Innovations in AI, APIs, and digital tools helped banks improve operations, customer engagement, and financial inclusion in the last year. Global Finance announces the 2025 Innovators from North America.
Regional Winners
Most Innovative Bank in North America | BANK OF AMERICA
Bank of America’s (BofA’s) dedication to improving customer experience is evident in the 12% increase in digital interactions by clients last year, reaching a recordbreaking 26 billion interactions. Corporate clients made over $1 trillion in payment approvals on the bank’s CashPro app in 2024—a 25% increase year on year.
Notable CashPro Data Intelligence innovations include CashPro Search with Investigations—the first comprehensive search-and-investigation tool across transaction types. Another innovation is CashPro Capital Markets Insights, which is the first integrated capital markets experience available in a treasury mobile app, offering access to investment-grade secondary bond pricing alongside treasury information.
The bank also launched Virtual Payables Direct, an innovative solution that combines BofA’s card-issuance, merchant-acquisition, and payment capabilities. For the first time, buyers can benefit from the working capital advantages of a card transaction while paying suppliers who prefer direct bank transfers: Payments begin as card transactions but are delivered to suppliers as bank transfers, ensuring that suppliers get paid quickly while buyers benefit from extended payment terms.
Most Innovative Financial Technology Company in North America | BATTERY FINANCE
In November 2024, Battery Finance executed a pioneering financial transaction by establishing a bitcoin reserve with shared appreciation benefits for both borrower and lender. This innovative approach was integrated into the collateral package for the refinancing of Project Bank Street Court, a seasoned multifamily mixed-use asset located in Center City, Philadelphia.
This groundbreaking transaction effectively enabled borrowers to leverage Bitcoin as collateral for loans. The structure of the deal was unique in its dual-collateralized nature—by combining Bitcoin with traditionally financeable assets, Battery Finance offered borrowers uncorrelated downside protection and enhanced the overall collateral package. This novel approach to collateralization mitigated risks associated with the volatility of Bitcoin while still allowing borrowers to capitalize on its potential for appreciation.
Innovations In Finance Globally From North America
Lumi Assistant | BMO
BMO uses an employee-assisting Gen AI solution, incorporating Amazon Web Services and Anthropic’s large language model, to read, interpret, and summarize complex documents including policies, procedures, operating manuals, and regulatory documents in a user-friendly format. Launched in March to support 200 employees, Lumi Assistant was expanded in April to support some 8,500 Canadian front-line bank employees. By the end of this year, BMO plans to make the solution available to over 14,600 Canadian personal and business banking employees.
Virtual Account Based Solutions (VABS) | BNY
In January, BNY launched VABS, a cash management solution that promises to provide clients with improved control and access to cash administration activities and reporting capabilities. VABS is one of the first cash management systems to offer instant access to robust, real-time transaction and balance reporting at the individual virtual account level and ACH allocations at the virtual account level. Virtual accounts can be linked to physical accounts within BNY and payments are reflected in real time.
Tokenization of the 1708 Stradivarius Violin, “Empress Caterina” | GALAXY DIGITAL
Galaxy Digital’s groundbreaking tokenization of the 1708 Stradivarius violin “Empress Caterina” last year established a new paradigm for high-value collectibles in the digital financial landscape. By enabling on-chain ownership tracking, the NFT ensures an immutable record while unlocking the potential for decentralized finance backed by real-world assets.
Asset Tokenization Studio| HEDERA
Hedera’s Asset Tokenization Studio, launched last September, is an open-source toolkit that streamlines the tokenization of bonds and equities. By integrating ownership records, compliance features, document management, and notifications directly on-ledger, it eliminates the need for off-chain data management, thereby reducing operational risk. The end-to-end solution improves upon the ERC-1400 standard, enabling full lifecycle management of tokenized assets.
SAF uses AI to enhance financial analysis and risk management via two platforms: Fintech V1 and Fintech V2. V1 generates reports for banks and third parties, helping to calculate risk-weighted assets. V2 allows for continuous monitoring and control, facilitating on-balance-sheet netting. Basel III regulations have shifted focus from the internal ratings-based approach to standardized methods for recognizing credit risk mitigation, a shift supported by SAF’s platforms.
Zenus Embedded Banking| ZENUS BANK
Last November, the Puerto Rico-based digital bank launched a first-of-its-kind, fully embedded banking platform. The API-driven solution enables other financial institutions around the world to set up dedicated US dollar accounts, process international payments, and offer cross-border Visa card issuance.
Banks accelerated digital transformation by adopting customer-focused platforms, AI-driven services, and advanced data analytics. Global Finances announces the 2025 Innovators from Western Europe.
Regional Winners
Most Innovative Bank in Western Europe | SOCIETE GENERALE
Societe Generale’s Global Transaction and Payment Services division has launched several new innovations to reduce their corporate clients’ workload. These include IKAR, a Gen AI chatbot for cash management product-documentation inquiries; and the Digitrade Tool, which uses advanced data analytics, including algorithms and pattern recognition, to personalize the document-checking process. The Digitrade Tool identifies and extracts key information from documents, adapting to the specific requirements of different transactions. By eliminating the need for paper checks and offering digital tools with multiple features, the tool provides users with a more convenient and tailored experience, aligning with their preferences for efficiency and accuracy.
Additionally, the bank’s X-Border API enables other banks to automatically send payment instructions to Societe Generale in 40 different currencies from a single account, benefiting from a guaranteed rate for 20 minutes after obtaining the quotation.
Most Innovative Financial Technology Company in Western Europe | REDCOMPASS LABS
AnalystAccelerator.ai is the world’s first multiagent AI solution engineered specifically to accelerate payments transformation. Developed by RedCompass Labs and launched in November 2024, this innovative tool leverages the extensive knowledge and experience gained from over 300 payment projects undertaken for leading global banks. It also utilizes the most comprehensive library of global payments documentation available.
Using AnalystAccelerator.ai, a business analyst can reduce manual work on a typical payment modernization project by up to 68%. Regulatory and project documentation updates that used to take weeks can be completed in under a day, saving banks millions of dollars and months of work. This leads to improved project outcomes and enhanced compliance with regulatory requirements.
In April this year, RedCompass Labs unveiled AnalystAccelerator.ai v2.5, an enhanced version fine-tuned on the largest collection of payments rulebooks in the world and outperforming leading general AI models. It delivers 13% better performance on complex payment-related tasks than GPT-4o and achieves a perplexity score 10 times lower than open-source AI models.
Innovations In Finance Globally From Western Europe
ADA (Analytics + Data + AI) Platform | BBVA
BBVA ADA, the first global data platform to fully integrate all countries in which the BBVA group has a presence, launched last November in Europe and Uruguay. The platform streamlines the end-to-end analytics process, utilizing 100% of the bank’s data and Amazon Web Services’ advanced managed services to optimize data processing, machine learning, and analytics. The combination improves the strategic capabilities and decision-making expertise of data scientists, analysts, and reporting teams throughout the organization.
New Signature for Operations in CaixaBank Group Applications | CAIXABANK
By consolidating the signing process on a single platform, CaixaBank has effectively eliminated the need for its customers to navigate multiple applications or interfaces to complete their banking tasks. The streamlined approach not only saves time but reduces the potential for error and enhances the overall user experience. The new authorization method incorporates advanced security measures to safeguard customers’ sensitive information and financial assets, ensuring they can conduct their banking activities knowing their transactions are protected by robust security protocols.
Mind Money Weather Model | MIND MONEY (FORMERLY ZERICH)
Mind Money Weather is the first quantitative model to connect operational weather forecasts and commodity prices. Typically, factoring weather data into trading strategies involves detecting significant patterns and combining these with meteorologists’ informal impact assessments, considering the economic context (demand, supply, stocks) but without a clear mathematical model. Instead of focusing on forecasting, Mind Money Weather centers on the formal, quantitative assessment of how weather affects commodity pricing.
Financial Services Company Labs (Working With External Startups and Scaleups)
Many FIs host labs nurturing outside startups. These labs operate around the world and focus on everything from deploying Gen AI to streamlining regulatory and legal processes to deploying stablecoins to speed international transactions.
Based in Morocco, Attijariwafa Bank has significant operations in 15 countries in northern and western Africa, along with branches in Europe and Asia. Its innovation department, Wenov, was founded in 2020. Wenov strives to bring innovation to the financial sector. Wenov’s WeLab experiments with emerging technologies. Since its inception, the lab has worked with more than 100 startups, helping them integrate their products into banking use cases. Thus far, more than 130 proofs of concept (PoCs) have been developed in the lab. In 2024, Wenov purchased more than $750,000 of these technologies. Startups nurtured work in the fields of AI, blockchain, cybersecurity, and open banking and payments.
In 2025, Wenov is debuting an innovation program geared toward helping Attijariwafa’s African subsidiaries facilitate collaboration with startups on that continent. A dedicated incubator is planned for this program, along with a physical space to test prototype bank solutions. The coworking space will also host debates, workshops, and pitch days.
Among the innovations to arise from the lab is the Nucleon Endpoint Detection and Response platform. This platform automates the search for, detection, and remediation of previously unknown cyber threats. Additional developments include a customer-service chatbot and AI-powered analyses of customer-satisfaction surveys.
Hosted by DBS Bank, DBS Asia X (DAX) is one of Singapore’s largest innovation centers. DBS employees, startups, and the broader fintech community come together to innovate in DAX’s 16,000-square-foot co-working space, The lab has three aims: to engage with the startup community, to develop and foster a culture of innovation within the bank, and to serve as a customerexperience hub. Currently, lab activities focus on the adoption of cutting-edge technologies in fields such as the metaverse, mixed reality, decentralized finance, and AI. Areas of concentration are determined in part by the lab’s “innovation radar,” a proprietary trend-indexing framework that systematically searches for potentially game-changing innovations. In 2024, innovation radar identified more than 60 trends relevant to banking.
The interior of DAX’s 16,000-square-foot co-working space.
Working with startups, DAX focuses on exploring disruptive technologies that impact banking. These include fintech, digital banking, and sustainable-finance technologies. The lab also strives to uncover new opportunities that enhance both customer and employee experiences. It further works to develop products that actively contribute to the wider Singaporean and global innovation ecosystems.
DAX fosters ties among the tech community. In 2004, it hosted nearly 15,000 visitors across four hackathons and more than 100 community events. Its DAX[AI]ON event last year brought together industry leaders, innovators, and experts to explore the transformative potential of Gen AI in the financial sector. Attending were 18 startups, 31 FIs, and representatives of government regulatory bodies, technology-solutions providers, and consulting and investment firms.
In Europe, Alior iLab is a startup accelerator for companies in the finance and insurance sectors that have already developed a minimum viable product. The lab, hosted by Poland’s Alior Bank, consists of five arms: fintech partnerships to accelerate solutions for the bank, user-experience and product research, user-experience design, open-banking development, and digital-process development. The latter category focuses on developing and implementing AI solutions, particularly in the field of customer identification. The lab has thus far worked with more than 60 startups and offers mentoring, access to customers and partners, and the opportunity for startups to test their products in a banking environment. Working with the Envirly ESG-reporting software company, the lab has developed a carbon calculator to help business customers measure and reduce their carbon footprints.
As Agata Rybicka, Alior Eco Projects manager, notes, “The European Union has implemented stringent regulations requiring companies to monitor, report, and verify their greenhousegas emissions, creating a pressing need for reliable tools that can help companies accurately measure and manage their emissions. At Alior Bank, we are deeply committed to promoting sustainable development and supporting our clients in their ESG initiatives. By partnering with Envirly, we aim to provide our business clients with an innovative solution that not only helps them comply with EU regulations but also aligns with their sustainability goals.”
Rybicka notes that the carbon calculator helps clients measure three essential components of the EU’s Corporate Sustainability Reporting Directive: direct emissions (greenhouse-gas emissions from sources owned or controlled by the company), indirect emissions (from electricity, steam, heat, or cooling purchased by the company), and “other indirect emissions” (those that occur in the course of doing business, including emissions from purchased goods and services, waste disposal, and business travel).
OTP Bank Innovation Lab was founded by Hungary’s OTP Group in 2017 to futureproof the bank’s technological and business processes, thereby helping the bank maintain its ability to compete. The lab has focused heavily on AI and automation. Lab innovations helped the bank develop and deploy software “robots,” enabling OTP to engage in fast, flexible, customer-centric processes. More than 50 processes have thus far been automated.
More recently, the lab launched its “beyondbanking” initiative, an effort to identify nonfinancial markets that OTP Group could penetrate. To enter these nonbanking industries, the beyond-banking arm of the OTP lab creates new subsidiaries, acquires and integrates existing companies, and works with nonbanking partners. The beyond-banking ecosystem now consists of travel services, online real estate platforms, a health care marketplace, and other businesses. Of particular note is Fizz.hu, a curated online marketplace offering built-in financing options.
In Istanbul, the TEB Faktoring Digital Transformation Program was founded in 2022 as part of TEB Faktoring’s commitment to innovation. It operates as an internal innovation hub within TEB Faktoring, which is a subsidiary of Turkish Economy Bank (TEB) and its partner BNP Paribas. The program focuses on financial technologies, process automation, customer-experience enhancement, and operational efficiency within the factoring industry. While the program is an internal effort, TEB does collaborate with fintechs, startups, and other technology partners for specific programs. These startups benefit from aid in refining their business models and strategies. They also receive access to senior TEB executives, regulatory education, and insight into best practices, to help make products both compliant and commercially viable.
The program prides itself on an initiative that integrates AI-powered analytics into internal credit scoring. That capability has automated 80% of decision-making processes, significantly improving operational efficiency. The initiative has also enhanced customer experience by leading to faster approvals. Managing risk efficiently is critical in the factoring industry.
The program’s AI-driven risk-assessment tool offers customer specific financial products, by providing real-time risk evaluation. This ensures that each client receives a factoring solution best suited to its individual financial profile.
In Latin America, labs work to serve the underbanked.
Bancolombia Ventures is the corporate venture capital arm of Grupo Bancolombia. It partners primarily with startups in Series A and Series B rounds of investments—those that have already demonstrated strong market traction and a market fit for their products. In addition to financial investments—offered for stakes ranging from 2%-20% in the companies nurtured—Bancolombia offers mentoring for startups in the fields of business-model refinement, regulatory compliance, marketing strategy, operational efficiency, and scaling. The bank also helps startups open doors with potential partners in key markets.
As discussed previously, significant innovations to arise from the bank include new credit-scoring methodologies for microbusinesses developed by the startup Quipu. Working with the Ozone API open banking company, Bancolombia is building the type of open application programming interface (API) infrastructure essential for secure data sharing. This innovation will empower banks to harness shared financial data for enhanced customer insights and personalized services.
In an effort to help BTG Pactual become a destination for tech companies operating in Latin America, boostLAB Powered by BTG Pactual was founded in 2018. This acceleration-andinvestment program is part of the bank’s early-stage venture capital strategy. It focuses on startups between seed and Series A funding stages—those that have achieved product-market fit, built a customer base, and are ready to scale. The lab has accelerated and/or invested in 86 startups since its inception. The four companies nurtured in the 2024 cohort each received an investment of 1 million Brazilian reais (about $177,500 at today’s rate) from BTG Pactual in exchange for a 3% equity stake. BTG Pactual also retains the option to invest an additional R$1 million in the startups’ next funding round, with a 25% discount on the round’s valuation. Among companies nurtured is Intuitive Care, a software-as-a-service platform that automates manual and repetitive processes in hospitals, clinics, and other centers. In automating and optimizing processes for reconciling payments from different health care plans, Intuitive Care can help improve revenue for health care centers.
Banco Bradesco inovabra was launched in 2013. It offers a physical and digital co-innovation environment housing more than 220 startups—with different lab programs connecting to an additional 1,500. A capital vehicle of Bradesco called FIP Inovabra invests between R$20 million and R$75 million for a minority share in the companies nurtured.
Innovations to arise from the lab include a pilot project for the use of stablecoins in international transactions. A stablecoin is a type of cryptocurrency pegged to a reserve asset such as the euro or US dollar. This is an effort to combine consistent value with the flexibility and speed of digital assets. The pilot program at inovabra, instituted in partnership with the Parafin digital-payment company, will use stablecoins in international transactions, notably for the payment of imports. Also on tap is the bank’s first crypto-asset investment vehicle, a capability offered through a partnership with the Hashdex crypto-asset management firm.
Innovations continue in the Middle East.
Headquartered in Amman, Jordan, Arab Bank now has more than 600 branches in the Middle East, Europe, and Asia. Its AB Xelerate innovation and venture capital arm has, since 2018, completed more than 30 PoCs designed to improve banking operations and the overall experience of Arab Bank customers. In 2024 alone, AB Xelerate nurtured seven successful PoCs. These focused on deploying Gen AI to streamline legal processes, provide virtual financial assistance to customers, and perform other tasks. A co-creation space is offered in the Arab Bank Innovation Hub.
AB Xelerate has also invested in 10 startups. These operate in the fintech, embedded finance, cybersecurity, and banking-as-aservice arenas. Working with the Riyadh-based Intella company, for example, the bank is implementing a program to transcribe all customer calls into Arabic text. This capability makes it easier for Arab Bank to obtain customer insight. Working with a US cybersecurity company, the bank is enhancing its cybersecurity capabilities with zero-day threat detection.
AI Xelerate, an associated bootcamp, extends the bank’s reach to additional startups. In the bootcamp’s latest incarnation, it nurtured eight teams (from more than 100 startups that applied) for mentorship, workshops, networking, and the opportunity to pitch ideas to investors.
An Arab Bank internal innovation center, Acabes for Financial Technology, is dedicated to the continuous upgrading and enhancement of the bank’s digital offerings. Acabes is also focused on building new end-to-end technology platforms to digitalize and optimize Arab Bank’s internal processes and customer-facing experiences.
The Morgan Stanley Inclusive & Sustainable Ventures Lab is an intensive five-month accelerator designed to scale tech startups. It launched in 2017 in the United States and expanded in 2021 to include startup founders in Europe, the Middle East, and Africa. The lab promotes financial inclusion and provides founders with much-needed access to investors—along with the tools, resources, and connections needed to grow. The lab builds on the success of two other Morgan Stanley offerings—the Inclusive Ventures Lab and the Sustainable Solutions Collaborative—that together distributed more than $30 million in capital to more than 100 companies over the course of eight years.
Through the lab, Morgan Stanley offers early-stage, highgrowth companies mentorship, networking opportunities, office space and access to external advisers. Lab curriculum covers topics such as branding, pitch development, value-proposition refinement, and devising effective finance and sales strategies. Capital investment is either $250,000 or £250,000 (about $332,000) in each company nurtured, depending on the region in which it operates: $250,000 in the Americas. In exchange, Morgan Stanley takes a 5% stake.
The lab culminates in a demo day, during which participants pitch their companies to potential investors. These include venture capitalists, angel investors, and private equity firms. Recent companies nurtured include Research Grid, which has produced an automation engine to streamline administration of clinical medical trials; DotLab, which develops AI and machinelearning technologies geared toward improving health outcomes for women, notably in the field of diagnosing endometriosis; and Fluix, whose CoPilot AI software reduces energy costs for facilities by integrating and optimizing systems.
In 2024, Mitsubishi UFJ Morgan Stanley Securities launched the Japan Inclusive Ventures Lab, a startup acceleration program in that country. It graduated its first cohort in February of this year.
Now in its 12th year, TD Lab of TD Bank Group studies market and technology trends to identify potential solutions for TD Bank lines of business. The lab works to build functional prototypes for TD Bank, to grow TD intellectual property, and to influence product-development road maps.
As part of this work, the lab proposes, prioritizes, and builds new solutions to address core customer problems. It also monitors and tests emerging technologies to determine practical use cases for the bank. Working with TD’s External Ecosystems team, TD Lab monitors startups and entrepreneurs for their potential to deliver unique technologies or bring strategic value to TD. Selected startups may pitch directly to TD executives, explaining how the startup’s offerings can help meet bank challenges. Through partnerships with the External Ecosystems team, startups engaged through TD Lab may ultimately receive funding from or partnership with TD Bank.
Other significant External Labs include: Akbank LAB, Alior Bank/RBL_Start, Alios Cooperative, Barclays Eagle Labs, BNY Enterprise Innovation Group, BofA Breakthrough Lab, Citi Innovation Labs, Deutsche Bank Innovation Center, EFG EV Fintech, Elevator Lab Powered by Raiffeisen Bank International, ING Labs, Up2Stars/Intesa Sanpaolo, Visa Global Innovation Center, x15 Ventures/Commonwealth Bank of Australia, and Yapi Kredi FRWRD.
Financial Services Company Labs (Internal)
At some FIs, innovation is germinated by staff.
Formally established in 2018, the CTBC Data & AI R&D Center in Taiwan now employs more than 200 people. Process optimization, improved customer service, automated risk management, automated fraud detection, and improved regulatory compliance are all areas of focus.
Most recently, the center has been investing its resources in Gen AI. It believes Gen AI can enhance operations, boost productivity, and redefine the customer experience. The bank plans to first deploy its Gen AI capabilities to optimize business operations and employee training. Eventually, these AI systems will provide bank employees with the type of market insights that can improve customer service. In back-office management, the bank will use AI to strengthen cybersecurity and fraud prevention.
Perhaps most important to CTBC, though, is the use of AI in compliance management. CTBC Bank says its AI technologies enable rapid data analysis, proactive risk detection, and real-time alerts to ensure regulatory compliance. By leveraging machine learning, the bank can now detect anomalous activities, trigger automatic alerts, and reduce manual compliance reviews by 25%.
China Zheshang Bank (CZBank) is a commercial bank based in Hangzhou. CZBank’s Network Security Innovation Laboratory, established in 2014, focuses on technological developments in network defense, data security, and other fields. Network security projects include building upon existing network protections to analyze evolving requirements, determine security-device capabilities, and clarify operational workflows. New projects establish a system for using situational awareness and other techniques to devise rapid warning, response, and threat-disposal capabilities. Data protection is also a concern, which the bank is addressing through the establishment of a holistic data-protection framework that uses a “zerotrust” approach to data access and control. Zero-trust protocols assume that no user or device should ever be automatically granted access to bank data. CZBank’s framework combines this protocol with continuous identity verification and other technological capabilities to provide comprehensive, dynamic, and flexible data protection and management.
Other Internal Labs of note include: ABC Labs/Bank ABC, BBVA AI Factory, Capital One Lab, CIB Innovation Group, Customer Experience LABs/CaixaBank, Fidelity Center for Applied Technology/Fidelity Labs, Goldman Sachs/GS Accelerate, Mastercard Labs as a Service, Moody’s, National Bank of Kuwait Group Digital Office, PayPal Innovation Labs, and SEB Embedded (SEB Group).
Independent Fintech Labs
Some innovation centers are unaligned with banks, VC firms, or economic development organizations. Among these are Accenture’s Fintech Innovation Labs. This program operates around the globe and helps fintechs scale their businesses in competitive markets. Thus far, the lab has nurtured nearly 400 startups and helped raise more than $6.5 billion in capital. In Boston, Mass Challenge is a 501(c) accelerator. Its program offers early-stage startups mentorship, training, office space, legal advice, and access to funding.
Additional significant Independent Labs include: Beta-I, TechQuartier, and Tenity.
Venture Capital Fintech Labs
Understanding the monetary value of innovation, many venture capital firms and consultancies host their own fintech labs.
Hosting fintech labs provides VC firms access to promising, early-stage companies before those companies are widely known—providing lab hosts with a competitive investment edge. Accelerator Frankfurt nurtures business-to-business software startups focusing on financial, regulatory, and insurance technology, as well as other topics. Benefits received by these startups include more than 200 hours of mentoring in taxation, user experience, strategic planning, and other fields. Notable VC labs also include Startup Bootcamp. Operating in more than 20 countries, this accelerator has thus far nurtured more than 1,600 startups, helping them to achieve an average funding of about €1.7 million (about $1.9 million). Current programs focus on technology that addresses extraordinarily complex challenges—for example, extraterrestrial mining and gene editing. Additional programs nurture companies operating in the climate change and the health- and life-sciences fields.
Additional notable Venture Capital Labs include: Deloitte Catalyst, Plug and Play, Startup Wise Guys, Synechron, and Y Combinator.
Economic and Social Development Fintech Labs
Some fintech innovation labs work to improve economic and social conditions for vulnerable populations.
One example is the Asobancaria Social Innovation Lab. After Colombia’s social unrest of 2021, the Banking and Financial Associations of Colombia (Asobancaria) began to identify ways to better serve the banking needs of diverse populations, groups, and territories. The lab is part of this effort. Its projects target women, the elderly, youth, rural populations, ethnic groups, migrants, disabled persons, LGBTQ+ populations, and particular segments included in the peace-building process. The latter category includes both victims of armed conflict and former perpetrators trying to reintegrate into society.
Recent work has included financial-inclusion studies for LGBTQ+ and migrant populations. The studies examine market segmentation among these populations. The hope is that by using the findings of these studies, FIs can better tailor their products to meet specific needs of different subsets of these communities. The migrant study focused on those immigrating to Colombia from Venezuela. It examined how banks can improve their customer-service strategy for immigrants, reducing the barriers to financial services sometimes faced by this population.
WLab is the digital innovation lab of Colombia’s Banco W microfinance bank. Established in 2023, the lab’s mission is to design and implement digital solutions for microentrepreneurs and the underserved communities to which they cater. Its goals are threefold: to accelerate the bank’s digital transformation, to create an agile environment for experimentation and development of customer-focused capabilities, and to address the growing need for digital financial products meaningful to microentrepreneurs.
According to Juliana Jaramillo, Banco W innovation manager, microentrepreneurs in Colombia include everyone from vendors selling potato chips from street carts to owners of hair salons that may start with one chair but grow over time. The Covid-19 pandemic pushed this segment of the population to adopt digital capabilities, but tailoring bank offerings to meet these businesses’ specific needs can be challenging. “You have to take into consideration these microentrepreneurs’ level of education, the fact that their cell phones may not have the best connectivity, that their screens may be cracked,” Jaramillo says.
Offerings for these and other challenges faced by microentrepreneurs are developed at WLab’s physical workspace on the campus of Universidad Icesi in Cali. WLab is the only fintech innovation lab in Colombia directly connected to a university, and this partnership provides opportunities for collaboration with professors and students to develop solutions. For example, Jaramillo says that the lab worked with university professors to write copy for its digital products that would be understandable to people who find reading difficult.
WLab startups receive access to multidisciplinary expertise and opportunities for real-world testing. The lab’s startups include Truora, a company that simplifies and automates background checks, digital identity verification, and other processes; Powwi, which provides digital payments to enable secure transactions and improved financial management; and Quash, which deploys AI to help optimize business processes.
Innovations currently arising from the lab, or now being tested, include Billetera W, a digital wallet designed to offer microentrepreneurs and their customers secure, user-friendly, and accessible payment methods. To date, it has engaged roughly 78,250 users and has processed more than 2 million transactions.
Gotahorro Digital is another innovation. This microcredit product is designed to digitally provide Colombian microentrepreneurs with responsible financing options. Rather than using traditional research methods to verify business information—typically entailing a visit to the business from a bank representative—WLab now uses AI to scrape the web for information that supports business owners’ claims. This represents an evolution from initial Gotahorro processes. At first, applicants were asked to submit photos or videos of their businesses. However, the lab found that too many microentrepreneurs couldn’t take videos with their cell phone. Hence the move to AI-powered examination of alternative data.
Finally, in addition to WLab’s work with the university, it boasts a robust network of strategic partners and mentors Juliana Jarmillo Valencia, WLab innovation manager. dedicated to fostering innovation and growth among startups in the financial sector. Key partners include Fundacion WWB Colombia and Fundacion Grupo Social.
An initiative of the Brazilian Development Association, the Inter-American Development Bank, and the Brazilian Securities and Exchange Commission, the Brazilian Financial Innovation Lab (LAB) promotes cooperation and publicprivate dialogue between diverse actors to stimulate financial innovation and sustainable finance in Brazil. It also has a fintech working group. Its 1,408 individual and 372 institutional members represent FIs, government ministries, financial-market regulators, insurance and capital markets, public and private companies, fintechs, NGOs, and academic institutions. Most of its work takes place online.
The fintech working group specializes in promoting open innovation projects in fields such as crypto assets. It also studies ways to use data to identify and solve ESG challenges. Additional fields of study include green finance, social impact investment, and fintech innovation.
While acting primarily as a think tank, the lab does produce tangible projects. For example, in 2024 it compiled a pitch book consisting of technological offerings to meet ESG challenges. All offerings were submitted by startups. In 2025, the lab’s fintech working group is planning to advance initiatives related to AI and its use in sustainable-development projects.
Future plans include the establishment of a physical experimental environment to include a testing and learning hub. Development of a regulatory sandbox is also planned. Both initiatives will be coordinated by the Brazilian Securities and Exchange Commission.
The European Investment Bank Group (EIB) is the world’s largest multilateral financial institution. It is owned by the 27 EU member nations. Its mission is to close gaps in innovation goals and skills as identified by EU policymakers. To do so, EIB partners with startups that use technology to cure the world’s ills. The Blue Champions Advisory Programme is a collaboration with the European Commission to support development of innovative technologies to restore oceans and other waters. Seventy companies applied for the program. Twenty were chosen in 2024, offering advanced technologies in fields such as decarbonization, electric vessels, underwater connectivity and transport, tidal energy products, and underwater robotics. Businesses nurtured—hailing from Croatia, Denmark, France, Germany, Greece, Italy, Norway, Portugal, Spain, and Sweden—received training on investment pitches, market-commercialization strategies, and other topics, along with introductions to investors.
Additional Economic and Social Development Labs of note include: Copenhagen Fintech Lab, Cyberport, DIFC Fintech Hive, FinTech Innovation Lab, and Seoul Fintech Lab.
From compliance to stablecoins to microbusinesses, fintech labs germinate next-gen uses for AI.
You wouldn’t think that the quipu—an abacuslike system of knotted cords used by the Incas for record keeping—would have much application to the breakneck adoption of artificial intelligence among financial institutions (FIs). But a Colombian financial-services company nurtured by Bancolombia Ventures harkens to that system. Quipu deploys AI-powered analyses of alternative data to determine the creditworthiness of microbusinesses.
Quipu’s work is just one example of the growing importance of AI to financial institutions. According to Statista, the financial sector “exhibit[s] one of the highest adoption rates across industries.” In fact, Statista estimates that in 2024, the financial services industry invested roughly $45 billion in AI technology. Concurrently, NVIDIA found that more than half of the companies represented in its global State of AI in Financial Services: 2025 Trends report view AI as “crucial to their future success.” Of the 600 financial services professionals surveyed, 98% of managers say that their organizations plan to increase AI infrastructure spending this year.
Many banks have already deployed AI to automate internal processes such as customer onboarding, credit scoring, fraud detection, and loan processing. Increasingly, FIs consider AI a pivotal tool for efficiency and cost-effectiveness in meeting evolving anti-money laundering and know-your-customer regulations.
As these innovations become more commonplace, some banks may wonder what’s next for AI? That’s where innovations arising from the world’s best fintech labs come in.
AI capabilities continue to mature. Enhanced AI capabilities will help FIs generate new business value, but only if those institutions follow the advance from AI to generative AI (Gen AI).
The term “artificial intelligence” is used for technologies that can perform tasks previously requiring human brain power. Relying on historical data and rules-based systems, these capabilities recognize patterns, understand language, and detect anomalies—notably, the types of anomalies that can indicate fraud.
Gen AI is a specialized branch of AI that exceeds content analysis to actually produce content. Gen AI can write. It can simulate human conversation. It can code. It can generate images and videos.
The difference between AI and Gen AI can be seen in chatbots. Imagine this: A customer asks a chatbot, “Why was my credit card application denied?” An AI-powered chatbot may return a list of common reasons for the bank to deny credit, followed by a customer-service phone number for the user to call. A Gen AI-powered chatbot may respond with, “Your credit card application was denied because your credit score is too low. Your credit score is too low because a $2,000 write-off appears on your credit report. This write-off seems to be related to an auto loan from ABC Motors. Repaying this debt will help you improve your credit score. You may want to contact ABC Motors to settle this debt. Consider negotiating a ‘pay-for-delete’ arrangement.”
“Loan sharks were these businesses’ only solution. We’re an alternative to that.”
Mercedes Bidart, CEO and Founder, Quipu
Chatbot improvement is just one way Gen AI can improve business for FIs. It can study customer data to more closely tailor marketing strategies and financial services to individual needs. It can improve loan and investment strategies by generating “what if ” scenarios to help banks chart, for example, how changing interest rates affect customers’ willingness to take out new loans, and customers’ ability to repay those loans. And, as the innovations discussed below indicate, AI and Gen AI can help banks and their clients hasten international trade. They can help spot and stop previously unknown threats to bank infrastructures and data. And they can provide a financial lifeline to the underbanked.
Bancolombia Ventures partners with startups, focusing on topics such as fintech, climate-related technology, and cybersecurity. One of those startups, Quipu, has developed a new credit-scoring system tailored to what Bancolombia calls the “informal” nature of business in Latin America.
Quipu CEO and Founder Mercedes Bidart (center) with co-founders Viviana Siless (CTO) and Juan Cristobal Constain (COO).
According to El Pais, a leading Colombian newspaper, close to 95% of all businesses in that country are microenterprises—defined as operations with 10 employees or less. While employing 65% of the Colombian workforce, these organizations tend to suffer from “business dwarfism,” or an inability to grow. Why? They lack access to capital. Traditional credit scoring methods paint them as a bad risk.
This is a problem that Mercedes Bidart, Quipu CEO, is trying to solve. The MIT graduate notes that most microentrepreneurs in the country operate as freelancers. “They have their digital wallet or bank account as a person, not as a business,” Bidart says. “They come in for an SME [small or midsize enterprise] loan at the bank, but they won’t get that. There’s no information about their business behavior.”
The Quipu system finds new ways to detect business value. It looks at business location, social media posts (including videos, pictures, and customer comments) and other nontraditional sources of information to determine business health. Even Google Maps can indicate whether a business is growing—showing, perhaps, the physical expansion of a home-based garage over time.
Quipu uses this information to develop its own credit scores for microbusinesses. Potential new clients are often referred by Bancolombia, from its pool of declined applicants. Quipu has offered many of these microbusinesses loans ranging from $100 to $2,000—for a total of $3.5 million in loans granted over the past 18 months. While these are personal loans, rather than business loans, Bidart believes that these small infusions of cash will help some businesses grow to the point where they eventually qualify for more-traditional SME loans.
“The people we serve—before us the only financial solution they had was the predatory lender. We have loan sharks. They charge abusive interest rates, and they’re violent,” Bidart says. “They operate from Mexico to Argentina. In Colombia, loan sharks were these businesses’ only solution. We’re an alternative to that.”
Let’s take look at innovations arising at other fintech labs around the world.
“Valuation: Measuring and Managing the Value of Companies” has long been a definitive guide for corporate finance professionals. Eight editions in, the book’s lead author, Tim Koller—a partner at consulting giant McKinsey & Company—says the biggest surprise is what hasn’t changed. Koller speaks to Global Finance about one of the dealmaking world’s most enduring topics.
Global Finance: To what extent does geography play a role in affecting a company’s valuation?
Koller: It applies to most parts of the world. If you are a purely local business, in Europe or Asia, for example, then it’s less of an issue. But, if the US were to experience a severe recession, it would probably affect everybody. And then, of course, there are those businesses that are directly impacted—companies that export, import or compete with US companies. A lot of companies, even if they appear to be local, they’re competing with US-based companies, or they’re trading with US-based companies. So, the impact is felt far beyond the US.
GF: Are more companies growing frustrated with US volatility and seeking opportunities in Europe and the APAC region?
Koller: For most companies, it takes years to build or to change strategies from a geographic perspective. Some of the companies I talked to are thinking about these things, but, at this stage, you don’t just break into a market in a couple of months. If you want to build a business in a new country, or if you want to change your supply chain, these things take time. So it depends. If your supply chain is highly specialized, that could take years to restructure. If your supply chain is simple or there are lots of other producers, and you can switch from one country to another, that’s a little bit easier.
Bringing things back to the US is also very time consuming—no matter what industry it is. People are thinking about it and making plans, but for the most part, the timeframe of any kind of major structural change is fairly long, and you don’t want to commit to it until you probably know more about what’s going on.
GF: In this latest edition of your book, did you touch upon digital assets or how companies are building their own reserves?
Koller: We don’t address it, and I’ll tell you why. For the most part, a lot of what people are talking about is not a currency. We call it a cryptocurrency, but it’s not a currency. It is a speculative investment. And the nature of these speculative investments is unlike a stock or a bond. There’s no inherent valuation. We won’t know what the answer is eventually. It’s purely a function of supply and demand of investors and sentiment for many of these cryptocurrencies. It’s like investing in vintage automobiles or fine art. It’s nothing more than that. As far as I’m concerned, that’s why we don’t touch on it, because you can’t do anything with it, and then I wouldn’t understand why a company would put money into that. Because you’re really betting on market sentiment. You’re betting on other investors wanting to get into that market and pushing up the price.
GF: What about stablecoins?
Koller: Stablecoins are cryptocurrencies tied to real-world assets, usually the US dollar or another fiat currency. The more reputable ones are backed 1:1 by actual reserves. From a corporate valuation perspective, they’re not particularly interesting. If a cryptocurrency is simply pegged to the dollar but involves additional transaction costs, it doesn’t offer much advantage over using dollars directly.
There’s been talk for decades about something replacing the US dollar as the world’s reserve currency—whether the euro, the yuan, or others—but those alternatives face their own challenges. For a currency to be viable for transactions, especially everyday purchases, it needs to have a stable value. That’s why something backed by the dollar or another relatively stable fiat currency is necessary.
However, stablecoins don’t really factor into the strategic decision-making of most companies or investors unless they’re directly involved in currency or cryptocurrency markets. And that’s a niche area I’m hesitant to speculate on.
GF: Are there certain basic mistakes that happen at a company that hurts valuation or leads to their failure?
Koller: It’s rarely that a company is fundamentally unsound. The real issue is often the gap between how companies value themselves and how the market values them. Many CEOs and CFOs believe their companies are undervalued, but when we analyze hundreds of companies each year—using discounted cash flow models and peer comparisons—we usually find valuations are within 10% of fair value. That margin is small and can fluctuate day to day.
Companies, on the other hand, often have financial projections that are inconsistent with their market values, because the market doesn’t give them credit for things that they hope to achieve, unless they have a strong track record. For example, if an industry grows at 4% annually and a company projects 6% growth, the market may only price in 4%. If the company hits just that, it’s not a failure—investors never expected more. It’s not a disaster from a valuation perspective, because investors didn’t expect that anyway.
The bigger issue is the disconnect we saw in the dotcom bubble. There’s sometimes a disconnect, you might argue, with some of the big mega [magnificent seven] stocks. One of the characteristics I look for, in terms of potential overvaluation, is who are the investors in a company. And, in particular, what share of retail investors? And if you see a very high share of retail investors inside in a stock, that is often a sign of overvaluation. Retail investors don’t crunch the numbers. They typically buy based on emotion and hype. It may be a great company, but that doesn’t mean you should pay 100 times earnings for it.
GF: Could that also complicate M&A strategies?
Koller: Yes, although that does create an opportunity. Very few companies have the guts to take advantage of it. If my shares are overvalued, that’s the time when you can use those shares to buy something, and that’s great. We’ve seen a couple of those, but not that often.
GF: Over the eight editions on valuation, what’s the most surprising change that you’ve seen in how companies wrestle with value?
Koller: The most surprising thing isn’t how much companies have changed, but how little they have. And it’s not just because we’ve written a book, but other academics have done research. Many companies remain too short-term oriented. Large firms still try to cost-cut their way to success, which only works for a limited time. And while innovation continues, it often comes from smaller companies rather than the big players.
One positive shift has been the steady decline of conglomerates. More companies are breaking themselves up into simpler, more focused entities. This trend, certainly evident in the US and to some extent in Europe as well, has improved management effectiveness and is favored by investors who value focus and clarity. That’s probably the most meaningful change—the breaking up of complex companies into smaller ones.
GF: Do the recent headlines of Google and Meta being under scrutiny and possibly broken up exemplify that trend?
Koller: I can’t speak specifically to Google or Meta, because their business units are more interconnected than, say, a company making both valves and toothpaste—where there’s clearly no synergy. What matters isn’t size but complexity, especially when businesses don’t share customers, technologies, suppliers, or distribution channels. That’s when it makes sense to consider breaking them up.
More broadly, while the trend toward focused companies has been positive, many firms remain too short-term oriented. They often blame the stock market, but that’s not entirely fair. Our research shows that about 75% of investors—whether retail, index funds, or institutions—are long-term holders. The problem is that companies tend to pay too much attention to the loudest voices, which are often short-term traders. There’s still a lot of room for companies to take a more long-term approach, and that’s work that continues.
GF: Inpast editions or in this new edition on valuations, has there been any sort of trend or surprising development you noticed?
Koller: One major trend we’ve seen is the globalization of equity markets over the last 35 years. Today, the shareholder-base of large companies in Europe, Japan, and Taiwan often looks very similar to their US peers. As an individual investor, you can easily buy hundreds of international funds or even individual foreign stocks—and the same goes for investors abroad buying US equities. So, from a capital markets perspective, things have truly globalized.
However, corporate behavior still varies by region. On average, European companies continue to earn lower returns on capital than their US counterparts—though the gap has narrowed, and some of the best-performing companies in various industries are European. In Asia, there’s still a noticeable emphasis on size and prestige over value creation. I’m surprised that focus persists. While it’s slowly shifting, many companies still prioritize growth and scale rather than returns, which often results in lower valuations compared to US firms—unless they’re high-growth global competitors.
GF:What will modern finance look like in the future?
Koller: I’m hopeful that AI will help us value companies more effectively. Right now, it’s good at tasks like summarizing and researching quickly, and over time it may become more capable. But while tech—and AI in particular—makes up a large share of the stock market, it still represents a relatively small part of the broader economy. Most people still need housing, food, clothing, travel—those businesses aren’t going away.
AI will be used across many industries to improve customer experience, reduce costs, or enhance products, but it’s not fundamentally going to change things. Valuations are going to be disproportionate towards those companies. But the real question is: Will companies use AI to actually boost profits, or will those gains be passed on to consumers, like with many past innovations? For investors and executives, the key is understanding whether AI is a true source of competitive advantage. That distinction will vary by industry, but it’s central to how we think about value in the future.
Thomas Cowan, VP of tokenization at regional winner Galaxy Digital, explains why the digital asset company tokenized a 300-year-old Stradivarius violin.
Global Finance:There’s a lot of talk lately about tokenizing physical assets like gold, real estate, and art. What are the advantages? When you tokenize a collectible like a 1708 Stradivarius violin, as your company did recently, don’t you still have to go through the same demanding documentation process as you would if you sold it through an auction house?
Thomas Cowan: One difference is that once you’ve completed that due diligence and you’ve put the asset on-chain—as a NFT that is mapped to the violin—all that information remains encapsulated in the NFT: the violin’s history, its former owners, etc.
GF: And that makes it more easily traded?
Cowan: The next person won’t have to do nearly as much diligence, because they will have the history already on-chain. You end up saving a lot of costs on the due diligence side, because the source of truth and the source of record are fully on-chain, already there.
Another advantage is transparency. Minting a publicly recorded NFT on the Ethereum blockchain [as happened with the Stradivarius] ensures a verifiable, fraud-proof record of ownership and provenance.
GF: By tokenizing a 300-year-old violin that once belonged to Catherine the Great, what financing opportunities do you open up?
Cowan: Owners can unlock liquidity without necessitating a sale if they convert the asset into a digital token. The violin can then be utilized as collateral. This can fundamentally transform the way these assets interact with financial markets.
GF: Can tokenization make global finance safer?
Cowan: Think back to the situation before the 2008 financial crisis, when you could buy into a mortgage-backed security pool, but you didn’t know the performance of the underlying loans. Well, with tokenization, you see every single underlying loan. If I’m buying a senior tranche of a debt pool, I know exactly what that risk looks like because I can see every single loan.
GF: What were the key challenges in making this project happen?
Cowan: The legal aspects were a hurdle. With a traditional IPO or a bond issuance, you have the legal documents, which are pretty standard across the industry. It turns out there are no standard legal documents out there for violin tokenizations. So, we had to really start from scratch.
GF: What are some other areas ripe for tokenization?
Cowan: I think we’ll really begin to see an increased interest in on-chain debt, especially structured products and private credit, over the next year or two. Tokenization technology can create a lot of efficiencies there.
GF: What about real estate and equities?
Cowan: I think real estate is still relatively far out. You’ve got property laws that differ based on country, state, and municipality, for instance. Also, much of the history with real estate is still paper based.
As for equities, a few months ago, I would have said we have a long way to go. But because of how quickly regulatory clarity is coming [especially in the US] and how quickly the Securities and Exchange Commission is moving [with regard to crypto and blockchain technology-enabling regulation], the industry may move faster on tokenizing equities.
GF: What obstacles remain before tokenization of financial products becomes widespread?
Cowan: We still have regulatory challenges, and of course identity and know your customer (KYC) and anti-money laundering (AML) challenges. Those are not going away.
GF: Overall, what does tokenization mean for global finance generally? Will it really change the landscape? Cowan: Over the past decade, we’ve been moving forward without regulatory clarity. But when we are given rules of the road, we’re going to see a lot of capital, especially from institutions, flood into the industry because they’ve seen the value of the technology. We’ll get cost reduction, but also a much more inclusive economy.
Global Finance spoke with Rafael Ernesto Barrientos Interiano, Director of Technology and Digital Transformation at Banco Cuscatlan, about innovations in banking in Latin America and how Banco Cuscatlan uses technology to create a better customer experience.
Global Finance: How have technology and innovation transformed banking in Latin America?
Rafael Ernesto Barrientos Interiano: Technology and innovation have broken down geographical barriers, reduced wait times, and offered more personalized and secure services. Banco Cuscatlan has led this transformation through a deep digital overhaul, enabling access to digital products like savings accounts, fixed-term deposits, overdraft facilities, personal loans, credit cards, and debt consolidation.
This vision has empowered thousands of Salvadorans to manage their finances quickly and securely, aligning with global trends in the industry. Banco Cuscatlan’s ongoing focus on technological improvement and customer service strengthens our vision to continue leading digital banking transformation in the region.
GF: Where do technology and innovation have the greatest impact? Where do you see the greatest opportunity for innovation?
Barrientos: Our digital ecosystem has transformed the relationship between people and banking, helping us achieve a broader reach and closer interaction with clients. We envision a future where every client enjoys a banking experience tailored to their habits and goals. The greatest opportunity lies in continuing to develop personalized financial solutions using artificial intelligence, advanced analytics, and process automation.
Also, regional expansion is a key opportunity to replicate and scale our successful digital models in new markets, solidifying our leadership as a reference in financial innovation across the region.
GF: How are digital solutions transforming how people bank in El Salvador?
Barrientos: Clients shouldn’t have to adapt to tedious financial processes; but rather, banks must use technology to deliver innovative financial solutions tailored to clients’ pace of life. These solutions are changing how people interact with financial services. Customers can use their mobile phones to open accounts, apply for loans or overdrafts, obtain and use credit cards, and consolidate debt. This transformation has democratized access to banking products and improved the quality of life for thousands of Salvadorans, making banking an experience that’s simple, human and efficient.
GF: What sets Banco Cuscatlan apart from its competitors? How does technology give you an advantage?
Barrientos: We have a customer-centric approach, and by actively listening to people’s needs, we deliver solutions with real value. We can anticipate customer needs through agile, comprehensive, and fully self-managed digital solutions. Banco Cuscatlan has digitized its portfolio, enabling a smooth, secure, and frictionless experience. Technology gives us a competitive edge and reduced operational costs, quickly scaled services, and personalized the customer experience. This commitment to continuous improvement, combined with an internal culture of digital transformation, has made the bank a change agent within the financial sector in El Salvador and the region.
GF: How has the bank used technology to overcome business challenges?
Barrientos: Banco Cuscatlan has leveraged technology to overcome business challenges like financial inclusion, the need to streamline processes, and increased demand for personalized services. Through a comprehensive digital transformation strategy, we eliminated our dependency on physical infrastructure by offering digital financial products accessible from any device.
With this commitment to self-service, we can scale operations, maintain business continuity, and adapt to users’ evolving expectations. Technology has been our ally in optimizing resources, expanding our regional reach, and delivering excellence.
Manish Kohli, head of Global Payments Solutions at HSBC, discusses the bank’s digital-payments strategy and how it is innovating in transaction banking. HSBC was named one of Global Finance’s Most Innovative Banks.
Global Finance: Open banking is on the rise. How does HSBC see its role evolving in this new ecosystem?
Manish Kohli: HSBC is a major player in the open-banking and open-finance ecosystem. We’re the world’s largest transaction bank and have a global footprint that spans the numerous jurisdictions and clearing systems that are driving the open-banking agenda.
We are reengineering our processes by integrating advanced digital solutions, from automated cash management to robust API connectivity. So we automate manual processes and integrate systems to improve efficiency and risk management.
Collaboration is key, because we see open banking as a catalyst for a more client-centric ecosystem. This collaboration starts with our clients as they help shape our product-development road map.
We also collaborate across clients’ treasury tech stacks and have live API integrations with partners such as SAP, Oracle, Kyriba, and FIS. This ensures we are providing clients with an end-to-end solution and staying focused on incorporating technology into payment solutions that support our clients and their treasurers with the real-time information they need to make more-informed cash management decisions.
GF: What is HSBC’s strategy for incorporating emerging payment technologies such as digital currencies—including central bank digital currencies (CBDCs)—andhow do you see these impacting your payment solutions?
Kohli: Whilst CBDC maturity varies greatly by market, it will play a critical role in the payments solutions of tomorrow, which is why we continue to research, test, and invest with various central banks globally.
Currently, HSBC is involved in pilot projects with central banks in markets including the UK, France, Singapore, Hong Kong, China, Thailand, and the United Arab Emirates, and with the Bank for International Settlements’ Project Agorà.
Our tokenization platform for digital bond issuance, Project Orion, has led the way in the digitalization of capital markets infrastructure. HSBC was also one of the first financial institutions to complete proof-of-concept use cases within the Project Ensemble Sandbox, the Hong Kong Monetary Authority’s CBDC project to accelerate tokenization.
GF: How is HSBC utilizing data analytics to gain deeper insights into customer behavior within digital channels? And how are you using these insights to drive innovation in client service?
Kohli: We process numerous transactions per second, generating a wealth of data. This data is used not only for retrospective analysis but also in real time, powering intelligent payments solutions. The insights gathered from millions of transactions help us to not only improve our own processes but deliver tailored, actionable advice to our clients ranging from choosing the fastest or cheapest route for international payments to risk-mitigated strategies for currency management.
Our innovative analytics tools can detect when a payment is made in an alternative currency. This allows us to offer customers the option to secure the best rate. The use of AI and API integration further ensures that insights derived from data immediately support payment decisions.
We’ve established a dedicated Treasury Solutions Group, which conducts gap analyses and recommends best practices to improve treasury operations.
GF: Beyond incremental improvements to existing digital channels, what “moon shot” or disruptive digital banking or payment solutions is HSBC investing in?
Kohli: We don’t underestimate the importance of incremental improvement, given that we operate in a heavily regulated, market-driven ecosystem that spans numerous regulators, central banks, and payments partners.
We are focused on building innovative solutions that enable our clients to transform in the digital economy. In recent years, we’ve made significant investments to develop digital solutions that help accelerate the pace at which money moves globally. Our most recent innovative solution, Digital Merchant Services, has enabled HSBC to become a digital-merchant acquirer for cards, local e-wallets, and real-time payments, helping our merchant clients with seamless payment collections at scale and to grow their business efficiently.
We’ve invested $30 million in building a next-generation liquidity engine, and our use of AI allows us to provide real-time, data-driven insights during transactions. For example, through FX Prompt, our systems can instantly advise customers on the best currency option, ensuring they secure the most favorable rates, making our payment solutions smarter and more agile. Tomorrow’s moon shots will be the result of ongoing collaboration with numerous stakeholders in the ecosystem, persistent investment, and continuous R&D.
Michelle Knowles is managing executive for Trade and Working Capital (Pan Africa) at regional winner Absa Group. She discusses how innovation and technology is changing finance in Africa.
Global Finance: How is innovation transforming banking in Africa?
Michelle Knowles: Innovation in Africa has created a more inclusive and efficient financial ecosystem by driving economic growth and empowering emerging populations. At Absa, our solutions help our clients’ businesses grow so that the communities where they operate can thrive. We believe that innovation will further help support African trade, which also enables economic growth.
GF: Where does technology and innovation have the biggest impact within finance?
Knowles: Digital banking solutions have opened doors for millions of people who lacked access to traditional banking services. AI and machine learning help analyze patterns, detect anomalies, and prevent fraud more effectively while enhancing our sustainability efforts. Seamless digital platforms like our Trade Management Online channel are a game changer, elevating customer service while enhancing user engagement.
GF: What makes Absa different from its competitors?
Knowles: Absa has a client-centric, digitally enabled model. Preparing for the “client of the future” means continuously enhancing our capabilities and access points through APIs and online and mobile platforms, providing tailored service options to our clients, and sharing and leveraging industry research and insights.
We are a data-led, customer-focused business, and by streamlining our products in different markets, we create a consistent experience for customers across Pan Africa. Our technology, products, and processes facilitate access to trade finance, which is key to facilitating trade flows. Technology investments like APIs and the ability to collaborate closely with key fintechs help us with the much-needed digitization of trade finance and to future-proof our trade finance systems.
GF: How is Absa innovating in trade finance for Africa?
Knowles: By automating and streamlining processes, Absa can significantly reduce costs and increase the availability of financing for businesses. Our digitization strategy for trade finance includes a client portal built on open-source architecture so that the bank can integrate with various ecosystems through APIs, ensuring efficient connections with strategic partners and systems. With big data and AI, we are optimizing key processes, automating compliance checks, and enhancing risk management. Absa also collaborates with development finance institutions and fintechs to digitally transform trade finance and ensure that innovative technologies are effectively implemented.
GF: How are you working with African entrepreneurs?
Knowles: There are several promising opportunities, particularly in areas that address key challenges and leverage the continent’s unique strengths. The Youth Entrepreneurship Programme, a collaboration between Absa and the Young African Entrepreneurs Institute, is a flagship initiative designed to bridge the gap between young innovators and opportunities so they can establish thriving businesses. The program offers business advisory support, skills development, mentorship, and funding to help youth transition from innovation to formalized businesses.
Also, Absa Bank Zambia’s Mosi-Oa-Tunya Innovation Hub serves as an incubator for local businesses in that country’s the tourism and agriculture sectors, providing training, mentorship, and digital tools to help entrepreneurs develop their products or services.
GF: How does Absa use technology to overcome business challenges?
Knowles: Facilitating access to trade finance is essential for supporting African trade and crucial for trade flows. And trade finance has consistently been a fundamental component of Absa’s transactional banking services. Absa continues to observe growing demand for its trade finance solutions and has intensified its efforts to become a leading provider of trade finance across the continent.
Additionally, Absa supports the African Continental Free Trade Area (AfCFTA) agreement, which is a vital step in increasing intra-African trade. We understand that digitizing trade finance helps us expand and simplify access to finance. To date, Absa has implemented Trade Management Online, a secure online banking platform where clients can initiate, receive, and manage the complete lifecycle of trade finance products and services.
We have also provided meaningful efficiency gains and improved risk management by, for example, integrating Optical Character Recognition and workflow automation into our processing systems. This has significantly reduced manual intervention, improved turnaround times, and enhanced the accuracy of documentation handling. Our digital and data-led approach to risk management enables us to proactively monitor exposures, client behaviors, and trends, which empowers our teams to make faster and more informed decisions.
Uncertainty continues to cloud the global economic horizon, with tariffs remaining a dominant con- cern in both political and financial circles. In the
United States, decisions by the Trump administration have increasingly been subject to legal scrutiny and challenged in court, and what’s legal one week may be overturned the next. As economists at BNP Paribas aptly describe it, the legal status of trade decisions moves like a yo-yo.
Meanwhile, formal and informal trade talks between sovereign nations continue moving up and down. Financial markets reflect this instability with sharp reactions. But for the corporate world, time doesn’t stop. Daily decisions must be made—regardless of the uncertainty hanging over long-term strategies. Questions abound: Will multinational infrastructure projects go ahead? Will financing for wind and alternative energy initiatives hold firm? These are difficult questions, and for many, the answers remain elusive. And yet, in this uncertainty, one sector shows remark- able resilience: innovation. In this issue, we’re proud to present our annual awards for innovation and innovators, along with a selection of some of the most dynamic innovation labs around the world. Unsurprisingly, artificial intelligence leads the way, both in concept and in real- world application. Many of the financial institutions and fintech firms recognized this year are not just adapting to the future—they are helping to shape it.
The innovations profiled by our global team of reporters and analysts are impressive on their own merits. But more striking is the broader trend they represent. Despite economic and political volatility, organizations across the financial and technology spectrum—banks, startups, consulting firms, and independent labs—are continuing to invest aggressively in R&D. Why? Because innovation is not a luxury. It’s a necessity.
This strong commitment to innovation suggests something profound: in uncertain times, looking forward becomes more important, not less. Innovation, in this context, is not merely a growth strategy—it’s a survival strategy. And in many ways, it proves to be counter-cyclical. When the present is unstable, thinking ahead becomes not just prudent, but essential.
