Fenergo Forges Strategic Partnership with Arachnys

Client lifecycle management technology specialist Fenergo announced a strategic partnership with another regtech innovator, Arachnys, this week. The agreement will integrate Arachnys’ due diligence research and management solution within Fenergo’s end-to-end on boarding workflow. The combination of Arachnys search, audit trail, and reporting functionality with Fenergo’s regulatory rules and risk scoring engine will give FIs a comprehensive KYC and CLM solution. Investment, corporate, and private banks alike will benefit from an integrated audit trail, automated periodic review, and accelerated on boarding and compliance for businesses.

Fenergo CEO Marc Murphy called partnerships like this “key” to his company’s ability to expand and better serve its clients. Adding that “our community is seeking to deploy new technologies for automating regulatory compliance,” Murphy praised Arachnys’s use of robotics for investigative processes in particular as “cutting edge.”

“We are delighted to partner with Fenergo to improve the visibility and tracking of due diligence processes across the customer risk lifecycle, eliminating the need to work across multiple systems,” said Arachnys president Ed Sander. “The harmony between Fenergo’s rules engine and Arachnys’s search, audit trail and reporting techniques will convert compliance into an accelerator for top line revenue.”

Founded in 2009 and headquartered in Dublin, Ireland, Fenergo demonstrated its Deal Manager client on boarding and account opening solution at FinovateEurope 2012. More recently, the company partnered with BNP Paribas to deploy its Client Lifecycle Management solution, and teamed up with compliance and risk management solutions provider Opus to improve integration of risk relevant data in the KYC process. In December, the company was recognized by Chartis RiskTech100 as the only CLM provider in the top 40 of the world’s major risk and compliance technology companies.

Fenergo has raised more than $80 million in funding. The company includes Ulster Bank Diageo Venture Fund, Aquiline Capital Partners, Insight Venture Partners, and Investec among its investors.

Finect Raises Capital as BME Takes Minority Stake

Spanish fintech Finect announced today that Bolsas y Mercados Españoles (BME) has acquired a 9.7% stake in the company in a transaction valued at “lower than one million euros.”

Finect provides a social trading community for investors to communicate with and learn from financial professionals. Nearly two million users take advantage of Finect’s solutions, including its financial aggregator for portfolio tracking, interactive “pildoras” to respond to specific user questions, and a knowledgeable community of both private and professional investors.

“The transaction is a milestone in our mission to assist investors in their financial decisions,” Finect CEO Antonio Botas said. “BME will bring us experience and leadership, both financial and technological, which are of great help towards our goal of improving the finances of investors.”

BME CEO Javier Hernani added, “This investment and the alliance with Finect is another step forward in the company’s diversification policy and growth of the business’ technological area. The objective of BME is to offer its clients and investors a wide range of services and products so that they can compete in the complex financial and digital environment in which they operate.”

BME’s investment comes amid a major digitalization initiative for the Spanish stock market operator, which is moving to increase the role of technological consultancy services among its offerings. BME integrated its IT, consulting, regulation, and innovation value-added services into BME Inntech last year, as part of this process.

With origins as a social network for financial advisors, asset managers, and their clients, Finect was launched by founder Nicolas Oriol in Spain in 2008 and in the U.S. in 2012. The company demonstrated its Global Library and Pros on Products solutions at FinovateFall 2013. Global Library facilitates content sharing between financial advisors and their customers. Pros on Products makes it easy for financial professionals to track investment products on the Finect platform, along with peer opinions, real time news, and social media. We highlighted the company in our RegTech Reality Check back in October 2016.

Meniga to Support Digital Transformation for French Banking Group, BPCE

With FinovateEurope right around the corner, our antennae is tuned to any and all news from what Americans call “The Old Country.” The latest dispatch features European digital banking solutions provider – and multiple Finovate Best of Show winner – Meniga and its newly announced partnership with France’s second largest banking group, BPCE.

“Meniga is excited to be partnering with BPCE,” Meniga co-founder and CEO Georg Ludviksson said. “We have been very impressed by BPCE’s commitment to digital innovation and their clear focus on their mobile banking application through a simple and personal user experience.”

Per the agreement, BPCE will deploy Meniga’s technology across its Banques Populaires and Caisses d’Epargne in France. The first phase of the rollout will feature Meniga’s Financial Activity Feed, a real-time spending overview with personalized, data-driven alerts and insights for customers. The partnership comes as the EU Payment Services Directive (PSD2) compels new relationships between banking customers, financial services providers, and third party fintechs.

“As we enter into an era of open banking, we look forward to working closely with Meniga to transform our digital customer experience,” said Francois Perol, BPCE CEO. “Meniga’s data-driven digital banking solutions will help accelerate our digital transformation journey and help us adapt to the ever-evolving needs of our customers.”

Winner of Best App and Best Web Solution at the Icelandic Web Awards for 2017 earlier this month, Meniga was named one of five Reyjavik startups to watch by Wired in December and announced a new deployment of its technology at Spanish bank IberCaja in November. Meniga has raised nearly $23 million in funding, most recently picking up an $8 million investment in April. The company has offices in London, Reykjavik, Stockholm, and Warsaw, and serves more than fifty million digital banking users in 20 countries.

Meniga’s most recent Finovate appearance was at FinovateEurope last February. Ludviksson and Chief Product Owner Finnur Magnusson demonstrated Personal Finance Challenges, a new UX and API designed to help users take short-term actions that can improve their financial fitness. The solution leverages goal-making, community reinforcement, and “nudges” to help users accept and meet challenges that will encourage better financial habits. Challenges won a finalist spot at the FStech Awards earlier this month.

Be sure to check out Meniga’s latest solution when the company returns to FinovateEurope next month in March.

Finovate Alumni News

On Finovate.com

  • Tuition.io to Power Student Loan Repayment Benefit for Estée Lauder Employees.
  • Check out sneak peeks from next month’s FinovateEurope presenting companies:
  • Meniga to Support Digital Transformation for French Banking Group, BPCE. See Meniga at FinovateEurope 2018 in March.
  • Handle Financial’s Prism Mobile App Reaches $1 Billion in Bills Paid.
  • Finect Raises Capital as BME Takes Minority Stake.

Around the web

  • Actiance forges partnership with Relativity to bring seamless data delivery to eDiscovery platform.
  • Neustar unveils multi-factor authentication risk assessment tool to help enterprises mitigate fraud risk.
  • Tinkoff Bank and AHML to launch joint venture to offer mortgage loans via new electronic platform.
  • Y Combinator interviews Jake Rosenberg, cofounder and CTO of LendUp.
  • VentureBeat highlights OurCrowd, which has raised $650 million for 145 startups and plans to top $1 billion in 2018.

This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

nCino Reels in Investment from Salesforce Ventures

The amount of the funding was undisclosed. But cloud-based banking innovator nCino has just picked up a fresh infusion of capital courtesy of a round led by Salesforce Ventures. The investment adds to the company’s known total capital of more than $81 million, which includes a $17 million private equity round back in August.

“From day one, our vision has been to be the worldwide leader in cloud banking,” nCino CEO Pierre Naude said. “We are successfully executing on that vision and empowering financial institutions around the globe to grow their business and better serve their customers. Our strong alignment with Salesforce has been a key factor in our growth and success.”

nCino will use the funds to help drive its global expansion, as well as speed innovation on its Bank Operating System technology. The solution is built on the Salesforce platform and is integrated with Salesforce Financial Services Cloud. nCino has been a Salesforce partner since it was founded in 2012.

SVP and GM of Financial Services for Salesforce, Rohit Mahna highlighted the long-term relationship between the two companies. “nCino extends the power of the Salesforce platform, enabling banks to get closer to their customers than ever before,” Mahna said. “The investment from Salesforce Ventures is the latest evolution in our strong partnership, and we’re thrilled to help fuel nCino’s global growth and innovation.”

The company’s Bank Operating System integrates with core banking and transactional systems. The technology combines CRM, deposit account opening, loan origination, workflow, enterprise content management, digital engagement, and real-time reporting to enable financial institutions to provide the kind of personalized, streamlined experience customers and bank employees alike have come to expect. nCino notes that on average its client institutions have experienced:

  • 17% reduction in operating costs
  • 19% increase in loan volume
  • 22% increase in staff efficiency
  • 34% decrease in loan closing time
  • 54% reduction in policy exceptions

nCino demonstrated its Bank Operating System at FinovateEurope 2017. Headquartered in Wilmington, North Carolina, the company began the year with a major new partnership with Navy Federal Credit Union, the largest credit union in the world with more than $87 billion in assets, more than seven million members, and 300 branches. 2017 was a big year for nCino, with deployments of its Bank Operating System announced with CFCU Community Credit Union in DecemberIberiabank in November, and Pacific Western Bank in August – to name just a few recent wins. The cumulative result was that nCino ended the year with 10 of the 30 largest U.S. banks by asset size as customers and 180 financial clients around the world.

London-based Lender EZBOB Raises $21 Million in New Funding

Small business online lender EZBOB has raised $21 million in new funding (£15 million) courtesy of an investment from Moscow-based PE firm Da Vinci Capital Management. The funding puts the company’s total capital at more than $146 million (£103 million).

Founded in 2011, EZBOB demonstrated its lending platform at FinovateEurope 2014. The company provides small and medium-sized businesses with up to £120,000 in financing in minutes. There are no pre-payment penalties, and borrowers are offered a flexible repayment schedule of up to 24 months and an APR as low as 18%.

What will EZBOB do with the additional financing? Some clues hinted at in a Forbes interview with EZBOB co-founder and CEO Tomer Guriel from last summer suggest that new products (“such as a consumer lending platform and a mortgage platform”) may be in the offering. The idea is to model any new lending product after the company’s current SME lending platform.

So it was no surprise that when asked by interviewer Omri Barzilay what EZBOB’s advantage is in the SME lending space, Guriel answered “technology” and discussed the company’s commitment to improving the customer experience. But he segued quickly to the “fin” part of “fintech,” adding that:

“Our advantage is that we are solely focused on digital lending solutions. We live and breathe the lending space. Lending is at the heart of the bank’s business and our experience in lending has given us phenomenal insight into what works for a customer and from a lender perspective.”

So far, so good. EZBOB ended 2017 winning “Best Technology Initiative” from the Financial Innovation Awards. In November, Yorkshire Bank said that it would deploy technology from EZBOB to speed the loan application process from two weeks to less than 24 hours. Back in August, the company announced that it would extend its contract with AU10TIX for ID authentication and automating customer onboarding. The Royal Bank of Scotland has also used EZBOB’s technology to launch its automated lending platform, Esme.

BlueVine Boosts Invoice Factoring Credit Line to $5 Million

Small business lender BlueVine announced today that it would double the size of its invoice factoring solution and increase the limit for its business line of credit, Flex Credit, by more than 30%.

“In just four years, we’ve dramatically increased our invoice factoring credit line to $5 million, and our business line of credit to $200,000,” Eyal Lifshitz, BlueVine CEO and founder, said. “We continue to be fully committed to providing business owners with robust financing options to help them thrive.”

BlueVine provides two avenues for small businesses looking for funding. With Flex Credit, SMEs can get approved for a line of credit product in 24 hours. With the click of a button, borrowers are able to withdraw funds whenever they need them, with available credit replenished as the funds are repaid. No maintenance fees or prepayment penalties are charged, and interest rates as low as 4.8% are available.

Designed to help free up cash flow, BlueVine’s invoice factoring product differs from traditional factoring solutions by giving businesses flexibility in choosing which invoices they want to fund rather than having to fund all of them. Bluevine also distributes rebates on the same day instead of once a month, and syncs with accounting platforms instead of requiring mailed or faxed original invoices. Businesses can also use BlueVine’s invoice factoring without fear of being locked in to a long-term contract or having to pay sizable termination fees. BlueVine offers flat 85% to 90% advance rates, free ACH transfer, and $15 per wire.

BlueVine’s news comes just a few days after announcing its new Chief Financial Officer. After joining BlueVine as Vice President of Finance and Capital Markets in 2016 – and being named to the Women in Fintech Powerlist last November – Ana Sirbu (pictured) has been appointed CFO. Sirbu has a degree from Harvard University, a background in investment banking, and was a technology investor at both Silver Lake Partners and Google Capital before her tenure at BlueVine.

“Ana has played a critical role in BlueVine’s growth and success,” Lifshitz said. “She has done an incredible job spearheading our capital markets strategy, building out our finance and analytics functions, and strengthening our position in the online business lending market.”

BlueVine demonstrated its small business lending platform at FinovateFall 2014. The company was featured by Entrepreneur magazine earlier this month, in a look at the top 360 best entrepreneurial companies in the U.S. Last fall, BlueVine was awarded Best Business Finance Provider, North America, at the Trade Finance Global awards. BlueVine reeled in $130 million in debt financing back in October – its second in 2017. This gave the firm overall financing of $273 million, of which $68 million is equity funding.

In addition to its Redwood City, California headquarters, BlueVine has offices in New Orleans and Tel Aviv, Israel. The company also today announced a new office in Jersey City, New Jersey, which it believes will help grow its customer base on the east coast of the U.S.

French PFM Innovator Linxo Partners with Raisin

A Franco-German alliance has formed with Linxo and Raisin teaming up to target the European savings sector, reports Antony Peyton of Fintech Futures (sister publication of Finovate).

Linxo, a smart financial assistant from France, and Berlin-based financial marketplace Raisin said via their collaboration 1.6 million Linxo users will get access to a choice of savings accounts across the continent.

Bruno Van Haetsdaele, co-founder of Linxo, said with the “impetus of the Payment Services Directive (PSD2), we will now be able to create a harmonised approach in Europe” and the partnership “reflects our desire to create an open European ecosystem of financial services directly accessible from Linxo whatever the European country you live in”.

Tamaz Georgadze, founder of Raisin, said with Linxo, a French citizen can open a term savings account in Austria, Portugal or the Czech Republic “while benefiting” from the respective national deposit guarantee scheme in all EU countries that covers invested capital of up to €100,000 per customer and per bank.

Established in 2013, Raisin said it works with more than 40 banks and financial institutions. To date, more than 100,000 European customers have invested over €5 billion via its platform. It said it operates country-specific platforms in Germany, France, Spain and Austria, as well as its European platform.

Linxo is available on mobile devices and the internet. The start-up was launched in 2010 by Van Haetsdaele, an engineer at Stanford Research Institute and former CTO and co-founder of Wimba, a start-up devoted to on-line education, and Hugues Pisapia (formerly of Wimba and the initiator of the Linxo project). Based in Aix-en-Provence, Linxo demonstrated its PFM platform at FinovateEurope 2011. The company has raised more than $26 million in funding (€23.2 million) and includes Crédit Agricole, Crédit Mutuel Arkéa and MAIF among its investors.

Growth, Wealth, Modernization Drive Fintech Innovation in the MENA Region


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The MENA (Middle East and North Africa) region has experienced the highest rate of population growth of any region in the world over the past 100 years. Today, the countries of MENA boast more than 380 million people or 6% of the world’s population. And as leaders in the region respond to this population growth, developing a financial infrastructure capable of serving those who live in the Middle East and North Africa – from the underbanked to the ultra high net worth individual – is a massive challenge.

Much of what is driving change in the MENA region is taking place in partnership with some of the world’s biggest financial institutions. But as the foreword to EY’s World Islamic Banking Competitiveness Report 2016 cautions,

Participation banks are still attempting to transform their rather generalist business models to more direct integration with priority sectors of the Islamic economy. There is increasing pressure on these banks to demonstrate the purpose of existence – specifically their role in enabling important sectors such as transportation, retail, telecommunications, and SMEs to name a few – that have the greatest impact on the economy and on creating employment alternatives.

So how does financial technology make it possible for the people of the MENA countries to have the tools necessary to manage their finances efficiently and securely in the context of an emerging, increasingly mobile, increasingly social, and yet exceptionally diverse Islamic world? Fintech authority Chris Skinner observed last spring:

The net:net is that you have a rapidly growing economy, with a mix of young migrant workers who need remittance services; another group of professionals who expect mass affluent services; and a small group of High Net Worth and Ultra High Net Worth individuals who take exceptional service for granted.

An interesting place to be a bank.

Fintechs

Or a fintech? Looking at a map of the MENA region – which consists of more than 20 countries from Algeria to Yemen – the first observation to make is that a majority of MENA fintechs come from a handful of countries. According to a recent study by Wamda Research Lab (WRL) and Payfort and published in their Spring 2016 report, State of Fintech, three out of four fintech companies in the MENA are based in just four countries: UAE, Egypt, Jordan, and Lebanon. And four out of 12 countries host 73% of all MENA fintech startups. A second observation is that, as is the case with fintech in most areas of the world, payments and lending are the areas with the greatest number of fintechs in the Middle East and North Africa. Per Wamda, payments-based companies represent 84% of all MENA fintech startups.

Who are these companies? Among payments companies, Jordan’s MadfooatCom (founded in 2011), UAE’s Beam Wallet (founded in 2012), and PayMob and Fawry of Egypt (founded in 2015 and 2008, respectively) are some of the more notable fintechs in this space. MadfooatCom is a online real-time bill presentment and payment system. Beam Wallet is the leading mobile wallet in the UAE with more than 500,000 users. PayMob builds white label mobile wallet solutions for MNOs and FIs. And Fawry is an electronic payment network that provides billpay, mobile wallet, and other services.

Given Islamic sanctions against usury, or charging interest, there is ample space for companies specializing in Sharia-compliant lending practices. In the MENA region, this includes companies like Moneyfellows of Egypt (founded in 2014) , Zoomaal of Lebanon (founded in 2012), Jordan’s Liwwa (founded in 2013), and companies like YallaCompare (formerly Compareit4me) and Durise from the UAE (founded in 2011 and 2014, respectively). Moneyfellows is a social savings and lending service. Zoomaal is a crowdfunding platform. Liwwa caters to small business borrowers. YallaCompare is an insurance, credit card, personal loan comparison shopping site. Durise specializes in real estate crowdfunding.

It’s also worth pointing out that many companies headquartered outside the MENA region have nevertheless made major commitments to bringing fintech innovation to communities in the Middle East. Among Finovate alums recently making major MENA-related headlines are ACI Worldwide, Fidor BankNCR, NetGuardians and Thomson Reuters.

That said, behind every great fintech startup is not just a great idea, but also significant guidance and support. In the MENA region both accelerators and incubators as well as leadership from the public sector play major roles in helping area entrepreneurs turn their technologies into solutions that can be brought successfully to market.

The role of accelerators

With regard to accelerators, a recent look by Forbes shared 15 Middle East Accelerators to Watch, and a number of the organizations featured in the Forbes article have made significant recent commitments to supporting fintech innovation. Flat6Labs, founded in Egypt, partnered with Barclays to launch a fintech accelerator, 1864 Accelerator, in the fall of 2016. Last month, Jordan’s Oasis500 announced its latest round of investments including support for fintechs like Akaryana.com (global platform for marketing real estate properties), Amwal.com (comparison shopping for financial products), and DareebaTech (online tax return filing and payment facilitator). Lebanon’s Berytech includes interactive retail banking portal Bnooki.com, mobile payments solutions provider Via Mobile, and the Bank of Baghdad among its fintech alums.

But no discussion of the development of fintech in the MENA region is possible without a discussion of the sizable degree of support from the leaders of countries in the area. Last month the Bahrain Economic Development Board partnered with fintech accelerator FinTech Consortium to launch Bahrain FinTech Bay. The goal is to help support MENA-area fintechs and guide Bahrain toward becoming a regional fintech hub. In the UAE, the Abu Dhabi Global Market (ADGM), which launched in 2015, will play a major role in helping build a 21st century financial services sector and, by extension, stimulate development of vibrant fintech innovation, as well. Back in October, ADGM announced a pair of new initiatives – launching the ADGM FinTech Innovation Centre and a partnership with Plug and Play – as part of its first FinTech Abu Dhabi Summit.

The blockchain

Sophisticated technologies such as bitcoin and blockchain are being studied by governments and central banks in the MENA region. This is particularly the case in the UAE, but is also true for institutions in Saudi Arabia, Qatar, Kuwait, and Bahrain. In a post called “GulfTech is the Next Big Thing,” Skinner underscored the area’s fascination with the blockchain in a subsection titled “Everything on a blockchain.” Skinner discusses how blockchain technology might be used to help turn the region into an international leader in Islamic finance:

IslamTech is an opportunity for the GCC, and one they need to grasp, You would think that the GCC countries would lead in Islamic Finance, but they don’t. Kuala Lumpur and London take those honors. However, as a FinTech opportunity, building their presence as an Islamic FinTech center, or IslamTech as I like to call it, makes sense. In particular, because Dubai wants to build everything on a blockchain, and transparency of products through a shared ledger service for Islamic investments makes absolute sense.

Skinner also links to an article from CoinDesk that discusses Dubai’s strategic partnership with IBM for a city-wide blockchain pilot project run by Dubai’s innovation arm, Smart Dubai.

Partnerships

Partnerships are also developing between MENA countries as well as within them. In December, the central bank of UAE announced a joint project with the Saudi Arabian Monetary Authority (Sama) to use blockchain technology to issue a digital currency that would be accepted for cross-border transactions between the UAE and KSA. Individual companies in the MENA region that are innovating with blockchain technology include firms like ArabianChain, a UAE-based startup founded in 2016 that is building a public blockchain for Islamic banking and government services-related apps.

There are many aspects of fintech in the MENA region that make it easy to be optimistic about the industry’s future. According to Wamda, MENA-area fintech startups have raised more than $100 million in the last 10 years. And the opportunity is clear: 86% of the adult population in the MENA is unbanked, and SME lending by regional banks is significantly below the average for middle income countries. Combine this with (1) the growing appetite for mobile-based solutions driven in part by the disproportionately large under 30-population, (2) the emergence of increasingly-diversified sources of wealth and investment, and (3) the clear commitment of leaders in the region to leverage fintech to help modernize their societies and provide better life outcomes for their citizens, and you have one of the world’s most worthwhile fintech industries to watch.

figo Announces “License as a Service” PSD2 Solution, RegShield

German banking service provider figo has joined the fight to ensure that fintechs and other third parties are able to make the most from the arrival of PSD2. The company announced its new “license as a service” solution – RegShield – which will enable figo to serve as a regulated partner for firms looking to offer or use payment initiation account information services (PSIP/AISP). This will allow figo’s partners to operate without having to apply for their own authorization.

Before the PSD2 deadline earlier this month, Cornelia Schwertner, Head of Governance, Risk & Compliance at figo warned, “Implementation of PSD2 is imminent and the license application period for companies is tight. So it is particularly alarming that many companies do not even know that they will soon be subject to authorization, let alone when. Importantly, Schwertner added, PSD2 implementation is a challenge for both fintech startups and more established players. For newer companies, the process of securing a BaFin permit can challenge the financial resources of smaller firms. Larger companies, on the other hand, typically find it difficult to integrate their own processes with a changing regulatory environment.

With RegShield, figo takes responsibility for “all relevant processes and licensing requirements,” giving third parties the ability to focus on developing their solutions rather than negotiating regulations. RegShield will provide for many of the authorization requirements including:

  • PSD2-compliant customer processes
  • Execution of internal audits to prepare for external examinations
  • Setup of governance and security policies
  • Management of security incidents
  • Regulatory and compliance expertise
  • Outsourcing controlling
  • Business continuity management

According to figo, more companies may be affected by the need to meet these requirements than they may think. In Germany, for example, companies looking to offer services this year are required to apply for authorization as PISP or AISP under the Payment Services Supervision Act (ZAG). And this is precisely where figo’s RegShield can play a role.

“Being touched by authorization requirements is a certainty for any company that can answer the following questions with a yes,” figo CEO André M. Bajorat said. “‘Do I offer an online service that includes display or processing of account information?’ ‘Does my service enable transactions on my customers’ bank accounts?’ or ‘Do I need online banking login information for my product or service?'” Find out more about figo’s RegShield offering.

At FinovateEurope 2013, figo demonstrated its consumer-facing, cloud-based service that aggregates bank and payment accounts, enriches transaction data and gives customers real-time notification. The company’s technology complements the rise of open banking by making it easier for third parties to access a wider range of financial resources, and enabling banks to develop value-added products and services for their customers.

“The tried and true technical solutions which we already offer, which preeminently match up to the basic idea of PSD2, show how forward-looking our approach is,” the company observes in an introductory note on its website.

Last August, the company announced that Consorsbank would leverage technology from figo to power its multibanking service. In June, figo was named to FinTechCity’s FinTech50 for 2017. Founded in 2012, the company has raised more than $12.5 million in funding and includes Berliner Volksbank Ventures and Deutsche Borse among its investors.