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Finovate Blog
Tracking fintech, banking & financial services innovations since 1994
PayPal will enable Apple users to log in to their accounts with passkeys rather than passwords.
PayPal also announced that Amazon had authorized Venmo as a payment option.
PayPal made its Finovate debut more than a decade ago at FinovateSpring 2011.
Two days in and it’s already been a pretty good week for PayPal.
On Monday, the payments innovator announced that it had teamed up with Apple. The partnership will enable Apple users to log in to their accounts using a passkey rather than a password. Developed by the FIDO Alliance and the World Wide Web Consortium – along with Apple, Google, and Microsoft – passkeys use cryptographic key pairs. These key pairs consist of a public key that is stored in the cloud and a private key that is stored on the users’ device.
This authentication method has a number of advantages. The fact that the keys are separated means that if a cyberattack compromises a given server, the attacker will not be able to access account credentials. It also makes it harder for individuals to share authentication data between different platforms – a significant challenge for password-based systems, as companies like Netflix have learned.
The passkeys are available for iPhone, iPad, and Mac users. PayPal says that it will bring passkeys to other platforms as support is available. U.S. customers will be able to use the passkeys this week. Other markets likely will be able to access the technology early next year.
Today, PayPal added to its roster of Big Tech partners with news that Amazon will enable its customers in the U.S. to pay with Venmo on both Amazon.com and on its mobile app. Available to “select Amazon customers” today, the ability to pay with Venmo will be available to all customers in the U.S. by Black Friday – November 25th, the notorious shopping day after Thanksgiving.
Launched as a free service in 2009 and owned by PayPal since 2013, Venmo traditionally has been a convenient way for friends and family to transfer funds to each other. Last year, Venmo facilitated $230 billion in transactions. But increasingly, merchants ranging from Shopify to Lululemon have embraced the popular payment solution as a way to pay for retail goods and services. With today’s announcement, Amazon users will be able to add their Venmo accounts as an Amazon payment option and to select Venmo as their payment preference at checkout.
“We want to offer customers payment options that are convenient, easy to use, and secure – and there’s no better time for that than the busy holiday season,” Amazon Worldwide Payments VP Max Bardon said. “Whether it’s paying with cash, buying now and paying later, or now paying via Venmo, our goal is to meet the needs and preferences of every Amazon customer.”
Venmo Purchase Protection is available on all eligible transactions. Amazon’s A-to-Z Guarantee applies as well in the event of an issue with an order. Nearly 90 million consumers in the U.S. actively use Venmo.
Finovate audiences were introduced to Venmo in 2013 by Braintree. The company bought Venmo the previous year for $26 million, and demoed its Venmo Touch solution at FinovateSpring 2013. Braintree was acquired by PayPal later that year for $800 million. PayPal made its own Finovate debut at FinovateSpring in 2011.
SKU data network company Banyan raised $43 million in Series A funding.
The round consisted of $28 million in equity and $15 million in venture debt, and gives the company a total of $53 million in equity funding.
Banyan made its Finovate debut at FinovateFall 2021 in New York, and returned to the Finovate stage this year for FinovateSpring in San Francisco.
In a round led by Fin Capital and M13, SKU data network company Banyan has raised $43 million in funding. The Series A round includes $28 million in equity and $15 million in venture debt, taking the total equity capital raised by Banyan to $53 million. In addition to Fin Capital and M13, the round featured participation from FIS Impact Ventures, Bridge Bank, Interplay, and TTV Capital.
The financing will be used to help accelerate Banyan’s technology and infrastructure growth. Banyan enables retailers and financial institutions to leverage enriched, item-level data capabilities to boost consumer engagement and financial wellness, as well as improve business expense management. The company offers the world’s largest SKU data network, which helps “unlock a new world of valuable information in the form of item-level receipt data,” according to Banyan founder and CEO Jehan Luth. Luth added that the funding was “evidence of market validation for Banyan as the first to deliver the next level of Precise Commerce applications to merchants and financial services.”
Banyan’s network is used by both Fortune 150 corporations as well as convenience stores. The company’s solution suite enables dramatic reductions in the time spent on expense reports by integrating item-level purchase data into banking and expense management apps. Banyan’s technology also provides shopping and loyalty offers that help merchants and their partners better target the offering of incentives, keying on the specific item, category, and aisle-level categories they want to reward. Fin Capital founder and managing partner Logan Allin said that Banyan’s solutions help businesses “re-imagine the experiences they can bring to consumers.”
Banyan demonstrated its Enrich solution at FinovateSpring earlier this year. At the conference, Banyan showed how its technology enables banks, fintechs, and their retail partners to use item level data to drive both everyday spending and top of wallet behavior. Relying on both API calls for individual transactions and batch calls for unlimited records, Banyan’s at-scale network lets retailers share receipt data with banks and fintechs to make financial apps more impactful for the digitally-oriented financial services customer.
Founded in 2019 and headquartered in Holmdel, New Jersey, Banyan has processed more than $400 billion in gross merchandise value (GMV), more than 10.3 billion in bank and fintech partner transactions, and more than 10.4 billion in purchase receipts from network retailers. The company also has more than four million UPCs catalogued in its network.
Earlier this year, Banyan introduced new Chief Marketing Officer Andrea Gilman, formerly SVP with Mastercard. This spring, Banyan announced a rebrand – including a new logo and a website refresh – to reflect what Luth called the company’s “defined path to disrupt and change the retail landscape while bringing new benefits to consumers.”
In addition to hosting the biggest FinovateFall to date, Finovate VP Greg Palmer has spent the month of September talking with some of the most interesting achievers in fintech. From CEOs of digital banks to entrepreneurs working to bring about greater financial inclusion, Greg Palmer’s Finovate Podcast is a great way to meet the people who are driving innovation in our industry.
Below is a rundown of recent episodes from late August through September.
Finovate Podcast host Greg Palmer sits down with Miles Paschini to discuss FV Bank’s mission to serve fintechs and bring new technologies to the mainstream. Episode 147.
“The regulated segment of the industry was not matching up to the creator side of the industry … FV stands for Fintech Ventures Bank and the purpose of developing FV Bank was so that we could create a regulated banking environment where fintech creators would have a place to work with people who were really there to help them grow their business as opposed to keep(ing) them out.”
“I learned very quickly that men are actually given investment for their potential, while women are given investment for what they’ve done. That’s definitely been one of my biggest lessons. And the stats are also horrendous. You know, we’re in 2022 and less than 3% of the venture capital still just goes to women in general, less than 1% to minorities.”
Roman Chwyl, Managing Director Fintech Unicorns, Microsoft; Paul Walker, SVP, Revenue and Partnerships, Helix
“Currently we’re helping several brands together, like Acorns, Credit Karma, Gusto … These are all brands that have real scale and are focused on (underserved) segments. One of my key goals today is just to make real impact and change, and (talk about) how Helix and Microsoft can share our partnership story and work with other companies out there looking to do the same.”
“Linden Lab was started a long time ago, and is actually the parent company of Second Life, which is the sort of OG metaverse. You’ve heard a lot of talk about the metaverse and virtual worlds. Second Life was the first one that really created an economy … A guy named Philip Rosedale, who happens to be one of my closest friends, came up with the idea. Building a virtual world.”
Billie Simmons, Co-founder and Chief Operating Officer, Daylight
Billie Simmons of LGBTQ-supporting digital bank Daylight and Finovate podcast host Greg Palmer talk about supporting customers and enabling them to live their best lives. Episode 143.
“It’s an incredibly expensive, time-consuming, potentially dangerous process to get your name and gender updated across all of your banking services. You have to go to court. You have to get documents notarized. You have to out yourself multiple times as trans … I just realized through talking about these things that we can do so much better. That’s really how Daylight was born.”
Mitek launched its new biometric authentication solution, MiPass, that leverages both voice and facial recognition.
The new technology provides advantages over both passwords and solutions that rely on on-device stored biometrics.
Mitek’s MiPass can be deployed in a range of use cases ranging from simple password resets to high-value transactions.
Could the end of passwords finally be at hand?
Identity verification innovator Mitek has launched a new solution designed to enable individuals to access digital accounts easily and securely by leveraging facial and voice recognition technology together. MiPass, unveiled today, offers a passwordless identity authentication solution that only requires a selfie and a recorded phrase to provide a level of convenience and security greater than that provided by authentication solutions based on face- or voice-recognition alone.
“MiPass provides the highest level of digital security available today,” Mitek CTO Steve Ritter said. “MiPass combines voice and face recognition using sophisticated liveness detection technology to defend against digital and deepfake attacks in real time.”
Using MiPass to authenticate digital identity also poses less risk than other solutions that rely on on-device stored biometrics, which Mitek states can be compromised, shared, or even overwritten. Additionally, MiPass’ algorithms have been tested against balanced and representative data sets to avoid bias. As such, the technology accurately authenticates users regardless of age, gender, or ethnicity. Mitek also offers a developer-friendly SDK to make it easy for companies to embed MiPass for use cases ranging from account information updates and password resets to high-risk financial transactions.
“Companies care about their customers’ trust and security more than anything,” Mitek Head of Product Chris Briggs said. “Mitek understands this. That’s why we focus all our attention on bringing products to market that enable trusted online access. People are most loyal to companies that offer both convenience and security. That’s where MiPass excels.”
A Finovate alum for more than a decade, Mitek most recently demonstrated its technology on the Finovate stage at FinovateFall 2017. In the years since then, the company has grown into a digital access leader trusted by 99% of U.S. banks for mobile check deposits and 7,500 of the world’s largest organizations.
Earlier this year, Mitek acquired fellow Finovate alum HooYu for $110 million (£98 million). The acquisition came a year after Mitek had purchased another fellow Finovate alum, ID R&D, for $49 million. This summer, the company reported record revenues for the fiscal third quarter, with a 24% year over year gain, and announced the launch of its Mitek Verified Identity Platform (MiVIP).
Headquartered in San Diego, California, and founded in 1985, Mitek is a publicly traded company on the NASDAQ under the ticker MITK. The firm has a market capitalization of $456 million.
We are all familiar with the challenge businesses have when it comes to new customers. On the one hand, there is an urge to onboard as many new customers as possible. On the other hand, great care must be taken to block bad actors or, in the case of the lending business, to avoid borrowers who are unlikely to repay their loans.
To help companies manage this tug-of-war, innovators in the credit scoring space have developed new strategies for determining credit-worthiness. These new approaches have moved beyond traditional credit scoring to help lenders reach reliable borrowers who may have thin credit histories – or even no significant, traditional credit history at all.
VantageScore is one such innovator. This year at FinovateFall, we caught up with Rikard Bandebo, VantageScore Executive Vice President and Chief Product Officer to talk about the company’s approach to credit scoring, how it differs from traditional credit scoring methods, and how fintechs can leverage VantageScore’s technology discover more “newly lendable” customers.
On making credit scoring more accurate and more inclusive
We went back to the drawing board in a way to look at what we could do to make these models much more accurate and inclusive. In doing so we started looking at ways we could look at the data on the credit file. We began using what’s called trended data and found, in doing so, we were able to improve the accuracy of the model significantly. It’s probably one of the most accurate, if not the most accurate, generic model that’s been widely adopted.
Secondly, we also found that by using this type of data we got much more consistent scores for consumers over time. There’s nothing quite as frustrating for consumers and lenders (than) when their scores go up and down a lot over time. So this provides a much smoother transition throughout a consumer’s history.
And the third piece is that we were able to massively improve our inclusion with this latest model. We score about 37 million more consumers than traditional generic models that are out there – out of which more than 10 million are above 620.
On transitioning to VantageScore from other credit scoring providers.
First and foremost, we are a very transparent credit scoring company. We provide a lot of transparency into how our models work (and) what impacts different activities have on our models. We also have built out great support services around migration and also around governance. We do a lot to make it as easy as possible for both fintechs and lenders to make a transition.
On VantageScore’s reputation in the capital markets and among ratings agencies.
We recently had FTI Consulting conduct a study where they went out and interviewed and tried to understand what the appetite was like in the broader market, what they were looking for. One of the common feedbacks they found was that, like other markets, they’re looking for more competition, and they’re looking for the best models that they can use to understand the impact of different types of consumers on risk.
We’ve actually seen a big uptake in VantageScore being used in general, and we’re seeing now a growing appetite in the securitization markets. We’ve seen some very large lenders transition to now offering their securities based on VantageScore.
Envestnet launched its Wealth Data Platform this week.
Powered by Snowflake, Envestnet’s enhanced platform gives financial advisors a more comprehensive view of clients’ finances
Envestnet made its Finovate debut in 2016 at FinovateEurope, one year after acquiring Yodlee for $660 million.
With the launch of its Wealth Data Platform this week, Envestnet has enhanced its data and analytics business by providing financial advisors with the ability to connect and enrich data – as well as give clients actionable data at scale – via a single platform. The new offering is powered by data cloud company Snowflake, and will enable Envestnet customers to benefit from a more holistic, comprehensive view of their clients’ financial information.
“Our Wealth Data Platform solves the very real challenge wealth advisors face in connecting, analyzing, and deriving insights from their clients’ various data sources,” Envestnet Data and Analytics Group President Farouk Ferchichi said. “And we know this is important for clients; our research shows that for a majority of Americans, financial technology and apps are key to achieving their financial goals.”
“By partnering with Snowflake, our Wealth Data Platform will become more holistic and allow advisors to better serve their clients,” Ferchichi said.
Envestnet’s enhanced solution improves data access and efficiency, enabling research and analytics teams to access multiple capabilities such as valuation, client aggregations, advisor analytics, and more on one platform. Customers will be able to leverage outside data, as well, combining, normalizing, and enriching that data along with other data sets available on the Envestnet platform. By partnering with Snowflake, the platform “will help transform the way wealth professionals advise and interact with their customers,” according to Snowflake Global Head of Financial Services Rinesh Patel.
Envestnet’s Wealth Data Platform adds to the company’s suite of data, digital solutions, and differentiated experiences known as Envestnet Data and Analytics. Through both APIs and standalone portals, Envestnet’s solutions help its clients – which include financial advisors as well as small and medium-sized businesses and their customers – better grow and manage the financial wellness of their businesses.
Founded in 1999 and headquartered in Chicago, Illinois, Envestnet made its Finovate debut eight years ago at FinovateEurope in London – just one year after the company acquired Finovate alum Yodlee for $660 million. In the years since, Envestnet has provided technology and services to more than 105,000 advisors and more than 6,500 companies. This figure includes 16 of the 20 largest banks in the U.S., 47 of the 50 largest wealth management and brokerage firms, more than 500 of the largest registered investment advisors (RIAs) – as well as hundreds of fintechs.
In addition to the launch of its Wealth Data Platform, Envestnet also recently announced a partnership between Tata Consultancy Services (TCS) and its Data and Analytics business. The agreement calls for TCS to help Envestnet Data and Analytics scale internationally. Earlier this month, Envestnet unveiled its Intelligent Financial Life Advisor Practice Score, which helps financial advisors learn how effectively they are helping clients “achieve peace of mind and financial security” while on the journey to reach their financial goals.
“Our mission has always been to help advisors make sense of their clients’ overall financial picture and empower them to take the advice they give – and their practice – to the next level,” Envestnet Chief Marketing Officer Mary Ellen Dugan said. “This assessment provides advisors with a way to understand how well they’re positioned to help clients navigate their complex financial lives – through their day-to-day and more long-term financial decisions.”
Global Processing Services (GPS) has partnered with Featurespace to launch a new issuer processing fraud mitigation solution.
The new offering, GPS Fraud Advantage, will leverage Featurespace’s ARIC Risk Hub to provide real-time fraud threat protection.
Featurespace made its Finovate debut at FinovateEurope in 2016. The Cambridge, U.K.-based company was founded in 2008.
Global Processing Services (GPS) announced a partnership with Finovate alum Featurespace to create a new issuer processing fraud mitigation solution. GPS will integrate Featurespace’s ARIC Risk Hub into its suite of fraud and risk management services.
The new solution will manage fraud threats in real-time, boosting fraud detection rates by more than 70%, and reducing false positives by 80%. Named GPS Fraud Advantage and powered by Featurespace, the technology is expected to go live in mid-2023. The new offering will benefit from the expansion of GPS’ Fraud Prevention Team, providing comprehensive monitoring and management of fraud alerts throughout the payments process.
“Our technology and the results our customers achieve are recognized as industry leading by those committed to fighting fraud and financial crime,” Featurespace CEO Martina King said. “Through this partnership, GPS will be able to provide an enhanced level of customer experience and increased security assurances, enabling their clients to focus on continued innovation and growth.”
Featurespace’s technology provides real-time fraud prevention for cards and payments businesses against emerging fraud challenges. The company’s ARIC Risk Hub leverages machine learning and artificial intelligence to learn from and adapt to the cardholders’ historical transactions to provide risk assessments and alerts when potentially fraudulent activity is suspected. The solution helps businesses achieve higher approval rates while simultaneously minimizing false positives.
Founded in 2008 and headquartered in Cambridge, U.K., Featurespace made its Finovate debut at FinovateEurope 2016. Of late, the company announced that it was embedding its fraud prevention technology in the platform of U.K.-based payments services provider Equals. Featurespace also reported recently that it was helping regtech Vital4 with enhanced watchlist screening. Since inception, Featurespace has protected 500 million consumers, processed more than 50 billion events a year, and blocked 75% of fraud attacks in real-time, with a false positive ratio of 5:1.
With investors including Insight Partners, Future Fifty, and TTV Capital, Featurespace has raised more than $107 million in funding.
Cryptocurrency Investment Platform Pillow Raises $18 Million
In a round co-led by Accel and Quona Capital, crypto investment platform Pillow has secured $18 million in Series A funding. Also participating in the round were Elevation Capital and Jump Capital.
Singapore-based Pillow enables individuals to save and invest in a variety of major cryptocurrencies. The company will use the capital to power expansion of its cryptocurrency savings and investment services into emerging markets in Africa and Southeast Asia. Pillow already operates in Nigeria, Ghana, and Vietnam. This week’s funding adds to the $3 million in seed capital Pillow secured earlier this year.
Founded in 2021, Pillow has more than 75,000 users in more than 60 countries on its app. Among the cryptocurrencies available are: Bitcoin, Ethereum, Solana, Polygon, and Axie Infinity, as well as USD-backed stablecoins, USDC and USDT. Pillow plans to support more than 20 different digital assets over the next few months. The company offers returns of more than 10% on its stablecoins and approximately 6% on Bitcoin and Ethereum. Pillow earns its money by investing user funds in DeFi protocols on blockchain networks.
BlueSnap and BitPay Team Up for Crypto Acceptance and Payout
Payment orchestration platform BlueSnapannounced a new partnership this week. The company is teaming up with cryptocurrency payments company BitPay to enable businesses to accept and make payouts in as many as 15 different cryptocurrencies – as well as seven fiat currencies. The currencies available include leading digital assets such as Bitcoin, Ethereum, Litecoin, Ripple, and Dogecoin. Five stablecoins pegged to the U.S. dollar and one stablecoin pegged to the Euro will also be supported.
Courtesy of the partnership, customers will be able to accept cryptocurrencies and be paid out in fiat currencies including the U.S. dollar, the Euro, the British pound, and the Mexican peso, as well as the Canadian, Australian, and New Zealand dollars.
BlueSnap and BitPay noted in a statement that a growing number of retailers are accepting cryptocurrencies as payment, and that consumers were becoming increasingly “crypto curious.”
“By working with one of the most well-respected crypto companies in the industry, we’ll be able to make the new payment experience as frictionless as possible,” BlueSnap Managing Director for Europe Nihkhita Hyett said. “We look forward to making a real impact in this new space – through developing technologies like blockchain and cryptocurrency – as we foster greater innovation in payments, and further our growth across Europe.”
WSJ: NYDIG Lays Off a Third of its Workforce
According to reporting in the Wall Street Journal, institutional cryptocurrency custody firm NYDIG has laid off more than 100 of its workers, an amount believed to be approximately a third of the New York-based crypto firm’s total workforce. The layoffs took place over a number of weeks per the Journal’s sources, and come almost a year after NYDIG raised $1 billion in funding at a valuation of more than $7 billion. NYDIG mentioned using the capital to “further expand its world-class team across the globe” – though this was noted toward the end of the company’s funding announcement. Using the capital to “develop NYDIG’s institutional-grade Bitcoin platform” was noted in paragraph two.
More recently, NYDIG was in the headlines for the C-suite shuffle in October that had CEO Robert Gutmann and President Yan Zhao stepping down and returning to NYDIG’s parent company Stone Ridge Holdings. Gutmann and Zhao co-founded Stone Ridge, along with Ross Stevens, in 2012.
There has been no comment on the lay off report from NYDIG at this time.
Mastercard Teams Up with Blockchain Platform Paxos
Our last edition of 5 Tales highlighted Mastercard’s new Crypto Secure solution that helps card issuers assess the risk profile of crypto exchanges and other providers.
This week we share more news of Mastercard and its business in the crypto space. The company has announced a partnership with blockchain infrastructure platform Paxos that will enable financial institutions to offer secure cryptocurrency trading capabilities to their customers. Mastercard’s Crypto Source program will give its financial institution partners access to a suite of services that will enable them to buy, hold, and sell select crypto assets.
The suite of services provides technology and partnership support to enable FIs to buy, sell, and hold select digital assets; security management, including AML, transaction monitoring, and KYB; crypto spend and cash out capabilities; and crypto program management, including go-to-market optimization.
“What we are announcing today is a connected approach to services that will help bring the next billion users safely and securely into the crypto ecosystem,” Mastercard President, Cyber & Intelligence, Ajay Bhalla said.
Coinbase Expands in Europe – And Adds a Friend in Google
Cryptocurrency exchange Coinbase has had more than its fair share of less than pleasant news over the past few days. Today we read headlines about the company experiencing the largest outflow of Bitcoin since June. This follows reports of hundreds of Coinbase users in the Republic of Georgia who allegedly profited from a pricing glitch – and what Coinbase may have to do to get the money back.
Meanwhile, the San Francisco-based company continues to grow, expanding its operations in Australia earlier this month with a pair of new features. PayID will enable Australians to top up their Coinbase accounts directly with Australian dollars. Retail Advanced Trading will give local clients access to low volume-based pricing and trading tools with one unified balance.
And earlier this week, Coinbase introduced the man who will lead the company’s expansion in Europe: former Solarisbank Chief Operating Officer Daniel Seifert. The appointment comes as Coinbase gains momentum in the region, earning regulatory approval to offer its services to customers in Italy in July and the Netherlands in September. Coinbase VP of International and Business Development Nana Murusegan has called international expansion an “existential priority.”
But the biggest news of the week for the company is the announcement that Google has partnered with Coinbase to allow select customers pay for cloud services via cryptocurrencies starting early next year. The capability will be made possible thanks to an integration with Coinbase Commerce, which supports 10 cryptocurrencies including Bitcoin, Ethereum, Dogecoin, and Litecoin. Coinbase will earn a fraction of each transaction processed, according to the company’s VP of Business Development Jim Migdal.
Coinbase made its Finovate debut in 2014. More than 100 million individuals and companies use Coinbase’s technology to buy, sell, and hold cryptocurrencies.
SME financing platform Crowdz has teamed up with London-based GoCardless.
The partnership will enable Crowdz to leverage open banking to enhance its ability to provide small businesses with working capital.
Headquartered in Campbell, California, and founded in 2015, Crowdz made its Finovate debut at FinovateEurope 2020 in Berlin.
Small business financing platform Crowdz has partnered with direct bank payments company GoCardless. The collaboration will enable the California-based fintech, which made its Finovate debut at FinovateEurope in Berlin in 2020, to leverage open banking to bring better financing options to SMEs.
“We’re proud to have provided over $80 million in working capital to SMEs, but this is just the start,” Crowdz CEO and co-founder Payson E. Johnston said. “With our global expansion plans and our target of providing 25,000 SMEs with over $1 billion in working capital by the end of 2023, we needed a partner that could offer the right coverage, technology, and expertise. That’s where GoCardless comes in.”
The partnership will bring three of GoCardless’ payment features to Crowdz’s Avalon Marketplace to enhance both its payment and risk modeling capability. These features are Instant Bank Pay, which enables the collection of instant, one-off payments directly from bank accounts; Verified Mandates, which provide enhanced fraud protections; and GoCardless’ PayTo integration, which supports instant payments and account verification. Both Instant Bank Pay and Verified Mandates will be available in the U.K., the U.S., and Europe. GoCardless’ PayTo integration will be available in Australia.
“We’re excited to see our open banking features powering a true disruptor like Crowdz,” GoCardless Chief Product Officer and Chief Growth Officer Duncan Barrigan said. “Thanks to our global bank payment network, we’ll be able to accelerate their speed-to-market and offer cutting-edge payment solutions, making it that much easier for SMEs to gain access to working capital all over the world.”
Crowdz made its Finovate debut in Berlin at FinovateEurope 2020. At the conference, the company demoed its end-to-end invoice solution helps turn unpaid receivables into cash. Crowdz’s technology leverages the blockchain to provide a platform of invoices for sellers, buyers, and funders, a global receivables marketplace that gives small businesses access to alternative financing that accelerates their cash flow. Crowdz uses a proprietary risk assessment model, the SuRF score, which it says helps provide more equitable funding compared to financing based on traditional credit scores.
As of March, Crowdz had funded $50 million in receivables. The company began the year partnering with Angels Den to launch the organization’s financing program that helps small businesses in the U.K. secure working capital. Crowdz also teamed up with Meta last fall (formerly known as Facebook) to help the company launch its SME financing program.
Crowdz has raised more than $25 million in funding from investors including Citi, Barclays Corporate Banking, Bold Capital Partners, Global Cleantech Capital, and EG Funds Management.
Plaid added a new anti-fraud engine to its Plaid Identity Verification (IDV) solution.
The addition leverages autofill to accelerate sign up and help reduce manual errors. The technology also assesses device behavior and the way users input their personally identifiable information (PII).
Plaid announcement comes in the wake of news that the company is expanding in Europe.
Open banking innovator Plaid has added a new anti-fraud engine to its identity verification solution, Plaid Identity Verification (IDV). The anti-fraud engine supports a faster verification process to boost both conversions and signups. The new addition also assesses behavioral risk to better defend against emerging threats and strategies from fraudster and financial criminals.
The new tool comes months after Plaid launched its identity verification solution, and is the product of Plaid’s work with “hundreds of digital finance companies” in industries ranging from crypto and neo-lending to proptech and banking. Not only did Plaid’s work with these firms underscore fraud as a “top challenge.” it also highlighted two chief values that companies have when it comes to improving security and anti-fraud protection: a fast and secure onboarding process and a fraud defense regime that is capable of evolving to meet new threats.
To enhance the onboarding process, Plaid’s new tool offers an autofill experience that makes sign up seamless without compromising security. Customers in the U.S. only need to enter their date of birth and phone number when signing up, and Plaid’s autofill technology auto-populates with full name, address, and social security number and other information associated with the user’s phone number and birthdate. The autofill feature accelerates the verification time for customers from 30 seconds to as little as 10 seconds. Plaid also noted that its autofill feature can improve conversion by up to 20%.
The new anti-fraud engine also assesses device behavior and the way users enter their personally identifiable information (PII) to detect a range of behaviors that are associated with fraudulent actors and bots. The tool analyzes the speed and pace with which PII is entered, the order in which data is imputed, whether the data input method is copy and paste, and more. By monitoring these behaviors during the sign up process, Plaid’s new anti-fraud enhancements will help users of Plaid Identity Verification accurately verify customer identity, reduce fraud incidents, and meet compliance obligations.
Plaid’s announcement comes in the wake of big expansion and partnership news for the company. In August, Plaid reported that it will be expanding its operations in Europe. The company now offers its open banking capabilities in both Spain and Portugal, and provides clients in Germany with data connectivity services. The move comes with the addition of a pair of new Payment Service Provider (PSP) partners: Norbr and GlobePay. Plaid anticipates launching operations in other European countries soon, including Sweden, Denmark, Norway, Lithuania, Latvia, and Estonia.
Also in August, Plaid announced a partnership with fellow Finovate alum Wise (formerly Transferwise). The deal will enable Wise customers to access to more than 6,000 apps courtesy of Plaid’s open finance core exchange, launched earlier this year. Venmo, Chime, and Truebill are among the apps that Wise customers will be able to select and add to their digital platforms.
Although not getting as much attention these days as the metaverse or Web3, the potential impact of quantum computing in financial services certainly has the attention of the industry’s biggest players. This week, Mastercardapproved the first cards for issuers that meet EMVCo contactless specifications to protect cardholders from attacks from quantum computers as well as traditional computers.
“Technology has the potential to open new opportunities for both consumers and fraudsters,” President of Cyber & Intelligence at Mastercard Ajay Bhalla said. “That’s why future-proofing security is critical.”
Quantum computing involves leveraging the capacities of quantum physics to solve certain computational problems faster than traditional computers. Much of the buzz over quantum computing is related to the purported ability of quantum computing to defy even the most rigorous encryption protocols. And while some of these concerns may have been overblown, at least in the short term, the ability of quantum computers to solve certain complex problems faster than the most advanced supercomputers currently available makes them a potential source of major financial crime if adequate safeguards are not in place.
To this end, Mastercard introduced new, quantum-resistant Enhanced Contactless specifications in January 2021. Referred to as “Ecos” the new specifications are designed to provide greater convenience for merchants and financial institutions, enhanced trust thanks for next-generation algorithms and cryptographic key strengths, and enhanced privacy to deliver protection when account information in shared between the card or digital wallet and checkout.
“As the ecosystem continues to evolve, more connected devices and the Internet of Things are going to create more user demand, and an even greater need for constant innovation to build next-generation capability, helping to ensure that technology never outpaces trust,” Bhalla said when the Ecos specifications were unveiled. In the months since then, Mastercard has teamed up with EMVCo to continue to develop the Ecos-compliant technology with the goal of making it an industry standard for contactless acceptance. In a statement, Mastercard cited a Juniper report that indicated that contactless payment devices will top 12.5 billion by 2027. The value of contactless transactions is similarly expected to grow, reaching $10 trillion worldwide by 2027.
“By bringing quantum-era technology to contactless payments, we are taking steps to future-proof security and privacy protection as much as possible,” Bhalla said this week. “These new cards will deliver that greater peace of mind, while also providing consumers and merchants a seamless transition from today’s contactless experience.”
Mastercard’s embrace of quantum computing has been marked in 2022. In July, the company announced a multi-year strategic alliance with D-Wave Systems, the world’s first commercial supplier of quantum computers. In February, Mastercard’s Foundry Live Series presentedThe Quantum Advantage, a look at the potential impact of quantum computing in financial services.
Lendsmart announced that First Community Bank and Trust will go live with its digital lending platform.
Lendsmart won Best of Show at FinovateFall Digital in 2020.
More than 100 years old, First Community Bank and Trust serves communities in Illinois and has assets of more than $205 million.
One of the brightest stars from FinovateFall Digital shared partnership news this week. Lendsmart, which won Best of Show at FinovateFall Digital in 2020, has brought its AI-driven digital lending platform and home buying marketplace to First Community Bank and Trust. The Illinois-based institution will leverage Lendsmart’s technology to streamline its mortgage lending operations, bringing automation and digitization to 70% of the process.
Courtesy of the partnership, First Community Bank and Trust will be able to offer its customers and end-to-end digital lending experience including a digital application, a 10 minute process to get pre-approved, funds availability in a week, and a digital closing option.
“We’re committed to providing our customers with the latest in convenient technological financial solutions,” First Community Bank and Trust President and CEO Greg Ohlendorf said. “(By) partnering with Lendsmart, we are fulfilling this commitment by offering our customers a seamless digital experience from start to finish in just a few minutes.”
First Community Bank and Trust is a privately owned bank that serves communities in Beecher and Peotone, Illinois, and throughout the state. The institution’s roots extend back to 1916, when a group of fourteen businessmen with $25,000 in capital launched what was then called Farmers State Bank of Beecher. A hundred years later, First Community Bank and Trust celebrated the success of its EMV Chip Debit MasterCard – and assets of more than $205 million.
Headquartered in New York, Lendsmart made its Finovate debut at FinovateFall Digital in 2020. At the event, the company won Best of Show for its centralized platform that streamlines and optimizes the customer onboarding and engagement process, and automates manual processes to minimize risk and underwrite borrowers faster.
Other recent partnerships with Lendsmart include collaborations with Sutton Bank of Ohio, Midwest Bank and Legence Bank of Illinois, and Wisconsin-based Citizens State Bank. Lendsmart was founded in 2018 by CEO A.K. Patel.
