Dealstruck Raises $8 Million in Funding, $50 Million for New Credit Facility

Dealstruck Raises $8 Million in Funding, $50 Million for New Credit Facility

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In an investment that brings its total lending capacity to more than $100 million, direct lender Dealstruck has raised $58 million in new funding. The funding comes in the form of a $50 million credit facility led by Brevet Capital Management and the completion of a Series A round led by Trinity Ventures.

Co-founder and CEO of Dealstruck Ethan Senturia said, “Recent IPOs by alternative lenders validate an increasing need for new sources of growth capital. We look forward to building on our growth to date by setting even more businesses on the path to becoming bankable.”

The funding will be used to provide funding to small businesses across the country. Dealstruck has loaned more than $50 million since inception, and says it is the fastest online direct lender to reach and surpass the “$50 million lent” milestone.

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(Left to right): Dealstruck CTO Russell McLoughlin and CEO Ethan Senturia presented at FinovateSpring 2014 in San Jose.

Talking about his firm’s investment, Doug Monticciolo of Brevet Capital focused on Dealstruck’s role in supporting small businesses, which Monticciolo called “an important engine of economic growth.” Added Noel Fenton of Trinity Ventures, “When small businesses succeed, it’s a win for everyone. Dealstruck is poised to help thousands of small- and medium-sized businesses grow.”

Operating in 43 states, Dealstruck offers three loan products: a term loan, an asset-based line of credit, and an inventory line of credit. Term loans are available up to $250,000, with lines of credit available as high as $500,000. Approved loans are funded within 48 hours.

Dealstruck made its Finovate debut at FinovateSpring 2014 in San Jose, where it demonstrated its Investor API. The company was founded in July 2012 by Ethan Senturia, CEO, and Russell McLoughlin, CTO, and is headquartered in Carlsbad, California.

Finovate Alumni News

On Finovate.com

  • Dealstruck Raises $8 Million in Funding, $50 Million for New Credit Facility
  • BBVA Taps Dwolla for Real-time Money Transfers

Around the web

  • Vouch launches its social network for credit. See Vouch at FinovateSpring 2015 in San Jose.
  • Retail Week features Zooz as its Start-up of the Week.
  • Vermont Federal Credit Union partners with Insuritas to open and manage turnkey insurance agency.
  • Optimal Payments integrates Jumio’s Netverify into its NETELLER stored-value service.
  • BillGuard launches custom categories capability.
  • Taulia Launches Research Arm, Taulia Labs.
  • Norway Registers Development agrees to take 80% stake in Etronika.
  • PayNearMe partners with online rent payment network RentMoola to enable landlords to take rent in cash online.

This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

Finovate Debuts: StreetShares Helps Small Businesses Raise Capital

Finovate Debuts: StreetShares Helps Small Businesses Raise Capital

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StreetShares is a specialist in what the company calls “affinity-based social lending.” The idea is to take crowdfunding a step further by connecting small business owners in need of capital with investors with shared affinities. The first shared affinity StreetShares has been able to serve is the veteran and veteran-owned business community.

Calling the platform “Shark Tank Meets eBay,” business owners on StreetShares pitch their business to interested, accredited investors who compete for the opportunity to fund the loan.

“We are bringing the ‘peer’ back to peer-to-peer lending in the U.S. market,” StreetShares CEO Mark Rockefeller said, in explaining P2P lending’s origins in Great Britain and its evolution in the U.S. “We are talking about veterans funding veterans; female executives funding female executives; alumni from one school funding fellow alums from the same school.”

StreetShares’ stats:

  • Founded in July 2013
  • Headquartered in Reston, Virginia
  • CEO Mark Rockefeller, COO Mickey Konson, and CTO Ben Shiftlet are co-founders
  • Raised more than $1 million in funding
  • Maintains 12 FTEs
  • Provides small business loans of up to $50,000

The story

The idea behind StreetShares originated from the concept of the GI Bill, which gave millions of servicemen returning from World War II the opportunity to buy homes, start businesses, and raise families, giving birth to a true middle-class in America.

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(Left to right): COO Mickey Konson and CEU Mark Rockefeller presented StreetShares at FinovateEurope 2015.

And while the circumstances have changed since 1945, many of the challenges remain: entrepreneurs, many of them veterans, still struggle to raise the capital help get their businesses off the ground or to move to the next level in terms of growth and expansion.

This is where StreetShares comes in. The company believes that businesses are more likely to get funded by (a) investors who have some sense of connection with the borrower and (b) investors who feel as if they know exactly where a business is headed and how it plans on getting there.

Add to this the extensive information about applicants provided to potential investors—and located on each applicant’s “tile”—and an investor has everything needed to make a lending determination. This includes information on the business itself, with links to websites and social media; a pitch with the ability to attached additional information, including spreadsheets, background on the applicant; and information on the status of the bidding for that company’s loan.

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What do businesses need in order to apply for a loan via StreetShares? SMEs can apply online or by phone, and any U.S. citizen-owned business that has been in operation for at least a year is eligible. Businesses must earn a minimum amount of revenue, be incorporated, and have a business guarantor “with reasonable credit.” More information on the application is available at StreetShares.com.

Individuals with “accredited investors” can participate on the platform. Accredited investors need a StreetShares account, and must have an income of $200,000 or more ($300,000 for a couple), or have a net worth of $1,000,000, excluding the value of a primary residence.

At FinovateEurope 2015, StreetShares showed its auto-invest feature. Auto-invest enables the platform to make investments for the investor based on a set of prearranged criteria such as risk-tolerance level, affinity type, interest rate, bid amounts and more. Once set, the platform bids on open loans on the investor’s behalf. The investor can review the bids in the invest tab, as well as in the investor portfolio.

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The future

StreetShares believes three key factors distinguish it from others in the SME lending space. The first, and most prominent, is the use of social affinity groups to “build bonds of trust” between borrowers and lenders. This trust results in lower-cost loans. The second factor is a fully transparent platform in which all investors, retail and institutional, compete for loans fairly side by side. And the third factor is co-investment, in which StreetShares puts its own capital to work as a co-investor on each loan that is made.

The company remains focused on expanding its capacity to provide loans, especially in the below-$100,000 category, which Rockefeller says is a $136 billion market. “We think lending is about risk and risk is about data,” Rockefeller said from the Finovate stage in February. “But what if we could tap into human trust, and apply that to lending. We think we have a way.”

That way has been brightened by news last month that StreetShares has picked up a $200 million commitment from Direct Lending Investments, Community Investment Management (CIM), and Eagle Bank Corporation to help fund loans. Speaking for Direct Lending Investments, Brendan Ross said, “Our mission is to put money to work funding small businesses. We are excited about this business partnership with StreetShares and the unique business owners they serve.”


Watch StreetShares demo its technology live at FinovateEurope 2015.

 

ZenPayroll Raises $60 Million in Round Led by Google Capital

ZenPayroll Raises $60 Million in Round Led by Google Capital

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Forget about presidents and painters. The next face I want on my paper currency is that of the ever-smiling ZenPayroll CEO Joshua Reeves, whose startup just raised $60 million in a round led by Google Capital.

Also participating in the Series B were Emergence Capital Partners, General Catalyst, Google Ventures, Kleiner Perkins Caulfield & Byers, and Ribbit Capital. The investment round takes ZenPayroll’s total funding to more than $85 million and, according to TechCrunch, values the company at more $550 million.

Coverage in the New York Times noted that round-leader Google Capital typically specializes in funding “older companies with more established businesses.” Google Capital partner Laela Sturdy pointed to the way ZenPayroll “changed payroll from an impersonal transaction into a meaningful connection between employers and employees.” And beyond ZenPayroll’s capacity to “solve every business owner’s biggest headache”—as another observer put it—Sturdy had high praise for the company’s human capital, as well. “We’re big believers in Josh and his team, and big believers in where they can take this company.”

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Above: ZenPayroll co-founder and CEO Joshua Reeves presented at FinovateSpring 2014 in San Jose.

ZenPayroll offers all of its features: direct deposit; unlimited payroll runs; year-end W-2s and 1099s for $29 per month plus $4 per employee. There is no longer-term contract, and nothing to download. The online platform is accessible 24-7 from any web-enabled device. ZenPayroll is currently promoting a 2-month, free trial.

We last reported on ZenPayroll in September when the company opened up its API. The company processes billions of dollars in annual payroll for more than 10,000 SMEs in 47 states and the District of Columbia. With the additional funding, ZenPayroll anticipates going nationwide by the end of the month.

ZenPayroll made its Finovate debut last year at FinovateSpring 2014 in San Jose, Calif. Founded in October 2011 by Reeves, Tomer London (CPO), and Edward Kim (CTO), the company is headquartered in San Francisco, California.

FinovateFall 2015: Ladies and Gentlemen, Launch Your Applications!

FinovateFall 2015: Ladies and Gentlemen, Launch Your Applications!

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Spring may have sprung, but for many here on the Finovate team, the fall season is already on our minds.

Why? Because the application-window for companies looking to demo their latest fintech innovations at FinovateFall 2015 in New York is now open! And that’s a big deal for fintech players of all shapes and sizes. For example:

  • Startups ready to show new technology in front of an audience of banking executives, press and industry analysts, fellow fintech firms and venture capitalists.
  • Industry veterans eager to show the world that they’ve still got more than a few innovations to showcase.
  • International firms looking to launch, or make serious inroads, into North America.
  • Direct-to-consumer financial firms with a digital value-proposition new to the industry.

If this describes you and your technology, then FinovateFall 2015 may be the opportunity you’ve been waiting for!

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FinovateFall 2015 returns to the New York Hilton Midtown for two days of technological innovation and intense networking. The conference will be held on 16/17 Sept 2015, featuring our signature 7-minute live demos focused on the “special sauce” of true innovation in fields ranging from authentication and digital investing to mobile payments and P2P lending.

Watch last year’s presenters in the FinovateFall archives. For a refresher on last year’s Best of Show winners, read our FinovateFall 2014 Best of Show review.

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For attendees: Be a part of the live audience at FinovateFall 2015. Register today and take advantage of special pre-sales savings!

For presenters: Demo your technology on stage at FinovateFall 2015 before an audience of nearly 1,500 financial professionals. Email us at [email protected] for information on how to apply. The application window for FinovateFall 2015 opens today and applicants are encouraged to apply as early as possible.

Other questions? Send us an email at [email protected] or contact Finovate Event Director, Greg Palmer, 1-800-418-0980.

Finovate Debuts: LockByMobile Lets Cardholders Lock Out Fraud

Finovate Debuts: LockByMobile Lets Cardholders Lock Out Fraud

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The concept behind LockByMobile is simple: use mobile devices to give cardholders an added level of security against credit and ATM card breaches. For Smart e-Money, the company behind LockByMobile, the strategy was to leverage and deploy the award-winning technology it had already patented and deployed in another context.

“What if you could be one step ahead of fraud?” said Smart e-Money VP of Innovation Angelito Villanueva from the Finovate stage in February. “What if you could add a hard lock that only your customers could lock and unlock, just with a swipe of their finger using their smart phone?”

“Wish it could be done? Well, this solution already exists, and we call it LockByMobile.”

LockByMobile stats:

  • Founded in 2000
  • Headquartered in Manila, Philippines
  • Operates as a subsidiary of Smart Communications
  • Serves more than 72 million subscribers
  • Has more than 200 employees

The story

The key technology that makes LockByMobile work has been around since 2007 when it was first developed by Smart e-Money as a security tool for its prepaid wallets. The technology won an award in 2009 for “Best Mobile Security Feature” at GSMA in Barcelona, Spain, but it is the enhancement and deployment of the technology as a way to make cardholders more secure that brought the company to London for FinovateEurope 2015.

To get started with LockByMobile, users download the app, register, and then sign in with their mobile number and a PIN. Users will be able to see their various card accounts on file with the participating issuing banks. Locking and unlocking cards is as easy as a swipe of a finger, and a bright-red highlighting makes it easy for users to see at a glance which of their cards are locked and which are not.

If a transaction is attempted on a locked card, the cardholder will get an SMS notification to their mobile device. And real-time functionality means that even in the case of an accidental locking, there is no friction or inconvenience when it comes to unlocking the card on the spot.

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There are a variety of ways LockByMobile is helpful to cardholders. Consumers who lose their cards or have their cards stolen can use the mobile app to lock their cards to prevent use. But LockByMobile points out, even though cards are only used once or twice a day on average, “your card is potentially exposed to fraud all the time.” In other words, even with your card “safely” in your pocket or purse, locking the card using LockByMobile’s technology provides valuable anti-fraud protection.

In addition, the platform’s spending controls can be used to manage supplemental cards given to children or be used by caregivers helping seniors avoid financial exploitation. LockByMobile allows transactions to be limited by channel, amount, location, type of merchant, and type of currency.

The future

LockByMobile caught the attention of more than one observer at FinovateEurope 2015. Let’s Talk Payments praised the company as an added layer of security for ATM and credit-card users. Data monitor’s profile of LockByMobile’s Finovate debut led to a 4 out of 5 rating, including high marks for being a potentially “game-changing” opportunity for banks.

Going forward, the company plans to launch LockByMobile in “several financial institutions across different countries” in 2015, as well as build relationships with a number of potential partners.

“We are constantly improving our offer and enhancing the platform with new functionalities,” said Villanueva from the Finovate stage. Added Guillaume Danielou: “We are currently developing a version for Corporate Cards where the business owner can control the limits and usage for his employees’ business cards, as well as benefiting from the Lock/Unlock feature to protect the cards against fraud.”


Watch LockByMobile’s live demo at FinovateEurope 2015.

 

Finovate Alumni News

On Finovate.com

  • Finovate Debuts: LockByMobile Lets Cardholders Lock Out Fraud
  • ZenPayroll Raises $60 Million in Round Led by Google Capital
  • FinovateFall 2015: Ladies and Gentlemen, Launch Your Applications!
  • Finovate Debuts: Pirean’s “Access: One” Keeps Access Management Simple

Around the web

  • Feature on automation in debt collection highlights Global Debt Registry and True Accord. See True Accord at FinovateSpring 2015 in San Jose.
  • Ripple adds dropdown customizations to its price charts.
  • Huffington Post: Trulioo, Making Trust Online an Option.
  • Callcredit Information Group partners with Trulioo. Check out Trulioo at FinovateSpring 2015.
  • GMC Software Technology Named SIIA Software CODiE Award Finalist.

This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

EZBOB Raises £3 Million in Private Equity Investment

EZBOB Raises £3 Million in Private Equity Investment

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U.K.-based SME lender EZBOB has raised £3 million in new capital courtesy of a private equity investment.

The investment takes the company’s total capital to more than £16 million (more than $23 million USD), including a £7 million debt-financing round in February 2014.

EZBOB made headlines this spring with its partnership with online Chinese marketplace Alibaba. A loan guarantee agreement with the European Investment Fund (EIF) in March enabled EZBOB to increase its loan volumes by up to £40 million over the next two years. EZBOB acquired Everline, Wonga’s small business financing unit, in February.

A two-time Finovate alum, EZBOB last appeared on the Finovate stage as part of FinovateEurope 2014 conference. The company was founded in November 2011 by Tomer Guriel, CEO, and Sharone Perlstein, business development, and is headquartered in London.

PayPal Pays $280 Million for Paydiant

PayPal Pays $280 Million for Paydiant

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Mobile payments innovator Paydiant has been acquired by PayPal in a deal believed to be worth $280 million. The acquisition, announced in March, closed today.

A specialist in white-label, cloud-based mobile payment, cardless ATM access, and offer-redemption and -loyalty solutions, Paydiant gives merchants, FIs, and processors the ability to provide and run their own mobile solutions under their own brands.

Welcoming Paydiant to the PayPal family in the company blog, PayPal President and CEO Designee Dan Schulman highlighted the role Paydiant played in helping businesses like Capital One and Subway launch mobile payments and rewards programs. Schulman also reminded readers that Paydiant provides the white-label, mobile platform for MCX’s CurrentC mobile wallet, which is supported by many of the largest retailers in the world, including CVS, Exxon, and Walmart.

According to Schulman, the goal of the acquisition is to offer merchants the opportunity to build their own branded wallets. He explained that this “will accelerate mobile-in-store payments … and drive consumer engagement through loyalty, offers, and the prioritization of preferred payment types, such as store-branded credit cards and gift cards.”

Paydiant was founded in 2010 by Chris Gardner and Kevin Laracey. Headquartered in Wellesley, Massachusetts, the company made its Finovate debut at FinovateSpring 2013 in a joint demonstration with FIS.

Finovate Debuts: Telenor Banka’s Synergy of Telco and Banking Brings Financial Innovation to Serbia

Finovate Debuts: Telenor Banka’s Synergy of Telco and Banking Brings Financial Innovation to Serbia

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Telenor has leveraged its success as a telecommunications company to build the first fully online and mobile-direct bank in Serbia, Telenor Banka. For its Finovate debut, the company teamed up with Asseco SEE to demonstrate its Automated Online Handset Loan powered by ASEB Multichannel Solution.

The solution enables customers to easily apply for a loan to purchase a new mobile device. Using a combination of banking and telecommunications transaction data, offers are customized, relevant, and likelier to be used.

Telenor Banka facts:

  • Opened in September 2014
  • Has 130 employees
  • Part of the Telenor Group with 186 million mobile subscriptions in 13 markets

The story

The “Tele” in Telenor stands for Telco, which is a large part of what Telenor Banka brings to the table. The bank was founded in 1996 as ALCO bank, but changed its name and ownership to Telenor Banka in 2014, when it became a member of Telenor Group. The goal was to provide the citizens of Serbia with modern and innovative mobile and online financial services through Telenor Banka.

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At left: Martin Navratil, chairman of the executive committee for Telenor banka, presented at FinovateEurope 2015.

The presented innovation platform enables Telenor Banka’s customers in Serbia to get customized offers by two industries in one place— telecommunications and banking. The demo version of the solution is an example of a fully automated and personalized online offer of purchase loans for smart devices, personalized to the customers’ needs in real time.

While the company anticipates adding other service providers to this centralized dashboard, the current technology already offers customers conveniences such as a bill pay solution called “Bills on Click”; P2P payments to a phone number or email; and, launched in Dec 2014, the interest-free loans for purchasing smart devices from Telenor.

And in partnering with Asseco SEE, Telenor Banka has extended this service a step further with its Automated Handset Online Loan. The access to banking and telecommunications data alerts the platform that a bank customer may be in the market for a new smartphone. Moreover, the platform can extend a loan to the bank customer that not only offers rates and terms that are compatible with the customer’s financial situation, but also personalized telecommunications services and products that would make the most sense given the customer’s history.

Moving back and forth between the Telco and the banking functions of the platform is seamless for both the customer on the front end and the bank on the back end. Credit scoring, AML and KYC all take place on the platform, and relevant agreements and contracts from both the telecom and the bank are generated immediately for the consumer.

The future

Telenor Banka followed up its Finovate debut with a major milestone: the company celebrated its 50,000th account opened, making Telenor Banka one of the fastest-growing banks in the CEE region. According to Martin Navratil, chairman of the executive board and managing director, Telenor Banka is “focused on providing easy-to-use financial services and shifting from traditional banking to innovative, customer-oriented mobile solutions.” The technology demonstrated in February is scheduled to be available in the second half of 2015.

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Seven months after its launch, the company has enjoyed growth of more than 50% a month, and sees its future very much focused on continuing to serve the Serbian market. “We will probably see examples of other services expanding to a smartphone user-interface as well,” Navratil said. “The more players joining the arena, the faster the market will develop and move forward.”

Read our Finovate Debut feature of Telenor Banka’s FinovateEurope 2015 partner, Asseco SEE.


See Telenor banka’s live demonstration from FinovateEurope 2015.

Multifactor Authentication Specialist Toopher Acquired by Salesforce

Multifactor Authentication Specialist Toopher Acquired by Salesforce

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(Left to right): Toopher co-founders CTO Evan Grim and CEO Josh Alexander demonstrated their multifactor authentication technology at FinovateFall 2014.

When word hit the Finovate office that Austin, Texas-based, multifactor authentication specialist Toopher had agreed to be acquired by Salesforce, we all had the same question in mind:

Will Salesforce get the drone too?

What’s certain is that the purchase of Toopher will give the cloud-computing innovator a powerful solution to offer customers looking for multifactor authentication.

Terms of the acquisition were not disclosed. Including $200k in debt financing raised in March, Toopher’s total is $3 million.

According to the Austin Business Journal, Toopher’s seven workers will remain in Austin as employees of Salesforce. The Journal also notes that conversations between Toopher and Salesforce began a year ago, with “acquisition discussions” starting in 2015. The company has discontinued selling its own products as it makes the transition (although Toopher’s”pre-acquisition” developer portal remains open).

Writing at the Toopher blog, CEO Josh Alexander explains the move in his typically colorful fashion:

We here at Toopher have a standard question we ask new Toopherarians: ‘If you could have a superpower, what would you choose?’ Even with the normal, attractive archetypes, the most common response from a Toopherarian is to be able to provide even greater levels of security without affecting the user experience.

And with the Salesforce acquisition, Toopher now considers itself appropriately “superpowered.”

Toopher was founded in September 2011 and is headquartered in Austin, Texas. The company demoed its technology at both FinovateFall 2014 and FinovateFall 2013.

Finovate Debuts: Asseco SEE Brings Real-time Big Data Processing to Multichannel Banking

Finovate Debuts: Asseco SEE Brings Real-time Big Data Processing to Multichannel Banking

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In some parts of the world, telecommunications companies have aggressively worked to disrupt financial services. This is very much the case in Central and Southern Europe where companies like Telenor Banka and Asseco SEE have teamed up to address relatively low adoption rates of online and mobile banking, despite the region’s high levels of connectivity.

Along with Telenor Banka, Asseco SEE made its Finovate debut in February 2015 (read Our Finovate Debut post on Telenor Banka here), unveiling their Automated Online Handset loan offer and technology solutions that made it possible. Asseco SEE is the largest provider of proprietary software solutions in the SEE (South Eastern European) region and offers end-to-end solutions that include core banking, multichannel (including ATM), and a fully native mobile app.

Asseco SEE facts:

  • Founded in 2007
  • Headquartered in Warsaw, Poland
  • Asseco SEE has more than 1,400 employees
  • Piotr Jelenski is President of the Management Board

The story

Asseco’s business lines include production of software solutions for banking, telecommunications and government, complete payment solutions (ATM and PoS implementation and services), as well as system integration.

Asseco SEE’s partnership with Telenor Banka provides a complete end-to-end solution for banking, and also a mature and flexible system that helps identify the right offers at the right time.

In addition, Asseco SEE provides a fully automated process to support the development of new products.

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(Left to right): Asseco Group President of the Management Board, Piotr Jelenski, and Telenor banka Chairman of the Executive Committee, Martin Navratil

The solution, in large part, was Asseco’s ASEBA Multichannel Hub. The hub includes services for a variety of channels (web, mobile, ATM, branch, call center, etc.), as well as fundamental business operations that can be integrated with external legacy back-end systems. Thanks to this ability of integrating with external systems, Telenor Bank achieves the kind of “synergy” between telecom and the bank that makes the latter’s service unique: a customized loan offer created from data derived from two different companies.

The future

Asseco SEE is confident that the SEE region will experience the digital transformation of banks that is taking place elsewhere in Europe and around the world. Moreover, the company is confident that it will play a major role in making this happen, saying it has the experience, know-how, and full potential to help banks and other FIs make the transition.

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The ASEBA Multichannel Hub is an example of this know-how. By creating an integrated e-banking solution, Asseco SEE has made it possible for banking services to be distributed over alternative channels, e.g., mobile. This provides new opportunities for financial institutions to better engage current customers and attract new ones with more personalized services.

Read our Finovate Debut feature of Asseco SEE’s FinovateEurope 2015 partner, Telenor Banka.


See the live demonstration with Asseco SEE and Telenor Banka from FinovateEurope 2015.