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Finovate Blog
Tracking fintech, banking & financial services innovations since 1994
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.
Just yesterday we previewed our new all-digital FinovateAsia conference coming in July. Today we’ll give you a sneak peek at some of the talent who will be providing keynote addresses at this special, mid-summer event.
Start-Ups and Digital Transformation
The first day of FinovateAsia will feature an afternoon keynote address with Chris Skinner, financial services and fintech expert, author of both the Finanser blog and the new book Doing Digital: Lessons from Leaders. Doing Digital looks at the successful digital transformations of five banks – JP Morgan Chase, BBVA, ING, DBS, and CMB – to learn how they are maximizing the opportunities that technological innovation can bring to financial services.
Skinner’s presentation – What Does COVID-19 Mean for Fintech and the Pace of Digital Change? – will look at the ways that the global health pandemic has put new strains on the financial infrastructure and examine which companies in which industries within fintech are most likely to turn the present challenge into future opportunity.
Digital Payments and Future Tech
Three keynote addresses on the second day of FinovateAsia are worth marking your calendar for. Start your day with Director of Innovation for Consult Hyperion David Birch who will provide a keynote address titled, Will COVID 19 Move Us To a Cashless Society?
Named one of the top 15 favorite sources of business information by Wired magazine and a top banking influencer, Birch has written about the various ways that society’s reaction to the coronavirus is likely to accelerate a number of technology trends that were already underway, such as the move toward digital ID. His presentation at FinovateAsia promises to be a fascinating extension of this conversation.
Later that morning, catch founder and director of Kapronasia Zennon Kapron as he discusses The Future of Real Time Payments in Asia. Kapronasia is one of the leading fintech consultancy services operating in Asia today. With more than 20 years of experience in fintech and blockchain, Kapron is also the author of Chomping at the Bitcoin: The History and Future of Bitcoin in China.
How will the Internet of Things transform financial services and how will the coronavirus impact the development of IoT are two questions that Ville Sointu, Head of Emerging Technologies for Nordea will answer in his afternoon keynote address on Day Two of FinovateAsia. With more than 15 years of experience in digital financial services, Sointu is also a member of European Commission’s Blockchain Observatory’s Use Cases and Transition Scenarios Working Group.
FinovateAsia will also feature the return of Clara Durodié, Chief Executive, Cognitive Finance Group, who is an expert on the nexus between artificial intelligence and its applications in financial services. Delivering one of the more challenging addresses of FinovateEurope in February – in which she stressed the importance of the distinctions between technologies like advanced machine learning and A.I. – Durodié joins our FinovateAsia line up to offer a similarly sobering and inspiring take on how financial services can effectively implement advanced technological innovations.
Our “main stage” presentations heat up on Wednesday as four speakers provide keynote addresses. Head of European Product Management at BBH Simone Vroegop starts things off with a look at how the investment management industry is handling disruption from fintechs.
Just before lunch, Helene Li, CEO and co-founder of GoImpact Capital Partners will discuss how new technologies, new players, and new customers will drive what she calls “the democratization of wealth services.” Li will also examine the rise of digital assets and ESG investing.
That afternoon, join us for Dr. Louise Beaumont as we turn our focus toward the challenges of Lending 2.0. As more and more small businesses look to non-traditional sources of financing, will strategic partnerships between banks, financial services companies, and fintechs become critical to getting the job done? Co-chair of the Open Bank Working Group, Dr. Beaumont recently joined Finovate VP Greg Palmer on the Finovate podcast as part of his Fintech in Extraordinary Times series.
Utpal Chakraborty, Head of Artificial Intelligence for YES BANK, provides our final keynote of the day. His address, Why the Democratization and Formalization of Data in Asia Will Open Up Marketing Opportunities in Lending for All, will also look at the way enabling technologies like artificial intelligence are empowering lenders to get more capital into the hands of those underbanked small businesses and individuals who need it.
Emerging Markets, Financial Inclusion, and the Future of Fintech
On a day dedicated to financial inclusion and the future of fintech, Kapronasia’s Zennon Kapron returns to lead a conversation on the status of emerging fintech marktets in Southeast Asia. Kapron will look to countries like Indonesia, Malaysia, Thailand, Vietnam, and the Philippines to discern the impact of COVID-19 on the growing fintech and financial services industries of these developing countries.
Frequent Finovate speaker, moderator, and panelist Theodora Lau will provide a keynote address that takes up the relationship between technology and financial inclusion. Specifically, Lau, founder of Unconventional Ventures, will examine how the rise of platform players and superapps is helping reach previously excluded communities.
Digital Customer Experience, Regtech, and Fighting Financial Crime
One of the highlights of our final day of FinovateAsia will feature Steven Van Belleghem, whose presentation on the future of the customer experience was one of the highlights of FinovateEurope in Berlin earlier this year.
This summer, Van Belleghem will tackle the issue of the customer experience during and after the COVID-19 crisis. How will the trends he introduced to us in February – faster than real-time service, hyper-personalization, and intuitive user interfaces – survive a world of social distancing, remote learning, and lockdown? Join us in July as Van Belleghem tackles some of the questions surrounding the fate of the customer in the age of the coronavirus.
We’re still building the agenda for FinovateAsia with more speakers and special guests, so be sure to check out our FinovateAsia hub for the latest updates on what’s in store July 6 through 10.
B2B cross-border solutions provider Currencycloud is teaming up with Canadian transaction processor Carta Worldwide to bring transparency, accuracy, and cost-competitiveness to international transactions.
“This is an exciting partnership and the first of its kind, combining our respective skills sets to drive innovation and give customers further transparency on their international card payments,” Currencycloud co-founder and Head of Strategic Partnerships Steve Lemon said. He noted that the partnership would put customers “at the center of the offer” and enable issuers to offer real-time foreign exchange rates at the point of sale to fintechs and challenger banks.
The two companies said in a statement that they are presently in the development phase of the collaboration. Their first joint offering is expected in the second half of 2020.
“We are very excited about this partnership,” Carta Worldwide Managing Director EMEA Richard Wray added. “Carta’s innovative processing capabilities collaborating with one of the most reputable platforms in the industry will enable us to deliver some real change to customers across the world.”
Named one of Canada’s top fintechs by the Digital Finance Institute, Carta Worldwide specializes in processing mobile and prepaid transactions. Founded in 2006 and headquartered in Ontario, Canada, and London, U.K., the company includes Vodafone, Westpac NZ, and Novum Bank among its customers.
Offering 85 APIs across four modules – Collect, Convert, Pay, and Manage – that support the full, B2B cross border payments workflow, Currencycloud provides enterprise-grade payments solutions to partners such as Visa and Starling Bank. Headquartered in London and founded in 2012, Currencycloud is regulated in the U.K., the E.U., the U.S., and Canada. The company began the year with an $80 million Series E fundraising round that featured participation of new backers such as Siam Commercial Bank, SBI Group, and Visa – whose SVP and Treasurer Colleen Ostrowski joined Currencycloud’s board of directors.
More recently, Currencycloud announced a partnership with Derivative Path to enable community and regional banks to offer more FX and interest rate derivative trading options to customers. The company has been a Finovate alum since 2012, and demonstrated its Global Collections solution at our west coast conference in 2018.
If auto manufacturers can make ventilators, and whiskey distilleries churn out hand sanitizer, then why can’t skiptracers be deployed to help put the “trace” in “contact tracing”?
“There’s an entire industry of seasoned skiptracing investigators that are out of work while debt collection is on hold,” President and CEO of masterQueue John Lewis wrote recently on his company’s LinkedIn page. Introducing his firm as a skiptracing platform used for contact tracing in debt collection, Lewis explained that when it comes to the “trace” component of the “test and trace” strategy to combat the spread of the coronavirus, masterQueue is your huckleberry.
“Many states are advertising the hiring of thousands of people to do the work these people are trained to do, and it should be done in a secure platform that’s turnkey and already built as this needs to happen now,” Lewis wrote, “with workflow automation, integrated click-to-dial recording with QA, regulatory compliance rule tracking and data privacy pieces built-in.”
“If you are a state that is interested in leveraging the experience of people who do this for a living,” he concluded, “let’s talk.”
Skiptracing is the art – and science – of finding an individual who is trying to avoid being found. The phrase itself refers to the slang term for fleeing a given area without leaving a trace: “to skip town.” Those who employ the services of professional skip tracers range from debt collectors and bail bonds agents to lawyers, journalists, and even members of law enforcement.
As you might guess, skiptracing involves accumulating, managing, and analyzing what can become massive volumes of information. Much of this data comes from incomplete or untraditional sources. But all of it needs to be verified, reviewed, and synthesized in order for skip tracers to gain actionable insights on their subjects.
masterQueue is a web-based solution that automates the skiptracing and collections process. The platform enables users to gather and organize publicly-available customer data, and integrate relevant state, Federal, and data privacy rules in order to remain compliant. Finally, masterQueue tracks loan portfolio, customer, account, employee, third-party vendor, and data provider metrics to provide robust reporting and audit functionality.
masterQueue’s John Lewis demonstrating the company’s platform at FinovateFall 2019.
“If there are three things you remember from what I talk with you today about, it’s three words: gather, organize, and track,” masterQueue’s Lewis told Finovate audiences in New York last fall. “Think about it in terms of data. We launched out masterQueue platform at Finovate in the spring of 2011 to be able to help debt collection (companies) find anyone they needed to find and in order to do that you need to gather, organize, and track data.”
Traditional methods in the debt collections business are especially problematic not only because of the large volumes of data to be collected, but also because of new data privacy laws that mandate how data must be handled. This has been overlooked in some of the media discussions over contact tracing in the context of COVID-19. But for masterQueue, these concerns are central – and on-going. At FinovateFall Lewis explained how, years ago, one efficient strategy of information collection – leveraging road cameras to identify the missing vehicle of a delinquent borrower instead of engaging in an outdated, time-consuming plow through paper records – was undermined by the arrival of new regulations from the Consumer Financial Protection Bureau. He highlighted the importance of innovation in the regtech space in the face of the latest shift in the regulatory sands – the California Consumer Privacy Act – and reminded attendees of the cost of getting it wrong.
“From $22 million against Google to $5 billion against Facebook tells you the stakes involved in data privacy,” Lewis noted, comparing the penalty assessed against Google by the FTC in 2012 with the fines levied against Facebook by the E.U. just six years later.
In recent years, masterQueue has scored seed funding after being self-funded by its founders and a pair of strategic Angel investors for the first years of its existence. The amount of the investment was not disclosed, but the capital did enable the company to add to both its workforce and to its top line. “This (funding) allows us to double staff and increase our year over year Q1 revenue from 2018 to 2019 by eight percent,” masterQueue co-founder and CFO Perla Lewis said.
In addition to working with some of the largest financial institutions in the U.S., the company recently has forged strategic partnerships with firms like PassTime a leading GPS solution provider, and expanded its relationship with PAR North America, a business division of KAR Auction Services. Founded in 2011, masterQueue is headquartered in El Dorado Hills, California.
Small business expense management platform Bento for Business has a new man at the top. The company announced today that Guido Schulz will join the company as its new CEO. Schulz will team up with co-founder Farhan Ahmad who will remain as chairman of the company’s board of directors.
“Bento for Business has built an incredibly intuitive product that directly addresses the core cash flow and operational problems faced by the businesses that drive much of our economy, create jobs, and help build our communities,” Shulz explained. He called expense management “the single largest area of opportunity” for small businesses.
Founded in 2014, Bento for Business provides expense management solutions that are designed specifically for small businesses and nonprofits. Bento offers business debit cards with spending controls – including virtual cards that can be issued and used instantly – as well as Bento Pay, a B2B digital payments service that only requires the fund recipient’s email address in order to send money. Bento made its Finovate debut at our west coast conference in 2015.
“As we’ve reached a new phase of growth ourselves, bringing on Guido is an important step for delivering the same exceptional experience to businesses as Bento’s footprint continues to expand,” Ahmad said. He praised Schulz’s record in scaling companies and said he looked forward to working together to “deliver a healthy bottom line for businesses through unprecedented visibility and control over monthly expenses.”
Schulz comes to Bento from global hospitality payment gateway provider Merchant Link, where he was Chief Commercial and Strategy Officer. The company was acquired by Shift4 last August. Previously, Schulz worked for Bluefin Payment Systems, where he was also Chief Commercial Officer and, before that, at AFEX as Global EVP and Chief Strategy Officer. He was educated at the University of Erlangen-Nuremberg and was a visiting scholar at the University of Notre Dame.
Bento’s C-suite addition comes almost a year after the company bolstered its executive ranks with the addition of Paula Bachman as Chief Financial Officer. The news also arrives as the company announces a partnership with San Francisco Achievers, a youth development program that is using the Bento for Business app to manage scholarship funds and learn responsible budgeting habits.
“We have an orientation for our scholarship students,” Duane Wilson, the program’s Executive Director explained. “For some of them, this is their very first card. It allows them to have the experience.”
Headquartered in San Francisco, California, Bento for Business has raised $18.5 million in funding. The company includes Edison Partners, Anthemis Group, and Comcast Ventures among its investors.
The millennial-focused social trading and investing app, which drew criticism during the market meltdown in March for repeated outages, is now sitting with $280 million in additional funding. The new capital comes courtesy of a just-completed Series F round led by Sequoia Capital, and gives the company a valuation of $8.3 billion. NEA, Ribbit Capital, 9Yards Capital, and Unusual Ventures also participated in the round.
“Amid challenging times and market volatility, we’re humbled that people are turning to Robinhood to participate in the markets and build their financial future,” the company’s blog read this week. The announcement included data points such as the three million funded accounts the company has added in 2020, as well as Robinhood’s effective outreach to new investors. The company also noted that the funding would be used to scale the Robinhood platform, develop new solutions, and add to its workforce.
Fortune’s coverage of Robinhood’s fundraising features observations on the company’s rumored IPO, the diversification of its revenue and profitability, as well as a potential launch in the U.K.
Founded in 2013 by Baiju Bhatt and Vladimir Tenev, Robinhood offers users the ability to trade and invest, commission-free, in a variety of assets including stocks and ETFs, options, gold, and cryptocurrencies. The app-based platform supports fractional share purchasing, enabling investors to buy equity in thousands of companies with as little as $1, and provides 0.30% APY on uninvested cash. The company began the year with news that its financial newsletter and podcast, Robinhood Snacks, had surpassed 10 million downloads. More recently, to help customers understand recent turbulence in the financial markets, Robinhood unveiled a new Market Volatility page with information on the various steps exchanges take to help mitigate market extremes.
Robinhood became notorious in some circles for the “race to zero” movement last fall in which major brokerages including E-Trade, Charles Schwab, and TD Ameritrade announced plans to eliminate trading fees in stocks and ETFs. Competition with Robinhood was cited as the reason.
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. The new integration will enable the company’s Breach Clarity Premium for Financial Services platform to empower banks, credit unions, brokerage firms and insurance companies to address the impact of data breaches – from financial losses to identity theft – after they happen.
“We sought out a company we knew would execute our vision and provide us with the knowledge and expertise to get these entirely new products to market,” Breach Clarity CEO Jim Van Dyke said. He credited Xtensifi not only for helping develop the new platform, but also for giving the company the ability to market its technology to a new client base: financial services companies. “Initially consumer focused, we are now able to provide financial institutions with hyper-personalized, customer-level breach risk intelligence, capable of making a measurable difference in a variety of areas – from customer engagement to fraud loss mitigation,” Van Dyke explained.
Founded in 2019 and based in Walnut Creek, California, Breach Clarity analyzes more than 1,000 elements to gauge and score the risk level of a data breach. The company’s proprietary, machine learning algorithm analyzes 50 data breaches a week on average, and Breach Clarity said that it has 4,000+ such incidents in its database. This resource is maintained by the Identity Theft Resource Center.
“Breach Clarity is working to revolutionize the fraud detection, prevention, and mitigation landscape by providing a greater degree of transparency into breaches and their effects,” Xtensifi CEO George Kelley said. “Providing the industry with more clarity, confidence, and direction around breaches will ultimately result in stronger consumer financial health and safety.”
Like a number of companies in the fintech space, Breach Clarity is making its services easier to access during the COVID-19 crisis. More than a month ago, the company announced that it was waiving per-user costs for financial institutions using its Breach Clarity Premium for Financial Services solution for six months.
Breach Clarity co-founder and COO Al Pascual underscored the value of these services at a time when shifting computer use patterns – from business offices to private homes – during the global pandemic have given rise to a shifting set of risks. “As cybercriminals experiment with new forms of cyber scams,” Pascual said, “newly remote workers and the systems to which they are attached will be a high value target.”
Breach Clarity demonstrated its consumer-facing solution last year at FinovateFall. A specialist in post-compromise fraud, Breach Clarity enables users to search any publicly-reported data breach and receive a fraud risk rating, a list of top identity-holder risks, and a set of action steps ranging from freezing credit to modifying alerts to limit exposure to potential identity theft and related cybercrimes.
The 2019-2020 school year has been one of the many casualties in the fight against the coronavirus. While there have been some areas where student life has been relatively unchanged, for thousands of students around the world – from the youngest grades through collegiate ranks – learning has been disrupted significantly.
Financial education has suffered as well – which makes the newly-announced partnership between fellow Finovate alums Envestnet and EVERFI good news for the cause of financial literacy. The two companies have teamed up to provide clients and families of advisor customers with complimentary access to digital financial literacy courses.
“At a time when schools around the nation are closed, we are providing students and their parents with fun, interactive digital resources that can bring them closer together as families, while making progress toward financial wellness,” SVP and Head of Envestnet Wealth Marketing Kimberly Beck said. “We are there to provide advisors, clients, and their families with financial insights and learning at every point in their schooling, and their careers.”
Envestnet unveiled its first two digital financial literacy courses: Marketplaces and Vault, and noted that 20 additional courses from EVERFI also will be made available for a limited time. Marketplaces is directed toward high school students and helps them understand the global and real-world forces that can impact an investment portfolio. Vault enables elementary school age students to develop responsible decision-making skills using real-life financial scenarios such as creating a budget and goal-setting.
Envestnet most recently demonstrated its financial data management technology at FinovateFall last year. EVERFI made its Finovate debut a year ago at FinovateSpring, presenting its financial wellness solution, EVERFI Achieve.
Fintech in Extraordinary Times: Finovate Podcast and Learning Lessons from Leaders
Chair of the European networking forum, The Financial Services Club and Nordic Finance Innovation, Skinner is a well-known, independent voice on fintech and the financial markets. He maintains a blog, the Finanser.com, where he shares his insights and observations.
What are the challenges that financial institutions face in pursing digital transformation at a time of renewed uncertainty? How will fintech respond the new needs of small businesses, savers, and consumers in the current environment? Join the Finovate podcast and hear where the industry’s best analysts see fintech headed next.
Here is our weekly roundup of news from our Finovate alums.
Realrates goes live with RealCheck, a free credit affordability checking service, courtesy of a partnership with AccountScore.
Fenergointroduces remote access opening solution in the EMEA.
SecuredTouchtakes homeBest Product award at Loyal Security Association conference.
BlueRushlaunches COVID-19 personalized video library microsite featuring best safety practices for dealing with the coronavirus pandemic.
RedRock Biometricspartners with HYPR to provide palm-based authentication.
Lendio to help Mindbody’s fitness, wellness, and beauty business customers access SBA’s PPP funds.
Brattleboro Savings & Loan selectsNCR for digital banking.
DeutscheBank extends contract with Avaloq to 2028.
Finovate Best of Show winner Sonectearns spot in Fintech Europe’s incoming incubator class.
Finovate Alumni Features and Profiles
Taulia Teams Up with J.P. Morgan on Trade Finance – The collaboration will enable J.P. Morgan to build a “unique and differentiated” trade finance solution for its clients, giving them the ability to onboard a wide range of supplier types and sizes.
Motif Investing to Close its Doors – The company notified users via email on April 17 in a message saying, “At this time, we’ve made the decision to cease operations and transfer your account to Folio Investments.”
Micro Investment Platform Stash Secures $112 Million – The round, which also involved existing investors Union Square Ventures, Breyer Capital, Goodwater Capital, and Greenspring Associates, gives the company $300+ million in total capital and boosts the firm’s valuation to more than $800 million.
Personalization and One-to-One Communication – Gregg Hammerman has seen first hand what works when it comes to personalization. In fact, in 2012, he launched a company built around the entire premise of personalization.
Mambu, the cloud-based banking platform based in Germany, is partnering with U.K. business banking platform Tide to power the company’s revolving credit facilities and overdrafts for small businesses.
“There is a need to be flexible, agile, and customer-centric in the design of financial products,” Managing Director of Mambu EMEA Eelco-Jan Boonstra explained. “Legacy technology constraints can undermine even the best innovation strategy.”
The collaboration will enable Tide to overhaul its product suite in order to better serve customers in a number of locations around the world. This includes offering larger overdrafts, credit cards, and invoice financing, as well as enabling Tide members to lend to each other leveraging solutions managed by Mambu.
“When today’s customers evaluate financial institutions, they no longer compare different banks, they compare experiences,” Boonstra said. “We see this partnership approach as the future of banking technology.”
Regtech is all the rage in fintech these days. From helping businesses negotiate a wave of new regulation – from GDPR to PSD2 – to empowering firms to combat fraud, companies involved in developing technologies to ensure that businesses are getting and staying compliant are enjoying rare attention from the rest of the industry.
A recent review of top regtech startups in Europe in Fintech News was an example of the light increasingly shining on these companies and their vital role in supporting a fintech industry that a growing number of financial services customers – and other businesses – are relying on.
The review cited research from KPMG that anticipates regtech spending in 2022 climbing to $76 billion. Analysis from XAnge, a European VC firm, finds approximately 140 regtech startups in the E.U., divided fairly equally between compliance management, KYC/AML, and risk management solutions.
We were especially please to see that, of the ten regtech startups highlighted in the feature, four of the companies are Finovate alums. Apiax and NetGuardians, which most recently demoed at FinovateEurope and at FinovateAsia respectively, both hail from Switzerland. Apiax, recently profiled here on the Finovate blog, offers a comprehensive compliance solution that leverages APIs to integrate its compliance rules into digital processes. NetGuardians focuses on Big Data and uses it to help banks fight fraud and automate compliance.
Also earning recognition on the top European regtech list was Ireland’s Fenergo. The company, founded in 2009 and having made its Finovate debut back in 2012, specializes in client onboarding and account opening solutions for banks and financial services companies. Just this week, Fenergo announced that it was launching a new remote account opening solution in both the EMEA and APAC regions.
Half of the companies on Fintech News’ regtech roster are from the U.K. The Finovate alum among this group, Onfido, leverages automated machine learning, optical character recognition (OCR), and other technologies to provide identity verification to combat fraud. Demoing its technology at both FinovateEurope and FinovateFall in 2018, the company earlier this month announced a major $100 million fundraising that brought the company’s total capital to more than $182 million.
“We’ve naturally chosen the grow-fast path because we strongly feel that the time to solve the digital access problem is overdue, and urgently needs to be solved, for good,” Onfido CEO and co-founder Husayn Kassai said. “We didn’t fundraise to just get to the next milestone, we need the funding as we’re changing the world.”
The Buy Now Pay Later Revolution is sweeping the world. Check out Finovate Senior Research Analyst Julie Muhn’s coverage of Tencent’s $300 million investment in Australia-based Afterpay this week:
Tencent’s move comes shortly after its rival Ant Financial took a minority stake in Afterpay competitor Klarna. Afterpay has 3x the web traffic of Klarna and 1.5x the traffic of its other major competitor Affirm.
The buy-now-pay-later segment of fintech has been heating up this year, despite– or perhaps because of– the current economic and health crises.
Here is our weekly look at fintech around the world.
Asia-Pacific
V Capital, and advisory firm based in Malaysia, and U.S.-based Cross River Bank partner to apply for a digital banking license in the country.
Hong Kong-based Oriente, a fintech that provides digital infrastructure for financial services, secures $50 million in its still-open Series B round.
South Korean cryptocurrency startup Childly teams up with blockchain analysis company Chainalysis.
Sub-Saharan Africa
Nigerian fintech startup Okra, which facilitates the exchange of real-time financial between banks, customers, and apps, locks in $1 million in pre-seed funding in a round led by TLcom Capital.
Flutterwave, based in San Francisco, California and Lagos, Nigeria, introduces new portal for African e-commerce merchants.
Visa and Kenya’s Pesapal team up to support connected digital payments.
Central and Eastern Europe
Resistant AI, a cybersecurity startup based in the Czech Republic, raises $2.75 million in funding.
Azer Turk Bank (ATB), based in Azerbaijan, deploys technology from Lithuania’s Ashburn to manage EFTPOS networks.
Germany’s Celonis leverages its process mining platform to develop new AI-powered accounts payable solution.
Middle East and Northern Africa
Egypt’s Commercial International Bank acquires 51% stake in Kenya’s Mayfair Bank.
BenefitPay, Bahrain’s national electronic wallet, announces 1257% increase in remittance volume in March.
Tata Consultancy Services to launch a digital only bank in Israel.
Central and Southern Asia
Indian cryptocurrency exchange CoinDCX announces trading availability of two native tokens from Crypto.com, MCO and CRO, on its platform.
Amazon launches new credit service, AmazonPay Later, in India.
India-based ecommerce firm Paytm unveils contactless dining solution for restaurants in the coronavirus era.
Latin America and the Caribbean
paysafecard brings its payments platform, Paysafe, to Paraguay.
Latin Post looks at the use of fintech apps in Mexico.
In a round featuring participation from LendingTree and T. Rowe Price, personal finance and investing app Stash has locked in $112 million in Series F funding. The round, which also involved existing investors Union Square Ventures, Breyer Capital, Goodwater Capital, and Greenspring Associates, gives the company $300+ million in total capital and boosts the firm’s valuation to more than $800 million.
“We are very fortunate to bring together world class investors to help accelerate Stash’s goal of bringing digital banking, investing plus financial education and advice to the millions of middle class Americans working hard every day to make ends meet,” company CEO Brandon Krieg said.
Stash’s $112 million fundraising arrives just over a year after the company’s last financing – a $65 million Series E led by an unnamed, private investor. That investment also accompanied the launch of Stash’s Stock-Back rewards program that gives users fractional shares of stock when they use their Stash debit card for qualified purchases at publicly-held companies like Amazon and Chipotle.
Stash offers a mobile-first, micro-investment and PFM solution that enables investors to build a portfolio starting with as little as $5. Users can invest in both stocks and funds without having to pay add-on trading fees, as well as make fractional share investments with smaller dollar amounts. In addition to being an investment platform, Stash also provides online banking services including an early paycheck feature for those who set up direct deposit, a Stash debit card, and no overdraft, monthly maintenance, or minimum balance fees. Billpay, mobile check deposit, and PFM functionality are also part of the platform.
Stash provides users with three tiered plans with monthly costs of $1, $3, and $9. The company’s premium offering, Stash+, provides two additional investing accounts for youth, and a metal card with double Stock-Back rewards, as well as the platform’s standard features.
The funding announcement also comes on the heels of a major milestone reached by the company earlier this year. In February, Stash reported that it topped $1 billion in assets under management on its platform. What’s all the more remarkable about this accomplishment is that the average per customer deposit at Stash is just $28.
“(Middle class Americans have) attempted to make financial progress within a system that simply does not serve their best interests or meet their needs,” Krieg said. “It’s time for them to reconsider the current financial services industry as the ‘status quo’ and take control of their financial life with the customer-obsessed solutions we provide at Stash.”
With more than four million members – 86% of whom are first-time investors – STASH demonstrated its technology at FinovateFall in 2017. The company is headquartered in New York City.
