Finovate Alumni News

On Finovate.com

  • Dynamics Leverages Sprint’s Wireless Network for New IoT Connected Card.
  • Kyckr Lands Global Payment Provider Client.

Around the web

  • Taulia announces milestone, accelerating $1 billion in invoices in a single day.
  • Klarna extends partnership with ACI Worldwide, now reaching 10 major markets including the U.S. and U.K.
  • Marquette Bank ($1.6 billion in assets) builds on existing relationship with Baker Hill by adding risk management, loan origination and other solutions.
  • Datanami highlights Narrative Science’s natural language processing tech.
  • Disruptor Daily names eToro, Motif, Kapitall among 9 companies to watch 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.

Finovate Alumni News

On Finovate.com

  • Women on the Finovate Stage.

On FinDEVr.com

  • Check out this week’s FinDEVr APIntelligence.

Around the web

  • mBank partners with Cloudera to handle its big data processing.
  • Careington Health Products leverages SmartCART platform from Insuritas to deploy advisor services and discount programs.
  • BBVA Compass adds cash-back incentive to stimulate interest in mobile banking app.
  • Fiserv launches Credit Sense, combining credit monitoring with digital banking.
  • Kontomatik nominated at the Dutch FinTech Awards 2017.
  • PayPal partners with Oro ecommerce platform.
  • Arxan Application Protection named Best IoT product at the 2017 Cybersecurity Excellence Awards.
  • Zopa wins Top Consumer Lending Platform at LendIt awards.
  • Pindrop to mitigate call center fraud for Credit union service organization PSCU.
  • Motif jumps on the robo advisor bandwagon.
  • Tradeshift to acquire Capgemini’s IBX Business Network.
  • Linqto and Western Independent Bankers Launch New Apps Store for Banks.

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.

Top Direct-to-Consumer Wealthtech Plays

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Our wealthtech industry coverage continues this week. We looked at the industry last week and reviewed the top trends earlier this month. Today we’re taking a look at industry players with B2C offerings—in other words, companies that market directly to consumers and not through businesses.

Since wealthtech is broader than just roboadvisers, we’ve divided B2C wealthtech players into seven categories and laid out our top picks for each group. Since category sizes vary, the number of our selections also vary.

Top in-house builds from traditional players
These are offerings from traditional wealth management firms that have been built in-house (or purchased and then white-labeled) and marketed under the firm’s brand.

Fully automated roboadvisers
These are online platforms that provide automated, algorithm-based portfolio management without intervention from human advisers and without personalized, one-on-one conversations with a human adviser.

screen-shot-2016-12-22-at-4-06-40-pmAcorns takes a unique approach by linking a user’s debit card and investing their “spare change”

Hybrid roboadvisers
These are traditional advisory services, including personalized conversations and actively managed portfolios blended with computerized portfolio recommendations. Business Insider reports hybrid roboadvisers will manage 10% of all investable assets by 2025.

screen-shot-2016-12-22-at-4-11-08-pmSigFig has partnered with multiple banks, including Wells Fargo, Pershing, and Citizens Bank

Non-U.S. roboadvisers

Alternative investing platforms
These are platforms that link participants to unconventional investment types, such as private equity, hedge funds, futures, real estate, etc.

screen-shot-2016-12-22-at-4-18-08-pmWith Motif, uses invest in grouped stocks and ETFs that revolve around a common theme

Non-U.S. alternative investing platforms

News and information companies
These are online platforms that help users discover news and market trends before they go mainstream. Some include social networking aspects.

screen-shot-2016-12-22-at-4-23-47-pmTickerTags helps users discover trends even before they become news

Top Trends in Wealthtech: From API-ization to Virtual Engagement

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Wealth management technology provider eMoney Advisor, pictured here at FinovateFall, was acquired by Fidelity Investments in 2015 for $250 million.

With 2017 just around the corner, what trends are likely to drive innovations in wealth management technology, aka wealth tech?

The biggest potential regulatory change is the Department of Labor rule that financial planners must act as fiduciaries. The Trump election victory, accompanied by Republican control over both houses of Congress, may make this rule irrelevant. But most in the wealth management industry are nevertheless making preparations in the event the rule (announced this past spring and to be rolled out next spring) is kept. One concern with regard to the fiduciary rule specifically related to wealth tech is how fiduciary responsibility would work with robo-advisories. Can an automated investment platform determine conflicts of interest between the planner and client? What technological tools will be needed to give robo-advisory platforms this capacity? Maintaining fiduciary responsibility with a robotic investment platform suggests two potential scenarios: increasing use of human advisers in combination with automated technology, and deploying sentiment analysis technologies to better interpret nonverbal communication between planners and clients. Interestingly, both of these solutions are connected to other trends in wealth management, such as virtual meetings/conferences.

Use of virtual meetings

Virtual meetings will help wealth managers respond to a variety of issues, including better engagement and multichannel/channel-of-choice engagement. Virtual meetings could even help managers deal with greater fiduciary responsibilities. The channels can include everything from the use of Skype calls and video conferencing to more elaborate virtual meeting platforms such as those from Finovate alums like SuiteBox (F16) and SaleMove (F16). Both PwC and Deloitte have noticed the trend. “Multichannel delivery will become a strategy for delivering advice to clients in the most convenient, most efficient way possible based on each client’s particular needs at particular moments,” said PwC, in a recent look at wealth management technology trends. Deloitte noted that “new combinations of digital and human-based channels” are not just for millennials, saying that some gen-Xers and boomers “want to engage in new ways” as well.

According to a study conducted by Investment News/Cambridge, only 4% of advisers who responded currently list video conferencing as one of their communication methods, but 32% expect to rely on it more within five years. Douglas Boneparth, partner at Life and Wealth Planning, told Investment News, “I am seeing advisers, especially younger advisers, adapt to a more virtual and technologically savvy way of doing business. Advisers are focused on the level of service we provide and being accessible in more ways … virtual meetings is a great example of that.”

API-driven platform-ization

The ability to integrate financial data using APIs (Application Programming Interfaces) has been a huge boon for finance in general and wealth tech in specific. API use and adoption within wealth tech is especially strong where brokerage services are involved, (e.g., order-management system APIs). At a fundamental level, APIs enable linking multiple apps (portfolio management, document management, pricing systems); eliminate manual data entry; and limit mistakes during data transfer and update.

Marion Asnes of Broadridge Financial Solutions emphasized this last point. “Platforms must aggregate performance data across various institutions, and then, integrate planning, portfolio accounting, trading, reporting, and communications functions,” Asnes wrote for Investment News. “A wealth manager would need to aggregate performance data from all the various accounts in one place and base recommendations on that complete picture.” Writing in Quovo, John Horneff presented APIs also as an opportunity for managers to differentiate themselves, “leveraging new, innovative technology to break away from the pack and provide unique offerings.”

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Stephane Dubois, CEO of Xignite, during his company’s demo at FinovateAsia 2016. Xignite serves more than one one trillion market data API calls a year.

Xignite (F16) founder and CEO Stephane Dubois says the most salient factors of robo-advisory are: “ETFs, Trading APIs, and Market Data APIs.” Dubois’ firm is an acknowledged leader in the latter. With clients that are a who’s who of wealth management innovators—think Betterment (F11); Motif Investing (F14); Personal Capital (F14); and TipRanks (F13)—Xignite launched its FintechRevolution API Ecosystem in 2015 in an effort to make financial APIs more available to startups.

Growing importance of platforms

Both digital storage and ensuring ready accessibility of data are two trends in wealth management that point to the growing importance of advisor platforms to help wealth managers to their work. This is clearly one area where technology is playing a major role, especially for those focusing on the “accessibility of data” issue. Quoted in Investment News, Overplays co-founder Abby Schneiderman said, “Having data all in one place is one more way advisers can serve their clients’ needs … . I think one thing advisers are looking for is singular places to house all of their client’s information: wishes, documents, investment accounts, etc. in one place.”

Innovations in wealth management and financial advice platforms enable better engagement. Innovative platforms can give advisers more “surface area” for conversation and engagement with their clients. A good example is Polly Portfolio (F16) that uses natural language technology to ask customers about their financial goals and economic outlook to personalize and, importantly, explain portfolio construction. Combined with API-delivery and the inclusion of functionality like video, innovations in platform design will be key to help managers and advisors take advantage of industry trends.

HNW clients and robo-advisory

As robo-advisory becomes both more sophisticated and more accepted, an increasing number of high net worth (HNW) individuals are taking the automated investment route for some part of their finances. Betterment’s Jon Stein says their largest customer has $10 million invested with the company. He adds that many HNW people are already investors, but are now upping their investment from 5% two years ago to 20% (Stein defines HNW as having assets above $500,000).

Catering to high net worth clients, according to some, involves both greater technological sophistication on the part of robo-advisors as well as more extensive customer service. Writing in the CBInsights Blog, the analysts noted that one criticism of robo-advisors is that the very wealthy might have “more complex investment needs and higher customer service expectations.”

Specifically, high net worth clients may require access to more complex investment vehicles, including non-equity investments, as well as more advanced rebalancing and tax harvesting than the average investor. Other services, such as helping HNW clients manage sizable amounts of cash a la MaxMyInterest (F14), would also help encourage more wealthy investors to allocate a portion of their assets to robo-advisors.

wealthtech_wisebanyan

Herbert Moore and Jennifer Chin of WiseBanyan during their FinDEVr Silicon Valley debut. WiseBanyan is an independent robo-advisor that caters to millennials.

“Small data”

One large trend wherever clients and customers are involved is the role of small data, the kind of basic client data—demographics, for example—that can be very informative for the financial planner or wealth manager. In terms of increasing engagement, providing more accurate and personalized financial guidance, a little information about a client’s personal circumstances can go a long way.

In addition to providing better service to customers, small data can be the key to making a wealth management or financial planning business more efficient. Knowing which revenues are coming from new versus existing clients, for example, can help managers get the right products and services to the right customers. This is another area where innovators have produced platforms and software to help analyze client data and provide insights, often leveraging visualization technologies.

Robo-advisories: build or buy?

For financial institutions looking to provide wealth management services via robo-advisor, the question is whether to build or buy. While each approach has advantages and disadvantages, many FIs and brokerage firms have already decided:

Examples of firms that have gone the “roll your own” route include Fidelity with its Fidelity Go; Schwab with its Schwab Intelligent Portfolios; Vanguard with its Vanguard Personal Advisors Services; and E-Trade with its E-Trade Adaptive Portfolio.

But acquisitions have been a way for FIs to get up and running with robo-advisory service in a hurry. Some of the more notable recent acquisitions include Legg Mason’s purchase of Financial Guard (F13); Invesco PowerShares acquisition of Jemstep (F13); and Blackrock’s taking on FutureAdvisor (F13).

Other FIs are splitting the difference and instead seek partnerships with robo-advisors. The recent agreement and investment between Citizens Bank and SigFig to help the former build out a robo-advisory platform is an example of this approach.

Changing nature of advice

The growing capacity of robo-advisors to help manage other aspects of personal finance supports a more expansive view of wealth management and financial planning. This includes everything from health care planning, insurance, even real estate, education and leisure. The ability of technology to aggregate financial information is a major catalyst here, giving managers the ability to provide guidance beyond traditional boundaries.

Much of what is driving the changing nature of advice has to do with those being advised. The myriad and interconnected financial concerns affecting millennials—from managing student loan debt to starting a family—mean that financial planning beyond how to invest in a 401(k) is increasingly relevant and necessary. At the other end of the spectrum, active older adults in the “longevity economy” have financial issues that differ from those of seniors a generation ago who often had pensions and other financial support later in life.

This is where companies like iQuantifi (F14)—a self-described “proud robo-advisor” and virtual financial advisor—come in, with a platform that provides planning and guidance over a wide variety of topics, including insurance. Millennials are being catered to by wealth tech firms like WiseBanyan (FD16) while near and recent retirees can look to a company like True Link (F14), which specializes in financial planning for seniors.

H2 Ventures and KPMG Unveil 2016 Fintech 100

h2_kpmg_2016fintech100

H2 Ventures and KPMG have released their Fintech 100 roster for 2016. Divided equally between 50 “industry leaders” and 50 “emerging stars,” the roster features 17 Finovate/FinDEVr alums in the first category, and 10 in the second. Calling its roster a “celebration” of the most compelling innovators in this “bold new space,” the H2 Ventures/KPMG 2016 Fintech 100 covers a variety of different shades of fintech:

  • Lending (32 companies)
  • Payments (18 companies)
  • Insurance (12 companies)
  • RegTech (9 companies)
  • Data & analytics (7 companies)
  • Wealth management (6 companies)
  • Blockchain (5 companies)
  • Digital currency (5 companies)
  • Capital markets (3 companies)
  • Crowdfunding (2 companies)
  • Accounting (1 company)

And here is a look at how Finovate/FinDEVr alums fared. Earning recognition among the companies in the Leading 50 group are:

Also noteworthy in the Leading 50 are Ant Financial, which acquired Best of Show-winning EyeVerify in September 2016, and Avant, which acquired Finovate alum ReadyForZero in the spring of 2015.

Additionally, Finovate/FinDEVr alums earning spots in the Fintech 100’s 50 Emerging Stars roster were:

The H2 Ventures/KPMG report includes a geographic breakdown of the 2016 Fintech 100, as well as a set of key takeaways such as increased geographic diversification, the return of lending, the continued ascent of Insurtech, and the appearance of RegTech. The report also notes that China now has four out of the top five companies in the report’s top 10, and eight companies in the top 50. The report says funding for fintech “continues to rise,” and its authors cite more than $14 billion in capital was raised by the Fintech 100 in the past year.

Finovate Alumni News

On Finovate.com

  • Trunomi Closes $3 Million Seed Round
  • Symbiont Completes Proof of Concept with R3, Credit Suisse, Ipreo
  • Qumram Unveils Compliant WhatsApp Social Media Recording Solution
  • Mastercard Now Allows Developers to Access Suite of APIs through Single Gateway
  • Check out today’s FinDEVr APIntelligence.

Around the web

  • D+H Expands Mortgagebot Platform with MortgagebotMobile.
  • Gusto (fomerly ZenPayroll) now serves 40,000 small businesses.
  • Entersekt and Meniga listed among 100 most promising African fintech companies of 2016.
  • Motif Investing transitions to subscription service; hints at plans to launch roboadviser.

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.

2016 CNBC Disruptor 50 Features Klarna, Kabbage, Twilio, and Motif Investing

CNBC_Disruptor2016

What does it take to win a spot on the 2016 CNBC Disruptor 50? Ask alternative online broker Motif Investing. They’ve done it three times in a row.

“We’re very proud to be continuously recognized by CNBC for our hard work and commitment to making smart investing easy,” Motif founder and CEO Hardeep Walia said. “The CNBC Disruptor list is a well-respected industry benchmark and we’re honored to be ranked on the list for the past three years.”

Or ask cloud communications and authentication specialist Twilio, a FinDEVr alum (FinDEVr San Francisco 2015) enjoying its third consecutive year on CNBC’s Disruptors List of companies “whose innovations are revolutionizing the business landscape.”

Sponsored by Nasdaq, the CNBC Disruptor 50 for 2016 was released last week. And among some of the easy-to-call favorites like Uber and SpaceX and Snapchat, there are additional familiar faces, especially to fans of Finovate and financial technology. This year more than 750 companies competed for the 50 spots in CNBC’s Disruptor roster. Combined, the 50 companies in this year’s roster have raised more than $40 billion in venture capital and have an implied market valuation of $242 billion. Joining Motif Investing and Twilio in this year’s roster are alums Klarna at #8 and Kabbage at #35. This marks Klarna’s second year in a row on the list, and Kabbage’s first.

Klarna was featured earlier this month in PYMNTS.com in a look at the tech scene in Stockholm and, in May, the company’s CEO Sebastian Siemiatkowski was interviewed in BankNxt. In April, Klarna announced a partnership with U.K. e-commerce provider EKM. CNBC Disruptor 50 newcomer Kabbage just reached $2 billion in loans underwritten last month. Also in May, Kabbage announced a partnership with fellow Finovate alums OnDeck and CAN Capital to launch a pair of new initiatives: the Innovative Lending Platform Association and Smart Box. Both projects are geared toward improving transparency among online lenders and borrowers. In April, Kabbage teamed up with Santander to bring same-day financing to small businesses in the U.K.

Here’s a quick look at Finovate alums that have made the CNBC Disruptor 50 in years past.

  • 2015 CNBC Disruptor 50 featured alums TransferWise, Personal Capital, Motif Investing, Zen Payroll, Coinbase, Klarna, Wealthfront, Betterment, Twilio, Narrative Science
  • 2014 CNBC Disruptor 50 featured alums Motif Investing, TransferWise, Personal Capital, Wealthfront, Lending Club, Coinbase, Bill.com, Nexmo, Betterment, Twilio
  • 2013 CNBC Disruptor 50 featured alums Boku, Lending Club, Twilio, Wealthfront

Motif Investing demoed its Advisor Platform at FinovateSpring 2014. At FinDEVr San Francisco 2014, Twilio discussed the challenges of multifactor authentication in its presentation, “Authy 2FA in 20 Minutes.” Klarna demonstrated its e-commerce solution at FinovateSpring 2012. And Kabbage demoed its small business line of credit, the Kabbage Card, at FinovateSpring 2015.

Finovate Alumni News

On Finovate.com

  • “2016 CNBC Distruptor 50 Features Klarna, Kabbage, Twilio, and Motif Investing”
  • “Ping Goes the Blockchain: Partnership Brings Consensus, Kill Switch with New Platform”
  • “Ripple Receives BitLicense to Sell XRP”

Around the web

  • FICO launches its Academic Engagement Program, helping business students get hands-on experience with analytic software.
  • Mashable features Dashlane in its list of “7 can’t miss apps.”
  • Ping Identity partners with blockchain innovator, Swirlds.
  • Braintree announces new integrations with Demandware and Netsuite.
  • Top Image Systems earns spot in the Russell Microcap Index.
  • Bloomberg Businessweek profiles TransferWise, ‘London’s Lonely Unicorn.’
  • The economist looks at Strands and Entrepreneurial Finanace Lab’s roles for businesses in developing countries.
  • Unicredit launches Appathon powered by Open Bank Project.
  • Crowdtrader looks at C.K. Mack’s new take on crowd-sourced real estate investing.

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.

 

FT Partners New Research Report on Digital Wealth Management Features a Dozen Finovate Alums

The new research report on digital wealth management from Financial Technology Partners is a timely reminder of just how deep the firm’s dedication to, and insight into, the fintech world goes (that the report features a dozen Finovate and FinDEVr alums is pretty neat, too).

FT Partners’ report “Are the Robots Taking Over? The Emergence of Automated Digital Wealth Management Solutions” looks at the different platforms and business models used by digital wealth management companies, as well as the response by industry incumbents. The 140+ page report also features interviews with CEOs from leading major digital wealth-management companies such as Betterment, Nutmeg, and SigFig.

Writing about this FT Partners’ report on digital wealth management for Bloomberg View, columnist and money manager Barry Ritholtz noted:

“For those of you who may not have thought much about how technology might affect Wall Street, the work you do each day, and how you do it—not to mention what it means for your careers—this report is invaluable.”

Ritholtz outlined how his own experience as a money manager had been shaped by the rapidly changing technology landscape (“My office is small, but thanks to technology, and fintech in particular, we are able to be very productive with just 14 people,” he wrote). He also admits this productivity comes at a cost for some. “Those people who don’t adapt will find themselves with limited career options,” Ritholtz writes.

So who are the disruptors in the digital wealth management space of whom both FT Partners and Ritholtz speak?

Betterment_logo

 

dyme

 

 

 

futureadvisorlogo

 

 

HedgeableLogo

 

 

iQuantifiLogo_FF2014

 

 

Jemstep_Logo

 

 

  • Founded in 2008
  • Headquartered in Los Altos, California
  • Kevin Cimring and Michael Blumenthal are joint CEOs
  • Acquired by Invesco, January 2016
  • FinovateSpring 2013

LearnVest_logo

 

 

  • Founded in 2009
  • Headquartered in New York, New York
  • Alexa von Tobel is CEO and founder
  • Acquired by Northwestern Mutual, March 2015
  • FinovateFall 2013

MotifInvesting_logo_150x

 

 

NutmegLogo-thumb-200x56-5002-thumb-150x42-5003

 

 

Personal-Capital-Logo

 

SigFig_logo

 

 

tradeking_logo

 

 

 

  • Founded in 2005
  • Headquartered in Boca Raton, Florida
  • Donato Montanaro is CEO
  • Acquired by Ally Financial, April 2016
  • FinovateSpring 2008

 

Finovate Alumni News

On Finovate.com

  • “Brunon Bartkiewicz Named New CEO at ING Bank Slaski”

On FinDEVr.com

Around the web

  • Xignite announces its XigniteGlobalCurrencies API is now available in the Oracle Cloud Marketplace. Join Xignite at FinDEVr 2016 in New York, March 29 and 30.
  • CardFlight integrates with Stripe to encourage developers to build EMV payment functionality within their mobile apps.
  • Jack Henry partners with The Clearing House to help spread “real-time payment ubiquity” among FIs.
  • Fenergo to provide Client Lifecycle Management solutions to Nikko Securities America.
  • WePay wins gold at 2016 Stevie Awards for sales and customer service.
  • Entrepreneur reports: Payoneer to enter Indian market.
  • Insuritas replaces GoogleCompare by launching new technology that provides one-stop shopping for financial products.
  • Bill.com launches the Bill.com Network to promote faster, lower-cost payments for businesses.

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.