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India Cracks Down on ‘Sketchy’ TRENDING NEWS

India Cracks Down on ‘Sketchy’

FinTech KYC Rules FinTech KYC Rules

Databricks Doubles Down on Data

to Bring AI to Fortune 500
BY PYMNTS | FEBRUARY 22, 2024     |  
US Bank Says Credit Products Win
by Rewarding Small Businesses
for Their Spend

THE BIG STORY

Payments Choice Boosts Clinical
Trial Participation and Drug
Development Outcomes

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 FEATURED NEWS
Databricks Doubles Down on Data
to Bring AI to Fortune 500

US Bank Says Credit Products Win

by Rewarding Small Businesses
for Their Spend

Uber Eats Takes Its Robot Delivery

India’s banking regulator has made some high-profile enforcement moves in recent Show on the Road
weeks. NVIDIA’s Blowout Earnings
Cement AI, Accelerated
Last month, the Reserve Bank of India (RBI) ordered Paytm Payments Bank to halt its Computing as Foundational
businesses after an audit uncovered “persistent non-compliances and continued Shifts
material supervisory concerns.” Half of Online Shoppers Demand
Easy Checkout Experiences
More recently, the RBI has directed Visa and Mastercard to suspend domestic
transactions for business payment solution providers (BPSPs). 42% of SMBs Would Pay a Fee to
Receive Instant Ad Hoc Payments
Writing about these developments Wednesday (Feb. 21), Bloomberg opinion columnist
The EU Inches Closer to the Digital
Andy Mukherjee argues that the regulator’s moves follow the growth of neo-banking Euro — Will Stablecoins and Crypto
that’s arisen from cloud computing, which has let India move vast swaths of small Take a Back Seat?
payments instantaneously.
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This has also opened the door for more fraud, with know-your-customer (KYC) rules EMAIL
becoming harder to enforce.
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“If individual KYC is this sketchy, the process of onboarding businesses isn’t ironclad, Artificial Intelligence
either,” wrote Mukherjee. “It used to be that only large retailers accepted online
Cryptocurrency
payments, as cards were too expensive for small players. But now more than 50 million
B2B
merchants accept QR code-based settlements over an ubiquitous smartphone-based
protocol known as Unified Payments Interface,” or UPI. Retail
TechREG®
To combat fraud, he recommends a three-pronged solution, the first of which is making
Digital Transformation
India’s Aadhaar ID verification more secure.
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Mukherjee also notes that most UPI transactions are free, meaning traditional lenders
have no incentive to upgrade their technology. He also argues that the National
Payments Corporation of India, which manages the UPI, is a monopoly, and says more PARTNER WITH PYMNTS
competition will help reduce fraud in the system. We’re always on the lookout for
opportunities to partner with
Last week, RBI Executive Director P. Vasudevan said the regulator wants to take a innovators and disruptors.
“hands-off” approach to its FinTech oversight, while still expecting these companies to
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stick to the rules of customer verification and data protection.

There are “no harsher measures coming on FinTech,” Vasudevan told Bloomberg
News.

This month also saw reports that Paytm, which owns Paytm Payments Bank, was
under investigation by India’s financial crime-fighting agency for potential violations of
foreign exchange rules.

The investigation is aimed at determining whether platforms operated by One97

Communications, also known as Paytm, took part in any unlawful activities related to
foreign exchange transfers, Reuters reported , citing unnamed sources.
A spokesperson for Paytm has denied any violations of FEMA, calling the accusations
“unfounded and factually incorrect.”

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Databricks Doubles Down on

Data to Bring AI to Fortune 500
BY PYMNTS | FEBRUARY 22, 2024     |  
For all its technological complexity, artificial intelligence (AI) rests on one very
simple foundation: data.

And it’s here that Databricks has put a stake in the ground, claiming 50% of the
Fortune 500 as customers since its founding in 2013. As global head of financial
services Junta Nakai told PYMNTS, educating those clients — and prospects — is
top priority.

“Especially in financial services, they want to use the most important asset that
they have today more effectively, and that asset is data,” Nakai said. “And then to do
so, you need to go up this maturity curve. The maturity curve breaks down to
something simple, which is you must modernize your tech stack. You need to
democratize access to data right throughout your company, and then you must
transform your company. That’s what we do with our technology. And simply put, it
stores all your data in a single place, and do all the things that you do with your data
come from that.”

Sounds simple. But Databricks takes its mission seriously. In fact, right on its
homepage is a tutorial, “Migrating From A Data Warehouse to A Data Lakehouse
For Dummies.” One of its taglines summarizes its go-to-market approach:
“Databricks brings AI to your data to help you bring AI to the world.” It does that by
giving enterprises the ability to create their own generative AI models, which can be
deployed and monitored at scale.

Read more: Why Every Business Now Wants a Data Lakehouse

A good example of how it works can be seen in Databricks’ work with Block. The
parent company of Square and Cash App uses machine learning to detect and
defend against fraud and enhances the user experience with personalized
recommendations, which requires a deep understanding of customer needs and
preferences.

It’s also important in the company’s drive to increase financial inclusion. Block
works with Databricks to consolidate and streamline its data, AI and analytics
workloads. According to Block executives, the move positions it for what it calls
“the forthcoming automation-driven innovation shift” in financial services.

CEO-Level Priority
That shift, and the ability to enhance the consumer financial services experience
using AI, is critical for the Databricks value proposition. Nakai says it will lead to the
ability to hyper personalize offers and messaging. It also creates the ability to
inform that personalization by using AI to scour unstructured data and text to
understand the customer at a different level.
The potential ramifications of getting this information wrong can be substantial.
Nakai said he recently became aware of an automotive dealership, for example,
that set out to integrate AI into its marketing without this due diligence. It ended up
creating ads that sent consumers to a rival dealership.

Nakai’s background is in securities sales and trading, which he did for 14 years at
Goldman Sachs. He’s familiar with the frustrations of manual work, slow trading
programs and even slower Excel files. He realized early on that the future of his
business was going to be at least partially dictated by algorithms, and now he sees
that future in action.

“I think one of the reasons we’ve been so successful is because AI is a CEO-level

priority at every single company in the world,” Nakai said.

“AI is going to be critically important, and we think cloud is the future. All the things
that you need to futureproof your architecture is there, but it also is sort of your eye
on the prize for AI in the future. What we provide is the opportunity to modernize
your legacy system so you could set yourself up for those kinds of things in the
future.”

Of course, legacy systems and financial services still belong in the same sentence.
Nakai believes advanced AI has not yet been deployed at most financial institutions
because of that legacy infrastructure and the inherent risk-averse nature of the
business.

But that’s changing. He sees major banks flowing more of their innovation budgets
toward AI and that executives know that if they want to compete with the FinTechs
nipping at their heels that AI will be an important competitive factor.

“The secret sauce that the winning banks are going to embrace is capitalizing on
their capital, scale data and people,” he said. “You need to do that extremely well.”
“That’s how the future of banking is going to be created. Because the future of
finance will be three things. It’s going to be instant. It’s going to be inclusive. And I
think it’s going to be invisible, meaning like using Uber. You don’t even think about
paying because it’s part of the experience.”

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