Payment Expert’s 2023 reflections: A big year for AI and Open Banking comes to an end

credit: Shutterstock
credit: Shutterstock

The past 12 months have seen as active a year as any other in the payments and fintech space. Reflecting over 2023, Payment Expert highlights some of the defining events which shaped the fintech headlines.

Cryptocurrency, artificial intelligence and Open Banking – three of the defining talking points of the fintech discussion in recent years, and 2023 was no different. As the year drew to a close, each sector had its time in the sun, for better or worse.

In the UK, cultivating a thriving fintech sector and setting the UK up as a leading nation in global fintech has been a vocal goal of Rishi Sunak’s government for some time, and was reiterated in the administration’s Autumn Budget.

Unveiling the government’s fiscal policy for the coming months to MPs, Chancellor of the Exchequer, Jeremy Hunt, announced plans for investment of £500m in UK tech, including AI, which leaders believe is essential for the country’s fintech leadership ambitions.

However, the UK payments and fintech space still has some catching up to do according to some observers, with the Future of Payments Review published soon after the government’s Autumn Statement was announced.

In the review, significant gaps in Britain’s regulation of Open Banking were identified, with review author Joe Garner, former Chief Executive of Nationwide Bank, highlighting an urgent need to address these if the full benefits of the tech are to be realised.

Open Banking in general has been moving forward with great strides in 2023, having been adopted by a plethora of financial stakeholders. For example, October saw JP Morgan and Mastercard launch an Open Banking-based solution.

Similar to the Future of Payments Review’s recommendations to the UK government, payments network TrueLayer would take its own case to the EU, arguing that the political bloc needs to keep pace with changing payments developments.

Meanwhile, the adoption of Open Banking by the gambling sector continued this year, as prominent bookmakers such as William Hill would sign partnerships in this area, with the 888 brand signing a deal with the aforementioned TrueLayer. 

On the topic of the gambling sector, the payments side of the industry saw a number of ongoing developments. The recommendations of the UK Gambling Act review are still the subject of various consultations.

November saw the second round of UK Gambling Commission-organised consultations commence, with one particular area of engagement focusing around transparency in consumer funds.

In a separate development unrelated to the White Paper, the Commission also issued an update to British operators about money laundering and terrorist financing threats, reminding the industry of the risks faced.

Finally, as with the previous year, 2023 saw a lot of activity in the crypto space. Similarly to how 2022 closed with the collapse of FTX, 2023 came to an end with another high-profile crypto exchange hitting the headlines for the wrong reasons.

Following a long-running legal dispute regarding money laundering and KYC failures and illegal money transmits, Binance – the world’s largest cryptocurrency exchange – paid a record $4.3bn settlement to the US Department of Defence.

The company was found to have violated US economic sanctions and “willfully violated the Bank Secrecy Act by failing to implement and maintain an effective anti-money laundering program”.

The case would permeate to multiple levels of finance and even to the world of sports, with a class action lawsuit filed against Cristiano Ronaldo, with the individuals in question claiming they suffered losses because of the footballer’s promotion of the exchange.