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Finovate Blog
Tracking fintech, banking & financial services innovations since 1994
Automated workflow and portfolio management solutions provider Teslar Software is partnering with Liberty National Bank. The Oklahoma-based bank will use Teslar’s technology to boost productivity, increase transparency, and streamline its commercial lending process.
“By leveraging our advanced portfolio management tools,” Teslar CEO and founder Joe Ehrhardt said, “Liberty National Bank will benefit from stronger data and increased visibility in the commercial lending process, helping them carry out their growth plans with confidence.”
Specifically, the bank will use Teslar’s technology to enhance its exceptions tracking, reporting, and portfolio management. This will give Liberty National Bank’s loan officers better access to more customer information, enabling them to both better engage customers as well as take advantage of potential cross-selling opportunities.
“We’re confident that through our partnership with Teslar, we’ll be able to boost efficiencies, improve accuracy of information, and provide better customer service, ultimately helping us rise above the competition,” Liberty National Bank Chief Credit Officer Michael Bucher said. “Our bank appreciates that Teslar’s platform is built by former bankers who understand our unique challenges and goals.”
With seven branches in five counties in Oklahoma, and a new loan production office in Oklahoma City, Liberty National Bank has nearly doubled its asset size over the past ten years. Founded in 1902 as the Bank of Elgin before Oklahoma had been granted statehood, the institution became Liberty National Bank in 2002. Currently serving customers in Oklahoma and North Texas, the bank has assets of $456 million as of last summer.
Teslar provides community banks and credit unions with a lending and credit management SaaS solution that enables them to manage all stages of the loan lifecycle, from pipeline and call activity to loan review. The company behind the technology, 3E Software, was founded in 2008 and is headquartered in Springdale, Arkansas. Teslar has been a Finovate alum since 2015.
There are two things that the COVID-19 crisis is teaching us. Be careful of what you touch. And be careful of who you are near.
Neither one is a good message for the future of cash nor the bank branch, two staples of 20th century financial life whose demise analysts and prognosticators have been anticipating for decades.
Could a global pandemic that forces society into “social distancing” prove to be the final straw that breaks the back of both our commitment to cash and what’s left of the bank branch?
Cash: The Irresistible Force
For all the innovations in digital payments, and the increasing adoption of these technologies by younger generations, the persistence of cash in modern economies has been impressive. In part, this is because technology has not yet been able to outperform cash where it performs best: convertibility, convenience, and anonymity.
Of late, however, one of cash’s biggest – and probably least considered – downsides has become impossible to ignore: cash is dirty. At the end of the day, regardless of whatever hero, politician, or artistic talent adorns it, cash is a slip of cotton paper passed from hand to hand, over and over again. In a article published in Scientific American three years ago, Dina Fine Maron noted:
The fibrous surfaces of U.S. currency provide ample crevices for bacteria to make themselves at home. And the longer any of that money stays in circulation, the more opportunity it has to become contaminated.
And bad news for those who limit their cash exposure to a “just couple of bucks” for tips and tiny purchases.
Lower-denomination bills are used more often, so studies suggest our ones, fives and tens are more likely to be teeming with disease-causing bacteria. Some of these pathogens are known to survive for months …
Countries around the world have already begun a coronavirus-induced assault on cash, with South Korea’s central bank both quarantining and even burning bank notes, as well as resorting to a “high-heat laundering process” to help stem the spread of the virus. Paper money has faced a similar fate in China, and even the U.S. Federal Reserve is getting into the act (albeit with currency imported from China).
Not everyone believes that COVID-19 will herald the beginning of the end of cash. Maybe it is because of doubts that, as dirty as cash is, paper money may not be a reliable transmitter of viral infection. Possibly, like young revelers at beaches in Florida well into last month, we are just too accustomed to our habits to change.
But again, the emphasis on which “we” is being discussed is probably what matters. While there is a tendency to equate people’s willingness to use digital payments as one of many options with a desire to use digital payment method exclusively, the generational trends away from cash are clear. For those who grow up in a world in which cash is increasingly under assault from one source or another, it may simply be the passage of time that ends up accomplishing what neither global pandemic nor technological innovation – combined – could not.
Branches: The Immovable Object
As thousands of traditionally on-premises employees find themselves working from home, businesses all over the world are seeing a version of themselves that is far less dependent on a brick and mortar presence – let alone multiple ones. In banking, where the value of the local branch office with lobby, tellers, and loan officers is hotly debated, it seems like the COVID-19 crisis will make the case for branches that much more of a challenge to make.
Although essential businesses that are allowed to remain open in most instances during the pandemic, banks have dramatically cut back on access to their physical locations. Often, as is the case with my bank, access is limited to a drive-through window – complete with gloved and masked teller who has you to sign your withdrawal receipt with a branded pen she asks you not to give back.
As someone who still regularly visits his bank branch – and has for decades – I actually found the experience no less impersonal than the ATMs I’ve avoided for years. Could our social distancing response to the coronavirus pandemic encourage a long-time branch-lover like me to stay away? Asked whether the COVID crisis will accelerate the trend toward fewer bank branches, KeyBank EVP and head of digital banking Jamie Warder told The Financial Brand’s Jim Marous that more “thoughtful consolidation” wouldn’t surprise him. But Warder suggested that the world still had a need for the branch, even as it “continue(d) to morph and become more digitized.”
Many innovations in the branch designed to accommodate a more digitally-savvy customer, for example, could survive the demise of the branch. Self-service kiosks that enable bank customers to perform a number of routine banking tasks without the intervention of a human teller could find homes in locations ranging from fitness centers to restaurants and other recreation hubs. The ubiquitous bank branch in any U.S. supermarket of even middling size is a reminder of how compatible these banking kiosks could be with a wide number of environments.
Unfortunately, those innovations that are geared toward making the branch itself a more enjoyable place to spend your time may struggle in the current public health climate. More luxurious accommodations – including addition of full-service cafes – could be a weak draw in a world in which we are conditioned to keep our distance.
The strain between distancing and the branch will be most acute for those who live in communities where the bank branch serves as the center of everyday financial activity. Often this consists of bill payments, check cashing, money transfers, but notably does not include short-term personal loans, a major source of financial activity in many of these communities. While a great deal of time is spent envisioning a Branch 2.0 that would appeal to the digitally-savvy and already well-banked, it may be the case that the future of the branch – to the extent that there is one – is best geared to the real needs of these communities above all others.
Merchant acquirer EVO Payments, the parent company of EVO Snap, has secured $150 million in cash to help fortify the company’s balance sheet, retire debt, and provide funding for future investment opportunities during the COVID-19 crisis. Private equity firm Madison Dearborn, a major shareholder in the company, led the investment.
“While EVO’s global portfolio represents a diversified mix of merchants across Europe and North America,” the company explained in a statement, “many of these merchants operate in markets that are subject to broad governmental restrictions on movement and commerce, resulting in substantial reductions in merchant transaction count and volumes.”
In addition to the funding, EVO Payments has launched initiatives to lower fixed costs and capital expenditures over the balance of fiscal 2020. The company’s CEO James G. Kelly said that the “long-term fundamentals of EVO’s business remain strong” and that the current strategies will enable the company to continue to grow.
Founded in 1989 and currently active in 50 markets around the world, EVO Payments acquired the technology that powers the EVO Snap development platform in 2013. EVO Snap makes it easy for developers, independent software vendors, and merchants to develop omni-channel and cross-border payment solutions. The company participated in our developers conference, FinDEVr Silicon Valley, offering a presentation and workshop on building customized loyalty programs, card-linked offers, and real-time POS rewards.
EVO Payments is publicly-traded on the Nasdaq under the ticker EVOP. The company, headquartered in McLean, Virginia near Washington, D.C., has a market capitalization of $1 billion. EVO services more than 500,000 merchants in North America and Europe, processing 900+ million transactions in the former and 1.7 billion transactions in the latter each year.
Vymo, the company whose intelligent sales assistant makes life easier for on-the-go sales pros, has unveiled a new enhancement to help sales teams at this time when customer engagement is even more challenging. The company has introduced a new Work From Home enhancement to its sales assistant solution which enables secure, 24/7 access to critical data via an app instead of requiring a desktop or on-premises hardware.
“Considering Vymo supports over 100,000 remote users already, this is a logical extension,” Vymo CEO Yamini Bhat explained. “We are seeing very encouraging signs in several of the deployments that have gone live over the past week. This social and economic situation is unlike anything we have seen before, and so our team at Vymo is committed to helping organizations adapt to this new paradigm.”
Available as an upgrade to the Vymo app, the new offering is a way for organizations to maintain business continuity during the Covid-19 crisis, and to ensure accurate communication with customers. The solution features secure calling and video conferencing, broadcasts and targeted notifications, and a central hub that provides a comprehensive view of KPIs such as agent adoption and customer coverage.
Sandeep Kumar Mishar, SVP and Head -HDFC Bank Relationship for Aditya Birla Sun Life Insurance, led the implementation of Vymo’s technology at his firm. He praised the analytics available via Vymo’s platform, and credited them for “enabling me to manage my team’s productivity better and turnaround the WFH (Work From Home) challenges positively.”
An alum of both FinovateAsia and FinovateFall, Vymo was founded in 2013 and is headquartered in Bangalore, India. The company has raised $23 million in funding from investors including Sequoia Capital India and Emergence.
Updated: 4/3/20: Added Paystand’s $20 million fundraising from February.
Finovate alums raised more than $1.3 billion in the first quarter of 2020, matching their best, first quarter performance to date from two years ago. In some ways, this year’s haul is even more impressive in that Q1 of 2020 featured half the horses as Q1 of 2018.
It is hard to not be aware of the shadow that the current coronavirus pandemic is casting over funding prospects for fintech ahead of the second quarter of the year. With regard to Finovate alums in specific, the $1.8 billion in funding they brought in for Q2 2019 would be a hard mark to beat in any year – let alone one with the sort of historic challenges we are facing in 2020.
Far and away, the $500 million raised by Revolut was the biggest fundraising of the quarter by our alums. But the nine-digit investments picked up by Tradeshift, Flywire, and Tink would put these companies at the top of any of our quarterly equity investment lists in recent years, as well. And with only a baker’s dozen of alums getting funding this quarter, it is no surprise that the top ten equity investments shown below comprise the vast majority of the quarter’s total at $1.2 billion or more than 99%.
Top Equity Investments
Revolut: $500 million
Tradeshift: $240 million
Flywire: $120 million
Tink: $100 million
Thought Machine: $83 million
Currencycloud: $80 million
Fenergo: $80 million
Lendio: $55 million
Arkose Labs: $22 million
Trusona: $20 milllion
Here is our detailed alum funding report for Q1 2020.
January: More than $440 million raised by four alums
If you are a Finovate alum that raised money in the first quarter 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! Funding received prior to becoming an alum not included.
One of the clearest messages from our conversations with fintech analysts and observers this year has been the importance of RegTech. Whether the challenge is financial inclusion, open banking, or simply making ever-more complex business processes less cumbersome, less error-prone, and less expensive, RegTech is increasingly seen as a critical component of financial technology.
We caught up with Nicole Newlin, VP of Solutions for Ocrolus, to talk about how the company leverages artificial intelligence to automate critical business tasks like underwriting for lenders. Via a combination of patttern recognition, crowdsourced data verification, and fraud detection, Ocrolus’ technology brings both transparent analysis and rigorous documentation to the credit decisioning process.
We also thought this would be a great opportunity to revisit and wrap up our celebration of Women’s History Month. To this end, we asked Ms. Newlin about her work with NYC Fintech Women, as well as her thoughts on how women are faring in the world of fintech and financial services.
Finovate: I would be remiss not to ask how Ocrolus is coping with the current global crisis with regard to the COVID-19 outbreak. How has this affected the company and the work it does?
VP of Solutions for Ocrolus Nicole Newlin
Nicole Newlin: The COVID-19 outbreak has caused companies around the world to change the way that they do business, and prepare for the long-term. Planning for the unpredictable is an oxymoron, but we’re certainly seeing the difference between companies built for scalability – those able to flex up/down with demand – and those with a less agile workforce. In volatile times like these, scalability is key to success.
We see digitization and virtualization particularly impacting the financial markets that Ocrolus serves. If we zoom in on the state of lending, it’s a historically low rate, quarantined world, with more than 3,000 borrowers per day seeking mortgages and refinancing online. In parallel, many lenders are more bandwidth-constrained than ever, creating a gap between rising demand and lenders’ ability to meet that demand.
A key factor in lender scalability is the elimination of data entry bottlenecks. Our customers don’t have underwriters keying in borrower information or performing “stare and compare” analysis of income, asset and identification documents. Instead, they are using document digitization services and data aggregators to provide underwriters with actionable data. Replacing manual data entry and review with API-called data connectivity enables our customers to accommodate fluctuating loan volume on-call rather than scrambling to add, subtract, or redeploy human resources.
For these reasons, our customers are better able to flex up/down with the markets.
We’re also seeing new customers expedite their Ocrolus integrations to lessen the gap between demand and their ability to meet demand without needing to bring on additional resources.
Finovate: And if I may ask, how has it affected you as a professional? Have you had to make dramatic changes to the way you work, or the way you work with your team?
Newlin: Moving to a fully remote workforce is a new muscle for most of us. Fortunately, Ocrolus has always embraced a flexible work from home policy, so our team is able to adapt to working remotely with relative ease.
That said, without the built-in face time of being in an office, communication is critical, so we’re relying heavily on Slack and Zoom video calls to ensure ongoing communication. We’re also spending more time clarifying objectives and expectations so that we can continue to work towards our shared goals remotely.
To maintain culture and morale, we’re experimenting with virtual events. Our first-ever Virtual Happy Hour was a big hit!
Finovate: Ocrolus finished 2019 with the introduction of a new extension to its platform. Ocrolus+, which offers advanced document-based data extraction. Can you tell us a little bit about this feature, perhaps by way of introducing the company to our readers?
Newlin: While Ocrolus transforms documents into actionable data with over 99% accuracy, Ocrolus+ is an advanced version of our fintech infrastructure platform for capturing financial information, validating the veracity of data, and performing cash flow analytics. Ocrolus+ is the first turnkey solution for ingesting documents and digital data streams through a single API. The platform enables lenders to corroborate data retrieved from submitted documents with source data from financial institutions through a partnership with Plaid. Moreover, our partnership with SentiLink enhances our fraud capabilities by enabling us to detect use of synthetic identities.
Finovate: What markets does Ocrolus serve primarily?
Newlin: Ocrolus primarily serves a broad array of lending businesses – including small business lenders, consumer lenders, and mortgage lenders – with some analyzing different sets of documents based on application requirements. Regardless of asset class, Ocrolus has become a critical part of the modern lending infrastructure.
Finovate:Ocrolus interestingly has partnered with a number of other Finovate alums like Plaid and BlueVine in recent years. In fact, you spent some time at Plaid/Quovo, if I read correctly. Why are partnerships important in your industry? What makes for a productive relationship between fintechs?
Newlin: We are in an age of partnerships and collaboration. With technology and market conditions changing at such a fast pace, it’s virtually impossible to build everything internally. Competition is growing, and we’ve seen tech behemoths like Google, Amazon, and Apple making moves to break into financial services. Partnerships are key to staying ahead in a competitive market. By partnering with best of breed companies, you can save resources, accelerate time to market, and hijack otherwise steep learning curves. However, it’s important to note that partnerships must be aligned with the company’s strategy and values. And they should benefit both organizations in order to ensure long-term alignment.
Ocrolus Co-founder and CEO Sam Bobley and Director of Business Development Kevin Bailey demonstrating PerfectAudit at FinovateFall 2018.
Finovate: You came to Ocrolus after being a founder and president of a fintech/financial services consultancy. What drew you to Ocrolus? And now that you’re here, can you tell us a little about the work you do for the company as VP of Solutions?
Newlin: I was introduced to Ocrolus via a few current board members that had also supported my previous employer, Quovo (acquired by Plaid). Once I met with the leadership team and learned more about what Ocrolus offered, I was intrigued. The opportunity to work at a company that could cross many verticals with its offering was interesting to me, because that spoke to the flexibility and endless possibilities of staying nimble and being relevant. Of course, that has been proven out even faster than expected with COVID-19 as we see new opportunities in a challenging environment!
When I joined Ocrolus, my primary focus was to build out a strong Solutions team that would support all sales activities via sales engineering/implementation, which includes all aspects of client onboarding and API integrations. As I’ve built out the team and developed those functions, we also work closely with our Product/Operations team in piloting new verticals/services. Lastly, a big focus today is ensuring we promote strong client relationships via our account management and client success teams. In a nutshell, our team is the client-facing division of our firm in the entire customer lifecycle.
Finovate: You’ve recently joined the NYC Fintech Women’s Leadership team. Can you tell us about the organization and its goals? How did you come to the decision to work with them?
Newlin: NYC Fintech Women is a community of women fintech executives, founders, and engineers, who are opening the doors of Wall Street by facilitating access to education, community, and coaching. I want to contribute by supporting and mentoring these women. Additionally, given my path into fintech and the number of talented women transitioning from traditional firms, I feel a strong sense of duty to support their efforts.
Finovate: What are the two or three steps that would do the most good to promote women’s leadership in fintech and financial services in general? And what are the greatest challenges or obstacles to pursuing these steps?
Newlin: I think women have a hard time breaking into financial services because there have never been that many in the space. The reality is that there are still fewer women in tech positions, senior positions, on boards, etc. There isn’t a magic button to press for greater equality – we have to take the initiative to create diversity in the industry.
One of my favorite quotes is, “Ability is of little account without opportunity,” by Lucille Ball. In that spirit, here are three things we can do to promote women’s leadership in financial services:
We must give women the chance to succeed. I look to leadership in all companies of all types to consider how they are offering opportunity across a wide and diverse employee and candidate pool. Look at your organization and consider who is the next to move forward in their career and how leadership must mentor their employees. Don’t let great team members slip away because they see no career path.
Consider how diversity in hiring grows market share, promotes creativity and stimulates fresh ideas.
Finally, think strategically about how you are building teams and providing thoughtful professional development.
Ocrolus was founded in 2014 and is headquartered in New York City. Sam Bobley is CEO and co-founder. With more than $33 million in funding, Ocrolus includes Oak HC/FT, Laconia, and Bullpen Capital among its investors.
Tink Ties Up with Eurobits Technologies – Stockholm-based open banking platform Tink, announced late last week that it is acquiring Spanish account aggregation services provider – and fellow Finovate alum – Eurobits Technologies for $17 million (€15.5 million). The acquisition will enhance Tink’s position in Southern Europe, extending the firm’s presence to 17 markets around the world.
“We are extremely impressed by the Eurobits team, what they have built and their very strong position in Southern Europe,” Tink co-founder and CEO Daniel Kjellén said. “Not only does it strengthen our platform through increased connectivity, it also gives existing Eurobits customers access to our payment initiation and data services.”
A certified account information and payment initiation services provider (PISP), Eurobits facilitates more than 50 million transactions a month in Europe and Latin America. The company, which demonstrated its account aggregation technology at FinovateEurope 2019, works with some of Europe’s biggest fintech and financial institutions, including BBVA, Santander, and Fintonic. Founded in 2014, Eurobits is headquartered in Madrid, Spain.
“Tink is undoubtedly one of the most innovative companies within open banking,” Eurobits CEO Arturo Gonzalez Mac Dowell said. “Joining forces with them to help expand their coverage across Europe and Latin America is a unique opportunity, not only for both of our businesses, but for the broader industry as a whole.”
Tink’s most recent Finovate appearance was also at FinovateEurope 2019. Founded in 2012, the company began this year with a major fundraising, picking up $100 million in funding in a round co-led by Dawn Capital, HMI Capital, and Insight Partners. Tink has collaborated with PayPal, Klarna, NatWest, and ABN AMRO. The company’s platform is used by more than 5,000 developers.
Aireoffers three months of free access to its credit information services to help lenders during the coronavirus crisis.
TinkacquiresEurobits Technologies, a Spanish account aggregation vendor, for $17 million (€15.5 million).
Best of Show winning financial literacy app Zogoteams up with financial coop VolCorp.
Minna Technologies and Jscramblerearn finalist spots in the Tech5 Founders Day competition among top European startups.
Personeticsannounces strategic partnership with Avaloq.
Finovate Alumni Features and Profiles
Moven Minds its Business in B2B Pivot – In a transition announced earlier this week, Moven is moving away from the direct to consumer / neobank model to focus on what founder Brett King summed up as “our distributed smart banking and financial wellness capabilities.”
ebankIT and Enterprise Engineering Forge North American Partnership – Finovate Best of Show winner ebankIT is working with fellow Finovate alum Enterprise Engineering (EEI) to launch a new omnichannel banking solution geared toward financial institutions in North America in general, and the U.S. in specific.
Revolut Arrives in the U.S.A. – Revolut, the London-based fintech and alternative bank that reached unicorn status in 2018, has finally made its move to America.
Ripple Explains What’s Holding Back Blockchain Adoption – Last fall, blockchain payments company Ripple, in conjunction with Celent, conducted a survey to better understand payment services providers’ adoption of blockchain-based payments.
Lighter Capital Takes Debt Financing to Canada – The physical border between the U.S. and Canada may be closed, but that’s not stopping tech startup financing provider Lighter Capital. The Seattle-based company announced today it has launched its services in Canada.
Blame it on the ‘rona? In a transition announced earlier this week, Moven – which made headlines recently with its partnership with Saudi Arabia’s STC Pay – is moving away from the direct to consumer / neobank model to focus on what founder Brett King summed up as “our distributed smart banking and financial wellness capabilities.”
“It has become patently clear we need to focus our energies and our resources on the segment of our business where we can reach the most consumers moving forward,” King said.
The company specifically noted the impact of the COVID-19 crisis on Moven’s funding pipeline as a leading factor in the decision. The company emphasized that its Enterprise business remains healthy and well-funded.
“The Moven brand now has the opportunity to represent patented financial well-being, available to enterprises of all types,” Head of Moven’s U.S. Strategy Denny Brandt said. “Our patent gives us competitive strength in a rapidly evolving B2B environment. We continue to be involved in ventures in multiple geographies where we power direct-to-consumer banking services.”
Moven announced that it will close customer accounts at the end of April. The company has begun to communicate with accountholders to let them know what to expect as well as to ensure a smooth transition.
Founded in 2011, Moven made its Finovate debut a few years later at FinovateEurope in London, earning a Best of Show award. The New York-based company, among the first to combine smartphone apps, debit cards, and bank accounts as part of a unified strategy for managing personal finances, launched Moven Enterprise in 2016 to license its technology to banks and other financial institutions. Moven Enterprise debuted on the Finovate stage at FinovateEurope in 2017, showing how its engagement platform brings value to customers while producing measurable, positive business outcomes for banks.
Notably, Moven’s partnership with STC Pay is not the company’s first foray into the MENA region. A little over a year ago, Moven announced that it was teaming up with Bahrain-based Almoayad Technologies, which is leveraging the company’s technology to help fulfill the open banking mandate from the country’s central bank.
The fight against the coronavirus pandemic has captured the attention of people all over the world. From medical professionals on the front lines of caring for the sick to small businesses making hard decisions about how to keep their workforces intact during lockdowns and stay-at-home orders, everyone has been touched by the current crisis.
Earlier this week, we took a look at how fintechs and financial services firms are rising to the challenge of the COVID-19 outbreak. Looking at three different areas – safety, digitalization, and service – we saw how companies in countries ranging from Russia and India to the U.K. and the U.S. are lending their insights, talents, and generosity to the cause.
Companies like London-based Aire, a Finovate alum that is offering lenders three months of free access to its credit insight service, are an example of what is happening across the fintech space. “We’re seeing an unprecedented level of change in the market for consumers right now,” company founder and CEO Aneesh Varma said. “Lenders are understandably stretched and struggling to build accurate pictures of their customers in real-time.”
CoinDCX Cashes In: Two weeks ago we interviewed Neeraj Khandelwal, co-founder of Indian cryptocurrency trading platform CoinDCX, on cryptocurrencies and cashlessness. This week, we learned that the company has raised $3 million in Series A funding. The round was led by Polychain Capital, Bain Capital Ventures, and HDR Group. The capital will help the company launch new products, boost R&D efforts and marketing, and build the CoinDCX team.
“As the country’s largest exchange, we are in a position to drive national crypto adoption forward responsibly,” CEO and co-founder Sumit Gupta said. “This successful investment round will go a long way in funding our vision of accelerating India’s growth into a $5 trillion economy.”
Here is our weekly look at fintech around the world.
Sub-Saharan Africa
Kenya-based telecom Safaricom to waive fees for its M-Pesa mobile money service to help customers avoid cash during the COVID-19 outbreak.
Somalia’s MyBank to deploy Sharia-compliant, core banking technology from Path Solutions.
Ghana goes live with its Universal Quick Response (QR) Code and Proxy Pay system.
Central and Eastern Europe
SME Finance, a factoring services provider for businesses in the Baltics and Poland, picks up 10 million euro investment from new partner, Citadele Bank of Latvia.
Berlin, Germany-based, digital business bank Penta raises 18.5 million euros in new funding.
The COVID crisis has authorities in Russia decontaminating cash and urging citizens to use digital payments.
Erste Bank Hungary deploys mobile security technology from OneSpan.
Middle East and Northern Africa
DriveWealthannounces its first MENA region partnership: a collaboration with UAE-based wealth management firm, Wealthface.
Al Ansari Exchange taps Pelican for financial crime compliance.
Emirates’ World Investments commits to investment of $255 million in Australian challenger bank Xinja.
Central and Southern Asia
Mobile payments company HUMBL forges new partnership with Digital India Payments.
Singapore-based anti-fraud solutions provider Advance.AI opens offices in Bengaluru and Delhi.
Indian alt lender Vivriti Capital secures $50 million in Series B funding.
Latin America and the Caribbean
Mexican SME lender Creditjusto raises $100 million in debt financing from Credit Suisse Group.
Brazilian fintech Creditas announces plans to boost staff by 500 by the end of the year.
Wirecard teams up with Mexico’s Banca Afirme as the German digital payments solutions provider extends further into the Mexican market.
Asia-Pacific
TransferWiseteams up with Alipay to enable fund transfers to China.
Bank of China launches its AI-based FX trading signal app via Eikon.
Thai remittance company DeeMoney goes live on RippleNet.
The impact of technology on the insurance industry continues to be one of the more underrated developments in fintech. And while the level of disruption varies from one region to another, the intersection of insurance and technology is the growing source of innovation.
This year at FinovateEurope, we spoke with Roland Woerle, founder and partner of KONSULTA.eu, a boutique advisory firm, based in Austria, with a focus on the European insurance industry. KONSULTA helps insurers and brokers increase revenues, improve their customer experience, and manage business transformations.
“We are different, refreshing, highly-competent, fun, value-driven, and 100% customer focused,” Woerle described KONSULTA by way of introduction. “We are trying to help insurance players in their transformation, innovation, and customer/employee value propositions.”
Finovate Research Analyst David Penn talks technology and innovation in insurtech with KONSULTA’s Roland Woerle
Woerle is also senior representative at Vienna-based Match-Maker Ventures, where he helps startups that have already reached the proof-of-concept level scale their businesses. Previously, Woerle spent more than five years as Chief Operations Officer (Nordics/ Austria and CEE) for global financial services firm Aon, and more than ten years as Chief Operating Officer (Austria, CEE, CIS, and Nordics ) for leading insurance broker Marsh.
We talked about the role of technology in accelerating processes in insurance, and which business models benefit the most from the cost savings of technologies ranging from robotics to satellites. We also discussed the key distinction between companies with innovation teams and companies with innovation cultures, and the challenges businesses face in developing the latter from the former.
“Large insurance organizations they are still struggling with (this),” Woerle said. He pointed to issues with the company’s best and brightest often being pre-occupied with other, day-to-day tasks, as well as an incentive structure that does not reward what he called a “try and fail fast” approach to innovation, as major obstacles. Add to that insurance companies’ traditional risk aversion and it’s easy to see why “unconventional ideas,” as Woerle referred to them, face a challenging road to adoption.
Here are some of the top takeaways from our conversation with Roland Woerle this year at FinovateEurope in Berlin.
On platformification and the future of the insurtech
Woerle: (The platform economy) is highly relevant for insurance. We had a good debate in the afternoon, discussing where insurance companies might go into, and how they might become platform providers and solution providers for platforms. The industry as such might evaporate over time and morph into the platforms.
It’s a bit of a scary thought on the one hand. But, on the other hand, it’s a great opportunity for those who actually partner with the right platform providers. They can actually grow and grasp new opportunities in the market.
On the main ways the technology is changing the traditional insurance business
Woerle: I think that there are probably three areas where technology is really changing (insurance). First of all, it primarily speeds up the processes along the insurance value chain. Whether it’s distribution, underwriting, customer service … there’s huge potential for claims … just to make the process faster.
I see also tremendous potential on the B2B side, especially the large B2B speciality insurance lines like marine, where you can actually use satellite tracking, blockchain contracts in much more innovative ways around data analytics to drive down the tremendous costs in that industry.
On the relationship between insurance incumbents and insurtech startups.
Woerle: It’s still a difficult relationship to make work. I guess it’s the same as in the fintech space. It’s one of the things that KONSULTA is actually focusing on. We are working with startups and working with industry leaders to better match them to make sure it’s a win/win case for both of them.
They need to be true partnerships. Incumbents cannot see a startup just as a supplier. This won’t work. They will fail any procurement process. They will not “tick the boxes” which they need to tick. (Incumbents) need to nurture (startups). They need to see them as strategic partners.
So bringing them together, speaking the same language, seeing where value is added on both sides, and how can they make a win/win situation … I think that is the way to succeed.
The collaboration will combine Enterprise Engineering’s experience as an integrator and advisor on digital transformation and open banking with ebankIT’s omnichannel digital banking platform.
“This partnership is an important step on the consolidation of our growth strategy for the North American market, where we already have a significant presence,” ebankIT CEO Renato Oliveira said. “With the change of both operations and customer service models, it is essential for banking organizations to have a flexible and sophisticated solution, capable of bringing a true omnichannel experience, which is exactly the main strength of ebankIT.”
The companies previewed this initiative back in February. The joint venture is geared toward helping banks and credit unions in the U.S. offer full-service banking capabilities, including leading-edge technology solutions, to their customers. EEI and ebankIT are marking this latest development in their relationship with a series of educational, half-day seminars on Open Banking beginning this month in New York City.
“This partnership represents a terrific opportunity for EEI and ebankIT,” EEI founder George Anderson said when the collaboration was announced. “Our product sets are extremely complimentary and are best-in-class in our target markets.” Anderson noted that the partnership will result in “impossibly fast time to market and ROI for our joint customers.”
Founded in 2014 and maintaining offices in Porto, Portugal and London, U.K., ebankIT demonstrated its Digital Concierge 2.0 solution at FinovateEurope earlier this year. The technology unites financial and third party services via open banking integrations and channel analytics to provide relevant and engaging customer journeys.
Enterprise Engineering participated in our developers conference, FinDEVr Silicon Valley, presenting its Trusted Network Platform, an advanced data aggregation and management solution. A WealthManagement.com 2018 Industry Award winner, New York-based Enterprise Engineering was founded in 1995.
How are fintech companies lending their technology and talent to help the world better manage the COVID-19 pandemic? From insights into the impact on financial services to digital identity solutions to help with remote medical services, fintech companies from across the world are all-in when it comes to coping with the current global health crisis.
One of the key early posts on the impact of the coronavirus on financial services was put together by Jim Marous, co-publisher of The Financial Brand, owner of Digital Banking Report, and host of the Banking Transformed podcast. Looking at both negative and positive impacts of coronavirus on fintech, Marous’ How Will the Coronavirus Impact the Banking Ecosystem, is an excellent first stop.
Another worthwhile read is Ron Shevlin’s Forbes column, which lists fintech companies that are providing technology help during the crisis. The continuously updated list, started on March 23rd, currently has more than 125 companies that are “extending free, discounted, or accelerated deployment offers to financial institutions.”
Here’s a look at three ways that fintechs and financial services companies are doing their part to make a difference.
Safety First
In times of crisis, leadership is paramount. Much of the fear and anxiety that comes with tough times can be alleviated by giving people and institutions clear guidelines on what the best practices are in order to manage the challenge.
In this regard, credit to the American Bankers Association for their guidance to community banks, issued earlier this week, on the importance of communicating “early and often” with customers. As a dinosaur who still visits his bank branch a couple of times a month, I have found it fascinating – and a little disconcerting, at first – to watch my local bank transition from gloved bank tellers (and no more free cookies!) to drive-up service only.
With this in mind, the ABA both encouraged branches to emphasize their digital channels, as well as provided suggestions on how to make in-branch visits safer for those customers who still required that access. Similar recommendations on personal responsibility (“if you feel sick, stay home”) as well as social distancing were made for bank employees whose jobs require them to be physically onsite.
Go Digital
The trend toward cashlessness and digital currencies is one area of fintech that will be positively affected by the social distancing of the COVID-19 crisis. Both the central bank of Russia and the National Payment Corporation of India have urged citizens in their respective countries to use digital payments in lieu of cash to help stem the spread of the coronavirus.
Africa, where mobile payments have helped contribute to financial re-inclusion, is also finding these technologies to be a potential resource for supporting public health. With cash deemed a conduit for the spread of the coronavirus by the World Health Organization, countries where mobile payment technologies are emergent are likely to see an even more accelerated rate of mobile and digital payments adoption.
Note that Safaricom, the telecommunications company behind the region’s leading mobile money service, M-Pesa, announced that it would waive fees on all P2P transactions under $10 for three months. Mobile money services in Ghana also have been encouraged by the country’s central bank to waive fees and lower KYC requirements to ensure access.
Maybe the image of a dystopian future in which books are incinerated will be replaced by one where massive bundles of cash put to the figurative – if not literal – torch. ” ATM Marketplace’s David Jones recently reported a conversation with an analyst who granted that reports of cash being disinfected or burned in Asia are making a pretty good case for the future of contactless payments.
Serve Somebody
Conducting their normal operations is one of many challenges businesses are facing at present. Fortunately, firms like U.K.-based challenger bank NorthOne are providing free banking services to SMEs and restaurants during the crisis.
“Small business owners across the country are having incredibly hard conversations right now around the kitchen table and desperately trying to figure out how they can keep the lights on through this crisis,” NorthOne co-founder and CEO Eytan Bensoussan said. “The last thing they need to worry about is finding a branch or paying bank fees.”
But the loss of revenue due to the various lockdowns and stay-at-home orders issued in many countries is even more of an acute problem. While governments haggle over publicly-sourced solutions for small businesses, a group of U.K. fintechs in the lending business – Trade Ledger, Wisefunding, and NorthRow – have teamed up to offer a turnkey origination and underwriting platform to enable banks and lenders to digitally fund SMEs.
“The government’s capital injection is a massive boost to an underserved market at an extreme time of need,” Trade Ledger CEO Martin McCann said, “but it’s impact will be lost if lenders aren’t able go get these loans to their customers quickly.”
The technology community in general, and to some degrees fintech, as well, has come under various strains of criticism of late. From overvaluation to questions of work culture to concerns that the innovations of Silicon Valley increasingly cater to the young and affluent, many of these critiques have merit. But all that said, as many of these companies are showing, there may be in the current crisis an opportunity for technology – and fintech – to remind the world of its enduring value to us all.
We would be remiss not to highlight our Finovate alums that are offering their services and solutions to help during the COVID-19 pandemic. These alums include Alpharank, Banno, Cunexus, Datanomers, Digital Onboarding, Finovera, Finscend, Horizn, Hydrogen, Inspirave, Invest Sou Sou, Kasasa, Moxtra, Pinkaloo Technologies, Plinqit, Q2, StreetShares, Temenos, and Teslar Software.
