AI and Fintech Insights - Issue #475 July 6th, 2024

Apple Inc. has secured an observer role on OpenAI's board in a significant new agreement, strengthening the bond between the two companies. Phil Schiller, head of Apple's App Store and former marketing chief, has been selected for the position, according to sources familiar with the matter. As a board observer, Schiller will not serve as a full-fledged director, these sources added, requesting anonymity due to the non-public nature of the information.

In the latest episode of this Podcast Series, Dr. Verena Ritter-Döring, Partner in Frankfurt, discusses the deployment of AI in financial services with Fritz-Ulli Pieper, Salary Partner in Düsseldorf, and Miroslav Đurić LL.M., Senior Associate in Frankfurt. They explore the main use cases of AI in this sector, the benefits it offers to financial institutions, and the key regulatory considerations involved.

Globally, governments are urgently seeking solutions to ensure accountability for both creators and users of AI applications. The European Union has swiftly enacted regulations such as the AI Act, while others lack a clear strategy. Moreover, the enforceability of AI regulations in a globalized world remains uncertain. Meanwhile, blockchain technology, introduced 15 years ago with Bitcoin, is gaining attention as a potential solution for AI accountability, possibly poised to become its definitive use case.

The chairman of Nigeria’s Economic and Financial Crimes Commission, Olanipekun Olukoyede, has identified blockchain technology and artificial intelligence (AI) as essential tools to combat illicit financial flows (IFFs) in Africa. According to local media, Olukoyede emphasized the $88.6 billion lost annually by African countries due to IFFs at the Pan-African Conference on Illicit Financial Flows and Taxation.

Nubank, the Brazilian neobank, has acquired the AI platform Hyperplane seven months after its $6 million seed funding round. This move aims to strengthen Nubank's AI capabilities, offering improved decision-making, valuable insights, and an enhanced user experience for its customers.

On July 1, a new initiative called Lab Innova was launched at Technopark Casablanca to promote the internationalization of Moroccan startups. This program is a collaboration between the Italian Trade Agency (ICE/ITA) and Moroccan institutions such as Technopark, StartGate at UM6P Ben Guerir, and the Moroccan Center for Innovation & Entrepreneurship (MCISE). It targets 24 Moroccan startups in high-growth sectors, including Energy, GreenTech, AgriTech, MedTech, ICT, Big Data, Fintech, IoT, AI, and Mobility.

European fintech executives claim that financial services are struggling to implement artificial intelligence effectively, despite evidence suggesting that AI can enhance productivity and reduce costs. Key obstacles include fears of job losses, regulatory concerns, and institutional resistance to change.

Many founders of European AI startups "just want to make some quick money" and had no exposure to the space 18 months before the launch of ChatGPT, according to a European fintech founder’s critical assessment. Christian Frahm, CEO and founder of United Fintech, which aims to acquire and scale fintechs in the capital markets space, expressed this view.