David Penn, Author at Finovate

Marcus and the Marriage of Banking and PFM

By David Penn Posted on September 15, 2020
Categories: Daily news

On the day that Goldman Sachs announced that its digital banking solution Marcus would now feature a suite of PFM tools, FinovateFall Digital attendees were busy listening to the architect of this new feature – Adam Dell, Head of Product at Marcus – making the case for, among other things, the union of digital banking and PFM.

Successful digital financial services offerings in the post-COVID era will have three main features, Dell said. They will have a low cost means of delivery, they will represent a fair deal for the consumer, and they will provide what he called “delightful digital experiences.”

The new PFM solution, known as Marcus Insights, is currently available on iOS and will be made available on Android platforms and on the web soon. Marcus Insights aggregates the user’s financial information in a single dashboard, and offers tools and trackers to provide an easy-to-understand overview of their finances. After linking their checking, savings, loans, and/or investment accounts, users can analyze their spending in pre-set categories such as travel, shopping, and dining, as well as get instant insight into their spending and saving patterns, and their investment performance.

Interestingly, due to a restrictive data sharing agreement, users will not be able to link their Apple Cards to Marcus Insights. This is despite the fact that Apple is a Goldman partner. Also partnering with Goldman and Marcus on this initiative is Finovate alum Plaid, which was acquired by Visa for $5.3 billion at the beginning of the year.

Goldman launched Marcus, which was named after the investment bank’s founder Marcus Goldman, in 2016 and, just this year, unveiled a mobile app for the online bank. As of January, Marcus has $60 billion in customer deposits, and $5 billion in loans. CNBC reported that Marcus plans to add a digital checking account and an investing service in 2021.

Photo by julie aagaard from Pexels

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Raisin and Finect Team Up to Bring Better Options to Spanish Savers

By David Penn Posted on September 14, 2020
Categories: Finect

In a financial world still dealing with near-zero interest rates – and less – word that Spain-based financial resource platform Finect has partnered with savings-as-a-solution innovator Raisin is great news for Finect’s two million plus users.

“Spanish families have accumulated a record figure of almost €900,000 million in bank deposits, but not always with a meaningful return. In fact, in many cases, they don’t even earn interest,” Finect CEO Antonia Botas explained. He called the partnership with Raisin part of Finect’s “broader objective: to bring the best products and services to Spanish savers, following the launch of our fund platform in July.”

Finect offers a way for consumers to shop for a wide variety of financial services and products. More than 10,000 savers have used the platform to find and request a financial advisor, and 100+ national and international investment firms leverage Finect’s platform to connect with clients and grow their businesses. Courtesy of the partnership with Raisin, Finect users will have access to 60+ deposit products from Raisin’s European partner banks, and give users the ability to earn as much as 1.41% on their savings.

“With the increase in savings volume since the start of COVID-19 pandemic, creating access to better savings options with higher yields is more important than ever,” Raisin Spain Country Manager Miguel Freire said. “Finect and Raisin share a mission to use digital technology to provide people in Spain with not only more information, but also more competitive options.”

German fintech Raisin, which began operations in the United States over the summer, began the year with the news that it has topped the €20 billion in deposits mark. Founded in 2012, Raisin has more than 280,000 customers across Europe, and more than 98 partner banks.

A Finovate alum since making its debut at FinovateFall in 2013, Finect was founded a year before, and is headquartered in Madrid, Spain.

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Unifying Financial Planning with Path-to-Purchase, Inspirave Introduces SaveAway

By David Penn Posted on September 11, 2020
Categories: Alumni News, inSpirAVE

“Buy Now Pay Later” may be the e-commerce rage du jour. But if you check in with the team from Inspirave, then you’ll hear about a better way for consumers to spend and save. The New York based company – which we profiled last fall – unveiled its SaveAway platform this week, enabling consumers to benefit from its unique blend of “financial planning with the path-to-purchase.”

“There has never been a better time to see Inspirave’s economically sustainable blueprint, propelled by greater purchasing power, striking such an inimitably strong chord with our growing community of SaveAway users and partners who recognize that what inspires our new-to-market innovations enabling greater financial wellness and social mobility is our steadfast mission to further human potential and prosperity for all,” Inspirave founder and CEO Om Kundu said in a statement.

SaveAway’s unification of micro-saving and social commerce offers consumers a way to save for the things they really value and avoid purchasing these same items with credit and accumulating unnecessary debt in the process. Aided by the insights, advice – and even material support – of friends and family, consumers using the SaveAway platform can leverage the collective wisdom of those who know them best and care about them the most to help them make financial decisions that are as responsible as they are affordable.

Miguel Sanchez and Philip Shearer, co-founders of diversity-focused accelerator MetaBronx, praised both the Inspirave’s innovation and its approach to spending and saving. “What made the SaveAway platform stand out in the top six companies chosen in 2020 derived from the breakthroughs in Inspirave’s patented technology as much as its novel operating model, pointing to the massive impact SaveAway is moving forward to uniquely deliver,” they said.

The company noted in its statement that those who signed up for Early Access to the SaveAway platform are eligible for a variety of bonuses, including referral credits and entry into a sweepstakes for a $1,000 contribution toward the winner’s SaveAway purchase-goal to be paid by the company. More than 12,000 people have signed up for Early Access to date.

Named a a Top Fintech Forward Company to Watch by American Banker and BAI, and A Finovate alum since 2016, Inspirave is headquartered in New York City.

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Digital is Global, E-Currency for the Eurozone, Open Banking in Switzerland

By David Penn Posted on September 11, 2020
Categories: Finovate Global, Onfido, Revolut, Trulioo

FinovateFall: Digital AND Global

What’s to like about FinovateFall Digital, our all-digital fintech conference starting Monday, September 14th and continuing through Friday, the 18th? A CEO from one of our demoing companies pointed out that one of the special things about this fall’s conference is that because the FinovateFall is all-digital, it enables people all over the world to participate as virtual attendees.

With this in mind, we wanted to use this week’s Finovate Global to highlight those companies from outside the United States that will be demonstrating their latest fintech innovations as part of our annual autumn event. Here’s hoping they bring a few friends from across the border – or from over the sea – to digitally join us!

Cinchy – Toronto, Ontario, Canada. Provides a real-time data collaboration platform to solve data integration, access, governance, and solution-delivery challenges. Finovate Best of Show Winner. Founded in 2014.

DQ Labs – Bangalore, Karnataka, India. Offers a unified suite of modules that enables companies to unlock the value in their data to gain new insights. Founded in 2019.

Horizn – Toronto, Ontario, Canada. Helps banks and financial institutions dramatically increase digital adoption. Finovate Best of Show winner. Founded in 2012.

Mostly AI – Vienna, Wien, Austria. Enables companies to unlock privacy-sensitive data assets while protecting privacy. Founded in 2017.

Payever – Hamburg, Germany. Offers a Commerce Operating System to help entrepreneurs start, run, and grow their businesses. Founded in 2013.

Scientia Consulting – London, U.K. Leading fintech consulting and development firm in Europe. Founded in 2010.

Join us next week for Finovate’s latest all-digital fintech conference. Visit our registration page today and save your spot at our live and On Demand event.

Digital Currency Comeback?

Back in January Finovate Global took a look at the growing case for national digital currencies. We highlighted initiatives in countries as different as India and Japan, and underscored observations from Christine Lagarde (former head of the IMF and current president of the European Central Bank) in her address, “The Case for New Digital Currency”.

Now Ms. Lagarde is back in the news hinting at a near-term resolution to the question of a digital euro. In a speech this week at the Bundesbank’s conference on digital banking and payments, Lagarde argued that Europe must be wary of falling behind when it comes to the development of digital payment options, and that consideration of a national digital currency needs to be a part of that conversation.

“The Eurosystem has so far not made a decision on whether to introduce a digital euro,” Lagarde said. “But, like many other central banks around the world, we are exploring the benefits, risks, and operation challenges of doing so.” Lagarde added a taskforce on development of a digital euro is expected to release its findings “in the coming weeks.”

Open Banking All Over the World

We recently investigated the prospects for open banking in Australia. This week we share an overview of the state of open banking in Switzerland courtesy of Fintech Zoom’s Jung Min-Seo.

“Europe may moderately declare to be the cradle of open banking,” Min-Seo wrote, “however in contrast to within the E.U. the place members are obliged to implement PSD2, a directive meant to opening up cost transactions to non-banks and promote competitors, Switzerland has no such regulation in place.”

Read the rest: A Brief 2020 Overview of Open Banking in Switzerland

Here is our look at fintech around the world.

Middle East and Northern Africa

The Fintech Times profiles Demet Zübeyiroğlu, chair of the Financial Innovation and Technologies Association, a nonprofit based in Turkey
Israeli fintech startup Salaryo secures $5.8 million in funding from investors including Dubai-based private equity fund Ken Investments.
Jordanian fintech Whyise raises $675,000.

Central and Southern Asia

Trulioo expands to Pakistan.
TechWire Asia looks at how Amazon is leveraging its relationship with India to grow its fintech offerings.
Proving that cash is still alive in India, RapiPay, a subsidiary of Capital India Finance, will install 500,000 micro ATMs in the country over the next two years.

Latin America and the Caribbean

Caribbean-based fintech WiPay teams up with Mastercard to expand digital payments in the region.
Austria’s Paysafecard announces expansion into Mexico.
Mexican fintech Ubank, which offers an automated savings solution, plans to expand to the United States.

Asia-Pacific

Revolut goes live in Japan.
Onfido brings ID verification to migrant worker e-marketplace, MyCash Money, which serves workers in Malaysia and Singapore.
Backbase partners with Vietnam’s Tien Phong Commercial Joint Stock Bank (TPBank) to speed the institution’s digital transformation.

Sub-Saharan Africa

Nigerian fintechs Opay and PalmPay, along with South African e-payment firm, Yoco, are the only three Africa fintechs to earn spots on CB Insights’ 2020 Fintech Top 250.
Ozow, a digital payments company based in South Africa, launches its new payments platform.
Nigeria’s Sparkle announces plans for digital distribution of insurance solutions.

Central and Eastern Europe

Blockchain analytics firm Chainalysis praises Ukraine as the country with the greatest rate of cryptocurrency adoption in a new report.
Hungarian biometric payment startup PeasyPay announces plans to expand to Spain and the U.K.
Balkan Insight reviews the fintech ecosystem in Croatia.

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CheckAlt Acquires U.S. Dataworks

By David Penn Posted on September 10, 2020
Categories: CheckAlt, Mergers & Acquisitions

Independent lockbox and electronic payments provider CheckAlt has acquired software and engineering company U.S. Dataworks from The Bankers Bank of Oklahoma. Terms of the deal were not immediately available.

CheckAlt CEO and co-chairman Shai Stern put the purchase in the context of upcoming challenges related to the COVID-19 pandemic and the 2020 election. “Recognizing that the U.S. Postal Service is going to be overwhelmed and distracted with mail-in voting and other impediments to normal delivery, we must enable additional solutions for our clients to capture payments on-site, remotely, or through any one of our 13 lockbox processing centers around the country,” Stern said.

“Moreover, between the hundreds of financial institutions that both CheckAlt and U.S. Dataworks serve directly, we now have further reach to offer our full suite of payment solutions which include not only paper processing but as well our Catch! product and card processing services.”

With more than 300 financial institution partners, CheckAlt offers financial institutions and commercial clients a range of lockbox and payment processing solutions. These include a full set of check imaging products that provide consolidated item processing across all channels and points of capture: mobile, ATM, and in-branch. The company also offers standard payment processing solutions and services such as credit card processing, integrated receivables, and merchant RDC.

The U.S. Dataworks acquisition marks CheckAlt’s third in six years. The company bought ERAS, a security systems provider, in 2014, and acquired financial services provider Klik Technologies, two years later. CheckAlt’s acquisition announcement comes at the end of a busy summer for the Los Angeles, California-based company. CheckAlt announced an expansion of its partnership with Pawtucket Credit Union ($2 billion in assets) in June, teamed up with Five Star Bank of California ($2 billion in assets) in July, and collaborated with NXTsoft’s OmniConnect to enhance its ability to integrate with credit unions, core providers, and banks.

Founded in 2004, CheckAlt made its Finovate debut last year at FinovateFall. The company demonstrated its LoanPay solution, which enables financial institutions to accept a wide variety of loan payments – from auto and business to mortgage and personal – from their customers. The solution enables customers to use debit, credit, and checking accounts to make both one-time and recurring payments in person, via mobile, or online.

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Identity Verification Innovator Sumsub Secures $6 Million in New Funding

By David Penn Posted on September 9, 2020
Categories: Daily news, Funding

London-based identity verification platform Sumsub (which stands for “Sum & Substance”) raised $6 million in Series A funding this week. The round brings the company’s total funding to more than $7.5 million. With the additional capital, the company plans to intensify its product development initiatives, expand into new markets, and pursue its goal of more than 1,000 new SME and enterprise customers by the end of next year.

Sumsub co-founder and CEO Andrew Sever highlighted the compliance and risk management questions that global businesses face when operating in multiple jurisdictions, and pointed to his company’s technology as an answer. “We solve the issue by presenting teams with a single solution to drive customers and enhanced due diligence from one place, customizing the onboarding flow to any jurisdiction or requirement.”

Sumsub provides a single, AI-powered identity verification and compliance risk management toolkit that automates the identity verification process and boosts conversion rates to as high as 97%. The company’s technology offers accelerated ID verification, digital fraud detection, and compliance for businesses in more than 200 markets around the world such as the U.K., North America, Germany, Singapore, and Hong Kong, and has verified “tens of millions of users” since launch in 2015.

The Series A was led by MetaQuotes, a financial trading software development company. The round featured the participation of several existing investors, as well as individual investor Ilia Perekopsky, VP of Telegram messenger.

Earlier this year, Sumsub announced that it and another ID verification company Veriff, had partnered with international money transfer firm TransferGo. TransferGo Compliance Manager Milda Mačiulaitytė said Sumsub’s platform would enable TransferGo to not only deliver a “tailored money transfer experience” but also to make sure that experience provided in a compliant and secure way across all regions.

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Promises Made, Promises Kept: Challenger Jiko Buys a Bank

By David Penn Posted on September 8, 2020
Categories: Daily news

Almost three years ago, Jiko co-founder and CEO Stephane Lintner told TechCrunch that his company “at some point” would own its current bank partner.

Late last week, Lintner made good on that prediction. The former Goldman Sachs managing director announced that the challenger bank he founded in 2019 had completed its acquisition of $100 million asset, Mid-Central National Bank, a Minnesota-based retail bank that’s served its community for 63 years.

“The past decade of fintech and online banking innovations has exposed new customers to our industry and demonstrated that innovation in the financial sector is needed,” Lintner said. “People’s relationship to money must be fundamentally improved for everyone. One of Jiko’s primary goals is to give people what they deserve: more organic and direct returns, without intermediaries and unnecessary friction.”

Mid-Central National Bank’s three branches in Minnesota will continue to operate, post-acquisition.

What makes Jiko different from other challengers is that it invests customer deposits in liquid U.S.-government backed Treasury bills (T-bills) instead of holding them. To do this the company has developed a core infrastructure which combines payment rails with real-time, 24/7 principal trading capabilities in T-bills. Add to this the requisite banking and broker-dealer licenses, and you have a banking platform that provides customers with an investment that is also a liquid, spendable alternative to cash.

That said, the lack of FDIC insurance may give some potential investors pause. Additionally, interest rates on T-bills have plunged in recent months (the three-month T-bill is at 0.11% today compared to 1.93% just a year ago). Fintech Futures reports that Jiko accountholders earned an annualized 3.3% return last year while the service was in beta. FintechLabs’ coverage of the Jiko’s bank purchase notes that the company may be less concerned with these issues as it focuses on B2B and BaaS customers and partnerships.

Lintner has positioned his Oakland, California-based company near the front of fintechs becoming banks (witness Varo Money’s securing of a national bank charter over the summer). And courtesy of approvals from both the Federal Reserve Bank of San Francisco and the Office of the Comptroller of the Currency (OCC), Jiko is the first to do so by acquiring a nationally regulated bank. The company plans to add a cash-back debit card and tokenized bank account numbers by year’s end.

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Who’s Smiling Now? Ohpen Acquires Mortgagetech Davinci

By David Penn Posted on September 8, 2020
Categories: Alumni News, Alumni profile, Mergers & Acquisitions, Ohpen

One of my favorite sayings popularized by the current Democratic Party candidate for president is “don’t tell me your values. Show me your budget.” The implication is that, at the end of the day, talk is cheap. Show me how you actually spend your money, and I’ll learn all I need to know about what matters to you and what does not.

By that metric, the news that Dutch fintech and Finovate alum Ohpen has acquired Saas-based, crossborder mortgagetech Davinci tells us quite a bit about what what the Amsterdam-based cloud core banking engine maker thinks about the importance of expanding beyond its competencies in savings, investments, loans, and current account products.

“We are a growing company with huge ambitions,” Ohpen CEO Matthijs Aler said. “Together, we intend to lead the charge in directly challenging incumbent providers with outdated technology. Our mission is – and always has been – to set financial institutions free from legacy software. Now we can help a broader range of financial institutions deliver tangible change to meet the needs of tomorrow’s customers.”

Ohpen put the acquisition announcement in the context of its global growth strategy. This includes scaling operations in the Netherlands – where the company is a market leader – the United Kingdom, and Belgium initially, as well as expansion to other areas. Ohpen also plans to scale up its development centers in Spain and Slovakia.

The terms of the acquisition were not disclosed, but the combined entity will have 350 employees and $35 million in revenue. Davinci is Ohpen’s second acquisition. The company purchased core banking system implementation consultancy FYNN Advice in the fall of 2017.

Davinci leverages machine learning and AI to enhance and accelerate digital onboarding and acceptance during the mortgage lending process. Delivering cost savings of as much as 80%, the company’s signature solution is Close, a cloud-native platform for mortgage loan origination and servicing.

Calling the acquisition, “the natural next step” for both companies, Davinci Director Alwin van Dijk said, “We are the only two players with a real focus on back and middle office innovation for new and existing propositions.” van Dijk added that the ability to offer a broader range of products will be a “market game changer.”

With $47 million (€40 million) in funding from investors including NPM Capital and Amerborgh, Ohpen began the year teaming up with pensions administrator TKP Pensioen. The partnership with the Groningen, Netherlands-based digital pension platform enabled Ohpen to enter the pension market for the first time. Aler pointed out that the integration would enable the “originally conservative industry” of pension management to have a “fully digital and futureproof pension solution at its disposal.” This spring, Ohpen partnered with another pension management firm, Ortec Finance, integrating the company’s forecasting engine with the Ohpen platform.

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The Buy Now Pay Later Revolution Rolls on as Zip Acquires QuadPay

By David Penn Posted on September 4, 2020
Categories: ACI Worldwide, additiv, Entersekt, Finovate Global, NuData Security, VISA

Photo by **Chavdar Lungov** from **Pexels**

We talked so much about the Buy Now Pay Later (BNPL) revolution in ecommerce that we are starting to sound like a broken record (someone please explain that reference to the younger millennials in the room). But the no-interest financing strategy is quickly becoming a must-offer feature for merchants, card issuers, and other players in the ecommerce ecosystem.

This week brings news that Zip Co, a digital retail financing and payments services company based in Australia, has agreed to acquire New York based Buy Now Pay Later company QuadPay in a deal valued at $269 million. One of the biggest BNPL companies in the U.S, QuadPay will enable Zip to expand its reach to five countries (Australia, New Zealand, South Africa, the U.S., and the U.K.), a combined annualized revenue of $182 million (AU$250 million) and 3.5 million customers.

Aside from the company’s co-founders, Adam Ezra and Brad Lindenberg, Zip was the largest shareholder in QuadPay. Ezra and Lindenberg will join Zip’s global leadership team post-acquistion with the responsibility of scaling business in the U.S.

Hungry for good news on the fintech funding front? Gaze no further than Latin America where a new report from KoreFusion highlights growth in smartphone ownership, ecommerce adoption, and dissatisfactioin with banks as just a few of the reasons why Latin America’s fintech boom is ust beginning.

The study, available for free from the San Francisco, California-based consultancy, is based on a study of more than 1,000 fintechs in Argentina, Brazil, Chile, Colombia, and Mexico. In addition to a survey of the fintech landscape – finding a concentration in the payments category with lending and B2B-based fintechs coming in second and third, respectively – the report underscores other areas – such as remittances and foreign exchange – where it believe major opportunities remain.

Read more in KoreFusion’s 2020 Latam Fintech Report.

Here is our look at fintech around the world.