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Robotic Automations

Germany's financial regulator ends anti-money laundering cap on N26 signups after $10M fine | TechCrunch


After the Wirecard scandal, Germany’s financial regulator BaFin started to look more closely at young fintech startups that wanted to grow at a rapid pace — it’s better to be safe than sorry. In particular, N26, a Berlin-based banking startup that raised hundreds of millions of euros and quickly became a unicorn, has had a […]

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Robotic Automations

Daloopa trains AI to automate financial analysts' workflows | TechCrunch


Thomas Li was working at Point72, the hedge fund founded by notorious investor Steve Cohen, when he realized that the financial industry relies heavily on manual data entry processes that could be prone to errors.

“As a buy-side analyst, I felt the pain of manually sourcing and entering data to build and update financial models,” Li told TechCrunch. “It took time away from the more important work of analyzing and making investments.”

After meeting Jeremy Huang, a former software engineer at Airbnb and Meta, and Daniel Chen, an ex-Microsoft engineer, through New York University connections (all three are all alums), Li decided to try his hand at an automated solution to the data entry challenges.

The three partners  launched Daloopa, which uses AI to extract and organize data from financial reports and investor presentations for analysts. Daloopa on Tuesday announced that it raised $18 million in a Series B funding round led by Touring Capital, with participation from Morgan Stanley and Nexus Venture Partners.

“Daloopa is an AI-powered historical data infrastructure for analysts,” Li said. “This way of approaching the data discovery process keeps highly competitive firms and teams ahead of the curve.”

Daloopa’s customers are primarily hedge funds, private equity firms, mutual funds and corporate and investment banks, Li says. They use the startup’s tools to build workflows for investment and due diligence research. The workflows, powered by AI algorithms, discover and deliver data to analysts’ financial models, reducing the need to copy data manually.

“Daloopa provides a new way to get mission-critical data to both the buy side and sell side,” Li said. “The time savings is reinvested into research and analysis, or client-facing time — helping our customers gain an edge in their research process.”

Now, I’m a little skeptical that Daloopa’s AI doesn’t make mistakes: No AI system’s perfect, after all. Thanks to the phenomenon known as hallucination, it’s not uncommon for AI models to make up facts and figures when summarizing documents and files.

Li didn’t suggest that Daloopa is foolproof. But he did claim that the platform’s algorithms “only continue to improve over time” as they’re trained on growing sets of financial documents. Mum’s the word on where the data’s sourced from, exactly; Li says it’s a trade secret.

“Daloopa has been an AI company since birth five years ago, before all the AI hype,” Li said. “We’ve spent those years training our algorithms and developing AI for financial institutions.”

With the new funding, which brings NYC-based Daloopa’s total raised to $40 million, the company plans to grow its team of ~300 employees, bolster product R&D and expand its customer acquisition efforts.

“Daloopa is an AI-powered solution that started ahead of the curve and has seen year-over-year growth acceleration over the past two years,” he said. “As financial institutions increase their adoption of AI tools, we’re very well positioned to be a leader in the AI-driven fundamental data space.”


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Robotic Automations

OpenAI inks strategic tie-up with UK's Financial Times, including content use | TechCrunch


OpenAI, maker of the viral AI chatbot ChatGPT, has netted another news licensing deal in Europe, adding London’s Financial Times to a growing list of publishers it’s paying for content access.

As with earlier OpenAI’s publisher licensing deals, financial terms of the arrangement are not being made public.

The latest deal looks a touch cozier than other recent OpenAI publisher tie-ups — such as with German giant Axel Springer or with the AP, Le Monde and Prisa Media in France and Spain respectively — as the pair are referring to the arrangement as a “strategic partnership and licensing agreement”. (Though Le Monde’s CEO also referred to the “partnership” it announced with OpenAI in March as a “strategic move”.)

However we understand it’s a non-exclusive licensing arrangement — and OpenAI is not taking any kind of stake in the FT Group.

On the content licensing front, the pair said the deal covers OpenAI use of the FT’s content for training AI models and, where appropriate, for displaying in generative AI responses produced by tools like ChatGPT, which looks much the same as its other publisher deals.

The strategic element appears to center on the FT boosting its understanding of generative AI, especially as a content discovery tool, and what’s being couched as a collaboration aimed at developing “new AI products and features for FT readers” — suggesting the news publisher is eager to expand its use of the AI technology more generally.

“Through the partnership, ChatGPT users will be able to see select attributed summaries, quotes and rich links to FT journalism in response to relevant queries,” the FT wrote in a press release.

The publisher also noted that it became a customer of OpenAI’s ChatGPT Enterprise product earlier this year. It goes on to suggest it wants to explore ways to deepen its use of AI, while expressing caution over the reliability of automated outputs and potential risks to reader trust.

“This is an important agreement in a number of respects,” wrote FT Group CEO John Ridding in a statement. “It recognises the value of our award-winning journalism and will give us early insights into how content is surfaced through AI.” 

He went on, “Apart from the benefits to the FT, there are broader implications for the industry. It’s right, of course, that AI platforms pay publishers for the use of their material. OpenAI understands the importance of transparency, attribution, and compensation — all essential for us. At the same time, it’s clearly in the interests of users that these products contain reliable sources.”

Large language models (LLMs) such as OpenAI’s GPT, which powers the ChatGPT chatbot, are notorious for their capacity to fabricate information or “hallucinate.” This is the polar opposite of journalism, where reporters work to verify that the information they provide is as accurate as possible.

So it’s actually not surprising that OpenAI’s early moves toward licensing content for model training have centered on journalism. The AI giant may hope this will help it fix the “hallucination” problem. (A line in the PR suggests the partnership will “help improve [OpenAI’s] models’ usefulness by learning from FT journalism.”)

There’s another major motivating factor in play here too, though: Legal liability around copyright.

Last December the New York Times announced it’s suing OpenAI, alleging that its copyrighted content was used by the AI giant to train models without a license. OpenAI disputes that but one way to close down the risk of further lawsuits from news publishers, whose content was likely scraped off the public Internet (or otherwise harvested) to feed development of LLMs is to pay publishers for using their copyrighted content.

For their part, publishers stand to gain some cold hard cash from the content licensing. OpenAI told TechCrunch it has “around a dozen” publisher deals signed (or “imminent”), adding “many” more are in the works.

They could also, potentially, acquire some readers — such as if users of ChatGPT opt to click on citations that link to their content. However, generative AI could also cannibalize the use of search engines over time, diverting traffic away from news publishers’ sites. If that kind of disruption is coming down the pipe, some news publishers may feel a strategic advantage in developing closer relationships with the likes of OpenAI.

Getting involved with Big AI carries some reputational pitfalls for publishers, too.

Tech publisher CNET, which last year rushed to adopt generative AI as a content production tool — without making its use of the tech abundantly clear to readers — took further knocks to its reputation when journalists at Futurism found scores of errors in machine-written articles it had published.

The FT has a well-established reputation for producing quality journalism. So it will certainly be interesting to see how it further integrates generative AI into its products and/or newsroom processes.

Last month it also announced a GenAI tool for subscribers — which essentially shakes out to offering a natural language search option atop two decades of FT content (so, basically, it’s a value-add aimed at driving subscriptions for human-produced journalism). Additionally, in Europe legal uncertainty is clouding use of tools like ChatGPT over a raft of privacy law concerns.


Software Development in Sri Lanka

Robotic Automations

Hackers are threatening to publish a huge stolen sanctions and financial crimes watchlist | TechCrunch


A financially motivated criminal hacking group says it has stolen a confidential database containing millions of records that companies use for screening potential customers for links to sanctions and financial crime.

The hackers, which call themselves GhostR, said they stole 5.3 million records from the World-Check screening database in March and are threatening to publish the data online.

World-Check is a screening database used for “know your customer” checks (or KYC), allowing companies to determine if prospective customers are high risk or potential criminals, such as people with links to money laundering or who are under government sanctions.The hackers told TechCrunch that they stole the data from a Singapore-based firm with access to the World-Check database, but did not name the firm.

A portion of the stolen data, which the hackers shared with TechCrunch, includes individuals who were sanctioned as recently as this year.

Simon Henrick, a spokesperson for the London Stock Exchange Group, which maintains the database, told TechCrunch: “This was not a security breach of LSEG/our systems. The incident involves a third party’s data set, which includes a copy of the World-Check data file. This was illegally obtained from the third party’s system. We are liaising with the affected third party, to ensure our data is protected and ensuring that any appropriate authorities are notified.”

LSEG did not name the third-party company, but did not dispute the amount of data stolen.

The portion of stolen data seen by TechCrunch contains records on thousands of people, including current and former government officials, diplomats, and private companies whose leaders are considered “politically exposed people,” who are at a higher risk of involvement in corruption or bribery. The list also contains individuals accused of involvement in organized crime, suspected terrorists, intelligence operatives, and a European spyware vendor.

The data varies by record. The database contains names, passport numbers, Social Security numbers, online crypto account identifiers and bank account numbers, and more.

World-Check is currently owned by the London Stock Exchange Group following a $27 billion deal to buy financial data provider Refinitiv in 2021. LSEG collects information from public sources, including sanctions lists, government sources, and news outlets, then provides the database as a subscription to companies for conducting customer due diligence.

But privately run databases, like World-Check, are known to contain errors that can affect entirely innocent people with no nexus or connection to crime but whose information is stored in these databases.

In 2016, an older copy of the World-Check database leaked online following a security lapse at a third-party company with access to the data, including a former advisor to the U.K. government that World-Check had applied a “terrorism” label to his name. Banking giant HSBC shut down bank accounts belonging to several prominent British Muslims after the World-Check database branded them with “terrorism” tags.

A spokesperson for the U.K.’s data protection authority, the Information Commissioner’s Office, did not immediately comment on the breach.


To contact this reporter, get in touch on Signal and WhatsApp at +1 646-755-8849, or by email. You can also send files and documents via SecureDrop.


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Robotic Automations

Consumer Financial Protection Bureau fines BloomTech for false claims | TechCrunch


In an order today, the U.S. Consumer Financial Protection Bureau (CFPB) said that BloomTech, the for-profit coding bootcamp previously known as the Lambda School, deceived students about the cost of loans, made false claims about graduates’ hiring rates and engaged in illegal lending masked as “income sharing” agreements with high fees.

The order marks the end of the CFPB’s investigation into BloomTech’s practices — and the start of agency’s penalties on the organization.

The CFPB is permanently banning BloomTech from consumer lending activities and its CEO, Austen Allred, from student lending for a period of ten years. In addition, the agency is ordering BloomTech and Allred to cease collecting payments on loans for graduates who didn’t have a qualifying job and allow students to withdraw their funds without penalty — as well as eliminate finance changes for “certain agreements.”

“BloomTech and its CEO sought to drive students toward income share loans that were marketed as risk-free, but in fact carried significant finance charges and many of the same risks as other credit products,” CFPB director Rohit Chopra said in a statement. “Today’s action underscores our increased focus on investigating individual executives and, when appropriate, charging them with breaking the law.”

BloomTech and Allred must also pay the CFPB over $164,000 in civil penalties to be deposited in the agency’s victims relief fund, with BloomTech contributing ~$64,000 and Allred forking over the remainder ($100,000).

Allred founded BloomTech, which rebranded from the Lambda School in 2022 after cutting half its staff, in 2017. Based in San Francisco, the vocational organization — owned primarily by Allred — is backed by various VC funds and investors including Gigafund, Tandem Fund, Y Combinator, GV, GGV and Stripe, and at one time was valued at over $150 million.

Critics almost immediately attacked the firm’s then-pioneering business model — the income share agreement, or ISA — as predatory.

For BloomTech’s short-term, typically six-to-nine-month certification — not degree — programs in fields spanning web development, data science and backend engineering, the school originated income-share loans to fund students’ tuition. (According to the CFPB, BloomTech has originated “at least” 11,000 loans to date.) These loans require that recipients who earn more than $50,000 in a related industry pay BloomTech 17% of their pre-tax income each month until reaching the 24-payment or $30,000 total repayment threshold.

BloomTech didn’t market the loans as such, saying that they didn’t create debt and were “risk free,” and advertised a 71%-86% job placement rate. But the CFPB found these marketing claims and others to be flatly untrue.

BloomTech’s loans in fact carried an annual percentage rate and an average finance charge of around $4,000, neither of which students were made aware of, and a single missed payment triggered a default. The school’s job placement rates were closer to 50% and sank as low as 30%. And, unbeknownst to many students, BloomTech was selling a portion of its loans to investors while depriving recipients of rights they should’ve had under a federal protection known as the Holder Rule.

Prior to the CFPB order, BloomTech, which briefly landed in hot water with California’s oversight board several years ago for operating without approval, had faced other lawsuits claiming the school misrepresented how likely graduates were to get a job and how much they were likely to earn. Last year, leaked documents obtained by Business Insider raised questions about the company inflating its efficacy and hyping up a curriculum that didn’t upskill students at the level they expected.

To comply with the CFPB order, BloomTech must stop collecting payments on loans to graduates who didn’t receive a qualifying job in the past year, and eliminate the finance charge for those who graduated the program more than 18 months ago and obtained a qualifying job making $70,000 or less. The company must also allow current students to withdraw from the program and cancel their loans, or continue in the program with a third-party loan.




Software Development in Sri Lanka

Robotic Automations

Jio Financial, BlackRock to tap India's wealth management market | TechCrunch


Jio Financial Services, part of the Indian conglomerate Reliance, is forming a joint venture with U.S. asset manager BlackRock to set up a wealth management and broking business in India, the two firms said Monday.

The announcement follows BlackRock and Jio Financial launching a joint venture last year to offer asset management services in India. The two companies plan to invest $150 million each in the joint venture, they said last year. That joint venture is awaiting the Indian market regulator’s approval.

The expansion of BlackRock and Jio Financial’s partnership underscores Reliance’s growing ambitions in the financial services sector. The $237 billion Indian firm already leads the nation’s refinery, retail and telecom sectors. (India’s central bank doesn’t permit tycoons to receive the banking license.)

Jio Financial Services said in a report last year that it was taking a direct-to-customer approach, using alternate data models for personalized offerings and a unified app for diverse customer financial needs, to cut costs and tailor interactions.

Since its public debut in August, Jio Financial Services has already expanded to insurance and lending businesses.


Software Development in Sri Lanka

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