Finovate Alumni News

On Finovate.com

  • Stay Current with Financial Market Changes Courtesy of RateSeer’s Denoti.
  •  BondIT Closes $14 Million in Funding.
  • Stronger Together: Fintechs, Techs, and FIs Collaborating on Cybersecurity.

Around the web

  • Check Point teams with LG to secure IoT devices.
  • Irish Tech News features Pendo Systems.
  • ACI Worldwide to provide access to all instant payment schemes in Europe.
  • Uniken CEO Bimal Gandhi quoted in USA Today special supplement on the future of digital security.
  • VP of Risk Management for WePay John Canfield talks about fraud prevention for SMEs.
  • Inc.com features Flybits in an article on real-time personalization and app design.
  • Kasasa earns finalist spot in the Ethics in Business & Community Awards.

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.

Kasasa Rolls Out Kasasa Loans

Financial technology and marketing services company Kasasa unveiled its newest offering this week. The Austin, Texas-based company launched Kasasa Loans, a loan product that lets consumers pay ahead to reduce debt, and take that extra money back if they need it.

Kasasa is calling it a Take-Back, and it works similar to a regular loan agreement in which the borrower repays according to a regular payment schedule. Here’s how the Take-Back works: every month, the consumer has the option to overpay on their loan repayment and at any time in the future if they need to access cash quickly, they have the option to “take-back” any portion of the overpayment.

The new loan offering aims to broaden financial institutions’ loan portfolio while enticing their clients with a flexible borrowing solution that is unique to Kasasa bank clients. It fits with Kasasa’s mission to “create products that are good for both consumers and community financial institutions” and helps financial institutions compete on something other than interest rates.

“Until now, there has been no way to differentiate loan products beyond interest rates – Kasasa Loans is changing that,” said Gabe Krajicek, CEO of Kasasa. “We are revolutionizing the customer experience of paying off debt early by introducing the first loan with take-backs. Kasasa Loans allows borrowers to pay off their loan faster but leverage take-backs to access extra payments in times of need, eliminating that fear of parting with ‘extra money’ while also enabling the consumer to make better financial decisions.”

In conjunction with this launch, the company began offering a new marketing automation platform, Connect. Kasasa was founded in 2003 when it launched its flagship REWARDChecking account to help community financial institutions compete against big banks. Since then, the company has expanded to 350 employees and now offers a full suite of branded bank products. Kasasa debuted at FinovateFall 2009 under BancVue, which was founded in 2003, and created a premium, national consumer brand for the BancVue product offering – Kasasa – which launched in 2009.  Last month, Kasasa was named a Best Place to Work in Austin for the third consecutive year.

Feature Friday: Sweep Accounts for the Mass Market

Does anyone remember when sweep accounts were all the rage? They were disruptive technology in the 1980s. The idea was to automatically sweep idle cash from non-interest bearing accounts to savings or investment accounts with higher yields. It’s still a core feature in treasury management accounts for large businesses, but you don’t hear much about it these days on the retail side.

Why? The small differential between checking and savings or money markets hardly justifies the trouble. If the average annual amount swept to savings was $2,500, it would only net an extra $1 or $2 annually (after tax) from a typical large U.S. bank, or up to $10 in a “high interest” account from a community bank or credit union.

But if instead of sweeping idle cash into savings, what if you could use it to pay down, even temporarily, a personal loan or revolving credit balance? All of a sudden, that $2,500 cushion is worth $300 or more annually (assuming 12% APR), 150x the return of sweeping to a bank savings account. That’s enough to get your customers’ attention.

Some overdraft credit lines work this way. You can freely transfer money between credit line and checking to minimize interest charges. I had the feature at US Bank years ago. During cash-strapped times, I would keep $0 in checking and every time I wrote a check it would trigger an automatic (and fee-free) credit line advance. It was a great system, but when the bank started charging fees on each automatic transfer, I abandoned my “sweep account” hack.

Fast-forward 10 years and Kasasa has reinvented the credit-line sweep with its hybrid loan product launched today. Kasasa loans offer a “take back” feature which allows consumers to pay down their loan balance at any time, and then get those extra funds back at any time in the future free of charge. Basically, in banking jargon, it’s a fixed-rate installment loan (with a repayment schedule), married to a credit line that allows you to move money in and out up to the extra amount you’ve paid in (see note 1). One sees this in the home equity space, but not in the personal loan arena.

A key part of the account’s appeal is the Loan Management Dashboard. Without the dashboard, the changing balances and available “excess” would be a customer services nightmare to explain and track. The dashboard makes it (relatively) simple to move money back and forth. There will be some customer service questions, but they should primarily be one-time only.

Bottom line: Kasasa’s hybrid loan is a winning concept, especially for its community bank and credit union clients looking to differentiate themselves from the big banks and online lenders. It’s a user-friendly approach that should play well with their loyal customer/member bases. The laon does have the downside of cannibalizing deposits while lowering loan balances. But with proper marketing, a Kasasa speciality, the incremental loan balances (and customers) should far outweigh the lower deposit totals.

Author: Jim Bruene (@netbanker) is Founder & Senior Advisor to Finovate as well as Principal of BUX Advisors, a financial services user-experience consultancy. 


Note:
(1) Unlike a credit line where you can always borrow to the maximum credit line, in the Kasasa Loan, you can only borrow back your excess contributions. This is a benefit for consumers who prefer the discipline of a fixed repayment period rather than an open-ended credit line.

Finovate Alumni News

On Finovate.com

  • With New Funding, Prosper’s Valuation stands at $550 Million.
  • Tuition.io Raises $7 Million in Series B.
  • AutoGravity Teams Up with Hyundai Capital America.

Around the web

  • Infosys Finacle partners with ToneTag to leverage sound wave technology to drive contactless authentications and transactions.
  • PYMNTS interviews Jumio CEO Stephen Stuut on the challenge of combating cybercrime in “real time.”
  • Xero teams up with TradeGecko to help Singapore’s SMEs Go-Digital.
  • Bento for Business appoints Jeff Pomeroy to the role of Vice President of Product.
  • ThreatMetrix Announces Smart Authentication Platform.

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.

Finovate Alumni News

On Finovate.com

  • Kantox Pulls in $6 Million from Existing Investors.

Around the web

  • Kasasa named a Best Place to Work in Austin for a third consecutive year.
  • PCF Bank partners with Sandstone to launch a digital origination and servicing platform.
  • Cloud Lending Solutions announces CL Portal, a new expansion of the CL Solution Suite.
  • PwC UK and Featurespace partner to provide clients with technology to combat financial crime attacks.

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.

Finovate Alumni News

On Finovate.com

  • Check out today’s FinDEVr Feature — FairCom.
  • A Plus for P2P Lending: Investors to Buy Up to $5 Billion in Loans on Prosper.

Around the web

  • Zopa awarded Superbrand status for the first time.
  • Benzinga features M1 Finance CEO Brian Barnes.
  • Kasasa names Guy Daubenspeck Chief Information Security Officer.
  • The Co-operative Group to leverage ACI Worldwide for cloud-based mobile wallet.

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.

Forecasting Fintech for 2017

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It takes more than just one crystal ball to discern which trends will drive fintech innovation in 2017. To this end, here’s a roundup of predictions and prognostications on what the new year will bring in everything from artificial intelligence and the blockchain to payments and banking for the underbanked.

  • Banking ‘Disappears’ and Other Fintech Predictions for ’17 – American Banker
    • Hot Take: “Whether it’s through IoT devices, fintech platforms, virtual assistants or chatbots, people will likely spend more time connecting to their money through such channels and less time directly interacting with their banks.”
  • 3 Key Fintech Predictions for 2017 – Banking.com
    • Hot Take: “As much as 80 percent of the (African) continent is unbanked and up to 90 percent of retail payments are made using cash. This opens the door for fintech players to target consumers and workers who do not have access to traditional banking. Because of this banking gap, it is likely that some countries will entirely skip one generation of payment types (e.g. cards and start building a more innovative, mobile-drive(n) payments infrastructure.”
  • 11 Fintech Trends You Need to Follow – The Finanser
    • Hot Take: “According to EY, China has now taken the lead as the #1 fintech market in the world. Organizations should be looking east for business model innovations that can drive new revenues and sources of profit. New business models, such as Ant Financial and WeBank services, will start influencing fintech in the U.S. and Europe, as they are driven by mobile money services.”
  • Top 10 Fintech Predictions for 2017 – Daily Fintech
    • Hot Take: “Bitcoin moves from its Darknet phase (illegal) to the early adopter Clearnet phase. This is when legitimate people charge in Bitcoin for legal transactions. This will start with cross border digital products. Because this brings new bitcoins into ‘circulation’ with owners who also then want to pay in bitcoin, this starts a sustainable move to mainstream use which supports the price.”
  • Five fintech trends for 2017 – bobsguide
    • Hot Take: “Innovation in artificial intelligence is set to increase in 2017. AI will provide business users with access to powerful insights before they are available to them. This will be done through the use of cognitive interfaces in complex systems, advanced analytics, and machine learning technology.”
  • Top Ten Fintech Predictions for 2017 – Crowdfund Insider
    • Hot Take: “The rebirth of trust is upon us with the advent of distributed ledger. Many issues such as fraud, verification of true ownership, clearance of multi-party transactions and chain-of-events are easily solvable. Insiders have been calling the distributed database, ‘The New Internet.'”
  • Fintech Predictions for 2017 – TechCrunch
    • Hot Take: “2016 brought rocky times for some FinTech lenders, especially in the first half of the year, but through the tumult came maturity. The complexity and challenges of running capital intensive businesses in a highly regulated industry was never more real than 2016, but the top platform weathered the storm, and most are long-term stronger for it. 2017 will continue to be the year where the top players pull away from the pack. At the beginning of 2016, there were an estimated 400+ fintech lenders in the U.S. – in 2017, I expected the supermajority of the lending to come from just 10 or so platforms.”

Fintech 2017 – The Roundtables

  • Fintech: What’s Next? – Breaking Banks
    • Brett King, Moven (F16); Chris Skinner, The Finanser; Jim Marous, The Financial Brand; Dave Birch, Consult Hyperion; Ghela Boscovich, FemTech Leaders; and Penny Crosman, American Banker
  • Fintech Predictions for 2017 – Fintech Insider
    • David M. Brear, 11FS; Chris Skinner; Jason Bates, 11FS; Simon Taylor, 11FS; David Birch; Ben Brabyn, Level3
  • Top 10 Retail Banking Trends and Predictions for 2017 – The Financial Brand
    • Last, but not least, this 90+ page report features insights from a panel of more than 100 global financial service leaders from around the world. Includes Don Bergal, Avoka (F16, FD16); Mike Carter, D3 Banking (F15); Scarlett Sieber, Shamir Karkal, Teppo Paavola, Maria Jose Jorda Garcia, BBVA (F13, FD16); Jon Ogden, MX (F16, FD16); Frank Schwab, Sberbank (F16); Sophie Guibaud, Fidor (F11, FD16); Matthew Wilcox and Deva Annamalai, Fiserv (F16); Bob Legters, FIS (F16); John Waupsh; Kasasa (as BancVue F09); Jelmer de Jong, Backbase (F16).

“F” refers to the company’s most recent Finovate conference appearance. “FD” refers to the company’s most recent presentation at our developer’s conference, FinDEVr. Find out more about our upcoming events FinovateEurope in February and FinDEVR New York in March.

Finovate Alumni News

On Finovate.com

Around the Web

  • Technology from Modo Payments supports new loyalty point POS payment partnership between FIS and Verifone.
  • CurrencyFair unveils new SMS/push notifications feature for deposits and auto transactions.
  • RightCapital enhances platform to make compliance with DOL fiduciary rule easier.
  • FIS earns top honors in Bank Director’s Core Provider and Asia Risk Technology rankings.
  • Marc Thompson joins PaySimple as Chief Financial Officer.
  • Token partners with VirtusaPolaris, information technology consulting and outsourcing company.
  • M1 Finance rolls out retirement account functionality.
  • CUNA Strategic Services partners with Kasasa to provide credit unions with products and services to stay competitive.

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.

Finovate Alumni News

On Finovate.com

  • “SigFig to Power Digital Wealth Management for Citizens Bank”

Around the web

  • IBM helps The Mahindra Group test blockchain technology to innovate supply-chain finance in India.
  • Digital River World Payments integrates its online payments platform with ACI PAY.ON Payment Gateway from ACI Worldwide.
  • Bank Innovation looks at the Secure Private Login launched by Civic.
  • Avoka wins AWS financial services competency status with its account-opening solution.
  • Kasasa named a BankNews Innovative Solution Award Winner.
  • PayPal revamps its business app with new capabilities.
  • CAN appoints Parris Sanz, chief legal officer, as the company’s interim CEO while CEO Daniel DeMeo takes a leave of absence.

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

Finovate Alumni News

On Finovate.com

  • From Advisers to VPs: A Profile of FinovateAsia Attendees
  • FICO Teams Up with EFL Global as Part of Financial Inclusion Initiative
  • Fintech Trending: Australia and the Road to Fintech in Asia

Around the web

  • Socure unveils new dashboard for its digital ID verification technology.
  • Compass Plus announces successful stress test of TranzAxis on Oracle Exadata.
  • Neustar CEO Lisa Hook named to Advertising Ages’s 10 Digital Marketing Innovators You Should Know.
  • Singapore Fintech Awards 2016 lists Turnkey Lender as finalist. Check out their live demo next week at FinovateAsia.
  • Mastercard launches blockchain APIs for developers.
  • Portland Business Journal: Tyfone looks to open-source to solve IoT security issues.
  • Forrester Wave: Information Archiving Cloud Providers cites Actiance as an information archiving cloud leader.
  • Kasasa Wins 12th MarCom Award.

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.