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Finovate Blog
Tracking fintech, banking & financial services innovations since 1994
How can companies take advantage of the opportunity of AI to grow revenues, help develop new products, and better engage customers? Our latest Streamly interview features Chris Brown, President of Intelygenz, who shares strategies for businesses to effectively implement AI.
In this interview, conducted by Finovate Senior Research Analyst Julie Muhn, Brown talks about Intelygenz’s engagement models that quickly deliver measurable ROI. Brown also discusses Intelygenz’s “Day Zero” promise, successful use cases in financial services, and explains what the metrics for success are when it comes to AI projects.
“There are a few things actually that I think organizations can do: I think the first thing is try and get yourself out of the AI buzzword, out of that AI hype, and really try to understand where you can apply AI within your business. Try and cross match your strategy, your challenges to the art of the possible of AI.”
“Don’t get hung up and leave that technical jargon. Leave all those hype words to the machine learning engineers and data scientists. Really focus on ‘What are the challenges I’m facing in my industry?’ ‘What will make a difference to my business?’ And if you do that, I can promise people from our vantage point that over many years you will put yourself in a really good position.”
Headquartered in San Francisco, California and founded in 2002, Intelygenz provides expert AI consultancy and implementation services. Specializing in AI, Deep Learning, Computer Vision, and other enabling technologies, Intelygenz guides businesses and organizations through their AI journeys – from conceptualization to implementation.
Identity verification solution and infrastructure company IDVerse announced a partnership with Hastings Direct Loans.
The U.K.-based lender will leverage IDVerse’s technology to enhance the accuracy and reliability of its identity verification process.
IDVerse, as OCR Labs, won Best of Show at FinovateAsia in 2017. The company rebranded to IDVerse in 2023.
Hastings Direct Loans is working with IDVerse to further automate the customer journey by adding IDVerse’s identity tools to its offering. The lender will put IDVerse’s identity tools to work to boost the accuracy and reliability of its identity verification process.
Calling IDVerse’s technology a “perfect match,” Hastings Direct Loans Head of Digital, IT and Change, Sam Kerr added, “Hastings prides itself on giving our customers a fair, easy to understand loan process by implementing innovative technology solutions into our stack, which also enable our ambitious growth plans. The API approach from IDVerse has allowed us to ingest more data to further insights in our decision process leading to better outcomes for our customers and business.”
IDVerse’s tools and infrastructure empower businesses to verify identities within seconds using only their face and smartphone. IDVerse’s identity verification technology covers more than 16,000 identity documents, and works with more than 140 different languages and typesets to produce face matching accuracy of 99.998%. Equipped with Zero Bias AI Tested technology, IDVerse enables businesses to verify a wider range of identities, ensuring greater accessibility, for example with those with disabilities.
Additionally, the technology leverages light refraction analysis to determine liveness, removing the need for users to turn or move uncomfortably or endure unnatural lighting in order to establish their identity. Zero Bias AI also means normalizing user photos to account for individuals that may not have the most modern smartphone camera technology or high-speed data connection. In addition to integrating and testing within a month, Hastings Direct Loans noted that it had experienced a 4x ROI within a month of launch based on the amount of fraud the company has caught.
IDVerse Commercial Director Adam Desmond complimented the Hastings team for its eagerness to embrace enabling technologies. “They understand the need for fintechs to use the latest technology and data to drive improved outcomes in customer experience – which led to better business outcomes. Being able to exchange information at speed during the integration has allowed us to show the true value of the tech (in) near instant time.”
Headquartered in the U.K., Hastings Direct Loans has offered personal loans to consumers for more than three years. To date, the firm has financed nearly $655 million (£500 million) for more than 50,000 customers, and currently processes more than $39 billion (£30 billion) worth of loan quotes per month. Hastings Direct Loans is part of the Hastings Group, a U.K.-based digital insurance provider with more than 3.1 million live customers policies.
Founded as OCR Labs, the company won Best of Show for its demo at FinovateAsia 2017 in Hong Kong. The firm rebranded as IDVerse in May 2023. More recently, the company has forged partnerships with data and compliance infrastructure company Prembly, age and identity verification solutions provider Veratad Technologies, and identity verification and fraud prevention specialist TrustID.
Last month, IDVerse announced the beta launch of its real-time face matching solution, Face Access, that offers 99.998% accuracy and instant, secure user authentication. Face Access features both Zero Bias AI and the company’s Deepfake Defender protection, which provides 100% liveness video fraud assessment with ISO 30107-3 compliance for presentation attack detection (PAD).
IDVerse has raised $45 million in funding according to Crunchbase, and includes Equable Capital and OYAK among its investors. The company is headquartered in London. John Myers is CEO.
Cardlay Payments Solutions has inked a partnership with Visa.
The collaboration combines Cardlay’s spend management technology with Visa’s payment network, data capabilities, and market position to drive innovation in spend management for commercial card issuers and their customers.
Headquartered in Denmark, Cardlay made its Finovate debut earlier this year at FinovateSpring.
Danish fintech Cardlay is collaborating with digital payments leader Visa to power innovations in the spend management space for commercial card issuers and their clients. The two companies’ new referral relationship combines Cardlay’s white label spend management platform with Visa’s market position, payment network, and data capabilities to provide fully embedded commercial cards and spend management solutions to their clients.
“We’re thrilled to partner with Visa, a highly respected leader in the digital payments industry,” Cardlay CEO Jørgen Christian Juul said. “To be able to fuel our product and commercial growth further together with Visa is great and the collaboration will help bring our vision to life: delivering fast and effortless spend management to commercial card issuers.”
Cardlay leverages the integration of virtual and plastic payment cards, card management, and expense management (including automated VAT reclaim) to help companies automate key business processes. A strategic partner to banks, fintechs, card issuers and processors, as well as other financial institutions, Cardlay also runs its own virtual card program to complement its software suite.
Cardlay’s technology enables commercial card issuers to enjoy a fast time-to-market and ROI, as well as benefit from data capabilities such as real-time virtual credit cards and Visa’s Fleet 2.0 data. These capabilities provide greater efficiency via access to data and insights, facilitate cost reduction, and help support sustainable transportation and mobility budgets.
“We’re delighted to have partnered up with Cardlay and look forward to our work together, helping to streamline financial operations for businesses, providing them with greater transparency and control over their spending,” said Helen Jones, Executive Director, Visa Commercial Solutions, Visa Europe.
Headquartered in Denmark and founded in 2020, Cardlay Payment Solutions made its Finovate debut at FinovateSpring earlier this year. At the conference, the company demoed its bank-integrated, real-time expense management solution, Cardlay Expense. More than 500 companies and 5,000+ users in 10 markets around the world are taking advantage of the technology to simplify and streamline the spend management process.
Cardlay has raised more than $29 million in funding according to Crunchbase. The company’s investors include Global PayTech Ventures and SEB Venture Capital.
Mastercard has agreed to acquire subscription management platform Minna Technologies. Terms were not disclosed.
Minna Technologies offers technology that enables users to manage their subscriptions from within their bank app or website, saving users millions of dollars in spending on unwanted subscriptions.
Minna Technologies made its Finovate debut at FinovateEurope 2019. The company is headquartered in Gothenburg, Sweden.
Terms were not disclosed. But Mastercard announced today that it has agreed to acquire Swedish subscription management platform Minna Technologies. The transaction, which is subject to regulatory approval, will bring greater simplicity and clarity to the subscription process and help enhance the engagement between merchants and their customers.
“This is significant recognition of the strength, growth, and impact of Minna Technologies in powering the global subscription economy, partnering with top-tier banks, fintechs, and subscription businesses,” Minna Technologies CEO and Chair Amanda Mesler said. “We look forward to joining Mastercard’s world-class team and helping businesses to empower consumers with control, convenience, and flexibility in managing their subscriptions and recurring payments.”
Minna Technologies offers banks and other financial institutions a subscription management platform that enables users to take control over their subscriptions via an automatically generated overview of all the user’s recurring expenses. Individuals can use Minna to cancel unwanted subscriptions as well as identify and quickly switch to new utility service providers. Mastercard’s acquisition comes as the number of subscriptions globally has climbed to 6.8 billion, with analysts at Juniper Research expecting that number to climb to 9.3 billion by 2028.
That said, the experience of our subscription economy can be a mixed one for consumers. Changing, extending, or canceling a subscription is often much more difficult than it needs to be. Additionally, the proliferation of subscription-based services means that many people have trouble keeping track of what they subscribe to, and when those subscriptions will be renewed. In the U.S., for example, the average person has 4.5 subscriptions. Additionally, more than 85% of Americans say that they have at least one paid subscription that goes unused each month.
Minna provides a payment-scheme agnostic service that empowers subscribers to manage their subscriptions from within their banking apps and websites. Bringing this technology into Mastercard’s suite of offerings is yet another example of how some of the biggest companies in financial services are leveraging acquisitions to add new solutions – from account-to-account payment functionality to enhanced cybersecurity – to their product mix. To that point, just last week, we shared news that Mastercard rival Visa had agreed to acquire fraud prevention company (and Finovate alum) Featurespace.
Founded in 2014, Minna Technologies demoed its technology at FinovateEurope in 2019. Today, the Sweden-based company has connected with more than 22,000 subscription businesses, served more than 120 million retail bank and fintech users, and saved customers more than $1 billion in spending on unwanted subscriptions.
Credit bureau, business information, and credit risk specialist CRIF has inked a strategic partnership with open banking API company Ozone API.
The collaboration is designed to hep financial institutions enhance data-driven decision-making, streamline operations, and share data safely.
CRIF made its Finovate debut at FinovateEurope in 2014.
A newly announced strategic partnership between CRIF and open banking API solution provider Ozone API will help financial institutions securely share their data and create new financial solutions that enhance data-driven decision-making, streamline operations, and improve customer satisfaction.
“By partnering with Ozone API, we are combining our strengths to create a seamless and efficient banking experience for our clients,” CRIF Digital Platform Business Development & Ecosystem Strategy Senior Director Andrea Martellone said. “This collaboration aligns perfectly with our mission to innovate and provide advanced solutions that drive growth in the financial sector.”
The partnership combines CRIF’s credit information and decision support systems with Ozone API’s open banking experience and secure, standards-compliant technology. Not only will the partnership assist financial institutions in meeting evolving needs, CRIF and Ozone API will also enable them to provide more personalized and efficient banking services to their customers now.
“This is an exciting partnership for Ozone API, as this will drive financial inclusion by providing the right tools to financial institutions to allow their customers to make more informed decisions about their financial wellbeing and get access to a wider range of financial services,” Ozone API Global Partnership Lead James Bushby said.
Headquartered in the U.K., Ozone API was founded in 2017. The open banking API platform helps banks and financial institutions take advantage of the opportunities of open banking and open finance with its compliant, open API technology. Ozone API’s technology supports all international standards and empowers financial institutions to create real commercial value and monetize open finance globally. The company began 2024 securing $11.3 million (£8.5 million) in Series A funding in a round led by Gresham House Ventures.
CRIF introduced itself to Finovate audiences in 2014 as part of our FinovateEurope conference. The company provides credit information services for business and marketing; business intelligence services, including credit ratings and data analysis; and digital solutions to support business development and open banking. Founded in 1988 and headquartered in Bologna, Italy, CRIF today serves more than 10,000 financial institutions, more than 90,000 business clients, and more than one million consumers. The company operates in 39 countries across four continents.
According to market intelligence platform Tracxn, funding for U.S.-based tech companies in Q3 of this year fell, both in comparison to the previous quarter as well as when compared to Q3 2023. Tracxn also reported that the number of tech unicorns actually increased this year compared to last year, with 13 new unicorns acknowledged in Q3 2024 compared to just five in Q3 2023. And while the report took this as a positive sign that “investor sentiment is stable,” there are other indications that the much-anticipated return to more robust funding trends for tech companies in general, and fintechs in particular, has yet to arrive.
Laura Bock, partner at QED Investors, was quoted in The Financial Brand back in January saying that “53% of fintechs will be cash out by Q3 2024 if they do not raise or exit.” We have a few more days before some of the research firms begin producing their Q3 reports on fintech funding, but clearly expectations are low.
Looking at our own Finovate alum funding for Q3 2024, we see plenty of evidence of the funding drought. In terms of the number of alums that reported receiving funding, as well as the amounts invested, Q3 alum funding for this year is as low as it has been in quite some time.
Previous quarterly comparisons
Q3 2023: More than $293 million raised by eight alums
Q3 2022: More than $1 billion raised by eight alums
Q3 2021: More than $1.1 billion raised by 14 alums
Q3 2020: More than $1.2 billion raised by 21 alums
Top equity investments
The top equity investment for Finovate alums in Q3 2024 was the $9 million raised by Illuma Labs. Headquartered in Plano, Texas, and founded in 2016, Illuma Labs debuted at FinovateSpring 2019 and has been a staple of our Spring and Fall conferences ever since. The company won Best of Show at FinovateFall in September for a demo of its Illuma Shield real-time voice authentication solution, now equipped with the latest deepfake detection technology to help prevent account takeover fraud.
Also noteworthy were the fundraisings from two brand-new alums: Dotfile, a regtech based in Paris, France, which debuted at FinovateEurope in February; and Scamnetic, an AI-powered anti-fraud solution provider that first appeared on the Finovate stage at FinovateFall in New York last month.
Here is our detailed alumni funding report for Q3 2024.
July 2024: An undisclosed amount raised by one alum
If you are a Finovate alum that raised money in the third quarter of 2024 and do not see your company listed, please drop us a note at [email protected]. We would love to share the good news! Funding received prior to becoming an alum not included.
This week’s edition of Finovate Global looks at recent developments in the fintech scene in Canada.
First up, we head over to Toronto, Ontario, where embedded payroll software company Nmbrhas secured $5.6 million (CAD$7.6 million) in seed funding. The round featured investors Panache Ventures, Golden Ventures, Motivate Venture Capital, and Luge Capital. In a statement, the company indicated it will use the funding to fuel growth and accelerate product development. And while focused presently on the Canadian market, Nmbr believes the investment will enable the firm to explore expansion opportunities in other countries.
“We’re incredibly grateful for our investors’ support and their confidence in our mission to empower businesses across the country with embedded payroll solutions,” Nmbr Co-Founder and CEO Simon Bourgeois said. “With these integrated systems already gaining traction in the U.S., we’re excited to extend these proven strategies to Canada.”
Founded in 2023, Nmbr simplifies complex financial products like payroll. The company’s technology enables businesses to embed Canadian payroll within their offering in days or weeks, rather than in years as is often the case with traditional payroll systems. Companies partnering with Nmbr have added payroll alongside operations such as AP/AR automation, employee scheduling, e-commerce, employee benefits management, and more. In addition to its funding announcement, Nmbr also reported that RBCx, the technology and innovation arm of Royal Bank of Canada, will serve as the company’s banking partner.
Staying in Ontario, but traveling 300 or so miles east, takes us to Ottawa and the home of Salt Edge, an open banking solution provider for banks, lenders, and other fintechs. This week, the Canadian fintech announced that it is helping Multitude Bank enhance its loan repayment processes to enable instant loan repayments.
“Salt Edge’s solution stood out due to its flexibility, competitive pricing, extensive coverage, and readiness to adapt to Multitude’s specific needs,” Multitude Bank CBO and Deputy CEO Dario Azzopardi said. “These factors were pivotal in choosing Salt Edge as a partner in this initiative.”
A core subsidiary of the Multitude Group, Multitude Bank will leverage Salt Edge’s technology, specifically using open banking method Pay-by-Link to provide customers with timely notifications about upcoming installments. The bank will use Salt Edge’s Payment Initiation solution to enable its customers to make instant loan repayments instead of relying on traditional online banking methods. The new process reduces transaction costs and connects bank clients with more than 2,300 banks across Europe.
“Open banking offers flexibility, and we’re happy to assist Multitude in supporting its clients with a safe and faster payment solution powered by open banking,” Salt Edge VP of Sales Erica Virlan said.
Salt Edge’s partnership with Multitude Bank comes just days after Moldova-based Victoriabank announced it was teaming up with Salt Edge to help ensure compliance with impending national legislation that will transpose European 2nd Payment Services Directive (PSD2) into Moldovan law. Also this month, the Canadian company forged new partnerships with international financial services company Ebury and Moldova’s Comertbank.
Salt Edge made its Finovate debut at FinovateEurope 2018 in London. The company offers an Open Banking Gateway that enables financial institutions to secure instant access to accounts in 5,000 banks across Europe, GCC, APAC, and the Americas for account information and payment initiation. Salt Edge also offers an Open Banking and Compliance Solution that helps banks and Electronic Money Institutions (EMIs) become compliant with PSD2 and open banking requirements.
Canada has a well-deserved reputation as a welcoming country. As of 2023, with more than eight million immigrants earning permanent residence status in Canada, immigrants currently make up approximately a fifth of the country’s population.
With this in mind, it is heartening to read news that Scotiabank has expanded its partnership with Canadian cross-border credit bureau Nova Credit. The two entities will work together to help newcomers from countries including Australia, India, Kenya, Mexico, and Nigeria to leverage their credit history from their home country to help them access higher credit limits when applying online for financing in Canada.
“Canada relies heavily on the success of our immigrant population and the contributions they make to our economy,” Scotiabank SVP for Retail Customers, Tanya Eisener said. “In an increasingly digital world, a person’s history doesn’t have to start over when they move to a new country. Being able to access their foreign credit report through Nova Credit’s credit service allows us to get a better understanding of their credit risk and ultimately help them settle in Canada faster.”
The expanded partnership between Scotiabank and Nova Credit is designed to tackle the challenge of “credit invisibility” or the absence of a credit record. In Canada, based on data from 2015 through 2019, more than 25% of those considered “credit invisible” were immigrants. Further, more recent immigrants, those who had been in the country for less than two years, were nearly twice as likely to be credit invisible compared to native-born Canadians.
Scotiabank is a multinational banking and financial services company based in Toronto, Ontario. The bank offers a range of services including personal and commercial banking, wealth management, private banking, corporate and investment banking, and capital markets. The institution has more than 90,000 employees and assets of more than $1.3 trillion as of April 2023.
Headquartered in San Francisco, California, Nova Credit is a consumer-permissioned credit bureau that specializes in helping businesses make informed decisions on thin-file, no-credit history, and new-to-country credit applicants. Founded in 2016, Nova Credit expanded to Canada in 2023 as part of its initial partnership with Scotiabank.
Here is our look at fintech innovation around the world.
A partnership between Mastercard and ZOOD will bring virtual Buy Now, Pay Later cards for consumers in Uzbekistan. Read more about fintech in Uzbekistan in our Finovate Global interview with Oliver Hughes of TBC Uzbekistan.
Latin America and the Caribbean
Uruguayan cross-border payment platform dLocal teamed up with Asia-based mobile wallet ShopeePay.
Proclaiming itself the first digital bank dedicated to customers with disabilities, Brazil’s Parabank partnered with Dock to launch a new suite of credit and prepaid cards.
Payments innovator NETSTARS teamed up with ACI Worldwide to boost development of cashless payments in Japan.
Singapore-based Bybit introduced new Shariah-compliant cryptocurrency accounts for Muslim investors.
HSBC launched new financing plan for SMEs in Hong Kong.
Sub-Saharan Africa
Africa-focused investment firm Helios Investment Partners led a $100 million Series D funding round in Banking-as-a-Service (BaaS) and infrastructure API provider M2P Fintech.
Coming to America! African paytech Flutterwave has expanded its Send App remittance service to 49 states in the U.S. courtesy of a partnership with MainStreet Bank.
PayZeep, a Nigerian fintech startup, partnered with the Amalgamated Union of App-based Transporters of Nigeria (AUATON) to bring new payment options to drivers.
How is digital transformation impacting community banking? What can community banks do to maximize the opportunities that digitalization can provide? And what role should enabling technologies like AI play in helping community banks develop new products, new services, and new sources of revenue?
These are some of the questions posed to our fintech experts in our latest Streamly Subject Snapshot video on the digital transformation of community banking. Today’s conversation features insights and observations from:
Barb Maclean, SVP, Head of Technology Operations and Implementation at Coastal Community Bank (Linkedin)
“Your customers today are expecting to interact with their money at the time and place and mechanism of their choosing and they’re going to drive it off their phone, for the most part. So if you haven’t yet put in the kind of technology that enables them to do that in the way that they choose to do it, when they choose to do it, you’re definitely already behind the eight ball.”
John Waupsh, Chief Revenue Officer at Manifest Financial (LinkedIn)
“Certainly a lot of time the core is the scapegoat, whether it’s a real issue or not. ‘We as a bank have a challenge with X or building Y or doing some tactical thing because our data is being held by the core’ … The end of the story here is while it’s very challenging to switch core providers, every core, just like every vendor, wants to keep their customers around, wants to keep their clients around. So having progressive discussions with these providers, at an executive level, sharing strategy and moving forward together can usually be very productive.”
Brian Solis, Author of Mindshift: Ignite Change, Inspire Action, and Innovate for a Better Tomorrow (LinkedIn)
“Right now we have an ability to run our company as an intelligent company, an AI-first company, one that’s more intelligent, more integrated, and one that’s more focused on not just using AI to automate what we do, but looking to unlock the future. It’s prioritizing the use of AI in shaping new business models and operational models, products, services, with AI influencing every decision, from the problems the company chooses to solve, to explore new horizons, to the way it interacts with customers and employees.”
“Building the relationship is not about being personable, about saying, ‘Oh, we’ve got dog treats in our branch.’ That’s not going to grow your deposits. You need to bundle in additional services that grow your deposits without growing the cost of those. These include things like, say, account protection against scams and frauds. Things like an AI assistant that helps you answer tough questions about retirement and health care choices attached to it.”
Greg Palmer, Vice President at Finovate (LinkedIn)
“Community banks are in desperate need of new technologies, but they lack the resources that some of their larger competitors have, which means there’s a real opportunity for fintechs to come in and help them, give them new access to technologies that they need to stay competitive with their larger counterparts.”
Online brokerage firm TradeStation has partnered with open source algorithmic trading platform QuantConnect.
The collaboration will enable mutual customers to build and automate strategies with QuantConnect, and then execute their trades via their TradeStation brokerage accounts.
QuantConnect made its Finovate debut at FinovateEurope 2013. The company was founded in 2011.
Multi-asset online brokerage service TradeStation has announced a partnership with open source algorithmic trading platform QuantConnect. The two companies have integrated their solutions to enable mutual customers to create and automate their trading strategies on the QuantConnect platform, and then execute their trades via API through their TradeStation brokerage account.
“By integrating our personalized brokerage service with QuantConnect’s algorithmic trading platform, we’re providing sophisticated traders with powerful tools to develop, backtest, and automate their strategies, enhancing their ability to identify and execute new trading opportunities,” President and CEO of TradeStation Securities’ parent company, TradeStation Group, Inc. John Bartleman said.
The partnership combines two significant forces in the algorithmic trading tools space. TradeStation Securities provides institutional-grade tools and personalized services, enabling traders to buy and sell a wide range of assets including equities, equity options, and futures. A favorite of advanced retail and institutional traders, TradeStation caters to market participants who often require a more customizable and sophisticated trading experience, especially those who rely on algorithms to make buy and sell decisions. The integration will make the transition from building strategies to executing them in the market that much smoother.
“With this collaboration, mutual customers can create, manage, and analyze trading strategies from the new cross-platform integration,” QuantConnect CEO Jared Broad said. “TradeStation Securities is a well-known self-directed online broker-dealer and futures commission merchant, and it’s exciting to know that QuantConnect’s platform will be available to mutual customers.”
Founded in 2011, QuantConnect made its Finovate debut at FinovateEurope 2013. At the conference, the company demoed its cloud-powered stock market backtesting technology, which can simulate years of stock market data in minutes. The company’s quantitative analytics platform facilitates more than 500,000 backtests per month for a community of more than 300,000 quants and developers. QuantConnect’s platform is powered by the LEAN Engine, an open source infrastructure for algorithmic trading.
QuantConnect’s partnership with TradeStation Securities comes a month after the Miami, Florida-based firm announced an integration with brokerage platform Alpaca. Courtesy of the partnership, Alpaca users can leverage QuantConnect’s technology to design, backtest, and trade algorithmic strategies for stocks, ETFs, options, as well as cryptocurrencies.
It is no secret that banks are under pressure from a variety of sources: fintech upstarts, the rise of embedded finance, an increasingly dynamic regulatory environment, the pace of technological innovation–to say nothing of competition with one another.
For community banks, the pressure can be all the more intense. While many community banks enjoy a special relationship with local customers and businesses, this relationship does not prevent their patrons from wondering from time to time if the grass might be greener with a banking or fintech solution offered by another provider.
BNY recently surveyed community bankers to find out what they see as their top challenges–and opportunities–in the current environment. Conducted in partnership with the Harris Poll, BNY’s 2024 Voice of Community Banks Survey provides some interesting insights into where community banking is today, and what it needs in order to be successful in the years to come.
Wealth management and treasury services in demand
The growing interest in wealth management and treasury services was one of the more exciting insights from the BNY survey of community bankers. With the aging of the Baby Boomers and Millennials entering prime family formation years, it is little surprise to see a growing demand for everything from investment to estate planning. Relative to their larger rivals, community banks have not been as active in wealth management. But some have argued that community banks could change this by better leveraging their more personal relationships with their customer base to entice them away from faceless, corporate asset managers and large institutions. In fact, 100% of the community banks surveyed indicated that they want to add wealth management services to their offering.
At the same time, the interest in treasury services is perhaps even more eye-catching. The advent of real-time payments has made treasury services an increasingly attractive offering for financial institutions. In the same way that more personal relationships with individual customers can make wealth management services worthwhile for community banks to offer, so can the personal relationships these institutions have their local businesses encourage them to consider seeking treasury services where they are already doing much, if not all, of their banking business. According to BNY’s survey, fully 95% of community banks surveyed are inclined to agree that they would like to see treasury services added to their portfolio.
AI, tech, and digital transformation
While nearly half the community banks surveyed indicated that they saw themselves as “innovative within their communities,” that has not stopped most of them from wanting to enhance their products and services–as well as offer new ones– via digital transformation and enabling technologies. Interestingly, the survey did not just ask about technology per se, but instead queried them to find out specifically what they hoped these enabling technologies would do. To this point, nearly 30% pointed to efficiency and security as two major needs and indicated offerings like instant payments and automated loan processing both responded to these needs and helped community banks maintain “a competitive edge.”
Yet, while more than 90% of community banks said they were ready to embark upon digital transformations, significant uncertainty about the actual readiness remains. Approximately half of the respondents considered their data analytics capabilities–key for maximizing technologies like AI–to be “advanced,” and less than 20% believed that they had any real expertise when it comes to data analytics.
Non-fintech partnerships
Partnerships with technology companies and fintechs is one way for community banks to improve their ability to take advantage of enabling technologies like AI. However, one interesting reveal from the BNY survey was the interest that many community bankers have in non-fintech partnerships.
Almost 30% of respondents indicated that they saw non-fintech partnerships–collaborations with institutions in retail and education–as opportunities that would be as important as fintech partnerships over the next five years. This, arguably, should serve as a wake-up call for those fintechs that are innovating in adjacent areas–from e-commerce and consumer lending to financial education and even college prep.
France-based regtech Dotfile has secured $6.7 million (€6 million) in new funding.
The round was led by Seaya Ventures. The company’s existing investors Serena and Hexa also participated in the investment.
Dotfile made its Finovate debut earlier this year at FinovateEurope 2024 in London.
Fresh off its FinovateEurope debut earlier this year, Paris-based fintech Dotfile has raised $6.7 million (€6 million) in funding. The round was led by Seaya Ventures, and featured participation from the firm’s existing investors Serena and Hexa. In a statement, the regtech innovator indicated that the funding will power its R&D efforts as well as fuel its international expansion plans.
Dotfile leverages AI to enable banks and other financial institutions to automate customer onboarding and ensure compliance with anti-money laundering (AML) regulations. The company’s business verification platform improves upon the traditionally manual, complex, and expensive Know-Your-Business (KYB) process by aggregating dozens of different data sources to produce a comprehensive picture of a business within 10 seconds.
“More than $200 billion is invested in compliance every year, yet 2% of the world GDP is still going through the money-laundering rinse cycle, which is fueling crime,” Dotfile CEO Vasco Alexandre said. “AI could change how effective those policies are and the positive impact for our societies could be massive.”
The investment in Dotfile comes at a time of growing awareness of the importance of compliance in financial services – and the ability of technology to help banks and other institutions meet these obligations. From banks seeking to maximize opportunities in fintech partnerships to cryptocurrency platforms eager for greater clarity on digital asset regulations, institutions throughout financial services are finding themselves in an increasingly dynamic regulatory environment. To help companies better manage their compliance obligations, a new generation of fintechs such as Dotfile have emerged with tools, workflows, and other solutions–often AI-powered–to streamline and enhance verification, ensure accurate auditability, and reduce costs.
“Compliance is costing banks up to 10% of their revenue, 1 out of 4 employees work in a compliance-related position and existing systems are sometimes more than a decade old,” Alexandre said. “With the competition from fintech intensifying, a transition is bound to happen and generative AI is the tipping point.”
Dotfile made its Finovate debut at FinovateEurope 2024 in London. At the conference, the French regtech demonstrated its end-to-end business verification platform that empowers compliance teams to streamline their operations. The company was founded in 2021 by Alexandre and Titouan Benoit, and received major support from startup studio Hexa (formerly known as eFounders). Today, Dotfile has more than 50 customers across 10 countries, including banks, private equity firms, and fintechs. Most recently, the company announced a partnership with private market investment platform Roundtable, helping the firm improve its KYC process to optimize and accelerate customer onboarding.
Voice authentication technology innovator Illuma Labs has raised $9 million in funding. The Series A round was led by LiveOak Ventures and featured participation from Forefront Ventures, Curql Fund, UsNet, Capital Factory, Connexus, and TDECU.
As the first major investment for the company, the capital will help accelerate the development of Illuma’s voice verification offerings to help banks and other institutions fight fraud, voice cloning, deep fakes, and more. Illuma Labs also plans to leverage the funding to expand its reach to more credit unions and banks across the country.
“While we are excited about the capital infusion to accelerate our development of fraud prevention and deep fake detection tools, we are equally excited about bringing in new partners to fuel Illuma’s continued commercial growth,” Illuma Co-Founder and CEO Milind Borkar said. He praised both LiveOak Ventures and Forefront Ventures for their operational expertise and industry connections and thanked investors Curql Fund, UsNet, Capital Factory, Connexus, and TDECU for their “continued support.”
Illuma Labs offers banks, credit unions, and other financial institutions the ability to replace their traditional, knowledge-based authentication protocols with a secure, real-time voice authentication solution. The company’s flagship product, Illuma Shield, delivers effortless authentication that enhances the customer experience, improves operational efficiency, and prevents fraud in contact centers.
The funding news arrives one month after the identity verification specialist inked a partnership with Americu Credit Union. The New York State-based CU added voice recognition technology to its Member Contact Center courtesy of a partnership with Illuma announced in August. Earlier this year, Illuma announced that SF Fire Credit Union was adding voice authentication technology to its call center via a collaboration between Illuma and fellow Finovate alum Glia.
Headquartered in Plano, Texas, and founded in 2016, Illuma Labs made its Finovate debut at FinovateSpring 2019. The company most recently demoed its technology on the Finovate stage earlier this month at FinovateFall, winning Best of Show for its latest deepfake detection technology that helps banks fend off a new generation of AI-enabled fraudsters.
