Sponsored by

Hi, fintech fam! 💜

I'm thrilled to be back covering fintech news yet again - and there was no lack of news to report in this already thriving 2024!

But before diving in, I want to express my gratitude to my Fintech Feminists who joined our premium membership! You’ll be hearing directly from me about the next steps soon! 

As a reminder, here's a quick rundown of member benefits:

Executive Influence: Every Sunday and Friday, I'll drop into your inbox with the “On Performance” and “On Community” columns, sharing insights from my interviews with top business leaders. I've distilled their lessons into actionable advice for women in fintech, from founders to business leaders. 

Network Effect: The heart of Fintech Is Femme is our community. You can connect with other amazing humans of fintech and expand your network with an invite to our member group chat. Plus, warm introductions to other members and 1:1 chats curated by me. 

Events: Private get-togethers, plus first access to tickets for my events IRL and virtual, including my Fintech Is Femme Storytelling Event, kicking off New York Fintech Week on April 8th (more details to come!)

Thrilled you're on this journey with me. Let's get into the news!

This AI Startup Investment is Winning

RAD AI has developed technology that transforms the $633B MarTech industry. Its award-winning AI tells brands who their customer is and how to best create content for them. 

Investors are taking notice, here’s why: 

1) $27M raised from 6,000+ investors, including VCs, execs at Google and Amazon. Backed by Adobe Fund for Design.

2) Dubbed “essential AI” for brands looking to attract new audiences and boost ROI. 

3) 3X revenue growth, clients include Hasbro, Sweetgreen, MGM and more.

83% Subscribed, Invest Before Feb. 16th, Closing Soon.

Disclosure: This is a paid advertisement for RAD AI’s Regulation CF offering. Please read the offering circular at invest.radintel.ai 

#TRENDING

What’s Up In Fintech

Every Thursday, I share news stories and trending pieces I follow. Think of it as a way to quickly find the most noteworthy news in the fintech world.

#1 SEC’s Green Light for Bitcoin ETFs Signals a Turning Point

In a move that promises to thaw the crypto winter, the U.S. Securities and Exchange Commission (SEC) gave its nod to 11 spot bitcoin exchange-traded funds (ETFs) late Wednesday. 

The SEC's approval opens the floodgates for a more accessible crypto market.

A Bitcoin ETF is an exchange-traded fund that can directly hold Bitcoin among other investable securities. (I've spent years reporting on when this might finally happen. Here's a throwback of young reporter Nicole to prove it).

This decision means mainstream investors can now buy and sell bitcoin as easily as stocks and mutual funds through regular brokerage accounts, marking a pivotal moment for the crypto market while fostering increased participation and market maturity.

Bitcoin, the rollercoaster of the financial world over the last few years, has experienced significant price fluctuations, hitting a high of nearly $69,000 in November 2021, plummeting to below $17,000 in the crypto winter of 2022, and trading just below $46,000 after the SEC's green light. 

The complete list of companies that got SEC approval to launch bitcoin ETFs are Ark Invest together with 21 Shares; Bitwise, BlackRock, Fidelity, Franklin Templeton, Grayscale, Hashdex, Invesco, WisdomTree, Valkyrie, and VanEck.

Why It Matters

The crypto winter wasn't just a financial chill; it tarnished the sector's reputation with scandal after scandal. 

Despite its initial goal of fostering financial inclusion, the crypto space has been dominated by the same voices, deviating from its original intent.

These scandals were devastating, especially for the crypto experts and advocates I've interviewed, who have spent countless hours working on and advocating for blockchain solutions to open financial markets to marginalized communities. 

An example is Anna Stone, Executive Director of GoodDollar.

Through GoodDollar, Stone has overseen one of the world's most widely used crypto projects, creating an open system to deliver a basic universal crypto income.

According to her LinkedIn, GoodDollar has over 100,000 weekly active users and 650,000 members worldwide. 

The SEC's move brings hope for a revitalized blockchain momentum to see more solutions like GoodDollar, challenging the sector to embrace diversity and reclaim its mission of creating a fair financial ecosystem. 

The approval of Bitcoin ETFs may relieve the challenges faced by the crypto industry.

However, regulatory concerns persist, and a bipartisan approach is necessary to balance innovation with safeguarding interests.

The rise of Bitcoin and the crypto industry will positively impact fintech, but it is essential to maintain sight of Satoshi Nakamoto's original vision of financial inclusion, freedom, and empowerment.

The SEC's approval is a step toward realizing a vision where everyone has equal access to financial services. 

Hello, Crypto Spring!

Resources to get you excited about crypto again: 

• I interviewed Cathie Wood, one of the most prolific women in the Bitcoin arena. You can read about her and how she does business here.

• For my financial advisor friends (hi!) who are wondering how to navigate client questions about Bitcoin ETFs, Tyrone Ross provided the insights you need, which you can watch here. 

#2 Starbucks Brews Controversy: Unpacking the Alleged $900M Rigging Scandal

In a twist that adds a bitter aftertaste to your morning brew, Starbucks finds itself at the center of controversy.

The Washington Consumer Protection Coalition (WCPC) accuses the coffee giant of manipulating customers through its gift card and app payment systems, alleging an exploitation that has raked in nearly $900 million over the last five years. And Starbucks has been reporting that $900 million as corporate revenue.

The alleged rigging involves restrictions on reloading amounts, tipping, and splitting payments, preventing users from reaching a zero-dollar balance.

For example, the complaint argues that users are pushed into reloading excessive amounts due to a $10 minimum requirement.

According to the WCPC, Starbucks cleverly designed these features to ensnare customers in a cycle where spending becomes an involuntary subscription.

These can be called "dark patterns," or actions a company may build into its platforms that trick or manipulate users into making choices they would not otherwise have made. 

The complaint contends that the company's practices, especially on its app, create an uneven playing field, trapping customers in a loop that benefits Starbucks while harming consumers.

Starbucks, however, rebuffs these claims, asserting that customers can pay the remaining balance with cash.

Why It Matters:

Beyond the coffee cup, this controversy spotlights the growing influence of embedded finance in today's consumer and fintech landscape. 

​​Embedded finance enables brands and merchants to easily and inexpensively integrate financial services into their offerings and customer experiences.

Instead of developing these services in-house, companies can use APIs as "building blocks" to increase customer lifetime value and meet a wide range of needs in one place.

And it has exploded in fintech over the years from lending, insurance, investing, payments, banking, and the introduction of Buy Now Pay Later.

A report by Ernst & Young projects that the global market size for embedded finance will reach $606 billion by 2025. And we might even see one of the largest enablers of embedded finance, Stripe, go public this year. 

As fintech companies increasingly embed financial services into various platforms, Starbucks' alleged manipulation stains the concept.

It raises questions about the ethical implications of such practices, reminding consumers that even their daily coffee run may involve subtle financial intricacies.

On top of that, for fintech companies – whether an embedded finance provider or enabler – the case could have wider implications for the industry, prompting a closer look by regulators at how companies embed financial services into their offerings.

As new financial services integrate into everyday experiences, the balance between personalization, convenience, and consumer protection becomes paramount.

#3 New York Times Sues OpenAI

In the latest episode of Silicon Valley drama, OpenAI finds itself in the legal crosshairs of none other than The New York Times. 

The venerable news giant threw down the gauntlet in December, accusing OpenAI and its parent company, Microsoft, of taking an unwarranted "free ride" on its journalism to fuel AI products without doling out due "permission or payment."

This legal skirmish is just one in a growing list of copyright-related complaints aimed at OpenAI, including grievances from heavyweight authors like George R.R. Martin. 

However, the Times' legal cannonball is anticipated to carry the most weight, potentially paving the way for a flood of similar claims from content creators seeking their due.

Why It Matters

Generative AI has been the talk of the town everywhere – including our fintech space.

Opportunities primarily revolve around leveraging AI to clean up data biases in underwriting processes while helping financial institutions create vastly deeper relationships with their customers by pinpointing opportunities to help users when needed – like reallocating capital or after a significant life event. 

The outcome of these copyright lawsuits could shape the future landscape of AI training and usage, determining the ethical boundaries that these algorithms need.

This legal battle is significant beyond courtroom theatrics because it addresses a fundamental aspect of generative AI – the content it's fed.

As the saying goes, "garbage in, garbage out." 

As I shared in Tuesday’s column, we've seen instances where AI algorithmic biases have excluded our most vulnerable communities from the financial system. 

We have to leverage AI to bring more people into the financial system, not less.

To do so, we must decide who should be talking AI, and who should be listening.

_{HUMANS OF FINTECH}

Crack the Growth Code - How to Grow a Business Ethically

How do you crack business growth and grow a business ethically while becoming an advocate for under-represented groups? Lara Hodgson has the secret sauce that sets her apart as an entrepreneur and activist.

Lara and her Co-Founder, Stacey Abrams, are behind Now, an invoice payment solution that redefines when businesses get paid.

In this throwback episode, Lara and I talk about how she and Stacey started Now to solve their own problem, why it takes intention to advocate for people whose voices are often left out, and the story of their entrepreneurial journey.

You’ll also hear why Lara and Stacey’s differences are their superpowers, why you don’t need a finance background to be successful in fintech, and more about their new book Level Up, a guide for entrepreneurs.

Watch our conversation here.

_FINTUNES

🎵 Reneé Rapp, Megan Thee Stallion - Not My Fault

An unexpected combination! This groovy single encompasses everything I could have ever hoped for, and to top it off, it serves as the perfect soundtrack for the new Mean Girls movie! It's truly mind-blowing to realize that two decades have passed since this iconic film left an indelible mark on popular culture. I’m so excited to see the musical reboot!

That’s all for now! Stay safe, everyone. Hug your loved ones. See you Tuesday!

Love,

Nicole

📰 Newsletter | 🔗 LinkedIn | 🤝 Partnerships | 🎤 Speaking |📱 @fintechisfemme