FinTech Today: Spain’s Ibercaja Bank Eyes IPO

In today’s top FinTech news, authentication gateway and data provider Plaid moved further into identity verification with the acquisition of Cognito, while Ibercaja Bank eyed becoming Spain’s first initial public offering (IPO) of 2022. Meanwhile, digital-first payments firm i2c weighed in regarding governments’ influence over buy now, pay later (BNPL) schemes, cryptocurrency and Big Tech.

Plaid Buys ID Verifier Cognito

Silicon Valley authentication gateway Plaid has acquired digital ID verification firm Cognito to advance know your customer (KYC) and anti-money laundering (AML) screenings. The move enables Plaid to layer additional services on top of its core offerings.

Plaid, which powers FinTechs like Venmo and PayPal, allows people to securely connect financial accounts to an app in seconds. With Cognito’s additional screening tools, digital financial apps can onboard customers while reducing fraud.

Simplifying the consumer journey is something Plaid is striving to achieve, from users’ initial signups and money transfers to trading stocks or cryptocurrencies. With Cognito’s identity and compliance expertise, Plaid anticipates smoother onramps to digital finance.

Ibercaja Banco on Track to be Spain’s First IPO of 2022

Ibercaja Banco could be Spain’s first initial public offering (IPO) of 2022, as well as the first bank going public since 2017. Ibercaja must go public as part of the bank’s legal mandates following a 2012 financial crisis bailout.

Spanish regulators gave Ibercaja and banks until the end of 2022 to either file for a public offering or raise funds to minimize outside stakes held.

Ibercaja indicated that it has assets totaling 58 billion euros ($65.7 billion), and shares offered would be from the estimated 88% of existing shares held by the Ibercaja Foundation.

One FinTech’s Take on the Regulatory Showdowns Looming for BNPL, Crypto and Swipe Fees

Digital-first payments and banking platform i2c weighed in on the impact of government interference as buy now, pay later (BNPL), cryptocurrency and swipe fees came into the regulatory spotlight.

The U.S. Consumer Financial Protection Bureau (CFPB) opened an inquiry into BNPL risk in December of last year, and i2c President Jim McCarthy told PYMNTS CEO Karen Webster that some think the government should intervene because consumers can’t be trusted to know what they’re signing up for.

Interchange fees are also in the crosshairs of government agencies, with trade associations challenging the 2011 Durbin amendment that requires the Federal Reserve to limit the fees banks can charge acquirers for debit card transactions.

Crypto is another area being debated by government officials worldwide, and the U.S. Federal Reserve’s white paper on a central bank digital currency (CBDC) is expected to be released in the coming days.

In conjunction with Web3, McCarthy anticipates further debate and more regulations to come on all fronts.

Lean Technologies Nets $33M in Series A Round

Saudi FinTech startup Lean Technologies raised $33 million in a Series A funding round led by Sequoia Capital India, marking Sequoia’s first investment in the Arab Gulf region.

Lean’s platform enables third-party financial services providers to initiate payments in real-time via an application programming interface (API) and access their customer’s bank data across the Middle East and North Africa.

The investment follows Saudi Arabia’s move in 2021 to launch a legal framework for open banking across the Gulf region. Over the last 10 years, open banking has been introduced to over 55 global markets, including Europe and the U.S.

How Avant Deploys Behavioral Analytics to Verify Its Customers

New account fraud is a growing threat as stolen identities show up on the dark web for as little as $8 apiece. Fraudsters use these purchased, stolen or synthetic identities to open accounts for criminal motives, including money laundering and fraudulent loans.

Paul Zhang, chief technology officer at the FinTech Avant, said that behavioral analytics can offer a strong defense against new account fraud, particularly when combined with biometrics and other security measures in a multilayered system.

Aside from fraud mitigation, behavioral analytics and other tools can also pinpoint how consumers respond in everyday circumstances, which in turn can help employees boost user experience.