HSBC funds digital identity fintech; Mastercard expands carbon gauge

As banks around the world figure out uses for generative AI, bunq, a Dutch neobank, is applying the technology to a search engine. That could provide the financial services industry a look at how gen AI can be used to improve customer engagement. Here's what's happening around the world

HSBC funds U.K. digital identity firm

London-based security company Yoti has drawn about $16 million in debt funding from HSBC, and another $10 million in convertible debt funding from existing shareholders. Yoti, which sells digital identity technology to e-commerce companies, banks, gaming and other clients, said the infusion will enable it to achieve profitability. The company performs more than 6.5 million age and identity checks each month and has expanded monthly revenue from about $800,000 to about $16 million in the past year.

Yoti's other investors include Lloyds, which has partnered with Yoti and the U.K.'s Post Office on a digital ID network that includes more than 4 million people in the U.K. The rush to digital commerce that accompanied the pandemic has drawn banks and other investors to technology companies that can digitize identity risk and apply financial identity verification to partners to create larger networks.—John Adams

Mastercard lets Egyptian cardholders see the carbon footprint of their purchases

Mastercard and Cairo-based payment processor MDP have collaborated to launch a carbon calculator in Egypt. The calculator, which is similar to Mastercard calculators in other markets, estimates the environmental impact of purchases and offers comparisons, such as the number of trees that would absorb the carbon emissions tied to a specific payment.

"As our customers respond to increased consumer desire to make more eco-friendly choices, we are making a firm commitment to reducing our environmental footprint. Every single transaction we can make towards a greener world matters," said Ahmed Nafie, CEO at MDP, in a release.

The collaboration is part of an initiative at MDP to reach net-zero emissions by 2040. Mastercard has set a net-zero emissions goal for 2050. Mastercard, Visa, Adyen and a number of other payment companies have expanded the use of technology that measures the environmental impact of payments in recent years.—John Adams

Dutch neobank bunq adds gen AI to search

Amsterdam-based digital financial services firm bunq has added Finn, a generative AI tool that will upgrade the company's search function. The initial uses include customer service queries, enabling consumers to ask questions about their balances or spending habits, or the name of a business they recently visited. The firm says it is using internally developed gen AI to power the platform.

"Years of AI innovation, coupled with laser focus on our users, allowed us to completely transform banking as you know it. Seeing generative AI make life so much easier for our users is incredibly exciting," said Ali Nikham, founder and CEO of bunq, in a release.

Gen AI is an advanced version of AI that uses large language models to produce original content. Gen AI took financial services and other industries by storm in 2023, with firms quickly embracing the innovation for a variety of uses, including changes to work patterns.—John Adams

India signals it's loosening fintech restrictions

The Reserve Bank of India has approved payment aggregator licenses for fintechs including RazorPay, Cashfree and Open. The licenses enable the firms to offer payment processing and other financial services to small businesses and other clients. The move comes about a year after the RBI had issued a ban on new customer onboarding to dozens of fintechs, according to The Economic Times.

"The enhanced capabilities will bolster our financial automation platforms, providing SMEs with advanced tools to streamline their financial operations and thrive in the digital era," said Anish Achuthan, co-founder and CEO of Open, in a release. The RBI did not provide comment by deadline.

India is one of the world's largest payment markets and supports the UPI digital payment rail that has boosted e-commerce and real-time settlement. Yet payment firms including Visa and Mastercard have long faced regulatory challenges in India, such as requirements that payments data be stored locally.—John Adams

Worldline makes a play for restaurant payments

Bezons, France-based payment company Worldline has launched a food service suite that includes point of sale technology, data analytics and targeted sales, with a particular focus on quick service chains.

The product bundle will support digital wallets, in-app payments and contactless QR-code payments. The payment company also plans to use artificial intelligence to track and analyze information, such as consumer products and payment preferences, for use in marketing campaigns at restaurant chains.

Worldline, which is in the midst of a strategy to add more digital payment options, recently acquired a majority stake in SoftPos.eu, a Warsaw-based firm that enables smartphones to act at point of sale terminals without adding additional hardware. The technology aims to cut costs by enabling store staff to use their own devices to serve consumers.—John Adams

South Korea pushes crypto disclosure

South Korean government officials will soon have to publicly list their cryptocurrency investments at a government-operated ethics portal. A regulation that goes into effect in 2024 will cover about 6,000 elected officials and agency employees, reports Cointelegraph and several other crypto news sites, translating an announcement from South Korea's Ministry of Personnel Management.

The new disclosure rules are designed to centralize and simplify access to information on cryptocurrency investment, replacing the current system in which government officials list their investments on the websites of individual government agencies or parliamentary offices. The new rule follows an incident in May, when a group of national assembly members were found to have made large crypto trades — raising concerns about conflicts of interest.—John Adams.

Nigeria lets banks open accounts for crypto firms

Nigeria, the nation with the highest rate of cryptocurrency adoption after India, allowed lenders to deal with companies providing digital tokens, reversing a ban the central bank introduced in 2021, the BusinessDay reported.

The Central Bank of Nigeria asked lenders to open accounts for crypto firms, according to the report, which cited a circular dated Friday. In February 2021, the central bank had ordered deposit-taking financial institutions to immediately close accounts transacting in or operating cryptocurrency exchanges, saying such deals are "prohibited."

The easing of rules will be a boost for crypto exchanges, which have been seeking to expand in the nation that ranks second in blockchain data company Chainalysis Inc.'s adoption index.

Cryptocurrency transactions in Africa's most-populated nation grew 9%, Chainalysis said in September, even as prices of virtual assets such as bitcoin plunged. Nigeria's currency has weakened almost 49% this year after President Bola Tinubu eased rules in a bid to remove the spread between the official and unauthorized street rates. A depreciating currency spurred residents to seek crypto assets. —Arijit Ghosh, Bloomberg News

Ripple receives a payments license in Ireland

The central bank of Ireland has added Ripple's Irish subsidiary, Ripple Markets Ireland Limited, to its list of approved virtual asset service providers.

The license will enable Ripple to offer blockchain-powered financial services in Ireland, and is part of Ripple's compliance strategy in the European economic area when the Markets in Crypto Assets Regulation goes into effect at the end of 2024.

The regulation will create a standard set of rules for cryptocurrencies and other digital assets. Ripple plans to "passport" the license in Ireland to other countries under the MiCA regulation. Coinbase, another cryptocurrency and blockchain company, is utilizing a similar passporting strategy. Ripple and Coinbase recently received payments licenses in Singapore to support their strategies in the Asia-Pacific region. Ripple's international strategy includes work in multiple countries on central bank digital currencies and stablecoins. —John Adams