Author: David Penn

India Cracks Down on Consumer Lending; Razorpay and Pine Labs Score Payment Licenses

India Cracks Down on Consumer Lending; Razorpay and Pine Labs Score Payment Licenses
By David Penn Posted on
Categories: Finovate Global

This week’s edition of Finovate Global takes a look at recent developments in the fintech industry in India.

Has a “fintech reckoning” come to India? That’s the take shared by the Wall Street Journal recently, which suggested that many of the country’s fintech startups are facing new regulatory scrutiny. TechCrunch joined the alarm, looking specifically at the decision by the Reserve Bank of India to ban the practice of using credit cards to load and top up non-bank prepaid payment instruments (PPIs) such as prepaid cards.

The potential impact of the ruling is broad, with companies that specifically leverage PPI licenses to issue cards and then offer cardholders lines of credit, as well as Buy Now, Pay Later firms, that also use a similar approach to offer loans to consumers, being affected. The former group includes major Indian fintechs such as Slice, OneCard, Jupiter, Uni, and KreditBee.

The decision has drawn criticism from individuals in those businesses, some of whom have spoken to the press only on condition of anonymity to “avoid upsetting RBI officials” as TechCrunch described it. Some of those speaking against the policy have accused the RBI of issuing a ruling that is “very confusing and strange.” Others have hinted that lobbying from banks has played a role and reflects a common practice of incumbents using the system to stymie new entrants and slow innovation.

In fact, one option some of the potentially impacted companies may pursue – moving to PPIs through banks and offering their services inline with RBI guidelines –could actually bolster the position of the banks relative to fintechs.

“Not allowing loading of prepaid instruments through credit is aimed at protecting bank’s lazy credit card business from fintech’s potent BNPL business,” BharatPe co-founder Ashneer Grover tweeted after RBI’s decision was announced. “It’s a flex move by banks – rent seeking.”

In other fintech news from India, we learned this week that Razorpay and Pine Labs both secured approval from the RBI for payment aggregator licenses. The firms are among the first to receive the approvals, which come as the central bank prepares a list of fintechs that will be allowed to operate as payment aggregators in the country. Reportedly more than 185 fintechs have applied for the authorization, which requires companies to have a net worth of $1.9 million as of FY 2021 and a net worth of $3.1 million by the end of FY 2023.

Established in 2020, India’s payment aggregator framework enables only RBI-approved firms to offer payment services to merchants. Among the companies to have applied are major fintechs such as PayU, BharatPe, and FSS, as well as technology companies Google and Amazon.

Founded in 2013, Razorpay is a payment gateway that seeks to improve money management for online businesses by offering clean, developer-friendly APIs and easy integration. With more than 300 million end customers, Razorpay has raised more than $816 million in funding. Harshil Mathur is co-founder and CEO.

Pine Labs is an omnichannel merchant commerce platform that serves businesses in India and Southeast Asia. The company’s solutions offer frictionless online payments for businesses, provide closed-loop gift cards for businesses to boost customer acquisition, and a smart payment app. Founded in 1998, Pine Labs has raised $1.2 billion in funding. Amrish Rau is CEO.

Here is our look at fintech innovation around the world.

Middle East and Northern Africa

Central and Southern Asia

Latin America and the Caribbean

Asia-Pacific

Sub-Saharan Africa

Central and Eastern Europe

Photo by ritesh arya

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GoCardless to Acquire Latvian Open Banking Data Platform Nordigen

GoCardless to Acquire Latvian Open Banking Data Platform Nordigen
By David Penn Posted on
Categories: Alumni News, Daily news, Mergers & Acquisitions, Nordigen
  • Bank payments company GoCardless has announced its intention to acquire open banking platform Nordigen.
  • The Latvia-based fintech, a Finovate alum since 2018, connects to 2,300 banks in Europe and the U.K. via its free API.
  • Terms of the acquisition, which is expected to close later this summer, were not disclosed.

Bank payments company GoCardless has announced its intention to acquire Nordigen, an open banking platform based in Latvia. GoCardless will integrate Nordigen’s open banking connectivity into its account-to-account network. Terms of the acquisition were not disclosed. The acquisition is expected to close later this summer.

“The Nordigen acquisition will take us to the next level,” GoCardless co-founder and CEO Hiroki Takeuchi said. “By intelligently combining free, state-of-the-art open banking connectivity with deep payment expertise, we can now offer open banking-as-a-service to any developer, partner, or fintech.” Takeuchi added that the acquisition will “lead to experimentation … that will create even more compelling use cases.”

Nordigen leverages open banking to help banks and lenders make more creditworthy loans. The company offers solutions that automate income and liability verification, and provides critical insights into prospective borrowers from account data for scoring models. Nordigen offers high-performance analytics including transaction categorization, feature engineering for credit modeling, and the capacity to generate risk scores from account data. Operating in 13 countries and partnered with more than 50 banks and lenders around the world, Nordigen connects to more than 2,300 banks in Europe and the U.K. via its free API.

“Our mission at Nordigen is to help companies around the world adopt and use Open Banking to enable greater financial transparency and financial inclusion,” Nordigen CEO Rolands Mesters said in a statement. “We share GoCardless’ enthusiasm for the growth of Open Banking and are excited to partner with people who not only share our passion for disruptive innovation in financial services, but who will also help us bring Open Banking freely to a much wider audience.”

Acquisition talk has not slowed down Nordigen, which has forged partnerships at an impressive pace this year alone. In June, Nordigen announced that it was working with Sherpa CRM, Landlord Fusion, HES FinTech, BUNNI, and Acounto. Already this month, Nordigen reported that it has expanded its collaboration with Latvian financial services company AS DelfinGroup.

Founded in 2016, Nordigen made its Finovate debut in 2018 at FinovateFall in New York. The company returned to the Finovate stage the following spring for FinovateEurope in London. Prior to the acquisition announcement, Nordigen had raised $4.2 million in funding from investors including Black Pearls VC and Superangel.

Photo by Mariya Todorova

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Brazil’s Travelex Bank Partners with ThetaRay for Transaction Monitoring, Sanctions Screening

Brazil’s Travelex Bank Partners with ThetaRay for Transaction Monitoring, Sanctions Screening
By David Penn Posted on
Categories: Alumni News, Daily news, ThetaRay
  • Tel Aviv, Israel-based ThetaRay announced a partnership with Brazil’s Travelex Bank.
  • Travelex Bank will deploy ThetaRay’s transaction monitoring and sanctions screening solution, SONAR, to enhance its ability to combat money laundering.
  • ThetaRay made its Finovate debut in 2015. The company has raised more than $112 million in funding.

Transaction monitoring technology provider ThetaRay will help Brazil’s biggest FX specialist, Travelex Bank, enhance its transaction monitoring and sanctions screening capabilities. Travelex Bank will deploy ThetaRay’s SaaS-based anti-money laundering solution, SONAR, to provide both domestic and international transaction monitoring, as well as real-time sanctions screening for international payments.

Travelex Bank Chief Compliance Officer Célia Pizzi highlighted ThetaRay’s ability to meet the institution’s transactions monitoring and sanctions screening needs with a single platform. “ThetaRay’s SONAR will enable us to expand our product services portfolio and improve customer service while improving our overall AML operations,” Pizzi said. “SONAR will provide higher efficiency and secure risk coverage, enabling new businesses and lines of revenue.”

SONAR leverages an advanced type of AI, “artificial intelligence intuition,” that gives banks and financial services institutions a risk-based approach to effectively identify suspicious transactions and individuals. Without bias or thresholds, SONAR provides a comprehensive profile of customer identities across cross-border transaction paths that leads to a quick and accurate identification of money laundering threats. According to ThetaRay, SONAR offers a 95% detection rate and a 99% reduction in false positives when compared to rules-based AML solutions.

“Travelex Bank represents a new generation of global institutions that is readying its money transfer and payment infrastructure for changing conditions,” ThetaRay CEO Mark Gazit said. “Travelex is a provider that looks to the future and prioritizes trust, confidence, and quality.”

Travelex Bank represents international exchange corporation Travelex in Brazil (along with the brokerage Travelex Confidence). The bank provides a wide variety of services including international remittances, imports and exports, crypto exchange transactions, registration services, and more. The firm’s adoption of SONAR, in addition to bolstering its AML capabilities, will also enable Travelex Bank to offer new, compliant products and services.

A Finovate alum since 2015, ThetaRay has spent much of this year forging partnerships with a number of fintechs and banks. In March, ThetaRay announced a partnership with Dubai-based Mashreq Bank and teamed up with fellow Finovate alum Payoneer. Also this spring, the Tel Aviv, Israel-based company reported that it had selected sanctions screening firm Screena as its screening solutions partner, and had partnered with omnichannel money movement platform Qolo to provide transactions monitoring.

With more than $112 million in funding, ThetaRay includes Benhamou Global Ventures, Jerusalem Venture Partners (JVP), and ABN AMRO Ventures among its investors.

Photo by Burst

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CIBC Bank USA Chooses Velocity Solutions’ Akouba Digital Lending Platform

CIBC Bank USA Chooses Velocity Solutions’ Akouba Digital Lending Platform
By David Penn Posted on
Categories: Alumni News, Daily news, Velocity Solutions
  • Chicago, Illinois-based CIBC Bank USA has announced a partnership with Finovate newcomer, Velocity Solutions.
  • CIBC will leverage Velocity Solutions’ Akouba Digital Lending Platform to lower costs, better manage risk, and increase per-loan profitability.
  • Velocity Solutions made its Finovate debut in the fall of 2021. The company acquired the Akouba platform in 2018.

CIBC Bank USA has chosen Velocity Solutions’ Akouba Digital Lending Platform to support its small business banking division. The Chicago, Illinois-based commercial bank, founded in 1989 as The PrivateBank and Trust Company, will leverage Akouba’s cloud-based SaaS platform to lower the cost, time, and risk associated with the loan origination process. At the same time, the platform will help boost the profitability of every loan made.

“We’ve made tremendous progress with the platform since we acquired Akouba in June 2018,” Velocity Solutions EVP of Product Management Mike Triggiano said. “We’re continually refining the platform and adding new features and functionality. It’s been a thrill to enhance Akouba’s industry-leading technology over the past two years, and the opportunity to add CIBC Bank USA to our growing list of clients is definitely one of the most exciting milestones in Akouba’s history to date.”

Added to Velocity Solution’s product suite four years ago, Akouba is designed to accelerate loan origination for both retail and commercial lending. The only small business loan origination platform endorsed by the American Bankers Association (ABA), Akouba reduces end-to-end time, streamlines operational processes, and helps increase profits. The platform does all this while giving financial institutions the ability to retain control over the decision, pricing, credit policy, risk metrics, and loan amounts, as well as the borrower experience.

“At CIBC, we are building an innovative, relationship-focused bank,” CIBC Bank USA President of Retail and Digital Banking and Head of U.S. Strategy and Administration Brant Ahrens said. “Akouba gives our small business clients the ability to seek financing on any device at any time in any place that is convenient for them.”

Velocity Solutions made its Finovate debut at FinovateFall in New York last September, where the company demoed its Akouba platform. In the months since, Velocity Solutions has introduced a number of new solutions including VelocityConnector that enables efficient and secure API connections between banking data systems; its VelocityScore feature, which helps indicate the ability of accountholders to repay loans; and its Consumer Liquidity Engine, which makes a range of flexible overdraft options and affordable short-term loans available to bank and credit union customers and members.

Founded in 1995, Velocity Solutions is headquartered in Fort Lauderdale, Florida. Christopher Leonard is CEO.

Photo by Jonathan Petersson

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Intelligent Identity Security Innovator Sontiq Urges Customer Engagement to Fight Fraud

Intelligent Identity Security Innovator Sontiq Urges Customer Engagement to Fight Fraud
By David Penn Posted on
Categories: Alumni News, Alumni profile, Daily news, Mergers & Acquisitions, Report series, Sontiq
  • Intelligent identity solution provider Sontiq has issued a new report on security in financial services.
  • The report, 2022 Digital Safety and Security Report for Financial Services, underscores the importance of engaging customers and members in the fight against cyberfraud.
  • Sontiq made its Finovate debut in the fall of 2021 and was acquired a few months later by TransUnion for $638 million.

Intelligent identity security firm Sontiq has warned that the growing sophistication of cybercriminals and increased awareness and concern over the challenge to digital security from the public have created both new challenges and new opportunities for financial institutions. In a new report, the 2022 Digital Safety and Security Report for Financial Services, Sontiq highlights the way cybercriminals have leveraged advanced technologies – including automation and AI – to achieve what Sontiq called a “historic level of data compromise” in 2021.

“Consumers are increasingly anxious about cyber threats, but feel unprepared to take action or deal with the fallout,” Sontiq SVP of Enterprise Risk Solutions Al Pascual said. “Notably, they don’t want generic security advice. Financial institutions can combat increased identity risks with personalized, self-service tools that are seamlessly embedded into the digital banking experience.”

Here are some of the key takeaways from Sontiq’s report.

Financial institutions must understand the threat landscape

“What consumers, organizations, and the media often misunderstand,” the report noted, “is that the data breaches with the greatest impact on individuals are often not the high-profile ones that capture headlines.” Sontiq’s research distinguishes between high-profile breaches at institutions like Facebook/Meta and LinkedIn and high-risk breaches at companies like Gallagher and Waste Management. This is because “high-risk” breaches, while involving fewer victims, tend to involve compromises of more valuable personally-identifiable information compared to “high-profile” breaches.

Synthetic identity fraud is a bigger threat than identity theft

A growing number of financial services companies are recognizing the challenge of synthetic identity fraud, with Sontiq observing that 72% of financial services firms believe that synthetic identity fraud is a “much more pressing issue” compared to traditional identity theft.

Why so? And what’s the difference?

Traditional identity theft involves stealing a real person’s PII (personally-identifiable information) and using that data to engage in criminal activity. And make no mistake: traditional identity theft is still an issue, costing $24 billion in losses and victimizing more than 15 million individuals in 2021. Synthetic identity fraud, by comparison, involves a blending of both real and fictitious information. This enables the fraudster to create a completely new, made-up identity that can then be used to fraudulently open accounts, and apply for loans and credit cards. A newer arrival on the cybercrime scene, synthetic identity fraud also comes at a significant cost. The Federal Reserve has estimated that synthetic identity fraud losses have climbed to $20 billion, making it the “fastest growing financial crime.”

Personalized, proactive identity protection gives financial institutions the opportunity to differentiate themselves

In its report, Sontiq makes it clear that consumers are uncertain about who to turn to in the event of a security breach. “Nearly half of Americans,” the report notes, “say they would not know what to do if their identity was stolen.” Because of this, more than half of American fraud victims (54%) have indicated that they believe their financial institution can play a major role in helping them “navigate and resolve their identity fraud issues.” Breach victims across generations – under 35, between 35 and 54, and over 55 – all turned to their financial institutions for assistance in comparable numbers (50%, 48%, and 44% respectively).

This has resulted in a significant growth in the identity theft protection services market. Analysts project that this market will grow at a compound annual growth rate of 9.4% over the next 10 years.

There are a variety of ways that financial institutions can seize this opportunity by deploying better anti-fraud tools and partnering with fintechs and cybersecurity specialists. But key to all of these efforts, according to Sontiq, is customer engagement. Educating financial services consumers on what to do to enhance their own online security – and what to do in the event of a security breach – is critical. Also important is the role of empowerment, and helping consumers understand what they can do to enhance their own defense against fraud.

“Getting consumers to adopt a self-service approach to identity protection also has the potential to help a financial institution better invest resources,” the report noted. “Informed, engaged customers who actively protect their identities become potent allies – finding fraud earlier and reducing overall risk to them and the financial institution.”

Download the free white paper to read the full report.

Sontiq made its Finovate debut at FinovateFall 2021. At the event, the Nottingham, Maryland-based company demonstrated its BreachIQ solution. BreachIQ identifies and diagnoses a consumer’s security breach history to provide personalized, protective actions the consumer can take to improve financial health and enhance security. The technology effectively leverages AI to turn ID fraud risk into a consumer financial health opportunity.

Launched in 2019, Sontiq was formed when EZShield acquired identity theft protection provider IdentityForce. Last spring, Sontiq announced its acquisition of Breach Clarity, a post-breach fraud specialist and Finovate Best of Show winner. In October 2021, Sontiq itself was acquired by fellow Finovate alum TransUnion for $638 million. In a statement, TransUnion said that Sontiq’s identity security technology compliments its own digital identity assets and solutions.

“TransUnion is committed to empowering consumers to shape their financial futures,” TransUnion President of U.S. Markets and Consumer Interactive Steve Chaouki said. “With Sontiq, we will ensure that consumers and businesses have a comprehensive set of tools to protect the financial profile they have built.”

Photo by RODNAE Productions

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Increasing Resiliency and Agility to Anticipate Ongoing Market Volatility

Increasing Resiliency and Agility to Anticipate Ongoing Market Volatility
By David Penn Posted on
Categories: InterSystems, Sponsored

The following is a sponsored post by Tim FitzGerald, EMEA Financial Services Sales Manager, InterSystems.

If the last few years have proven anything, it’s that market volatility will occur with monotonous regularity. Even if we can’t predict the exact nature of the turbulence – whether it’s the impact of geo-political events, pandemics, elections, or disasters – the effects are being felt with increasing frequency. Being able to anticipate and respond to sudden market changes has become increasingly important.

As many organizations look to obtain the capabilities needed to become more agile and resilient in the face of this ongoing volatility, the role of data has become more widely recognized. In particular, in a landscape where things can change very quickly, there is a growing understanding of the importance obtaining fresh data.

Today, the ability to see and work off data in real-time is essential for a financial services firm to compete. However, despite the clear need to be able to use fresh data, many firms face significant challenges in accessing and leveraging data in real time. At the heart of these difficulties lie the growing volume, velocity, and complexity of the data firms are dealing with.

Consequently, if firms are to become more resilient and agile to anticipate and respond to market volatility, they must begin by solving these challenges. At its core, this requires organizations to not only bridge their data silos, but also to simplify their data architecture.

The growing burden of data silos

For large numbers of financial services, siloed systems across multiple departments are proving to be a sizable burden. These ever-growing data silos lead to data that is inconsistent, disparate, and difficult to interpret. Often, these organizations have also amassed overly complex data infrastructures that rely on a disjointed set of technologies for data management, semantic layers, data pipelines, data integration, and analytics, making it difficult to obtain information and insights in a timely manner.

Together, these issues prevent firms from being able to get the insights they need to adapt to changing market conditions, capitalize on crucial business opportunities, comply with changing industry regulations, and gain an accurate understanding of risk and decisions related to financial data. Put another way, it severely impacts their agility and resiliency. Ultimately, it is far simpler for these organizations to have a system that is easy to understand, use and adapt, rather than trying to navigate hundreds of different applications dispersed across many locations.

A data architecture fit for modern-day volatility

As market volatility continues to bring these challenges into stark focus, a new architectural approach, the smart data fabric, which speeds and simplifies access to data assets across the entire business has emerged as a solution for financial services firms.

Powered by a unified data platform, the smart data fabric accesses, transforms, and harmonizes data from multiple sources, on demand, to make it usable and actionable for a wide variety of business applications. Analytics capabilities embedded within the platform, including data exploration, business intelligence, natural language processing, and machine learning, make it faster and easier for firms to gain new insights and power intelligent predictive and prescriptive services and applications.

In addition to simplifying their data architecture, implementing a unified data platform allows existing legacy applications and data to remain in place. This helps firms to maximize the value from their previous technology investments, including existing data lakes and data warehouses, without having to “rip-and-replace” any of their existing technology.

Moving forward in a volatile landscape

Faced with continued market volatility, the ability to incorporate real-time transactional data and eliminate delays in accessing data stored in production applications and data silos offers financial services firms a wide range of benefits. Not least is that business leaders will be able to make decisions based on accurate and current data, rather than data that is weeks old, helping to eliminate errors and missed business opportunities.

This consistent, accurate, real-time view of the data they need to run their business will also enable firms to make more informed and better decisions, and give them the resiliency and agility to anticipate and adapt to changing market conditions. Armed with a complete 360-degree view of both their business and their customers, financial institutions can turn their data into a true business enabler. This will empower firms to better capitalize on crucial business opportunities, comply with changing industry regulations, and gain an accurate understanding of risk and decisions related to financial data. Above all, it will ensure that they are no longer on the back foot when spikes occur and can instead continue to move their businesses forward during times of uncertainty.

Photo by Zsolt Joo

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Atomic and Bond Team Up to Offer New Fractional Repayments Solution, Repay

Atomic and Bond Team Up to Offer New Fractional Repayments Solution, Repay
By David Penn Posted on
Categories: Alumni News, Atomic FI, Daily news
  • Atomic and Bond Financial have partnered to launch Atomic’s Repay solution.
  • The new offering enables users to turn large transactions into a series of smaller, recurring payments.
  • Atomic made its Finovate debut at FinovateFall in September 2021.

Payroll connectivity solution provider Atomic and embedded finance company Bond Financial Technologies have expanded their existing partnership with the launch of Atomic’s Repay solution. Repay enables customers to make recurring payments, turning larger transactions such as monthly rent and loans into a series of smaller installments. Repayments come from the customer’s wages instead of from their bank account. This helps customers avoid the expense of taking out short-term loans or missing repayment dates.

Atomic will use Bond’s embedded finance infrastructure to create and open user bank accounts, as well as manage KYC, transaction monitoring, and compliance. When new users sign up for the service, Repay connects the payroll data while Bond opens a demand deposit account. From here, fractional deposit amounts are calculated, which are managed based on the due date, and Repay automatically makes timely payments.

Users have complete transparency into the process. All deposits and distributions are monitored by the technology and any overpayment is refunded to the user “usually in under a week.”

“Repay gives consumers the tools to take control of their personal finances, both income and liabilities, and for customers to proactively tailor products to their user’s financial profile with payroll data,” Atomic co-founder and CEO Jordan Wright said. He underscored the fact that Repay provides “financial vulnerable consumers” with the functional equivalent of a “fractional repayment plan.” Wright added that businesses that offer Repay “now have a novel option to build goodwill with consumers by offering better interest rates while minimizing default and late repayment risks.”

A leading provider of payroll APIs, and a partner to 12 of the largest fintech firms – including neobanks, alternative lenders, and digital brokers, Atomic made its Finovate debut last year at FinovateFall. At the event, the company demonstrated how its payroll connectivity solution accelerates paydays for consumers, increases direct deposit acquisition opportunities for banks and financial institutions, and helps qualify users for financial services that rely on income and/or employment data.

Headquartered in Salt Lake City, Utah and founded in 2019, Atomic has raised more than $68 million in funding. This total includes $40 million in Series B funding secured this March in a round co-led by Mercato Partners and Greylock.

Photo by Dan Meyers on Unsplash

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Pride or Prejudice? How Transparency Can Help Banks Better Serve LGBTQ+ Communities

Pride or Prejudice? How Transparency Can Help Banks Better Serve LGBTQ+ Communities
By David Penn Posted on
Categories: Diversity in Fintech, Interview

As Pride Month draws to a close, we wanted to take a look at the impact that banks and other financial services companies have on LGBTQ+ communities.

The issues that face LGBTQ+ communities when it comes to financial services are as varied as these communities themselves are. They range from simply allowing cardholders to determine how they will be identified on their own bank cards, to healthcare-related savings and investment planning, to learning which financial institutions respect LGBTQ+ individuals and their values – as well as those institutions who work against them.

We caught up with Chris Luton, Director of Customer Care with Oakland, California-based Beneficial State Bank, to talk about the relationship between banks – especially community banks – and LGBTQ+ communities. We also discuss Beneficial State Bank’s efforts in this regard – as a “values-based bank” – as well as the bank’s own development as a community financial institution in the age of digitization.

Tell us about Beneficial State Bank. What makes you unique in your community?

Chris Luton: Beneficial State Bank is a for-profit, mission-driven bank whose owners are institutions governed in the public interest. Instead of working to maximize shareholder profits, we work to maximize prosperity for our communities and our clients, while maintaining strong business performance and serving as a model for ethical banking.

The bank was founded to serve a triple bottom line of environmental sustainability, social equity, and prosperity. The intention was to prove that this banking model could be sustainable, and influence the banking system to substantially change its practices. 

All of these qualities differentiate us from most banks. For instance, we invest in and work with community organizations that are often turned away by traditional banks. We offer socially-conscious individuals, small businesses, and nonprofits the unique opportunity to put their money toward causes they believe in. 

What does it mean to be a values-based bank?

Luton: This means prioritizing our values just as much as our profits, which is captured in our triple bottom line of environmental sustainability, social equity, and prosperity. 

In practice, this means that our values guide our investment decisions. All of Beneficial State Bank’s investments are mission-aligned, and we aim for at least 75% of that lending to go toward the highest-impact organizations and initiatives. We then work to ensure that the rest never goes toward projects or organizations that cause harm. 

For example, we invest in environmental sustainability, affordable housing, social justice, and health and well-being. Meanwhile, we never invest in fossil fuels, payday lenders, private prisons, or weapons manufacturers.

What can banks do to better serve and support the LGBTQ+ community?

Luton: Right now, some of the nation’s biggest banks fund anti-LGBTQIA+ policies through political donations. If the millions put toward these discriminatory policies were instead invested in organizations that protect and uplift the LGBTQIA+ community, banks could make huge progress in a more positive direction. For better or worse, money is hugely influential, especially in our political process. Banks could better serve the LGBTQIA+ community by leveraging this power for good. 

Banks should also consider how their policies and practices impact their LGBTQIA+ customers and employees. At Beneficial State Bank, we strive to create a welcoming and inclusive customer experience — for example, we make it as easy as we can for clients to change their name and gender on any official communications.  

Ultimately, it’s important that banks try to see the big picture on this issue by looking beyond performative celebrations during Pride Month. Members and allies of the LGBTQIA+ community are looking for more than just a rainbow logo or special blog post, and the community’s needs don’t suddenly end once Pride month is over. Support for the LGBTQIA+ community should last all year long. Companies should also look at their overall impact to see if it’s consistent with their messaging. For instance, they might claim to support the LGBTQIA+ community while funding discriminatory politicians or having discriminatory internal policies.

What changes do banks need to make internally to better support their LGBTQ+ employees?

Luton: It starts with building a welcoming and inclusive environment where employees feel safe and empowered to be themselves. We make an effort to hold space for connection among our LGBTQIA+ employees and their allies, and host Pride celebrations every year. Benefits and policies should also be inclusive. For instance, we make sure employees can add domestic partners and their children to their insurance plans, regardless of marital status. 

How can banks help consumers make better banking choices that are aligned with their values?

Luton: The first step is transparency. Consumers can’t make better banking choices if they don’t know where their money is going. Unfortunately, a lot of banks aren’t transparent about where their money goes. Banks need to be honest about their investments so consumers can learn, engage, and make banking choices that are more aligned with their values. 

Values-based institutions like Beneficial State Bank are upfront about our investments. For example, our goal is always for at least 75% of our commercial loan dollars to go to mission-aligned businesses – i.e., those working on issues like affordable housing or renewable energy. We also never lend in non-mission-aligned sectors, such as fossil fuel extraction, private prisons, or weapons manufacturing.

Mighty Deposits is a great resource for discovering how your bank is using your money, and what better options might be out there. Beyond the banking sector, Data for Progress has also released the latest version of its Pride Corporate Accountability Project, which looks at how many Pride sponsors and Fortune 500 companies are funding anti-LGBTQ+ campaigns. 

Digital transformation is a big topic in banking. How has this trend impacted Beneficial State Bank?

Luton: A big milestone in our own digital transformation was the PPP lending process in 2020. We did a substantial amount of lending that required all hands on deck. This actually gave us confidence in bringing up a new platform quickly and effectively. Since then, we’ve improved our digital and online functions, increased efficiency and speed, and lowered our cost of delivery.  

The bank also recently closed on an equity investment of $218 million from the U.S. Treasury’s Emergency Capital Investment Program (ECIP), which will support expanded lending to small businesses, and low- and moderate-income consumers. Our first priority is investing in the bank’s capacity so we can better serve our customers. This will include technological capacities like automation and infrastructure. 

Where do you hope to see Beneficial State Bank in the next three to five years?

Luton: With this recent investment from the U.S. Treasury, we see the next few years as a time of growth and an opportunity to demonstrate the power of values-based banking. We see ourselves continuing our work with marginalized customers and communities on a larger scale, expanding our investments in people and organizations making positive change in the world, and influencing other banks to do the same. 

Our ultimate vision is an economy that restores our planet and extends prosperity to all people. We can achieve this vision if more banks decide that doing good and doing well are not mutually exclusive.

Photo by Markus Spiske

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Mortgagetech Roostify Integrates Indecomm’s IncomeGenius; Appoints New COO Nadia Aziz

Mortgagetech Roostify Integrates Indecomm’s IncomeGenius; Appoints New COO Nadia Aziz
By David Penn Posted on
Categories: Alumni News, Daily news, Roostify
  • Roostify announced a partnership with Indecomm that will integrate Indecomm’s IncomeGenius technology into Roostify’s Roostify Beyond platform.
  • The integration will make it easier for Roostify to calculate income for self-employed borrowers.
  • A Finovate alum since 2014, Roostify also announced this week the appointment of Nadia Aziz as its new Chief Operating Officer.

A new partnership with intelligent automation solutions company Indecomm will bring automated income calculation technology to Roostify’s data intelligence solution Roostify Beyond. A Finovate alum since its debut at FinovateSpring 2014, Roostify will integrate Indecomm’s IncomeGenius solution, which will add to its current income calculation capabilities – especially when it comes to income calculations for self-employed borrowers.

“Improving loan assembly and processing costs, and timeframes is an imperative for all lenders in today’s environment,” Roostify co-founder and CEO Rajesh Bhat said. “Roostify Beyond already incorporates income calculation and analysis for the most common employment scenarios. With the integration of IncomeGenius, we can now simplify and automate calculations for self-employed borrowers, an increasingly important use case as the gig economy expands.”

IncomeGenius leverages standardized rules and algorithms to minimize the risks associated with manual data entry. IncomeGenius doubles productivity at loan set-up, reduces time spent on income calculations by 60%, and guarantees 100% compliance with audit requirements, including a complete audit trail. Courtesy of the integration, Roostify Beyond’s Analysis Assistant will send self-employment documentation and data to IncomeGenius, which generates a thorough, self-employment income analysis and GSE worksheet – in accordance with Fannie Mae and Freddie Mac guidelines. IncomeGenius then returns the information to the Roostify Beyond platform for presentation in the interactive Analysis Assistant dashboard.

Roostify launched its Beyond platform near the end of 2021. The latest iteration of the company’s Roostify Document Intelligence (RDI) Service, Roostify Beyond integrates RDI at the start of the lending process, providing borrowers with instant alerts if they upload documentation that is incorrect or illegible without having to engage with a human representative. Roostify Beyond also has data extraction capabilities that allow lenders to highlight data discrepancies, automatically create tasks, and publish document classification and validated information to the loan origination system (LOS).

“When we launched RDI a couple of months ago, we were excited to use data to propel the industry forward,” Bhat said in December when Roostify Beyond was introduced. “Data empowers lenders to spend less time in systems and more time with customers, and we are truly happy to provide our customers with this experience.”

Founded in 2012, Roostify most recently demonstrated its technology on the Finovate stage in 2018. In the years since, the company has grown into a mortgagetech leader that helps lenders process more than $50 billion in loans each month. The San Francisco, California-based company counts more than 250 financial institutions as clients and has 150+ employees.

This week Roostify introduced its new Chief Operating Officer, Nadia Aziz. With a focus on home lending, Aziz brings more than 20 years of financial services and fintech experience to Roostify’s C-suite. Before joining Roostify, Aziz was General Manager of Opendoor Home Loans, a digital lending platform for residential real estate.

“Roostify’s goal is to provide lenders with the tools and capabilities they need to deliver an exceptional experience for their customers while ensuring they achieve their business objectives by digitizing the loan origination process,” Aziz said in a statement. “I am excited to help Roostify on this mission and expand our impact on the industry by transforming the home lending journey.”

Photo by Scott Webb

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Best of Show: The Finovate Podcast’s Greg Palmer Chats with the Faves from FinovateSpring

Best of Show: The Finovate Podcast’s Greg Palmer Chats with the Faves from FinovateSpring
By David Penn Posted on
Categories: Array, Best of Show, FinGoal, FinovateSpring 2022, Horizn, Keep Financial Technology, Podcasting, QuickFi, Spave

Join Finovate VP and Host of the Finovate Podcast Greg Palmer as he shares his video conversations with companies that earned Best of Show honors at FinovateSpring in May.

Greg Palmer talks with Rob Frohwein, co-founder of Keep Financial, which won Best of Show honors at FinovateSpring 2022. Demo video.

“What Keep does is it enables employers to implement what we call ‘investing cash plans’ which is a new compensation technique that enables an employer to issue what’s essentially a retention bonus, but that cash is provided on the front end of some period of time … There’s an ongoing obligation of the employee to stick around the company for whatever the vesting period is and, once they hit that vesting period or vesting periods along the way, that portion, or all of the debt that they owe for getting that retention bonus up front, disappears.”

Greg Palmer chats with Susan Sarensen Langer, CEO of Spave, which won Best of Show at FinovateSpring 2022. Demo video.

“Spave is all about helping realize financial wholeness and more balance in their life. You can think of Spave as a number of apps altogether. It’s Mint. It’s Acorns. It’s Digit. It’s United Way. It’s Venmo. All in one. We want people to be able to use their spending, so Spave is all based on people’s spending … (That) spending ignites micro amounts that we call “spavings”. So you can either round up spare change, you can apply a percent, you can spave now and do a one-time donation or one-time savings (set-aside) … We’re helping people decide how they’re going to save for their future, give to the causes that they care about and live a more balanced whole life.”

Greg Palmer interviews Nathan Gibbons, Chief Operating Officer at QuickFi, one of the companies that won Best of Show at FinovateSpring 2022. Demo video.

“QuickFi is a business financing platform that really is meant to serve banks and manufacturers. It enables them to offer their business customers a secure, completely digital way of applying for an consummating lower rate term loans in a matter of minutes instead of days or weeks. (This is) because the platform is 100% digital and self-service. It really allows banks and manufacturers to close more loans and more sales faster and much more cost-effectively.”

Greg Palmer talks with Leigh Gross, SVP of Sales and Revenue with Array. FinovateSpring 2022 Best of Show winner. Demo video.

“We’re an innovation platform that helps banks, credit unions, and other fintechs offer cutting-edge financial tools to their customers. For example, we offer credit and identity protection solutions, personal privacy components that we allow our partners to easily embed within their experience so they can offer these services directly to their customers.”

Greg Palmer chats with Ariam Sium, VP of Product with Fingoal. FinovateSpring 2022 Best of Show winner. Demo video.

“We build insights and data infrastructure for financial institutions. The fintech space has a lot left to be desired when it comes to serving actual human beings. And that’s really where (Fingoal) shines. When it comes to our insights, it’s the personalization that actually makes them worth anything. And when it comes to our technical solutions for our clients … at the end of the day we’re improving the overall user experience. It’s also nice that it happens to save the financial institutions money and time.”

Greg Palmer catches up with Janice Diner, CEO, and Steve Frook, SVP of Global Sales with Horizn, which won Best of Show honors at FinovateSpring 2022. Demo video.

“We solve quite a few business problems (for financial institutions). But the three that Steve probably will talk about a little later is reduce the cost to serve digital customers, increase the number of fully-digital customers, drive mass adoption of new products and features. We do this by educating both customers and employees across the full bank ecosystem: retail banking, business banking, wealth management, insurance, just to name a few.”

Stay tuned for more videos from Greg Palmer and the Finovate Podcast’s Conversations with Best of Show winners.

Photo by Abet Llacer

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Location Identity Leader Incognia Secures $15.5 Million to Help Fight Identity Fraud

Location Identity Leader Incognia Secures $15.5 Million to Help Fight Identity Fraud
By David Penn Posted on
Categories: Alumni News, Daily news, Funding, Incognia
  • Mobile fraud prevention specialist Incognia, which made its Finovate debut in May at FinovateSpring, has raised $15.5 million in Series A funding.
  • The capital will be used to help fuel the company’s growth; Incognia currently has 200 million mobile users in more than 20 countries worldwide.
  • Incognia leverages location and motion sensors to create a unique “location footprint” for trusted users that rivals other authentication methods in accuracy.

In a round led by Point72 Ventures, mobile identity company Incognia has secured $15.5 million in Series A funding to help fight identity fraud. The investment will help fuel the Palo Alto, California-based company’s continued growth, building on the 200 million mobile users in more than 20 countries currently protected by Incognia’s technology.

“Today’s authentication and fraud detection solutions aren’t working for the user, or for businesses, and the market is looking for more innovative technologies,” Incognia founder and CEO André Ferraz said. “Incognia is pushing the frontier of identity assurance and authentication to deliver increased security with minimal user friction.”

Incognia leverages location signals and motion sensors on an individual’s mobile device to help combat identity fraud. The technology creates a privacy-first location identity that is unique to each user and acts like a “location fingerprint” that effectively differentiates trusted users from fraudulent ones. The company says that its solution, which can be deployed in industries ranging from fintech and crypto to gaming and social media, is 10x more accurate than FaceID in terms of uniquely identifying users. Further, Incognia notes that the technology has a false acceptance rate of less than 1 in 17 million.

“We’re emerging as the global location identity leader, effectively combating the increasing fraud on mobile around the world,” Ferraz added. “We’re dedicated to enabling our customers to deliver frictionless mobile experiences without compromising security and privacy.”

Incognia made its Finovate debut at FinovateSpring 2022 in May. At the conference, the company demonstrated how its frictionless fraud prevention solution for mobile apps combats identity fraud without bringing additional friction to the authentication process. The technology’s zero-factor authentication requires no action from the user in order to provide a highly accurate risk assessment with low false acceptance rates.

Founded in 2020, Incognia also recently introduced its new location-based liveness spoofing detection solution module. The offering prevents biometric liveness spoofing during the onboarding process. This particular form of fraud is often used by cybercriminals to create “money mule” accounts for money laundering – as innovative fraudsters have turned to liveness spoofing to get around selfie-based liveness detection algorithms. The challenge of liveness spoofing has become even greater with the availability of cheap – or even free – deepfake video technology. Incognia’s location-based liveness spoofing detection module is designed to prevent these deepfake attacks in real-time.

“As fraudsters advance their techniques to trick liveness detection tools, it is critical that there is a solution on the market that can successfully combat the use of deepfakes at onboarding,” Ferraz said.

Photo by Pixabay

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Finovate Newcomer Lokyata Integrates its Credit Decisioning Technology with Infinity Software

Finovate Newcomer Lokyata Integrates its Credit Decisioning Technology with Infinity Software
By David Penn Posted on
Categories: Alumni News, Daily news, Lokyata, Startups
  • Lokyata, a credit decisioning specialist, announced a partnership with Infinity Software.
  • The integration will make Lokyata’s BankAnalyze solution available to Infinity Software’s financial services customers.
  • Lokyata, founded in 2017, made its Finovate debut at FinovateSpring earlier this year.

Just over a month after making its Finovate debut at FinovateSpring 2022 in San Francisco, California, credit decision solutions provider Lokyata has announced that its real-time, automated credit decisioning tool, BankAnalyze, is now integrated with Infinity Software’s loan management software platform.

Courtesy of the API-enabled integration with Lokyata, Infinity Solutions will give its customers the ability to access key loan decision information. This includes customer-permissioned bank statement analysis such as average monthly net income, minimum balance, average monthly loan payments, and insufficient funds (NSF) notification histories. The integration will also enable lenders to configure both auto-fund and auto-deny rules to bring additional streamlining to the loan decisioning experience.

“At Lokyata, we are always looking to work with innovators in the market and Infinity Software is demonstrating the value of scalable, modern technology in an evolving lending ecosystem,” Lokyata CTO Steve Bireley said. “Increasingly, lenders are looking for ways to responsibly help more consumers gain access to credit, and through tools like BankAnalyze and Infinity Software’s platform, more lenders are successfully meeting that goal.”

With 20 years of experience providing lending solutions and other tools to direct-to-consumer lenders, Infinity Software has helped more than 700 businesses enhance their lending processes. The company uses a configurable loan product engine that gives lenders access to advanced accounting and reporting, as well as a built-in collections suite and access controls. Infinity Software offers a wide range of services to lenders, ranging from website design to optimized loan agreements to automated underwriting waterfalls, as well as a number of additional consumer loan solutions.

“Infinity has worked with hundreds of vendors to meet the needs of lenders in our space,” Infinity Software Director of Products Shannon Lee said. “Lokyata has proven to have a unique product that helps lenders better meet the needs of underserved borrowers and grow their business in a responsible and innovative way.”

Currently headquartered in Washington, D.C., Lokyata made its Finovate debut last month at FinovateSpring 2022. At the conference, Lokyata’s Bireley demoed the company’s BankAnalyze solution. The technology assesses the bank statements from a loan applicant and then provides an automated credit decision recommendation based on a combination of a weighted rules and a Lokyata score created in collaboration with the client. The company believes that using borrower-permissioned data is a major boon to the lending process, creating a more accurate, and up-to-date depiction of the borrower’s credit status. Moreover, Lokyata says that this approach “primes” near and subprime borrowers by making it easier for financial institutions to lend to “near prime” borrowers without taking on excessive risk.

Lokyata’s other products include ExcelRate, a lending and lead decision platform, and FraudBlock, a real-time identity verification and fraud intelligence solution for financial transactions. With $1.5 million in funding, Lokyata has scored more than 6.1 million loans impacting more than 240,000 customers. Founded in 2017, the company has raised $1.5 million in funding. Santosh Thiruthi is co-founder and CEO.

Photo by Diana Smykova

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