Hi, fintech fam! 💜

Can you believe that it's already mid-January? Around this time, most people give up on their New Year resolutions. 

For me, I'm determined to keep going and stay consistent. After all, consistency beats motivation when achieving long-term goals. 

One of my goals this year is to master the art of manifestation and cultivate an abundance mindset. To make this happen, I've been saying my affirmations every day.

My extensive research (thanks, YouTube) on the topic taught me more about the science behind rewiring our mindsets. (You can check out the bottom of this newsletter for more information on that). 

I'm excited to see if I can consistently tell myself I'm a badass! 

Anyway, let's dive into some fintech news!

#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 important news in the fintech world.

#1 Mastercard's Latest Move: AI for SMB Owners

Mastercard is stepping up its AI game.

The company announced it's building Mastercard Small Business AI, the name for a tool designed to deliver personalized advice for small business owners and entrepreneurs. 

While using generative AI to produce custom advice is hardly exciting, thanks to OpenAI's ChatGPT, what sets Mastercard's tool apart is not just the deployment of the technology but the inclusive data it relies on.

An analysis of data sources that feed ChatGPT — including popular content and media platforms — revealed that less than 15% of Wikipedia contributors were women or girls, only 34% of Twitter users were women, and 67% of Redditors were men. 

These sources are where large language models (LLMs) get their training data (aka the data you use to train a machine learning algorithm or model).

Plus, Timnit Gebru's research proves that white supremacist and misogynistic views are prevalent in the training data.

So, unlike ChatGPT, Mastercard is partnering with Create Labs to ensure diversity in its generative AI data sources.

Mastercard is pulling this off by forming a global media coalition that will contribute to the AI training data by licensing their business content—such as articles, podcasts, and interviews.

The media coalition includes partnerships with:

• Blavity Media Group, a digital media company with a mission to economically and creatively support Black millennials

• Group Black, a Black-owned media company dedicated to connecting brands with diverse audiences

• TelevisaUnivision is the world's leading Spanish-language media company, reaching over 53 million U.S. consumers across linear and digital platforms.

• Newsweek is the modern global digital news organization built around the iconic 90-year-old American magazine.

Why It Matters

Let's get one thing straight – small businesses are the unsung heroes of the global economy.

According to the Small Business Administration, these enterprises generate 1.5 million jobs annually, constituting 64% of new jobs in America.

They also contribute a significant 44% to the U.S. economic activity, underlining their crucial role in driving economic growth.

However, small businesses are severely underserved.

Eight out of ten small businesses operate without employees, 88% acknowledge the immense value of having a mentor, and resource-strapped entrepreneurs feel the sting of isolation, especially in the early stages of their business. 

Mastercard's tool will aim to address these pain points with "always on advice," according to the announcement. 

Scheduled for a U.S. pilot later this year, Mastercard's collective effort reflects a commitment to inclusivity, reducing exclusion felt by minority founders and empowering them with resources to succeed.

Plus, the AI landscape has long been marred by concerns about societal discrimination and biases.

Visionary researchers like Timnit Gebru, Rumman Chowdhury, Safiya Noble, Seeta Peña Gangadharan, and Joy Buolamwini have warned about AI's dangers magnifying existing inequalities.

Mastercard's commitment to inclusive training data is a breath of fresh air. 

This opens the door for other financial services and fintech companies to think differently about leveraging AI and, more importantly, where the training data comes from. 

#2 X's Launch Into P2P Payments

In the latest twist of X's transformation from Twitter under Elon Musk's influence, the company announced it will launch peer-to-peer (P2P) payments in 2024.

This move towards financial services has been in the works even before Musk's acquisition of the platform, and the company's blog post announcing the 2024 changes suggests a strategic tie-in with other X products, including creator revenue sharing and online shopping.

However, before we delve into predicting any outcome of X's P2P venture, let's take a moment to reflect on Musk's impact on X over the past year. 

Since his takeover, the platform witnessed a global app download decline of 38%, with a staggering 57% drop in the U.S.

Musk's controversial leadership, marked by toxic content and advertiser backlash, raises serious questions about the platform's viability.

User churn, or users who stop using the app, increased more than 30% year-over-year. In September, Musk admitted that the company's U.S. ad business was down 60%.

The New York Times reported that X could lose as much as $75 million in advertising revenue as dozens of significant brands pause their marketing campaigns after their owner endorsed an antisemitic conspiracy theory.

Look at the past year, and it's comical to think that Musk will pull off any of X's financial services initiatives well after he fundamentally flopped X's core business model. 

Why It Matters

I've shared how social media and financial services are two of the least trusted industries, so we must be super-mindful when combining the two, especially given Musk's track record. 

And the P2P payment space is already booming without X. Insider Intelligence forecasts 170.4 million U.S. consumers will use mobile P2P payments in 2024, or 62.6% of U.S. mobile phone users.

And the space is already dominated by Venmo, PayPal, Zelle, and Cash App. 

Payment trends point toward feature innovation in digital wallets, making consumers even more attached to their preferred wallets. For example, new features like PayPal's digital smart receipts and package tracking create more use cases for the app, boosting user loyalty.

Musk might find some help from his PayPal Mafia, but new features rolling out with the already-established players will make it much harder to convince consumers to switch to a new P2P platform like X.

Plus, better opportunities to leverage social networking platforms for financial services are worth exploring. 

Looking internationally, we could learn something from companies like India P2P, led by CEO Neha Juneja, which addresses the credit gap for women entrepreneurs. 

The company offers diversified investment products, empowering investors to support credit-worthy women borrowers.

In a world focused on Musk, we should shift our attention to leaders like Neha, who are creating meaningful advancements in the industry. 

Musk may have made headlines, but individuals like Neha offer lessons for real progress. 

#3 Nasdaq Unmasks the Trillion-Dollar Financial Crime Problem

Nasdaq has pulled back the curtain on the shadowy underworld of financial malfeasance with its Global Financial Crime Report, shedding light on the chilling human impact and stories of survival in the face of financial crimes.

The report exposes the staggering scale of illicit funds that cost the world over $3.1 trillion in 2023 alone.

Losses include:

• $800 billion in drug trafficking

• $350 billion in human trafficking

• $11 billion in terrorist financing

• $500 billion in fraud and bank schemes

Financial institutions, facing inefficient processes, changing technology, and increasing operational costs, have been at the forefront of combating financial crime.

I have been reporting on financial crime for my whole career, and it is important for fintech companies to be proactive rather than reactive. Easier said than done.

But we are in the age of generative AI, which the Nasdaq report does list as a tool to improve efficiency and better detect threats.

Why It Matters

Financial institutions find themselves on the front lines of a multi-trillion-dollar epidemic as they grapple with inefficiencies, evolving technology, and soaring operational costs.

Nasdaq's report is a snapshot of financial malfeasance and a call to action. It urges a united front against these challenges, emphasizing the role of technology, collaboration, and innovation in safeguarding our financial system and protecting the vulnerable from the pervasive threat of financial crime.

Only through a collective and vigilant effort can we dismantle the intricate web of financial crime that threatens the most vulnerable members of society and jeopardizes the integrity of our economic system.

Also, diving deep into the report, you'll read about the resilience of survivors who, despite emotional tolls, share their stories to deepen our understanding of these crimes and protect others from falling victim.

As financial institutions invest more in combating financial crime, Nasdaq's initiative offers data-driven insights to industry professionals and calls for a united front against this pervasive menace.

Check out the full report to stay in the know here.

_{MARK YOUR CALENDARS}

Join us every Thursday to stay updated on the top fintech events! These events are a great way to network, learn, and connect with our fintech community. Let's fill our calendars with these awesome events - I would love to see you there! If you have an event to share, please inform me!

MONDAY 1/22

[VIRTUAL] Establishing An Abundance Mindset: Kick off your week by understanding the nuances around rewiring our brains to make our ideal versions of success a reality. I love starting the week with a little homework.

Check it out here.

_{TUESDAY 1/23}

[SEATTLE] What’s In Store for 2024: This one is for the crypto bulls. Hear from leading experts in digital finance, including renowned blockchain developers, influential crypto investors, and pioneering NFT artists. They will provide insights into the latest trends, technological advancements, and future prospects of the digital currency world.

_{WEDNESDAY 1/31}

[NYC] Building the Next Era of the Internet with a16z: Curious about the buzz surrounding blockchain technology and its role in shaping the digital landscape? In this live taping of the Next Big Idea podcast, venture capitalist Chris Dixon of Andreessen Horowitz will share his bold vision for Web3 — and offer actionable insights to help creators, entrepreneurs, and executives thrive in the internet’s next era.

_{HUMANS OF FINTECH}

Banks, Fintech, and Representation (a Conversation with Cristina Ciaravalli)

In this candid conversation, I sit down with the fabulous Cristina Ciaravalli about her storied career in the fintech industry, from her early beginnings working for Goldman Sachs to meeting and falling in love with tech startup Plaid.

And generally talk about why we love fintech. Watch our conversation here.

_FINTUNES

🎵 Kali Uchis - Dame Beso // Muévete

Kali Uchis is doing amazing in the music industry. She recently released a new song that is absolutely delightful. It's the perfect way to start the weekend.

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

Love,

Nicole

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