Simultaneously with this transaction, Hg has bought out prior Ncontracts shareholder Gryphon Investors (“Gryphon”), as well as prior Venminder shareholders. Hg is a leading investor in software and services businesses and is backing Founder and CEO, Michael Berman, to lead the combined business, which promises to deliver more value to customers via these expanded capabilities.

Acquiring Venminder gives Ncontracts more depth and expertise in third-party risk management, further enhancing its position as a software-as-a-service (SaaS) and knowledge-as-a-service (KaaS) leader in enterprise risk management. The investment from Hg brings resources and expertise, continuing to strengthen Ncontracts as a leader in governance, risk and compliance (“GRC”) software solutions for banks, credit unions, mortgage companies, fintechs and registered investment advisors, as they grapple with increased risks and regulatory scrutiny.

“We are excited to join forces with Venminder,” said Michael Berman, Ncontracts Founder and CEO. “With our teams coming together to help reduce risk, improve compliance and control costs, we will continue to strengthen the financial industry and the communities they serve. With the investment and support from Hg, we are well positioned to continue our rapid growth. Gryphon has been a valuable partner, and I want to thank their outstanding team of operating partners, operating advisors and investment professionals.”

“Uniting Venminder and Ncontracts will bring tremendous value to our customers,” stated James Hyde, Venminder’s CEO. “This strategic partnership extends beyond third-party risk management, propelling Venminder into the broader integrated risk and compliance space. By combining our strengths, we are poised to deliver even more comprehensive and innovative solutions to our clients and the broader market. Our unwavering commitment is to continue to support our clients by guiding them through the complex landscape of third-party risk.”

Ncontracts has been named in the prestigious Inc. 5000 list of fastest growing private companies in America for the sixth consecutive year in 2024. This transaction will grow Ncontracts’ customer base further to over 5,000 customers. The investment and acquisition demonstrate Ncontracts’ commitment to continued growth from both an organic and inorganic perspective.

Alan Cline, Head of North America at Hg, said: “We see Ncontracts swiftly becoming a ‘gold standard’ provider of highly automated, AI-enabled, integrated software solutions for the financial industry. The merger with Venminder creates a compelling platform with a comprehensive product suite that can deliver significant value to customers.”

Alexander Johnson, a Director at Hg added: “We’re excited to partner with Michael Berman as he continues to lead and scale the company for its next stage of growth.”

Jon Cheek, Partner & Co-Head of the Software Group at Gryphon, said: “We are delighted to have completed a complex transaction that significantly transforms Ncontracts and positions it to continue to thrive. Through a combination of organic and inorganic growth strategies, Ncontracts has more than quadrupled in size since Gryphon originally invested in 2020. With its comprehensive suite of products meeting the continued demand for sophisticated financial services governance, risk and compliance management tools, the company is poised to continue that aggressive growth going forward.”

Gryphon sees continued attractive opportunity for new platform investments in the GRC sector and retains its investment in separate portfolio company RegEd, a leading provider of enterprise regulatory compliance solutions to insurance companies and financial services firms.

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Since 2021 the SEC and CFTC have conducted a number of investigations and levied significant fines and other enforcement action against companies making business communications on personal devices and non-sanctioned platforms.

Fines for non-compliance have exceeded $2.7 billion and this has raised the importance of compliance of cross-channel communications.

According to Julia Applegate, business communications specialist at Esendex, there are some essential steps financial services businesses need to take to ensure compliance across digital communications channels.

Julia said:

“Communication is essential to building trust with customers and this is even more important when dealing with people’s finances. We also know that customers expect to be able to make contact and access services across a range of channels at a time that is convenient for them.

“Business communications for financial professions are heavily regulated and this is vital for retaining consumer trust in the long-term. Text messaging has become one of the most effective ways to stay in touch, but while some financial advisors may be tempted to send the occasional text from their personal phone, this represents a major risk, not only for them, but also for their employer and customers.”

Stay up-to-date with the latest regulations

Financial services businesses are heavily regulated by the SEC and FINRA. With scrutiny of off-channel communications increased, it’s important to monitor the latest regulatory notices. A prominent update from FINRA reminded firms of their obligation to retain records of digital communications that relate to their business.

Clarify policies

Many financial services businesses will conduct regular, scheduled reviews of policies and procedures, and digital communications must not become a ‘set it and forget it’ initiative. Your documents should make it clear what communication channels are acceptable, as well as which are banned and monitored.

The world of business communications is rapidly changing, so any new channels will require an update to policies, clearly outlining how and when they can be used.

Put training schemes in place

It’s not just the business which is responsible for actioning changes to avoid SEC and FINRA scrutiny. Employees should be trained on the differences between business and non-business communications, and understand that any business communications need to be retained, ‘reasonably supervised’, and retrievable.

Use a platform to simplify separation

There is always a risk when employees are using the same cell number for business and personal communications, and it causes privacy complications in the case of an audit. Using an online SMS portal or customizable SMS API and a separate phone number and device will create an extra security barrier between business communications.

Specialist SMS platforms also make it easy to include an option for customers to opt-out of communications, which is another legal requirement.

Maintain archive records

SMS platforms also maintain a record of conversations, meaning your company can access and archive any text messages, so they can be easily retrieved when it is time for an audit.  Businesses benefit from the knowledge they can monitor and manage business messages, as well as maintaining regulatory compliance.

Julia added:

“Businesses operating across the financial services sector are well-aware of the risks of a failure to ensure compliance. Modern communication channels have opened up new and more convenient ways to keep in touch with customers, but these steps will help to ensure that firms can maintain security and continue to build trust through their communications.”

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“As partner to Neptune Networks and Octaura, the Genesis platform is supporting some of the most vital and innovative work in fixed income trading,” said Dan Barnes, editorial director of Markets Media Group. “Clients report that its ability to deliver customized data and workflow environments is driving efficiency within primary markets for bonds to post-trade automation. The platform is also proving invaluable in delivering solutions requiring a mix of new software and integration with other user systems.”

“How to be efficient in trading needs to be defined by each firm, not prescribed by a technology provider,” said Stephen Murphy, CEO and Co-Founder of Genesis Global. “The Genesis platform and Marketplace of financial industry components allow users to rapidly build highly bespoke trading solutions. With this award, Markets Media recognizes how clients use Genesis to deliver the new technologies, integrations, transaction processing and workflows which modernize their trading and operations.”

The Genesis platform provides a unified developer environment for creating full-stack applications requiring high-performance transaction processing, event-driven workflows, real-time data and other integrations and rich, interactive user experiences.

The platform dramatically boosts the productivity of developers in financial markets through its:

• Development Suite: specialized low-code framework, AI assistance and accelerators for front- and back-end programming empower developers
• Application Runtime environment: a real-time core, enterprise integrations and built-in encryption and audit power high-performance, secure applications at scale
• Component Marketplace: a library of pre-built financial industry solutions, templates, components and integrations accelerate builds and innovation

In the last year, Genesis:

• Launched Version 8 of the Genesis Application Platform, including step changes in platform technologies and componentry, risk-free trials and a shift to usage-based pricing to make it easier for developers to experience the value and power of Genesis.
• Introduced a unique solution for primary bond markets that helps traders, portfolio managers and credit analysts rapidly analyze new bond deals and request allocations. Now part of the Marketplace, the solution is available to all platform users.
• Deployed a web version of its multi-asset class middle-office solution, Trade Allocation Manager (TAM). It provides a robust foundation for post-trade efficiency and regulatory compliance by automating trade matching, allocation, confirmation and other middle-office processes. TAM is also part of the Marketplace.
• Engaged with Quantitative Brokers and X-Change Financial Access (XFA) to bring new trading technologies to complex fixed-income markets.

Banks, asset managers and trading infrastructure providers worldwide use Genesis and its platform to develop new software, enhance legacy technology systems and replace end-user computing and manual processes with enterprise-quality solutions. Among these clients, Bank of America, BNY Mellon and Citi are also strategic investors in Genesis.

Presented annually, the Markets Choice Awards recognize “the best of the best in capital markets trading and technology.” Winners are selected by the editors at Markets Media Group, in consultation with a range of market participants.

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The firms will apply the power of the Genesis Application Platform and the expertise in Inovotek’s team of more than 60 consultants and developers to rapidly deliver new software and integration work for clients working to enhance their trading, treasury, risk, compliance and other financial industry technologies.

“Partnering with consultants like Inovotek is a key part of our strategy to make the Genesis platform the innovation engine in financial markets,” said Devry Ross, Head of Partnerships at Genesis Global. “Extending the capabilities of core systems, like Murex, is a major opportunity for buy- and sell-side firms taking their digitalization strategies to the next level. Combining our technology with Inovotek expertise helps us reduce time to market for our clients’ most innovative ideas.”

“The Genesis platform possesses a distinctive capability to meet not only the rigorous standards for data processing and resilience in trading and other financial applications, but also the compliance and control requirements,” said Karim Yahia, CEO and Founder of Inovotek Solutions. “In working together, we will help clients realize the technology edge they need to compete and succeed.”

Partnering with Genesis drives competitive advantage by improving profitability, reducing time to delivery for technology projects and lowering costs for end clients. Genesis partners have access to the Genesis Academy and other dedicated developer support programs designed to ensure their success in using the Genesis platform.

The Genesis Application Platform combines a specialized low-code framework, a library of prebuilt components and AI-driven developer tools to make it easier and faster for financial firms to build new applications or upgrade legacy systems at speed. It provides a unified developer environment for creating full-stack applications requiring high-performance transaction processing, event-driven workflows, real-time data integrations and rich, interactive user experiences.

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This initiative will allow mutual customers an easier and quicker integration to enhance their fraud detection capabilities to start fighting check fraud faster.

According to the U.S. Department of the Treasury, check fraud has increased by 385% since 2020. Moreover, a recent Propeller Insights survey indicates that check fraud is expected to reach $24 billion in losses by the end of this year.

“This partnership with Mitek marks a significant milestone in our ongoing commitment to help safeguard the financial industry and consumers from the escalating threats of check fraud,” said Susan Blackburn, Chief Commercial Officer at Viewpointe. “By leveraging Mitek’s cutting-edge technologies, we are not only responding to the trends we are seeing but actively helping to shape a safer future for financial transactions.”

Mitek’s Check Fraud Defender is a cloud-hosted consortium that uses patented imaging science, machine learning, and artificial intelligence to quickly analyze data, to help reduce losses associated with check fraud.

“We are excited to partner with Viewpointe to offer our check fraud detection technology,” stated Kerry Cantley, VP of Digital Banking Strategy at Mitek. “Together, we can take a proactive approach to combating check fraud across financial institutions. By combining Viewpointe’s content and compliance expertise with Mitek’s robust Check Fraud Defender consortium, we’re delivering an innovative solution, setting new standards in fraud prevention across banking.”

Through this partnership, Viewpointe is significantly aiding its customers in their ongoing efforts to combat fraud and keep consumers safe online.

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This strategic partnership will enable Spark Systems to accelerate its business development and market reach in Singapore and globally by bringing Fintica AI’s unique unsupervised artificial intelligence technology to its client base.

The finance sector in Singapore has witnessed a remarkable transformation in recent years, with the growing importance and relevance of AI technology as well as a rapidly expanding foreign exchange market at its forefront. Singapore has positioned itself as a global financial hub, and its financial institutions are increasingly turning to artificial intelligence to pursue efficiency and profitability. AI-powered solutions, such as those created by Fintica AI, have revolutionized various aspects of finance, from AI-augmented investment decision and risk management to enhanced market liquidity and monitoring.

Fintica AI’s solutions enable analysis of vast amounts of data, giving financial institutions greater leverage to make data-driven decisions swiftly and accurately. This move therefore holds the potential to make Singapore’s financial sector not only more competitive, but also more innovative in the global arena.

The decision of Spark Systems to partner with Fintica AI is a key example of how the Singapore ecosystem is investing in becoming one of the most dynamic financial sectors in the world, driving further innovation and cementing the city-state’s reputation as a cutting-edge financial center.

Wong Joo Seng, Executive Director and Chief Executive Officer at Spark Systems, said: “Spark Systems is pleased to partner with Fintica AI and its cutting-edge AI technology team that is focused on trading financial markets. Artificial intelligence is neither artificial nor science fiction anymore, it’s real and happening now. Traders armed with AI will possess the most significant edge the industry has seen to date.”

“We are thrilled to partner with our esteemed Singapore counterpart to spearhead transformative initiatives in the foreign exchange trading space,” said Philippe Metoudi, Chief Executive Officer of Fintica AI. “This partnership will enable us to leverage each other’s strengths, tap into the immense potential of Singapore’s financial institutions and fintech ecosystem, and deliver innovative solutions that will shape the future of foreign exchange.”

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Powered by OpenFin’s Workspace “Anywhere” technology, Kondor users will have easy access to the solution either in web browsers such as Google Chrome and Microsoft Edge or as a lightweight desktop app. Whether curating personalized experiences via the micro-UI workspace, or consuming partner applications via unified dashboards, banks benefit from a more seamless, intuitive and value-added treasury management experience wherever they are working.

“Enriching Kondor with OpenFin’s software reflects our ongoing commitment to placing our customers at the center of the solution experience,” said Herve Carrere, Chief Product & Technology Officer, Treasury & Capital Markets at Finastra. “Through robust technology and TaaS, we’re giving banks the tools to fast-track their transformation, future-proof their business to evolve with new demands and optimize their entire treasury operations – from full back-office processing through to real-time coverage of credit, market and liquidity risk in the front office. The seamless workspace experience also ensures that users can easily access these tools in the way that works best for them.”

“Our collaboration with Finastra enhances Kondor’s already impressive capabilities, making it even more powerful in the complex landscape of treasury trading,” said Adam Toms, Chief Operating Officer at OpenFin. “Together, we are setting a new standard for what financial institutions can expect in terms of performance and user experience.”

Finastra Kondor is a best-of-breed treasury trading system that meets financial institutions’ needs for sophisticated treasury functionality, while enabling growth and ensuring compliance. Renowned for its robust capabilities in supporting complex trading, risk management and operations, the solution is the backbone of numerous financial institutions, enabling them to navigate the intricate landscape of global markets with precision and agility.

OpenFin is a leading provider of Chromium-based workspace technology to the financial industry, deployed to more than 3,800 banks and buy-side firms. Its technology is specifically designed to meet the rigorous standards and dynamic needs of financial services, providing a robust foundation for platforms like Kondor.

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Based on the firm’s deep experience in analytics, mathematics and market intelligence, the new ML initiative aims to offer retail traders and buy-side firms, including proprietary trading firms and hedge funds, unprecedented tools for identifying new trading and analytics opportunities, guiding trading strategies, and managing their positions. CQG has been exploring the field of AI for the past year in the context of solving for its clients’ challenges, testing the technology in a state-of-the-art multi-platform lab. Last week, for the first time, the company tested its next-generation machine learning toolkit in a live trading environment and achieved 80% predictive accuracy – matching the results attained in the back-testing environment.

CQG CEO Ryan Moroney said: “In early 2023, we decided we wanted to do something different in machine learning and AI that leveraged our unique position in the market, building off our comprehensive database of historical trade data and analytics in a way that could help our clients and prospects analyze, predict and trade markets through a new lens. We built a lab, and Kevin Darby – our Vice President of Execution Technologies – has done an extraordinary job of turning that effort into an exciting reality with results that have significantly surpassed our expectations.”

Darby said: “We first had to solve multiple real-world challenges, such as storing and curating terabytes of historical market data while retaining the ability to make decisions in microseconds in real-time environments. We built bridges between the current ML infrastructure, based on the Python language, and the reliance of the financial industry infrastructure on C++. We also needed to recast the traditional ML training pipeline to optimize for generative time series prediction to estimate conditional probability distributions in a mathematically satisfying and stable way.”

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CONTEMPORANEOUS STATISTICS AND SYSTEM FLAWS

In the fintech world, the gender gap is striking with only about 20% holding executive positions. Despite the industry’s projected 20% growth to $305 billion by 2025, the gender gap is expected to widen further.

Likewise, salaries are not the only front in the battle for gender equality.

Financial inclusion matters to everyone because it is the main tool to help people facilitate easier access to finance. Consequently, the absence of women on the board dominates the quality and diversity of the products made by the industry that negatively impacts it from the bottom to the top.

The grounds for inequality go much further than gender discrimination, biases, statistics, organizational faults, and the absence of required qualifications, and payroll. As one of the most consultative sectors, fintech as a domain often requires women to execute individual dedication and avoid personal activities at the workplace, which makes it appear less promising to keep a social life alongside work.

However, the market generally distinguishes itself in its conservatism as much as it requires resourcefulness and innovativeness with creative solutions reciprocated by bold and decisive actions. The already existing system across many regions, which is meant to provide women with cases where they can easily tap into the industry and excel while having enough funds and financing for loans because currently women have minimal access to venture capital funding. All these factors, unfortunately work against and opposite to the favor of women making it difficult for them to enter this industry in an inclusive format.

The issue also pinpoints the psychological barriers that many women often neglect and/or don’t deal with appropriately at the right time. Feminist academics Linda Babcock and Sara Laschever, in their book “Women Don’t Ask”, delved into the issue of negotiation and the gender split, illustrating how women are subject to psychological barriers which impede their capacity to negotiate effectively. The authors stress that females do not assert themselves or share information they have because they perceive it necessary to get more trained before taking a step. This hesitancy is attributed to a perception that they must fully understand a situation before making decisions, which can lead to them feeling overwhelmed by the progress and presence of men in certain industries

THE GENDER GAP IMPACT

Failure to embrace gender diversity in businesses leads to the inefficient utilization of the skills and capabilities of the organization and thus causes poor business performance. Numerous studies indicate that highly diverse teams are more creative, informative, and able to achieve tasks more effectively. Also, a McKinsey study in January 2014 revealed a 15% financial return increment in companies with higher gender diversity. While we are conversing on the topic of the role of women executives and their influence on financial performance, a Credit Suisse study revealed that companies with more female leaders generated 27% higher returns on equity, while the ratio of dividend payouts is approximately half. In 2015, an in-depth research was conducted on the budget viability of women-owned organizations versus that of Standard & Poor’s (S&P) over a period of 12 years. Certainly, the financial success of such companies with female leaders is 226% higher than that of S&P.

Beyond the implications described above, gender diversity brings a diversity of skills adequate for comparative advantage, encourages different ideas to be exchanged, ultimately leading to efficiency in business. In doing so, it also secures the financial industry from the practice of democratization by making provisions for the different stakeholders, such as customers, by including the voices of a wider audience, improving product development, the speed of growth, and competition in the sector. Opening up the fields for women not only adds top-class performance to the market but also increases productivity because of additional workers and the creation of better social representations that therefore lead to creating lasting products and services for end-users to make a purchase decision on them.

Promoting One Woman to a C-Suite Position Could Lead to a Three-Fold Increase in Women in the Firm’s Senior Leadership

“Breaking the glass ceiling” is mostly associated with women’s activity in leadership and participation, especially in fintech. Although some glass ceilings have been broken down over the last decade, the number of women in power roles remains very limited. The three-pronged problem of gender diversity in fintech—under-representation of female founders, employees, and users—only highlights the need for more comprehensive and strategic solutions.

Only ¼ of leadership roles are held by women, even though they make up ⅓ of the workforce in the 20 technology companies globally. Additionally, women account for more than 13% of leadership positions as founders and executive board members in fintech firms, which is lower than their presence in traditional banking and tech companies.

The presence of women in fintech makes it possible for these products to be developed in a way that reflects women’s requirements. However, we stand to lose some of the most revolutionary concepts and solutions with such low representation of women in fintech. For instance, let’s consider the case of Vrinda Gupta, who is the founder of Sequin Financial, a fintech company aimed at improving women’s credit ratings. A well-known credit card firm rejected her idea about targeting its product towards female customers before she established this successful organization. Nevertheless, through her persistence, she was able to create her own company and is now listed among those “Women in Fintech to Watch-Out for in 2023.”

Gender bias predominantly arises when it comes to accessing finance by female-founded fintech startups over male-founded ones due to gender discrimination, lack of equal opportunity, or exploitation. Even though this presents the same business ideas, investors tend to prefer those presented by male entrepreneurs. Many real-life scenarios have highlighted the issue of investor panels downplaying women as compared to men, as they mainly question male entrepreneurs about potential gains and ROI, while female entrepreneurs are questioned about the risks and losses to be incurred in their businesses. Furthermore, during investor meetings, female founders are nudged to tag along with their male teammates or business partners to support their presentation and agree with their opinions to make a lasting impact on the investors for a surefire way to closure.

To change gender roles and break down barriers for females in the STEM fields, there is a need for an all-inclusive approach that involves parents, tutors, mentors, business people, and investors. It starts with parents, schools, and communities that motivate girls by encouraging their efforts to make a transition into STEM and further into their relevant careers. This effort also requires government programs and employers’ participation in doing away with obstacles and creating spaces where women can flourish, advance, and lead in sectors that are usually male-dominated.

Lastly, it needs financiers who create a conducive business environment and equal opportunity platform for women and willingly invest in female entrepreneurs, acknowledging their innovativeness, enthusiasm, and aptitude that they bring to the table.

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“With Vermiculus as a partner in developing the nuam exchange post-trade systems, we are marking a new milestone for the unification of our markets. In addition to gaining a cutting-edge technological partner, we envision the possibility of enhancing our customers’ experience through dynamic technological architecture in line with the needs of the integrated market,” said Juan Pablo Cordoba, CEO of nuam exchange.

Vermiculus is a fintech based in Stockholm, Sweden. Although it just began operating in 2020, the company is already recognized as a leading provider of technology solutions for exchanges, clearing houses and central depositories worldwide. With this new partnership together with nuam exchange, Vermiculus’ products will be present in the four largest financial markets in Latin America.

“We are proud to deliver a system that plays an integral role in the core of this historical merger, empowering one of Latin America’s most crucial markets with VeriClear’s state-of-the-art technology, together with our deep market expertise,” commented Taraneh Derayati, CEO of Vermiculus, and continues: “We look forward to bringing our forefront technology and sharing our industry knowledge with nuam exchange throughout this project and beyond.”

The new clearing system will include trade and position management, settlement processing, collateral management and risk management. It will also handle interoperability, real time risk monitoring, margining and collateral across all three CCPs.

In parallel, nuam exchange is working with the three countries’ regulators to obtain the required approvals to change the regulations for the CCPs in Chile and Colombia—CCLV and CRCC, respectively—and to obtain approval for creating a CCP in Peru, establishing its processes and operating contracts.

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