AI’s Impact on Payments & Fintech: Fraud Management; How embedded finance can disrupt the value chain in financial services; The Rise of Vertical AI in Accounting;
This week, we’re diving into the future of money mobility, AI’s growing role in fraud prevention, and the latest fintech funding rounds.
Insights & Reports:
1️⃣ The Modern Money Mobility: Ecosystem Providers
2️⃣ The largest US banks’ Q4 performance
3️⃣ Factors Influencing SWIFT PaymentProcessing Times
4️⃣ AI’s Impact on Payments & Fintech: Fraud Management
5️⃣ Six dynamics are shaping the emerging African fintech landscape
6️⃣ How embedded finance can disrupt the value chain in financial services
7️⃣ The Rise of Vertical AI in Accounting
9️⃣ Formance raises $21M to build the AWS for fintech infrastructure
TL;DR:
Here’s the latest edition of Fintech Wrap Up, packed with insights on the evolving money mobility ecosystem, big bank earnings, SWIFT payment processing, AI’s role in fraud management, and fintech trends shaping Africa.
The financial ecosystem is more interconnected than ever, with money mobility at its core. Businesses must decide whether to work with a single provider or build a custom network of partners, but either way, real-time payments, AI-driven analytics, and embedded finance are reshaping how funds move globally. Meanwhile, Q4 earnings from major U.S. banks were stronger than expected, thanks to surging investment banking and trading revenues. However, rising credit risks and commercial real estate challenges remain areas to watch in 2025. On the payments front, SWIFT transactions can be delayed by regulatory compliance, outdated banking tech, and country-specific capital controls — highlighting the need for modernization. AI is playing an increasingly crucial role in fraud prevention, reducing manual reviews and making risk management more accessible, even for smaller businesses. Across Africa, fintech partnerships, M&As, and cross-industry integrations are driving the next wave of innovation, though regulatory hurdles still pose challenges.
Embedded finance continues to disrupt traditional financial services, allowing businesses to integrate banking products seamlessly into their ecosystems. While the market is poised for massive growth, legacy infrastructure and regulatory limitations remain roadblocks to widespread adoption. AI is also making waves in accounting, with verticalized AI solutions helping firms automate complex workflows, particularly in Client Advisory Services (CAS), a growing revenue driver for accounting firms. Finally, in crypto, the outlook for 2025 is filled with cautious optimism as investors balance inflation concerns with evolving market conditions.
On the funding front, fintech infrastructure startup Formance secured $21M to build an AWS-like solution for financial services, QED backed stablecoin payments startup Cedar Money with a $9.9M seed round, and embedded finance player Swan extended its Series B with €42M.
Until next time, stay informed and stay ahead! 🚀
Insights & Reports
The Modern Money Mobility: Ecosystem Providers
The following table provides a comprehensive overview of the various players in the financial technology and services ecosystem, categorized by their primary functions while acknowledging their presence in multiple areas of this ecosystem.
👉 The Future of the Money Mobility Ecosystem
The money mobility ecosystem has evolved into a complex and dynamic network of accounts, rails, intermediaries, and service providers. At its core, this ecosystem revolves around the seamless movement of funds into and out of accounts, facilitated by various rails and intermediaries. Banks and non-bank FinTechs leverage this infrastructure to create new account relationships and monetization opportunities, transforming simple transactions into deeper financial relationships.
As the ecosystem continues to evolve, businesses must carefully consider their approach to money mobility and their strategies for integrating it into their organizations. The choice between a single, integrated provider and a customized, multi-partner solution depends on factors such as business size, scope, and specific needs. Regardless of the chosen approach, a well-implemented money mobility strategy can provide significant competitive advantages, improve operational efficiency, and enhance customer satisfaction.
As technology continues to advance and consumer expectations evolve, the money mobility ecosystem is likely to see further innovations.
The largest US banks Q4 performance
Big banks just posted their strongest quarter in years, fueled by soaring trading revenues, rebounding dealmaking, and renewed corporate confidence.
As a reminder, banks make money through two main revenue streams:
💵 Net Interest Income (NII): The difference between interest earned on loans (like mortgages) and interest paid to depositors (like savings accounts). It’s the primary source of income for many banks and depends on interest rates.
👔 Noninterest Income: The revenue from services unrelated to interest. It includes fees (like ATM charges), advisory services, and trading revenue. Banks relying more on noninterest income are less affected by interest rate changes.
Here are the significant developments in Q4 FY24:
📈 Wall Street rebounds: Investment banking and trading delivered blockbuster performances across major banks. Investment banking revenue soared 24% at Goldman Sachs and 44% at BofA, reaching its highest level in three years.
💹 Trading boom continues: Market volatility tied to the US election and shifting rate expectations fueled record trading revenues. Morgan Stanley’s equities division hit an all-time high, while JPMorgan and Goldman Sachs saw substantial gains in fixed income.
🏦 Corporate optimism fuels dealmaking: CEO confidence has driven a resurgence in M&A, IPOs, and private credit demand. Morgan Stanley’s M&A pipeline is the highest in seven years, signaling a multi-year comeback.
Curated News
Formance raises $21M to build the AWS for fintech infrastructure
A ledger is a record of money movements that serves as the source of truth for financial assets, but when a company starts having multiple bank accounts, payment processors and funds spread across discrete services, it can become a headache to manage. Most companies end up dedicating engineering resources to build their own ledgers to solve that.
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