Published:
May 25, 2024
Author:
Sarah Parsons Wolter
Share:
In realizing what potentially is a client’s worst nightmare, Google accidentally deleted the private Google Cloud account of an $125b Australian pension fund. While Google claims the mistake has never happened before and is very much an isolated incident, this unfortunate event does little to calm the nerves of companies who were already reluctant to move their data to the cloud for fear of leakage or erasure. In this case, the Australian pension fund’s over 500 thousand users could not access their accounts for a week, before the service was restored via a backup account.
Of all the industries who have been embarking on a long journey to migrate to the cloud, financial institutions are perhaps the most fearful of loss of data or leaking highly sensitive information. Fidelity, for example, started its cloud journey in 2016 and is still migrating.
In addition to storing data, asset managers like Fidelity also need to be able to create insights into its customer base. Fidelity Investments announced that in the first quarter of 2024, the number of 401(k) accounts with balances of $1m or more rose to a record figure, with much of it driven by stock market gains. Although millionaire retirement accounts continue to be rare (and generally old), this data points could point to account balance growth overall which would be much needed given how underfunded America’s retirement pool is. So as long as nobody accidentally hits ‘delete’ on those!
Portfolio News
Mattilda: 9 out of 10 private schools in Mexico face tuition arrears - This has an impact on infrastructure development, remodeling, teacher and administrative training, equipment purchases and the acquisition of technological resources. The Mexican company, which specializes in collection management, payment processing and financing for private schools, explained that only 70% of tuition is paid in a timely manner, while the rest is recovered little by little or lost. Read more
Carlos Alonso Torras featured on K Fund's podcast discussing fintech trends in Emerging Markets - In the latest episode of K Fund's PodKast, Carlos Alonso Torras, a Partner at FinTech Collective, discusses the evolving landscape of fintech investing in Emerging Markets, drawing cross-border similarities and differences across Latin America, Africa, and India. Read more
Backing Up Millionaires
Google accidentally deleted a $125b pension fund's account - Google made a big mistake recently. The company accidentally erased the private Google Cloud account of a $125b Australian pension fund, UniSuper. The result: more than half a million UniSuper fund members had no access to their accounts for about a week. Read more
Number of 401(k) millionaires hits new record, Fidelity says - With stocks surging, the number of retirement account millionaires jumped 15% from the prior quarter and 43% since March 2023. Average retirement account balances, meanwhile, hit their highest level since the end of 2021, rising to $125,900 for 401(k)s and $127,745 for IRAs. Read more
Industry News
Citi trader got 711 warning messages before sparking flash crash - A Citi trader working from home and unable to access their full suite of trading tools was forced to manually build a basket of stocks. That’s when things started to go wrong. The trader intended a $58m trade but entered 58m units, creating a $444b basket by mistake. Ooops. Read more
Blackstone to grant equity to most employees in future U.S. buyouts - The plan by Blackstone, whose $143b private-equity business employs more than 400,000 people via its portfolio companies, is part of a broader movement in the buyout industry to expand ownership beyond management ranks. Read more
What a real-time money movement revolution in the U.S. means for banks and SMBs - Small businesses will benefit from faster paychecks and supplier payments, easier expense reconciliation. On the other hand, the near-immediate payments processing eliminates float, meaning no more taking advantage of a few additional days of interest income on idle cash. Such factors will force small businesses to manage their cash more carefully. Read more
Nubank’s Velez channels Munger in race for long-term domination - David Velez's Nubank, launched to disrupt Brazil’s banking industry, now boasts over 100m customers and briefly surpassed Itau Unibanco's market value. Velez, a Colombia native, is also Latin America’s wealthiest tech entrepreneur with a net worth of about $11.8b. Read more
AI startups are making their home in New York. Can they turn it into an AI powerhouse? - A new class of startups is setting up shop in NYC instead of Silicon Valley, hoping to tap its concentration of businesses ready to buy AI applications. Read more
MercadoLibre kicks off talks to apply for Mexico banking license - Mexico has emerged as a key battleground for financial services startups given that less than 50% of the population has a bank account. A growing number of the fintech firms are seeking banking licenses to offer a full menu of options. Read more
CFPB targeting 'lack of competition' in credit reporting, credit scores - The CFPB is looking to improve ‘competition, choice and affordability’ in credit reporting costs and other mortgage closing costs. Mortgage lenders have told the bureau that costs for credit reports and scores have increased by as much as 400% since 2022. Read more
The package king of Miami: How a young coder dominated fake tracking ID (FTID) fraud during COVID - Matt Bergwall was a gifted coder who could have gotten a job at any tech company. He decided to go in another direction by hacking UPS accounts to manipulate tracking data, and faking returns of items like a $41,000 Rolex. Read more
JPMorgan: all new employees will receive AI training - Getting trained in artificial intelligence is now part of being hired. While new hires will get a crash course, AI is currently helping the bank in two ways: improving revenue growth and saving time. Read more
Hong Kong trials digital yuan for retail and cross-border payments - It will allow retail transactions and cross-border payments for residents within the city while integrating China’s central bank digital currency (CBDC) into its financial system. Read more
Dimon led bank CEOs to fend off tougher capital rules - Jamie Dimon and other big-bank CEOs played hardball with the Federal Reserve over proposals that the lenders hold more capital. Now, it looks like those tactics are paying off. Read more
How a decades-old technology and a paper from Meta created an AI industry standard - Vector databases were an obscure technology until Pinecone and other startups turned it into a billion-dollar market amid the AI boom. Businesses are leveraging vector databases to integrate private data with generative AI like GPT-4, enhancing data analysis and reducing AI errors. Read more
The rise of the disposable car... and insurance premiums - Modern cars are packed with electronic devices to reduce accidents, but their high repair costs often lead to insurers” totaling” vehicles. The increase in write-offs benefits auction firms but continues to drive higher insurance premiums for drivers. Read more
Goldman becomes first Wall Street bank to get Saudi HQ license - Saudi Arabia announced new regulations for state contracts in 2021, saying it wanted to limit “economic leakage”. Under the rules that came into force this year, firms must have a regional base in Saudi Arabia with at least 15 employees, including executives overseeing other countries or risk losing business with the kingdom’s vast network of government entities. Read more
Select Financings
7Analytics - Norway based flood risk startup raised €4m in Seed funding led by Scale Capital. Read more
Aeropay - Chicago based account-to-account payments company raised $20m in Series B funding led by Group 11. Read more
Agora - Israel based real estate investment management platform raised $34m in Series B funding led by Qumra Capital. Read more
Alpian - Switzerland based neobank raised $84m in Series C funding led by Fideuram. Read more
BTrust - Chile based auction platform that enables SMEs to sell invoices to end buyers raised $1.5m in Seed funding led by Invexor. Read more
Colendi - Turkey based neobank raised $65m in Series B funding led by Citi Ventures. Read more
Daffodil Health - San Francisco based health care pricing automation startup raised $5m in Seed funding led by Maverick Ventures. Read more
Ember - UK based embedded accounting startup raised £5m in Seed funding led by Valar Ventures. Read more
Farcaster - Decentralized social media protocol raised $150m in growth funding led by Paradigm. Read more
Finout - Israel based cloud cost optimization startup raised $26m in Series B funding led by Red Dot Capital. Read more
Footprint - New York based identity verification startup raised $13m in Series A funding led by QED. Read more
Kudos - California based AI-powered smart wallet raised $10m in Series A funding led by QED Investors. Read more
Merit - Saudi Arabia based SaaS company raises $12m in Series B funding led by Alistithmar Capital i-Cap. Read more
Osome - Singapore based finance automation platform for SMEs raised $17m in Series B funding led by undisclosed investors. Read more
Quantia - Poland based sales analytics platform raised $1.2m in pre-Seed funding led by Inovo VC. Read more
STRATxAI - Ireland based investing platform raised €1.5m in pre-Seed funding led by Delta Partners. Read more
Teal - New York based company building accounting infrastructure for SaaS businesses raised $8m in Seed funding. Read more
Vitesse - London based treasury and payment provider for the insurance industry raised $93m in Series C Funding led by KKR. Read more
FinTech Collective Newsletter
Curated News with Context
Delivered every Monday, the weekly newsletter, produced by our team, provides a tightly edited rundown of global fintech news, along with a bit of our original analysis.