Category: Partners

Leading with a Data-First Mindset in Fintech: The Currency of Success in the Age of AI

Posted on by Jim Smith

By Darton Rose, Principal, Data Solutions, Wolf & Company

Darton Rose, Principal, Data Solutions at Wolf & Co.

Success depends on making the most of one of our most valuable assets: data. However, as we navigate the age of artificial intelligence (AI), data has become more than just an asset – it’s the currency of this new age, driving innovation, growth, and competitive advantage. Whether for fintech startups or established companies, embracing a data-first mindset is no longer optional – it’s essential for maintaining your competitive edge.

How Data Became the New Currency Within the Fintech Industry

In my view, fintech thrives on personalization, speed, and trust. Whether it’s seamless payment systems or AI-driven investment advice, every product or service relies on a deep understanding of customer behaviors, needs, and preferences. As a data science expert, I’ve seen firsthand how AI has amplified this dependence, enabling advanced analytics, predictive modeling, and automation.

These technologies have the potential to unlock new revenue streams, streamline operations, and deliver hyper-personalized customer experiences. But I firmly believe that this can only happen if the underlying data is accurate, accessible, and actionable. Without that foundation, even the most advanced technologies can’t deliver their full potential.

From my perspective, companies that invest in robust data strategies aren’t just responding to market trends – they’re future-proofing their business. Data empowers us as leaders to anticipate customer needs, spot market opportunities, and make decisions based on real insights. In today’s competitive landscape, those who fail to prioritize data risk falling behind their competitors who are more agile, informed, and prepared to adapt.

Invest in Customer Data for Significant Returns

In my experience, understanding every aspect of customer data is essential for driving growth and building loyalty in fintech. Yet, I’ve seen many organizations of all sizes struggle with fragmented data systems and siloed teams, leaving valuable insights untapped.

This is where data mapping becomes a game-changer. By identifying, categorizing, and linking all customer data points across the organization, data mapping creates a comprehensive, 360-degree view of the customer journey. Below are three use cases of how I see managers and executives using data today.

Optimize Customer Segmentation

When we organize data into meaningful segments, we gain a clearer understanding of customer behaviors and can tailor offerings more effectively. For instance, I’ve seen how a fintech startup offering personal loans can use segmentation to identify customers who would benefit most from premium credit products. This approach allows for targeted marketing campaigns that not only resonate with the right audience but also drive higher conversion rates.

Unlock Upselling Opportunities

I believe data mapping is also a powerful way to uncover patterns that reveal upselling opportunities. For example, clients using basic financial management tools might display behavior that signals they’re ready for more advanced investment products. With these insights, fintech companies can create personalized experiences that not only meet customer needs but also drive meaningful revenue growth.

Strengthen Compliance & Risk Management

In a heavily regulated industry, I’ve found that data mapping plays a crucial role in helping fintechs stay compliant. It ensures transparency and consistency in how data is collected, stored, and used. By taking a proactive approach to regulatory requirements, fintechs can not only avoid costly penalties but also build trust with both customers and regulators – a trust that’s vital in today’s business environment.

Data-First Leadership Turns Vision into Reality

Adopting a data-first mindset begins with leadership. At Wolf, where we work closely with fintech innovators, we’ve prioritized data strategy for decision-making. Therefore, as a data expert driving this transformation, I believe there are four key strategies that growth-focused fintechs should implement today.

1.      Build a Culture of Data-Driven Decision-Making

Fostering a culture where data drives every decision starts with empowering employees to use data effectively in their roles. This means investing in the right training and tools to build data literacy, ensuring that insights are not only accessible but actionable for everyone across the organization.

2.      Invest in Scalable Data Infrastructure

I always emphasize the importance of building systems that can handle growing volumes of data securely and efficiently. In my experience, a modern data stack with robust analytics capabilities isn’t just a nice-to-have – it’s the foundation for scaling AI and advanced machine learning initiatives effectively.

3.      Collaborate Across Teams

I’ve seen firsthand how data silos can stifle innovation. Breaking down these barriers and fostering collaboration between data scientists, product teams, and customer-facing departments is essential to fully harnessing the power of your data. When everyone works together, the opportunities for growth and transformation are limitless.

4.      Leverage AI for Continuous Improvement

In my experience, AI tools have transformed how organizations operate by enabling real-time monitoring of key performance indicators, automating routine tasks, and uncovering actionable insights with incredible speed. When paired with a strong data foundation, AI allows fintechs to shift their focus to delivering value where it truly matters most.

Win the Fintech Race by Investing in Data

In the age of AI, I’ve come to believe that data isn’t just a tool for decision-making – it’s the very foundation of innovation and the key to drive growth. I’ve seen our fintech clients who adopt a data-first mindset are not only better equipped to deliver personalized experiences and optimize operations, but also to stay ahead of the competition.

By embracing strategies like data mapping and customer segmentation, fintech companies like yours can transform data into a powerful engine for growth. The future belongs to organizations that view data not as a byproduct of their operations, but as their most critical asset – a currency that, when managed effectively, creates endless opportunities.

At Wolf Data Solutions, we partner with fintech companies to harness the full power of their data, driving strategic decisions and delivering measurable outcomes. If you’re ready to lead with a data-first mindset, I’d love to start the conversation.

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This guest post is provided by our friends at Wolf & Company, which provides industry-focused innovative public accounting, risk management, and consulting services to companies of all sizes. We are grateful to them for sharing their expertise. To learn more about Wolf & Company, please visit https://www.wolfandco.com/.

H1 2024 Wrap-Up Part 2

Posted on by Jim Smith

New Sponsors and Data Partners

Part 1 of our review of the first six months of 2024 covered the 19 startups we accepted for our Data Access Residency. And we hosted our 10th Demo Day in April, one of our two signature annual events. But we were also busy on other important fronts.

New Sponsors

We are very excited that two new sponsors joined the prestigious organizations contributing to our mission. Their generous support enables us to provide free access to data, services, a collaborative community, and a support system for early-stage fintech entrepreneurs. We are thrilled to have them working with us to further innovate in fintech. They are:

  • Global Atlantic, a leading insurance company meeting the retirement and life insurance needs of individuals and institutions. The Global Atlantic Foundation, which showcases its commitment to serving the community, and is a core part of the company’s culture and identity, provided a generous grant.
  • MCS Group, a relationship-focused consulting firm based in Boston. MCS specializes in working with fintech companies to create bespoke talent/hiring solutions for their IT teams, assisting companies ranging from startups to Fortune 500.

They joined existing sponsors Commonwealth, EY, F-Prime Capital, Fidelity Investments, Goodwin, MassMutual, Morrison Foerster, Rise, created by Barclays, and Slalom in helping startups and entrepreneurs build great products and companies.

New Data Partners

Thus far in 2024 we have welcomed three new data partners and expanded the datasets offered by a whopping seven of our long-time partners.

  • Kaleidoscope provides API access to a wide range of pre-defined and searchable securities datasets that have been extracted and aggregated from registered US and Canadian filings, including public companies, investment companies, funds, investment advisors, and US insiders. Just a few years ago, Kaleidoscope was a startup in our Data Access Residency!
  • ApeVue is a data services provider in the Private Equity / Venture Capital space. They provide the most actionable and timely market data and analytics on private company investments, including Pricing Data, Index and Benchmark Data, and Reference Datasets.
  • ATTOM is a leading curator of land, property, and real estate data, and provides premium property data to power products that improve transparency, innovation, efficiency, and disruption in a data-driven economy. ATTOM multi-sources various datasets for more than 155 million U.S. residential and commercial properties covering 99 percent of the nation’s population.

Existing Data Partners Benzinga, Dow Jones, FactSet, Moody’s, Nasdaq Data Link, Plaid, and S&P also made additional datasets available to our Data Access Residents.

If your company or foundation would like to discuss sponsorship opportunities, please reach out to us here. Fintech Sandbox is a 501(c)(3) organization committed to advancing financial innovation and reducing barriers for early-stage entrepreneurs by supporting the global fintech community.

And if your organization has data, and would like an efficient way to see what innovative fintech entrepreneurs can build with it, please reach out to us here. You’ll be fueling further advances in fintech while building relationships with impactful startups and entrepreneurs.

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The world needs FinTech like never before

Posted on by Jim Smith

A guest blog post from our friends at Rise, created by Barclays.

If you are an early-stage Climate FinTech founder, check out Rise Start-up Academy: Climate FinTech Edition.

Ever wondered how the fintech ecosystem can play a part in tackling climate change? A new report, Climate FinTech: An innovation thesis, from Rise, created by Barclays, highlights how one area of our industry could emerge to drive greater adoption of low-carbon solutions and technology.

That area is what Rise has identified as Climate FinTech. Climate FinTech describes organizations that build products leveraging a combination of climate, finance and technology solutions that support climate change mitigation and adaptation. Climate FinTech products can range from quantifying a carbon footprint to embedding financing within a climate solution. The companies innovating in this space are addressing the significant challenges faced by both consumers and businesses, who find that switching to low-carbon solutions can be painful due to adoption barriers that include upfront costs and technical complexity.

“Reaching at least 50% carbon reductions currently costs about $55,000 for a typical single-family home” — Research performed by the University of California, Berkeley

“US Department of Agriculture agency set aside nearly $3bn to give to farmers who cut emissions, but about $1.9bn spent on practices not doing that” — The Guardian

Climate FinTech can make that switch more affordable and simpler than it is today. Solutions can be grouped into three themes:

  • Carbon management drives understanding and enabling control of emissions. Fintech Example:

Persefoni, based in Arizona, have developed a climate management and accounting platform to support businesses and financial institutions in meeting climate disclosure requirements.

  • Direct mitigation facilitates the absolute reduction of user emissions. Fintech Example:

Banyan, based in California, helps finance sustainable projects such as solar, wind or other renewable energy initiatives by connecting banks, lenders and developers.

  • Climate risk management measures and mitigates exposure to climate risk. Fintech Example:

Agcor, based in California, uses data science and machine learning to support the agricultural economy with risk management and water intelligence.

According to our report, this sector is growing at speed with over $2.9B of investment in 2022 with Carbon Management related companies receiving the vast majority of investment. Direct Mitigation, however, received only 11% of total investment. Our analysis shows that Direct Mitigation could be the key area to unlock significant emissions reduction and commercial gain with the right support and financing compared to the other two themes.

Through our fintech focussed Rise, created by Barclays proposition, we provide Climate FinTechs with the tools to engage, network and experiment with the bank and other top innovators to support growth in this area. We offer:

  • Tailored accelerator programmes and physical workspaces to help Climate FinTechs grow and collaborate with each other.
  • Access to a global FinTech ecosystem made up of cutting-edge start-ups and scale-ups through our physical locations in New York and London, and our virtual community in India.
  • A capability allowing Barclays to engage and experiment with Climate FinTechs, helping to tackle clearly defined business cases using synthetic and public data.

If you are an early-stage Climate FinTech founder solving a problem across our three Climate FinTech thesis areas, check out our 10-week digital Rise Start-up Academy: Climate FinTech Edition. Across the programme, start-ups will fine-tune their product, get to grips with the foundations of pricing, understand how to increase sales and learn how to build out their team. As well as developing a repeatable and scalable business model.

Key Dates

  • Applications opened: 8th Feb
  • Applications close: 4th April
  • Programme starts: 22nd April

For more information and to apply — https://rise.barclays/rise-startup-academy-climatefintech-edition/

The Fintech 5 with Michael Haney — Head of Product Strategy at Galileo Financial Technologies

Posted on by Jim Smith

The Fintech 5 is a series of blog posts consisting of questions and answers designed to help you get to know the people in the Fintech Sandbox community.

Michael Haney heads product strategy for Galileo Financial Technologies. Galileo enables fintechs, banks, and both emerging and established brands to build differentiated financial solutions that deliver exceptional, customer-centric experiences.

Michael has spent his career at the intersection of technology and financial services, frequently driving digital transformation. Last fall, he was on the 2023 Boston Fintech Week stage as a participant in a panel called Laying the Foundation: Digital Infrastructure for Modern Banking.

Michael Haney — Head of Product Strategy at Galileo Financial Technologies
Michael Haney

Question #1: What fintech problem has your attention right now?

The Federal Reserve Bank analysis revealed that most consumers in the Millennial cohort have a high degree of interest in faster payments for both account-to-account (A2A) and consumer-to-business (C2B) scenarios, at 61% and 71% respectively. Two separate studies by Barlow Research Associates and Citizens Bank show that about 52% of businesses also indicate a high degree of interest in faster payments and expect about 22% of their outbound payments to faster payments. As of the third quarter of 2023, 461 financial institutions participate in The Clearing House’s RTP platform, and 331 participate in the Federal Reserve’s FedNow service. Here at Galileo Financial Technologies, we are meeting this growing demand by enhancing our money movement capabilities to support faster payments. Galileo clients of all types, including financial institutions, digital challengers, and even non-financial brands, can leverage this new capability.

#2: What trends in fintech are you most excited about?

(1) The rise of faster payments and its enablement of pay-by-bank services.

(2) The improvement of conversational banking by incorporating generative AI technologies.

(3) Better fraud prevention and detection through broad industry participation in data consortiums.

(4) Increased bank adoption of purchase finance solutions, such as BNPL.

(5) Bank workload migration to the cloud, including core processing.

#3: What are some of the biggest learnings from your career journey in fintech and/or entrepreneurship?

(1) There is no success in this industry without a deep understanding and appreciation for risk management and regulatory compliance.

(2) Surround yourself with colleagues who are smarter than you, complement your skill set, and are at least as equally passionate about the opportunity.

(3) Rebuilding the same capabilities on a modern technology stack is insufficient to succeed; you must offer something new.

(4) There is no straight path to success, but don’t let that detour you from achieving your goals.

(5) Start with a customer pain point or unexploited niche, then grow new offerings quickly and tangentially.

#4: Which fintech companies are you keeping an eye on right now?

Credit, used responsibly, has the power to enhance our lives greatly. However, traditional credit scoring limits individuals from accessing loans and increasingly impacts the ability to rent homes or gain employment. New credit scoring methods improve inclusivity and help create a more complete picture of existing clients already in the lending system. Emerging players for alternative credit scoring include Nova Credit, Zest AI, Altro and Pagaya.

#5: Hot take! What are your thoughts on AI in the industry?

Artificial Intelligence, or AI, is an umbrella term for several technologies that can work together or independently to increase automation, improve user engagement, or uncover insights. The three forms of AI penetrating the financial services industry the most are Robotic Process Automation (RPA), Machine Learning (ML), and Natural Language Processing (NLP). The application of these technologies is almost limitless, ranging from intelligent digital assistants and alternative credit scoring to personalized marketing offers. Financial institutions will improve productivity, increase efficiency, and shift work to more value-added tasks. These technologies continue to improve over time; for example, neural networks enhance ML, and generative AI enhances NLP. We have only begun to leverage the power of AI, and it will shape our industry for years to come. However, safeguards are required to ensure fairness, maintain resiliency, and improve confidence in the output of these solutions.

Bonus Question!

What’s the best career or life advice you’ve received?

Prioritize your health. Without it, you cannot achieve your professional ambitions, support your family, or enjoy your personal endeavors. Do what it takes to keep your energy levels high, your mood elevated, and your enthusiasm sustained.

If you are a fintech entrepreneur with an early-stage company and you could benefit from free access to data, cloud hosting, and a supportive community, please visit our website to learn more!

A Few Questions about Fundraising with Data Advocate Sarah Lamont

Posted on by Erin

Over the next few months, we’d like to introduce you to some of the sponsors, partners, advocates, and entrepreneurs who make up the unique Fintech Sandbox community, and without whom our small team could not provide fintech startups with access to critical data and resources, entirely for free.

First up is Sarah Lamont, a Data Advocate who helps us evaluate startups that have applied for admission to our Data Access Residency. Her day job is as an investor at Fintech Sandbox sponsor F-Prime Capital.

While most startups apply to Fintech Sandbox before speaking to venture capital firms, raising a seed or Series A is usually high on their list of things to do, so we thought we’d ask Sarah to provide some guidance that might be particularly helpful to first-time entrepreneurs who have not had to raise venture capital before.

sarah-lamont

Sarah, thanks for talking to us today. First off, can you tell us why you volunteer your time as a Data Advocate?

Financial data is expensive! i.e., cost-prohibitive for startups who are caught in the catch-22 of ‘need money for data, need data to build my product, need product to raise money’. So I volunteer time as a Data Advocate to help funnel early-stage companies into the Sandbox and get their product off the ground, and because it gives me the chance to meet entrepreneurs when they’re still in build-mode, outside of the fundraising context.

Can I ask a venture firm to sign an NDA before I send them my pitch deck?

It’s highly recommended to not do this (and doing so is a bit of a yellow flag). Investors may be reviewing hundreds or even thousands of pitch decks per year, and signing an NDA for each would be putting undue stress on their legal teams. Consider lighter weight options for staying in control of who sees your pitch deck e.g., email/password requirements or link expirations.

Who should pitch the company when meeting with a VC? Just the CEO? The whole founding team? Important team members who are non-founders?

There’s no hard and fast rule, but the first meeting should be 1-2 (co-)founders. Investors will want to meet the rest of senior leadership (e.g., product, marketing) at some point during the diligence process, but those meetings can be scheduled separately after a first few conversations.

Say we’re a B2B startup and several firms are already using our software. At what point in the process should I let a potential investor talk to my clients?

You want to be respectful of your customers’ time and ask for minimal favors, but also recognize that voice of the customer is one of the more important data points for early-stage investors. You should save the customer introductions until investors have given you the signal that they’re nearing the end of their diligence process and trending positively towards a term sheet.

How do you place a value on a startup that’s pre-revenue?

It’s a bit more art than science (and becomes more science than art in later stages). Most go the route of considering qualitative factors – like founding team, opportunity size, existence of early pilots – while also weighing quantitative considerations like expected exit value and return on investment.

Is there a danger you can over-inflate your seed stage valuation?

Yes. An over-inflated seed stage valuation puts you in a more difficult spot to raise funds at later stages, as investors will hesitate on price unless you have significant traction to justify the valuation.

When should I ask an investor for introductions to CEOs of their portfolio companies so I can do my own due diligence?

This is a great step to take during the diligence process. You should take this step when you’re nearing a term sheet, or when investors are asking for introductions to some of your most valuable customers (which, as mentioned previously, should also ideally be towards the end of the process).

If we pitched a venture fund that really liked us but decided to pass for whatever reason, should we ask them to introduce us to other VCs? Or will other VCs be less interested because the first VC passed?

Introductions to other VCs is one of the quicker-wins you can get out of VCs, and in most cases you can and should ask for them. If the pass is due to stage or sector, they can help you identify VCs whose fund mandate is more aligned to your company and get you a warm introduction.

Are there any other tips you’d like to pass to first-time founders on pitching a venture capital firm?

Investors will have varying preferences on whether they want to walk through a deck or keep it more conversational, Q&A style. Get a feel for that upfront and adjust the pitch accordingly.

As for landing a meeting, don’t feel compelled to meet every VC through a warm introduction. Cold outreach works – but do make sure the message is tailored to that investor or fund specifically. It doesn’t send a good signal when you send a seed-stage fintech deck to a growth-stage healthcare investor.