Bottom Line: Traditional banks aren’t innovating fast enough to improve credit card fraud, endpoint cybersecurity, AI-powered end-to-end identity verification and more intuitive user experiences creating new opportunities for startups.
Fintech is forecast to achieve a compound annual growth rate (CAGR) of 25% through 2022, reaching a market value of $309B. The broader financial services market expected to reach $26.5T by 2022, achieving a 6% CAGR. Traditional banks’ legacy approach to IT holds them back from being more customer-centric. And in a recently published World Retail Banking Report, 2020 by Capgemini and Efma, 78% of financial services leaders said cybersecurity is the biggest obstacle to collaborating and becoming more customer-centric. 72% say poor IT integration and compatibility make collaborating very difficult. The following graphic from the study shows why fintech is flourishing today by bringing innovation into the industry:
Lanistar Bets Fintech’s Future Is Trust Not Transactions
Traditional banks’ IT systems are struggling in the areas customers need them to excel at most. These include improving credit card fraud, endpoint cybersecurity, adopting AI-powered end-to-end identity verification and most importantly, delivering a more intuitive user experience. Designed for transaction efficiency with little thought of customer empathy, it’s no wonder traditional banks are losing customers to fast-moving fintech startups. Fintech startups excel at analytics, AI and machine learning to see how they can become more empathetic and helpful to customers.
Fintech startups are also succeeding today because they design their IT platforms, applications and cybersecurity strategies to provide customers the freedom to interact with them as they want. Fintech startups getting traction treat cybersecurity as a part of customer experience. There’s been a 667% increase in spear-fishing email attacks related to Covid-19 since February alone, further underscoring the need for designing in cybersecurity to the platform level. Fintech startup leaders are delivering excellent user experiences with apps based on adaptive design today. They’re also able to scale how many credit cards can be on a single account and integrated into a single card using polymorphic technology that thwarts fraud attempts. Best of all, they’re busy creating a new type of open banking service that protects customers using AI-powered end-to-end identity verification while using advanced analytics always to be learning how to serve them. Lanistar’s rapid advances in each of these areas make them one of the fascinating fintech startups to watch this year. Their new product is going to be launched in winter 2020, based on polymorphic technology.
“The Covid-19 outbreak has exposed shockingly poor services from many of the big banks, with customers and businesses complaining about delays and slow-coach responses, at a time when people urgently need quick communication and support,” says Gurhan Kiziloz, founder and CEO of Lanistar. He continued, “for far too long, the customer has been an afterthought in the minds of the banks. Rather than being seen as a valued client, whose views are treated with the utmost respect, the modern customer has been seen as nothing more than a statistic on a balance sheet.” Gurhan continued, saying, “we’re here to change that and this investment through Milaya Capital will help us to do that and brings us closer to my ambition of building a $1 billion fintech company.”
Lanistar’s market valuation is $189M today with key investors seeing the potential through marketing, sales and R&D investment for the business to reach a $1B valuation. Milaya Capital is a lead investor with a $19M round for a 10% stake, which is going to be invested in operational and customer support teams while scaling all departments to support the launch later this year. Gurhan Kiziloz and Milaya Capital’s CEO Yasam Ayavefe are doubling down on fraud prevention, endpoint cybersecurity and AI-powered end-to-end identity verification with a recently announced partnership with Jumio. Jumio’s unique combination of informed AI, computer vision and machine learning enables financial services firms to reliably and securely verify remote users while streamlining the onboarding process. Lanistar also has a partnership with Mastercard with several other financial services firms interested as well. The startup has 50 full-time staff in London and plans on creating a 150-person support team in Greece.
Yasam Ayavefe, founder and CEO of Milaya Capital, added, “I am always on the lookout for the next big thing in the world of technology, but more importantly, we also want to support and invest in ideas that will simplify and benefit people’s lives.” He continued, “this is exactly what Lanistar will provide. The technology underpinning Lanistar’s product is the future of personal finance and I believe that it will go on to change our lives forever, by letting us streamline our finances. Gurhan Kiziloz and Yasam Ayavefe have succeeded in getting the attention of leading financial services firms who see the potential of Lanistar today and it’s future. The two are shown below during a recent interview.
Fintech will see more startups base their core business model on fraud prevention, endpoint cybersecurity, AI-powered end-to-end identity verification, all designed around more intuitive user experiences. Thwarting fraud and securing user identities, data and funds are the cornerstones of building trust with customers – a gap traditional banks continue to struggle and fill. Lanistar shows the potential to bridge the gap and transform banking with advanced cybersecurity technologies and a unique polymorphic technology-based approach to card design.