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Finovate Blog
Tracking fintech, banking & financial services innovations since 1994
Neo, an international corporate treasury services provider, has cleared more than $10.5 billion (€10 billion) in its corporate multi-currency accounts since 2020.
Founded in 2017, the company has grown from a FX hedging platform to a one-stop-shop to help corporates better manage cross-border transactions.
Neo made its Finovate debut at FinovateEurope in 2019.
International treasury services provider Neo announced today that it has cleared more than $10.5 billion (€10 billion) via its corporate multi-currency accounts since their launch three years ago. This includes a doubling of its cleared volume in less than a year, as its accounts for corporate treasurers reached $5.3 billion (€5 billion) already in 2023.
Neo CEO and co-founder Laurent Descout said that reaching the milestone was a testament to the scalability of the company’s core banking system technology. He called Neo’s innovation “machine-tooled to satisfy the growing complexity faced by international treasury teams.”
The new milestone also affirms Neo’s commitment to helping corporate treasurers navigate a global B2B cross-border payments market that is expected to top $250 trillion by 2027. This is based on estimates from the Bank of England. But it is not the size of the market alone that makes international corporate treasury operations a challenge. Growth into new markets also means securing different accounts for each new country or currency. For many corporate banks, opening an international bank account is a cumbersome and time-consuming process. Add to this the fact that many firms are unable to secure the international accounts they seek and those that do often deal with significant operational inefficiencies, including a lack of support from cross-border payment specialists.
“Accessing multi-currency accounts has literally become impossible for too many corporates across many different industries,” Descout said.
To this end, Neo offers a platform that enables businesses to set up an international account with their own multi-currency International Bank Account Number (IBAN). This will allow them to manage cash flows with supply chains, hedge FX exposure, and access transaction data from a single location. Companies can also leverage virtual wallets to allow them to make and receive payments in more than 25 different currencies. In addition to transparent and competitive pricing, Neo also offers professional support from a team of international payments specialists.
Founded in 2017 and headquartered in Barcelona, Spain, Neo made its Finovate debut at FinovateEurope 2019. From its origins as an FX hedging platform, Neo today provides treasury management services to more than 400 corporates across 28 countries. The company delivers payments in 100+ countries, and reaches 8,000+ banks via its Bank Identification Code (BIC) on the Swift network.
SME lending platform Credibly has partnered with Green Dot to add small business banking services to its offering.
The new solution, Credibly Business Banking, will help SMEs improve cash flow and secure capital easier and faster.
Green Dot made its Finovate debut in 2013. The company has managed more than 67 million accounts to date.
SME lending platform Credibly is adding small business banking services to its offering. Powered by Green Dot’s banking-as-a-service platform, Credibly Business Banking will enhance the banking experience for small and medium-sized businesses with improved cash flow management and faster access to financing.
Access to capital and better managing cash flow are two critical challenges for small businesses. The number of new small businesses continues to rebound in the wake of the pandemic, with small business applications in the U.S. up more than 40% from pre-pandemic levels. Unfortunately, many of these small businesses struggle to secure the financing they need to grow. Goldman Sachs revealed that more than 75% of small business owners surveyed in their 10,000 Small Businesses Voices Initiative cited access to capital as a main concern.
The hurdles are greater for those small businesses that do not have a business bank account. A Nav survey discovered that 70% of small business owners without a business bank account were rejected for loans within the past two years.
Credibly Business Banking is a response to these challenges, according to Credibly founder and co-CEO Ryan Rosett. “With a business checking account, customers will have faster and easier access to the cash, credit, and capital they need to run and grow their business,” Rosett said. The new account also features online mobile banking, fast account set-up, overdraft protection, no fees for eligible deposits, and access to a nationwide ATM network.
Founded in 2010, Credibly has facilitated more than $2 billion in financing to 30,000+ small and medium-sized businesses. Headquartered in Southfield, Michigan, the company has raised more than $82 million in total funding. Credibly Business Banking is one of a number of new products for small businesses the company has on its roadmap.
“The demand for seamless, accessible and intuitive financial tools for businesses remains on the rise,” Rosett said, “and we are thrilled to partner with Green Dot to add small business banking to complement our lending solutions.”
Founded in 1999, Green Dot has been a Finovate alum since 2013. The firm has managed 67 million accounts to date, providing banking services such as online bank accounts, debit cards, and credit solutions, as well as deposits and transfers. Green Dot has leveraged its embedded finance capabilities to enable partners from Apple to Walmart to embed scalable banking solutions into their offerings.
Newsweek named Green Dot one of its “Most Trustworthy Companies in America” earlier this year. Publicly traded on the New York Stock Exchange under the ticker GDOT, the Austin, Texas-based company has a market capitalization of $719 million.
What is the future of open banking in the U.S.? Today, financial connectivity innovator AtomiclaunchedPayLink, a new suite of solutions that streamline payment switching for consumers.
The new offering provides for an improved user experience for financial services consumers. It is also a big step towards helping banks and other financial institutions align themselves with the Consumer Financial Protection Bureau’s goals with regards to open banking.
We talked with Andrea Martone, Head of Product for Atomic, to learn more about PayLink, and the drive toward a more open banking system in the U.S.
Headquartered in Salt Lake City, Utah, and founded in 2019, Atomic made its Finovate debut two years ago at FinovateFall 2021. Jordan Wright is co-founder and CEO.
Congratulations on the launch of PayLink. Tell us more about this new suite of products.
Andrea Martone: Thank you! We’re thrilled about the launch of PayLink. We’ve taken our expertise in building user-permissioned connectivity for sharing and updating data and expanded it to merchant accounts, streaming services, and recurring bill providers, enabling consumers to seamlessly update their payment methods on file and retrieve information on upcoming payments. Building PayLink was a natural next step on our journey towards helping consumers update their primary banking relationship as it helps overcome a major point of friction in the process. To build it, we leveraged our cutting-edge TrueAuth technology that allows users to authenticate directly on their devices, without ever sharing login credentials.
For our readers who are new to Atomic, can you tell us a little about the company?
Martone: At Atomic we believe that making it simple for consumers to access, share, and update their financial data is key to unlocking new financial opportunities. By embedding Atomic’s SDK into their online and mobile banking applications, financial institutions can enable consumers to easily update direct deposit instructions, verify income and employment, import W2s and, now, update payment methods on file with merchants without leaving their application. With our solutions, financial institutions help grow new account adoption, qualify borrowers, and streamline tax filing.
Open banking was a major topic of conversation at our FinovateFall conference a few weeks ago. What is your take on the state of open banking in the U.S.?
Martone: Open banking in the U.S. is at an interesting juncture. With the CFPB taking bold steps in their public commentary, there’s an exciting momentum building around the consumer-centric transformation of financial services. While Europe has been ahead in this race, the U.S. is catching up, and I believe we are headed for an ecosystem that allows for significant innovations to support both consumers and financial institutions.
One of the issues that came up in our discussion on open banking was the idea that open banking is integrally related to the issue of digital identity. Do you agree? Why is this so and why is it important to keep in mind?
Martone: Digital identity is the backbone of a secure open banking ecosystem. As we democratize access to financial data, establishing secure, verifiable digital identities becomes crucial. It’s not just about sharing data, but ensuring that the right data gets shared with the right entities for the right purposes – securely. Our TrueAuth technology, for example, is designed to enhance credential security while empowering consumers.
The CFPB is working on regulations that could impact personal data rights. What are your thoughts on these potential regulations and their impact on companies in the open banking space – as well as the impact on consumer adoption of open banking?
Martone: I view the CFPB’s focus on personal data rights as a necessary step toward fostering a fair, transparent financial ecosystem. Giving consumers greater portability over their financial data opens the door for increased innovation and competition in the financial services space. However, it also creates a wider surface area for exploitation and misuse of data, as well. As a result, regulations will need to set the standards that ensure consumer privacy and data security and, in turn, build consumer trust. For companies evolving into the open banking space, this is an opportunity to align their products with consumer-centric values, which I believe will accelerate consumer adoption and loyalty in the long run.
Atomic is headquartered in Salt Lake City, Utah. We’ve seen a surprising number of innovative fintechs headquartered in Utah. What is it like to be a tech startup in the Beehive State?
Martone: Being headquartered in Utah has been fantastic for us. The state offers a thriving tech scene, a highly skilled workforce, and a business-friendly environment. We also have a dynamic team located throughout the country, which ensures that we comprise a diverse workforce.
What can we expect to see from Atomic over the next few months and into next year?
Martone: We have a busy roadmap ahead! You can expect to see more advanced features being rolled into PayLink, further strengthening its capabilities. You will also see us double-down on our strengths in expanding connectivity where it can benefit consumers to access, share, and update data in secure, transparent, and reliable ways to expand their financial opportunities. Key to this is continuing to advance our authentication methods, including our TrueAuth technology. Additionally, we’ll be focusing on strategic partnerships to widen our reach. Our aim is to continue leading the charge in making open banking a tangible, beneficial reality for all.
Engagement banking innovator Backbase has teamed up with identity verification and fraud prevention company FrankieOne.
The strategic partnership will combine the Backbase Engagement Banking Platform with FrankieOne’s identity verification solutions.
A four-time Finovate Best of Show winner, Backbase most recently demoed its technology at FinovateFall 2021.
Engagement banking firm Backbase has forged a strategic partnership with identity verification and fraud prevention platform FrankieOne. The two companies will work together to help banks and credit unions in Australia and New Zealand onboard customers faster and more securely. The collaboration blends Backbase’s personalized banking experience platform with FrankieOne’s identity verification solutions to make it easier for customers to seamlessly and safely access digital financial services.
Courtesy of the partnership, users of Backbase’s Engagement Banking platform will be able to access a variety of KYC, AML, biometric verification, transaction monitoring, fraud detection, and compliance capabilities from a curated roster of providers. Additionally, the recent launch of Backbase’s Engagement Banking Cloud (EBC) will give its strategic partners – like FrankieOne – a single platform that supports the full customer lifecycle.
“This partnership reinforces Backbase’s global commitment to enhancing our offering and meeting the needs of financial institutions across the region,” Backbase Director of Global Head of Fintech-As-a-Service Mayank Somaiya said. “These partnerships allow us to accelerate the integration of best-in-class capabilities into the Backbase Engagement Banking Platform.”
Backbase’s announcement comes just a few days after the company reported that it was working with Judo Bank. The Australian challenger bank, launched in 2016, selected Backbase’s Engagement Banking Platform earlier this month. In August, the Amsterdam-based fintech announced partnerships with business and IT consulting company Valleysoft and fellow Finovate alum SavvyMoney. Founded in 2003, the four-time Finovate Best of Show winner most recently demoed its technology at FinovateFall 2021. At the conference, Backbase introduced its customer onboarding solution. This technology consolidates customer finances through direct deposit, billpay auto linking, and debit card account opening.
Onboarding and fraud platform FrankieOne was founded in 2017 by Simon Costello (CEO) and Aaron Chipper (CTO). The company leverages more than 350 data sources to enable businesses to quickly and securely onboard more customers. Headquartered in Australia, FrankieOne notes that its customers see a 11% uplift in match rates after transitioning to FrankieOne.
It’s been a busy summer for Finovate VP Greg Palmer and the Finovate Podcast. If you’ve missed an episode or two, now is a great time to join Greg and his guests as they talk about some of the most pressing issues in fintech today.
From the challenge of optimizing the customer experience to strategies to make fintech-bank partnerships thrive, the Finovate podcast is a great source for insightful conversation on the key trends and opportunities in our industry.
Greg Palmer talks with Rachel Lyubovitzky, CEO and Chairwoman of Setuply, on transforming new clients into brand champions with seamless onboarding. Episode 188.
Greg Palmer interviews Kevin Brown, CMO and Head of Corporate Development at Onbe, on the importance of an excellent payments experience on customer retention and growth. Episode 187.
Greg Palmer explores alternatives to equity-based growth models and the broader fintech ecosystem with Neil Kenley, Principal with Vistara Growth. Episode 186.
Greg Palmer interviews Bryon Guerra and Herb Berkley of Lone Star National Bank on tech priorities, tips for engaging with banks, and how to make a partnership work. Episode 184.
What do you as an investor know about the people who manage your money? If your answer to this question is “not very much,” then imagine the challenge of banks and other financial institutions who invest millions of dollars with hundreds, if not thousands of investment professionals.
This is an underdiscussed problem in the investment world: the lack of systematic knowledge about the individuals and teams making investment decisions for millions of individuals, families, and organizations. This can lead to underperformance in terms of investments, as well as inefficient financial advisory.
To this end, we caught up with Thomas Oberlechner, CEO and founder of BehaviorQuant. The company he founded in 2018 gives financial institutions predictive information about the people behind investment decisions. BehaviorQuant leverages behavioral science, machine learning, and automation to learn and analyze the behavior of investment professionals and teams – as well as customers. The insights derived from BehaviorQuant’s automated survey technology enables fund managers to improve their performance and better customize their services to their customers.
Headquartered in Vienna, Austria, BehaviorQuant demoed its technology at FinovateEurope earlier this year.
What problem does BehaviorQuant solve and who does it solve it for?
Thomas Oberlechner: We developed BehaviorQuant because every financial decision is ultimately made by a person or a team. BehaviorQuant solves a core problem that underlies the entire investment industry: we don’t have systematic knowledge about the people and teams behind investment decisions. And that’s true for financial professionals and clients alike.
Financial players – for example, banks, funds, financial advisors – are used to having access to vast amounts of financial data and information. But without BehaviorQuant, they don’t have systematic knowledge and data about the people and teams behind this data. Yet it is the people and teams behind the visible financial results that play the key role in investing. You can see this everywhere — in the performance of investment teams, in the selection of fund managers, in the efficiency and success of wealth advisors.
For example, in our research we found that 37% of the performance of top decision makers at world-leading financial institutions is based on their behavioral characteristics. However, there is no product to easily measure and quantify the behavioral characteristics of decision-makers. This lack of insight into the behavioral aspects and decision-making tendencies leads to underperformance of asset managers, missed profit opportunities for investors, unrecognized fund manager selection risks, costly staffing mistakes, and churn among dissatisfied clients.
How does BehaviorQuant solve this problem better than other companies?
Oberlechner: Our behavioral finance technology combines the highest level of expertise in behavioral science, personality and decision research with machine learning. For the first time ever, we are capturing the people and teams behind the visible investment decisions. And we give our customers predictive knowledge about themselves and about others – about their own investment teams, about the fund managers they allocate their money to, about their clients. Our solutions solve three distinct problems: first, they help asset managers to improve their performance; second, they help allocators choose the best fund managers; and third, they enable advisors to tailor their advice highly efficiently to each individual client.
As we all know and often forget, markets are made up of people. And financial decision makers have very different ways of processing information, personalities, values, goals, and decision paths. Before BehaviorQuant, there was no systematic knowledge of these aspects. But it is exactly these aspects that are critical to how successfully you steer your course through the rough waters of financial risks and returns.
So BehaviorQuant enables you to efficiently personalize your client advice, optimize your investment decisions, and avoid invisible risks in capital allocation and manager selection.
Regardless of how experienced you are as a financial professional, you will always benefit from a system that gives you systematic, quantitative knowledge about people. Our clients receive predictive knowledge about asset managers, investment teams, and clients. And they make far better decisions — whether they want to interact more effectively with their clients, optimize their team’s decision-making, hire promising professionals, or select compatible external fund managers. BehaviorQuant effortlessly makes them a master of these tasks.
Who are BehaviorQuant’s primary customers. How do you reach them?
Oberlechner: The lack of knowledge about the actual decision makers is pervasive, and it affects three kinds of financial companies in particular. These companies are also our main customers. First, we work with financial companies and asset managers who actively invest in the markets and who want to optimize the returns they generate by improving their own decision processes. Second, we work with family offices and other allocators who use BehaviorQuant to evaluate and select fund managers. And thirdly, we cater to banks and investment advisors who want to excel in advising their clients. They want to advise in a highly personalized way that is truly aligned with their clients.
How do we reach these customers? We’re proud that our first clients found us, not the other way around. Of course, in the meantime, we have grown our sales and marketing team and expanded our outreach efforts by maintaining an active presence on social and other media and attending of relevant conferences — like Finovate. And we’re finding that word of mouth from customers who love our solutions is increasingly supporting our efforts to win new customers.
Can you tell us about a favorite implementation or deployment of your technology?
Oberlechner: We have been receiving enthusiastic feedback from users on both sides of the Atlantic. It makes me and the team happy when they tell us that BehaviorQuant should be a mandatory tool in any decision-making process, when they emphasize how BehaviorQuant’s solutions help them to make better decisions in a systematic and sustainable way, and when they express their enthusiasm about how it helps them deepen their customer relationships.
But my personal favourite deployment of our technology is something that has only very recently come to market. It allows us to impact many more customers without them having to contact our friendly sales team first. Just in time for the 2023 fall season, we’ve introduced an all-new, self-service option for our financial and wealth advisors. They can now effortlessly get detailed information on our website and actively try out BQ Advisory. Then they can purchase single product uses for their work with clients. They can do this directly on the website, on a credit-by-credit basis. This self-service option and the ability to join on a credit basis alongside our attractive licensing offerings have made the of BQ Advisory much easier, especially for the many independent advisors who advise a limited number of clients. And it’s also great for advisors in large institutions who use us already and now want to easily show their colleagues what BehaviorQuant can do.
What in your background gave you the confidence to respond to this challenge?
Oberlechner: I was initially trained as a clinical psychologist in Vienna and always have been fascinated by the differences between people and the way they make decisions. As a university professor for many years, I have focused on how people actually make financial decisions — and the fact that we are all different financial decision makers. I have been fortunate to work with dozens of the world’s leading financial institutions for my research, from Goldman Sachs to Merrill Lynch to UBS. My female cofounder, Dr. Gerlinde Berghofer, and I both have PhDs and strong backgrounds in behavioral science. We have spent years doing research at Harvard, MIT, and Columbia University. We have worked with and studied hundreds and thousands of investment decision makers, from top fund managers to banks, advisors, and financial clients. From academia, we moved first to Silicon Valley and now to Vienna to translate this research into turnkey behavioral technologies for investment professionals.
Our solutions are therefore based on our many years of scientific work with many of the world’s leading investment institutions. And we have gone to great lengths to empirically test their benefits. For example, we have systematically tested the predictive power of BQ Performance with professional portfolio decision makers. While their average annual performance was about 10%, the annual performance of those whom the system predicted would outperform was more than twice as high. To give another example, in a comprehensive study of wealth advisory clients, BQ Advisory identified clients at risk of churn with 90% accuracy. Compare this to the 50% accuracy without BehaviorQuant!
Left to right: Dr. Thomas Oberlechner (CEO, Founder) and Gerlinde Berghofer (COO, Co-founder) of BehaviorQuant at FinovateEurope 2023.
What is the fintech ecosystem like in Austria? What is the relationship between techs, fintechs, and traditional financial services companies?
Oberlechner: Austria and Vienna have proven to be a fertile breeding ground for the specific type of fintech that BehaviorQuant offers. Vienna historically has played a large role in the sciences that generate a better understanding of individual and collective behavior, from Freud’s psychoanalysis to the Austrian School of Economics. After spending many years in San Francisco developing fintech, we felt very fortunate that the Austrian government offered us a generous grant to bring BehaviorQuant here.
I would describe the fintech industry as friendly and highly innovative, with some already well-known international players with roots in Austria like n26 and Bitpanda. Collaboration between traditional financial institutions and fintech startups has been a major driver of innovation in the Austrian market. Established banks are turning to fintech partnerships to expand their service offerings, improve the customer experience, and stay competitive in the digital age. Vienna has become a bit of a fintech hotspot, attracting both local and international talent and investment. Fintech companies benefit from Vienna’s consistently high rankings in international surveys of capitals’ attractiveness. The city offers an ecosystem of co-working spaces, incubators, and accelerators that foster collaboration and help fintech startups succeed.
At BehaviorQuant, we maintain close personal relationships with many of Austria’s “traditional” financial firms and banks, and we also have a very active bridge to the U.S. based on our history and our strong network on both the East and West coasts.
You demoed at FinovateEurope in London earlier this year How was that experience?
Oberlechner: Wow! We are absolutely thrilled by the incredible response we’ve received for our products! The interest and the number of new connections we’ve made were really overwhelming. We received amazing support from the organizers throughout the conference, as well as during in the preparation stage for our participation and presentation. The feedback from participants gave us an incredible boost of confidence and motivation. Thanks again to the team for a great and wonderfully rewarding experience!
What are your goals for BehaviorQuant and what can we expect in the months to come?
Oberlechner: Our goal with BehaviorQuant is simple: we want financial decision makers around the globe to become better decision-makers though our systematic behavioral data and decision support. And we want to become the world’s leading provider of predictive behavioral data for financial professionals and investment companies.
I briefly mentioned that we recently launched a self-service payment option for our advisory solution. In the coming months, exciting new self-service options are in the queue for the analysis of financial professionals with BQ Performance. This will allow individual investment professionals to easily get started with a comprehensive analysis of their personal untapped performance potential, as well as possible behavioral bias and performance blockers — before using it in the wider context, for example, with their entire team or company. So stay tuned for our upcoming releases!
Credit union marketplace Union Credit has announced a collaboration with financial resource network Your Money Further.
The partnership will enable users of Your Money Further to access the Union Credit Marketplace of pre-approved financing offers.
Union Credit made its Finovate debut earlier this month at FinovateFall.
Fresh of its debut at FinovateFall in New York last week, marketplace for credit unions Union Credit has announced a collaboration with financial resource network Your Money Further.
“This collaboration with Your Money Further demonstrates our commitment to expanding our reach to communities and creating a level playing field for credit unions, while also empowering consumers to accomplish their financial goals,” Union Credit Chief Revenue Officer and co-founder Barry Kirby said.
A CU Awareness company, Your Money Further helps consumers find the credit union that best suits their needs. Courtesy of the firm’s collaboration with Union Credit, credit unions in Your Money Further’s network will be able to access the Union Credit Marketplace. This will give the more than 12 million consumers who visit Your Money Further every year access to financing options from nearly 300 credit unions that are now eligible to join.
“Union Credit’s marketplace … (provides) our users wth firm, pre-approved offers of credit,” CU Awareness Executive Director Chris Lorence said in a statement, “eliminating the hassle and guesswork that comes with applying for a loan and empowering consumers to take commands of their finances.” Lorence added that the rising interest rate environment was a challenge that was making consumers increasingly anxious about their financial decision-making.
Union Credit gives consumers access to one-click credit offers embedded in their daily activities. The company’s marketplace enables credit unions to enter new markets both at the front end of purchases as well as part of a financing experience. Additionally, the marketplace gives credit unions the opportunity to boost loan volume and brand-awareness. Your Money Further users will be able to compare and choose offers and rates for home purchasing, equity loans and personal loans, and refinancing, as well as new and used auto loans – all from local credit unions looking to serve new credit-worthy members.
“Your Money Further is dedicated to empowering consumers to make financial decisions with confidence,” Lorence said, “and we’re here to help them learn more about the unique benefits of joining a credit union.”
CU Awareness is a subsidiary of Credit Union National Association (CUNA). Recall that CUNA announced just last month that it would merge with the other major credit union organization in the U.S., the National Association of Federally-Insured Credit Unions (NAFCU).
Headquartered in Santa Rosa, California and founded in 2022, Union Credit demoed its Always Approved Marketplace at FinovateFall 2023 this month. The startup has more than 130 million consumers in its publisher network and approved loan offers can be activated within 90 seconds. There is no cost to credit unions for participating in Union Credit’s marketplace. Co-founder Dave Buerger is Union Credit’s CEO.
Of all the takes I’ve heard about open banking over the past week, here is a great one I did not hear courtesy of The Finanser’s Chris Skinner: open banking is bad branding.
The core issue is that banking and finance is being ripped open by technologies to ensure better service, data enrichment, machine learning, more knowledge … but to achieve this, the service is no longer delivered by one company: a bank. It is delivered by multiple service providers through apps, APIs and analytics. That’s what Open Banking is all about. It just has the wrong name. We don’t want Open Banking. We want Closed Banking.
A typically heterodox take from Skinner and a prompt I would have loved to put to our open banking panelists at FinovateFall last week.
As it turned out, our conversation revolved around other issues – from the role of regulation to the differences in the evolution of open banking between countries and regions. But the same issues raised by Skinner this week were not far away. See for yourself in our brief summary of the top takeaways from our FinovateFall discussion.
User Experience Matters
One area of major agreement on the panel was that user experience was an undervalued aspect of the appeal (or lack thereof) of open banking. Imran Haider, Director of Product, Intuit Data Exchange, noted that the user experience for a customer connecting to their bank via an open banking flow can vary significantly. He cited the occurrence of everything from cumbersome flows to basic performance issues as obstacles to wider acceptance of open banking. “If we really want to unlock the power of customer permissioned data sharing,” Haider said, “then we need better standards and approaches on the UX side.”
Location Shapes the Market
Appreciating the way open banking is evolving differently across geographies was another key takeaway from our conversation on open banking. Florencia Ardissone, Head of Product, Customer Insights & ChaseNet Analytics, JP Morgan Chase, led with this insight. In places like the U.K., Europe, and Australia, open banking has evolved courtesy of a highly-engaged regulatory authority. By contrast, in countries like India, market forces have tended to lead, with the drive for greater financial inclusion often fueling innovation. As such, we should expect the evolution of open banking in the U.S. – however slow and sluggish – to develop based on the unique features of the U.S. banking system – including the massive number of players.
Open Banking Demands Identity Management
Skinner’s skepticism about consumer appetites for “open” banking is also a great way to understand another key takeaway from our Open Banking conversation: the idea that open banking is integrally linked to identity management. Sasha Dobrolioubov, Head of Partnerships at Persona, made the point that it critical that those financial institutions involved in open banking – the banks, the fintechs – need to have a “strong identity presence” to foster trust between would-be open banking consumers and providers.
Regulation Defines the Opportunity
The funny thing about the evolution of Open Banking in the U.S. is that has taken both the route of market-driven innovation as well as the path laid by regulators, particularly the CFPB. Kevin Jacques, Partner at Cota Capital, noted that the access to account data component of open banking evolved ahead of regulations. Jacques cited innovators – and Finovate alums – like Plaid, MX, and Finicity as examples.
That said, with pending CFPB regulations potentially limiting and restricting collection of account data based on a narrower view on consumer consent, innovation in this aspect of open banking is likely to be impacted.
iProov and Ping Identity announced a partnership that will bring liveness detection to Ping Identity’s DaVinci digital identity verification platform.
Liveness detection is a key component of facial biometric authentication to ensure that the person seeking access is both the right person and a real person.
Both iProov and Ping Identity are Finovate alums. iProov has won Finovate Best of Show awards on three separate occasions.
Per the partnership, iProov will deliver a DaVinci connector that integrates with its iProov Biometric Solution Suite. This will enable businesses and organizations to deploy technologies like liveness detection as part of their identity access and customer identity access management processes. Liveness detection is a key feature of facial biometric verification and authentication. It ensures that the individual seeking access is both the right person and a real person – not the product of spoofing techniques used by fraudsters and cybercriminals, techniques that range from simple photographs to deepfakes created by Generative AI.
iProov’s biometric verification solutions have been deployed by organizations from the U.S. Department of Homeland Security to UBS Group AG.
“Many organizations across the globe are already using iProov facial biometric technology to verify the online identity of citizens, workforces, and customers more securely and effortlessly than ever before,” iProov Chief Product and Innovation Officer Joe Palmer said. “Partnering with Ping Identity will help us to expand our reach even further and we’re delighted to be bringing this integration to PingOne DaVinci.”
A Finovate alum since 2017, iProov has earned Finovate Best of Show awards on three separate occasions. The company most recently demoed its technology at FinovateEurope in 2021. At the conference, iProov showed how its Flexible Authentication solution combined two of the company’s innovations – Genuine Presence Assurance and Liveness Assurance – to ensure that organizations apply the appropriate level of verification for a given situation.
Founded in 2003 and headquartered in Denver, Colorado, Ping Identity made its Finovate debut in 2012. The company’s PingOne DaVinci solution is a vendor-agnostic, no-code, identity orchestration service. DaVinci streamlines the process of integrating and deploying identity verification solutions from a variety of vendors. The solution currently has more than 100 out-of-the-box connectors to services ranging from identity to automation.
Earlier this week, Ping Identity launched its PingOne for Customers Passwordless solution. The new offering helps companies migrate toward a secure, seamless, password-free digital experience for their customers.
How can greater transparency in financial services help improve underwriting, lower risks, and create more opportunities for banks and small businesses alike?
We caught up with Matthew Parker, founder and CEO of ModernTax, to discuss how bringing more transparency to areas of finance like taxation can help credit providers make better decisions.
Founded in 2021 and headquartered in San Francisco, California, ModernTax made its Finovate debut earlier this year at FinovateSpring. At the conference, the company demoed its Business Verification Platform and Verifier API, a secure solution that enables fintechs and banks to verify tax records, business standing and KYC data.
Last month, ModernTax launched its Live Contributory Network for on-demand tax verification. The solution connects licensed tax professionals with ModernTax customers to provide on-demand, secure, and reliable tax verification services.
To start off, what is it about taxes that interests you? Of all the areas of finance, what’s special about taxes?
Matthew Parker: My first job out of college was in social services, specifically working in child support. My responsibilities included calculating the combined income of two people with misaligned incentives. This experience opened my eyes to how broken the world of tax, income, and finance can be at the ground level.
A few years later, I worked in consulting, helping banks understand what went wrong with the mortgage crisis. I then stumbled into my first entrepreneurial endeavor: a franchise tax preparation company. Over three years, I grew from one office to five and learned the ins and outs of the tax preparation business.
In 2017, I caught the technology bug and bought a one-way flight to San Francisco with the goal of starting a tax startup that utilized all of the tax data I had been accessing through my tax preparation business as alternative data to underwrite loans.
Six years later, I am building ModernTax to make use of this data to help underwrite, decrease risk, and create a more transparent financial ecosystem for U.S.-based small businesses.
Can you elaborate on that?
Parker: One thing that has consistently bothered me is the black box of tax information that lives outside of our bank feeds and accounting feeds. There is an entire business that helps accountants export accounting data into tax software (they are a customer), but that is a niche market.
The real problem we are solving is financial transparency. Many businesses that provide financial services are locked out of access to critical financial records, and 99% of U.S. businesses are not required to report any financials. This results in a massive transparency gap. Tax records are one way to fill this gap, with 15 million unique entities and 160 million individual tax returns filed annually in the U.S. alone.
How does ModernTax solve this problem better than other companies, or other solutions?
Parker: ModernTax aims to solve the problem of financial transparency by providing tax information on all U.S. small businesses, which can level the playing field and create a more transparent financial ecosystem. The commercial credit market in the U.S. alone is worth $8.8 trillion annually, and the average company in this industry generates approximately $7 billion in yearly revenue.
By utilizing tax records, which are filed by 15 million unique entities and 160 million individuals annually in the U.S. alone, ModernTax’s strategy revolves around transparency and eliminates the need for countless hours of back-and-forth communication and manual data entry to collect this information, saving commercial providers time and money, and making it easier to evaluate businesses.
What is your primary market? What has the response to your technology been like?
Parker: We primarily sell to commercial credit providers such as banks, online lenders, and other data providers that assist companies in underwriting, fraud prevention, and verifying financial documents for their customers.
We have received positive responses from data providers such as D&B, Experian, and Transunion, as well as from our first paying partner, Enigma Technologies. Moreover, ModernTax has been well-received by direct carrier insurance companies for both underwriting and claims processing on income-related products.
Are there any deployments or features of your technology that are especially noteworthy?
Parker: In the past month, we have added 14 new features. One notable observation is the need for a robust platform that allows our contributors to efficiently provide us with data. Unfortunately, the IRS does not provide adequate tools to help companies maintain transparency in their reporting. We are constantly learning from our contributors on how we can build tools to address this issue.
ModernTax is headquartered in San Francisco and was founded in 2021. What is it like to be a young startup in San Francisco today?
Parker: Personally, it feels surreal to me. I moved to San Francisco in 2017, lived through the pandemic, and experienced the boom of 2021 and the correction of 2022. Nevertheless, San Francisco is resilient. Although there are political and socioeconomic problems that come with being a high-stakes, high- reward city, founders can arrive here with nothing and become paper billionaires and liquid millionaires faster than anywhere else in the world.
This creates a tale of two cities. To be a young startup, you have a ton of resources right in your backyard, but you also realize how competitive it is. There was a new billion-dollar company born every day for a certain amount of time and now, with AI, we are seeing history repeat itself. It’s important to keep your momentum but also not get too distracted.
We also wanted to talk with you as a Black founder and entrepreneur. What advice would you give to other potential founders-of-color?
Parker: Starting a company is hard, full stop. I even joke with my wife that I don’t mind telling my 18-month-old son “no” a lot because it’s just the nature of life in general. As a black founder, I have experienced both ups and downs. George Floyd’s murder created a domino effect of predominantly white people at large institutions feeling guilty, which led to a lot of initiatives that were half-baked and more PR moves than anything. That sentiment wore off pretty quickly, especially as markets turned for the worst in 2022.
If you built your brand “how hard it is to be a black founder”, you are likely bitter right now because we learned that the market didn’t care about you being black or about what happened with George Floyd. We are now seeing pushback with the rollback of affirmative action, the lawsuit impacting Fearless Fund, and I think more challenges will come. So, I would say focus on your business, focus on your customers, and build products. If you play the victim in a game that is already hard, you decrease your chances of winning.
You demoed your technology at FinovateSpring earlier this year. What was that experience like for you and your team?
Parker: This demo helped us think about how our product helps financial institutions and we were able to demonstrate the capabilities that companies can experience by getting access to this information in real-time.
What are your goals for ModernTax? What can we expect from the company over the balance of 2023 and into next year?
Parker: ModernTax aims to provide near-instant access to verified tax and financial information through a network of licensed tax agents to create a more transparent verification process for their customers. Over the balance of 2023 and into next year, the company plans to add eight new customers, launch new features for its contributor portal and business user features, and attend various business development events and in-person client meetings.
How will AI help drive fintech innovation? How can digital transformation power greater financial inclusion? Where is the smart money investing in fintech? What will be the Next Big Thing in financial services?
FinovateFall wrapped up just days ago – and much of the three days of fintech demoes, keynote addresses, and panel discussions was dedicated to providing answers to these questions.
Here we’ll reflect of those responses and highlight some of the key takeaways from our mainstage fintech experts, our innovative demoing companies, and Finovate attendees themselves.
What we learned from the experts
Our invitation-only, Leaders+ session held the evening before the conference began featured a number of insights on the present and future of fintech. The lead-off address on major fintech themes set a tone for our invitees that foreshadowed much of what the rest of our attendees would see and hear once FinovateFall got underway the following morning.
Analyst and expert Alex Johnson of Fintech Takes provided one of the more surprising insights of the night in his keynote on top trends in banking and fintech. Johnson suggested that the relatively unglamorous areas of the industry may turn out to be the “Coming Attractions” in terms of fintech innovation over the near term. Much of the fintech revolution to date, Johnson explained, involved solving consumer problems – many of them bearing an uncanny resemblance to the problems of the company founder’s themselves.
As innovation in this space runs its course, opportunities in other, neglected areas can emerge. Johnson encouraged invitees to keep an eye on “the boring stuff” like payments infrastructure and the B2B world when gauging the overall level of innovation and opportunity in the fintech and financial services industry.
Johnson also observed that we should continue to see fintech deployed to solve problems that are not necessarily considered to be financial problems. Our own Finovate research team has noted the increased news flow from companies looking to help small businesses survive supply chain financing challenges. It was heartening to hear Johnson use the example of fintechs providing financing to SMEs caught in supply chain snafus in that part of his presentation.
The other major topic of conversation in our Leaders+ session was AI and the metaverse. This was another discussion that extended over the balance of FinovateFall. The jury may still be out on the impact of the metaverse in banking. But the potential of AI in fintech and financial services seems clear.
From greater personalization of services to more efficient, more secure, and more innovative financial products, banking and financial services are ready to find roles for AI.
Start with Generative AI. One commonality between keynote speakers on AI was to compare the adoption rate of a Generative AI solution like ChatGPT to the adoption rate of previous popular technologies from the past. Think everything from Napster to LinkedIn to TikTok. GenerativeAI was clearly in a class of its own. This sentiment – that AI is here to stay – was echoed in virtually every discussion of the technology – from Leaders+ and keynote speaker Tomas Chamorro-Premuzic to Analyst All-Star Tiffani Montez of Insider Intelligence. At one point, even David Letterman’s classic skewering of the Internet in an interview with Bill Gates back in 1995 (“Does radio ring a bell?”) was deployed to remind our FinovateFall audience that we’ve underestimated innovation before.
What we learned from the innovators
There is no better way to feel the pulse of fintech innovation than by attending the Demo Days at a Finovate event. And there is no better distillation of what direction fintech innovation is going than the companies that take home Finovate Best of Show awards.
FinovateFall was no exception. Of the six companies that won Best of Show last week, we saw three companies demo solutions in areas that observers long have said are ripe for innovation. Chimney demoed a solution for homeowners that gave them actionable advice on their home’s value and equity, their borrowing power, and the availability of relevant pre-qualified offers. Trust & Will demonstrated technology that streamlines and simplifies estate planning and settlement with attorney approved, legally valid documents. Wysh, an innovator in the insurance space, demoed a deposit solution that provides micro-life insurance coverage of up to 10% of the account holders balance.
Best of Show winning companies like eSelf.ai showed fintech to be at the cutting edge of enabling technologies like AI, as well. The Israel-based company, whose founder helped launch three-time Finovate Best of Show winner Voca.ai, demoed eSelf.ai’s AI-powered client interaction solution that provides human-like conversation and engagement. Mahalo Banking, headquartered in Michigan and also winning Best of Show in its Finovate debut last week, demonstrated fintech’s commitment to diversity and inclusivity. The company leverages innovative technology to deliver online and mobile banking solutions for credit unions that help them serve neurodiverse customers with visual, cognitive, and other challenges.
And the return of Debbie to the Best of Show winner’s circle is a reminder that solutions that respond to the basics of financial wellness – saving and reducing debt – remain critical components of the fintech ecosystem. Having won Best of Show in its Finovate debut last fall, Debbie was back with new tools to help users manage debt, including a credit card refinancing marketplace for credit unions.
Where we go from here
There were a few dogs that did not bark – at least not as loudly as they once did. Cryptocurrency and digital assets, for example, did not draw as much attention this year as they have in previous years. We’ve seen more from mortgagetech, as well. It is hard not to wonder what the impact of higher interest rates will have on this industry and other consumer-facing, interest-rate sensitive sectors and services from lending to Buy Now Pay Later.
Therein lies the opportunity. The problems may seem more intractable and the solutions not as sexy as they used to be. But the eagerness of founders and financial institutions to embrace both new technologies like digitization, automation, and AI – as well as new causes like financial inclusion and sustainability – is a strong sign for the future of our industry.
They are cheering in Times Square tonight as the winners of Best of Show at FinovateFall 2023 are crowned. After two days of live fintech demos from more than 60+ innovative fintechs, our delegates have decided. Here are the winners of Best of Show for FinovateFall 2023.
Chimney for its Chimney Home solution that gives homeowners actionable advice about their home value, equity, borrowing power, and pre-qualified offers. Video.
Debbie for its rewards app for debt payout and its new credit card refinance marketplace for credit unions. Video.
eSelf.ai for its technology that delivers the next generation of client-financial institution interaction, enabling human-like conversations and efficient personalization. Video.
Mahalo Banking for its intuitive and neurodiverse-inclusive online and mobile banking solutions for credit unions with tight core integrations. Video.
Trust & Will for its technology that simplifies estate planning and settlement with attorney-approved, legally valid documents. Video.
Wysh for its innovative deposit solution called Life Benefit that provides micro-life insurance coverage up to 10% of an accountholders’s balance onto an existing deposit account. Video.
We want to thank our demoing companies, our partners, our sponsors, and – last but not least – our valued attendees whose engagement continues to make Finovate a must-attend event on the fintech conference calendar. We look forward to seeing you again next year in The City That Never Sleeps for FinovateFall 2024!
Notes on methodology:
1. Only audience members NOT associated with demoing companies were eligible to vote. Finovate employees did not vote.
2. Attendees were encouraged to note their favorites during each day. At the end of the last demo, they chose their six favorites.
3. The exact written instructions given to attendees: “Please rate (the companies) on the basis of demo quality and potential impact of the innovation demoed.”
4. The six companies appearing on the highest percentage of submitted ballots were named “Best of Show.”
5. Go here for a list of previous Best of Show winners through 2014. Best of Show winners from our 2015 through 2023 conferences are below:
