Finding the right RegTech partner for you & PayTech funding to nosedive 55% in 2024

Top Story of the Week

Finding the right RegTech partner for you - Part 1 - The global RegTech sector is projected to reach a value of $66.9bn by 2032, growing at a 22.6% CAGR from 2023, according to a report from Allied Market Research. Given its size, it is evident that the market is full of various types of RegTech solutions all claiming to revolutionise the output of compliance teams. However, with so much noise in the market, finding the right solution is like finding a needle in a haystack. FinTech Global spoke to several RegTech providers for an insight into what to look for.

Read the full story here .

Research highlight

European PayTech deal activity on track to almost half in 2024

Key European PayTech stats in Q1 2024:

• European PayTech deal activity totalled at 27 deals in Q1 2024, a 55% drop from Q1 2023
• European PayTech companies raised a combined $235m in Q1 2024, a 18% reduction YoY
• The UK was home to the highest number of PayTech deals with 11 transactions, a 40% share of deals on the continent

In the first quarter of 2024, European PayTech companies experienced a notable decrease in investment, with deal activity dropping by 55% to a total of 27 funding rounds compared to the same period in the previous year. Based on this activity, deals are expected to reach 108 in Q1 2024, a 45% drop from 2023. These companies also raised a combined total of $235m, marking an 18% reduction YoY.

PPRO, a digital payment provider to banks and businesses, had the largest FinTech deal in Q1 2024 after raising $93m in their latest private equity funding round. The funding will be used to pursue growth in key markets and further enhance its global network of local payment methods. The funding is provided by new and existing investors, including Eurazeo, HPE Growth, Sprints, PayPal Ventures, J.P. Morgan, Citi Ventures, Claret Capital Partners, and funds managed by BlackRock. “PPRO had a stellar 2023, delivering record revenue.” said Rahul Raswant, Chief Financial Officer, PPRO. “Our focus on helping customers access new markets by creating seamless local payment experiences is validated by the strong demand we’re seeing, as well as by this infusion of capital which represents a real vote of confidence in PPRO’s growth prospects.”

The UK was the most active European PayTech country with 11 deals, a 40% share of all transactions. The second most active country was Estonia with three deals, a 11% share of deals. Sweden, Germany and Switzerland were joint third with two deals each.

In February 2024, The EU Council approved a regulation facilitating instant euro payments across the EU and EEA, aiming to bolster the region's economic and financial independence by reducing reliance on non-EU financial institutions. This move is expected to benefit individuals and businesses, enabling money transfers within ten seconds at any time, including cross-border transactions. Payment service providers must offer instant payment services at rates no higher than standard transfers, with a transition period for implementation. Additionally, the regulation extends access to payment systems for payment and e-money institutions, subject to safeguards to mitigate risks. Notably, the regulation mandates verification of beneficiary details to prevent errors or fraud and includes a review clause for assessing credit charges.

Weekly FinTech deal roundup

USA maintains spot as FinTech’s central hub in this week’s funding rounds - USA maintained its position as FinTech’s central hub for deals this week, on a solid week for FinTech funding. Read the full story here.

RegTech news

• How to effectively manage third-party risks - The concept of third-party risk management is hardly a fledgling idea. However, as the world becomes ever-more digitised, cybersecurity threats are now looming larger than ever before. According to research from Soha Systems, more than 60% of data breaches can be traced back to third-party vendors. This means that an effective third-party risk management strategy is not just a luxury anymore – it is a necessity. Read the full story here.
• Revolutionising client lifecycle management with embedded customer outreach - In the age of enhanced due diligence, knowing your customer has evolved from a simple onboarding task to the lifeblood of a compliant, modern business. However, standard practices for gathering and updating customer data often overlook the customer itself. KYC Portal, a client lifecycle management platform, recently explored the power of embedded customer outreach in client lifecycle management.? Read the full story here.
• The intersection of KYB and AML: A guide to business identity verification - On 23 April 2024, the Organization for Economic Co-operation and Development (OECD) published a pivotal update, listing jurisdictions newly committed to the Automatic Exchange of Information (AEoI) and CRS Reporting. Taina Tech, which offers a fully automated FARCA and CRS validation platform, has recently commented on what these changes mean. Read the full story here.

InsurTech news

• Are insurers thinking about the value proposition for consumers by collecting timely data? - In the ever-evolving landscape of insurance, the quest to better serve consumers is a constant battle. In an attempt to craft the ultimate value proposition for consumers, incumbents are harnessing the power of real-time data to revolutionise the way in which they operate. Read the full story here.
• InsurTech unicorn Wefox faces insolvency risk according to reports - Wefox, an InsurTech unicorn, has issued a stark warning to its investors regarding potential insolvency looming over the company. Read the full story here.
• InsurTech innovator Vitesse secures $93m Series C for US expansion - Vitesse, a leading provider of treasury and payment solutions tailored for the insurance industry, has announced the completion of a substantial $93m Series C funding round. Read the full story here.

WealthTech news

• Revolutionising financial data management with KidbrookeONE - Navigating ESG integration presents unique opportunities for differentiation but also brings challenges from a data management perspective. Read the full story here.
• Tietoevry survey reveals Nordic seniors’ struggle with digital services - A survey by Tietoevry has shed light on the digital accessibility experiences of elderly citizens aged 65 and over in Finland, Sweden, and Norway. Read the full story here.
• Blossom Social secures $2.1m to expand US investing network - Blossom Social, a Vancouver-based FinTech startup, has successfully secured more than $2.1m CAD in seed funding. The funds were raised to support the expansion of its investing social network into the US. Read the full story here.

CyberTech news

• CyberArk to bolster identity security with $1.54bn Venafi acquisition - CyberArk has announced its agreement to acquire Venafi, a machine identity management firm, from Thoma Bravo for approximately $1.54bn. Read the full story here.
• HoundDog.ai raises $3.1m to enhance AI-driven data security and privacy compliance - HoundDog.ai, the company implementing data security and privacy controls at the code level, has completed a $3.1m seed round. Read the full story here.
• Velotix secures investment from Barclays and Capri Ventures - Velotix, a pioneering provider of an AI-driven data security platform, has announced a significant investment from Barclays Bank and Capri Ventures. Read the full story here.

ESG FinTech news

• Beyond standardisation: Tailoring ESG metrics to industry dynamics - ESG criteria have become indispensable in evaluating a company’s sustainability and societal impact, claims IntellectAI. Read the full story here.
• Semantic Visions launches ESG Index for corporate sustainability - Semantic Visions has introduced a pioneering Environmental, Social, Governance (ESG) Index, offering a new way to assess business sustainability and ethical behaviour through media analysis. Read the full story here.
• NGFS urges central banks to embrace sustainable investing - The Network for Greening the Financial System (NGFS) has released a comprehensive report advocating for central banks worldwide to incorporate sustainability considerations into their portfolio management strategies. Read the full story here.

Other FinTech news

• Experian acquires strategic stake in customer engagement leader Reward - Experian, a FTSE50 company and the world’s leading global information services company, has acquired a strategic stake in Reward, an industry leader in customer engagement and commerce media. Read the full story here .
• DKK Partners and Seed Group collaborate to enhance financial connectivity in MENA - DKK Partners, a leading FinTech company specialising in emerging markets and foreign exchange liquidity, has partnered with Seed Group, a company of the Private Office of Sheikh Saeed bin Ahmed Al Maktoum, based in Dubai. Read the full story here.
• PPRO and Afterpay team up to launch BNPL solution for US market - PPRO, the leading local payments platform, has announced its partnership with Buy Now, Pay Later (BNPL) provider Afterpay. Read the full story here.