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FinTech Interview with Pete Major, VP of Fintech Solutions at Member Driven Technologies

FTB News Desk — Tue, 10 Sep 2024 13:30:48 +0000

Pete Major of Member Driven Technologies shares key fintech strategies for credit unions, tips for evaluating fintech partners, and the role of AI in financial services.

Pete Major, VP of Fintech Solutions at Member Driven Technologies

Pete, please guide us through your background and your role as VP of Fintech Solutions at Member Driven Technologies?
I have over 25 years of experience in financial services, spanning front-office and back-office operations, payments, IT processing, consulting, mergers, conversions and integrations. Prior to MDT, I spent over 15 years at Jack Henry with my last position being the director of Symitar implementations.

Even in my previous role, I admired MDT’s deep commitment to clients, employees and its dynamic culture, which are major reasons I ended up here. My passion is helping credit unions leverage the most effective technology and solutions to meet their unique needs and ultimately enhance member service, helping solidify our credit unions’ position as the financial partner of choice in their communities. As VP of Fintech Solutions, I support our clients with fintech integrations and strategy, helping them navigate today’s complex landscape to remain competitive and successful.

For banks and credit unions, what are the key considerations when evaluating potential fintech partners?
When evaluating potential fintech partners, there are several factors that institutions should consider to ensure alignment with their innovation goals and strategic priorities. First, prioritize fintech investments based on cost-effectiveness and their impact on the institution’s overarching strategy. Does the solution solve a pressing problem or business need? Some common top priorities include digital banking solutions, payment systems, efficiency improvements, and security/fraud prevention technologies along with technology that can drive deposits.

It’s also critical to make sure the potential partner has a strong values and culture match. If the fintech doesn’t align with the institution’s long-term vision, the implementation is likely to be disruptive instead of transformative. Finally, thoroughly evaluate the fintech’s track record (which should include reaching out to others who have leveraged the technology), their approach to data security and compliance, and its ability to integrate seamlessly with existing systems.

Prioritizing fintech partners based on overarching strategy, culture and values alignment – as well as extensive due diligence – will be best positioned for success.

What are the common pitfalls that financial institutions should avoid during the fintech selection process?
A major one is innovation for innovation’s sake. Community-focused institutions in particular have limited time and resources, so it’s critical for their attention to be dedicated to deploying technology that squarely supports the organization’s high-level strategy. If innovation is not a key part of your credit union’s strategy, then avoid the ‘shiny new thing’ and focus on investing in technology that augments your institution’s competitive differentiators.

Another common pitfall is only assessing the fintech’s sales and business development team. While these contacts might be great, what will matter most is connection and collaboration with who the institution will be working with on a daily basis, such as the fintech’s operational and support teams. Make sure there is good chemistry between key players.

How important is it for a fintech solution to align with the existing processes and culture of a financial institution?
It’s extremely important; even the most advanced technology can be harmful rather than helpful if it doesn’t align with the institution’s overarching mission or long-term vision. As part of this ‘vibe check’, institutions should evaluate the fintech’s commitment to the customer or member experience, their risk appetite and their view of technology’s role in the broader ecosystem. It’s important to understand how well the fintech solution integrates with existing processes, complements the company culture and advances organizational goals.

Please keep in mind that this isn’t the greenlight to make new fintech solutions to fit into existing processes that have been in place for 20 years. You will likely not gain the efficiencies you’re looking for if you take this approach. Be willing to consider different approaches to existing processes and make the changes that make sense from an ROI perspective.

Can you share some best practices for conducting thorough due diligence on potential fintech partners?
There are several key areas that should be thoroughly vetted to ensure a successful and secure partnership. This includes factors such as the solution’s technical architecture, integration points with existing systems, security posture and the company’s financial position. While this process is arduous, it’s extremely necessary; there is great financial and reputational risk involved in partnering with a company that doesn’t employ proper controls or fails to meet security standards. Here, it can be extremely beneficial to rely on trusted strategic partners for insight and guidance.

By conducting thorough due diligence and thinking long-term, institutions can identify solutions that not only help differentiate but also foster growth and lasting loyalty.

How can smaller institutions, with limited technology resources, navigate the vast array of fintech options available to them?
Navigating the fintech ecosystem can be especially difficult for smaller institutions without the extensive technology resources or in-house expertise available. This is where the right partner can make all the difference, one that is able to provide comprehensive support to guide institutions through the complex fintech ecosystem. Partners that help institutions bridge the fintech gap and understand and speak the fintech language are often a gamechanger for smaller institutions.

When it comes to integrating AI, what steps should financial institutions take to distinguish between hype and substance?
There is a lot of literature out there about AI needing a very structured waterfall approach to implementing this technology. If we’re talking about narrow AI, this approach makes sense because this technology has been around for decades and you’re likely already using this technology without knowing it. If we’re talking about the new Generative AI (GenAI), I don’t think a structured approach here is the right path, particularly for small institutions.

People have a very difficult time switching to new technologies and if you’re going to get the efficiency lift that GenAI promises, you have to change behaviors. It’s just nature, we all love a good habit (maybe it’s just me). But we have found that the best approach here is to pilot GenAI technologies. This approach gives your team a chance to test the new technology in a controlled environment and allows you to figure out the pros and cons without making a major investment in a platform that will likely be very different a year from now. Engaging strategic, and consultive partners is key here if you don’t have the technical expertise on staff.

What role does education and literacy around AI play in helping financial institutions make informed decisions about adopting this technology?
Education and literacy are huge. In general, people tend to fear the unknown, so it makes sense that institutions that fail to properly educate themselves about AI will avoid it. Ensuring key stakeholders understand AI’s potential – and risks – is a critical first step before a strategy can be formed. You can’t avoid AI’s impact. Your employees are likely using this technology now. Lean on industry groups, reputable publications and trusted partners to help share the most relevant AI information and content.

Can you provide examples of small-scale AI use cases that financial institutions can experiment with before fully committing to larger implementations?
As the hype and buzz around AI continues (and frankly, it’s exhausting), financial institutions are exploring several small-scale use cases before committing to larger implementations. For instance, they can start by integrating AI into simpler customer or member chats, where the AI can handle routine inquiries and free up human agents for more complex interactions. Keep in mind, quality here is extremely important as the chatbot is talking directly to your members. Another promising area is AI’s role in supporting the loan approval process by automating preliminary assessments and streamlining documentation review.

AI also proves beneficial in enhancing operational efficiencies by optimizing workflows, improving work quality, and proactively informing decision-making. And, it can support with crafting more personalized offerings, tailored to individual customer or member needs. Even if immediate action isn’t taken, it’s crucial for banks and credit unions to consider how AI could align with and support their service and brand strategy. Engaging with trusted partners and peers is a great starting point to stay informed about the latest advancements and potential applications.

Looking forward, what trends do you see in the fintech landscape that banks and credit unions should be aware of?
Origination and servicing in digital channels continue to be top of mind. Ensuring member engagement after they open their accounts is also areas of interest for our credit unions. We expect loan rates to start to decrease and as a result, lending volumes will go up (no surprise there). Make sure you have the right technology tools for loan origination in place before volume goes up. Also, you cannot be passive with respect to fraud and security. Using technologies to help mitigate these risks is a must for every financial institution.

We see a lot of interest in technologies to provide services for non-interest income. Business Banking and the associated fee income is big right now. Also, is there a way to use Faster Payments (FedNow/RTP) to generate non-interest income? Perhaps.

BNPL (Buy Now Pay Later) continues to get a lot of press and frankly, the adoption numbers are really amazing. But with multiple due dates and rising delinquencies, it does make me wonder if this new service is really helping or hurting consumers.

Anything from the CEO Forum we could highlight?

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The Unseen Link: Connecting ITAM, Employee Satisfaction, and Fintech Customer Experience

Syed Ali — Wed, 04 Sep 2024 12:30:42 +0000

Customer-centricity, shown through exceptional user experiences, is vital for fintech success. While the industry recognizes the importance of seamless and intuitive customer interactions, it often underestimates the crucial role that employee experience plays in achieving this goal.

Fintechs are now heavily investing in AI to gauge credit risk, analyze customer behavior to identify customer needs, and to provide digital customer service. However, it is equally important to have the right technology in place to manage the employee experience – which directly affects the customer experience.

For fintech companies to deliver exceptional customer experiences, they must first ensure their employees have the tools and resources they need to perform their jobs effectively. This is where a robust IT Asset Management (ITAM) solution comes into play.

A good employee experience, facilitated by advanced ITAM solutions, can ensure employees efficiently manage assets, maintain security and compliance, and minimize downtime—all of which directly translate into a superior customer experience.

Some of the top outputs of a strong ITAM solution in enhancing the employee experience include:

Asset tracking and management: An ITAM solution allows employees to keep track of all hardware and software assets. This ensures that resources are available when needed, reducing frustration and inefficiencies caused by missing or outdated equipment.
Security and compliance: ITAM solutions help maintain security and compliance across all devices by ensuring authorized access to software with assigned roles.
Reduced downtime: An effective ITAM solution helps schedule preventive maintenance, ensuring that all equipment and devices are in optimal condition. When technical issues arise, an effective ITAM solution enables employees to create tickets on a help desk and escalate an incident for faster resolution, minimizing employee downtime. Features such as a Service Catalog can help employees self-cater to small technical concerns and access needed IT services spontaneously – streamlining the IT support process. This is crucial in a fast-paced industry where every minute counts.
Streamlined onboarding and offboarding: New employees can be quickly set up with the necessary tools and access, allowing them to hit the ground running. This reduces the time and cost associated with onboarding and training. Access can also easily be revoked and all equipment collected with a smooth offboarding process; critical to reducing asset loss, misplacement, ensuring data privacy and preventing unauthorized access.

By enhancing the employee experience, fintech companies can ensure that their workforce is productive, engaged, and capable of delivering high-quality service. This, in turn, leads to a better customer experience.

Connecting EX and CX: The path to fintech success

The relationship between employee experience and customer experience is symbiotic. A positive employee experience, supported by an efficient ITAM solution, leads to more motivated and capable employees. These employees are better equipped to serve customers, providing timely and effective solutions to their needs.

When employees have a seamless experience managing technology and assets, they can focus more on delivering value to customers. For instance, a customer support representative who experiences minimal downtime due to IT issues can handle more inquiries and provide quicker resolutions, leading to higher customer satisfaction. Similarly, a financial advisor with access to up-to-date tools and information can offer more accurate and personalized advice.

As fintech continues to evolve, companies must adopt a holistic approach that prioritizes both customer and employee experiences. Ensuring that employees have the best possible experience through effective ITAM solutions is equally important.

By investing in EX, fintech companies can create a virtuous cycle where happy employees lead to happy customers, driving growth and success in the industry. The future of fintech lies in this balanced approach, where technology and human experience work hand in hand to deliver exceptional value.

Fintech success is not just about adopting the latest technologies but also about creating an environment where employees can thrive. A good employee experience translates into a good customer experience, and together, they form the foundation of a successful fintech company.

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Syed Ali, founder and CEO at EZO

Syed Ali is the founder and CEO at EZO and has over 25 years of experience in the tech sector. Ali specialized in the field of Computer Science and is an alumni of LUMS and University of Illinois at Urbana-Champaign. Under his leadership, EZO has evolved to offer a suite of four innovative products that streamline critical asset management processes, increase accessibility, reduce costs, and boost productivity for organizations.

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Broadridge announced the launch of Tradeverse

PRNewswire — Tue, 03 Sep 2024 18:00:03 +0000

The launch of Tradeverse, a new data platform by global Fintech leader Broadridge Financial Solutions Inc., will help trading firms eliminate data silos, unleash the potential of their data across the enterprise and better manage costs, reconciliation, and the data quality and lineage challenges of firms typical complex platform ecosystems.

Tradeverse consolidates real-time, multi-asset class data from multiple vendor applications and platforms from orders and executions through settlement into a unified, harmonized data platform. It reduces errors, simplifies access with a common data ontology across front, middle and back office and incorporates robust security to protect sensitive information and maintain data integrity. The clear data structure unlocks insights for all key functions – trading desks, operations, risk, finance, and regulatory – by providing a trusted and transparent data source.

“A Tradeverse implementation we’ve recently completed with a global bank is proving the power of harmonizing trade data,” said Hugh Daly, Head of Data and AI, Capital Markets, Broadridge. “The solution delivers efficiencies for their regulatory reporting and compliance teams, allowing direct access to the data for business users initiating complex searches using natural language.”

Many enterprise data warehouse projects fail to deliver the expected benefits due to the complexity arising from disparate representations of the source data. Tradeverse is focused on ensuring true data harmonization. The application of business logic and constraint of the data ontology is critical to that. This leads to seamless access to high quality data, which ultimately accelerates time-to-value for multiple AI initiatives.

In another use case, the Securities Operations team of a top ten capital markets firm is using Tradeverse’s harmonized data platform coupled with Broadridge’s Generative AI tool for Operations (OpsGPT) to empower users. This is allowing the teams to identify and implement productivity gains such as settlement fails analysis that were previously incredibly hard to capture in a fragmented ecosystem.

Tradeverse will be the cornerstone of a number of innovative value-add business solutions that Broadridge will bring to market in the coming months.

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APX Lending Expands into the US and Unveils White Label Solution

PRNewswire — Wed, 14 Aug 2024 17:00:23 +0000

APX Lending, a pioneer in compliant crypto-backed lending, is proud to announce two significant developments that underscore its commitment to innovation and market leadership. At the Blockchain Futurist Conference 2024 in Toronto, Canada, CEO Andrei Poliakov announced the company’s expansion into the United States, where it now serves comfmercial borrowers across 30 states, and unveiled APX Lending’s new White Label Solution designed for banks, credit unions, lenders, and fintech companies.

Expansion into the US Market
APX Lending is pleased to announce that it has expanded its services to commercial borrowers across 30 U.S. states, offering loans from $1,000 to $10 million, with retail lending coming soon. This strategic move targets the $4 billion U.S. crypto-backed lending market. The company is committed to maintaining its high standards of security and compliance, with collateral held in segregated and insured cold storage wallets and visible to borrowers on the blockchain throughout the loan term.

Introducing the APX Lending White Label Solution
In addition to the U.S. expansion, APX Lending has unveiled its White Label Solution—a comprehensive, fully managed platform that enables financial institutions to offer their own branded crypto-backed lending services with minimal overhead. Built on APX Lending’s 100% proprietary technology, the platform is designed with high availability, customizable branding, and robust API integration to ensure seamless adoption. The solution also features advanced security protocols, including role-based access control, out-of-the-box Web Application and API Protection (WAAP), and custom reporting capabilities, all backed by dedicated support from APX Lending.

These announcements strengthen APX Lending’s role as a leading provider in the global crypto-backed lending industry, offering innovative solutions that cater to the changing needs of both businesses and institutions.

Notable Quotes for Media Reference:

“As we continue to innovate and expand in Canada and the US, our focus remains on delivering cutting-edge crypto-backed lending solutions with the highest standards of security and compliance. This commitment sets APX Lending apart globally. We’re excited to now serve commercial borrowers across 30 states and look forward to expanding into the retail sector soon.” – Andrei Poliakov, CEO of APX Lending
“Our technology and compliance expertise make us uniquely positioned to offer a white label solution that is both robust and adaptable. We are excited to collaborate with financial institutions worldwide, helping them to seamlessly enter the crypto-backed lending space with confidence and security.” – Andrei Poliakov, CEO of APX Lending

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Kompliant partners with the Digital Solutions team at Equifax

PRNewswire — Wed, 31 Jul 2024 14:00:05 +0000

Building on its promise to provide customers with a best-in-class experience while decreasing compliance risk, Kompliant, a leading provider of intelligent automation, is further elevating the merchant underwriting process, by announcing a partnership with the Digital Solutions team at Equifax to provide the powerful suite of Kount solutions for fraud and risk management.

The partnership will provide Kompliant access to the Kount Payment Fraud solutions that use advanced Artificial Intelligence, equipped with supervised and unsupervised machine learning, to analyze data from an online purchase or transaction.

“Our partnership with Equifax arrives at a crucial time when businesses must stay ahead of increasingly sophisticated fraud tactics while navigating complex regulatory environments,” said Leo Patching, CEO of Kompliant. “By enhancing our powerful workflow automation tools with AI-driven fraud detection capabilities from the Equifax Kount Payment Fraud solutions, we’re providing financial institutions with a comprehensive solution that not only safeguards against fraud but also streamlines risk management processes, enhances operational efficiency, and supports data-driven decision-making.”

Growth in the eCommerce industry has presented many companies with new opportunities such as revenue growth and new customers, but it has also caused pain due to a steady rise in fraud. Kount Payment Fraud solutions provide merchants with a comprehensive view of transactions and uses machine learning to set rules and automate approve and decline decisions, lowering operational costs and driving scalability for their fraud operations teams.

“Our goal is to help manage clients’ exposure to risk and quickly and effectively reduce fraud, all while maintaining the customer experience,” said Scott Przybyla, SVP of Kount Payments Sales, Digital Solutions at Equifax. “Together with Kompliant, we’re empowering financial institutions to drive their organization’s growth without compromising their security.”

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HTX Integrates Fireblocks Off Exchange

PRNewswire — Thu, 18 Jul 2024 17:30:22 +0000

HTX announces its integration of Fireblocks Off Exchange, an innovative direct custody solution that mitigates exchange counterparty risk. Fireblocks, an enterprise platform to manage digital asset operations and build innovative businesses on blockchain, launched Off Exchange to enable trading firms and asset managers to trade on centralized exchanges from an on-chain multi-party computation (MPC) shared wallet. The integration of Off Exchange will help strengthen digital asset security, streamline global compliance operations, and create a better virtual asset trading experience for HTX users.

Off Exchange effectively mitigates exchange counterparty risk by allocating and mirroring assets from a wallet both institutional traders and exchanges mutually control, leveraging Fireblocks’ MPC technology and on-chain settlement. In the last 90 days, the Fireblocks Network, upon which Off Exchange was deployed, facilitated over $200 billion in transactions between institutional traders and over 30 connected exchanges.

In March 2023, HTX joined the Fireblocks Network, an enterprise-grade digital asset transfer platform for rapid digital asset transactions and dynamic payment workflows, to facilitate seamless trading on the HTX platform, leveraging the direct custody solution offered by Fireblocks.

Fireblocks Off Exchange: Battle-Tested Technology and Real-Time Settlement

Fireblocks Off Exchange sets itself apart from other third-party custodial solutions by utilizing MPC technology to help traders mitigate exchange counterparty risk by locking funds in secure MPC-based shared wallets.

Justin Sun, a member of the HTX Global Advisory Board, acknowledged the importance of leveraging Fireblocks, stating, “By working with Fireblocks, HTX will deliver a more secure trading environment and an enhanced user experience. HTX is committed to establishing itself as the world’s leading one-stop trading platform, earning the trust of millions of users worldwide.”

Michael Shaulov, CEO and Co-founder of Fireblocks, said, “Exchanges are increasingly looking to innovative technology and institutional-grade security to address the challenges around counterparty risk and to ensure customer funds are protected. Fireblocks Off Exchange provides HTX with the ability to monitor and validate client collateral on-chain and enforce risk management without taking custody, as well as increases liquidity and maximizes capital efficiency, creating a more secure digital asset trading environment.”

HTX Continues to Elevate User Trading Experience, Paving the Way for Freedom of Crypto Trading

HTX recognizes the launch of Fireblocks Off Exchange as a milestone in risk mitigation for over-the-counter (OTC) transactions in the cryptocurrency market. Adhering to the “User First” principle, HTX is committed to consistently reducing trading risks and enhancing the overall trading experience. By working with Fireblocks, HTX aims to contribute to a cryptocurrency ecosystem that fosters greater freedom in trading, while simultaneously decreasing risk and increasing liquidity. Users from both platforms can seamlessly perform instant transfers, payments, and other operations directly through their HTX accounts. This move enhances the platform’s global presence and provides a myriad of investment opportunities for users worldwide.

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Advisor360° Launches New Bulk Onboarding Capability

BusinessWire — Wed, 17 Jul 2024 18:00:51 +0000

Advisor360°, a leading provider of integrated technology for enterprise wealth management firms, has launched Account Transitions, its newest Digital Onboarding capability that allows firms to easily repaper thousands of client accounts in seconds in support of advisors in transition. Debuting on the heels of its recent research revealing that nine out of 10 financial advisors would switch firms over bad technology, Advisor360°’s new capability facilitates a best first impression when advisors make a move.

Account Transitions accelerates the collection and transfer of data during the onboarding of client accounts, supporting the setup of up to 6,000 accounts in 90 seconds. The new capability collects and standardizes client and account data en masse by automating error detection, creating contacts and households for the CRM, and drafting new account information. By facilitating a seamless and efficient bulk account transfer and repapering process, the Account Transitions capability is a force-multiplier for advisors moving entire books of business from one firm to another.

“Research shows that on average 13,000 advisors switch firms every year. With so many advisors on the move, firms need solutions to help attract and transition them effectively,” said Mat Mathews, Chief Product and Engineering Officer of Advisor360°. “Account Transitions enables firms to get advisors settled with ease and move their client accounts in less time while maintaining excellent client service.”

Advisor360°’s award-winning Digital Onboarding solution is already used by advisors to open approximately 400,000 new accounts per year. The company has integrated Envestnet’s managed accounts platform into its Digital Onboarding offering, resulting in an average of 6,500 new Envestnet account openings per month.

In addition to the launch of Account Transitions, Advisor360° continues to drive efficiency for advisors and their home office teams with updates to its mobile app and Home Office Dashboard.

More Access in the Mobile App

Advisor360° has elevated the overall functionality and user experience in its mobile app for both iOS and Android devices. In addition to having a holistic view of their portfolios, clients now also have real-time account balance details and can communicate securely with their advisors. Balances on all types of accounts are now accurate up to the minute, so clients have access to the most current portfolio information every time.

Enhanced Home Office Dashboard

Advisor360° unveiled a new environment for advisors and their teams using its Home Office Dashboard. Now, Home Office users can more easily navigate across cases, accounts, trading and compliance, as well as initiate portfolio analysis. Users can personalize their dashboards to consolidate what they need into a single view—whether that’s support, operations, or compliance—creating efficiencies and streamlining workflows for deeper analysis with advanced visuals.

“Growth-minded firms are investing in the best technology to empower home office users to work more efficiently,” said Mathews. “Our new Home Office Portal and Dashboard improve productivity, ensure security, deliver personalization and enable home office users to complete their daily tasks within a single integrated portal.”

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Red Teaming Platform for LLM in Global 100 AI Fintech List 2024

PRNewswire — Fri, 05 Jul 2024 15:30:34 +0000

Adversa AI is thrilled to announce its continuous AI Red Teaming solution inclusion in the renowned AI Fintech Global list for 2024. This honor highlights the world’s most innovative companies developing cutting-edge AI technologies in financial services, showcasing Adversa AI’s pivotal role in the AI and GenAI Security industry.

The recognition underscores Adversa AI’s flagship product, Continuous Red Teaming for Generative AI (GenAI), which is revolutionizing the financial sector’s approach to security and resilience. As financial institutions worldwide rush to implement GenAI for serving customers and grapple with increasingly sophisticated cyber threats specific to AI Applications, from prompt Injections and Jailbreaks to Data Leakages, Adversa AI’s Continuous Red Teaming stands out as an essential tool, ensuring Security and Safety of AI-driven applications in financial systems.

In an era where GenAI is transforming financial services, ensuring the security and reliability of AI systems is paramount. Adversa AI’s Continuous Red Teaming for GenAI addresses this critical need by providing continuous, rigorous testing and fortification of AI models against potential vulnerabilities and adversarial attacks. This proactive approach not only enhances the security of financial institutions but also builds trust and confidence among stakeholders and customers.

“Being named in the AI Fintech Global list is a testament to our commitment to innovation and excellence in the financial technology sector, the most growing customer segment and the most affected by Cyberattacks. This accolade recognizes our contributions to developing advanced and pioneering AI technologies that are crucial for the financial services industry in 2024 and beyond.” – added Alex Polyakov, Adversa AI CEO.

Continuous Red teaming involves the ongoing simulation of sophisticated cyber-attacks on AI systems, identifying weaknesses before they can be exploited by malicious actors. For financial institutions, this means staying ahead of threats, safeguarding sensitive data, and maintaining operational integrity. Adversa AI’s solution is designed to adapt to evolving threats, ensuring that financial companies can operate with the highest levels of security and reliability.

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CertiK Releases Hack3d: The Web3 Security Report for Q2 and H1 2024

GlobeNewswire — Fri, 05 Jul 2024 13:30:26 +0000

CertiK, the industry leader in blockchain security, announced the release of its latest publication. Hack3d: The Web3 Security Report for Q2 and H1 2024 reports on the state of onchain security over the eventful second quarter and the first half of the year.

Hack3d reports are the most detailed and authoritative security reports in the industry, providing the Web3 community with the most comprehensive statistics on onchain hacks, scams, and exploits.

In Q2 2024, $688 million was lost across 184 onchain security incidents, a 37% increase in value lost compared to Q1 2024. Phishing accounted for $433 million of these losses, with private key compromises coming in second at $170 million. Ethereum was hit hardest, with 83 incidents causing $170 million in losses. Despite these breaches, $99 million was ultimately recovered, adjusting total losses to $589 million for the quarter.

Total losses in the first half of 2024 reached $1.19 billion across 408 incidents. Despite these losses, regulatory advancements such as the passage of the FIT21 bill in the U.S. and the approval of spot ETFs for Bitcoin and Ethereum indicate a maturing market poised for increased institutional participation. However, the substantial losses experienced in Q2 and H1 2024 highlight the ongoing challenges in achieving a secure and stable crypto ecosystem.

“Q2 2024 has been another eventful quarter for the blockchain security world,” said Prof. Ronghui Gu, co-founder of CertiK. “The increasing value lost to hacks and scams underscores the importance of continued vigilance and innovation when it comes to onchain security.”

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Aave’s GHO Stablecoin Now Live on Arbitrum Powered by Chainlink CCIP

PRNewswire — Wed, 03 Jul 2024 14:00:21 +0000

Following community discussions and voting, the Aave DAO has launched GHO on the Arbitrum network – the DAO’s first new market in its phased GHO cross-chain expansion strategy. GHO, the multi-collateralized stablecoin native to the Aave Protocol, will utilize the industry standard Chainlink Cross-Chain Interoperability Protocol (CCIP) and rollout progressively, beginning with Arbitrum as the first network and expanding over time to other networks. The expanded availability of GHO beyond Ethereum mainnet aims to increase accessibility, lower transaction costs, enhance the user experience, and improve liquidity, fostering greater adoption and spurring innovation. Although GHO is issued on Ethereum mainnet, the cross-chain strategy enabled by Chainlink CCIP will open the door to integration opportunities and new use cases. With the expansion to Arbitrum, the largest Layer 2 network with $17.7B in TVL, GHO becomes a borrowable asset in the Aave Arbitrum pool, making GHO more available in a cost effective way with additional use cases expected to follow.

“Congratulations to the Aave community on achieving this milestone for GHO’s expansion beyond Ethereum mainnet to Arbitrum,” said Aave Labs Founder and CEO Stani Kulechov. “The DAO’s measured approach to making GHO more accessible, aligns perfectly with its commitment to stability and risk management. Integrating with other networks will lower fees, offer faster transactions, and enhance liquidity, making GHO more attractive to users and ushering in a variety of new use cases, including GHO digital payments.”

“We are excited to see that the Aave DAO has chosen Arbitrum as the first platform to launch its GHO stablecoin. This integration is poised to revolutionize accessibility, lower transaction costs, and unlock unprecedented liquidity. As decentralized finance continues to advance, we are looking forward to seeing more transformative new use cases across Arbitrum.” said Nina Rong, Head of Ecosystem Development at The Arbitrum Foundation

“Excited to see that the Aave community has voted to choose the security of Chainlink’s CCIP as its interoperability solution for cross-chain GHO transfers. I have always seen the developers of Aave prioritize security, thanks to their deep understanding of the dynamics around keeping user value secure. CCIP does provide a large improvement on the security of other cross-chain systems, which is what will come to define it as the leading cross-chain infrastructure, just like the security of Chainlink Data Feeds is what led them to become the leading source of data in DeFi,” said Sergey Nazarov, Co-Founder of Chainlink.

For secure and cost-effective GHO cross-chain transfers, the Aave DAO chose CCIP, which is compatible with both EVM and non-EVM networks, enhances risk mitigation, security, and user experience through advanced features and mechanisms like rate limits, flexible billing, Programmable Token Transfers, a well-audited codebase, and a first of its kind separateRisk Management Network. Additionally, CCIP’s cross-chain security innovations empower the DAO through important risk management levers such as configurable rate limits and the ability to control GHO bridge logic. Backed by Chainlink’s battle-tested infrastructure, CCIP is widely adopted across DeFi and capital markets and supports existing Aave deployments, helping to ensure smooth and secure cross-chain expansion for GHO.

GHO was designed to be a secure multi-chain stablecoin architectured for flexibility. Arbitrum has, and every chain with GHO in the future will have, its own GHO version, backed by reserves on Ethereum, for sufficient collateralization. For secure cross-chain transfers between Ethereum and non-Ethereum chains like Arbitrum, GHO uses a lock-and-mint model enabled by CCIP, where tokens are locked on Ethereum while an equivalent amount is minted on the other network, keeping the total supply constant. As additional chains are supported, transfers between non-Ethereum chains will use a burn-and-mint model enabled by CCIP for maximum capital efficiency and fungibility, while still being backed by reserves on Ethereum. This ensures security and flexibility for GHO’s future expansion across multiple blockchains.

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