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Finovate Blog
Tracking fintech, banking & financial services innovations since 1994
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 research@finovate.com. 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.
Global analytics software company FICO has teamed up with Jersey Telecom to offer a new solution to combat Authorized Push Payment (APP) fraud.
The new offering, the FICO Customer Communications Service Scam Signal, combines real time network data with customer and payment data to identify and mitigate APP fraud as it happens.
FICO made its Finovate debut at our developers conference, FinDEVr New York, in 2016.
The solution, the FICO Customer Communications Service Scam Signal, works by identifying the most relevant telephony signals that indicate a scam is taking place. The new offering represents the first real-time combination of telephony data, customer data, and payment data to deal with the problem of Authorized Push Payment fraud.
“Authorized Push Payment fraud is where customers are tricked into sending authorized payments to scammers,” JT Head of Mobile Intelligence Solutions Clare Messenger said. “This type of fraud is growing around the world; 2023 losses in the U.K. alone reached £460 million. To protect customers from being caught by such scams, the new FICO and JT solution enables direct intervention with the customer to quickly determine if a payment should proceed.”
To achieve the new solution, Jersey Telecom worked with the Global System for Mobile Communications Association (GSMA) and the U.K. Mobile Network Operators to access mobile network insights while adhering to a privacy compliance framework that protected customers’ personal information. Meanwhile, FICO uncovered strong correlations between a customer’s mobile phone behavior and the potential that an active scam is occurring. The Scam Signal leverages this combination of real-time network data, customer data, and payment data to identify and mitigate the social engineering tactics that can trick and ultimately defraud account holders.
“The integration of Scam Signal within the FICO Customer Communications Service allows banks to present customers with personalized, omni-channel, and highly contextualized messages that break the scammer’s spell for high-risk activities,” FICO VP of Product Management Adam Davies said.
“These messages can be built into conversation ‘flows’ that respond in real-time to the actions the customer takes,” Davies explained. “For example, if a customer hesitates or looks to progress a payment, additional messages can be sent, and different options offered, such as suggesting delaying the payment or offering to speak to a fraud prevention specialist.”
The new offering is currently available in the Channel Island of Jersey, the U.K., and Spain, and there are plans to eventually expand to additional markets. Nevertheless, FICO reported that “major high-street banks in the U.K.” are already deploying Scam Signal. One institution piloting the new technology said that it had reduced the number of people being scammed by 41%, lowered fraud losses from scams by 44%, and reduced the number of false positives by 55%.
Last month, Scam Signal won the Silver Medal at Datos Insights’ Fraud Impact Awards for “Best Scam and APP Fraud Prevention” solution. The technology has also been shortlisted for the “Anti-Fraud Solution of the Year” award at the 2024 U.K. Payments Awards.
FICO made its Finovate debut in 2016 at our developers conference, FinDEVr New York. Today, businesses in more than 100 countries use FICO’s technology and solutions to defend customers against fraud, advance financial inclusion, boost supply chain resiliency, and more. The company’s FICO Score has become the standard measure of consumer credit risk in the U.S., and is used by 90% of the country’s top lenders.
Founded in 1956 and headquartered in San Jose, California, FICO is publicly traded on the NYSE under the ticker FICO. The company has a market capitalization of $47 billion.
Summer’s officially over. But you’ve still got plenty of time to catch up on episodes of the Finovate Podcast that you might have missed while on vacation or just taking a break from the fintech buzz.
EverBank is a nationwide specialty bank that serves both consumer and commercial clients. A pioneer in online banking, EverBank is headquartered in Jacksonville, Florida.
Fintech Sandbox offers entrepreneurs free access to data and resources in order to build their early-stage fintech solutions via its Data Access Residency program. Fryer is Executive Director.
Finovate Podcast host Greg Palmer interviews Jeff Trammell of Merchants & Marine Bank on the issue of cannabis banking and community banks. As a COO, Trammell offers his perspective on implementing new programs. Ep 225.
Headquartered in Pascagoula, Mississippi, Merchants & Marine Bank is a community bank that has served customers in the Gulf Coast region of the U.S. for more than 120 years.
Author of Web3 in Financial Services, Martins’ book examines the transformative potential of Web3 in the financial services space.
Alex Harris of Fiat Ventures shared his 2024 mid-year review this summer. In this podcast conversation with host Greg Palmer, Harris handed out a few tips for founders and gave his prediction for what’s next for the fintech industry. Ep 223.
Headquartered in San Francisco, Fiat Ventures is an emerging VC focused on supporting the next generation of market-leading, early-stage fintech companies. Harris is Co-Founder and General Partner.
Fall is officially here! A favorite season for many, autumn also marks a likely acceleration in fintech and financial services news and activity. Be sure to check Finovate’s Fintech Rundown all week long for the latest in headlines and news updates!
Nasdaq Verafin announces enhancements to its Targeted Typology Analytics suite to add detection capabilities for terrorist financing and drug trafficking activity.
This week, we turn to Uzbekistan, a Central Asian nation and former Soviet republic with a population of just over 37 million. The doubly-landlocked country (one of only two in the world) has been transitioning toward a market economy for years and has been credited by the Brookings Institution for its high economic growth and low public debt. A major producer and exporter of cotton, Uzbekistan has leveraged major natural gas supplies to be one of the largest electricity producers in the region. HSBC has predicted that the country will have one of the fastest-growing economies in the next few decades.
We interviewed Oliver Hughes, former CEO of Tinkoff and current Head of International Business for TBC Bank Group – which recently expanded to Uzbekistan. In our extended conversation, we discussed TBC’s goals in Uzbekistan, nature of banking in Central Asia, what key financial services are in the most demand, as well as how enabling technologies are helping financial institutions in the region better serve their customers.
You joined TBC a few years after the bank expanded to Uzbekistan. First, what drew you to TBC?
Oliver Hughes: Joining TBC in Uzbekistan was a great opportunity for two reasons. First, the market itself is full of potential and ripe for disruption. A young, growing population of 37 million people, of which 59% are under the age of 30, economic reforms and liberalization, a favorable macroeconomic environment and an under-penetrated digital banking market create huge demand for world-class online banking services, so I could see a clear path to success.
Second, I knew that TBC Uzbekistan would be a great place to work and an environment that would allow me to make an impact. Since coming to Uzbekistan in 2019, TBC has built a world-class team, secured a banking license, reached profitability within two years, and outlined a vision that aligns with my previous experience of building and scaling a best-in-class, profitable digital banking ecosystem.
Uzbekistan was TBC’s first international market outside of its native Georgia. Why Uzbekistan?
Hughes: Uzbekistan is a hidden gem, previously largely overlooked by the international investment community, but slowly getting on the radar of investors and fintech heavyweights. It is Central Asia’s largest country by population, which is young and getting younger each year. This supports demand for modern digital financial services. The country has also embarked on a large-scale program of economic reform and liberalization, empowering the private sector and starting to attract more international investment.
TBC Uzbekistan is part of London-listed TBC Bank Group and we are proud to play our part in attracting major global investors to the country. Through TBC, large global investment funds like Fidelity, JPMorgan Asset Management, Schroder, BlackRock and Vanguard have been investing in Uzbekistan, and more investors are coming in every month.
The macroeconomic picture is strong, with GDP expanding at an average annual rate of around 6% for the past decade and forecast to almost double to $160 billion between 2023 and 2030.
In addition, Uzbekistan has a deep tech talent base. It’s both because of its highly educated domestic workforce – a product of a strong education system, and also because Uzbekistan is benefiting from an influx of returning expats and a broad range of international tech specialists from neighboring countries.
What does the financial services ecosystem look like in Uzbekistan? What is the level of interest in fintech innovation there?
Hughes: The financial services sector is still largely dominated by major state banks, which command around 70% of the market. However, competition is increasing as the government continues its drive for privatization and other reforms. A recent example of this was with Hungary’s OTP, which in June 2023 became the first international player to participate in the privatization of the Uzbek banking sector, acquiring former state-owned Ipoteka Bank. And recently, Kaspi announced its intention to participate in the privatization of Humo, Uzbekistan’s second largest open-loop domestic payment system.
TBC Uzbekistan is part of London-listed TBC Bank Group PLC, which also operates Georgia’s leading tech-enabled commercial bank. Despite being part of a multinational group, we consider ourselves to be a local player because we operate as a standalone company in Uzbekistan with a separate tech stack and separate team purpose-built for this country.
In terms of the ecosystem as a whole, it is a mix of state banks, international operators, and local Uzbek players, as well as a developing fintech scene covering everything from payments to crypto.
The level of innovation in the local fintech market is very advanced, thanks to open banking. The key development, which has not yet been replicated in developed markets, is the full banking interoperability that open banking enables in Uzbekistan. In practice, it allows customers to seamlessly interact with multiple financial institutions.
For instance, when a customer of one bank opens an account with another institution, the new bank gains visibility into the customer’s transaction history and account balances from their original bank, while the new bank is also able to initiate fund transfers or debit transactions from the customer’s account at the original institution. This helped TBC enter the market in 2019 via the acquisition of the leading P2P payments app Payme to quickly achieve profitable growth and access to a huge customer base.
Let’s talk a little more specifically about TBC Uzbekistan. How is it structured? What is its mission?
Hughes: Our mission is simple – to make people’s lives easier. As I described earlier, the financial services sector has been and is still to some extent dominated by state institutions that operate in a traditional fashion. We see that there is demand for modern, digital banks that provide a great, convenient user experience and that is what we are building.
At present, there are three components to TBC Uzbekistan: TBC Bank Uzbekistan (TBC UZ), a mobile-only bank; Payme, a digital payments app for individuals and small businesses; and Payme nasiya (Payme instalments), an installment credit business. London-listed TBC Group owns 100% of both Payme and Payme nasiya and is the major shareholder of TBC UZ, with a 60% stake. The other 40% stake in TBC UZ is split between two institutional investors: the European Bank for Reconstruction and Development (EBRD) and the International Finance Corporation (IFC), part of the World Bank Group.
What are some of the biggest areas of opportunity in your opinion?
Hughes: We see some really exciting opportunities in Uzbekistan. At present, we are focused on consumers and specifically consumer lending. Despite over 45 million cards in circulation across the country, product offerings remain limited and retail lending is especially underdeveloped, representing just 12% of GDP.
Demand from consumers for financial services is already significant and continuing to grow, with point-of-sale (POS) digital payment volumes tripling to over $22 billion in the three years ending in 2023, with the number of POS terminals and bank cards in circulation doubling over the same time period.
There are interesting opportunities in other areas as well, including a new, product-rich debit card, financial services for SMEs, insurance and brokerage, with the latter two being at a fairly nascent stage of development in Uzbekistan. So, we plan to leverage those as well in the future.
TBC Uzbekistan recently raised a significant amount of capital. How will the new funding help the bank?
Hughes: Our business in Uzbekistan is scaling rapidly, but there is still significant potential for further growth, including through diversifying our offering to address market demand. The recent funding is being used to increase our loan book — which we are currently doubling year-on-year — advance financial inclusion, and accelerate our progress in launching new product lines.
In addition to powering our growth, new funds help us to continue to diversify our funding base.
What are some things about Uzbekistan that those of us on the outside may be surprised to learn?
Hughes: Uzbekistan is a country that largely exists outside the mainstream consciousness in the West. Some people might have their preconceptions, and would be surprised to learn about the advanced state of open banking in the country. Building on that, the level of innovation in financial services is pretty impressive in Uzbekistan. The fintech sector is thriving and strongly supported by the government and the wider ecosystem that is fueled by local and international tech talent.
In terms of other things that may surprise you about Uzbekistan, it’s the food scene. The food here is incredible, so I urge everyone to come over and try it!
There is a lot of talk about enabling technologies such as AI. Are any of these major areas of innovation in Uzbekistan’s fintech scene?
Hughes: Artificial Intelligence is a key innovation area and one that I am proud to say that TBC is leading among peers by integrating AI into our services.
Our plans are ambitious. We are building an AI Virtual Assistant that takes customer service to the next level. The most common customer service solution right now is chatbots, but we’re skipping that stage and going straight to an interactive voice assistant. What’s more, we’re enabling functionality in the Uzbek language and, in the future, in other local languages such as Tajik and Karakalpak, which tend to get overlooked by major tech giants.
We ultimately envision this Virtual Assistant being able to guide our users across all of our product offerings within TBC Uzbekistan, including the ones we plan to launch in the future, such as insurance, brokerage, travel and ticketing.
How do you see TBC Uzbekistan growing over the next two-to-three years?
Hughes: Since launching in 2019, TBC Uzbekistan has scaled significantly and established itself as a leading player in the market. As disclosed in our recent half-year results, we have grown our user base to 16 million unique registered users and achieved an operating profit of $61 million, up 87% year-on-year, with TBC Uzbekistan accounting for 7% of total profit for the group, as well as 13% of revenue and 44% of consumer loans on the group level. This is a very significant contribution, which is set to expand further.
We plan to continue to grow rapidly over the next 2-3 years, launching new product lines and gaining an increased percentage of market share. This is reflected in the guidance we have issued to the market: a net profit for TBC Uzbekistan of $75 million for the full year of 2025, with 30% of the Group’s loan book coming from TBC’s operations in Uzbekistan.
Where might TBC expand next? Are there any areas of special interest?
Hughes: We’re not yet at the stage where we can point to a specific market. However, I can tell you the types of markets we are considering. Our attention is on emerging markets with a population of around 30 to 70 million people, scope for growth and other favorable characteristics. For now, we still have a lot of exciting things to do in Uzbekistan.
Here is our look at fintech headlines around the world.
Sub-Saharan Africa
South African fintech Happy Pay locked in $1.8 million in pre-seed funding in a round co-led by E4E Africa and 4Di Capital.
Ghanaian crypto platform, Mybitstore, went live in Nigeria this week.
Nigerian fraud detection company Regfyl raised $1.1 million in funding.
Central and Eastern Europe
Germany’s Commerzbank partnered with Deutsche Börse subsidiary, Crypto Finance.
Instanbul, Turkey-based fintech Colenda AI launched new AI solution to help financial institutions enhance decision-making and boost loan performance.
Bulgaria-based Paynetics teamed up with tell.money to launch its Confirmation of Payee (CoP) service.
Middle East and Northern Africa
UAE-based B2B payments platform Xpence teamed up with Egypt-based Paymob to enhance digital payments in the region.
Egyptian fintech SETTLE raised $2 million in pre-seed funding.
Mesh integrated with digital asset trading platform CoinMENA FZE to enhance crypto transfers and account management for customers in the MENA region.
Central and Southern Asia
India-based insurtech Onsurity raised $21 million to power expansion plans.
ZaakPay, the payment gateway arm of India’s MobiKwik, partnered with Meta to provide an embedded payment option via WhatsApp.
Indian financial services platform Kaleidofin secured $13.8 million in funding.
Latin America and the Caribbean
Uruguay-based MercadoLibre secured $250 million in financing from JPMorgan.
JMM Group and Liberty Latin America launched microlending service MYNE Lend for Jamaican customers.
dLocal, a cross-border payments platform based in Uruguay, forged a partnership with MoneyGram.
Asia-Pacific
Vietnam Maritime Commercial Joint Stock Bank (MSB) teamed up with TerraPay.
Paysend launched instant cross-border payouts to China UnionPay cards for enterprise customers.
