AI Meets Global Responsibility - Issue #446

Fintech companies are targeting the UN's Sustainable Development Goals (SDGs) using artificial intelligence. At the Niger SDGs Fintech AI Hackathon in Lagos, young talents focused on AI and fintech solutions to drive sustainable development. The initiative, attracting participants aged 18 to 35, emphasizes innovation in combating climate change and boosting economic growth. It's expected that achieving the SDGs could unlock $12 trillion in market opportunities and create 380 million jobs by 2030. The event also highlighted Nigeria's growing role in the global tech landscape.

At the Fintech Connect conference in London, financial institutions discussed the future of cryptocurrencies, focusing on stablecoins, tokenized bank deposits, and central bank digital currencies (CBDCs). A key topic was the use of wholesale CBDCs for cross-border transactions. The conference emphasized the need for regulatory clarity, particularly in retail sectors, with banks currently prioritizing institutional clients. Interoperability with existing financial systems and the need for more liquidity in the digital asset space were highlighted. Citibank's tokenization of the dollar for 24/7 money movement and its expansion plans underscore the evolving landscape where digital currencies and traditional banking intersect.

Spain's CaixaBank is creating a multi-disciplinary team to develop generative AI, aiming to enhance internal processes and customer experiences. This initiative will focus on areas like digital customer service, risk analytics, and automating technical documentation. The project, expected to roll out across the group by 2024, seeks to optimize operations and offer better, more efficient services, positioning CaixaBank at the forefront of AI integration in the banking sector.

Palau's pilot program for its Ripple-supported stablecoin, the Palau Stablecoin (PSC), has shown promising results. In a three-month trial, 168 volunteers used the U.S. dollar-pegged PSC for retail purchases, leveraging Ripple's XRP Ledger platform. Participants, including government employees, made transactions using QR codes or wallet addresses at local retailers. While only retailers could convert PSC into U.S. dollars, Palau's legal currency, the feedback from both users and merchants was largely positive. The stablecoin was backed by $20,000 in a Tier 1 FDIC-insured U.S. bank, marking a significant step towards potentially scaling up the PSC nationally.

In Latin America, fintech solutions are becoming increasingly pivotal for small and medium-sized enterprises (SMEs), which form the backbone of the region's economy. According to a KoreFusion report, 98% of businesses in LATAM are SMEs, totaling about 65 million companies. Fintechs, with a third focusing on SMEs, are addressing key areas like payments, loans, and financial management. Despite the critical role of SMEs in driving employment and production, they face a significant financing gap estimated at $1 trillion. Fintechs are emerging as vital players in bridging this gap, offering innovative solutions to the challenges SMEs face in accessing traditional financial services.

British fintech SumUp, competing with Jack Dorsey's Block, announced a significant funding boost of €285 million ($306.6 million), pushing its valuation over $8.6 billion. The investment, led by Sixth Street Growth, included participation from Bain Capital Tech Opportunities, Fin Capital, and Liquidity Group. This funding round, primarily equity with a minor debt component, equips SumUp with substantial resources to capitalize on upcoming opportunities in the next two years, as stated by CFO Hermione McKee.