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Finovate Blog
Tracking fintech, banking & financial services innovations since 1994
European wealth management firm Raisin is bringing its Savings-as-a-Service solution to the U.S. The new offering, the first U.S.-based product from the Berlin-based fintech, will enable banks and credit unions to provide private-banking services typically not available to the average banking customer.
Foremost, FIs that partner with Raisin will be able to leverage the company’s technology to quickly build custom retail deposit products. These products include market-linked solutions that enable customers to benefit from a resurgence in economic activity while at the same time providing 100% FDIC deposit insurance up to $250,000. Banks and credit unions can also create deposit products with dynamic features such as laddering, and ones that can be optimized for profitability or other individual preferences.
“Given the current economic uncertainty, financial institutions want a share of the big increase in deposits, but many don’t have the technological tools to optimize or meet customers’ current needs,” Raisin U.S. CEO Paul Kodel explained. He said that in order for banks and credit unions to help rekindle the economy, they will need to be able to offer a wider range of solutions. “Banks need affordable products that enable customers to stabilize their assets now, and then also grow with a recovery,” Kodel said.
Raisin Communications Manager Maggie Bell noted that the company’s new offering comes at a time of increased opportunity in deposit products for financial institutions. She cited data from the Federal Reserve indicating that while commercial bank deposit market volume had grown by more than 10% since the beginning of the year, deposits spiked from $13.5 trillion to nearly $15 trillion between the second week of March and the third week of April. Additionally, deposits could represent a significant part of the refinancing mix for banks, Bell wrote, “especially as bonds have become more cost-intensive within the last two months.”
With 92 partner banks, more than 260,000 customers and €23 billion in assets invested, Raisin was founded in 2012. The company provides access to guaranteed deposit products from across Europe and, in Germany, offers diversified, cost-effective exchange-traded fund (ETF) portfolios and pension products. Named a top five European fintech by the FinTech 50 awards, Raisin is backed by investors including Goldman Sachs, PayPal Ventures, Thrive Capital, and Index Ventures.
A global product and pricing solution provider for banks, Zafin finished 2019 with a new Salesforce integration and began this year with a major change at the top: adding financial services veteran Venkataraman Balasubramanian (known informally as “Bala”) as the company’s new Chief Technology Officer.
Balasubramanian arrived at the Toronto, Ontario, Canada-based company at a time of major innovation in the financial services industry – as well as a time of significant disruption in the everyday lives of people all over the world due to the coronavirus pandemic. How is Zafin helping banks and other financial institutions cope with the current environment? How do some of the most compelling technology innovations of our time – from advanced machine learning and AI to the blockchain and Big Data – give innovators the tools they need to find new solutions to old – and new – problems? We talk with “Bala” about all this and more in our latest Finovate Alumni profile.
Finovate: You have only been at Zafin for a month or two. How are you finding your new position? Any surprises?
Venkataraman Balasubramanian: It has been an incredible first few months for me here at Zafin. First and foremost, I find myself in the midst of a very talented group of people: engineers, business and technical analysts, a robust management team, and a very dedicated client success team. The depth of these teams is a testament to the value our clients see in our products.
Counter-intuitive yet brilliant has been the approach our management team has taken during these very trying times: to continue to bring in strong talent that will put us in a strong position coming out of this period of economic uncertainty.
Zafin was among the first to move to protect our employees by requiring all to work remotely. Our employees have access to extra “care days” for this year as a benefit. Recognition that the safety and well-being of our team is paramount to our client success is unusual to see in a business our size and one we continue to focus on.
Finovate: You have more than 35 years of experience in financial services and information technology. What attracted you to Zafin?
Balasubramanian: Digital was here to stay even before our current crisis. It is now even more so cemented in our everyday lives. This aspect of digital, however, goes far beyond the creation of experiences into the digitization of entire workflows — propositions that resonate in this context with a cloud-first service architecture, enabled by artificial intelligence and machine learning.
The implementation of such a system typically requires truly digital fintech partners (such as Zafin) and services integration (SI) partners. Having spent considerable time with SI partners in my prior roles, I felt that the timing is appropriate to work with a specific digital enabler. Zafin provided that opportunity in that its solution truly enables a digital transformation of the customer experience across the entire customer relationship and banks’ business lines.
Finovate: What are some of the things you are most eager to accomplish in your first year as CTO?
Balasubramanian: We are a cloud-based solution today, and I would like for us to be a multi-cloud solution in a manner that is unique. We are currently defining that framework, and I hope to get it to completion during the year.
In the era of digital transformation, core systems transformation will progress considerably. To that end, I expect to work with both existing core providers and transformational core providers to enable a “Bank-in-a-Box,” with a modernized core and externalized cross-product layers that enable product, pricing, and billing functionalities. Further, we will look to incorporate AI/ML capabilities into our solution to create proactive end-user interfaces.
Finovate: What are some of the most significant changes in the banking industry going on right now and what role is Zafin playing to help banks and other financial institutions successfully navigate these changes?
Balasubramanian: COVID-19 has redefined life as we know it, and financial services are no exception. Whether it is social distancing, phased restarts of the economy, or just the uncertainty that this virus has created, it has made us all think about the experiences we want in our everyday lives. Naturally, this means digitizing many facets of those experiences.
We want payments to be contactless and frictionless. We want highly relevant products and offers that seek to simplify our lives. From a banking perspective, Zafin works with banks to digitize the product lifecycle and its applicability to pricing and billing by injecting the customer and relationship context. We also enable banks with a cross-product layer that allows the centralization of product variants across the various systems. These are fundamental building blocks as a bank strives to digitize customer journeys.
Finovate: There are a number of enabling technologies that are helping drive innovation in fintech right now: AI, Big Data, blockchain, machine learning, and so on. Which technologies do you believe are being leveraged most effectively in the industry and how?
Balasubramanian: Each of these enabling technologies is at various stages of maturity, depending on the use case. Blockchain has great applicability not merely as a decentralized ledger, but also in immutability. Yet, that set of applications has some adoption in capital markets and not quite yet in other facets of the industry. Community creation has been a major impediment to its success.
Big Data, AI and ML have a slightly more nuanced twist: These require a considerable upfront investment in terms of data and infrastructure, hypothesis creation, testing and validation to produce a result. This will likely only be valuable if it is integrated into the delivery system — otherwise, it may turn out to be nothing more than an interesting experiment.
As these technologies and usage mature, they will prove more valuable. The discontinuity that the current situation creates allows for value systems to be re-arranged, and, in so doing, I believe many more interesting use cases will be discovered.
Finovate: Tell us more about how the COVID-19 pandemic is impacting Zafin and the work it does? How is it impacting you and your work, having just arrived at the company?
Balasubramanian: If there was one major surprise for me that I didn’t answer in the very first question, it is this. We were among the first companies to transition our entire workforce to a remote setup. We rapidly implemented technologies to enhance internal collaboration and client communication. Working remotely may have impeded my own ability to get to know my team personally (as I would have typically done), but given the circumstances, our transition has been about as seamless as it could have been.
In some cases, COVID-19 has accelerated banks’ plans for digital transformation. Based on the volume and nature of conversations we’re having with banks and partners, if anything, the interest in and demand for what we offer has only increased over the past few months.
As much as we hope for the return to what we knew as “normal”, we are also certain that a new normal will emerge. And we think we are well prepared for that.
Visa’sacquisition of Plaid for $5.3 billion at the beginning of the year set a high mark for mergers and acquisitions among Finovate alums in 2020. How have subsequent deals among our alums in the fintech space measured up?
Unfortunately, many M&A deals keep their financials well under wraps, which makes comparisons difficult. But we can take a look at some of the brighter lights in the merger and acquisition sky, and gain some sense of just how big some of these fintech stars truly are.
Looking at the first few months of the year, we have no figures for the four alums that were acquired in the first half of 2020. Of the acquirers, however, two deals stick out, rivaling the Visa/Plaid purchase in January: Intuit’s $7.1 billion buy of Credit Karma, and Worldline’s decision to put down $8.6 billion for Ingenico.
Below is our quick rundown of some of the biggest M&A action from our Finovate alums so far in 2020.
The Acquired
Emailageacquired by LexisNexis Risk Solutions. May 7.
Worldlineacquired Ingenico for $8.6 billion. February 3.
If you are a Finovate alum that was involved in a merger or acquisition in the first half of 2020, and do not see your company listed, please drop us a note at research@finovate.com. We would love to share the good news! M&A activity prior to becoming an alum not included.
Cloud banking innovator nCino has picked up another partner. The Wilmington, North Carolina company – which made its Finovate debut at FinovateEurope in 2017 – has teamed up with Swedish SME lender Yourban. The firm will deploy the nCino Bank Operating System to power its SME lending operations.
“Our vision for Yourban was to create an institution that could be in place for the long-term,” Yourban CEO and founder Marthin Larsson explained. “With this in mind, we wanted to partner with a technology provider that could adapt and scale our operations as we expand firstly across Sweden and then Europe.”
nCino’s Banking Operating System leverages the Salesforce platform to deliver an end-to-end banking solution that enables banks, credit unions, and other financial institutions to grow market share, meet compliance obligations and boost profitability. The cloud-based platform combines CRM, ECM, loan origination, workflow, business intelligence and reporting in a single, digitally-optimized experience, providing greater security, efficiency, as well as time- and cost-savings.
“In a competitive SME lending market, Yourban understands the need to provide customers with an unparalleled digital experience,” nCino VP of Sales, EMEA Edward Lane said. “We’re excited to be helping Yourban achieve its goals at such a critical time in its lifecycle.”
With the company’s SME loan business as a starting point, the partnership between nCino and Yourban is designed to expand to include additional product offerings as the lender’s business grows.
Two years ago, Access Softekdemonstrated its white label roboadvisory technology at FinovateFall in New York. Last week, the company announced the launch of its latest roboadvisory solution, EasyVest. The new offering provides investors with an automated personal investment advisor that seamlessly connects with bank, credit union, and mobile banking platforms.
“Over the next decade, America will experience the largest generational transfer of wealth we’ve ever seen as Baby Boomers pass along their assets to their children and grandchildren,” Access Softek founder and CEO Chris Doner said. “Robo-advisors especially appeal to the generations receiving the wealth transfer. Financial institutions that provide the technology recipients want will benefit from the transfer.”
Investors can use EasyVest to build wealth via a variety of low-cast exchange-traded fund portfolios. The technology supports individual and retirement accounts, conducts automatic portfolio rebalancing, and supports fractional share purchases. Investors can open an account with as little as $200.
Finovate Podcast Interviews Jim Bruene
In the latest episode of the Finovate podcast, host Greg Palmer talks with Jim Bruene, founder of the Online Banking Report – the first and longest lasting specialty information publication for the digital banking industry. Bruene is currently a Principal at Fintech Labs UX, a firm that collaborates with banks, credit unions, and fintechs to improve ROI.
Bruene is also the “Father of Finovate,” having founded the fintech conference series in 1994. In this podcast conversation, he talks about the third recession of the fintech era, how to apply lessons learned from the dot.com crash, the Great Recession, and the COVID-19 crisis.
FalconPro Technology selects Redrock Biometrics to co-develop a palm-based biometric identification solution for mass transportation.
Truliooadds new features to its EmbedID developer tool.
Daonextends partnership with ForgeRock to bring multi-factor authentication and digital onboarding to ForgeRock authentication trees.
Featurespace to grow behavioral analytics with fresh $37.4 million round.
nanopay to power self-service international payments for Brazil-based Treviso.
Envestnetprovides new integrated unified managed account (UMA) platform to Canaccord Genuity Group.
Washington Trust Bank deploys digital account opening technology from Terafina.
Prolific London interviewsDatasine CEO Igor Volzhanin.
Eigen Technologiesannounces new Chief Customer Officer David Brooks.
Infosys Finacleinks joint partnership agreement with Traydstream to drive automation in trade finance.
Thomson Reuterspartners with Path Solutions to add automation and greater efficiency to tax workflows and core banking processes.
Fiservlaunches new feature of its Clover POS platform, Clover Online Ordering, to help restaurants more easily serve take-out customers during the COVID-19 pandemic.
Jumiobrings its online identity verification technology to Mobiquity’s digital onboarding service.
Salt Edgeintroduces new feature for third party providers that streamlines PSD2 onboarding with banks.
Tradeshiftpartners with Denmark’s ECA Eksport Kredit Fonden on supply chain finance program for businesses.
Caixabankintroduces new mentoring program for female entrepreneurs and SME founders.
TransUnionannounces partnership with Horizon Media to support digital identity initiative.
Payoneerpartners with banking app ANNA to help SMEs and freelancers receive international payments in U.S. dollars or Euros.
Blytzpayforges strategic partnership with AFS Dealers.
FIS Unveils Portal to Help SMEs Access PPP Loan Forgiveness – This portal, available to FIs and merchants participating in the SBA’s PPP, automates and streamlines the process of applying for loan forgiveness under the provisions of the new program.
QR code payments may not inherit the earth. But they may be one of the key technologies developing countries can leverage in order to bring both untaxed merchants and underbanked consumers into their formal national economies.
These are some of the top level conclusions reached in the report – QR Code Developments May Disrupt the Disrupters – from Mercator Advisory Group published late last year. The author, Brian Riley, credited three factors: better authentication, centralized clearance, and improvements to the payments network as giving QR codes renewed viability as a payment acceptance option in some markets.
The convenience of QR (Quick Response) codes as a payment option is clear. They are a fast, easy-to-use compliment to mobile commerce that requires little to no equipment. Armed with a QR code scanning app, their ubiquitous mobile devices and their cameras, consumers can make in-person purchases without relying on cash or physical cards. QR codes also have shown promise as an option for ecommerce, as well.
Adoption of QR code based mobile payments has been modest in markets in the West, such as the U.S. and the U.K. However in regions like the Asia-Pacific, QR code usage has soared. Greg Geng, VP of Tencent’s WeChat Business Group told CNBC last fall that in China, “payment methods using QR codes have replaced cash and cards in just five years.” In fact, the country is now making headlines for the way it is leveraging its affection for QR codes to help fight the spread of the coronavirus.
The news from Ghana this week is further evidence that QR codes continue to prove their mettle. A subsidiary of Ghana’s national bank, Ghana Interbank Payment and Settlement Systems (GhIPSS) has partnered with global payments solution provider HPS to launch its Universal QR Code and Proxy Pay platform. The solution will enable consumers to make instant payments from mobile wallets, cards, and bank accounts by scanning QR codes with their mobile devices.
Ghana is a pioneer in this regard, being the first country in Africa to introduce a national, QR code payment system. The initiative is believed to be a part of the country’s attempt to transition toward significantly less reliance on cash. “At this time, our quest toward a modern, cashless society is more important than ever and we are proud to be the first African country to implement this universal QR code solution,” GhIPSS CEO Archie Hesse said. “HPS has delivered an agile, comprehensive solution during a time of global crisis and we can foresee incredible benefits.”
Abdeslam Alaoui Smaili, HPS CEO, echoed Hesse’s sentiments about the power of QR codes to support a move away from paper currency, calling the initiative “an important part to a long-term goal of a cashless society.”
HPS offers a comprehensive suite of solutions, PowerCARD, that covers the entire payment value chain and enables its partners to process payments regardless of channel or initiated means-of-payment. With more than 400 institutions in 90+ countries using HPS’ technology, the company was founded in 1995 and maintains offices in Africa, Europe, the Middle East, and Asia.
Here is our weekly look at fintech around the world.
Central and Eastern Europe
Billon announced blockchain-based proof of concept with Polish electric company Tauron.
Euromoney looks at how finechs in the CEE region are benefitting as consumers opt for digital payments rather than cash.
Silicon Canals features Ukrainian fintech startups that are “taking the industry to the next level.”
Middle East and Northern Africa
Dubai-based Spotii goes live in UAE with its Shop Now Pay Later platform.
Egyptian digital lender Shahry locks in $650,000 in pre-seed funding.
Securrency forges strategic partnership with investment management and banking company, Musharaka Capital, to develop digital asset issuance platform in Saudi Arabia.
Central and Southern Asia
Partnership between MoneyGram and India’s Federal Bank to bring a direct-to-bank-account credit solution to Indian consumers.
Uzbekistan president pledges reform of banking system, including the privatization of six bank.
Indian cryptocurrency exchange Shiftal to leverage digital identity verification technology from Yoti to support compliant customer onboarding.
Latin America and the Caribbean
Mexico’s Flux partners with Bonnuscard, Moneypool, and Cuando Volvamos to enable businesses to offer pre-paid digital gift cards.
Financial inclusion-based accelerator makes its Latin American debut with a launch in Mexico.
SME payments company Kushki goes live in Mexico, having already expanded to Colombia, Ecuador, Chile, and Peru.
Asia-Pacific
Validus, a Singapore-based P2P lending platform, raises another $20 million in Series B+ funding ahead of its expansion into Thailand.
Indonesia’s Pintek, which helps students and educational institutions alike access credit, raises an undisclosed amount of funding from Accion Ventures Lab.
Fintech News Singapore features the top ten fintech companies in the Philippines.
Sub-Saharan Africa
Voyance, a data science startup based in Nigeria, launches fintech fraud tracking database, Sigma.
South African cryptocurrency exchange Altcoin Trader enables instant EFT withdrawals from any bank account.
WeeTracker looks at the strength of the wealthtech component of Kenya’s fintech industry.
This week the Wall Street Journal reported that JPMorgan had established an official banking relationship with two cryptocurrency exchanges: Gemini and long-time Finovate alum Coinbase. JPMorgan is not going all-in on crypto; the agreement calls for the bank to process only the exchange’s fiat-based transactions. Nevertheless, the partnership is a notable milestone in the relationship between big banks and the bitcoin business.
The news is interesting for a variety of reasons. For one, JPMorgan CEO and Jamie Dimon has been a notorious critic of, if not all cryptocurrencies, then at least bitcoin. In 2017, Dimon called bitcoin “a fraud,” adding that bitcoin is “worse than tulip bulbs. It won’t end well. Someone is going to get killed.” He has since moderated his critique, and his bank, like most other major financial institutions, are piloting various initiatives that use bitcoin’s underlying blockchain technology – even if not embracing bitcoin itself. That said, last year the bank announced the creation of a JPM Coin that can be used as a digital token to instantly settle transactions. The initiative was the first real-world use of a digital coin by a major bank in the U.S.
The partnership news also comes just after the bitcoin halving, in which the reward for mining BTC transactions is reduced by 50% in order to manage supply. This week’s process is the third in the cryptocurrency’s history; bitcoin was halved first in 2012 and again in 2016. After the most recent halving four years ago, bitcoin saw significant price appreciation, climbing from approximately $650 that July to nearly $20,000 a year and a half later. And while the halving has helped draw renewed attention to cryptocurrencies as alternative stores of value, few anticipate bitcoin making the same kind of post-halving run this time around as it did in 2016.
Whether or not JP Morgan will seek out other customers in the cryptocurrency industry remains to be seen. One advantage both Gemini and Coinbase have is that they are among the most heavily regulated cryptocurrency exchanges in the U.S. Both have earned BitLicenses from the New York State Department of Financial Services, and are registered as money services with FinCEN. These may prove to be high hurdles for many other crypto businesses.
Coinbase made its Finovate debut in 2014 at our west coast conference. Founded two years earlier, the company has raised more than $547 million in funding, and had an estimated global revenue of approximately $520 million in 2018 according to Reuters. Since inception, Coinbase has facilitated the exchange of $150 billion in cryptocurrencies, and served more than 30 million customers in 102 countries.
There may be no second acts in politics. But with the Small Business Administration’s Paycheck Protection Program (PPP) rolling out the next phase in its loan forgiveness initiative for SMEs, it’s good to see that the economic rescue plan has another shot at getting it right.
We chronicled some of the challenges that PPP 1.0 faced. Fortunately, this time around, many of the cooperating financial institutions, financial services companies, and fintechs are in a better, more informed position to help make sure the businesses that need the help actually get the help.
One example of this is the new portal powered by the FISReal-time Lending Platform. This portal, available to FIs and merchants participating in the SBA’s PPP, automates and streamlines the process of applying for loan forgiveness under the provisions of the new program.
“As a critical infrastructure provider, FIS is focused on making it as easy as possible for small businesses and merchants to complete the loan forgiveness process and help them get back to business as soon as possible,” FIS Head of Global Core Banking and Channels Rob Lee said. “Our new portal uses advanced automation technology to handle the entire process, reducing the time and complexity for businesses in getting forgiveness of the essential loans that are critical to their business.”
Using pre-filled applications and documentation uploads for efficiency, the portal figures loan forgiveness amounts, and allows FIs to review and e-sign the requests. The document packages are sent to the borrower and bank for e-signing and then, via the portal, the materials are submitted to the SBA for validation. The portal is 100% digital and can be easily deployed by banks who can get started by uploading a file of eligible loans from their current PPP customers. FIS notes that via its Real-Time Lending Platform, it has facilitated “billions” in PPP loan funds through lenders to SMEs whose businesses have been affected by the COVID-19 crisis.
A Finovate alum since 2013, FIS made fintech headlines last month when the company unveiled a new venture arm and a plan to invest $150 million in fintech startups. Last year, FIS was part of fintech’s biggest transactions of 2019 with its $34 billion acquisition of fellow Finovate alum Worldpay.
The new data acquisition solution from Ephesoft will bring 97% accuracy and 30% cost-savings to companies looking for ways to enhance their accounts payable processes.
“With more than half of invoices still processed manually and taking on average 8.5 days, AP processing is ripe for innovation,” Ephesoft founder and CEO Ike Kavas explained. “(T)here is a market need for solutions that are highly scalable and have a quick time to value.”
Semantik Invoice, unveiled today, is an out-of-the-box, cloud-based platform that leverages AI and automation to extract critical information from invoices – regardless of format. The solution imports the data into the user’s existing workflow and business systems – Enterprise Resource Planning (ERP), Enterprise Content Management (ECM), Robotic Process Automation (RPA), or other tools – for processing. Semantik Invoice recognizes and analyzes critical data fields including dates, rates, IDs, amounts due, and more, providing businesses with a low-code, no-code option that can be quickly set up and started in a production capacity.
Kavas added that the technology also helps businesses future-proof their AP processes. “During times of uncertainty and budget tightening, companies should be asking themselves if the products they are investing in will integrate with future products and solutions,” he said. “Ephesoft has designed this SaaS-based solution to leverage the power of context in accounts payable with scalability and agility for future innovations.”
Ephesoft most recently demonstrated its technology at FinovateSpring (now FinovateWest) in 2018. The company showed how its technology uncovers business intelligence for mortgage document processing by leveraging data mining and analytics.
Ephesoft began this year partnering with Toyota Finance New Zealand to accelerate loan application and settlement processing. In the months since, the company has launched a new protocol, Context Driven Productivity, that transforms flat data – information that is stored in traditional formats like PDFs, emails, and spreadsheets – into contextually enriched semantic data. This discipline was implemented in the company’s Ephesoft Transact 2020 platform.
Ephesoft also bolstered its executive ranks this spring, appointing Doug Lee to the post of Chief Revenue Officer. Lee arrived at the company after holding executive sales positions as SaaS companies such as Puppet, PatientPop, and Smarsh.
Founded in 2010 and based in Irvine, California, Ephesoft has raised $15 million in funding from investors including Mercato Partners.
Text messaging platform Eltropy and omnichannel marketing innovator Prisma Campaigns have teamed up to help credit unions communicate more effectively with their customers. The new solution, which integrates technologies from both companies, will enable credit unions to leverage online banking, mobile banking, text, and SMS channels to launch targeted marketing campaigns.
“Increasingly, credit unions are hearing from members that they want (to use) text messaging to communicate,” Global Solution Manager at Prisma Campaigns Gastón Vizziano said. “Prisma Campaign’s omnichannel approach and ease-of-use of Eltropy’s platform make this new partnership a powerful value proposition for credit unions.”
Eltropy offers financial services companies a secure and compliant way to engage with their customers on the messaging platforms they prefer such as iMessage, Facebook Messenger, and WeChat. Demonstrating its technology at FinovateSpring (now FinovateWest) in 2018, Eltropy leverages AI to analyze 24 data points within message conversations in order to provide behavioral analytics that can guide institutions when marketing products and services to their customers.
Prisma Campaigns CEO Felipe Gil praised Eltropy’s ability to “give credit unions exactly what they want – personalized communications capabilities, in a way that is uncomplicated, secure, and compliant.” Founded in 2017, Prisma Campaigns leverages customer data to enable financial services companies to build and launch targeted, personalized marketing campaigns on both digital and non-digital channels. The Boston, Massachusetts-based company, which made its Finovate debut in 2018, partnered with fellow Finovate alum Jumio last month to empower credit unions to adopt automated digital ID verification technology.
Eltropy was founded in 2013 and is headquartered in Milpitas, California. Last month, the company announced that it had inked agreements with 12 credit unions ranging in size from $11 million Paducah Teachers Federal Credit Union to $3.92 billion BCU. Company CEO and co-founder Ashish Garg credited Eltropy’s relationship with the Credit Union National Association (CUNA) for its ability to secure the trust of these smaller, community-oriented financial institutions.
“We have been signing an average of two credit unions a week for the last seven weeks,” Garg said. “Team Eltropy is thankful for its partnership with CUNA and state leagues across the country who have helped accelerate our business by spreading awareness of our product throughout the industry.”
Driven by the preferences of millennial consumers, the fintech industry is expected to generate revenues of $500 billion in ten years based on research just published by UBS. This represents a growth of more than 3x over the $150 billion in revenues the industry generated in 2018, and shows fintech outpacing the revenue growth expectations of the overall financial sector.
The projections from UBS rely on more than just millennials – who represent 27% of the world’s population and own an estimated $24 trillion in wealth. The UBS report also suggested that blockchain technology will generate economic value of between $300 and $400 billion in multiple industries, with fintech and financial services being the biggest beneficiaries. In addition to automation, blockchain and distributed ledger technologies were recognized as playing key roles in enhancing areas ranging from trade finance and compliance to foreign exchange and insurance.
AI also will play a role in generating significant economic value for the fintech industry over the next decade, according to UBS. In addition to enhancing processes in fields like roboadvisory, insurance, and compliance, AI will help develop a growing array of ever-more-sophisticated, customer-facing applications such as virtual assistants and chatbots. Increased consumer interaction with these AI-enabled technologies could drive a customer experience/innovation loop that would keep adoption rates of these kinds of solutions high and growing. UBS featured data from its Semi-annual Cognitive/Artificial Intelligence Systems Spending Guide (in collaboration with IDC) which indicated that spending on AI technology worldwide this year would reach $47 billion. Ten years ago, that spending total was less than a quarter of that amount at $11 billion.
The report also underscored the growth of the e-wallet industry, particularly in the Asia-Pacific region where the area’s millennials have helped create a 66% penetration rate for the technology. This is double the rate in North America and an even more significant margin over trends in EMEA. Other areas in fintech highlighted in the UBS report were payments, insurtech, wealthtech, capital markets tech, and online lending.
Positive moves from regulators were cited as one of the more surprising sources of optimism for fintech revenues over the next ten years. The reasons vary widely, but include the public-private partnerships that characterize fintech development in the MENA regions, as well as pro-consumer compliance laws in Europe, the U.K, and North America that are driving innovation in often overlooked subsectors of fintech like regulatory technology (“regtech”). The rise of open banking and the proliferation of neo- and challenger banks are also ways that governments have and are likely to continue to create space for growth in fintech.
Two Finovate alums will be among the 12 startups selected to participate in Mastercard’s Start Path program. Thought Machine, a core banking technology provider, and Enveil, a data security firm specializing in protecting Data-in-Use, will join 10 fellow tech startups for the six-month virtual accelerator program.
Amy Neal, SVP, Start Path and Fintech, Mastercard, suggested that the current public health crisis will have an impact on the environment in which these startups compete. “This global pandemic has strengthened collaboration between corporates and startups,” Neal said, “and we look forward to co-creating with our newest Start Path members and providing them access to a powerful network and tailored programming on their mission to scale.”
Joining Thought Machine and Enveil are:
Hoolah
mx51
ryd
SmartPesa
Ukheshe
Worldcoo
Goalsetteris
Zinobe
ConnexPay
Mylo
The goal of the program is to help companies scale their business with the support of a Mastercard sponsor. Startups are able to develop relationships with a curated, global network of established financial services and e-commerce firms, as well as with technology and marketing professionals within Mastercard’s network. Since its inception in 2014, the program has worked with 230 startups.
“We’re delighted to announce we’ve joined @MAstartpath! An industry-wide collaboration of banks, merchants and startups building the future of commerce,” Thought Machine’s Twitter feed read when the news was announced. The company demonstrated its core banking solution, Vault, and FinovateEurope 2018. The U.K.-based company made fintech headlines this spring when it announced receiving an investment of $83 million to fuel the company’s growth in the Asia-Pacific region.
Enveil made its Finovate debut one year earlier, demonstrating its point-to-point, Data-in-Use security solution at FinovateFall. Picking up $10 million in funding in February, Enveil was highlighted in an Alumni Profile in March.
“Proud to be selected to join Mastercard Start Path!” the company’s Twitter feed read late last week. “Of the more than 1,500 applications evaluated per year, Start Path selects about 40 companies that offer the most promising technologies and demonstrate a readiness to scale.”
This week on the Finovate Podcast, host Greg Palmer talks with writer, researcher, and keynote speaker Aleks Svetski on Bitcoin in 2020, the halving event, and the importance of understanding the root of money’s functionality.
Svetski is the founder of Amber, an app designed to make it easier for individuals to invest in Bitcoin. He also launched one of the world’s premier publications on Bitcoin, The Bitcoin Times.
Amber Labs demonstrated its technology at FinovateMiddleEast in Dubai last year. The company won Best of Show for its all-in-one Bitcoin exchange, wallet, and micro-investment app.
Here is our weekly roundup of news from our Finovate alums.
Fiservdetails CEO succession plan, electing Frank Bisignano to succeed Jeffery Yabuki as Chief Executive Officer effective July 1.
Samsung to launch new Samsung Pay debit card courtesy of new partnership with SoFi.
linked2paylaunches CustomerConnect to help businesses eliminate late B2B invoice payments.
Tradeshiftteams up with the Danish Export Credit Agency to launch a program to free up liquidity for businesses.
Taulia now offering customers 3 cash analytics solutions for free.
Blackhawk Networkcreates digital version of its One4all gift cards with Dejamobile.
Microblinkoffers free access to its BlinkID solution to organizations fighting the coronavius pandemic.
BHD Leon, a bank based in the Dominican Republic, partners with Temenos to power its digital banking.
PostFinance goes live with its new digital investment platform powered by Additiv.
Finantix’s latest Digital Collaboration Hub helps banks drive advisor-client collaboration.
Visions FCU tapsZogo Finance to promote financial literacy.
Winvesta teams up with DriveWealth to offer investors in India access to U.S. securities.
The Financial Times ranksPayfone among America’s fastest growing companies.
FISadds GooglePay to its Hosted Payment Page product for online merchants.
Avaloq’s SaaS solution to help Bank of the Philippine Islands boost business.
Wyndham Capital Mortgage putsAI Foundry’sAgile Mortgages solution to work.
PointCheckout takes top prize in hackathon for its app that helps deliver funds quickly amid the global health pandemic.
Regtech innovator Keepabllaunches its Privacy Kitchen to help businesses learn about GDPR, the role of a data protection officer, and all things privacy-related.
Persistent Systemsearns recognition as a “Top 15 Sourcing Standout” from IT advisory firm ISG.
Wise Bankingannounces rebranding: “our look evolves, but our mission remains the same.”
BlueRush’sIndiVideo platform approved for 2020 USPS postage rebate program.
CollegeBackerintroducesBacker Bucks program to help parents save for college while shopping with major online retailers.
Norway’s Boost.ailaunches self-learning system for conversational AI.
Adluminintegrates automated cybersecurity examination tool (ACET) into its SIEM (security information and event management) platform for financial institutions.
Post-Compromise Fraud Specialist Breach Clarity Partners with Xtensifi – A collaboration between fraud prevention and detection company Breach Clarity and digital consulting firm Xtensifi will bring additional machine learning technology to bear in the battle against cybercrime in financial services.
TransUnion Launches Fraud and Identity Unit – The new unit, Global Fraud & Identity Solutions Group, will tie together TransUnion’s identity verification and authentication tools that help businesses do everything from fight originations fraud to target consumers in their risk profile.
Emailage Acquired by LexisNexis – Fraud prevention solutions provider Emailage recently announced it has been acquired. LexisNexis Risk Solutions, owned by parent company RELX, closed the deal for $480 million.
The CEE region – Central and Eastern Europe – has been the source of some of the week’s most compelling international fintech headlines. Among them was news that digital alternative bank Revoluthas gone live in Lithuania. The company said that it will passport its Lithuanian banking license – which it secured in 2018 – to launch in other markets in the CEE, and rely on Lithuania as its regional hub.
“Four years ago we set out to build a new kind of bank. The kind of bank that solves your problems and treats you fairly,” the company announced on Twitter this week. “Starting today, we’re excited to launch Revolut Bank to our 300,000 customers in Lithuania.”
Lithuania is the latest market Revolut has engaged; the company made its long-awaited U.S. launch in March, partnering with Metropolitan Commercial Bank to bring its banking app to market in the States. The difference is that Revolut will be able to operate as a licensed bank in the European markets it has targeted. The company has yet to officially apply for a banking license in America.
Speaking of Lithuania, Luminor Bank – the third largest bank in the Baltics – announced that it was introducing a digital onboarding solution that would enable new customers to set up accounts with a selfie. The technology, courtesy of a partnership with Ondato, compares the image on the new customer’s identification document with an image created by a 3D biometric map of the customer’s face. Ondato checks the data on the ID document, analyzes the images, and enables customers to confirm their identity with a mobile signature.
“When performing client identification, not only document validity is tested, but also with the aid of biometric data, it is established whether the individual in the document truly is a match of the individual seeking to open an account,” Ondato CEO Liudas Kanapienis said. He praised the bank as the first traditional bank in Lithuania to “fully embrace” the digitization of customer verification and account opening.
Leaning in on the COVID-19 crisis, intelligent data extraction specialist Microblink is offering free access to its flagship solution, BlinkID, “for all the heroes who have replace their capes with masks.” The company is reaching out to public healthcare, non-profit, and government organizations that are helping fight the coronavirus pandemic with an offer to integrate its data capture solution into their mobile or web app – free of charge.
BlinkID enables users to quickly and securely capture personal information from 400+ identity documents in the world. The data remains on the app and the identity document remains in the hands of the document bearer, providing for a safe, contactless experience. During the current public health crisis, the solution has been used in Indonesia by police officers conducting public health checks, in Dubai to track those delivering medicines, and in the U.K. to register volunteers who bring food to seniors and others in need of assistance.
Microblink said the offer will remain in place “until the virus subsides” and interested organizations should contact them directly to apply. “Tell us what you’re doing to mitigate the crisis,” the company said in a statement. “We’ll make sure you’re set up with the right license key and ready to fly off and save the world.” Based in London, U.K., and Zagreb, Croatia, Microblink demonstrated its technology last year at FinovateEurope.
This year FinovateAsia will be an all-digital affair. Starting on July 6 and running through July 10th, our new format offers more keynotes, more debates, and more insight into our demoing companies than we ever have offered before.
Check out our introduction to FinovateAsia from earlier this week – as well as our feature on the event’s keynote speakers – and start saving the dates. The biggest fintech event of the summer will be here sooner than you think.
Here is our weekly look at fintech around the world.
Sub-Saharan Africa
Dash teams up with cryptocurrency payments company AnkerPay to bring the DASH payments network to sub-Sharan Africa.
