Where Steve Cohen’s Point72 Ventures sees opportunities in fintech, from generative AI to solving gamers’ payments woes

• Tripp Shriner is a managing partner at Point72 Ventures, the VC arm of Steve Cohen’s hedge fund.
• Fintechs suffered from a lack of funding and IPOs in the year, but there are signs of a rebound.
• Shriner outlines three investment areas the VC is excited about and why.

Anyone in the fintech industry will tell you that the last year has been difficult.

The once-hot sector has significantly cooled. Since the beginning of 2022, the number of deals has been decreasing. However, there is a silver lining for some investors, such as Steve Cohen’s hedge fund Point72, which has spent the past year strategizing about the firm’s future.

Point72 Ventures is actively seeking new fintech investments after a “quieter period” — it last invested in payment startup Pagos’ $34 million Series A in February.

“We’re still early, getting toward the check-writing side of things,” said Tripp Shriner, managing partner and fintech investor at Point72 Ventures.

Shriner provided insight into the firm’s investment strategy and future areas of interest, such as scaling identity verification, capitalizing payments in the videogame industry, and how generative AI could be used in risk and wealth management. The investment themes establish where Point72 Ventures will invest its time and money in the coming months and years.

Videogame payments and currency exchanges

Point72 Ventures is in the early stages of investigating the role of payments in gaming. It would be a different ballgame for the VC, which has mostly invested in behind-the-scenes technology that powers financial firms.

However, Shriner believes there is an untapped opportunity in the gaming industry, which is a large, global market that is growing. According to PwC research, the global gaming industry is expected to be worth $321 billion by 2026, and a recent Mastercard report found respondents were frustrated with purchasing in-game currency and the checkout process.

Another area of interest for the VC is the creation of a currency exchange between different games. Today, each game functions as its own ecosystem, with players able to pay money to purchase skins or other specialty items, more lives, or rewards. However, if you play six different games, you cannot transfer money, rewards, or items between them.

According to Shriner, gaming studios want to create connective tissue between disparate games that can act as a fiat exchange where players can take rewards from one game and use them in another. Not only is it better for the consumer, but it also allows gaming studios to release new games, and players will feel less bound to older versions after investing money and time in a specific game.

Generative AI within wealth management

On Wall Street, there is a lot of buzz about generative AI, and firms are already implementing internal use cases ranging from making software engineers more efficient to helping wealth advisors access data and research faster.

Point72 Ventures’ approach to AI is heavily influenced by how financial firms intend to use the technology. Though many firms are still in the exploratory phase, Shriner believes the best bets are in wealth management, particularly in making advisors more efficient with research and summarization.

Many of Point72 Ventures’ AI conversations with financial firms begin optimistically about the product and experience, but almost every conversation concludes with what could go wrong and how to mitigate that risk, according to Shriner. The company is on the lookout for solutions that use AI to combat new fraudulent acts made possible by AI.

“Almost every conversation we have about next-generation AI eventually turns to what bad actors can do with this technology,” Shriner said.

On the hunt for new KYB and KYC solutions

Shriner stated that Point72 Ventures is focused on improving the identification process for businesses and consumers within the broad and complex world of risk and compliance.

“RegTech,” or compliance technology, has always been one of the “more boring plumbing areas of financial services,” according to Shriner. “But it’s one of the most important, and I believe it’s one of those where there’s still a lot of room for innovation.”

Scaling solutions for Know Your Customer (KYC) and Know Your Business (KYB), regulations that require financial providers to know who they are providing services to, are a major pain point for financial firms.

According to Shriner, most KYB solutions on the market today are too rigid to quickly adapt to evolving regulations and require a lot of manual work. There are still data coverage gaps, and many solutions were designed for domestic regulations, which fall short as more companies expand internationally.

Meanwhile, KYC is a problem that every financial institution must address, and each firm approaches the process slightly differently.

Customers can verify their identities and provide documentation to one provider, and that digital identity can then be shared with the firms that require it, similar to how single sign-on authentication allows users to log in to multiple apps or websites with a single set of credentials.

However, success would be contingent on financial firms’ willingness to embrace such a fundamental shift.

“It’s just a question of whether it’s too early or whether we’re there now,” Shriner said.