Tag: AI

The New Faces of Fintech — Featuring DAIZY

Posted on by Jim Smith

While we may not know exactly how fintech will impact our future, we have an idea as to who will be leading the charge. In the next installments of our ongoing blog series, “The New Faces of Fintech”, we will spotlight some of the emerging leaders in the fintech world to get their thoughts on what the future of the industry will look like.

Their origin stories are different, their paths to entrepreneurship are unique, but their impacts on their respective industries are significant. No one truly knows what the future of fintech holds, but these industry leaders may have an inkling as to what we can expect.

Our next guest is Deborah Yang, CEO & Co-Founder of DAIZY. DAIZY Scribe (currently in private beta) allows you to generate personalized financial content in seconds with compliant data, real-time calculations, and dynamic infographics and do so at scale. Deborah is based in Paris.

Deborah Yang, CEO of DAIZY, is featured in New Faces of Fintech

Deborah, tell us a little bit about your background. What were you working on before founding this company?

Before DAIZY, I was Global Head of Sustainable Indexes at MSCI, leading high-growth franchises including factor indexes, EMEA index, and Asia regions across 18 years. I am also the Co-President of Women in ETFs EMEA.

Tell us a bit about your company? What’s the problem you’re solving?

DAIZY combines compliant financial data, real-time calculation engines, and large language models (LLMs) to bring generative AI solutions to the financial services industry. We enable financial insights and communications production with unprecedented scale, authority, efficiency, and customization.

What’s the origin story behind your company? How and why did you come up with the idea?

We fundamentally believe that the wealth management and broader financial services industry is suffering the consequences of legacy technology and disparate data. The time for firms to make a technological leap is now, and with the adoption of AI there will be massive change and disruption in the industry.

Start-ups are all about the team. Working with Jonty Hurwitz, a veteran tech-founder with a track record including the unicorn FinTech company, Wonga, has been amazing because he is always 10 steps ahead of everyone else in dreaming up “the art of the possible”. We also brought on Jim Wiandt, the visionary behind ETF.com and InsideETFs, because of his deep ties in the wealth and financial services industry. We have the best of the best from seasoned leaders, and we will need to continue to attract the next generation of builders. Together, we have a lot of ideas and potential, but right now we’re laser focused on scalable product-market fit for DAIZY Scribe — our first B2B platform for asset and wealth management firms.

What milestones has your company achieved so far?

We launched our B2B platform beta, DAIZY Scribe, in December 2023.

Immediately after launch, we started running implementations with leading asset management firms and platforms.

We were one of the first investment providers with a plug-in live in the OpenAI plug-in store, seeing huge numbers of queries coming from users.

We have built a team of genuine industry leaders in our business to oversee client implementations and will continue to build to remain agile in this evolving industry.

Can you describe what it’s been like to be part of the Fintech Sandbox community?

As a recent addition to Fintech Sandbox, we’ve already found the experience beneficial. We’ve been impressed with the speed of being able to arrange meetings with partners and the quality of people.

Access to reliable, high-quality data is crucial for the industry. Especially with the widespread concern of ‘hallucinations’ by large language models, we are committed to only using best-in-class data. For financial services firms, trust and accuracy are paramount.

What’s next for your company?

We are highly focused on deepening our scalable product-market fit by adding more Skills for DAIZY Scribe. Our implementations enable us to stay closely aligned with clients’ usage and make direct ties to the amplification of their human capital and revenue growth.

What is some of the best advice you’ve received as a startup founder?

Marc Andreesen famously believes that “only” product-market-fit matters. Though it’s a great point, the question is, how do you get there?

For us, we’re focused on three key areas: 1) building a world-class team by hiring the best talent and ensuring they are agile, 2) listening proactively to clients’ needs and pain points and constantly asking questions, and 3) combining 1 + 2 into a product that adds undeniable value to our clients’ businesses.

We believe we have those pieces at DAIZY, and we know we need to continually prove that. To solve the investing industry’s most daunting problems, first we must earn and maintain our clients’ trust. It’s the only way to bring AI solutions to our industry and generate the ROI we know we can for our clients.

What fintech trends are you most excited about right now?

AI in fintech has captured the industry’s imagination. The adoption of AI in wealth and financial services industry will revolutionize the industry in a way that I have not witnessed in my 25 years in financial services. It will be a step function transformation that will quickly separate the winners and the losers in the space because of the opportunity for massive productivity gains.

Are you hiring?

We anticipate the need for product builders, developers, and client-facing teams as we manage increasing customer demand for our AI solutions.

We’re thrilled to feature some of the incredible entrepreneurs who are participating in our Data Access Residency. If you are aware of any fintech entrepreneurs with an early stage company who could benefit from free access to data, cloud hosting, and a supportive community, please have them visit our website to learn more.

The Fintech 5 with Frazer Anderson — Principal at Vestigo Ventures

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.

Frazer Anderson is a Principal at Boston-based, fintech-focused venture firm Vestigo Ventures. Vestigo targets initial investment in seed and series A companies. Frazer has a particular interest in how machine learning and SaaS are transforming financial services.

Frazer Anderson
Frazer Anderson

Question #1: Frazer, what fintech problem has your attention right now?

Problems abound! I’m not focused on any one specifically — looking to find excellent founders who want to automate and build analytics on top of existing workflows. If there is one area I would look though it would be platform plays in private markets.

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

It’s all about AI-driven automation and infrastructure or the API-ification of financial services.

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

Early-stage investing is 100% about the team. Everything else you do as part of diligence ultimately gets back to information about how perceptive, relentless, networked, etc. the team you’re investing in is.

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

SaaSWorks is automating the customer data file and bringing superpowers to the office of the CFO.

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

Visibility and accuracy are the biggest things holding back the adoption curve. The stakes in financial services are too high to have hallucinations for a lot of tasks and enterprises are going to require visibility into how decisions are made. That’s why there is still plenty of room to build good old-fashioned infrastructure or lean in to super high-value tech-enabled services.

Bonus Question! If you could have coffee with any entrepreneur, who would it be?

Warren Buffet.

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!

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!

The Fintech 5 with Abdul Abdirahman — Principal at F-Prime Capital

Posted on by Jim Smith

In an ongoing series of blog posts, 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.

Next up is Abdul Abdirahman, a Principal with F-Prime Capital and an erstwhile Advocate for Fintech Sandbox. If you were at Boston Fintech Week in October, you may have seen Abdul demo and launch the newly revised F-Prime Fintech Index during a plenary session. His talk was entitled State of Fintech: F-Prime Capital Fintech Index Highlights.

Briefly, the F-Prime Fintech Index tracks the stock market performance of ~50 emerging and publicly traded financial technology companies, and allows for comparisons between individual companies as well as fintech subsectors such as payments, banking wealth management, insurance, and proptech.

Abdul Abdirahman — Investor of F-Prime Capital
Abdul Abdirahman

Question 1. Abdul, can you tell us about the intent behind the Fintech Index?

The F-Prime Fintech Index was launched as a way to track disruptive, publicly-traded fintech companies. The F-Prime Fintech Index serves as a benchmark for the development of this rapidly maturing sector and closely tracks the leading disruptors.

Q 2. Why is F-Prime Capital, a venture capital firm which invests in private companies at the earliest stages, tracking the performance of publicly traded fintech stocks?

At F-Prime Capital, we are thematic investors who spend a lot of time in the fintech space. We have been investing in this growing sector for more than a decade and, alongside our sister funds at Eight Roads, we have been fortunate to back some large and category-defining disruptors including Alibaba, Toast, Quovo/Plaid, Fireblocks, Flywire, and many more. As investors, we closely monitor public markets to inform our thinking across different fintech sub-categories and understand what potential exits might look like. This process often involves pulling revenue multiples, financial metrics, and other non-financial data. These data points — and the insights we compile in our newsletter and State of Fintech reports — can be useful to entrepreneurs, operators, and fellow investors who want a real-time window on the market.

Last year we went a step further and added vertical-specific benchmarks. These benchmarks go a level deeper than top-line metrics (such as revenue, growth rate, and multiples) and capture vital metrics that require digging into public and private reports. For example, if you are building in the payment space, wouldn’t it be great to see how take rates are trending, and which companies are garnering the highest take rates? The F-Prime Fintech Index now lets you do that — and much more.

Q 3. What should we know about the new Fintech Index functionality?

The new functionality on the Fintech Index includes:

  1. Company and sector comparison by revenue, growth, margin, multiple, and more,
  2. Adaptive visual multiples and benchmarks
  3. Head-to-head company comparisons
  4. Adaptive sector- and vertical-specific benchmarks
  5. Time series of historical metrics by sector and revenue growth

To learn more about how to use the new-look F-Prime Fintech Index, check out this brief video overview. Additionally, the October 2023 edition of our Fintech Prime Time newsletter demonstrates how we’re using these new tools in our own industry analysis.

Q. 4. What are the most interesting insights you’ve recently gleaned from the Index?

There are three fintech disruptors with market caps of $50B+, and they have very different revenue profiles. As a result, they garner very different multiples to get to the $50B+ valuation. Vertical SaaS company Shopify has revenues of $6.7B and an LTM revenue multiple of ~14x, whereas payment companies PayPal and Mercado Libre have LTM revenues of $29B and $13B respectively, along with LTM revenue multiples of 2.4x and 6x. Investors love a good SaaS + payments business, and Shopify delivers, 29% and 71%, respectively.

Q 5. Do you have any predictions for the state of fintech in 2024?

The overall climate for fintech in 2023 was “regulation on, risk off” with heightened scrutiny, rule-making, and enforcement by regulators. We will continue to see increased regulatory scrutiny in 2024. However, we also think the fintech correction in private markets will stabilize in the new year. Our full State of Fintech report will be launched soon — sign up for our fintech newsletter to gain access when we release it in February.

Bonus Q 1. Why did you choose to launch the revised Fintech Index during Boston Fintech Week?

As a Boston-based firm with a strong partnership with the Fintech Sandbox, we were happy to launch the new-look F-Prime Fintech Index at Boston Fintech Week. Boston has a great fintech community of founders, operators, investors, and other folks in the financial services ecosystem, and we know the Index has many fans among them. We received a lot of positive feedback on the changes, and always welcome suggestions from our Boston Fintech community.

Bonus Q 2. What impact do you think GenAI will have on wealth management?

Within fintech, one of our key investment areas is wealth and asset management. We think there are many opportunities for GenAI to have an impact in this arena, especially when it comes to how financial advisors work with their clients. In short, we believe GenAI will act more like a co-pilot than a driver for fully autonomous finance in the wealth management sector — at least in the short-to-medium term. If you’re interested, a recent edition of our fintech newsletter delved into this topic.

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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!