Agentic commerce, AI-driven fraud shake up financial services dealmaking

Good morning, Nina Lindholm here with the Europe Wire from the London newsroom.

We kick off this Friday in financial services, exploring AI’s impact on various parts of the sector. This week, we’ve seen deals in payment fraud prevention, as well as commodity trading and risk management. PE Hub’s Craig McGlashan also caught up with Warburg Pincus’s Peter Deming about banking deals, and we learned Apis Partners’ Matteo Stefanel’s views on AI-powered shopping assistants.

Next, we take a look at They Said It, a segment where I highlight star quotes from this week’s PE Hub stories.

I’ll finish with a quick scheduling note.

Complete revolution

The financial services sector offers private equity a myriad of investment opportunities, many of which PE Hub explored in our Sector Spotlight earlier this year. Fintech is a particularly interesting subsegment, as artificial intelligence alters the way consumers spend online.

“Agentic commerce is going to be a complete revolution,” Matteo Stefanel, managing partner and co-founder at Apis Partners, told PE Hub’s Craig McGlashan this week. “What does that mean for financial services? It means on the other side, you need to have not just commerce agents. The financial institutions will need to be able to participate in that lightspeed discussion between the various agents to facilitate the whole interaction.”

While AI adds ease and speed to commerce, it also highlights weak points in existing safety systems. Earlier this week, Accel-KKR-backed Basware signed a binding agreement to acquire Trustpair, in a deal pairing Basware’s invoice lifecycle management platform with Trustpair’s payment fraud prevention technology.

The push comes as businesses lose an estimated 8 percent of revenue to fraud each year, with generative AI making it cheaper to impersonate suppliers, the companies said. The Association of Certified Fraud Examiners found that 75 percent of anti-fraud professionals reported a rise in generative AI-driven document fraud over the past two years, while just 7 percent said their organizations are more than moderately prepared to detect or prevent it.

The advent of AI is also bringing some potential targets back into play – including European banking. Peter Deming, managing director and co-lead of European financial and business services at Warburg Pincus, told PE Hub he is viewing European banking with “fresh eyes” – and that “comes down to AI.”

“We’re looking at a few of these right now because we see a value creation opportunity that matches really well with our own capabilities,” he said. “We’re okay with regulated businesses. We’re okay with capital-intensive businesses.

“AI with a regulatory overlay creates an opportunity for these banks as incumbents. They’re unlikely to get materially disrupted. There’s a lot of inertia that happens in the banking business.”

They Said It

In this week’s They Said It, we look at sectors where AI can assist but not replace the human touch.

My colleague Obey Martin Manayiti looked into private equity’s interest in cleaning companies:

“This is an essential service that is not going away, and it doesn’t have AI risk or robot risk. PE has started spending more time on specialty cleaning, especially when they serve end markets that are viewed as non-discretionary. This theme is going to continue for the next few years.” – Disha Mehta, a managing director at Houlihan Lokey

Meanwhile, PE Hub’s Michael Schoeck explored the reasons driving high valuations for fire safety platforms:

“Fire safety and security system integration are about tools and people. They are contractually recurring. There’s a cadence that’s driven by state, local and federal regulatory policies. Critically, AI is an enabler of service but cannot replace the broad service provided by a fire code-regulated business. AI helps with route co-ordination, contract pricing and placement but the sector still requires highly skilled, certified individuals.” – David Sweet, a managing director at JPMorgan

Before I sign off, a scheduling note: There will be no Europe Wire on Monday due to a UK bank holiday. The next one will hit your inboxes on Tuesday. The US Wire will arrive as usual.

That’s all from me. John R Fischer will be with you later today with the US Friday Wire.

Cheers,

Nina