first public claim that its models can deliver unexpected scientific results. As such, it is a step toward determining whether or not AI can make true discoveries, which some argue is a major test on the pathway to “artificial general intelligence.”
ChatGPT’s Chief Product Officer to testify in the US case against Google: The US government wants to prove that Google’s competitors cannot freely enter this market due to the high barriers created by the company. To do this, they invited Nick Turley, Chief Product Officer of ChatGPT, to testify and help strengthen the case. None of the filings specify exactly when Turley will testify. Turley is expected to be asked by the U.S. about “generative AI’s relationship with Search Access Points, distribution, barriers to entry and expansion, and data sharing,” per the filing. The DOJ hasn’t provided details about what it wants to ask Turley.
Cisco introduces AI Defense: Reimagining safety and security for AI: At it’s recent AI Summit, Cisco announced Cisco AI Defense—a solution designed to eliminate the tradeoff between safety/security and speed when dealing with AI.
AI Defense provides robust protection in two critical areas:
Building and Running AI Application: Developers need the freedom to innovate without worrying about vulnerabilities or safety issues in their AI models. AI Defense discovers your AI footprint, validates models to identify vulnerabilities, applies guardrails, and enforces them in real time across public and private clouds.
Accessing AI Applications: Third-party AI apps can supercharge productivity but pose risks like data leakage or malicious downloads. With AI Defense, you gain full visibility into app usage and enforce policies that ensure safe, secure access—all powered by Cisco Secure Access and enhanced with AI-specific protections.
This Week on Tech Behind Fintech
Join us on Tech Behind FinTech on Friday, January 24th, 2025, at 12 PM EST, for an insightful conversation with Chiagozie Iwu, a seasoned FinTech and blockchain entrepreneur passionate about the transformative power of blockchain technology. With extensive experience in creating and scaling disruptive technologies, Chiagozie brings unparalleled expertise in navigating the complexities of blockchain and crypto markets. In this episode.
🔍 Key Topics:
- The latest trends shaping cryptocurrency and blockchain technology.
- How to navigate the evolving crypto landscape and identify opportunities.
- Practical strategies for leveraging blockchain to drive growth and innovation.
Whether you’re a blockchain enthusiast, FinTech professional, or simply curious about the future of cryptocurrency, this episode will provide valuable insights and actionable takeaways.
Show Links
LinkedIn: https://www.linkedin.com/events/7283611512445759488
YouTube: https://www.youtube.com/watch?v=QPlGyuLhuM8
Facebook: https://www.facebook.com/events/389390404231734
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